Saskatchewan accounts for nearly 30 percent of liquids production in Canada. While more than half of gas production is associated with oil production, it accounts for only 2–3 percent of total Canadian production. Associated gas production was rising until 2020, along with increased tight oil activity.

Based on 2020 data, the largest greenhouse gas (GHG) sources in Saskatchewan are oil and gas production (26 percent), agriculture (25 percent), and electricity generation (19 percent). Before 2020, emissions from the oil and gas sector accounted for 35 to 43 percent of the total. Between 2005 and 2018, overall GHG emissions in Saskatchewan increased by 14 percent, or nearly 10 million tonnes of carbon dioxide equivalent (tCO2e). Emissions from the oil and gas industry fell by nearly 40 percent between 2018 and 2020. Associated methane emissions from venting and flaring in 2015 were 10.9 million tCO2e.

As part of the 2016 Pan-Canadian Framework on Clean Growth and Climate Change, the government of Canada committed to reducing methane emissions from the oil and gas sector by 40–45 percent from 2012 levels by 2025. The Saskatchewan government committed to reducing methane emissions from flaring and venting in the province’s upstream oil and gas sector by 40–45 percent of the 2015 levels as part of the province’s Methane Action Plan. O-2 Reg 7: Oil and Gas Emissions Management Regulations, 2019 (Oil and Gas Emissions Management Regulations, 2019, hereafter), required companies to submit methane emissions reduction plans by September 2019, before compliance obligations took effect on January 1, 2020.

In 2018, the Environment and Climate Change Canada (ECCC), a Canadian government agency, published SOR/2018-66, Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector). Provinces can adopt these regulations or draft their own to meet or exceed the federal targets. Saskatchewan has released and periodically updated several sets of regulations to reduce GHG emissions from flaring and venting in the upstream oil and gas sector, including the Oil and Gas Emissions Management Regulations, 2019 (last amended in 2020; see footnote 5); Directive PNG036: Venting and Flaring Requirements, 2019 (last updated in June 2022); and Directive PNG017: Measurement Requirements for Oil and Gas Operations, 2015 (last updated in August 2022).

Section 10 of the Canadian Environmental Protection Act, 1999, authorizes the minister of the environment to defer to equivalent regulations promulgated by a provincial government. In May 2020, the federal government concluded that the Saskatchewan regulations would not be equivalent to federal regulations, mainly because the latter fixed the emission intensity limits after 2025 with no further reduction required. As the equivalency agreement between the government of Canada and the government of Saskatchewan terminates at the end of 2024, the government of Saskatchewan will have to introduce additional regulatory measures for a new equivalency agreement to be concluded beyond 2024.

The O-2 Reg 7: Oil and Gas Emissions Management Regulations, 2019 , aim to reduce methane emissions in the province by 4.5 million tCO2e per year between 2020 and 2025. Table 2 in the Appendix to the regulations limits the methane emission intensity by production class and year, starting in 2020 and ending in 2030 (2025–30 limits are the same for all five production classes). An Emissions Reduction Plan is due if the combined potential annual emissions are higher than 50,000 tCO2e, calculated by Saskatchewan’s Ministry of Energy and Resources (MER) based on government data (Petrinex or Integrated Resource Information System [IRIS] reporting information).

The province’s legislation—the Crown Minerals Act, 1985, and the Oil and Gas Conservation Act, 1978—governs oil and gas rights for exploration and production of these resources. Directive PNG036: Venting and Flaring Requirements, 2019 , limits flaring and venting in oil and gas facilities and restricts temporary flaring during well completions. Revisions in 2020 require companies to implement a leak-detection-and-repair program for gas facilities. Applicable facilities include gas storage facilities, gas-processing plants, and gas-gathering systems. O-2 Reg 6: The Oil and Gas Conservation Regulations, 2012 (last amended in 2021; Oil and Gas Conservation Regulations, 2012, hereafter), stipulate gas flaring and venting limits and requirements, which are consistent with Directive PNG036 (Section 51) and set penalties for noncompliance with any of the regulations (Section 122).

Directive PNG017: Measurement Requirements for Oil and Gas Operations  details how fuel gas, vented gas, and flared gas are measured for accounting and reporting purposes in Saskatchewan. It also requires enhanced quantification of associated gas at heavy-oil facilities. Directive PNG032: Volumetric, Valuation and Infrastructure Reporting in Petrinex provides guidance on reporting volumes in Petrinex.

Directive S-20: Saskatchewan Upstream Flaring and Incineration Requirements, 2019. The Oil and Gas Emissions Management Regulations, 2019 , require mandatory, results-based methane emissions reduction at the company level, not at the level of individual facilities or pieces of equipment.

Saskatchewan has jurisdiction over flaring, venting, and incineration, for which the province has comprehensive regulations. Emission regulations are aligned with federal legislation and regulations through 2025. As mentioned earlier, that the methane emissions intensity limit is set to be the same between 2025 and 2030 is not considered equivalent to federal regulations.

Ownership of oil and gas is split between the provincial government, the federal government, private freehold owners, and First Nations. The rights to explore for, develop, and produce oil and natural gas, including associated gas, are transferred to participants through licenses or leases.

The MER is the primary regulatory authority for the oil and gas industry. It develops and implements policies and programs to promote responsible growth and development of the province’s natural resources.

The MER is responsible for regulating licensees of oil and gas wells and facilities and managing flaring and venting in accordance with Directive PNG036: Venting and Flaring Requirements, 2019 . It is responsible for gathering and analyzing data, reporting requirements for flaring reduction, compliance, and enforcement.

The environmental screening process for oil and gas exploration and development activities is outlined in the Environmental Review Guidelines for Oil and Gas Activities. They clarify which branch of the Saskatchewan Ministry of Environment should be contacted first.

Directive PNG076: Enhanced Production Audit Program, 2016 (last updated in April 2023), describes the procedures of the province’s audit program for the oil and gas industry. The audit program aims to ensure accuracy and completeness of the reported volumetric data. Section 15 of the Oil and Gas Emissions Management Regulations, 2019 , empowers the minister to audit the measurement and reporting of volumes of associated gas at oil facilities of the licensee at any time to determine whether the measurement and reporting comply with the Oil and Gas Conservation Act , implementing regulations, and any applicable directives. Section 122 of the Oil and Gas Conservation Regulations, 2012 , provides that the minister may issue administrative penalties (see sections 18 and 19 of this case study) for noncompliance with those regulations.

The Oil and Gas Conservation Regulations, 2012 , stipulate that gas flared or vented at an oil well or facility should not exceed 900 cubic meters (m³) a day unless it is an emergency and a reasonable level of precaution has been taken to protect human health, public safety, property, and the environment. Sections 6 and 7 of Directive PNG036: Venting and Flaring Requirements, 2019 , states that gas venting from a well or facility, including gas plants, is not permitted unless there is an emergency, and venting is required to protect human health, public safety, property, or the environment, including prevention of a fire or explosion.

Directive PNG036: Venting and Flaring Requirements, 2019 , imposes several restrictions on flaring and venting:

• Section 6.1 (Associated Gas Venting Limit) states that oil wells and facilities that flare and vent a combined volume of associated gas greater than 900 m³ a day should flare all nonconserved gas, unless it needs to be vented to avoid emergencies.
• Section 6.2 (Associated Gas Flaring) states that oil and gas facilities may flare in excess of 900 m³ a day if they meet the Directive S-20: Saskatchewan Upstream Flaring and Incineration Requirements, 2019 . However, if flared volumes exceed 900 m³ a day, and the flare is within 500 meters of an occupied dwelling, a public facility, or an urban center, the gas should be conserved unless the operator obtains consent from the occupants or approval from the regulator.
• Section 7.1 (Gas Venting) bans venting at gas wells and facilities, including gas processing plants unless it is an emergency.
• Section 7.2 (Gas Flaring) bans flaring at gas wells and facilities but allows for flaring at gas processing plants as per the conditions of their licenses.

In addition, according to Section 5, no venting or flaring from any source should cause off-lease odors or cause emissions in excess of the Saskatchewan Ambient Air Quality Standards. Also, operators should not vent any volume of gas that contains hydrogen sulfide in a concentration greater than 10 moles per kilomole of gas as measured at the source, or 0.01 mole per kilomole as measured at the lease edge.

No evidence regarding development plans could be found in the sources consulted.

Section 50 (Gas or Product Conservation) of the Oil and Gas Conservation Regulations, 2012 , states that for conservation purposes, the minister may require the operator of an oil well to collect and either use or sell the gas produced. Also, the minister may require the operator to analyze gas composition. If, in the opinion of the minister, a product is present in a quantity that can be economically extracted, the minister may require the product’s separation, conservation, and utilization.

Directive PNG017: Measurement Requirements for Oil and Gas Operations, 2015 , provides the regulatory requirements for the measurement, accounting, and reporting of flaring and venting across a variety of oil and gas operations, including flaring and venting at various sites. Directive PNG032: Volumetric, Valuation and Infrastructure Reporting in Petrinex, 2016 , requires all operators to provide well and facility infrastructure information, monthly pipeline split, and volumetric and valuation information electronically via the website of Petrinex. This requirement is stipulated in Section 66 of the Oil and Gas Conservation Act, 1978 , and Section 3 of the Petroleum Registry and Electronics Documents Regulations, 2012. Directive PNG032 also requires all emissions to be calculated and expressed in CO2e. Directive PNG076: Enhanced Production Audit Program, 2016 , sets out the requirements for operators to declare the degree to which they have the infrastructure in place to ensure compliance with the regulator’s measurement and reporting requirements.

Directive PNG017: Measurement Requirements for Oil and Gas Operations, 2015 , provides regulatory requirements with respect to measurement points used for accounting and reporting purposes. It specifies what volumes must be measured and how (including estimation methods), the volumes to be reported to the regulator, the accounting procedures to determine those volumes, and the data to be kept for auditing. The principal measurement technologies and procedures include, among others, meters for flow volumes, calculated volumes using a proration formula based on test volumes, estimates of volumes based on production facility and product characteristics, and gauge boards for tanks. The directive provides “standards of accuracy for gas and liquid measurement that take into account potential impacts to royalty, equity, reservoir engineering, declining production rates, aging equipment, environment, public safety, accuracy and completeness.”

There are detailed guidelines specifically for venting from different facilities in Guideline PNG035: Estimating Venting and Fugitive Emissions, 2019. An Excel-based gas estimation tool has been developed to aid operators in estimating vent volumes consistently and accurately. There are also special guidelines for heavy-oil projects.

Section 4 of Guideline PNG035: Estimating Venting and Fugitive Emissions, 2019 , allows the use of vent gas factors or engineering estimates unless an operator is otherwise required to meter or test, as per Directive PNG017: Measurement Requirements for Oil and Gas Operations, 2015 .

Section 11.3 of Directive PNG036: Venting and Flaring Requirements, 2019 , states that the licensee should maintain a log of flaring and venting events and respond to public complaints. The logs must:

• include information on complaints related to flaring and venting events and their resolution
• describe each nonroutine flaring and venting incident and any changes implemented to prevent future nonroutine events
• include the date, time, duration, gas source, hydrogen sulfide concentration, and volumes of each incident
• keep records for a minimum of 12 months.

Flaring and venting records should be made available to the MER upon request. Every person who submits a report or return following Section 29 of the Management and Reduction of Greenhouse Gases (Standards and Compliance) Regulations, 2019, should retain all documents, methodologies, and information used to prepare the report for a minimum of seven years.

The MER publishes monthly Natural Gas Volume and Value Summary reports. Reports detailing the gas produced from wells, total gas production, gas flared or vented, and gas available for use or sale can also be downloaded. Under Section 20 of the Oil and Gas Emissions Management Regulations, 2019 , the minister is required to publish an annual report setting out:

• the total of combined emissions at all oil facilities in Saskatchewan
• the total of combined potential emissions at all oil facilities in Saskatchewan
• the emissions for all oil facilities that are licensed by each licensee for the year.

Starting in 2021, the government of Saskatchewan will release an annual progress report on all commitments, targets, programs, and policies listed in the Methane Action Plan.

Section 122 of the Oil and Gas Conservation Regulations, 2012 , provides that the minister may issue administrative penalties if an operator fails to comply with the regulations, including flaring and venting limits, and requirements outlined in Section 51. The operator may apply to the minister within 45 days of receipt of invoice. Failure to submit the required information can be subject to a penalty of Can$100 per day or up to Can$1,000 a month, depending on the violation. Submission of false declaration is penalized up to Can$250,000 per incident. Failure to comply with the minister’s orders is subject to a penalty of Can$5,000 per day, up to a maximum of Can$200,000. Section 13 of Directive PNG076: Enhanced Production Audit Program, 2016 , states that if a declaration is not submitted via Petrinex, the Petrinex error EPP001 will trigger a penalty in accordance with the Oil and Gas Conservation Regulations, 2012.

The Oil and Gas Emissions Management Regulations, 2019 , set out the penalties for excess emissions. Section 10 states that the minister may impose a penalty on a company whose oil facilities produce, in any year, combined emissions that exceed the limit determined in the regulations calculated using the formula AP = EE ´ D, where AP is the administrative penalty to be paid; EE is the amount by which the combined emissions exceed the combined emissions limit, expressed in tCO2e and calculated for the year in accordance with Section 9; and D is the dollar amount per tonne of excess emissions set out in Table 3 of the regulations’ Appendix. The penalty per tCO2e increases every year until 2024, when the unit penalty is fixed in nominal terms at Can$50.

If a correction results in a change in the combined emissions for a licensee on December 31 of the year for which the combined emissions are calculated, the licensee is required to pay, within the period specified by the minister, a penalty on any amount by which the combined emissions at the oil facilities exceed the limit on combined emissions, calculated in accordance with Section 9, plus interest, calculated, at a rate of 10 percent a year. This payment is in addition to any penalty already paid for that year.

Part XII (Sections 75–77) of the Oil and Gas Conservation Regulations, 2012 ,16 authorizes the minister to suspend or shut down wells and other production facilities and seal any meter valves.

Directive S-20: Saskatchewan Upstream Flaring and Incineration Requirements, 2011 (last updated in June 2022; see footnote 18), provides comprehensive specifications for upstream oil and gas flaring and incineration performance, equipment spacing, and set-back distances, referencing engineering standards by the American Petroleum Institute and other professional organizations.

Associated gas that is flared or vented within permitted levels is not subject to royalties. According to the Administrative Procedures Related to Associated Gas Royalties/Taxes and Crude Oil and Natural Gas Royalty/Tax Factors Information Circulars, companies are exempt from royalties if royalties make gas production uneconomic. In addition, any gas used for on-site power generation is exempt from royalties. The gas royalty rate may be as high as 12 percent, depending on the type of gas well and the production rate of the well. SaskEnergy is launching a new Associated Gas Conservation Program to create more opportunities in the upstream sector for the sale and movement of methane between oil production facilities for on-site use.

The Saskatchewan Petroleum Innovation Incentive provides a royalty credit for commercial innovation projects new to Saskatchewan that can better manage GHG emissions. The Oil and Gas Processing Investment Incentive offers transferable royalty or freehold production tax credits at a rate of 15 percent of eligible program costs to value-added projects across all oil and gas industry segments such as gas-gathering transport infrastructure and methane gathering projects. The Oil and Gas Conservation Regulations, 2012 , allow operators to build pipelines to capture associated gas as qualifying conservation projects to avoid paying penalties.

The 2016 Pan-Canadian Framework on Clean Growth and Climate Change  set a federal benchmark, requiring all provinces and territories to implement carbon pollution pricing systems by 2019. Saskatchewan has an output-based pricing system, which is mandatory for facilities emitting more than 25,000 tonnes of CO2e per year and voluntary for facilities emitting more than 10,000 tonnes of CO2e per year. The minimum threshold was removed for upstream oil and gas facilities in late 2020. To comply, companies can pay the Saskatchewan Technology Fund a carbon fee, which was Can$30 (about $22 in May 2023) in 2020.

The Saskatchewan Petroleum Industry/Government Environment Committee was formed in 1992 to respond to the need for the government and industry to work cooperatively to resolve provincial environmental management issues. The provincial government agencies represented include the Ministry of Environment, the MER, and the Ministry of Agriculture, on a project-specific or issue-specific basis. Several industrial associations are also represented. The committee addresses matters including climate change, flaring and venting, remediation guidelines, and management standards.

Many of the regulations on flaring, venting, and emissions cover pipeline and storage facilities. Most oil production in Saskatchewan is exported to other provinces or the United States via pipelines. The gaps in the synchronization of drilling activity with the development of sufficient gas midstream capacity can create bottlenecks and lead to increased flaring or venting.