Alberta is making up to $250,000 available annually, per small- and mid-sized facility in the oil and gas industry, to help reduce methane waste through leak detection and repair, energy-efficient equipment upgrades and other measures. The new Methane Emissions Reduction Program is designed for oil and gas facilities operating in Alberta that produce no more than 40,000 barrels of oil per day. A total of $5 million is available.
Methane is a potent greenhouse gas, and the oil and gas industry is Alberta’s largest source of methane emissions, accounting for 70% of the provincial total and 25% of all emissions from the upstream oil and gas sector.
Alberta has an offset credit program for methane reduction that larger facilities are taking advantage of, explained Environment and Parks Minister Shannon Phillips at a press conference. But the initial capital investment puts the offset program out of reach of smaller operators, she said. This new program is intended to help bridge that gap.
Phillips also took a swipe at her neighbouring province, noting that the suite of incentives for methane reduction in Alberta came out of its climate leadership plan, and that those incentives would not be available to Saskatchewan’s oil and gas industry under the federal backstop that will be imposed on Saskatchewan come January 1, 2019.
Alberta companies will be “poised to compete, poised to take advantage of the economic benefits of greenhouse gas emission reductions,” said Phillips. “Saskatchewan has none of that.”
Methane reduction in the oil and gas sector is a cost-effective way to cut emissions, according to David Tyner and Matthew Johnson, two Carleton University researchers who recently analyzed the mitigation potential of nearly 10,000 individual sites in Alberta. They found that a 45% reduction in vented methane emissions is both feasible and economically efficient.
Capital costs will largely be offset “by revenue from capture of saleable gas into pipelines or reduced reliance on supplementary propane use at production sites,” said Tyner, a research associate at the Energy and Emissions Research Lab (EERL), in a release. “The net average cost to industry is less than $2.50 per tonne CO2e and some sites could be profitable depending on the scenario considered.”
“Compared to federal and provincial carbon price targets of $30 to $50 per tonne, these actions are incredibly cheap,” added Johnson, a Canada Research Professor in Carleton’s Faculty of Engineering and Design and head of EERL.
The Alberta Energy Regulator is developing provincial oil and gas methane standards. The province has also launched the Emissions Reduction Alberta’s Methane Challenge, which has invested in 12 methane-reducing technology projects.