A Pricey Methane Mess for Oil

In his final months as President, Joe Biden has enacted another costly regulation on the oil and gas sector. This time, it’s a new tax on methane emissions, rolled out by the Environmental Protection Agency (EPA) on Tuesday.

As reported by Fox News, Republican Rep. Greg Murphy was quick to respond, voicing his frustration with Biden’s regulatory push, saying, “Thankfully, this insanity will end in January.”

This tax emerges from Biden’s ambitious climate legislation—the so-called Inflation Reduction Act—which included a “Waste Emissions Charge” provision. Though Congress required the emissions charge, the administration had leeway in how aggressively to enforce it.

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Starting in 2024, oil and gas companies will be charged $900 per metric ton of methane emitted over an EPA-set limit. That fee will escalate each year, hitting $1,200 per metric ton in 2025 and $1,500 in 2026, with further annual increases thereafter.

EPA Administrator Michael Regan praised the measure, claiming it supports American jobs, promotes clean air, and enhances U.S. leadership on climate. “The final Waste Emissions Charge is the latest in a series of actions under President Biden’s methane strategy,” Regan declared in a press release.

The Biden administration has maintained a strict stance on methane regulation since his inauguration. In 2021, Biden rolled back a Trump-era move that had eased methane restrictions, favoring instead to reinstate Obama-era controls.

Environmental groups, like the Clean Air Task Force, have applauded the latest rule, arguing it’s necessary to combat climate change.

However, not everyone sees this tax as effective or necessary. Steve Milloy, of the Energy and Environmental Legal Institute, dismissed the new methane tax as “irrelevant,” noting that the majority of greenhouse gases consist of water vapor and carbon dioxide—not methane.

Milloy further argued that the tax unfairly targets oil and gas while ignoring agriculture, which is a significant methane producer. “The largest source of methane is actually microbes,” Milloy emphasized, referencing organisms in cows, farms, and wetlands.

Milloy also suggested that Big Oil may benefit from the new rule by pushing out smaller competitors burdened by regulatory costs. “All these regulations cripple the competition,” he said. “Taxing the oil industry, you know, Big Oil is going to be all for that.”

Rep. Murphy echoed these concerns, saying the tax would only “raise costs and prevent investment” in the energy sector. With Biden’s exit around the corner, Republican leaders are preparing to roll back many green initiatives tied to his Inflation Reduction Act.

President-elect Donald Trump has signaled his intent to undo several of Biden’s climate policies and has nominated former Rep. Lee Zeldin as EPA chief. Speculation continues over other cabinet roles, with Alaska Gov. Mike Dunleavy potentially in line for Energy Secretary.

Despite inquiries, the White House and EPA remained tight-lipped, only directing reporters to a fact sheet touting the administration’s climate achievements.