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Methane Leaks in Alberta Government Crosshairs

While raising use of natural gas by phasing out coal-fired power stations, Canada's chief supplier province is also singling out the cleaner fuel's production practices for environmental action.

Methane stands out as a target because its greenhouse gas potency rating -- 25 times worse than carbon-dioxide coal exhaust -- makes modest emission cuts exceptionally rewarding as counter-climate change measures for the Alberta government.

Fugitive leaks and venting by the aging provincial web of 160,000 gas and oil wells, 584 processing plants and 415,000 kilometers of pipelines also stand out for being accepted by all concerned as open to improvement for reasonable costs.

Reductions of annual methane emissions equivalent to 12 million tonnes of carbon dioxide can be achieved by 2020 and increased to 20 million tonnes as of 2030, predicts a government-appointed Alberta Climate Change Leadership Panel.

"On methane, the panel found significant common ground between industry and environmental groups," said a 97-page report by the four-member team.  The document guides climate change policy that Alberta's New Democratic Party (NDP) regime announced Nov. 22.

Under the heading "methane management," the NDP policy directs the Alberta Energy Regulator to work with industry on crafting a cleanup portfolio of technical improvements to gas and oil production practices.

Big results can be scored by small changes to old hardware and habits. As a priority emissions culprit the panel cites 245,000 pneumatic devices that control flows and pump cleanser chemicals using gas flowing from wells instead of compressed air.

As an added bonus on top of greenhouse gas emissions cuts, replacing the devices -- or turning them off at aging wells where depletion has reduced production pressure to levels no longer in need of safety restriction -- is projected to create green jobs.

"It is estimated...the policy would trigger a total investment of C$1 billion (US$750 million) or more between now and 2030, with economic spill-overs, employment and training opportunities in the equipment and service sectors," said the policy panel.

"It is estimated that one complete leak detection scan of Alberta's oil and gas facilities would require 111 person-years of employment. Replacement of pneumatic controllers and pumps requires facility redesign prior to the change, and engineers, welders and other service personnel will be needed."

Changing old habits and gear rank as bargains on the scale of environmental costs, adds a report by the University of Calgary's public policy school that supports the NDP commitment to clap a carbon tax on all Alberta fossil fuel use as of 2018.

"The range of emission-reduction costs is massive," the academics write after reviewing field trial partnerships of companies and Alberta's Climate Change Emissions Management Corp. (CCEMC). The government-chartered, nonprofit agency selects and supports industrial-scale, shared-cost improvement tests. CCEMC uses more than C$200 million (US$150 million) in proceeds from a penalty levied since 2007 on sites that emit more than 100,000 tonnes per year and fail to hit mandated reduction targets.

The U of C review of price tags on carbon emissions reductions said, "When considering only CCEMC funding, costs range from C$0.74 per tonne [US$0.55] for a project to improve energy efficiency in chemical manufacturing to C$4,468 per tonne [US$3,351] for a greenhouse solar energy project. When considering all sources of funding, the range of emission-reduction costs spans C$1.48 [US$1.11] to C$11,426 [US$8,570] per tonne."

The government's policy panel estimates that methane leak and venting reduction will cost C$8-25 (US$6-18.75) per tonne of carbon dioxide-equivalent emissions cuts.

Industry will offset the costs by earning emissions reduction credits and gaining natural gas sales. Complying with the NDP schedule for phasing out 18 coal-fired stations that currently make 55% of Alberta's electricity will require replacing 6,000 megawatts of power generation capacity.

The Canadian Association of Petroleum Producers predicts their Alberta gas sales will grow by 1.5 Bcf/d, even if the NDP policy hits its target of ensuring that renewable energy sources replace 70% of the lost coal power. On the province's fully deregulated power market, the policy panel predicts low-cost gas will be stiff competition for wind and solar projects. Further work is underway on devising a system of emission reduction credits against the new carbon tax that will be rich enough to lure investors into large-scale green power development.

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