Suncor's base plant with upgraders in the oil sands in Fort McMurray Alta.JASON FRANSON/The Canadian Press
A decade ago, communities in the Peace River region of northern Alberta had a common complaint: A strong odour would regularly waft through the air.
And it wasn’t just the rank smell. It was causing health issues. The problem was natural gas with a high amount of hydrogen sulphide, emitted nearby as part of heavy oil and bitumen production, and often on purpose.
The provincial regulator intervened in 2014. It imposed stricter rules, such as restrictions on “venting” the gas – a cost-free way for oil companies to avoid dealing with their own problem – and requirements to look for leaks every month and repair them quickly. Within five years, emissions from venting gas had been cut to nearly zero, without affecting oil production.
It was a success for local communities but also helped the fight against climate change. According to the Pembina Institute, a Calgary-based clean energy think tank, what was achieved in Peace River shows how much oil and gas companies can change when they have to.
Methane, the main component of natural gas, is a greenhouse gas that’s much more potent in heating the climate than carbon dioxide, so reducing these emissions packs a punch. That it can be done relatively quickly and cheaply is a bonus.
Methane emissions from Canada’s oil and gas sector account for 5 per cent of the country’s total GHGs, and about 20 per cent of the industry’s total. Driving down methane most of the way to zero by 2030, guided by smart policies and within reach of industry, can be a climate success that doesn’t need a revolutionary effort.
At COP27 in Egypt, the annual United Nations climate meeting, progress this year seems elusive. There is continuing debate around issues such as compensation for lower-income countries battered by a hotter climate, and no big obvious gains in cutting emissions – the world is still too dependent on coal power. But there is increased momentum around methane.
The United States now plays a central role. That’s positive for the world and especially for Canada, which finds itself on the same climate policy page as its biggest trading partner.
Last year, the U.S. and Europe launched the Global Methane Pledge, under which countries promise to cut methane at least 30 per cent by 2030. If achieved, it would be the same as the world’s entire transportation sector going to net zero. The U.S. plans to institute stricter rules around methane next year; last Friday it announced several toughened regulations, such as better monitoring of wells and requirements on flaring of methane during production.
Canada last week also published proposals to strengthen existing regulations. They will apply more widely, and all facilities, including individual wells, will have to have plans for what are called fugitive emissions, with monthly inspections and swift repairs when leaks are found.
Canada has been a leader on reducing methane. A year ago, Ottawa pledged to cut methane emissions in the oil and gas industry by 75 per cent in 2030 from 2012 levels, an extension of a previous goal to cut by at least 40 per cent by 2025. The 2025 target is in sight, with solid reductions in Alberta and Saskatchewan.
Another emerging idea is to find and fix major methane emissions discovered by third parties – satellite technology can reveal billowing plumes. The Biden administration, citing studies that show large leaks from a few places are a big problem, plans to require companies to deal with these situations when uncovered.
In Canada, a lot of industry talk focuses on the fledgling technology of carbon capture. Oil sands companies plan to spend $24-billion, the majority of it on carbon capture, to cut 22 megatonnes of emissions by 2030. But several oil sands companies also have sizable conventional oil and gas operations, where the cost to cut methane is much lower. The Pembina Institute points to a 2019 study from the Canadian Energy Research Institute that estimates costs of $5.5-billion to cut more than 30 MT by taking on methane emissions across the industry.
The challenge to cut GHGs is vast. It requires change across the economy, but some moves are easier than others. Reducing methane emissions is a clear win within grasp. The oil industry, buoyed by high profits, needs to get a lot done as fast as possible.