Scientists say the world urgently needs to cut methane emissions. The politics aren't as simple. – POLITICO

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The Biden administration’s emerging efforts to slash emissions of methane — a greenhouse gas triggering alarms across the globe — is setting the stage for a new clash among lawmakers, agricultural interests and the energy industry.

Carbon dioxide commands most of the attention when it comes to plans to combat climate change, but the Biden administration and some Democrats are shifting focus to methane, the greenhouse gas second-most responsible for heating the planet.

Methane emissions have boomed since 2007, largely from oil and gas production propelled by the fracking revolution, and atmospheric concentrations are at their highest level in 800,000 years, according to the latest United Nations’ Intergovernmental Panel on Climate Change report. Scientists around the world increasingly say that curbing the gas — which traps heat 86 times more effectively over 20 years than carbon dioxide — is the clearest near-term way to put the planet on a more sustainable temperature trajectory.

But wrestling methane is presenting a new round of political and practical complications for the Biden administration: Agriculture, including livestock and land-based systems, accounts for 40 percent of global methane emissions — spurring concern among Republicans and farm-state Democrats about regulatory efforts to tackle the problem.

Senate Democrats plan to include a so-called “methane polluter fee” in their $3.5 trillion budget resolution that would hit energy producers that vent or burn off excess methane and compressors used to pressurize and transport natural gas. Several also introduced legislation this month requiring refiners and oil and gas producers operating in the United States to pay into a fund based on a share of their global carbon and methane emissions.

“The methane polluter fee targets industry leakage, which even the fossil fuel industry has a hard time defending,” Sen. Sheldon Whitehouse (D-R.I.) told POLITICO. “I think that the public more and more cares about climate change and people understand that methane is a particularly powerful greenhouse gas – indeed more powerful than carbon dioxide. So it seems like addressing it is a good thing.”

Whitehouse said the Senate Budget Committee informed him that his bill with Sens. Brian Schatz (D-Hawaii) and Cory Booker (D-N.J.) will form the basis of the polluter fee. That legislation calls for a $1,800 per ton fee on oil and gas producers whose emissions rate perform worse than regional averages.

Environmental allies who have joined Democrats in challenging the fossil fuel industry’s political power, misinformation tactics and for causing climate change also believe addressing methane is a winning political strategy.

“It’s to help the worst performers to clean up their act. It’s to get them to avoid paying the fee because we’re basically setting money on fire,” National Wildlife Federation CEO Collin O’Mara said. “It’s great policy, but I also think it’s good politics to be incentivizing companies to reduce their waste, which in the long run is going to end up saving consumers money.”

Mark Brownstein, senior vice president for energy at the Environmental Defense Fund, drew connections to ongoing wildfires, droughts and floods in reasoning the public is ready to embrace a fee on methane emissions. He noted that already available technology can reduce oil and gas methane emissions 75 percent from current levels, and that the evolution of remote sensing by drone and aircraft has also reduced costs for curbing methane.

“Over a quarter of the warming we’re seeing right now is being driven by methane emissions from human activities,” he said. “We know that by controlling methane pollution from the oil and gas industry we can make a major difference in addressing the climate problem that’s affecting all of us today. That’s the key issue.”

But Republicans are preparing to fight Democrats’ efforts by saying it would increase costs to everyday Americans for things like home heating, electricity and groceries.

A fee on methane emissions would function as an implicit tax hike on Americans with less disposable income, making it “violative” of Biden’s pledge to avoid raising taxes on people earning less than $400,000, said Mike McKenna, a Republican lobbyist who works with energy companies.

“What the Republicans need to do is just remind everybody there has to be cheaper ways to do this,” he said.

Some have taken to calling the proposed methane polluter fee a “cow tax” — tied to longstanding GOP efforts to portray Biden and Democrats as going after Americans’ hamburgers.

“Our hard-working livestock producers should not have to worry about being subject to onerous regulations and increased production costs,” Sen. Joni Ernst (R-Iowa) said this month on the Senate floor about Democrats’ proposal for a fee on methane emissions. “This ‘cow tax’ will just result in higher food costs for Americans at the grocery store at a time when inflation already has caused prices to skyrocket.”

The Biden administration is weighing in on the side of curbing methane emissions, teasing it has big plans it will soon announce, but understanding that it will walk a fine line in doing so as any comprehensive policy to curb methane would have to tackle agriculture. That presents challenges to Democrats wary of alienating rural and centrist voters. So the administration has been careful to avoid talk of new regulations for agriculture, where livestock like cows account for a large share of emissions, instead speaking in terms of carrots such as incentives and voluntary programs for agricultural methane.

On the energy side, EPA Administrator Michael Regan tweeted after the IPCC report release that “we are developing strong standards to reduce methane — a potent greenhouse gas identified by the IPCC for urgent action.” Those rules would build on Obama-era standards for controlling methane leaks at new and existing oil and gas operations. They are on track for completion in September and would utilize new technology to help locate so-called “super-emitting” methane leaks, according to an EPA spokesperson.

“Reading the tea leaves, I think this administration is likely to use its whole of government approach and make sure all of its relevant departments — including Agriculture and Energy — are doing everything possible to reduce this potent climate pollution,” said Sarah Smith, super pollutants director at environmental group Clean Air Task Force.

The Biden administration is calculating just how much damage methane causes. White House National Climate Adviser Gina McCarthy’s office is working on a social cost of methane, which would assign a monetary value to the benefits of reducing methane that the administration could use to justify regulations.

“We absolutely are looking at climate change and looking to ensure that we consider climate across the administration every action we take. And part of that is revisiting the social cost of carbon and the social cost of methane, which is an ongoing reassessment at this point,” McCarthy said in a recent interview.

Another potential complication lies in the international approach to combating methane emissions. The governments of Japan and other countries and pressure from U.S. oil and gas firms are working to keep options for natural gas open for countries that currently run on coal, such as those in energy-poor Africa, since burning that fuel produces half the carbon dioxide when burned for electricity.

But greens say an instant switch to zero-emitting energy like wind and solar is all that can save the planet, arguing that methane leaks from producing and transporting natural gas outweigh its supposed climate advantage over coal.

Departments of Treasury, State and Energy also are putting the final touches on an international climate finance plan, which is expected to include an emissions performance standard that would guide investments in overseas projects, said Jake Schmidt, senior strategic director for international climate at the Natural Resources Defense Council and Kate DeAngelis, international finance program manager at Friends of the Earth.

The finance plan will likely include some exemptions that would allow fossil fuel finance — particularly oil and natural gas — in cases where it promotes development or national security objectives. Between 2008 and 2018, nearly two-thirds of the additional 47 gigawatts of energy capacity supported by bilateral U.S. finance went to fossil fuel projects, particularly natural gas, according to research published last week by researchers at Boston University Global Development Policy Center and Princeton University.

Environmental campaigners hope to limit exemptions and are pressing the Biden administration that any investments in natural gas, such as financing facilities in other countries to import liquefied natural gas, are inconsistent with its goals of keeping the planet from heating 1.5 degrees C — a case the IPCC report makes all the more clear, Schmidt said.

“What they’ve been signaling to folks is it’s going to be an aggressive standard, it’s going to be a strong signal to the rest of the world,” Schmidt said. “But we haven’t seen the details.”

The oil and gas industry contends it is self-motivated to stop methane leaks, given any escaping gas is something they would otherwise sell. But the burdens for detecting and repairing those leaks are less significant for larger producers that have said they are open to methane rules compared with smaller U.S. drillers who find regulations onerous — and potentially a death knell. The Independent Petroleum Association of America, which represents small drillers, criticized EPA’s efforts as a “‘one-size-fits-all’ approach” that is “inappropriate and disproportionally impacts conventional operations, low production wells, and small businesses.”

Larger companies are concerned about their social license to operate given ever-restrictive climate rules and growing public angst to address rising emissions, said Kevin O’Scannlain, vice president of upstream policy with the American Petroleum Institute. API and major oil and gas companies such as Royal Dutch Shell and Exxon Mobil have thus advocated for methane regulations, though they also are still significant methane emitters.

API officials have met with top Biden administration personnel, including Regan and McCarthy, to discuss methane regulations.

“We are actively working with the administration in support of the direct regulation of methane from new and existing sources,” O’Scannlain said in emailed responses, adding, “[W]e know there is more work to be done and federal policymaking can play a role.”

But O’Scannlain said API does not support the Democratic push to impose a methane fee on oil and gas producers, which he said would be duplicative of existing regulations while failing to address emissions from agriculture.

Three sources from the oil and gas sector told POLITICO that they see Democratic proposals to include the fee in a $3.5 trillion Senate budget resolution as an avenue to imposing a price on emissions.

“It’s going to be tough,” said an oil and gas industry official, who asked for anonymity to discuss private conversations with companies. “This administration is moving without the wild fluctuations of the previous one on policy, and it seems to be moving directly.”

Ben Lefebvre contributed to this report.