Partner Poe Leggette provided insight on the enforceability of a new fee for certain oil and gas companies in the Law360 article “Energy Legislation and Regulation to Watch in 2024,” published Jan. 1, 2024. The article noted that this could be a hugely consequential year for energy regulation and delved into several areas on which attorneys in the industry are keeping a close eye. Among them: the implementation of an Inflation Reduction Act-mandated fee that some oil and gas companies must pay if their methane emissions exceed a certain threshold.
Leggette offered that the EPA may have trouble enforcing the fee, as the Inflation Reduction Act amended the Clean Air Act to charge a fee based on the weight of the excess methane emissions, but exemptions are tied to the volumes of gas sold – which isn’t an apples-to-apples comparison.
“There may be no enforceable way to allow companies to bridge the gap,” said Leggette. “Doesn't mean the charge won't be owed, but it does mean that companies will have to come up with company-specific ways to make that gap, in good faith, on their own.”