Upstream Methane Abatement Toolbox: Oil and gas methane regulations

Overview

The Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) is the regulatory instrument used to abate methane emissions in Canada. A regulatory approach was chosen to ensure that methane emission reduction targets are legally enforceable.

The Regulations introduce nation-wide emissions limits for the extraction, transportation and processing of oil and natural gas. Regulations have reduction targets associated with specific pieces of emitting equipment and require industry to regularly inspect and repair equipment. The approach supplements or complements regulatory approaches of some Canadian provinces (sub-national governments).

Key points of interest

Implicated parties

Government regulations were established to oblige emission reductions by private companies. These regulations are replaced by equivalent regulations in some Canadian provinces through limited and renewable term agreements.

Impact

Canada is on track to meet the target of reducing the sector’s methane emissions by 40-45 percent by 2025, relative to 2012 emissions. 

Challenges

• Remote operations – In the context of Canada’s geographically dispersed oil and gas sector, costs can be higher for methane emission reduction solutions in remote locations, as they can be only accessible during specific time windows during the year (e.g. ice road access only).
• Overlapping jurisdiction – Several sub-national governments have introduced specific methane policy measures, including regulations that use different data sources, and focus on different sources of methane emissions. These different approaches respond to local geology and production practices.

Lessons learned

• Understanding methane emissions trajectory as regulations are implemented requires multiple approaches to track progress. The Government of Canada can see industry reported data through regulatory data systems, but also supports research efforts to track emissions using technology for aerial and satellite measurements, regional air quality monitoring networks, and facility-level methane emissions measurements. Progress is updated every year through Environment and Climate Change Canada’s Departmental Results Report.
• Incorporating flexibilities into regulatory design can lower compliance costs across the oil and gas sector. Examples of flexibilities within Canada’s 2018 regulations include:
  • Phased in implementation to allow industry lead time to manage the required changes.
  • Exempting smaller facilities that emit less methane.
  • Providing options to develop innovative compliance pathways.
• Streamlining of reporting obligations can reduce regulatory burden (e.g. use existing data collection mechanisms and sources).
• Working in transparent partnership with sub-national regulators, Indigenous groups, civil society, the oil and gas industry and ENGOs fosters creative approaches and facilitates implementation of regulatory direction.
• Using regulatory approaches that are measurable, achievable and time-bound, and adjusted as required during implementation. Continuous improvement of the regulatory construct and associated emission reduction goals enables steady and early progress towards the ultimate goal of net zero by 2050.

Additional resources

• Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector)
• Review of Canada’s methane regulations for the upstream oil and gas sector
• Canada’s Methane Strategy
• Environment and Climate Change Canada’s Departmental Results Report