Natural Resources Minister Jonathan Wilkinson is overhauling a methane reduction program that the environment commissioner slammed last fall as poorly designed and a waste of money.
The third round of applications for the C$675-million onshore program of the Emissions Reduction Fund was initially set to close Friday, but has been put on hold while Wilkinson’s department tries to address some of those concerns, The Canadian Press reports.
A relaunch is tentatively scheduled for the third week of January with applications due by March. Wilkinson promised the changes will adjust program requirements to make things more transparent, achieve better results, and set limits on how much projects can cost per tonne of emissions they reduce.
The program offers loans of up to $50 million to help oil and gas producers meet or exceed regulations enforcing cuts to their methane emissions.
The first two rounds resulted in $134 million in funding for 81 projects by 26 companies.
The federal government claims those projects will cut more than four million tonnes of greenhouse gas emissions. But Environment Commissioner Jerry DeMarco raised a number of red flags about the program in an audit released in November, including whether to believe the claimed emissions cuts.
He also said the program did not ensure companies weren’t just using the new funds to pay for projects they were already planning, in which case the program wasn’t achieving any new emissions cuts and wasn’t good value for money.
DeMarco said applications from several companies included a claim that the loan funds would allow them to reduce their methane emissions so much they could increase oil and gas production and still hit the targets set by new methane regulations. But, he noted, any increased emissions from that added production were not part of the calculation of the emissions reduced through the funding program.
DeMarco said the program needed “a vast improvement.”
Controlling methane, a shorter-lived greenhouse gas that is 80 to 85 times more potent a warming agent than carbon dioxide over a 20-year span, is critical to slowing climate change.
It accounts for 13% of Canada’s total emissions and 40% of emissions from the oil and gas sector, mostly from venting and flaring of methane at fossil production sites, CP says. Venting is a controlled release of unburned gases that are left over during the oil and gas production process. Flaring is a controlled burning of waste gas, often visible as a large flame at the top of a stack on a production site.
Many projects funded to date reduced or eliminated venting and flaring, but Wilkinson said going forward only projects that eliminate it will qualify.
The new criteria will also include a requirement that projects go above and beyond the existing regulations that require a 40% cut in fossil sector methane emissions from 2012 levels by 2025.
A report released last month claims Canada is on track to get there. The federal government is also starting work on the next target, of 75% below 2012 levels by 2030, and joined a global methane pledge to cut all methane emissions 30% below 2020 levels by 2030.
When that pledge was announced during the COP 26 climate summit in early November, experts called for a tougher 2030 target, consistent with the science assessment released earlier in the year by the Intergovernmental Panel on Climate Change.
Outside the oil and gas sector, agriculture and landfills are the biggest sources of methane in Canada.
This report by The Canadian Press was first published January 7, 2021.