Canadian Regulations Seek to Reduce Oil & Gas Methane Emissions

Methane (CH4) emissions, which absorb more heat than carbon dioxide (CO2), comprise approximately 13% of Canada’s total greenhouse gas (GHG) emissions. Once regulations passed in 2018 are in full force, Canada should be able to reduce CH4 emissions by up to 23 million tonnes CO2 equivalent (Mt CO2e) per year.

Canadian Methane Emissions from Oil & Gas Sector

Figure 1 shows Canadian GHG emissions by gas type in Mt CO2e.1 CH4 emissions in 2017 amounted to 93 Mt CO2e or 13% of Canada’s total emissions.2 Main sources of these emissions included the oil & natural gas sector (43% of total CH4 emissions), agriculture (30% of total CH4 emissions), and landfills (18% of total CH4 emissions). Around half of the CH4 emissions came from deliberate direct venting from wells or equipment; the other half came from unintended leaks, which are classified as fugitive emissions.

Figure 1. Canadian GHG Emissions by GHG in Mt CO2e

Fugitive emissions come from multiple resources, including:

  • Hydrogen production
  • Removal of sulfur dioxide (flue gas desulphurization (FGD))
  • Storage and handling losses
  • Equipment leaks
  • Emissions from open mine surfaces
  • Emissions from methanogenic bacteria in the mine tailings settling ponds
  • Emissions from abandoned oil & gas wells

In 2012, Canadian CH4 emissions represented less than 1.5% of global CH4 emissions.

Regulations Call for Programs to Reduce Fugitive Methane Emissions, Venting

By 2025, as part of the Pan-Canadian Framework on Clean Growth and Climate Change, the government of Canada plans to reduce oil & gas CH4 emissions from 2012 levels by 40–45%. In April 2018, Environment and Climate Change Canada (ECCC) published federal methane regulations to put this plan into action.

This plan calls for:

  • Reducing fugitive emissions by implementing a leak detection and repair (LDAR) program
  • Reducing production venting
  • Reducing venting from pneumatic devices, placing limits on what these devices can emit, and conserving natural gas for re-use at the well site or for sale
  • Reducing venting from compressors
  • Reducing venting from well completions involving hydraulic fracturing, with the goal to eliminate venting from such operations by 2020               

Once regulations are in full force, Canada should be able to reduce CH4 emissions by up to 23 Mt CO2e per year—the equivalent of 3.2% of total GHG emissions in 2017. The regulations are expected to reduce total GHG emissions between 2018 and 2035 by approximately 232 Mt of CO2e,[3] or 32% of total GHG emissions in 2017.

The Canadian government estimated the social cost of methane, or the economic value of global climate change damage that can be avoided by reducing methane emissions, at 11.6 billion Canadian dollars (B CAD). The total compliance costs attributable to the proposed regulations are estimated to be 3.9B CAD between 2018 and 2035. However, these compliance costs would be partly offset by the recovery of an additional 333 billion cubic feet (Bcf) of natural gas. While this additional production is not very significant compared with Canada’s total yearly gas production of about 5,500 Bcf, this gas could be sold on the open market.

1 United Nations Climate Change. Canada. 2019 National Inventory Report (NIR) English.

2 Government of Canada. Greenhouse gas sources and sinks: executive summary 2019. An inventory of the greenhouse gases in Canada for the year.

3 Government of Canada. Technical Backgrounder: Federal methane regulations for the upstream oil & gas sector.