Canada’s oil and gas producers will need to reduce greenhouse gas emissions by approximately one-third over the next eight years under new regulations unveiled today by Environment Minister Steven Guilbeault.
These draft regulations, which are about two years behind schedule, could heighten tensions between Ottawa and the Alberta government. Alberta recently launched a $7-million advertising campaign to “scrap the cap.”
The regulations fulfill a 2021 Liberal election promise aimed at ensuring the energy sector contributes more significantly to combating climate change.
In 2022, upstream oil and gas operations, including production and refining, accounted for around 31 per cent of Canada’s total emissions. The new rules propose that emissions from these operations be reduced by 35 per cent compared to 2019 levels by 2030-2032.
Between 2019 and 2022, emissions from the sector fell by seven per cent, despite similar production levels.
The regulations do not prescribe specific measures for companies but suggest that about half the emissions cuts will come from reducing methane leaks, a process already underway as producers upgrade equipment.
The remainder of the cuts are expected to come from various technologies, including carbon capture and storage. The government plans to spend approximately $12.5 billion on a tax credit to support investment in systems that capture carbon dioxide and store it underground.
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