Methane Emissions Charge (Inflation Reduction Act)

Policy Engagement Overview

The aggregated evidence of corporate and industry lobbying on the Methane Emissions Charge shows negative engagement from oil and gas companies and industry associations.

Long-term Lobbying Trends

• Several key oil and gas sector industry associations are opposing or lobbying to weaken the Methane Emissions Charge, such as the American Petroleum Institute (API), American Gas Association (AGA), and American Fuel & Petrochemical Manufacturers (AFPM).

• Industry associations sent joint letters to US policymakers voicing opposition the methane fee, citing concerns of competitiveness, costs, and affordability. A September 2021 joint letter to the US Senate Committee on Environment and Public Works, led by the API, and signed by 130 organizations including the AFPM stated the fee would result in “adverse environmental and economic impacts.”

• Oppositional positions have frequently argued for direct methane regulation as the best approach to tackle methane emissions from the oil and gas industry. Both the API and AGA in 2021 labelled a potential methane fee as duplicative of EPA regulations. However, InfluenceMap has identified significant opposition to the EPA’s 2022 Methane Regulations from the both cross-sector and oil and gas sector industry associations.

• The key narrative used by industry to advocate against the Methane Emissions Charge has been claiming that methane regulation would impact energy supply and security. For example, in August 2022, the API argued that the fee would increase production costs and impact energy supply in a time of US energy demand increase. InfluenceMap’s Narrative Tracker analyzes the use of narratives on methane regulation here.

• There has been limited support of the methane fee in corporate engagement with the policy, Shell supported the final version of the fee in the Inflation Reduction Act. However, it is unclear if the company supported the fee in its earlier iterations.

Impacts on Policy Ambition

Despite the Methane Emissions Charge eventually passing via the 2022 Inflation Reduction Act’s Methane Emissions Reduction Program, significant lobbying from the oil and gas industry saw the fee watered down. In its final version, the fee is only applicable to facilities that emit 25,000 metric tons of CO2e or more annually, creating the possibility that it may overlook a high proportion of oil and gas facilities producing fewer emissions. Alongside exemptions for facilities that comply with the EPA’s 2022 Methane Regulation, industry pressure has ensured exemptions for gas infrastructure that provide energy to homes and businesses, and facilities that sell volumes of gas below a certain threshold, while also more broadly providing incentives to the oil and gas industry of up to $1.5bn to clean up methane under the Inflation Reduction Act.