As President Joe Biden prepares to exit the White House, his administration has implemented a new methane emissions tax targeting the oil and gas industry.
According to Fox News, the Environmental Protection Agency announced a rule on Tuesday, establishing a fee for excessive methane emissions beginning in 2024.
The Inflation Reduction Act's Waste Emissions Charge provision enacts this regulation, imposing an initial fee of $900 per metric ton when emission thresholds are exceeded. By 2025, the fee will rise to $1,200 per metric ton and will further increase to $1,500 per ton by 2026, with additional annual increases expected.
EPA Administrator Michael Regan affirmed that this initiative forms part of a larger strategy to improve the oil and gas sector’s efficiency, support American jobs, and uphold environmental standards.
"The final Waste Emissions Charge is the latest in a series of actions under President Biden’s methane strategy to improve efficiency in the oil and gas sector, support American jobs, protect clean air, and reinforce U.S. leadership on the global stage," Regan stated.
The EPA’s new methane tax aims to curb emissions from one of the primary sources, yet critics like Steve Milloy, a former EPA transition member during the Trump administration, argue that it unfairly targets the oil and gas industries while overlooking other major contributors like agriculture. "Microbes are the largest source of methane," Milloy argued, expressing concern over the focus solely on industrial contributors.
Further criticism highlights fears that these regulations could disproportionately impact smaller oil firms, possibly giving larger corporations an advantage. Critics suggest that the tax structure may unintentionally stifle competition within the industry.
The newly legislated methane tax faces uncertainty as the incoming administration, led by President-elect Trump, plans to repeal such green energy initiatives.
Moreover, this stance signals a shift in environmental policy focus back toward deregulation, echoing the Trump administration's approach during its previous term.
As the transition of presidential power approaches, Rep. Greg Murphy commented on the anticipated policy reversal, stating, "Thankfully, this insanity will end in January." President-elect Trump has nominated former New York Rep. Lee Zeldin as the next chief of the EPA, further emphasizing potential policy shifts.
The decision to implement the methane emissions tax reflects an ongoing political tug-of-war over environmental regulations. During President Trump's term, his administration rolled back several regulations, including those on methane emissions, a move that the Biden administration quickly reversed upon taking office in 2021.
Although the Biden administration established the methane tax, the impending political change casts doubt on its longevity. Various stakeholders note that the continual regulatory back-and-forth between administrations could disrupt long-term planning and stability within the oil and gas sectors.
Advocates of the methane tax argue it is essential for environmental sustainability and a critical step for the U.S. to lead globally in climate governance. However, with the upcoming administrative change, Biden's environmental policies, including this methane tax, face ongoing scrutiny regarding their durability.
