Federal methane emission reduction regulations target oil and gas industry

The Canadian government has proposed new regulations under the Canadian Environmental Protection Act, 1999 to reduce methane emissions from upstream oil and gas activities. Methane is a colourless, odourless flammable gas and the primary component of natural gas. However, it is 25 times more potent as a greenhouse gas than carbon dioxide, meaning reducing one tonne of methane emissions is the same as reducing 25 tonnes of carbon emissions from a global warming perspective. About 44% of Canada’s methane emissions come from upstream oil and gas activities.

The proposed regulations will impose both facility- and equipment-level requirements. Facilities that have the potential to emit more than 60,000 m³ of hydrocarbons in any of the past five years and facilities using pneumatic devices or compressors are covered by the proposed regulations, as are certain hydraulic fracturing activities.

These new proposed regulations are expected to cover over 95% of methane emission sources from upstream oil and gas activities. Oil and gas distribution, refining and some oil sands emissions are not covered.

Methane emission limits are being proposed in five areas:

Fugitive equipment leaks

Beginning in 2020 operators of upstream oil and gas facilities (except single wellheads) must inspect their facilities three times a year with specialized infrared cameras or other devices that can detect fugitive methane leaks. Leaking equipment must be repaired within 30 days if repairs are possible without shutting down the equipment. If repairs are not possible without shutting down the equipment, the repairs must be done before the volume of gas from the leak is larger than the volume of gas that would be released by shutting down the equipment. Leaks on offshore equipment must be repaired within one year.

Venting

In 2023 larger oil and gas facilities will have a limit of 3,000 m³ per year on the volume of methane they can vent during normal operations. The expectation is facilities that cannot reduce venting to the new limit will install conservation, flaring or incineration equipment. Emergency venting will still be allowed.

Pneumatic devices

Pneumatic devices are automatic instruments widely used in the upstream oil and gas industry for various processes, such as maintaining liquid levels, pressures and temperatures. Commonly, pneumatic devices use natural gas.

In 2023 larger oil and gas facilities and ones with larger pumping rates will require controllers to be low or non-methane emitting and pumps to be non-methane emitting. Potential exemptions may be created for operational needs or if there is no feasible technology available.

Compressors

Beginning in 2020 existing and new compressors will have to meet certain methane emission limits depending on the size and type of compressor. Operators of non-compliant compressors will have to make modifications to bring their compressors into compliance. All operators will have to annually measure their emissions except those whose compressors are equipped with emission conservation or destruction technology.

Fracs

In 2020 the new regulations will require operators undertaking hydraulic fracturing activities outside of Alberta and British Columbia on wells with high gas-to-oil ratios to conserve, flare or incinerate any methane that would otherwise be vented. Alberta and British Columbia already have provincial measures that cover these activities.

Registration and record keeping

All upstream oil and gas facilities will be required to register and keep records to demonstrate compliance with the proposed regulations. Facility operators will also be required to submit reports at the request of the federal minister of environment.

Environment and Climate Change Canada is hosting a public comment period on the proposed regulations until July 27, 2017. It is contemplated that the final regulations will be published in 2018.