Good afternoon, Mr. Chair and members of the committee.
My name is Jan Gorski and I'm the director of the oil and gas program at the Pembina Institute. My colleague Chris Severson-Baker is the Alberta regional director.
The Pembina Institute is a non-profit think tank that advocates for strong, effective policies to support Canada's clean energy transition. We've advocated for methane regulations at the provincial and federal levels since before 2015, and we've informed their development and implementation since then. We've also provided recommendations to Natural Resources Canada on the design of the emissions reduction fund, which were adopted. Pembina has a long history of working on environmental issues in the oil and gas sector, having done this for close to four decades.
In 2021, we saw significant momentum building on reducing methane emissions, both in Canada and globally. Reports from the International Energy Agency, the United Nations Environment Programme and the Intergovernmental Panel on Climate Change all highlighted the urgent need to address methane emissions in 2021. Over 100 countries, including Canada, signed on to the global methane pledge at COP26. This was a clear signal of impending global action.
Recent research confirms that we need to act fast on methane. Cutting global methane emissions from all human sources—including oil and gas, agriculture, waste and others—in half by 2030 would avoid an additional half a degree increase in global temperatures by 2100. This is equivalent to slowing down global warming by almost [Technical difficulty—Editor]. That's a large amount.
The need to act now is made more urgent by the fact that actual methane emissions are much higher than current government estimates. Studies in Canada and the U.S. consistently show that methane emissions from oil and gas could be as much as twice as high as current government estimates show.
Canada needs to get as close as possible to eliminating methane emissions from the oil and gas sector by the end of this decade. A 2019 study from the Canadian Energy Research Institute examined how much oil and gas methane we could eliminate using existing technology. The study found that methane emissions in 2017 could be reduced by 33 megatonnes. Based on our analysis of this report, this translates to almost a 90% reduction from 2012 levels, at a cost of less than $25 a tonne. This is very inexpensive when compared to the carbon price, which will be rising to $170 a tonne.
What this shows is that we have the technologies to drastically cut methane emissions, and they're commercially available and economically feasible.
The federal government has recently set a new target to reduce oil and gas methane emissions by at least 75% by 2030 and is well placed to be a leader in addressing methane, but they must now act quickly to implement policy to meet and exceed that target. Such action must include strong regulations, but they also must address challenges with methane data and infrastructure barriers. There is a lot of uncertainty in the amount of methane emitted by oil and gas operations, as I mentioned, so we need to improve methane data and continue to address the kind of infrastructure barriers that the emissions reduction fund has been addressing.
The fund was implemented during the pandemic to create jobs and economic benefits within the oil and gas sector, while at the same time reducing emissions. At that time, the government's own modelling showed that Canada's regulations were falling short of our 2025 methane reduction target of 40%. The fund was also meant to help bridge the gap to meeting our 2025 target.
As Pembina recommended, the fund was designed to go beyond incremental reductions and to encourage the complete elimination of methane emissions, which is something that's not required by current regulations. Setting this ambitious target was the only way the fund would achieve reductions above and beyond current regulations. In that respect, the fund was successful, in that 97% of the money went to projects that eliminated methane.
Given the urgency of the climate crisis and the need to act quickly on methane, the fund should be kept for the remainder of 2022 to eliminate as much methane as possible.
We are also still in the dark about progress towards Canada's 2025 methane reduction target, because the federal government's recent progress report has not included promised updates to the national inventory or the most recently available data on the real levels of methane emissions. There's a need to calculate what reductions from the fund were on top of regulations, meaning that they went above and beyond regulatory requirements. This information is key to evaluating Canada's progress towards the 2025 target.
The federal government also needs to publicly release more detailed information from the ERF showing the types of projects, costs and emissions reductions that were funded. This data will help inform future policy design.
To wrap up, Canada has an opportunity to be a leader in addressing methane. Doing so is critical to addressing emissions from the oil and gas sector. The government must waste no time and act quickly to implement policy to exceed our 2030 methane target.
Thank you very much.