US Takes Bold Step with Methane Fee Proposal: A Key Move in Tackling Climate Change in 2024

US Takes Bold Step with Methane Fee Proposal: A Key Move in Tackling Climate Change

In a significant move towards environmental responsibility, the United States has put forth a groundbreaking proposal to impose fees on methane emissions from major oil and gas producers. This initiative, mandated by the 2022 climate law, serves as a crucial backstop to broader regulations targeting greenhouse gas emissions within the energy sector.

The Environmental Protection Agency (EPA) is at the forefront of this effort, targeting large oil and gas facilities emitting more than 25,000 metric tons of carbon dioxide equivalent annually. The proposed fee, as outlined by the Inflation Reduction Act (IRA), commencing at $900 per ton in 2024, escalates to $1,200 for 2025, and further rises to $1,500 for subsequent years. Importantly, the fee is applicable solely to emissions surpassing the specified threshold.

Over time, the EPA anticipates a reduction in facilities subject to this charge as they actively decrease their emissions, making them eligible for compliance exemptions. EPA Administrator Michael Regan emphasized that this proposal, once finalized, will complement a set of technology standards and historic resources from the Inflation Reduction Act, fostering industry innovation and prompt action.

Methane, known to leak undetected into the atmosphere from various sources such as drill sites, gas pipelines, and oil and gas equipment, possesses higher warming potential than carbon dioxide. Additionally, it breaks down faster in the atmosphere, making the reduction of methane emissions a potent strategy for immediate climate change impact.

The EPA’s wider rule on methane from oil and gas operations, finalized during the COP28 climate talks in Dubai, reflects a multifaceted approach. It prohibits routine flaring of natural gas from newly drilled oil wells, mandates monitoring for leaks from well sites and compressor stations, and establishes a program utilizing third-party remote sensing to detect large methane releases from “super emitters.”

However, it’s noteworthy that the methane fee was subject to compromise in the IRA, passed in 2022, covering less than half of the sector’s methane releases. This compromise was a result of concessions made to secure the support of Senator Joe Manchin, a conservative Democrat from gas-producing West Virginia.

As the U.S. takes strides towards a greener future, this methane fee proposal stands as a testament to the nation’s commitment to addressing climate change through comprehensive regulatory measures. The success of thubtedly depend on collaborative efforts between the government, industry, and environmental advocates, marking a pivotal moment in the global fight

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