Federal government defines ‘upstream emissions’ for proposed energy regulations

OTTAWA – The us government has officially slapped a definition on “upstream emissions,” which are now being factored into all environmental reviews for major oil and gas projects.

The Department of Environment and Climate Change quietly released its proposal Friday for which should be come under the classification during environmental assessments of large energy projects – explaining that the extraction, processing, handling and transportation of petroleum could be factored into the equation.

“‘Upstream’ includes all industrial activities in the point of resource extraction to the project under review,” the federal government said inside a notice from the proposed regulations issued Friday within the Canada Gazette.

“The specific processes included as upstream activities will be different by resource and project type, however in general they include extraction, processing, handling and transportation.”

Environment Minister Catherine McKenna and Natural Resources Minister Jim Carr announced in late January the us government would overhaul the way it examines major energy projects, to be able to put more concentrate on greenhouse gas emissions – such as the assessment of so-called upstream emissions created by extracting or producing petroleum. 

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But just what would come under that definition continues to be the subject of controversy, because the Liberal government prepares a pan-Canadian technique for combatting global warming.

The government’s proposed methodology says the assessment of upstream GHGs will contain two parts.

The first will be a quantitative estimation of GHG emissions released as a result of upstream production associated with the project, “including those linked to the production of steam or hydrogen used by upstream facilities.”

The second will be a discussion from the project’s potential impact on Canadian and global GHG emissions.

Examples of the items could be considered upstream greenhouse gas emissions include:

Extraction – crude oil and gas wells and oil sands mining and in situ facilities;Processing – field processing and upgrading;Handling – product transfer at terminals; andTransportation – any pipeline operation in advance of the project.

Stakeholders like gas and oil companies, pipeline proponents, environmental groups and average Canadians will have 30 days to comment on the planned regulations.

The proposed rules state that, whenever possible, GHG estimates calculated through the authorities is going to be validated against estimates developed using their company levels of government or organizations using their own emission and production projections.

For example, when it comes to the North american liquefied gas project in B.C., the department estimated emissions using a projection from the Pembina Institute, an eco think-tank, and a report by the B.C. government.

The second factor considered in the assessment of upstream GHGs – the discussion part – will assess whether the estimated emissions would likely occur whether or not the project weren’t built.

As part of this calculation, the department will examine future Canadian resource production forecasts under various price scenarios; potential alternative markets and modes of transportation as well as their costs; along with other Canadian and global market conditions, the proposed regulations say.

The specific processes included as upstream activities will be different by resource and project type, but in general they include extraction, processing, handling and transportation.

As well, the discussion will also examine the impact from the project’s potential GHG emissions on overall Canadian greenhouse gas emissions and, where possible, on global GHGs.

The government is working on a new, permanent environmental assessment process that will probably take a “number of years” to build up, McKenna said in January.

In the meantime, new interim measures is going to be applied when reviewing major energy projects like gas and oil pipelines, oil sands developments, and liquefied gas projects. Those includes an assessment of all direct and upstream greenhouse gas emissions linked to projects under review.

The new interim rules will affect environmental assessments of TransCanada’s proposed Energy East Pipeline from Alberta to New Brunswick and Kinder Morgan’s proposed Trans Mountain pipeline expansion from Alberta to Burnaby, B.C.

Also falling under the new rules are the North american LNG project and the Woodfibre LNG project near Squamish, B.C..

McKenna announced late Friday the government has completed its environmental overview of the Woodfibre LNG project and determined it “is not likely to result in significant adverse environmental effects.”

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