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Federal EV tax credit: unnecessary, inefficient, unpopular, costly, and unfair

October 9, 2019 by 19 Comments

In April, Senator Debbie Stabenow (D-MI) introduced the Drive America Forward Act, a bill that would expand the tax credit for new plug-in electric vehicles (EVs) by allowing an additional 400,000 vehicles per manufacturer to be eligible for a credit of up to $7,000. Currently, the tax credit is worth up to$7,500 until a manufacturer sells more than 200,000 vehicles. In late September, groups that stand to benefit from the extension of the federal tax credits wrote to Senator McConnell and other leaders in Congress, encouraging them to support on the Drive America Forward Act. As IER has documented in the past, lawmakers should not extend the EV tax credit as the policy is unnecessary, inefficient, unpopular, costly, and unfair.

Unnecessary and inefficient

The EV tax credit is not necessary to support an electric vehicle market in the U.S. as one group estimates that 70 percent of EV owners would have purchased their vehicle without receiving a subsidy, which is reasonable seeing as 78 percent of credits go to households making more than $100,000 a year.  Furthermore, the federal tax credit overlaps with a number of other government privileges for EVs, including:

  • State rebates and/or other favors (reduced registration fees, carpool-lane access, etc.) in California, as well as in 44 other states and the District of Columbia.
  • Tax credits for infrastructure investment, a federal program that began in 2005 and, after six extensions, expired in 2017.
  • Federal R&D for “sustainable transportation,” mainly to reduce battery costs, averaging almost $700 million per year.
  • Credit for EV sales for automakers to meet their corporate fuel economy (CAFE) obligations.
  • Mandates in California and a dozen other states for automakers to sell Zero-Emission Vehicles—a quota in addition to subsidies.

Even if the federal tax credits were needed to support demand for EVs, the extension of the tax credit would be an absurdly inefficient means of achieving the stated goal of the policy, which is ostensibly to lower carbon emissions. The Manhattan Institute found that electric vehicles will reduce energy-related U.S. carbon dioxide emissions by less than 1 percent by 2050.

Unpopular

Lawmakers should be aware that the vast majority of people do not support subsidizing electric vehicle purchases. The American Energy Alliance recently released the results of surveys that examine the sentiments of likely voters about tax credits for electric vehicles. The surveys were administered to 800 likely voters statewide in each of three states (ME, MI and ND). The margin of error for the results in each state is 3.5 percent.

The findings include:

  • Voters don’t think they should pay for other people’s car purchases. In every state, overwhelming majorities (70 percent or more) said that while electric cars might be a good choice for some, those purchases should not be paid for by other consumers.
  • As always, few voters (less than 1/5 in all three states) trust the federal government to make decisions about what kinds of cars should be subsidized or mandated.
  • Voters’ sentiments about paying for others’ electric vehicles are especially sharp when they learn that those who purchase electric vehicles are, for the most part, wealthy and/or from California.
  • There is almost no willingness to pay for electric vehicle car purchases. When asked how much they would be willing to pay each year to support the purchase of electric vehicles by other consumers, the most popular answer in each state (by 70 percent or more) was “nothing.”

The full details of the survey can be found here.

Costly and unfair

Most importantly, an extension of the federal EV tax credit is unfair as the policy concentrates and directs benefits to wealthy individuals that are predominantly located in one geographic area, namely California. A breakdown of each state’s share of the EV tax credit is displayed in the map below:

In 2018, over 46 percent of new electric vehicle sales were made in California alone. Given that California represents only about 12 percent of the U.S. car market, this disparity means that the other 49 states are subsidizing expensive cars for Californians.  However, in order to understand the full extent of the benefits that people in California are receiving, some further explanation is in order.

When governments enact tax credit programs that favor special businesses without reducing spending, the overall impact is parallel to a direct subsidy as the costs of covering the tax liability shift to the American taxpayer or are subsumed in the national debt (future taxpayers). California offers a number of additional incentives on top of the federal tax credit for electric vehicles that are also driving demand for EVs in the state. These incentives include an additional purchase rebate of up to $7,000 through the Clean Vehicle Rebate Project, privileged access to high-occupancy vehicle lanes, and significant public spending on the infrastructure needed to support EVs. Therefore, the additional incentives that California (and other states) offer to promote EVs have broader impacts as these policies incentivize more people to make use of the federal tax credit, passing their costs on to American taxpayers. In other words, you’re not avoiding the costs of California’s EV policies by not living in California.

This problem is made even worse when we consider the impact of zero-emission vehicle (ZEV) regulations, which require manufacturers to offer for sale specific numbers of zero-emission vehicles. As recently as 2017, auto producers have been producing EVs at a loss in order to meet these standards, and they have been passing the costs on to their other consumers. This was made apparent in 2015 by Bob Lutz, the former Executive Vice President of Chrysler and former Vice-Chairman of GM, said:

“I don’t know if anybody noticed, but full-size sport-utilities used to be — just a few years ago used to be $42,000, all in, fully equipped. You can’t touch a Chevy Tahoe for under about $65,000 now. Yukons are in the $70,000. The Escalade comfortably hits $100,000. Three or four years ago they were about $60,000. What this is, is companies trying to recover what they’re losing at the other end with what I call compliance vehicles, which are Chevy Volts, Bolts, plug-in Cadillacs and fuel cell vehicles.”

Fiat Chrysler paid $600 million for ZEV compliance credits in 2015 (plus an unknown amount of losses on their EV sales), and sold 2.2 million vehicles, indicating Fiat Chrysler internal combustion engine (ICE) buyers paid a hidden tax of approximately $272 per vehicle to subsidize wealthy EV byers. ICE buyers were 99.3 percent of U.S. vehicle purchases in 2015. So, even if half the credits purchased were for hybrids, each EV sold in 2015 was subsidized by more than $13,000 in ZEV credit sales, in addition to all of the other federal, state, and local subsidies.

As is typical with most policies that benefit a politically privileged group, the plan to extend the federal tax credit program comes with tremendous costs, which are likely being compounded by people abusing the policy.  One estimate found that the overall costs of the Drive America Forward Act would be roughly $15.7 billion over 10 years and would range from $23,000 to $33,900 for each additional EV purchase under the expanded tax credit. Seeing as the costs of monitoring and enforcing the eligibility requirements of the EV tax credit program are not zero, it should surprise no one that the program has been abused as it has recently come to light that thousands of auto buyers may have improperly claimed more than $70 million in tax credits for purchases of new plug-in EVs. Finally, additional concerns arise over the equity of the federal EV tax credit due to the fact that half of EV tax credits are claimed by corporations, not individuals. 

End this charade

When the tax credit was first adopted, politicians assured us that the purpose of the program was to help launch the EV market in the U.S. and that the tax credit would remain capped at the current limit of 200,000 vehicles. At that time, we warned that once this program was in place, politicians would continue to extend the cap in order to appease the demands of manufacturers and other political constituencies that were created by the program. A decade later, we find ourselves in that exact situation. At this point, it should be clear that Congress should not expand the federal EV tax credit as the program is nothing more than an extension of special privileges to wealthy individuals and corporations that are mostly located in California. If Congress can’t find the courage to put an end to such an unfair and inefficient policy, President Trump should not hesitate to veto any legislation that extends the federal EV tax credit, as doing so would be consistent with his approach to other energy issues such as CAFE reform.

Filed Under: Blog, Electric Vehicles Tagged With: , , , , , , , ,

AEA to Senate: Highway Bill is Highway Robbery

July 30, 2019 by Leave a Comment

WASHINGTON DC (July 30, 2019) – Today, Thomas Pyle, President of the American Energy Alliance, issued a letter to Senate Environment and Public Works Committee Chairman John Barrasso highlighting concerns about the recently introduced America’s Transportation Infrastructure Act. Included in the legislation is an unjustified, $1 billion handout to special interests in the form of charging stations for electric vehicles.  AEA maintains that provisions like this are nearly impossible to reverse in the future and create a regressive, unnecessary, and duplicative giveaway program to the wealthiest vehicle owners in the United States. 
 
Read the text of the letter below:
 

Chairman Barrasso,

The Senate Committee on Environment and Public Works is scheduled to consider the reauthorization of the highway bill and the Highway Trust Fund today.  At least some part of this consideration will include provisions that provide for $1 billion in federal grants for electric vehicle charging infrastructure.  This is among $10 billion in new spending included in a “climate change” subtitle.  All of this new spending is to be siphoned away from the Highway Trust Fund (HTF), meant to provide funding for the construction and maintenance of our nation’s roads and bridges.  The HTF already consistently runs out of money, a situation that will only be exacerbated by these new spending programs.

We oppose this new federal program for EV infrastructure for a number of reasons, including, but not limited to the following:

  • The grant program, once established in the HTF, will never be removed.  Our experience with other, non-highway spending in the trust fund (transit, bicycles, etc.) is that once it is given access to the trust fund, the access is never revoked.  Our nation’s highway infrastructure already rates poorly in significant part due to the diversion of highway funds to non-highway spending.
  • As we have noted elsewhere, federal support for electric vehicles provides economic advantages to upper income individuals at the expense of those in middle and lower income quintiles.  This grant program would exacerbate that problem.
  • This program will result in taxpayers in States with few electric vehicles or little desire for electric vehicles having their tax dollars redirected from the roads they actually use to subsidize electric vehicle owners in States like California and New York.
  • This program is duplicative.  There is already a loan program within DOE that allows companies and States to get taxpayer dollars to subsidize wealthy electric vehicle owners.

For these and other reasons, we oppose the provisions that would create a regressive, unnecessary, and duplicative giveaway program to wealthy, mostly coastal electric vehicle owners.  This giveaway not only redirects taxpayer money from the many States to the few, in looting the Highway Trust Fund it also leaves those many States, including Wyoming, with less money to maintain their own extensive road networks.


Sincerely,

Thomas J. Pyle

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Congress Repeals Biden’s Natural Gas Tax

March 6, 2025 by Leave a Comment

The House of Representatives and the Senate voted to overturn a Biden-era rule imposing progressively higher fees on oil and natural gas companies for excess methane emissions, advancing the bill to President Trump for his signature. The House vote was 220-206 and the Senate vote was 52-47. The measure was part of Biden’s climate law, the 2022 Inflation Reduction Act. However, because the Environmental Protection Agency (EPA) did not formally set rules until late last year, Congress could use the Congressional Review Act (CRA) to repeal it. The CRA allows Congress to pass a resolution to undo rules finalized towards the end of a president’s term. If those resolutions pass and the president signs them, the rule is terminated, and agencies cannot issue a similar rule again.

The methane fee was to start at $900 per metric ton of methane released above the government’s threshold amount in 2024 and to be paid this year, increasing to $1,200 per metric ton based on 2025 emissions, and $1,500 per metric ton based on 2026 emissions and for each year thereafter. The rule applies to oil and gas facilities reporting annual methane emissions greater than 25,000 metric tons of carbon dioxide equivalent. According to EPA projections, the fees could amount to $560 million in fines this year. Opponents believe the overall cost of complying with the regulation will likely be much higher.

According to the American Petroleum Institute, the fee is a “duplicative, punitive tax on American energy production that stifles innovation.” Fees incurred by the industry will be passed on to consumers, who will pay more for energy through this backdoor tax.

Besides the fee, the Biden administration’s EPA and Interior Department have other regulations affecting emissions of methane from oil and gas operations that will remain in place even if the methane fee is repealed. Biden’s Bureau of Land Management implemented a rule to cut gas leakage from oil and gas production on federal lands by tightening limits on gas flaring on federal land and requiring energy companies to detect methane leaks better. The rule imposes monthly limits on flaring and charges fees for flaring that exceeds those limits. Flaring sometimes occurs because of inadequate pipeline take-away capacity due to pipelines awaiting government permits.

Biden’s EPA implemented a methane reduction plan that includes emissions from existing oil and gas wells nationwide, rather than focusing only on new wells, as previous EPA regulations have done. It also regulates smaller wells, which emit less than 3 tons of methane per year, that are now required to find and plug methane leaks.

The methane fee is punitive as the oil and gas industry has already been making progress on reducing methane emissions. Between 2015 and 2022, the industry reduced methane emissions by 37% across onshore production regions, according to EPA data. One hundred companies representing nearly 70% of U.S. onshore oil and natural gas production participated in a partnership that achieved 6.6% in reduced flare intensity and a 10% reduction in total flare volumes in 2023. By implementing robust leak detection and repair programs, companies reduced their occurrence rate from a reported 0.16% in 2018 to 0.06% in 2023.

The industry would prefer to capture and sell its excess methane, but infrastructure limitations, such as insufficient pipeline capacity, often hinder them. This shortage is primarily due to the challenges of securing federal permits, which forces companies to flare the methane. If the necessary permits were granted and pipelines built, the issue could be resolved, potentially preventing any increase in consumer costs.

Other Measures to be Repealed by the CRA

There are roughly 40 resolutions targeting Biden-era rules that Congress hopes to rescind using the CRA. Rules finalized in August or later are subject to repeal using the CRA with a deadline to act by mid-May. These resolutions include a measure rolling back Energy Department efficiency standards for gas-fired tankless hot water heaters that recently passed the House of Representatives at a vote of 221 to 198 and a resolution rescinding an Interior Department rule requiring offshore oil and gas leaseholders to submit archaeological reports before production, which recently passed the Senate. The water heater ban would increase the cost of a water heater by about $400 to $800 and put thousands of Americans out of work since the heaters are made in the United States.

Other rules being targeted for repeal include regulations on electric vehicles. EPA Administrator Lee Zeldin has requested Congress use the CRA to reject Biden’s EPA’s approval of a California Clean Air Act rule that would encourage the use of more electric vehicles. Several other states follow California’s auto emission standards.

There are also plans to cut the Energy Conservation-Appliance Standards for certification and labeling, by which appliances must meet specific standards to receive a label informing consumers that they are energy-efficient. The standards slow the introduction of products to market, limit consumer options, and affect the supply chain. Companies can also advertise their products’ energy-saving benefits to consumers, if they choose to focus on that as part of their marketing.

Other climate-related rules being considered include the Oil and Gas and Sulfur Operations in the Outer Continental Shelf, which is a list of strict regulations on offshore oil drilling in high-pressure and temperature environments, which increase burdens on energy operations and raise costs for consumers. The Commodity Futures Trading Commission’s Guidance Regarding the Listing of Voluntary Carbon Credit Derivative Contracts that establishes standards to buy and sell carbon credits to offset emissions is also being considered as the rule prioritizes environmental, social, and governance (ESG) goals, which most American firms are abandoning as a passing fad inconsistent with their fiduciary responsibilities.

Conclusion

The House and Senate have passed a bill to eliminate the methane fee on oil and gas operations, which is contained in the Democrat-passed Inflation Reduction Act (IRA), using the Congressional Review Act. Although the IRA was passed in 2022, the Biden administration did not set the rule until the end of last year, allowing the CRA to be used. Congress is expected to use the CRA to rescind about 40 resolutions stemming from the Biden administration that were primarily part of his climate plan to transition the U.S. energy system to net-zero, raising consumer costs. The CRA is a valuable and expeditious way to reverse oftentimes expensive and injurious regulations foisted upon consumers at the very end of an administration leaving office, and Congress is putting it to good use.

*This article was adapted from content originally published by the Institute for Energy Research.

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Key Vote YES on H.J. Res. 42

March 5, 2025 by Leave a Comment

The American Energy Alliance supports H.J. Res. 42, providing for congressional disapproval of certain Department of Energy appliance standards.

Energy efficiency standards were created 50 years ago when politicians feared we were running out of domestic energy sources and dangerously reliant on the Middle East. That world is long past and the U.S. is the world’s leading natural gas, as well as leading oil, producer. Additionally, technology development has made appliances enormously efficient in energy use, so efficient that new energy efficiency rules, as restrictive and destructive as they are, would only theoretically save customers a few dollars a year. Such meager supposed savings, at the cost of convenience and consumer choice, in pursuit of obsolete goals expose the pointless destructiveness of energy efficiency mandates. Indeed, under the previous administration these rules were wielded not to save customers money, but rather to try to force customers to stop using the energy sources that the previous administration disliked. Congress should decisively reject this abuse of an antiquated statute at every opportunity.

A YES vote on H.J. Res. 42 is a vote in support of free markets and affordable energy. AEA will include this vote in its American Energy Scorecard.

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AEA to President Trump: Energy Should be Exempt from Tariffs

March 5, 2025 by Leave a Comment

WASHINGTON DC (3/5/25) – President Trump’s tariffs on Canada and Mexico went into effect yesterday, with a 25% tariff on most goods and a 10% tariff on Canadian energy imports, including crude oil and electricity. Canadian and Mexican officials have both signaled plans to respond with retaliatory tariffs of their own.

Tom Pyle, President of the American Energy Alliance, issued the following statement:

“We appreciate that the President recognizes that energy is its own unique category when it comes to his plans for tariffs, something he acknowledged when he set the rate lower at 10%. However, we cannot stress enough the importance of the energy interconnection between our three nations – especially Canadian oil and electricity – to the American economy. 

“Imposing tariffs on these essential energy sources would unnecessarily disrupt the complex and integrated supply chain that has developed over 50 years. It will reduce output from U.S. oil refineries, and raise electricity and fuel prices for the American people. I strongly urge President Trump to take the next step and exempt energy from his tariff agenda.

“American refineries are set up to process the heavy-grade Canadian crude imported into the U.S. Together, Canadian and Mexican oil imports account for nearly 30% of total U.S. crude oil consumption. Even under President Trump’s lower tariff rate, the annual increase in the cost of these imports would be an additional $10.4 billion. Given that crude oil costs are the biggest input cost in gasoline prices, this could lead to an overall increase of about 9 cents per gallon. On the electricity side, Ontario Premier Doug Ford has already sent letters to the governors of three U.S. states—Minnesota, Michigan, and New York—to inform them about reciprocal tariffs on electricity and the possibility of cutting off access to the much needed power.

“Exempting energy from the tariff agenda will ensure that our refineries can continue to operate to the maximum efficiency, providing relief at the pump for American families and businesses. At the same time, it will not impact our goal to break away from China and bring manufacturing back to America. It’s a win-win for the Trump administration and the American people.” 

AEA Experts Available For Interview On This Topic:

Additional Background Resources From AEA:

For media inquiries please contact: 

[email protected]

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Trump Working To Save New Yorkers From Their Own State Government

March 4, 2025 by Leave a Comment

Trump wants to revive a canceled pipeline that would carry natural gas from Pennsylvania’s shale gas fields to New York, indicating that it could cut energy prices in the Northeast by as much as 70%. The 124-mile Constitution Pipeline project was abandoned due to legal and regulatory challenges that made it economically unfeasible. The pipeline was proposed in 2013 at a projected cost under $700 million, but delays and legal challenges drove up the costs by nearly 40%. After the project received Federal Energy Regulatory Commission approval in 2014, New York regulators refused to issue water quality permits, citing concerns about danger to wetlands and stream crossings. New York State lawmakers have passed anti-gas laws and it has banned fracking in the state. The Constitution Pipeline project was scrapped in 2020.

Source: Inside Climate News

The pipeline had four project partners. The principal partner was The Williams Cos., based in Tulsa, Oklahoma. Other partners are Duke Energy, Houston-based Cabot Oil and Gas, and Calgary, Alberta-based Alta Gas. Williams had a 41% stake and, in 2019, took a loss of $354 million for the project. The Williams Cos. indicated that its existing pipeline network and planned expansions are better investments than new projects like Constitution that are impacted by an uncertain regulatory framework.

Trump’s Announcement

President Trump asserted that “most of the permits — almost all of the permits” for the project are already in place. During a press conference, he said, “We are going to get this done, and once we start construction, we’re looking at anywhere from nine to 12 months, if you can believe it.” Limited pipeline capacity has hindered the Northeast’s access to natural gas.

President Trump did not indicate how the pipeline would be authorized or whether Williams Cos. would resume construction. Trump also raised the possibility of using eminent domain to secure land for the project, though he prefers to avoid that route.

New York Anti-Gas Policies

New York was the first state in the country to ban natural gas and other fossil fuels in most new buildings. The law bans gas-powered stoves, furnaces, and propane heating and encourages the use of other appliances, such as heat pumps and induction stoves, in most new residential buildings across the state. An induction stove — the most efficient electric range — costs about $1,000 and also requires the use of induction-capable cookware, which may mean additional expenses for purchasers. The law requires all-electric heating and cooking in new buildings shorter than seven stories by 2026 and for taller buildings by 2029. Sixty to 70% of N.Y. homes cook with natural gas. It also prohibits other gas-powered appliances in new residential buildings, such as water heaters and clothes dryers.

New York banned hydraulic fracturing technology in 2014 for oil and gas development. Despite having a section of the Marcellus shale basin in the state, New York produces less than 1%of the natural gas it consumes and imports the rest from outside its borders. New York’s ban on hydraulic fracturing cuts off about 12 million acres of the Marcellus Shale — an underground rock formation with natural gas reserves that have helped fuel an energy-production boom in Pennsylvania, West Virginia, and Ohio. Local communities in New York hoped to revive stagnating economies by producing natural gas from the Marcellus, but the state will not permit it. The stagnating economies would benefit from the investment, jobs, and royalties that would come from providing energy to lower natural gas prices for New York and neighboring states, perhaps leading to a rebirth of manufacturing as it has in Pennsylvania. To make matters worse for gas producers, New York lawmakers strengthened the ban on fracking by recently passing a bill that would block natural gas drilling companies from using an extraction method that involves injecting liquid carbon dioxide into the ground.

Source: IER

New York recently approved a controversial law that creates a climate superfund by taxing oil, natural gas, and coal companies $75 billion to fund climate projects, which will be added to the energy bills of New Yorkers. New York’s bill taxes energy companies that were the biggest emitters of greenhouse gases between 2000 and 2024, with a combined total of $3 billion annually for 25 years to fund projects politicians want under the guise of climate change mitigation. The companies are expected to begin putting money into the climate fund starting in 2028, giving state officials time to establish how to identify and notify responsible companies. The state must create rules on identifying responsible parties, inform companies of the fines, and make a system to determine which infrastructure projects will be paid for by the fund. The law’s impact will be significant, with annual fees levied on domestic and international energy producers.

On February 6, 2025, 22 states sued New York state in federal court, claiming the climate superfund unfairly harms businesses and people within their states and that the New York law was usurping federal authority under the Clean Air Act. Now, natural gas and electricity prices are spiking in New York state and Governor Hochul is reversing herself on some previous positions, including allowing for more gas to be produced and transported. For example, Hochul approved permits to expand the capacity of the 414-mile Iroquois pipeline and pump more natural gas into New York City and southern Connecticut to maintain adequate supply during cold spells and to avoid freezeouts.

Conclusion

The state of New York has constrained the supply of natural gas to the state by banning fracking and rejecting a pipeline transporting gas from Pennsylvania, causing gas prices in New York to be higher than they would be without those restrictions. President Trump, citing an energy emergency, plans to complete the Constitution pipeline, which would carry gas from Pennsylvania shale fields that were abandoned in 2020 due to legal challenges and the denial of a water quality permit by New York State. The impediments raised the cost of the 124-mile proposed pipeline by around 40%. Trump expects natural gas prices to be reduced by up to 70% when the pipeline is completed, which he expects in 9 to 12 months once construction starts. New York State legislators have passed a number of bills that are anti-gas, including banning natural gas from being used in most new buildings.

*This article was adapted from content originally published by the Institute for Energy Research.

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The Unregulated Podcast #219: Beyond Parody 

February 28, 2025 by Leave a Comment

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna examine the disarrayed Democratic Party and cover the fallout from the latest week in Trump’s golden era.

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AEA Comments on House Vote to Repeal Ban on Gas-Fueled Water Heaters

February 27, 2025 by Leave a Comment

WASHINGTON DC (2/27/28) – Today, the U.S. House voted 221-198-2 to pass H.J.Res. 20. The resolution uses the Congressional Review Act (CRA) to express congressional disapproval of the Department of Energy’s ban on certain gas-fueled water heaters. The vote will be scored for AEA’s American Energy Scorecard.

Tom Pyle, President of the American Energy Alliance, released the following statement:

“The Department of Energy’s water heater rule is an outdated holdover from a bygone era. Energy efficiency standards were originally established 50 years ago, during a time when there were concerns about the U.S. depleting its domestic energy supplies and becoming too dependent on the Middle East. That scenario is no longer relevant—today, the U.S. is the world’s leading producer of both natural gas and oil. Meanwhile, technological advancements have made appliances incredibly efficient, to the point where these current regulations would only save consumers a few dollars annually—if at all. These minimal savings, which come at the cost of convenience and consumer choice, highlight the futility and harm of the rule. In reality, the rule isn’t about saving consumers money; it’s an attempt to push them away from energy sources that the previous administration disapproved of.

“Shameful regulations like these not only limit consumer freedom and choice, but they also almost always hit low-income and elderly Americans the hardest. I am pleased to see House members prioritized this repeal and are continuing to put the American people first. I look forward to seeing the Senate taking the same actions.” 

AEA Experts Available For Interview On This Topic:

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American Energy Alliance Comments on House Vote to Repeal Methane Tax

February 26, 2025 by Leave a Comment

WASHINGTON DC (2/26/25) – Today, the House passed H.J. Res. 35 with a vote of 220-206-1. The resolution uses the Congressional Review Act (CRA) to express congressional disapproval of the methane emissions tax on U.S. oil and gas producers. The vote will be scored for AEA’s American Energy Scorecard.

Tom Pyle, President of the American Energy Alliance, released the following statement:

“It cannot be overstated—reliable and affordable energy is absolutely essential to the success of the American economy. The EPA’s methane fee is an unnecessary tax on energy. Energy producers already have a clear economic incentive to reduce methane leakage, as natural gas is a valuable product. Adding an EPA tax on top of this existing motivation only increases compliance costs. Ultimately, consumers bear the burden of this tax through higher energy bills, as the costs are passed on. The true objective of this regulation appears to be raising the cost of reliable energy in an effort to promote other, more ideologically favored energy sources.

“The previous administration’s methane emissions tax was simply another attempt to harm an industry they oppose, all while advancing an ideology the American people have clearly rejected. The Biden administration finalized this methane tax in November, once the political risks of imposing such a costly policy on Americans were no longer a concern. I’m pleased to see that Republican leaders are listening to the American people and have made repealing this tax a top priority in the new Congress.”

AEA Experts Available For Interview On This Topic:

Additional Background Resources From AEA:

For media inquiries please contact: 

[email protected]

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Key Vote YES on S.J. Res.12 

February 26, 2025 by Leave a Comment

The American Energy Alliance supports S.J. Res. 12, providing for congressional disapproval of the EPA methane fee. 

The EPA methane fee is nothing more than an unnecessary tax on energy. Energy producers already have a strong economic incentive to minimize methane leakage throughout their processes because natural gas is marketable product. Piling an EPA tax on top of that existing business rationale is unnecessary. It raises compliance costs without providing any additional incentive to further reduce emissions. Ultimately, end consumers pay the cost of this tax on their heating bills as the tax is passed through. Thus the true goal of this regulation is increasing the cost of reliable energy sources in an attempt to advantage more ideologically preferred energy sources.

A YES vote on S.J. Res. 12 is a vote in support of free markets and affordable energy. AEA will include this vote in its American Energy Scorecard.

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Key Vote YES on H.J. Res. 35 and H.J. Res. 20

February 26, 2025 by Leave a Comment

The American Energy Alliance supports H.J. Res. 35, providing for congressional disapproval of the EPA methane fee and H.J. Res. 20, providing for congressional disapproval of the Department of Energy rules on gas fired tankless water heaters. Both these rulemakings were part of the previous administration’s efforts to increases energy costs and limit consumer choice in pursuit of its ideological goals.

The EPA methane fee is nothing more than an unnecessary tax on energy. Energy producers already have a strong economic incentive to minimize methane leakage throughout their processes because natural gas is marketable product. Piling an EPA tax on top of that existing business rationale is unnecessary. It raises compliance costs without providing any additional incentive to further reduce emissions. Ultimately, end consumers pay the cost of this tax on their heating bills as the tax is passed through. Thus the true goal of this regulation is increasing the cost of reliable energy sources in an attempt to advantage more ideologically preferred energy sources.

The Dept. of Energy water heater rule is an obsolete relic of another time. Energy efficiency standards were created 50 years ago when politicians feared we were running out of domestic energy sources and dangerously reliant on the Middle East. That world is long past and the U.S. is the world’s leading natural gas, as well as leading oil, producer. Additionally, technology development has made appliances enormously efficient in energy use, so efficient that these current rules, as restrictive and destructive as they are, would only theoretically save customers a few dollars a year. Such meager supposed savings, at the cost of convenience and consumer choice, in pursuit of obsolete goals expose the pointless destructiveness of this rule. Indeed, the rule isn’t about saving customers money, it is about trying to force customers to stop using the energy sources that the previous administration disliked. It was an inappropriate and unnecessary rule to pursue.

YES votes on H.J. Res. 35 and H.J. Res. 20 are a votes in support of free markets and affordable energy. AEA will include these votes in its American Energy Scorecard.

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The Unregulated Podcast #218: The Competition

February 24, 2025 by Leave a Comment

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the latest stories emerging from the Trump administration, the Hill, CPAC, and more.

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