Ottawa and Alberta say the oil and gas industry won’t be subject to duplicative methane regulations as the two governments continue to negotiate an equivalency agreement.

Regulations meant to restrict the potent greenhouse gas come into effect on Jan. 1 at the federal and provincial level. Alberta introduced its rules in the hopes that Ottawa would then exempt it from federal rules, but the Trudeau government says the provincial regime is not yet stringent enough to be granted equivalency and talks continue.

The request for an equivalency agreement was one of Alberta Premier Jason Kenney’s main asks during his latest trip to Ottawa. At the time, the Prime Minister’s Office signalled it, too, is keen to reach a deal on the issue. However, the two sides disagree on whether Alberta’s rules will have the same outcome as Ottawa’s.

Story continues below advertisement

“There has to be equivalent environmental outcomes,” federal Environment Minister Jonathan Wilkinson said in an interview. He said officials are in talks “to try and close those gaps,” and the hope is that a deal will be reached by January or February.

A source with the Alberta government said the province does not agree with Ottawa’s assessment and called the federal rules too prescriptive. The Globe and Mail is keeping the name of the source confidential in order to discuss internal matters.

However, as the two sides barter over the rules, they’ve agreed not to subject companies to both of them at the same time. Late Monday, Alberta’s environment and energy ministers announced the province has agreed to “streamline” registration and recognize Alberta’s reporting system.

Letters are being sent to the industry to ensure companies are aware of what is required as of Jan. 1, the statement said.

Mr. Wilkinson said the only significant requirement for companies in the first four months of the regulations is to register, so Ottawa is allowing firms to sign up under Alberta’s rules to ensure the governments are “streamlining the process for businesses.”

British Columbia and Saskatchewan are also negotiating agreements in which Ottawa would recognize provincial methane regulations in lieu of federal rules. The federal government has already negotiated a draft deal with B.C. and negotiations with Saskatchewan continue. A spokesperson with the federal environment department said Ottawa is also in talks with Saskatchewan to recognize its provincial reporting system for company registration.

Methane is a more powerful greenhouse gas than carbon dioxide – measured over 100 years, it’s 25 times more powerful. As the principal component of natural gas, it’s highly valuable and so limiting methane leaks is also viewed as a cost-effective way to cut greenhouse gas emissions.

Story continues below advertisement

Releasing methane directly into the atmosphere is worse for climate change than end-use combustion because when it’s burned, it turns into less harmful carbon dioxide. Methane is lost to the atmosphere during extraction and processing, for example from unintentional leaks in equipment and controlled venting and flaring.

As part of Ottawa’s climate targets, the government committed to reduce methane emissions from the oil and gas sector by 40 to 45 per cent from 2012 levels by 2025. Provincial rules must also meet that target to be exempted from federal rules.

In the equivalency talks, one point of contention centres on leak detection. Federal rules will require most facilities to start inspecting equipment three times a year for leaks. Alberta’s rules require that rate for some facilities, but many others would only require annual inspections.

Alberta maintains its proposed emissions regulations will give businesses more flexibility in how they cut methane emissions while still meeting the targets. The ministers’ statement said Alberta is still working with Ottawa to analyze the data and understand the modelling methodology.

An analysis from a coalition of environmental groups though, finds the province’s rules would fall short.

“Alberta fails to effectively address some of the biggest sources of emissions, for example leaks and venting from sources like storage tanks," said Jan Gorski of the Pembina Institute. The organization, along with the David Suzuki Foundation, Environmental Defense Fund, the Clean Air Task Force and Environmental Defence Canada are calling on Ottawa to hold the line with its rules and not weaken standards in order to grant Alberta equivalency.

Story continues below advertisement

However, the Canadian Association of Petroleum Producers argues that Alberta’s rules around leak detection tie the frequency of inspections to the risks associated with the different types of facilities and are therefore more efficient.

President and chief executive Tim McMillan said if the two governments can’t reach an equivalency deal before January, then the regulations should be postponed so that "we wouldn’t even start down the path of the overlapping federal and provincial regulations.”