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The federal government is developing regulations for greenhouse gas (GHG) emissions from Canada's oil and gas sector.

This is a necessary and important policy step given the sector's substantial contribution to national emissions, rapid production and emissions growth projections. Our analysis and modelling suggests that the oil and gas sector has a limited ability to deliver emission intensity improvements between now and 2020. To ensure cost-effective policy and increase the level of ambition for achieving deeper emissions reductions, federal sector-by-sector GHG regulations should consider including compliance flexibility both within the sector and beyond the sector. Federal light- and heavy-duty vehicle GHG regulations as well as Alberta's Specified Gas Emitter Regulations provide compliance flexibility blueprints from which to inform the emerging federal oil and gas GHG regulations. But stringency will need to be higher in order to move Canada towards achieving its 2020 GHG target of 607 megatonnes.