Biden’s methane fee could cost oil companies billions, but will it survive legal challenges?
At a Glance
- Biden administration announces first-ever methane fee on oil and gas companies
- Fee starts at $900 per ton of excess methane emissions, rising to $1,500 by 2026
- Methane traps 80 times more heat than CO2 in the short term
- Industry groups and Republican-led states expected to challenge the rule
- EPA estimates rule will reduce emissions equivalent to removing 8 million cars from roads
Biden Administration Takes Aim at Methane Emissions
The Biden administration has unveiled a groundbreaking methane fee targeting oil and gas companies, marking a significant step in the fight against climate change. Announced at a UN climate summit in Azerbaijan, this new policy aims to tackle one of the most potent greenhouse gases contributing to global warming. The Environmental Protection Agency (EPA) will charge $900 per ton of methane emissions exceeding federal levels starting in 2024, with the fee increasing to $1,500 by 2026.
John Podesta, President Biden’s top climate diplomat, emphasized the critical nature of this initiative.
“Slashing these super-pollutants is the fastest and often, I would add, the cheapest way to slow down warming in the coming decades,” Podesta stated.
Biden EPA to charge first-ever ‘methane fee’ for drilling waste by oil and gas companies https://t.co/Y4vw95wdFW
— KX News (@KXMB) November 12, 2024
Should Biden even be able to do things like this right before he leaves office?
The Impact of Methane and Industry Pushback
Methane, known as a “super-pollutant,” traps about 80 times more heat than carbon dioxide in the short term. This makes it a prime target for immediate climate action. The fee, part of the 2022 Inflation Reduction Act, applies to facilities emitting more than 25,000 metric tons of carbon dioxide equivalent per year. The EPA estimates this rule will reduce emissions by 1.2 million metric tons of methane through 2035, equivalent to removing nearly 8 million gas-powered cars from the road for a year.
“While we expect the next administration to recklessly greenlight fossil fuel extraction, it’s heartening to see this effort to make polluters pay for their leakage of the super climate pollutant methane,” said Maggie Coulter, an environmental advocate.
However, the oil industry strongly opposes this fee. The American Petroleum Institute argues that it “hampers our ability to meet the growing energy needs of American families and businesses and fails to advance meaningful emissions reduction.” This resistance sets the stage for potential legal battles and political challenges.
