Country
Assessment
British Columbia implemented the Carbon Tax Regulation, 2008, which was last amended in November 2022. The tax applies to the purchase and use of fossil fuels burned for transport, home heating, and electricity. It covers approximately 70 percent of provincial GHG emissions. The impact of the tax on consumers is compensated for by a reduction in personal and corporate income taxes by an approximately equal amount. The carbon tax increased gradually from Can$10 (about US$7.9 as of September 2021) per tCO2e in 2008 to Can$30 (about US$24 as of September 2021) per tCO2e in 2012, at which point the government froze the rate at Can$30 per tCO2e until other jurisdictions implemented similar carbon taxes. In 2018, the carbon tax was increased to Can$35 (about US$28) per tCO2e; in April 2019, it rose to Can$40 (about US$32 as of September 2021) per tCO2e, which for natural gas corresponds to Can$0.076 per m³. The updated regulation sets Can$50 per tCO2e for 2022 and beyond. The carbon taxes by fuel type are updated through 2026.
The Ministry of Environment and Climate Change Strategy has been managing a carbon offset program since 2010. In the oil and gas sector, offset projects have reduced flaring or venting, typically by using gas for electricity generation.
Most gas production in British Columbia is exported to other provinces or the United States via pipelines. Gas production increasingly comes from remote unconventional resource basins, such as the Montney and Horn River in the northeast corner of the province, which are far from consuming regions. The coordination of drilling activity with the development of sufficient midstream capacity can avoid bottlenecks in transport capacity and hence reduce flaring. The regulator encourages producers and third parties to pursue such coordination of midstream capacity and new production.
The Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) SOR/2018-66, last amended on January 1, 2023, contain standards for extraction, primary processing, long-distance transport, and storage. The regulations apply to facilities producing or receiving more than 60,000 m³ annually of hydrocarbon gas, which includes methane and certain volatile organic compounds. Upstream oil and gas facilities are required to take the following actions, among others:
- Limit vented volumes to 15,000 m³ a year.
- Implement leak detection and repair, starting in 2020. Regular inspections will be required three times a year, and detected leaks are to be repaired within 30 days unless the facility is required to be shut down, in which case an action plan must be prepared and implemented.
- Conserve or flare gas instead of venting, starting in 2020.
In many instances, but especially in technical matters such as the measurement of gas volumes flared or vented, these federal regulations defer to provincial flaring and venting rules and emissions limits, which provincial regulators implement. Provincial emission limits must meet or exceed federal targets.
The Canada Energy Regulator (CER) was formed under the Canadian Energy Regulator Act, 2019, replacing the National Energy Board. It regulates the Northwest Territories, Nunavut and Sable Island, submarine areas not within a province in the internal waters of Canada, and the territorial sea or continental shelf of Canada, as defined in the Canada Oil and Gas Operations Act, 1999. The act provides a clear separation between the operational and adjudicative functions of the regulator.
The Canada–Newfoundland and Labrador Offshore Petroleum Board is an independent agency that regulates petroleum-related offshore activities. The Newfoundland and Labrador Department of Natural Resources part of the provincial government, regulates onshore petroleum-related activities. The Canada–Nova Scotia Offshore Petroleum Board regulates oil and gas activities in the Canada–Nova Scotia offshore area. The Canada–Newfoundland and Labrador Offshore Petroleum Board and the Canada–Nova Scotia Offshore Petroleum Board jointly regulate oil production off the coast of the maritime provinces and set limits on the volumes of gas flared in offshore installations in their respective jurisdictions.
Canada’s constitution grants exclusive authority to the provinces to regulate mineral development within their boundaries. The major producing provinces have independent oil and gas regulators. Federal and provincial (as well as territorial and indigenous) governments share authority over environmental matters. Each province has its own environmental laws.
The definition of “waste” in the Canada Oil and Gas Drilling and Production Regulations, 2009 , includes gas flared or vented when it could have been economically recovered and processed or injected into an underground reservoir. Section 67 states that no operator should flare or vent gas unless an emergency requires it to do so. The CER must be notified in the daily drilling report, daily production report, or any other written or electronic form. The notification should include the volume of flared or vented gas. The same provisions can be found in the Newfoundland Offshore Petroleum Drilling and Production Regulations, 2009 , and the Nova Scotia Offshore Petroleum Drilling and Production Regulations, 2009 .
Section 48 of the Processing Plant Regulations requires companies to report to the CER within one week of any flaring of hydrocarbon gas occurrence or a by-product of the processing of hydrocarbon gas that occurs as a result of an emergency. Section 6 of the CER Event Reporting Guidelines, 2018, defines an emergency as any situation in which emergency or contingency procedures, such as process upsets because of automated or manual emergency shutdowns, were used. Also reportable are flaring events that may have a significant adverse effect on property, the environment, or safety. Companies are not required to report nonroutine flaring, such as that resulting from regulator-required maintenance. Provincial regulators have more specific guidelines on flaring and venting that do not require permits (see the case studies on Alberta, British Columbia, and Saskatchewan).
Section 5 of the Canada Oil and Gas Drilling and Production Regulations, 2009 (“Management System, Application for Authorization and Well Approvals”; see footnote 8), requires that the application for authorization be accompanied by information about any proposed flaring or venting of gas. This information should include the rationale, rate, quantity, and duration of the flaring or venting. Provincial regulators have more specific guidelines on applying for and obtaining flaring and venting authorizations.
Development plans are required and published on the Canada–Newfoundland and Labrador Offshore Petroleum Board website. An example is the public review of the Hebron Development Plan Application.
No evidence regarding economic evaluations by the federal government could be found in the sources consulted. However, provincial regulators consider the economic assessment of options to prevent or reduce flaring and venting.
Part 7 of the Canada Oil and Gas Drilling and Production Regulations, 2009 (“Measurements Flow and Volume”; see footnote 8), states that unless otherwise included in the approval, the operator should ensure the rate of flow and volume of any produced fluid that enters, leaves, is used, or is flared, vented, burned (incinerated)—or otherwise disposed of—are measured and recorded. This requirement encompasses any oil storage tanks, treatment facilities, or processing plants. The Newfoundland Offshore Petroleum Drilling and Production Regulations, 2009 , and the Nova Scotia Offshore Petroleum Drilling and Production Regulations, 2009 , have similar provisions.
The CER Event Reporting Guidelines, 2018 , require operators to submit an annual production report covering the previous year no later than March 31 of each year. This report must include details on the production forecast and gas conservation as well as efforts to maximize recovery and reduce costs. The report must also demonstrate how the operator manages or intends to manage the resource and avoid waste.
An annual environmental report must also be submitted. This report should include a summary of any incidents that may have had an environmental impact, discharges that had occurred and the waste material produced, and a discussion of the efforts undertaken to reduce pollution and waste material. The ECCC first developed the GHG reporting program in 2004. It has updated reporting and GHG quantification requirements several times. Compliance with the annual reporting of GHG is mandatory. All facilities emitting more than 10,000 tonnes of carbon dioxide equivalent (tCO2e) in a given year must submit a report on their GHG emissions by June 1 of the following year. Facilities emitting less than the threshold can report voluntarily.
The Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) SOR/2018-66 include monthly reporting requirements to improve emissions estimates. They include inventories of emitting components at upstream facilities; reports on volumes of gas vented, flared, and delivered off-site; and results of leak-detection-and-repair inspections and monitoring.
No monetary penalties or fees relate explicitly to gas flaring and venting at the federal level (although provincial regulators can impose them). However, noncompliance with regulations and rules issued by the CER, which include reporting requirements on gas flaring and venting, can result in monetary penalties of up to Can$100,000 (about US$79,000 as of September 2021) a day per violation.
The violation of any specified provision of the Canada Oil and Gas Operations Act, 1999 , or any of its regulations may result in a penalty. Such violations include failure to comply with any term, condition, or requirement of an operating license or authorization or any approval, leave, or exemption granted under the act. Under Paragraph (1)(b), the penalty for a violation should not be more than Can$25,000 (about US$20,000 as of September 2021) for an individual and Can$100,000 (about US$79,000 as of September 2021) for any other entity.
Canada Oil and Gas Operations Administrative Monetary Penalties Regulations (Federal-SOR/2016-25) establish administrative monetary penalties to provide regulatory agencies with an enforcement tool to complement other types of sanctions, such as notices of noncompliance, orders, directions, and prosecution. The process for imposing administrative monetary penalties is similar at both the federal and provincial levels. The CER website provides a record of the sanctions imposed via a downloadable spreadsheet and an interactive tool. Compliance measures reported include administrative monetary penalties and other measures.
The Environmental Enforcement Act, 2010, enhanced the enforcement tools and penalty regime by adding ranges for fines tailored to different offenses. It also introduced minimum fines and increased maximum fines for serious offenses. The Environmental Violations Administrative Monetary Penalties Act, 2009, details environmental administrative monetary penalties.