Energy groups oppose proposed methane fee rule

The American Petroleum Institute (API) and more than a dozen other U.S. oil and natural gas associations called on the U.S. Environmental Protection Agency to revise a proposed fee for methane.

The proposed “waste emissions charge” would charge would assess a $900 per metric ton of methane exceeding the threshold starting in 2024, increasing to $1,200 per metric ton of methane in 2025, and to $1,500 per metric ton of methane in 2026 and thereafter. In comments submitted to the EPA, the associations said the agency’s proposed rule creates an “incoherent regulatory regime,” while failing to meet the statutory requirements outlined in the Inflation Reduction Act, and that the proposed rule disincentivizes emissions reduction efforts by the oil and natural gas industry.

“This tax on American energy is a serious misstep that could jeopardize our nation’s energy advantage and weaken our energy security,” said API Senior Vice President of Policy, Economics and Regulatory Affairs Dustin Meyer. “U.S. oil and natural gas is innovating throughout its operations to reduce methane emissions while meeting growing energy demand. Yet this proposal creates an incoherent, confusing regulatory regime that will only stifle technology advancements and hamper energy development. With partners across the industry, we will consider all options to ensure a smart regulatory framework for continued American energy development.”

The associations, which included the Pennsylvania Independent Oil & Gas Association, said in their comment letter they would like to see the Biden administration coordinate this proposed rule with other regulations, including Subpart W ad the EPA’s final Methane Rule. Additionally, the associations called for more flexibility on netting requirements to incentivize emission reductions, as well as commonsense compliance and reporting timelines.