Methane Restriction Legislation Introduced

Legislative, NSWA Legislative ReportLeave a Comment

Chris Kearney | NSWA Vice President, Governmental Affairs

Two bills have been introduced  – one in the  House and one in the Senate – aimed at curtailing operations that produce methane. 

The first, introduced by Rep. Degette (D-CO) – the Methane Waste Prevention Act of 2021 – would require the Environmental Protection Agency and Bureau of Land Management to set strict new standards limiting the amount of methane that oil and gas producers can release into the atmosphere from their drilling sites. For private sector operations, oil and gas producers would be required to take steps to cut their methane emissions by at least 65 percent by 2025; and by at least 90 percent below their 2012 emissions by 2030. 

On Federal lands, the bill would require the Department of Interior to issue new rules to ban the controversial practice of flaring or venting of natural gas at drill sites across the country. It would also require oil and gas producers operating on public lands to capture 99 percent of all natural gas brought to the surface within five years of the bill’s enactment. 

The second, introduced by Sen. Sheldon Whitehouse (D-RI) – a bill to Reduce Methane Emissions From Flaring and Venting Natural Gas During Oil and Natural Gas Production Activities would set a fee on methane that would be determined on a basin-by-basin basis for all companies that produce, gather, process, or transmit oil or natural gas. The price on methane would begin at $1,800 per ton and increase 2 percent above inflation in subsequent years.

Funds collected through the fee would go toward the National Coastal Resilience Fund, a program that aims to prepare coastal communities to deal with impacts of climate change. The Treasury Department would develop the program in conjunction with the Environmental Protection Agency and the National Oceanic and Atmospheric Administration.

Under the bill, companies would be able to “opt out” and pay a lower fee if they can demonstrate their methane emissions intensity is less than a basin’s average. As part of that process, they would have to use an independently peer-reviewed method for gathering emissions data and report their emissions regularly, install control technologies, and eliminate venting and flaring.

Climate Legislation Reintroduced 

For the second year in a row, the House Energy and Commerce Committee Leadership has introduced the 900+ page Climate Leadership and Environmental Action for our Nation’s (CLEAN) Future Act, which calls for the U.S. to achieve net-zero greenhouse gas emissions no later than 2050. The measure (bill text here and section-by-section here) is a comprehensive proposal of sector-specific and economy-wide solutions to address the climate crisis.

Of note, it also includes a nationwide Clean Electricity Standard (CES) requiring all retail electricity suppliers to obtain 100 percent clean electricity by 2035, in line with President Biden’s call to action for the power sector. The CES mandates that all retail electricity suppliers provide an increasing supply of clean electricity to consumers starting in 2023, rising to 80 percent clean by 2030, and then 100 percent clean by 2035.

The bill also highlights the importance of clean energy, distributed energy resources, grid infrastructure, and microgrids – all of which build resiliency and are crucial to reducing carbon pollution. In addition, it allows the federal government to expedite buildout of electricity transmission systems to achieve clean energy goals.

A series of hearings are expected to be held in the coming weeks in the  Energy and Commerce Committee.   

NSWA and our federal affairs representative will continue to monitor and engage with Members and staff – where appropriate – on the oil and gas and climate-related bills as they advance through the legislative process.    

Proposed Increase in “Social Cost of Carbon”  

The Biden Administration has announced it is beginning a process to modify the calculation of the cost of carbon as it relates to federal actions, a step that could significantly reshape a range of federal decisions, ranging from whether to allow new coal leasing on federal land to what sort of steel is used in taxpayer-funded infrastructure projects.

The administration is looking to increase the price  it will use to assess the impacts of greenhouse gases on society to $51 per ton of carbon dioxide — a rate more than seven times higher than that used by former president Donald Trump’s administration. But the number, known as the “social cost of carbon,” may reach $125 per ton once the administration conducts a more thorough analysis – expected to be conducted by a federal interagency team over the next year.

The cost per ton will be incorporated into decisions across the federal government, including what sort of purchases it makes, the kind of pollution controls it imposes on industry, and which highways and pipelines are permitted in the years to come.

One potential impact from the increased price:  While this is not a new tax that consumers pay directly, it would likely increase the difficulty for oil and gas projects to win government approval by factoring in their long-term costs to society.

NSWA and our federal affairs representative will continue to monitor and engage with – where appropriate – the administration’s actions on this effort.   

FY 2022 Appropriations

On February 4, the House Appropriations Committee officially organized itself for the 117th Congress. The Committee Rules and Subcommittee Jurisdictions were both adopted by voice vote. Additionally, Subcommittee Vice Chairs were also announced. The full list of subcommittee members is available here. On February 12, the Senate Appropriations Committee officially organized itself for the 117th Congress and announced chairs, ranking members, and subcommittee rosters.

On February 26, House Budget Committee Chairman John Yarmuth (D-KY) said that President Joe Biden is not expected to submit his Fiscal Year (FY) 2022 “skinny” budget request to Congress until “mid-to-late April.” The president is required by statute to submit a budget request to Congress by the first Monday in February, but there is no penalty for missing the deadline. A delay is common when a new president takes office, but Biden’s first budget could come later than any of his recent predecessors. The skinny budget request release will allow the House and Senate Appropriations Committees to begin holding hearings with various Biden Administration officials to hear testimony on departmental/agency-specific requests, and to eventually mark up and consider each of the twelve annual appropriations bills. The full budget request from President Biden will likely be sent to Congress sometime in May 2021.

On February 26, House Appropriations Committee Chair Rosa DeLauro (D-CT) announced that the House will accept Member requests for Community Project Funding in appropriations bills for FY 2022. Chair DeLauro also announced that the Appropriations Committee will enforce a set of important reforms that build on existing House Rules and prioritize accountability, transparency, and strong community support. The important reforms for Community Project Funding are described here.

Coronavirus Relief

On February 27, the House passed, by a vote of 219-212, the $1.9 trillion American Rescue Plan Act of 2021 (H.R. 1319). The legislation includes $350 billion to states, localities, tribes and territories in flexible funding to “replace revenue that was lost, delayed, or decreased” as a result of the COVID-19 pandemic (as of January 27, 2020); $4.5 billion to the U.S. Department of Health and Human Services (HHS) for home energy assistance through the LIHEAP program; $500 million to HHS to provide financial assistance to low-income consumers and other consumers adversely affected financially by COVID-19 to assist with payments for drinking water and wastewater expenses; $30 billion to state and local governments to administer the Emergency Rental Assistance Program (which includes covering utility and home energy cost arrears); and $9.961 billion for a Homeowner Assistance Fund (which includes covering utility and home energy cost arrears). A section-by-section analysis of the House-passed bill is available here.

Passage and enactment has been swift: On March 6, the Senate passed a slightly amended version of the bill and the House followed suit on March 10th (see text of the key elements of amended version of the American Rescue Plan Act); and the President signed the bill into law on March 11.

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