EPA Sets Fees to Cut Oil, Gas Industry Methane Emissions

The gas is responsible for one-third of global warming
By Bob Cronin,  Newser Staff
Posted Jan 13, 2024 1:20 PM CST
EPA Sets Fees to Cut Oil, Gas Industry Methane Emissions
A flare burns natural gas at an oil well in August 2021 in Watford City, North Dakota.   (AP Photo/Matthew Brown, File)

With US gas and oil production at record highs, the Biden administration on Friday announced moves to counter the resulting release of methane gas. For the first time, oil and gas companies would have to pay a fee to the Environmental Protection Agency for emitting methane during production, the New York Times reports. Large producers would pay $900 for every ton of methane emissions above levels set by the government. The amount would rise to $1,200 next year and level off at $1,500 per ton in 2026. The totals assessed under the proposal could reach millions of dollars.

The fees are among the few penalties called for by the Inflation Reduction Act; the package mostly provides financial incentives for businesses to reduce emissions. Methane reduction is becoming more attention around the world, per the Washington Post. Its ability to trap heat is problematic, which it's as much as 80 times more effective at than carbon dioxide is, even though methane doesn't stay in the atmosphere as long. Methane is the cause of about one-third of global warming. The oil and gas industry is responsible for about 14% of methane emissions, the International Energy Agency estimates. Other large contributors are livestock, landfills, and coal mines.

EPA Administrator Michael Regan said Friday that installations won't have to pay the fees if they're in compliance with the new Clean Air Act regulations on industrial operations, per the Hill. The American Petroleum Institute was critical. An executive of the industry's largest lobbying group said Congress should repeal the fee plan, saying it "will only stifle innovation and undermine our ability to meet rising energy demand." The top Democrat on the House Energy and Commerce Committee defended the change. "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," Rep. Frank Pallone said in a statement. (More methane stories.)

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