EPA proposes fines on oil, gas producers to reduce methane emissions

Jan. 13 (UPI) -- Oil and gas companies could for the first time face fines for methane emissions that exceed government-approved levels under a new proposal from the Biden administration.

The Environmental Protection Agency said in a statement Friday it has proposed a new rule to charge certain oil and gas producers for methane emissions above emissions levels set by Congress.

Part of the Inflation Reduction Act, the proposed waste emissions charge starts at $900 per metric ton of wasteful emissions this year and rises to $1,200 for 2025, $1,500 for 2026 and beyond.

The fines would only apply to facilities that report emissions of more than 25,000 metric tons of carbon dioxide equivalent per year and for emissions above specified levels.

Methane is a "climate super-pollutant" more potent than carbon dioxide and is responsible for nearly a third of warming from greenhouse gases, according to the EPA, which says the waste emissions charge is meant to encourage oil and gas companies to adopt new technologies and best practices as outlined in the new industry standards the agency issued in December.

Facilities that are already in compliance with the Clean Air Act would be exempt from the charge after they meet certain criteria set by Congress, the EPA said. The agency also plans to leverage over $1 billion provided by the Inflation Reduction Act to help oil and gas companies adopt zero- and low-emission technologies sooner.

The proposal still needs to go through the review process, where the EPA will listen to comments and make revisions before it issues its final rule.

The proposal already is facing pushback from the American Petroleum Institute, which is calling on Congress to repeal it.

"This punitive tax increase is a serious misstep that undermines America's energy advantage," the API said in a statement. "While we support smart federal methane regulation, this proposal creates an incoherent, confusing regulatory regime that will only stifle innovation and undermine our ability to meet rising energy demand."

Environmentalists, however, praised the move.

"EPA's proposal for a fee on oil and gas methane pollution implements the clean air protections for Americans that were part of the Inflation Reduction Act," Environmental Defense Fund President Fred Krupp said in a statement. "It's common sense to hold oil and gas companies accountable for this pollution. Proven solutions to cut oil and gas methane and to avoid the fee are being used by leading companies in states across the country."