Dems confident on methane charges as budget bill passes Senate

WASHINGTON – A Democratic plan to impose a levy on methane emissions from oil and gas wells has lifted a key hurdle, but it faces strong opposition from the oil and gas industry and criticism from centrist Senator Joe Manchin, DW.Va.

The proposed levy on methane – a potent pollutant that contributes to global warming – was included in a massive social and environmental policy bill passed by House Democrats last Friday.

As the bill passes through the Senate, attention will once again focus on Manchin, a moderate who once forced Democrats to drop one of their biggest climate proposals: a clean electricity program that would boost wind and solar power while phasing out coal and gas. – thermal power stations.

Manchin, whose state is a major producer of coal and natural gas, said he was concerned that a methane tax could be used to bankrupt energy companies. He said ahead of the House vote that he wanted to make sure fees are structured to incent innovation and not just “punish” energy companies “for the sake of punishing them.”

A spokeswoman for Manchin declined to comment after the House vote, but Democrats in the House and Senate said they were confident the fee would remain in the Senate bill, despite a 50 split. -50 in the chamber which gives each democrat a right of veto. Republicans unanimously oppose the bill.

The language approved by the House represents a compromise that would impose a fee increase on excess emissions from oil and gas facilities, reaching $ 1,500 per tonne in 2025, as well as $ 775 million in subsidies for companies taking action to reduce emissions.

Representative Frank Pallone, DN.J., who chairs the House of Commons Energy and Trade Committee, said he and other Democrats had worked with senators on methane charges, including Manchin , who chairs the Senate Energy and Natural Resources Committee.

“We have this very important provision regarding methane emissions which has been worked on with senators and has also been worked on with members of the House over the past few weeks,” Pallone said at a press conference on Friday. “So I think that’s pretty much that. I mean, there may be some additional changes, but… in terms of actual background authorization language, I think we’re pretty solid at this point.”

While the Senate may make minor revisions over the next few weeks, “nothing major, in my opinion,” will be changed or removed, Pallone said.

Delaware Senator Tom Carper, a Democrat who chairs the Senate Committee on the Environment and Public Works, is also optimistic that the methane levy – officially known as the Methane Emissions Reduction Program – will be included in the final bill.

“Instead of punishing the industry, our program encourages the right behavior, scales over time, and also increases (fees) over time,” Carper said in a statement. “It’s good for the planet and good for creating jobs – a win-win in my book.”

The proposed methane tax comes as President Joe Biden launches a massive plan to cut methane emissions, which has a bigger short-term impact on the climate than even carbon dioxide.

Biden pledged at a United Nations climate summit in Glasgow, Scotland earlier this month to work with the European Union and dozens of other countries to reduce global methane emissions by 30% by 2030.

The centerpiece of U.S. actions is a long-awaited Environmental Protection Agency rule to tighten methane regulations for the oil and gas sector. The proposed rule would target for the first time reductions in existing oil and gas wells nationwide, rather than focusing only on new wells as previous regulations have done.

The new US rule, along with the global commitment, is expected to “make a huge difference”, not only in the fight against climate change, but also in improving health and reducing asthma and others. breathing problems, Biden said.

Once finalized, the proposed requirements are expected to reduce methane emissions from U.S. drilling operations and equipment by about 75% by 2030, from 2005 levels, the White House said.

The oil and natural gas industry, the country’s largest industrial source of methane emissions, supports methane regulation but opposes congressional charges as an unnecessary tax that could increase energy costs and result in the loss of thousands of jobs.

“This is a tax on US natural gas that makes us less competitive,” said Frank Macchiarola, senior vice president of the American Petroleum Institute, the industry’s leading lobbying group.

“At a time when energy costs are rising, it is a flawed policy to raise the costs of energy producers,” he said, adding that he hoped the Senate would eliminate the fees.

“Senator Manchin is a proponent of US energy, so it makes sense that he is looking closely” at the methane levy, Macchiarola said.

Environmental groups call methane reduction the fastest, most cost-effective action to slow the rate of global warming. Current rules for methane emissions from US oil and gas wells only apply to sources that were built or altered after 2015, leaving more than 90% of the country’s roughly 900,000 well sites unregulated. Many of these sites are smaller and lower producing wells.

A group of Texas Democrats in the House initially opposed the methane levy, but ended up supporting the compromise. Only one Democrat, Maine Representative Jared Golden, opposed the House legislation.

“No bill is perfect,” said Rep. Henry Cuellar, D-Texas, who voted for the measure despite fears over methane. dollars to tackle the climate crisis, he said.

Even so, Cuellar said he would continue to pressure the Senate to remove the methane charge from the legislation.