API: IRA’s “confusing” methane fee to stifle American energy innovation
WASHINGTON — The American Petroleum Institute (API) released a statement from API Senior Vice President of Policy, Economics and Regulatory Affairs Dustin Meyer after the U.S. Environmental Protection Agency (EPA) released a proposed rule to establish a fee on methane emissions as required by the Methane Emissions Reduction Program in the Inflation Reduction Act (IRA):
“As the world looks to U.S. energy producers to provide stability in an increasingly unstable world, this punitive tax increase is a serious misstep that undermines America’s energy advantage. While we support smart federal methane regulation, this proposal creates an incoherent, confusing regulatory regime that will only stifle innovation and undermine our ability to meet rising energy demand. We look forward to working with Congress to repeal the IRA’s misguided new tax on American energy.”
API has worked with the administration to craft policies that maximize emissions reduction at the lowest cost to society. We are concerned that lack of coordination between policymakers shaping various methane regulations, including the Methane Rule that sets the standards for emissions reductions, the Reporting Rule that will determine what companies may pay under the Methane Fee, and the Methane Fee Rule, could result in regulatory incoherence. For these complex rules to work cohesively, meaningful coordination both within EPA and between federal regulators and the industry throughout the rulemaking process will be critical.
The U.S. natural gas and oil industry is taking action to reduce methane emissions while continuing to produce affordable, reliable energy. Average methane emissions intensity declined by nearly 66 percent across all seven major producing regions from 2011 to 2021.
Industry-led initiatives like The Environmental Partnership, whose members make up nearly 70% of the U.S. onshore natural gas and oil industry, are helping to accelerate progress on methane emissions reductions by driving collaboration and sharing best practices across the industry.
