[Congressional Record Volume 147, Number 172 (Wednesday, December 12, 2001)]
[Senate]
[Pages S13052-S13053]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. THOMAS (for himself and Ms. Landrieu):
  S. 1808. A bill to amend the Mineral Leasing Act to encourage the 
development of natural gas and oil resources on Federal land; to the 
Committee on Energy and Natural Resources.
  Mr. THOMAS. Madam President, I rise today to introduce the Federal 
Acreage Chargeability Act of 2001. The Mineral Leasing Act of 1920 
restricts the interests a company can own in Federal oil and gas leases 
in any one State to 246,080 acres. This legislation alters the acreage 
cap for oil and gas leases on federal lands so that producing leases 
are not included in the existing Statewide acreage limitation. This 
provides an incentive for producers to keep domestic acreage in 
production or to turn the leases over to another operator who will.
  Historically, the acreage limitation in the Mineral Leasing Act 
responded to public concern over a few major integrated oil companies 
locking up potential supplies of crude oil from Federal lands in the 
West. As originally enacted, the Act forbade any person from owning 
more than three Federal oil and gas leases in any state and more than 
one lease in an oil and gas field. In 1926, the restriction was 
converted from leases into acres and the acreage limit was increased to 
7,680 acres in any state. The Congress, on three other occasions, has 
further expanded the number of acres a lessee may hold to 15,360 acres 
in 1946, to 46,080 acres per state in 1954, and to its present 246,080 
acres in 1960. Under present-day conditions increased acreage and more 
time are necessary to protect the huge investments now needed to 
maintain rates of discovery.
  Today, companies are able to administratively exempt Federal acreage 
from the 246,080-acre limit per state either through unitization or by 
the creation of a development contract. At this time, the BLM only 
allows development contracts in situations where the acreage is 
considered wildcat. The BLM has been extremely cooperative in working 
with companies that find themselves bumping up against or exceeding the 
acreage cap. However, the time has come to pass legislation that will 
encourage the sizeable capital investment that will be needed to 
promote orderly and environmentally responsible exploration, 
development, and production of natural gas and oil from the public 
lands of the United States.
  In our modern economy, the acreage limitations of the Mineral Leasing 
Act appear as historical relics, ill suited to their original task of 
promoting competition. The acreage limitations of the Act are once 
again inhibiting a company's ability to assemble sufficient blocks of 
acreage to efficiently explore promising natural gas and oil prospects. 
Companies are also unable to adequately finance the development of 
those prospects and related infrastructure such as pipelines. 
Exacerbating the acreage situation further, is the trend toward mergers 
and acquisitions taking place in the oil and gas industry.
  The Federal Acreage Chargeability Act of 2001 amends the acreage 
limitation provisions of the Mineral Leasing Act of 1920 in such a 
manner that is truly reflective of today's exploration and production 
techniques and economics. Given the uncertain natural gas and oil 
supply situation that this country faces, it is even more critical to 
reform the outdated existing Federal acreage limitation provisions. The 
Federal Acreage Chargeability Act of 2001 amends the Mineral Leasing 
Act of 1920 by exempting oil and natural gas producing acreage from 
being counted against the Federal acreage cap.
  Acreage limitations for other federal minerals such as coal and trona 
have also been revised upward over the years. Last Congress, I authored 
legislation that passed and was signed into law that raised the acreage 
limits for both Federal coal and trona leases due to industry 
consolidation and international competition. The domestic natural gas 
and oil industry is certainly facing these same concerns.
  In recognition of the economics and technological advances of 
exploring for and producing domestic natural gas and oil on our public 
lands, and the national goal of increasing both domestic production and 
environmental efficiency, make now the right time to enact the Federal 
Acreage Chargeability Act of 2001.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

[[Page S13053]]

                                S. 1808

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Mineral Leasing Act Revision 
     of 2001''.

     SEC. 2. DEVELOPMENT OF NATURAL GAS AND OIL RESOURCES.

       (a) In General.--Section 27(d) of the Mineral Leasing Act 
     (30 U.S.C. 184(d)) is amended--
       (1) in the first sentence of paragraph (1), by inserting 
     ``producing acreage and'' after ``Provided, however, That''; 
     and
       (2) by adding at the end the following:
       ``(3) Definition of producing acreage.--In this subsection, 
     the term `producing acreage' means any lease--
       ``(A) for which minimum royalty, royalty, royalty in kind, 
     or compensatory royalty has been--
       ``(i) paid during the calendar year; or
       ``(ii) waived by the Secretary of the Interior; or
       ``(B) that has been committed to a federally approved 
     cooperative plan, unit plan, or communitization agreement.''.
       (b) Application.--Section 27 of the Mineral Leasing Act (30 
     U.S.C. 184) shall apply separately to land leased under the 
     Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et 
     seq.).
                                 ______