API-led Methane Fee Opposition Letter

Dear Chairman Carper and Ranking Member Capito,

As the Senate develops a reconciliation package, ensuring Americans have access to affordable and reliable energy while continuing to reduce emissions should be top of mind. Unfortunately, the Methane Emissions Reduction Act of 2021, first introduced by Senators Whitehouse, Booker, and Schatz in March 2021 and being considered for inclusion in the reconciliation bill as a payfor, would levy an unreasonable, punitive fee on methane emissions only from oil and natural gas facilities that could jeopardize affordable and reliable energy with likely little reduction in greenhouse gas (GHG) emissions. The bill would tax methane emissions at a default rate of $1,800 per ton in 2023, increasing 5% above inflation annually, with fees for individual companies assessed via a complicated formula based on their share of production or handling (not actual emissions) and the average emissions intensity in the oil and gas basin in which they operate. Alternatively, companies could engage in a likely costly and burdensome process of tracking their own emissions. The bill also includes an import fee which will be levied on each company that imports crude oil, natural gas, or natural gas liquids into the United States. The import fee could likely raise consumer costs, distort markets, and could incentivize retaliatory actions from our trading partners. The bill has never been the subject of a Congressional hearing, and therefore never scrutinized or debated among lawmakers. Congress has never discussed the potential impacts of the methane fee on consumers or the U.S. energy market. …