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On Wednesday, Senator Ted Cruz, R-Texas, introduced the “Natural Gas Tax Repeal Act,” pointing to excessive energy costs and ongoing inflation as justification. Both of Alabama’s senators, Katie Britt and Tommy Tuberville, were among the 12 other Republican senators to cosponsor the bill.
Just two pages long, the Natural Gas Tax Repeal Act would repeal the entirety of Section 136 of the Clean Air Act.
Added to the Clean Air Act by the Inflation Reduction Act in 2022, Section 136 established two sets of incentives for gas and oil companies to reduce methane and other greenhouse gas emissions.
First, Section 136 set $1.55 billion aside in the form of subsidies meant to help companies pay to reduce emissions, mitigate the health effects of emissions, and aid in environmental restoration.
It also authorized a fee for every metric ton of methane emitted by a production facility above “0.20 percent of the natural gas sent to sale” or “10 metric tons of methane per million barrels of oil sent to sale,” by nonproduction facilities above “0.05 percent of the natural gas sent to sale,” and by transmission systems above “0.11 percent of the natural gas sent to sale.”
For 2024, the rate was set at $900 per metric ton. This will rise to $1,200 per metric ton in 2025 and then to $1,500 per metric ton in 2026 and beyond.
While the title of Cruz’ bill refers to this fee as a “Natural Gas Tax,” it only applies to waste emissions of methane, or methane that is released during the production, storage, and transmission process and not used by consumers.
When it is actually burned by consumers, natural gas (which is primarily methane) becomes carbon dioxide and water vapor. While carbon dioxide is a greenhouse gas, the fee established by Section 136 only applies to methane emissions, so any natural gas actually used by consumers would not be taxed.
Accusing the Biden administration of inappropriate deference to “woke climate activists,” Senator Tuberville described the provisions as unnecessary government overreach.
He said that “since day 1 in office, Joe Biden has waged war on American energy — driving up costs and sending American jobs overseas. The last thing Americans need right now are higher taxes and government red tape.”
Senator Britt criticized the Biden administration’s energy policy too and also referred to “its war on American energy.”
“For the past three years, this Administration has been intent on prioritizing its irresponsible, partisan Green New Deal Agenda, ultimately weakening our national and economic security,” Britt said. “It’s past time to unleash not just U.S. energy independence, but energy dominance.”
The Biden White House has defended Section 136 from previous Republican attacks, calling it a “key provision of the Inflation Reduction Act.”
On March 19, in a statement of administration policy, the Biden White House said that “if the President were presented with HR1023 [a bill passed by the House which includes the Natural Gas Tax Repeal Act], he would veto it.”
