I 111th CONGRESS 2d Session H. R. 5661 IN THE HOUSE OF REPRESENTATIVES July 1, 2010 Mr. Polis of Colorado introduced the following bill; which was referred to the Committee on Natural Resources A BILL To amend the Outer Continental Shelf Lands Act to require the making of royalty and other payments for oil that is removed under an offshore oil and gas lease under that Act and discharged into waters of the United States or ocean waters, and for other purposes.

1.

Short title

This Act may be cited as the Oil Pollution Taxpayer and Environment Protection Act.

2.

Royalties and other payments under offshore oil and gas leases

(a)

Application of royalty to oil discharged under offshore oil and gas leases

Section 8(a) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)) is amended by adding at the end the following new paragraph: (9)(A)Notwithstanding the terms of any bidding otherwise authorized by paragraph (1) and the authority of the Secretary to reduce or eliminate royalty or net profit share under paragraph (3), any royalty under a lease under this section shall apply to all oil that is removed under the lease and discharged into waters of the United States or ocean waters. (B)In this paragraph the term discharged means any emission (other than natural seepage), intentional or unintentional, and includes, but is not limited to, spilling, leaking, pumping, pouring, emitting, emptying, or dumping. . (b)

Minimum royalty under offshore oil and gas leases

Section 8(a) of the Outer Continental Shelf Lands Act (43 U.S.C. 1336(a)) is amended— (1)in paragraph (1)— (A)by striking 12½ per centum each place it appears and inserting 20 percent; (B)in subparagraph (H) by striking 12 and ½ per centum and inserting 20 percent; (C)in paragraph (3)(C)(i), by inserting and paragraph (9) after other than this subparagraph; and (D)by adding at the end the following new paragraph: (9)Notwithstanding any other provision of this Act, the royalty under any lease under this Act shall be not less than 20 percent in amount or value of production saved, removed, or sold. . (c)

Ensuring fair return to the American taxpayer

Section 8(a) of the Outer Continental Shelf Lands Act (43 U.S.C. 1336(a)) is further amended by adding at the end the following new paragraph: (10)The Secretary shall— (A)ensure that royalty and other payments required for each lease under this section provide a fair return to the United States; and (B)publish in the Federal Register for each such lease an explanation of how such royalty and other payments were derived. . (d)

Consideration of average royalty rates in other countries

Section 8(a) of the Outer Continental Shelf Lands Act (43 U.S.C. 1336(a)) is further amended by adding at the end the following new paragraph: (11)In establishing the royalty and other payments required for a lease under this section, the Secretary shall consider average rates for those payments that are required by other countries. . (e)

electronic flow monitoring systems

(1)

Requirement

Section 8(a) of the Outer Continental Shelf Lands Act (43 U.S.C. 1336(a)) is further amended by adding at the end the following new paragraph: (12)The Secretary shall— (A)require the use of an electronic flow monitoring system on each well drilled under a lease under this section that provides an accurate accounting of oil and gas removed under the lease; and (B)collect data produced by such system. . (2)

Rulemaking

The Secretary of the Interior shall issue a rule within 90 days after the date of enactment of this Act to implement the amendment made by this subsection, including the establishment of standards and specifications for electronic flow monitoring systems required under the amendment. (f)

Repeal of outer Continental Shelf deep water and deep gas royalty relief

(1)

In general

Sections 344 and 345 of the Energy Policy Act of 2005 (42 U.S.C. 15904, 15905) are repealed. (2)

Administration

The Secretary of the Interior shall not be required to provide for royalty relief in the lease sale terms beginning with the first lease sale held on or after the date of enactment of this Act for which a final notice of sale has not been published.