Inflation Reduction Act Methane Emissions Charge: Overview and Considerations for Policymakers
Congressional research reportApr 15, 2026
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Inflation Reduction Act Methane Emissions
Charge: Overview and Considerations for
Policymakers
April 15, 2026
Congressional Research Service
https://crsreports.congress.gov
R48906
SUMMARY
Inflation Reduction Act Methane Emissions
Charge: Overview and Considerations for
Policymakers
R48906
April 15, 2026
Jonathan L. Ramseur
Specialist in Environmental
Policy
On August 16, 2022, President Biden signed H.R. 5376 (P.L. 117-169), a budget reconciliation
measure commonly referred to as the “Inflation Reduction Act of 2022” (IRA). Among other
provisions, IRA amended the Clean Air Act (CAA) by adding Section 136. Section 136 directs
the U.S. Environmental Protection Agency (EPA) to impose and collect a “waste emissions
charge” (WEC) for methane emissions from specific types of facilities that are required to report their greenhouse gas (GHG)
emissions to the EPA’s Greenhouse Gas Emissions Reporting Program (GHGRP). This charge is the first time the federal
government has directly imposed a charge, fee, or tax on GHG emissions.
Since its inception, the methane charge has received considerable attention from some Members of Congress and a range of
stakeholders. Some policymakers have raised concerns about economic impacts resulting from the methane charge, including
impacts on natural gas prices. Some policymakers are concerned about the charge in the context of EPA regulations to
address methane emissions from the same categories of new and existing facilities. Others point out that methane mitigation
could be a key component of U.S. climate policy due to methane’s shorter-term climate impacts compared to other GHGs.
On November 18, 2024, EPA issued a final rulemaking to implement the WEC. EPA’s WEC rulemaking received attention
under the Congressional Review Act (CRA). In February 2025, both the House and the Senate passed a joint resolution
(H.J.Res. 35) disapproving of EPA’s WEC rule. President Trump signed the measure on March 14, 2025, enacting the
resolution (P.L. 119-2). The CRA disapproval does not alter the statutory requirements of CAA Section 136 that direct EPA
to implement the WEC. Accordingly, EPA may have to determine how to comply with Section 136 without adopting a rule
that is substantially the same as the disapproved rule in violation of the CRA.
In the 119th Congress, P.L. 119-21, a budget reconciliation measure sometimes known as the “One Big Beautiful Bill Act,”
which was signed by the President on July 4, 2025, altered the start date for the WEC. When first established by IRA, Section
136 directed EPA to start imposing the WEC on methane emissions released in 2024. P.L. 119-21 changed the WEC
effective date from 2024 to 2034.
CAA Section 136 includes several provisions that narrow the scope of facilities and methane emissions that would be subject
to the WEC. In 2024, EPA estimated that after these provisions were considered, the WEC would apply to approximately 20
million metric tons of carbon dioxide equivalent (MMTCO2e) of methane emissions. These emissions represented 0.3% of
total U.S. GHG emissions in 2022.
In addition, the WEC is statutorily linked to an EPA CAA Section 111 rulemaking that applies to methane emissions from
many of the same facilities that are subject to the WEC. The CAA Section 136 WEC provisions include a conditional
exemption from the WEC based on the development of this CAA Section 111 rulemaking. EPA finalized this CAA Section
111 rulemaking in March 2024. EPA published a final rule in December 2025 that extends the compliance deadlines
provided in the 2024 final rule. Until this CAA Section 111 rule is in effect in all states, the conditional exemption from the
WEC would not be available. The extension of the WEC effective date in P.L. 119-21 provides additional time for this CAA
Section 111 rulemaking to go into effect before the WEC is scheduled to take effect in 2034.
A range of factors could play a role in determining the scope of emissions subject to the WEC and its ultimate effects,
including (1) the EPA CAA Section 111 Regulation; (2) other federal climate and energy policies; and (3) international
policies affecting U.S. natural gas facility operations. The recent statutory and regulatory developments raise a number of
questions and considerations for policymakers regarding the WEC and its implementation. For example, one consideration
concerns the consequences of the 2025 CRA joint resolution, which disapproved EPA’s 2024 WEC rule. It is uncertain what
effects the enacted joint resolution will have on the implementation of the WEC, which is required by statute. Another
consideration for policymakers pertains to the CAA Section 111 rulemaking that governs methane emissions from many of
the same oil and gas facilities that are subject to the WEC. The scope and implementation of the WEC are directly linked
with the CAA Section 111 rulemaking.
Congressional Research Service
Inflation Reduction Act Methane Emissions Charge: Overview and Considerations
Contents
Introduction and Recent Developments .......................................................................................... 1
U.S. Methane Emissions and Sources ............................................................................................. 4
Inflation Reduction Act (IRA) Methane Emissions Charge ............................................................ 6
Scope and Applicability ............................................................................................................ 6
Rate of Charge......................................................................................................................... 12
Conditional Exemption ........................................................................................................... 13
Potential Effects of the Methane Charge ....................................................................................... 14
Estimated Effects from EPA’s 2024 Regulatory Analysis ............................................................. 16
Considerations for Policymakers ................................................................................................... 17
Figures
Figure 1. Estimated U.S. Total Greenhouse Gas Emissions by Greenhouse Gas and a
Breakdown of Methane Emissions, by Source ............................................................................. 5
Figure 2. Petroleum and Gas Entities Subject to EPA’s GHG Emissions Reporting
Program (GHGRP) ....................................................................................................................... 7
Tables
Table 1. EPA’s Analysis of Number of Subpart W Reporting Facilities and Facilities with
Emissions Subject to WEC After Applying Thresholds and Netting ........................................... 8
Table 2. EPA’s Estimates of Subpart W Methane Emissions and Methane Emissions
Subject to WEC after Applying Thresholds and Netting ............................................................11
Table 3. EPA GHG Emissions Inventory Estimates of Methane Emissions from
Petroleum and Natural Gas and Systems (2022) ........................................................................ 12
Contacts
Author Information........................................................................................................................ 18
Congressional Research Service
Inflation Reduction Act Methane Emissions Charge: Overview and Considerations
Introduction and Recent Developments
Methane is the second-most-prevalent greenhouse gas (GHG) emitted in the United States
(behind carbon dioxide, or CO2). The primary anthropogenic sources of U.S. methane emissions
include livestock operations (enteric fermentation and manure management), natural gas and
petroleum operations, and landfills.1
Some policymakers and stakeholders contend that reducing near-term global warming is an
important climate change goal. Due to methane’s chemical characteristics, some argue that
methane mitigation (e.g., through a fee on emissions)2 is one of the best opportunities to achieve
this objective.3 Some groups have raised concerns about the economic impacts, including impacts
on natural gas prices, resulting from a fee on methane emissions.4
On August 16, 2022, President Biden signed H.R. 5376 (P.L. 117-169), a budget reconciliation
measure commonly referred to as the “Inflation Reduction Act of 2022” (IRA). Among other
provisions, IRA includes a charge—sometimes described as a fee—on methane emissions from
selected entities in the oil and gas sector.5 IRA added Section 136 to the Clean Air Act (CAA),
directing the U.S. Environmental Protection Agency (EPA) to impose and collect this “waste
emissions charge” (WEC).6 This charge is the first time the federal government has directly
imposed a charge, fee, or tax on GHG emissions.7
Since the WEC’s inception in 2022, Congress and the Biden and Trump Administrations have
taken a number of actions that affect the implementation of the WEC. In some cases, these
developments have generated uncertainty regarding the WEC’s implementation, particularly its
scope and effective date.
1 U.S. Environmental Protection Agency (EPA), Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2022,
2024, Figure ES-4, https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks (hereinafter
EPA Inventory).
2 Policymakers may consider a range of policy options that could be used to limit or remove human-related greenhouse
gas (GHG) emissions—including methane. For more information, see CRS In Focus IF11791, Mitigating Greenhouse
Gas Emissions: Selected Policy Options, by Jonathan L. Ramseur et al.
3 See, for example, Sen. Whitehouse, Senate debate, “Providing for Congressional Disapproval under Chapter 8 of Title
5, United States Code, of the Rule Submitted by the Environmental Protection Agency Relating to the Waste Emissions
Charge for Petroleum and Natural Gas Systems: Procedures for Facilitating Compliance, Including Netting and
Exemptions,” Congressional Record, daily edition, vol. 171 (February 27, 2025), p. S1413; see also Intergovernmental
Panel on Climate Change (IPCC), Climate Change 2021—The Physical Science Basis, 2021.
4 See, for example, American Gas Association et al., Letter to Congressional Leaders, September 2021,
https://www.aga.org/globalassets/letter-to-congress-on-methane-fees-090721_final.pdf; Eweline Czapla, “Methane
Fees for Petroleum and Natural Gas Systems,” American Action Forum, November 2021,
https://www.americanactionforum.org/insight/methane-fees-for-petroleum-and-natural-gas-systems/; Americans for
Tax Reform, “Dem Reconciliation Bill Contains $8 Billion Home Heating Tax,” November 2021, https://www.atr.org/
dem-reconciliation-bill-contains-8-billion-home-heating-tax.
5 For further information, see CRS Report R47262, Inflation Reduction Act of 2022 (IRA): Provisions Related to
Climate Change, coordinated by Jonathan L. Ramseur.
6 The phrase “waste emissions charge” is used in the statute and is also the term EPA uses in its rulemakings
implementing the charge.
7 For almost 20 years, some Members have put forth various legislative proposals that would attach a price to GHG
emissions through carbon taxes, emission fees, or cap-and-trade programs. For more information, see CRS Report
R45472, Market-Based Greenhouse Gas Emission Reduction Legislation: 108th Through 118th Congresses, by
Jonathan L. Ramseur.
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Inflation Reduction Act Methane Emissions Charge: Overview and Considerations
During the Biden Administration, EPA proposed a rulemaking to implement the WEC on January
26, 2024.8 EPA issued a final rulemaking on November 18, 2024.9 Based on the underlying
statutory text, EPA made a number of determinations in the WEC rulemaking that shape the scope
and applicability of the WEC. These determinations would affect which facilities would be
subject to the WEC.
At the start of the 119th Congress, EPA’s 2024 WEC final rulemaking received attention under the
Congressional Review Act (CRA). This act created a legislative process that allows Congress to
overturn—under specific conditions—certain federal agency actions.10 In February 2025, both the
House and the Senate passed a joint resolution (H.J.Res. 35) disapproving of EPA’s WEC rule.11
President Trump signed the measure on March 14, 2025, enacting the resolution (P.L. 119-2).
Therefore, EPA’s 2024 final rule did not take effect. Moreover, a rule subject to an enacted joint
resolution of disapproval under the CRA “may not be reissued in substantially the same form, and
a new rule that is substantially the same … may not be issued, unless the reissued or new rule is
specifically authorized by a law enacted after the date of the joint resolution.”12
The CRA disapproval does not alter the statutory requirements of CAA Section 136 that direct
EPA to implement the WEC. Accordingly, EPA may have to determine how to comply with
Section 136 without adopting a rule that is substantially the same as the disapproved rule in
violation of the CRA.13 Therefore, it is uncertain what effect the enacted joint resolution will have
on the implementation of the WEC.
In addition, in the 119th Congress, P.L. 119-21, a budget reconciliation measure sometimes known
as the “One Big Beautiful Bill Act,” extended the effective date of the methane emissions charge
from 2024 to 2034.
The WEC is statutorily linked to a separate EPA CAA Section 111 rulemaking that governs
methane emissions from many (but not all) of the same oil and gas facilities that are subject to the
WEC. The CAA Section 136 WEC provisions include a conditional exemption from the WEC
based on the development of EPA CAA Section 111 rulemaking. The CAA Section 111 regulation
was first finalized during the Obama Administration14 and subsequently altered during the first
Trump Administration, the Biden Administration, and the second Trump Administration.15 During
8 EPA, “Waste Emissions Charge for Petroleum and Natural Gas Systems,” proposed rule, 89 Federal Register 5318,
January 26, 2024.
9 EPA, “Waste Emissions Charge for Petroleum and Natural Gas Systems: Procedures for Facilitating Compliance,
Including Netting and Exemptions,” final rule, 89 Federal Register 91094, November 18, 2024 (hereinafter EPA, WEC
Final Rule).
10 For more details, see CRS In Focus IF10023, The Congressional Review Act (CRA): A Brief Overview, by Maeve P.
Carey and Christopher M. Davis.
11 For the House debate on this resolution, see House of Representatives, Congressional Record, “Providing for
Congressional Disapproval of the Rule Submitted by the Environmental Protection Agency Relating to the Waste
Emissions Charge for Petroleum and Natural Gas Systems: Procedures for Facilitating Compliance, Including Netting
and Exemptions,” daily edition, February 26, 2025, p. H845, https://www.congress.gov/119/crec/2025/02/26/171/38/
CREC-2025-02-26-pt1-PgH845-5.pdf.
12 5 U.S.C. §801.
13 For more information, see CRS Report R43992, The Congressional Review Act (CRA): Frequently Asked Questions,
by Maeve P. Carey and Christopher M. Davis.
14 EPA, “Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources,” 81 Federal
Register 35824, June 3, 2016.
15 For a list of historical rulemakings related to this issue, see EPA, “Actions and Notices about Oil and Natural Gas Air
Pollution Standards,” https://www.epa.gov/controlling-air-pollution-oil-and-natural-gas-operations.
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Inflation Reduction Act Methane Emissions Charge: Overview and Considerations
the Biden Administration, EPA finalized the CAA Section 111 rulemaking in March 2024.16 At
that time, EPA estimated that these Section 111 regulations would not be in effect until 2029 at
the earliest.17 In December 2025, EPA published a final Section 111 rule that extends the
compliance deadlines provided in the 2024 final rule.18 For example, the Section 111 final rule
extended the deadline (from March 9, 2026, to January 22, 2027) for states to submit plans to
EPA to address methane emissions from existing sources covered by the Section 111 rule. This is
the first of several procedural steps in the implementation of the Section 111 rule. This extension
would likely add another year to EPA’s prior effective date estimate (i.e., the 2029 estimate is
adjusted to 2030). Until this CAA Section 111 rule is in effect, the conditional exemption from
the WEC would not be available. The extension of the WEC effective date in P.L. 119-21
provides additional time for this parallel CAA Section 111 rulemaking to go into effect before the
WEC is scheduled to take effect in 2034.
In addition, the applicability of the WEC is statutorily linked with EPA’s GHG Reporting
Program (GHGRP).19 Since 2010, this regulatory program has required a number of facilities—
including oil and natural gas facilities—to annually report GHG emissions to the agency. The
WEC applies to specific types of oil and natural gas facilities that are required to report their
GHG emissions to the GHGRP. In September 2025, EPA proposed to eliminate GHG reporting
from all facilities, except for oil and natural gas sources.20 For the oil and natural gas sources,
EPA proposed to suspend GHGRP requirements until January 1, 2034. If EPA finalizes this
reporting suspension, the WEC would not be able to take effect until the suspension is lifted. This
regulatory extension is in addition to the statutory extension for WEC provided in P.L. 119-21.
This report provides context for U.S. methane emissions and discusses the scope and applicability
of the IRA methane charge. The first section of this report provides background about sources of
U.S. methane emissions. The second section discusses the scope and applicability of the methane
charge and its rate structure. The third section includes estimated effects of the methane charge.
The last section provides considerations for policymakers.
Some of the information and analysis provided below is based on EPA interpretations of the
statutory text in CAA Section 136. EPA provided these interpretations during its WEC
rulemaking process in 2024. As discussed above, a CRA joint resolution disapproved EPA’s final
WEC rule, creating uncertainty regarding EPA’s interpretations and implementation of the WEC
in 2034. In addition, the analysis EPA prepared for its 2024 rulemaking is based on information
that is subject to change (e.g., facility emissions data).
16 EPA, “Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for
Existing Sources: Oil and Natural Gas Sector Climate Review,” final rule, 89 Federal Register 16820, March 8, 2024.
17 In its analysis of the rule, EPA bases this effective date estimate on the timing involved in several procedural steps.
For instance, states have 24 months to submit their state plans implementing the rule. EPA must approve or deny state
plans within 12 months. At the conclusion of this process, the states generally phase-in a rule’s requirements over
several years. See EPA, Regulatory Impact Analysis of the Waste Emissions Charge, 2024.
18 EPA, “Oil and Natural Gas Sector Climate Review: Extension of Deadlines in Standards of Performance for New,
Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources,” final rule, 90 Federal Register
55671, December 3, 2025.
19 The Consolidated Appropriations Act, 2008 (P.L. 110-161) provided funding to EPA to promulgate a rule that would
“require mandatory reporting of greenhouse gas emissions above appropriate thresholds in all sectors of the economy
of the United States.” In the accompanying joint explanatory statement, Congress directed EPA to “use its existing
authority under the Clean Air Act” to promulgate this rule. In its initial 2009 GHGRP rulemaking, EPA also cited CAA
Sections 114 and 208 as providing “broad authority to require the information mandated” by the reporting rule. For
more information, see CRS In Focus IF11754, EPA’s Greenhouse Gas Reporting Program, by Angela C. Jones.
20 EPA, “Reconsideration of the Greenhouse Reporting Program,” 90 Federal Register 44591, September 16, 2025.
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Inflation Reduction Act Methane Emissions Charge: Overview and Considerations
U.S. Methane Emissions and Sources
Methane (or CH4) is the primary component of natural gas, which can be used as either a fuel or
as a feedstock for the chemical industry. Natural gas is generally produced from geologic
formations in the ground through drilling and extraction activities by the oil and gas sector. As
natural gas travels through the interconnected systems of exploration, production, processing,
storage, and transmission that deliver natural gas from the wellhead to the consumer, methane
emissions can be released into the atmosphere in a variety of ways, including
•
•
•
•
intentional venting from equipment (e.g., pneumatic devices);21
unintentional equipment leaks, worker error, or malfunctions;
routine maintenance of equipment; and
flaring (burning) of excess natural gas at a petroleum production site, which can
result in both uncombusted methane and CO2 emissions.
Methane is a potent GHG. When averaged over a 100-year time period—the time period often
used in annual GHG inventories—methane’s global warming potential (GWP) is 28 times greater
than that of an equivalent mass of CO2.22 Over a 20-year time period, methane’s GWP is 84 times
greater than that of CO2.23 Due to methane’s shorter-term climate impacts, some scientists
contend that “methane mitigation [is] one of the best opportunities for reducing near term [global]
warming.”24
Since the early 1990s, EPA has historically prepared an annual Inventory of U.S. Greenhouse Gas
Emissions and Sinks.25 The United States has historically submitted this inventory to the United
Nations in accordance with the Framework Convention on Climate Change.26 EPA published its
most recent inventory in 2024, covering U.S. GHG emissions from 1990 through 2022.27
Figure 1 includes methane emissions data from EPA’s most recent inventory. Methane emissions,
and other GHG emissions, are typically measured in carbon dioxide equivalents to allow for
comparisons between gases.28 As illustrated in the left panel of Figure 1, total U.S. GHG
21 Methane emissions from pneumatic devices have been one of the largest sources of vented methane emissions from
the industry. See EPA, “Pneumatic Controllers,” https://www.epa.gov/natural-gas-star-program/pneumatic-controllers.
22 Consistent with international GHG reporting protocols, EPA’s most recent GHG inventory (April 2024) uses the
global warming potential (GWP) values presented in the IPCC’s 2013 Fifth Assessment Report. Therefore, in EPA’s
inventories and in this report, a metric ton of methane equates to 28 metric tons of CO2 when averaged over a 100-year
time frame.
23 EPA Inventory, Annex 6, Table A-233, https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissionsand-sinks.
24 See, for example, EPA, “Standards of Performance for New, Reconstructed, and Modified Sources and Emissions
Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review,” 86 Federal Register 63110, November
15, 2021. To support this argument, EPA cites statements from the IPCC, Sixth Assessment Report, 2021,
https://www.ipcc.ch/report/ar6/wg1/#SPM.
25 See EPA website, “Inventory of U.S. Greenhouse Gas Emissions and Sinks,” https://www.epa.gov/ghgemissions/
inventory-us-greenhouse-gas-emissions-and-sinks.
26 For more information, see CRS Report R46204, The United Nations Framework Convention on Climate Change, the
Kyoto Protocol, and the Paris Agreement: A Summary, by Richard K. Lattanzio.
27 As of the date of this report, EPA has not released a complete inventory in 2025, nor submitted an inventory to the
United Nations. In previous years, EPA released a draft inventory report (often in February) and published a final
inventory report several months later. In 2025, the agency published two draft sections in the report. Thus, the most
recent inventory release was in 2024, covering emissions through 2022.
28 A carbon-dioxide-equivalent measure is often used to compare different GHG emissions. Methane’s global warming
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Inflation Reduction Act Methane Emissions Charge: Overview and Considerations
emissions in 2022 were 6,343 million metric tons of carbon dioxide equivalent (MMTCO2e). U.S.
methane emissions were 702 MMTCO2e in 2022, accounting for 11% of total U.S. GHG
emissions in 2022.29
The right panel of the figure identifies the range of sources that produced these methane
emissions. Methane emissions from enteric fermentation (e.g., in livestock)30 accounted for the
largest amount, followed by emissions from natural gas systems. Taken together, natural gas and
petroleum systems, which are the sectors subject to the WEC, account for the largest combined
source of U.S. methane emissions. In aggregate, they comprise approximately 30% of total U.S.
methane emissions and approximately 4% of total U.S. GHG emissions.
Figure 1. Estimated U.S.Total Greenhouse Gas Emissions by Greenhouse Gas and a
Breakdown of Methane Emissions, by Source
2022 Emissions Estimates from EPA Inventory
Source: Prepared by CRS; emissions data from EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–
2022, 2024, Table 2-1, https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks1990-2022.
Note: MMTCO2e = million metric tons of carbon dioxide equivalent.
The GHG emissions estimates in EPA’s annual inventories use commonly accepted emissions
factors and activity data to calculate aggregate estimates for all source categories.31 In recent
years, the emissions estimates for the natural gas and petroleum system categories have received
potential (GWP) is 28 times greater than that of an equivalent mass of CO2. GWP is an index that allows comparisons
of the heat-trapping ability of different gases over a period of time, typically 100 years. Consistent with international
GHG reporting protocols, EPA’s most recent GHG inventory (April 2024) uses the GWP values presented in the
Intergovernmental Panel on Climate Change (IPCC) 2013 Fifth Assessment Report. Therefore, in EPA’s inventories
and in this report, a metric ton of methane equates to 28 metric tons of CO2 when averaged over a 100-year time frame.
29 EPA Inventory, Table ES-2, https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks1990-2022.
30 Enteric fermentation refers to the normal digestive process in ruminant animals, such as cattle, during metabolism
and digestion, resulting in methane emissions. For more information, see CRS In Focus IF11404, Greenhouse Gas
Emissions and Sinks in U.S. Agriculture, by Megan Stubbs.
31 EPA explains that “activity data can include fuel consumption or deliveries, vehicle-miles traveled, raw material
processed, or commodity produced.” Emissions factors include assumptions (based on scientific observations) about
the amount of GHG emissions that would be produced through a certain activity (e.g., coal mining or livestock
operations). EPA Inventory, Chapter 1.
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Inflation Reduction Act Methane Emissions Charge: Overview and Considerations
scrutiny from a range of stakeholders. For example, some studies found EPA underestimates
methane leaking from U.S. oil and gas operations by as much as 50%.32
Inflation Reduction Act (IRA) Methane Emissions
Charge
Scope and Applicability
In 2008, Congress directed EPA to establish the GHGRP.33 Starting in 2010, EPA’s GHGRP
regulations have required large emissions sources and fuel suppliers (among others) to annually
report GHG emissions to the agency. EPA’s GHGRP complements its annual Emissions
Inventory. For example, EPA uses the facility-level GHGRP data to help prepare the agency’s
annual Emissions Inventory.34
GHGRP requirements are codified in 40 C.F.R. Part 98. Part 98, Subpart W includes the detailed
requirements for petroleum and natural gas facilities. The reporting requirements in Subpart W
apply to facilities that emit 25,000 metric tons of CO2 equivalent (MTCO2e) or more per year.35 In
2023, approximately 2,300 petroleum and natural gas facilities reported their GHG emissions to
the GHGRP.36
Not all of the entities that report emissions under Subpart W are subject to the WEC. The
facilities subject to the WEC include the following industry operations:37
•
•
•
•
•
•
•
•
offshore petroleum and natural gas production;
onshore petroleum and natural gas production;
onshore natural gas processing;
onshore natural gas transmission compression;
underground natural gas storage;
liquefied natural gas storage;
liquefied natural gas import and export equipment;
onshore petroleum and natural gas gathering and boosting;38 and
32 See, for example, Jeffrey S. Rutherford et al., “Closing the Methane Gap in US Oil and Natural Gas Production
Emissions Inventories,” Nature Communications, 2021; and Ramon Alvarez et al., “Assessment of Methane Emissions
from the U.S. Oil and Gas Supply Chain,” Science, June 2018.
33 See the Consolidated Appropriations Act, 2008 (P.L. 110-161) and its accompanying joint explanatory statement.
For more information about the Greenhouse Gas Reporting Program (GHGRP), see CRS In Focus IF11754, EPA’s
Greenhouse Gas Reporting Program, by Angela C. Jones. See also EPA’s GHGRP website, https://www.epa.gov/
ghgreporting.
34 In addition, EPA states that “the GHGRP dataset continues to be an important resource for the Inventory, providing
not only annual emissions information, but also other annual information, such as activity data and emission factors
that can improve and refine national emission estimates and trends over time” (EPA Inventory, p. 3-6).
35 As discussed in footnote 22, GHG emissions are measured in MTCO e because GHGs vary by global warming
2
potential.
36 EPA, “GHGRP Petroleum and Natural Gas Systems,” https://www.epa.gov/ghgreporting/ghgrp-petroleum-andnatural-gas-systems.
37 42 U.S.C. §7436(d).
38 According to EPA, “Gathering and boosting stations receive natural gas from production sites and transfer it, via
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•
onshore natural gas transmission pipelines.
Figure 2 illustrates the petroleum and natural gas system entities that are required to report their
GHG emissions in EPA’s GHGRP. The entities with red labels are subject to Subpart W reporting
requirements. Two facility categories that report emissions under Subpart W are not subject to the
WEC: (1) natural gas distribution facilities and (2) facilities EPA describes as “other oil and gas
combustion facilities.”39
Figure 2. Petroleum and Gas Entities
Subject to EPA’s GHG Emissions Reporting Program (GHGRP)
Source: Reproduced from EPA, “GHGRP and the Oil and Gas Industry,” https://www.epa.gov/ghgreporting/
ghgrp-and-oil-and-gas-industry.
Note: “RY” refers to reporting year for EPA’s GHGRP.
gathering pipelines, to transmission pipelines or processing facilities.... Boosting processes include compression,
dehydration, and transport of gas to a processing facility or pipeline” (EPA Inventory, p. 3-95).
39 EPA states these are “stationary fuel combustion emissions from facilities that are associated with the petroleum and
natural gas industry, but that do not report process emissions from any of the above source categories.” EPA, 20112020 Greenhouse Gas Reporting Program Sector Profile: Petroleum and Natural Gas Systems, 2020,
https://www.epa.gov/ghgreporting/ghgrp-petroleum-and-natural-gas-systems-sector-profile.
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Inflation Reduction Act Methane Emissions Charge: Overview and Considerations
CAA Section 136 includes several provisions that narrow the scope of facilities and methane
emissions that would be subject to the WEC. Pursuant to CAA Section 136, the scope of
emissions subject to the WEC is based on (1) the number of facilities reporting emissions under
Subpart W, as described above; (2) the number of Subpart W facilities with emissions subject to
the WEC threshold of 25,000 MTCO2e; (3) the number of facilities with emissions subject to the
WEC after applying facility-specific fuel sales thresholds; and (4) the number of facilities subject
to the WEC after “netting” emissions across facilities under common ownership.
Table 1 identifies EPA’s estimated effects (prepared in 2024) of these provisions on the number of
facilities that would be potentially subject to the WEC. EPA estimated these effects in a
Regulatory Impact Analysis that accompanied the agency’s 2024 final rule.40 Although EPA’s
final rule is no longer in effect, some of the information and analysis in the rule and its
Regulatory Impact Analysis may provide instructive context for policymakers.
Column A identifies the number of petroleum and natural gas facilities by category that reported
their GHG emissions to EPA in 2022 pursuant to the regulations in Subpart W. (As discussed
above, natural gas distribution facilities, which report emissions under Subpart W, are not subject
to the WEC.)41 Column A indicates 2,112 total facilities reported methane emissions under
Subpart W. Onshore petroleum and natural gas production facilities accounted for 459 of the total
facilities.
Table 1. EPA’s Analysis of Number of Subpart W Reporting Facilities and Facilities
with Emissions Subject to WEC After Applying Thresholds and Netting
Data from EPA 2024 Regulatory Impact Analysis—Derived from GHGRP Year 2022
A
Facility Type
Number of
Facilities
Reporting
Subpart W
Emissions
B
C
D
Number of
Facilities with
Emissions
Subject to the
WEC
Number of
Facilities with
WEC
Emissions
After
Applying
Thresholds
Number of
Facilities
with
Emissions
Subject to
WEC After
“Netting”
Onshore petroleum and natural gas production
459
393
226
202
Onshore petroleum and natural gas gathering and boosting
350
310
201
125
Onshore natural gas transmission compression
659
22
~5
~0
Onshore natural gas transmission pipeline
44
20
4
4
Natural gas processing
444
180
~53
~16
Offshore petroleum and natural gas production
116
23
17
16
Underground natural gas storage
51
1
1
1
Liquefied natural gas import and export equipment
11
7
0
0
Liquefied natural gas storage
5
0
0
0
2,112
954
~507
~364
Total Number of Facilitiesa
40 EPA, Regulatory Impact Analysis of the Waste Emissions Charge, 2024 (hereinafter EPA RIA).
41 According to EPA reporting data, 157 natural gas distribution facilities emitted approximately 11 MMTCO e of
2
methane in 2022. If these facilities were subject to the charge, this group would rank third in methane emissions. See
EPA Greenhouse Gas Reporting Program, Facility Level Information on Greenhouse Gases Tool (FLIGHT),
https://ghgdata.epa.gov.
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Source: Prepared by CRS; based on Table 4-1 in EPA, Regulatory Impact Analysis of the Waste Emissions Charge,
2024. Column A includes facilities that are subject to the WEC. EPA’s analysis used 2022 facility reporting data
from its GHGRP.
Notes: Several of the numbers above include “~.” In its analysis, EPA explained that for facilities in the natural
gas processing and onshore natural gas transmission compression categories, EPA used estimates of natural gas
and petroleum throughput (in lieu of using confidential business information) to estimate the number of facilities
subject to the WEC after applying the thresholds and netting.
a. In its analysis, EPA stated that “a subpart W reporting facility may include operations from multiple colocated industry segments. The counts [i.e., number of facilities] presented reflect each industry segment
reported, while the total count includes only unique facilities, and as a result may not match the sum of
industry segment reporting.”
WEC 25,000 MTCO2e Emissions Threshold
Column B indicates the number of facilities with methane emissions that would be subject to
WEC after accounting for the 25,000 MTCO2e emissions threshold. In its 2024 WEC final rule
analysis, EPA pointed out that many of facilities that report under Subpart W (listed in Column A)
would not be subject to the WEC charge. The reason for this reduction is due to the differing
emissions reporting thresholds in the GHGRP. For instance, a number of facilities release GHG
emissions that are subject to multiple GHGRP subparts (e.g., stationary combustion, petroleum
refineries), including Subpart W.42 Although the total GHG emissions from these facilities trigger
reporting for multiple subparts, including Subpart W, the Subpart W emissions from these
facilities are below the 25,000 MTCO2e threshold for the WEC. In its analysis, EPA determined
(based on 2022 data) that about half of the facilities reporting Subpart W emissions would be
subject to the WEC.43 These 954 facilities are listed in Column B, and all report Subpart W
emissions that exceed the 25,000 MTCO2e threshold. The others report Subpart W emissions, but
their emissions do not exceed the 25,000 MTCO2e threshold.
Specific Emissions and Sales Thresholds
Column C in Table 1 indicates the number of facilities that would be subject to the WEC after
applying additional thresholds—based on both emissions and fuel sales—specific to facility
types.
•
•
•
For petroleum and natural gas production facilities, the charge applies only to the
number of reported tons of methane that exceed 0.2% of the natural gas sent to
sale from such a facility.
For nonproduction facilities, such as gathering and boosting facilities,44 the
charge applies to methane emissions that exceed 0.05% of the natural gas sent for
sale from the facility.
For natural gas transmission facilities, the charge applies to methane emissions
that exceed 0.11% of the natural gas sent for sale from the facility.
42 EPA’s GHGRP regulations include a number of subparts that apply to a range of emissions sources (e.g., electricity
generation, cement production, and manure management). In some cases, a facility may need to report under multiple
subparts.
43 Table 4-1 of EPA RIA.
44 According to EPA, “gathering and boosting facilities” refers to “pipelines and other equipment that collect
petroleum/natural gas from onshore production gas or oil wells and then compress, dehydrate, sweeten, or transport the
petroleum/natural gas” (EPA, 2011-2023 Greenhouse Gas Reporting Program Industrial Profile: Petroleum and
Natural Gas Systems, 2023, https://www.epa.gov/ghgreporting/ghgrp-petroleum-and-natural-gas-systems-sectorprofile).
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These thresholds effectively allow for some amount of methane to be released from these
facilities without being subject to the charge, thus decreasing the quantity of emissions reported
under the GHGRP that are subject to the charge. This outcome would likely occur more
frequently at facilities with comparatively high natural gas sales. Column C indicates, for
example, that after applying the emissions thresholds for onshore petroleum and natural gas
production facilities, the number of these facilities subject to the WEC would decrease from 393
facilities to 226 facilities.
Emissions Netting
The emissions thresholds described above also play a role in emissions netting, which further
narrows the WEC scope. CAA Section 136 allows facilities “under common ownership or
control” to “net” their emissions across different applicable facilities, potentially reducing the
total emissions that would be subject to the WEC.45 If a facility’s methane emissions are below
the emissions threshold applicable to that facility category (e.g., onshore production), the facility
can generate what EPA describes as “negative emissions.” A facility can then apply these negative
emissions to other facilities under a common ownership to reduce its potential WEC obligation at
these other facilities. For example, consider a scenario in which an entity owns both an onshore
natural gas production facility and a natural gas processing facility. In this scenario, assume that
(1) the methane emissions at the onshore production facility exceed the emissions threshold by
100 metric tons, and are thus subject to the WEC; and (2) the methane emissions at the processing
facility are below the threshold by 200 metric tons (i.e., negative emissions) and thus are not
subject to the WEC. The entity that owns both of these facilities can combine (“net”) the positive
100 metric tons with the negative 200 metric tons, resulting in a net of 100 negative metric tons
for both of the entity’s facilities. Therefore, none of this entity’s methane emissions would be
subject to the WEC.
Column D in Table 1 indicates EPA’s estimates of the effects of netting for different facility
categories. As the table indicates, each of the above provisions would narrow the scope of
facilities with emissions subject to the WEC. After applying each of the above provisions, EPA
estimated that the total number of facilities with emissions potentially subject to the WEC would
be decreased from 2,112 facilities to 364 facilities (based on data from 2022).
Table 2 includes EPA’s estimates of the annual methane emissions that would be subject to the
WEC after considering each of the steps discussed above. For comparison purposes, the methane
emissions are measured in MMTCO2e. Column A includes the annual estimated methane
emissions that facilities are expected to report under Subpart W. As in Table 1, these facilities
include only facilities potentially subject to the WEC.46 Column A indicates the annual methane
emissions from these facilities would total approximately 59 MMTCO2e.
45 42 U.S.C. §7436(f). In EPA’s final WEC rule, the agency decided to allow netting at the parent company level, rather
than at the level of owners and operators of individual facilities, as proposed.
46 As discussed above, two facility categories that report emissions under Subpart W are not subject to the WEC: (1)
natural gas distribution facilities and (2) facilities EPA describes as “other oil and gas combustion facilities.”
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Table 2. EPA’s Estimates of Subpart W Methane Emissions and Methane Emissions
Subject to WEC after Applying Thresholds and Netting
Estimated Annual Emissions in Million Metric Tons of Carbon-Dioxide-Equivalent (MMTCO2e)
A
B
C
D
Methane
Emissions
Reported Under
Subpart W
WEC
Emissions
from Facilities
Subject to
Subpart W
WEC
Emissions
After
Applying
Thresholds
WEC
Emissions
After
“Netting”
Onshore petroleum and natural gas production
30.8
23.8
17.1
14.8
Onshore petroleum and natural gas gathering and boosting
15.1
11.8
7.8
3.9
Onshore natural gas transmission compression
4.5
0.5
0.2
0.1
Onshore natural gas transmission pipeline
2.4
0.8
0.4
0.4
Natural gas processing
2.7
1.2
0.8
0.3
Offshore petroleum and natural gas production
1.5
0.8
0.6
0.6
Underground natural gas storage
0.3
0.003
—
—
Liquefied natural gas import and export equipment
0.1
—
—
—
Liquefied natural gas storage
—
—
—
—
Total Emissions
58.8
39.2
26.9
19.9
Facility Type
Source: Prepared by CRS; based on Table 4-3 in EPA, Regulatory Impact Analysis of the Waste Emissions Charge,
2024. EPA noted that these estimates do not account for mitigation and market responses. Column A includes
facilities subject to the WEC. EPA’s estimates are for the reporting year 2024.
Notes: CRS converted metric tons of methane emissions into metric tons of carbon dioxide-equivalent
emissions. This term of measure is used because GHGs vary by global warming potential (GWP). GWP is an
index developed by the Intergovernmental Panel on Climate Change (IPCC) that allows comparisons of the heattrapping ability of different gases over a period of time, typically 100 years. Consistent with international GHG
reporting requirements, EPA’s most recent GHG inventory (published in 2024) uses the GWP values presented
in the IPCC’s 2013 Fifth Assessment Report. For example, based on these GWP values, a ton of methane is 28
times more potent than a ton of CO2 when averaged over a 100-year time frame. EPA’s inventory is available at
EPA, "Inventory of U.S. Greenhouse Gas Emissions and Sinks," https://www.epa.gov/ghgemissions/inventory-usgreenhouse-gas-emissions-and-sinks.
Column B reduces this amount by including only the annual methane emissions that would be
subject to the WEC’s 25,000 MTCO2e emissions threshold. As discussed above, a number of
facilities report methane emissions under Subpart W that are below the 25,000 MTCO2e threshold
for the WEC, and thus are not subject to the WEC. Column B identifies the Subpart W methane
emissions that are above this threshold for each facility type. Column B indicates that the annual
methane emissions from these facilities would total approximately 39 MMTCO2e.
Column C includes EPA’s annual methane emissions estimates after applying the facility-specific
emissions and fuel sales thresholds (discussed above). As indicated in Column C, EPA estimated
that the WEC thresholds would decrease the annual methane emissions subject to the WEC to
approximately 27 MMTCO2e.
Column D includes EPA’s methane emissions estimates after emissions netting (discussed above).
As the column indicates, EPA estimated the netting process would result in approximately 20
MMTCO2e of annual methane emissions subject to the WEC.
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EPA’s annual emissions estimate can be compared to several points of reference for context. For
example, EPA’s 2024 estimate of the methane emissions potentially subject to the WEC (20
MMTCO2e in Table 2) can be compared to EPA’s 2022 GHG Inventory estimates of the total
methane emissions from the same facility types.47 Table 3 indicates that the 2022 Inventory
methane emissions for the subset of facilities types that match the applicability of the IRA
methane charge were 188 MMTCO2e.48 As the Inventory estimates are intended to capture all of
the methane emissions in petroleum and natural gas systems, the inventory estimates are higher
than the methane emissions reported under Subpart W.49 For example, the inventory estimates
include facilities that emit less than 25,000 MT of CO2e per year.
Table 3. EPA GHG Emissions Inventory Estimates of Methane Emissions from
Petroleum and Natural Gas and Systems (2022)
Million Metric Tons CO2e (MMTCO2e)
Facility Type
Total onshore petroleum and natural gas production
Methane Emissions
84.7
Onshore natural gas production
46.2
Onshore petroleum production
33.5
Total offshore petroleum and natural gas production
5.8
Offshore natural gas production
0.6
Offshore petroleum production
5.1
Natural gas gathering and boosting
42.8
Natural gas processing
15.1
Natural gas transmission and storage
39.6
Total of above facility types
188.0
Source: Prepared by CRS; data from EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2022, 2024,
Table 3-44 and Table 3-73, https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks.
As an additional point of comparison, EPA’s estimate of 20 MMTCO2e of methane emissions
ultimately subject to the WEC accounted for about 0.3% of the total U.S. GHG emissions in 2022
(6,343 MMTCO2e as depicted in Figure 1).
Rate of Charge
Pursuant to IRA, the WEC was scheduled to start in calendar year 2024 at $900 per metric ton of
methane, increase to $1,200 in 2025, and increase to $1,500 in 2026. The charge remains at
$1,500 in subsequent years.50 As discussed above, P.L. 119-2 changed the starting year from 2024
to 2034. Therefore, the first WEC rate of charge is scheduled to be $1,500 in 2034, which equates
to $54 per MTCO2e. The cost per MTCO2e is the measure commonly used in carbon tax and
47 This comparison includes estimates prepared in different years. The 2022 EPA Inventory estimates are from the most
recent release of EPA’s annual inventory in 2024.
48 For example, the emissions in Table 3 do not include emissions from natural gas distribution.
49 Some have argued that EPA’s inventory estimates of methane emissions from these systems have underestimated the
magnitude of emissions. See, for example, Ramon Alvarez et al., “Assessment of Methane Emissions from the U.S. Oil
and Gas Supply Chain,” Science, June 2018.
50 The rate of the charge does not include an inflation adjustment.
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emissions charge proposals.51 This methane charge rate is comparable to the carbon tax and
emissions charge rates in recent legislative proposals.52
Conditional Exemption53
The WEC is statutorily linked to a separate, but related, EPA CAA Section 111 rulemaking that
governs methane emissions from many (but not all) of the same oil and gas facilities that are
subject to the WEC. The CAA Section 111 regulation was first finalized during the Obama
Administration54 and subsequently altered during the first Trump Administration, the Biden
Administration, and the second Trump Administration.55
Section 136 allows for an exemption from the emissions charge if future, final EPA CAA Section
111 regulations addressing methane emissions (1) are “in effect in all states,”56 and (2) will “result
in equivalent or greater emissions reductions as would be achieved” by an EPA rule proposed in
November 2021.57 Section 136 directs EPA to determine whether future methane regulations will
meet these conditions.
On March 8, 2024, EPA finalized the CAA Section 111 rulemaking for methane emissions from
the oil and natural gas sector.58 The Section 111 final rule establishes new source performance
standards59 and emissions guidelines for the oil and gas source category for methane emissions.60
In the WEC final rule, EPA determined that facilities in compliance with the CAA Section 111
regulations would likely have emissions below the thresholds described above, and thus not
subject to the WEC.
Another implementation determination for EPA was how to interpret the Section 136 phrase “in
effect in all states.” In its WEC proposed rule, EPA concluded that the conditional exemption
would become available when “each and every state” that contained WEC-applicable facilities
had EPA-approved state plans implementing the final rule for methane emissions. In its 2024
WEC final rule, EPA altered this determination, deciding that states could be eligible for the WEC
conditional exemption on an individual basis. Thus, if a state had an EPA-approved state plan in
51 See footnote 28.
52 For more information, see CRS Report R45472, Market-Based Greenhouse Gas Emission Reduction Legislation:
108th Through 118th Congresses, by Jonathan L. Ramseur.
53 CAA Section 136 includes two other exemptions from the WEC. One exemption involves emissions caused by
delays in environmental permitting for specific activities. EPA’s analysis did not include an estimate of facilities that
could be eligible for this exemption. The other exemption involves oil and natural gas wells that are permanently shut
or plugged.
54 EPA, “Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources,” 81 Federal
Register 35824, June 3, 2016.
55 For a list of historical rulemakings related to this issue, see EPA, “Actions and Notices about Oil and Natural Gas Air
Pollution Standards,” https://www.epa.gov/controlling-air-pollution-oil-and-natural-gas-operations.
56 CAA Section 302 (42 U.S.C. §7602) defines “state” as “the District of Columbia, the Commonwealth of Puerto Rico,
the Virgin Islands, Guam, and American Samoa and includes the Commonwealth of the Northern Mariana Islands.”
57 EPA, “Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for
Existing Sources: Oil and Natural Gas Sector Climate Review,” proposed rule, 86 Federal Register 63110, November
15, 2021.
58 EPA, “Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for
Existing Sources: Oil and Natural Gas Sector Climate Review,” final rule, 89 Federal Register 16820, March 8, 2024.
59 Examples of performance standards from this rule include phasing out routine flaring of natural gas from new oil
wells and requiring routine monitoring of methane leaks from specific equipment.
60 For more background, see CRS In Focus IF12217, The Legal Framework for Federal Methane Regulation, by
Benjamin M. Barczewski.
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effect addressing methane emissions from the oil and natural gas sector, the WEC-applicable
facilities in that state could be eligible for the WEC exemption.
In its 2024 WEC final rule, EPA provided estimates regarding the timing of the conditional
exemption. EPA noted that states have 24 months to submit state plans implementing the March
2024 methane emissions rule. EPA must approve or deny these plans within 12 months of receipt.
EPA stated that state plan requirements are often phased in over three years; thus, EPA estimated
that the conditional WEC exemption would not be available until 2029 at the earliest.
In March 2025, the Trump Administration announced that it would be reconsidering the CAA
Section 111 rulemaking—finalized under the Biden Administration in March 2024.61 In
December 2025, EPA published a final rule that extends the compliance deadlines provided in the
CAA Section 111 final rule.62 In particular, EPA’s 2025 rule extends the deadline for states to
submit their implementation plans from March 7, 2026, to January 22, 2027. This extension
would likely alter EPA’s prior estimate (discussed above) of the conditional WEC exemption
becoming available in 2029 (at the earliest), potentially adding about a year to the estimate.
Further changes to the compliance deadlines for the Section 111 rule could alter the effect and the
timing of the conditional WEC exemption.
Several of the facility categories covered by the WEC would not be subject to the 2024 methane
emissions regulations. Facility categories include offshore oil and gas production, LNG storage,
LNG import and export, and transmission pipelines. Thus, methane emissions from these
particular facility categories would not be eligible for this conditional exemption if it becomes
available. Based on EPA’s estimates in Table 1, 20 of the 364 facilities potentially subject to the
WEC would not be eligible for the conditional exemption. Table 1 indicates that 16 of these 20
facilities are offshore oil and gas production facilities. Based on EPA’s analysis (included in Table
2), the methane emissions from offshore facilities—after applying the emissions thresholds and
netting exemptions—would account for 0.6 MMTCO2e.
Potential Effects of the Methane Charge
A range of factors could play a role in determining the scope of emissions subject to the WEC and
the WEC’s ultimate effects on GHG emissions levels and economic measures, such as natural gas
prices. A comprehensive analysis of these factors and their potential effects is beyond the scope of
this report. Selected factors include the following:
•
EPA CAA Section 111 Regulation of Petroleum and Natural Gas Systems.
The CAA Section 111 regulations could potentially provide a conditional
exemption from the WEC for many facilities, if the Section 111 regulations are in
effect (as discussed above) before the WEC takes effect. These EPA CAA Section
111 regulations have been subject to change with different administrations. The
degree to which these regulations would affect the methane emissions charge—
scheduled to go into effect in 2034—depends on the scope, applicability, and
timing of the final Section 111 regulations in place in 2034. As noted above, the
conditional exemption is not available to all facility types.
61 EPA, “Trump EPA Announces OOOO b/c Reconsideration of Biden-Harris Rules Strangling American Energy
Producers,” press release, March 12, 2025, https://www.epa.gov/newsreleases/trump-epa-announces-oooo-bcreconsideration-biden-harris-rules-strangling-american.
62 EPA, “Oil and Natural Gas Sector Climate Review: Extension of Deadlines in Standards of Performance for New,
Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources,” final rule, 90 Federal Register
55671, December 3, 2025.
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•
•
•
•
Changes to Equipment or Operations. A fee on methane emissions from
petroleum and natural gas systems provides an economic incentive for facilities
to modify their equipment and operations in order to avoid paying the charge.
Economic theory suggests facilities would likely find ways to reduce onsite
methane emissions until the costs associated with these changes reach the level of
the charge. At that point, facilities would pay the charge for the remaining
emissions. The degree to which facilities make such changes would likely be
based on site-specific economic conditions.
Funding for Technological Improvements. IRA included supplemental funds of
$850 million to EPA to provide grants to facilities subject to the methane charge
for a range of objectives, including “improving and deploying industrial
equipment and processes” that reduce methane emissions. The act also included
supplemental funds of $700 million for “marginal conventional wells” for the
same purposes. Based on a December 2024 EPA press release, the Department of
Energy and EPA had awarded, in aggregate, $1.36 billion of the Section 136
funds to various eligible entities. These funds may lead to methane reductions at
oil and natural gas facilities, thus affecting the impact of the WEC. P.L. 119-21
repealed the Section 136 funding provisions and rescinded any unobligated
funds.
Other Federal Climate and Energy Policies. Other federal climate and energy
policies could affect the WEC’s impact. For example, some policies could shape
the portfolio of fuels and sources of energy used in various economic sectors—
namely, electricity, transportation, and industry. These changes may result in a
decrease or increase in the use of natural gas, which would affect the methane
emissions subject to the WEC. For example, IRA included a number of climateand energy-related policies that could affect the U.S. energy portfolio.63 P.L. 11921 repealed a number of the climate-related provisions and funding programs
established by IRA.64
International Climate and Energy Developments. U.S. natural gas production
levels may be influenced by climate and energy policies in other countries. For
example, in 2024, the European Union (EU) finalized methane emissions
regulations that apply to both domestic natural gas production, as well as natural
gas imports.65 In particular, starting in 2030, natural gas imports into the EU must
meet certain methane intensity requirements.66 Implementation details are under
development and uncertain, but this EU program could have some impact on
63 For more information, see CRS Report R47262, Inflation Reduction Act of 2022 (IRA): Provisions Related to
Climate Change, coordinated by Jonathan L. Ramseur; and CRS Report R47385, U.S. Greenhouse Gas Emissions
Trends and Projections from the Inflation Reduction Act, by Jonathan L. Ramseur. See also Rhodium Group, “A
Congressional Climate Breakthrough,” July 28, 2022, https://rhg.com/research/inflation-reduction-act/; and Princeton
University Rapid Energy Policy Evaluation and Analysis Toolkit (“REPEAT Project”), Preliminary Report: The
Climate and Energy Impacts of the Inflation Reduction Act of 2022, https://repeatproject.org/.
64 See, for example, CRS Insight IN12624, IRA Tax Credit Repeal in the FY2025 Reconciliation Law: Part 1, by
Nicholas E. Buffie; and CRS Insight IN12625, IRA Tax Credit Repeal in the FY2025 Reconciliation Law: Part 2, by
Nicholas E. Buffie.
65 Regulation (EU) 2024/1787 of the European Parliament and of the Council of 13 June 2024 on the reduction of
methane emissions in the energy sector and amending Regulation (EU) 2019/942, OJ L, 2024/1787, 15.7.2024,
https://eur-lex.europa.eu/eli/reg/2024/1787/oj/eng.
66 Although the EU requirements are not yet determined, emissions intensity typically refers to an industry’s (or
facility's) total GHG emissions divided by a measure of its total production, which may be measured by weight,
volume, or value.
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natural gas facility operations in the United States, potentially affecting the
methane emissions subject to the WEC.
Estimated Effects from EPA’s 2024 Regulatory
Analysis
EPA’s 2024 regulatory analysis of its final rule included estimates of effects that may be of
interest to policymakers. In its 2024 analysis, EPA assumed that the WEC would be in effect from
2024 to 2028, after which most facilities would be subject to the methane emissions regulations
and thus exempt from the WEC.67 As noted above, this underlying assumption is no longer valid,
because P.L. 119-21 extended the WEC starting date from 2024 to 2034. This shift in the effective
date also changes the WEC starting price from $900 per metric ton to $1,500 per metric ton.
Although some of EPA’s underlying assumptions for its estimates are no longer valid, the selected
estimates below provide some context for the scope and magnitude of the potential effects from
the WEC.
•
•
•
EPA estimated the WEC would result in a cumulative emissions reduction of 34
MMTCO2e of methane emissions between 2024 and 2035. Most of the
reductions occur between 2024 and 2027, during which the annual average
reductions equate to about 6 MMTCO2e.68 Nearly all (99.7%) of these reductions
are due to mitigation activities (e.g., equipment replacement) taken to reduce
WEC payments, rather than decreased production activity resulting from the final
rule.69 EPA estimated that these mitigation activities would be less expensive than
paying the WEC.
EPA estimated revenue from the WEC payments would average about $525
million per year between 2024 and 2027 (in nominal dollars). After this time
period, EPA assumed that most facilities would be in compliance with the CAA
Section 111 methane emissions regulations, and would thus be exempt from the
WEC.70 This estimate was based on WEC prices of $900 per metric ton of
methane in 2024, $1,200 in 2025, and $1,500 in 2026 and 2027. If the WEC goes
into effect as scheduled in 2034, its starting price would be $1,500 per metric ton
of methane.
EPA estimated that the WEC would increase the price of natural gas by 0.01% in
2024 and 2025, and by 0.04% in 2026 and 2027. As with the above revenue
estimates, these natural gas price estimates were based on WEC prices of $900
per metric ton of methane in 2024, $1,200 in 2025, and $1,500 in 2026 and 2027.
If WEC goes into effect as scheduled in 2034, the starting price of $1,500 per
metric ton of methane could alter these estimates.
67 As discussed above, several of the facility categories covered by the WEC would not be subject to the 2024 CAA
Section 111 methane emissions regulations, and thus would not be eligible for the conditional exemption from the
WEC. These facility categories include offshore oil and gas production, LNG storage, LNG import and export, and
transmission pipelines.
68
CRS calculations (using a GWP of 28 for methane) based on EPA’s estimates in Table 5-8 of EPA RIA.
69 Table 5-8 of EPA RIA and preamble discussion in the final rule (EPA, WEC Final Rule, p. 91155).
70 Table 5-10 of EPA RIA.
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Considerations for Policymakers
Recent statutory and regulatory developments raise a number of questions and considerations for
policymakers regarding the WEC and its implementation. Some of these developments have
generated uncertainty regarding the WEC’s implementation.
A key consideration concerns the consequences of the 2025 CRA joint resolution (P.L. 119-2),
which disapproved EPA’s 2024 WEC rule. As a result of this disapproval, EPA may not issue a
new rule that is “substantially the same form” as the original rule, and a new rule “may not be
issued, unless the reissued or new rule is specifically authorized by a law enacted after the date of
the joint resolution.”71 Although the CRA disapproval stopped EPA’s 2024 WEC rule from taking
effect, the provision in CAA Section 136, which directs EPA to “impose and collect a charge on
methane emissions,” remains. Therefore, EPA may have to determine how to comply with this
directive without promulgating a new rule that is substantially the same as the 2024 final rule. A
few federal agencies have reissued rules following disapproval under the CRA, including two
agencies that were under a statutory mandate to regulate on a certain issue.72 In the latter two
cases, the agencies looked to the legislative history of the disapproval resolution that overturned
the rule to understand Congress’s specific objections. The agencies then focused on changing
those aspects of each rule when reissuing them.73 It is uncertain whether EPA would be able to
take a similar course of action, considering the specific statutory text in Section 136, which
prescribes the applicability and rate of the methane charge. Some Members may consider
authorizing EPA to issue a new rule to address this implementation uncertainty.
Another consideration for policymakers pertains to the CAA Section 111 rulemaking that governs
methane emissions from many—but not all—of the same oil and gas facilities that are subject to
the WEC. As discussed above, the scope and implementation of the WEC are directly linked with
the Section 111 rulemaking. In particular, the WEC provisions in CAA Section 136 provide a
conditional exemption from the WEC if the Section 111 rule is “in effect in all states.” In its 2024
WEC rule, EPA interpreted this phrase to mean that if a state had an EPA-approved state plan in
effect addressing methane emissions, the WEC-applicable facilities in that state would be exempt
from the WEC. As this 2024 WEC rule was disapproved by CRA, future applications of this key
phrase are uncertain. For example, in EPA’s first interpretation of this phrase, the agency
concluded that the exemption only would be available if “each and every state” had EPAapproved plans in accordance with the Section 111 rulemaking. To address this uncertainty in
future agency interpretations, Members could consider clarifying the original intent behind the
“in effect in all states” phrase in CAA Section 136.
Another consideration concerns the timing of the CAA Section 111 rulemaking and its
implementation, both of which are uncertain. Thus, the timing of WEC’s conditional exemption is
uncertain. Although P.L. 119-21 extended the effective date of the WEC from 2024 to 2034,
providing more time for EPA and the states to implement the Section 111 regulations, the process
steps involved in the Section 111 rulemaking could take a number of years. Based on EPA
estimates and the recent compliance extension provided by EPA, the Section 111 regulations may
not be in effect until 2030 at the earliest. This estimated schedule could be further extended if
71 5 U.S.C. §801.
72 Department of Labor, “Federal-State Unemployment Compensation Program,” final rule, 84 Federal Register 53037,
October 4, 2019; and Securities and Exchange Commission, “Disclosure of Payments by Resource Extraction Issuers,”
final rule, 86 Federal Register 4662, January 15, 2021.
73 For further information, see CRS Report R43992, The Congressional Review Act (CRA): Frequently Asked
Questions, by Maeve P. Carey and Christopher M. Davis.
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Inflation Reduction Act Methane Emissions Charge: Overview and Considerations
EPA provides additional compliance extensions. To address this timing uncertainty, Members
could consider including schedule deadlines for the Section 111 rulemaking in statutory text. In
addition, stakeholders may pursue legal challenges to EPA’s Section 111 rulemaking, which could
further alter the estimated schedule for CAA Section 111 compliance.
Policymakers may also want to consider the role of the WEC in a scenario in which the CAA
Section 111 rulemaking is in effect, and the conditions of the WEC exemption are met. In this
scenario, nearly all of the facilities subject to the WEC would be eligible for the conditional
exemption from the WEC (see Table 1), but the WEC would continue to apply to an estimated 20
facilities, most of which are offshore oil and gas production facilities. EPA estimated the methane
emissions from these offshore facilities would be 0.6 MMTCO2e (Table 2), which accounts for
less than 0.01% of total U.S. GHG emissions.74 Members may want to consider the costs and
benefits of applying the WEC to this subset of facilities and how these costs and benefits compare
to the effects of the CAA Section 111 regulations, which (under this scenario) now apply to the
larger group of oil and natural gas facilities.
In addition, some policymakers may want to consider the analysis EPA prepared in its 2024 WEC
rule. In particular, some Members may want to examine the agency’s application and
interpretation of statutory text and the agency’s estimates of facilities and their methane emissions
that would be potentially subject to a future WEC rulemaking (documented in Table 1 and Table
2). Based on such an examination, some Members may want to direct EPA to prepare a new
analysis with different interpretations of the underlying statutory text. As discussed above, EPA
estimated that the methane emissions subject to the WEC would account for about 0.3% of the
total U.S. GHG emissions. Some Members may want to assess the estimated scope of the WEC
and potentially consider modifying the statutory text to adjust the scope of the WEC.
Author Information
Jonathan L. Ramseur
Specialist in Environmental Policy
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
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under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
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74 Based on U.S. GHG emissions in 2022 of 6,343 MMTCO e (see Figure 1).
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