Methane Emissions Reduction Initiative. Prepared by Alberta Energy for February 10, 2017

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1 Methane Emissions Reduction Initiative Prepared by Alberta Energy for February 10, 2017

2 Caveat This represents a status update regarding Alberta s methane work and does not represent final Government of Alberta policy.

3 Goals of the Methane Emission Reduction Initiative Alberta s goal reduce oil and gas methane emissions by 45% by 2025 (from 2014 levels) Objective #1 - to encourage industry, environmental groups, Indigenous peoples and other key stakeholders to work collaboratively to identify emission reduction opportunities and achieve reductions from existing facilities. Objective #2 - to obtain perspectives from key stakeholders regarding barriers that currently exist that impede early action.

4 Governance Government-Led Regulatory Direction for Methane Reduction Assistant Deputy Minister, Alberta Climate Change Office Project Sponsor Assistant Deputy Minister, Energy Inter-related projects: Carbon Pricing / Fund (economy-wide), Carbon Levy, Output-Based Allocation (Performance Standards) (opt-in provisions), Offset Protocol Core Executive Director Steering Committee Energy (lead) Alberta Climate Change Office AER Information or As needed from other government departments AER Multi-Stakeholder Process Project Manager, Energy Core Project Team External Consultants 4

5 Environment and Climate Change Canada Federal government has committed to a 40-45% reduction in oil and gas methane emissions by 2025 Federal regulation will focus in 5 areas: Well completions Leak detection and repair (fugitives) Compressors Venting Pneumatics Federal regulation is expected to be published in Canada Gazette 1 in the spring of 2017, Canada Gazette 2 in fall 2017

6 Alberta s action on federal regulation Negotiating with the federal government to better align federal and Alberta regulation Successfully moved federal timelines from 2018 and 2020 to 2020 and 2023 Working with western oil and gas producing provinces Investigate and understand implications for federal equivalency and ensure regulations meet Alberta s unique needs (e.g.. Heavy Oil Production)

7 Meeting Alberta s 45% by 2025 target Design and implement the multistakeholder process Enhance existing directives consistency, basis for further action Enhance Regulation and/or directives to improve measurement, monitoring and reporting of emissions 7

8 Climate Leadership Plan - Meeting Alberta s 45% by 2025 target Develop new leak detection and repair (LDAR) standards New facility standards New requirements for existing facilities Investigation of carbon offset protocols that could support methane reductions 8

9 Timelines Complete Completion Date Regulatory Enhancement Fall 2017 Measurement, Monitoring and Reporting Early 2018 Fugitive Emissions/LDAR Early 2018 New Facility Standards Spring 2018 Existing Facility Standards Late 2018 Transition to full compliance

10 Non-regulatory Development Furthering technology development and deployment with an initial focus on methane reductions Engagement and development of partnerships with other sub-national jurisdictions, Federal Government and international organizations, such as Climate and Clean Air Coalition and the World Bank 10

11 Climate Initiatives Application Climate and Area Implications Application Methane Emissions Reduction Initiative Requirements will apply to all upstream oil and gas facilities where specified equipment or processes exist irrespective of application of the levy or output-based allocation Carbon Levy (precludes Performance Standard application) Applies to smaller oil and gas facilities (fuel, vent, flare ) Levy exemption until 2023 Some facilities may be granted ability to opt into the Performance Standard/Output-Based Allocation Performance Standards/ Output-Based Allocation (precludes Carbon Levy application) Applies to larger oil and gas facilities Standard applied to all CO2e emissions above threshold set Oil Sands Limit Applies to oil sands production where it exceeds 100 megatonnes/year

12 Tracking Emissions Reductions Key indicator is Environment and Climate Change Canada s National Inventory Report on Carbon Emissions Alberta will undertake research to better quantify methane emissions for recognition for the methane emissions reduction activities undertaken in Alberta

13 Barriers and Opportunities for Early Action Interested in input from a variety of stakeholders real and perceived barriers that impede action Opportunity for stakeholders not represented on the Methane Reduction Oversight Committee 13

14 Your Thoughts on Barriers and Opportunities or