Canada’s Prime Minister announces CA$750 million fund to reduce methane emissions from the oil and gas sector

The fund is part of a Canadian Government COVID-19 job protection package announced on April 17, 2020.

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An oil pump jack in a farm field in Alberta, Canada.

Canada’s Prime Minister, Justin Trudeau, announced the establishment of a CA$750 million (US $530 million) Emission Reduction Fund, which will focus on methane pollution to create and maintain jobs.

The fund supports Canada’s energy sector, which the government said is disproportionally affected by COVID-19. The sector is dealing with both low prices caused by a surge in global crude oil supply and a decline in demand due to the economic effects of the pandemic.

This fund will mainly provide repayable contributions to companies to protect jobs, increase competitiveness, and reduce pollution.  

Prime Minister Trudeau said the public health crisis caused by COVID-19 should not prevent Canada from also addressing the climate crisis.

“Companies in the energy sector are having cash flow problems right now, which means they don’t have the funds they need to invest in technologies that will help reduce emissions or fix methane leaks,” Prime Minister Trudeau said. “Today’s announcement will allow these companies to do this work and create jobs during this difficult time.”

Announcing new support to protect Canadian jobs

Announcing new support to protect Canadian jobs
Canada's Prime Minister, Justin Trudeau, announces new support to protect Canadian jobs on April 17, 2020. Support for the oil and gas sector starts at 2:12.

CA$75 million of the CA$750 million amount will go to offshore oil and gas companies in the Province of Newfoundland and Labrador to reduce their emissions.

The fund is part of larger package of funding for Canada’s energy sector in order to retain and create approximately 10,000 well-paying jobs. Another CA$1.72 billion will go to the provincial governments of Alberta, Saskatchewan, and British Columbia, and the Alberta Orphan Well Association, to clean up orphan and/or inactive oil and gas wells that are also a source of methane emissions. 

The Government of Canada has put in place regulations to cut oil-and-gas sector methane emissions by 20 million tonnes a year by 2025. The first requirements under the federal methane regulations came into force on January 1, 2020.

The Climate and Clean Air Coalition, of which Canada is a founding partner, works with countries to reduce methane, and other short-lived climate pollutants, from the oil and gas, agriculture and municipal solid waste sectors.

The head of the Coalition’s Secretariat, Helena Molin Valdés, welcomed the move by Canada saying: “In this time of economic stress and personal hardship we must work together to keep each other safe both now and for the future. Initiatives like Canada’s Emissions Reduction Fund helps protect jobs and livelihoods during the COVID-19 crisis, while putting in place measures that help reduce the threat from future crises like climate change. We must do both and as economies start to open up again, we must build back better and build back greener.”

Methane is a powerful greenhouse gas responsible for a quarter of current anthropogenic climate warming. Because methane’s atmospheric lifespan is relatively short – 10 to 12 years – actions to reduce methane emissions can yield the most immediate reduction in the rate of warming, while also delivering air quality benefits.

The oil and gas sector is the second largest source of man-made methane emissions, responsible for 24% of global anthropogenic methane emissions, and is the sector with the greatest potential for cost-effective reductions. These reductions could slow the rate of global warming in the short term as efforts continue to decarbonize the energy system by adopting cleaner forms of energy.

The Climate and Clean Air Coalition is a global partnership of governments, civil society and private sector, committed to reducing short-lived climate pollutants (black carbon, methane, tropospheric ozone, and hydrofluorocarbons). It acts as a catalyst to create, implement and share immediate solutions to rapidly reduce near-term warming, protect human health, increase food security, and ensure sustainable development for future generations. Reducing these pollutants, together with deep and persistent cuts to carbon dioxide, can prevent up to 0.5˚ Celsius of warming by the end of the century. The Coalition’s Secretariat is hosted by the United Nations Environment Programme.

More information on the announcement can be found here

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