Air emissions regulations and reporting requirements in Western Canada are in constant evolution and can be a very confusing topic.
Often there are different regulations in each province and federally, many of which are currently undergoing change as a result of the climate change initiatives underway in each jurisdiction.
This high level overview examines the existing and upcoming regulatory and reporting requirements for air emissions, specifically those focused around climate change, but touching on other aspects that impact the upstream oil and gas industry as well.
Methane has recently been the subject of intense scrutiny at various industry-government forums, including the development of an accord between Canada, Mexico and the U.S. on methane emissions reductions from upstream oil and gas.
Due to its potent global warming impact (compared to CO2), methane is receiving significant focus within the oil and gas industry and in other sectors. Here is the current (early 2017) state of regulation in various jurisdictions:
Alberta has stated that it will reduce methane emissions from oil and gas operations by 45 percent from a 2012 baseline by 2025 using the following approaches:
- Applying new emissions design standards to new Alberta facilities; applying standards at the planning stage will be less expensive.
- A new facility standards directive will be published in mid-2018, according to the Alberta Energy Regulator (AER).
- Improving measurement and reporting of methane emissions, as well as leak detection and repair (LDR) requirements.
- Draft regulations for LDAR and measurement, monitoring and reporting (MMR) should be available in summer 2017, with possible implementation starting in January 2018, the AER says.
- Developing a voluntary joint initiative on methane reduction and verification for existing facilities, and backstopping this with regulated standards that take effect in 2020, to ensure the 2025 target is met.
This initiative will include Alberta industry, environmental groups and indigenous communities.
BC will reduce methane emissions from oil and gas operations by 45 percent by 2025 using the following approaches:
- Targets for fugitive and vented emissions for legacy facilities (built before Jan. 1, 2015).
- New facilities between 2015 and 2018 will have an offset protocol and a clean infrastructure royalty credit program.
- Post 2018 – will include mandatory LDAR coordination with other jurisdictions.
- More efficient engines.
- Supplying "clean LNG"
No methane-specific policy or regulation is being discussed at this time, other than being required to follow the rules set out by the federal government.
Canada will reduce methane emissions from oil and gas operations and will include that reduction in the promised national reduction of methane by 40-45 percent (below 2012 levels) by 2025.
This will be regulated under the Canadian Environmental Protection Act (1999). The first draft of proposed regulations is due in March 2017, with first implementation in Jan. 2018.
Regulations will likely fall under the following categories – with timelines for possible implementation:
- LDAR – 2020
- Compressors (seals and rod packing vents) – 2020
- Well completions (prohibit venting) – 2020
- Venting (limit totals, dehydrator capture requirements) – 2023
- Pneumatics (low or no emissions) - 2023
Greenhouse gases (GHGs)
For the oil and gas industry, GHGs usually refers to CO2, CH4, and N2O.
Additionally there are ozone (O3) and fluorinated gases (CFCs, HCFCs, SF6, NF3). These gases (total) have had regulations in most jurisdictions for some time, however, rules will be tightening and validation/verification will be more stringent going forward.
Here is the breakdown by jurisdiction:
- SGRR (Specified Gas Reporting Regulation, Alberta Environment and Parks) – If a facility emits over 50,000 tonnes of CO2e per year, they must report emissions.
- SGER (Specified Gas Emitters Regulation, Alberta Environment and Parks) – If a facility emits over 100,000 tonnes of CO2e per year, it must reduce its emissions intensity by 15 percent in 2016 and 20 percent in each reporting period thereafter. This can be accomplished by:
- Improved operations.
- Emissions offsets (can purchase - $20/tonne 2016; $30/tonne 2017, which is double from previous $15/tonne).
- Emissions performance credits from a previous period.
- This will be replaced by a carbon competitiveness regulation by 2018.
- Carbon Tax: Starting Jan. 1, 2017: $20/tonne CO2e in 2017; $30/tonne CO2e in 2018. (Equivalent to $1.011/GJ for 2017, $1.517/GJ for 2018+). Tax is charged on:
- Fuel Imported into Alberta.
- Fuel sold within Alberta.
- Fuel flared or vented in Alberta.
- Natural gas produced/consumed on site is exempt.
The Greenhouse Gas Industrial Reporting and Control Act (2016), administered by the Climate Action Secretariat (CAS), includes three regulations:
- Greenhouse Gas Emission Reporting Regulation (GGERR).
- Greenhouse Gas Emission Control Regulation (GGECR).
- Greenhouse Gas Emission Administrative Penalties and Appeals Regulation (GGAPAR).
Highlights of these regulations:
- Facilities (linear) emitting 10,000 tonnes or more CO2e/year must report emissions.
- Facilities (linear) emitting 25,000 tonnes CO2e or more per year must have emission reports third party verified.
- Emissions must be calculated using rules as laid out in the Western Climate Initiative (WCI).
Saskatchewan is waiting on federal rules and regulations. The current focus is on carbon capture and storage and de-carbonizing the province's power system.
- GHGRP – Greenhouse Gas Reporting Program – since 2004:
- Mandatory reporting of total GHG for facilities emitting more than 50,000 tonnes/yr CO2e. (Note that this will likely change for the 2018 or 2019 reporting year to 10,000 tonnes/yr CO2e).
- Voluntary program for smaller emitters currently.
- Carbon tax: - Minimum price on carbon. Currently set at $10/tonne CO2e starting in 2018. Negotiations with provinces ongoing.
The National Pollutant Release Inventory (NPRI) is a federal program that requires reporting of many air, water and ground emissions.
Many oil and gas facilities are too small to require full reporting under NPRI (<20,000 man-hours per year). These smaller facilities are only required to report combustion equipment emissions – Criteria Air Contaminants (CACs) which include:
- Particulate Matter (PM)
Note that the requirements for reporting thresholds and types of reporting under NPRI for the oil and gas industry are currently under review and will likely require much more reporting for all sizes of facilities in future years (2018 and onwards).
As a Type I carcinogen, this pollutant has no "safe" limit. It is often emitted during the course of dehydrating natural gas in the field. As a result, all provinces have regulations on the amount of Benzene that can be emitted per facility per year. These regulations are:
- Alberta: Directive 39 (AER)
- BC: Oil and Gas Operations Manual Appendix J
- Saskatchewan: Directive S-18
Flared and Vented Volumes
These volumes of gas have been regulated for a considerable amount of time, however as they directly impact the amount of other emissions, the volumes have specific regulations:
- Alberta: Directive 060 (AER) – although the amount of flared and vented gas is also included in the amounts reported to Petrinex under facility volumetric reporting guidelines (refer to AER Directives 7, 17, and 76).
- BC Oil and Gas Commission: Flaring and venting Reduction Guideline: Eliminate Routine Flaring by 2016 (last year).
- Saskatchewan: Directives S-10 and S-20
AQMS – Air Quality Management System
This is a federal initiative (except Quebec) and consists of 3 parts:
- CAAQS – Canadian Ambient Air Quality Standards – These are issued under the authority of the Canadian Environmental Protection Act (1999) and cover many pollutants. Particularly of interest to the oil and gas industry are newly reduced limits on PM2.5 and ozone. These standards are intended to be aspirational targets to drive the system.
- BLIERs – Base Level Industrial Emission Requirements are aimed at major industrial emitters to ensure a good base level of environmental performance – i.e. these are minimum acceptable performance standards. One instrument that is used federally to define the minimum standards for oil and gas is the MSAPR - Multi-Sector Air Pollutants Regulations.
The highlights of these are the regulation of:
- NOx from large boilers (>10.5 GJ/h), heaters, stationary spark engines
- In future there will be further standards around: SO2, VOCs, NH3 and particulate matter
- Provincial and Regional Air Quality Management (see other directives written above).
The wider world
There are news reports every day regarding climate change and government regulations and action on emissions. The terminology can get confusing. Canada and the oil and gas producing provinces are party to all of the following bodies that have a part to play in setting objectives for policy as well as helping develop best practices and recommendations on processes to reduce emissions.
- Conference of the Parties (United Nations) – COP22 was the most recent, in November 2016 in Marrakech, Morocco. This is a yearly conference.
- United Nations Economic Commission for Europe (UNECE) – best practices
- Global Methane Initiative (GMI)
- Climate and Clean Air Coalition (CCAC) of the UNEP
- Global Gas Flaring Reduction Partnership (World Bank)
- Arctic Council
Here in Alberta (and most of Western Canada), the regulations on methane emissions are still not clear. Questions still exist on things such as: How will a carbon tax on ‘vented’ material work?’ What type of audit/verification structure will exist?
The largest focus currently is on methane reduction, due to its higher global warming potential. Industry currently struggles with defining the baseline of emissions accurately. In addition, carbon offset protocols (accepted by government) are limited – currently only two carbon offset protocols exist to support methane reductions in the oil and gas sector:
- An offset protocol to encourage converting existing pneumatic equipment to highly efficient options
- An offset protocol for solution gas conservation
Where from here?
As we wait to hear what federal and provincial regulations will be imposed to meet emission reduction targets, oil and gas companies can be ready with an accurate baseline of emissions through a combination of modeling and measurement. Participating in industry working groups and providing feedback to regulators when possible is an excellent way to impact the process. If you have questions about any of these reporting requirements, please don’t hesitate to contact us at firstname.lastname@example.org.
Laura Chutny is managing partner of Process Ecology Inc. She has more than 25 years of experience in process engineering and chemical engineering research. Her key strengths are in process modeling and dynamic simulation, distillation optimization, conceptual design, air emissions estimation and emissions reduction.