WASHINGTON, Feb 2 (Reuters) - Projects to capture methane from farm livestock manure for energy production should not be eligible for farm conservation dollars included in U.S. President Joe Biden's signature climate law because they are harmful to the environment, members of Congress told the administration in a letter sent on Thursday.

The Inflation Reduction Act (IRA), passed last year, includes $18 billion for Department of Agriculture-designated climate-smart farming practices. Agriculture accounts for about 10% of U.S. greenhouse gas emissions, largely from livestock and fertilizer application.

The process of capturing methane from animal manure involves infrastructure to separate, store and process the waste.

Proponents argue livestock biogas projects can combat climate change by reducing methane emissions, while also providing a revenue stream for farmers. But environmental groups have argued that biogas projects can encourage farmers to increase their herds, resulting in more farm runoff and air pollution, and that such projects are viable only for the largest farms.

USDA's conservation sub-agency should remove certain biogas infrastructure, like waste storage facilities, from its list of practices eligible for federal support, said the letter to Agriculture Secretary Tom Vilsack. The document's 15 signatories included Senator Cory Booker and Representative Alma Adams, both Democrats.

"We oppose the inclusion of these practices, which further entrench the unsustainable, inhumane industrial model by funneling a significant portion of conservation dollars to a handful of large producers instead of supporting more small and mid-sized producers," said the letter, which was first reported by Reuters.

The agency expanded its climate-smart practices list for fiscal- year 2024 to include more biogas infrastructure.

A USDA spokesperson said the IRA conservation money "will provide direct climate mitigation benefits and will expand access to financial and technical assistance for producers to advance conservation on their farm, ranch or forest land."

Some farm state Republicans are hoping to reallocate the IRA conservation dollars to a broader array of practices, a dispute with Democrats that could further delay the already overdue federal farm funding bill. (Reporting by Leah Douglas in Washington; Editing by Matthew Lewis)