Tougher methane measures prompt cost worries

CALGARY — Tougher methane emission regulations unveiled Thursday are expected to create oil and gas services jobs, but have raised concern that the costs of implementation could further weaken an industry hit hard by two years of commodity price uncertainty.

The new restrictions to be phased in between 2020 and 2023 will require energy companies to regularly check equipment for leaks, make repairs, use cleaner technologies, monitor emission levels and report results to Ottawa.

The federal government estimates the regulations would cost industry $3.3 billion from 2018 to 2035, but says the costs of avoiding action on climate change would be more than four times that.

Mark Salkeld, CEO of the Petroleum Services Association of Canada, said the initiative would likely create jobs for his members, but noted the cost is too high when added to provincial and federal carbon price proposals.

“There’s more concern right now that it’s going to hurt the industry than there is excitement about opportunities,” he said.

Terry Abel, executive vice-president of the Canadian Association of Petroleum Producers, said his organization will be recommending changes to the proposed regulations that will reduce the cost of implementation by half or more while retaining the targets and timeline.

“Our industry is facing increased competition globally for capital … Any incremental cost just contributes to that overall competitiveness burden,” Abel said.

Methane is considered far more potent than carbon dioxide in trapping heat in the atmosphere. It is the main component of natural gas.

The United States and Canada agreed last year to jointly slash oil and gas methane emissions to between 40 and 45 per cent over 2012 levels by 2025.

Canada planned to implement regulations between 2018 and 2020 to reach the target, but Ottawa decided in April to delay for three years after U.S. President Donald Trump signed an executive order to reconsider the methane cuts.

The Trump order was blocked this month in the U.S. Senate, but Environment Minister Catherine McKenna said Thursday that Canada will follow the delayed schedule to ensure industry has sufficient time to implement the measures.

She added the 2025 target timeline also remains in place. The regulations are expected to be finalized next year.

“Today our climate plan is quickly moving into the implementation phase where we will see real results and spark real change,” McKenna said.

She said the new rules will be less stringent than those in the U.S., where federal law has restricted methane emissions since 2012 and oil and gas producing states like California, Colorado and Wyoming have added their own laws.

Environmentalists welcomed the new regulations, but said they don’t go far enough.

Diane Regas, executive director of the Environmental Defense Fund, said stronger rules are needed for Canada to meet its climate targets and match U.S. methane controls.

“This is a critical first step,” said Duncan Kenyon, a policy director at the Pembina Institute. “It’s going to start everyone thinking about how we’re actually make this happen in practise.”

The federal government said it is also moving ahead with regulations to reduce leaks of air pollutants from refineries, oilsands upgraders and petrochemical plants, estimating the cost to industry at $254 million.

McKenna wouldn’t directly answer the question of what the government will do if energy producers refuse or can’t afford to comply with the regulations, instead pointing out captured methane can be sold and thus provides a financial incentive to stop leaks.

She said provinces and territories will have the option to develop their own regulations if they achieve the same results.

Just Posted

WATCH: Christmas Wish Breakfast toy donations almost double

All toys donated Sunday will be given to the Red Deer Christmas Bureau and Red Deer Salvation Army

VIDEO: ‘Party bus’ goes up in flames in Vancouver

Fire crews responded to the late night blaze

Mothers Against Drunk Driving hold candlelight vigil

Four-and-a-half years ago Marilyn Rinas’ husband was killed in a collision with… Continue reading

Thousands expected at memorial for fallen police officer in Abbotsford, B.C.

ABBOTSFORD, B.C. — The streets of Abbotsford, B.C., will be lined with… Continue reading

One person dead, five others injured in early-morning crash in Kingston, Ont.

KINGSTON, Ont. — A man who was checking the damage on his… Continue reading

VIDEO: Replay Red Deer: Nov. 19

Watch news highlights from the week of Nov. 13

CP Holiday train to stop in Ponoka for another year

The popular train will feature entertainment from Colin James and Emma-Lee

Kittens rescued after allegedly being tossed from vehicle

Couple finds abandoned kittens new home through Facebook

VIDEO: ‘Party bus’ goes up in flames in Vancouver

Fire crews responded to the late night blaze

Chicken crosses B.C. road, stops traffic

Rooster makes early morning commuters wait in Maple Ridge

Red Deerian honours her brother who died in a motorcycle collision

Houaida Haddad is encouraging Red Deer residents to donate blood

Red Deer County firefighters to be recognized for Waterton help

RCMP brass will give formal recognition Monday

Ron James tries to lighten humanity’s load through humour

The comedian returns to Red Deer for shows Dec. 1 and 2

100+ Women Red Deer donate to Christmas Bureau

About $14,000 will help with Christmas hampers and toys

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month