March 26, 2024
The Biden administration announced new moves on Friday, January 12, 2024 to curb the release from oil and gas facilities of methane, according to an article from The New York Times.
Under the new plan, oil and gas companies would be required for the first time to pay a fee for emitting methane. The resulting penalties could total millions of dollars for the companies.
Methane is the second-most-abundant greenhouse gas after carbon dioxide, but is 80 times as powerful in the short run in terms of heating the atmosphere.
The proposed fees come as American gas and oil production have reached record levels.
Methane wafts into the atmosphere from pipelines, drill sites and storage facilities. Some producers burn excess gas at the production site, a process known as flaring, which releases carbon dioxide and also, sometimes, methane.
To try to curb those emissions, the Environmental Protection Agency is proposing to charge large energy producers $900 for every ton of methane emissions that exceed levels set by the federal government, beginning this year. The fee would increase to $1,200 in 2025 and plateau in 2026 at $1,500 per ton.
The fee is the second part of new methane restrictions the Biden administration is imposing on the oil and gas industry. Last month, the E.P.A. announced it would require companies for the first time to detect and fix leaks of methane from wells, pipelines and storage facilities and that it would mostly ban the practice of flaring, except in emergencies. Congress also has authorized more than $1 billion in grants and other spending to help companies and communities improve methane monitoring and data collection, and to find and repair leaks.
The proposed fee was approved by Congress as part of a landmark climate law President Biden signed in 2022. When finalized, it will be the first fee or tax on greenhouse gas emissions imposed by the federal government.
While fossil fuel groups have largely accepted requirements aimed at detecting and stopping methane leaks, they plan to fight the monetary penalties, saying that they would raise energy costs for consumers.
Dustin Meyer, senior vice president for policy at the American Petroleum Institute, an industry group, said in a statement on Friday that the group supported “smart” methane regulations but said the fee “creates an incoherent, confusing regulatory regime that will only stifle innovation and undermine our ability to meet rising energy demand.”
Michael S. Regan, the administrator of the E.P.A., called the fee part of a “comprehensive strategy to reduce wasteful methane emissions that endanger communities and fuel the climate crisis.” In a statement, he noted that while the government was imposing a fee, it also was allocating “historic resources” from the climate law to help companies comply with new rules.
But the new proposal relies on large energy producers to self-report if their methane emissions exceeds levels set by Congress, with no provision for the government to verify that data.
Environmental groups say that relying on oil and gas producers to report their own emissions is a worrisome loophole. Last year, a House committee issued a report that found methane leaks were most likely significantly higher than data reported by companies to the federal government.
The E.P.A. in a statement said that it expected that over time “fewer facilities will face the charge as they reduce their emissions and become eligible for this regulatory compliance exemption.”
In the meantime, the agency said, the fee “will help to level the playing field” between companies that have already been detecting and fixing methane leaks and those that emit without concern.
“For too long it has been cheaper for oil and gas operators to waste methane rather than make the necessary upgrades to prevent leaks and flaring,” Representative Frank Pallone Jr. of New Jersey, the senior Democrat on the House Energy and Commerce Committee, said in a statement. He said the fee “will ensure consumers no longer pay for wasted energy or the harm its emissions can cause.”
The proposed regulation will become final following a 45-day public comment period.