On October 4, 2022, The Canadian Government released their Draft Guidance for best-in-class GHG emissions performance by oil and gas projects. This has been anticipated since it was announced in April 2022.
This announcement comes at a time of the confluence of several issues around traditional energy including the Government’s commitment to reduce anthropogenic greenhouse gases 40-45% below 2005 levels by 2030 and Net Zero by 2050; an increased demand for reliable energy, especially in Europe; and the battle between the Canadian federal government and Alberta Supreme Court over Bill C-69 (Impact Assessment Act – IAA). The IAA is the basis of the Draft Guidance.
Elements of the Draft Guidance
According to the Draft Guidance, it is “part of a suite of Government of Canada measures to reduce oil and gas sector emissions and to support the goal of net-zero emissions by 2050.” The measures include:
- Developing regulations to reduce oil and gas sector methane emissions by at least 75% below 2012 levels by 2030;
- Capping oil and gas sector emissions at current levels and reducing them at the pace and scale needed to get to net-zero by 2050;
- Developing a common global standard to determine the emissions intensity of hydrogen production in collaboration with provinces, territories, businesses and governments globally;
- The Clean Fuel Regulations, which set increasingly stringent requirements on fuel producers and importers to reduce the lifecycle emissions intensity of gasoline and diesel; and
- Providing various supports through programs to reduce the costs of significant decarbonisation investments within the oil and gas sector.
According to the guidance, it is “intended to help proponents of designated oil and gas projects that are subject to a federal Impact Assessment under the IAA to demonstrate best-in-class GHG emissions performance.”
The guidance applies to oil and gas projects that are subject to a federal assessment under the IAA, including:
- Offshore production;
- Onshore production;
- Pipelines; and
- Processing facilities, including oil refineries, heavy oil upgraders, natural gas processing and LNG (Liquefied Natural Gas).
Environment and Climate Change Canada will accept comments on the draft guidance until December 3, 2022. Comments are to be submitted by email to: firstname.lastname@example.org.
The final guidance is expected to be published in early 2023.
You can read the draft in its entirety here, “Draft guidance for the submission of information demonstrating best-in-class GHG emissions performance by oil and gas projects undergoing a federal impact assessment.”
As you may recall, in May, Alberta’s appeal court struck down the IAA, calling the law an existential threat to each province’s right to control its own resources. However, as reported by the CBC, “The Liberal government was quick to announce its plan to take the Alberta court’s non-binding opinion to the Supreme Court…the Office of the Attorney General of Canada completed its notice of appeal, and filing deadlines have now been set.”
The former Premier, Jason Kinney said, “(The) federal approvals process … creates uncertainty and unnecessary delays and that is exactly why we kept our commitment to sue the federal government on the constitutionality of the bill.”
Alberta’s new Premier, Danielle Smith has also been vocal in opposing policies from Ottawa. “We will not have our resources landlocked or our energy phased out of existence by a virtue-signalling prime minister. Albertans, not Ottawa, will chart our own destiny on our own terms and we will work with our fellow Canadians to build the most free and prosperous country on earth.”
That said, as reported in the Globe and Mail the Premier told reporters that “The Supreme Court is the ultimate arbiter…when the Supreme Court makes a decision, we have to abide by that.”
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