[House Report 108-302]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    108-302
======================================================================
 
                      COMBINED HYDROCARBON LEASING

                                _______
                                

October 7, 2003.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Pombo, from the Committee on Resources, submitted the following

                              R E P O R T

                        [To accompany H.R. 3062]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Resources, to whom was referred the bill 
(H.R. 3062) to amend the Mineral Leasing Act to authorize the 
Secretary of the Interior to issue separately, for the same 
area, a lease for tar sand and a lease for oil and gas, and for 
other purposes, having considered the same, report favorably 
thereon without amendment and recommend that the bill do pass.

                          Purpose of the Bill

    The purpose of H.R. 3062 is to amend the Mineral Leasing 
Act to authorize the Secretary of the Interior to issue 
separately, for the same area, a lease for tar sand and a lease 
for oil and gas, and for other purposes.

                  Background and Need for Legislation

    On November 16, 1981 Congress passed the Combined 
Hydrocarbon Leasing Act (CHLA). The Act was intended to 
encourage production of tar sands and other hydrocarbon 
deposits. At the time of enactment, the Secretary of the 
Interior identified 11 designated tar sand areas, all located 
in Utah, covering over one million acres of federal land. 
However, since the Act was passed, only one lease sale has 
occurred on tar sand lands.
    The CHLA has failed to accomplish its goal of increased 
energy production. A combined hydrocarbon lease contemplates 
not only oil and gas production, but production of tar sands, 
which is similar to mining. The Bureau of Land Management 
(BLM), which administers the program, does not fully understand 
how to implement the CHLA regulations so nominated lands are 
rarely leased. Complex National Environmental Policy Act (NEPA) 
documentation needed for tar sands development prohibit the 
issuance of leases for natural gas and oil in the designated 
tar sand areas. As a result, vast natural gas resources have 
not been developed in eastern Utah.
    H.R. 3062 would amend the CHLA and allow the Secretary to 
issue separate leases for tar sands and for oil and gas 
development. The bill would promote the development of the 
natural gas and oil resource in the region. Under H.R. 3062, no 
environmental regulations would be modified or circumvented in 
any way, nor would there be any change to existing wilderness 
designations. BLM would remain the steward of the land and 
would determine adequate level NEPA documentation.

                            Committee Action

    H.R. 3062 was introduced on September 10, 2003, by 
Congressman Chris Cannon (R-UT). The bill was referred to the 
Committee on Resources. On September 24, 2003, the Full 
Resources Committee met to consider the bill. No amendments 
were offered and the bill was then ordered favorably reported 
to the House of Representatives by unanimous consent.

            Committee Oversight Findings and Recommendations

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Resources' oversight findings and recommendations 
are reflected in the body of this report.

                   Constitutional Authority Statement

    Article I, section 8 of the Constitution of the United 
States grants Congress the authority to enact this bill.

                    Compliance With House Rule XIII

    1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the 
Rules of the House of Representatives requires an estimate and 
a comparison by the Committee of the costs which would be 
incurred in carrying out this bill. However, clause 3(d)(3)(B) 
of that rule provides that this requirement does not apply when 
the Committee has included in its report a timely submitted 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974.
    2. Congressional Budget Act. As required by clause 3(c)(2) 
of rule XIII of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, this 
bill does not contain any new budget authority, spending 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures.
    3. General Performance Goals and Objectives. This bill does 
not authorize funding and therefore, clause 3(c)(4) of rule 
XIII of the Rules of the House of Representatives does not 
apply.
    4. Congressional Budget Office Cost Estimate. Under clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 403 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for this bill from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 2, 2003.
Hon. Richard W. Pombo,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3062, a bill to 
amend the Mineral Leasing Act to authorize the Secretary of the 
Interior to issue separately, for the same area, a lease for 
tar sand and a lease for oil and gas, and for other purposes.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Megan 
Carroll and Deborah Reis.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

H.R. 3062--A bill to amend the Mineral Leasing Act to authorize the 
        Secretary of the Interior to issue separately, for the same 
        area, a lease for tar sand and a lease for oil and gas, and for 
        other purposes

    CBO estimates that H.R. 3062 would have no significant 
impact on the federal budget. The bill would not affect direct 
spending or revenues. H.R. 3062 contains no intergovernmental 
or private-sector mandates as defined in the Unfunded Mandates 
Reform Act and would impose no costs on state, local, or tribal 
governments.
    H.R. 3062 would amend section 17 of the Mineral Leasing Act 
to allow the Secretary of the Interior to issue separate leases 
for tar sand and for oil and gas resources that lie within the 
same parcel of land. Under current law, these resources must be 
leased together. According to the Bureau of Land Management, 
the proposed change would not significantly affect the agency's 
administrative costs or receipts from leasing those resources.
    The CBO staff contacts for this estimate are Megan Carroll 
and Deborah Reis. This estimate was approved by Peter H. 
Fontaine, Deputy Assistant Director for Budget Analysis.

                    Compliance With Public Law 104-4

    This bill contains no unfunded mandates.

                Preemption of State, Local or Tribal Law

    This bill is not intended to preempt any State, local or 
tribal law.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                 SECTION 17 OF THE MINERAL LEASING ACT

  Sec. 17. (a) * * *
  (b)(1)(A) * * *
  (B) The national minimum acceptable bid shall be $2 per acre 
for a period of 2 years from the date of enactment of the 
Federal Onshore Oil and Gas Leasing Reform Act of 1987. 
Thereafter, the Secretary may establish by regulation a higher 
national minimum acceptable bid for all leases based upon a 
finding that such action is necessary: (i) to enhance financial 
returns to the United States; and (ii) to promote more 
efficient management of oil and gas resources on Federal lands. 
Ninety days before the Secretary makes any change in the 
national minimum acceptable bid, the Secretary shall notify the 
Committee on Natural Resources of the United States House of 
Representatives and the Committee on Energy and Natural 
Resources of the United States Senate. The proposal or 
promulgation of any regulation to establish a national minimum 
acceptable bid shall not be considered a major Federal action 
subject to the requirements of section 102(2)(C) of the 
National Environmental Policy Act of 1969.
  (2)(A) If the lands to be leased are within a special tar 
sand area, they shall be leased to the highest responsible 
qualified bidder by competitive bidding under general 
regulations in units of not more than five thousand one hundred 
and twenty acres, which shall be as nearly compact as possible, 
upon the payment by the lessee of such bonus as may be accepted 
by the Secretary. Royalty shall be 12\1/2\ per centum in amount 
of value of production removed or sold from the lease subject 
to section 17(k)(1)(c). The Secretary may lease such additional 
lands in special tar sand areas as may be required in support 
of any operations necessary for the recovery of tar sands.
  (B) The Secretary may issue under this Act for the same area, 
separately--
          (i) a lease for exploration for and extraction of tar 
        sand; and
          (ii) a lease for exploration for and development of 
        oil and gas.
  (C) A lease issued under subparagraph (B)(ii) shall not be 
further subject to the Combined Hydrocarbon Leasing Act of 1981 
(30 U.S.C. 181 et seq.).
  (D) A lease issued for tar sand shall be issued using the 
same bidding process, annual rental, and posting period as a 
lease issued for oil and gas, except that the minimum 
acceptable bid required for a lease issued for tar sand shall 
be $2 per acre.
  (E) The Secretary may waive, suspend, or alter any 
requirement under section 26 that a permittee under a permit 
authorizing prospecting for tar sand must exercise due 
diligence, to promote any resource covered by a combined 
hydrocarbon lease.

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