Inflation Reduction Act 2022: Sec. 60113 and Sec. 50263 on Methane Emissions Reductions

On 7 August 2022, the U.S. Senate approved the Inflation Reduction Act (IRA) of 2022. Amongst the objectives set out for the energy sector, the Act aims to lower energy costs and increase investments in climate to reduce carbon emissions by 40% by 2030. A total of 369 billion USD was appropriated for disbursement, dedicated to improving energy security and achieving climate change goals. 
With regards to methane mitigation, the IRA included a Methane Emissions Reduction Program (Sec. 60113) that introduced a charge on methane emitted by oil and gas companies who report emissions under the Clean Air Act. The charge applied to facilities that emit over 25,000 metric tons of carbon dioxide equivalent per year and exceed applicable waste emissions thresholds. The charge did not apply to wells permanently plugged in the previous year or to emissions caused by an unreasonable delay in environmental permitting of transmission pipelines. The Program further provided USD 1 550 million for the Environmental Protection Agency to fund and provide technical assistance for methane abatement in the oil and gas sector (including USD 700 million earmarked for activities at marginal conventional wells). 
The IRA also introduced royalties for produced methane on federal lands and waters (Sec. 50263). Under Sec. 50263, royalties were assessed on all gas produced, including gas that is consumed or lost by venting, flaring or negligent releases during upstream operations. Exceptions included gas vented or flared for not longer than 48 hours in emergencies; gas used within the area of the lease; and gas that is unavoidably lost.
As of July 2025, the waste emissions charge on methane was postponed until 2034 under the One Big Beautiful Bill Act. The Act further rescinds any unobligated funding (i.e. any funding that the EPA has neither expended nor entered into a legally binding commitment to expend) of the 1 550 million USD that was previously provided to support technical assistance for methane abatement in the oil and gas sector. Further, the Act repeals Sec. 50263 of the IRA, which required royalties to be assessed on all extracted methane.

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