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Overview of the Inflation Reduction Act’s Methane Tax


Key Takeaways
  • Section 60113 of the Inflation Reduction Act adds Section 136 to the Clean Air Act, imposing a first-ever direct “charge” on methane emissions.
  • The charge is based on an unworkable comparison between the weight of methane emitted and the volume of the natural gas stream sent to sale.
  • In light of West Virginia v. Env’t Prot. Agency, 142 S. Ct. 2587 (2022), EPA likely lacks the authority to cure the statute’s unworkability through substantive rulemaking.

Part I of this three-part methane update discussed the state of substantive methane regulation in the United States and touched on the Inflation Reduction Act’s (“IRA” or “the Act”) addition of Section 136 to the Clean Air Act. This Part II covers Section 136’s first-ever federal “charge on methane emissions[.]” Part III will cover currently proposed changes to the substantive regulation of methane emissions.

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