Energy, Manufacturing, Labor and Business Groups Urge Senate to Oppose Punitive Natural Gas Tax

The American Petroleum Institute (API) and 130 energy, manufacturing, business and labor trade organizations across the natural gas and oil supply chain sent a letter to the U.S. Senate Committee on Environment and Public Works opposing legislation that would place a fee on methane.

The organizations, led by API, explain that the proposal is a “pay-for” that “could jeopardize affordable and reliable energy with likely little reduction in greenhouse gas (GHG) emissions" and that cost-effective regulation is a better approach.

“The undersigned organizations, on behalf of their diverse memberships … as producers, distributors, and users of oil, natural gas, and natural gas liquids, join together to oppose the Methane Emissions Reduction Act due to the adverse environmental and economic impacts it will likely cause and because methane emissions are already being mitigated via appropriate regulatory programs,” the groups wrote.

The groups assert that imposing a “misguided punitive tax on natural gas” could undermine the legislation’s alleged effort to reduce GHG emissions.

“The potential direct cost of the bill to the economy, not including import fees, could initially be as high as $14.4 billion, increasing 5% above inflation annually,” the letter states. “As many as 155,000 jobs could be impacted by the tax, with the largest impacts concentrated in the health care and social assistance industries.”

U.S. methane emissions rates in the largest producing regions have declined 70 percent in the past decade, even as America produces more affordable, reliable and cleaner natural gas. API continues to work with the Biden administration to support the direct federal regulation of methane emissions for new and existing sources to build on this progress.

“If the objective is to reduce methane emissions, direct regulation of methane is the best method to implement such a government policy and do so in an equitable manner that is tied to actual emissions,” the groups wrote in the letter.

EPA is best-suited to address the challenges in reducing methane emissions because regulation stipulates the installation of cost-effective control technologies – as well as leak detection and repair requirements – that prevent and reduce methane emissions at oil and natural gas facilities, the groups said.

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