II 112th CONGRESS 1st Session S. 205 IN THE SENATE OF THE UNITED STATES January 26, 2011 Mr. Begich introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To amend the Outer Continental Shelf Lands Act to require that oil produced from Federal leases in certain Arctic waters be transported by pipeline to onshore facilities and to provide for the sharing of certain outer Continental Shelf revenues from areas in the Alaska Adjacent Zone.

1.

Short title

This Act may be cited as the Alaska Adjacent Zone Safe Oil Transport and Revenue Sharing Act.

2.

Findings

Congress finds that— (1)the United States is an Arctic nation with— (A)an approximately 700-mile border with the Arctic Ocean; (B)more than 100,000,000 acres of land above the Arctic Circle; and (C)an even broader area defined as Arctic by temperature, which includes the Bering Sea and Aleutian Islands; (2)the Arctic region of the United States— (A)is home to an indigenous population that has subsisted for millennia on the abundance of marine mammals, fish, and wildlife in the Arctic region, many of which are unique to the region; (B)is known to the indigenous population as Inuvikput or the place where we live; and (C)has produced more than 16,000,000,000 barrels of oil and, according to the United States Geological Survey, may hold an additional 30,000,000,000 barrels of oil and 220,000,000,000,000 cubic feet of natural gas, making the region of fundamental importance to the national interest of the United States; (3)temperatures in the United States Arctic region have warmed by 3 to 4 degrees Celsius over the past half-century, a rate of increase that is twice the global average; (4)the Arctic ice pack is rapidly diminishing and thinning, and the National Oceanic and Atmospheric Administration estimates the Arctic Ocean may be ice-free during summer months in as few as 30 years; (5)those changes to the Arctic region are having a significant impact on the indigenous people of the Arctic, the communities and ecosystems of the people, as well as the marine mammals, fish, and wildlife on which the people depend; and (6)those changes are opening new portions of the United States Arctic continental shelf to possible development for offshore oil and gas, commercial fishing, marine shipping, and tourism.

3.

Production of oil from certain arctic offshore leases

Section 5 of the Outer Continental Shelf Lands Act (43 U.S.C. 1334) is amended by adding at the end the following: (k)

Oil transportation in arctic waters

The Secretary shall— (1)require that oil produced from Federal leases in Arctic waters in the Chukchi Sea planning area, Beaufort Sea planning area, or Hope Basin planning area be transported by pipeline to onshore facilities; and (2)provide for, and issue appropriate permits for, the transportation of oil from Federal leases in Arctic waters in preproduction phases (including exploration) by means other than pipeline. .

4.

Revenue sharing from areas in Alaska Adjacent zone

Section 18 of the Outer Continental Shelf Lands Act (43 U.S.C. 1344) is amended by adding at the end the following: (i)

Revenue Sharing From Areas in Alaska Adjacent Zone

(1)

Definitions

In this subsection: (A)

Coastal political subdivision

The term coastal political subdivision means a county-equivalent subdivision of the State all or part of which— (i)lies within the coastal zone (as defined in section 304 of the Coastal Zone Management Act of 1972 (16 U.S.C. 1453)); and (ii)the closest point of which is not more than 300 statute miles from the geographical center of any leased tract. (B)

Distance

The terms distance means minimum great circle distance. (C)

Indian tribe

The term Indian tribe means an Alaska Native entity recognized and eligible to receive services from the Bureau of Indian Affairs, the headquarters of which is located within 300 miles of the geographical center of a leased tract. (D)

Leased tract

The term leased tract means a tract leased under this Act for the purpose of drilling for, developing, and producing oil or natural gas resources. (E)

State

The term State means the State of Alaska. (2)

Bonus bids

Subject to paragraphs (4), (5), and (6), effective beginning on the date that is 5 years after the date of enactment of this subsection, the State shall, without further appropriation or action, receive 37.5 percent of any bonus bid paid for leasing rights for any area in the Alaska Adjacent Zone. (3)

Postleasing revenues

Subject to paragraphs (4), (5), and (6), in addition to bonus bids under paragraph (1), the State shall receive, from leasing of the area, 37.5 percent of— (A)any lease rental payments; (B)any lease royalty payments; (C)any royalty proceeds from a sale of royalties taken in kind by the Secretary; and (D)any other revenues from a bidding system under section 8. (4)

Allocation among coastal political subdivisions of the State

(A)

In general

The Secretary shall pay 20 percent of any allocable share of the State, as determined under paragraphs (2) and (3), directly to coastal political subdivisions. (B)

Allocation

(i)

In general

For each leased tract used to calculate the allocation of the State, the Secretary shall pay the coastal political subdivisions within 300 miles of the geographical center of the leased tract based on the relative distance of the coastal political subdivisions from the leased tract in accordance with this subparagraph. (ii)

Distances

For each coastal political subdivision, the Secretary shall determine the distance between the point on the coastal political subdivision coastline closest to the geographical center of the leased tract and the geographical center of the tract. (iii)

Payments

The Secretary shall divide and allocate the qualified outer Continental Shelf revenues derived from the leased tract among coastal political subdivisions in amounts that are inversely proportional to the applicable distances determined under clause (ii). (5)

Allocation among Regional Corporations

(A)

In general

The Secretary shall pay 33 percent of any allocable share of the State, as determined under this subsection, directly to certain Regional Corporations established under section 7(a) of the Alaska Native Claims Settlement Act (43 U.S.C. 1606(a)). (B)

Allocation

(i)

In general

For each leased tract used to calculate the allocation of the State, the Secretary shall pay the Regional Corporations, after determining those Native villages within the region of the Regional Corporation which are within 300 miles of the geographical center of the leased tract based on the relative distance of such villages from the leased tract, in accordance with this paragraph. (ii)

Distances

For each such village, the Secretary shall determine the distance between the point in the village closest to the geographical center of the leased tract and the geographical center of the tract. (iii)

Payments

The Secretary shall divide and allocate the qualified outer Continental Shelf revenues derived from the leased tract among the qualifying Regional Corporations in amounts that are inversely proportional to the distances of all of the Native villages within each qualifying region. (iv)

Revenues

All revenues received by each Regional Corporation shall be— (I)treated by the Regional Corporation as revenue subject to the distribution requirements of section 7(i)(1)(A) of the Alaska Native Claims Settlement Act (43 U.S.C. 1606(i)(1)(A)); and (II)divided annually by the Regional Corporation among all 12 Regional Corporations in accordance with section 7(i) of that Act. (v)

Further distribution

A Regional Corporation receiving revenues under clause (iv)(II) shall further distribute 50 percent of the revenues received in accordance with section 7(j) of the Alaska Native Claims Settlement Act (43 U.S.C. 1606(j)). (6)

Allocation among Indian tribes

(A)

In general

The Secretary shall pay 7 percent of any allocable share of the State, as determined under this subsection, directly to Indian tribes. (B)

Allocation

(i)

In general

For each leased tract used to calculate the allocation of the State, the Secretary shall pay Indian tribes based on the relative distance of the headquarters of the Indian tribes from the leased tract, in accordance with this subparagraph. (ii)

Distances

For each Indian tribe, the Secretary shall determine the distance between the location of the headquarters of the Indian tribe and the geographical center of the tract. (iii)

Payments

The Secretary shall divide and allocate the qualified outer Continental Shelf revenues derived from the leased tract among the Indian tribes in amounts that are inversely proportional to the distances described in clause (ii). (7)

Conservation royalty

After making distributions under paragraphs (2) and (3) and section 31, the Secretary shall, without further appropriation or action, distribute a conservation royalty equal to 6.25 percent of Federal royalty revenues derived from an area leased under this subsection from all areas leased under this subsection for any year, into 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). (8)

Deficit reduction

After making distributions in accordance with paragraphs (2) and (3) and in accordance with section 31, the Secretary shall, without further appropriation or action, distribute an amount equal to 6.25 percent of Federal royalty revenues derived from an area leased under this subsection from all areas leased under this subsection for any year, into direct Federal deficit reduction. .