Methane Emissions: New Developments In The Inflation Reduction Act

The recently enacted Inflation Reduction Act (IRA) contains several new provisions related to methane emissions impacting oil and gas companies, including upstream and midstream. Companies who already report emissions to the U.S. Environmental Protection Agency's (EPA) Greenhouse Gas Emissions Reporting Program under Subpart W of the Clean Air Act are likely to face stiff new charges starting in 2025, unless they reduce their emissions below the 25,000 metric tons of carbon dioxide equivalent threshold. Here's a summary of the main provisions that oil and gas companies should be focused on in the months ahead.

New Methane Charge

The IRA puts a price on methane for oil and gas companies who report their emissions under Subpart W of the Clean Air Act. This includes both offshore and onshore producers, natural gas processing, transmission and compression, underground gas storage, LNG facilities, gas gathering, and boosting stations. The charge starts at $900 per