Gas industry groups express concerns to Congress over methane tax proposal

Several gas industry groups, including the Independent Petroleum Association of America (IPAA) and the American Gas Association (AGA), wrote a letter to congressional leaders expressing their concerns about a proposed methane emissions tax in the budget reconciliation legislation being negotiated in Congress.

“The industry is committed to continuing its efforts to minimize methane emissions across the U.S. economy. However, the methane fee framework currently being considered would introduce a regressive tax on low-income and fixed-income Americans, ignore existing and anticipated federal regulations on methane emissions, and lessen available capital for our companies’ ongoing investments in further reducing methane emissions,” said the Sept. 7 letter to U.S. Senate and House leadership that was signed by 27 organizations representing the gas industry, as well as others.

Along with IPAA and AGA, it was also signed by the American Supply Association, Distribution Contractors Association, Energy Equipment & Infrastructure Alliance, Florida Gas Association, Hearth, Patio & Barbecue Association, Interstate Natural Gas Association of America, International Association of Drilling Contractors, Marcellus Shale Coalition, and National Association of Homebuilders, among others.

“New fees or taxes on energy companies will raise costs for customers, creating a burden that will fall most heavily on lower-income Americans. While we appreciate that the details of the methane fee proposal are still under development, based on similar proposals introduced earlier this Congress, we estimate that the fee could amount to tens of billions of dollars annually. These major new costs most likely will result in higher bills for natural gas customers, including families, small businesses, and power generators,” the groups wrote.

The groups said the average customer could see an estimated increase of 17 percent in their natural gas bill in one scenario. They also said it could put up to 100,000 jobs at risk.