Alberta poised to win autonomy from Ottawa on methane emissions, following Saskatchewan’s lead

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Alberta is “extremely close” to taking control of its methane emission regulations from the federal government, Energy Minister Sonya Savage says, weeks after Saskatchewan reached a similar agreement with Ottawa,

The movement represents a significant step for Canada’s largest oil-producing province. It has wrestled with the federal government for years to secure equivalency of its methane emission-reduction regulations, which propose a 45-per-cent reduction of 2014 levels by 2025.

A province can seek an “equivalency” ruling from Ottawa to exempt it from federal regulations once it has released its own final rules. A key part of Alberta’s plan for that exemption is to direct funding from its large-emitter carbon tax toward methane-reduction technology, and use financial incentives to encourage industry to get on board.

Alberta and Ottawa were still at loggerheads over equivalency in December. One point of contention centred on leak detection. Federal rules will require most facilities to start inspecting equipment three times a year for leaks. Alberta’s rules require that rate for some facilities, but many others would only require annual inspections.

Saskatchewan took years to sign a deal with the federal government, only reaching an agreement this month.

Under that plan, the province will reduce greenhouse gas emissions, from venting and flaring activities in its upstream oil and gas industry, by 4.5 million tonnes of CO2 annually by 2025.

Energy and Resources Minister Bronwyn Eyre said the green light from Ottawa gives Saskatchewan’s climate plan, Prairie Resilience, “an important endorsement.”

The Saskatchewan model is “more common sense” than the federal plan, she said, because it was developed with the province’s needs in mind.

“They get to the same [emissions] goal, but they allow operators to make investments across their operations as a whole, and that’s important,” Ms. Eyre said.

Methane is a more powerful greenhouse gas than carbon dioxide. As the principal component of natural gas, it’s highly valuable, so limiting methane leaks is viewed as a cost-effective way to cut greenhouse gas emissions.

Saskatchewan’s equivalency deal and Alberta’s rapid movement toward an agreement are occurring as provincial governments and producers examine details of a $750-million federal government fund aimed at methane-emissions reduction.

Prime Minister Justin Trudeau announced the cash earlier this month as part of a broader $2.4-billion support package for an oil and gas sector struggling with plummeting demand and historically low crude prices.

“Obviously it’s a very big priority for their government, and it’s something that’s going to help our companies in Alberta be in a position to reduce their emissions and comply with the methane regulations that we have here in Alberta,” Ms. Savage told The Globe and Mail in an interview.

And while the money was a welcome industry boost in both provinces, Ms. Eyre told The Globe that it left “an unfortunate impression” that methane is leaking everywhere, “which isn’t the case.”

Still, Ms. Eyre said companies seem to be on board with the idea, and expects her province will see federal dollars invested in infrastructure, such as feeding lines to help conserve gas.

“Conserving that, obviously, is good for everybody – good for the economy and good for the environment,” she said.

The emissions-reductions fund includes $75-million earmarked for Newfoundland and Labrador’s offshore oil sector.

Natural Resources Minister Siobhan Coady said methane emissions aren’t a problem in her province’s energy sector, so it’s likely the money will be funnelled toward other, more general reduction projects that play into Advance 2030, the province’s plan for growth in the oil and gas sector.

Ms. Coady said that could include offshore wind-power generation and developing the province’s natural-gas resources.

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