Methane emissions and waste reduction incentive program for petroleum and natural gas systems
42 U.S.C. § 7436
in effect(a) Incentives for methane mitigation and monitoringIn addition to amounts otherwise available, there is appropriated to the Administrator for fiscal year 2022, out of any money in the Treasury not otherwise appropriated, $850,000,000, to remain available until September 30, 2028—(1) for grants, rebates, contracts, loans, and other activities of the Environmental Protection Agency for the purposes of providing financial and technical assistance to owners and operators of applicable facilities to prepare and submit greenhouse gas reports under subpart W of part 98 of title 40, Code of Federal Regulations; (2) for grants, rebates, contracts, loans, and other activities of the Environmental Protection Agency authorized under subsections (a) through (c) of section 7403 of this title for methane emissions monitoring; (3) for grants, rebates, contracts, loans, and other activities of the Environmental Protection Agency for the purposes of providing financial and technical assistance to reduce methane and other greenhouse gas emissions from petroleum and natural gas systems, mitigate legacy air pollution from petroleum and natural gas systems, and provide funding for—(A) improving climate resiliency of communities and petroleum and natural gas systems; (B) improving and deploying industrial equipment and processes that reduce methane and other greenhouse gas emissions and waste; (C) supporting innovation in reducing methane and other greenhouse gas emissions and waste from petroleum and natural gas systems; (D) permanently shutting in and plugging wells on non-Federal land; (E) mitigating health effects of methane and other greenhouse gas emissions, and legacy air pollution from petroleum and natural gas systems in low-income and disadvantaged communities; and (F) supporting environmental restoration; and (4) to cover all direct and indirect costs required to administer this section, prepare inventories, gather empirical data, and track emissions.
(b) Incentives for methane mitigation from conventional wellsIn addition to amounts otherwise available, there is appropriated to the Administrator for fiscal year 2022, out of any money in the Treasury not otherwise appropriated, $700,000,000, to remain available until September 30, 2028, for activities described in paragraphs (1) through (4) of subsection (a) at marginal conventional wells.
(c) Waste emissions chargeThe Administrator shall impose and collect a charge on methane emissions that exceed an applicable waste emissions threshold under subsection (f) from an owner or operator of an applicable facility that reports more than 25,000 metric tons of carbon dioxide equivalent of greenhouse gases emitted per year pursuant to subpart W of part 98 of title 40, Code of Federal Regulations, regardless of the reporting threshold under that subpart.
(d) Applicable facilityFor purposes of this section, the term “applicable facility” means a facility within the following industry segments, as defined in subpart W of part 98 of title 40, Code of Federal Regulations:(1) Offshore petroleum and natural gas production. (2) Onshore petroleum and natural gas production. (3) Onshore natural gas processing. (4) Onshore natural gas transmission compression. (5) Underground natural gas storage. (6) Liquefied natural gas storage. (7) Liquefied natural gas import and export equipment. (8) Onshore petroleum and natural gas gathering and boosting. (9) Onshore natural gas transmission pipeline.
(e) Charge amountThe amount of a charge under subsection (c) for an applicable facility shall be equal to the product obtained by multiplying—(1) the number of metric tons of methane emissions reported pursuant to subpart W of part 98 of title 40, Code of Federal Regulations, for the applicable facility that exceed the applicable annual waste emissions threshold listed in subsection (f) during the previous reporting period; and (2)(A) $900 for emissions reported for calendar year 2024; (B) $1,200 for emissions reported for calendar year 2025; or (C) $1,500 for emissions reported for calendar year 2026 and each year thereafter.
(f) Waste emissions threshold(1) Petroleum and natural gas productionWith respect to imposing and collecting the charge under subsection (c) for an applicable facility in an industry segment listed in paragraph (1) or (2) of subsection (d), the Administrator shall impose and collect the charge on the reported metric tons of methane emissions from such facility that exceed—(A) 0.20 percent of the natural gas sent to sale from such facility; or (B) 10 metric tons of methane per million barrels of oil sent to sale from such facility, if such facility sent no natural gas to sale. (2) Nonproduction petroleum and natural gas systemsWith respect to imposing and collecting the charge under subsection (c) for an applicable facility in an industry segment listed in paragraph (3), (6), (7), or (8) of subsection (d), the Administrator shall impose and collect the charge on the reported metric tons of methane emissions that exceed 0.05 percent of the natural gas sent to sale from or through such facility. (3) Natural gas transmissionWith respect to imposing and collecting the charge under subsection (c) for an applicable facility in an industry segment listed in paragraph (4), (5), or (9) of subsection (d), the Administrator shall impose and collect the charge on the reported metric tons of methane emissions that exceed 0.11 percent of the natural gas sent to sale from or through such facility. (4) Common ownership or controlIn calculating the total emissions charge obligation for facilities under common ownership or control, the Administrator shall allow for the netting of emissions by reducing the total obligation to account for facility emissions levels that are below the applicable thresholds within and across all applicable segments identified in subsection (d). (5) ExemptionCharges shall not be imposed pursuant to paragraph (1) on emissions that exceed the waste emissions threshold specified in such paragraph if such emissions are caused by unreasonable delay, as determined by the Administrator, in environmental permitting of gathering or transmission infrastructure necessary for offtake of increased volume as a result of methane emissions mitigation implementation. (6) Exemption for regulatory compliance(A) In generalCharges shall not be imposed pursuant to subsection (c) on an applicable facility that is subject to and in compliance with methane emissions requirements pursuant to subsections (b) and (d) of section 7411 of this title upon a determination by the Administrator that—(i) methane emissions standards and plans pursuant to subsections (b) and (d) of section 7411 of this title have been approved and are in effect in all States with respect to the applicable facilities; and (ii) compliance with the requirements described in clause (i) will result in equivalent or greater emissions reductions as would be achieved by the proposed rule of the Administrator entitled “Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review” (86 Fed. Reg. 63110 (November 15, 2021)), if such rule had been finalized and implemented. (B) Resumption of chargeIf the conditions in clause (i) or (ii) of subparagraph (A) cease to apply after the Administrator has made the determination in that subparagraph, the applicable facility will again be subject to the charge under subsection (c) beginning in the first calendar year in which the conditions in either clause (i) or (ii) of that subparagraph are no longer met. (7) Plugged wellsCharges shall not be imposed with respect to the emissions rate from any well that has been permanently shut-in and plugged in the previous year in accordance with all applicable closure requirements, as determined by the Administrator.
(g) PeriodThe charge under subsection (c) shall be imposed and collected beginning with respect to emissions reported for calendar year 2034 and for each year thereafter.
(h) ReportingNot later than 2 years after August 16, 2022, the Administrator shall revise the requirements of subpart W of part 98 of title 40, Code of Federal Regulations, to ensure the reporting under such subpart, and calculation of charges under subsections (e) and (f) of this section, are based on empirical data, including data collected pursuant to subsection (a)(4), accurately reflect the total methane emissions and waste emissions from the applicable facilities, and allow owners and operators of applicable facilities to submit empirical emissions data, in a manner to be prescribed by the Administrator, to demonstrate the extent to which a charge under subsection (c) is owed.
(i) Definition of greenhouse gasIn this section, the term “greenhouse gas” means the air pollutants carbon dioxide, hydrofluorocarbons, methane, nitrous oxide, perfluorocarbons, and sulfur hexafluoride.
Source: OLRC USLMURL: https://uscode.house.gov/download/releasepoints/us/pl/119/95/xml_usc42@119-95.zipFetched: 6/7/2026