EPA Proposes Regulations To Implement Methane Fee

In Short

The Situation: The U.S. Environmental Protection Agency ("EPA") has proposed regulations for calculating methane emissions fees required beginning this year under the Inflation Reduction Act ("IRA"). Section 136 of the Clean Air Act (added by the IRA) requires that a fee be paid starting with emissions in 2024 for every metric ton of methane released by most oil and natural gas facilities in excess of identified thresholds. EPA has proposed regulations detailing how excess methane emissions are calculated and interpreting the statutory exemptions from the fee.

The Result: The proposed rules would implement a waste emissions charge ("WEC") assessed against facilities operating in any of nine oil and gas industry segments, reporting at least 25,000 metric tons ("mt") of carbon dioxide equivalents of greenhouse gases ("CO2e"), and exceeding established segment-specific waste emissions thresholds (subject to certain exemptions).