MORGANTOWN – The Gas & Oil Association of West Virginia – GO WV – sent a letter on Thurday to all five members of the state’s Congressional delegation asking them to oppose the Methane Emissions Reduction Act, which is expected to be embedded in the $3.5 trillion social infrastructure bill coming before Congress.
The bill would impose a two-prong tax on oil and gas producers. One would be a flat $1,800 per ton tax on production of natural gas, oil and natural gas liquids such as ethane, with automatic annual increases. It also imposes a blanket tax based on average emission intensity in a basin of operation.
The letter says, “Our members are fully committed to improving air quality and further reducing all emission sources, particularly methane, through leveraging technologies and best practices that make natural gas and oil production and transportation safer and more environmentally efficient.”
It continues, This harmful energy tax legislation, however, would raise costs for all Americans, discourage capital investment that incentivizes innovation and provide virtually no environmental benefit.”
Go WV Executive Director Charlie Burd delved more into the thinking behind the letter.
“It punishes us and sort of isolates us from any other fuel source going forward,” he said. Neither aspect of the tax accounts for a producer’s efforts to reduce emissions.
“These producers are doing everything they can to reduce emissions leaks on their systems,” Burd said. “Those leaks equate to lost revenues.” Last year West Virginia had the lowest gas prices in 30 years, and that means they, and producers nationwide want to keep as much product in the pipeline as possible.
He cited data from the American Gas Association showing that the industry has reduced emissions by 69% since 1990 while adding 780,000 miles of pipeline to the system. “That’s really a pretty amazing number.”
He said, “When companies spend money to reduce emissions, only to come along and face a tax that is based on total production, as opposed to the actual losses that might occur, it’s pretty punitive. That equates to lost jobs, lost money to reinvest, less money to put in to repair infrastructure. It’s a pretty defeatist tax..”
And higher gas prices will get passed along to consumers who use natural gas to heat their homes and run their stoves. The American Gas Association estimates it could initially raise rates 17% to 20%.
The letter cites U.S. Energy Information Administration figures estimating one-third of all Americans face challenges meeting their energy needs, and says as they recover from the pandemic they don’t need to be burdened with higher costs – especially low- and fixed-income families who will be disproportionately burdened.
GO WV is alarmed by President Biden’s efforts to rely more heavily on OPEC for fuel supplies, the letter says. “Given much of the nation’s energy reliability challenges and surging fuel prices, state and federal policy priorities should focus on encouraging more domestic production to promote national and energy security.”
The Dominion Post contacted Sens. Shelley Moore Capito and Joe Manchin, and Rep. David McKinley late Thursday afternoon for comment on the letter.
Only Capito was able to respond in time for this report. She said in an email exchange, “The Democrats’ reconciliation legislation is likely to include a host of left-wing provisions, which are designed to reduce fossil fuel use and cause economic harm in energy producing communities. I am very concerned with the methane fee, which is outlined in the GO WV letter and amounts to a tax on natural gas production that would harm both consumers and workers. I oppose the Democrats reckless tax and spending spree legislation that would not only burden our children and grandchildren with mountains of debt and fuel inflation, but would also harm our energy producers here in West Virginia.”
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