The Environmental Protection Agency is cracking down on methane emissions in the oil and gas industry in a newly proposed rule that would assess a charge on certain large emitters of waste methane.
Methane is known as a super pollutant, more potent than carbon dioxide and responsible for approximately one-third of the warming from greenhouse gasses today, according to the EPA. The oil and gas industry is the largest industrial source of methane emissions in the United States, making the sector prime for decarbonization amid efforts to slow rising global temperatures.
“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. Wasted methane never makes its way to consumers, but they are nevertheless stuck with the bill,” New Jersey Rep. Frank Pallone, Jr., ranking member of the House Energy and Commerce Committee, said in the announcement. “The Methane Emissions Reduction Program and the proposed Waste Emissions Charge will ensure consumers no longer pay for wasted energy or the harm its emissions can cause.”
The directive stems from the Inflation Reduction Act, which was signed into law in 2022 and is one of the most significant climate change legislation to date in the U.S.
The proposed rule would work in tandem with the funding in the IRA and consider the emissions intensity levels set by Congress. The proposed Waste Emissions Charge encourages early deployment of available technologies and best practices to reduce methane emissions and other pollutants even before recently issued technology standards for the industry.
The EPA finalized a rule for oil and gas in December 2023 to control methane emissions in both new and existing operations. Plus, the agency is working to implement the three-part framework of the Inflation Reduction Act’s Methane Emissions Reduction Program.
The Department of Energy is providing more than $1 billion in financial and technical assistance, as directed under the IRA, to accelerate the transition to no- and low-emitting oil and gas technologies. This includes funds for “activities associated with low-producing conventional wells, support for methane monitoring and funding to help reduce methane emissions from oil and gas operations,” according to the EPA.
In addition, the EPA is working with industry stakeholders to improve the accuracy of reported methane emissions through the Greenhouse Gas Reporting Program, which requires greenhouse gas emissions data from large GHG emission sources, fuel and industrial gas suppliers, as well as carbon dioxide injection sites.
The proposal from the EPA would charge oil and gas facilities that report emissions of more than 25,000 metric tons of carbon equivalent per year to the Greenhouse Gas Reporting Program. The rule also addresses how the charge will be implemented, including the calculation of the charge and exemptions.
“The Waste Emissions Charge starts at $900 per metric ton of wasteful emissions in 2024, increasing to $1,200 for 2025, and $1,500 for 2026 and beyond, and only applies to emissions that exceed the statutorily specified levels,” the EPA stated.
Oil and gas companies can eliminate these charges by lowering their methane emissions over time.
