Biden Admin Charging Methane Emission Fee To Tackle Climate Change

Blue and yellow industrial gas pipes with valves.

The Biden administration has implemented a new fee on methane emissions from oil and gas companies, sparking controversy and debate about its potential impact on the industry and climate change efforts.

At a Glance

EPA to charge oil companies $900 per ton of methane emissions exceeding federal levels starting in 2024
Fee is part of the 2022 Inflation Reduction Act and targets methane as a potent greenhouse gas
Measure aims to reduce emissions by 1.2 million metric tons through 2035
Oil industry opposes the fee, arguing it hampers energy needs
Environmental groups support the fee, advocating for pollution accountability

Biden Administration Takes Aim at Methane Emissions

The Environmental Protection Agency (EPA) has announced a groundbreaking measure to combat climate change by implementing a fee on methane emissions from oil and gas companies. This initiative, introduced at the United Nations climate conference in Azerbaijan, targets methane’s significant role as a potent greenhouse gas. The fee structure, established under the Inflation Reduction Act, will begin at $900 per ton of methane emitted above federal thresholds starting in 2024, increasing to $1,500 by 2026.

The new rule applies to facilities emitting more than 25,000 metric tons of carbon dioxide equivalent per year. EPA Administrator Michael Regan stated that this measure is part of a broader strategy to improve efficiency in the oil and gas sector while protecting clean air and reinforcing U.S. leadership on the global stage.

Industry Opposition and Environmental Support

The oil industry, including major trade groups like the American Exploration and Production Council and the American Petroleum Institute, strongly opposes the methane fee. Dustin Meyer, from the American Petroleum Institute, argues that the fee “hampers our ability to meet the growing energy needs of American families and businesses and fails to advance meaningful emissions reduction.”

“While we expect the next administration to recklessly greenlight fossil fuel extraction, it’s heartening to see this effort to make polluters pay for their leakage of the super climate pollutant methane,” said Maggie Coulter, a lawyer at the advocacy group Center for Biological Diversity.

On the other hand, environmental groups support the fee, advocating for accountability in pollution contributing to global warming. The EPA estimates that this rule will reduce emissions by 1.2 million metric tons of methane through 2035, equivalent to removing nearly 8 million gas-powered cars from the road for a year.

Global Implications and Cooperation

The U.S. initiative is part of a larger global effort to combat climate change. The Biden administration plans to use satellite data to detect large methane leaks and alert companies. Additionally, the U.S. and China have agreed to cooperate on reducing methane emissions, with China working to reduce emissions particularly from coal mines.

The European Union and other nations are also setting methane import standards, which could influence global market access. This international cooperation highlights the growing recognition of methane’s significant impact on climate change and the need for coordinated action.

Potential Challenges and Future Outlook

Despite the administration’s determination, the new rule is expected to face legal challenges from industry groups and Republican-led states. The Congressional Review Act could potentially allow Republicans to repeal the regulation if they gain control of Congress. However, many large oil and gas companies already meet or exceed the methane-performance levels set by Congress, suggesting that the industry may be capable of adapting to these new standards.

As the Biden administration continues to push forward with its climate agenda, the methane fee represents a significant step in the fight against climate change. The effectiveness of this measure and its impact on both the environment and the energy industry will likely be closely watched in the coming years.