The methane emissions charge saw several unsuccessful legislative attempts, first appearing as a separate bill, and then adopted into the Build Back Better Act in 2021, prior to its inception as part of the Methane Emissions Reduction Program under the Inflation Reduction Act in 2022. The fee is applicable to facilities that emit 25,000 metric tons of CO2e or more annually of $900 per ton of methane emitted from any facility in 2024, increasing annually in increments to $1,500 in 2026. It is complementary to the Environmental Protection Agency’s (EPA) 2022 Methane Regulation announced in November 2021, in that companies that don't comply with the regulation will be subject to the fee. The methane fee also covers a wider scope of oil and gas operations in comparison to the EPA’s regulation, such as offshore facilities and liquefied natural gas (LNG) export terminals.
Methane Emissions Charge adopted as part of Inflation Reduction Act (IRA) in August 2022.
Methane Emissions Charge adopted as part of Inflation Reduction Act (IRA) in August 2022.
In a series of letters sent on 17 April to the heads of various US federal agencies, the National Association of Manufacturers (NAM) supported the rollback of a number of federal climate regulations, including the Biden administration's LNG export pause, the Inflation Reduction Act (IRA)'s methane fee, and the Environmental Protection Agency (EPA)'s power plant rules. Across the letters, NAM also supported measures to increase oil and gas exploration in the US, and appeared to oppose energy efficiency standards for appliances.
Communications from the American Petroleum Institute (API) between August 6th and August 12th, 2022 commented on various provisions of the US Inflation Reduction Act (IRA). API President and CEO, Mike Sommers, welcomed parts of the IRA that proposed new oil and gas lease sales and carbon capture and storage (CCS) investments in a press release. Sommers also opposed the proposed tax on crude oil and fossil gas, citing that it imposes additional costs to the industry, and went on to suggest the need for a “comprehensive plan” for critical investment in oil and gas infrastructure. Further, an August 9th blog post released by API opposed the consumer tax credit extension for electric vehicle purchases set in the IRA, suggesting that this provision would “pick winners and losers” and was not technology neutral. In this post, API also opposed the tax on methane emissions.
In a blog post released on 11th August, the American Fuel & Petrochemical Manufacturers (AFPM) announced its opposition to the Inflation Reduction Act being considered in the House. The blog post detailed its specific opposition to climate provisions, including the electric vehicle tax credit and the methane fee.
In the Q2 2022 federal lobbying disclosures published on July 20th for American Gas Association and Edison Electric Institute with utilities CenterPoint, AES Corporation, American Electric Power Company, DTE Energy, Edison International, Exelon, FirstEnergy, NextEra, Pacific Gas & Electric, PPL Corporation, Public Service Enterprise Group, Southern Company, Vistra Corp, and Xcel Energy and Entergy, published on July 20th, disclosed the companies direct engagement with policymakers on the Build Back Better Act’s proposed methane fee without disclosing a clear position.
In the Q2 2022 federal lobbying disclosures for Ameren Corp and Duke Energy both utilities stated direct engagement with policymakers on the Build Back Better Act’s clean energy tax credits without disclosing any clear positions on the legislation. In the same disclosure, Duke also listed engagement activities on the “natural gas provisions” of the Build Back Better Act without providing any description of its position. In Consolidated Edison’s federal lobbying report for Q2 2022, published on July 20th, the utility stated direct engagement on the electric vehicle provisions of the Build Back Better Act without disclosing a clear position. The reports highlight the industry’s private engagement and lack of transparency on specific climate provisions of the reconciliation bill, which remains stalled in Congress.
These lobbying reports demonstrate strong industry engagement on the reconciliation bill, which remains stalled in negotiation following inconsistent statements from Senator Manchin.
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