Canada-Alberta MOU a Disappointing Retreat on Oil & Gas Methane Regulation

(OTTAWA, ON) The Canadian federal and Alberta governments announced a Memorandum of Understanding today to develop the energy sector. Among other measures, the MOU pledges to “Enter into a methane equivalency agreement on or before April 1, 2026, with a 2035 target date and a 75% reduction target relative to 2014 emissions levels.”

Groups who are concerned about the climate and health impacts of methane pollution issued the following statement: 

At a time when we need to move faster on climate, it is disappointing to see Canada tapping the brakes.

Oil and gas is responsible for the largest share of Canada’s emissions, and it is the industry whose emissions are rising fastest. Methane is the least expensive and easiest way to reduce these emissions at scale. It is extremely disappointing to see that Canada is failing to harvest the lowest-hanging fruit. 

What’s more, this unnecessary delay will lead to more wasted energy that already totals over $2 billion since the federal methane target was announced, as well as potentially threaten the creation of tens of thousands of jobs in the growing methane mitigation industry.

In 2021, the federal Liberals promised a 75% reduction in oil and gas methane by 2030.  After four years of delay in passing the regulation, the government is now proposing yet another five years of delay for its implementation. 

It is five years we can’t afford to waste, given the dramatic increase in climate-related impacts such as wildfires, floods and drought, as well as an ever-widening gap between what Canada is doing to address climate change and its fair share of the GHG reductions needed.

Background

After 10 years of global leadership on oil and gas methane, this is Canada’s first major climb down on its efforts to control this pollutant that’s responsible for 30% of emissions that are causing the climate crisis. 

The MOU means the federal government is failing to keep up with other jurisdictions on many fronts:

• Mere weeks ago, Canada and several allies (e.g., the UK, Japan, Germany and France) agreed to a near-zero oil and gas methane target, “including clear policies to end routine venting and flaring by 2030 and hold operators accountable.” This MOU will likely preclude Canada from meeting this recent commitment.
• BC has committed to meet a near-zero emissions standard by 2035.
• Major U.S. states like New Mexico (2^nd-largest oil producing state, and 4^th-largest gas producer) and Colorado (4^th-largest oil producing state and 8^th-largest gas producer) have had regulations in place for many years that are stronger than Canada’s draft 2030 regulation.
• In May 2024, the EU approved new import standards on natural gas for 2030. (This would apply to potential LNG imports from Canada.)
• Asian countries including Japan and South Korea have already taken steps to improve supply chain transparency of methane emissions for LNG exporting countries, signaling a preference for low-emission energy.
• The Oil and Gas Climate Initiative (OGCI) — comprised of 12 of the world’s largest oil and gas companies that represent more than 40% of global oil and gas production — recommitted, in January 2025, to reducing climate emissions, including by pursuing a near-zero methane emissions by 2030.

Delaying methane regulations will stall the many economic benefits that methane reductions produce.

• Canada’s draft regulation would have produced 34,000 jobs and recovered billions in energy waste.
• Eighty-one manufacturing firms and 55 service firms provide oil and gas operators across Canada with the equipment and services they need to directly reduce methane emissions. These firms account for 359 employee sites across the country, more than half of which are in Alberta.
• Methane leaks by oil and gas operators across Alberta wasted $671 million in natural gas, costing the provincial government over $120 million in lost royalties and uncollected corporate taxes.   
• Methane abatement is among the least expensive options for reducing GHGs at scale for the oil and gas sector. A 75% reduction can be achieved at an average cost of just $11/t-co2-e using today’s technologies.