The API and 19 other associations representing the US oil and gas industry nationwide have urged the EPA to reconsider its “misguided” methane fee imposed on the US energy sector.

In their comments to the agency regarding the "waste emissions charge," the associations, including the American Exploration and Production Council, American Fuel and Petrochemical Manufacturers and the Independent Petroleum Association of America, to name a few, stated that the EPA's proposed rulemaking creates a regulatory regime that lacks coherence. 

They also argued that it fails to meet the statutory requirements outlined by the Inflation Reduction Act (IRA) and “disincentivises” emissions reduction efforts by the industry.

“This tax on American energy is a serious misstep that could jeopardise our nation’s energy advantage and weaken our energy security,” said API senior vice-president of policy, economics and regulatory affairs Dustin Meyer.

“US oil and natural gas is innovating throughout its operations to reduce methane emissions while meeting growing energy demand. Yet, this proposal creates an incoherent, confusing regulatory regime that will only stifle technology advancements and hamper energy development. With partners across the industry, we will consider all options to ensure a smart regulatory framework for continued American energy development,” Meyer added.

In December 2023, the EPA announced a final rule to significantly reduce methane and other harmful air pollutants from the oil and natural gas industry. A month later, a proposed regulation was introduced to address wasteful methane emissions from the industry. According to the government, this fulfils the mandate set forth in the IRA to promote adopting the industry's most effective practices for reducing pollution.

The proposed regulation would impose a fee on specific large methane emitters from the oil and gas industry that surpass the emission intensity levels established by the Biden administration. The proposed "waste emissions charge” aims to encourage the early implementation of available technologies and best practices to minimise methane emissions and other detrimental air pollutants before the new standards come into effect, the government said in a statement. 

The associations have requested the administration to align this proposed rule with other regulations, including Subpart W and the EPA’s final methane rule. They have also asked for more flexibility in netting requirements to encourage greater emissions reductions, clarification of the rule’s exemptions as intended by the Biden administration, and reasonable compliance and reporting timelines.

“The US oil and natural gas industry is taking action to reduce methane emissions while continuing to produce affordable, reliable energy. Thanks to industry action, average methane emissions intensity declined by nearly 66% across all seven major producing regions from 2011 to 2021,” the API stated.