Democrats float new methane fee in spending bill -Breaking
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© Reuters. FILE PHOTO: U.S. FILE PHOTO: U.S. Senator Joe Manchin (D.W.Va.) walks by the U.S. Capitol, Washington, U.S.A. on October 21, 2021. REUTERS/Elizabeth FrantzWASHINGTON, (Reuters) – The U.S. may charge oil and gas companies if they emit methane beyond a certain limit. In addition to offering $775 million for monitoring and reducing greenhouse gases, a draft plan of President Joe Biden was released on Thursday.
This provision, which is contained in the House Build Back Better proposal of 1,600 pages, replaces the previous proposal for a fee to methane operators who release more than a threshold. Texas Democrats and West Virginia Senator Joe Manchin opposed the previous proposal.
Initial plans by Democrats to forcibly oil producers and refiners to pay $1500 per metric ton methane above certain intensity thresholds were rejected. However, Democrats managed to salvage the measure with numerous modifications over the past few days.
Biden, who presented Thursday a $1.75 Trillion budget reconciliation plan with $555 Billion earmarked to climate actions, said it unified Democrats. But some members of his own party quickly rejected it.
While he plans to promote the framework next week when he travels to Glasgow to participate in the COP26 climate conference, it’s not clear if the Senate will support the methane fees.
Proposed changes in the House bill include a gradual increase in the fee, from $900 to $1,500 per emission in 2023 and 2025.
This proposal provides $775 million of grants, rebates, loans and other assistance to help oil and natural gas producers monitor and reduce their methane emission.
Anne Bradbury, CEO of the American Exploration & Production Council, which represents independent oil and gas producers, called the latest proposal “a poorly constructed natural gas tax” that will add to the costs of complying with methane regulations from the Environmental Protection Agency.
According to people familiar with the matter, the EPA will present its first proposal for regulating existing oil and gas operations early next week.
Recently, the United States also announced that it would participate in the voluntary Global Methane Pledge which will reduce methane emissions by 30% by 2030.
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