Drills to pay fees for methane leaks under Biden plan

The companies of Petroleum and gas would be forced to pay for excess methane leaking from wells, storage sites and pipelines with the new draft of the president’s climate and social spending plan Joe Biden.

Under the measure published Thursday, tariffs of up to US $ 1,500 per ton would be imposed on a variety of oil and gas infrastructure, from wells and pipelines to terminals that process natural gas for export around the world.

The position proposed in the bill of the House of Representatives of EE.UU., which is still subject to change, comes amid increasing scrutiny for methane, which has an 80 times potential to trap heat from carbon dioxide and is credited with a quarter of global warming.

“This would be very important,” said Sarah Smith, program director for the environmental group Clean Air Task Force. “Pricing this harmful and potent greenhouse gas at this level would help force oil and gas producers to clean up their processes.”

The proposed rates would be part of a new $ 775 million grant, reimbursement, loan and other incentive program from the Environmental Protection Agency (EPA) to help oil and gas companies inform and mitigate its methane emissions.

The current House language has been reconfigured to satisfy Democrats in energy-producing states, including representatives from Texas in the House and Sen. Joe Manchin, a Democrat from West Virginia and a key swing vote in his House. Manchin has previously spoken critically about fees and it is unclear if the changes, including a longer incorporation period, would be enough to resolve his concerns. A spokeswoman for Manchin did not respond to an email seeking comment on the proposal.

The Senate’s previous plan put rates at US $ 1,800 per ton, according to Treasury Department calculations, calculations tied to regional averages for methane emissions.

According to the latest version, rates would start at US $ 900 per ton of excess methane emissions in 2023, increase to US $ 1,200 in 2024, and rise to US $ 1,500 in 2025 and beyond. It would also be adapted to each location, establishing a threshold for leaks and imposing rates on emissions that exceed it. In natural gas production operations, for example, fees would be imposed on reported methane emissions that exceed 0.2% of natural gas sold on-site.

That approach is intended to encourage companies to repair leaks so that emissions remain below the acceptable level.

Oil and gas industry groups have warned that any payment for methane is likely to translate into higher electricity and heating costs for consumers. The American Gas Association said it was still analyzing the potential impact of the latest proposal on some 180 million Americans and 5.5 million businesses that use natural gas.

“If you increase your bills, an outrageous measure amid rising energy prices, we will oppose it,” the group said in an emailed statement.

The fees would come alongside EPA’s separate efforts to limit methane emissions, including upcoming proposals to strengthen requirements for companies to search for and repair leaks in hundreds of thousands of oil and gas wells. These measures are expected to be proposed in a few days.