The federal government continues to develop additional regulatory framework surrounding sustainability and climate-related issues. The most recent focus is on the Oil and Gas sector. We also cover a new voluntary sustainability program and new commitments made by the Canadian Government at the Conference of Parties (COP) 29.
Oil and Gas Sector GHG Cap
The Government of Canada recently (Canada Gazette, November 9, 2024) released the proposed “Oil and Gas Sector Greenhouse Gas (GHG) Emissions Cap Regulations.” The proposed regulations set a cap on GHG emissions from the oil and gas sector. The proposed regulations would require a reduction in GHG emissions equivalent to 35% below 2019 levels.
The proposed regulations are expected to achieve GHG reductions while enabling the Oil and Gas sector to increase production from historic levels. “This would address the Government’s objectives for the oil and gas emissions cap-and-trade system to establish a mechanism to ensure the sector reduces GHG emissions and is on a path to net-zero emissions in a way that allows the sector to compete in the emerging net-zero global economy” (Canada Gazette).
According to the announcement, “The obligations under the proposed Regulations would be at the operator level. Operators of all existing facilities would be required to register prior to January 1, 2026. From January 1, 2026, operators would be prohibited from emitting any GHGs from their industrial activities unless they have first registered in accordance with the proposed Regulations.”
The Government of Canada continues to focus of reducing anthropogenic sources of CO2 emissions (Image by Leonhard Niederwimmer from Pixabay)
Who Is Affected By the Proposed Regulations?
The proposed Regulations would apply to all operators of upstream oil and gas facilities and LNG (Liquified Natural Gas) facilities that carry out the following industrial activities:
- Bitumen and other crude oil production, other than bitumen extracted through thermal in situ recovery or from surface mining, including
- extraction, processing, and production of light crude oil (having a density of less than 920 kg/m3 at 15 °C);
- extraction, processing, and production of bitumen or other heavy crude oil (having a density greater than or equal to 920 kg/m3 at 15 °C);
- Thermal in situ recovery of bitumen from oil sand deposits;
- Surface mining of oil sands and extraction of bitumen;
- Upgrading of bitumen or heavy oil to produce synthetic crude oil;
- Extraction of natural gas and natural gas condensates;
- Compression of natural gas between production wells, natural gas processing facilities, or re-injection sites;
- Processing of natural gas or natural gas condensates into marketable natural gas and natural gas liquids; and
- Production of LNG.
In addition to registering, operators would be obligated to provide
- Annual reports: one report for each facility, as defined in the proposed Regulations (i.e. one report for each deemed facility and one for each other facility).
- Report on cumulative production: one report that includes the operator’s cumulative production across all facilities and information on the facilities operated by the operator in the relevant calendar year.
Our World in Data provides an interesting look at global GHG emissions by country or region. You can also see a time-lapse view of GHG emissions and the impact of growing economies such as India and China.
The 60-day consultation period ends on January 6, 2025.
Voluntary Program Announced
On October 10, 2024, The Government of Canada announced the “development of voluntary Made-in-Canada sustainable investment guidelines (otherwise known as a taxonomy) that would categorize investments based on scientifically determined eligibility criteria that are consistent with the goal of reaching net-zero emissions by 2050 and limiting global temperature rise to 1.5°C above pre-industrial levels.”
The plan is aimed at “facilitating financial flows and investments needed to achieve these goals.” The initial focus of the taxonomy will be on sectors including electricity, transportation, buildings, agriculture and forestry, manufacturing, and extractives, including mineral extraction and processing, and natural gas (Source: ESG Today).
While the program is voluntary, some caution should be exercised as ESG-related claims are getting increased scrutiny under Bill C-59 (See our July 15, 2024, blog for details).
For more details, see the Backgrounder, “Government advances Made-in-Canada sustainable investment guidelines to accelerate progress to net-zero emissions by 2050.”
Climate Reparations
Finally, at the COP 29 meeting in Azerbaijan, Steven Guilbeault, Canadian Minister of Environment, promised a financing platform worth more than $2 billion, which can help developing countries prepare for the worst impacts of climate change and shift their economies to cleaner sources of energy.
In an interview, Mr. Guilbeault said, “Canada has played a very important role in terms of working with nations like the European Union, Japan, and the United States in the last many years in helping to mobilize more than $100 billion to help developing countries adapt to climate change and face the impacts of climate change.”
According to the Globe and Mail, The public-private partnership, called GAIA, will devote 70 per cent of its funds to climate adaptation projects, with 25 per cent going to countries classified as “least developed” and “small island developing states.”
“GAIA,” announced at the COP 29 a new finance platform that will “mobilize climate-focused investments in vulnerable regions” (See statement from Environment and Climate Change Canada).
While not defined in the announcement, GAIA in ecological terms is the hypothesis which is, “named after the ancient Greek goddess of Earth, posits that Earth and its biological systems behave as a huge single entity. This entity has closely controlled self-regulatory negative feedback loops that keep the conditions on the planet within boundaries that are favorable to life” (Science Direct).
Lori Kerr, Chief Executive Officer, FinDev Canada (a Crown Corporation) said, “GAIA symbolizes Canada’s leadership in climate and development finance – and accelerates the mobilization of much-needed investment in climate-vulnerable regions.”
See the official announcement by the Government of Canada.
If you need assistance with an environmental permit, contact Christopher Paré, P.Geo., Q.P., at 519-948-7300, Ext. 114.
Dragun Corporation does not use artificial intelligence in drafting our blogs or any other material.
Alan Hahn drafted this blog. Alan has an undergraduate degree in Environmental Studies and completed a graduate program in Environmental Management. He has worked in environmental management for more than 45 years. He has written hundreds of blogs and articles. His published work includes HazMat Magazine, BizX Magazine, Michigan Lawyers Weekly, GreenStone Partners, Manure Manager Magazine, and Progressive Dairy.
Christopher Paré, P.Geo, reviewed this blog. Chris is a senior geoscientist and manager of Dragun’s Windsor, Ontario, office. Chris has more than 35 years of experience on projects ranging from environmental site assessments (Phase One/Two ESA), excess soils, remedial investigations, soil and groundwater remediation, Permits to Take Water, Records of Site Conditions, vapour intrusion, and site decommissioning. Chris is a frequent speaker, author, and expert witness. See Chris’ bio.
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