II 111th CONGRESS 1st Session S. 503 IN THE SENATE OF THE UNITED STATES February 27, 2009 Ms. Murkowski (for herself and Mr. Begich) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To authorize the exploration, leasing, development, and production of oil and gas in and from the western portion of the Coastal Plain of the State of Alaska without surface occupancy, and for other purposes.

1.

Short title

This Act may be cited as the No Surface Occupancy Western Arctic Coastal Plain Domestic Energy Security Act.

2.

Definitions

In this Act: (1)

Coastal Plain

The term Coastal Plain means the area identified as the 1002 Coastal Plain Area on the map. (2)

Final Statement

The term Final Statement means the final legislative environmental impact statement on the Coastal Plain, dated April 1987, and prepared pursuant to— (A)section 1002 of the Alaska National Interest Lands Conservation Act (16 U.S.C. 3142); and (B)section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). (3)

Map

The term map means the map entitled Arctic National Wildlife Refuge, dated September 2005, and prepared by the United States Geological Survey. (4)

Secretary

The term Secretary means the Secretary of the Interior (or the designee of the Secretary), acting through the Director of the Bureau of Land Management, in consultation with the Director of the United States Fish and Wildlife Service and in coordination with a State coordinator appointed by the Governor of the State of Alaska. (5)

Western Coastal Plain

The term Western Coastal Plain means that area of the Coastal Plain— (A)that borders the land of the State of Alaska to the west and State of Alaska offshore waters of the Beaufort Sea on the north; and (B)from which the Secretary, in the sole discretion of the Secretary, finds oil and gas can be produced through the use of horizontal drilling or other subsurface technology from sites outside or underneath the surface of the Coastal Plain.

3.

Leasing program for land within the Western Coastal Plain

(a)

In general

(1)

Authorization

There is authorized the exploration, leasing, development, and production of oil and gas from the Western Coastal Plain. (2)

Actions

The Secretary shall take such actions as are necessary— (A)to establish and implement, in accordance with this Act, a competitive oil and gas leasing program that will result in an environmentally sound program for the exploration, development, and production of the oil and gas resources of the Western Coastal Plain; and (B)to administer this Act through regulations, lease terms, conditions, restrictions, prohibitions, stipulations, and other provisions that— (i)ensure the oil and gas exploration, development, and production activities on the Western Coastal Plain will result in no significant adverse effect on fish and wildlife, fish and wildlife habitat, subsistence resources, and the environment; (ii)prohibit surface occupancy of the Western Coastal Plain during oil and gas development and production; and (iii)require the application of the best commercially available technology for oil and gas exploration, development, and production to all exploration, development, and production operations under this Act in a manner that ensures the receipt of fair market value by the public for the mineral resources to be leased. (b)

Compliance with requirements under certain other laws

(1)

Compatibility

For purposes of the National Wildlife Refuge System Administration Act of 1966 (16 U.S.C. 668dd et seq.)— (A)the oil and gas leasing program and activities authorized by this section in the Western Coastal Plain shall be considered to be compatible with the purposes for which the Arctic National Wildlife Refuge was established; and (B)no further findings or decisions shall be required to implement that program and those activities. (2)

Adequacy of DOI legislative environmental impact statement

The Final Statement shall be considered to satisfy the requirements of the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) that apply with respect to prelease activities, including actions authorized to be taken by the Secretary to develop and promulgate the regulations for the establishment of a leasing program authorized by this Act before the conduct of the first lease sale. (c)

Relationship to State and local authority

Nothing in this Act expands or limits any State or local regulatory authority. (d)

Regulations

(1)

In general

Not later than 1 year after the date of enactment of this Act, the Secretary shall promulgate such regulations as are necessary to carry out this Act. (2)

Revision of regulations

The Secretary shall periodically review and, as appropriate, revise the rules and regulations promulgated under paragraph (1) to reflect any significant biological, environmental, or engineering data that come to the attention of the Secretary.

4.

Lease sales

(a)

Qualified lessees

(1)

In general

Except as provided in paragraph (2), land may be leased under this Act to any person qualified to obtain a lease for deposits of oil and gas under the Mineral Leasing Act (30 U.S.C. 181 et seq.). (2)

Exclusion

Land may not be leased under this Act to any person prohibited from participation in a lease sale under section 1002(e)(2)(C) of the Alaska National Interest Lands Conservation Act (16 U.S.C. 3142(e)(2)(C)). (b)

Procedures

The Secretary shall, by regulation, establish procedures for— (1)receipt and consideration of sealed nominations for any area in the Western Coastal Plain for inclusion in, or exclusion from, a lease sale; (2)the holding of lease sales after the nomination process described in paragraph (1); and (3)public notice of, and comment on, designation of areas to be included in, or excluded from, a lease sale. (c)

Lease sale bids

Bidding for leases under this Act shall be by sealed competitive cash bonus bids. (d)

Acreage minimum in first sale

For the first lease sale under this Act, the Secretary shall offer for lease those tracts the Secretary considers to have the greatest potential for the discovery of hydrocarbons, taking into consideration nominations received pursuant to subsection (b)(1), but in no case less than 200,000 acres. (e)

Timing of lease sales

The Secretary shall— (1)not later than 18 months after the date of enactment of this Act, conduct the first lease sale under this Act; (2)not later than 2 years after the first lease sale, conduct a second lease sale under this Act; and (3)conduct additional sales at appropriate intervals if, as determined by the Secretary, sufficient interest in development exists to warrant the conduct of the additional sales.

5.

Grant of leases by the Secretary

(a)

In general

On payment by a lessee of such bonus as may be accepted by the Secretary, the Secretary may grant to the highest responsible qualified bidder in a lease sale conducted pursuant to section 4 a lease for any land on the Western Coastal Plain. (b)

Subsequent transfers

(1)

In general

No lease issued under this Act may be sold, exchanged, assigned, sublet, or otherwise transferred except with the approval of the Secretary. (2)

Condition for approval

Before granting any approval under paragraph (1), the Secretary shall consult with, and give due consideration to the opinion of, the Attorney General.

6.

Lease terms and conditions

(a)

In general

An oil or gas lease issued pursuant to this Act shall— (1)provide for the payment of a royalty of not less than 121/2 percent of the quantity or value of the production removed or sold from the lease, as determined by the Secretary in accordance with regulations applicable to other Federal oil and gas leases; (2)provide that the Secretary may close, on a seasonal basis, such portions of the Western Coastal Plain to exploratory drilling activities as are necessary to protect caribou calving areas and other species of fish and wildlife; (3)require that each lessee of land within the Western Coastal Plain shall be fully responsible and liable for the reclamation of land within the Western Coastal Plain and any other Federal land that is adversely affected in connection with exploration activities conducted under the lease and within the Western Coastal Plain by the lessee or by any of the subcontractors or agents of the lessee; (4)provide that the lessee may not delegate or convey, by contract or otherwise, the reclamation responsibility and liability described in paragraph (3) to another person without the express written approval of the Secretary; (5)contain terms and conditions relating to protection of fish and wildlife, fish and wildlife habitat, subsistence resources, and the environment as required under section 3(a)(2); (6)provide that each lessee, and each agent and contractor of a lessee, shall use the best efforts of the lessee to provide a fair share of employment and contracting for Alaska Natives and Alaska Native Corporations from throughout the State, as determined by the level of obligation previously agreed to in the Federal Agreement; and (7)contain such other provisions as the Secretary determines to be necessary to ensure compliance with this Act, including regulations promulgated under this Act. (b)

Project labor agreements

The Secretary, as a term and condition of each lease under this Act, and in recognizing the proprietary interest of the Federal Government in labor stability and in the ability of construction labor and management to meet the particular needs and conditions of projects to be developed under the leases issued pursuant to this Act (including the special concerns of the parties to those leases), shall require that each lessee, and each agent and contractor of a lessee, under this Act negotiate to obtain a project labor agreement for the employment of laborers and mechanics on production, maintenance, and construction under the lease.

7.

Expedited judicial review

(a)

Filing of complaints

(1)

Deadline

A complaint seeking judicial review of a provision of this Act or an action of the Secretary under this Act shall be filed— (A)except as provided in subparagraph (B), during the 90-day period beginning on the date on which the action being challenged was carried out; or (B)in the case of a complaint based solely on grounds arising after the 90-day period described in subparagraph (A), by not later than 90 days after the date on which the complainant knew or reasonably should have known about the grounds for the complaint. (2)

Venue

A complaint seeking judicial review of a provision of this Act or an action of the Secretary under this Act shall be filed in the United States Court of Appeals for the District of Columbia Circuit. (3)

Scope

(A)

In general

Judicial review of a decision of the Secretary relating to a lease sale under this Act (including an environmental analysis of such a lease sale) shall be— (i)limited to a review of whether the decision is in accordance with this Act; and (ii)based on the administrative record of the decision. (B)

Presumptions

Any identification by the Secretary of a preferred course of action relating to a lease sale, and any analysis by the Secretary of environmental effects, under this Act shall be presumed to be correct unless proven otherwise by clear and convincing evidence. (b)

Limitation on other review

Any action of the Secretary that is subject to judicial review under this section shall not be subject to judicial review in any civil or criminal proceeding for enforcement.

8.

Local government impact aid and community service assistance

(a)

Establishment of Fund

(1)

In general

The Secretary shall establish in the Treasury a fund to be known as the Coastal Plain Local Government Impact Aid Assistance Fund (referred to in this section as the Fund) to offset any planning, land use-related, or service-related impacts of offshore development caused by this Act. (2)

Deposits

The Secretary of the Treasury shall deposit into the Fund, $15,000,000 each year from the amount available under section 9(1). (b)

Assistance

The Governor of Alaska, in cooperation with the Mayor of the North Slope Borough, shall use amounts in the Fund to provide assistance to the North Slope Borough, Alaska, the City of Kaktovik, Alaska, and any other borough, municipal subdivision, village, or other community in the State of Alaska that is directly impacted by exploration for, or the production of, oil or gas on or near the Coastal Plain under this Act, or any Alaska Native Regional Corporation acting on behalf of the villages and communities within its region whose land lies along the right of way of the Trans Alaska Pipeline System, as determined by the Governor. (c)

Application

(1)

In general

To receive assistance under subsection (b), a community or Regional Corporation described in that subsection shall submit to the Governor, or to the Mayor of the North Slope Borough, an application in such time, in such manner, and containing such information as the Governor may require. (2)

Action by North Slope Borough

The Mayor of the North Slope Borough shall submit to the Governor each application received under paragraph (1) as soon as practicable after the date on which the application is received. (3)

Assistance of Governor

The Governor shall assist communities in submitting applications under this subsection to the maximum extent practicable. (d)

Use of funds

A community or Regional Corporation that receives funds under subsection (b) may use the funds— (1)to plan for mitigation, implement a mitigation plan, or maintain a mitigation project to address the potential effects of oil and gas exploration and development on environmental, social, cultural, recreational, and subsistence resources of the community; (2)to develop, carry out, and maintain— (A)a project to provide new or expanded public facilities; or (B)services to address the needs and problems associated with the effects described in paragraph (1), including firefighting, police, water and waste treatment, first responder, rescue, and other medical services; (3)to compensate residents of the Coastal Plain or nearby waters for significant damage to environmental, social, cultural, recreation, or subsistence resources; and (4)in the City of Kaktovik, Alaska— (A)to develop a mechanism for providing members of the Kaktovikmiut Inupiat community an opportunity— (i)to monitor development in or near the Coastal Plain; and (ii)to provide information and recommendations based on traditional knowledge; and (B)to establish a local coordination office, to be managed by the Mayor of the North Slope Borough, in coordination with the City of Kaktovik, Alaska— (i)to coordinate with and advise developers on local conditions and the history of areas affected by development; (ii)to collect from residents of the Coastal Plain information regarding the impacts of development on fish, wildlife, whales, other marine mammals, habitats, subsistence resources, and the environment of the Coastal Plain; and (iii)to ensure that the information collected under clause (ii) is submitted to any appropriate Federal agency.

9.

Allocation of revenues

(a)

In general

Notwithstanding any other provision of law, of the amount of adjusted bonus, rental, and royalty revenues from Federal oil and gas leasing and operations authorized under this Act— (1)50 percent shall be paid semiannually to the State of Alaska; and (2)50 percent shall be allocated in accordance with subsection (b). (b)

Allocation of Federal funds

Any amounts made available under subsection (a)(2), plus an appropriated amount equal to the amount of Federal income tax attributable to sales of oil and gas produced from operations described in subsection (a), shall be deposited in an account in the Treasury which shall be available, without further appropriation or fiscal year limitation, each fiscal year as follows: (1)$15,000,000 shall be deposited by the Secretary of the Treasury into the Fund created under section 8(a)(1). (2)The remainder shall be available as follows: (A)50 percent shall be available to the Department of Energy to carry out alternative energy programs established under the Energy Policy Act of 2005 (42 U.S.C. 15801 et seq.), the Energy Independence and Security Act of 2007 (42 U.S.C. 17001 et seq.), or an amendment made by either of those Acts, as determined by the Secretary of Energy. (B)25 percent shall be available to the Department of the Interior for award to wildlife habitat and fish and game programs authorized by the Pittman-Robertson Wildlife Restoration Act (16 U.S.C. 669 et seq.) and the Dingell-Johnson Sport Fish Restoration Act) (commonly known as the Wallop-Breaux Act) (16 U.S.C. 777 et seq.). (C)25 percent shall remain in the general fund of the Treasury.