Methane Emissions Fee Draws Opposition From Natural Gas Industry

A methane emissions fee that may be included in a huge federal budget reconciliation bill before Congress is getting pushback from organizations representing the Appalachian shale gas industry.

Called a “natural gas tax” by some, the fee would be imposed on natural gas production, transmission, and storage based on a calculation of their emissions. Methane is the main component of natural gas, and while producers have been working to reduce their emissions and joined certification and monitoring programs, some emissions still occur. Methane is a potent greenhouse gas that contributes to global warming, and recent legislative efforts have been focused on climate change reduction.

The leaders of three natural gas trade associations in Pennsylvania, West Virginia, and Ohio, recently sent a joint letter to members of the congressional delegations from those states, urging them to oppose any emissions tax that might make its way into a reconciliation bill now being crafted.

“Such a fee is simply an unreasonable, punitive tax intended to harm the oil and natural gas industry and consumers, as well as diminish the tremendous economic and environmental benefits derived from the hundreds of thousands of women and men who work directly and indirectly for the industry in the Appalachian Basin,” the letter states. It was signed by the leaders of the Marcellus Shale Coalition, the Gas & Oil Association of West Virginia, and the Ohio Oil & Gas Association.

The fee would increase costs on producers, which would be passed on to consumers who rely on natural gas for energy. The letter also makes the argument for increasing natural gas production to improve energy security as well as environmental progress. U.S. emissions from electric production have been reduced as natural gas has replaced coal as the chief source of power generation since gas produces far less CO2 emissions.

Recently, many natural gas producers have put an increased emphasis on methane emissions reduction, and set ambitious goals to be net-zero emissions producers.

It remains to be seen if the methane fee will be included in the final version of the legislation, but legislative actions aimed at reducing emissions and fossil fuel use will continue to be a focus in the coming years.