Oil and Gas Industry Braces for ‘Punitive’ Methane Fee

Here’s why even oil and gas producers that support cracking down on emissions are up in arms over a proposal to tax American methane pollution.

Myles McCormick, Financial Times
Oil and Gas Industry Braces for ‘Punitive’ Methane Fee

An oil and gas industry group led by the American Petroleum Institute described the proposed policy as “unreasonable,” “punitive,” and “unnecessary. (Source: Photo collage by Hart Energy; images by Hart Energy, Shutterstock.com)

As Democrats thrash out their $3.5 billion budget plan, one element is causing particular anxiety in the oil and gas industry: a fee on methane emissions.

The idea of the fee—effectively a pollution tax—is to create a financial reason for companies to clamp down on the roughly 13 million tonnes of leaked gas that enters the atmosphere each year from across their supply chains.

But the industry is up in arms. The policy, it says, would raise production costs that would ultimately wind up on consumers’ bills—and risks unfairly hitting companies that have taken strides to cut emissions. In a letter this week, a group led by the American Petroleum Institute (API) described it as “unreasonable,” “punitive,” and “unnecessary.”

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