EPA imposes fees on methane, a climate superpollutant

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The Environmental Protection Agency on Friday proposed steep new fees for methane emissions from oil and gas facilities, tightening its crackdown on global warming pollution from the fossil fuel industry.

The proposed rules represent one of the biggest sticks in the White House’s climate change strategy, which has so far been dangled with carrots. President Biden’s signature climate law, the Inflation Control Act, provides generous financial rewards to companies that reduce emissions, but there are few penalties for companies that fail to do so.

The exception is the Methane Emissions Reduction Program, which charges fees for wasteful methane emissions from large oil and gas facilities. Charges will start at $900 per tonne of emissions in 2024, increase to $1,200 in 2025, and $1,500 from 2026 onwards.

EPA’s proposal specifies how the fees will be implemented, including how they will be calculated. It comes as U.S. oil production hits a record high and policymakers around the world are increasingly focused on curbing methane, a climate superpollutant.

Although methane does not persist in the atmosphere as long as carbon dioxide, it is much more effective at trapping heat, becoming approximately 80 times more effective within the first 10 years.that The International Energy Agency estimates that global warming is responsible for about one-third of global warming today, and the oil and gas industry is responsible for about 14 percent of the world’s annual methane emissions. Other large-scale sources of methane include livestock, landfills, and coal mines.

At the United Nations Climate Change Conference in Dubai in December, Environmental Protection Agency Administrator Michael Regan announced final standards to limit methane emissions from U.S. oil and gas operations. Fossil fuel companies that comply with these standards will be exempt from the new fees.

“Under President Biden’s leadership, EPA is implementing a comprehensive strategy to reduce wasteful methane emissions that endanger communities and fuel the climate crisis,” Regan said in a statement. “Today’s proposal, if finalized, would support a complementary set of technical standards and historic resources from the Inflation Control Act to foster industry innovation and encourage rapid action. Become.”

Environmental Defense Fund Chairman Fred Krupp said the fee would encourage fossil fuel companies to adopt innovative technology to detect methane leaks. These cutting-edge technologies range from sensors on the ground to satellites in space.

“Proven solutions to reduce oil and gas methane and avoid fees are being used by leading companies in states across the country,” Krupp said in a statement.

But the American Petroleum Institute, the largest lobbying group for the U.S. oil and gas industry, said it has expressed concerns about supply chain bottlenecks. Implementation of methane detection technology may be delayed. The institute on Friday denounced the EPA proposal as a “punitive tax” that could stifle domestic energy production.

“The world is looking to U.S. energy producers to bring stability to an increasingly unstable world, but this punishment is “Increasing taxes would be a grave mistake that would undermine America’s energy advantage.” In a statement. “While we support sensible federal methane regulations, this proposal would create an inconsistent and confusing regulatory regime that would only stifle innovation and undermine our ability to meet growing energy demands. .”

Meyer also called on Congress to pass legislation rescinding the EPA proposal. Rep. August Pflueger (R-Texas), whose state includes the vast oil-producing Permian Basin, has introduced a bill that would eliminate what he calls the “natural gas tax.” But the measure is unlikely to move forward unless Republicans regain the Senate majority in the November elections.

Asked about industry concerns, EPA officials noted that the Inflation Control Act provided nearly $1 billion to help fossil fuel companies comply with the agency’s set of methane regulations.

“We have provided over $1 billion in financial and technical assistance,” said the official, who spoke on condition of anonymity because he was not authorized to comment publicly. “This really helps put the industry in a better position when it comes to waste discharge fees.”

In addition to methane, the EPA’s proposal could reduce emissions of harmful air pollutants such as smog-forming volatile organic compounds and carcinogenic benzene, officials added.

The United States has never implemented a carbon tax that imposes a parallel fee on every ton of carbon dioxide that companies emit into the atmosphere. Although many economists consider a carbon tax to be one of the most effective ways to reduce emissions, the idea is considered a political issue on Capitol Hill.

During early negotiations on the anti-inflation law, some Democratic lawmakers pushed for the bill to include a carbon tax starting at $15 to $18 per ton. But it ultimately abandoned the proposal after intense opposition from the fossil fuel industry and other polluting sectors.

That means they can freely emit carbon dioxide anywhere in the United States, regardless of the climate impact. If the EPA rule is finalized, for the first time in history, U.S. companies will have to pay for their second-largest greenhouse gas emissions.

Jonathan Banks, global director of methane pollution prevention at the environmental group Clean Air Task Force, said these steps are common sense and long overdue.

“By putting a price on discarded methane, EPA can help companies choose the right course of action and start mitigating methane pollution now. Companies that choose to pollute will pay a price.” he said.

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