On Wednesday, Senator Ted Cruz, a Republican from Texas, introduced the “Natural Gas Tax Repeal Act” in response to the rising energy costs and persistent inflation. Joining him in cosponsoring the bill are Alabama’s senators, Katie Britt and Tommy Tuberville, along with 12 other Republican senators.
The Natural Gas Tax Repeal Act, a concise two-page document, aims to eliminate Section 136 of the Clean Air Act entirely.
In 2022, the Inflation Reduction Act made an addition to the Clean Air Act known as Section 136. This section introduced two sets of incentives aimed at encouraging gas and oil companies to actively reduce their emissions of methane and other greenhouse gases.
Section 136 allocated $1.55 billion in subsidies to assist companies in reducing emissions, addressing the health impacts of emissions, and supporting environmental restoration efforts.
The new policy includes a provision for charging a fee based on the amount of methane emitted by a production facility. This fee applies to emissions that exceed 0.20 percent of the natural gas sent for sale or 10 metric tons of methane per million barrels of oil sent for sale. Nonproduction facilities will be subject to a fee for emissions that exceed 0.05 percent of the natural gas sent for sale, while transmission systems will be charged for emissions that exceed 0.11 percent of the natural gas sent for sale.
The rate for 2024 has been set at $900 per metric ton. However, this figure will increase to $1,200 per metric ton in 2025 and further rise to $1,500 per metric ton in 2026 and beyond.
Cruz’s bill, titled as the “Natural Gas Tax,” specifically targets waste emissions of methane. This fee is applicable to methane that is released during the production, storage, and transmission process, but not utilized by consumers.
When consumers burn natural gas, which is primarily methane, it transforms into carbon dioxide and water vapor. Although carbon dioxide is a greenhouse gas, the fee outlined in Section 136 only pertains to methane emissions. Consequently, any natural gas utilized by consumers would not be subject to taxation.
Senator Tuberville criticized the Biden administration for showing excessive deference to “woke climate activists” and argued that the provisions were an unnecessary form of government overreach.
According to the statement, Joe Biden has been actively opposing American energy since the start of his term, resulting in increased costs and the relocation of jobs abroad. It is emphasized that higher taxes and excessive government regulations are the last things that Americans require at this time.
Senator Britt voiced his criticism of the energy policy of the Biden administration, highlighting what he referred to as “its war on American energy.”
Britt stated that over the past three years, the Administration has been focused on prioritizing its irresponsible and partisan Green New Deal Agenda, which has resulted in the weakening of our national and economic security. According to Britt, it is high time to not only achieve energy independence, but also establish energy dominance for the United States.
The Biden administration has come to the defense of Section 136, referring to it as a crucial provision of the Inflation Reduction Act.
In a recent statement, the Biden White House made it clear that they would veto H.R. 1023, a bill passed by the House that includes the Natural Gas Tax Repeal Act.
