Canada to regulate greenhouse-gas, other air emissions

By OGJ editors
HOUSTON, May 3--The Canadian government has issued a proposed framework for regulation of air emissions that it says contains "the toughest action on greenhouse gases ever proposed by a Canadian government."

The framework envisions regulations that for the first time in Canada set "mandatory and enforceable reduction targets" for emissions not only of greenhouse gases but also of specified air pollutants from major industrial sources.

The oil and gas industry is one of seven categories to which the industrial regulations apply. Others are electricity generation via combustion; forest products; smelting and metals refining; iron and steel; some mining; and cement, lime, and chemicals.

For greenhouse gases, the framework sets a 2010 implementation date for reduction targets for emission intensity, defined as greenhouse-gas emissions per unit of production. For air pollutants—nitrogen oxides, sulfur oxides, volatile organic compounds, and particulate matter—the framework sets fixed emission caps taking effect as soon as possible between 2012 and 2015.

All emission cuts are measured against 2006 baselines.

In addition to regulating industrial emissions, the framework calls for:

-- A mandatory vehicle fuel-efficiency standard taking effect in the 2011 model year.

-- A phaseout of incandescent light bulbs in common uses after 2012.

-- New energy-performance standards for consumer and commercial products.

-- Development of "a comprehensive regulatory agenda to improve indoor air quality."

Greenhouse gases
For greenhouse gases from existing facilities, the government seeks 6%/year improvement during 2007-10 in emissions intensity and 2%/year improvement for 10 years after 2010.

New facilities—those beginning operations in 2004 or after—will have a 3-year grace period for greenhouse-gas emission targets. After the grace period, targets will be based on a "cleaner fuel standard," and the facilities will have to achieve 2%/year emissions improvements.

Production-related, noncombustion emissions that can't be cut with existing technology are exempt from the early, 6%/year targets.

The framework uses carbon dioxide equivalency, based on global warming potential, to report emissions of the various greenhouse gases.

Companies can meet their obligations under the proposed greenhouse-gas regulations by cutting their own emissions, contributing to a technology fund, trading emission-reduction credits, receiving credit for actions taken during 1992-2006, and participating in other North American emissions trading systems that might develop.

Air pollution cuts
For air pollutants, the framework sets national targets for cuts against 2006 levels, within which goals for specific industries will be set.

Fixed emission caps for pollutants from specific industries also will be set. The government used benzene from gas production and processing and refining as an example.

The national goals set volumetric caps for each pollutant that are to take effect as early as possible between 2012 and 2015. Against 2006 emission levels, these caps represent cuts of about 40% for nitrogen oxides, 55% for sulfur oxides, 45% for volatile organic compounds, and 20% for particulate matter.

A Canadian cap-and-trade emissions trading system will be available for sulfur oxides and nitrogen oxides only.

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