Budget bill could impose a fee on methane, and Big Oil lies like hell to stop it

The $ 3.5 trillion budget reconciliation package at the center of a heated debate in Congress this week represents a unique opportunity for Democrats to push forward ambitious climate policies. Among his provisions is a levy on methane, an extremely potent greenhouse gas emitted from a number of sources, including oil and gas operations.

The oil and gas industry is desperately fighting this fee proposal by repeating old spurious claims that there is an “economic incentive” to reduce methane because it is the main component of natural gas and is believed to be valuable for fossil fuel producers. In other words: don’t worry about our shows, we take care of it ourselves.

But in closed-door meetings, industry executives admitted the opposite: Methane gas is of very little value. This fact undermines the idea that it is in the best interests of industry to capture this gas and sell it rather than vent it and release it into the atmosphere.

Sen. Sheldon Whitehouse (DR.I.) and other progressives introduced a provision in March that would assess a charge of $ 1,800 per tonne of methane pollution from 2023, with a 2% increase above inflation each following year. In September, the House Energy and Commerce Committee voted to include the methane royalty in the reconciliation bill, despite vehement Republican opposition.

Methane is 86 times more powerful than CO2 over 20 years in the atmosphere and account for approximately a fifth of man-made global warming. Atmospheric concentrations have increased by more than 150% since 1750.

Over the past three months, Exxon Mobil, the American Petroleum Institute and other fossil fuel interests have flooded Facebook with advertisements opposing the finance bill and its climate provisions. Exxon alone spent $ 2 million on Facebook ads in the past three months, CNBC reported this week.

In a letter earlier this month, before leaders of the Senate Committee on Environment and Public Works, the American Petroleum Institute and more than 100 other groups, they voiced their opposition to what they described as “unreasonable and punitive” charges on methane pollution that “could jeopardize affordable and reliable energy.” with probably a small reduction in greenhouse gas emissions.

The groups have insisted that fossil fuel interests are determined to mitigate methane.

“Not only is it in the best interest of the environment, it is in the best economic interest of the country’s oil and gas companies, because any methane lost to the atmosphere is a product that cannot be used to fuel our country’s electric utilities, heat our homes and businesses, power our manufacturing facilities, create chemicals used in products that make us healthier, safer and more productive, make our steel or help produce the foods that nourish our families, ”they wrote.

Privately, however, oil lobbyists have described methane as unwanted waste.

“This pesky natural gas, to me, is almost like produced water,” said Ron Ness, chairman of the North Dakota Petroleum Council, at a gathering of industry groups in 2019. “The value of it- this is very minimal. But you have to manage your gas to produce your oil.

The New York Times first reported Ness comments last year after getting a recording of the industry meeting hosted by the Independent Petroleum Association of America. HuffPost recently obtained a recording and transcript of the discussion from a source who asked not to be identified.

At the event, Ness described methane emissions and flaring as a “serious threat” to the public image and the long-term future of the fossil fuel industry.

“I’ll tell you, there’s no harder interview to do in all things oil and gas than when you’re talking on TV, and they’ve set up a 5,000-barrel Bakken well. a day with a push and out of it, ”Ness said.“ Or when all the fishermen in North Dakota no longer need to use their lights on their boats on Lake Sakakawea now because the rockets are lighting up the lake . “

“We have to go to work,” he added. “We can no longer be the deniers.”

“I cannot stress enough that [Ness] was talking about emissions, and in particular flaring, ”said Pete Obermueller, president of the Petroleum Association of Wyoming. He noted that a Wyoming lawmaker he “would consider friendly enough” to the industry recently posted on Facebook about driving through part of the oil-rich Permian Basin and urged residents of Wyoming to be careful what they want in terms of fossils. fuel development.

Ness’s view that methane is of little value did not stop the North Dakota Petroleum Council from signing the September letter in which dozens of groups touted the “economic incentive” to reduce emissions. Neither the North Dakota Petroleum Council nor the Independent Petroleum Association of America responded to HuffPost’s request for comment.

The oil industry has long fought efforts to regulate methane by arguing that gas is valuable. When the Obama administration finalized the rules to limit methane emissions on federal lands in 2016, the Independent Petroleum Association of America released a document “Debunking” several claims regarding methane pollution, including that “large amounts of natural gas are wasted in the production of oil and gas.”

“This claim is simply not consistent with the science,” the IPAA wrote. “Producers have a vested interest in capturing and selling as much of their product as possible to consumers, rather than letting it escape into the atmosphere. “

In fact, drillers drain and burn a huge amount of excess methane. “We’re just burning a huge amount of gas,” Ness admitted at the industry meeting in June 2019.

In March, a team of Harvard researchers found that emissions from oil production are 90% higher than EPA estimates, and emissions from natural gas production are 50% higher. In Texas’ oil-rich Permian Basin, unauthorized methane flaring is rampant, recent study finds report from the Earthworks conservation group.

Of 227 active flares that were studied in a series of flyovers between January and June 2020, 192 of them – 84% – did not have the necessary permits from the Texas Railroad Commission, according to this study. The United Nations Intergovernmental Panel on Climate Change, or IPCC, warned in its most recent climate report that cutting back on methane and other so-called super pollutants could go a long way in stopping warming. additional planetary.

The American Petroleum Institute, the industry’s largest trade association, recently expressed support for the Biden administration and the European Union’s commitment to reduce methane pollution by at least 30% in over the next decade. (The Environmental Protection Agency is expected to finalize stricter methane rules in the coming weeks.)

Whitehouse is not buying the alleged support of the industry.

“Whoever believes @ APIenergy must have his head examined, ”he said. tweeted earlier this month. “It’s a dodge to avoid methane costs. Then they will fight and delay the regs, either directly or through coordinated front groups. Cheat on me once … “