[Congressional Record Volume 144, Number 147 (Thursday, October 15, 1998)]
[House]
[Pages H10939-H10940]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




PROVIDING FOR CONTINUANCE OF OIL AND GAS OPERATIONS PURSUANT TO CERTAIN 
                EXISTING LEASES IN WAYNE NATIONAL FOREST

  Mrs. CUBIN. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 1467) to provide for the continuance of oil and gas 
operations pursuant to certain existing leases in the Wayne National 
Forest, as amended.
  The Clerk read as follows:

                               H.R. 1467

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. OIL AND GAS WELLS IN WAYNE NATIONAL FOREST, OHIO.

       (a) Authority.--The Secretary of the Interior may enter 
     into noncompetitive oil and gas production and reclamation 
     contracts in accordance with this section with operators of 
     wells in the Wayne National Forest in the State of Ohio who 
     meet the criteria of section 17(b)(3)(A) of the Act of 
     February 25, 1920 (30 U.S.C. 226(b)(3)(A)) pursuant to 
     private land mineral leases which were in effect on and after 
     the date of the enactment of this section, subject to the 
     same laws and regulations that applied to those private land 
     mineral leases.
       (b) Additional Drilling.--No contract under this section 
     may authorize deeper completions or additional drilling.
       (c) Bonding.--
       (1) Waiver of Federal bonding.--Each contract under this 
     section shall require the contractor to provide a Federal oil 
     and gas bond to ensure complete and timely reclamation of the 
     former lease tract in accordance with the regulations of the 
     Bureau of Land Management and the Forest Service, unless the 
     Secretary of the Interior accepts in lieu thereof assurances 
     from the Ohio Department of Natural Resources, Division of 
     Oil and Gas, that--
       (A) the contractor has duly satisfied the bonding 
     requirements of the State of Ohio; and following inspection 
     of operator performance, the Ohio Department of Natural 
     Resources is not opposed to such waiver of Federal bonding 
     requirements;
       (B) the United States of America is entitled to apply for 
     and receive funding under the provision of section 1509.071 
     of the Ohio Revised Code so as to properly plug and restore 
     oil and gas sites and lease tracts; and
       (C) during the 2 years prior to the date on which the 
     contract is entered into no less than 20 percent of Ohio 
     State severance tax revenues has been allocated to the State 
     of Ohio Orphan Well Fund.
       (2) Continued compliance with 20 percent requirement.--In 
     entering into any contract under this section, the Secretary 
     of the Interior shall reserve the right to require the 
     contractor to comply with all Federal oil and gas bonding 
     requirements applicable to Federal oil and gas leases under 
     the regulations of the Bureau of Land Management and the 
     Forest Service whenever the Secretary finds that less than 20 
     percent of Ohio State severance tax revenues has been 
     allocated to the State of Ohio Orphan Well Fund.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
Wyoming (Mrs. Cubin) and the gentleman from California (Mr. Miller) 
each will control 20 minutes.
  The Chair recognizes the gentlewoman from Wyoming (Mrs. Cubin).
  Mrs. CUBIN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in strong support of this bill by our colleague 
from southern Ohio (Mr. Ney) which addresses a problem encountered by 
small businessmen operating Federal oil and gas leases on the Wayne 
National Forest. The situation these folks find themselves in is rather 
unique. These lessees formerly held private oil leases from individuals 
owning the reserve mineral estate beneath the Forest Service 
administered surface estate. A few years ago the private reservations 
began to expire, and the United States is now the mineral owner.
  Our colleague from West Virginia (Mr. Rahall) in 1992 added a 
provision to the 1992 Energy Policy Act to allow a private lessee to 
acquire a Federal lease for the same tract on the Wayne National Forest 
without need of competitive bidding. Mr. Speaker, this was only fair 
given these small businessmen already owned the wells and the equipment 
that was necessary to pump and store the production.
  However, these operators soon discovered that ownership of a Federal 
lease meant having to financially guarantee proper abandonment of their 
lessees, plugging the wells properly and reclaiming the surface 
impacts. This was despite the fact that they had long ago met the State 
of Ohio's bonding requirements back when they drilled the private 
wells.
  The gentleman from Ohio (Mr. Ney) sought to remedy this situation 
with his original bill but the Department of Interior, as lessor of the 
mineral rights, opposed that text. As chairman of the Subcommittee on 
Energy and Mineral Resources, I asked the Federal agency and the State 
of Ohio's Department of Natural Resources to try to find an acceptable 
remedy.
  Mr. Speaker, the substitute before us today is the answer and is 
supported by the administration and by the Ohio DNR.
  The substitute codifies a recognition by the Secretary of Interior as 
to the adequacy of Ohio State's Orphan Well Fund to provide financial 
guarantees for the proper plugging and abandonment of preexisting wells 
on these special leases and these leases only.
  No precedent is being established elsewhere, although I do happen to 
think that many States' oil and gas commissions do a fine job in 
regulating the industry within their borders, and especially my State 
of Wyoming.
  The substitute provides opportunity for the Secretary to review the 
continuing adequacy of the Ohio law to ensure reclamation in the 
unlikely event of multiple bankruptcies.
  The Secretary may require the lessees to meet the Federal standard 
bonding requirements for these wells if the State of Ohio fails to fund 
the program at 20 percent of the State's severance tax levels that it 
currently has.
  Mr. Speaker, I want to thank our colleague, the gentleman from Ohio 
(Mr. Ney), for his willingness to aid these small businesses in the 
Wayne National Forest. They are not his constituents, per se, but he 
saw their plight and decided to help them nonetheless.
  I also want to thank the ranking member on our subcommittee, the 
gentleman from Puerto Rico (Mr. Romero-Barcelo), and his staffer, who 
helped the administration see the need to find a reasonable solution to 
the problem of double bonding.
  Mr. Speaker, I urge my colleagues to support H.R. 1467, as amended.
  Mr. Speaker, I reserve the balance of my time.
  Mr. MILLER of California. Mr. Speaker, I yield myself such time as I 
may consume.

[[Page H10940]]

  (Mr. MILLER of California asked and was given permission to revise 
and extend his remarks.)
  Mr. MILLER of California. Mr. Speaker, once again, the gentlewoman 
from Wyoming (Mrs. Cubin), the subcommittee chair, has properly 
explained this legislation and the need for it. We support the 
legislation.
  The U.S. Forest Service has been acquiring lands in southeastern Ohio 
for the Wayne National Forest for many years. Typically, these land 
purchases are subject to reservation of the mineral estate by the 
seller for a term of 25 to 40 years.
  Upon expiration of the term, the mineral rights revert to the United 
States. However, until that term expires, the private owner of the 
mineral rights retains the rights to develop these minerals and many of 
them lease the rights to local operators who drill wells on the 
property. The private lessors have no rights to lease beyond the 
expiration of their mineral rights and thus the mineral leases expire 
with their reservations.
  However, producers in the Wayne National Forest were under the 
mistaken belief that they could simply continue operating under the 
same terms they had with the private lessors and simply pay royalties 
to the Forest Service.
  Under the terms of the Federal Oil and Gas Leasing Reform Act, the 
BLM could not offer noncompetitive leases to these producers. This was 
not acceptable to the local producers. In 1990, BLM attempted to 
resolve the problem through an administrative remedy that hinged on 
drainage compensation agreements. However, after executing seven such 
agreements, the Department's Solicitor determined that this method 
violated the competitive leasing law.
  In response, under the leadership of Representative Nick Rahall, 
Congress enacted, as part of the Comprehensive National Policy Act of 
1992, authorization for the BLM to issue noncompetitive leases to the 
owners of ``stripper wells'' upon reversion of mineral interests.
  Most of the eligible operators applied for the federal leases. 
However, they continued to disagree with BLM's interpretation of the 
law. The producers contend that the new provision of law actually 
allowed continuation of their existing private leases, with no changes 
to the terms and conditions other than paying royalties to the U.S. 
instead of the former owners. The Department's Solicitor affirmed BLM's 
position that new Federal leases are required. And, the Department's 
Board of Land Appeals upheld this position.
  H.R. 1467 would prevent BLM from requiring the operators to post 
bonds or other financial guaranties which the administration opposes. 
But, the administration does not object to a legislative solution to 
for the operators in the Wayne National Forest if one can be found that 
requires the producers to enter into production and reclamation 
contracts with the BLM, as well as several other conditions. Since the 
Committee adopted such an amendment, we do not object to the House 
acting favorably on this bill.
  Mr. Speaker, I yield back the balance of my time.
  Mrs. CUBIN. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from Wyoming (Mrs. Cubin) that the House suspend the rules 
and pass the bill, H.R. 1467, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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