Gas industry groups call on Congress to withdraw methane fee from federal budget

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Leading gas industry groups are calling on Congress to withdraw a new tax on natural gas – referred to as a “methane fee” — from the proposed federal budget reconciliation bill.

The American Gas Association (AGA), American Petroleum institute (API), Independent Petroleum Association of America (IPAA), and Interstate Natural Gas Association of America (INGAA) say the focus should be on driving down methane emissions without adding new taxes.

“Make no mistake, our industry supports methane emissions regulations that are safe, effective, and protect energy reliability. EPA is expected to propose significant new federal methane emissions regulations any day now, yet the new tax under consideration in Congress would apply regardless of compliance with EPA regulations. This tax on natural gas is not about reducing emissions—it’s about forcing American families, regardless of their income level, to help fund the reconciliation package through higher utility bills,” Amy Andryszak, president and CEO of INGAA, said.

This is particularly impactful in Pennsylvania, where the natural gas and oil industry directly and indirectly support about a half million jobs and contribute more than $78 billion to the state’s GDP – the highest contribution in the nation.

At a recent speech before the Economic Club of Pittsburgh, API CEO Mike Sommers, said Pennsylvania’s economic outlook depends on policies at all levels of government that support natural gas and oil development. However, he said that outlook is facing headwinds from Washington in the form of this methane fee.

“According to EPA and EIA data, our industry is driving down methane emissions intensity today, and targeted taxes and fees are self-inflicted and will hurt American competitiveness and family budgets,” Sommers stated. “A course correction in Washington policymaking is urgent, and we’re making the case every day for this industry.”

Karen Harbert, president and CEO of AGA said the additional taxes could lead to higher bills for customers.

“With one-third of households already facing challenges affording their energy needs, Congress should not add a new tax on natural gas. Our analysis indicates that the proposed tax could increase natural gas bills from 12 percent to 34 percent, depending on the variation of the proposal assessed,” Harbert said.

According to a recent survey, AGA found that natural gas customers could save up to 67 percent this winter compared to customers using other forms of energy, while lowering their carbon footprints. Further, AGA’s study found that an Energy Star natural gas household could have a carbon footprint that is 19 percent lower than an Energy Star heat pump and 64 percent lower emissions compared to an electrical resistance furnace.

Barry Russell, president and CEO of IPAA, pointed out that natural gas and petroleum account for nearly 70 percent of energy consumption in the U.S.

“These new taxes will not only impose a burden on industry and consumers generally, they are specifically designed to impose a new burden on small businesses. This costly policy will send both jobs and greenhouse gas emissions to other countries,” Russell said.