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Methane Crackdown Could Threaten U.S. Driller Profits, Citi Says

  • How leaks are measured would determine magnitude of impact
  • Congress proposing $1,680-per-ton fee on methane leaked
Photographer: Robert Nickelsberg/Hulton Archive/Getty Images

Natural gas drillers’ earnings would take a hit from a potential U.S. crackdown on methane leaks, according to Citigroup Inc. -- but the magnitude of the impact depends on how emissions are measured.

Lawmakers have proposed adding a $1,680-per-ton fee on methane to the budget bill making its way through Congress. If the levies are based on figures reported by the companies themselves, the hit to gas producers will be less than 1% of 2023 earnings, Citigroup said. But if the gauge is based on the much higher levels of emissions detected by satellite from shale basins, the financial impact could jump to 8.5% of earnings, according to the bank.