EPA Finalizes Methane Fee for Oil Firms

The Biden administration has finalized a methane fee targeting oil and gas companies, set to begin in 2024, as part of efforts to reduce greenhouse gas emissions. Under this rule, companies emitting over 25,000 metric tons of carbon dioxide equivalent annually will incur charges starting at $900 per metric ton, increasing to $1,500 by 2026. This initiative, mandated by the 2022 Inflation Reduction Act, aims to cut methane emissions by an estimated 1.2 million metric tons by 2035, equating to the impact of removing nearly 8 million gas-powered cars from the roads for a year. However, the rule faces uncertainty as the incoming Trump administration may seek to repeal it. EPA Administrator Michael Regan emphasized the importance of this fee in promoting environmental responsibility within the industry. Advocates argue that reducing methane emissions is crucial for mitigating climate change, as methane is significantly more potent than carbon dioxide in the short term.