National Tax On Natural Gas Would Be An Issue For All Americans

A proposed tax on natural gas that’s been presented as a ‘methane fee’ within the reconciliation package currently being debated in Congress was the subject of the recent Leader’s Roundtable: Exposing the Democrats’ “Heat Your Home Tax.”

As Independent Petroleum Association of America Chairman and Texland Petroleum President Jim Wilkes explained, the bill will particularly impact independent oil and natural gas producers and American consumers:

“The proposals put forward in reconciliation – from changes in tax policy to the proposed establishment of new and unprecedented fees on industry at every level, and threats to cease federal lands production, would have a dramatic impact on IPAA members. All the things being considered would result in higher gasoline prices and higher heating costs for communities across the United States.”

The remarks came on the heels of IPAA joining the American Gas Association (AGA), American Petroleum Institute (API), and Interstate Natural Gas Association of America (INGAA) in a call for Congress to withdraw the national energy tax from the proposed reconciliation bill citing the impacts that consumers and producers are already feeling the impact of the administration’s anti-domestic production policies.

During his first year in office, President Biden has restricted access to reliable and affordable energy for all Americans. Not only has the president killed the Keystone XL Pipeline and ordered a perpetual (and illegal) federal leasing ban, he has also begged OPEC+ to increase its energy production to help reduce fuel and gasoline costs in the United States.

As Wilkes described:

“All of the feeling it’s created makes you doubt whether you really want to invest in this business in the long-run in the United States of America. That’s really kind of the bottom line. When you have uncertainty in tax policy, regulatory policy, access to federal lands and just an all out assault from the regulatory agencies on our industry, it creates doubt. And anytime you do that, it’s going to make people pull back from investing. That’s just natural.

“So I’ve talked to many different independents, small independents, and they wonder, ‘What kind of future do we have?’”

Now, Congress has proposed a duplicative tax on oil and natural gas production and natural gas transmission that will force Americans to make detrimental financial decisions. Kristen Granier, Senior Director at AGA, said:

“By AGA’s estimates, the tax will increase natural gas bills at a minimum of 12 percent per American family per year. While this might not seem like a lot to most, this is the difference between buying groceries and paying to heat your home this winter.” (emphasis added)

Anne Bradbury, CEO of the American Exploration & Production Council (AXPC), added:

“These policies will make the natural gas that Americans use to heat their homes and cook their meals significantly more expensive… and those that will be especially hard hit will be that one-third of Americans already struggling to pay their energy bills.” (emphasis added)

Claudette Duff, the president and CEO of Integrity Senior Services, described the especially troubling impact this could have on seniors. She discussed that seniors represent 34 percent of the population and that homelessness amongst people over 50 is not only on the rise, but a national crisis:

Implementing the methane tax could add to these rising costs and I’m concerned that vulnerable seniors are not being considered.

“While I believe we must battle climate change, I am also painfully aware that most seniors have little financial wiggle room. Seniors in my community are having difficulty paying their co-pays and other health-related costs. In fact, this situation is so dire that my agency has been waiving co-pays, and most recently, have started offering pro bono medical health services to seniors.

“…These most vulnerable among us make daily compromises in order to survive. Any possibility of an added cost to them must be seriously considered.” (emphasis added)

What about methane reductions?

This attack on domestic energy production and American households is being disguised as a methane fee but in reality, it is the wrong path to manage methane. As Granier stated:

“The tax is designed to fine companies based on the amount of natural gas they produce or transport, not on actual emissions… The tax would actually reduce incentives for natural gas companies to invest in infrastructure upgrades that we continuously use to enhance safety.”  (emphasis added)

Rep. Kelly Armstrong (R-ND) agreed:

“We are not lowering worldwide emissions by doing this. What we are doing is putting American companies, American workers, and American energy producers at a disadvantage on the world stage… It’s not making the world any cleaner and it’s not making us any safer.”

While domestic policies are not reducing emissions, they are impacting both energy prices and national security, as expressed by Rep. Bill Johnson (R-OH):

“Inflation is a problem, but energy inflation is a crisis. It’s a national security crisis because energy policy is national security policy in this country.” (emphasis added)

Conversations about the increase in natural gas and oil prices have been ongoing for the past few weeks. The good news is that neither the problem nor the solution is unknown – domestic policies are impacting energy prices and increased domestic production would help alleviate the costs for consumers.

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