The oil industry is divided on how to prepare for the new methane tax.
Companies will begin paying the fee in 2025, based on this year’s emissions, and could end up paying a total of $750 million, according to EPA’s regulatory analysis.
That has prompted many companies to use 2024 to increase emissions monitoring and cut leaks. Others, however, are waiting to see if the levy survives a court challenge — and the possible return of former president and fossil fuel ally Donald Trump to the White House. And some are still unsure whether the charge will apply to them, particularly if they are small enough to never have had to report emissions to EPA in the past.
“The majority of companies are just coming to grips with the charge, and they’re trying to assess what the charge is versus what the mitigation costs are,” said Dick Brown, CEO of Kathairos Solutions, which helps petroleum firms reduce their leak rates. “I would say it’s like early innings as far as companies understanding the charge, what their exposure is and then what the real cost of mitigation of the methane is.”
