---
kind: "section"
citation: "42 U.S.C. § 7436"
title: "42"
title_heading: "The Public Health and Welfare"
number: "7436"
heading: "Methane emissions and waste reduction incentive program for petroleum and natural gas systems"
release: "119-102"
url: "https://uscodex.org/usc/42/7436"
units:
  - "Chapter 85 — Air Pollution Prevention and Control"
  - "Subchapter I — Programs and Activities"
  - "Part A — Air Quality and Emission Limitations"
---

# §7436. Methane emissions and waste reduction incentive program for petroleum and natural gas systems

- (a) **Incentives for methane mitigation and monitoring—** In addition to amounts otherwise available, there is appropriated to the [Administrator](/usc/42/7602.md?p=a) 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](/usc/42/13641.md?p=4) and operators of [applicable facilities](#d) to prepare and submit [greenhouse gas](#i) reports under [subpart W of part 98 of title 40, Code of Federal Regulations](/cfr/40/part98-subpartW.md);
  - (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](/usc/42/7403.md) 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](#i) 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](#i) emissions and waste;
    - (C) supporting innovation in reducing methane and other [greenhouse gas](#i) 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](#i) emissions, and legacy air pollution from petroleum and natural gas systems in low-[income](/usc/42/292s.md?p=c-4) and disadvantaged communities; and
    - (F) supporting environmental restoration; and
  - (4) to cover all direct and indirect costs required to administer this section, prepare [inventories](/usc/42/4370m.md?p=14), gather empirical data, and track emissions.
- (b) **Incentives for methane mitigation from conventional wells—** In addition to amounts otherwise available, there is appropriated to the [Administrator](/usc/42/7602.md?p=a) 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)](#a-1..a-4) of subsection (a) at marginal conventional wells.
- (c) **Waste emissions charge—** The [Administrator](/usc/42/7602.md?p=a) shall impose and collect a charge on methane emissions that exceed an applicable waste emissions threshold under [subsection (f)](#f) from an [owner or operator](/usc/42/9601.md?p=20-B) of an [applicable facility](#d) that reports more than 25,000 metric tons of carbon dioxide equivalent of [greenhouse gases](#i) emitted per year pursuant to [subpart W of part 98 of title 40, Code of Federal Regulations](/cfr/40/part98-subpartW.md), regardless of the reporting threshold under that subpart.
- (d) **Applicable facility—** For purposes of this section, the term “applicable facility” means a [facility](/usc/42/11049.md?p=4) within the following industry segments, as defined in [subpart W of part 98 of title 40, Code of Federal Regulations](/cfr/40/part98-subpartW.md):
  - (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](/usc/42/6311.md?p=7) and export equipment.
  - (8) Onshore petroleum and natural gas gathering and boosting.
  - (9) Onshore natural gas transmission pipeline.
- (e) **Charge amount—** The amount of a charge under [subsection (c)](#c) for an [applicable facility](#d) 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](/cfr/40/part98-subpartW.md), for the [applicable facility](#d) that exceed the applicable annual waste emissions threshold listed in [subsection (f)](#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 production—** With respect to imposing and collecting the charge under [subsection (c)](#c) for an [applicable facility](#d) in an industry segment listed in paragraph [(1)](#d-1) or [(2)](#d-2) of subsection (d), the [Administrator](/usc/42/7602.md?p=a) shall impose and collect the charge on the reported metric tons of methane emissions from such [facility](/usc/42/11049.md?p=4) that exceed—
    - (A) 0.20 percent of the natural gas sent to sale from such [facility](/usc/42/11049.md?p=4); or
    - (B) 10 metric tons of methane per million barrels of oil sent to sale from such [facility](/usc/42/11049.md?p=4), if such [facility](/usc/42/11049.md?p=4) sent no natural gas to sale.
  - (2) **Nonproduction petroleum and natural gas systems—** With respect to imposing and collecting the charge under [subsection (c)](#c) for an [applicable facility](#d) in an industry segment listed in paragraph [(3)](#d-3), [(6)](#d-6), [(7)](#d-7), or [(8)](#d-8) of subsection (d), the [Administrator](/usc/42/7602.md?p=a) 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](/usc/42/11049.md?p=4).
  - (3) **Natural gas transmission—** With respect to imposing and collecting the charge under [subsection (c)](#c) for an [applicable facility](#d) in an industry segment listed in paragraph [(4)](#d-4), [(5)](#d-5), or [(9)](#d-9) of subsection (d), the [Administrator](/usc/42/7602.md?p=a) 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](/usc/42/11049.md?p=4).
  - (4) **Common ownership or control—** In calculating the total emissions charge obligation for [facilities](/usc/42/11049.md?p=4) under common ownership or control, the [Administrator](/usc/42/7602.md?p=a) shall allow for the netting of emissions by reducing the total obligation to account for [facility](/usc/42/11049.md?p=4) emissions levels that are below the applicable thresholds within and across all applicable segments identified in [subsection (d)](#d).
  - (5) **Exemption—** Charges shall not be imposed pursuant to [paragraph (1)](#f-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](/usc/42/7602.md?p=a), 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 general—** Charges shall not be imposed pursuant to [subsection (c)](#c) on an [applicable facility](#d) that is subject to and in compliance with methane emissions requirements pursuant to subsections (b) and (d) of [section 7411 of this title](/usc/42/7411.md) upon a determination by the [Administrator](/usc/42/7602.md?p=a) that—
      - (i) methane emissions [standards](/usc/42/1320d.md?p=7) and plans pursuant to subsections (b) and (d) of [section 7411 of this title](/usc/42/7411.md) have been approved and are in effect in all [States](/usc/42/7602.md?p=d) with respect to the [applicable facilities](#d); and
      - (ii) compliance with the requirements described in [clause (i)](#f-6-A-i) will result in equivalent or greater [emissions reductions](/usc/42/17114.md?p=a-3) as would be achieved by the proposed rule of the [Administrator](/usc/42/7602.md?p=a) entitled “[Standards](/usc/42/1320d.md?p=7) of Performance for New, Reconstructed, and [Modified](/usc/42/7501.md?p=4) 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 charge—** If the conditions in clause [(i)](#f-6-A-i) or [(ii)](#f-6-A-ii) of subparagraph (A) cease to apply after the [Administrator](/usc/42/7602.md?p=a) has made the determination in that subparagraph, the [applicable facility](#d) will again be subject to the charge under [subsection (c)](#c) beginning in the first calendar year in which the conditions in either clause [(i)](#i) or (ii) of that subparagraph are no longer met.
  - (7) **Plugged wells—** Charges 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](/usc/42/7602.md?p=a).
- (g) **Period—** The charge under [subsection (c)](#c) shall be imposed and collected beginning with respect to emissions reported for calendar year 2034 and for each year thereafter.
- (h) **Reporting—** Not later than 2 years after August 16, 2022, the [Administrator](/usc/42/7602.md?p=a) shall revise the requirements of [subpart W of part 98 of title 40, Code of Federal Regulations](/cfr/40/part98-subpartW.md), to ensure the reporting under such subpart, and calculation of charges under subsections [(e)](#e) and [(f)](#f) of this section, are based on empirical data, including data collected pursuant to [subsection (a)(4)](#a-4), accurately reflect the total methane emissions and waste emissions from the [applicable facilities](#d), and allow [owners](/usc/42/13641.md?p=4) and operators of [applicable facilities](#d) to submit empirical emissions data, in a manner to be prescribed by the [Administrator](/usc/42/7602.md?p=a), to demonstrate the extent to which a charge under [subsection (c)](#c) is owed.
- (i) **Definition of greenhouse gas—** In this section, the term “greenhouse gas” means the [air pollutants](/usc/42/7602.md?p=g) carbon dioxide, hydrofluorocarbons, methane, nitrous oxide, perfluorocarbons, and sulfur hexafluoride.

## Source credit

(July 14, 1955, ch. 360, title I, § 136, as added Pub. L. 117–169, title VI, § 60113, Aug. 16, 2022, 136 Stat. 2073; amended Pub. L. 119–21, title VI, § 60012(b), July 4, 2025, 139 Stat. 156.)

## Notes

### Editorial Notes

### Amendments

2025—Subsec. (g). Pub. L. 119–21 substituted “calendar year 2034” for “calendar year 2024”.