Biden Administration Announces $350 Million to Reduce Methane Emissions

The U.S. Environmental Protection Agency and Department of Energy have announced a conditional commitments for grant funding for 14 states to assist in both measuring and reducing methane emissions from the oil and gas sector. The states will receive a total of $350 million in formula grants, the first in the first in a series of funding opportunities through the 2022 Inflation Reduction Act to address methane emissions from the oil and gas sector.

The agencies will provide financial assistance to operators or well owners to voluntarily and permanently plug and abandon such wells on non-federal lands as well as monitor methane emissions from them. Moreover, the states can use the funding to assist in environmental restoration of well sites and monitoring to ensure that plugged wells are no longer emitting methane.

The Inflation Reduction Act makes a commitment to develop a new clean energy economy, that will create well paid employment opportunities and reduce carbon emissions, in order to deter the climate crisis. Moreover, the act and the consequent funding will assist states industry efforts to reduce methane emissions from wells on non federal lands and support environmental restoration of well sites.

Reducing methane emissions is an pivotal step in slowing down the negative effects of climate change and the grants awarded will assist in supporting vital associations between states and the oil and gas sector. As it stands, the oil and gas sector accounts for 30 percent of total methane emissions, and as a result addressing this sector will allow for near immediate climate benefits, which will in turn reduce emissions. Moreover, from an environmental justice perspective, the monitoring and reduction of methane emissions in the oil and gas sector will benefit disadvantaged communities and will support the Justice40 Initiative.

As a result of the funding, the Methane Emissions Reduction Program will be accelerated and will continue to assist the U.S. in its goal to achieve emission reduction targets and help fulfil their climate goals. The program provides more than $1 billion to reduce methane emissions from the petroleum and natural gas sector and also establishes a waste emissions charge for methane from applicable facilities that report more than 25,000 metric tons of CO2 equivalent per year and that exceed statutorily specified waste emissions thresholds.

The agencies plan to make supplemental competitive solicitations in 2024, which would include a wider array of applicants to advance the deployment of technologies and methods to observe and reduce methane emissions.

Efforts to address emissions and unwanted releases of methane have been growing. EPA has proposed to amend reporting requirements for petroleum and natural gas systems under the agency’s Greenhouse Gas Reporting Program to improve the accuracy of reported emissions, including methane, consistent with the Methane Emissions Reduction Program.