Canadian oilpatch group explains why it stayed out of global climate effort

Canada’s main oil and gas industry lobby group says it stayed out of a recent global effort by fossil fuel companies to strengthen action to fight climate change. But the group says its own plan to cut a potent form of carbon pollution "incorporates several of the same ideals."

The comments from the Canadian Association of Petroleum Producers (CAPP) come as one of the largest energy firms in the new international effort, Royal Dutch Shell, announced it will cut the net carbon footprint of its oil and gas products around the world roughly in half by 2050.

Shell chief executive officer Ben van Beurden told investors Tuesday that as an interim step, the firm will aim for a 20 per cent cut by 2035.

Shell was doing this "in step with society’s drive" to align with the Paris Agreement on combating climate change, said van Beurden. The Paris deal aims to keep the world from warming more than two degrees Celsius on average compared to pre-industrial levels by the end of the century, in order to slow the destructive impact of climate change.

"We will do it by reducing the net carbon footprint of the full range of Shell emissions, from our operations and from the consumption of our products," he said in a statement.

Last week, Shell also joined seven other oil and gas firms in signing a document of "guiding principles" committing them to reduce pollution of methane, a potent greenhouse gas, from their natural gas drilling.

The document, spearheaded by the Climate and Clean Air Coalition (CCAC) — a partnership of governments and the private sector advocating for cuts to potent forms of carbon pollutants — said the firms will "reduce venting, and fugitive methane emissions, and improve combustion efficiency."

Methane is 86 times as powerful as carbon dioxide in trapping heat in the atmosphere over a 20-year period, so it's an effective way to cut carbon pollution quickly.

CAPP 'did not participate' in global methane effort

The oil and gas industry in Canada is at the centre of efforts to cut methane, as it constitutes 95 per cent of natural gas. The energy sector in Canada was responsible for the largest portion of Canada's methane emissions in 2015, according to the country's most recent national emissions profile.

The Trudeau government rolled out a plan earlier this year to cut methane 40 to 45 per cent below 2012 levels by 2025.

But in Alberta, where the oil and gas sector accounts for 70 per cent of provincial methane emissions, the province is still working out how it will achieve its plan to cut methane 45 per cent by 2025, and has continued talks with industry over draft rules through Dec. 1.

Debate over Alberta's rules intensified after research showed industry and government underestimating methane emissions in Alberta. In August, an environmental coalition came together to push the province to make its methane rules as stringent as possible.

CAPP is promoting its own plan for Alberta that it calls a "flexible approach," saying it can achieve that same 45-per-cent cut while also avoiding "prescriptive" enforcement, which it claims will lead to the "loss of nearly 7,000 jobs."

CAPP media relations adviser Tonya Zelinsky said the lobby group "did not participate in the process" to develop the "guiding principles" at CCAC, but was aware of the effort. She also noted some signatories to the CCAC effort have operations in Canada.

"Our methane action plan incorporates several of the same ideals as the CCAC’s guiding principles, including encouraging continuous improvement at new operating sites and the use of innovation and technology," she said.

Ottawa added to methane committee as observer

Alberta Premier Rachel Notley said earlier this year that her province's draft rules would be "in place this fall," but discussions inside Alberta's Methane Reduction Oversight Committee have continued through Dec. 1, Alberta Energy Minister Margaret McCuaig-Boyd's office confirmed to National Observer.

Depending on the outcome of those discussions, the draft rules "could take some time," said McCuaig-Boyd's spokesman Mike McKinnon.

"As you know, we must achieve equivalency with federal regulations in order to not have a plan imposed on us by Ottawa," he said.

The committee has been sparring over how methane reduction targets will be enforced, the Financial Post reported. Both the federal government and CAPP have now been added to the committee.

McKinnon said Ottawa was added as an "observer" in order to "help speed up the process."

Zelinsky declined to comment on "the Alberta government’s rationale for delaying the release of draft methane reduction regulations."

"However, CAPP welcomes the opportunity to work collaboratively with the government," she said. "Industry has taken the initiative to take action towards reducing emissions in advance of any provincial regulations. We recognize the importance of addressing climate change."

Environmental groups say results depend on action

In addition to cutting methane gas emissions, the "guiding principles" document also commits companies to incorporate the "management of methane emissions" in any new projects or maintenance plans and to provide "financial and operational support" for new technologies to monitor and reduce methane.

"Documents like this matter if the intent is carried forward into action within specific government regulatory discussions where real actions are being discussed," said Tim Gray, executive director of Environmental Defence Canada.

The principles cover the "gamut of issues to be addressed in regulatory discussions on how to reduce methane emissions,” said Gray.

“In the Canadian context this means that signatories would need to behave in a consistent manner within the discussions underway in Alberta and at the federal level.”

Andrew Read, senior analyst at the Pembina Institute, said the International Energy Agency has noted that companies will need to take action to ensure they maintain market share.

"These commitments are important and align with the oil and gas industry's recognition that they need to manage upstream emissions to maintain any role for natural gas in a decarbonized world," said Read.

He also cautioned that success will "completely depend on the actions that are driven from it...the commitment is the first step to some potential meaningful action to reduce methane releases."

The CCAC effort was also praised by the Alberta energy minister's spokesman.

"We know Alberta’s oil and gas industry and environmental groups are up to the challenge, as evidenced by initiatives like the guiding principles released by those companies," said McKinnon.

Canada is a “founding member” of the CCAC, and has been co-chairing the oil and gas subcommittee of its Global Methane Initiative.

At the UN climate meeting in Bonn, Germany, Canada led the coalition's annual assembly, and is hosting its Global Methane Forum in Toronto next spring.