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EPA Introduces Methane Fee To Curb Emissions

A flare burns natural gas at an oil well in Watford City, N.D., Aug. 26, 2021. (AP Photo/Matthew Brown, File)

Oil and natural gas companies will now be subject to a federal fee if they exceed certain levels of methane emissions, as per a new rule being finalized by the Biden administration. This rule, a result of a directive from Congress in the 2022 climate law, aims to incentivize the industry to adopt practices that reduce methane emissions, a potent climate 'super pollutant' responsible for about one-third of greenhouse gas emissions.

The fee, known as the Waste Emissions Charge, is designed to prompt early adoption of technologies that curb methane emissions and other harmful pollutants. Excess methane emissions could incur fees starting at $900 per ton in 2024, escalating to $1,500 per ton by 2026.

The EPA, under Administrator Michael Regan, views this rule as a crucial step in conjunction with other methane emission regulations to combat global warming. The agency estimates that the rule could lead to a reduction of 1.2 million metric tons of methane emissions by 2035, equivalent to the impact of removing nearly 8 million gas-powered cars from the road for a year.

While some industry groups and states have contested the earlier methane regulations in court, the EPA asserts that the rules fall within its legal purview and are vital for public protection. Many major oil and gas companies already meet or surpass the methane-performance standards set by Congress.

Despite anticipated legal challenges from industry groups, environmental organizations have welcomed the methane fee, emphasizing the importance of holding oil and gas companies accountable for their contributions to global warming. The EPA anticipates that as companies comply with the rule, fewer will be subject to excess methane fees over time.

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