A provision from the sweeping climate and healthcare law signed by President Joe Biden would reduce methane emissions often caused by the oil and gas industry.
States like Texas, which has been deemed notorious for having a large carbon footprint, will mainly be impacted by the provision.
According to the Railroad Commission of Texas, The Permian Basin of Texas accounts for nearly 40% of oil production in the U.S. and 15% of the natural gas extracted in the U.S. today.
That means the state is an outsized contributor of methane, a greenhouse gas that has more warming power than carbon dioxide.
“It's an additional incentive for companies to meet really a lot, in a lot of cases, the targets that they themselves have set internally for reducing methane emissions," Colin Leyden, a state director for the Environmental Defense Action Fund, said.
The Inflation Reduction Act creates a methane emissions reduction program, which will impose fees on methane leaks above a certain threshold starting in 2024. The law also includes $1.5 billion to incentivize the oil and gas industry to changes it practices and meet reductions.
Though some advocates tout the benefits of the sweeping climate change bill as a benefit for the planet, everyone isn't on board.
“It's a very difficult challenge for operators. That means we need more energy and we need that lower costs. And so that should be the focus. We really feel like the IRA was a missed opportunity," Jason Modglin, president of Texas Alliance of Energy Producers, told Spectrum News.
Some trade groups representing Texas oil and gas producers call the emission fees a tax on the industry. This all comes at a time when high energy prices and inflation are straining the budgets of many Americans.
"It will require them is to invest in leak detection technologies, and will require them to replace certain valves and certain tanks. All of those things are good and are happening right now, at a pace that companies can afford to quickly innovate. But the difficulty is in an imposed tax coming from the government," Modglin added.
The Texas Alliance of Energy Producers does praise the law for providing incentives for developing carbon capture technology, which captures carbon-dioxide emissions from industrial sources.
Michael Lewis, a clean air and water advocate for Environmental Texas, has concerns about carbon capture development and said he believes it is expensive and requires a lot of infrastructure to build out.
"Carbon capture, it's likely to extend the use of fossil fuels for longer than it is necessary," Lewis said. Lewis also said he wished the fees were imposed sooner among other provisions, but, in general, he said he recognized there was compromises under the law.
“I’m hoping that we will see significant reductions in methane. Methane is kind of that low hanging fruit that we have to quickly reduce overall greenhouse gas emissions by subsidizing some of these controls that are being pushed," Lewis continued. "It's important that we keep the climate change message at the front.
Lewis said Texas has seen and experienced "extreme or exceptional drought conditions," and "1000 year flood event in Dallas," adding: "These things are all directly attributable to climate change.
Although some environmental groups say they are disappointed the law isn’t tougher on the fossil fuel industry, many are pleased the law is likely to accelerate the transition to renewable energy. “Whether, you know, the political leadership of Texas likes it or not, the world is moving forward with decarbonizing our economy, and Texas has a choice," Leyden said.
He asked," Do we want to lead in that? Or do we want to, you know, be dragged along and find ourselves, not being able to take advantage of all the economic opportunities -- in the coming years?"
Some environmental advocates say these provisions could complement what’s to come from the Environmental Protection Agency, (EPA).
The EPA is set to release, by early next year, comprehensive methane regulations for the oil and gas industry.
Under the Inflation Reduction Act, oil and gas companies that comply with the new EPA rules will not be subject to the methane fees.