H. Rept. 112-531 - PROVIDING LEASING CERTAINTY FOR AMERICAN ENERGY ACT OF 2012112th Congress (2011-2012)
Committee Report
Hide Overview| Report Type: | House Report |
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| Accompanies: | H.R.4382 |
| Committees: | House Natural Resources Committee |
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112th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 112-531
======================================================================
PROVIDING LEASING CERTAINTY FOR AMERICAN ENERGY ACT OF 2012
_______
June 15, 2012.--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. 4382]
[Including cost estimate of the Congressional Budget Office]
The Committee on Natural Resources, to whom was referred
the bill (H.R. 4382) to ensure Federal oil and natural gas
lease sales occur, eliminate redundant leasing bureaucracy, and
provide leasing certainty, having considered the same, report
favorably thereon with an amendment and recommend that the bill
as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Providing Leasing Certainty for
American Energy Act of 2012''.
SEC. 2. MINIMUM ACREAGE REQUIREMENT FOR ONSHORE LEASE SALES.
In conducting lease sales as required by section 17(a) of the Mineral
Leasing Act (30 U.S.C. 226(a)), each year the Secretary of the Interior
shall perform the following:
(1) The Secretary shall offer for sale no less than 25
percent of the annual nominated acreage not previously made
available for lease. Acreage offered for lease pursuant to this
paragraph shall not be subject to protest and shall be eligible
for categorical exclusions under section 390 of the Energy
Policy Act of 2005 (42 U.S.C. 15492), except that it shall not
be subject to the test of extraordinary circumstances.
(2) In administering this section, the Secretary shall only
consider leasing of Federal lands that are available for
leasing at the time the lease sale occurs.
SEC. 3. LEASING CERTAINTY.
Section 17(a) of the Mineral Leasing Act (30 U.S.C. 226(a)) is
amended by inserting ``(1)'' before ``All lands'', and by adding at the
end the following:
``(2)(A) The Secretary shall not withdraw any covered energy project
issued under this Act without finding a violation of the terms of the
lease by the lessee.
``(B) The Secretary shall not infringe upon lease rights under leases
issued under this Act by indefinitely delaying issuance of project
approvals, drilling and seismic permits, and rights of way for
activities under such a lease.
``(C) No later than 18 months after an area is designated as open
under the current land use plan the Secretary shall make available
nominated areas for lease under the criteria in section 2.
``(D) Notwithstanding any other law, the Secretary shall issue all
leases sold no later than 60 days after the last payment is made.
``(E) The Secretary shall not cancel or withdraw any lease parcel
after a competitive lease sale has occurred and a winning bidder has
submitted the last payment for the parcel.
``(F) Not later than 60 days after a lease sale held under this Act,
the Secretary shall adjudicate any lease protests filed following a
lease sale. If after 60 days any protest is left unsettled, said
protest is automatically denied and appeal rights of the protestor
begin.
``(G) No additional lease stipulations may be added after the parcel
is sold without consultation and agreement of the lessee, unless the
Secretary deems such stipulations as emergency actions to conserve the
resources of the United States.''.
SEC. 4. LEASING CONSISTENCY.
Federal land managers must follow existing resource management plans
and continue to actively lease in areas designated as open when
resource management plans are being amended or revised, until such time
as a new record of decision is signed.
SEC. 5. REDUCE REDUNDANT POLICIES.
Bureau of Land Management Instruction Memorandum 2010-117 shall have
no force or effect.
Purpose of the Bill
The purpose of H.R. 4382, as ordered reported, is to ensure
Federal oil and natural gas lease sales occur, eliminate
redundant leasing bureaucracy, and provide leasing certainty.
Background and Need for Legislation
The Department of the Interior is required by law under the
Mineral Leasing Act to hold competitive auctions to allow oil
and natural gas developers the opportunity to acquire federal
land for energy development. Each year, millions of acres
throughout the nation are nominated as areas where there is
interest in oil and natural gas development to give the Bureau
of Land Management (BLM) a general idea of where to hold lease
sales. While many states depend on the energy industry as a
chief driver of their economies, statistics show the percentage
of land leased by BLM versus the number of acres nominated have
drastically decreased over the course of the Obama
Administration. In fact, in some states BLM has not leased a
single acre for energy development, despite abundant interest
from industry.
For example, in 2011 in Colorado, interest was expressed in
219,651 acres for development. However, BLM chose to only lease
5,527 acres--equating to 3 percent. In California, BLM only
leased 8 percent of the nominated acreage (10,299 of 128,140
acres). Furthermore, in Arizona the Obama Administration has
not held single lease sale since coming into office, despite
interest in nearly 50,000 acres for development.
H.R. 4382 would ensure that a minimum number of acres are
leased to guarantee that onshore leasing continues to move
forward in the United States.
The Department of the Interior is to promote a ``multiple
use policy'' for federal lands. This policy allows federal
lands to be enjoyed by all citizens and used for a variety of
purposes--recreation, hunting, ranching, grazing, and energy
development. These land uses have historically been compatible
on public lands and this legislation does not impact the
multiple land use policy under the Federal Land Management and
Policy Act (FLPMA). It gives the Secretary of the Interior the
flexibility under FLPMA to continue to manage federal lands in
a way that accommodates all activities Americans have come to
enjoy on these lands.
A variety of other bureaucratic actions have delayed energy
development and made leasing uncertain for developers who no
longer have assurance that they will actually be able to move
forward with development on the land they lease. Since coming
into office, the Obama Administration has withdrawn leases
after selling them at public auction despite having received
full payment for these leases, deferred lease nominations
indefinitely, added unexpected and additional lease terms and
stipulations following lease sales, and taken years to issue
leases despite language in the Mineral Leasing Act that
specifies that the federal government shall issue leases sixty
days after accepting payment. In 2009, the Department of the
Interior went so far as to completely withdraw 77 oil and gas
leases in Utah after the lease parcels had been sold and final
payment received. In September 2010, a U.S. District Court
judge ruled that Interior Secretary Salazar had exceeded his
authority by withdrawing these leases.
In 2012, Secretary Salazar issued BLM Instruction
Memorandum 2010-117. This Master Leasing Plan (MLP) policy
required a new layer of environmental analysis for certain
federal land areas, even though the new analysis is redundant
with analysis already required in the Resource Management Plans
(RMP) for these lands. The intent of the MLPs was to re-do RMPs
completed since 2005 by requiring RMP amendments. These
amendments routinely take several years to complete. The MLP
seems intended to simply identify new restrictions on lands
available for oil and natural gas development beyond those
identified in the previously existing analysis.
The ``Providing Leasing Certainty for American Energy Act
of 2012'' would encourage companies to seek out federal land
for production by creating certainty that they would receive
their leases in a timely fashion, lease terms would not be
changed after the lease has been issued, and leases could not
be withdrawn after they have been paid for.
While the Obama Administration has recently attempted to
take credit for our nation's increase production in oil and
gas, the reality is that production on federal lands has, in
fact, decreased under the Administration--while production on
state and private lands has increased significantly, North
Dakota being a prime example. According to a study recently
released by the American Petroleum Institute, ``at no time in
the last 25 years has the number of new onshore federal oil and
gas leases been lower than the number of new leases issued in
2009 and 2011,'' with new leases numbering 44 percent less in
2009 and 2010 when compared to 2007 and 2008.
The policies of this Administration have made it more
difficult, time consuming and expensive to bring a lease
through to production--and in some cases have even cast doubt
on whether the lease, once paid for, will even be able to be
developed. This legislation seeks to provide certainty and
efficiency to the BLM leasing process which has fallen into
disrepair under the current Administration. By doing so, the
bill can foster increased energy development on federal lands.
Because there are no guidelines to ensure regular leasing
occurs, the number of acres leased has been extremely sporadic
through the years and has varied greatly as Administrations
have changed. This gives industry little certainty that new
areas will regularly be leased and new development can occur.
Currently, the federal government leases less than 3 percent of
the federal offshore areas and less than 6 percent of the
federal onshore areas for oil and gas production. Furthermore,
the Obama Administration has issued fewer new federal leases
than any administration in nearly thirty years.
Committee Action
H.R. 4382 was introduced on April 18, 2012, by Congressman
Mike Coffman (R-CO). The bill was referred to the Committee on
Natural Resources, and within the Committee to the Subcommittee
on Energy and Mineral Resources. On April 26, 2012, the
Subcommittee held a hearing on the bill. On May 16, 2012, the
Full Natural Resources Committee met to consider the bill. The
Subcommittee on Energy and Mineral Resources was discharged by
unanimous consent. Congressman Coffman offered amendment
designated #1 to the bill; the amendment was adopted by voice
vote. Congressman Rush Holt (D-NJ) offered amendment designated
.007 to the bill; the amendment was not adopted by a bipartisan
roll call vote of 14 to 25, as follows:
Congressman Ben Lujan (D-NM) offered amendment designated
.004 to the bill; the amendment was not adopted by a roll call
vote of 18 to 22, as follows:
Congressman Paul Tonko (D-NY) offered amendment designated
.003 to the bill; the amendment was not adopted by a bipartisan
roll call vote of 15 to 25, as follows:
Congressman Ed Markey (D-MA) offered amendment designated
.002 to the bill; the amendment was not adopted by a roll call
vote of 16 to 25, as follows:
Congressman Ed Markey (D-MA) offered amendment designated
.005 to the bill; the amendment was not adopted by a bipartisan
roll call vote of 14 to 27, as follows:
The bill, as amended, was then adopted and ordered
favorably reported to the House of Representatives by a
bipartisan roll call vote of 24 to 17, as follows:
Section-by-Section Analysis
Section 1. Short title
The title of the bill is the ``Providing Leasing Certainty
for American Energy Act of 2012.''
Section 2. Minimum acreage requirement for onshore lease sales
Section 2 requires the Secretary of the Interior to
annually lease at least 25% of nominated acreage not previously
made available for lease.
Section 3. Leasing certainty
This section prohibits the Secretary from withdrawing lease
parcels after they have been leased or adding additional lease
stipulations after the lease sale. It also sets timelines for
the adjudication of lease protests and requires the Secretary
to issue leases in a timely fashion.
Section 4. Leasing consistency
Section 4 requires land managers to continue leasing in
open areas when they are amending current resource management
plans.
Section 5. Reduce redundant policies
This section overturns the Bureau of Land Management's
Instruction Memorandum 2010-117 (Master Leasing Plans).
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:
H.R. 4382--Providing Leasing Certainty for American Energy Act of 2012
CBO estimates that enacting H.R. 4382 would increase
offsetting receipts from bonus bids by $2 million over the
2013-2022 period; therefore, pay-as-you-go procedures apply. We
estimate that implementing the bill would not affect
discretionary spending. Enacting H.R. 4382 would not affect
revenues.
H.R. 4382 would require the Secretary of the Interior to
offer for sale at least 25 percent of onshore federal lands
nominated by firms for oil and gas leasing. Based on
information provided by the Bureau of Land Management (BLM)
about the amount of nominated lands leased, CBO estimates that
implementing that provision would not affect the federal budget
because, under current law, the agency already offers for sale
more than 25 percent of the acreage nominated. The bill also
would prevent the Secretary from taking certain actions that
would delay or cancel leases, lease sales, or project
approvals. CBO estimates that this provision also would not
affect the federal budget because, under current law, the
Secretary rarely takes such actions and the budgetary effects
of those actions are typically small.
H.R. 4382 would prohibit the Secretary from deferring lease
sales in areas where BLM is revising existing land use plans.
Because leasing is deferred for up to five years in areas
undergoing land use planning, CBO expects that certain areas
would be leased sooner under H.R. 4382 than under current law.
Based on information provided by BLM, CBO expects that leasing
activities are deferred on about 150,000 new acres per year.
Based on information about the amount of acres leased annually
relative to the amount of acres available for lease, CBO
estimates that accelerating leasing of those lands would
increase offsetting receipts from bonus bids by $2 million over
the 2013-2022 period.
H.R. 4382 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Jeff LaFave. The
estimate was 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, spending authority, credit authority, or an increase
or decrease in revenues or tax expenditures. CBO estimates that
enacting H.R. 4382 would increase offsetting receipts from
bonus bids by $2 million over the 2013-2022 period; therefore,
pay-as-you-go procedures apply. CBO estimates that implementing
the bill would not affect discretionary spending.
3. General Performance Goals and Objectives. As required by
clause 3(c)(4) of rule XIII, the general performance goal or
objective of this bill, as ordered reported, is to ensure
Federal oil and natural gas lease sales occur, eliminate
redundant leasing bureaucracy, and provide leasing certainty.
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 Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
MINERAL LEASING ACT
* * * * * * *
Sec. 17. (a)(1) All lands subject to disposition under this
Act which are known or believed to contain oil or gas deposits
may be leased by the Secretary.
(2)(A) The Secretary shall not withdraw any covered energy
project issued under this Act without finding a violation of
the terms of the lease by the lessee.
(B) The Secretary shall not infringe upon lease rights under
leases issued under this Act by indefinitely delaying issuance
of project approvals, drilling and seismic permits, and rights
of way for activities under such a lease.
(C) No later than 18 months after an area is designated as
open under the current land use plan the Secretary shall make
available nominated areas for lease under the criteria in
section 2.
(D) Notwithstanding any other law, the Secretary shall issue
all leases sold no later than 60 days after the last payment is
made.
(E) The Secretary shall not cancel or withdraw any lease
parcel after a competitive lease sale has occurred and a
winning bidder has submitted the last payment for the parcel.
(F) Not later than 60 days after a lease sale held under this
Act, the Secretary shall adjudicate any lease protests filed
following a lease sale. If after 60 days any protest is left
unsettled, said protest is automatically denied and appeal
rights of the protestor begin.
(G) No additional lease stipulations may be added after the
parcel is sold without consultation and agreement of the
lessee, unless the Secretary deems such stipulations as
emergency actions to conserve the resources of the United
States.
* * * * * * *
DISSENTING VIEWS
We oppose H.R. 4382 because it would set an arbitrary
requirement that the Department of the Interior offer oil
companies at least 25 percent of whatever onshore areas
industry nominates every year, regardless of whether or not
drilling in these areas would be appropriate. Under this
legislation, the Interior Department could no longer lease in
areas nominated by the industry that have the greatest resource
potential and where drilling makes the most sense. Under H.R.
4382, there is no limit to the acreage that can be nominated by
the oil industry. This legislation would therefore threaten
other important uses of our public lands such as hunting,
fishing, livestock grazing and recreational shooting by
requiring leasing in areas that may threaten these important
values.
This arbitrary requirement that a certain percentage of
acres be offered for lease also completely disregards the fact
that industry already has 25 million acres of public land under
lease onshore on which it is not producing. As we have seen,
handcuffing the Department by requiring that we give away more
public land to the oil industry in no way guarantees that the
industry will actually begin producing on those leases.
This misguided legislation would also invalidate the BLM's
new leasing reforms, which are designed to increase certainty
for the oil and gas industry and reduce the number of lease
areas that are protested. Under the BLM's leasing reforms, the
number of protested parcels has already dropped by 8 percent.
Yet, this bill would throw out those reforms and instead create
a process with less public involvement and less certainty for
industry.
H.R. 4382 would also require the BLM to continue ``actively
leasing'' in areas where land use plans are being updated or
revised to protect wildlife or other resource values, deal with
a growing population, or incorporate a new recreational
activity. Land-use planning is a proactive tool to ensure that
we protect various land uses under the Federal Lands Policy and
Management Act of 1976 (FLPMA). According to the Interior
Department ``continuing to lease in some open areas in which
recreational or ecological values are at risk could prevent the
BLM from protecting important resource values. It could be
counterproductive to efforts to develop energy resources on
Federal lands if the result is greater near-term resource
damage that, in turn, would necessitate more onerous
restrictions on future energy development activities.'' Rather
than allowing for smart planning ahead of time that includes
greater public participation, this legislation would reduce
public participation and certainty for the oil industry in the
leasing process.
The Majority rejected an amendment from Representative
Lujan (D-NM) that would have allowed the Secretary to offer
less than 25 percent of the areas nominated by the oil and gas
industry if it was necessary to protect hunting, fishing,
grazing or recreational shooting. The Majority also rejected an
amendment from Representative Tonko (D-NY) that would have
required oil companies seeking new leases under this bill to
disclose all political contributions over the previous five
years, in the wake of the Citizens United Supreme Court
decision. These oil and gas resources on public lands belong to
the American people and they have a right to know how companies
benefiting from accessing those resources are influencing
elections. The Majority voted down an amendment from Ranking
Member Markey (D-MA) that would have made drilling safer by
increasing the fines that can be assessed for oil companies who
violate regulations for things such as drilling without a
blowout preventer; fines which were set 30 years ago and which
the Department cannot raise through administrative action. The
Majority also rejected an amendment from Ranking Member Markey
to ensure that all the oil and natural gas produced from the
leases issued under this bill could not be exported. Finally,
the Majority rebuffed an amendment from Energy and Mineral
Resources Subcommittee Ranking Member Holt (D-NJ) that would
have sought to end the royalty free drilling in the Gulf that
is projected to cost American taxpayers nearly $10 billion over
the next decade.
We shouldn't be seeking to shut the public out of the
management of our public lands as this bill would do. There is
also no reason to threaten hunting, fishing and the other uses
of our public lands when oil companies already have 25 million
acres of public lands onshore under lease on which they are not
producing.
Edward J. Markey.
Rush D. Holt.
Paul Tonko.
Grace F. Napolitano.
Madeleine Z. Bordallo.
Raul M. Grijalva.
Ben Ray Lujan.