Oil group pushes GOP to end methane fee, internal documents show
Photo illustration: Shoshana Gordon/Axios. Photo: Ashley Cooper/Construction Photography/Avalon/Getty Images
A major oil and gas lobbying group is pressuring Republicans to repeal the IRA's methane fee in reconciliation if they take unified control of Congress next year, according to an internal industry document.
Why it matters: The American Exploration and Production Council document lays out detailed plans for the looming tax debate in 2025, when the Trump tax cuts will expire.
- The tax debate is crucial to policy ambitions for industry and NGOs alike and widely seen as the top vehicle for legislative priorities in the next Congress.
Driving the news: The internal roadmap, distributed to members of AXPC at board meetings this year, was obtained by climate nonprofit Fieldnotes and shared with Axios.
- AXPC also wants at least a half-dozen climate-related executive orders rolled back, according to the document, which was first reported by The Washington Post.
- Oil executives reportedly told Trump over the summer he should push to replace the leader of the International Energy Agency, which has found methane emissions responsible for a third of human-caused global warming, the Post reported.
- AXPC has taken these positions publicly, but the documents offer a rare glimpse at a trade group's more detailed plans to reverse major policies.
What they're saying: "AXPC supports pro-energy policymakers on both sides of the aisle and works to advance pro-energy policies regardless of election outcome," Mark Bednar, VP of communications for AXPC, said in a statement.
Context: The proposed methane fee, established by the IRA, applies to oil and gas facilities that emit more than 25,000 metric tons of CO2 per year, according to the EPA's plans published in January.
- Nine of the group's member companies reported their methane flaring intensity actually increased — by as much as 134% — from 2021 to 2023. Ten other companies had reduced flaring in that time period.
- AXPC, which expects a final rule by the end of the year, pledged to apply "additional pressure" on EPA political appointees and schedule follow-up meetings with EPA staff, according to the document.
- "We're proud to advocate for our American producers and the sound, workable federal regulation of oil and natural gas because our economy is stronger, the world is safer, and the environment is cleaner when the U.S. is the global energy leader," Bednar said.
Zoom in: One of the group's "consensus" priorities in the tax debate is tweaking the tax treatment for so-called intangible drilling costs.
- This lets oil companies deduct "intangible" costs like labor — as opposed to things like pipes and materials — when they drill a well.
- The IRA's changes to corporate taxes limited many companies' ability to claim IDCs immediately as they had been able to for decades.
- While some companies will be pushing for wholesale repeal of the IRA's corporate tax provisions, AXPC is shopping a bipartisan bill, introduced by Rep. Mike Carey and Sen. James Lankford, that would make a technical fix to let companies immediately claim IDCs.
Yes, but: The group says its advocacy won't change with who's in power, but policy success hinges on Donald Trump winning the White House.
- The roadmap acknowledges that if Democrats win the White House and at least one chamber of Congress, AXPC would have a "limited ability to influence" policy-makers on the methane fee and see "likely no improvement in the final rule."
The bottom line: The group's strategy is yet another sign of the starkly different approach a Trump White House would take on energy and climate issues.
