Oil companies will soon pay fees for emitting a climate ‘super-pollutant’

Archive link. The United States Environmental Protection Agency will soon be enforcing "steep new fees on methane emissions from oil and gas facilities." While the Inflation Reduction Act provided incentives for companies to reduce emissions of various kinds, many have failed to do so voluntarily.

Previous analysis has suggested that enacting systemic industrial change is most effective when the government offers positive benefits for a voluntary switch in procedures/behavior AND negative consequences for stakeholders that refuse to change their procedures/behavior. Doing the former without the latter is naive and ineffective; the latter without the former, while still effective, is politically challenging. But doing both is both effective and politically tenable.

The IRA passed in 2022 included the Methane Emissions Reduction Program, which directs the EPA to enforce methane emissions reductions (but does not specify how). The new rule from the EPA gives details. Starting in 2024, a "Waste Emissions Charge" based on tons of methane emitted will be applied to companies emitting an excessive amount of it. That page also contains links to a useful fact sheet and obviously the rule itself:

The WEC is specifically tailored to impose a charge on high-emitting oil and gas facilities to incentivize actions to reduce wasteful methane emissions while EPA and states work toward full implementation of the CAA rule.

The WEC is required by CAA section 136(e) to apply to emissions occurring in year 2024 at $900 per metric ton of methane, increasing to $1,200 per metric ton of methane in 2025, and to $1,500 per metric ton of methane in 2026 and in the years after. The WEC only applies to the subset of a facility’s emissions that exceed the levels set by Congress, and that are not exempt from the charge.

An applicable facility, as defined in CAA section 136(d), is a facility within the following industry segments (as defined in 40 CFR part 98, subpart W): onshore petroleum and natural gas production, offshore petroleum and natural gas production, onshore natural gas processing, onshore petroleum and natural gas gathering and boosting, onshore gas transmission compression, onshore natural gas transmission pipeline, underground natural gas storage, liquefied natural gas import and export equipment, and liquefied natural gas storage. Only applicable facilities that report more than 25,000 metric tons of carbon dioxide equivalent under subpart W would be subject to the WEC.

Emphasis mine. So this isn't a "methane tax" or a "carbon tax" in the ideal sense, which would tax any pollutants for any reason. In addition to some obvious exemptions, it also exempts small emitters, as well as methane wells that have previously been plugged (and could leak), and potentially exempts some industries that aren't explicitly stated. But the WEC does cull the worst offenders.