II 

117TH CONGRESS 

1ST SESSION S. 645 

To require the Secretary of the Treasury to levy a fee on methane emissions 

from oil and natural gas facilities, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 9, 2021 

Mr. WHITEHOUSE (for himself, Mr. BOOKER, and Mr. SCHATZ) introduced the 

following bill; which was read twice and referred to the Committee on Environment and Public Works 

A BILL 

To require the Secretary of the Treasury to levy a fee on 

methane emissions from oil and natural gas facilities, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Methane Emissions 

5 Reduction Act of 2021’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds that— 


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1 (1) methane is a potent heat-trapping gas that 

2 absorbs 28 to 36 times the quantity of energy that 

3 carbon dioxide absorbs over a 100-year period; 

4 (2) increased methane concentrations in the at5 mosphere are responsible for approximately 25 per6 cent of observed global warming; 

(3) approximately 1 7 ⁄3 of global anthropogenic 

8 methane emissions are produced by the production 

9 and transmission of fossil fuels; 

10 (4) recent estimates suggest that methane emis11 sions from oil and natural gas operations in the 

12 United States are 60 percent higher than previously 

13 believed, representing 2.3 percent of natural gas pro14 duction; 

15 (5) methane emissions from oil and natural gas 

16 operations in the United States represent approxi17 mately $2,000,000,000 in lost natural gas that could 

18 be used to fuel 10,000,000 homes; 

19 (6) estimates from the International Energy 

Agency suggest that 1 20 ⁄2 of methane emissions from 

21 global oil and natural gas supply chains may be 

22 eliminated at zero net cost; 

23 (7) some oil and natural gas companies have 

24 announced plans to reduce methane emissions from 

25 the operations of those companies to below 0.2 perVerDate Sep 11 2014 19:35 Apr 04, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S645.IS S645

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1 cent of production, demonstrating that significant 

2 reductions in methane emissions are technically and 

3 economically feasible; and 

4 (8) numerous companies in the United States 

5 are developing innovative technologies to allow oil 

6 and natural gas companies to more cost-effectively 

7 detect and reduce methane emissions. 

8 SEC. 3. DEFINITIONS. 

9 In this Act: 

10 (1) BASIN.—The term ‘‘basin’’ means a geo11 logic province (as defined by the American Associa12 tion of Petroleum Geologists). 

13 (2) EMPIRICALLY DETERMINED.—The term 

14 ‘‘empirically determined’’ means determined through 

15 the collection of sufficient data in situ, including 

16 measurement on the ground or by drone, airplane, 

17 or satellite, for the purpose of accurately estimating 

18 the quantity of methane emissions from a basin. 

19 (3) METHANE.—The term ‘‘methane’’ means a 

20 chemical compound with the chemical formula CH4. 

21 (4) METHANE EMISSION.—The term ‘‘methane 

22 emission’’ means the release of methane from the ex23 traction, production, gathering, processing, compres24 sion, transmission, or storage of— 

25 (A) oil; or 


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1 (B) natural gas. 

2 (5) METHANE FEE FACTOR.—The term ‘‘meth3 ane fee factor’’ means the amount calculated under 

4 section 4(b)(2)(D) for the applicable calendar year. 

5 (6) NATURAL GAS.—The term ‘‘natural gas’’ 

6 has the meaning given the term in section 3 of the 

7 Deepwater Port Act of 1974 (33 U.S.C. 1502). 

8 (7) OIL.—The term ‘‘oil’’ has the meaning 

9 given the term in section 3 of the Deepwater Port 

10 Act of 1974 (33 U.S.C. 1502). 

11 (8) PERCENTAGE OF VOLUME LOST TO THE AT12 MOSPHERE.—The term ‘‘percentage of volume lost 

13 to the atmosphere’’ means, for any 1 company with 

14 respect to any 1 basin— 

15 (A) for companies that use the fee cal16 culated under section 4(b)(2)(B)(i), the per17 centage determined for the basin under the pro18 gram established under section 4(a); and 

19 (B) for companies that use the fee cal20 culated under clause (iii) of section 4(b)(2)(C), 

21 the quotient obtained by dividing— 

22 (i) the methane emissions in the basin 

23 during the applicable calendar year, as de24 termined by the company using a protocol 


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1 validated by the Secretary under clause (ii) 

2 of that section; by 

3 (ii) the total quantity of natural gas 

4 produced, gathered, processed, trans5 mitted, or released and lost to the atmos6 phere by the company in the basin during 

7 the applicable calendar year, as determined 

8 by the company using a protocol validated 

9 by the Secretary under clause (ii) of that 

10 section. 

11 (9) SECRETARY.—The term ‘‘Secretary’’ means 

12 the Secretary of the Treasury. 

13 SEC. 4. FEE ON METHANE EMISSIONS. 

14 (a) ESTIMATE OF METHANE EMISSIONS.—Not later 

15 than December 31, 2022, the Secretary, in consultation 

16 with the Administrator of the Environmental Protection 

17 Agency and the Administrator of the National Oceanic 

18 and Atmospheric Administration, shall establish and im19 plement a program to estimate, based on empirically de20 termined, peer-reviewed methane emission rates, annual 

21 methane emissions, and methane emission rates (ex22 pressed in percentage of natural gas production), from 

23 each oil and natural gas producing basin. 

24 (b) FEE.— 


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1 (1) IN GENERAL.—For calendar year 2023 and 

2 each calendar year thereafter, the Secretary shall 

3 levy a fee on methane emissions on each company 

4 that produces, gathers, processes, or transmits oil or 

5 natural gas. 

6 (2) AMOUNT.— 

7 (A) IN GENERAL.—The fee under para8 graph (1) shall be calculated in accordance with 

9 subparagraph (B) or (C), as applicable. 

10 (B) PROPORTIONAL FEE CALCULATION.— 

11 (i) IN GENERAL.—Subject to subpara12 graph (C), the fee under paragraph (1) for 

13 a basin in which a company produces, 

14 gathers, processes, or transmits oil or nat15 ural gas for a calendar year shall be the 

16 sum obtained by adding— 

17 (I) the product obtained by mul18 tiplying— 

19 (aa) the difference be20 tween— 

21 (AA) the percentage of 

22 volume lost to the atmos23 phere in the basin during 

24 the calendar year; and 

25 (BB) 0.2 percent; 


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1 (bb) the total quantity of 

2 natural gas produced or released 

3 and lost to the atmosphere dur4 ing oil or natural gas production 

5 by the company in the basin dur6 ing the calendar year; and 

7 (cc) the methane fee factor 

8 for the applicable calendar year; 

9 and 

10 (II) the product obtained by mul11 tiplying— 

12 (aa) the difference be13 tween— 

14 (AA) the percentage of 

15 volume lost to the atmos16 phere in the basin during 

17 the calendar year; and 

18 (BB) 0.1 percent; 

19 (bb) the total quantity of 

20 natural gas gathered, processed, 

21 or transmitted by the company in 

22 the basin during the calendar 

23 year; and 

24 (cc) the methane fee factor 

25 for the applicable calendar year. 


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1 (ii) REQUIREMENT.—The fee cal2 culated under clause (i) for a company 

3 shall be determined on a basin-by-basin 

4 basis for each basin in which the company 

5 produces, gathers, processes, or transmits 

6 oil or natural gas. 

7 (C) ALTERNATIVE FEE CALCULATION.— 

8 (i) OPT OUT.—A company may opt 

9 out of the fee calculated under subpara10 graph (B) if— 

11 (I) the company submits to the 

12 Secretary a peer-reviewed protocol for 

13 empirically determining, on a basin14 by-basin basis for all basins, the total 

15 amount of methane emissions that re16 sult from oil and natural gas facili17 ties— 

18 (aa) that the company oper19 ates; or 

20 (bb) in which the company 

21 has an ownership interest; and 

22 (II) the Secretary validates the 

23 protocol in accordance with clause (ii). 

24 (ii) VALIDATION.— 


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1 (I) IN GENERAL.—The Secretary 

2 may validate a protocol submitted 

3 under clause (i)(I) if— 

4 (aa) the Secretary deter5 mines that the protocol is an ac6 curate and comprehensive empir7 ical method for calculating the 

8 methane emissions of the com9 pany submitting the protocol; 

10 (bb) the protocol— 

11 (AA) is peer-reviewed 

12 by independent scientists; 

13 (BB) is available to the 

14 public in its entirety; and 

15 (CC) requires the reg16 ular collection of data; 

17 (cc) all underlying data col18 lected under the protocol are 

19 available to the public; and 

20 (dd) the Secretary deter21 mines that— 

22 (AA) to the maximum 

23 extent practicable, the com24 pany has installed state-of25 the-art technologies to detect 


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1 and eliminate methane leaks 

2 from all oil and natural gas 

3 facilities the company owns 

4 or operates; and 

5 (BB) subject to sub6 clause (III), the company 

7 has prohibited the venting 

8 and flaring of methane, ex9 cept in emergency cir10 cumstances. 

11 (II) TIMELINE.—A protocol de12 scribed in clause (i)(I) shall be sub13 mitted to the Secretary for validation 

14 under subclause (I) not later than 

15 June 30 of the calendar year before 

16 the calendar year for which the com17 pany is seeking to opt out of the fee 

18 calculated under subparagraph (B). 

19 (III) EMERGENCY CIR20 CUMSTANCES.—An emergency cir21 cumstance for which the venting or 

22 flaring of methane is authorized under 

23 subclause (I)(dd)(BB) does not in24 clude— 


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1 (aa) venting or flaring of 

2 methane from oil wells because 

3 the company has failed to develop 

4 the infrastructure necessary to 

5 capture, process, and transmit 

6 methane associated with oil pro7 duction; or 

8 (bb) any claim of economic 

9 necessity. 

10 (iii) CALCULATION.—For a company 

11 that has opted out of the fee calculated 

12 under subparagraph (B) in accordance 

13 with clause (i), the fee under paragraph 

14 (1) for a basin in which the company pro15 duces, gathers, processes, or transmits oil 

16 or natural gas for a calendar year shall be 

17 the sum obtained by adding— 

18 (I) the product obtained by mul19 tiplying— 

20 (aa) the difference be21 tween— 

22 (AA) the percentage of 

23 volume lost to the atmos24 phere in the basin during 

25 the calendar year; and 


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1 (BB) 0.2 percent; 

2 (bb) the total quantity of 

3 natural gas produced or released 

4 and lost to the atmosphere dur5 ing oil or natural gas production 

6 by the company in the basin dur7 ing the calendar year; and 

8 (cc) the methane fee factor 

9 for the applicable calendar year; 

10 and 

11 (II) the product obtained by mul12 tiplying— 

13 (aa) the difference be14 tween— 

15 (AA) the percentage of 

16 volume lost to the atmos17 phere in the basin during 

18 the calendar year; and 

19 (BB) 0.1 percent; 

20 (bb) the total quantity of 

21 natural gas gathered, processed, 

22 or transmitted by the company in 

23 the basin during the calendar 

24 year; and 


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1 (cc) the methane fee factor 

2 for the applicable calendar year. 

3 (iv) REQUIREMENT.—The fee cal4 culated under clause (iii) for a company 

5 that opted out of a fee calculated under 

6 subparagraph (B) shall be determined on a 

7 basin-by-basin basis for each basin in 

8 which the company produces, gathers, 

9 processes, or transmits oil or natural gas. 

10 (D) METHANE FEE FACTOR.— 

11 (i) INITIAL COST.—For calendar year 

12 2023, the methane fee factor shall be 

13 $1,800 per ton. 

14 (ii) ANNUAL ADJUSTMENT.—For each 

15 calendar year after 2023, the methane fee 

16 factor shall be adjusted to an amount that 

17 is equal to the product obtained by multi18 plying— 

19 (I) the methane fee factor for the 

20 preceding calendar year; and 

21 (II) the percentage obtained by 

22 adding— 

23 (aa) 102 percent; and 

24 (bb) the percentage by which 

25 the Consumer Price Index for the 


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1 calendar year exceeds the Con2 sumer Price Index for the pre3 ceding calendar year. 

4 (3) TIMING.—Not later than July 1 of each 

5 year, the Secretary shall calculate and levy the fee 

6 under paragraph (1) for the preceding calendar year. 

7 (4) NATIONAL COASTAL RESILIENCE FUND.— 

8 Notwithstanding section 10(b)(2) of the National 

9 Fish and Wildlife Foundation Establishment Act (16 

10 U.S.C. 3709(b)(2)), the Secretary shall, on an an11 nual basis, transfer an amount equal to the amounts 

12 collected under the fee under paragraph (1) to the 

13 National Fish and Wildlife Foundation to provide 

14 grants through the National Coastal Resilience 

15 Fund of the National Fish and Wildlife Foundation 

16 (or a successor program). 

17 SEC. 5. SAVINGS. 

18 Nothing in this Act— 

19 (1) affects the ability to regulate methane emis20 sions under any other provision of law; or 

21 (2) preempts a State from regulating or assess22 ing a fee on methane emissions from oil and gas fa23 cilities. 

Æ 


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