Methane Recovery Minimizes Carbon Tax Burden

There’s no secret that capturing voluntary methane emissions is a win-win for the oil and gas industry and the environment. Recapturing natural gas after a pipeline or facility has been isolated for depressurization helps to improve operational economics. Some technologies can keep as much as 99.99% of potential methane emissions out of the atmosphere and in the pipeline.

While the bottom-line benefit is meaningful for operators worldwide, Canada has an additional financial incentive for using a gas recovery solution: enormous tax savings associated with the federal government’s “price on carbon pollution.”

In recent years, Ottawa has mounted a multifaceted, proactive drive toward a sustainable future, one that has operators searching for technology solutions to respond to new rules and regulations. In addition to launching an ambitious 2030 Emissions Reduction Plan and pioneering the National Adaptation Strategy, the government has also implemented a robust carbon pricing mechanism. Since 2019, every jurisdiction in Canada has had a price on carbon pollution, either through their own system or the federal one, which includes a regulatory charge on fossil fuels and a performance-based system for industries. This approach is designed to incentivize low-carbon innovation and reduce greenhouse gas emissions.

Earlier this year, the federal government raised the nationwide carbon price to $65 per tonne of carbon dioxide equivalent emissions (tCO2e), which will rise to $170 per tonne by 2030.

That’s a pretty hefty fee, considering that even a small pipeline depressurization project, such as 13 kilometers of 8-inch pipeline, can produce 390 tonnes or more of CO2e emissions, while a big project — for example, depressurizing 160-plus kilometers of 16-inch pipeline, can emit more than 5,300 tonnes of CO2e. In that case, it wouldn’t take long for the tax bill to reach nearly $350,000.

An American company has developed a system for bringing figures like that down to size — almost to zero, in fact.

When WeldFit, a Houston, Texas-based energy solutions provider, introduced its ReCAP® Emissions Recovery System with Straight-Line™ Performance in the U.S. more than two years ago, the company knew it would help operators reduce emissions safely, rapidly, and reliably.

But the financial implications were nothing short of astonishing when they did the math for Canadian energy operators.

Adam Murray, Vice President WeldFit Performance Products, said that over the course of all ReCAP jobs performed across the U.S., on average, 2,521 metric tonnes of CO2e were prevented from entering the atmosphere per job.

At $65 per tonne, that’s like avoiding $163,865 in carbon tax. If the entire 731,309.74 metric tonnes of CO2e WeldFit has recaptured over the past two years had been subject to a carbon tax, the savings would have exceeded $47 million.

“Canadian energy operators are proactively embracing strategies to diminish methane emissions, including leak detection, tax incentives, carbon capture, and sequestration,” shares Adam Murray, Vice President of WeldFit Performance Products. “This proactive stance underscores a profound dedication to safeguarding our environment and crafting a more sustainable future for all. WeldFit’s innovative ReCAP emissions recovery technology is not just a powerful ally in achieving these environmental goals, but it also offers a significant economic advantage for pipeline operators, making it a win-win solution for both our planet and the industry.”

To learn more about ReCAP technology and how it can help you avoid carbon pollution pricing, contact Rusty Hurl at rhurl@weldfit.com or visit WeldFit.com/ReCAP.

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