Methane emissions rules in U.S. play catch-up with Alberta

A proposal by the Obama administration to overhaul rules for methane and gas emissions for oil wells would create U.S. rules equivalent to the Alberta government's latest proposals on emissions reductions.

Drew Nelson, senior manager of natural gas for the Environmental Defense Fund, an environmental group, said controlling these emissions is the "low-hanging fruit" in meeting targets for climate change.

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That's because methane is a particularly harmful greenhouse gas. Though it only lasts in the atmosphere for 20 years, methane is 84 times more effective than carbon dioxide at trapping heat.

The U.S. Department of the Interior estimates it could reduce emissions of methane by up to 169,000 tonnes per year with these rules, which would force the entire oil industry to control venting and leaking of gas.

Similarly, Alberta's NDP government proposed in November to reduce methane emissions from oil wells by 45 per cent from 2014 levels by 2025. The actual rules have not yet been drafted but are in process, according to a government spokeswoman.

Other Canadian provinces should follow

Nelson said other Canadian provinces and the federal government should be stepping up to follow Alberta's lead.

"Unfortunately, as things stand now, only Alberta has announced those regulations. Alberta has shown a lot of leadership and hopefully other oil and gas producing provinces like British Columbia will follow Alberta and the U.S. regulations announced today," he said in an interview with CBC News, speaking from Austin, Texas.

The oilpatch in Canada and the oilpatch in the U.S. are quite integrated; to ensure competitiveness and coherence it would make sense for regulatory regimes in both places to be quite similar.- Drew Nelson, Environmental Defense Fund

The U.S. rules call for control of methane release at every stage of oil and gas production, including pipelines and transportation. But the particular focus is venting and leaking around oil wells.

"Natural gas is essentially methane," Nelson said. "It's much better to burn it than it is to leak it directly to the atmosphere because methane is such a potent greenhouse gas."

Tried and reliable technology already exists for oil and gas drillers and oilsands operations to capture these gases and potentially sell them.

Change could be cost-effective

The proposals would force the U.S. oil and gas industry to move to state-of-the art carbon capture technology, but could be cost effective as it would result in capturing natural gas that could be sold.

Nelson said the new U.S. regulations are a big step forward and put the U.S. ahead of Canada as a whole. He pointed out that the previous Harper government in Canada had pledged to reduce methane emissions in concert with the U.S.

"If they're going to move forward in a North American integrated fashion and the oilpatch in Canada and the oilpatch in the U.S. are quite integrated, to ensure competitiveness and coherence it would make sense for regulatory regimes in both places to be quite similar," he said.

The regulations issued Friday apply to federal and treaty lands, but the Environmental Protection Agency has put forward rules for all oil and gas operations and states such as Colorado, Pennysylvania and Wyoming already have rules in place.

Part of Paris promise

The Obama administration aims to reduce U.S. methane emissions by 45 per cent and had planned on this target when it put forward its emissions goals for the UN climate change conference in Paris late last year.

The U.S. Bureau of Land Management estimated that the country's onshore oil and gas wells leak enough gas for 5.1 million households every year.

In the oil-rich Bakken region of North Dakota, as much as one-third of natural gas is burned off, causing significant light pollution that is visible from space.

Nelson said the new rules are a "big step forward" for the U.S. and fill gaps in existing regulations, which are 30 years out of date.

Duplicate rules

The U.S. oil industry has argued that new regulations are not needed for methane, because the industry already has a financial incentive to capture and sell natural gas.

"Another duplicative rule at a time when methane emissions are falling, and on top of an onslaught of other new [federal] regulations, could drive more energy production off federal lands," said Erik Milito, director of upstream and industry operations for the American Petroleum Institute, the top lobbying group for the oil and gas industry.

The U.S. rules are now open to comment for the next 90 days.

Nelson said it is necessary to have rules in place so every operation is doing the right thing. Too many just vent their natural gas because the price of gas is considered so cheap and they want to avoid the capital costs involved with capturing leaks.

The U.S. Bureau of Land Management said taxpayers are losing out on $23 million US annually in royalty revenues because of the waste of natural gas.

Oil industry on Alberta's new rules

Alberta and Saskatchewan already have regulations in place on capturing gas from venting. The new rules, once they take effect, will force the industry to take more "strenuous efforts to find leaks," according to David Gowland, manager of Alberta operations for the Canadian Association of Petroleum Producers.

The industry has been engaged in a "collaborative" process with government in drafting new rules, including a carbon credit system that will put incentives in place until 2023.

"For every unit of methane that you capture, there will be an equivalent credit on a CO2 basis that can be used to offset some of your other emissions profile," Gowland told CBC News.

The industry is concerned about how the province will measure the starting point on which it bases the 45 per cent reduction.

"When you're talking about fugitive emissions, they're fugitive by nature so you don't have a real good grasp on the actual firm number on the baseline," he said.

Gowland said it would help to have other provinces and the U.S. adopt similar rules – British Columbia and Saskatchewan currently are watching the Alberta experience with methane rules.

"Alberta doesn't want to be a competitive disadvantage to other jurisdictions," he said.