Implications of Alberta's Updated Pneumatic Carbon Credit Guidance

The industry was dismayed in July this year when Alberta Environment and Parks (AEP) unexpectedly issued a memo which effectively eliminated carbon credit eligibility for zero-bleed retrofits of pneumatic instruments. The memo was met with a strong response from industry, expressing concerns about the potential impact on emissions reduction projects and goals. The AEP was listening and issued an updated memo on November 25th, followed by a correction to that memo on November 29th.

So what changed?

The challenges that the AEP was addressing in the July memo were related to how credits would be quantified after Dec 31, 2022 when new Directive 60 restrictions including the overall vent gas (OVG) limit and requirements for low bleed devices come into effect. The November memo has addressed these issues while retaining crediting for instrument gas to instrument air projects through new quantification guidelines. 

The main take away from the new memo is that zero bleed retrofits of controllers and pneumatic pumps are once again eligible for eight years of credits. Another key change is there is now a new quantification guideline which adjusts the baseline after Jan 1 2023 in the event there are high bleed devices in the system or if the overall vent gas limit (OVG) is exceeded. A summary of latest guidance by project type is provided below.

How should operators think about this change?

The Federal Government recently announced that they were committing to reducing methane emissions from the oil and gas industry by 75% by 2030 from 2012 levels. New regulations mandating zero emissions pneumatic devices will be necessary to meet this goal. South of our border, similar regulations were recently proposed by the EPA. All of this implies that zero-bleed retrofits are inevitable. The AEP memo changes present a great opportunity for forward thinking operators take advantage of the strong economic returns created by carbon credits (the carrot). Operators who fail to act are likely to find themselves with regulations forcing changes and no incentives (the stick).

For those interested in further reading the Alberta Pneumatics Quantification Protocol can be found here.

The team at Westgen has developed a tool to ingest pneumatics device inventory data and perform a ranked site by site level assessment. Each assessment includes full project economics and emissions reduction projections. This model is based on the most up to date emissions quantification methodology available and the report is provided free of charge. Reach out to your Westgen representative to learn more.

If you have any questions or would like additional information please contact us.

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