Canada: From Commitment To Action: New Proposed Regulations To Reduce Emissions In Canada's Oil And Gas Industry

On May 27, 2017, the federal government published the proposed Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) (the Proposed Regulations) in the Canada Gazette Part I. The Proposed Regulations are designed to meet the federal government's domestic (under the Pan-Canadian Framework on Clean Growth and Climate Change) and international commitments (under the Paris Agreement) to reduce methane emissions by 40–45% by 2025. In particular, the Proposed Regulations seek to introduce control measures (i.e. facility and equipment level standards) to reduce fugitive and venting emissions of hydrocarbons, including methane, from the oil and gas sector. Depending on the standard adopted, the Proposed Regulations would come into force on January 1, 2020 or January 1, 2023. Both Alberta and British Columbia (BC) have also made matching commitments under their climate change strategies to reduce methane emissions in the oil and gas sector by 45% by 2025.

Current Regulatory Context

According to the Regulatory Impact Analysis Statement prepared by Environment and Climate Change Canada (ECCC), the oil and gas sector is the largest emitter of greenhouse gases (GHG) in Canada and, more specifically, the largest industrial emitter of methane in the country. The most recent emissions data indicates that the GHG emissions from production and processing activities in the oil and gas sector account for 26% of Canada's total GHG emissions. In 2012, 90% of methane emissions from the oil and gas sector came from upstream activities, with the major sources of emissions being facility production venting, fugitive equipment leaks, well completion by hydraulic fracturing, pneumatic controllers and pumps, and compressors.

While there are currently no federal regulations established to regulate GHG emissions from upstream activities, certain provinces including BC, Alberta and Saskatchewan have requirements in place to address fugitive and venting emissions. In addition, the Canadian Association of Petroleum Producers (CAPP) and the Canadian Standards Association (CSA) have established guidelines for flaring (CAPP) and addressing fugitive and vented emissions from certain point sources (CSA). In BC, the Flaring and Venting Reduction Guideline applies to the flaring, incineration and venting of natural gas at well sites, facilities and pipelines. Alberta's Directive 060 sets outs requirements for incinerating and venting at all petroleum industry wells and facilities. Saskatchewan's Directive S-10 establishes requirements for the reduction of flaring and venting of associated gas, applicable to oil wells, associated gas processing plants, and any wells that vent, flare or incinerate associated gas; Directive S-20 provides performance requirements and specifications for equipment spacing and setback distance specifications for oil and gas flaring and incineration, which are applicable to licensed wells and facilities. The Proposed Regulations are designed to bring a consistent approach to methane emission reductions from the oil and gas sector in terms of scope and coverage.

Overview of Compliance Obligations

The Proposed Regulations would target emissions from the upstream oil and gas sector by implementing facility and equipment level requirements. In particular, the Proposed Regulations would impose both general requirements and requirements that are conditional on a facility producing and receiving at least 60 000 m3 of hydrocarbon gas in any of the previous five years of operations. Facility level requirements would include emission limits on facility production venting and leak detection and repair (LDAR) standards. At the equipment level, there would be requirements for well completion by hydraulic fracturing, as well as limits on emissions from pneumatic devices (controllers and pumps) and compressors. Facility operators with the charge, management, or control of the facility will be responsible for ensuring compliance with the requirements.

The Proposed Regulations' general requirements target emissions from the following methane sources:

  1. Well Completion by Hydraulic Fracturing

    As of January 1, 2020, these sites must conserve or destroy methane gas instead of venting it. However, the requirement will not apply in Alberta or BC, where provincial measures already exist.
  2. Compressors

    As of January 1, 2020, the flow rate of methane emissions of a compressor must be measured annually. If emissions exceed 0.17 m3 per minute for centrifugal compressors and 0.023 m3 per minute for reciprocating compressors, corrective action is required. Any new compressors installed must capture and route gas to the facility's gas conservation equipment.
  3. Gas Conservation and Destruction Equipment

    As of January 1, 2020, gas conservation equipment must capture and conserve at least 95% of methane gas, and gas destruction equipment must comply with provincial guidelines and rules.

The Proposed Regulations' conditional requirements (i.e. facilities meeting the 60,000 m3 per year threshold in any of the previous five years) in a year target emissions from the following methane sources:

  1. Facility Production Venting

    As of January 1, 2023, facilities must not vent more than 250 m3 per month except in emergencies. These facilities would need to capture the gas and either use it on site, reinject it underground, send it to a sales pipeline, or route it to a flare. Facilities that vent less than 40,000 m3 of gas per year without destroying or selling any would not be required to destroy or conserve it.
  2. Pneumatic Controllers and Pumps

    As of January 1, 2023, controllers with a total compressor power rating of 745 kilowatts (kW) or more must not emit methane. Similarly, pumps pumping an average of more than 20 L of liquid per day must not emit methane as of January 1, 2023. However, where it would not be technically or economically feasible for a facility to comply with the pump requirement, the facility may apply for a permit exempting it from this requirement.
  3. Equipment Leaks

    As of January 1, 2020, upstream oil and gas facilities (except single wellheads) would be required to implement LDAR programs with inspections three times a year using eligible leak detection instruments. If a leak is discovered, the leak must be repaired (1) within 30 days of being discovered where repairs are possible while facility is operating; (2) within 365 days of being discovered where the facility is located offshore; and (3) during a planned shutdown after being discovered where repairs are not possible without shutting down the facility.
  4. Other Equipment

    As of January 1, 2020, open ends of pipes and hatches must be closed in a way that minimizes methane emissions. Likewise, sampling systems or pressure relief devices must be installed and operated in a way that minimizes methane emissions.

All upstream oil and gas facilities would also be required to register and keep records in order to demonstrate compliance with the Proposed Regulations. Further, facilities would be required to submit reports at the request of the Minister. ECCC estimates that the Proposed Regulations would increase annual administrative costs by approximately $1,100 per business. The main administrative costs for business will result from increased record-keeping and document-keeping requirements under the Proposed Regulations. Further, the Regulatory Impact Analysis Statement notes that both industry stakeholders and the federal government are expected to incur incremental costs to ensure regulatory compliance. Most compliance costs are not expected to take effect until 2023 and will be partially offset by recovering the market value of natural gas conserved.

It is estimated that the Proposed Regulations will affect 57,874 oil and gas facilities, owned by 1,062 companies. Although the majority of facilities that would be covered by the Proposed Regulations are owned by medium and large businesses, some facilities operated by small businesses would also be covered (ECCC notes that 579 facilities are owned by 475 small businesses). Therefore, the Proposed Regulations would trigger the small business lens, meaning that several regulatory exemptions would be incorporated into the Proposed Regulations. In particular, facilities operating with a potential to emit under the 60 000 m3 threshold would be exempt from most of the facility-based requirements under the Proposed Regulations. Since most small businesses own facilities that emit gaseous hydrocarbons less than the threshold, ECCC anticipates that they would not be subject to the above requirements or the associated record-keeping and reporting requirements.

Consequences of Non-Compliance

The Proposed Regulations would be made under Canadian Environmental Protection Act, 1999 (CEPA), meaning that fines will be determined in accordance with the applicable CEPA regulations and the Compliance and Enforcement Policy for CEPA (the Policy) will apply. The Policy sets out the range of possible responses to alleged violations, including warnings, directions, environmental protection compliance orders, tickets, ministerial orders, injunctions, prosecution and environmental protection alternative measures (which are an alternative to a court prosecution after the laying of charges for a CEPA violation). The implementation of the Proposed Regulations will require related changes to the Regulations Designating Regulatory Provisions for Purposes of Enforcement (Canadian Environmental Protection Act, 1999), which designate the various provisions in the CEPA regulations that apply the fine regime under the Environmental Enforcement Act (under this fine regime, which came into force in June 2012, designated offences involving direct harm or risk of harm to the environment, or obstruction of authority, are subject to an increased fine range).

Public Comment Period Open Until July 27, 2017

ECCC is accepting public comments on the Proposed Regulations until July 27, 2017. All comments and notices must cite the Canada Gazette, Part I, and the date of publication of the notice, and be sent by mail to the Oil, Gas and Alternative Energy Division, Department of the Environment, Gatineau, Quebec K1A 0H3 or by email to

To view original article, please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.