Federal Methane Rules Not Applied in Alberta

Summary#

Order Declaring that the Provisions of the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) Do Not Apply in Alberta: SOR/2020-233 tells oil and gas operators in Alberta that most of the federal methane-and-VOC rules will not apply in the province. The order took effect on the day it was registered (October 26, 2020), except for some parts that start on January 1, 2023. It rests on an agreement that Alberta’s own rules are equivalent to the federal rules.

What it does#

• Suspends the application in Alberta of the federal Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) for most oil and gas facilities. Federal rules still apply to federal works and undertakings (for example, some interprovincial infrastructure).
• Implements that suspension because the Government of Alberta and the federal Minister signed an equivalency agreement saying Alberta’s rules will achieve similar methane reductions.
• Says the Order ends when that agreement ends. The agreement can run for up to five years or be ended earlier with notice.
• Sets the specific timing: the Order came into force with registration (October 26, 2020) except for certain provisions that come into force on January 1, 2023.

Who's affected#

• Oil and gas companies and facilities operating in Alberta.
• Facilities that are federal works or undertakings remain under the federal rules (these are not stood down).
• Small businesses: the government identified 354 small businesses in Alberta that would have been affected by the federal rules.
• Indigenous communities with facilities on reserve lands — the Order applies there too; the source notes facilities were identified on the lands of 26 First Nations.
• Environmental groups and nearby communities concerned about air quality, because the change affects VOC (smog-forming pollutant) controls.

Why it matters#

• It avoids duplicate federal and provincial regulations for the same facilities. The government says this reduces reporting and administrative burden and saves money: about $1,385,000 in federal administrative cost savings over the five-year agreement, and about $1,305,206 in average annualized administrative savings (roughly $2,133 per affected business).
• The federal department’s modelling shows Alberta’s rules will produce roughly equivalent methane reductions to the federal rules: about 18.60 Mt CO2e (Alberta) versus 18.71 Mt CO2e (federal) over 2020–2024, and 57.28 Mt versus 56.48 Mt over 2020–2029 in one comparison.
• There is an expected increase in volatile organic compound (VOC) emissions of 17 kilotonnes (kt) compared with what the federal rules would have delivered in Alberta; the government says the extra VOCs are unlikely to have large national health impacts because the affected facilities are mostly in remote areas.
• The equivalency will be reviewed annually and is time-limited (maximum five years), so the arrangement can be re-assessed or changed in the future.