The Environmental Protection Agency announced Friday a proposal that will issue fees to oil and gas producers on emissions that exceed specified levels, charging $900 per metric ton for “wasteful emissions” in 2024 and targeting methane emissions, which are responsible for about a third of greenhouse gas warming today.
The Methane Emissions Reduction Program—authorized as part of the Inflation Reduction Act—includes a waste emissions charge for oil and gas facilities that emit more than 25,000 metric tons of carbon dioxide equivalent per year, levying a $900 per metric ton fee for wasteful emissions against the producers in 2024.
The $900 fee will increase to $1,200 per metric ton for 2025 and $1,500 for 2026 and beyond.
The proposal brought by the EPA would introduce calculation procedures, flexibilities and exemptions related to the waste emissions charge, according to the agency’s statement.
Facilities already complying with the Clean Air Act’s standards for oil and gas operations would be exempt from the charge after meeting congressional criteria, an EPA statement added, noting it expects fewer facilities to face the charge over time as they reduce emissions and eventually become eligible for exemption.
The EPA indicated in the statement that it’s addressing gas and oil sector concerns about the fee proposal with nearly $1 billion provided by the Inflation Reduction Act that will offer support for methane monitoring and funding to help reduce emissions.
14%. That’s the share of the world’s annual methane emissions produced by the oil and gas industry, according to the International Energy Agency.
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The EPA will still need to consider comments on the proposal, revise it and issue a final rule before it’s finalized into the Code of Federal Regulations. The proposal is facing pushback from organizations like the American Petroleum Institute, which called it a “punitive tax” and called on Congress to pass legislation to repeal it, according to the Washington Post.
Methane, which produces carbon dioxide when burned, is responsible for roughly 30% of the rise in global temperatures since the 1800s, the International Energy Agency reported. The agency noted that methane has a shorter lifespan than carbon dioxide but absorbs much more energy while in the atmosphere, also presenting hazards to ground-level air quality. The emission reduction initiatives proposed by the EPA fall under the Clean Air Act, which the EPA has also used to propose emission limits for carbon dioxide from fossil fuel-fired power plants. The limits would apply to new gas-fired combustion turbines, existing coal, oil and gas-fired steam generating units and certain existing gas-fired combustion turbines, according to the EPA.