Thank you, Jackson.
I will focus on one example of how Alberta's leadership in carbon pricing and offsets has created a vehicle for substantial private sector financing for, and investment in, emissions reduction technology innovation and implementation.
Fifteen years ago, Alberta established the first functioning carbon markets in North America. Since their inception, the challenge has been to strike a balance between regulatory oversight and flexibility, ensuring stability to incent technology innovation and attract financing for implementation.
To illustrate, in areas where line power is not available in the industry, the oil and gas industry has deployed natural gas-powered pneumatic controllers and injection pumps, resulting in one of the largest vent gas contributors to methane emissions. In Alberta, offset protocols were developed to reduce or eliminate these emissions.
Annual offsets created by pneumatic pump conversions went from almost zero in 2017 to over two million tonnes of CO2 in 2021. In 2021 alone, pneumatic replacements delivered twice the annual carbon emissions reductions achieved in a major Canadian carbon capture and storage facility. Privately funded offsets from pneumatic conversions in 2021 represented over 30% of reported upstream vent gas emissions.
However, carbon markets are fragile. As Jackson noted, risk reduction and legislative certainty are critical to attract private capital to finance our climate ambitions. Unfortunately, proposed revisions to the 2018 federal methane regulations will create significant unintended consequences. Requiring all pumps and controllers on oil and gas facilities to be non-emitting may sound like a good thing, but it effectively eliminates the potential for Alberta's highly robust and thriving carbon offset market to attract private capital to fund emissions reduction for pneumatic conversions. This will cause hundreds of millions of dollars in private capital to dry up, and it will send a chilling signal through, arguably, the most robust carbon market in the world.
As international voluntary carbon markets are being formed, Canadian leadership is essential to a world community crying for successful models to emulate. Canada can be a leader. Canada needs to work with the provinces to ensure that regulatory reforms add, and do not inhibit, functioning carbon markets across Canada, and to then take that Canadian experience, the Canadian successes, to the world.
Thank you, Mr. Chair.