The Environmental Protection Agency has finalized a major climate rule tackling methane emissions through a controversial fee on oil and gas companies.
The final rule was announced on Tuesday amid the United Nations’s annual Climate Change Conference in Baku, Azerbaijan, as Biden administration officials aim to affirm America’s commitments toward mitigating climate change despite President-elect Donald Trump having won the recent election.
First proposed in January, the rule imposes a fee on oil and gas companies if their methane emissions exceed certain levels. The EPA has estimated that the rule will result in reductions of 1.2 million metric tons of methane through 2035 — roughly equal to the impact of taking nearly 8 million gas-powered vehicles off the road for just one year.
Dubbed the “Waste Emissions Charge,” the fee is expected to only be applied to “high-emitting” oil and gas producers that report emissions of more than 25,000 metric tons of carbon dioxide equivalent every year. Facilities that report wasteful methane emissions will face a fee of $900 per metric ton in 2024, $1,200 in 2025, and $1,500 in 2026 and beyond.
Through the rule, the EPA has said it anticipates these facilities won’t be slapped with the fee over a long period of time. Instead, the agency suggests, it will encourage facilities to lower their emissions and become exempt from the fee. At the same time, facilities that are also in compliance with other separate rules on methane emissions can avoid the fine altogether.
The EPA has identified methane as one of the most “powerful” greenhouse gasses, along with carbon dioxide, making up around 16% of emissions worldwide. In the United States, the oil and natural gas industry is the largest source of methane emissions. While methane is known to break down faster than carbon dioxide, it is around 80 times more potent, trapping much more heat within the atmosphere.
“The final Waste Emissions Charge 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,” EPA Administrator Michael Regan said in a statement.
The rule has been highly criticized by some in the industry and Republicans in Congress, who say the fee will result in greater strain on the national grid.
The American Exploration Production Council, which is made up of around 30 oil and gas producers, has already called on Trump to reverse the rule.
“The methane tax is not the right policy to incentivize continued progress on emission reduction, and when combined with other recent rulemakings at EPA, is compounding to penalize all American oil and gas production — which is some of the cleanest and most heavily regulated in the world,” the group said in a statement. “The tax will lead to less energy security and higher energy prices for American families and businesses. ”
However, not all members of AXPC are in agreement. Last month, officials with ExxonMobil told the Washington Post that there “are some issues” the company does not align with the industry group.
“We think there needs to be an accountability mechanism within the regulations,” ExxonMobil Senior Vice President Bart Cahir said of the methane tax at the time.
Trump has vowed to walk back multiple Biden EPA rules under his new administration, particularly those cracking down on the fossil fuel industry. While this new rule may be at risk, Trump may face difficulty repealing it as the rule was mandated by the Democratic-passed Inflation Reduction Act.
On Monday, Trump named former Congressman Lee Zeldin as his pick for EPA administrator, indicating the Republican would pave the way for massive rollbacks.
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“He will ensure fair and swift deregulatory decisions that will be enacted in a way to unleash the power of American businesses, while at the same time maintaining the highest environmental standards, including the cleanest air and water on the planet,” Trump said in a statement.
Zeldin will need to be confirmed by the Senate before ascending to the top of the agency.