With the federal government announcing new regulations capping oil and gas emissions, the indirect impacts are something companies operating in this district and elsewhere in Alberta and other stakeholders will need to consider, says Mark Taylor, former chief operating officer with the Alberta Energy Regulator (AER).
The federal government has announced new regulations that will require oil and gas companies to reduce emissions by one-third over eight years starting in 2026.
Federal environment minister Steven Guilbeault says the reductions are needed as part of the nation’s overall response to climate change; Premier Danielle Smith says the reductions amount to a production cap on a provincial resource.
Taylor’s consultant company, Taylor Energy Advisor, works with oil and gas companies across the province.
“The number one thing that always bothered us as a regulator is you are worried about the unintended consequences of any regulation that you put into place,” Taylor said. “The rule seems simple but what could the knock-on effect be?
“Let’s assume that Alberta is operating right at the cap, so we can only emit X amount of CO2 related to oil and gas production in total. And then you come along with a new company and you have the absolute best technology ever invented in the oil and gas industry and you can add a million barrels of production a day in Alberta and all you need to emit is a thousand tonnes of CO2 but we are at the cap.
“Now how do you regulate that? You still need a thousand tonnes of emission space and there is none because Alberta as whole is running right at the cap.
“Do you tell the new company to go packing and take the technology somewhere else or do you go to an existing company and tell them they have to shut in and we’re essentially expropriating their asset?”
The AER oversees oil and gas development in Alberta.
SPOG is a collection of oil and gas companies with operations in the district.
With details of the new federal regulations pending, SPOG companies are working with the Alberta Methane Emissions Management Program (AMEP) as part of emission reduction efforts, says executive director Tracey McCrimmon.
“For the past three years, the Technology Innovation and Emissions Reduction (TIER)-funded AMEP has been working with oil and gas producers, service providers and academia to develop and deliver cost effective and efficient solutions to identify, quantify and, ultimately, manage fugitive and vented methane emissions at over 3,000 operating well sites and facilities in Alberta,” McCrimmon told the Albertan.
“It has supported the testing, evaluation and deployment of methane identification and quantification technologies including aerial and truck-mounted platforms as well continuous monitoring.
“The data and insights derived from AMEP will not only inform governments, regulators and producers on the performance opportunities associated with continuous monitoring but on the optimal means of reducing methane emissions with a much larger tool set.”
