The Biden administration proposed a new regulation Friday that would impose fines on oil and gas companies for methane emissions, the Environmental Protection Agency announced.
The policy would require companies to pay a penalty of $900 per every ton of methane emitted beyond limits established by the government starting this year, with the cost for each ton above the government's thresholds increasing to $1,200 in 2025 and jumping to $1,500 in 2026 and beyond, according to the EPA. While the agency touts the proposal as a tool to reduce methane emissions, energy producers have slammed it for adding complexity to the regulatory environment and potentially driving up energy costs for consumers.
The proposal would become the first direct federal tax on emissions in the U.S. if it is finalized and implemented as planned, according to The New York Times.
Environmentalists malign natural gas production in particular as a source of methane emissions, but natural gas burns more cleanly in comparison to other fossil fuels, such as coal, according to the U.S. Energy Information Administration.
"As the world looks to U.S. energy producers to provide stability in an increasingly unstable world, this punitive tax increase is a serious misstep that undermines America's energy advantage," Dustin Meyer, the senior vice president of Policy, Economics and Regulatory Affairs for the American Petroleum Institute, said of the proposal.
The EPA projects that the regulation would only have a limited impact on energy costs for Americans, but the policy is a de facto "Natural gas tax" that will almost certainly drive up costs, Larry Behrens, the communications director for Power The Future, told the Daily Caller News Foundation.
Friday's proposal complements a December 2023 EPA proposal for methane detection requirements, which independent oil and gas companies strongly oppose because the increased compliance costs would put them at a disadvantage relative to the major firms.
https://wattsupwiththat.com/2024/01/12/biden-admin-unveils-natural-gas-tax-proposal/
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