[Congressional Record Volume 151, Number 126 (Monday, October 3, 2005)]
[Senate]
[Pages S10824-S10826]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WARNER:
  S. 1810. A bill to amend the Outer Continental Shelf Lands Act to 
allow certain coastal States to share in qualified Outer Continental 
Shelf revenues; to the Committee on Energy and Natural Resources.
  Mr. WARNER. Mr. President, I rise to introduce the Outer Continental 
Shelf Revenue Sharing Act of 2005.
  Earlier this year, the Congress passed a bill, and the President 
signed it into law. It is the first comprehensive energy package in 
over a decade.
  Great strides were made in addressing the Nation's energy needs. This 
new law contains a number of valuable conservation measures and, as the 
chairman of the Energy Committee once stated, passage of this 
legislation means we will need 170 fewer powerplants by 2020. On the 
energy supply side, however, we still have much work to do. The recent 
disruptions in the Nation's energy supply caused by Hurricanes Katrina 
and Rita--tragedies, natural disasters of proportions never really seen 
before in this county--underscore the fragility of our energy supply 
system. The estimates are that 20 to 25 percent of our energy needs 
come in through that narrow nexus of Louisiana and Mississippi, right 
in that area.
  During debate on the bill, I offered an amendment to provide for an 
increased domestic supply of oil and natural gas from Outer Continental 
Shelf lands. Regrettably, my amendment and other similar measures were 
not successful.
  I thank the distinguished manager of that bill, Mr. Domenici, and 
others. They gave me a great deal of encouragement, as did the Senators 
from Louisiana, who likewise participated in that debate. But, 
nevertheless, I was not successful. I did say--and I suppose in a 
prophetic way--and I remember beckoning to fellow Senators on the 
floor, ``The day will come when I will once again stand on this floor 
and offer this same legislation, not knowing, of course, of the 
tragedies of Katrina. But that did give this Nation a serious wake-up 
call as to the fragility of our energy system.
  Again, the tragic events of the past month along the gulf coast have 
thrust the issue of energy supplies back into the spotlight. We need 
only look at the rising gas prices all over our pumps in this Nation's 
land, where people--men and women--on small budgets are struggling to 
find the resources to meet their daily requirements of the use of the 
automobile and to inject these increased gasoline prices into their 
budgets. Prices at the pump have climbed quickly, and with the winter 
heating season approaching, we can expect natural gas and home heating 
oil prices to increase, perhaps going as high as 50 percent more than 
last year's level.
  We need to address our inadequate refining capacity and expand 
conservation incentives. With more than 30 percent of our domestic 
supply of oil coming in from the Gulf of Mexico and a significant 
portion of our refining capacity located in the Gulf States, we must 
also look at ways to increase and diversify the location and sources of 
our domestic supplies of energy, as well as the refining capabilities; 
and natural gas, likewise.
  Before passage of the energy bill, production revenues totaling more 
than $7.5 billion annually from offshore oil and gas belonged to the 
Federal Government. This is an inconsistent policy, however, because 55 
percent of the revenues from land-based oil and gas production has 
always been returned to the States. The one exception to this rule is 
Alaska, which receives back 90 percent of such revenues. Thanks to the 
diligence of my colleagues from Louisiana, this inequity was partially 
addressed in the energy bill by providing that current offshore energy-
producing States will now share in the Federal Government's royalties.
  Indeed, it is a matter of fairness that these revenues be shared with 
the energy producing States. After all, it is the states closest to oil 
and gas production facilities that are assuming the risks that those 
production facilities will not have harmful environmental or economical 
impacts. Tourism is often the lifeblood of these regions which could be 
adversely affected by any environmental accidents. So it is very 
appropriate that they should receive a share of the revenues derived 
from offshore oil and gas production.
  While the issue of revenue sharing was addressed in the energy bill 
for States currently producing oil and gas off their coasts, it does 
not include a comprehensive policy for offshore production 
opportunities.
  Specifically, the bill does not allow other States to share revenues 
when and if they ever become producing regions. As we all know, the 
production of oil and natural gas has been subject to a moratorium 
along most of the Nation's coastline. While this moratorium has been in 
effect for some time, many Americans believe that it is now time to 
reevaluate its need. This past year in Virginia, both houses of the 
state legislature passed legislation asking for production to occur off 
the Virginia coast if the State is allowed to receive a share of the 
revenue. I think the rising costs of oil and gas are now leading other 
States to consider the same possibility.
  The bill I am introducing today would provide a portion of revenues 
to States under the current moratorium that may decide to undertake 
future offshore exploration and production activities. My legislation 
is based, in large part, on the hard work of my colleagues who achieved 
a revenue-sharing proposal for their States and local governments in 
the recently enacted energy bill. The new law provides State and local 
governments with a share of the royalties from offshore energy 
production, but it is limited only to the five States that are 
currently exempt from the moratorium on offshore oil and gas leases.
  As provided by current law, my bill requires the Federal Government 
to transfer 50 percent of the revenues received from any offshore 
leases to the States based upon the production levels. This would put 
oil and gas production in coastal areas on par with the production on 
other Federal lands throughout the United States. It is a matter of 
equity for all producing regions and represents a fair revenue-sharing 
model for the Federal and State governments.
  My proposal does not affect the current moratorium on offshore energy 
production. As the moratorium expires, however, my legislation enables 
States that wish to pursue oil and gas production to be eligible for a 
portion of the royalty payments that otherwise would go exclusively to 
the Federal Government.
  The amendment does not supersede a State's ability to veto any 
production proposals under their authority of the Coastal Zone 
Management Act, CZMA. It does not change the manner in which the 
Federal Government grants these production leases, and it does not lift 
the moratorium for any OCS land that is currently in place.
  While I believe very strongly that the States should have a role in 
determining whether or not to utilize these resources, I also believe 
that they should receive a fair share of the revenues from any 
production that may follow.
  I understand the concerns of some of my colleagues and their desire 
to avoid drawing specific boundary lines. While this amendment does not 
address all of the concerns, it offers a fair starting point to discuss 
this issue. It is my hope that we can all work together in addressing 
these concerns that will result in a commonsense approach to expand our 
domestic supply of oil and gas, to diversify the geographic 
concentration of our current industry, and to allow the States to have 
a role in the process.

[[Page S10825]]

  Mr. President, the time has come for the Senate to speak boldly. We 
can all agree that more supply is needed and that there is a vast 
resource yet to be tapped. My proposal offers a fair way to encourage 
production in States that wish to do so. In the long term our Nation 
will benefit by reducing its dependence on foreign sources of energy 
and by diversifying the geographic source of our domestic supply.
  I believe this proposal will solve a necessary part of the energy 
puzzle. I believe it is essential for our energy security, our economic 
security, and our national security to evaluate this, and other 
proposals, that address our energy supply needs.
  Mr. President, as I say, today I introduce, again, this bill, which I 
put in a few months ago. It provides for the offshore drilling of oil. 
I recognize the sensitivity of that, but I say to my colleagues, we can 
not continually ignore these warnings, whether they are brought about 
by Mother Nature or political problems or wars or conflicts across our 
shores. Now is the time to lay down that framework of legislation for 
those States which, by actions taken by the Governor and the State 
legislature, say: We will permit offshore drilling off of this State's 
boundaries. Hopefully, we can receive for those States, should that 
take place, an additional source of revenue.
  I ask unanimous consent that the text of the bill be printed in the 
Record, and I will seek to have it considered by the Senate as a whole 
at the earliest possible opportunity.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1810

       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 ``Outer Continental Shelf 
     Revenue Sharing Act of 2005''.

     SEC. 2. OUTER CONTINENTAL SHELF REVENUE SHARING.

       Section 31 of the Outer Continental Shelf Lands Act (43 
     U.S.C. 1356a) is amended--
       (1) in subsection (a)--
       (A) by striking paragraph (7);
       (B) by redesignating paragraphs (8), (9), and (10) as 
     paragraphs (7), (8), and (9), respectively;
       (C) in paragraph (8) (as redesignated by subparagraph (B)), 
     by striking subparagraph (B) and inserting the following:
       ``(B) Inclusion.--The term `producing State' includes any 
     State that begins production on a leased tract on or after 
     the date of enactment of the Outer Continental Shelf Revenue 
     Sharing Act of 2005, regardless of whether the leased tract 
     was on any date subject to a leasing moratorium.''; and
       (D) in paragraph (9) (as redesignated by subparagraph (B)), 
     by striking subparagraph (C); and
       (2) in subsection (b)(4), by striking subparagraph (E).

     SEC. 3. ESTABLISHMENT OF SEAWARD LATERAL BOUNDARIES FOR 
                   COASTAL STATES.

       Section 4(a)(2)(A) of the Outer Continental Shelf Lands Act 
     (43 U.S.C. 1333(a)(2)(A)) is amended--
       (1) by inserting ``(i)'' after ``(A)'';
       (2) in the first sentence--
       (A) by striking ``President shall'' and inserting 
     ``Secretary shall by regulation''; and
       (B) by inserting before the period at the end the 
     following: ``not later than 180 days after the date of 
     enactment of the Outer Continental Shelf Revenue Sharing Act 
     of 2005''; and
       (3) by adding at the end the following:
       ``(ii)(I) For purposes of this Act (including determining 
     boundaries to authorize leasing and preleasing activities and 
     any attributing revenues under this Act and calculating 
     payments to producing States and coastal political 
     subdivisions under section 31), the Secretary shall delineate 
     the lateral boundaries between coastal States in areas of the 
     Outer Continental shelf under exclusive Federal jurisdiction, 
     to the extent of the exclusive economic zone of the United 
     States, in accordance with article 15 of the United Nations 
     Convention on the Law of the Sea of December 10, 1982.
       ``(II) This clause shall not affect any right or title to 
     Federal submerged land on the outer Continental Shelf.''.

     SEC. 4. OPTION TO PETITION FOR LEASING WITHIN CERTAIN AREAS 
                   ON THE OUTER CONTINENTAL SHELF.

       Section 12 of the Outer Continental Shelf Lands Act (43 
     U.S.C. 1341) is amended by adding at the end the following:
       ``(g) Leasing Within the Seaward Lateral Boundaries of 
     Coastal States.--
       ``(1) Definition of affected area.--In this subsection, the 
     term `affected area' means any area located--
       ``(A) in the areas of northern, central, and southern 
     California and the areas of Oregon and Washington;
       ``(B) in the north, middle, or south planning area of the 
     Atlantic Ocean;
       ``(C) in the eastern Gulf of Mexico planning area and 
     lying--
       ``(i) south of 26 degrees north latitude; and
       ``(ii) east of 86 degrees west longitude; or
       ``(D) in the Straits of Florida.
       ``(2) Restrictions on leasing.--The Secretary shall not 
     offer for offshore leasing, preleasing, or any related 
     activity--
       ``(A) any area located on the outer Continental Shelf that, 
     as of the date of enactment of this subsection, is designated 
     as a marine sanctuary under the Marine Protection, Research, 
     and Sanctuaries Act of 1972 (33 U.S.C. 1401 et seq.); or
       ``(B) except as provided in paragraphs (3) and (4), during 
     the period beginning on the date of enactment of this 
     subsection and ending on June 30, 2012, any affected area.
       ``(3) Resource assessments.--
       ``(A) In general.--Beginning on the date on which the 
     Secretary delineates seaward lateral boundaries under section 
     4(a)(2)(A)(ii), a Governor of a State in which an affected 
     area is located, with the consent of the legislature of the 
     State, may submit to the Secretary a petition requesting a 
     resource assessment of any area within the seaward lateral 
     boundary of the State.
       ``(B) Eligible resources.--A petition for a resource 
     assessment under subparagraph (A) may be for--
       ``(i) oil and gas leasing;
       ``(ii) gas-only leasing; or
       ``(iii) any other energy source leasing, including 
     renewable energy leasing.
       ``(C) Action by secretary.--Not later than 90 days after 
     receipt of a petition under subparagraph (A), the Secretary 
     shall approve the petition, unless the Secretary determines 
     that a resource assessment of the area would create an 
     unreasonable risk of harm to the marine, human, or coastal 
     environment of the State.
       ``(D) Failure to act.--If the Secretary fails to approve or 
     deny a petition in accordance with subparagraph (C)--
       ``(i) the petition shall be considered to be approved; and
       ``(ii) a resource assessment of any appropriate area shall 
     be carried out as soon as practicable.
       ``(E) Submission to state.--As soon as practicable after 
     the date on which a petition is approved under subparagraph 
     (C) or (D), the Secretary shall--
       ``(i) complete the resource assessment for the area; and
       ``(ii) submit the completed resource assessment to the 
     State.
       ``(4) Petition for leasing.--
       ``(A) In general.--On receipt of a resource assessment 
     under paragraph (3)(E)(ii), the Governor of a State in which 
     an affected area is located, with the consent of the 
     legislature of the State, may submit to the Secretary a 
     petition requesting that the Secretary make available any 
     land that is within the seaward lateral boundaries of the 
     State (as established under section 4(a)(2)(A)(ii)) and that 
     is greater than 20 miles from the coastline of the State for 
     the conduct of offshore leasing, pre-leasing, or related 
     activities with respect to--
       ``(i) oil and gas leasing;
       ``(ii) gas-only leasing; or
       ``(iii) any other energy source leasing, including 
     renewable energy leasing.
       ``(B) Action by secretary.--Not later than 90 days after 
     receipt of a petition under subparagraph (A), the Secretary 
     shall approve the petition, unless the Secretary determines 
     that leasing the area would create an unreasonable risk of 
     harm to the marine, human, or coastal environment of the 
     State.
       ``(C) Failure to act.--If the Secretary fails to approve or 
     deny a petition in accordance with subparagraph (B)--
       ``(i) the petition shall be considered to be approved; and
       ``(ii) any appropriate area shall be made available for oil 
     and gas leasing, gas-only leasing, or any other energy source 
     leasing, including renewable energy leasing.
       ``(5) Revenue sharing.--
       ``(A) In general.--Beginning on the date on which 
     production begins in an area under this subsection, the State 
     shall, without further appropriation, share in any qualified 
     outer Continental Shelf revenues of the production under 
     section 31.
       ``(B) Applicable law.--
       ``(i) In general.--Except as provided in clause (ii), a 
     State shall not be required to comply with subsections (c) 
     and (d) of section 31 to share in qualified outer Continental 
     Shelf revenues under subparagraph (A).
       ``(ii) Exception.--Of any qualified outer Continental Shelf 
     revenues received by a State (including a political 
     subdivision of a State) under subparagraph (A), at least 25 
     percent shall be used for 1 or more of the purposes described 
     in section 31(d)(1).
       ``(6) Effect.--Nothing in this subsection affects any right 
     relating to an area described in paragraph (1) or (2) under a 
     lease that was in existence on the day before the date of 
     enactment of this subsection.''.

     SEC. 5. REGULATIONS.

       (a) In General.--The Secretary of the Interior shall issue 
     such regulations as are necessary to carry out this Act and 
     the amendments made by this Act, including regulations 
     establishing procedures for entering into gas-only leases.
       (b) Gas-Only Leases.--In issuing regulations establishing 
     procedures for entering into gas-only leases, the Secretary 
     shall--
       (1) ensure that gas-only leases under the Outer Continental 
     Shelf Lands Act (43 U.S.C. 1331 et seq.) are not available in 
     a State that (as of the day before the date of enactment of 
     this Act) did not contain an affected area

[[Page S10826]]

     (as defined in section 12(g)(1) of that Act (as added by 
     section 4)); and
       (2) define ``natural gas'' as--
       (A) unmixed natural gas; or
       (B) any mixture of natural or artificial gas (including 
     compressed or liquefied petroleum gas) and condensate 
     recovered from natural gas.
                                 ______