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New oil and gas projects to be subject to “best-in-class” performance

April 7, 2022   Don Horne

Ottawa has announced plans to develop guidance that will require proponents of new oil and gas production projects subject to a federal impact assessment to demonstrate that they will have “best-in-class” low-emissions performance.

New Canadian oil production subject to federal impact assessment will have to meet even higher standards. New projects would have to deliver emissions performance — the amount of greenhouse gas pollution it takes to produce a barrel of oil or cubic metre of natural gas — that is best in class, and all future oil and gas projects would have to be net zero by 2050.

“In a global market moving away from fossil fuels combustion, this new guidance will help steer oil and gas projects towards “best-in-class” low-emissions performance and maintain our competitive advantage. And by 2050, any projects operating in Canada will have to be net-zero emissions. This policy guidance helps implement our ambition for the sector and builds off our recently announced 2030 Emissions Reduction Plan, which included $9.1 billion in new investments and a suite of new measures to help mobilize Canada towards a truly sustainable economy and a leading competitor in the global transition to cleaner industries and technologies,” says Steven Guilbeault, Minister of Environment and Climate Change.

With some global demand for oil and gas expected even once the global economy reaches net-zero emissions, now is the right time to transform Canada into the cleanest global oil and gas producer, states Guilbeaut. Moving to provide low-carbon and non-emitting energy products and services “will help ensure economic competitiveness and prosperity, and create good, sustainable jobs for Canadians.”

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The new guidance will explain how proponents of new oil and gas projects subject to a federal impact assessment should use the analysis required by the Government of Canada’s strategic assessment of climate change (SACC) to demonstrate that the project will be “best in class,” such as by:

  • demonstrating that the project will integrate advanced technologies and best environmental practices (BEPs), including emerging technologies, to minimize emissions;
  • comparing the project’s emissions with high-performing projects in the world; and
  • developing a plan to achieve net-zero emissions by 2050 if the project will continue to operate after that date.

The new guidance will also include information about how a proposed project is consistent with the overall economic transition to a low carbon-economy, including considerations such as how the project will remain competitive across global low-carbon transition and net-zero scenarios, and how it avoids supporting activities and assets that are at risk of becoming stranded from declining demand.

The development of the guidance will be informed by consultations with industry, provinces, territories, Indigenous Peoples, and other stakeholders.

“Around the world, smart money is increasingly flowing away from assets that are not compatible with a transition to a net-zero world, and towards opportunities that are. Fuels that are produced in an ultra-low carbon fashion will have significant value internationally going forward, and Canada is positioned to provide these fuels as part of our broader suite of domestic and international climate measures,” says Jonathan Wilkinson, Minister of Natural Resources.


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