There is still too much flaring and fugitive gasses in the province and the Alberta government may have to clamp down, the province’s minister of environment told an industry audience this week.
“In the long term we’re obviously going to have to ratchet down the point at which we regulate,” Alberta Environment Minister Rob Renner told a Petroleum Technology Alliance of Canada (PTAC) meeting.
“There are a number of opportunities for a number of – I don’t want to use the term ‘offsets’ because I don’t particularly want to go down that road – but I’ve been in discussion with a number of operators that indicate to me that at this point in time there are not economic incentives in place to deal with the issue of fugitive emissions and methane that may or may not be captured … going into pipelines.”
According to the Alberta Energy Resources Conservation Board (ERCB), of the 14.88 billion cubic metres of solution gas produced in 2008, 306 million cubic metres were flared in 2008 compared to 325 million cubic metres in 2007, a drop of 5.8%.
The Clean Air Strategic Alliance Flaring and Venting Project Team, which is composed of stakeholders from environmental groups, the petroleum industry, the ERCB, Alberta Energy, Alberta Environment and other government agencies, is reviewing the economic test currently used to determine if oil facilities must conserve solution gas.
British Columbia has announced it will begin its regulatory regime at 25,000 tonnes of carbon dioxide equivalent emissions while Alberta’s is at 100,000 tonnes, Renner told PTAC’s annual general meeting.
“I don’t see us going down to 25,000 (tonnes) as fast as British Columbia but I think that industry needs to be aware that there is a movement afoot by others to begin to have the regulatory regime ratcheted down to that point and if that happens elsewhere it will be difficult for us to remain as an outsider,” said Renner.
The province needs to consider ways to mitigate CO2 in particular, on the upstream side of oil and gas operations. Meanwhile government is working on developing a cumulative effects model on the downstream side, at refineries, upgraders and in the petrochemical industry, he said.
Alberta may want to upgrade or retire existing sources of emissions as new sources emerge, he said. “We’re concentrating right now on the Industrial Heartland in the Edmonton region but I think that’s the direction we’ll probably have to go at some point in the future throughout the rest of the province.”
Clearly, the limits that have to be imposed in Ontario, where emissions are far more concentrated than they are in Alberta’s industrial areas, cannot be the same as they are in Alberta, he added. Environment Canada is proposing to set arbitrary limits for emissions from each individual source but that may not work depending on the number of sources, said Renner.
In 2007, Alberta became the first jurisdiction in North America to legislate greenhouse gas (GHG) reductions for large industrial facilities. Any facility that emits more than 100,000 tonnes of GHG per year is required to reduce emissions intensity by 12% from a pre-determined baseline.
Facilities that fail to meet this target have the option of buying Alberta-based carbon offsets, or paying $15 a tonne over reduction targets into a technology fund entitled the Climate Change and Emissions Management Fund. The fund supports projects and technologies aimed at reducing GHG emissions in the province.
That fund was worth $123.4 million at last count but Renner suspects an update following the March 31 reporting deadline will put the current amount at about $200 million if trends continue. An arm’s length board has short-listed 31 projects that might use the fund.
“I’m looking forward to seeing where the technical and advanced review process ends up at,” said Renner.
Alberta’s $15 compliance fee has been criticized for not being high enough but Renner noted that “it’s $15 more than anyone else at this point,” and until similar costs are imposed throughout the rest of Canada and more importantly in the U.S. there is little incentive for the province to increase that amount.
Alberta Environment has revamped its State of the Environment website to provide detailed information about the current state of the province’s land, air, water and biodiversity.
According to the department, indicators show that the overall state of the province’s environment “is good and is consistently meeting or exceeding standards. In areas of higher development, environmental data shows some levels are increasing but still well within acceptable limits.”
The site is www.environment.alberta.ca. Click on the State of the Environment icon to access detailed environmental trend and indicator data for air, land, water and biodiversity.
Renner also said his government wants to ensure that in following the U.S.’s lead on whatever environmental measures that country legislates, Alberta is not required to follow it step-for-step and incur extra costs. In his discussions with American and Canadian government officials he has emphasized that there needs to be flexibility.
The Alberta government does not view the proposed cap and trade system as being an effective way of addressing the province’s issues, at least in the short term, he said. An unrestricted cap and trade market means Alberta’s emitters “would pick everyone else’s low-hanging fruit for them and then at some point in time the arrows would all be pointed back at Alberta, saying, ‘Well, we’ve all solved our problem, why haven’t you done anything about yours?” he said.
“The reason we haven’t done anything about