CONTINUED NSWA MEMBERSHIP ENGAGEMENT NEEDED: Percentage Depletion has been kept out of the budget bill until now because of small operator voices like yours.

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Chris Kearney | NSWA Vice President, Governmental Affairs

Ahead of the President’s overseas trip to the UN meeting on climate change – known as COP-26 – the week of November 1, House and Senate Democratic leaders are promising agreement on their long delayed “framework” of the FY22 Budget Reconciliation Bill – where inclusion of percentage depletion’s elimination and a methane tax on small producers is being pushed hard by powerful House Progressives.

If such agreement could be reached, it is not expected that it would be a completely drafted bill but rather a detailed blueprint, with more specific legislative language to follow in the weeks ahead. Some have suggested it will be a hybrid – part text on some issues and “placeholder” concepts for others.

Key struggles that have faced party leaders and rank and file members continues to be: what the level of funding should be (latest reports say possibly around $2 trillion over five years); how should it be paid for (moderate and liberal Democrats are squabbling over how to best raise taxes, on the rich primarily); and, what should be included (climate change related provisions continue to be a centerpiece of the discussion).  

It’s expected that once such agreement is reached, a House vote on the bipartisan Senate-passed $1.2 trillion infrastructure bill will soon follow, thus allowing Democrat leaders to advance their two-track legislative strategy of enacting President Biden’s “Build Back Better Agenda.”

The Infrastructure Bill is expected to pass the House once an agreement on reconciliation is reached.   

Of course, in the Senate ultimately, Majority Leader Chuck Schumer (D-NY) will need every Democrat (50) to vote for the bill and House Democrats can only afford to lose three “no” votes on reconciliation.       

Where we stand: regardless of the process of hammering out final details – and achieving consensus (or not) – legislative work will remain fluid so engagement with Congress is key.  

Until the President signs a budget bill that does not include punitive attacks on our industry – including percentage depletion elimination – you need to engage and have your voices heard. It will make a difference. Percentage Depletion has been kept out of the budget bill until now because of small operator voices like yours.

So, NSWA strongly urges all members to call and or email their member of congress and senator and ask the elected officials the following: 1) ensure percentage depletion continues to not be included in the FY22 Budget Reconciliation bill and, that 2) the methane tax proposal – of any kind – not be included.      

Chris Kearney, NSWA’s VP of Governmental Affairs is available to assist with identifying key congressional members and their staffs, as well as consulting on talking points and other key information.

Again, time is of the essence. So, please don’t hesitate to reach out to Chris or NSWA board members for assistance.     

Chris Kearney

NSWA VP for Governmental Affairs

202-549-1583

Call or text anytime.   

Find your U.S. Representative here

Find your U.S. Senator here.

Background – How We Got Here

In late August, the House passed, by a party-line vote of 220-212, a multi-section procedural measure (H. Res. 601) which includes the adoption of the Senate-passed FY 2022 budget resolution or  “blueprint” (S. Con. Res. 14) and outlines a date certain for voting on the Senate-passed infrastructure bill.

With the House’s adoption of the FY22 budget resolution by both chambers, it officially kickstarted the budget reconciliation process that will allow congressional Democrats to pass a ten year $3.5 trillion annual expansive social spending and tax package aimed at implementing the President’s “Build Back Better” agenda, including large swaths of President Joe Biden’s proposed American Jobs and Families Plans unveiled earlier this year.

Once, the multiple bills are marked up and passed by the committees, the House Budget Committee will then bundle them together into a single, mammoth bill prior to a vote by the House.

Also, the House Energy and Commerce Committee has completed its work on the committee’s contribution to the budget reconciliation process.  

The committee’s bill includes a methane fee on the oil and gas industry that “recognizes the cleanest performers” and “holds individual companies responsible for their own leaks and excess methane pollution.”

Specifically, the committee by a vote of 31-26 approved a portion of the $3.5 trillion budget reconciliation measure that would direct the Environmental Protection Agency to impose a methane pollution fee on the oil and gas industry. Rep. Kurt Schrader (D-Ore.) joined Republicans in voting against the legislation.

The fee would vary depending on how much of the greenhouse gas a facility emits. Methane emissions are considered more toxic than carbon dioxide.

The amount of the fee, which would begin in calendar year 2023, would be $1,500 per ton of methane that a facility reports during the prior reporting period, based on the specific industry’s intensity threshold number.

The fee for petroleum and natural gas production, for example, would be based on the reported tons of methane emissions that exceed 0.20% of the natural gas sent to sale from such facility. The fee for nonproduction petroleum and gas industry would be on the reported tons of methane emissions that exceed 0.05% of natural gas sent to sale from the facility.

It is expected that Democrats and Republicans from oil and gas states – on and off the committee – will continue efforts to strike the fee from the bill as negotiations continue with the Senate . 

Senate action on a methane fee is unknown at this time, though leading Progressive members are expected to push for inclusion of a broad methane tax on oil and gas operations in the final reconciliation package. 

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