Province makes it easier for oil and gas producers to sign up for emissions reduction program

Photo courtesy Government of Saskatchewan.

The provincial government has amended regulations in Saskatchewan’s climate change strategy.

In a press release issued Tuesday, the province highlighted the amendments, made in July, that allow oil and gas emitters of any size sign up to the province’s voluntary emissions reduction program, exempting them from paying the federal carbon tax.

The province hopes the move will make Saskatchewan more attractive to these companies and make them more competitive while still reducing emissions.

In 2019, the province introduced performance standards required for facilities that emit at least 25,000 tonnes of carbon dioxide equivalent.

Since then, amendments were made to allow for voluntary registration for facilities in the upstream oil and gas sector wishing to combine emissions into an aggregate facility for a combined 10,000 tonnes of equivalent.

In July of this year, that threshold was lowered to zero for upstream oil and gas aggregate facilities.

 “The new threshold to the output-based performance standards will enable many smaller oil and gas producers to be covered by provincial regulation and protect them from the federal carbon tax, which will save them millions of dollars,” Energy and Resources Minister Bronwyn Eyre said. “Our provincial standards are designed to achieve real GHG emission reductions, while at the same time protecting competitiveness and limiting carbon leakage and investment flight to jurisdictions with lower regulatory standards.”

Registering in the performance standard protects facilities from the federal carbon tax. Instead of paying the increasing federal price per tonne of greenhouse gases, the companies instead reduce the intensity of their emissions from 2019 onward through the Saskatchewan program, or comply through one of three provincial mechanisms.

One mechanism is the Saskatchewan Technology Fund. Emitters may choose to pay into a new technology fund if they don’t reduce their emissions as per the province’s schedule. Money from the fund will be used drive innovation and reduce emissions at regulated facilities through a competitive and criteria-based application process.

The second mechanism is best performance credits.

Those credits are generated by facilities that reduce their emissions beyond what the province requires in their performance standard. The standards for the credit system were developed for a fall launch.

The third mechanism is a carbon offset program. The government held engagements on the program in 2019, but delayed further engagements due to COVID-19 concerns.

In the meantime, the ministry will develop proposed offset protocol including agricultural soils sequestration, enhanced oil recovery, composting, landfill gas and opportunities for regional and national alignment.

“Since the regulations and voluntary registration were introduced, 66 large emitting facilities and 24 aggregates containing more than 10,000 individual facilities are now registered in the program and must comply with provincial climate change legislation,” Environment Minister Dustin Duncan said.

 “These facilities generate 13 per cent, or approximately 10.3 million tonnes, of total provincial emissions and are expected to reduce that portion by a total of 10 per cent by 2030. We also expect many new companies to register aggregate upstream oil and gas facilities as part of the most recent amendments.”

But while the Saskatchewan Party praised its model for allowing companies to reduce emissions and avoid the federal carbon tax, the provincial NDP said the government hasn’t gone far enough.

“This change again is deferring action for some of our heavy emitters with no guarantee of an overall reduction in emissions,” Yens Pederson said.

“You have to balance support for Saskatchewan industries and Saskatchewan jobs with making progress on emissions. what we’re not seeing is progress being made on emissions reductions.

Pederson said the NDP will instead make it easier for families, small businesses and municipalities to get into clean energy. He said that’s in contrast to the province, which cancelled the net metering program, and in Peterson’s words “basically shut down a growing industry.”

The NDP would provide loans for clean energy installations, energy-efficient retrofits and electric vehicles, with the loan to be repaid off of realized savings. Excess power would be fed back onto the grid, with power produced over what users need purchased by SaskPower. The cost of the technology and installation would be repaid through an assessment on the property’s power or energy bill that would not exceed the amount saved through usage reductions or net metering.

“This is a government that has been in power for the past 13 years,” Pederson said.

“Throughout that time they’ve really done nothing. They’re not showing leadership on this file.”