Oil industry group confident new methane regulations will help keep Trans Mountain pipeline on track

The head of Canada's largest oil industry lobby group is confident that stringent new methane regulations will help move the needle in favour of expanding the controversial Trans Mountain pipeline.

CAPP announced a plan to reduce the Alberta energy industry's methane emissions by 45 per cent by 2025

CAPP president Tim McMillan speaks with CBC Edmonton on Monday. (Peter Evans/CBC)

The head of Canada's largest oil industry lobby group is confident that stringent new methane regulations will help move the needle in favour of expanding the controversial Trans Mountain pipeline.

That's despite political pushback against the oilsands project in British Columbia, and the recent cancellations of the Northern Gateway and Energy East pipelines.

"I'm quite confident that it will [be built]," said Tim McMillan, president of the Canadian Association of Petroleum Producers (CAPP), in an interview Monday with CBC News.

"The company has successfully raised the capital, moved the project forward and are committed to getting it built. So I'm quite positive."

The federal government approved the twinning of the $6.8-billion Edmonton-to-Burnaby pipeline owned by Kinder Morgan in July, subject to 157 conditions.

"It's got approvals, it's got the support of the federal government," McMillan said.

But, then again, so did Enbridge's Northern Gateway — a proposed pipeline from the oilsands through northern B.C. that was ultimately derailed by grassroots opposition from local Indigenous communities.

This map depicts the level of methane emissions from oil and gas operations, which make up the bulk of Canada's total methane emissions, by province. (Environment Canada)

On Monday, CAPP announced a plan to reduce the Alberta energy industry's methane emissions by 45 per cent by 2025, matching federal targets announced this year.

The plan, according to the group, would cost the oil and gas industry $700 million over eight years, protect nearly 7,000 jobs and see $710 million reinvested in Alberta's economy.

U.S. sees investment as restrictions loosened

"The reality is we are seeing more capital going south of the border than into Canada," McMillan said. "We've seen, over the last few years, an increasingly difficult time attracting capital from the U.S."

Promoting stricter greenhouse gas regulations for industry, at a time when the U.S. is rolling back its own climate commitments, may seem incongruous with the goal of attracting more companies to the Canadian oil patch. But McMillan said promoting regulatory stability is key.

"The U.S. was a partner with us on the methane reductions, then they said they weren't," McMillan said. "They were a part of Paris [climate agreement] and now they said, 'We're not.' So we have to balance Canada's leadership position with our ability to continue to be a global supplier — aspiring to be a global supplier of choice."

CAPP's recommendations

CAPP's methane-reduction plan hinges on attracting investment in new methane measurement and leak-detection technologies, and asking the government for flexibility on emissions-reduction targets on a company-by-company basis.

CAPP has come under criticism lately for being too oilsands-focused at the expense of conventional oil producers in Alberta and Saskatchewan. Some conventional producers have quit CAPP over the issue.

Many of those conventional producers argue that if it weren't for the oilsands, environmental groups would not be beating up on the industry so forcefully to begin with, and the federal and provincial governments would not be imposing methane regulations or carbon pricing at all. 

"We are a voluntary organization and we have members that have left," McMillan admitted. "The climate file is one that is obviously challenging for, I think, not just our industry but all industries."

The oil and and gas industry is the largest source of methane emissions in Canada, accounting for 44 per cent of total emissions, according to 2014 data from Environment Canada. The next largest contributor is agriculture at 26 per cent.

Canada's total methane emissions, by source, are depicted in this graph based from Environment Canada, which is based on 2014 data. (Environment Canada)

Methane, a greenhouse gas that's 25 times more damaging to the environment than carbon dioxide, is the primary component of natural gas, which leaks from oilfield infrastructure like pipes, valves, storage tanks and compressors.

It's also vented into the air from oil wells when it's present in concentrations too low to burn off in a process known as flaring.

Global methane hits record high

The global concentration of atmospheric methane hit a record high in 2016 and is now 257 per cent of pre-industrial levels, according to a report released Monday by the World Meteorological Organization.

If Canada can position itself as a leader in reducing methane emissions through initiatives like those recommended by CAPP, then Canadian oil products — and Canadian pipelines — will be recognized as the most environmentally responsible option on the world oil market, both in Canada and abroad, McMillan said.

"We can't control Nigeria — we can encourage them to make the right policy choices," McMillan said. "But in Alberta, we have set the 45-per-cent target. We've all agreed that we have to work towards that."

Environmental and Indigenous groups have filed for a judicial review of the Trans Mountain pipeline that some supporters fear could ultimately overturn the project's federal approval.


Todd Coyne is a writer and editor with CBC Edmonton.