H. Rept. 112-68 - 112th Congress (2011-2012)
May 02, 2011, As Reported by the Natural Resources Committee

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House Report 112-68 - RESTARTING AMERICAN OFFSHORE LEASING NOW ACT




[House Report 112-68]
[From the U.S. Government Printing Office]


112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     112-68

======================================================================



 
              RESTARTING AMERICAN OFFSHORE LEASING NOW ACT

                                _______
                                

  May 2, 2011.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Hastings of Washington, from the Committee on Natural Resources, 
                        submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 1230]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 1230) to require the Secretary of the Interior 
to conduct certain offshore oil and gas lease sales, and for 
other purposes, having considered the same, report favorably 
thereon without amendment and recommend that the bill do pass.

                          PURPOSE OF THE BILL

    The purpose of H.R. 1230 is to require the Secretary of the 
Interior to conduct certain offshore oil and gas lease sales.

                  BACKGROUND AND NEED FOR LEGISLATION

    The Outer Continental Shelf Lands Act (OCSLA) provides a 
system for offshore oil and natural gas exploration, leasing, 
and development in federal waters. The federal government 
develops five-year plans to determine where and when offshore 
leasing and energy production will occur.
    The current five-year plan (2007-2012) included a lease 
sale off the Virginia coast in 2011 (#220), two Gulf of Mexico 
lease sales (#216 and #218) in 2011, and another Gulf of Mexico 
lease sale (#222) to have taken place in 2012. All of these 
sales have been either canceled or delayed by the Obama 
Administration, threatening to make 2011 the first year since 
1958 that there will have been no lease sales in the OCS. As a 
result, the President's budget predicts that OCS revenues from 
bonus bids and rents will be only $150 million, approximately 
1.5% of the 2008 revenue generated by OCS sales, which was 
$9.85 billion in FY2008. This loss of billions in revenue will 
have a real impact on the federal budget and, in future years, 
delay new American energy production. These are the direct 
results of conscious decisions by the Obama Administration that 
have real impacts on our economic and energy security.
    In 2008, both Congress and the President lifted the 
decades-long ban on offshore drilling. This opened 500 million 
additional acres to offshore drilling--including off the 
Atlantic coast. The lifting of this ban allowed the scheduled 
Virginia lease sale in 2011 to proceed. However, in 2010 the 
Secretary of the Interior delayed the Virginia lease sale until 
2012 and then later announced that no areas off the Atlantic 
Coast would be available for leasing and energy development in 
the next five-year plan (2012-2017). In 2010, the Secretary of 
the Interior also canceled or delayed two scheduled Gulf of 
Mexico lease sales from 2011 until 2012. H.R. 1230 will reverse 
the Administration's delays by validating the existing 
completed Environmental Impact Statements (EIS), prepared for 
these lease sales under the National Environmental Policy Act, 
and ensuring these lease sales move forward in a prompt, timely 
and safe manner. H.R. 1230 expands American energy production, 
creates jobs and generates revenue for taxpayers.
    It is important to note that the EIS work for the Gulf 
lease sales is complete, thorough, and sufficient to safely and 
responsibly conduct lease sales. The EIS for the Virginia lease 
sale is to be completed within one year. Furthermore, this is 
not the final analysis these leases will undergo. Each lease 
will undergo a lease sale Environmental Assessment along with 
additional environmental review of the submitted Exploration 
Plan. In totality, before an oil and natural gas project on a 
lease in federal waters takes place, there will be at least 
four separate environmental reviews that look at the overall 
environmental effects of development down to the site-specific 
review of impacts.

                            COMMITTEE ACTION

    H.R. 1230, the Restarting American Offshore Leasing Now 
Act, was introduced on March 29, 2011, by Natural Resources 
Committee Chairman Doc Hastings (R-WA). The bill was referred 
to the Committee on Natural Resources, and within the Committee 
to the Subcommittee on Energy and Mineral Resources. On April 
6, 2011, the Subcommittee on Energy and Mineral Resources held 
a hearing on the bill. On April 13, 2011, the Full Natural 
Resources Committee met to consider the bill. The Subcommittee 
on Energy and Mineral Resources was discharged by unanimous 
consent. Congressman Rush Holt (D-NJ) offered amendment 
designated 001 to the bill; the amendment was ruled out of 
order. Congressman Rush Holt (D-NJ) offered amendment 
designated #A; the amendment was not adopted by a roll call 
vote of 12-28, as follows:

<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

    Congressman Rush Holt (D-NJ) offered amendment designated 
#B; the amendment was not adopted by a roll call vote of 14-28, 
as follows:

<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

    Congressman John Sarbanes (D-MD) offered amendment 
designated 008; the amendment was not adopted by a roll call 
vote of 14-28, as follows:

<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

    Congressman Ben Lujan (D-NM) offered amendment designated 
009; the amendment was not adopted by a roll call vote of 14-
28, as follows:

<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

    Congressman Rush Holt (D-NJ) offered amendment designated 
007. Congressman Holt offered an amendment to the amendment 
which was adopted by unanimous consent. The amendment, as 
amended, was not adopted by voice vote. Congressman Ben Lujan 
(D-NM) offered amendment designated 005. Congressman Lujan 
offered an amendment to the amendment which was adopted by 
unanimous consent. The amendment, as amended, was not adopted 
by a roll call vote of 16-26, as follows:
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

    Congressman Edward Markey (D-MA) offered amendment 
designated 002; the amendment was not adopted by a roll call 
vote of 15-27, as follows:
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

    Congressman Rush Holt (D-NJ) offered amendment designated 
#D; the amendment was not adopted by a roll call vote of 14-29, 
as follows:
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

    The bill was then favorably reported to the House of 
Representatives by a roll call vote of 29-14, as follows:
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

            COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Natural Resources' oversight findings and 
recommendations are reflected in the body of this report.

                    COMPLIANCE WITH HOUSE RULE XIII

    1. Cost of Legislation. Clause 3(d)(1) of rule XIII of the 
Rules of the House of Representatives requires an estimate and 
a comparison by the Committee of the costs which would be 
incurred in carrying out this bill. However, clause 3(d)(2)(B) 
of that rule provides that this requirement does not apply when 
the Committee has included in its report a timely submitted 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974. Under clause 3(c)(3) of rule 
XIII of the Rules of the House of Representatives and section 
403 of the Congressional Budget Act of 1974, the Committee has 
received the following cost estimate for this bill from the 
Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 28, 2011.
Hon. Doc Hastings,
Chairman, Committee on Natural Resources, House of Representatives, 
        Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1230, the 
Restarting American Offshore Leasing Now Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kathleen 
Gramp.
            Sincerely,
                                          Peter H. Fontaine
                                        (For Douglas W. Elmendorf).
    Enclosure.

H.R. 1230--Restarting American Offshore Leasing Now Act

    Summary: H.R. 1230 would establish statutory deadlines for 
sales of certain oil and gas leases in the Outer Continental 
Shelf (OCS). If the bill were enacted, the Department of the 
Interior (DOI) would be required to auction leases in the 
Central and Western Gulf of Mexico within four and eight months 
of enactment, respectively. The legislation also would direct 
DOI to auction leases for an area off the coast of Virginia 
within one year of enactment.
    Enacting H.R. 1230 would affect direct spending; therefore, 
pay-as-you-go procedures apply. CBO estimates that enacting 
this legislation would reduce net direct spending by $25 
million over the 2011-2016 period and about $40 million over 
the 2011-2021 period.
    In addition, CBO estimates that DOI would spend about $2 
million to implement the legislation, assuming the availability 
of appropriated funds.
    H.R. 1230 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 1230 is shown in the following table. 
The costs of this legislation fall within budget function 950 
(undistributed offsetting receipts).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  By fiscal year, in millions of dollars--
                                                   -----------------------------------------------------------------------------------------------------
                                                     2012    2013    2014    2015    2016    2017    2018    2019    2020    2021   2012-2016  2012-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDINGa

Estimated Budget Authority........................       0       0       0     -10     -15     -20      -7       4       4       4       -25        -40
Estimated Outlays.................................       0       0       0     -10     -15     -20      -7       4       4       4       -25        -40
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\In addition to the estimated impact on direct spending, CBO estimates that implementing H.R. 1230 would cost about $2 million over the 2012-2016
  period, subject to the availability of appropriated funds.

    Basis of estimate: For this estimate, CBO assumes that H.R. 
1230 will be enacted by the end of fiscal year 2011 and that 
DOI will conduct the sales of federal leases in the Gulf of 
Mexico according to the schedule included in the President's 
budget request for fiscal year 2012. Bonus bids, rental fees, 
and royalty payments for OCS leases are recorded in the budget 
as offsetting receipts, which are an offset to direct spending.

Direct spending

    CBO estimates that implementing the bill would have no 
significant effect on proceeds from lease sales in the Gulf of 
Mexico because the proposed schedule is similar to the plan 
included in DOI's budget for 2011. CBO expects, however, that 
directing DOI to hold a lease sale off the Virginia coast soon 
after enactment would increase the number of lease sales in 
that area relative to current policies.
    Under existing law, DOI can auction acreage if it is 
included in an approved five-year plan. The Administration's 
plan for the 2007-2012 period included a proposed sale in 2011 
of about 4 million acres off the coast of Virginia. That lease 
sale was canceled in 2010, however, to allow for further review 
of the impact of oil and gas development on military operations 
and the environment. A final leasing plan for the 2012-2017 
period has not yet been adopted. Recent guidelines for that 
plan recommended preparing the environmental studies needed for 
seismic assessments of the Mid-Atlantic region (including the 
coast of Virginia), but did not include any lease sales in that 
area over the 2012-2017 period. As a result, CBO's baseline 
projections assume that the Virginia OCS would not be opened 
for leasing until after June 30, 2017, under current law.
    Based on information from DOI on the oil and gas resources 
in the Mid-Atlantic region, CBO estimates that enacting the 
bill would increase net offsetting receipts (and thus decrease 
direct spending) by about $40 million over the 10-year period. 
That estimate reflects CBO's expectation that holding a 
Virginia lease sale soon after enactment would increase 
proceeds in the next five years but also would reduce the 
amount collected in auctions held after 2017. For this 
estimate, CBO assumes that DOI would incorporate the Virginia 
lease sale into the five-year plan for 2012-2017 after 
completing the assessments and consultations required by the 
bill and existing law. Given the time needed to complete those 
assessments, conduct sales, and issue leases, CBO anticipates 
that proceeds from leasing in those areas would be collected 
after fiscal year 2014.

Spending subject to appropriation

    Based on spending patterns for similar activities, CBO 
estimates that DOI would spend about $2 million over the 2012-
2016 period to complete the necessary environmental and other 
assessments necessary to conduct the Virginia lease sale, 
assuming the availability of appropriated funds.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in the following table.

  CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 1230, THE RESTARTING AMERICAN OFFSHORE LEASING NOW ACT, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON
                                                           NATURAL RESOURCES ON APRIL 13, 2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year, in millions of dollars--
                                           -------------------------------------------------------------------------------------------------------------
                                             2011    2012    2013    2014    2015    2016    2017    2018    2019    2020    2021   2011-2016  2011-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT

Statutory Pay-As-You-Go Impact............       0       0       0       0     -10     -15     -20      -7       0       4       4       -25     -40
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: H.R. 1230 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal Costs: Kathleen Gramp; Impact 
on State, Local, and Tribal Governments: Melissa Merrell; 
Impact on the Private Sector: Amy Petz.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.
    2. Section 308(a) of Congressional Budget Act. As required 
by clause 3(c)(2) of Rule XIII of the Rules of the House of 
Representatives and section 308(a) of the Congressional Budget 
Act of 1974, this bill does not contain any new budget 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures. According to the Congressional 
Budget Office, enactment of this bill would reduce net direct 
spending by $25 million over the 2011-2016 period and about $40 
million over the 2011-2021 period.
    3. General Performance Goals and Objectives. This bill does 
not authorize funding and therefore, clause 3(c)(4) of Rule 
XIII of the Rules of the House of Representatives does not 
apply.

                           EARMARK STATEMENT

    This bill does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined 
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of 
the House of Representatives.

                    COMPLIANCE WITH PUBLIC LAW 104-4

    This bill contains no unfunded mandates.

                PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

    This bill is not intended to preempt any State, local or 
tribal law.

                        CHANGES IN EXISTING LAW

    If enacted, this bill would make no changes in existing 
law.

                            DISSENTING VIEWS

    We oppose H.R. 1230 because it is a blatant political 
attempt to use rising gasoline prices as an excuse to grant 
enormous, multi-national energy companies more access to the 
Gulf with less oversight. Enacting this legislation would have 
no impact on the price of gasoline but would make another 
catastrophic oil spill more likely.
    The short title of H.R. 1230 asserts that the purpose of 
the legislation is to ``restart'' offshore leasing. Of course, 
the legislation is belated given that the Obama Administration 
restarted offshore drilling in February and has already 
announced plans to offer all three Gulf of Mexico lease sales 
mandated in the bill later this year or early next year. As a 
result, H.R. 1230 ``restarts'' nothing, but would mandate that 
the lease sales go forward within unreasonable time limits and 
without proper environmental review.
    In addition to destroying beaches, livelihoods and lives, 
the BP Deepwater Horizon disaster destroyed any notion that 
pre-spill environmental reviews were adequate. As is too often 
the case, these environmental review documents turned out to be 
amalgamations of wildly speculative industry claims, outdated 
or inaccurate information and cookie-cutter, boilerplate 
verbiage. Virtually every assumption these reviews were based 
upon washed away in the BP spill.
    The existing environmental impact statements for the Gulf 
lease sales were completed in 2007, long before the BP spill. 
Amongst other deficiencies, these reviews assume ``the most 
likely size of an offshore spill greater than or equal to 1,000 
barrels that is predicted to occur is 4,600 barrels'' of oil. 
The 2007 analysis concluded that the total volume of oil that 
would be spilled from all spills in the central and western 
Gulf over the next 40 years would be roughly 47,000 barrels. 
That is less than what was spilled during the Deepwater Horizon 
disaster in one day. Finally, these reviews concluded that in a 
worst case scenario, only 19 to 31 miles of Gulf coastline 
would be impacted by a spill. In reality, the Deepwater Horizon 
disaster resulted in oil reaching over 950 miles of the Gulf 
coastline, according to NOAA. Nevertheless, H.R. 1230 would 
``deem'' these outdated and demonstrably inadequate reviews as 
satisfying the requirements of the National Environmental 
Policy Act for these new lease sales.
    Rigorous engagement in the review process required under 
NEPA would provide the ideal forum to review these assumptions 
in light of the BP spill, gather expert as well as public 
input, and formulate policy to allow drilling to proceed 
without repeating the mistakes which led to the BP calamity. 
H.R. 1230 prohibits that process.
    H.R. 1230 would also force the Interior Department to 
conduct a lease sale off the coast of Virginia within one year. 
Opening up the coastline of the East Coast to drilling within 
one year, before any new safety standards for offshore drilling 
have been enacted by the Congress, is reckless and would 
endanger the economies and the environment of the Mid-Atlantic 
coastal states.
    Energy and Mineral Subcommittee Ranking Member Holt offered 
amendments to cure the NEPA deficiencies in the bill, which 
were rejected in lock-step by the Majority. Further, Ranking 
Member Markey offered an amendment to insure that, if these 
lease sales are to go forward, they must provide a fair return 
to the American taxpayers; that too was rejected. 
Representative Sarbanes offered an amendment to remove the ill-
considered lease sale off Virginia, which was also defeated. 
Finally, Representative Lujan offered an amendment seeking to 
guarantee that the energy resources produced pursuant to these 
leases would at least remain in the United States. That basic 
assurance was also rejected by the Majority.
    Witness after witness before the Natural Resources 
Committee has made clear that the price of oil is determined on 
an international market, largely controlled by OPEC. Increases 
in U.S. domestic production can easily be offset by reductions 
in OPEC production in order to maintain high prices.
    H.R. 1230 will not change this reality. All it would do is 
insist on denying the reality of the BP spill and put the Gulf 
and the Nation back on the dangerous path that led to that 
tragic event.

                                   Edward J. Markey.
                                   Peter A. DeFazio.
                                   John P. Sarbanes.
                                   Raul M. Grijalva.
                                   Gregorio Kilili Camacho Sablan.
                                   Dale E. Kildee.
                                   Niki Tsongas.
                                   Betty Sutton.
                                   Ben Ray Lujan.
                                   Frank Pallone, Jr.
                                   Colleen Hanabusa.
                                   Grace F. Napolitano.
                                   Eni F.H. Faleomavaega.
                                   John Garamendi.
                                   Rush Holt.