[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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