I 
117TH CONGRESS 
1ST SESSION H. R. 4084 
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 HOUSE OF REPRESENTATIVES 
JUNE 23, 2021 
Mr. DEUTCH (for himself and Mr. CRIST) introduced the following bill; which 
was referred to the Committee on Energy and Commerce, and in addition 
to the Committee on Natural Resources, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Methane Emissions 
Reduction Act of 2021’’. 
SEC. 2. FINDINGS. 
Congress finds that— 
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(1) methane is a potent heat-trapping gas that 
absorbs 28 to 36 times the quantity of energy that 
carbon dioxide absorbs over a 100-year period; 
(2) increased methane concentrations in the at-
mosphere are responsible for approximately 25 per-
cent of observed global warming; 
(3) approximately 1⁄3 of global anthropogenic 
methane emissions are produced by the production 
and transmission of fossil fuels; 
(4) recent estimates suggest that methane emis-
sions from oil and natural gas operations in the 
United States are 60 percent higher than previously 
believed, representing 2.3 percent of natural gas pro-
duction; 
(5) methane emissions from oil and natural gas 
operations in the United States represent approxi-
mately $2,000,000,000 in lost natural gas that could 
be used to fuel 10,000,000 homes; 
(6) estimates from the International Energy 
Agency suggest that 1⁄2 of methane emissions from 
global oil and natural gas supply chains may be 
eliminated at zero net cost; 
(7) some oil and natural gas companies have 
announced plans to reduce methane emissions from 
the operations of those companies to below 0.2 per-
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cent of production, demonstrating that significant 
reductions in methane emissions are technically and 
economically feasible; and 
(8) numerous companies in the United States 
are developing innovative technologies to allow oil 
and natural gas companies to more cost-effectively 
detect and reduce methane emissions. 
SEC. 3. DEFINITIONS. 
In this Act: 
(1) BASIN.—The term ‘‘basin’’ means a geo-
logic province (as defined by the American Associa-
tion of Petroleum Geologists). 
(2) EMPIRICALLY
DETERMINED.—The term 
‘‘empirically determined’’ means determined through 
the collection of sufficient data in situ, including 
measurement on the ground or by drone, airplane, 
or satellite, for the purpose of accurately estimating 
the quantity of methane emissions from a basin. 
(3) METHANE.—The term ‘‘methane’’ means a 
chemical compound with the chemical formula CH4. 
(4) METHANE EMISSION.—The term ‘‘methane 
emission’’ means the release of methane from the ex-
traction, production, gathering, processing, compres-
sion, transmission, or storage of— 
(A) oil; or 
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(B) natural gas. 
(5) METHANE FEE FACTOR.—The term ‘‘meth-
ane fee factor’’ means the amount calculated under 
section 4(b)(2)(D) for the applicable calendar year. 
(6) NATURAL GAS.—The term ‘‘natural gas’’ 
has the meaning given the term in section 3 of the 
Deepwater Port Act of 1974 (33 U.S.C. 1502). 
(7) OIL.—The term ‘‘oil’’ has the meaning 
given the term in section 3 of the Deepwater Port 
Act of 1974 (33 U.S.C. 1502). 
(8) PERCENTAGE OF VOLUME LOST TO THE AT-
MOSPHERE.—The term ‘‘percentage of volume lost 
to the atmosphere’’ means, for any 1 company with 
respect to any 1 basin— 
(A) for companies that use the fee cal-
culated under section 4(b)(2)(B)(i), the per-
centage determined for the basin under the pro-
gram established under section 4(a); and 
(B) for companies that use the fee cal-
culated under clause (iii) of section 4(b)(2)(C), 
the quotient obtained by dividing— 
(i) the methane emissions in the basin 
during the applicable calendar year, as de-
termined by the company using a protocol 
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validated by the Secretary under clause (ii) 
of that section; by 
(ii) the total quantity of natural gas 
produced, 
gathered, 
processed, 
trans-
mitted, or released and lost to the atmos-
phere by the company in the basin during 
the applicable calendar year, as determined 
by the company using a protocol validated 
by the Secretary under clause (ii) of that 
section. 
(9) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Treasury. 
SEC. 4. FEE ON METHANE EMISSIONS. 
(a) ESTIMATE OF METHANE EMISSIONS.—Not later 
than December 31, 2022, the Secretary, in consultation 
with the Administrator of the Environmental Protection 
Agency and the Administrator of the National Oceanic 
and Atmospheric Administration, shall establish and im-
plement a program to estimate, based on empirically de-
termined, peer-reviewed methane emission rates, annual 
methane emissions, and methane emission rates (ex-
pressed in percentage of natural gas production), from 
each oil and natural gas producing basin. 
(b) FEE.— 
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(1) IN GENERAL.—For calendar year 2023 and 
each calendar year thereafter, the Secretary shall 
levy a fee on methane emissions on each company 
that produces, gathers, processes, or transmits oil or 
natural gas. 
(2) AMOUNT.— 
(A) IN
GENERAL.—The fee under para-
graph (1) shall be calculated in accordance with 
subparagraph (B) or (C), as applicable. 
(B) PROPORTIONAL FEE CALCULATION.— 
(i) IN GENERAL.—Subject to subpara-
graph (C), the fee under paragraph (1) for 
a basin in which a company produces, 
gathers, processes, or transmits oil or nat-
ural gas for a calendar year shall be the 
sum obtained by adding— 
(I) the product obtained by mul-
tiplying— 
(aa) 
the 
difference 
be-
tween— 
(AA) the percentage of 
volume lost to the atmos-
phere in the basin during 
the calendar year; and 
(BB) 0.2 percent; 
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(bb) the total quantity of 
natural gas produced or released 
and lost to the atmosphere dur-
ing oil or natural gas production 
by the company in the basin dur-
ing the calendar year; and 
(cc) the methane fee factor 
for the applicable calendar year; 
and 
(II) the product obtained by mul-
tiplying— 
(aa) 
the 
difference 
be-
tween— 
(AA) the percentage of 
volume lost to the atmos-
phere in the basin during 
the calendar year; and 
(BB) 0.1 percent; 
(bb) the total quantity of 
natural gas gathered, processed, 
or transmitted by the company in 
the basin during the calendar 
year; and 
(cc) the methane fee factor 
for the applicable calendar year. 
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(ii) REQUIREMENT.—The fee cal-
culated under clause (i) for a company 
shall be determined on a basin-by-basin 
basis for each basin in which the company 
produces, gathers, processes, or transmits 
oil or natural gas. 
(C) ALTERNATIVE FEE CALCULATION.— 
(i) OPT OUT.—A company may opt 
out of the fee calculated under subpara-
graph (B) if— 
(I) the company submits to the 
Secretary a peer-reviewed protocol for 
empirically determining, on a basin- 
by-basin basis for all basins, the total 
amount of methane emissions that re-
sult from oil and natural gas facili-
ties— 
(aa) that the company oper-
ates; or 
(bb) in which the company 
has an ownership interest; and 
(II) the Secretary validates the 
protocol in accordance with clause (ii). 
(ii) VALIDATION.— 
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(I) IN GENERAL.—The Secretary 
may validate a protocol submitted 
under clause (i)(I) if— 
(aa) the Secretary deter-
mines that the protocol is an ac-
curate and comprehensive empir-
ical method for calculating the 
methane emissions of the com-
pany submitting the protocol; 
(bb) the protocol— 
(AA) is peer-reviewed 
by independent scientists; 
(BB) is available to the 
public in its entirety; and 
(CC) requires the reg-
ular collection of data; 
(cc) all underlying data col-
lected under the protocol are 
available to the public; and 
(dd) the Secretary deter-
mines that— 
(AA) to the maximum 
extent practicable, the com-
pany has installed state-of- 
the-art technologies to detect 
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and eliminate methane leaks 
from all oil and natural gas 
facilities the company owns 
or operates; and 
(BB) subject to sub-
clause (III), the company 
has prohibited the venting 
and flaring of methane, ex-
cept 
in 
emergency 
cir-
cumstances. 
(II) TIMELINE.—A protocol de-
scribed in clause (i)(I) shall be sub-
mitted to the Secretary for validation 
under subclause (I) not later than 
June 30 of the calendar year before 
the calendar year for which the com-
pany is seeking to opt out of the fee 
calculated under subparagraph (B). 
(III) 
EMERGENCY
CIR-
CUMSTANCES.—An 
emergency 
cir-
cumstance for which the venting or 
flaring of methane is authorized under 
subclause (I)(dd)(BB) does not in-
clude— 
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(aa) venting or flaring of 
methane from oil wells because 
the company has failed to develop 
the infrastructure necessary to 
capture, process, and transmit 
methane associated with oil pro-
duction; or 
(bb) any claim of economic 
necessity. 
(iii) CALCULATION.—For a company 
that has opted out of the fee calculated 
under subparagraph (B) in accordance 
with clause (i), the fee under paragraph 
(1) for a basin in which the company pro-
duces, gathers, processes, or transmits oil 
or natural gas for a calendar year shall be 
the sum obtained by adding— 
(I) the product obtained by mul-
tiplying— 
(aa) 
the 
difference 
be-
tween— 
(AA) the percentage of 
volume lost to the atmos-
phere in the basin during 
the calendar year; and 
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(BB) 0.2 percent; 
(bb) the total quantity of 
natural gas produced or released 
and lost to the atmosphere dur-
ing oil or natural gas production 
by the company in the basin dur-
ing the calendar year; and 
(cc) the methane fee factor 
for the applicable calendar year; 
and 
(II) the product obtained by mul-
tiplying— 
(aa) 
the 
difference 
be-
tween— 
(AA) the percentage of 
volume lost to the atmos-
phere in the basin during 
the calendar year; and 
(BB) 0.1 percent; 
(bb) the total quantity of 
natural gas gathered, processed, 
or transmitted by the company in 
the basin during the calendar 
year; and 
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