API urges methane emissions cuts through rules, not taxes

The American Petroleum Institute pledged Jan. 12 to work with legislators and regulators to bring down the oil and natural gas sector's methane emissions while continuing to explore the newer emissions reduction technologies, primarily carbon capture and storage.

At the API's annual State of American Energy event, API President and CEO Mike Sommers called on policymakers at the federal and state levels to use public-private partnerships to fund lower-carbon initiatives while creating regulations that promote certainty for oil and gas operators.

"Our industry brings the scale and expertise to make a lower-carbon future a reality," Sommers said. "This is about addition, not subtraction. America needs all the reliable, affordable, lower-carbon energy we can get."

Sommers said the API is against a methane fee proposed in Congress because it would duplicate API's own efforts to have the Environmental Protection Agency issue rules to directly reduce methane emissions. Curbing methane emissions is seen as one of the fastest ways to mitigate climate change.

"We support the direct regulation of methane," Sommers said. "Based on EPA numbers, our combined costs for that new methane regulation could exceed $15 billion. So, we don't think that it's right to impose both a new regulation — which we support — and a tax on top of that. We don't think a punitive tax which ultimately will blow through to American consumers is the right policy choice on this issue."

In his opening remarks for the virtual event, Sommers said the Biden administration's efforts to restrict leasing on federal lands, while revoking key permits for pipeline projects such as TC Energy's Keystone XL oil pipeline, contributed to rising oil and gas prices.

"We begin 2022 with Americans viewing energy and its costs as major concerns," Sommers said. "This is in part because lately, we've seen policies aimed at restricting production and delivery of U.S. natural gas and oil. These decisions exacerbate Americans' concerns and put upward pressure on their energy prices,."

With oil and gas investors no longer interested in oil and gas production growth, most US producers committed themselves to maintenance-level drilling plans in 2021 and have no plans in 2022 to increase production in in the face of higher prices.

"Energy prices are up because of an imbalance in supply and demand as the world deals with the pandemic impacts, inflation and other volatility," API spokeswoman Bethany Williams said. "There are many factors at play, including mixed signals from Washington and a policy environment that has contributed to uncertainty across the industry."