A proposal to impose a methane royalty on oil and gas producers is on precarious ground for survival in the Congressional Democrats’ welfare spending bill.
It is the latest climate priority that risks being dropped as negotiations on the reconciliation package continue and negotiators begin to face the reality of making tough choices to meet Senator Joe Manchin’s demands for both lower prices and political concessions.
After dismissing what many saw as the centerpiece of the climate provisions of the Reconciliation Bill – the $ 150 billion Clean Electricity Performance Program, or CEPP – the West Virginia Democrat now appears to be expressing concern to the government. about the proposal to charge oil and gas facilities for methane emissions that exceed certain levels.
Manchin met yesterday afternoon to discuss the climate part of the reconciliation package with Senate Majority Leader Chuck Schumer (DN.Y.), Environment and Public Works Senate Speaker Tom Carper (D-Del.), Senate Finance Speaker Ron Wyden (D-Ore.) And Senate Agriculture Speaker Debbie Stabenow (D-Mich.).
“I hope it will,” Carper, whose committee has jurisdiction over methane charges, told reporters after the meeting. “We negotiated a methane fee, we tried to do it in a way that Senator Manchin and his parents would be more receptive, and we are still talking about it and continuing to work on it.”
The methane levy was a tough sell early on for moderates, especially those representing oil and gas interests, with Republicans calling it a natural gas tax and wondering if the costs would be passed on to consumers.
As written by the House Energy and Commerce Committee, the charge – calculated via a complex formula – would be assessed on individual oil and gas facilities that report methane emissions as part of the greenhouse gas reporting program.
Rep. Lizzie Fletcher (D-Texas), who represents parts of Houston, raised concerns about the proposal when the committee tagged her reconciliation package last month, though she ultimately voted for (Daily E&E, September 14).
Manchin, for his part, did not say after yesterday’s meeting whether he opposes the methane levy, but earlier today he reiterated his broader view that the policy climate should focus on the carrot and not on the stick.
“We mainly work on climate, credits and try to help people with incentives,” Manchin told reporters. “You won’t be able to penalize yourself, you won’t be able to regulate for a cleaner environment.”
“Not going to move”
Carper would not go into detail yesterday about the types of revisions under consideration that might make the proposal more palatable to Manchin, or what had been discussed in the room. Instead, he put a positive spin on the ongoing conversations.
âI think we are making progress,â he said. âWe reduce our differences by trying to be sensitive and responsive. I am originally from West Virginia. I don’t want to do things that hurt my native state. But at the same time, I live in Delaware. We have the lowest state in the country. My dark state, the sea rises. So we have to do something about it.
Yet, last night, Carper made it clear on social media that the methane fee was to remain as part of the final package.
âMethane is a super pollutant – 80 times more powerful than carbon dioxide,â he tweeted. âBy charging a fee, we can #CutMethane, create jobs and help save our planet. We can and we must. “
Carper’s posture underscores the current difficulty Democrats have in trying to find a compromise on the reconciliation bill without appearing too ready to give in to their initial demands – a series of climate change policies that promised to be the most ambitious and aggressive of all time.
Congressional Democrats are also desperate to strike a deal this week before President Biden leads a delegation to Glasgow for the so-called COP 26 climate talks, where running empty-handed would be a humiliation for a new one. administration which promised to take the policies seriously. to avoid an environmental disaster.
Meanwhile, even as House Speaker Nancy Pelosi (D-Calif.) Continues to project confidence that a deal is near, the deadlock on methane charges is the last of many remaining hurdles.
House Ways and Means chairman Richard Neal (D-Mass.) After saying last week he expected to be able to reach a compromise with Wyden on the clean energy tax credit package which is expected to be introduced in the reconciliation bill, said last night it was reverting to its previous position that the House framework should take precedence over that of the Senate.
“They won’t budge and I won’t budge,” Neal said of himself and Democratic Reps Mike Thompson of California and Earl Blumenauer of Oregon, his Ways and Means Committee colleagues who helped write the House proposal. it would essentially expand and expand existing tax credits for clean energy and so on.
Neal said Thompson and Blumenauer insisted their tax credits go into effect for the first five years before giving way to the tax credits proposed by Wyden, which would represent a whole new set of incentives tied to the reduction. emissions, for the remaining five years.
Wyden has said he wants his tax plan to go into effect after four years, and there was an indication last week that the two presidents may find a way to make their competing plans overlap. Neal confirmed yesterday that Thompson and Blumenauer disagreed, and neither did he.
When asked for an update on the progress of these talks, Wyden said he and Neal “are still talking.”
‘May a thousand flowers bloom ‘
Democrats are also still negotiating what exactly should replace CEPP, the central policy of decarbonization in the House reconciliation proposal that Manchin effectively killed.
President Biden said last week he was negotiating with Manchin to keep the $ 150 billion originally allocated to CEPP and inject it into other climate programs, hoping to generate roughly equivalent emission reductions. (Daily E&E, October 22).
Even after the Senators’ meeting yesterday, however, lawmakers acknowledged that they had made few final decisions on what it looked like.
A congressional source familiar with the negotiations said the Biden administration and Democratic leaders are considering a range of other policies to replace CEPP, including additional funding for climate-smart agriculture, industrial decarbonization policies and some policies of Manchin jurisdiction in energy and natural resources. Committee.
Another option, the source said, is a potential extension of a nuclear energy tax credit beyond the five years provided for in the House Ways and Means Committee’s reconciliation package (Daily E&E, September 13).
Carper also said he expects the $ 150 billion to be split across different climate priorities.
“We could invest more money in hydrogen refueling stations,” Carper told reporters. âWe could invest more money in electric charging stations. We can invest more money in ports, more money in school buses, garbage trucks. “
These programs would not be the direct responsibility of Manchin in his capacity as chairman of the Senate ENR committee. But Carper said his staff were in talks with Manchin on how to replace CEPP. There may be room for further work on energy transmission and storage, two areas of interest for Manchin.
âI indicated today, and I’ll speak just for myself, I think we can do even more in the transmission area, in the storage area,â Wyden said after the meeting with Carper and Manchin.
The House Energy and Commerce Committee’s program would also channel $ 7 billion towards several Department of Energy loan programs. Putting more money in these would be “helpful,” said Rep. Paul Tonko (DN.Y.), who chairs the environment and climate change subcommittee.
âAnything we can do to incentivize because the goals are pretty solid,â Tonko said in an interview.
Another option on the table is a potential subsidy program for states to reduce carbon emissions, a proposal first presented by Senator Tina Smith (D-Minn.), The chief architect and champion of the CEPP.
“It could be promising,” said Rep. Jared Huffman (D-Calif.), Who criticized suggestions that CEPP should be replaced with carbon capture and sequestration, which he called “a favorite of industry “.
At the end of the day, Carper said, âCEPP is apparently not going to take place. The question is, in its absence, how to fix it? Let a thousand flowers bloom.
Journalist George Cahlink contributed to it.