Klein: Democrats' Methane Fee Might Sound Harmless, But Here's the Ugly Truth


Sen. Joe Manchin’s recent decision to oppose Democrats’ $1.75 trillion “Build Back Better” agenda appears to have slowed its momentum. However, with Senate Majority Leader Schumer calling for a floor vote on the bill, the potential still exists for the legislation to reach the president’s desk.

This is something that anyone concerned about high energy prices should be watching closely.

One of the most concerning components of the bill is a fee on the methane emissions produced by the oil and gas industry. This redundant measure will unnecessarily penalize the producers of traditional energy in the U.S. and result in billions of dollars in additional costs that consumers across the country will likely have to shoulder.

At a time when skyrocketing inflation is making every product more expensive, leaders in Washington must reconsider imposing a methane fee.

The methane fee is proving to be particularly divisive, even among congressional Democrats like Arizona Sen. Kyrsten Sinema. Axios reported that Sinema raised questions about the methane fee in November. Sinema’s counterpart, Sen. Mark Kelly, also voiced anxieties about rapidly increasing gas prices in a recent letter addressed to the Biden administration. Increased fuel costs are a problem that the methane fee is very likely to intensify.

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Among his other concerns about the broader BBB package, Manchin has also expressed skepticism about the methane fee specifically and believes it will drive energy companies out of business.

In addition to the economic impacts, the fact remains that there are already effective measures in place to reduce methane emissions and energy companies are already well motivated to reduce methane leaks.

Methane is the principal component of natural gas and leaks mean less revenue. Given the investments that are required to produce and transport natural gas, oil and gas producers accordingly strive to deliver as much of it as they can safely and reliably to market.

Current state regulations and proposed Environmental Protection Agency regulations effectively address how to curtail methane emissions. The development of new technologies and the institution of best practices have caused methane emissions from natural gas systems to decline by 23.6 percent even though production during the same period increased by 70 percent. Hence, there is no need to burden producers with an additional fee that will ultimately punish taxpayers and consumers.

Estimates show a potential loss of 155,000 jobs and a cost of over $14 billion to businesses and consumers. Given the fact that oil and natural gas account for nearly 70 percent of energy consumption in the U.S., this draconian tax that singles out oil and natural gas production will increase inflation and cripple an already struggling economy.

Do you support a methane fee?

As Frank Macchiarola of the American Petroleum Institute stated, the methane fee is a “tax on American natural gas that makes us less competitive. At a time of rising energy costs, it’s a flawed policy to raise costs on energy producers.”

Reading between the lines, it is not hard to imagine that the true intent of this law is to eviscerate traditional energy, not lower methane emissions. If policymakers are serious about curtailing emissions, they must also look at other major emitters like agriculture, landfills and coal.

This singular focus on the oil and gas industry exposes the true political agenda of the methane fee and also indicates that policymakers know the huge adverse economic impact such a punitive tax would have if expanded to other industries.

The EPA has already proposed new regulations for methane emissions as they relate to oil and natural gas production. It is not appropriate for Congress to impose additional, duplicative taxes.

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There are scores of unintended consequences that will ultimately be borne by residents across the U.S., such as increased energy costs and a reversal of the environmental progress that has been made by the widespread adoption of natural gas for power generation.

With these concerns in mind, I hope that both chambers of Congress will finally put the idea of a methane fee to rest and that they will remove it from consideration in any future legislation entirely.

In the midst of inflation and record-high consumer costs, increased energy prices are untenable for middle-class Americans struggling to make ends meet.

The views expressed in this opinion article are those of their author and are not necessarily either shared or endorsed by the owners of this website. If you are interested in contributing an Op-Ed to The Western Journal, you can learn about our submission guidelines and process here.

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