The Trump administration’s pro-oil and gas stance was demonstrated when the Republican-controlled Congress voted to repeal a federal fee on oil and gas producers who release high levels of methane.
The Senate on Thursday voted along party lines 52-47 to repeal the fee, following a similar House of Representatives vote on Wednesday. The measure now goes to President Trump, who is expected to sign it, APN News reported.
Considered a tax by the oil and gas industry, the fee was one of the previous Environmental Protection Agency's final measures to force producers to slash methane emissions.
It was also part of the Biden administration’s signature 2022 Inflation Reduction Act. Most major oil and gas companies do not release enough methane to trigger the fee, which is $900 per ton, an amount that would increase to $1,500 by 2026, according to APN News.
The fee was expected to reduce 1.1 million tonnes of methane emissions by 2035 and bring in billions of dollars.
Natural gas is mostly methane (CH4), a potent greenhouse gas that is over 25 times more efficient than carbon dioxide at trapping heat in the atmosphere over a 100-year period. The Global Methane Pledge from COP26 acknowledges that methane is one of the most powerful greenhouse gases, responsible for a third of current warming from human activities.
Most methane is emitted from flaring excess natural gas instead of putting it into a pipeline. Methane also leaks into the atmosphere undetected from drill sites and other oil and gas infrastructure.
Related: US Oil, Gas Rig Count Inches Up As Drillers Proceed With Caution
The biggest methane leak in US history occurred in California in 2015. It took SoCal Gas nearly four months to plug the leak at the Alison Canyon gas field — during which an estimated 109,000 tonnes of methane was released into the atmosphere.
Repealing the methane fee is the latest in a series of pro-oil and gas moves Republicans have taken since the start of Trump’s term. On his first day, Trump declared a national energy emergency and called for more oil and gas production and fewer environmental reviews. The second-term president also lifted a pause on new applications for LNG terminals, removed the US from the Paris climate agreement, and moved to open up more areas of public land and waters for oil and gas drilling. (APN News)
Reaction from the oil and gas industry was obviously positive. The American Petroleum Institute, a lobby group, called the fee a “duplicative, punitive tax on American energy production that stifles innovation.”
“Thanks to industry action, methane emissions continue to decline as production increases, and we support building on this progress through smart and effective regulation,” said Amanda Eversole, the executive vice president and chief advocacy officer at API.
In fact global methane emissions in the atmosphere have been steadily climbing. According to The Guardian, “So far in the 2020s, global methane emissions have typically been about 30m tons higher each year than during last decade, with annual records in methane emissions broken in 2021 and again in 2022.”
Republican Sen. Shelley Moore Capito of West Virginia, who chairs the Senate’s Environmental and Public Works Committee, spoke in favor of repeal, stating on the Senate floor, “We should be expanding natural gas production, not restricting it. Instead, the natural gas tax will constrain American natural gas production, leading to increased energy prices and providing a boost to the production of natural gas in Russia.”
"The Biden administration and Democrats in Congress passed the methane tax to single out and punish the oil and natural gas industry despite its already burdensome EPA regulatory framework," said Independent Petroleum Association of America President Jeff Eshelman, via Reuters.
Environmentalists called the move a giveaway to big oil companies.
“Republicans are helping out the absolutely worst offenders of methane leakage,” said Sen. Sheldon Whitehouse of Rhode Island, the top Democrat on the environment panel. “The companies only pay the methane fee if they don’t meet their own industry standard for ... avoiding leaks of a dangerous, explosive, poisonous greenhouse gas.”
By Andrew Topf for Oilprice.com