GOP Repeal of Biden’s Methane Fee Complicated by Climate Law

The Republican crusade against a fee that would impose penalties on oil and gas companies for planet-warming emission leaks faces a glaring snag in the Inflation Reduction Act’s methane provisions, which lawmakers are working to address with their budget plans.

The Waste Emissions Charge, finalized by former President Joe Biden, was repealed in February by a Congressional Review Act measure and is awaiting President Donald Trump’s signature, but the Democrats’ 2022 climate law will stand in the way of outright elimination of the fee.

Resolutions passed under the Congressional Review Act prevent federal agencies from trying to circumvent Congress by putting in place a “substantially similar” rule. That’s at odds with the reality that a methane fee regulation is required under law by the IRA.

“We’ve never tested the words ‘substantially similar’ in litigation or in application,” according to Harvard Law School’s Carrie Jenks, so the path forward for the statutory requirement remains unclear.

Oil and gas companies face an estimated $560 million in fines under the program, which assesses a fee on facilities for each metric ton of reported methane emissions.

Jenks, Executive Director of Harvard’s Environmental & Energy Law Program, says it’s unlikely the Trump administration will actually collect the fee after the repeal, but unless the law changes, having the methane fee codified could allow future Democratic administrations to craft clever ways to get around the restrictions.

“If Congress leaves the waste emissions charge on the books for some reason and a subsequent administration decides to to collect it—or through some sort of litigation a court directs the agency to collect it—it would be very hard to imagine the agency not being able to come up with a new implementation rule,” according to Joe Goffman, who served as head of the EPA’s Office of Air and Radiation during the Biden Administration.

“I’m assuming that’s all going to be moot,” Goffman said. “When Congress does budget reconciliation, they’ll actually repeal the statuary provision.”

And Capitol Hill Republicans are determined to make that happen through the budget reconciliation process, which is the same tool Democrats used to pass the IRA.

Killing the Fee

The Senate Environment and Public Works Committee is writing a provision for the budget bill that repeals the methane emissions fee from the IRA.

“We’re trying to totally kill it,” Committee Chairman Shelley Moore Capito (R-W.Va.) told reporters March 4.

Republicans will have to figure out a way to remove the language though, as it could be used as a source of revenue to pay for other costs in reconciliation.

But Capito said scrapping the methane fee doesn’t take away a “pay-for” from Republicans in reconciliation. “We wanted to make sure it didn’t,” she said. “We’ve decided we can do both.”

Democrats acknowledge the situation puts them in an “awkward spot,” as Rep. Paul Tonko (D-N.Y.) characterized it.

Tonko said Democrats need to better educate ratepayers and companies on the benefits of the methane fee. The fee was created to help companies address cleanup, the ranking member of the Energy and Commerce Environment Subcommittee said.

“Ratepayers are paying that money now, and the company is losing every molecule of methane that leaks they could be charging for legitimately,” Tonko said. “It seems like a win-win to me, and we just need to get more info out there and get the industry to speak up.”

‘Points of Attack’

Democrats and environmental groups consider the hard-won climate law provision the strongest enforcement tool they managed to push through Congress to force industry to pay for pollution.

“It remains a legal requirement for EPA to hold the biggest methane polluters accountable for their negligence,” Sierra Club’s Beyond Fossil Fuels director Mahyar Sorour said in a statement.

“Forcing the agency to implement the charge some other way after conducting a thorough, well-researched process is as wasteful of taxpayer resources as these oil and gas operators are wasteful of harmful methane,” Sorour said.

The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg. Bloomberg Law is operated by entities controlled by Michael Bloomberg.

Sen. Sheldon Whitehouse (D-R.I.) called the Senate vote to repeal the fee “a really, really despicable act by the fossil fuel industry,” during extensive Feb. 26 floor remarks opposing the resolution.

The top Democrat on the Environment and Public Works Committee, Whitehouse has led the argument against Republican cuts to climate programs and policies. He says the party needs “very clear points of attack” related to countering Republicans’ efforts to undo Biden-era climate efforts.

“The context always has to be quid pro quo corruption,” he said in a Feb. 26 call with reporters and the League of Conservation Voters.