Congress Votes to Roll Back Biden-Era Methane Fee

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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--The U.S. Senate voted on Thursday to repeal the methane waste emissions charge, which was part of the Inflation Reduction Act. The House of Representatives voted 220-206 on a repeal resolution on Wednesday.

In the House, the measure was sponsored by Texas Republican August Pfluger, whose district includes the Permian Basin. Other sponsors include Republican Representative Jodey Arrington, whose district also includes part of the Permian Basin, along with representatives from oil producing districts in Colorado and Pennsylvania.

The intent of the resolution is to force the Environmental Protection Agency (EPA) to remove the ''Waste Emissions Charge for Petroleum and Natural Gas Systems: Procedures for Facilitating Compliance, Including Netting and Exemptions."

In a statement, Pfluger said, "This tax raises costs on production, discourages investment, and increases energy prices across America." He said the November elections signaled a change in voter attitudes toward energy.

The waste emissions charge stated purpose is to push producers to reduce methane emissions at the wellhead. Methane is identified as a greenhouse gas, contributing to global warming.

The Inflation Reduction Act (IRA) of 2022 instructed the EPA to make rules aimed at reducing greenhouse gases, including methane. In November, the agency set fees that would begin at $900 per metric ton of emissions over a specific level in 2024, and increase significantly year by year.

Proponents of the waste emissions charge say that eliminating leaks puts more methane into the sales pipeline, thereby paying for itself in increased revenue. Many in the industry say, however, that the expense of monitoring and compliance is only mitigated in high-producing wells. Marginal or "stripper" wells producing less than 10 barrels per day lack the cash flow required to recover those costs, and would have to be shut in, thus unfairly targeting small independent producers.

Speaking on the House floor before the vote, Congresswoman Julie Fedorchack, R-North Dakota, put it this way: "This heavy-handed federal mandate punishes small and mid-sized, independent producers who are responsible for 90% of America's natural gas."

On the other hand, Energy and Commerce Committee Ranking Member Frank Pallone, Jr. (Democrat-New Jersey), also speaking on the House floor before the vote, said, "...the reality is this: without the methane polluter fee, it's cheaper for the oil and gas industry to waste valuable methane rather than install or upgrade equipment to control that pollution. Currently, oil and gas companies waste enough natural gas from leaks, venting and flaring to meet the energy demand of 14 million households every year."

Pallone maintained that eliminating the fee would reduce government revenues by $7.2 billion.

On Thursday, the Senate followed suit, voting 52-47 for the measure. It now goes to the White House for a presidential signature, which is expected. Meanwhile, Senator Ted Cruz (R-Texas) and Katie Britt (R-Arkansas), along with 10 other senators, introduced H.R.1141, the Natural Gas Tax Repeal Act, aimed at eliminating the EPA's methane emission fees as well as its emissions reporting requirements.

Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association (TIPRO), said, he was looking to the White House to act quickly.

"Congressman Pfluger's Congressional Review Act (CRA) resolution, which passed yesterday (Wednesday) with bipartisan support, will allow U.S. oil and gas producers to continue providing clean, reliable energy while helping maintain affordable prices for consumers," Longanecker said. "Texas' energy industry has long demonstrated a strong commitment to environmental stewardship, implementing technologies and initiatives to reduce methane emissions and flaring."

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