The Government of Canada published draft regulations to further reduce volatile organic compounds (VOCs) from a variety of oil and gas facilities for consultation on February 23, 2024.
VOCs are a harmful form of airborne pollution that lead to the formation of ground-level ozone and particulate matter, notably particulate matter less than 2.5 micrometres in diameter (PM2.5) that can travel deep into the human body. Exposure to these pollutants increases the risks for a wide range of health problems, including cardiovascular and respiratory illnesses like asthma attacks, lung cancer, and heart and lung disease, as well as heart failure.
The impacts of VOC emissions on human health are well understood. Scientific research in Canada and around the world has shown these emissions contribute to premature deaths and lead to more frequent and worsening of asthma symptoms. In addition, evidence shows that human exposure to certain VOCs, such as benzene, increases the risk of cancer. Benzene is included in the List of Toxic Substances under the Canadian Environmental Protection Act.
These regulations covering petroleum storage tanks and loading represent a second phase of VOC regulations for the petroleum sector and respond to findings under Canada's Chemicals Management Plan. VOC Phase 1 regulations were finalized in 2020 to address emissions from process equipment at petroleum refineries, upgraders, and petrochemical facilities integrated with a refinery or upgrader.
Highlights of the draft VOC regulations
The oil and gas sector is Canada's largest source of VOC emissions. Sources of VOC emissions from petroleum and petrochemical facilities include leaks from process equipment, storage tanks, and loading operations. Total estimated VOC emissions from petroleum and petrochemical facilities covered by the draft VOC Phase 2 regulations are 53,790 tonnes, with approximately 63 percent (33,878 tonnes) from storage and loading of petroleum products.
The draft regulations introduce a nationally consistent approach to lowering VOC emissions from these sources. Current regulatory measures vary across the country, and jurisdictions with VOC measures like these draft regulations have significantly lower emissions than jurisdictions where no requirements are in place. Canada's approach to reducing VOC emissions is aligned with already existing United States regulations. Canada has a long history of collaboration with the United States Environmental Protection Agency on improving air quality on both sides of the border.
The draft regulations would require that petroleum liquid storage tanks and loading racks be equipped with emissions control equipment. The operators of these facilities would be required to install, inspect, maintain, and repair that equipment. The draft regulations would also include recordkeeping and reporting requirements for operators. Facilities that would be subject to the draft regulations include truck, rail, marine, and pipeline terminals; petroleum refineries; upgraders; petrochemical facilities; and large bulk fuel facilities. Almost 250 facilities are expected to be subject to the draft regulations-these facilities are in every province and in the Northwest Territories. Many are in and around residential neighbourhoods.
The Government of Canada understands the importance of the energy sector to Canada's economy and that future development of natural resources in cleaner, more sustainable ways will ensure that Canadian petroleum resources continue to contribute to the economy and support good jobs. Cost-effective technology solutions to meet the requirements are readily available, and industry would see cost savings over time through recovered petroleum products from the installation of vapour control equipment required under the regulations.
Covered facilities and implementation
The draft regulations would apply to terminals, refineries, upgraders, petrochemical facilities, and bulk fuel facilities that:
- Store volatile petroleum liquids in tanks that meet or exceed a specified capacity, in general 100 cubic metres, or
- Load and unload volatile petroleum liquids that exceed a specified daily or annual quantity, in general 500,000 standard litres per day, or 25 million standard litres per year.
The draft regulations would establish equipment-based requirements for new equipment and a timeline for adding equipment to existing volatile petroleum liquid storage tanks and loading operations at petroleum and petrochemical facilities.
Health and economic benefits
Preventative action on these toxic emissions will save lives, reduce health care costs, and lower the economic burden air pollution is having on the economy.
The draft regulations would generate environmental and health benefits from improved air quality and reduced climate change impacts and lead to recovered fuels, such as crude oil and gasoline, by preventing their evaporation from storage tanks and during loading operations.
Between 2024 and 2045, it is estimated that air quality improvements from the draft regulations would result in 150 fewer premature deaths, mainly associated with reduced exposure to PM2.5 and ground-level ozone. In addition, better air quality is expected to result in 31,000 fewer days of asthma symptoms among youth and 91,000 fewer days of restricted activity among non-asthmatics. The total present value of health benefits resulting from these air quality improvements is estimated at $1.05 billion for the 2024 to 2045 period.
Crude oil contains methane, which can evaporate during storage and loading operations. Reducing VOC releases from the storage and loading would also result in the reduction of methane emissions which contribute to climate change. In total, the draft regulations would reduce methane emissions by 195 kilotonnes of carbon dioxide equivalent emissions (CO2e) between 2024 and 2045, which would result in climate change benefits (reduced climate change damages) of about $24 million.
The production benefits from recovered crude oil and gasoline associated with the regulations are estimated at $343 million worth of recovered products, while the total costs of the regulations to industry are estimated at approximately $1.08 billion between 2024 and 2045.
The draft regulations would provide a net benefit to the Canadian economy of $337 million.
Right to a healthy environment
Petroleum and petrochemical facilities in Canada are commonly located near urban areas, including Indigenous and low-income communities. This increases the local population's risk of exposure to elevated VOCs, including benzene emitted by these facilities. Studies have shown that Sarnia-home to the largest number of petroleum and petrochemical facilities in the country-has the highest ambient levels of benzene and the highest leukemia incidence in Canada. Similarly, air quality monitoring data in neighbouring Aamjiwnaang First Nation continues to show benzene levels more than 20 times Ontario's acceptable annual average ambient level.
Last year, the Government of Canada finalized a strengthened Canadian Environmental Protection Act that provides Canadians with better protection, including people most vulnerable to harm from exposure to toxic substances and those living in communities where exposure is high. These regulations are informed by that commitment, and the continuous efforts by Aamjiwnaang First Nation and other communities, to highlight the harms of VOCs and reduce their exposure to this type of pollution.
On February 8, 2024, the Government of Canada launched consultation and engagement activities with Canadians on the development of an implementation framework for a right to a healthy environment within the Canadian Environmental Protection Act, to develop a national strategy to advance environmental justice, and to assess, prevent, and address environmental racism.
Reducing benzene emissions from gasoline stations
The Government of Canada will take further steps to limit harmful benzene emissions from additional sources that affect Canadians. Consultations on risk management options to address benzene emissions from gasoline stations are being launched in the winter of 2024, with the publication of a Notice of Intent. Similar to health concerns related to emissions from the storage and loading of volatile petroleum liquids at terminals and other large facilities (addressed by the draft VOC regulations published today), a 2023 report by Health Canada concluded that Canadians living near gasoline stations may be exposed to elevated health risks due to benzene emissions from underground gasoline storage tanks and other sources at gas stations.
Send in your feedback
Help shape Canada's Reduction in the Release of Volatile Organic Compounds (Storage and Loading of Volatile Petroleum Liquids) Regulations. Submit comments on the draft regulations through the new Online Regulatory Consultation System
