According to its individual national determined contribution (INDC) to the United Nations Framework Convention on Climate Change (UNFCCC) following the COP21 Paris Agreement, Canada “is one of the cleanest electricity systems among G-7 and G-20 nations” with almost 80% of its electricity supply emitting no greenhouse gasses (GHGs) at all.
Canada emits 1.6% of the world’s GHGs and has pledged to reduce its GHG emissions by 30% below 2005 levels by 2020 in its INDC. This target is a “substantial reduction” for Canada and will place increasing pressure on the Oil & Gas Industry to do more to limit and monitor GHG emissions from the flaring process.
In Alberta — the country’s main oil and gas region — the recovery of gas from oil and bitumen production fell from 96.3 per cent in 2005 to 94.5 per cent in 2011 as a consequence of the drop in natural gas prices. As gas prices fall, investment in gas recovery falls and there is a correlating increase in routine flaring. There is a concern that other Canadian regions will follow suit and resort to using the flaring process as a means of routinely burning excess gas, which would have a detrimental effect on the wider environment and the ability of Canada to reach its INDC target. Gas capture infrastructure is expensive and operators will need to work out how they can monetise these operations to encourage the necessary investment.
The flaring of gas in Canada is governed at both a federal and provincial level. On a national scale, flaring regulations are enforced by a variety of legislation, including the Canada Oil and Gas Operations Act (COGO), the Canada-Newfoundland Atlantic Accord Implementation Act and the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act. This legislation governs the technical and operational aspects of oil and gas production in Canada’s Frontier Lands in the Northwest Territories and the offshore areas of British Columbia, Nova Scotia, Newfoundland and the Arctic Circle.
The COGO Act places a duty on operators to ensure flow rates and volumes are consistently recorded and reported. This is achieved by measuring the total amount of liquids produced from each well and covers any fluid that enters, leaves, is used or flared, burned or otherwise disposed of on an installation.
In Alberta, flaring and emissions are governed by the Environmental Protection and Enhancement Act (EPEA). This specifies that operations that flare more than 500 cubic metres of gas must accurately measure its release to within a five per cent uncertainty — with an allowed 20 per cent uncertainty over a period of one month. British Columbia, which is aiming to eliminate routine flaring at all oil and gas production facilities by the end of 2016, applies the same flaring rules as Alberta, with single-point measurement and monthly uncertainties of five and 29 per cent respectively.
Regulation of oil and gas production is stricter in Newfoundland, Labrador, and Nova Scotia, where operators are encouraged to reduce flaring and venting through guidelines issued by the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) and the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB). These state that an operator is — under no circumstances — allowed to flare or vent gas unless it has prior approval or because of an emergency.
With more countries now turning to unconventional drilling to recover oil in remote areas, there is a concern amongst environmentalists that this will lead to an increase in the use of gas flaring and venting across Canada. However, as a global leader in the fight against climate change, the Canadian government — which has already helped reduce flaring in some regions by more than 80 per cent during the last 20 years — is well equipped to ensure that the country meets its “ambitious but achievable” GHG targets.
