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Democrats Add $775 Million Oil and Gas Subsidy to Bill After Lobbyist Campaign

The subsidy was added on behalf of coal baron Sen. Joe Manchin, who opposed a methane fee proposal.

Phillips 66 oil refinery is seen in New Jersey, United States on April 21, 2020.

In a move that bucks climate advocates’ cries to end fossil fuel subsidies once and for all, House Democrats included a large handout to the oil and gas industry in the newly released draft text of the White House’s dismally low $1.75 trillion reconciliation package proposal.

The new methane fee proposal amends an earlier proposal by Sen. Sheldon Whitehouse (D-Rhode Island) that would have curbed emissions of the greenhouse gas, which is about 86 times more potent at warming the atmosphere than carbon dioxide. Upon rumor of its inclusion, the fossil fuel industry waged a desperate disinformation campaign against Whitehouse’s proposal.

Democrats’ new proposal is part of a $775 million grant, rebate and loan program that is meant to incentivize the oil and gas industry to reduce methane emissions — in other words, an oil and gas subsidy.

The change was made on behalf of Sen. Joe Manchin (D-West Virginia). Earlier this week, reporters found that the senator had been pushing against the methane proposal as it was originally included, having already succeeded at getting the most powerful segment of the climate portion of the bill, the Clean Energy Payment Program, hacked out.

Manchin, a coal baron himself, has deep ties to fossil fuel lobbyists; earlier this year, for instance, an Exxon lobbyist was caught on tape bragging, “Joe Manchin, I talk to his office every week.”

Since then, Manchin’s ties to Exxon and related lobbyists have remained — and perhaps deepened — as industry giants have drastically increased their lobbying efforts to water down the reconciliation bill. In recent months alone, Manchin has taken more than $400,000 from the fossil fuel industry, a quarter of the $1.6 million in campaign contributions he received between July and October. In turn, the lawmaker has fought to gut the package on the corporations’ behalf.

It’s likely no coincidence, then, that the fossil fuel industry’s lobby against the methane fee aligns with Manchin’s opposition. In a letter sent in September to the Senate Environment and Public Works Committee, the American Petroleum Institute and over 100 oil and gas interest groups decried the proposal and threatened to emit even more greenhouse gases if the fee was in place.

In the letter, which is riddled with falsehoods, the groups baselessly claim that it is already in the companies’ best interest to reduce methane emissions, touting their supposed efforts to reduce emissions — despite the fact that methane emissions have been rising for years. The groups also emphasize the importance of using “clean natural gas” — a blatant oxymoron — as an important part of the U.S. energy mix.

In reality, oil and natural gas are a significant source of methane emissions, and one of the best ways to reduce methane emissions is to place caps on the emissions, like the original methane fee proposed.

“Incentivizing” the oil and gas industry with ever more subsidies will only lead to further emissions. The government already provides the industry with tens of billions of dollars of fossil fuel subsidies a year, detracting from potential climate policy and funding further fossil fuel production and usage.

In an earlier version of the infrastructure and reconciliation bills, President Joe Biden had proposed ending fossil fuel subsidies in the form of tax breaks and loopholes. But those subsidies were eventually added back in, much to the chagrin of climate advocates and progressive lawmakers.

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