Methane Emissions Reduction Act of 2021
This bill requires the Department of the Treasury to estimate annual methane emissions from each oil and natural gas producing basin and levy a fee for such emissions on each company that produces, gathers, processes, or transmits oil or natural gas. The fees must be used to provide grants through the National Coastal Resilience Fund of the National Fish and Wildlife Foundation.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4084 Introduced in House (IH)]
<DOC>
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 provisions 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 Representatives 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--
(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 atmosphere are
responsible for approximately 25 percent 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 emissions from
oil and natural gas operations in the United States are 60
percent higher than previously believed, representing 2.3
percent of natural gas production;
(5) methane emissions from oil and natural gas operations
in the United States represent approximately $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 percent 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 geologic province
(as defined by the American Association 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 CH<INF>4</INF>.
(4) Methane emission.--The term ``methane emission'' means
the release of methane from the extraction, production,
gathering, processing, compression, transmission, or storage
of--
(A) oil; or
(B) natural gas.
(5) Methane fee factor.--The term ``methane 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 atmosphere.--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 calculated under
section 4(b)(2)(B)(i), the percentage determined for
the basin under the program established under section
4(a); and
(B) for companies that use the fee calculated 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
determined by the company using a protocol
validated by the Secretary under clause (ii) of
that section; by
(ii) the total quantity of natural gas
produced, gathered, processed, transmitted, or
released and lost to the atmosphere 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 implement a
program to estimate, based on empirically determined, peer-reviewed
methane emission rates, annual methane emissions, and methane emission
rates (expressed in percentage of natural gas production), from each
oil and natural gas producing basin.
(b) Fee.--
(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 paragraph (1) shall
be calculated in accordance with subparagraph (B) or
(C), as applicable.
(B) Proportional fee calculation.--
(i) In general.--Subject to subparagraph
(C), the fee under paragraph (1) for a basin in
which a company produces, gathers, processes,
or transmits oil or natural gas for a calendar
year shall be the sum obtained by adding--
(I) the product obtained by
multiplying--
(aa) the difference
between--
(AA) the percentage
of volume lost to the
atmosphere in the basin
during the calendar
year; and
(BB) 0.2 percent;
(bb) the total quantity of
natural gas produced or
released and lost to the
atmosphere during oil or
natural gas production by the
company in the basin during the
calendar year; and
(cc) the methane fee factor
for the applicable calendar
year; and
(II) the product obtained by
multiplying--
(aa) the difference
between--
(AA) the percentage
of volume lost to the
atmosphere 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.
(ii) Requirement.--The fee calculated 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 subparagraph (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 result
from oil and natural gas facilities--
(aa) that the company
operates; or
(bb) in which the company
has an ownership interest; and
(II) the Secretary validates the
protocol in accordance with clause
(ii).
(ii) Validation.--
(I) In general.--The Secretary may
validate a protocol submitted under
clause (i)(I) if--
(aa) the Secretary
determines that the protocol is
an accurate and comprehensive
empirical method for
calculating the methane
emissions of the company
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
regular collection of
data;
(cc) all underlying data
collected under the protocol
are available to the public;
and
(dd) the Secretary
determines that--
(AA) to the maximum
extent practicable, the
company has installed
state-of-the-art
technologies to detect
and eliminate methane
leaks from all oil and
natural gas facilities
the company owns or
operates; and
(BB) subject to
subclause (III), the
company has prohibited
the venting and flaring
of methane, except in
emergency
circumstances.
(II) Timeline.--A protocol
described in clause (i)(I) shall be
submitted to the Secretary for
validation under subclause (I) not
later than June 30 of the calendar year
before the calendar year for which the
company is seeking to opt out of the
fee calculated under subparagraph (B).
(III) Emergency circumstances.--An
emergency circumstance for which the
venting or flaring of methane is
authorized under subclause (I)(dd)(BB)
does not include--
(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 production; 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 produces, gathers, processes,
or transmits oil or natural gas for a calendar
year shall be the sum obtained by adding--
(I) the product obtained by
multiplying--
(aa) the difference
between--
(AA) the percentage
of volume lost to the
atmosphere in the basin
during the calendar
year; and
(BB) 0.2 percent;
(bb) the total quantity of
natural gas produced or
released and lost to the
atmosphere during oil or
natural gas production by the
company in the basin during the
calendar year; and
(cc) the methane fee factor
for the applicable calendar
year; and
(II) the product obtained by
multiplying--
(aa) the difference
between--
(AA) the percentage
of volume lost to the
atmosphere 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.
(iv) Requirement.--The fee calculated under
clause (iii) for a company that opted out of a
fee calculated under subparagraph (B) 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.
(D) Methane fee factor.--
(i) Initial cost.--For calendar year 2023,
the methane fee factor shall be $1,800 per ton.
(ii) Annual adjustment.--For each calendar
year after 2023, the methane fee factor shall
be adjusted to an amount that is equal to the
product obtained by multiplying--
(I) the methane fee factor for the
preceding calendar year; and
(II) the percentage obtained by
adding--
(aa) 102 percent; and
(bb) the percentage by
which the Consumer Price Index
for the calendar year exceeds
the Consumer Price Index for
the preceding calendar year.
(3) Timing.--Not later than July 1 of each year, the
Secretary shall calculate and levy the fee under paragraph (1)
for the preceding calendar year.
(4) National coastal resilience fund.--Notwithstanding
section 10(b)(2) of the National Fish and Wildlife Foundation
Establishment Act (16 U.S.C. 3709(b)(2)), the Secretary shall,
on an annual basis, transfer an amount equal to the amounts
collected under the fee under paragraph (1) to the National
Fish and Wildlife Foundation to provide grants through the
National Coastal Resilience Fund of the National Fish and
Wildlife Foundation (or a successor program).
SEC. 5. SAVINGS.
Nothing in this Act--
(1) affects the ability to regulate methane emissions under
any other provision of law; or
(2) preempts a State from regulating or assessing a fee on
methane emissions from oil and gas facilities.
<all>
Introduced in House
Introduced in House
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 provisions as fall within the jurisdiction of the committee concerned.
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 provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Environment and Climate Change.
Referred to the Subcommittee on Energy and Mineral Resources.
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