As Canadian industries expand, greenhouse gas emissions have become an urgent issue, with methane playing a significant role, particularly in the oil and gas sector. In response, Natural Resources Canada (NRC) has launched the Emissions Reduction Fund (ERF) – Onshore Program. With nearly $700 million in funding available, this initiative seeks to help Canadian onshore oil and gas companies reduce or eliminate methane emissions, thereby contributing to a greener future.
The Importance of Reducing Methane Emissions
Methane is a potent greenhouse gas, with a global warming potential over 25 times greater than that of carbon dioxide over a 100-year period. In Canada, the oil and gas sector is one of the largest sources of methane emissions, accounting for 43% of the country’s total. Reducing these emissions is critical for Canada to meet its climate targets and mitigate the impacts of climate change.
Funding Opportunities
The ERF offers substantial financial support to eligible projects:
- Funding Scope: Up to 75% of project costs and up to 90% of stacking costs (from other sources), ranging from $100,000 to $50 million per project.
- Repayment: A five-year payback period after project completion.
- Project Acceptance: Multiple projects can be accepted per application, providing flexibility for comprehensive emissions reduction strategies.
Eligibility Requirements
To qualify for funding, applicants must:
- Be an incorporated or registered legal entity within Canada.
- Be an oil and gas company, or a provincial, territorial, or municipal government owning or operating an upstream/midstream conventional, tight, or shale oil and gas facility in Canada.
- Provide mandatory documentation as listed in the NRC guide, including an engineer-certified Basis of Application (BOA) or equivalent.
Eligible Projects
Projects must focus on either eliminating or reducing greenhouse gas emissions:
- Eliminating Emissions:
- Conservation and active metering of vented natural gas.
- Developing or upgrading gas gathering or processing infrastructure.
- Installing compressed atmospheric air or inert non-hydrocarbon gas storage or piping infrastructure.
- Reducing Emissions:
- Incinerating or flaring previously vented natural gas.
- Reducing vented natural gas from pneumatic devices.
Eligible Activities
Projects can include a variety of activities:
- Engineering-certified BOAs or equivalents.
- Salaries and benefits for employees working on the project.
- Professional, scientific, technical, management, data collection, and contracting services.
- Travel expenditures related to the project.
- License fees, data purchases, certification costs, and regulatory compliance fees.
- Capital expenditures for new or improved equipment to reduce methane emissions.
- Materials, supplies, and equipment.
- Equipment leasing or rental.
- Overhead expenditures up to 15% of total project costs, if related to the project’s conduct.
Conclusion
The Emissions Reduction Fund – Onshore Program by NRC is a pivotal initiative aimed at reducing methane emissions in Canada’s oil and gas sector. By providing significant financial support and fostering innovation, the program helps industries transition towards more sustainable practices. This not only aids in achieving Canada’s climate goals but also promotes a healthier environment for future generations. For companies engaged in the oil and gas sector, participating in this program is a crucial step towards environmental stewardship and operational sustainability.
Project Timeline
The deadline for a proposal request under the Emissions Reduction Fund Onshore Program, Intake 3, is March 31, 2022, by 8:00 p.m. EST. The funding for projects will be entirely allocated by March 31, 2023.
Contact EVAMAX today to get started on your application!
