The Government of Canada and the Government of Alberta have announced an Agreement-in-Principle to lower methane emissions in the oil and gas sector by 75% below 2014 levels by 2035 in Alberta. The Agreement-in-Principle builds on the Canada-Alberta Memorandum of Understanding (see our earlier bulletin here) and follows the recently published draft Co-operation Agreement between Alberta and Canada on Environmental and Impact Assessment. Under the proposed framework, Alberta would implement a performance-based approach to reduce methane emissions that combines regulations, offset credits, and targeted investments.
This bulletin briefly summarizes the key commitments set out in the Agreement-in-Principle.
Commitments. Alberta and Canada commit to:
- develop an outcome-based equivalency agreement (the Agreement) under the Canadian Environmental Protection Act, 1999 (CEPA), whereby Canada’s Enhanced Methane Regulations would be stood down in Alberta, in recognition of final provincial regulations and a provincial approach that delivers, over the term of the Agreement, 75% methane emissions reductions by 2035;
- act reasonably in adjusting the Agreement, if required, in the face of a force majeure event;
- jointly select and rely on an independent third party, contracted on an equal cost-shared basis, to conduct methane modelling, analysis of emissions reductions, and to assess methane reduction results; and
- agree that Alberta will publish information explaining the covered sources of methane and the province’s approach to meet its emissions reduction targets.
Next Steps. Once Alberta and Canada agree on the terms of the Agreement, it will undergo a 60-day consultation period, with the goal of finalizing it by the end of the year and implementing it no later than January 1, 2027, for a 10-year period, subject to the amendments to CEPA contained in the federal Budget 2025 Implementation Act. Alberta’s existing equivalency agreement will remain in place until the Agreement is finalized.
For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.
