Canada Decarbonization and Methane Abatement in the Oil and Gas Sectors

In 2021, the Government of Canada announced that it would be joining the Global Methane Pledge, an initiative aiming to reduce global methane emissions by 30% below 2020 levels by 2030. This commitment is just one among many other indicators that oil and gas decarbonization is becoming a best prospect sector in the Canadian market.

Canada boasts numerous domestic and international commitments to reducing emissions. The federal government has made it a goal to reduce oil and gas methane emissions by 40-45% below 2005 levels by 2030. Moreover, Canada has been on the path toward phasing out coal-fired power generation, having identified coal mining as a significant contributor to methane emissions.

The U.S. clean technology industry can offer competitive solutions to this quickly developing industry in the Canadian market. Canada has consistently expressed its plans to become a producer and exporter of clean electricity and fuels. At the provincial level, the role of nuclear energy has rapidly increased, with provinces like Ontario and Saskatchewan signing MOUs with U.S. companies to build modular reactors. The federal government has launched numerous initiatives to fund and support R&D for clean technology. One such initiative is the Net Zero Accelerator (2021), which will invest CAD 8 billion to support faster decarbonization from large emitters, scale up clean technology and accelerate industrial transformation. 

Numerous non-governmental stakeholders in Canada have also been working to address climate change and identify solutions to decarbonization. The Pathways Alliance comprises six companies that operate around 95% of Canada’s oil sands production (CNRL, Cenovus, Suncor, MEG, Conoco Philips, Imperial Oil). These producers are working together to address climate change and offer an opportunity to promote U.S solutions to decarbonization.

The Canadian government does not shy away from inviting the thoughts of non-governmental stakeholders, provincial government, and critics. In March 2022, Environment and Climate Change Canada issued a discussion paper engaging stakeholders, including industry, non-governmental organizations, Indigenous organizations, and research organizations, on regulatory options and complementary measures to gather information for proposed regulations to follow in early 2023. The Canadian market is on a clear trajectory toward fully embracing cleaner energy, and U.S. producers.

For information about the Canadian oil and gas industries and how the U.S. Commercial Service assists U.S. exporters; visit www.trade.gov/canada or contact Commercial Specialist Connie Haider