42 U.S.C. § 7436 — Methane emissions and waste reduction incentive program for petroleum and natural gas systems

(a) Incentives for methane mitigation and monitoring: In addition to other available money, Congress appropriates $850,000,000 to the Administrator^* for fiscal year 2022. The money comes from the Treasury and remains available until September 30, 2028. The Administrator may use it: (1) for Environmental Protection Agency grants, rebates, contracts, loans, and other activities that provide financial and technical assistance to owners and operators of applicable facilities so they can prepare and submit greenhouse-gas reports under subpart W of part 98 of title 40 of the Code of Federal Regulations; (2) for Environmental Protection Agency grants, rebates, contracts, loans, and other activities authorized under section 7403(a) through (c) of this title for monitoring methane emissions; (3) for Environmental Protection Agency grants, rebates, contracts, loans, and other activities that provide financial and technical assistance to reduce methane and other greenhouse-gas emissions from petroleum and natural-gas systems, reduce older air pollution from those systems, and provide funding for: (A) improving the climate resilience 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) reducing the health effects of methane and other greenhouse-gas emissions and older air pollution from petroleum and natural-gas systems in low-income and disadvantaged communities; and (F) environmental restoration; and (4) covering all direct and indirect costs needed to administer this section, prepare inventories, gather empirical data, and track emissions.

(b) Incentives for methane mitigation from conventional wells: In addition to other available money, Congress appropriates $700,000,000 to the Administrator for fiscal year 2022. The money comes from the Treasury, remains available until September 30, 2028, and is for the activities described in subsection (a)(1) through (4) at marginal conventional wells.

(c) Waste emissions charge: The Administrator must impose and collect a charge on methane emissions that exceed a waste-emissions threshold under subsection (f). The charge is imposed on the 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 under subpart W of part 98 of title 40 of the Code of Federal Regulations, regardless of that subpart’s reporting threshold.

(d) Applicable facility: For this section, “applicable facility” means a facility in one of these industry segments, as defined in subpart W of part 98 of title 40 of the 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; and (9) onshore natural-gas transmission pipelines.

(e) Charge amount: The charge for an applicable facility equals the product of: (1) the number of metric tons of methane reported under subpart W for that facility that exceed the applicable annual waste-emissions threshold in subsection (f) during the previous reporting period; and (2) the applicable rate: (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 later year.

(f) Waste emissions threshold: (1) Petroleum and natural-gas production. For a facility in subsection (d)(1) or (2), the Administrator must impose and collect the charge on reported methane emissions above: (A) 0.20 percent of the natural gas sent to sale from the facility; or (B) 10 metric tons of methane per million barrels of oil sent to sale from the facility, if the facility sent no natural gas to sale. (2) Nonproduction petroleum and natural-gas systems. For a facility in subsection (d)(3), (6), (7), or (8), the charge applies to reported methane emissions above 0.05 percent of the natural gas sent to sale from or through the facility. (3) Natural-gas transmission. For a facility in subsection (d)(4), (5), or (9), the charge applies to reported methane emissions above 0.11 percent of the natural gas sent to sale from or through the facility. (4) Common ownership or control. When facilities have common ownership or control, the Administrator must allow emissions to be netted by reducing the total charge obligation to account for emissions below the applicable thresholds within and across all applicable segments in subsection (d). (5) Exemption. The charge may not be imposed under paragraph (1) on emissions above that paragraph’s threshold if the emissions were caused by an unreasonable delay, as determined by the Administrator, in environmental permitting of gathering or transmission infrastructure necessary for increased offtake volume resulting from implementation of methane-emissions mitigation. (6) Exemption for regulatory compliance. (A) The charge may not be imposed under subsection (c) on an applicable facility subject to and complying with methane-emissions requirements under section 7411(b) and (d) of this title if the Administrator determines that: (i) methane-emissions standards and plans under those provisions have been approved and are in effect in every State^* for the applicable facilities; and (ii) complying with those requirements will produce equal or greater emissions reductions than the Administrator’s proposed rule titled “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)) would have produced if it had been finalized and implemented. (B) If either condition in clause (i) or (ii) stops applying after the determination under subparagraph (A), the facility becomes subject again to the charge under subsection (c) beginning in the first calendar year when either condition is no longer met. (7) Plugged wells. The charge may not be imposed on the emissions rate from a well that was permanently shut in and plugged during the previous year in accordance with all applicable closure requirements, as determined by the Administrator.

(g) Period: The charge under subsection (c) begins with emissions reported for calendar year 2034 and applies to each later year.

(h) Reporting: Within two years after August 16, 2022, the Administrator must revise subpart W reporting requirements so that reporting and the charge calculations under subsections (e) and (f) are based on empirical data, including data collected under subsection (a)(4); accurately reflect total methane emissions and waste emissions from applicable facilities; and allow owners and operators of applicable facilities to submit empirical emissions data, in the manner the Administrator prescribes, to show the extent to which a charge under subsection (c) is owed.

(i) Definition of greenhouse gas: In this section, “greenhouse gas” means the air pollutants carbon dioxide, hydrofluorocarbons, methane, nitrous oxide, perfluorocarbons, and sulfur hexafluoride.