EPA proposes new rules for methane emission fees

A Biden administration rule issued Friday would establish new fees for methane emissions, one of the most potent drivers of climate change, under the provisions of the Inflation Reduction Act (IRA). 

The Methane Emissions Reduction Program, an enforcement provision in the 2022 climate law, imposes fees on excess emissions, and those fees will increase over the rest of the decade. The fee will initially kick in at $900 per metric ton this year, rise to $1,200 next year and increasing to $1,500 from 2026 on.

The Friday proposal hammers out further details on how the fee would be calculated and when oil and gas facilities would be eligible for exemptions. The EPA projects the rule will reduce emissions from methane by about 80 percent. 

Methane comprises about a third of greenhouse gas emissions, and while it dissipates in the atmosphere faster than carbon dioxide, it is more potent as a warming accelerant.

EPA Administrator Michael Regan said Friday that facilities will be exempt from the fees if they comply with recently finalized Clean Air Act rules on industrial operations. 

“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,” EPA Administrator Michael Regan said in a statement. “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.”

It received harsh reviews from the American Petroleum Institute, the biggest lobbying group for the oil and gas industry. API Senior Vice President of Policy, Economics and Regulatory Affairs Dustin Meyer called on Congress to repeal the fee, saying, “While we support smart federal methane regulation, this proposal creates an incoherent, confusing regulatory regime that will only stifle innovation and undermine our ability to meet rising energy demand.”

Meanwhile, the Center for Biological Diversity said the rule was a step in the right direction but said it would be insufficient amid an unprecedented level of fossil fuel production, including record highs for oil production.

“It’s significant that this rule holds polluters accountable for their super-polluting methane emissions, but the real issue is continued fossil fuel expansion,” Jason Rylander, legal director at the CBD’s Climate Law Institute, said in a statement. “After the hottest year on record, we know full well that fines won’t fix the climate emergency. The Biden administration needs to move toward phasing out climate-killing oil and gas, and a good place to start would be denying permits for new facilities to export fracked gas.”