The Biden administration announced a final rule that will require oil and natural gas companies to pay a federal fee if they emit dangerous levels of methane, a potent climate pollutant.
This rule is a response to a directive from Congress included in the 2022 climate law and aims to incentivize the industry to adopt best practices to reduce methane emissions.
Driving the news: Methane is a significant contributor to greenhouse gas emissions and a crucial target for slowing climate change, with the oil and natural gas sector being a major source of these emissions in the U.S.
- President-elect Donald Trump is expected to challenge the new rule, as it aligns with his plans to deregulate the oil and gas industry and prioritize “energy dominance.”
The big picture: The fee structure outlined by the EPA includes potential fees of $900 to $1,500 per ton for excess methane emissions produced by oil and gas companies, with industry groups likely to challenge the rule.
- The rule is set to become final in the early next year after publication in the Federal Register, and it will work in conjunction with a new EPA rule on methane emissions implemented this year.
- The fee, referred to as the Waste Emissions Charge, aims to encourage the deployment of technologies to reduce methane emissions and other harmful air pollutants, supporting American jobs and clean air while reinforcing U.S. leadership on climate change.
- Industry groups and Republican-led states have previously challenged EPA regulations on methane and emissions standards, arguing that they are unattainable or beyond the EPA’s authority.
What we’re watching: The EPA estimates that the new fee could result in significant emissions reductions and climate benefits, holding oil and gas companies accountable for pollution contributing to global warming.
