In America: Congress Repeals Natural Gas Tax, A Deep Dive into H.J.Res.35 and Its Impact on America's Energy Future
In a significant legislative move, the United States Congress passed H.J. Res.35, a resolution to repeal the natural gas tax established under the Biden administration. This bill, introduced by House Republicans in early February and recently voted on successfully by Senate Republicans, is now set to be signed into law by President Trump. But - what are the origins and implications of the natural gas tax, the motivations behind its repeal, and the broader impact on America's energy future?
The Natural Gas Tax: Origins and Intentions
The natural gas tax, formally known as the Waste Emissions Charge (WEC), was introduced as part of the 2022 Inflation Reduction Act (better known as the bill that started Bidenomics) during the Biden administration. The Environmental Protection Agency (EPA) implemented this rule to impose progressively higher fees on oil and natural gas companies for excess methane emissions. The goal was to reduce greenhouse gas emissions and fund green energy initiatives.
The tax was set to start at $900 per metric ton of methane released above the government’s threshold amount in 2024, increasing to $1,200 in 2025, and $1,500 in 2026 and beyond. The rule applied to oil and gas facilities reporting annual methane emissions greater than 25,000 metric tons of carbon dioxide equivalent. According to EPA projections, the fines could amount to $560 million in 2025. This fee was set to encourage the energy industry to transition into a more sustainable and clean form of energy over the next decades.
Successes and Failings of the Natural Gas Tax
While the natural gas tax aimed to curb methane emissions and promote environmental sustainability, its effectiveness has been a divisive topic. The American Energy Alliance found that the tax, though not perfect, went a long way toward funding the future of green energy. Between 2015 and 2022, the industry reduced methane emissions by 37% across onshore production regions. However, opponents argued that the tax stifled American energy production, discouraged investment, and increased energy prices.
The Repeal: Motivations and Implications
H.J. Res.35, introduced by Representative August Pfluger (R-TX) and supported by 13 GOP original cosponsors, seeks to nullify the EPA rule. The resolution passed the House with a vote of 220-206 and the Senate with a vote of 52-47. Proponents of the repeal, including Senator John Hoeven (R-ND), argue that the natural gas tax was part of the Biden administration’s "Green New Deal" policies, which they believe hindered domestic energy production and economic growth.
Fossil fuel processing is often presented as an immediate solution that remains effective in the long term. This is a long and arduous process. Setting up the drills and planning the excavation itself can take between 1 and 5 years. This does not account for the months of extraction and weeks of refining. What this administration seeks to present as a short-term solution is a long-term benefit for fossil-fuel-based energy producers. Setting up their drills and refineries now means that profits driven by fossil fuels stay up, and refineries and plants must be kept operational in the future to justify the government subsidies being doled out in the present. This is the start of a vicious cycle of fossil fuel dependency. And it is happening at a time when all major environmental organizations warn of the drastic effects of climate change and global warming.
The current administration’s mandate, often summarized as “Drill Baby Drill,” emphasizes increasing domestic oil and natural gas production to secure America’s energy future. This approach contrasts sharply with the previous administration’s focus on green energy and reducing carbon emissions.
Interestingly, while the current administration favors oil and natural gas, nuclear energy remains among the cleanest and most efficient sources. Nuclear power has the highest power yield and produces minimal greenhouse gas emissions. Despite this, the administration has not prioritized atomic energy development, focusing instead on fossil fuels.
Inconsistencies and Criticisms
A fact sheet detailing “National Energy Dominance” was released by the White House following the establishment of a council to further a mission of energy independence and cheaper bills for voters. It contains several inconsistencies and ambiguities. For example, it claims that gasoline prices increased by 30% under President Biden. This is proven using a figure that varies by source and lacks concrete evidence. Additionally, the assertion that the Biden administration dramatically slowed the growth rate of American energy production is contradicted by data showing record-high oil and gas production during his term.
Critics argue that H.J. Res.35 disproportionately benefits the mainstream energy industry, which is already one of the most affluent sectors in the U.S. The bill is seen as a way for small and medium-sized energy manufacturers to earn more, except it is criticized for favoring large corporations.
Lobbying Efforts and Political Dynamics
The fossil fuel industry boosted lobbying efforts in 2024, which may have influenced Congress to pass this bill. A report from OpenSecrets estimates that the fossil-fuel industry has spent upwards of $75 million. The American Petroleum Institute described the methane fee as a “duplicative, punitive tax on American energy production that stifles innovation”. These lobbying efforts highlight the latest in a long line of significant influence of various sectors in legislative decisions.
What does the future hold?
The passage of H.J. Res.35 marks a pivotal moment in America’s energy policy. While the bill aims to repeal the natural gas tax and promote domestic energy production, it asks Americans to consider what matters more to them - a clean future by 2035 or a lower energy bill in 2025. The current administration’s focus on fossil fuels, coupled with the potential for a recession and stock market downturn, paints a complex picture for the future.
As the administration navigates these challenges, it remains to be seen how their policies will impact America’s energy security and environmental health in the long term. The ongoing debate underscores the need for a balanced approach to economic and ecological priorities.