- The U.S. proposes a methane emissions fee on major oil and gas producers.
- EPA suggests the fee for facilities reporting over 25,000 metric tons of methane annually.
The U.S. has proposed a methane emissions fee on major oil and gas producers following the 2022 climate law. The fee, proposed by the Environmental Protection Agency (EPA), targets large facilities reporting over 25,000 metric tons of methane emissions annually. Starting at $900 per ton in 2024, it rises to $1,200 in 2025 and $1,500 in 2026, applying to excess emissions.
The Inflation Reduction Act (IRA) directs the fee, decreasing as facilities cut emissions and gain compliance exemptions over time. EPA Administrator, Michael Regan, stated that the proposal, when finalised, will support technology standards and resources to encourage industry innovation. Methane leaking from drill sites and gas equipment has more warming potential than carbon dioxide. Curbing methane emissions can swiftly impact climate change.
In December, the EPA finalised a rule at COP28, banning routine flaring, requiring leak monitoring, and establishing a program to detect large methane releases. The IRA diluted the methane fee, covering less than half of the sector’s emissions, due to concessions made to Senator Joe Manchin, a conservative Democrat from gas-producing West Virginia.