Biden EPA finalizes first-ever methane emissions fee
The EPA is going to charge oil and natural gas companies for methane emissions under a new rule finalized Tuesday, November 12. The final rule will be published in the Federal Register early in 2025 and go into effect 60 days after that.
The proposed rule laid out fees of $900 per ton of “excess” methane in 2024, with fees rising to $1,200 per ton in 2025 and $1,500 per ton by 2026. The final rule, of course, would merely “incentivize adoption of industry best practices that reduce pollution.” The EPA estimates its Waste Emissions Charge will reduce 1.2 million tonnes of methane by 2035. No word on how much money the charge will bring in for the federal government, though.
Flaring is a technique used in natural gas extraction where natural gas that is not economical to transport for sale is burned off. Venting occurs when excess natural gas is released, and flaring occurs when the gas is burned, and the methane is converted into CO2. Methane is a stronger greenhouse gas than carbon dioxide and therefore “flaring is safer than releasing natural gas into the air and results in lower overall greenhouse gas emissions because CO2 is not as strong a greenhouse gas as methane.”
The EPA in December 2023 had finalized a rule that requires companies to eliminate all flaring from certain wells, requires monitoring and repairing of leaks in short timeframes, and establishes new reporting requirements for methane emission events. That went into effect in March. The Bureau of Land Management is imposing its own methane rule, though that has been temporarily blocked in North Dakota, Montana, Texas, Utah, and Wyoming.
The U.S. Supreme Court declined to halt enforcement of the EPA’s earlier rule in October 2024, letting litigation play out in lower courts. Two dozen states, headed by Oklahoma, had filed an emergency appeal arguing that the rule is “onerous, imposing costs on the oil and gas industries that will — as even EPA admits — inevitably be passed onto consumers across the country.”
The final rule, according to the EPA’s press release, give states a “stronger incentive” to submit their plans and fees will continue until operators “achieve full compliance with state plans.”