WASHINGTON — Oil and gas companies will for the first time have to pay a federal tax if they emit dangerous methane above certain levels, under a final rule announced Tuesday by the Biden administration.

The Environmental Protection Agency rule follows a congressional directive included in the 2022 climate law. The new fees are intended to encourage industry to adopt best practices for reducing emissions of methane — the main component of gas natural – and thus avoid paying.

Methane is a climate “super pollutant” much more powerful in the short term than carbon dioxide and responsible for around a third of greenhouse gas emissions. The oil and natural gas sector is the largest industrial source of methane emissions in the United States, and advocates say reducing methane emissions is a crucial way to slow climate change.

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The Trump administration should challenge this rule

The rule, announced at an international climate conference in Azerbaijan, comes a day after President-elect Donald Trump named former New York congressman Lee Zeldin to lead the agency for a second term of Trump. If confirmed by the Senate, Zeldin is expected to roll back or relax dozens of environmental regulations approved under President Joe Biden, as Trump seeks to establish U.S. “energy dominance” around the world.

Trump is likely to target the methane tax amid a wave of expected actions he has promised to deregulate the oil and gas industry.

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Pricing structure and implementation schedule

As the EPA noted, excess methane produced in 2024 could result in fees of $900 per ton, with fees rising to $1,200 per ton in 2025 and $1,500 per ton by 2026. Industry groups are likely to challenge the rule, including any effort to impose retroactive fees.

The rule will not become final until early next year, after it is published in the Federal Register.

EPA Administrator Michael Regan said in a statement that the rule would work in tandem with a new EPA rule on methane emissions imposed this year. The rule targets the U.S. oil and natural gas industry for its role in global warming as Biden seeks to secure his legacy in the fight against climate change.

This tax, officially known as the Waste Emissions Tax, will encourage early deployment of available technologies to reduce emissions of methane and other harmful air pollutants, Regan said. This tax “is the latest in a series of actions under President Biden’s methane strategy to improve oil and gas sector efficiency, support American jobs, protect clean air and to strengthen American leadership on the world stage,” he said.

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Legal challenges and industry response

Industry groups and Republican-led states challenged the earlier methane rule in court, but lost a bid to have the Supreme Court block the rule while the case continues before lower judges .

Opponents argue that the EPA overstepped its authority and set unattainable standards with the new regulations. The EPA, however, said the rules were clearly within its legal responsibilities and would protect the public.

Many major oil and gas companies already meet or exceed methane performance levels set by Congress as part of the climate law, meaning they are unlikely to be forced to pay the new tax, Regan and other officials said.

Even so, the EPA estimates that the rule will result in a cumulative emissions reduction of 1.2 million tons of methane (34 million tons of carbon dioxide equivalent) through 2035. This figure is similar to the gains in air quality resulting from the absorption of nearly 8 million gases. -motor cars off the road for a year, the EPA said. Cumulative climate benefits could total up to $2 billion, the agency said.

Like the previous methane rule, the new tax faces an almost certain challenge from industry groups. The American Petroleum Institute, the oil and gas industry’s largest lobbying group, said the tax “hinders our ability to meet the growing energy needs of American families and businesses and fails to advance a reduction significant emissions”.

API Senior Vice President Dustin Meyer said the group looks forward to working with the Trump administration and the new Congress to repeal the fees and “get it right.”

Environmental groups welcomed the new tax, saying oil and gas companies should be held accountable for pollution that contributes to global warming. Oil and gas companies routinely calculate that it is cheaper to waste methane through flaring and other techniques than to make the improvements needed to prevent leaks, they said.

“As we expect the next administration to recklessly green-light fossil fuel extraction, it is heartening to see this effort to make polluters pay for leaking methane, a super climate pollutant,” he said. said Maggie Coulter, an attorney at the Center for Biological Diversity, a human rights organization. band.

“Ultimately, we know that curbing the climate emergency requires a rapid shift away from fossil fuel extraction,” Coulter said. “The oil and gas companies that are causing so much damage to our climate should have to pay for the methane leaks they have so scandalously failed to fix. »