This week, three Democratic Senators filed a bill that would set a price on methane beginning in 2023.
The Methane Emissions Reduction Act, filed by Senators Whitehouse (D-RI), Booker (D-NJ) and Schatz (D-HI), aims to discourage methane emissions from oil and gas production by putting a price on the natural gas, Whitehouse said.
The fees would be determined on a basin-by-basin basis and created from a formula factoring the company’s gas production and methane rate. Companies could be exempted if they can demonstrate how their emissions are lower than those of the basin average where they operate.
Currently the bill prices methane at $1,800 per ton and would increase 2% above inflation each year after 2023. The steep price seeks to make the emissions cost prohibitive to oil and gas companies, according to Booker.
Revenues from the fees would go to the National Coastal Resilience Fund and the program would be developed by the Department of the Treasury alongside the Environmental Protection Agency and National Oceanic and Atmospheric Administration.
Recently, the Texas Methane & Flaring Coalition, composed of several Texas energy trade associations and more than 40 Texas oil and natural gas companies announced the goal of ending routine flaring by 2030. Industry has been pushing to address methane emissions and flaring as part ESG related metrics and in advance of burdensome regulation from the Biden Administration.
The Council and its Government Affairs team will continue to monitor these issues and its impact on membership. If you are interested in joining the Government Affairs Committee, please reach out to SVP Government Affairs & Counsel Tim Tarpley.