Dems confident on methane fee as budget bill moves to Senate

Monday, November 22, 2021

WASHINGTON (AP) — A Democratic plan to impose a fee on methane emissions from oil and gas wells has cleared a key hurdle, but it faces strong opposition from the oil and gas industry and criticism by centrist Sen. Joe Manchin.

The proposed fee on methane — a powerful pollutant that contributes to global warming — was included in a huge social and environmental policy bill passed by House Democrats last Friday.

As the bill moves to the Senate, attention again will focus on Manchin, a West Virginia moderate who has already forced fellow Democrats to abandon one of their biggest climate proposals: a clean-electricity program that would boost wind and solar power while phasing out coal- and gas-fired power plants.

Manchin, whose state is a leading producer of coal and natural gas, has said he worries a methane tax could be used to drive energy companies out of business. He said before the House vote that he wants to make sure the fee is structured to incentivize innovation and not just “punish” energy companies “for the sake of punishing” them.

A spokeswoman for Manchin declined to comment after the House vote, but Democrats in the House and Senate said they are confident the fee will remain in the Senate bill, despite a 50-50 split in the chamber that gives every Democrat veto power. Republicans unanimously oppose the bill.

Language approved by the House represents a compromise that would slap a rising fee on excess emissions at oil and gas facilities, reaching $1,500 per ton in 2025, along with $775 million in subsidies for companies that take steps to reduce emissions.

Rep. Frank Pallone, D-N.J., who chairs the House Energy and Commerce Committee, said he and other Democrats have been working with senators on the methane fee, including Manchin, who chairs the Senate Energy and Natural Resources Committee.

“We have this very important provision with regard to methane emissions that was worked on with the senators and was also worked on with House members over the last few weeks,’’ Pallone said at a news conference Friday. “So I believe this is pretty much it. I mean, there may be some additional changes, but ... in terms of the actual substantive authorizing language, I think we’re pretty solid at this point.’’

While the Senate may make minor revisions over the next few weeks, “nothing major, in my opinion,’’ will be changed or taken out, Pallone said.

Delaware Sen. Tom Carper, a Democrat who chairs the Senate Environment and Public Works Committee, also is optimistic that the methane fee — formally known as the Methane Emissions Reduction Program — will be included in the final bill.

“Instead of punishing industry, our program incentivizes good behavior, phases in over time, and ramps up (fees) over time as well,’’ Carper said in a statement. “It’s good for the planet and good for job creation — a win-win in my book.”

The proposed methane tax comes as President Joe Biden launches a wide-ranging plan to reduce methane emissions, which pack a stronger short-term punch on climate than even carbon dioxide.

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