IPAA Statement on the Methane Tax Final Rule

WASHINGTON – Today the Independent Petroleum Association of America (IPAA) – advocating for thousands of oil and natural gas producers that develop 90 percent of wells nationwide – issued the following statement on the EPA Waste Emissions Charge final rule.

IPAA President & CEO Jeff Eshelman: “IPAA opposed the Waste Emissions Charge (Methane Tax or WEC) when it was being developed within the Inflation Reduction Act. The tax seriously complicates industry efforts to plan and comply with EPA and state regulations that address emissions from oil and natural gas production. The tax was passed without appropriate understanding of its impact or safeguards. It exemplifies the worst in legislation – no hearings, no committee reports, no conference report, no statements during floor debate. Now, EPA is using its regulatory authority to interpret the statute to consistently increase the taxable entities, to increase emissions calculations and to increase waste emissions thresholds while limiting the availability of the Exemption. IPAA maintains that EPA should reverse course, withdraw this proposal and the Subpart W proposal, and limit the adverse effects of the Methane Tax.”

IPAA filed comments in March on the EPA’s Waste Emissions Charge proposal: https://www.ipaa.org/ipaa-comments-on-inflation-reduction-act-waste-emissions-charge-proposal/

Ahead of the rule’s release, IPAA voiced concerns repeatedly to EPA and the Office of Information and Regulatory Affairs (OIRA). The association supported multiple legislative efforts to repeal the WEC, including efforts from Senator Ted Cruz and Congressman August Pfluger.

IPAA’s initial review of the final indicates that the deadline for submitting payment is moved from March to September 2, 2025, and August 31 thereafter.  This is an issue that IPAA raised because of the history of changes to Subpart W filings.  Moreover, because there is significant speculation that the new Congress will pass a budget reconciliation bill that will repeal the methane tax — another high priority for IPAA — the date change will mean that the WEC will not be paid by producers before Congress has a chance to act. However, this is a comprehensive regulation and IPAA will be assessing all of its provisions over the next few weeks.