January 15, 2024 - The U.S. Environmental Protection Agency announced Friday a proposed rule to charge companies for methane emissions from oil and natural gas production, a wide-sweeping change that has the potential to reduce greenhouse gases and change the amount of drilling in the Marcellus Shale and elsewhere.

The proposed rule would charge larger emitters of methane, the main component of natural gas that can also leak into the atmosphere from drilling sites and pipelines and cause pollution. Methane is a potent greenhouse gas and a source of emissions that natural gas drillers in the Marcellus Shale have been working to reduce across its operations.

“We are laser-focused on working collectively with companies, states and communities to ensure that America leads in deploying technologies and innovations that aid in the development of a clean energy economy,” said EPA Administrator Michael Regan. It’s part of a larger initiative that included stricter methane requirements from oil and gas operations.

The proposed rule would charge $900 per metric ton for emissions in 2024, $1,200 per metric ton of emissions in 2025 and $1,500 per metric ton of emissions in 2026. It needs to go through the public review process.

The American Petroleum Institute, which represents the oil and gas industry, called the proposed rule a “serious misstep” and a punitive tax.

“While we support federal methane regulation, this proposal creates an incoherent, confusing regulatory regime that will only stifle innovation and undermine our ability to meet rising energy demand,” said API SVP Dustin Meyer.

The methane fee was required as part of the Inflation Reduction Act. But producers have said that the action to reduce greenhouse gases as part of the energy transition should be a collaborative and market-driven one. Some companies, like Pittsburgh-based EQT Corp. (NYSE: EQT), have made big progress on reducing its gas emissions.

Others, including the Clean Air Task Force, applauded the use of the rule.

“The waste rule is a critical tool for driving methane pollution down,” said Clean Air Task Force Global Director of Methane Pollution Prevention Jonathan Banks. “The technologies and practices to reduce emissions and avoid the charge are widely available to the industry.”