In a move that has sparked debate across the energy sector and environmental advocacy groups, the US Senate has voted to overturn the Environmental Protection Agency’s (EPA) proposed fee on methane emissions from oil and gas producers.
The decision effectively nullifies the escalating charge that was set to be implemented as part of the 2022 Inflation Reduction Act.
The resolution, passed under the Congressional Review Act process, follows a similar decision by the House on Wednesday.
The now-defunct methane fee directed the EPA to levy a charge on facilities emitting more than 25,000 tonnes of carbon dioxide equivalent (CO₂e) per year.
The fee was structured to begin at US$900 per tonne of methane in 2024, increasing to US$1,200 in 2025, and ultimately reaching US$1,500 from 2026 onwards.
Methane, recognised as a potent greenhouse gas, is frequently released from drill sites, pipelines, and other components of oil and gas infrastructure.
Industry groups have largely applauded the Senate’s action.
Jeff Eshelman, president of the Independent Petroleum Association of America, stated: “The Biden administration and Democrats in Congress passed the methane tax to single out and punish the oil and natural gas industry despite its already burdensome EPA regulatory framework.”
The American Petroleum Institute (API) and 19 other industry associations had previously urged the EPA to reconsider the methane fee, labelling it as “misguided” and detrimental to the US energy sector back in March 2024.
Conversely, Democratic Senator Sheldon Whitehouse, the leading Democrat on the Senate environment committee, voiced concerns that the resolution would lead to increased energy prices and a decline in environmental quality for consumers.
In December 2023, the EPA finalised a rule aimed at reducing methane and other air pollutants from the oil and gas industry, which garnered relatively less opposition from the industry.
This was followed by a proposed regulation in January targeting wasteful methane emissions.
The oil and gas industry is now bracing for the next steps in the wake of the Senate’s decision.
Expectations are high that President Donald Trump will swiftly sign the legislation into law.
The implications of this reversal on future environmental regulations and the ongoing debate surrounding methane emissions remain to be seen.
