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Canadian natural gas producers are among the best in the world when it comes to methane emissions reductions and are on track to improve their performance even further, according to a new report by CIBC Capital Markets.

Published in October 2021, Methane: A Good News ESG Story for Canada's Natural Gas sheds light on Canada's world-class Environmental, Social and Governance (ESG) performance and our continued improvement on emission reductions.

With growing global consensus for the need to limit avoidable greenhouse gas (GHG) emissions, Canadian operators are well poised to adapt to increasingly stringent methane regulations according to the report. Also see:

• Advancing Cleantech in the Oilsands: COSIA's 100 Research Projects
• Canadian Oilsands the Best Choice for Future Supply: REPORT
• Canada's Largest Oilsands Producers Commit to Net-Zero by 2050

Report Highlights

A few major highlights from CIBC's latest ESG-focussed report:

#1 - Canada ranks as a global leader on methane emission reductions and is well-positioned to continue demonstrating further improvement.

The International Energy Agency's Methane Tracker Database indicates that Canada already is one of the lowest methane intensity energy jurisdictions globally. Alberta and British Columbia – two major petroleum-producing provinces – both have targeted policies in place for reducing common sources of methane emissions with new equipment installations in 2023 to drive them down further.

#2 - Canadian natural gas operators are better than comparable peers on methane emission volumes and intensities when adjusting for infrastructure ownership.

When comparing Canadian producers to those in the U.S. in dry gas producing basins, taking measurements at face value shows lower intensity for U.S. peers., but taking into account infrastructure ownership of Canadian operators and using EPA emissions estimates is a more practical approach for comparisons. Upstream infrastructure accounts for a significant portion of measured methane emissions in natural gas production, which often is overlooked when comparing Canadian and U.S. operators.

#3 - Consistency and completeness of data are likely to continue improving.

Leak detection capabilities are improving within Canada's natural gas sector while new technologies are being rapidly deployed to better monitor emissions, some of which are affordable to implement. Perfecting comparability between producers is always difficult, as the completeness of data is reliant on individual operator practices and estimation methods, and congruency is sometimes hard to find.

More Facts on Canadian Methane Emissions:

> Canada offers some of the lowest methane intensity hydrocarbons produced throughout the world.

> When comparing methane emissions from hydrocarbon development (estimated by the IEA) to the unit of hydrocarbons produced (both oil and gas) Canada, with a metric of 0.69 kt/mmboe (metric kilotonnes versus millions of barrels of oil equivalent), ranks as one of the lowest-intensity jurisdictions on the planet.

> Canada is the only major global energy-producing nation with policies at every level on methane emissions control (chart above)

> Alberta and British Columbia, accounting for 98% of Western Canadian natural gas supplies, have similar targets for methane reduction by 2025 (45% lower from 2014 levels).

> British Columbia and Canada recently announced a 75% reduction target by 2030 from 2012/2014 levels.

> Jurisdictions that do not have mandated measurement requirements for methane emissions makes accuracy on reporting difficult.

Methane & Global GHG Emissions

Methane has been a major focus of governments worldwide committed to the fight against climate change, as the gas is said to be several times more potent than carbon dioxide as a greenhouse gas. Three major factors drive the increased scrutiny by policymakers:

#1 – Determining how much methane the world emits with a great amount of certainty is relatively difficult.

Satellites have been useful in detecting methane super leaks from places such as Libya and Uzbekistan, which is progress. However, even satellite technology has its limitations in determining the true level of CH4 emissions.

#2 – Methane is a more potent GHG than carbon dioxide.

Methane is estimated to be the second-largest contributing GHG to global warming, after carbon. As mentioned above, CH4 is also estimated to be several times more potent – anywhere from 25x up to 110x depending on the scale applied.

#3 – Methane emissions are much more economical to limit.

Methane emission reduction and monitoring technologies are already developed and, in many instances, can be applied to commercial operations. The International Energy Agency's roadmap to reducing methane emissions by 75% - although a lofty target - is arguably achievable despite challenges still remaining for major industrial sectors such as cement, aviation and steel.

Canada's World-Class Record on ESG

Canada's record on methane emissions – and continued improvement in the years to come – is yet another ESG-related indication of why our nation should be a global supplier of oil and natural gas for as long as the world needs it.

With global projections of continued oil and gas demand growth for decades yet, it only makes sense that we source future supply from the most sustainable and responsible suppliers – and that means Canada! Also see:

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