US finalizes methane fee on emitters in waning months of Biden administration
The US Environmental Protection Agency (EPA) in the waning months of the Biden administration finalized a new rule implementing a methane fee on oil and gas operations that release more than 25,000 tons/year of CO2 equivalent.
The new Waste Emissions Charge (WEC) for methane is one of the last regulatory efforts by the Biden administration to curb methane emissions. The WEC is part of the Inflation Reduction Act of 2022’s Methane Emissions Reduction Program provision that requires EPA to impose and collect the emissions fees.
The WEC starts at $900/metric ton of methane emitted in 2024 before increasing to $1,200/ton in 2025, and $1,500/ton for 2026 and beyond (OGJ Online, Jan. 16, 2024).
EPA estimates that the rule will result in cumulative emissions reductions of 1.2 million metric tons of methane (34 million metric tons CO2-equivalent) through 2035 and will have cumulative climate benefits of up to $2 billion.
When finalized later this year, the proposed methane fee "incentivizes industry innovation" and encourages industry to adopt best practices that reduce emissions, said EPA Administrator Michael Regan in a statement Nov. 12.
Dustin Meyers, American Petroleum Institute senior vice-president of policy, economics, and regulatory affairs, urged Congress to repeal the methane fee.
"While we support smart federal methane regulation, this proposal creates an incoherent, confusing regulatory regime that will only stifle innovation and undermine our ability to meet rising energy demand. We look forward to working with Congress to repeal the [Inflation Reduction Act's] misguided new tax on American energy," Meyers said in a statement.
API first called for repeal of the WEC last January, with no success. With Republican control of the White House, House of Representatives and Senate next year, the chance of a repeal is growing.
As part of the methane emissions plan, EPA has taken other steps to slash emissions. In May, it finalized tougher methane reporting standards that could increase the number of oil and gas companies that must pay fees for excess emissions (OGJ Online, May 7, 2024). In June, EPA and the Department of Energy made $850 million in funding available for projects to slash methane emissions from oil and gas production (OGJ Online, June 21, 2024).
EPA’s final rule outlines how the methane fee will be implemented, including calculation of the charge, and how exemptions will be applied. Infrastructure in compliance with the finalized Clean Air Act standards for oil and gas operations are exempt from the charge after certain criteria set by Congress are met, EPA said.
In the final rule, EPA made changes in response to public comments that will provide owners and operators of oil and gas facilities with greater flexibility to achieve emission reductions and thereby avoid the charge, it said.
Listen in as OGJ editors discuss methane emissions, the new EPA methane emission rules, and their impact on operators of US oil and gas fields and infrastructure.
Cathy Landry | Washington Correspondent
Cathy Landry has worked over 20 years as a journalist, including 17 years as an energy reporter with Platts News Service (now S&P Global) in Washington and London.
She has served as a wire-service reporter, general news and sports reporter for local newspapers and a feature writer for association and company publications.
Cathy has deep public policy experience, having worked 15 years in Washington energy circles.
She earned a master’s degree in government from The Johns Hopkins University and studied newspaper journalism and psychology at Syracuse University.
