Energy, Manufacturing, Labor and Business Groups Urge Senate to Oppose Punitive Natural Gas Tax

WASHINGTON – September 7, 2021 – Today, the American Petroleum Institute (API) and 130 energy, manufacturing, business and labor trade organizations across the natural gas and oil supply chain sent a letter to the U.S. Senate Committee on Environment and Public Works opposing legislation that would place a fee on methane. The organizations, led by API, explain that the proposal is a “pay-for” that “could jeopardize affordable and reliable energy with likely little reduction in greenhouse gas (GHG) emissions" and that cost-effective regulation is a better approach. 

“The undersigned organizations, on behalf of their diverse memberships and representing a substantial cross-section of the U.S. economy as producers, distributors, and users of oil, natural gas, and natural gas liquids, join together to oppose the Methane Emissions Reduction Act due to the adverse environmental and economic impacts it will likely cause and because methane emissions are already being mitigated via appropriate regulatory programs,” the groups wrote. 

“To impose a misguided punitive tax on natural gas could significantly undermine any purported effort of this legislation to reduce GHG emissions,” the groups continued. “In addition to potentially detrimental environmental outcomes, the Methane Emissions Reduction Act could have adverse and disproportionate economic impacts nationwide. The potential direct cost of the bill to the economy, not including import fees, could initially be as high as $14.4 billion, increasing 5% above inflation annually. As many as 155,000 jobs could be impacted by the tax, with the largest impacts concentrated in the health care and social assistance industries.”

Thanks to innovation and industry actions, U.S. methane emissions rates in the largest producing regions have declined 70 percent in the past decade, even as America produces more affordable, reliable and cleaner natural gas. API continues to work with the Biden administration to support the direct federal regulation of methane emissions for new and existing sources to build on this progress.

“If the objective is to reduce methane emissions, direct regulation of methane is the best method to implement such a government policy and do so in an equitable manner that is tied to actual emissions,” the groups wrote in the letter. “EPA is best-suited to address the challenges in reducing methane emissions because regulation stipulates the installation of cost-effective control technologies – as well as leak detection and repair requirements – that prevent and reduce methane emissions at oil and natural gas facilities.”

API represents all segments of America’s natural gas and oil industry, which supports more than 11 million U.S. jobs and is backed by a growing grassroots movement of millions of Americans. Our 600 members produce, process and distribute the majority of the nation’s energy, and participate in API Energy Excellence®, which is accelerating environmental and safety progress by fostering new technologies and transparent reporting. API was formed in 1919 as a standards-setting organization and has developed more than 700 standards to enhance operational and environmental safety, efficiency and sustainability.

To learn more about API and the value of oil and natural gas, please visit API.org.

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