1.Short
title; table of contents
(a)This Act may be cited
as the Reliable and Affordable Natural
Gas Energy Reform Act of 2006
.
(b)The table of contents of this Act is as follows:
Sec. 1. Short title; table of
contents.
Sec. 2. Natural gas leases.
Sec. 3. Determination of adjacent zones and planning
areas.
Sec. 4. Leasing moratoria in the OCS.
Sec. 5. Option to petition for extension of withdrawal from
leasing within certain areas of the outer Continental Shelf.
Sec. 6. State requests to examine energy areas.
Sec. 7. Availability of certain areas for leasing.
Sec. 8. Neighboring State concurrence.
Sec. 9. Revenue sharing from moratorium areas.
Sec. 10. Revenue sharing from nonmoratorium areas.
Sec. 11. Repeal of requirement to conduct comprehensive
inventory of OCS natural gas resources.
Sec. 12. Leases for areas located within 100 miles off
California or Florida.
Sec. 13. Repurchase of certain leases.
2.Section 8 of the Outer
Continental Shelf Lands Act (43 U.S.C. 1337) is amended by adding at the end
the following:
(q)
(1)Beginning with the 5-year outer Continental Shelf oil and
gas leasing program for 2007 through 2012, the Secretary may issue a lease
under this section that authorizes development and production of gas and
associated condensate and other hydrocarbon liquids in a moratorium area (as
defined in section 18(j)(1)) in accordance with regulations issued under
paragraph (2).
(2)Not
later than October 1, 2006, the Secretary shall issue regulations that, for
purposes of this section—
(A)define
natural gas in a manner that includes—
(i)hydrocarbons and
other substances in a gaseous state at atmospheric pressure and a temperature
of 60 degrees Fahrenheit;
(ii)liquids that
condense (gas liquids) from natural gas in the process of treatment,
dehydration, decompression, or compression prior to the point for measuring
volume and quality of the production established by the Secretary, acting
through the Minerals Management Service;
(iii)other
associated hydrocarbon liquids if the predominant component is natural gas and
gas liquids; and
(iv)natural gas
liquefied for transportation;
(B)provide that
natural gas leases shall contain the same rights and obligations as oil and gas
leases;
(C)provide that, in
reviewing the adequacy of bids for natural gas leases, the Secretary, acting
through the Minerals Management Service, shall exclude the value of any crude
oil estimated to be discovered within the boundaries of the leasing
area;
(D)provide for
cancellation of a natural gas lease, with payment of the fair value of the
lease rights canceled, if the Secretary determines that hydrocarbons other than
natural gas and natural gas liquids will be the predominant production from the
lease; and
(E)provide that, at
the request and with the consent of the Governor of the State adjacent to the
lease area, as determined under section 18(j)(2)(B)(i), and with the consent of
the lessee, an existing natural gas lease may be converted, without an increase
in the rental royalty rate and without further payment in the nature of a lease
bonus, to a lease under subsection (b), in accordance with a process, to be
established by the Secretary, that requires—
(i)consultation by
the Secretary with the Governor of the State and the lessee with respect to the
operating conditions of the lease, taking into consideration environmental
resource conservation and recovery, economic factors, and other factors, as the
Secretary determines to be relevant; and
(ii)compliance with
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
(3)Any Federal law (including regulations) that applies to an
oil and gas lease on the outer Continental Shelf shall apply to a natural gas
lease issued under this
subsection.
.
3.Determination of
adjacent zones and planning areasSection 4(a)(2)(A) of the Outer Continental
Shelf Lands Act (43 U.S.C. 1333(a)(2)(A)) is amended—
(1)by designating
the first, second, and third sentences as clause (i), (iii), and (iv),
respectively;
(2)in clause (i) (as
so designated), by striking , and the President
and all that
follows through the end of the sentence; and
(3)by inserting
after clause (i) (as so designated) the following:
(ii)The lines extending seaward and
defining the Adjacent Zone of each State, and each Planning Area of the outer
Continental Shelf, shall be as indicated on the maps for each outer Continental
Shelf region entitled—
(I)Alaska OCS Region State
Adjacent Zone and OCS Planning Areas
;
(II)Pacific OCS Region State
Adjacent Zones and OCS Planning Areas
;
(III)Gulf of Mexico OCS Region
State Adjacent Zones and OCS Planning Areas
; and
(IV)Atlantic OCS Region State
Adjacent Zones and OCS Planning Areas
;
all of which
are dated September 2005 and on file in the Office of the Director, Minerals
Management
Service..
4.Leasing
moratoria in the OCSSection
18 of the Outer Continental Shelf Lands Act (43 U.S.C. 1344) is amended by
adding at the end the following:
(i)Leasing within
certain areas of the outer Continental Shelf
(1)Prohibition
against leasingExcept as otherwise provided in this subsection
and subsection (k), prior to June 30, 2012, the Secretary shall not offer for
leasing for natural gas—
(A)any area
withdrawn from disposition by leasing in the Atlantic OCS Region, the Pacific
OCS Region, or the Gulf of Mexico OCS Region Eastern Planning Area, as depicted
on the applicable map described in subparagraph (B), under the
Memorandum on Withdrawal of Certain Areas of the United States Outer
Continental Shelf from Leasing Disposition
, from 34 Weekly Comp. Pres.
Doc. 1111, dated June 12, 1998; or
(B)any area not
withdrawn under that Memorandum that is included within—
(i)the Gulf of
Mexico OCS Region Eastern Planning Area as indicated on the map entitled
Gulf of Mexico OCS Region State Adjacent Zones and OCS Planning
Areas
; or
(ii)the Florida
Straits Planning Area as indicated on the map entitled Atlantic OCS
Region State Adjacent Zones and OCS Planning Areas
;
both of
which are dated September 2005 and on file in the Office of the Director,
Minerals Management Service.(2)
(A)The withdrawal of any area from disposition by leasing
under the Memorandum on Withdrawal of Certain Areas of the United States
Outer Continental Shelf from Leasing Disposition
, from 34 Weekly Comp.
Pres. Doc. 1111, dated June 12, 1998, shall have no force or effect with
respect to any area included within the Gulf of Mexico OCS Region Central
Planning Area as indicated on the map entitled Gulf of Mexico OCS Region
State Adjacent Zones and OCS Planning Areas
, dated September 2005 and
on file in the Office of the Director, Minerals Management Service.
(B)The Secretary shall amend the 5-year outer Continental
Shelf oil and gas leasing program for 2002 through 2007 to include—
(i)the areas added
to the Gulf of Mexico OCS Region Central Planning Area by this paragraph to the
extent that the areas were included within the original boundaries of proposed
Lease Sale 181; and
(ii)2 sales in such
additional areas, 1 of which shall be held not later than January 2007 and 1 of
which shall be held not later than June 2007.
(C)Environmental
impact statementThe final environmental impact statement
prepared for an area covered by this paragraph for Lease Sale 181 shall be
considered sufficient for all purposes for each lease sale in which the area is
offered for lease during the 5-year outer Continental Shelf oil and gas leasing
program for 2002 through 2007 without need for supplementation.
(D)
(i)Part within
Planning AreaAny tract only partially added to the Gulf of
Mexico OCS Region Central Planning Area by this paragraph shall be eligible for
leasing of the part of the tract that is included within the Gulf of Mexico OCS
Region Central Planning Area.
(ii)Part outside
Planning AreaThe remainder of the tract that lies outside of the
Gulf of Mexico OCS Region Central Planning Area may be developed and produced
by the lessee of the partial tract using extended reach or similar drilling
from a location on a leased
area.
.
5.Option to
petition for extension of withdrawal from leasing within certain areas of the
outer Continental Shelf
(a)
(1)The Governor of a State may submit to the Secretary a
petition requesting that the Secretary extend for a period of time described in
paragraph (2) the withdrawal from leasing for all or part of any area within
the Adjacent Zone of the State within 125 miles of the coastline of the
State.
(2)
(A)The period of time requested in a petition submitted
under paragraph (1) shall not exceed 5 years for each petition.
(B)The
Secretary shall not grant a petition submitted under paragraph (1) that extends
the remaining period of a withdrawal of an area from leasing for a total of
more than 10 years.
(3)A State may petition multiple times for a particular
area, but not more than once per calendar year for any particular area.
(4)A petition submitted under paragraph (1) may—
(A)apply to natural
gas leasing; and
(B)request some
areas to be withdrawn from all leasing and some areas only withdrawn from one
type of leasing.
(5)A petition for extending the withdrawal from
leasing of any part of the Alabama Adjacent Zone that is a part of the Gulf of
Mexico OCS Region Eastern Planning Area, as indicated on the map entitled
Gulf of Mexico OCS Region State Adjacent Zones and OCS Planning
Areas
, dated September 2005 and on file in the Office of the Director,
Minerals Management Service, may be made by either the Governor of Alabama or
the Governor of Florida.
(b)Not later than 90 days after receipt of a petition
submitted under subsection (a), the Secretary shall approve the petition,
unless the Secretary determines that extending the withdrawal from leasing
would likely have an adverse effect on the availability of necessary energy
resources, which would contribute to significant economic hardship on a
national or regional basis, or would otherwise not be in the national
interest.
(c)If the Secretary fails to approve or deny a petition in
accordance with subsection (b), the petition shall be considered to be approved
90 days after the date on which the Secretary received the petition.
6.State requests
to examine energy areasSection 18 of the Outer Continental Shelf
Lands Act (43 U.S.C. 1344) (as amended by section 4) is amended by adding at
the end the following:
(j)State requests
to examine energy areas
(1)In
this subsection through subsection (m):
(A)The
term lease includes a natural gas lease under section 8(q).
(B)The term moratorium area means—
(i)any area
withdrawn from disposition by leasing by the Memorandum on Withdrawal of
Certain Areas of the United States Outer Continental Shelf from Leasing
Disposition
, from 34 Weekly Comp. Pres. Doc. 1111, dated June 12, 1998;
and
(ii)any area of the
outer Continental Shelf as to which Congress has denied the use of appropriated
funds or other means for preleasing, leasing, or related activities.
(2)
(A)At
any time, the Governor of an affected State (acting on behalf of the State) may
request the Secretary to provide a current estimate of proven and potential
natural gas resources that may result, and resulting State revenues, in any
moratorium area (or any part of the moratorium area the Governor identifies)
adjacent to, or lying seaward of the coastline of, that State.
(B)Not later than 45 days after the date on which the
Governor of a State requests an estimate under subparagraph (A), the Secretary
shall provide—
(i)a
current estimate of proven and potential natural gas resources in any
moratorium areas off the shore of a State;
(ii)an estimate of
potential revenues that could be shared under this Act if resources were
developed and produced; and
(iii)an explanation
of the planning processes that could lead to the leasing, exploration,
development, and production of the natural gas resources within the area
identified.
.
7.Availability of
certain areas for leasingSection 18 of the Outer Continental Shelf
Lands Act (43 U.S.C. 1344) (as amended by section 6) is amended by adding at
the end the following:
(k)Availability of
certain areas for leasing
(1)
(A)On consideration of the information received from the
Secretary, the Governor (acting on behalf of the State of the Governor) may
submit to the Secretary a petition requesting that the Secretary make available
for leasing any portion of a moratorium area in the Adjacent Zone of the
State.
(B)In
a petition under subparagraph (A), a Governor may request that an area
described in subparagraph (A) be made available for leasing under subsection
(b) or (q), or both, of section 8.
(2)Not later than 90 days after the date of receipt of a
petition under paragraph (1), the Secretary shall approve the petition unless
the Secretary determines that leasing in the affected area presents a
significant likelihood of incidents associated with the development of
resources that would cause serious harm or damage to the marine resources of
the area or of an adjacent State.
(3)If the Secretary fails to approve or deny a petition in
accordance with paragraph (2), the petition shall be considered to be approved
as of the date that is 90 days after the date of receipt of the
petition.
(4)Notwithstanding
any other provision of this section, not later than 180 days after the date on
which a petition is approved, or considered to be approved, under paragraph (2)
or (3), the Secretary shall—
(A)treat the
petition of the Governor under paragraph (1) as a proposed revision to a
leasing program under this section; and
(B)except as
provided in paragraph (5), expedite the revision of the 5-year outer
Continental Shelf oil and gas leasing program in effect as of that date to
include any lease sale for any area covered by the petition.
(5)Inclusion in
subsequent plans
(A)If there are less than 18 months remaining in the 5-year
outer Continental Shelf oil and gas leasing program described in paragraph
(4)(B), the Secretary, without consultation with any State, shall include the
areas covered by the petition in lease sales under the subsequent 5-year outer
Continental Shelf oil and gas leasing program.
(B)Before modifying a 5-Year outer Continental Shelf oil
and gas leasing program under subparagraph (A), the Secretary shall complete an
environmental assessment that describes any anticipated environmental effect of
leasing in the area covered by the petition.
(6)Any Federal spending limitation with respect to
preleasing, leasing, or a related activity in an area made available for
leasing under this subsection shall terminate as of the date on which the
petition of the Governor relating to the area is approved, or considered to be
approved, under paragraph (2) or (3).
(7)This
subsection shall not apply to—
(A)any area
designated as a national marine sanctuary or a national wildlife refuge;
(B)any area not
included in the outer Continental Shelf;
(C)the Great Lakes
(as defined in section 118(a)(3) of the Federal Water Pollution Control Act (33
U.S.C. 1268(a)(3));
(D)the eastern coast
of the State of Florida; or
(E)Bristol
Bay.
(8)The Great Lakes (as defined in section 118(a)(3) of the
Federal Water Pollution Control Act (33 U.S.C. 1268(a)(3)))—
(A)shall not be
considered part of the outer Continental Shelf under this Act; and
(B)shall not be
subject to
production.
.
8.Neighboring
State concurrence
(a)The Secretary of the Interior shall provide
notice to a neighboring State of any proposed lease of natural gas if the lease
would be located within 20 miles of the nearest point on the coastline of the
State.
(b)Not later than 30 days after receiving the
notice, the Governor of the State may object to the issuance of the lease on
grounds that the lease presents a significant risk to environmental and
economic resources of the State.
(c)If the Secretary, after review of the objection and
consultation with the adjacent State, concurs that the lease presents a
significant risk described in subsection (b), and that the risk cannot be
reasonably mitigated—
(1)the Secretary
shall not approve an exploration plan for the lease; and
(2)the lease shall
be eligible for repurchase in accordance with section 13.
(d)This section does not apply to a State
covered by section 12.
9.Revenue sharing
from moratorium areasSection
18 of the Outer Continental Shelf Lands Act (43 U.S.C. 1344) (as amended by
section 7) is amended by adding at the end the following:
(l)Revenue sharing
from moratorium areas
(1)If the Governor of a State requests the Secretary to allow
natural gas leasing in a moratorium area and the Secretary allows the leasing,
the State shall, without further appropriation or action, receive 50 percent of
any bonus bid paid for leasing rights in the area.
(2)In addition to bonus bids under paragraph (1), a State
described in paragraph (1) shall receive, from leasing of the area, 50 percent
of—
(A)any lease rental
minimum royalty;
(B)any royalty
proceeds from a sale of royalties taken in kind by the Secretary; and
(C)any other
revenues from a bidding system under section 8.
(3)After making distributions in accordance with
paragraphs (1) and (2) and in accordance with section 31, the Secretary shall,
without further appropriation or action, distribute a conservation royalty
equal to 12.5 percent of Federal royalty revenues derived from an area leased
under this section in an amount not to exceed $1,250,000,000 from all areas
leased under this section for any year, into the following programs that
distribute conservation funds to States:
(A)The Federal aid
to wildlife restoration fund established under section 3(a)(1) of the
Pittman-Robertson Wildlife Restoration Act (16 U.S.C. 669b(a)(1)).
(B)The land and
water conservation fund established under section 2 of the Land and Water
Conservation Fund Act of 1965 (16 U.S.C. 460l–5) to provide financial
assistance to States under section 6 of that Act (16 U.S.C.
460l–8).
.
10.Revenue sharing
from nonmoratorium areasSection 18 of the Outer Continental Shelf
Lands Act (43 U.S.C. 1344) (as amended by section 9) is amended by adding at
the end the following:
(m)Revenue sharing
from nonmoratorium areaRevenues from production that occurs
beginning on the date that is 5 years after the date of enactment of this
subsection in an area that is not a moratorium area shall be distributed in the
same proportion and for the same uses as provided in subsection
(l).
.
11.Repeal of
requirement to conduct comprehensive inventory of OCS natural gas
resourcesSection 357 of the
Energy Policy Act of 2005 (42 U.S.C. 15912) is repealed.
12.Leases for
areas located within 100 miles off California or Florida
(a)Effective beginning on the date that is 180 days after
the date of enactment of this Act, the lessee of a natural gas lease in
existence on the date of enactment of this Act for an area located completely
within 100 miles of the coastline and within the California or Florida Adjacent
Zones shall have the option, without compensation, of exchanging the lease for
a new natural gas lease having a primary term of 5 years.
(b)For
the area subject to the new lease, the lessee may select any unleased
tract—
(1)at least part of
which is located within the area between 100 and 125 miles from the coastline;
and
(2)that is
located—
(A)completely beyond
100 miles from the coastline; and
(B)within the same
Adjacent Zone of the adjacent State as the lease being exchanged.
(c)
(1)The Secretary of the Interior (referred to in this
section as the Secretary) shall establish a reasonable
administrative process through which a lessee may exercise the option of the
lessee to exchange a natural gas lease for a new natural gas lease in
accordance with this section.
(2)Relationship to
other lawsAn exchange of leases conducted in accordance with
this section (including the issuance of a new lease)—
(A)shall not be
considered to be a major Federal action for purposes of the
National Environmental Policy Act of
1969 (42
U.S.C. 4321 et seq.); and
(B)shall be
considered in compliance with the Outer Continental Shelf Lands Act
(43 U.S.C.
1331 et seq.).
(3)The
Secretary shall issue a new lease in exchange for the lease being exchanged
notwithstanding that the area that will be subject to the lease may be
withdrawn from leasing under the Outer Continental Shelf Lands Act
(43 U.S.C.
1331 et seq.) or otherwise unavailable for leasing under any
other law.
(d)A new lease issued in exchange for an existing lease
under this section shall be subject to such national defense operating
restrictions on the outer Continental Shelf tract covered by the new lease as
apply on the date of issuance of the new lease.
(e)
(1)The Secretary shall give priority in the lease exchange
process under this section based on the amount of the original bonus bid paid
for the issuance of each lease to be exchanged.
(2)Exchange of
partial tracts for full tractsThe Secretary shall allow leases
covering partial tracts to be exchanged for leases covering full tracts under
this section conditioned on payment of additional bonus bids on a per-acre
basis, as determined based on the average per acre of the original bonus bid
per acre for the partial tract being exchanged.
(f)An exploration plan submitted to the Secretary during the
period beginning on the date of enactment of this Act and ending June 30, 2012,
for a natural gas lease for an area wholly within 100 miles of the coastline
within the California Adjacent Zone or the Florida Adjacent Zone shall not be
treated as received by the Secretary until the earlier of—
(1)July 1, 2012;
or
(2)the date of
approval of a petition by the Adjacent State for natural gas leasing covering
the area within which is located the area subject to the natural gas
lease.
(g)As part of the lease exchange process under this section,
the Secretary shall cancel a lease that is exchanged under this section.
(h)Conditions for
lease exchangeFor a lease to be cancelled and exchanged under
this section—
(1)each lessee
holding an interest in the lease must consent to cancellation of the leasehold
interest of the lessee;
(2)each lessee must
waive any rights to bring any litigation against the United States related to
the transaction; and
(3)the plugging and
abandonment requirements for any well located on any lease to be cancelled and
exchanged under this section must be complied with by the lessees prior to the
cancellation and exchange.
(i)Area partially
within 100 miles of FloridaA natural gas lease in existence on
the date of enactment of this Act for an area located partially within 100
miles of the coastline within the Florida Adjacent Zone may only be developed
and produced under this section using wells drilled from well-head locations at
least 100 miles from the coastline to any bottom-hole location on the area of
the lease.
13.Repurchase of
certain leases
(a)The Secretary of the Interior (referred to in this
section as the Secretary) shall repurchase and cancel any Federal
natural gas lease in the outer Continental Shelf, if the Secretary finds that
the lease qualifies for repurchase and cancellation under the regulations
authorized by this section.
(b)
(1)Not later than 1 year after the date of enactment of this
Act, the Secretary shall publish a final regulation prescribing the conditions
under which a lease referred to in subsection (a) would qualify for repurchase
and cancellation, and the process to be followed regarding repurchase and
cancellation, in a manner consistent with this subsection.
(2)The
Secretary shall repurchase and cancel a lease under this section on a written
request by the lessee and a finding by the Secretary that—
(A)a request by the
lessee for a required permit or other approval complied with applicable law
(other than the Coastal Zone Management Act of
1972 (16
U.S.C. 1451 et seq.)) and terms of the lease and the permit or
other approval was denied;
(B)a Federal agency
failed to act on a request by the lessee for a required permit, other approval,
or administrative appeal—
(i)within a time
period established by law (including regulations) for the requested action,
whether advisory or mandatory; or
(ii)if
no such period is established, within 180 days after receipt of the request;
or
(C)a Federal agency
attached a condition of approval, without agreement by the lessee, to a
required permit or other approval that—
(i)was
not required by Federal law (including regulations) in effect on the date of
lease issuance; or
(ii)was not
specifically allowed under the terms of the lease.
(3)A lessee shall not be required to exhaust administrative
remedies regarding a permit request, administrative appeal, or other required
request for approval under this section.
(4)The
Secretary shall make a final agency decision on a request by a lessee under
this section not later than 180 days after receipt of the request.
(5)
(A)The
amount of compensation to a lessee to repurchase and cancel a lease under this
section shall be equal to the amount that a lessee would receive in a
restitution case for a material breach of contract.
(B)The
compensation shall be in the form of a check or electronic transfer from the
Secretary of the Treasury from funds deposited into miscellaneous receipts
under the authority of the Act that authorized the issuance of the lease being
repurchased.
(C)The
failure of the Secretary to make a final agency decision on a request by a
lessee under this section in accordance with paragraph (4) shall result in a
percent increase in the compensation due to the lessee if the lease is
ultimately repurchased.
(c)This section does not affect any other right the lessee
may have in the absence of this section.