Democrats should drop US methane royalties amid opposition, sources say

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October 25 (Reuters) – A Democratic proposal to impose a methane royalty on U.S. oil and gas producers is unlikely to be included in the party’s massive spending bill in Congress amid opposition in its own ranks, two sources close to the negotiations said on Monday. .

The proposal to tax oil and gas producers for methane emissions above a certain threshold faces opposition from U.S. Senator Joe Manchin, who represents the natural gas-producing West Virginia, as well as Democrats from the producer. Texas oil, the sources said.

The charges, backed by the White House, are part of a larger effort by Democratic President Joe Biden to reduce methane, a greenhouse gas believed to be the leading cause of climate change after carbon dioxide.

Biden is hoping to finalize part of a massive spending program that widens the country’s social safety net and seeks to tackle climate change before he leaves for the United Nations Climate Change Conference in Scotland on Thursday.

The US Environmental Protection Agency is expected to announce new rules this week to reduce methane emissions. The United States recently announced a global methane commitment with the European Union to reduce methane emissions by 30% by 2030.

Under a plan approved by the House of Representatives’ Energy and Trade Committee in September, oil and gas producers are expected to pay $ 1,500 for every tonne of methane they emit over specific intensity thresholds.

Democrats hold narrow majorities in the House and Senate.

Republican critics said the fees would increase the costs associated with heating homes and refueling cars, while Democrats argued they would reduce greenhouse gas emissions that contribute to global warming.

The American Petroleum Institute industry group lobbied to remove the methane levy discussed in Congress, which it called a duplicate and punishment. The group said it broadly supports the EPA’s efforts to regulate methane from existing oil and gas operations.

Reporting by Jarrett Renshaw in Philadelphia and Valerie Volcovici in Washington; Editing by Leslie Adler and Will Dunham

Our Standards: Thomson Reuters Trust Principles.


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