Key Vote NO on S.J. Res. 14

The American Energy Alliance urges all members to oppose S.J. Res. 14, the Senate companion to H.J. Res. 34, the Congressional Review Act resolution regarding new source performance standards for the oil and gas sector, also known as the methane rule. The original NSPS permitting rules from 2016 were onerous and unworkable, especially for independent and small producers. The rule under CRA consideration attempted to reduce some of the unnecessary burden, while still regulating pollutants from wells.

The support of the oil majors for this CRA resolution and for more onerous methane regulations in general is no surprise, Big Oil supports methane regulations for the simple reason that it raises costs for their smaller competitors. The majors have plenty of money for expensive monitoring equipment and already have armies of lawyers for compliance. If the regulatory costs of production in the US grow too much, they can easily shift their investments to other countries like Guyana, Australia, or dozens of others. Small domestic producers, which provide most of the production and jobs in the industry, do not have such easy options. Congress should not do the bidding of big oil companies by voting to hobble their smaller competitors.

Additionally, using the CRA for this issue is fraught with legal uncertainty because the CRA does not allow an agency to issue a similar rulemaking. The 2020 rule under consideration affirmed and built on the 2016 rules, even as it modified parts. Thus, despite the assertions of commentators, it is not at all clear as a legal matter that passing this CRA resolution simply reinstitutes the 2016 rules. Furthermore, the Biden administration has stated that it intends to undertake new rulemakings on methane, but the legal hurdles to such rulemakings from a CRA passage are unclear. This all means that passage of a CRA resolution will introduce years of litigation and uncertainty into the methane regulatory process. The better option would be for the Biden administration to remake the regulations as it sees fit through the normal rulemaking process without injecting a CRA resolution into the process.

The AEA urges all members to support free markets and affordable energy by voting NO on S.J. Res. 14. AEA will include this vote in its American Energy Scorecard.

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