Thank you for the opportunity to appear before the committee today.
The David Suzuki Foundation has long advocated for effective regulations to rapidly reduce methane emissions from the oil and gas sector. Because it is a short-acting greenhouse gas with a 20-year, climate-forcing effect 86 times that of CO2, less methane in the atmosphere leads to immediate climate benefits. The urgency of tackling the oil and gas sector's emissions is accentuated by field measurements that consistently show around double or more methane emissions than are recorded in Canada's national inventory report.
Unfortunately, existing methane regulations can actually incentivize the increase in flaring of gas that is rich in methane and volatile organic compounds. The flaring of methane and VOCs results in the formation of black carbon particulates, which are both toxic and a short-lived climate pollutant with a global warming potential that is many hundreds of times greater than carbon dioxide. Flaring is also a compliance pathway that is inconsistent with Canada's climate objectives and the commitment to zero routine flaring by 2030.
The federal government announced the emissions reduction fund in the early days of the pandemic, in a moment of economic uncertainty when governments were quickly rolling out a suite of measures to stabilize the economy. As my colleague, Dr. Pineau, mentioned, the prices of gas and oil were in a very low territory. We believe in the polluter pays principle, so the ERF providing financing to the oil and gas industry is not the approach we would have recommended. However, once the decision to establish the ERF was made, we sought to ensure that supported products achieved emissions reductions that went beyond regulatory requirements, with a focus on eliminating rather than reducing emissions.
In an April 2020 joint letter, we made recommendations to the minister. We believed that if the ERF were guided by such principles, the program would lead to emissions reductions beyond those that could be achieved by existing federal and provincial regulations. Further, the ERF would catalyze growth in Canada's nascent methane abatement industry.
When NRCan announced the net results from intakes one and two, we were pleased to see that 97% of the emissions reductions came from projects that eliminated intentional routine venting and flaring of methane. This abatement was achieved for less than $20 per tonne of CO2 equivalent. This is a notable achievement, demonstrating that Canada should immediately strengthen the existing regulations to end the intentional venting and flaring of methane-rich gas.
We were naturally concerned to learn some of the issues identified in the environmental commissioner's report. Expecting that NRCan would take corrective action, we wrote to Minister Wilkinson in December of last year to urge him to ensure that whatever course of action is taken, be it revising or cancelling the ERF in favour of other measures, the department aims to meet or exceed the proportionate outcomes of the first two intakes of the program over an equivalent period.
Last week, we were briefed by departmental officials on changes to the program for intake three. We are pleased that projects were required to surpass regulatory requirements to be verifiably incrementable, and that only capital infrastructure projects that eliminate sources of intentional routine venting will qualify under the program.
The ERF's achievement showed that tackling methane offers some of the lowest-cost mitigation on a dollar-per-tonne basis across the Canadian economy. We are committed to participating in the review of existing regulations and the development of enhanced regulations to achieve the 2030 target of requiring Canada's oil and gas sector to reduce its methane emissions by at least 75%. We are also cognizant that it takes time to develop those regulations. We prefer the regulatory approach and we believe that future efforts to mitigate emissions should be guided by the polluter pays principle, Canada's commitment to eliminate fossil fuel subsidies by 2023, and the commitment to phase out public financing of the fossil fuel sector.
Nonetheless, we recognize that the ERF, by focusing on elimination and exceeding regulations, has the potential to quickly deliver substantial reductions in emissions that put Canada in a better position to meet its climate goals on improving air quality and public health.
Thank you for listening. I'll be happy to answer your questions.