CERI study shows methane emission reduction regulations save billions

A new study from the Canadian Energy Research Institute (CERI) suggests the oil and gas industry could save billions of dollars if governments implement optimized methane emission reduction regulations instead of requiring the same level of cuts at every emitting source. Methane is the main component of natural gas and thought to contribute to climate change.

CERI’s findings support a recommendation by CAPP that industry be allowed the discretion to make methane reductions on a cost-effective basis. CEO Allan Fogwill says CERI’s study examined three scenarios: one in which all possible means were employed to reduce all emission sources, another required every methane emitter to cut by the 45 percent amount, and the third where emission cuts were implemented on a best-bang-for-the-buck basis.

The first exceeds the target, resulting in an emissions reduction of 35 million equivalent tonnes of carbon dioxide per year but at a cost of CAD $3 billion to $5.5 billion to implement.

The second achieves the 45 percent or 20-million-tonne-per-year goal and costs CAD $1.5 billion to $2.5 billion, while the third cuts more than 22 million tonnes of emissions and costs just CAD $500 million to $1.5 billion.

The federal government has proposed regulations for methane emission reductions from the upstream oil and gas sector to start early next year. Their target is to cut emissions by 45 percent below 2012 levels by 2025; Alberta has the same percentage target but compared with 2014 emissions. Mr. Fogwill says a problem with methane emission targets is that data is incomplete and therefore implementation should be delayed.