Republican Texas Sen. Ted Cruz is introducing a Senate bill that would repeal a “natural gas tax” proposal enabled by the Inflation Reduction Act (IRA), President Joe Biden’s signature climate bill.
The “Natural Gas Tax Repeal Act” would scrap IRA provisions that deputize the Environmental Protection Agency (EPA) to impose fines on energy companies that emit methane in amounts above government-dictated limits, according to its text. The rule will likely have a significant impact on producers of natural gas, the form of energy most commonly associated with methane emissions.
“Joe Biden and Biden officials have proven time and time again that they care more about their radical climate agenda than the needs of the American people,” Cruz said in a statement shared with the Daily Caller News Foundation. “They have driven up inflation and jeopardized American jobs and energy security, all of which would be made significantly worse by the methane emissions fee in the Inflation Reduction Act. This fee will particularly harm Texas by undermining producers in the Permian Basin and across the state.”
Natural Gas Tax Repeal Act by Nick Pope on Scribd
Cruz’s bill is supported by the Independent Petroleum Producers of America, the American Exploration and Production Council, the U.S. Oil and Gas Association and the American Petroleum Institute, among other organizations. House Republicans passed a similar bill in March to repeal the IRA’s natural gas tax.
The EPA’s proposal would require companies to pay a penalty of $900 for each ton of methane emitted above limits set by the government starting in 2024, with the penalty for every ton above the government’s benchmarks jumping to $1,200 in 2025 and increasing again to $1,500 in 2026 and after, according to the EPA. The agency describes the proposal as a means to reduce methane emissions, energy producers have criticized it for further complicating the regulatory environment and potentially increasing costs for consumers.
The EPA proposal also dovetails with a December 2023 EPA proposal to impose methane detection requirements, which independent oil and gas producers oppose because the additional compliance costs figure to disadvantage them relative to the major firms.
“President Biden’s tax on natural gas production does nothing but make it harder to produce American-made energy while driving up costs. Congress must take action to repeal this looming regulatory disaster,” Texas Rep. August Pfluger, who authored the House equivalent of Cruz’s bill, said in a statement shared with the DCNF. “The House has already passed my legislation to repeal the tax, and I am proud to work alongside Senator Cruz to get it to the President’s desk. Energy security is national security.”
The EPA and the White House did not respond immediately to a request for comment.
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