[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 2177 Introduced in Senate (IS)]
<DOC>
117th CONGRESS
1st Session
S. 2177
To amend the Mineral Leasing Act to ensure sufficient bonding and
complete and timely reclamation of land and water disturbed by Federal
and Indian oil and gas production, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 22, 2021
Mr. Bennet introduced the following bill; which was read twice and
referred to the Committee on Energy and Natural Resources
_______________________________________________________________________
A BILL
To amend the Mineral Leasing Act to ensure sufficient bonding and
complete and timely reclamation of land and water disturbed by Federal
and Indian oil and gas production, 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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Oil and Gas
Bonding Reform and Orphaned Well Remediation Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
TITLE I--ORPHANED WELL REMEDIATION
Sec. 101. Orphaned well remediation program.
TITLE II--FEDERAL ONSHORE OIL AND GAS RECLAMATION BONDING PROGRAM
Sec. 201. Declaration of policy.
Sec. 202. Regulation of surface-disturbing activities.
TITLE III--MISCELLANEOUS
Sec. 301. Cost recovery.
Sec. 302. Regulations.
SEC. 2. FINDINGS.
Congress finds that--
(1) according to the Interstate Oil and Gas Compact
Commission, there are in existence not fewer than 56,600
orphaned well sites, and as many as 746,000 undocumented
orphaned well sites, across the United States on Federal,
State, Tribal, and private land;
(2) as of April 2021, there are at least 14,400 orphaned
wells on Federal land, according to the Department of the
Interior;
(3)(A) orphaned well sites--
(i) pose significant public health, safety, and
environmental risks; and
(ii) should be remediated; but
(B) there are no identified responsible parties to provide
for the remediation of those sites;
(4) it is reasonable for the Federal Government--
(A) to provide financial resources to States and
Indian Tribes to rectify the long-term public health,
safety, and environmental risks described in paragraph
(3)(A)(i);
(B) to support the creation of jobs relating to the
remediation and reclamation of orphaned well sites; and
(C) to update policies to ensure that wells are not
orphaned in the future;
(5) under the Mineral Leasing Act (30 U.S.C. 181 et seq.),
the Secretary of the Interior (referred to in this Act as the
``Secretary'') is required--
(A) to ensure the complete and timely reclamation
of all Federal onshore oil and gas leases; and
(B) to secure financial assurances in the form of
bonds, sureties, or other approved financial
arrangements for remediation, reclamation, and well
closure;
(6) with respect to the Federal onshore oil and gas leasing
program, the Secretary--
(A) is required--
(i) regularly to review existing onshore
oil and gas financial assurances; and
(ii) to increase the amount of those
assurances, as necessary; but
(B) in practice, often fails to carry out the
activities described in subparagraph (A);
(7) the Secretary--
(A) implements well and financial assurance
adequacy review policies inconsistently across field
offices of the Department of the Interior;
(B) has failed to track systematically data
relating to potential liabilities and the adequacy of
financial assurances; and
(C) does not maintain information relating to
actual reclamation costs incurred for inactive,
orphaned, or inadequately reclaimed wells and leases;
(8) due to the shortcomings in the required minimum
financial assurance amounts and the ineffectiveness of the
Secretary in tracking and reviewing those financial assurances,
the cost of reclaiming existing Federal onshore oil and gas
wells and leases far exceeds the amounts posted as financial
assurance; and
(9) the inadequacy of the Secretary in the administration
of financial assurances for Federal onshore oil and gas
activities--
(A) poses a threat to land, water, and other
resources; and
(B) is a major financial liability to the taxpayers
of the United States, who are often responsible for the
costs of reclaiming onshore oil and gas wells and
leases that are inactive, orphaned, or inadequately
reclaimed by lessees.
TITLE I--ORPHANED WELL REMEDIATION
SEC. 101. ORPHANED WELL REMEDIATION PROGRAM.
(a) In General.--Section 17 of the Mineral Leasing Act (30 U.S.C.
226) is amended by adding at the end the following:
``(q) Orphaned Well Remediation Program.--
``(1) Definitions.--In this subsection:
``(A) Abandon.--The term `abandon', with respect to
a well under an oil or gas lease issued under this Act,
means--
``(i) to plug the well;
``(ii) to remove all installations
associated with the well; and
``(iii) to terminate operations for
production from the well.
``(B) Inactive.--The term `inactive', with respect
to a well or facility under an oil or gas lease issued
under this Act, means that the well or facility does
not--
``(i) produce oil or gas, as applicable, in
paying quantities; or
``(ii) actively aid in the production of
oil or gas, as applicable, in paying
quantities.
``(C) Operator.--The term `operator', with respect
to an oil or gas operation, means any individual or
entity (including a lessee or operating rights owner)
that has provided to a relevant authority a written
statement that the individual or entity is responsible
for the operation (or any portion of the operation).
``(D) Orphaned.--The term `orphaned', with respect
to a well or well site under an oil or gas lease issued
under this Act, means that the responsible party of the
well or well site--
``(i) cannot be located; or
``(ii) cannot provide adequate financial
assurance to permanently plug and reclaim the
well or well site.
``(E) Responsible party.--
``(i) In general.--The term `responsible
party', with respect to a well or well site
under an oil or gas lease issued under this
Act, means an individual or entity (including a
lessee or operator) that is or will be
responsible for--
``(I) the remediation, reclamation,
and permanent plugging of the well or
well site; or
``(II) the payment of financial
assurance for the well or well site in
accordance with subsection (g)(4).
``(ii) Inclusions.--The term `responsible
party' includes--
``(I) an association, corporation,
subsidiary, or affiliate of an
individual or entity described in
clause (i); and
``(II) any person controlled by, or
under common control with, an
individual or entity described in
clause (i).
``(F) Secretary.--The term `Secretary' means the
Secretary of the Interior.
``(2) Establishment.--Not later than 180 days after the
date of enactment of this subsection, the Secretary shall
establish, in accordance with this subsection--
``(A) in cooperation with the Secretary of
Agriculture, a program to remediate, reclaim, and
permanently plug orphaned oil and gas wells and well
sites located on land administered by the land
management agencies of the Department of the Interior
and the Department of Agriculture, respectively; and
``(B) a program under which the Secretary shall
distribute 75 percent of the amounts made available
under paragraph (9) to States and Indian tribes that
have submitted to the Secretary an application to
remediate, reclaim, and close orphaned oil and gas
wells and well sites on land under the jurisdiction of
the States and Indian tribes.
``(3) Activities.--The programs established under paragraph
(2) shall--
``(A) use existing and updated inventories of
orphaned well sites to establish priority for the
distribution of funds under the programs for
activities, including--
``(i) remediating, reclaiming, and
permanently plugging orphaned wells and well
sites;
``(ii) remediating and reclaiming related
well pads;
``(iii) reclaiming related access roads;
and
``(iv) restoring land, water, and habitat
impacted by orphaned wells and the prior
operation of the wells;
``(B) provide a public accounting of the costs of
remediation, reclamation, and permanent plugging for
each applicable orphaned oil or gas well and well site;
``(C) seek to determine the identity, if unknown,
of any potential responsible party associated with the
orphaned well or well site, or a surety or guarantor of
such a responsible party, to the extent such
information can be ascertained; and
``(D) seek to obtain from responsible parties
reimbursement for applicable expenditures, to the
maximum extent practicable.
``(4) Cooperation and consultation.--In carrying out the
programs established under paragraph (2), the Secretary shall--
``(A) work cooperatively with--
``(i) the Secretary of Agriculture; and
``(ii) each State, local government, and
Indian tribe within the jurisdiction of which
an orphaned well site on Federal land is
located; and
``(B) consult with--
``(i) affected States, local governments,
and Indian tribes;
``(ii) the Secretary of Energy; and
``(iii) the Interstate Oil and Gas Compact
Commission.
``(5) Report to congress.--Not later than 1 year after the
date of enactment of this subsection, and not less frequently
than once every 2 years thereafter, the Secretary, in
cooperation with the Secretary of Agriculture and in
consultation with affected States and Indian tribes, shall
submit to Congress a report describing the expenditures under,
and the progress and achievements of, the programs established
under paragraph (2).
``(6) Use of funds.--
``(A) Initial period.--For the first 2 fiscal years
beginning after the date of enactment of this
subsection, the funds made available to remediate,
reclaim, and permanently plug orphaned wells and well
sites under the program established under paragraph
(2)(B) shall be allocated based on a demonstration of--
``(i) identified orphaned wells and well
sites in need of remediation, reclamation, or
permanent plugging, with a priority for sites
posing the greatest adverse impacts to--
``(I) public health and safety; and
``(II) land, water, and other
resources; and
``(ii) adequate programmatic and
administrative capacity to expend the funds in
a timely and effective manner.
``(B) Subsequent fiscal years.--For the third
fiscal year beginning after the date of enactment of
this subsection, and each fiscal year thereafter, the
Secretary shall make funds available under the program
established under paragraph (2)(B) based on--
``(i) the factors described in subparagraph
(A); and
``(ii) a determination by the Secretary
that an affected State or Indian tribe is--
``(I) using bonds or other
financial assurances that will fully
cover costs associated with remediating
and reclaiming orphaned oil and gas
wells under the jurisdiction of the
State or Indian tribe; or
``(II) adopting and using--
``(aa) bonds described in
subclause (I); or
``(bb) other financial
assurances.
``(C) Unused funds.--In any case in which the
Secretary determines that, for any fiscal year, a State
or Indian tribe cannot effectively use any portion of
the funds that otherwise would be made available to the
State or Indian tribe under subparagraph (A) or (B),
the Secretary shall use those funds--
``(i) to remediate, reclaim, and close
orphaned wells and well sites on land
administered by the Secretary or the Secretary
of Agriculture;
``(ii) to review and update any inventory
of orphaned or inactive wells, including wells
previously identified as idle or abandoned, on
land described in clause (i);
``(iii) to carry out subsection (g)(6)(E);
``(iv) to carry out paragraph (8); or
``(v)(I) to determine the identity of any
potential responsible party associated with an
inactive well or well site, or a surety or
guarantor of such a responsible party, to the
extent such information can be ascertained; and
``(II) to obtain from such a responsible
party reimbursement for applicable
expenditures, to the maximum extent
practicable.
``(7) Limitation on re-leasing.--Before conducting any oil
and gas leasing of Federal land that contains a well or well
site that was remediated, reclaimed, or permanently plugged
pursuant to this Act, the Secretary, or the Secretary of
Agriculture with respect to National Forest System land,
shall--
``(A) determine that--
``(i) re-leasing and development of the
land will not degrade the restored conditions
accomplished pursuant to the remediation,
reclamation, or closure; and
``(ii) the land achieves compliance with
all applicable standards adopted pursuant to
subsection (g)(5) prior to being re-leased; and
``(B) on making a positive determination pursuant
to clauses (i) and (ii) of subparagraph (A), require
the operator to provide to the applicable Secretary a
bond or other financial assurance that will fully cover
the costs associated with the plugging and reclamation.
``(8) Data collection.--
``(A) In general.--Not later than 2 years after the
date of enactment of this subsection, the Secretary and
the Secretary of Agriculture shall jointly develop, and
make publicly available, a computer database to provide
centralized data relating to operations, reclamation
activities, and financial assurances for each oil and
gas lease in effect under this Act.
``(B) Inclusions.--The database under subparagraph
(A) shall include, with respect to each lease described
in that subparagraph, information relating to--
``(i) the number, location, and status of
each well subject to the lease;
``(ii) the number, location, and status of
each inactive and orphaned well subject to the
lease, and the length of time that each such
well has not been producing;
``(iii) the names of all responsible
parties for each well, including lessees and
operators;
``(iv) whether the lease is part of a unit;
``(v) the amount of the financial assurance
that has been established for the lease;
``(vi) the history of financial assurance
amounts for the lease, including dates of
review and requested increases;
``(vii) inspection, violations, and
enforcement actions taken with respect to the
lease, including resolution of each violation,
if any;
``(viii) whether the period of liability of
the financial assurance on the lease has been
terminated;
``(ix) payment status for royalties, rents,
and fees; and
``(x) any additional information required
to be collected pursuant to subsection (g)(6).
``(C) Notification.--The Secretary shall--
``(i) ensure that the database under
subparagraph (A) is made available to each
field office of the Bureau of Land Management
and the Forest Service, as applicable; and
``(ii) provide automatic and timely
notification, on a lease-by-lease basis, of
applicable requirements and deadlines to review
financial assurances and inactive well status,
in accordance with subsection (g).
``(D) Provision of data at expense of lessee.--
``(i) In general.--Except as provided in
clause (ii), the Secretary may require that
data for the database under subparagraph (A)
shall be provided and entered into the
database--
``(I) by the applicable lessee; and
``(II) at the expense of the
lessee.
``(ii) Inspection and enforcement
actions.--Any relevant data relating to a
Federal inspection or enforcement action shall
be provided and entered into the database under
subparagraph (A) by the applicable Federal
enforcement official.
``(iii) Data quality.--The Secretary shall
carry out such activities as the Secretary
determines to be necessary to ensure the
quality of the data included in the database
under subparagraph (A).
``(9) Funding.--
``(A) In general.--Notwithstanding any other
provision of law, from the Federal share of royalty
revenues deposited into the Treasury pursuant to
section 35, the Secretary of the Treasury shall
transfer to the Secretary to carry out the programs
established under paragraph (2), to remain available
until expended--
``(i) on October 1, 2021, $1,500,000,000;
``(ii) on October 1, 2022, $1,500,000,000;
and
``(iii) on October 1, 2023, and on each
October 1 thereafter through October 1, 2030,
$625,000,000.
``(B) Receipt and acceptance.--The Secretary shall
be entitled to receive, shall accept, and shall use to
carry out this subsection the funds transferred under
subparagraph (A), without further appropriation.''.
(b) Conforming Amendments.--
(1) Section 349 of the Energy Policy Act of 2005 (42 U.S.C.
15907) is amended by striking the section designation and
heading and all that follows through ``Out of any'' in
subsection (i) and inserting the following:
``SEC. 349. WELLS DRILLED INTO FEDERALLY MANAGED MINERAL ESTATE.
``Out of any''.
(2) The table of contents for the Energy Policy Act of 2005
(Public Law 109-58; 119 Stat. 596) is amended by striking the
item relating to section 349 and inserting the following:
``Sec. 349. Wells drilled into federally managed mineral estate.''.
TITLE II--FEDERAL ONSHORE OIL AND GAS RECLAMATION BONDING PROGRAM
SEC. 201. DECLARATION OF POLICY.
Congress declares that it is the policy of the United States that--
(1) pursuant to this title and the amendments made by this
title, the Secretary, and the Secretary of Agriculture with
respect to National Forest System land, should--
(A) require the posting by holders of oil or gas
leases under the Mineral Leasing Act (30 U.S.C. 181 et
seq.) or the Mineral Leasing Act for Acquired Lands (30
U.S.C. 351 et seq.) of financial assurances that are
sufficient to pay for the actual costs of remediating,
reclaiming, and permanently plugging onshore oil and
gas wells, well sites, and lease tracts; and
(B) implement a system of tracking and reviewing
the financial assurances described in subparagraph (A)
that ensures ongoing adequacy and public transparency;
(2) in ensuring robust onshore oil and gas financial
assurances under paragraph (1), the Secretary and the Secretary
of Agriculture will--
(A) better protect the land, water, and other
resources of the United States; and
(B) reduce the financial risks to taxpayers of
paying for inadequately reclaimed onshore oil and gas
wells and leases; and
(3) in administering this title and the amendments made by
this title, the Secretary, and the Secretary of Agriculture
with respect to National Forest System land, should ensure that
the actions of the applicable Secretary--
(A) are in accordance with the goals of multiple-
use management; and
(B) will benefit the fiscal interests of the United
States.
SEC. 202. REGULATION OF SURFACE-DISTURBING ACTIVITIES.
Section 17(g) of the Mineral Leasing Act (30 U.S.C. 226(g)) is
amended--
(1) in the sixth sentence--
(A) by striking ``such entity'' and inserting ``the
responsible party, or to the operator or other entity
on behalf of which the responsible party acted''; and
(B) by striking ``Once the entity has complied with
the'' and inserting the following:
``(C) Issuance of lease after compliance.--On
compliance by a responsible party under this paragraph
with each'';
(2) in the fifth sentence, by striking ``Prior to making
such determination with respect to any such entity the
concerned Secretary shall provide such entity with'' and
inserting the following:
``(B) Requirement for notice and opportunity to
comply.--Before making a determination under
subparagraph (A) with respect to any operator or other
entity or responsible party, the Secretary shall
provide to the operator, entity, or responsible
party'';
(3) by striking the fourth sentence and inserting the
following:
``(7) Failure or refusal to comply.--
``(A) In general.--The Secretary shall not issue,
or approve the assignment of, any lease under this
section to any operator, other entity, or responsible
party during any period in which, as determined by the
Secretary, the operator, entity, or responsible party
has failed or refused to comply in any material respect
with a reclamation requirement or other standard
established under this section that is applicable to
any other lease of the operator, entity, or responsible
party.''; and
(4) by striking the subsection designation and all that
follows through ``operations on the lease.'' and inserting the
following:
``(g) Regulation of Surface-Disturbing Activities.--
``(1) Definitions.--In this subsection:
``(A) Abandon.--The term `abandon', with respect to
a well under an oil or gas lease issued under this Act,
means--
``(i) to plug the well;
``(ii) to remove all installations
associated with the well; and
``(iii) to terminate operations for
production from the well.
``(B) Inactive.--The term `inactive', with respect
to a well or facility under an oil or gas lease issued
under this Act, means that the well or facility does
not--
``(i) produce oil or gas, as applicable, in
paying quantities; or
``(ii) actively aid in the production of
oil or gas, as applicable, in paying
quantities.
``(C) Operator.--The term `operator', with respect
to an oil or gas operation, means any individual or
entity (including a lessee or operating rights owner)
that has provided to a relevant authority a written
statement that the individual or entity is responsible
for the operation (or any portion of the operation).
``(D) Orphaned.--The term `orphaned', with respect
to a well or well site under an oil or gas lease issued
under this Act, means that the responsible party of the
well or well site--
``(i) cannot be located; or
``(ii) cannot provide adequate financial
assurance to permanently plug and reclaim the
well or well site.
``(E) Responsible party.--
``(i) In general.--The term `responsible
party', with respect to a well or well site
under an oil or gas lease issued under this
Act, means an individual or entity (including a
lessee or operator) that is or will be
responsible for--
``(I) the remediation, reclamation,
and permanent plugging of the well or
well site; or
``(II) the payment of financial
assurance for the well or well site in
accordance with paragraph (4).
``(ii) Inclusions.--The term `responsible
party' includes--
``(I) an association, corporation,
subsidiary, or affiliate of an
individual or entity described in
clause (i); and
``(II) any person controlled by, or
under common control with, an
individual or entity described in
clause (i).
``(F) Secretary.--The term `Secretary' means the
Secretary of the Interior.
``(2) Regulation of use and activities.--The Secretary, or
the Secretary of Agriculture with respect to National Forest
System land, shall--
``(A) regulate all use and activities conducted
pursuant to any lease for oil or gas issued under this
Act; and
``(B) determine the remediation, reclamation,
permanent plugging, and other activities that the
responsible party shall be required to carry out in the
interest of conservation of land, water, and surface
resources, including resources with recreation, range,
timber, mineral, watershed, fish or wildlife, natural
scenic, scientific, or historical value.
``(3) Reclamation and operations plan required.--
``(A) In general.--Each application for a permit to
drill submitted for a lease issued under this Act shall
include a plan of operations for surface use,
disturbance, and reclamation that covers all proposed
activities and operations within the lease area.
``(B) Inclusions.--Each plan of operations under
subparagraph (A) shall--
``(i) specify--
``(I) the location of all relevant
facilities, roads, drill pads,
trenches, and pipeline or utility
corridors;
``(II) details regarding drill pad
construction, methods for containment,
and disposal of waste material;
``(III) the identification,
location, and condition of any inactive
or orphaned well sites on land covered
by the lease; and
``(IV) such other information as
the Secretary, or the Secretary of
Agriculture with respect to National
Forest System land, may require; and
``(ii) include the interim reclamation plan
and final reclamation plan developed under
subparagraph (C).
``(C) Interim and final reclamation plans.--
``(i) Interim reclamation plan.--
``(I) In general.--Each applicant
for a permit to drill under
subparagraph (A) shall develop for
submission with the plan of operations
of the applicant under that
subparagraph an interim reclamation
plan that specifies the reclamation
activities that the applicant will
carry out to address the land, water,
and resources (including resources with
recreation, range, timber, mineral,
watershed, fish or wildlife, natural
scenic, scientific, or historical
value) impacted by activities carried
out pursuant to the permit to drill
that are not needed for active
operations.
``(II) Requirement.--The Secretary,
or the Secretary of Agriculture with
respect to National Forest System land,
shall--
``(aa) review each interim
reclamation plan submitted
under subclause (I) at regular
intervals; and
``(bb) as the applicable
Secretary determines to be
necessary, require the
amendment and reapproval by the
applicable Secretary of the
interim reclamation plan.
``(ii) Final reclamation plan.--
``(I) In general.--Each applicant
for a permit to drill under
subparagraph (A) shall develop for
submission with the plan of operations
of the applicant under that
subparagraph a final reclamation plan
that includes a detailed description of
the reclamation activities the
applicant will carry out prior to final
abandonment or cessation of oil and gas
operations with respect to all land,
water, and resources (including
resources with recreation, range,
timber, mineral, watershed, fish or
wildlife, natural scenic, scientific,
or historical value) impacted by
activities carried out pursuant to the
permit to drill.
``(II) Review and approval.--The
Secretary, or the Secretary of
Agriculture with respect to National
Forest System land, shall review and
approve a final reclamation plan under
subclause (I) only after determining
that the final reclamation plan is
consistent with the standards
promulgated pursuant to paragraph (5).
``(D) Analysis and approval required.--The
Secretary shall not grant a permit to drill under this
Act unless the Secretary has--
``(i) analyzed and approved the plan of
operations submitted with the application for
the permit under subparagraph (A), including
the interim reclamation plan and the final
reclamation plan under subparagraph (C); and
``(ii) made the interim and final
reclamation plans under subparagraph (C)
publicly available before that approval.
``(4) Financial assurances.--
``(A) Requirement.--
``(i) In general.--The Secretary, or the
Secretary of Agriculture with respect to
National Forest System land, shall promulgate
regulations to require that a financial
assurance shall be provided by the lessee prior
to the commencement of activities on any lease
issued under this Act to ensure the complete
and timely remediation and reclamation of any
land, water, or other resources (including
resources with recreation, range, timber,
mineral, watershed, fish or wildlife, natural
scenic, scientific, or historical value)
adversely affected by lease activities and
operations after the abandonment or cessation
of oil and gas operations on the lease.
``(ii) Elimination of nationwide financial
assurances.--
``(I) In general.--A lessee may not
provide a financial assurance under
clause (i) on a nationwide basis for
all leases of the lessee in the United
States.
``(II) Requirement.--With respect
to any nationwide financial assurance
in effect on the date of enactment of
the Oil and Gas Bonding Reform and
Orphaned Well Remediation Act, the
Secretary, or the Secretary of
Agriculture with respect to National
Forest System land, shall require that,
not later than 1 year after that date
of enactment, the lessee shall post
financial assurances in accordance with
this paragraph.
``(iii) Addition of new operators.--
Notwithstanding any other provision of law
(including regulations), in any case in which a
lease issued under this Act is assigned or
transferred to a new operator, the previous
operator of the lease shall include the new
operator on the existing financial assurance
provided under this subparagraph until the date
on which the new operator has provided a
financial assurance on behalf of that new
operator in accordance with this paragraph.
``(B) Form.--
``(i) In general.--The financial assurance
under subparagraph (A) shall be provided in the
form of a surety, bond, 1 or more letters of
credit, 1 or more certificates of deposit, or
cashier's or certified check, subject to the
approval of the Secretary, or the Secretary of
Agriculture with respect to National Forest
System land.
``(ii) Limitation.--Self-bonding shall not
be an acceptable form of financial assurance
under subparagraph (A).
``(C) Amount.--
``(i) In general.--Subject to clause (ii),
the amount of a financial assurance required
under this paragraph shall be the amount
determined by the Secretary, or the Secretary
of Agriculture with respect to National Forest
System land, to be sufficient to ensure the
complete and timely remediation and reclamation
required under subparagraph (A)(i) if the work
were to be performed by the applicable
Secretary in the event of forfeiture by the
lessee.
``(ii) Minimum amounts.--
``(I) In general.--Subject to
subclause (II), the minimum amount of a
financial assurance required under this
paragraph shall be not less than, as
applicable--
``(aa) $150,000, in the
case of a financial assurance
for surface-disturbing
activities of a responsible
party on an individual oil or
gas lease; or
``(bb) $500,000, in the
case of a financial assurance
for all oil and gas leases of a
responsible party in a State.
``(II) Adjustments for inflation.--
Not later than 3 years after the date
of enactment of the Oil and Gas Bonding
Reform and Orphaned Well Remediation
Act, and not less frequently than once
every 3 years thereafter, the
Secretary, or the Secretary of
Agriculture with respect to National
Forest System land, shall adjust for
inflation the minimum amounts under
items (aa) and (bb) of subclause (I).
``(iii) Additional factors.--The Secretary,
or the Secretary of Agriculture with respect to
National Forest System land, shall establish
the level of a financial assurance required
under this paragraph above the applicable
minimum level required under clause (ii) as the
applicable Secretary determines to be
appropriate or necessary to ensure the complete
and timely remediation and reclamation required
under subparagraph (A)(i), after taking into
consideration the following factors:
``(I) The depth of each relevant
proposed wellbore.
``(II) The presence of other
resources (including resources with
recreation, range, timber, mineral,
watershed, fish or wildlife, natural
scenic, scientific, or historical
value).
``(III) The number of wells to be
drilled on the lease.
``(IV) The number and percentage of
low-producing and inactive wells on--
``(aa) the applicable
lease; and
``(bb) any other leases
held by each applicable lessee,
operator, and responsible
party.
``(V) Any current or past
violations by each responsible party.
``(VI) The anticipated condition of
the applicable well site and the extent
of the remediation and reclamation to
be required.
``(VII) The ability of each
responsible party to fully carry out
that remediation and reclamation.
``(VIII) Such other factors as the
applicable Secretary determines to be
relevant.
``(D) Review.--
``(i) Prospective.--
``(I) In general.--With respect to
any financial assurance provided after
the date of enactment of the Oil and
Gas Bonding Reform and Orphaned Well
Remediation Act, not less frequently
than once every 5 years, and at any
time at which the applicable lease is
assigned or transferred, the Secretary,
or the Secretary of Agriculture with
respect to National Forest System land,
shall review the financial assurance to
determine, after taking into
consideration the factors described in
subparagraph (C)(iii), whether the
amount of the financial assurance is
adequate to ensure the complete and
timely remediation and reclamation
required under subparagraph (A)(i).
``(II) Authority to increase.--If
the Secretary, or the Secretary of
Agriculture with respect to National
Forest System land, determines under
subclause (I) that the amount of a
financial assurance is not adequate,
the applicable Secretary shall increase
the amount of the financial assurance
in accordance with subparagraph (C),
including making an adjustment for
inflation, as appropriate.
``(ii) Retrospective.--
``(I) In general.--Not later than 1
year after the date of enactment of the
Oil and Gas Bonding Reform and Orphaned
Well Remediation Act, and not less
frequently than once every 5 years
thereafter, the Secretary, or the
Secretary of Agriculture with respect
to National Forest System land, shall--
``(aa) review the
sufficiency of each financial
assurance provided before that
date of enactment;
``(bb) determine, after
taking into consideration the
factors described in
subparagraph (C)(iii), whether
the amount of the financial
assurance is adequate to ensure
the complete and timely
remediation and reclamation
required under subparagraph
(A)(i); and
``(cc) provide to each
responsible party a written
notice, including any relevant
findings, relating to the
determination under item (bb).
``(II) Authority to increase.--If
the Secretary, or the Secretary of
Agriculture with respect to National
Forest System land, determines under
subclause (I) that the amount of a
financial assurance is not adequate,
the applicable Secretary shall increase
the amount of the financial assurance
in accordance with subparagraph (C),
including making an adjustment for
inflation, as appropriate.
``(E) Release.--On request, and after inspection by
the Secretary, or the Secretary of Agriculture with
respect to National Forest System land, the applicable
Secretary may release, in whole or in part, the
financial assurance required for a lease under this
paragraph if the Secretary determines that--
``(i) the remediation, reclamation, or
permanent plugging covered by the financial
assurance has been completed in accordance
with--
``(I) subparagraph (A)(i); and
``(II) the standards established
under paragraph (5); and
``(ii) all other applicable Federal
requirements have been met.
``(5) Standards.--
``(A) In general.--The Secretary and the Secretary
of Agriculture shall jointly promulgate regulations to
establish uniform standards for the complete and timely
reclamation of land, water, and other resources
(including resources with recreation, range, timber,
mineral, watershed, fish or wildlife, natural scenic,
scientific, or historical value) adversely impacted,
directly or indirectly, by oil and gas activities and
operations (including any prior remediation or
reclamation efforts that fail to achieve compliance
with the standards described in subparagraph (B)) to
the condition that existed prior to the adverse impact,
including--
``(i) standards for the interim reclamation
plans and final reclamation plans required
under paragraph (3)(C); and
``(ii) timelines for--
``(I) commencing and completing the
permanent plugging of wells and related
remediation and reclamation activities;
and
``(II) achieving compliance with
the standards described in subparagraph
(B).
``(B) Requirements.--The standards under
subparagraph (A) shall include standards for--
``(i) the remediation and reclamation of
natural vegetation and hydrology;
``(ii) habitat restoration;
``(iii) salvage, storage, and reuse of
topsoils;
``(iv) erosion control;
``(v) reclamation of access roads;
``(vi) control of invasive species and
noxious weeds; and
``(vii) natural contouring.
``(6) Inactive wells.--
``(A) In general.--Any lessee the lease of which
includes an inactive well (except for a well with an
approved suspension of operations pursuant to section
39) shall, as soon as practicable after determining
that the well has been inactive--
``(i) for a period of more than 30
consecutive days, submit to the Secretary a
notice of that inactivity; and
``(ii) for a period of more than 60
consecutive days--
``(I) bring the inactive well
into--
``(aa) production in paying
quantities; or
``(bb) the active aid of
production in paying
quantities;
``(II) submit to the Secretary an
application for a delay in the
remediation, reclamation, and permanent
closure of the well in accordance with
this paragraph; or
``(III) permanently plug the well
and complete the timely remediation and
reclamation required under paragraphs
(4)(A)(i) and (5).
``(B) Period of delay.--
``(i) In general.--Subject to clause (ii),
the Secretary may approve an application under
subparagraph (A)(ii)(II) for a delay in the
remediation, reclamation, and permanent
plugging of an inactive well under subparagraph
(A)(ii)(III) for a period of not more than 1
year.
``(ii) Extensions.--
``(I) In general.--Subject to
subclause (II) and subparagraph (D), on
receipt of application by a lessee
under subparagraph (A)(ii)(II), the
Secretary may approve 1 or more
additional delays in the remediation,
reclamation, and permanent closure of
an inactive well, each of which
additional delays shall be for a period
of not more than 1 year.
``(II) Requirements.--Before
approving an application for an
additional delay under subclause (I),
the Secretary shall--
``(aa) take into
consideration whether the
operator is making all required
royalty, rental, and fee
payments on time;
``(bb) review the amount of
the financial assurance for the
applicable lease; and
``(cc) increase the amount
to ensure the complete and
timely remediation,
reclamation, and permanent
closure required under
paragraph (4)(A)(i) if the work
were to be performed by the
Secretary in the event of
forfeiture by the lessee.
``(C) Application requirements.--
``(i) In general.--Each application of a
lessee to delay permanent abandonment and
reclamation of a well under subparagraph
(A)(ii)(II) or (B)(ii) shall include a
description of--
``(I) the period of time during
which the well has been inactive;
``(II) the justification for
delaying permanent abandonment and
reclamation of the well;
``(III) the probable duration of
the delay;
``(IV) the means by which the
wellbore is to be protected during the
delay; and
``(V) the contemplated eventual
disposition of the well.
``(ii) Special requirements for
applications for extension.--Each application
for a delay under subparagraph (A)(ii) or
(B)(ii) shall demonstrate, through test
results, that the applicable well is--
``(I) mechanically sound; and
``(II) capable of--
``(aa) production in paying
quantities; or
``(bb) actively aiding in
production in paying
quantities.
``(D) Prohibition.--
``(i) In general.--No well may be inactive
for a period of more than 2 years.
``(ii) Requirement.--With respect to a well
under a lease issued under this Act that has
been inactive for a period of more than 2
years, the applicable lessee shall--
``(I)(aa) bring the inactive well
into--
``(AA) production in paying
quantities; or
``(BB) the active aid of
production in paying
quantities; and
``(bb) pay any related royalties,
rentals, or other fees due; or
``(II)(aa) permanently plug the
well; and
``(bb) complete the timely
remediation and reclamation required
under paragraph (4)(A)(i).
``(iii) Action by secretary.--In any case
in which a lessee has not carried out any
required action under clause (ii) with respect
to a well described in that clause, the
Secretary, or the Secretary of Agriculture with
respect to National Forest System land, shall
execute forfeiture of the financial assurance
associated with the well.
``(E) Inventory.--
``(i) In general.--Not later than 180 days
after the date of enactment of the Oil and Gas
Bonding Reform and Orphaned Well Remediation
Act, and not less frequently than annually
thereafter, the Secretary, or the Secretary of
Agriculture with respect to National Forest
System land, shall complete an inventory of all
wells that, as of the date of publication of
the inventory--
``(I) are inactive, orphaned, or
abandoned; or
``(II) have previously been
identified as idled, orphaned, or
abandoned.
``(ii) Inclusions.--Each inventory under
clause (i) shall identify, with respect to each
inactive or orphaned well--
``(I) the location of the well;
``(II) the length of time during
which the well has been inactive or
orphaned;
``(III) the responsible parties
associated with the well; and
``(IV) any financial assurance
provided to remediate and reclaim the
well, including the most recent date on
which the Secretary reviewed that
financial assurance.''.
TITLE III--MISCELLANEOUS
SEC. 301. COST RECOVERY.
(a) In General.--Section 17 of the Mineral Leasing Act (30 U.S.C.
226) (as amended by section 101(a)) is amended by adding at the end the
following:
``(r) Cost Recovery Requirements.--
``(1) In general.--Before approving an application for a
permit to drill pursuant to a lease issued under this Act, the
Secretary of the Interior, or the Secretary of Agriculture with
respect to National Forest System land, shall determine the
cost to the Federal Government of carrying out Federal
inspection and enforcement actions for the lease.
``(2) Financial assurances.--The Secretary of the Interior,
or the Secretary of Agriculture with respect to National Forest
System land, shall not release the financial assurance
established for a lease under subsection (g)(4)(E) until the
applicable lessee has reimbursed the applicable Secretary for
the total cost of Federal inspection and enforcement actions on
the lease.''.
(b) Use of BLM Permit Processing Improvement Fund.--Section
35(c)(3) of the Mineral Leasing Act (30 U.S.C. 191(c)(3)) is amended by
striking subparagraph (A) and inserting the following:
``(A) In general.--Of the amounts in the Fund, the
Secretary of the Interior, in consultation with the
Secretary of Agriculture, shall use, without further
appropriation or fiscal year limitation--
``(i) 50 percent--
``(I) to carry out the coordination
and review process for--
``(aa) financial assurances
for oil and gas leases under
this Act; and
``(bb) bond releases for
oil and gas leases under this
Act;
``(II) to coordinate--
``(aa) the inventory of
wells that are orphaned or
inactive (as those terms are
defined in subsection (q)(1));
and
``(bb) the processing of
requests for delays in the
permanent closure of wells that
are inactive (as so defined);
and
``(III) to coordinate and process
environmental and cultural resource
reviews applicable to oil and gas
activities under this Act; and
``(ii) the remaining amounts for the
coordination and processing of oil and gas use
authorizations on onshore Federal and Indian
trust mineral estate land.''.
SEC. 302. REGULATIONS.
(a) In General.--Not later than 1 year after the date of enactment
of this Act, the Secretary and the Secretary of Agriculture, acting in
coordination, shall concurrently promulgate regulations to implement
this Act and the amendments made by this Act.
(b) Effect on Funding.--The funds made available pursuant to
subsection (q)(9) of section 17 of the Mineral Leasing Act (30 U.S.C.
226) (as added by section 101(a)) shall be disbursed and expended in
accordance with applicable interim guidance pending completion of the
rulemaking required under subsection (a).
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