The Biden-Harris administration, through the Environmental Protection Agency (EPA), proposed a new plan to penalize the oil and gas sector for excess methane emissions per ton.
According to the press release, the fine can reach up to $1,500 under the proposal.
Waste Emissions Charge
The EPA’s Waste Emissions Charge is under the Methane Emissions Reduction Program, which is part of the more comprehensive Inflation Reduction Act.
The US regulators developed the Waste Emissions Charge to prompt fossil fuel firms to adopt available green technologies and best practices to cut methane emissions and other harmful air pollutants.
It will evaluate a fine on companies that surpass Congress-set emissions intensity levels. The EPA proposes to charge $900 for large energy producers for each ton of excess methane emissions starting in 2024. It would increase to $1,200 in 2025 and to $1,500 per ton in 2026 and beyond.
“Under President Biden’s leadership, EPA is delivering on a comprehensive strategy to reduce wasteful methane emissions that endanger communities and fuel the climate crisis. Today’s proposal, when finalized, will support a complementary set of technology standards and historic resources from the Inflation Reduction Act, to incentivize industry innovation and prompt action. We are laser-focused on working collectively with companies, states, and communities to ensure that America leads in deploying technologies and innovations that aid in the development of a clean energy economy.”
EPA Administrator Michael S. Regan
What is methane?
Methane is basically an odorless, colorless, flammable gas primarily used as fuel to produce heat and light. It is a “super pollutant” that is more powerful than carbon dioxide, accounting for about a third of the emissions causing global warming.
Methane is considered the second most prevalent greenhouse gas, following carbon dioxide, in terms of its abundance in the atmosphere. However, it is stronger by eightyfold in the short run with regards to warming the atmosphere.
According to the NY Times, it reaches the atmosphere from pipelines, drill sites, and storage establishments. Some companies also apparently burn excess gas at the production site through “flaring,” which emits carbon dioxide and even methane.
In that sense, the oil and gas sector is the leading industrial source of methane emissions in the US. Therefore, it is unsurprising that the EPA is trying to promptly address it to combat climate change.
Ensuring accuracy
The US Department of Energy (DOE) plans to allocate more than $1 billion from the Inflation Reduction Act funds to boost the shift to “no- and low-emitting oil and gas technologies,” such as methane monitoring, methane emission reductions, and wells and pipes repair.
The EPA is trying to ensure the accuracy of the methane emissions report under the Greenhouse Gas Reporting Program by collaborating with the
The move is part of the government’s efforts to address wasteful methane emissions that significantly pollute the fossil fuel industry. It is a crucial part of the new plan as oil and gas producers self-report their methane emissions level, which tends to surpass Congress’s standard. However, the EPA has not ratified the reports.
Congress apparently approved the new proposal under the climate law President Biden signed in 2022. That said, it can potentially advance as the US’ first federal government tax ever on greenhouse gas emissions when finalized.
Despite the US government’s efforts to combat environmental issues, several fossil fuel groups remain reluctant to support the new plan. They warned to fight the fines by raising energy costs for consumers.
