America’s first federal emissions tax will only increase emissions
This article originally appeared in The Hill on January 18th, 2024.
The new year brings a historic and self-defeating tax courtesy of the Inflation Reduction Act. Certain methane emissions produced by oil and gas companies this year will be subject to the nation’s first federal emissions tax. Designed solely to punish the backbone of the American energy industry, the tax will likely achieve its goal, albeit while increasing methane emissions in the process.
Since its initial drafting in 2021, the tax was written to target energy companies that are disfavored by the Biden administration. For methane emissions above a low threshold in 2024, the tax is $900 per metric ton — equivalent to a tax of $36 per ton of carbon dioxide. This tax will be levied exclusively on companies that produce or transport oil and gas.
Yet, the oil and gas industry is not the largest overall producer of methane emissions in America. That title belongs to livestock farmers, who get a pass under the law. The landfill industry is the third largest source of methane, yet it too goes untouched because regulators are determined to scrap the oil and gas industries first. All three industries are essential to modern life, but evidently, some emissions are more acceptable than others under the Inflation Reduction Act.
Read the full op-ed in The Hill.