Partner Poe Leggette and Associate Bailey Bridges have written an article titled “The Inflation Reduction Act’s Methane Tax Is Probably Unenforceable.” It appears in the June 2023 edition of Energy Law Advisor.
Leggette and Bridges write that there are both practical and legal challenges to enforcement of Section 60113 of the Inflation Reduction Act, which directs the Environmental Protection Agency (EPA) “to impose a first-ever direct ‘charge’ on methane emissions from oil and gas operations.”
As written, the tax formula is not workable, the authors write, in part because it relies on a weight measurement of gas ‘sent to sale’, while gas ‘sent to sale’ is measured by volume. To make the formula workable in the real world, they add, could require the EPA to operate outside its authority, particularly in light of the 2022 Supreme Court decision in West Virginia v. EPA.