The Biden administration’s recent implementation of a methane tax on energy producers is a misguided assault on American energy independence and a threat to the wallets of hardworking people. While supposedly set to help decrease emissions production, the new tax will only hinder our nation’s ability to provide affordable and reliable energy to its citizens.
The details of the methane fee, conveniently released by the Environmental Protection Agency during election season, reveal a burdensome tax structure that will escalate over time, adding significant costs to energy production. Starting at $900 per metric ton this year and rising to a staggering $1,500 by 2026, this fee will undoubtedly drive up prices for consumers and strain the budgets of American families. This punitive tax scheme will also stifle innovation and investment in our energy sector, hampering its ability to thrive and grow.
Furthermore, the timing of this methane fee could not be worse. As global energy demand continues to soar amidst geopolitical unrest, now is not the time to burden American energy producers with additional taxes and regulations. With conflicts continuing to brew in Ukraine and rockets soaring across the Red Sea and the Middle East, any decrease in U.S. energy production could have severe consequences for global energy markets and threaten our national security.
Add in the Biden administration’s recent decision to halt the export of American liquefied natural gas, its failure to pass any meaningful permitting reform, and the EPA’s constant stream of burdensome regulations, and it is clear that American energy security has never been at greater risk.
The EPA’s assurances that the impact of this fee on energy production will be marginal are woefully inadequate. They fail to consider the full extent of the burden placed on smaller producers, who may struggle to comply with the new regulations.
Moreover, the EPA’s estimates overlook the innovative technologies and industry-led initiatives already in place to reduce methane emissions. For instance, comprehensive methane monitoring, comprised of real-time leak detection that includes the location and rate quantification, has led to a significant decline in methane emissions intensity over the past decade, demonstrating the industry’s commitment to environmental stewardship.
Energy companies are making oil and gas production safer and more cost-effective than ever with technologies that cut energy usage, slash emissions, and streamline operations. These technologies have been available to operators since the 2010s and include a wide range of options.
In the Permian Basin, a team has been utilizing drones equipped with methane detection cameras and sensors. And this technology isn’t something that was just now put in place; in fact, it’s been in place since 2018. It has conducted more than 1,000 inspections using drones and drone-mounted sensors combined with an artificial intelligence-enabled software platform. This effort has contributed to operators’ efforts to maintain a methane emissions intensity below 0.2% by 2025 and meet the requirements of the Oil and Gas Methane Partnership 2.0 framework.
Further, average methane emissions intensity declined by nearly 66% across all seven major onshore-producing regions from 2011 to 2021, a trend that will only continue as new technology helps operators cut energy usage, reduce methane emissions, detect leaks, and streamline operations. The most effective actions should incentivize the creation of new technologies and streamline the requirements under the rule while not creating overly burdensome federal regulations that serve as a tax on domestic energy production.
The Biden administration’s methane fee also comes on the heels of newly finalized EPA requirements for methane emissions, further complicating compliance for energy producers. The regulatory burden imposed by these overlapping mandates will only hinder the growth of our energy sector and impede our progress toward energy independence.
Congress must stop the administration from implementing bureaucratic red tape to halt energy production and unfairly penalize energy producers. And the EPA should reconsider its approach and collaborate with industry stakeholders to develop effective and sustainable solutions to reduce methane emissions.
It is clear that the Biden administration’s approach to reducing methane emissions is deeply flawed. Rather than burdening American energy producers with punitive taxes and regulations, we should incentivize innovation and investment in technologies that make energy production more sustainable. Our nation’s energy future depends on it.
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Tim Tarpley is president of the Energy Workforce & Technology Council, the national trade association for the global energy technology and services sector, representing more than 665,000 U.S. jobs in the technology-driven energy value chain.
