Order Declaring that the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) Do Not Apply in Alberta, 2025: SOR/2025-213

Canada Gazette, Part II, Volume 159, Number 23

Registration
SOR/2025-213 October 23, 2025

CANADIAN ENVIRONMENTAL PROTECTION ACT, 1999

P.C. 2025-737 October 23, 2025

Whereas, under subsection 332(1)footnote a of the Canadian Environmental Protection Act, 1999 footnote b, the Minister of the Environment published in the Canada Gazette, Part I, on July 5, 2025, a copy of the proposed Order Declaring that the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) Do Not Apply in Alberta, 2025 and persons were given an opportunity to file comments with respect to the proposed Order or to file a notice of objection requesting that a board of review be established and stating the reasons for the objection;

Whereas, on September 26, 2025 the Minister of the Environment and the Government of Alberta entered into a written agreement referred to in subsection 10(3) of that Act to the effect that there are in force by or under the laws of Alberta

Whereas, under subsections 10(4) and (5) of that Act, the Minister gave notice of the availability of that agreement in the Canada Gazette, Part I, on July 5, 2025, and persons were given an opportunity to file with the Minister comments or a notice of objection;

And whereas, under subsection 10(6) of that Act, the Minister published in the Canada Gazette, Part I, on September 27, 2025, a notice of availability of a report that summarizes how any comments or notices of objection were dealt with;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of the Environment, makes the annexed Order Declaring that the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) Do Not Apply in Alberta, 2025 under subsection 10(3) of the Canadian Environmental Protection Act, 1999 footnote b.

Order Declaring that the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) Do Not Apply in Alberta, 2025

Declaration

Non-application

1 Except with respect to a federal work or undertaking, the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) do not apply in Alberta.

Cessation of Effect

Termination of agreement

2 This Order ceases to have effect on the day on which the agreement between the Minister of the Environment and the Government of Alberta entitled “Agreement on the Equivalency of Federal and Alberta Regulations Respecting the Release of Methane from the Oil and Gas Sector in Alberta, 2025” terminates or is terminated under subsection 10(8) of the Canadian Environmental Protection Act, 1999.

Repeal

3 The Order Declaring that the Provisions of the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) Do Not Apply in Alberta footnote 1 is repealed.

Coming into Force

Registration

4 This Order comes into force on the day on which it is registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Order.)

Issues

The current equivalency agreement between the Minister of the Environment and the Province of Alberta, which forms the basis for the non-application of the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) [the Federal Regulations]footnote 2 in the Province of Alberta, is set to expire on October 26, 2025.

A new equivalency agreement has been negotiated. An updated order (the Order) is required to avoid regulatory overlap and duplicative reporting burden.

Background

In April 2018, the Government of Canada published the Federal Regulations. The Federal Regulations introduced control measures (facility and equipment standards) to reduce fugitive and venting emissions of hydrocarbons, including methane, from the upstream oil and gas sector. The Federal Regulations came into force on January 1, 2020.

In December 2018, the Alberta Energy Regulator finalized amendments to the Directive 060: Upstream Petroleum Industry Flaring, Incinerating, and Venting and Directive 017: Measurement Requirements for Oil and Gas Operations (the Alberta Directives),footnote 3footnote 4 which put in place requirements for methane emissions reductions. These requirements are given force of law by the Methane Emission Reduction Regulation (the Alberta Regulations),footnote 5 which came into force on January 1, 2020.

In 2020, the Minister of the Environment entered into a five-year equivalency agreementfootnote 6 with Alberta and an associated order was made to declare that the Federal Regulations do not apply to the province over the period of the equivalency agreement.footnote 7 This approach reduces regulatory overlap and administrative burden. Alberta continues to apply its own methane emission regulations and facilities only face one set of requirements. This equivalency agreement recognized that Alberta’s regulations would achieve equivalent outcomes in reducing methane emissions compared to the Federal Regulations. The current equivalency agreement is in force until October 26, 2025, unless terminated earlier by either party on three months’ notice.

Equivalency agreements under the Canadian Environmental Protection Act, 1999

Protection of the environment is a shared jurisdiction between the Government of Canada and provincial governments. Section 10 of the Canadian Environmental Protection Act, 1999 (CEPA) authorizes the Governor in Council, on the recommendation of the Minister of the Environment, to make an order declaring that the provisions of a regulation made under certain subsections of CEPA do not apply in a province or territory. For this to occur, the province or territory must first enter into an equivalency agreement with the Minister of Environment. An equivalency agreement is a written agreement entered into by the Minister of the Environment and the province or territory declaring that there are in force in the province or territory laws containing provisions that are equivalent to the Federal Regulations, and laws containing provisions that are similar to sections 17 to 20 of CEPA for the investigation of alleged offences under environmental laws of the province or territory. Under subsection 10(8) of CEPA, an equivalency agreement has a maximum term of five years after the date on which it comes into force. An equivalency agreement may be terminated before this time subject to a three-month notice by either party.

The Department of the Environment (the Department) has indicated that it is willing to consider developing equivalency agreements for greenhouse gas (GHG) emission regulations with interested provinces and territories in order to reduce regulatory overlap and provide greater flexibility for regulated sectors. In the case of GHG regulations, provincial or territorial laws are considered equivalent if they meet the above requirements under CEPA, which includes resulting in equivalent or better GHG emission outcomes compared to what emissions would have been if the corresponding federal regulations had been applied instead, calculated in terms of carbon dioxide equivalent (CO2e).

Alberta equivalency agreement (2025–2030)

The Government of Canada published a draft equivalency agreement in the CEPA Registry and a notice of its availability was published in the Canada Gazette, Part I, on July 5, 2025, initiating a 60-day period for public comment.footnote 8, footnote 6 This agreement is based on equivalent methane emission reductions in CO2e, under provisions of the provincial laws in force in the jurisdiction of the Government of Alberta, and on the fact that these provincial laws contain similar provisions to sections 17 to 20 of CEPA for the right to require an investigation of alleged offences. These provisions are set out under the provincial Environmental Protection and Enhancement Act.

Following the public comment period, the agreement has now been finalized by the Governments of Canada and Alberta. This agreement will come into force on the date of registration of the Order declaring that the Federal Regulations do not apply in Alberta except with respect to federal works or undertakings. The agreement would be reviewed on an annual basis. The agreement is similar to the previous agreement, and institutes expanded information sharing requirements for Alberta that include facility-level emissions data, verification activities and enforcement measures. The new agreement also includes a requirement for an annual meeting between Canada and Alberta to discuss implementation of the agreement. The agreement will end five years after the date of its coming into force unless terminated early by either party with at least three months’ notice.

Equivalent environmental outcomes

For the purposes of determining equivalent outcomes between the Alberta Regulations and the Federal Regulations, the Department has maintained the analysis associated with the existing agreement showing methane reduction outcomes (in CO2e) from the Federal Regulations and the Alberta Regulations using the departmental reference case as published in Canada’s Greenhouse Gas and Air Pollutant Emissions Projections: 2018 (the 2018 Reference Case).footnote 9The analysis was conducted by first developing detailed, bottom-up engineering emission estimates for the baseline and regulatory scenarios for each emission source. The departmental reference case for the oil and gas sector was determined using historic emissions from the departmental National Inventory Report (NIR) and the production forecast of oil and gas from the Canada Energy Regulator.

Based on these estimates, the Alberta Regulations are expected to result in cumulative emission reductions of 38.68 megatonnes (Mt) of methane (in CO2e) for the period starting on January 1, 2025, and ending on December 31, 2029, compared to reductions of 37.77 Mt for the Federal Regulations, as summarized in Table 1 below. These estimates differ by 2.4% and are considered equivalent given the uncertainty of modelled results. As illustrated in Table 2, the Alberta Regulations are expected to result in greater emission reductions over a five-year time horizon. These emission reduction trends are expected to continue into 2030, when the equivalency agreement would expire.

Table 1: Five-year comparison of cumulative methane emission reductions (Mt CO2e) from January 1, 2025, to December 31, 2029
Figures may not add up to totals due to rounding.
Emissions source Alberta Regulations Federal Regulations Difference
Compressors 4.69 3.29 1.39
Fugitive emissions 4.01 4.96 −0.95
Glycol dehydrators 1.59 0 1.59
Pneumatic controllers 21.54 12.38 9.17
Pneumatic pumps 3.00 7.07 −4.07
Routine venting 3.85 10.07 −6.22
Total 38.68 37.77 0.91
Table 2: Five-year comparison of methane emission reductions (Mt CO2e) from January 1, 2025, to December 31, 2029
Figures may not add up to totals due to rounding.
Year Alberta Regulations Federal Regulations Difference
2025 7.12 7.30 −0.18
2026 7.44 7.43 0.00
2027 7.73 7.56 0.17
2028 8.08 7.68 0.40
2029 8.31 7.79 0.52
Total 38.68 37.77 0.91

While the existing equivalency agreement (from 2020 to 2025) was negotiated based on modelling results derived from the Department’s 2018 reference case, the Department continues to support the conclusion of equivalent methane emission reductions for the period of the new agreement, as neither the Government of Alberta nor the Government of Canada have made substantive changes to their regulations. If amendments are made to the Federal Regulations, then a new equivalency agreement may be required, and it would be based on emission estimates that reflect the amended regulations.

Objective

The objective of the Order is to reduce regulatory overlap and reporting burden, as it has been established that Alberta’s laws are expected to achieve equivalent GHG emission reductions in the oil and gas sector in a manner that best suits its particular circumstances.

Description

The Order, made pursuant to subsection 10(3) of CEPA, suspends the application of the Federal Regulations in Alberta, with the exception of federal works or undertakings as defined in subsection 3(1) of CEPA. The Order will cease to have effect upon the termination of the equivalency agreement. The equivalency agreement has a maximum term of five years from the day that the Order is registered but may be terminated earlier by either party with at least three months’ notice.

Regulatory development

Consultation prior to the publication of the proposed Order in the Canada Gazette, Part I

Officials from the Government of Alberta and the Government of Canada were actively engaged in bilateral discussions on the renewal of the equivalency agreement. These discussions have been focused on key policy and technical parameters used in support of the determination of equivalent outcomes, as well as information-sharing arrangements agreed to with Alberta representatives providing for the conduct of annual reviews of the agreement.

Comments received during the 60-day public comment period following the publication of the proposed equivalency agreement and the proposed Order in the Canada Gazette, Part I

A notice of the availability of the proposed equivalency agreement and the proposed Order were published in the Canada Gazette, Part I, on July 5, 2025. They were also posted to the Department’s CEPA Registry website to raise awareness that they were available to the public for comment. The Department received five submissions in total from various stakeholders, including associations representing oil and gas producers and methane-reduction solution providers, as well as environmental non-governmental organizations (ENGOs).

Overview of feedback received and responses to specific stakeholder feedback

The Department’s responses to all comments related to the draft agreement have been published on the CEPA Registry. Stakeholder comments and responses are summarized below.

Support for equivalency agreement

Industry stakeholders were supportive of the proposed equivalency agreement and proposed Order and expressed support for provincial regulations in the upstream oil and gas sector. Concerns were raised regarding the possibility of increased regulatory burden, unnecessary complexity and higher costs in the absence of an equivalency agreement. The Order has been published ahead of the expiry of the existing equivalency agreement to ensure no duplication of regulatory requirements. While ENGOs supported stronger regulatory measures within the equivalency agreement, greater use of direct measurement techniques, and more public oversight to ensure these agreements are effective and transparent.

Enhanced public engagement and Information sharing

ENGOs have asked that the Department encourage the provincial government to share the most recent and relevant information publicly. In particular, ENGOs sought information related to measurement-based data to improve the accuracy of estimates of methane emissions and enable the public to accurately assess the efficacy of the provincial regime in reducing methane from the oil and gas sector. ENGOs have requested enhanced public involvement in federal and provincial policy making. ENGOs would like the Department to provide greater transparency during the development, negotiation and review of renewed agreements, as well as allowing the public to provide input during the Department’s annual review of the information provided by Alberta under the agreement and to consider measurement data and compliance rates when conducting its annual review.

Relative to the 2020 equivalency agreement with Alberta, this equivalency agreement enhanced public engagement and information sharing. The Department seeks opportunities to work with ENGOs, in particular through informal engagements related to the ongoing improvement of methane data, to make data available outside of the scope of these agreements. The Province of Alberta currently publishes information related to methane emissions reduction publicly, including reported and modelled methane emissions for oil and gas facilities. In addition, the equivalency agreement mandates detailed, annual data submissions on the number of facilities, methane reduction outcomes and enforcement activities. It emphasizes transparency and ongoing evaluation of the effectiveness of both the federal and provincial regulations. This information is used to assess the implementation and effectiveness of the Province’s regulations to reduce methane emissions. Stakeholders are invited to share their observations on the annual reports with the Department.

Department’s methane emissions modelling and assumptions

Industry stakeholders have acknowledged that the Department’s modelling results published in the Canada Gazette, Part I, show that Alberta’s methane regulations are expected to have ongoing emissions reductions and that the province’s cumulative methane emission reductions are projected to slightly surpass the methane emission reductions target under the federal regulations.

ENGOs have requested more transparency regarding the Department’s modelling and the methods used to scale emissions. For this Order, the Department is relying on modelling that underpinned the order published in 2020, which covered a 10-year period. The Department notes that it has had ongoing consultations on modelling methods as part of the development of various methane policies. These consultations aim to refine and improve the modelling approaches, ensuring they reflect the latest data and methodologies, including provincial input and recent advancements in direct measurement techniques. The outcome of these consultations will further inform the Department’s approach to assessing methane emissions reductions and regulatory equivalency.

ENGOs have requested more detail regarding how the Department scales estimated emissions. The Department determined equivalent emissions outcomes by using the same modelling methodology for both the existing federal and provincial regulations.footnote 10 This approach involves developing detailed bottom-up emissions estimates for both sets of regulations and comparing them with Canada’s emissions baseline National Inventory Report (NIR) 2018.

Finally, ENGOs have inquired whether the Department’s modelling reflects the results of direct measurements of the oil and gas sector’s methane emissions that were integrated into the NIR starting in 2024. The modelling to support this equivalency agreement was based on NIR 2018 and does not consider whether direct measurements would influence the analytical outcome presented in Table 1. The Department has made subsequent efforts to incorporate measurement data into the NIR beginning in 2024. Should there be amendments to the Federal Regulations that require a new equivalency agreement, that analysis would be informed by an updated NIR.

Indigenous engagement, consultation and modern treaty obligations

In Alberta, facilities subject to the Federal Regulations were identified on the reserve lands of 26 First Nations. The Order suspends the application of the Federal Regulations in Alberta, including for those facilities on reserve lands. Equivalent environmental outcomes are expected to be achieved under the Alberta Regulations. Moreover, the Order is expected to result in incremental cost savings for facilities affected by the Federal Regulations, including facilities managed by Indigenous peoples. No modern treaty obligations are expected to be impacted by the Order.

Instrument choice

An order is the only regulatory instrument under CEPA for the Governor in Council to declare that the Federal Regulations do not apply in Alberta. Non-regulatory options, such as a voluntary option or code of practice, are therefore not suitable tools for achieving the objective.

Regulatory analysis

Benefits and costs

The Alberta Regulations will regulate methane emissions in a manner that results in equivalent outcomes to the Federal Regulations and in a manner designed with the specific characteristics of the Alberta oil and gas industry in mind. Furthermore, the Order would reduce regulatory overlap and reporting burden by suspending the requirements of the Federal Regulations in Alberta. As a result, the Order is expected to result in incremental compliance and administrative cost savings to industry.

The federal government is expected to realize incremental cost savings from suspended administrative activities related to enforcement, compliance promotion, and administration of the Federal Regulations in Alberta. These cost savings are estimated to total about $1,638,577 over a five-year period (2024 Canadian dollars).footnote 11

Small business lens

Given that the Order is not expected to result in incremental costs to industry, it is not expected to result in incremental cost impacts to small businesses.

One-for-one rule

The one-for-one rule applies to the Order, constituting an “OUT” as per the Policy on Limiting Regulatory Burden on Business. However, those cost reductions have already been accounted for in the Regulatory Impact Analysis Statement for the previous order, which covered the 2020–2029 analytical period. Accordingly, no additional impact was assessed for the Order.

Regulatory cooperation and alignment

Protection of the environment is a shared responsibility in Canada. The use of equivalency agreements, together with an order suspending the application of a federal regulation in a jurisdiction, is included in section 10 of CEPA as a tool for avoiding regulatory duplication.

International obligations

This Order is not linked to any international agreements or obligations.

Effects on the environment

The Federal Regulations were developed under the Pan-Canadian Framework on Clean Growth and Climate Change. A strategic environmental assessment (SEA) was completed for this framework in 2016. The SEA concluded that proposals under the framework will reduce GHG emissions and are in line with the 2022–2026 Federal Sustainable Development Strategy (FSDS) [PDF] goal of effective action on climate change.

Gender-based analysis plus

No impacts based on gender and other identity factors have been identified for this Order.

Right to a healthy environment

The Government of Canada has a duty, in the administration of CEPA, to protect the right to a healthy environment as provided for under CEPA, subject to reasonable limits. An implementation framework sets out considerations to protect this right and uphold the principles described in the framework.

Work to inform the Order was completed before the implementation framework was published on July 19, 2025. Recognizing that CEPA decisions are informed by analyses and consultations that are often the result of years of work, a transition period is in place to allow Environment and Climate Change Canada and Health Canada to support continued protection of the environment and human health. The objective of the transition period is to continue to advance timely CEPA decisions and actions, while consideration of the right to a healthy environment and relevant principles is being fully integrated into the administration of the Act. The Order is proceeding under the transition period referenced in the framework.

It is expected that Alberta’s regulatory regime will deliver equivalent greenhouse gas reductions in the oil and gas sector as would have been achieved under the Federal Regulations. Therefore, the Order supports a sustainable climate and an environment that is protected from harmful substances, pollutants and waste.

Implementation, compliance and enforcement, and service standards

Implementation

The Order declares that the Federal Regulations do not apply in Alberta, effective on the day on which the Order is registered, except for federal works and undertakings, which includes interprovincial pipelines.

Contacts

Clare Demerse
Acting Director
Oil, Gas and Alternative Energy Division
Energy and Transportation Directorate
Environmental Protection Branch
Department of the Environment
351 Saint-Joseph Boulevard
Gatineau, Quebec
K1A 0H3
Email: methane-methane@ec.gc.ca

Matthew Watkinson
Executive Director
Regulatory Analysis and Valuation Division
Economic Analysis Directorate
Strategic Policy Branch
Department of the Environment
351 Saint-Joseph Boulevard
Gatineau, Quebec
K1A 0H3
Email: darv-ravd@ec.gc.ca