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Creates a federal methane emissions and waste reduction incentive program for petroleum and natural gas systems under the Clean Air Act. The program sets who is eligible for exemptions, requires public documentation and minimum public comment periods for implementing rules, establishes an expedited dispute resolution process for orders, conditions when any waste charge may be collected, provides specific timelines for notices and rule proposals, and ends the program authority on December 31, 2034.
Administrator must publish an Administrator's Order publicly (including on EPA website) not later than 60 days after enactment containing plain-language explanations of: methods for calculating carbon dioxide equivalent, methane intensity, and other emissions factors; key calculations including conversion from CO2 to methane for determining the charge; the methods/mechanisms used to calculate the charge for each category in subsection (d)(1)–(9); lists of consultants, academic institutions, nongovernmental institutions, and other organizations involved (with contacts and biographies); citations/hyperlinks to all studies used; and a summary of other information used to develop these items.
In developing the documentation above, the Administrator must consult with owners and operators of applicable facilities with fewer than 2,500 full-time employees and ensure the documentation allows those operators to clearly understand reporting requirements and the required calculations.
Exemption for small upstream producers: the Administrator may not impose a reporting requirement or a charge under this section on an applicable facility that, as of August 16, 2022, (i) was generating less than 25,000 metric tons CO2 equivalent per year and (ii) had 2,500 or fewer full-time employees. The Administrator may not require such a facility to demonstrate it meets those conditions.
Within 60 days after enactment the Administrator must provide written notice to each applicable facility described as exempt (small upstream producers) that the facility is not subject to the reporting requirements or charges, and must publicly communicate (including press releases and EPA website messages) that those facilities are not subject to the reporting requirements or charges.
Exemption for certain producers complying with specific federal and State requirements: the Administrator may not impose a charge on an applicable facility during any period in which the facility (A) complies with subpart OOOOb and OOOOc, as applicable, of 40 C.F.R. part 60 (or successor regulations), and (B) is located in a State that is in compliance with the applicable State implementation plan required under subpart OOOOc (or successor regulations).
Who is affected and how:
Oil and natural gas producers and operators: Primary regulatory target. They may gain incentives to reduce methane emissions but will face program rules, reporting, and potentially fees if conditions for waste charges are met. Small producers designated in the statute receive exemptions, reducing near-term compliance burdens for those operations.
Midstream and pipeline operators: May be subject to program rules or eligibility requirements unless explicitly exempted; could face monitoring, reporting, and operational changes to reduce venting/leaks.
State environmental agencies and regulated states: States with plans that EPA recognizes as equivalent can have regulated facilities exempted, so state plan design and enforcement affect which facilities remain covered federally. States will likely interact with EPA on documentation and coordination.
Environmental and community stakeholders: Communities near oil and gas operations may see reduced methane and co-emitted pollutants if the program drives emission controls; public participation requirements give communities a formal comment role.
EPA and federal administrators: Must meet statutory timelines, prepare public documentation, run comment periods, operate an expedited dispute process, and ensure prerequisites before any fee collection.
Tradeoffs and likely outcomes:
Expand sections to see detailed analysis
Read twice and referred to the Committee on Environment and Public Works.
Introduced February 11, 2025 by James Lankford · Last progress February 11, 2025
Read twice and referred to the Committee on Environment and Public Works.
Introduced in Senate