Saskatchewan Methane Regulation Equivalency Order

Summary#

This is a proposed federal order, published May 16, 2020, that would suspend the application of the federal Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) in Saskatchewan. The suspension would apply while an equivalency agreement is in force — meaning Saskatchewan’s own rules would take the place of the federal rules for the oil and gas sector for the period covered.

What it does#

• Declares that the federal Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) would not apply in Saskatchewan, except for federal works or undertakings (for example, some interprovincial pipelines).
• Relies on Saskatchewan’s own rules, mainly the Oil and Gas Emissions Management Regulations and directives (including Directive PNG036 and Directive PNG017), to achieve equivalent methane reductions.
• The draft equivalency agreement would run until December 31, 2024, unless ended earlier with at least three months notice.
• The order would come into force on registration, except one part that specifically comes into force on January 1, 2023.
• This is a proposal open for public comment for 60 days after publication.

Who's affected#

• Upstream oil and gas companies and facilities operating in Saskatchewan.
• Small businesses in that sector — the federal review identified 111 small businesses in Saskatchewan that could be affected by the federal rules.
• Facilities on reserve lands of 11 First Nations in Saskatchewan (the proposed order would stand down the federal rules for those facilities too, since Saskatchewan’s rules would apply instead).
• The federal department responsible is Environment and Climate Change Canada, which supports the equivalency on the basis of matching emission outcomes.
• Environmental groups and some stakeholders have expressed concerns about Saskatchewan’s outcome-based approach; others in industry support avoiding duplicate rules.

Why it matters#

• The goal is to avoid duplicate regulation and reduce paperwork and compliance costs for operators in Saskatchewan by letting provincial rules replace the federal ones for the oil and gas sector during the equivalency period.
• Environment and Climate Change Canada’s modelling estimates the Saskatchewan rules would produce cumulative methane reductions of 11.61 megatonnes (Mt) CO2e for 2020–2024, compared with 11.48 Mt under the federal regulations — a roughly equivalent outcome for that five-year period.
• The modelling also shows Saskatchewan’s measures would deliver smaller reductions than the federal rules over a longer 2020–2029 window, meaning additional actions may be needed after 2024 to keep outcomes aligned.
• The federal government estimates administrative savings of about $410,500 over five years from not administering the federal rules in Saskatchewan, and average administrative savings for industry of about $2,015 per business (annualized savings of $386,793 under the one-for-one rule).
• Because this is a proposed order, the public and interested parties can comment during the 60-day consultation period; the final decision depends on completing the equivalency agreement and any follow-up federal steps.