Federal Methane Rules Suspended in Alberta

Summary#

This notice (published June 6, 2020) would make the 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. In plain terms, it would suspend the federal methane/VOC rules in Alberta (except for federal works and undertakings) because Alberta has its own rules that the federal government judges to be equivalent.

What it does#

• Declares that the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) will not apply in Alberta, except for federal works and undertakings (for example, some interprovincial pipelines).
• Relies on an equivalency agreement between the Government of Canada and the Government of Alberta that says Alberta’s rules deliver equivalent methane reductions. The agreement would last up to five years and can be ended early with three months' notice.
• Recognizes Alberta’s rules, notably the Methane Emission Reduction Regulation (which incorporates amended Directive 060 and Directive 017) and enforcement provisions in the Environmental Protection and Enhancement Act, as the provincial framework that will be used instead of the federal regulation.
• Most of the order would take effect when it is registered. A specific part of the order has a later start date of January 1, 2023.

Who's affected#

• Oil and gas facilities in Alberta — these would follow Alberta’s rules instead of the federal methane/VOC regulation (except for federal works and undertakings).
• Small businesses that operate medium-to-large gas facilities in Alberta — the government identified 354 such small businesses that would be affected by the federal rule but would see reduced overlap under the order.
• Facilities on Indigenous reserve lands: facilities subject to the federal rules were identified on reserves of 26 First Nations; those facilities would fall under the Alberta rules if the order is in effect.
• Industry, provincial regulators, and federal enforcement staff who currently prepare for or administer two parallel sets of rules.

Why it matters#

• It aims to avoid duplicate rules and paperwork. The federal government estimates about $1,385,000 in administrative savings over the five-year life of the equivalency agreement, and average annualized administrative savings of about $1,305,206, or roughly $2,133 per affected business.
• On methane, modelling shows the Alberta rules produce nearly the same reductions over 2020–2024: 18.60 megatonnes (Mt) CO2e for Alberta’s rules versus 18.71 Mt under the federal rules (a 0.6% difference). Over a 10-year horizon Alberta’s totals are slightly higher (57.28 Mt vs 56.48 Mt).
• On volatile organic compounds (VOCs), Alberta’s approach is less strict for routine venting. That is estimated to mean an increase of 17 kilotonnes (kt) of VOC emissions compared with the federal rules — under 1% of the sector’s VOCs in Alberta over the analysis period. The government says population health impacts are likely low because most affected facilities are in remote areas.
• Environmental groups raised concerns that Alberta’s rules had gaps before later updates. The equivalency decision rests on modelling and on periodic reviews; the agreement can be renewed or ended after the up-to-five-year term.
• This change is meant to preserve Canada’s overall methane reduction commitments (about 40%–45% below 2012 levels by 2025) while letting Alberta implement rules tailored to its industry.