Proposed Amendments to Canadian Regulations for Methane and VOC Emission Reduction in the Upstream Oil and Gas Sector

Canada's commitment to reduce methane and volatile organic compound (VOC) emissions in the upstream oil and gas sector by 40% to 45% below 2012 levels by 2025 led to the introduction of regulations in 2020. These regulations focused on emissions limits and mandatory equipment inspection and repair to minimize methane emissions. 

Proposed Amendments: 

At COP28 in Dubai, Minister of Environment and Climate Change, Steven Guilbeault, announced proposed amendments with the aim of reducing methane emissions in the sector by at least 75% below 2012 levels by 2030. The key components of these amendments are as follows: 

1. Risk-Based Approach: Implementing a risk-based approach for leak detection and repair (LDAR) will be pivotal in the amended regulations. 
2. Increased Stringency: Heightening stringency levels for sites at the highest risk of unintentional releases, with a specific focus on fugitive emissions. 
3. Performance-Based Standards: Introducing a performance-based compliance pathway, focusing on emissions outcomes. This approach relies on continuous monitoring systems to detect potential methane emissions, triggering mitigation timelines upon detection. 

Key Emissions Affected: 

• Venting emissions: The amendments prohibit hydrocarbon gas venting, with only minor exceptions, and the update also requires that all pressurized equipment be connected to conservation or destruction equipment with an exclusion when safe operation is compromised. Operators must also take measures to minimize venting maintenance or depressurization. 
• Emissions Associated with combustion of Hydrocarbon gas: Compliance requires combustion systems to have a pilot flame, automatic ignition, automatic flame failure detection, and a minimum carbon conversion efficiency of 98% when using hydrocarbon gas. Exceptions are allowed for catalytic oxidation systems with at least 85% efficiency for small gas volumes (up to 60 m3 per day). Flaring of hydrocarbon gases, except in emergency situations that threaten human health or safety, requires an engineering study to confirm that using the gas for heat or energy generation is not feasible. 
• Fugitive emissions: A risk-based approach for managing fugitive emissions, involving varying inspection frequencies based on facility risk levels, is introduced. Facilities with natural gas compressors, storage tanks for produced liquids, flares, or a gas liquid separator would require quarterly inspections, while all other sites require yearly assessments. All facilities would also require an annual inspection by a third-party auditor. 

Important Dates: 

• Fugitive emissions management requirements apply to all facilities in 2027. 
• Facilities increasing gas production from 2027 onwards must eliminate venting and comply with new requirements, including flaring limits. 
• All oil and gas sector facilities must meet the new requirements by 2030. This phased approach aims to distribute compliance costs over several years, offering flexibility to some facilities for compliance planning and late-life production sites to manage capital expenditures. 

Feedback Deadline:  

Starting December 16, 2023, Environment and Climate Change Canada will accept feedback on the draft regulations for 60 days through the Online Regulatory Consultation System. The deadline for comments is set for February 14, 2024. 

For further information on the changes, please reach out to support@envirosoft.com  

We strongly encourage you to provide your feedback and contact us with any questions on how you may be affected by the proposed changes.