Lloyd backs CAPP on methane cuts

By Geoff Lee

November 15, 2017 3:18 PM

Chris Montgomery, manager of exploration and production engagement with the Canadian Association of Petroleum Producers. GEOFF LEE LLS PHOTO

Lloydminster business and community leaders support the position of the Canadian Association of Petroleum Producers on how to reduce methane emissions in the oil and gas industry in Alberta.
A local letter writing action plan followed a presentation to the Rotary Club of Lloydminster on Monday, on what CAPP wants the Alberta government to include in a draft emissions reduction policy.
CAPP says Alberta can meet its commitment to reduce methane emissions by 45 per cent by 2025, with a policy that is flexible and preserves jobs and doesn’t take a prescriptive approach.
“We don’t have a problem with the target —we just want to make sure we get there in a way that makes sense for businesses and for governments,” said Chris Montgomery, CAPP’s manager of exploration and production engagement.
“By our estimate, if you take a very prescriptive approach versus what we’re suggesting, the net impact of that would be 7,000 jobs across the province.”
Montgomery told oil and gas workers in the crowd that natural gas and conventional cold heavy oil production in the Lloyd region could be the hardest hit with the wrong policy.
“If we get there in a way that no longer makes that type of oil production economic, companies won’t have a choice but to shut that production in which would have a negative impact on communities,” he said.
Montgomery said the policy could have a quite serious impact on the ability of producers to continue to produce “and in this area in particular, where you’ve got that cold heavy oil production.”
Methane is the main component of natural gas, but it’s also associated with the production, refining, transportation and storage of crude oil in batteries.
“It’s just the nature of the industry—you extract the heavy oil, you set it in tanks to let it settle out, and that creates what we call venting,” said Montgomery.
“So methane comes out of heavy oil and currently, either goes into the atmosphere, or companies can choose to do other things with that methane as well.”
Montgomery told Rotary, CAPP advocates taking a fleet approach to achieve reduction targets, versus targeting individual assets such as pneumatic devices used in the natural gas industry.
“That allows companies to make decisions that are best for their operations that are most cost effective than a very prescriptive approach,” said Montgomery.
Montgomery thinks it’s a positive sign the government is taking its time with the draft policy to get it right.
“We’re still at the table and having conversations with them,” he said, adding CAPP is looking for others to voice their support for a flexible approach.
“We still see some path forward to getting this right, and hopefully this is a sign of this.”
Montgomery noted methane is an issue that affects Alberta more than Saskatchewan since there is more thermal oil.
He said thermal production is much more of a contained system, and there is a lot less methane involved in that.
“Saskatchewan is a little bit further behind in the discussion as well,” said Montgomery.
He said it is important for governments to hear from not just industry and not just environmentalists, but also those who are directly impacted by the industry in their particular community when the draft comes out.
He said his main goal in speaking to Rotary was “to rally support and looking forward to sitting down with folks afterwards, as well to have a more detailed conversation about that.”
Montgomery said he was “trying to get the word out, and also just giving people an overall look at the state of the industry.”
Implementation of the new oil and gas methane standards will be led by the Alberta Energy Regulator, in collaboration with Alberta Energy and the Alberta Climate Change Office.
The Lloydminster Chamber of Commerce provided a template letter for the Rotary audience to sign in support of CAPP to lobby the Alberta government.
“Going forward, we ask the Chamber to voice their opinions about industry and ensuring that they are doing industry’s plan,” said Chamber president, Angela Minish.
She urges business members to attend public consultations that will follow the release of Alberta’s methane emissions reduction plan.
“Please attend these consultations and support industry’s plan,” said Minish.
Lloydminster Mayor Gerald Aalbers said he hopes Lloydminster will host one of the public hearings.
“If we have the opportunity, we’ll certainly be discussing with our MLA and the government to try to get on the agenda to host one of those meeting, so people locally can be heard from that committee on the effect it will have on this community,” said Aalbers.
“At the end of the day, we feel the brunt of it, being that we’re weighted heavily to cold heavy oil production, versus the lighter oils.”

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