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Biden EPA to Charge 'Methane Fee' 11/12 06:02
Oil and natural gas companies for the first time will have to pay a federal
fee if they emit dangerous methane above certain levels under a rule being made
final by the Biden administration.
WASHINGTON (AP) -- Oil and natural gas companies for the first time will
have to pay a federal fee if they emit dangerous methane above certain levels
under a rule being made final by the Biden administration.
The Environmental Protection Agency rule follows through on a directive from
Congress included in the 2022 climate law. The new fee is intended to encourage
industry to adopt best practices that reduce emissions of methane -- the
primary component of natural gas -- and thereby avoid paying.
Methane is a climate "super pollutant" that is far more potent in the short
term than carbon dioxide and is responsible for about one-third of greenhouse
gas emissions. The oil and natural gas sector is the largest industrial source
of methane emissions in the United States, and advocates say reduction of
methane emissions is a crucial way to slow climate change.
The rule, set to be announced Tuesday at an international climate conference
in Azerbaijan, comes hours after President-elect Donald Trump named former New
York congressman Lee Zeldin to head the agency in Trump's second term. If
confirmed by the Senate, Zeldin is expected to move to reverse or loosen dozens
of environmental regulations approved under President Joe Biden as Trump seeks
to establish U.S. "energy dominance" worldwide.
Trump is likely to target the methane fee amid a flurry of expected actions
he has promised to deregulate the oil and gas industry.
As outlined by the EPA, excess methane produced in 2024 could result in a
fee of $900 per ton, with fees rising to $1,200 per ton in 2025 and $1,500 per
ton by 2026. Industry groups are likely to challenge the rule, including any
effort to impose a retroactive fee.
The rule will not become final until early next year, following publication
in the Federal Register.
EPA Administrator Michael Regan said in a statement that the rule will work
in tandem with a new EPA rule on methane emissions imposed this year. The rule
targets the U.S. oil and natural gas industry for its role in global warming as
Biden seeks to secure his legacy on fighting climate change.
The fee, formally known as the Waste Emissions Charge, will encourage early
deployment of available technologies to reduce methane emissions and other
harmful air pollutants, Regan said. The fee "is the latest in a series of
actions under President Biden's methane strategy to improve efficiency in the
oil and gas sector, support American jobs, protect clean air and reinforce U.S.
leadership on the global stage," he said.
Industry groups and Republican-led states have challenged the earlier
methane rule in court, but lost a bid for the Supreme Court to block the rule
while the case continues before lower-level judges.
Opponents argue that EPA overstepped its authority and set unattainable
standards with the new regulations. The EPA, though, said the rules are
squarely within its legal responsibilities and would protect the public.
Many large oil and gas companies already meet or exceed methane-performance
levels set by Congress under the climate law, meaning they are unlikely to be
forced to pay the new fee, Regan and other officials said.
Even so, EPA estimates that the rule will result in cumulative emissions
reductions of 1.2 million metric tons of methane (34 million metric tons of
carbon-dioxide equivalent) through 2035. That figure is similar to clean-air
gains from taking nearly 8 million gas-powered cars off the road for a year,
the EPA said. Cumulative climate benefits could total as much $2 billion, the
agency said.
Like the earlier methane rule, the new fee faces a near-certain legal
challenge from industry groups. The American Petroleum Institute, the oil and
gas industry's largest lobbying group, called a fee proposed earlier this year
a "punitive tax increase" that "undermines America's energy advantage.''
API said it looks forward to working with Congress to repeal the "misguided
new tax on American energy."
Environmental groups, for their part, have hailed the impending methane fee,
saying oil and gas companies should be held accountable for pollution that
contributes to global warming. Oil and gas companies routinely calculate that
it's cheaper to waste methane through flaring and other techniques than to make
necessary upgrades to prevent leaks, they said.
The EPA said it expects that over time, fewer oil and gas companies will be
charged for excess methane as they reduce emissions in compliance with the rule.
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