[House Report 104-312]
[From the U.S. Government Publishing Office]
104th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 104-312
_______________________________________________________________________
ALASKA POWER ADMINISTRATION SALE AND EXPORTS OF ALASKAN NORTH SLOPE OIL
_______
November 6, 1995.--Ordered to be printed
_______________________________________________________________________
Mr. Young of Alaska, from the committee of conference, submitted the
following
CONFERENCE REPORT
[To accompany S. 395]
The committee of conference on the disagreeing votes of the
two Houses on the amendments of the House to the bill (S. 395),
to authorize and direct the Secretary of Energy to sell the
Alaska Power Administration, and to authorize the export of
Alaska North Slope crude oil, and for other purposes, having
met, after full and free conference, have agreed to recommend
and do recommend to their respective Houses as follows:
Amendment numbered 1:
That the Senate recede from its disagreement to the
amendment of the House numbered 1, and agree to the same with
an amendment, as follows:
In lieu of the matter proposed to be stricken by the House
amendment, insert the following:
TITLE I--ALASKA POWER ADMINISTRATION ASSET SALE AND TERMINATION
SEC. 101. SHORT TITLE.
This title may be cited as the ``Alaska Power
Administration Asset Sale and Termination Act''.
SEC. 102. DEFINITIONS.
For purposes of this title:
(1) The term ``Eklutna'' means the Eklutna
Hydroelectric Project and related assets as described
in section 4 and Exhibit A of the Eklutna Purchase
Agreement.
(2) The term ``Eklutna Purchase Agreement'' means
the August 2, 1989, Eklutna Purchase Agreement between
the Alaska Power Administration of the Department of
Energy and the Eklutna Purchasers, together with any
amendments thereto adopted before the enactment of this
section.
(3) The term ``Eklutna Purchasers'' means the
Municipality of Anchorage doing business as Municipal
Light and Power, the Chugach Electric Association, Inc.
and the Matanuska Electric Association, Inc.
(4) The term ``Snettisham'' means the Snettisham
Hydroelectric Project and related assets as described
in section 4 and Exhibit A of the Snettisham Purchase
Agreement.
(5) The term ``Snettisham Purchase Agreement''
means the February 10, 1989, Snettisham Purchase
Agreement between the Alaska Power Administration of
the Department of Energy and the Alaska Power Authority
and its successors in interest, together with any
amendments thereto adopted before the enactment of this
section.
(6) The term ``Snettisham Purchaser'' means the
Alaska Industrial Development and Export Authority or a
successor State agency or authority.
SEC. 103. SALE OF EKLUTNA AND SNETTISHAM HYDROELECTRIC PROJECTS.
(a) Sale of Eklutna.--The Secretary of Energy is authorized
and directed to sell Eklutna to the Eklutna Purchasers in
accordance with the terms of this Act and the Eklutna Purchase
Agreement.
(b) Sale of Snettisham.--The Secretary of Energy is
authorized and directed to sell Snettisham to the Snettisham
Purchaser in accordance with the terms of this Act and the
Snettisham Purchase Agreement.
(c) Cooperation of Other Agencies.--The heads of other
Federal departments, agencies, and instrumentalities of the
United States shall assist the Secretary of Energy in
implementing the sales and conveyances authorized and directed
by this title.
(d) Proceeds.--Proceeds from the sales required by this
title shall be deposited in the Treasury of the United States
to the credit of miscellaneous receipts.
(e) Authorization of Appropriations.--There are authorized
to be appropriated such sums as may be necessary to prepare,
survey, and acquire Eklutna and Snettisham for sale and
conveyance. Such preparations and acquisitions shall provide
sufficient title to ensure the beneficial use, enjoyment, and
occupancy by the purchasers.
(f) Contributed Funds.--Notwithstanding any other provision
of law, the Alaska Power Administration is authorized to
receive, administer, and expend such contributed funds as may
be provided by the Eklutna Purchasers or customers or the
Snettisham Purchaser or customers for the purposes of
upgrading, improving, maintaining, or administering Eklutna or
Snettisham. Upon the termination of the Alaska Power
Administration under section 104(f), the Secretary of Energy
shall administer and expend any remaining balances of such
contributed funds for the purposes intended by the
contributors.
SEC. 104. EXEMPTION AND OTHER PROVISIONS.
(a) Federal Power Act.--(1) After the sales authorized by
this Act occur, Eklutna and Snettisham, including future
modifications, shall continue to be exempt from the
requirements of Part I of the Federal Power Act (16 U.S.C. 791a
et seq.), except as provided in subsection (b).
(2) The exemption provided by paragraph (1) shall not
affect the Memorandum of Agreement entered into among the State
of Alaska, the Eklutna Purchasers, the Alaska Energy Authority,
and Federal fish and wildlife agencies regarding the
protection, mitigation of, damages to, and enhancement of fish
and wildlife, dated August 7, 1991, which remains in full force
and effect.
(3) Nothing in this title or the Federal Power Act preempts
the State of Alaska from carrying out the responsibilities and
authorities of the Memorandum of Agreement.
(b) Subsequent Transfers.--Except for subsequent assignment
of interest in Eklutna by the Eklutna Purchasers to the Alaska
Electric Generation and Transmission Cooperative Inc. pursuant
to section 19 of the Eklutna Purchase Agreement, upon any
subsequent sale or transfer of any portion of Eklutna or
Snettisham from the Eklutna Purchasers or the Snettisham
Purchaser to any other person, the exemption set forth in
paragraph (1) of subsection (a) of this section shall cease to
apply to such portion.
(c) Review.--(1) The United States District Court for the
District of Alaska shall have jurisdiction to review decisions
made under the Memorandum of Agreement and to enforce the
provisions of the Memorandum of Agreement, including the remedy
of specific performance.
(2) An action seeking review of a Fish and Wildlife Program
(``Program'') of the Governor of Alaska under the Memorandum of
Agreement or challenging actions of any of the parties to the
Memorandum of Agreement prior to the adoption of the Program
shall be brought not later than 90 days after the date on which
the Program is adopted by the Governor of Alaska, or be barred.
(3) An action seeking review of implementation of the
Program shall be brought not later than 90 days after the
challenged act implementing the Program, or be barred.
(d) Eklutna Lands.--With respect to Eklutna lands described
in Exhibit A of the Eklutna Purchase Agreement:
(1) The Secretary of the Interior shall issue
rights-of-way to the Alaska Power Administration for
subsequent reassignment to the Eklutna Purchasers--
(A) at no cost to the Eklutna Purchasers;
(B) to remain effective for a period equal
to the life of Eklutna as extended by
improvements, repairs, renewals, or
replacements; and
(C) sufficient for the operation of,
maintenance of, repair to, and replacement of,
and access to, Eklutna facilities located on
military lands and lands managed by the Bureau
of Land Management, including lands selected by
the State of Alaska.
(2) Fee title to lands at Anchorage Substation
shall be transferred to Eklutna Purchasers at no
additional cost if the Secretary of the Interior
determines that pending claims to, and selections of,
those lands are invalid or relinquished.
(3) With respect to the Eklutna lands identified in
paragraph 1 of Exhibit A of the Eklutna Purchase
Agreement, the State of Alaska may select, and the
Secretary of the Interior shall convey to the State,
improved lands under the selection entitlements in
section 6 of the Act of July 7, 1958 (commonly referred
to as the Alaska Statehood Act, Public Law 85-508; 72
Stat. 339), and the North Anchorage Land Agreement
dated January 31, 1983. This conveyance shall be
subject to the rights-of-way provided to the Eklutna
Purchasers under paragraph (1).
(e) Snettisham Lands.--With respect to the Snettisham lands
identified in paragraph 1 of Exhibit A of the Snettisham
Purchase Agreement and Public Land Order No. 5108, the State of
Alaska may select, and the Secretary of the Interior shall
convey to the State of Alaska, improved lands under the
selection entitlements in section 6 of the Act of July 7, 1958
(commonly referred to as the Alaska Statehood Act, Public Law
85-508; 72 Stat. 339).
(f) Termination of Alaska Power Administration.--Not later
than one year after both of the sales authorized in section 103
have occurred, as measured by the Transaction Dates stipulated
in the Purchase Agreements, the Secretary of Energy shall--
(1) complete the business of, and close out, the
Alaska Power Administration;
(2) submit to Congress a report documenting the
sales; and
(3) return unobligated balances of funds
appropriated for the Alaska Power Administration to the
Treasury of the United States.
(g) Repeals.--(1) The Act of July 31, 1950 (64 Stat. 382)
is repealed effective on the date that Eklutna is conveyed to
the Eklutna Purchasers.
(2) Section 204 of the Flood Control Act of 1962 (76 Stat.
1193) is repealed effective on the date that Snettisham is
conveyed to the Snettisham Purchaser.
(3) The Act of August 9, 1955, concerning water resources
investigation in Alaska (69 Stat. 618), is repealed.
(h) DOE Organization Act.--As of the later of the two dates
determined in paragraphs (1) and (2) of subsection (g), section
302(a) of the Department of Energy Organization Act (42 U.S.C.
7152(a)) is amended--
(1) in paragraph (1)--
(A) by striking subparagraph (C); and
(B) by redesignating subparagraphs (D),
(E), and (F) as subparagraphs (C), (D), and (E)
respectively; and
(2) in paragraph (2) by striking out ``and the
Alaska Power Administration'' and by inserting ``and''
after ``Southwestern Power Administration,''.
(i) Disposal.--The sales of Eklutna and Snettisham under
this title are not considered disposal of Federal surplus
property under the Federal Property and Administrative Services
Act of 1949 (40 U.S.C. 484) or the Act of October 3, 1944,
popularly referred to as the ``Surplus Property Act of 1944''
(50 U.S.C. App. 1622).
SEC. 105. OTHER FEDERAL HYDROELECTRIC PROJECTS.
The provisions of this title regarding the sale of the
Alaska Power Administration's hydroelectric projects under
section 103 and the exemption of these projects from Part I of
the Federal Power Act under section 104 do not apply to other
Federal hydroelectric projects.
And the House agree to the same.
Amendment numbered 2:
That the Senate recede from its disagreement to the
amendment of the House numbered 2, and agree to the same with
an amendment, as follows:
In lieu of the matter proposed to be inserted by the House
amendment, insert the following:
TITLE II--EXPORTS OF ALASKAN NORTH SLOPE OIL
SEC. 201. EXPORTS OF ALASKAN NORTH SLOPE OIL.
Section 28 of the Mineral Leasing Act (30 U.S.C. 185) is
amended by amending subsection (s) to read as follows:
``exports of alaskan north slope oil
``(s)(1) Subject to paragraphs (2) through (6) of this
subsection and notwithstanding any other provision of this Act
or any other provision of law (including any regulation)
applicable to the export of oil transported by pipeline over
right-of-way granted pursuant to section 203 of the Trans-
Alaska Pipeline Authorization Act (43 U.S.C. 1652), such oil
may be exported unless the President finds that exportation of
this oil is not in the national interest. The President shall
make his national interest determination within five months of
the date of enactment of this subsection. In evaluating whether
exports of this oil are in the national interest, the President
shall at a minimum consider--
``(A) whether exports of this oil would diminish
the total quantity or quality of petroleum available to
the United States;
``(B) the results of an appropriate environmental
review, including consideration of appropriate measures
to mitigate any potential adverse effects of exports of
this oil on the environment, which shall be completed
within four months of the date of the enactment of this
subsection; and
``(C) whether exports of this oil are likely to
cause sustained material oil supply shortages or
sustained oil prices significantly above world market
levels that would cause sustained material adverse
employment effects in the United States or that would
cause substantial harm to consumers, including
noncontiguous States and Pacific territories.
If the President determines that exports of this oil are in the
national interest, he may impose such terms and conditions
(other than a volume limitation) as are necessary or
appropriate to ensure that such exports are consistent with the
national interest.
``(2) Except in the case of oil exported to a country with
which the United States entered into a bilateral international
oil supply agreement before November 26, 1979, or to a country
pursuant to the International Emergency Oil Sharing Plan of the
International Energy Agency, any oil transported by pipeline
over right-of-way granted pursuant to section 203 of the Trans-
Alaska Pipeline Authorization Act (43 U.S.C. 1652) shall, when
exported, be transported by a vessel documented under the laws
of the United States and owned by a citizen of the United
States (as determined in accordance with section 2 of the
Shipping Act, 1916 (46 U.S.C. App. 802)).
``(3) Nothing in this subsection shall restrict the
authority of the President under the Constitution, the
International Emergency Economic Powers Act (50 U.S.C. 1701 et
seq.), the National Emergencies Act (50 U.S.C. 1601 et seq.),
or Part B of title II of the Energy Policy and Conservation Act
(42 U.S.C. 6271-76) to prohibit exports.
``(4) The Secretary of Commerce shall issue any rules
necessary for implementation of the President's national
interest determination, including any licensing requirements
and conditions, within 30 days of the date of such
determination by the President. The Secretary of Commerce shall
consult with the Secretary of Energy in administering the
provisions of this subsection.
``(5) If the Secretary of Commerce finds that exporting oil
under authority of this subsection has caused sustained
material oil supply shortages or sustained oil prices
significantly above world market levels and further finds that
these supply shortages or price increases have caused or are
likely to cause sustained material adverse employment effects
in the United States, the Secretary of Commerce, in
consultation with the Secretary of Energy, shall recommend, and
the President may take, appropriate action concerning exports
of this oil, which may include modifying or revoking authority
to export such oil.
``(6) Administrative action under this subsection is not
subject to sections 551 and 553 through 559 of title 5, United
States Code.''.
SEC. 202. GAO REPORT.
(a) Review.--The Comptroller General of the United States
shall conduct a review of energy production in California and
Alaska and the effects of Alaskan North Slope oil exports, if
any, on consumers, independent refiners, and shipbuilding and
ship repair yards on the West Coast and in Hawaii. The
Comptroller General shall commence this review three years
after the date of enactment of this Act and, within twelve
months after commencing the review, shall provide a report to
the Committee on Energy and Natural Resources of the Senate and
the Committee on Resources and the Committee on Commerce of the
House of Representatives.
(b) Contents of Report.--The report shall contain a
statement of the principal findings of the review and
recommendations for Congress and the President to address job
loss in the shipbuilding and ship repair industry on the West
Coast, as well as adverse impacts on consumers and refiners on
the West Coast and in Hawaii, that the Comptroller General
attributes to Alaska North Slope oil exports.
And the House agree to the same.
Amendment numbered 3:
That the Senate recede from its disagreement to the
amendment of the House numbered 3, and agree to the same with
an amendment, as follows:
In lieu of the matter proposed to be stricken by the House
amendment, insert the following:
SEC. 203. GRANT AUTHORITY.
(a) In General.--The Secretary of Transportation
(``Secretary'') may make grants to the Multnomah County Tax
Supervising and Conservation Commission of Multnomah County,
Oregon (``Commission'') in accordance with this section, not to
exceed the amount determined in subsection (b)(2).
(b) Finding and Determination.--Before making any grant
under this section not earlier than one year after exports of
Alaskan North Slope oil commence pursuant to section 201, the
Secretary shall--
(1) find on the basis of substantial evidence that
such exports are directly or indirectly a substantial
contributing factor to the need to levy port district
ad valorem taxes under Oregon Revised Statutes section
294.381; and
(2) determine the amount of such levy attributable
to the export of Alaskan North Slope oil.
(c) Agreement.--Before receiving a grant under this section
for the relief of port district ad valorem taxes which would
otherwise be levied under Oregon Revised Statutes section
294.381, the Commission shall enter into an agreement with the
Secretary to--
(1) establish a segregated account for the receipt
of grant funds;
(2) deposit and keep grant funds in that account;
(3) use the funds solely for the purpose of
payments in accordance with this subsection, as
determined pursuant to Oregon Revised Statutes sections
294.305-565, and computed in accordance with generally
accepted accounting principles; and
(4) terminate such account at the conclusion of
payments subject to this subsection and to transfer any
amounts, including interest, remaining in such account
to the Port of Portland for use in transportation
improvements to enhance freight mobility.
(d) Report.--Within 60 days of issuing a grant under this
section, the Secretary shall submit any finding and
determination made under subsection (b), including supporting
information, to the Committee on Energy and Natural Resources
of the Senate and the Committee on Transportation and
Infrastructure of the House of Representatives.
(e) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary of Transportation to carry
out subsection (a), $15,000,000 for fiscal year 1997, to remain
available until October 1, 2003.
And the House agree to the same.
Amendment numbered 4:
That the Senate recede from its disagreement to the
amendment of the House numbered 4, and agree to the same with
an amendment, as follows:
In lieu of the matter proposed to be stricken by the House
amendment, insert the following:
TITLE IV--MISCELLANEOUS
SEC. 401. EMERGENCY RESPONSE PLAN.
(a) In General.--Within 15 months after the date of the
enactment of this Act, the Commandant of the Coast Guard shall
submit a plan to Congress on the most cost-effective means of
implementing an international private-sector tug-of-opportunity
system, including a coordinated system of communication, using
existing towing vessels to provide timely emergency response to
a vessel in distress transiting the waters within the
boundaries of the Olympic Coast National Marine Sanctuary or
the Strait of Juan de Fuca.
(b) Coordination.--In carrying out this section, the
Commandant, in consultation with the Secretaries of State and
Transportation, shall coordinate with the Canadian Government
and the United States and Canadian maritime industries.
(c) Access to Information.--If necessary, the Commandant
shall allow United States nonprofit maritime organizations
access to United States Coast Guard radar imagery and
transponder information to identify and deploy towing vessels
for the purpose of facilitating emergency response.
(d) Towing Vessel Defined.--For the purpose of this
section, the term ``towing vessel'' has the meaning given that
term by section 2101(40) of title 46, United States Code.
And the House agree to the same.
Amendment numbered 5:
That the Senate recede from its disagreement to the
amendment of the House numbered 5, and agree to the same with
an amendment, as follows:
In lieu of the matter proposed to be stricken by the House
amendment, insert the following:
TITLE III--OUTER CONTINENTAL SHELF DEEP WATER ROYALTY RELIEF
SEC. 301. SHORT TITLE.
This title may be referred to as the ``Outer Continental
Shelf Deep Water Royalty Relief Act''.
SEC. 302. AMENDMENTS TO THE OUTER CONTINENTAL SHELF LANDS ACT.
Section 8(a) of the Outer Continental Shelf Lands Act (43
U.S.C. 1337(a)(3)), is amended--
(1) by designating the provisions of paragraph (3)
as subparagraph (A) of such paragraph (3); and
(2) by inserting after subparagraph (A), as so
designated, the following:
``(B) In the Western and Central Planning Areas of the Gulf
of Mexico and the portion of the Eastern Planning Area of the
Gulf of Mexico encompassing whole lease blocks lying west of 87
degrees, 30 minutes West longitude, the Secretary may, in order
to--
``(i) promote development or increased production
on producing or non-producing leases; or
``(ii) encourage production of marginal resources
on producing or non-producing leases;
through primary, secondary, or tertiary recovery means,
reduce or eliminate any royalty or net profit share set
forth in the lease(s). With the lessee's consent, the
Secretary may make other modifications to the royalty
or net profit share terms of the lease in order to
achieve these purposes.
``(C)(i) Notwithstanding the provisions of this Act other
than this subparagraph, with respect to any lease or unit in
existence on the date of enactment of the Outer Continental
Shelf Deep Water Royalty Relief Act meeting the requirements of
this subparagraph, no royalty payments shall be due on new
production, as defined in clause (iv) of this subparagraph,
from any lease or unit located in water depths of 200 meters or
greater in the Western and Central Planning Areas of the Gulf
of Mexico, including that portion of the Eastern Planning Area
of the Gulf of Mexico encompassing whole lease blocks lying
west of 87 degrees, 30 minutes West longitude, until such
volume of production as determined pursuant to clause (ii) has
been produced by the lessee.
``(ii) Upon submission of a complete application by the
lessee, the Secretary shall determine within 180 days of such
application whether new production from such lease or unit
would be economic in the absence of the relief from the
requirement to pay royalties provided for by clause (i) of this
subparagraph. In making such determination, the Secretary shall
consider the increased technological and financial risk of deep
water development and all costs associated with exploring,
developing, and producing from the lease. The lessee shall
provide information required for a complete application to the
Secretary prior to such determination. The Secretary shall
clearly define the information required for a complete
application under this section. Such application may be made on
the basis of an individual lease or unit. If the Secretary
determines that such new production would be economic in the
absence of the relief from the requirement to pay royalties
provided for by clause (i) of this subparagraph, the provisions
of clause (i) shall not apply to such production. If the
Secretary determines that such new production would not be
economic in the absence of the relief from the requirement to
pay royalties provided for by clause (i), the Secretary must
determine the volume of production from the lease or unit on
which no royalties would be due in order to make such new
production economically viable; except that for new production
as defined in clause (iv)(I), in no case will that volume be
less than 17.5 million barrels of oil equivalent in water
depths of 200 to 400 meters, 52.5 million barrels of oil
equivalent in 400-800 meters of water, and 87.5 million barrels
of oil equivalent in water depths greater than 800 meters.
Redetermination of the applicability of clause (i) shall be
undertaken by the Secretary when requested by the lessee prior
to the commencement of the new production and upon significant
change in the factors upon which the original determination was
made. The Secretary shall make such redetermination within 120
days of submission of a complete application. The Secretary may
extend the time period for making any determination or
redetermination under this clause for 30 days, or longer if
agreed to by the applicant, if circumstances so warrant. The
lessee shall be notified in writing of any determination or
redetermination and the reasons for and assumptions used for
such determination. Any determination or redetermination under
this clause shall be a final agency action. The Secretary's
determination or redetermination shall be judicially reviewable
under section 10(a) of the Administrative Procedures Act (5
U.S.C. 702), only for actions filed within 30 days of the
Secretary's determination or redetermination.
``(iii) In the event that the Secretary fails to make the
determination or redetermination called for in clause (ii) upon
application by the lessee within the time period, together with
any extension thereof, provided for by clause (ii), no royalty
payments shall be due on new production as follows:
``(I) For new production, as defined in clause
(iv)(I) of this subparagraph, no royalty shall be due
on such production according to the schedule of minimum
volumes specified in clause (ii) of this subparagraph.
``(II) For new production, as defined in clause
(iv)(II) of this subparagraph, no royalty shall be due
on such production for one year following the start of
such production.
``(iv) For purposes of this subparagraph, the term `new
production' is--
``(I) any production from a lease from which no
royalties are due on production, other than test
production, prior to the date of enactment of the Outer
Continental Shelf Deep Water Royalty Relief Act; or
``(II) any production resulting from lease
development activities pursuant to a Development
Operations Coordination Document, or supplement thereto
that would expand production significantly beyond the
level anticipated in the Development Operations
Coordination Document, approved by the Secretary after
the date of enactment of the Outer Continental Shelf
Deep Water Royalty Relief Act.
``(v) During the production of volumes determined pursuant
to clauses (ii) or (iii) of this subparagraph, in any year
during which the arithmetic average of the closing prices on
the New York Mercantile Exchange for light sweet crude oil
exceeds $28.00 per barrel, any production of oil will be
subject to royalties at the lease stipulated royalty rate. Any
production subject to this clause shall be counted toward the
production volume determined pursuant to clause (ii) or (iii).
Estimated royalty payments will be made if such average of the
closing prices for the previous year exceeds $28.00. After the
end of the calendar year, when the new average price can be
calculated, lessees will pay any royalties due, with interest
but without penalty, or can apply for a refund, with interest,
of any overpayment.
``(vi) During the production of volumes determined pursuant
to clause (ii) or (iii) of this subparagraph, in any year
during which the arithmetic average of the closing prices on
the New York Mercantile Exchange for natural gas exceeds $3.50
per million British thermal units, any production of natural
gas will be subject to royalties at the lease stipulated
royalty rate. Any production subject to this clause shall be
counted toward the production volume determined pursuant to
clauses (ii) or (iii). Estimated royalty payments will be made
if such average of the closing prices for the previous year
exceeds $3.50. After the end of the calendar year, when the new
average price can be calculated, lessees will pay any royalties
due, with interest but without penalty, or can apply for a
refund, with interest, of any overpayment.
``(vii) The prices referred to in clauses (v) and (vi) of
this subparagraph shall be changed during any calendar year
after 1994 by the percentage, if any, by which the implicit
price deflator for the gross domestic product changed during
the preceding calendar year.''.
SEC. 303. NEW LEASES.
Section 8(a)(1) of the Outer Continental Shelf Lands Act,
as amended (43 U.S.C. 1337(a)(1)) is amended--
(1) by redesignating subparagraph (H) as
subparagraph (I);
(2) by striking ``or'' at the end of subparagraph
(G); and
(3) by inserting after subparagraph (G) the
following new subparagraph:
``(H) cash bonus bid with royalty at no less than
12 and \1/2\ per centum fixed by the Secretary in
amount or value of production saved, removed, or sold,
and with suspension of royalties for a period, volume,
or value of production determined by the Secretary,
which suspensions may vary based on the price of
production from the lease; or''.
SEC. 304. LEASE SALES.
For all tracts located in water depths of 200 meters or
greater in the Western and Central Planning Area of the Gulf of
Mexico, including that portion of the Eastern Planning Area of
the Gulf of Mexico encompassing whole lease blocks lying west
of 87 degrees, 30 minutes West longitude, any lease sale within
five years of the date of enactment of this title, shall use
the bidding system authorized in section 8(a)(1)(H) of the
Outer Continental Shelf Lands Act, as amended by this title,
except that the suspension of royalties shall be set at a
volume of not less than the following:
(1) 17.5 million barrels of oil equivalent for
leases in water depths of 200 to 400 meters;
(2) 52.5 million barrels of oil equivalent for
leases in 400 to 800 meters of water; and
(3) 87.5 million barrels of oil equivalent for
leases in water depths greater than 800 meters.
SEC. 305. REGULATIONS.
The Secretary shall promulgate such rules and regulations
as are necessary to implement the provisions of this title
within 180 days after the enactment of this Act.
SEC. 306. SAVINGS CLAUSE.
Nothing in this title shall be construed to affect any
offshore pre-leasing, leasing, or development moratorium,
including any moratorium applicable to the Eastern Planning
Area of the Gulf of Mexico located off the Gulf Coast of
Florida.
And the House agree to the same.
Amendment to title:
That the House recede from its amendment to the title of
the bill.
For consideration of House amendment No. 1:
Don Young,
Ken Calvert,
Tom Bliley,
For consideration of House amendment No. 2:
Don Young,
Ken Calvert,
William Thomas,
Tom Bliley,
Howard Coble,
Lee H. Hamilton,
Jim Oberstar,
For consideration of House amendment No. 3:
Floyd Spence,
John R. Kasich,
For consideration of House amendment No. 4:
Howard Coble,
Tillie K. Fowler,
Jim Oberstar,
For consideration of House amendment No. 5:
Don Young,
Ken Calvert,
Managers on the Part of the House.
Frank H. Murkowski,
Pete V. Domenici,
J. Bennett Johnston,
Wendell Ford,
Managers on the Part of the Senate.
JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE
The managers on the part of the House and the Senate at
the conference on the disagreeing votes of the two Houses on
the amendments of the House to the bill (S. 395) to authorize
and direct the Secretary of Energy to sell the Alaska Power
Administration, and to authorize the export of Alaska North
Slope crude oil, and for other purposes, submit the following
joint statement to the House and the Senate in explanation of
the effect of the action agreed upon by the managers and
recommended in the accompanying conference report:
House amendment numbered 1 struck title I of the Senate
bill. House amendment numbered 2 struck sections 201 through
204 of the Senate bill and inserted the text of H.R. 70, as
passed by the House. House amendment numbered 3 struck section
205 of the Senate bill. House amendment numbered 4 struck
section 206 of the Senate bill. House amendment numbered 5
struck title III of the Senate bill.
With respect to House amendment numbered 1, 2, 3, 4, and
5, and Senate receded from its disagreement to each House
numbered amendment with an amendment.
The differences between the Senate bill, the House
amendments, and the amendment agreed to in conference are noted
below, except for clerical corrections, conforming changes made
necessary by agreements reached by the conferees, and minor
drafting and clarifying changes.
Title I--Alaska Power Administration Asset Sale and Termination
Senate bill
Title I of the Senate bill provides for the sale of the
Alaska Power Administration's (APA) assets, an the termination
of the APA once the sale occurs. It also provides for the
exemption of the two hydroelectric projects from the licensing
requirements of Part I of the Federal Power Act.
House amendment numbered 1
The House amendment struck Title I of the Senate bill.
Conference agreement
The House receded to the Senate with an amendment.
The Conference Report adopts the Senate language with
minor changes. The APA's assets will be sold pursuant to the
1989 purchase agreements between the Department of Energy and
the purchasers. The Snettisham hydroelectric project and
related assets will be sold to the State of Alaska. the Eklutna
hydroelectric project and related assets will be sold jointly
to the Municipality of Anchorage, the Chugach Electric
Association, and the Matanuska Electric Association. For both
projects, the sale price is determined by calculating the net
present value of the remaining debt service payments the
Treasury would receive if the Federal Government retained
ownership.
This provision and the separate formal agreements provide
for the full protection of fish and wildlife. The purchasers,
the State of Alaska, the National Marine Fisheries Service
(NMFS), and the U.S. Fish and Wildlife Service (USFWS) have
entered into a formal agreement providing for post-sale
protection, mitigation, and enhancement of fish and wildlife
resources affected by Eklutna and Snettisham. This provision
makes that agreement legally enforceable.
As a result of the formal agreements, the Department of
Energy, the Department of the Interior, and NMFS all agree that
the two hydroelectric projects warrant exemption from the
Federal Energy Regulatory Commission (FERC) licensing under
Part I of the Federal Power Act. The August 7, 1991, formal
purchase agreement states:
NMFS, USFWS and the State agree that the following
mechanism to develop and implement measures to protect,
mitigate damages to, and enhance fish and wildlife
(including related spawning grounds and habitat)
obviate the need for the Eklutna Purchasers and AEA to
obtain FERC licenses. [Emphasis supplied.]
The Alaska Power Administration has 34 people located in
the State of Alaska. The purchasers of the two projects have
pledges to hire as many of these as possible. For those who do
not receive offers of employment, the Department of Energy has
pledged it will offer employment to any remaining APA
employees, although the DOE jobs are expected to be in the
lower 48 States.
The House-passed bill did not contain any comparable
provisions. The Conference Agreement adopts the Senate-passed
bill with two material changes.
First, section 104(a)(1) of the Conference Agreement
provides an exemption for Eklutna and Snettisham only from Part
I of the Federal Power Act (hydroelectric licensing), not from
the entire Federal Power Act. That was intended by the Senate.
By making this change, the Conferees do not intend to imply
that the purchasers who are already exempt from other aspects
of the Federal Power Act lose that broader exemption. Nor do
the Conferees intend to imply that merely by reason of this
provision the other parts of the Federal Power Act apply to
Eklutna and Snettisham. They apply if they would have applied
in the absence of this provision.
Second, new section 104(b) provides that upon sale or
transfer of any portion of Eklutna or Snettisham from the
purchasers to any person (i.e. a person other than a purchaser
defined in section 102), the exemption from Part I of the
Federal Power Act shall cease to apply to that portion of
Eklutna or Snettisham. However, the exemption from Part I will
continue to apply if the sale or transfer is from one purchaser
to another purchaser, as defined in section 102. The
elimination of exemption from Part I for a sold or transferred
portion of Eklutna or Snettisham does not mandate the licensing
of that portion, it only eliminates the exemption from the
application of Part I. If licensing is not otherwise required
under Part I of the Federal Power Act for that portion, it is
not required by reason of section 104(b). The disposition of a
portion of the Eklutna or Snettisham assets does not affect the
remaining portions. The one exception to this rule is a
subsequent assignment of interests in Eklutna by the Eklutna
Purchasers to the Alaska Electric Generation and Transmission
Cooperative Inc. pursuant to section 19 of the Eklutna Purchase
Agreement will not result in the elimination of the exemption
from Part I of the Federal Power Act for that interest.
Sections 104(d) and 104(e) address selection and transfer
of Eklutna and Snettisham lands. It is the intent of these
provisions that notwithstanding the expiration of the right of
the State of Alaska to make selections under section 6 of the
Alaska Statehood Act, the State may select lands pursuant to
this provision and the Eklutna and Snettisham Purchase
Agreements. Likewise, it is the intent of this legislation that
the Secretary of the Interior shall convey lands selected by
the State of Alaska, notwithstanding any limitations contained
in section 6(b) of the Alaska Statehood Act.
The Conferees agree that the circumstances justifying
exemption from licensing under Part I of the Federal Power Act
for these two Federally-owned hydroelectric projects are
unique, and that they would not justify a similar exemption for
any other Federally-owned hydroelectric project if sold. The
Conferees agree that if other Federally-owned hydroelectric
projects whose generation is marketed by other Federal power
marketing administrations are privatized, these circumstances
would not justify an exemption from Part I. This is reflected
in section 105 of the Conference Agreement.
Title II--Exports of Alaskan North Slope Oil
senate bill
Sections 201 through 204 of Title II of the Senate bill
authorized exports of Alaskan North Slope (ANS) crude oil;
mandated the filing of additional information in an annual
report under the Energy Policy and Conservation Act; and
required a study by the General Accounting Office (GAO).
House amendment numbered 2
The House amendment similarly authorized exports of ANS
crude oil and provided for a GAO study.
conference agreement
The Senate receded to the House language with an
amendment.
Under section 201, Committee of Conference recommends
authorizing exports of ANS oil under terms substantially
similar to, and drawn from, both the Senate bill and the House
amendment.
Paragraph (1) authorizes ANS exports, making inapplicable
the general and specific restrictions on these exports in
Section 7(d) of the Export Administration Act of 1979 (50
U.S.C. App. Sec. 2406(b)), Section 28(u) of the Mineral Leasing
Act of 1920 (30 U.S.C. Sec. 185), Section 103 of the Energy
Policy and Conservation Act (42 U.S.C. Sec. 6212), and the
Short Supply regulations issued thereunder. However, the export
of the oil can be stopped if the President determines (within
five months of the date of enactment) that they would not be in
the national interest. (Other statutory restrictions on the
export of U.S. crude oil either inapplicable or superseded with
respect to ANS exports are 10 U.S.C. Sec. 7430 and 29 U.S.C.
Sec. 1354, restricting exports of crude oil from the Naval
Petroleum Reserve and the outer continental shelf.)
Before making the national interest determination, the
President must consider an appropriate environmental review (to
be completed within four months of enactment). Consistent with
the 1973 Trans-Alaska Pipeline Authorization Act, the President
also must consider whether exports would diminish the total
quantity or quality of petroleum available to the United
States. The President must also consider whether exports are
likely to cause sustained material oil supply shortages or
sustained oil prices significantly above world market levels
that would cause sustained material adverse employment effects
in the United States or that would cause substantial harm to
consumers, in particular in noncontiguous States and Pacific
territories.
In a comprehensive report submitted to Congress, the
Department of Energy found ``no plausible evidence of any
direct negative environmental impact from lifting the ANS crude
export ban.'' Based on this finding and the weight of the
testimony, section 201 of the Conference Agreement directs, as
the ``appropriate environmental review,'' an abbreviated four-
month study. The environmental review is intended to be
thorough and comprehensive, but in light of the prior
Department of Energy findings and the compressed time frame,
neither a full Environmental Impact Statement nor even a more
limited Environmental Assessment is contemplated. If any
potential adverse effects on the environment are found, the
study is to recommend ``appropriate measures'' to mitigate or
cure them.
In making the national interest determination, the
President is authorized to impose appropriate terms and
conditions, other than a volume limitation, on ANS exports.
However, nothing in this section or Title IV of the Conference
Agreement authorizes the imposition of new requirements for oil
spill prevention and response in locations which would not be
affected by ANS exports, such as the Strait of Juan de Fuca or
within the boundaries of the Olympic Coast National Marine
Sanctuary.
The Conference Agreement takes cognizance of the changed
condition of national oil demand and available oil resources.
Title II is intended to permit ANS crude oil to compete with
other crude oil in the world market under normal market
conditions. To facilitate this competition and in recognition
that section 201 specifically precludes imposition of a volume
limitation, the President should direct that exports proceed
under a general license. In further recognition that some
information (such as volume and price) will be needed to
monitor exports, the President may wish to impose after-the-
fact reporting requirements as may be deemed appropriate by the
Secretary of Commerce.
Given the anticipated substantial benefits to the Nation
of ANS exports, the Conferees urge the President to make the
national interest determination as promptly as possible. If the
President fails to make the required national interest
determination within the statutorily imposed deadline, ANS oil
exports are authorized without intervening action by the
President or the Secretary of Commerce.
Section 201 requires, with limited exceptions, that ANS
exports be carried in U.S.-flag vessels. The only exceptions
are exports to Israel under the terms of a specific bilateral
treaty that entered into force in 1979 and exports to a country
pursuant to the International Emergency Oil Sharing Plan of the
International Energy Agency. The Committee of Conference
concurs with the Administration's assessment that the U.S.-flag
cargo reservation requirement is consistent with U.S.
international obligations and is supported by ample precedent,
including in particular a comparable provision in the U.S.-
Canada Free Trade Agreement, as implemented under U.S. law.
Section 201 preserves any authority the President may
have under the Constitution and the enumerated statutes to
prohibit ANS exports in an emergency.
Section 201 also directs the Secretary of Commerce to
issue any rules necessary to govern ANS exports within 30 days
of the President's national interest determination. In light of
the clear benefits to the Nation of ANS exports, the Conferees
urge the Secretary of Commerce to promulgate any rules
necessary to implement that determination, including any
licensing requirements and conditions, contemporaneously with
the determination.
Section 201 further provides that, if the Secretary of
Commerce (after consulting with the Secretary of Energy) later
finds that exports have caused sustained material oil shortages
or sustained prices significantly above the world level and
that the shortages or high prices have caused or are likely to
cause sustained material job losses, the Secretary must
recommend appropriate action, including modification or
revocation of the authority to export ANS oil. The President
has the discretion to adopt, reject, or modify any
recommendation made by the Secretary. In recognition that
prices fluctuate and supply patterns change under normal market
conditions, the authority of the Secretary is limited to
addressing activity that causes the specified sustained
unanticipated price and supply effects.
Finally, section 201 provides that administrative action
is not subject to notice and comment rulemaking requirements or
other requirements of the Administrative Procedures Act.
Under section 202, the Committee of Conference recommends
that a GAO report be submitted four years after the date of
enactment. The report must contain a statement of principal
findings and recommendations to address job loss in the
shipbuilding and ship repair industry on the West Coast and
Hawaii, if any, as well as adverse impacts on consumers and
refiners on the West Coast and in Hawaii, if any, that the
Comptroller General attributes to ANS exports. The Committee
believes that the market should be given a reasonable period of
time to operate before submission of the report. The Conferees
want to be sure the Comptroller General has a solid basis on
which to make his analysis and offer any recommendations for
Congress and the President.
senate bill
Section 205 of Title II provided for the retirement of
certain costs incurred for the construction of a non-Federal
publicly-owned shipyard.
house amendment
House amendment numbered 3 struck section 205 of the
Senate bill.
conference agreement
The Senate receded from its disagreement with an
amendment (now designated as section 203).
Under section 203(a) of the conference amendment, the
Secretary of Transportation is authorized to make grants to the
Multnomah County Tax Supervising and Conservation Commission of
Multnomah County, Oregon. The grants may be used only for the
relief of port district ad valorem taxes that would otherwise
be levied under Oregon law. In addition, at the conclusion of
the grant payments under this section, any remaining funds
(plus interest) would be transferred to the Port of Portland
for making transportation improvements to enhance freight
mobility.
Under subsection (b), before issuing any grant, the
Secretary must find on the basis of substantial evidence that
Alaskan North Slope oil exports are a contributing factor to
the need to levy certain port district taxes. In addition, the
Secretary must determine the amount of the tax levy attributed
to the oil exports. The amount of the grants is limited to the
amount of the tax levy attributed to the oil exports.
Before receiving any grant under this section, subsection
(c) requires the Commission (by agreement with the Secretary)
to establish a separate account for the funds, to use the funds
as directed, and to terminate the account and transfer any
remaining funds to the Port of Portland at the conclusion of
the grants.
Under Subsection (d), the Secretary must report to the
relevant Congressional Committees on any findings and
determinations made under subsection (b) within 60 days of
issuing a grant under this section.
Subsection (e) provides an authorization for
appropriations of up to $15 million for fiscal year 1997, to
remain available until October 1, 2003.
senate bill
Section 206 of the Senate bill included a provision that
would amend Title VI of the Oil Pollution Act of 1990 (OPA '90)
by adding a new section 6005 that would impose a requirement
for an additional towing vessel to be listed in, and available
to respond under, vessel response plans developed in accordance
with section 311(j) of the Federal Water Pollution Control Act
(FWPCA), as amended by OPA '90, for tank vessels operating
within the boundaries of the Olympic Coast National Marine
Sanctuary or the Strait of Juan de Fuca near the coastline of
the State of Washington. In particular, the provision would
require an emergency response tugboat capable of towing tank
vessels, initial firefighting, and initial oil spill response
to be repositioned in the area of Neah Bay, the western-most
harbor in the Strait.
house amendment
The House amendment numbered 4 struck section 206 of the
Senate bill.
conference agreement
The Senate receded from its disagreement with an
amendment (now designated as Title IV of this Act). See
explanation below.
Title III--Outer Continental Shelf Deep Water Royalty Relief
senate bill
Title III of the Senate bill would provide royalty relief
for leases on Outer Continental Shelf tracts in deep water in
certain areas of the Gulf of Mexico.
house amendment
The House amendment numbered 5 struck title III of the
Senate bill.
conference agreement
The Senate recedes from its disagreement with the House
with an amendment.
The amendment agreed to by the committee of conference is
the text of Title III of S. 395 as passed by the Senate with
several technical corrections and a new provision clarifying
that nothing in this title shall be construed to affect any
offshore pre-leasing, leasing, or development moratorium,
including any moratorium applicable to the Eastern Planning
Area of the Gulf of Mexico located off the Gulf Coast of
Florida.
Title IV--Miscellaneous
OPA '90 contemplates a comprehensive approach to oil
spill prevention and response, with the Coast Guard given an
instrumental role in implementing all aspects of that Act. In
addition to establishing a new liability and compensation
scheme for oil spills, OPA '90 amended existing law to broaden
the Coast Guard's authority under the Ports and Waterways
Safety Act (PWSA) regarding navigation and vessel safety and
protection of the marine environment and the FWPCA regarding
oil spill prevention and response. Under OPA '90 (as delegated
by the President), the Coast Guard is the principal Federal
agency charged with conducting Federal removal and prevention
activities in coastal areas. Accordingly, the Committee of
Conference believes that the Coast Guard is the most
appropriate agency to evaluate emergency response services in
the Olympic Coast National Marine Sanctuary and the Strait of
Juan de Fuca.
Subsection (a) of title IV requires the Commandant of the
Coast Guard to submit to Congress within fifteen months of
enactment a plan on the most cost effective means of
implementing an international private-sector tug-of-opportunity
system to utilize existing towing vessels to provide emergency
response services to any vessel (including a tank vessel) in
distress transiting the waters within the boundaries of the
Olympic Coast National marine Sanctuary or the Strait of Juan
de Fuca.
Subsection (b) provides that the Commandant, in
consultation with the Secretaries of the State and
Transportation, is to coordinate with the Canadian Government
and with both Canadian and American maritime industries.
Subsection (c) provides that if necessary, the Commandant
is to allow United States non-profit maritime organizations
access to Coast Guard radar imagery and transponder information
to identify and deploy towing vessels for the purpose of
facilitating emergency response.
Subsection (d) provides for the definition of ``towing
vessel'' as that term is defined under title 46, United States
Code. Section 2101(40) of title 46, United States Code, defines
towing vessels to mean ``a commercial vessel engaged in or
intending to engage in the service of pulling, pushing, or
hauling alongside, or any combination of pulling, pushing, or
hauling alongside.'' The reference to this section ensures
that, at a minimum, all commercial towing vessels are included
in the definition and, therefore, are covered by the provisions
of this section.
Section 206 of the Senate bill was developed to respond
to a perceived threat to the marine environment of Puget Sound
and the Straits of Juan de Fuca from tank vessel traffic. The
Committee of Conference believes that, absent convincing
information to the contrary, the marine environment of Puget
Sound is adequately protected under the existing vessel
response plan requirement found in FWPCA, as amended by OPA
'90. The Senate provision is therefore unnecessary because the
Coast Guard's existing authority under OPA '90 to prevent and
respond to oil spills, as well as under PWSA and FWPCA
(particularly as those two statutes have been amended by the
OPA '90), to evaluate and to impose vessel operating
requirements to minimize the risks of navigation and vessel
safety and risks to the marine environment is fully sufficient
to address the needs of the waterways of the United States,
including Puget Sound and the Strait of Juan de Fuca.
Accordingly, the Committee of Conference does not believe
that the mandate implicit in the Senate provision is required
nor is it related to any authorization to export Alaskan North
Slope crude oil. The Committee believes that the more
appropriate step is to require the Coast Guard to examine the
most cost-effective method to use existing towing vessel
resources in a tug-of-opportunity system within the authority
of existing law to respond to any vessel (including a tank
vessel in distress). Consequently, nothing in this section or
in section 201 is intended to authorize the President or the
Coast Guard to impose additional oil spill preventing and
response requirements in the Strait of Juan de Fuca or within
the boundaries of the Olympic Coast National Marine Sanctuary
in excess of those in the relevant Area Contingency Plan for
those areas as a result of requiring the Commandant to submit
this plan to Congress nor to impose requirements under any
national interest determination or implementing regulations
regarding the export of Alaskan oil.
For consideration of House amendment No. 1:
Don Young,
Ken Calvert,
Tom Bliley,
For consideration of House amendment No. 2:
Don Young,
Ken Calvert,
William Thomas,
Tom Bliley,
Howard Coble,
Lee H. Hamilton,
Jim Oberstar,
For consideration of House amendment No. 3:
Floyd Spence,
John R. Kasich,
For consideration of House amendment No. 4:
Howard Coble,
Tillie K. Fowler,
Jim Oberstar,
For consideration of House amendment No. 5:
Don Young,
Ken Calvert,
Managers on the Part of the House.
Frank H. Murkowski,
Pete V. Domenici,
J. Bennett Johnston,
Wendell Ford,
Managers on the Part of the Senate.