[Senate Report 111-236]
[From the U.S. Government Publishing Office]
Calendar No. 492
111th Congress Report
SENATE
2d Session 111-236
======================================================================
OUTER CONTINENTAL SHELF REFORM ACT
_______
July 28, 2010.--Ordered to be printed
_______
Mr. Bingaman, from the Committee on Energy and Natural Resources,
submitted the following
R E P O R T
[To accompany S. 3516]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 3516) to amend the Outer Continental
Shelf Lands Act to reform the management of energy and mineral
resources on the Outer Continental Shelf, and for other
purposes, having considered the same, reports favorably thereon
with amendments and recommends that the bill, as amended, do
pass.
CONTENTS
Page
Amendments....................................................... 1
Purpose of the Measure........................................... 12
Summary of Major Provisions...................................... 12
Background and Need.............................................. 14
Legislative History.............................................. 16
Committee Recommendation and Tabulation of Votes................. 16
Committee Amendments (explanation)............................... 16
Section-by-Section Analysis...................................... 18
Cost and Budgetary Considerations................................ 30
Regulatory Impact Evaluation..................................... 31
Congressionally Directed Spending................................ 31
Executive Communications......................................... 31
Changes in Existing Law.......................................... 41
The amendments are as follows:
Beginning on page 3, strike line 13 and all that follows through
page 4, line 5, and insert the following:
(1) by striking paragraph (3) and inserting the following:
``(3) the outer Continental Shelf is a vital national
resource reserve held by the Federal Government for the public,
which should be managed in a manner that--
``(A) recognizes the need of the United States for
domestic sources of energy, food, minerals, and other
resources;
``(B) minimizes the potential impacts of development
of those resources on the marine and coastal
environment and on human health and safety; and
``(C) acknowledges the long-term economic value to
the United States of the balanced and orderly
management of those resources that safeguards the
environment and respects the multiple values and uses
of the outer Continental Shelf;'';
On page 7, line 23, insert ``peer-reviewed'' after `independent''.
On page 16, line 8, strike ``body of evidence'' and replace with
``complete set of safety documentation''.
On page 16, line 25, strike ``bond amounts'' and insert ``financial
responsibility requirements''.
On page 17, lines 1 and 2, strike ``set any bonds, surety, or other
evidence of financial responsibility required in amounts adequate'' and
insert ``adjust for inflation based on the Consumer Price Index for all
Urban Consumers published by the Bureau of Labor Statistics of the
Department of Labor, and recommend to Congress any further changes to
existing financial responsibility requirements necessary''.
On page 17, line 10, strike ``3'' and insert ``4''.
On page 18, line 7, strike ``2 years'' and insert ``1 year''.
On page 18, line 9, strike ``5'' and insert ``4.''
On page 18, line 14, insert ``income taxes and other significant
financial elements,'' after ``taxes''.
On page 19, between lines 21 and 22, insert the following:
``(E) Combined report.--The Secretary may combine the
reports required by paragraphs (1) and (2)(D) into 1
report.
On page 20, line 15, insert ``prior public'' after the word
``after''.
On page 22, line 14, strike ``potential'' and insert ``expected''.
On page 22, line 23, strike ``necessary'' and insert ``to be
used''.
On page 25, line 18, strike ``engineering''.
On page 25, line 19, strike ``system, including a'' and insert
``system by not less than 2 agency engineers, including a written''.
On page 26, lines 4 and 5, strike ``degrade'' and insert
``compromise''.
On page 41, line 9, strike ``The'' and insert ``To the extent
necessary to fund the inspections described in this paragraph, the''.
On page 45, between lines 12 and 13, insert the following:
(l) Conflicts of Interest.--Section 29 of the Outer Continental
Shelf Lands Act (43 U.S.C. 1355) is amended to read as follows:
``SEC. 29. CONFLICTS OF INTEREST.
``(a) Restrictions on Employment.--No full-time officer or employee
of the Department of the Interior who directly or indirectly discharged
duties or responsibilities under this Act shall--
``(1) within 2 years after his employment with the Department
has ceased--
``(A) knowingly act as agent or attorney for, or
otherwise represent, any other person (except the
United States) in any formal or informal appearance
before;
``(B) with the intent to influence, make any oral or
written communication on behalf of any other person
(except the United States) to; or
``(C) knowingly aid, advise, or assist in--
``(i) representing any other person (except
the United States in any formal or informal
appearance before; or
``(ii) making, with the intent to influence,
any oral or written communication on behalf of
any other person (except the United States) to,
any department, agency, or court of the United States, or any
officer or employee thereof, in connection with any judicial or
other proceeding, application, request for a ruling or other
determination, regulation, order lease, permit, rulemaking,
inspection, enforcement action, or other particular matter
involving a specific party or parties in which the United
States is a party or has a direct and substantial interest
which was actually pending under his official responsibility as
an officer or employee within a period of one year prior to the
termination of such responsibility or in which he participated
personally and substantially as an officer or employee;
``(2) within 1 year after his employment with the Department
has ceased--
``(A) knowingly act as agent or attorney for, or
otherwise represent, any other person (except the
United States) in any formal or informal appearance
before;
``(B) with the intent to influence, make any oral or
written communication on behalf of any other person
(except the United States) to; or
``(C) knowingly aid, advise, or assist in--
``(i) representing any other person (except
the United States in any formal or informal
appearance before, or
``(ii) making, with the intent to influence,
any oral or written communication on behalf of
any other person (except the United States) to,
the Department of the Interior, or any officer
or employee thereof, in connection with any
judicial, rulemaking, regulation, order, lease,
permit, regulation, inspection, enforcement
action, or other particular matter which is
pending before the Department of the Interior
or in which the Department has a direct and
substantial interest; or
``(3) accept employment or compensation, during the 1-year
period beginning on the date on which employment with the
Department has ceased, from any person (other than the United
States) that has a direct and substantial interest--
``(A) that was pending under the official
responsibility of the employee as an officer or
employee of the Department during the 1-year period
preceding the termination of the responsibility; or
``(B) in which the employee participated personally
and substantially as an officer or employee.
``(b) Prior Employment Relationships.--No full-time officer or
employee of the Department of the Interior who directly or indirectly
discharged duties or responsibilities under this Act shall participate
personally and substantially as a Federal officer or employee, through
decision, approval, disapproval, recommendation, the rendering of
advice, investigation, or otherwise, in a. proceeding, application,
request for a ruling or other determination, contract, claim,
controversy, charge, accusation, inspection, enforcement action, or
other particular matter in which, to the knowledge of the officer or
employee--
``(1) the officer or employee or the spouse, minor child, or
general partner of the officer or employee has a financial
interest;
``(2) any organization in which the officer or employee is
serving as an officer, director, trustee, general partner, or
employee has a financial interest;
``(3) any person or organization with whom the officer or
employee is negotiating or has any arrangement concerning
prospective employment has a financial interest; or
``(4) any person or organization in which the officer or
employee has, within the preceding 1-year period, served as an
officer, director, trustee, general partner, agent, attorney,
consultant, contractor, or employee.
``(c) Gifts From Outside Sources.--No full-time officer or employee
of the Department of the Interior who directly or indirectly discharged
duties or responsibilities under this Act shall, directly or
indirectly, solicit or accept any gift in violation of subpart B of
part 2635 of title X, Code of Federal Regulations (or successor
regulations).
``(d) Exemptions.--The Secretary may, by rule, exempt from this
section clerical and support personnel who do not conduct inspections,
perform audits, or otherwise exercise regulatory or policy making
authority under this Act.
``(e) Penalties.--
``(1) Criminal penalties.--Any person who violates paragraph
(1) or (2) of subsection (a) or subsection (b) shall be
punished in accordance with section 216 of title 18, United
States Code.
``(2) Civil penalties.--Any person who violates subsection
(a)(3) or (c) shall be punished in accordance with subsection
(b) of section 216 of title 18, United States Code.''.
On page 45, between lines 13 and 14, insert the following:
SEC. 7. STUDY ON THE EFFECT OF THE MORATORIA ON NEW DEEPWATER DRILLING
IN THE GULF OF MEXICO ON EMPLOYMENT AND SMALL
BUSINESSES.
(a) In General.--The Secretary of Energy, acting through the Energy
Information Administration, shall publish a monthly study evaluating
the effect of the moratoria resulting from the blowout and explosion of
the mobile offshore drilling unit Deepwater Horizon that occurred on
April 20, 2010, and resulting hydrocarbon releases into the
environment, on employment and small businesses.
(b) Report.--Not later than 60 days after the date of enactment of
this Act and at the beginning of each month thereafter during the
effective period of the moratoria described in subsection (a), the
Secretary of Energy, acting through the Energy Information
Administration, shall submit to the Committee on Energy and Natural
Resources of the Senate and the Committee on Energy and Commerce of the
House of Representatives a report regarding the results of the study
conducted under subsection (a), including--
(1) a survey of the effect of the moratoria on deepwater
drilling on employment in the industries directly involved in
oil and natural gas exploration in the Outer Continental Shelf;
(2) a survey of the effect of the moratoria on employment in
the industries indirectly involved in oil and natural gas
exploration in the Outer Continental Shelf, including suppliers
of supplies or services and customers of industries directly
involved in oil and natural gas exploration;
(3) an estimate of the effect of the moratoria on the
revenues of small business located near the Gulf of Mexico and,
to the maximum extent practicable, throughout the United
States; and
(4) any recommendations to mitigate possible negative effects
on small business concerns resulting from the moratoria.
On page 46, strike lines 3 through 11 and insert the following:
SEC. 8. SAFER OIL AND GAS PRODUCTION.
(a) Program Authority.--Section 999A of the Energy Policy Act of
2005 (42 U.S.C. 16371) is amended--
(1) in subsection (a)--
(A) by striking ``ultra-deepwater'' and inserting.
``deepwater''; and
(B) by inserting ``well control and accident
prevention,'' after ``safe operations,'';
(2) in subsection (b)--
(A) by striking paragraph (1) and inserting the
following:
``(1) Deepwater architecture, well control and accident
prevention, and deepwater technology, including drilling to
deep formations in waters greater than 500 feet''; and
(B) by striking paragraph (4) and inserting the
following:
``(4) Safety technology research and development for drilling
activities aimed at well control and accident prevention
performed by the Office of Fossil Energy of the Department.'';
and
(3) in subsection (d)--
(A) in the subsection heading, by striking ``National
Energy Technology Laboratory'' and inserting ``Office
of Fossil Energy of the Department''; and
(B) by striking ``National Energy Technology
Laboratory'' and inserting ``Office of Fossil Energy of
the Department''.
(b) Deepwater and Unconventional Onshore Natural Gas and Other
Petroleum Research and Development Program.--Section 999B of the Energy
Policy Act of 2005 (42 U.S.C. 16372) is amended--
(1) in the section heading, by striking ``ULTRADEEPWATER AND
UNCONVENTIONAL ONSHORE NATURAL GAS AND OTHER PETROLEUM'' and
inserting ``SAFE OIL AND GAS PRODUCTION AND ACCIDENT
PREVENTION'';
(2) in subsection (a), by striking. ``, by increasing'' and
all that follows through the period at the end and inserting
``and the safe and environmentally responsible exploration,
development, and production of hydrocarbon resources.'';
(3) in subsection (e)(1)--
(A) by redesignating subparagraphs (D) and (E) as
subparagraphs (E) and (F), respectively; and
(B) by inserting after subparagraph (C) the
following:
``(D) projects will be selected on a competitive,
peer-reviewed basis.''; and
(4) in subsection (d)--
(A) in paragraph (6), by striking ``ultradeepwater''
and inserting ``deepwater'';
(B) in paragraph (7)--
(i) in subparagraph (A)--
(I) in the subparagraph heading, by
striking ``Ultra-Deepwater'' and
inserting ``Deepwater'';
(II) by striking ``development and''
and inserting ``research, development,
and''; and
(III) by striking ``as well as'' and
all that follows through the period at
the end and inserting ``aimed at
improving operational safety of
drilling activities, including well
integrity systems, well control,
blowout prevention, the use of non-
toxic materials, and integrated systems
approach-based management for
exploration and production in
deepwater.'';
(ii) in subparagraph (B), by striking ``and
environmental mitigation'' and inserting ``use
of non-toxic materials, drilling safety, and
environmental mitigation and accident
prevention'';
(iii) in subparagraph (C), by inserting
``safety and accident prevention, well control
and systems integrity,'' after ``including'';
and
(iv) by adding at the end the following:
``(D) Safety and accident prevention technology
research and development.--Awards from allocations
under section 999H(d)(4) shall be expended on areas
including--
``(i) development of improved cementing and
casing technologies;
``(ii) best management practices for
cementing, casing, and other well control
activities and technologies;
``(iii) development of integrity and
stewardship guidelines for--
``(I) well-plugging and abandonment;
``(II) development of wellbore
sealant technologies; and
``(III) improvement and
standardization of blowout prevention
devices.''; and
(C) by adding at the end the following:
``(8) Study; report.--
``(A) Study.--As soon as practicable after the date
of enactment of this paragraph, the Secretary shall
enter into an arrangement with the National Academy of
Sciences under which the Academy shall conduct a study
to determine--
``(i) whether the benefits provided through
each award under this subsection during
calendar year 2011 have been maximized; and
``(ii) the new areas of research that could
be carried out to meet the overall objectives
of the program.
``(B) Report.--Not later than January 1, 2012, the
Secretary shall submit to the appropriate committees of
Congress a report that contains a description of the
results of the study conducted under subparagraph (A).
``(C) Optional updates.--The Secretary may update the
report described in subparagraph (B) for the 5-year
period beginning on the date described in that
subparagraph and each 5-year period thereafter.'';
(5) in subsection (e)--
(A) in paragraph (2)--
(i) in the second sentence of subparagraph
(A), by inserting ``to the Secretary for
review'' after ``submit''; and
(ii) in the first sentence of subparagraph
(B), by striking ``Ultra-Deepwater'' and all
that follows through ``and such Advisory
Committees'' and inserting ``Program Advisory
Committee established under section 999D(a),
and the Advisory Committee''; and
(B) by adding at the end the following:
``(6) Research findings and recommendations for
implementation.--The Secretary, in consultation with the
Secretary of the Interior and the Administrator of the
Environmental Protection Agency, shall publish in the Federal
Register an annual report on the research findings of the
program carried out under this section and any recommendations
for implementation that the Secretary, in consultation with the
Secretary of the Interior and the Administrator of the
Environmental Protection Agency, determines to be necessary.'';
(6) in subsection (i)--
(A) in the subsection heading, by striking ``United
States Geological Survey'' and inserting ``Department
of the Interior''; and
(B) by striking ``, through the United States
Geological Survey,''; and
(7) in the first sentence of subsection by striking
``National Energy Technology Laboratory'' and inserting
``Office of Fossil Energy of the Department''.
(c) Additional Requirements for Awards.--Section 999C(b) of the
Energy Policy Act of 2005 (42 U.S.C. 16373(b)) is amended by striking
``an ultra-deepwater technology or an ultra-deepwater architecture''
and inserting ``a deepwater technology''.
(d) Program Advisory Committee.--Section 999D of the Energy Policy
Act of 2005 (42 U.S.C. 16374) is amended to read as follows:
``SEC. 999D. PROGRAM ADVISORY COMMITTEE.
``(a) Establishment.--Not later than 270 days after the date of
enactment of the Safe and Responsible Energy Production Improvement Act
of 2010, the Secretary shall establish an advisory committee to be
known as the `Program Advisory Committee' (referred to in this section
as the `Advisory Committee').
``(b) Membership.--
``(1) In general.--The Advisory Committee shall be composed
of members appointed by the Secretary, including--
``(A) individuals with extensive research experience
or operational knowledge of hydrocarbon exploration and
production;
``(B) individuals broadly representative of the
affected interests in hydrocarbon production, including
interests in environmental protection and safety
operations;
``(C) representatives of Federal agencies, including
the Environmental Protection Agency and the Department
of the Interior;
``(D) State regulatory agency representatives; and
``(E) other individuals, as determined by the
Secretary.
``(2) Limitations.--
``(A) In general.--The Advisory Committee shall not
include individuals who are board members, officers, or
employees of the program consortium.
``(B) Categorical representation.--In appointing
members of the Advisory Committee, the Secretary shall
ensure that no class of individuals described in any of
subparagraphs (A), (B), (D), or (E) of paragraph (1)
comprises more than \1/3\ of the membership of the
Advisory Committee.
``(c) Subcommittees.--The Advisory Committee may establish
subcommittees for separate research programs carried out under this
subtitle.
``(d) Duties.--The Advisory Committee shall--
``(1) advise the Secretary on the development and
implementation of programs under this subtitle; and
``(2) carry out section 999B(e)(2)(B).
``(e) Compensation.--A member of the Advisory Committee shall serve
without compensation but shall be entitled to receive travel expenses
in accordance with subchapter I of chapter 57 of title 5, United States
Code.
``(f) Prohibition.--The Advisory Committee shall not make
recommendations on funding awards to particular consortia or other
entities, or for specific projects.''.
(e) Definitions.--Section 999G of the Energy Policy Act of 2005 (42
U.S.C. 16377) is amended--
(1) in paragraph (1), by striking ``200 but less than 1,500
meters'' and inserting ``500 feet'';
(2) by striking paragraphs (8), (9), and (10);
(3) by redesignating paragraphs (2) through (7) and (11) as
paragraphs (4) through (9) and (10), respectively;
(4) by inserting after paragraph (1) the following:
``(2) Deepwater architecture.--The term `deepwater
architecture' means the integration of technologies for the
exploration for, or production of, natural gas or other
petroleum resources located at deepwater depths.
``(3) Deepwater technology.--The term `deepwater technology'
means a discrete technology that is specially suited to address
1 or more challenges associated with the exploration for, or
production of, natural gas or other petroleum resources located
at deepwater depths.''; and
(5) in paragraph (10) (as redesignated by paragraph (3)), by
striking ``in an economically inaccessible geological
formation, including resources of small producers''.
(f) Funding.--Section 999H of the Energy Policy Act of 2005 (42
U.S.C. 16378) is amended--
(1) in the first sentence of subsection (a) by striking
``Ultra-Deepwater and Unconventional Natural Gas and Other
Petroleum Research Fund'' and inserting ``Safe and Responsible
Energy Production Research Fund'';
(2) in subsection (d)--
(A) in paragraph (1), by striking ``35 percent'' and
inserting ``21.5 percent'';
(B) in paragraph (2), by striking ``32.5 percent''
and inserting ``21 percent'';
(C) in paragraph (4)--
(i) by striking ``25 percent'' and inserting
``30 percent'';
(ii) by striking ``complementary research''
and inserting ``safety technology research and
development''; and
(iii) by striking ``contract management,''
and all that follows through the period at the
end and inserting ``and contract management.'';
and
(D) by adding at the end the following:
``(5) 20 percent shall be used for research activities
required under sections 20 and 21 of the Outer Continental
Shelf Lands Act (43 U.S.C. 1346, 1347).''; and
(3) in subsection (f), by striking ``Ultra-Deepwater and
Unconventional Natural Gas and Other Petroleum Research Fund''
and inserting ``Safer Oil and Gas Production and Accident
Prevention Research Fund''.
(g) Conforming Amendment.--Subtitle J of title IX of the Energy
Policy Act of 2005 (42 U.S.C. 16371 et seq.) is amended in the subtitle
heading by striking ``Ultra-Deepwater and Unconventional Natural Gas
and Other Petroleum Resources'' and inserting ``Safer Oil and Gas
Production and Accident Prevention''.
On page 46, between lines 11 and 12, insert the following:
SEC. 8. NATIONAL COMMISSION ON OUTER CONTINENTAL SHELF OIL SPILL
PREVENTION.
(a) Establisiiment.--There is established in the Legislative branch
the National Commission on Outer Continental Shelf Oil Spill Prevention
(referred to in this section as the ``Commission'').
(b) Purposes.--The purposes of the Commission are--
(1) to examine and report on the facts and causes relating to
the Deepwater Horizon explosion and oil spill of 2010;
(2) to ascertain, evaluate, and report on the evidence
developed by all relevant governmental agencies regarding the
facts and circumstances surrounding the incident;
(3) to build upon the investigations of other entities, and
avoid unnecessary duplication, by reviewing the findings,
conclusions, and recommendations of--
(A) the Committees on Energy and Natural Resources
and Commerce, Science, and Transportation of the
Senate;
(B) the Committee on Natural Resources and the
Subcommittee on Oversight and Investigations of the
House of Representatives; and
(C) other Executive branch, congressional, or
independent commission investigations into the
Deepwater Horizon incident of 2010, other fatal oil
platform accidents and major spills, and major oil
spills generally;
(4) to make a full and complete accounting of the
circumstances surrounding the incident, and the extent of the
preparedness of the United States for, and immediate response
of the United States to, the incident; and
(5) to investigate and report to the President and Congress
findings, conclusions, and recommendations for corrective
measures that may be taken to prevent similar incidents.
(c) Composition of Commission.--
(1) Members.--The Commission shall be composed of 10 members,
of whom--
(A) 1 member shall be appointed by the President, who
shall serve as Chairperson of the Commission;
(B) 1 member shall be appointed by the majority or
minority (as the case may be) leader of the Senate from
the Republican Party and the majority or minority (as
the case may be) leader of the House of Representatives
from the Republican Party, who shall serve as Vice
Chairperson of the Commission;
(C) 2 members shall be appointed by the senior member
of the leadership of the Senate from the Democratic
Party;
(D) 2 members shall be appointed by the senior member
of the leadership of the House of Representatives from
the Republican Party;
(E) 2 members shall be appointed by the senior member
of the leadership of the Senate from the Republican
Party; and
(F) 2 members shall be appointed by the senior member
of the leadership of the House of Representatives from
the Democratic Party.
(2) Qualifications; initial meeting.--
(A) Political party affiliation.--Not more than 5
members of the Commission shall be from the same
political party.
(B) Nongovernmental appointees.--An individual
appointed to the Commission may not be a current
officer or employee of the Federal Government or any
State or local government.
(C) Other qualifications.--It is the sense of
Congress that individuals appointed to the Commission
should be prominent United States citizens, with
national recognition and significant depth of
experience and expertise in such areas as--
(i) engineering;
(ii) environmental compliance;
(iii) health and safety law (particularly oil
spill legislation);
(iv) oil spill insurance policies;
(v) public administration;
(vi) oil and gas exploration and production;
(vii) environmental cleanup; and
(viii) fisheries and wildlife management.
(D) Deadline for appointment.--All members of the
Commission shall be appointed on or before September
15, 2010.
(E) Initial meeting.--The Commission shall meet and
begin the operations of the Commission as soon as
practicable after the date of enactment of this Act.
(3) Quorum; vacancies.--
(A) In general.--After the initial meeting of the
Commission, the Commission shall meet upon the call of
the Chairperson or a majority of the members of the
Commission.
(B) Quorum.--6 members of the Commission shall
constitute a quorum.
(C) Vacancies.--Any vacancy in the Commission shall
not affect the powers of the Commission, but shall be
filled in the same manner in which the original
appointment was made.
(d) Functions of Commission.--
(1) In general.--The functions of the Commission are--
(A) to conduct an investigation that--
(i) investigates relevant facts and
circumstances relating to the Deepwater Horizon
incident of April 20, 2010, and the associated
oil spill thereafter, including any relevant
legislation, Executive order, regulation, plan,
policy, practice, or procedure; and
(ii) may include relevant facts and
circumstances relating to--
(I) permitting agencies;
(II) environmental and worker safety
law enforcement agencies;
(III) national energy requirements;
(IV) deepwater and ultradeepwater oil
and gas exploration and development;
(V) regulatory specifications,
testing, and requirements for offshore
oil and gas well explosion prevention;
(VI) regulatory specifications,
testing, and requirements offshore oil
and gas well casing and cementing
regulation;
(VII) the role of congressional
oversight and resource allocation; and
(VIII) other areas of the public and
private sectors determined to be
relevant to the Deepwater Horizon
incident by the Commission;
(B) to identify, review, and evaluate the lessons
learned from the Deepwater Horizon incident of April
20, 2010, regarding the structure, coordination,
management policies, and procedures of the Federal
Government, and, if appropriate, State and local
governments and nongovernmental entities, and the
private sector, relative to detecting, preventing, and
responding to those incidents; and
(C) to submit to the President and Congress such
reports as are required under this section containing
such findings, conclusions, and recommendations as the
Commission determines to be appropriate, including
proposals for organization, coordination, planning,
management arrangements, procedures, rules, and
regulations.
(2) Relationship to inquiry by congressional committees.--In
investigating facts and circumstances relating to energy
policy, the Commission shall--
(A) first review the information compiled by, and any
findings, conclusions, and recommendations of, the
committees identified in subparagraphs (A) and (B) of
subsection (b)(3); and
(B) after completion of that review, pursue any
appropriate area of inquiry, if the Commission
determines that--
(i) those committees have not investigated
that area;
(ii) the investigation of that area by those
committees has not been completed; or
(iii) new information not reviewed by the
committees has become available with respect to
that area.
(e) Powers of Commission.--
(1) Hearings and evidence.--The Commission or, on the
authority of the Commission, any subcommittee or member of the
Commission, may, for the purpose of carrying out this section--
(A) hold such hearings, meet and act at such times
and places, take such testimony, receive such evidence,
and administer such oaths; and
(B) require, by subpoena or otherwise, the attendance
and testimony of such witnesses and the production of
such books, records, correspondence, memoranda, papers,
documents, tapes, and materials;
as the Commission or such subcommittee or member considers to
be advisable.
(2) Subpoenas.--
(A) Issuance.--
(i) In general.--A subpoena may be issued
under this paragraph only--
(I) by the agreement of the
Chairperson and the Vice Chairperson;
or
(II) by the affirmative vote of 6
members of the Commission.
(ii) Signature.--Subject to clause (i), a
subpoena issued under this paragraph--
(I) shall bear the signature of the
Chairperson or any member designated by
a majority of the Commission;
(II) and may be served by any person
or class of persons designated by the
Chairperson or by a member designated
by a majority of the Commission for
that purpose.
(B) Enforcement.--
(i) In general.--In the case of contumacy or
failure to obey a subpoena issued under
subparagraph (A), the United States district
court for the district in which the subpoenaed
person resides, is served, or may be found, or
where the subpoena is returnable, may issue an
order requiring the person to appear at any
designated place to testify or to produce
documentary or other evidence.
(ii) Judicial action for noncompliance.--Any
failure to obey the order of the court may be
punished by the court as a contempt of that
court.
(iii) Additional enforcement.--In the case of
any failure of any witness to comply with any
subpoena or to testify when summoned under
authority of this subsection, the Commission
may, by majority vote, certify a statement of
fact constituting such failure to the
appropriate United States attorney, who may
bring the matter before the grand jury for
action, under the same statutory authority and
procedures as if the United States attorney had
received a certification under sections 102
through 104 of the Revised Statutes (2 U.S.C.
192 through 194).
(3) Contracting.--The Commission may, to such extent and in
such amounts as are provided in appropriation Acts, enter into
contracts to enable the Commission to discharge the duties of
the Commission under this section.
(4) Information from federal agencies.--
(A) In general.--The Commission may secure directly
from any Executive department, bureau, agency, board,
commission, office, independent establishment, or
instrumentality of the Federal Government, information,
suggestions, estimates, and statistics for the purposes
of this section.
(B) Cooperation.--Each Federal department, bureau,
agency, board, commission, office, independent
establishment, or instrumentality shall, to the extent
authorized by law, furnish information, suggestions,
estimates, and statistics directly to the Commission,
upon request made by the Chairperson, the Chairperson
of any subcommittee created by a majority of the
Commission, or any member designated by a majority of
the Commission.
(C) Receipt, handling, storage, and dissemination.--
Information shall be received, handled, stored, and
disseminated only by members of the Commission and the
staff of the Commission in accordance with all
applicable laws (including regulations and Executive
orders).
(5) Assistance from federal agencies.--
(A) General services administration.--The
Administrator of General Services shall provide to the
Commission on a reimbursable basis administrative
support and other services for the performance of the
functions of the Commission.
(B) Other departments and agencies.--In addition to
the assistance prescribed in subparagraph (A),
departments and agencies of the United States may
provide to the Commission such services, funds,
facilities, staff, and other support services as are
determined to be advisable and authorized by law.
(6) Gifts.--The Commission may accept, use, and dispose of
gifts or donations of services or property, including travel,
for the direct advancement of the functions of the Commission.
(7) Postal services.--The Commission may use the United
States mails in the same manner and under the same conditions
as departments and agencies of the United States.
(f) Public Meetings and Hearings.--
(1) Public meetings and release of public versions of
reports.--The Commission shall--
(A) hold public hearings and meetings, to the extent
appropriate; and
(B) release public versions of the reports required
under paragraphs (1) and (2) of subsection (j).
(2) Public Hearings.--Any public hearings of the Commission
shall be conducted in a manner consistent with the protection
of proprietary or sensitive information provided to or
developed for or by the Commission as required by any
applicable law (including a regulation or Executive order).
(g) Staff of Commission.--
(1) In general.--
(A) Appointment and compensation.--
(i) In general.--The Chairperson, in
consultation with the Vice Chairperson and in
accordance with rules agreed upon by the
Commission, may, without regard to the civil
service laws (including regulations), appoint
and fix the compensation of a staff director
and such other personnel as are necessary to
enable the Commission to carry out the
functions of the Commission.
(ii) Maximum rate of pay.--No rate of pay
fixed under this subparagraph may exceed the
equivalent of that payable for a position at
level V of the Executive Schedule under section
5316 of title 5, United States Code.
(B) Personnel as federal employees.--
(i) In general.--The staff director and any
personnel of the Commission who are employees
shall be considered to be employees under
section 2105 of title 5, United States Code,
for purposes of chapters 63, 81, 83, 84, 85,
87, 89, and 90 of that title.
(ii) Members of commission.--Clause (i) shall
not apply to members of the Commission.
(2) Detailees.--
(A) In general.--An employee of the Federal
Government may be detailed to the Commission without
reimbursement.
(B) Civil service status.--The detail of the employee
shall be without interruption or loss of civil service
status or privilege.
(3) Procurement of temporary and intermittent services.--The
Chairperson of the Commission may procure temporary and
intermittent services in accordance with section 3109(b) of
title 5, United States Code, at rates for individuals that do
not exceed the daily equivalent of the annual rate of basic pay
prescribed for level V of the Executive Schedule under section
5316 of that title.
(h) Compensation and Travel Expenses.--
(1) Compensation of members.--
(A) Non-federal employees.--A member of the
Commission who is not an officer or employee of the
Federal Government shall be compensated at a rate equal
to the daily equivalent of the annual rate of basic pay
prescribed for level IV of the Executive Schedule under
section 5315 of title 5, United States Code, for each
day (including travel time) during which the member is
engaged in the performance of the duties of the
Commission.
(B) Federal employees.--A member of the Commission
who is an officer or employee of the Federal Government
shall serve without compensation in addition to the
compensation received for the services of the member as
an officer or employee of the Federal Government.
(2) Travel expenses.--A member of the Commission shall be
allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for an employee of an agency
under subchapter I of chapter 57 of title 5, United States
Code, while away from the home or regular place of business of
the member in the performance of the duties of the Commission.
(i) Security Clearances for Commission Members and Staff.--
(1) In general.--Subject to paragraph (2), the appropriate
Federal agencies or departments shall cooperate with the
Commission in expeditiously providing to the members and staff
of the Commission appropriate security clearances, to the
maximum extent practicable, pursuant to existing procedures and
requirements.
(2) Proprietary information.--No person shall be provided
with access to proprietary information under this section
without the appropriate security clearances.
(j) Reports of Commission; Adjournment.--
(1) Interim reports.--The Commission may submit to the
President and Congress interim reports containing such
findings, conclusions, and recommendations for corrective
measures as have been agreed to by a majority of members of the
Commission.
(2) Final report.--Not later than 180 days after the date of
the enactment of this Act, the Commission shall submit to the
President and Congress a final report containing such findings,
conclusions, and recommendations for corrective measures as
have been agreed to by a majority of members of the Commission.
(3) Temporary adjournment.--
(A) In general.--The Commission, and all the
authority provided under this section, shall adjourn
and be suspended, respectively, on the date that is 60
days after the date on which the final report is
submitted under paragraph (2).
(B) Administrative activities before termination.--
The Commission may use the 60-day period referred to in
subparagraph (A) for the purpose of concluding
activities of the Commission, including--
(i) providing testimony to committees of
Congress concerning reports of the Commission;
and
(ii) disseminating the final report submitted
under paragraph (2).
(C) Reconvening of commission.--The Commission shall
stand adjourned until such time as the President or the
Secretary of Homeland Security declares an oil spill of
national significance to have occurred, at which time--
(i) the Commission shall reconvene in
accordance with subsection (c)(3); and
(ii) the authority of the Commission under
this section shall be of full force and effect.
(k) Funding.--
(1) Authorization of appropriations.--There are authorized to
be appropriated to carry out this section--
(A) $10,000,000 for the first fiscal year in which
the Commission convenes; and
(B) $3,000,000 for each fiscal year thereafter in
which the Commission convenes.
(2) Availability.--Amounts made available to carry out this
section shall be available--
(A) for transfer to the Commission for use in
carrying out the functions and activities of the
Commission under this section; and
(B) until the date on which the Commission adjourns
for the fiscal year under subsection (j)(3).
(l) Nonapplicability of Federal Advisory Committee Act.--The
Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the
Commission.
On page 46, strike line 12 and insert the following:
SEC. 8. CLASSIFICATION OF OFFSHORE SYSTEMS.
(a) Regulations.--
(1) In general.--Not later than 2 years after the date of
enactment of this Act, the Secretary of the Interior and the
Secretary of the Department in which the Coast Guard is
operating shall jointly issue regulations requiring systems
(including existing systems) used in the offshore exploration,
development, and production of oil and gas in the outer
Continental Shelf (as defined in section 2 of the Outer
Continental Shelf Lands Act (43 U.S.C. 1331) to be constructed,
maintained, and operated so as to meet classification,
certification, rating, and inspection standards that are
necessary--
(A) to protect the health and safety of affiliated
workers; and
(B) to prevent environmental degradation.
(2) Third-party verification.--The standards established by
regulation under paragraph (1) shall be verified through
certification and classification by independent third parties
that--
(A) have been preapproved by both the Secretary of
the Interior and the Secretary of the Department in
which the Coast Guard is operating; and
(B) have no financial conflict of interest in
conducting the duties of the third parties.
(3) Minimum systems covered.--At a minimum, the regulations
issued under paragraph (1) shall require the certification and
classification by an independent third party who meets the
requirements of paragraph (2) of--
(A) mobile offshore drilling units;
(B) fixed and floating drilling or production
facilities;
(C) drilling systems, including risers and blowout
preventers; and
(D) any other equipment dedicated to the safety
systems relating to offshore extraction and production
of oil and gas.
(4) Exceptions.--The Secretary of the Interior and the
Secretary of the Department in which the Coast Guard is
operating may waive the standards established by regulation
under paragraph (1) for an existing system only if--
(A) the system is of an age or type where meeting
such requirements is impractical; and
(B) the system poses an acceptably low level of risk
to the environment and to human safety.
(b) Authority of Coast Guard.--Nothing in this section preempts or
interferes with the authority of the Coast Guard.
SEC. 9. SAVINGS PROVISIONS.
On page 47, strike line 7 and insert the following:
SEC. 10. BUDGETARY EFFECTS.
Purpose
The purposes of the measure are: to improve the management,
oversight, accountability, safety, and environmental protection
of all the resources on the Outer Continental Shelf; to provide
independent development and enforcement of safety and
environmental laws governing energy development and mineral
extractions activities on the Outer Continental Shelf and
related offshore activities; and to ensure a fair return to the
taxpayer from, and independent management of, royalty and
revenue activities from mineral and energy resources.
Summary of Major Provisions
National Policy for the Outer Continental Shelf
Section 4 clarifies U.S. policy to be applied in all
management decisions regarding the Outer Continental Shelf.
That policy provides that the vital resources of the U.S. Outer
Continental Shelf are to be managed in a way that recognizes
and balances the value of all of the resources, minimizes the
impact of development on the environment, and acknowledges the
long term economic value of balanced and orderly management. It
further provides that it is national policy to allow energy and
mineral development activities only when there is reasonable
assurance of adequate protection from harm to life, health, the
environment, property, or to other users of the waters, seabed,
or subsoil.
Structural Reform of Outer Continental Shelf Program Management
Section 5 reforms the organizational structure of the OCS
in several major ways. It requires reorganization of the agency
so that the revenue collection functions are kept separate from
the other functions; that no more than two other bureaus are to
be designated to carry out the leasing, safety, and
environmental functions in a way that minimizes the potential
for conflicts of interest; and that the heads of the bureaus or
offices created be appointed by the President and confirmed by
the Senate. It provides the Secretary with new hiring and
compensation authorities for a certain number of employees as
necessary to ensure that the agency has the technical expertise
required to carry out its safety and environmental functions.
Finally, it creates a new Outer Continental Shelf Safety and
Environmental Advisory Board made up of a balanced and unbiased
group of experts identified through consultation with the
National Academies of Science and Engineering to reflect a
range of disciplines related to safe and environmentally
compliant energy and mineral development activities. This Board
is to provide independent peer reviewed scientific and
technical advice for use by the agency in carrying out its
safety and environmental responsibilities.
Safety, Environmental, and Financial Reform
Section 6 amends various aspects of the Outer Continental
Shelf Lands Act to strengthen the planning, safety, and
environmental requirements involved in offshore energy
development to prevent future accidents and to create a culture
of excellence that governs both the regulators and the
industry. In addition to mandating more stringent regulatory
activity, it provides the Department of the Interior with
additional scientific and technical capability and some new
resources to help in the exercise of adequate oversight over
the industry through development of regulations, inspections,
and enforcement.
Key components of this system include: requirements for
exploration plans, separate deepwater operations plans, and
drilling permits for individual wells that focus on review of
the system of operations as a whole and as related to the
offshore conditions in which the system will operate; required
use of best available technology; full review of the systems by
qualified engineers; an evidentiary demonstration of the safety
of the system and any modifications; and new requirements to
ensure that containment systems and oil spill response plans
are adequate in advance of the start of operations.
An operations plan is also required that will demonstrate
that the industry employees who work on offshore facilities are
adequately trained and experienced, and training requirements
are established for all employees engaged in offshore
operations. Time limits currently applicable to review of
exploration plans are extended to ensure that the Secretary has
adequate time for complete review of the plans.
The Department of the Interior is required to establish
independent internal programs for research and development of
environmental and safety issues that must be used to inform the
regulatory activity, so that science will always be transparent
and an essential part of both areas. Existing research funding
is redirected to this research to reflect its high priority
status. This research, as well as data from required
investigations of all accidents, must be made public. The
Secretary is required to maximize the value of this
information, in part by the exchange of technical information
domestically and internationally to ensure widespread
understanding of best practices. The Department is also
required to seek the views of other agencies and to make public
those views and the Department's analysis of them to the extent
the Department disagrees.
The bill also will provide for a qualified independent
third party classification and certification utilizing a
technical and engineering review of key systems for each
operation based on standards to be developed jointly by the
Department of the Interior and the Coast Guard. This process is
modeled on the certification and classification systems
currently required for ocean-going vessels engaged in shipping
operations, and will provide an additional level of oversight
with the goal of safety and environmental protection.
Enforcement of the law is strengthened in a number of
respects. Inspection fees are established at a level that will
fully fund all inspections, so that increased numbers of highly
trained inspectors will be available to oversee compliance with
these rules. Operators who are found to be not meeting
diligence, safety, or environmental requirements on other
leases, or who have failed to meet their obligations for oil
spill-related damages, are disqualified from bidding on new
leases after public notice prior to the lease sale and
opportunity for a hearing. The Secretary is required to review
financial responsibility requirements to adjust the
requirements for Consumer Price Index and make recommendations
to Congress to ensure that they are adequate to permit lessees
to fulfill obligations, including oil spill-related
obligations. The National Transportation Safety Board is
authorized to perform independent investigations of any
accident at the Secretary's request. Civil and criminal
penalties for violations of any legal requirements are
increased. New ethics requirements are established to prevent
conflicts of interest and eliminate industry influence of
regulators.
To ensure a fair return to the taxpayer, the Secretary is
required to periodically review royalty rates and to complete a
comparative review of all components of relevant fiscal systems
for oil and gas resources with periodic reports to Congress.
Research for Safer Oil and Gas Production
Section 9 amends section 999 of the Energy Policy Act of
2005 to ensure research on the highest priority needs for
safety and environmental protection in offshore oil and gas
production; and to redirect a portion of the funding to the
Department of the Interior to assist in carrying out its new
research responsibilities as required by this Act.
Background and Need
The Department of the Interior is charged with the
management of the energy and mineral resources contained on the
Outer Continental Shelf--numerous and varied resources that all
are vital to our national well-being. Between January 19, 1982
and June 18, 2010, this responsibility was delegated by the
Secretary to the Minerals Management Service (MMS). While the
MMS was a small agency that was not well-known to the public,
it was tasked with an increasingly complex and wide-ranging set
of responsibilities which in some cases have a perceived or
real potential for conflict.
MMS had management responsibilities that determined the
uses of portions of the Outer Continental Shelf. It had
regulatory responsibilities that directly impacted the design
and operation of complex systems of offshore energy production.
It had planning responsibilities that significantly impacted
the marine and coastal environment. These same planning
decisions in some cases determined the level of federal revenue
received from offshore operations. It also had responsibility
for the collection of revenue that makes up a significant
portion of the federal budget from both offshore and onshore
mineral development on public lands.
The issues over which MMS had oversight became vastly more
complicated as offshore oil and gas operations moved into
deeper water and used deeper wells. The industry developed
increasingly sophisticated and complex technology for these
undertakings. For example, between 1992-2006, 2493 wells were
drilled at water depths greater than 1,000 feet. Wells are now
routinely drilled to depths of 10,000 feet below the sea floor
and often to 20,000 to 25,000 feet deep.
In such operations the potential impacts can be extremely
high, should there be a regulatory or operational failure.
Containment of wells and control of oil discharges in deepwater
can be much more complex than in shallow water or onshore. In
addition, marine research has provided better data about the
complexities of the ocean environment and its resources that
must be considered in planning efforts, making these efforts
much more sophisticated undertakings if done correctly. At the
same time, the MMS budget did not keep pace with other agencies
in terms of research capabilities. MMS had to become
increasingly reliant on industry for understanding of the
industry's technology and for understanding safety mechanisms
applicable to key components of the well design and operation.
The primary statute governing offshore oil and gas
development is the Outer Continental Shelf Lands Act (67
Stat.29), which originally was enacted in 1953 and last amended
by the Energy Policy Act of 2005 (Public Law 109-58; 119
Stat.594). Some significant safety and environmental provisions
have remained unchanged since 1978. Provisions of that Act
suggest that the primary responsibility of the agency carrying
out the Act is to provide national energy resources. Knowledge
of the other resources in the marine environment--both economic
and otherwise--has evolved significantly since initial
enactment, as has the technological capability of the industry
to locate and develop oil and gas in the outer continental
shelf.
In this legislative and regulatory context, on April 20,
2010 a loss of well control occurred and resulted in an
explosion and fire on the semisubmersible Mobile Offshore
Drilling Unit Deepwater Horizon about 50 miles off the coast of
Louisiana. Eleven lives were lost in this incident and the
vessel subsequently sank.
This drilling operation was in a water depth of 4,993 feet
and the well itself was at a depth of nearly 18,000 feet below
the seabed. As of the date of Committee consideration of this
bill, the well was not contained. Millions of gallons of oil
had been discharged into the Gulf, with dire consequences for
the people and wildlife of the Gulf coast, the regional marine
and coastal environment, and the fishing and tourism
industries.
The exact causes of the accident are as yet unknown and
several investigations are ongoing. However, testimony provided
during the Committee's hearings on the issue has demonstrated
that, at a minimum, there were multiple technical failures as
well as multiple regulatory failures. For example, the
regulatory system failed to require adequate demonstrations of
safety in well design, blowout prevention, containment
capability, and oil spill response planning. Questions exist
about the permitting of modifications to the well design,
adequacy and frequency of required inspections, and balanced
consideration generally of areas to be leased and risks
associated with leasing in those areas.
Even before the accident, in recognition of the increasing
complexity and volume of MMS's responsibilities, the Department
of the Interior had requested that Congress consider enactment
of an ``organic act'' for the MMS as well as budget increases
to fund more personnel, including inspectors, for offshore
operations. Following the accident, the Secretary requested,
among other things, that Congress eliminate the statutory time
constraints applicable to the agency's review of lessee's
exploration plans, the first plans in which the agency receives
specific, place-based design for the exploration process from a
lessee for review.
On May 19, 2010, in light of the Deepwater Horizon
accident, the Secretary announced a plan to fundamentally
restructure MMS and divide its responsibilities among three
separate offices: a Bureau of Ocean Energy Management; a Bureau
of Safety and Environmental Enforcement; and an Office of
Natural Resources Revenue. On June 18, 2010, the Secretary
renamed MMS the Bureau of Ocean Energy Management, Regulation,
and Enforcement pending further reorganization. He has been and
is still in the process of establishing additional safety
requirements applicable to the areas of concern in the loss of
well control, and has hired additional rig inspectors.
However, it is clear that administrative changes alone
cannot ultimately be sufficient to the challenges that are
demonstrated by the Deepwater Horizon accident. Legislation
will ensure that the necessary safety and environmental
requirements can be developed, enforced and maintained
regardless of changes in the leadership of the Department; that
the agency always has the scientific and technical resources to
lead instead of follow advances in technology of well design,
containment and oil spill response; and that agency
organization avoids conflicts of interest that can and have
arisen due to its multiple responsibilities. Legislation is
needed to create and embed an enduring culture of excellence in
the regulatory agency that in turn can ensure the same level of
excellence in industry operations.
Legislative History
S. 3516 was introduced by Senator Bingaman on June 21,
2010, and is cosponsored by Senators Murkowski, Dorgan and
Stabenow. The Committee on Energy and Natural Resources held a
hearing on environmental stewardship on November 19, 2009, four
oversight hearings on offshore oil and gas development and the
Deepwater Horizon Accident (May 11, May 18, May 25, and June 9,
2010), and a legislative hearing on S. 3516 and related
legislation on June 24, 2010. At its business meeting on June
30, 2010, the Committee on Energy and Natural Resources ordered
S. 3516 to be favorably reported with amendments.
Committee Recommendation
The Committee on Energy and Natural Resources, in open
business session on June 30, 2010, by a unanimous voice vote of
a quorum present, recommends that the Senate pass S. 3516, if
amended as described herein.
Committee Amendments
During its consideration of S. 3516, the Committee adopted
seven amendments as follows:
1. An amendment (#1) offered by Senator Shaheen to section
4 of S. 3516, which in turn amends section 3 of the Outer
Continental Shelf Lands Act relating to the national policy for
the OCS. The amendment requires that the OCS be managed in a
way that ``minimizes'' rather than ``recognizes'' the potential
impacts of the development of energy, food, mineral, and other
OCS resources on the marine and coastal environment and on
human health and safety.
2. An amendment (#2-17) offered by Senators Bingaman and
Murkowski, to make a series of 16 minor, technical, or
clarifying amendments to the bill.
3. An amendment (#18) offered by Senators Bingaman and
Wyden, which adds a new subsection (l) to section 6 of the
bill. The amendment amends section 29 of the Outer Continental
Shelf Lands Act to strengthen the post-employment restrictions
currently found in the Act, to add new conflict-of-interest
restrictions, and to prescribe civil and criminal penalties for
violations of the restrictions.
4. An amendment (#19) offered by Senator Landrieu, which
adds a new section 7 to the bill, to require that the Secretary
of Energy, acting through the Energy Information
Administration, publish a monthly study evaluating the effect
of the moratoria which followed the blowout and explosion of
the mobile offshore drilling unit Deepwater Horizon that
occurred on April 20, 2010. The amendment also requires that
not later than 60 days after the date of enactment of this Act
and at the beginning of each month thereafter during the
effective period of the moratoria, the Secretary of Energy
submit a report to the Committee on Energy and Natural
Resources of the Senate and the Committee on Energy and
Commerce of the House of Representatives regarding the results
of the study.
5. An amendment (#20) offered by Senator Udall, which adds
a new section 9 to the bill and amends title IX, subtitle J of
the Energy Policy Act of 2005, relating to ultra-deepwater and
unconventional natural gas and other petroleum resources. The
amendment refocuses the ultra-deepwater research and
development program on deepwater, redefines ``deepwater'' to
apply to depths of 500 feet or greater, and expands the scope
of the program to include deepwater well control and accident
prevention, improved safety and blowout prevention
technologies, and best practices. The amendment also changes
the name of the Fund established by section 999H of the Energy
Policy Act of 2005 and changes how the Fund is allocated among
program elements. It provides some of the funding to the
Department of the Interior for priority research required by
the bill.
6. An amendment (#21) offered by Senator Barrasso, which
adds a new section 10 to the bill, to establish a National
Commission on Outer Continental Shelf Oil Spill Prevention in
the Legislative branch to be comprised of 10 members to be
appointed by both political parties before September 15, 2010.
Functions of the Commission include: conducting an
investigation relating to the facts and circumstances of the
Deepwater Horizon incident of April 20, 2010 and the associated
oil spill; identifying, reviewing, and evaluating the lessons
learned from the Deepwater Horizon incident regarding
structure, coordination, management policies, and procedures of
the Federal Government and, if appropriate, State and local
governments, non-governmental entities, and the private sector;
and submitting to the President and the Congress reports
containing the Commission's findings, conclusions, and
recommendations, including a final report 180 days after
enactment. The Commission is given subpoena power and is
authorized at a level of $10,000,000 for the first fiscal year
and $3,000,000 for each fiscal year thereafter in which the
Commission convenes. It will adjourn 60 days after filing its
final report, with the authority to reconvene upon declaration
of any oil spill of national significance.
7. An amendment (#22) offered by Senator Cantwell, which
adds a new section 11 to the bill, to require that not later
than 2 years after the date of enactment, the Secretary of the
Interior and the Secretary of the department in which the Coast
Guard is operating jointly issue regulations requiring drilling
systems used in the offshore exploration, development, and
production of oil and gas in the OCS to be constructed,
maintained, and operated so as to meet classification,
certification, rating, and inspection standards that are
necessary to protect the health and safety of workers and
prevent environmental degradation. The standards established by
the regulations are to be verified through certification and
classification by qualified independent third parties that have
been preapproved by the Secretaries and have no financial
conflict of interest. The Secretaries may waive the standards
for an existing system only if the system is of an age or type
where meeting such requirements is impractical and the system
poses an acceptably low level of risk to the environment and
human safety.
The amendments are explained in further detail in the
section-by-section analysis that follows.
Section-by-Section Analysis
Section 1. Short title; table of contents
This section sets forth the short title and table of
contents.
Section 2. Purposes
This section sets forth the purposes of the legislation.
Section 3. Definitions
This section sets forth definitions.
Section 4. National policy for the outer Continental Shelf
This section amends the section 3 of the Outer Continental
Shelf Lands Act (OCSLA) (43 U.S.C. 1332), pertaining to the
national policy for the outer Continental Shelf (OCS).
Paragraph (1) adds a new paragraph (3) to section 3 of the
OCSLA that provides that the outer Continental Shelf (OCS) is a
vital national resource reserve to be managed to recognize the
need for domestic sources of energy, food, minerals, and other
resources; minimizes the potential impacts of development of
those resources on the marine and coastal environment and on
human health and safety; and acknowledges the long-term
economic value to the United States of the balanced and orderly
management of those resources that safeguards the environment
and respects the multiple values and uses of the OCS.
Paragraphs (2), (3), and (4) make conforming changes.
Paragraph (5) adds a new paragraph (6) to section 3 of the
OCSLA that provides that it is the policy of the United States
that energy exploration, development, and production on the OCS
should be allowed only when it can be done in a manner that
provides reasonable assurance of adequate protection against
harm to life, health, the environment, property or other users
of the waters, seabed or subsoil.
Paragraphs (6) and (7) are self-explanatory.
Section 5. Structural reform of Outer Continental Shelf program
management
Section 5(a) amends the OCSLA by adding a new section 32
pertaining to structural reform of OCS program management.
New OCLSA section 32(a) provides that the Secretary of the
Interior shall establish not more than two bureaus to carry out
the leasing, permitting, safety and environmental regulatory
functions vested in the Secretary by this Act and the Federal
Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 1701, et
seq.) related to the OCS. The Secretary is required to ensure
to the maximum extent practicable that any potential
organizational conflicts of interest are eliminated. The bureau
or bureaus established pursuant to this subsection are to be
headed by a Director appointed by the President by and with the
advice and consent of the Senate. The remaining provisions of
new subsection (a) pertaining to compensation and
qualifications are self-explanatory.
New OCSLA section 32(b) requires the Secretary to establish
within the Department of the Interior an office to carry out
the royalty and revenue management functions vested in the
Secretary by the OCSLA and the Federal Oil and Gas Royalty
Management Act of 1982 (30 U.S.C. 1701, et seq.). The office
established pursuant to this subsection is to be headed by a
Director appointed by the President by and with the advice and
consent of the Senate. The remaining provisions of new
subsection (b) pertaining to compensation and qualifications
are self-explanatory.
New OCSLA section 32(c) requires the Secretary of the
Interior to establish an Outer Continental Shelf Safety and
Environmental Advisory Board to provide the Secretary and the
bureau Directors with independent scientific and technical
advice on safe and environmentally compliant energy and mineral
resource exploration, development and production activities.
Paragraphs (2) through (5) address membership, meetings,
reports, and travel expenses, and are self-explanatory.
New OCSLA section 32(d) provides special personnel
authorities for the direct hiring of critical personnel,
including highly qualified accountants, scientists, engineers,
or critical technical personnel. The authorities include
critical pay authority and authority to reemploy civilian
retirees. The section imposes certain limitations on the terms
of employment for the employees hired under these special
authorities. The section also provides for continuity of
authorities and conforming amendments.
Section 5(b) makes conforming changes.
Section 6. Safety, environmental, and financial reform of the Outer
Continental Shelf Lands Act
This section amends several sections of the OCSLA to modify
safety, environmental, and financial requirements.
Section 6(a) amends section 2 of the OCSLA (43 U.S.C. 1331)
by adding a new subsection (r) setting forth the definition of
``safety case''.
Section 6(b) amends section 5(a) of the OCSLA (43 U.S.C.
1334(a) by requiring the Secretary to prescribe and amend rules
and regulations to provide for operational safety and the
protection of marine and coastal environment.
Section 6(c) amends section 6 of the OCSLA (43 U.S.C. 1335)
by adding new subsections (f) and (g). New OCSLA section 6(f)
requires the Secretary to review, periodically, minimum
financial responsibility requirements and adjust for inflation
and recommend to Congress any further changes to existing
financial responsibility requirements necessary to permit
lessees to fulfill all obligations under the OCSLA and the Oil
Pollution Act of 1990 (33 U.S.C. 2701, et seq.). New OCSLA
section 6(g)(1) requires a periodic review of rental and
royalty rates for leases under the OCSLA. New OCSLA section
6(g)(2) requires a periodic comparative review of fiscal
systems of the United States and other resource owners,
including states and foreign nations, for offshore oil and gas,
including requirements for bonus bids, royalties, rentals,
fees, oil and gas taxes, income taxes and other significant
financial elements. The Secretary may combine the reports
required under paragraphs (1) and (2)(D) into one report.
Section 6(d) amends section 8 of the OCSLA (43 U.S.C. 1337)
by striking subsection (d) and inserting a new subsection (d)
which provides that no bid for a lease may be submitted by any
entity that the Secretary finds, after prior public notice and
an opportunity for a hearing, is not meeting due diligence,
safety, or environmental requirements on other leases, or is a
responsible party for a vessel or facility from which oil is
discharged for purposes of section 1002 of the Oil Pollution
Act of 1990 and has failed to meet the obligations of the
responsible party under that Act to provide compensation for
covered removal costs and damages. It is the Committee's
intention that prior public notice of any such noncompliance
occur at the time of the lease sale announcement.
Section 6(e)(1) amends section 11(c) of the OCSLA (43
U.S.C. 1340(c)) to replace the requirement that the Secretary
approve an exploration plan within 30 days with a requirement
that the approval take place by the deadline described in new
paragraph (5).
Section 6(e)(1) further amends the OCSLA by adding a new
section 11(c)(3) that specifies certain requirements for the
exploration plan, including: a complete description and
schedule of exploration activities; a description of the
equipment to be used for exploration activities, including a
description of the drilling unit; a statement of the design of
major safety-related equipment; a statement demonstrating the
equipment meets the best available technology requirements; a
map showing the location of each well; a scenario for the
potential blowout of the well involving the highest expected
volume of liquid hydrocarbons; and a description of the
response plan to control the blowout and manage the
accompanying discharge of hydrocarbons. Before conducting
exploration activities in water depths greater than 500 feet,
the lessee must submit to the Secretary for approval a
deepwater operations plan prepared by the lessee, which must be
based on best available technology to carry out the exploration
activity and blowout response plan. The Secretary shall not
approve the plan unless it includes a technical systems
analysis as specified, including blowout prevention technology
and blowout and spill response plans.
Section 6(e)(1) further amends the OCSLA by adding a new
section 11(c)(5) that provides that for leases issued under a
sale held after March 17, 2010, the deadline for approval of an
exploration plan is 90 days, except that an additional 180 days
may be taken if the Secretary makes a finding that additional
time is necessary to complete any environmental, safety, or
other reviews. The Secretary may extend the 30 day deadline
with the consent of the lessee for leases issued under a sale
held on or before March 17, 2010. March 17, 2010 is the date of
the last lease sale held prior to the Deepwater Horizon
accident.
Section 6(e)(2) makes conforming changes.
Section 6(e)(3) amends section 11(d) of the OCSLA (43
U.S.C. 1340(d)) by striking subsection (d) and inserting a new
subsection that provides that the Secretary require that the
lessee obtain a drilling permit prior to drilling a well under
an exploration plan and before significantly modifying a well
design originally approved by the Secretary. The Secretary may
not grant any drilling permit until the date of completion of a
full review of the well system by not less than 2 agency
engineers, including a written determination that critical
safety systems will use best available technology and blowout
preventions systems will include redundancy and remote
triggering capability. The Secretary may not approve any
modification of a permit without a determination, after an
additional engineering review, that the modification will not
compromise the safety of the well system previously approved.
The Secretary may not grant any drilling permit or modification
of a permit until the date of completion and approval of a
safety and environmental management plan that specifies the
expertise and experience level of crew members who will be
present on the rig and that requires that not later than May 1,
2012, all employees on the rig meet certain training and
experience requirements.
Section 6(e)(3) further amends section 11 by adding a new
subsection (e) which requires that the Secretary disapprove an
exploration plan if the Secretary makes certain determinations
as specified. New OCSLA section 11(e) applies the Act's
provisions relating to compensation if an exploration plan is
disapproved under the subsection.
Section 6(f)(1) amends section 18(a) of the OCSLA (43
U.S.C. 1344(a)) to include the consideration of protection of
marine and coastal environment and resources in developing the
schedule for leasing on the OCS, and to require that equal
consideration is given to certain factors in developing the oil
and gas leasing program. The remaining provision is self-
explanatory.
Section 6(f)(2) amends section 18(b) of the OCSLA (43
U.S.C. 1344(b)) to require that additional items be considered
in estimating the appropriations and staff needed to carry out
the leasing program.
Section 6(f)(3) amends section 18(d)(2) of the OCSLA (43
U.S.C. 1344(d)(2)) to require the submission by the Secretary
under that paragraph to indicate why any specific
recommendation of the head of a Federal agency with respect to
a proposed leasing program was not accepted.
Section 6(f)(4) amends section 18(g) of the OCSLA (43
U.S.C. 1344(g) to list additional information that may be
obtained by the Secretary in preparing an environmental impact
statement and other evaluations required by the section.
Section 6(f)(5) amends section 18 of the OCSLA (43 U.S.C.
1344) by adding a new subsection (i) that requires the
Secretary to carry out a program of research and development to
ensure the continued improvement of methodologies for
characterizing resources of the OCS and conditions that may
affect the ability to develop and use those resources in a
safe, sound, and environmentally responsible manner. This may
include activities to provide accurate resource estimates.
These activities are not to be considered leasing or pre-
leasing activities. This section is not intended to alter other
provisions of the Act related to activities for characterizing
the resources of the OCS including environmental permitting
requirements.
Section 6(g) amends section 20 of the OCSLA (43 U.S.C.
1346) by making conforming changes and by inserting a new
subsection (a) that requires the Secretary to carry out
programs for the collection, evaluation and dissemination of
environmental and other resource data relevant to carrying out
the OCSLA. New OCSLA section 20(a) sets forth the scope of the
research and the use of the data. The subsection requires that
the program be carried out in a manner that is programmatically
separate and distinct from the leasing program and provides for
external scientific review of studies. Section 6(g) amends
redesignated section 20(b) of the OCSLA to require an
environmental study every three years of any area or region
included in any oil and gas lease sale.
Section 6(h)(1) amends section 21(a) of the OCSLA (43
U.S.C. 1347(a)) to require not later than May 1, 2011, and
every three years thereafter, a study of the adequacy of
existing safety and health regulations and of the technology,
equipment, and techniques available for the exploration,
development, and production of minerals on the OCS.
Section 6(h)(2) amends section 21 of the OCSLA by striking
subsection (b) and inserting a new subsection. New OCSLA
subsection 21(b)(1) requires on all new drilling and production
operations and, to the maximum extent practicable, on existing
operations, the use of the best available and safest
technologies and practices, if the failure of the equipment
would have a significant effect on safety, health, or the
environment. New OCSLA section 21(b)(2) requires the Secretary
to identify and publish not later than every three years an
updated list of best available technologies for key areas of
well design and operation. It is the Committee's intention that
this list be maintained to reflect developing technologies and
not preclude the use of improved equipment developed between
updates. New OCSLA section 21(b)(3) requires that the Secretary
promulgate regulations requiring a safety case to be submitted
along with each new application for a permit to drill.
New OCSLA section 21(b)(4) requires the Secretary to issue
regulations no later than May 1, 2011, setting standards for
training for all workers on offshore facilities conducting
energy and mineral resource exploration, development, and
production operations on the OCS. The standards shall require
that any worker who has less than 5 years of applied experience
pass a certification requirement after receiving appropriate
training. The new section sets forth additional requirements
regarding employee training that are self-explanatory.
Section 6(h)(3) amends section 21 of the OCSLA by adding a
new subsection (g) that requires the Secretary to carry out a
program of research, development, and risk assessment to
address technology and development issues associated with OCS
energy and mineral resource activities. New OCLSA section
21(g)(2) sets for the specific areas of focus for the program
and is self-explanatory. New OCSLA section 21(g)(3) requires
the Secretary to carry out programs to facilitate the exchange
and dissemination of scientific and technical information and
best practices. The Secretary is further directed to carry out
programs to cooperate with international organizations and
foreign governments to share information and best practices
related to management of safety and environmental issues
associated with energy and mineral resource exploration,
production and development on the OCS.
New OCSLA section 21(g)(4) sets forth reporting
requirements and is self-explanatory. New OCSLA section
21(g)(5) requires the Secretary to create a program within the
appropriate bureau that shall be programmatically separate and
distinct from the leasing program to carry out these studies
and activities, to provide for external scientific review, and
to make certain information available to the public.
Section 6(i)(1) amends section 22(d)(1) of the OCSLA (43
U.S.C. 1348(d)(1)) to require investigations of accidents that
presented a serious risk to human or environmental safety,
including: each loss of well control, blowout, and activation
of a blowout preventer. Section 22(d)(1) is further amended to
provide that the lessee shall cooperate with the investigation
as a condition of the lease.
Section 6(i)(2) amends section 22(e) of the OCSLA (43
U.S.C. 1348(e)) by redesignating the existing text as paragraph
(1) and adding a new paragraph (2) that requires the Secretary
to investigate any allegation of the existence of a violation
of a safety regulation issued under the OCSLA from an employee
of a lessee or a subcontractor.
Section 6(i)(3) amends Section 22 of the OCSLA by adding a
new subsection (g) authorizing the National Transportation
Safety Board to conduct, at the request of the Secretary of the
Interior, an independent investigation of certain accidents
occurring on the OCS and involving activities under the OCSLA.
New subsection (g) further provides that for purposes of an
investigation under this subsection, the accident that is the
subject of the request by the Secretary shall be determined to
be a transportation accident within the meaning of that term in
chapter 11 of title 49 of the United States Code.
Section 6(i)(3) further amends section 22 of the OCSLA by
adding a new subsection (h) that requires the Secretary to make
available to lessees and the public in a public database
technical information about the causes and corrective actions
taken for all incidents investigated under this section.
Section 6(i)(3) further amends section 22 of the OCSLA by
adding a new subsection (i) that requires, to the extent
necessary to fund the inspections described in this paragraph,
the Secretary to collect from the designated operator for
facilities subject to inspection under subsection (c), a non-
refundable inspection fee which shall be deposited in the Ocean
Energy Enforcement Fund. The Secretary shall establish the fee
by regulation at a level necessary to offset the annual
expenses of the inspections using a schedule that reflects
differences in complexity among the classes of facilities to be
inspected. Monies from the Fund may be expended only for
inspections and shall be subject to appropriation. The
subsection further provides that the Secretary is required to
prepare a report on the operation of the Fund and to submit the
report to the Congress, and need not collect the fee if
inspections are adequately funded. The remaining provisions in
new OCSLA section 22(i) are self-explanatory.
Section 6(j)(1) amends section 24 of the OCSLA (43 U.S.C.
1350) by striking subsection (b) and inserting a new subsection
(b). Section 24(b)(1) increases civil administrative penalties
to $75,000 per day of the continuance of the violation. New
OCSLA section 24(b)(2) provides that the Secretary may assess,
collect, and compromise any penalty under paragraph (1). New
OCSLA section 24(b)(3) provides that no penalty shall be
assessed until the person charged with a violation has been
given the opportunity for a hearing. New OCSLA section 24(b)(4)
provides that the civil penalty amount shall increase annually
to reflect any increases in the Consumer Price Index for All
Urban Consumers.
Section 6(j)(2) amends section 24(c) of the OCSLA (43
U.S.C. 1350(c)) to increase the corresponding criminal penalty
from not more than $100,000 per violation to not more than
$10,000,000. The subsection is further amended to provide that
the penalty amount shall increase each year to reflect any
increases in the Consumer Price Index for All Urban Consumers.
Section 6(j)(3) amends section 24(d) of the OCSLA (43
U.S.C. 1350(d)) to establish an additional basis for criminal
liability for officers and agents of a corporation or other
entity for authorizing, ordering, or carrying out proscribed
activities with reckless disregard.
Section 6(k) amends section 25 of the OCSLA (43 U.S.C.
1351) to delete exceptions from certain requirements for the
Gulf of Mexico.
Section 6(l) amends section 29 of the OCSLA (43 U.S.C.
1355) to strengthen the employment restrictions currently found
in section 29, add conflict of interest restrictions, and
stiffen penalties for violations of the restrictions.
Under current law, section 29 imposes two sets of
employment restrictions on any full-time officer or employee of
the Department of the Interior who directly or indirectly
discharged duties or responsibilities under the OSCLA and who
was at any time during the 12 months preceding the termination
of his employment with the Department compensated under the
Executive Schedule or at or above the GS-16 level of the
General Schedule. One set applies for two years after the
employee's employment with the Department ends and restricts
appearances before, communications to, and aiding and assisting
in appearances before federal agencies, officers, and employees
in any particular matter involving a specific party in which
the United States is a party or has a direct and substantial
interest, and which was actually pending under the employee's
official responsibility within one year before his or her
termination or in which he or she participated personally and
substantially. The second set applies for one year after the
employee's employment ends and restricts appearances before and
communications to the Department of the Interior or any officer
or employee on any particular matter that is pending before the
Department or in which the Department has a substantial
interest.
Subsection (l) redesignates the existing section 29 as
subsection (a) of an expanded section 29. It eliminates the
current language limiting the restrictions to senior officials
and employees, thereby making the restrictions applicable to
all full-time officers and employees discharging duties or
responsibilities under the OSCLA. It expands the two-year
restrictions by expressly including advising (in addition to
aiding and assisting) in the list of restricted activities in
paragraph (1)(C), and by banning aiding, advising, or assisting
others in making prohibited communications as well as in making
prohibited appearances in paragraph (1)(C). It expands the one-
year restrictions by adding a new paragraph (2)(C) that bans
aiding, advising or assisting others in making prohibited
appearances or prohibited communications.
In addition, subsection (l) adds a new paragraph (3) to the
redesignated section 29(a), which prohibits all officers and
employees discharging duties or responsibilities under the
OSCLA from accepting employment or compensation within one year
after his or her employment has ceased from any person that has
a direct and substantial interest which was actually pending
under his or her official responsibility during the year prior
to his or her termination or in which he participated
personally and substantially.
Subsection (l) also adds 4 new subsections to section 29.
Subsection (b) prohibits any full-time officer or employee of
the Department of the Interior who directly or indirectly
discharges duties or responsibilities under the OSCLA from
participating personally and substantially in any particular
matter in which--
(1) the officer or employee or his or her spouse,
minor child, or general partner has a financial
interest;
(2) any organization in which the officer or employee
is serving as an officer, director, trustee, or general
partner, or employee has a financial interest;
(3) any person or organization with whom the officer
or employee is negotiating or has arranged future
employment has a financial interest; or
(4) any person or organization in which the officer
or employee, during the preceding year, served as an
officer, director, trustee, general partner, agent,
attorney, consultant, contractor, or employee has a
financial interest.
Section 29 of the OCSLA currently contains no comparable
provision, though the federal criminal code and the Standards
of Ethical Conduct for Employees of the Executive Branch do.
Section 208 of title 18 of the United States Code already makes
it a felony for an officer or employee of the executive branch
to participate in particular matters covered by items (1), (2),
and (3) above. In addition, section 502 of the Standards of
Ethical Conduct prohibit a federal employee from participating
in any particular matter described in item (4). 5 C.F.R.
2635.502(b)(iv).
Subsection (c) prohibits any full-time officer or employee
of the Department of the Interior who directly or indirectly
discharged duties or responsibilities under the OSCLA from
soliciting or accepting any gifts in violation of the gift ban
in the Standards of Ethical Conduct for Employees of the
Executive Branch, 5 C.F.R. 2635, subpart B.
Subsection (d) authorizes the Secretary to exempt, by rule,
clerical or support personnel who would otherwise be covered by
section 29, as amended, if they do not conduct inspections,
perform audits, or otherwise exercise regulatory or policy
making authority under the OCSLA.
Subsection (e) prescribes penalties for violations of
section 29, as amended. As it now stands, section 29 itself
does not contain penalties for its violation. The federal
criminal code, however, provides that a violation of the post-
employment restrictions in 18 U.S.C. 207, which are similar to
those in paragraphs (1) and (2) of the amended section 29(a),
and the conflict-of-interest restrictions in 18 U.S.C. 208,
which are similar to those in paragraphs (1), (2), and (3) of
the amended section 29(b), is a felony, punishable by
imprisonment for up to one year, or up to five years if the
violation is willful, criminal fines of up to $250,000, and
civil penalties of up to $50,000 or the amount of compensation
which the person received for the prohibited conduct. 18 U.S.C.
216; 18 U.S.C. 3571. Violations of the provisions of the
Standards of Ethical Conduct similar to subsections (a)(3),
(b)(4), and (c) of the amended section 29 are not criminal, and
are punishable by disciplinary employment actions, such as
reprimand, suspension, demotion, or removal, rather than civil
or criminal penalties.
Subsection (e) prescribes penalties for violations of
section 29 that are generally comparable to the penalties for
similar violations of federal law. Paragraph (1) provides that
any person who violates the post-employment restrictions in
paragraphs (1) or (2) of the amended section 29(a), which are
comparable to restrictions in 18 U.S.C. 207, or the conflict-
of-interest restrictions in subsection (b), which are
comparable to restrictions in 18 U.S.C. 208, shall be
punishable in accordance with 18 U.S.C. 216, which provides for
imprisonment for up to one year, or up to five years if the
violation is willful, criminal fines of up to $250,000, and
civil penalties of up to $50,000 or the amount of compensation
which the person received for the prohibited conduct. 18 U.S.C.
216; 18 U.S.C. 3571. Paragraph (2) provides that any person who
violates the post-employment restriction in section 29(a)(3) or
the gift ban in subsection (c) shall be punishable in
accordance with subsection (b) of 18 U.S.C. 216, which provides
for a civil penalty of up to $55,000 ($50,000 adjusted for
inflation in accordance with the Federal Civil Monetary
Penalties Inflation Adjustment Act of 1990). 28 C.F.R. 85.3(c).
The penalty for violating the post-employment restriction in
section 29(a)(3) is comparable to the penalty for violating the
similar post-employment restriction on federal procurement
officers by the Procurement Integrity Act, 41 U.S.C. 423. The
penalties for violating the conflict-of-interest restriction in
section 29(b)(4) and the gift ban in section 29(c) are harsher
than those provided by current law, which are now limited to
disciplinary employment actions.
The Committee notes that section 24(c) of the OCSLA
provides that ``any person'' who fails to comply with ``any
provision'' of the OCSLA is subject to a civil penalty of up to
$20,000 for each day of failure, and that any person who
knowingly and willfully violates any provision of the OCSLA may
be punished by a fine of up to $100,000 or imprisoned for up to
10 years, or both. Section 6(j) of S. 3516 amends section 24 of
the OCSLA to increase the maximum civil penalty from $20,000 to
$75,000 per day of violation, and to increase the maximum
criminal fine from $100,000 to $10,000,000. While the broad
language of section 24(c) could be read to apply to section 29,
the Committee is not aware of any instance in which section
24(c) penalties have been imposed on an officer or employee of
the Department for violating the employment restrictions of
section 29. The Department has informally advised the Committee
that ``there is some ambiguity as to whether section 24 would
be applicable to section 29.'' Accordingly, the Committee chose
to prescribe specific penalties for violating section 29 in
section 29 itself, rather than rely on section 24(c).
Subsection (l) does not define key terms already used in
section 29 of the OCSLA, such as ``particular matter'',
``specific party'', ``direct and substantial interest'',
``official responsibility'', and ``personal and substantial
participation.'' The Committee believes that the meaning of
these terms have long been established by federal ethics laws
and the Standards of Ethical Conduct for Employees of the
Executive Branch, and does not intend to alter their
established meaning.
The Committee intends the amendments to section 29 of the
OCSLA made by subsection (l) to operate prospectively. Section
29(a), as amended, by its terms can apply only to any ``full-
time officer or employee of the Department of the Interior who
directly or indirectly discharges duties or responsibilities
under'' the OCSLA on or after the date of enactment of the
Outer Continental Shelf Reform Act of 2010. The amendments made
to the post-employment restrictions are intended to apply to
officers or employees who leave the Department on or after the
effective date of the Act, and under ordinary rules of
statutory construction, do not affect the substantive rights of
officers or employees who leave the Department prior to the
effective date of the Act.
Section 7. Study on the effect of the moratoria on new deepwater
drilling in the Gulf of Mexico on employment and small
businesses
Section 7(a) provides that the Secretary of Energy, acting
through the Energy Information Administration, shall publish a
monthly study evaluating the effect of the moratoria which
followed the blowout and explosion of the mobile offshore
drilling unit Deepwater Horizon that occurred on April 20,
2010.
Section 7(b) provides that not later than 60 days after the
date of enactment of this Act and at the beginning of each
month thereafter during the effective period of the moratoria,
the Secretary of Energy shall submit a report to the Committee
on Energy and Natural Resources of the Senate and the Committee
on Energy and Commerce of the House of Representatives a report
regarding the results of the study conducted under subsection
(a). The subsection further specifies the contents of the
report and is self-explanatory.
Section 8. Reform of Other Law
Section 8 amends section 388(b) of the Energy Policy Act of
2005 (43 U.S.C. 1337 note) to add a new paragraph (4) that
requires that with respect to the coordinated mapping
initiative provided for by that subsection, any head of a
Federal agency is required, on the request of the Secretary of
the Interior, to provide data and information that the
Secretary determines is necessary to the mapping initiative,
except the agency head is not required to provide privileged or
confidential information.
Section 9. Safer Oil and Gas Production
Section 9(a)(1) amends section 999A(a) of the Energy Policy
Act of 2005 (42 U.S.C. 16371(a)) to broaden the focus of the
research and development program from ``ultra-deepwater''
(defined in section 999G(8) of the Energy Policy Act of 2005
(42 U.S.C. 16377(8)) as 1,500 meters or greater) to
``deepwater'' (redefined by section 9(e)(1) as 500 feet or
greater). Paragraph (1) also adds research, development,
demonstration, and commercial application of technologies for
deepwater well control and accident prevention to the program's
mission. Paragraph (2) makes changes in two of the program
elements in section 999A(b) to reflect the program's new focus.
Paragraphs (2)(B) and (3) changes references to the National
Energy Technology Laboratory in subsections (b)(4) and (d) of
section 999A of the Energy Policy Act of 2005 to the Office of
Fossil Energy.
Section 9(b) amends section 999B of the Energy Policy Act
of 2005 (42 U.S.C. 16372) to refocus the program on developing
improved safety and blowout prevention technologies and best
practices associated with the drilling of deepwater oil and gas
wells. Paragraph (3) requires the program consortium to select
research and development projects on a competitive, peer-
reviewed basis. Paragraph (4)(D) requires the Secretary of
Energy to commission the National Academy of Sciences to review
the research program and its projects to determine the programs
effectiveness. Paragraph (5)(B) requires the Secretary of
Energy, in consultation with the Secretary of the Interior and
the Administrator of the Environmental Protection Agency, to
annually report on the research findings of the program and any
recommendations.
Section 9(c) amends section 999C(b) of the Energy Policy
Act of 2005 (42 U.S.C. 16373(b)) to change a reference to
``ultra-deepwater technology or . . . architecture'' to
``deepwater technology.''
Section 9(d) amends section 999D of the Energy Policy Act
of 2005 (42 U.S.C. 16374) to eliminate the Ultra-Deepwater
Advisory Committee and establish in its place a Program
Advisory Committee to advise the Secretary on the development
and implementation of the deepwater research and development
program.
Section 9(e) amends section 999G of the Energy Policy Act
of 2005 (42 U.S.C. 16375) by amending the definition of deep-
water in paragraph (1) from 200 to 1,500 meters to any water
depth greater than 500 feet deep, striking definitions relating
to ultra-deepwater, adding new definitions for ``deepwater
architecture'' and ``deepwater technology,'' and by renumbering
the remaining definitions.
Section 9(f) amends section 999H of the Energy Policy Act
of 2005 (42 U.S.C. 16378) to change the name of the Ultra-
Deepwater and Unconventional Natural Gas and Other Petroleum
Research Fund to the Safe and Responsible Energy Production
Research Fund, to modify how the Fund is allocated among
program elements, as those program elements are modified by
section 9(a), and to provide a new allocation of 20 percent of
the Fund for environmental and safety research required by
sections 20 and 21 of the OCSLA (43 U.S.C. 1346 and 1347), as
amended by sections 9(g) and 9(h).
Section 9(g) amends the subtitle heading to reflect the
program's new focus.
Section 10. National Commission on Outer Continental Shelf Oil Spill
Prevention
Section 10(a) establishes in the Legislative branch the
National Commission on Outer Continental Shelf Oil Spill
Prevention.
Section 10(b) sets forth the purposes of the Commission and
is self-explanatory.
Section 10(c) requires that the Commission be composed of
10 members and sets forth who shall appoint each member.
Subsection (c) sets forth qualification for commission members
and is self-explanatory. Subsection (c) provides that all
members of the Commission shall be appointed on or before
September 15, 2010, and requires that the initial Commission
meeting be as soon as practicable. Subsection (c) further
addresses quorum requirements and vacancies.
Section 10(d) sets forth the functions of the Commission,
including: conducting an investigation relating to the facts
and circumstances of the Deepwater Horizon incident of April
20, 2010 and the associated oil spill thereafter; identifying,
reviewing, and evaluating the lessons learned from the
Deepwater Horizon incident regarding structure, coordination,
management policies and procedures of the Federal Government
and if appropriate, State and local governments, non-
governmental entities, and the private sector; and submit to
the President and the Congress reports as are required by the
section containing such findings, conclusions, and
recommendations as the Commission finds appropriate. Section
10(d) sets forth the relationship of the Commission to the
inquiry by congressional committees and is self-explanatory.
Section 10(e) describes the powers of the Commission with
respect to: hearings and evidence; the issuance and enforcement
of subpoenas; contracting; securing and handling information
from Federal agencies; obtaining assistance from Federal
agencies; gifts; and postal services.
Section 10(f) requires the Commission to hold public
hearings and meetings, to the extent appropriate and to release
public versions of the Commission's interim and final reports
required under paragraphs (1) and (2) of subsection (j). Public
meetings are required to be conducted in a manner consistent
with the protection of proprietary or sensitive information.
Section 10(g) addresses the appointment and compensation of
Commission staff, the treatment of Commission staff as Federal
employees, and employees detailed to the Commission.
Section 10(h) addresses compensation and travel expenses
for Commission members and is self-explanatory.
Section 10(i) sets forth requirements relating to security
clearances for Commission members and staff and is self-
explanatory.
Section 10(j) addresses the reports of the Commission and
requirements relating to adjournment of the Commission and is
self-explanatory. Section 10(j)((3)(C) provides that after
adjourning upon completion of the final report on the Deepwater
Horizon incident, the Commission is to reconvene at such time
as the President or the Secretary of Homeland Security declares
an oil spill of national significance to have occurred.
Section 10(k) authorizes appropriations of $10,000,000 for
the first fiscal year in which the Commission convenes and
$3,000,000 for each fiscal year thereafter in which the
Commission convenes.
Section 10(l) provides that the Federal Advisory Committee
Act shall not apply to the Commission.
Section 11. Classification of Offshore Systems
Section 11(a) requires that not later than 2 years after
the date of enactment, the Secretary and the Secretary of the
department in which the Coast Guard is operating shall jointly
issue regulations requiring systems used in the offshore
exploration, development and production of oil and gas in the
OCS to be constructed, maintained, and operated so as to meet
classification, certification, rating, and inspection standards
that are necessary to protect the health and safety of workers
and prevent environmental degradation. The standards
established by the regulations are to be verified through
certification and classification by independent third parties
that have been preapproved by the Secretaries and have no
financial conflict of interest. Section 11(a) further describes
the minimum systems covered. The Secretaries may waive the
standards for an existing system only if the system is of an
age or type where meeting such requirements is impractical and
the system poses an acceptably low level of risk to the
environment and human safety.
Section 11(b) provides that nothing in section 11 preempts
or interferes with the authority of the Coast Guard.
Section 12. Savings Provisions
Section 12(a) provides that all regulations, rules,
standards, determinations, contracts and agreements, memoranda
of understanding, certifications, or any other actions issued,
made or taken by or pursuant to the authority of any law that
resulted in the assignment of functions to the Secretary, the
Director of the Minerals Management Service or the Department,
that were in effect on the date of enactment of this Act,
remain in full force and effect after the date of enactment of
this Act unless previously scheduled to expire or until
otherwise modified or rescinded by this Act or any other Act.
Section 12(b) provides that this Act does not amend or
alter the provisions of other applicable laws, unless otherwise
noted.
Section 13. Budgetary Effects
Section 13 addresses the determination of budgetary effects
of the legislation.
Cost and Budgetary Considerations
The Congressional Budget Office estimate of the costs of
this measure has been requested but was not received at the
time the report was filed. When the cost estimate is available
it will be posted on the Congressional Budget Office's website
www.cbo.gov.
Regulatory Impact Evaluation
In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee makes the following
evaluation of the regulatory impact which would be incurred in
carrying out S. 3516.
The bill strengthens the safety, environmental, and
financial regulation of companies exploring for, developing,
and producing federal oil and natural gas resources on the
Outer Continental Shelf, and is expected to impose some
additional regulatory burdens on such companies.
No personal information would be collected in administering
the program. Therefore, there would be no impact on personal
privacy.
Additional paperwork would result from the enactment of S.
3516, as ordered reported, due to increased requirements for
safety and environmental regulatory compliance, application,
planning, review, and documentation.
Congressionally Directed Spending
S. 3516, as ordered reported, does not contain any
congressionally directed spending items, limited tax benefits,
or limited tariff benefits as defined in rule XLIV of the
Standing Rules of the Senate.
Executive Communications
The views of the Administration on S. 3516 are included in
the testimony of the Secretary of the Interior received by the
Committee at its June 24, 2010, hearing, which is set forth
below:
Statement of Ken Salazar, Secretary of the Interior, June 24, 2010
Chairman Bingaman, Ranking Member Murkowski, and Members of
the Committee, I want to thank you for holding this hearing
today as we continue to address the issues and challenges
associated with the continuing reform of the Department of the
Interior's offshore energy program.
Before we begin, I want to introduce Michael R. Bromwich,
the new Director of the Bureau of Ocean Energy Management,
Regulation, and Enforcement. His impressive background includes
time as the Inspector General of the U.S. Department of
Justice, as an Assistant U.S. Attorney, and since 1999, as an
attorney in private practice. His extensive experience in
government and the private sector in improving the way
organizations work make him an ideal choice to lead the
restructuring and reform of the Department's offshore energy
program.
For the same reasons I chose Michael Bromwich for this
position, I chose Wilma Lewis who oversees the Department's
energy bureaus as the Assistant Secretary for Land and Minerals
Management. A former U.S. Attorney for the District of Columbia
and Inspector General at the Department, Wilma has played a
central leadership role in some of the most significant reforms
during my tenure as Secretary. She has helped shape reforms
ranging from our new approach to offshore oil and gas leasing
and a new emphasis on renewable energy development on the Outer
Continental Shelf, to ethics reform, to the enhancement of
leasing programs and the development of renewable energy
programs onshore, to support for our study of policies designed
to ensure fair return to American taxpayers for the development
of public oil and gas resources. I have also appointed her to
chair the Safety Oversight Board in the aftermath of the
Deepwater Horizon oil spill, and to help spearhead the
reorganization of MMS toward a new future.
offshore energy reforms completed
Although this unprecedented disaster, which resulted in the
tragic loss of life and many injuries, is commanding our time
and resources, it has also strengthened our resolve to continue
reforming the OCS program.
The reforms we have embarked on over the last 17 months,
and upon which we will continue to build, are substantive and
systematic, not cosmetic. The kind of fundamental changes we
are making do not come easily and many of the changes we have
already made have raised the ire of industry. Our efforts at
reform have been characterized by some as impediments and
roadblocks to the development of domestic oil and gas
resources. We believe, however, that they are crucial to
ensuring that we carry out our responsibilities effectively,
without compromise, and in a manner that facilitates the
balanced, responsible, and sustainable development of the
resources entrusted to us.
To review the reforms we have undertaken:
First, we focused our efforts on ethics and other concerns
that had been raised in the revenue collection side of the MMS.
We began changing the way the bureau does business and took
concrete action to:
upgrade and strengthen ethics standards
throughout MMS and for all political and career
employees;
terminate the Royalty-in-Kind program to
reduce the likelihood of fraud or collusion with
industry in connection with the collection of
royalties; and
aggressively pursue continued implementation
of the recommendations to improve the royalty
collection program that came from the Department's
Inspector General, the Government Accountability
Office, and a committee chaired by former Senators Bob
Kerrey and Jake Gam.
Second, we started reforms of the offshore oil and gas
regulatory program, which included actions to:
initiate in Fall 2009 an independent study
by an arm of the National Academy of Engineering to
examine how we could upgrade our inspection program for
offshore rigs;
procure substantial increases in the MMS
budget for FY 2010 and FY 2011, including a ten percent
increase in the number of inspectors for offshore
facilities; and
develop a new approach to on-going oil and
gas activities on the OCS aimed at promoting the
responsible, environmentally sound, and scientifically
grounded development of oil and gas resources on the
Outer Continental Shelf.
In that effort, we cancelled the upcoming Beaufort and
Chukchi lease sales, removed Bristol Bay altogether from
leasing under the current 5 year plan, and removed the Pacific
Coast and the Northeast entirely from any drilling under a new
5 year plan. We made clear that we will require full
environmental analysis through an Environmental Impact
Statement prior to any decision to lease in any additional
areas, such as the mid and south Atlantic, and launched a
scientific evaluation, led by the Director of USGS, to analyze
issues associated with drilling in the Arctic.
Third, we laid the groundwork for expanding the mission of
MMS beyond conventional oil and gas by devoting significant
attention and infusing new resources into the renewable energy
program, thereby providing for a more balanced energy portfolio
that reflects the President's priorities for clean energy.
Toward that end, we took action to:
finalize long-stalled regulations that
define a permitting process for off-shore wind--cutting
through jurisdictional disputes with FERC in the
process and ultimately approving the Cape Wind project;
announce the establishment of a regional
renewable energy office, located in Virginia, which
will coordinate and expedite, as appropriate, the
development of wind, solar, and other renewable energy
resources on the Atlantic Outer Continental Shelf; and
commence discussions and enter into an MOU
with governors of East Coast states, which formally
established an Atlantic Offshore Wind Energy Consortium
to promote the efficient, orderly, and responsible
development of wind resources on the Outer Continental
Shelf through increased Federal-State cooperation.
offshore energy reforms and related activities underway
Since the Deepwater Horizon explosion and oil spill, the
reforms and associated efforts have continued with urgency,
with particular focus on issues raised by, and lessons being
learned from, the circumstances surrounding the event. We are
aggressively pursuing actions on multiple fronts, including:
inspecting all deepwater oil and gas
drilling operations in the Gulf of Mexico and issuance
of a safety notice to all rig operators;
implementing the 30 day safety report to the
President, including issuing notices to lessees on new
safety requirements, and developing new rules for
safety and environmental protection; defending the
moratorium on new deepwater drilling, which is
currently the subject of litigation; and
implementing new requirements that operators
submit information regarding blowout scenarios in their
exploration plans--reversing a long standing exemption
that resulted from too much reliance on industry to
self-regulate.
Additional reforms will be influenced by several ongoing
investigations and reviews, including the Deepwater Horizon
Joint Investigation currently underway by the Bureau of Ocean
Energy Management, Regulation and Enforcement, and the United
States Coast Guard. In addition, at my request, a separate
investigation is being undertaken by the National Academy of
Engineering to conduct an independent, science-based analysis
of the root causes of the oil spill. I also requested that the
Inspector General's Office undertake an investigation to
determine whether there was a failure of MMS personnel to
adequately enforce standards or inspect the Deepwater Horizon.
Further, on April 30th I announced the formation of the
Outer Continental Shelf Safety Oversight Board to identify,
evaluate and implement new safety requirements. The Board,
which consists of Assistant Secretary for Land and Minerals
Management Wilma A. Lewis, who serves as Chair, Assistant
Secretary for Policy, Management and Budget Rhea Suh, and
Acting Inspector General Mary Kendall, will develop
recommendations designed to strengthen safety, and improve
overall management, regulation, and oversight of operations on
the Outer Continental Shelf.
Finally, the President established the independent
bipartisan National Commission on the BP Deepwater Horizon Oil
Spill and Offshore Drilling tasked with providing options on
how we can prevent and mitigate the impact of any future spills
that result from offshore drilling. The Commission will be
focused on the environmental and safety precautions we must
build into our regulatory framework in order to ensure an
accident like this never happens again, taking into account the
other investigations concerning the causes of the spill.
supplemental legislation
The Administration will make sure that BP and other
responsible parties are held accountable, that they will pay
the costs of the government in responding to the spill, and
compensation for loss or damages that arise from the spill. We
will do everything in our power to make our affected
communities whole. As a part of the response efforts, we expect
to spend a total of $27 million through June 30, 2010 for
Interior's response activities.
As part of our reforms, we are also building on the efforts
we undertook in the last sixteen months to strengthen the OCS
budget. As I already mentioned, the 2011 budget includes a ten
percent increase in the number of inspectors. Our restructuring
of the OCS program will require additional resources to
aggressively pursue the reforms I outlined earlier, to
implement the 30 day report to the President, and to
potentially address the results of ongoing investigations and
the President's Commission. We are currently hiring an
additional twelve inspectors, six more than we proposed in the
2011 budget, and we are taking other actions that are outlined
in the 30 day report to the President. Over the course of the
next several years, our restructuring of a more robust OCS
regulatory and enforcement program will dictate the need for
engineering, technical, and other specialized staff.
The President's supplemental request of May 12, 2010
includes $29 million that will fund the near term resources we
need for these activities. I appreciate the Senate's prompt
action in passing the supplemental on May 27. As you know, it
is critically needed to support our full and relentless
reforms--to bolster inspections of offshore oil and gas
platforms, draft enforcement and safety regulations, and carry
out environmental and engineering studies. The President's
request included a proposal to extend the time allowed by
statute for review and approve of oil and gas exploration plans
from 30 to 90 days--this is also needed and I hope Congress
will include it in the final version of the supplemental.
reorganization of the minerals management service
On June 15, I appointed Michael R. Bromwich as the Director
of the Bureau of Ocean Energy Management, Regulation and
Enforcement. Michael will lead us through the reorganization--
the foundation for the reforms we have underway. He will lead
the changes in how the agency does business, implement the
reforms that will raise the bar for safe and environmentally
sound offshore oil and gas operations, and help our Nation
transition to a clean energy future.
Michael will join the team that has been working out the
details of the reorganization. In a May 19 Secretarial Order I
tasked Rhea Suh, the Assistant Secretary for Policy, Management
and Budget, Wilma Lewis, the Assistant Secretary for Land and
Minerals Management, and Chris Henderson, one of my senior
advisors, to develop a reorganization plan in consultation with
others within the Administration and with Congress. The report
will provide the plan to restructure the Bureau of Ocean Energy
Management, Regulation and Enforcement in order to responsibly
address sustained development of the Outer Continental Shelf's
conventional and renewable energy resources, including resource
evaluation, planning, and other activities related to leasing;
comprehensive oversight, safety, and environmental protection
in all offshore energy activities; and royalty and revenue
management including the collection and distribution of
revenue, auditing and compliance, and asset management.
The Deepwater Horizon tragedy and the massive spill have
made the importance and urgency of a reorganization of this
nature ever more clear, particularly the creation of a separate
and independent safety and environmental enforcement entity. We
will responsibly and thoughtfully move to establish
independence and separation for this critical mission so that
the American people know they have a strong and independent
organization ensuring that energy companies comply with their
safety and environmental protection obligations.
The restructuring will also address any concerns about the
incentives related to revenue collections. The OCS currently
provides nearly 30 percent of the Nation's domestic oil
production and almost 11 percent of its domestic natural gas
production and is one of the largest sources of non-tax and
non-trust revenue for the Treasury. The MMS collected an
average of more than $13 billion annually for the past 5 years.
There will be clear separation between the entities that
collect and manage revenue and those that are responsible for
the management of the OCS exploration and leasing activities.
sustained response efforts in the gulf
Of utmost importance to us is the oil spill containment and
clean up of the Gulf. I have returned to the Gulf Region
numerous times to witness the work Departmental staff and
volunteers are carrying out to protect the coasts, wetlands,
and wildlife threatened by this spill. We have deployed
approximately 1,000 employees to the Gulf and they are
directing actions to contain the spill; cleaning up affected
coastal and marine areas under our jurisdiction; and assisting
Gulf Coast residents with information related to the claims
process, health and safety information, volunteer
opportunities, and general information on the efforts being
carried out in the region.
Under the direction of National Incident Commander Admiral
Thad Allen, the Flow Rate Technical Group, which is led by U.S.
Geological Survey Director Dr. Marcia McNutt, and a scientific
team led by Energy Secretary Steven Chu recently announced an
improved estimate of how much oil is flowing from the leaking
well. That estimate, suggests that the flow rate is at least
35,000 barrels per day, based on the improved quality and
quantity of data that are now available.
The Department's senior staff continues to offer
coordination and guidance to the effort. Deputy Secretary David
J. Hayes is devoting his time to coordinating the many Gulf-
related response activities we are undertaking. Assistant
Secretary for Fish, Wildlife and Parks Tom Strickland has been
leading the Department's efforts for onshore and near shore
protection. National Park Service Director Jon Jarvis and
Acting Director of the Fish and Wildlife Service Rowan Gould
continue to supervise incident management personnel and
activities that their bureaus are taking to respond to the
spill and clean up oil impacts. To protect the eight national
parks and 36 wildlife refuges and the numerous wildlife, birds,
and historic structures they are responsible for in the Gulf of
Mexico, the NPS and FWS dispatched approximately 590 employees.
Representatives from the FWS also participated with the
U.S. Coast Guard, the Environmental Protection Agency, and
state and local governments in a series of public meetings with
local residents to answer questions and offer information on a
variety of topics related to the spill and response activities.
Finally, there are many, many people in the Department who
are devoting significant time and energy to this event; to the
various investigations and inquiries, both within the
Administration and in Congress, that are being carried out; and
to the ongoing reorganization and reform. I want to acknowledge
their work and let them know their efforts are appreciated and
are not going unnoticed.
In the last 60 days we have also seen what the employees in
the Bureau of Ocean Energy Management, Regulation and
Enforcement are capable of, their professionalism, their
dedication to the Department, and their enthusiasm for the
reforms underway. With Michael's help we will be able to cast
aside the shadow on the many dedicated employees that has been
left by an errant few, and by previous policies that have
prioritized production over ethics, safety, and environmental
protection.
legislative efforts at reform
All four of the bills before you today address reform of
the Department's offshore energy and mineral resource
development program. I would like to provide you some general
comments on each of these bills and a few provisions in
particular.
Your legislation, Mr. Chairman, S. 3516, the ``Outer
Continental Shelf Reform Act,'' would provide general organic
authority for the restructuring of the offshore energy and
minerals program in the Department and would make additional
changes reforming some of the underlying laws governing
management of these resources.
I have previously testified in support of organic
legislation for the functions performed by MMS, noting that an
organization with such important responsibilities should be
governed by a thoughtfully considered organic act. It is
important for organic legislation to provide the Secretary with
the discretion to implement the details of a reorganization as
complicated as this.
The provisions in S. 3516 authorizing the creation of the
three new entities are consistent with the changes I have
directed in my Secretarial Order. The report and schedule for
implementation that I will receive on July 9 will provide a
detailed roadmap for this reorganization and will greatly
inform the process. The Administration would like to continue
discussion with the Committee regarding the specifics in this
legislation of the appointment and confirmation of the new
bureau and office directors.
A number of the changes contained in this bill highlight
the need for increased safety of operations and consideration
of the marine and coastal environment, including the need for
integrated programs for both environmental research and
technological research and development. In this same vein, S.
3509, the ``Safer Oil and Gas Production Research and
Development Act'', would amend certain research and development
provisions contained in the Energy Policy Act of 2005 to
provide an additional focus on research and development on
safety and reduced environmental impacts from development of
these resources.
A focus on strengthened safety and oversight and the
environmental impacts of offshore oil and gas operations are
priorities of the Administration. These issues, and several
others in the bills before you today, will require the
Department to work closely with the Committee and other
relevant federal agencies to ensure a coordinated approach to
attaining these important objectives.
S. 3516 also includes new planning requirements, including
a requirement for detailed descriptions of equipment and plans
to address potential well blowouts. S. 3497, the ``Oil Spill
Prevention and Mitigation Improvement Act,'' includes a similar
focus, amending the Outer Continental Shelf Lands Act to
require that leases entered into under that Act include a plan
for containment and termination of discharges of oil, and a
timeline for accomplishing those actions.
Recognizing the importance of this information, on June 18,
2010, the Department issued a Notice to Lessees (NTL) requiring
that new filings for drilling permits, exploration plans, or
development plans to contain information specifically
addressing the possibility of a blowout and the detailed steps
that lessees or operators would take to prevent blowouts. This
reverses a 2003 policy and a 2008 NTL that exempted many
offshore oiland gas operations in the Gulf from submitting
certain information about such a scenario and is consistent
with the requirements contained in these bills.
S. 3516 would also extend the deadline for the Department
to review and approve exploration plans; require that lessees
obtain a drilling permit after approval of an exploration plan;
and require that, prior to approval of such a permit, an
engineering review of the well system be completed and
reviewed. The Administration supports authority to provide for
longer review time and for stronger reviews of exploration
plans prior to drilling. We would like to work with the
Committee on this important issue.
We are also supportive of the changes in S. 3516 intended
to strengthen civil and criminal penalties contained in the
OCSLA. These provisions are generally consistent with the
support for increasing these penalties that Deputy Secretary
Hayes expressed before this Committee on May 25th.
It is also important to provide the Department with the
tools necessary to appropriately staff critical and hard-to-
fill positions in these new entities. We look forward to
continuing the dialog on this issue, as well.
strengthening the way we do business
Over the past several weeks I have talked about the many
ways we have changed the direction of the MMS, both
programmatically and structurally. S. 3431 would change laws
governing ethical standards and fraudulent statements by MMS
employees.
I have already mentioned the actions in this regard that I
ordered last year. I am also pleased to have two former
Inspectors General, in Michael Bromwich and Wilma Lewis, to
help lead our reform efforts. But my interest in strengthened
ethics standards isn't limited to employees of the MMS.
President Obama made it clear from the earliest days of this
Administration that ethical behavior, among both political and
career employees, was to be held to a premium standard. On
January 26, 2009, I issued a memorandum to all employees
regarding the high ethical standards with which we were all
expected to carry out our duties. I also directed the
Department's Ethics Office to review Department-specific
regulations and recommend areas where improvements could be
made. On August 19, 2009, I issued a Secretarial Order laying
out additional clarifications to enhance and promote a stronger
ethical culture at the Department.
S. 3431 would codify portions of the new standards made
applicable to MMS employees in January 2009. The Department's
Ethics Office is currently preparing updates to statutory
language, including updates to provisions applicable to
Departmental offices and to lands and energy and mineral
development programs. I look forward to working with you and
the sponsor as we move to modernize these important
obligations.
conclusion
Much of my time as Secretary of the Interior has been spent
working to promote reform of prior practices in the Minerals
Management Service and to advance the President's vision of a
new energy future that will help us to move away from spending
hundreds of billions of dollars each year on imported oil. A
balanced program of safe and environmentally responsible
offshore energy development is a necessary part of that future.
We are also involved in a multi-agency process to develop a new
national ocean policy that is intended to look ahead in the
long term to help the United States think comprehensively about
how we make better informed management decisions regarding the
use and conservation of ocean, coastal, and Great Lakes
resources.
As we evaluate new areas for potential exploration and
development on the OCS, we will conduct thorough environmental
analysis and scientific study, gather public input and comment,
and carefully examine the potential safety and spill risk
considerations. The findings of the Joint Investigation and the
independent National Academy of Engineering will provide us
with the facts and help us understand what happened on the
Deepwater Horizon. Those findings, the work of the Outer
Continental Shelf Safety Oversight Board, the OIG investigation
and review, and the findings of the Presidential Commission
will help inform the implementation of the Administration's
comprehensive energy strategy for the OCS.
We are taking responsible action to address the safety of
other offshore oil and gas operations, further tightening our
oversight of industry's practices through a package of reforms,
and taking a careful look at the questions this disaster is
raising. We will also work with you on legislative reforms and
the finalization of a reorganization that will ensure that the
OCS program is effectively managed to achieve these goals.
Lastly, let me assure you this Administration will continue
its relentless response to the Deepwater Horizon tragedy. Our
team is committed to help the people and communities of the
Gulf Coast region persevere through this disaster, to protect
our important places and resources, and to take actions based
on the valuable lessons that will help prevent similar spills
in the future.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill H.R. 2741, as ordered reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italic, existing law in
which no change is proposed is shown in roman):
TABLE OF EXISTING LAWS PROPOSED TO BE CHANGED
1. Outer Continental Shelf Lands Act, Act of August 7,
1953, as amended
2. Title 5, United States Code
3. Energy Policy Act of 2005, Public Law 109-58, as amended
OUTER CONTINENTAL SHELF LANDS ACT
ACT OF AUGUST 7, 1953, AS AMENDED
AN ACT To provide for the jurisdiction of the United States over the
submerged lands of the outer Continental Shelf, and to authorize the
Secretary of the Interior to lease such lands for certain purposes
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That this
Act may be cited as the ``Outer Continental Shelf Lands Act.''
Sec. 2. Definitions.--When used in this Act--
(a) The term ``outer Continental Shelf'' means all
submerged lands lying seaward and outside of the area of lands
beneath navigable waters as defined in section 2 of the
Submerged Lands Act (Public Law 31, Eighty-third Congress,
first session), and of which the subsoil and seabed appertain
to the United States and are subject to its jurisdiction and
control;
* * * * * * *
(r) Safety Case.--The term ``safety case'' means a complete
set of safety documentation that provides a basis for
determining whether a system is adequately safe for a given
application in a given environment.
Sec. 3. National Policy for the Outer Continental Shelf.--
It is hereby declared to be the policy of the United States
that--
(1) the subsoil and seabed of the outer Continental
Shelf appertain to the United States and are subject to
its jurisdiction, control, and power of disposition as
provided in this Act;
* * * * * * *
[(3) the outer Continental Shelf is a vital national
resource reserve held by the Federal Government for the
public, which should be made available for expeditious
and orderly development, subject to environmental
safeguards, in a manner which is consistent with the
maintenance of competition and other national needs;]
(3) the outer Continental Shelf is a vital national
resource reserve held by the Federal Government for the
public, which should be managed in a manner that--
(A) recognizes the need of the United States
for domestic sources of energy, food, minerals,
and other resources;
(B) minimizes the potential impacts of
development of those resources on the marine
and coastal environment and on human health and
safety; and
(C) acknowledges the long-term economic value
to the United States of the balanced and
orderly management of those resources that
safeguards the environment and respects the
multiple values and uses of the outer
Continental Shelf;
(4) since exploration, development, and production of
the minerals of the outer Continental Shelf will have
significant impacts on coastal and non-coastal areas of
the coastal States, and on other affected States, and,
in recognition of the national interest in the
effective management of the marine, coastal, and human
environments--
(A) such States and their affected local
governments may require assistance in
protecting their coastal zones and other
affected areas from any temporary or permanent
adverse effects of such impacts;
(B) the distribution of a portion of the
receipts from the leasing of mineral resources
of the outer Continental Shelf adjacent to
State lands, as provided under section 1337(g)
of this title, will provide affected coastal
States and localities with funds which may be
used for the mitigation of adverse economic and
environmental effects related to the
development of such resources; and
(C) such States, and through such States,
affected local governments, are entitled to an
opportunity to participate, to the extent
consistent with the national interest, in the
policy and planning decisions made by the
Federal Government relating to exploration for,
and development and production of, minerals of
the outer Continental Shelf[.];
(5) the rights and responsibilities of all States
and, where appropriate, local governments, to preserve
and protect their marine, human, and coastal
environments through such means as regulation of land,
air, and water uses, of safety, and of related
development and activity should be considered and
recognized[; and];
(6) exploration, development, and production of
energy and minerals on the outer Continental Shelf
should be allowed only when those activities can be
accomplished in a manner that provides reasonable
assurance of adequate protection against harm to life,
health, the environment, property, or other users of
the waters, seabed, or subsoil; and
[(6)] (7) operations in the outer Continental Shelf
[should be] shall be conducted in a safe manner by
well-trained personnel using best available technology,
precautions, and techniques sufficient to prevent or
minimize the likelihood of blowouts, loss of well
control, fires, spillages, physical obstruction to
other users of the waters or subsoil and seabed, or
other occurrences which may cause damage to the
environment or to property, or endanger life or health.
* * * * * * *
Sec. 5. Administration of Leasing of the Outer Continental
Shelf.--(a) The Secretary shall administer the provisions of
this Act relating to the leasing of the outer Continental
Shelf, and shall prescribe such rules and regulations as may be
necessary to carry out such provisions. [The Secretary may at
any time] The Secretary shall prescribe and amend such rules
and regulations as he determines to be necessary and proper in
order to provide for operational safety, the protection of the
marine and coastal environment, the prevention of waste and
conservation of the natural resources of the outer Continental
Shelf, and the protection of correlative rights therein, and,
not withstanding any other provisions herein, such rules and
regulations shall, as of their effective date, apply to all
operations conducted under a lease issued or maintained under
the provisions of this Act. In the enforcement of safety,
environmental, and conservation laws and regulations, the
Secretary shall cooperate with the relevant departments and
agencies of the Federal Government and of the affected States.
In the formulation and promulgation of regulations, the
Secretary shall request and give due consideration to the views
of the Attorney General with respect to matters which may
affect competition. In considering any regulations and in
preparing any such views the Attorney General shall consult
with the Federal Trade Commission. The regulations prescribed
by the Secretary under this subsection shall include, but not
be limited to, provisions--
* * * * * * *
Sec. 6. Maintenance of Leases on Outer Continental Shelf.--
(a) The provisions of this section shall apply to any mineral
lease covering submerged lands of the outer Continental Shelf
issued by any State (including any extension, renewal, or
replacement thereof heretofore granted pursuant to such lease
or under the laws of such State) if--
(1) such lease, or a true copy thereof, is filed with
the Secretary by the lessee or his duly authorized
agent within ninety days from the effective date of
this Act, or within such further period or periods as
provided in section 7 hereof or as may be fixed from
time to time by the Secretary;
* * * * * * *
(e) In the event any lease maintained under this section
covers lands beneath navigable waters, as that term is used in
the Submerged Lands Act, as well as lands of the outer
Continental Shelf, the provisions of this section shall apply
to such lease only insofar as it covers lands of the outer
Continental Shelf.
(f) Review of Bond and Surety Amounts.--Not later than May
1, 2011, and every 5 years thereafter, the Secretary shall--
(1) review the minimum financial responsibility
requirements for mineral leases under subsection
(a)(11); and
(2) adjust for inflation based on the Consumer Price
Index for all Urban Consumers published by the Bureau
of Labor Statistics of the Department of Labor, and
recommend to Congress any further changes to existing
financial responsibility requirements necessary to
permit lessees to fulfill all obligations under this
Act or the Oil Pollution Act of 1990 (33 U.S.C. 2701 et
seq.).
(g) Periodic Fiscal Reviews and Reports.--
(1) Royalty rates.--
(A) In general.--Not later than 1 year after
the date of enactment of this subsection and
every 4 years thereafter, the Secretary shall
carry out a review of, and prepare a report
that describes--
(i) the royalty and rental rates
included in new offshore oil and gas
leases and the rationale for the rates;
(ii) whether, in the view of the
Secretary, the royalty and rental rates
described in subparagraph (A) would
yield a fair return to the public while
promoting the production of oil and gas
resources in a timely manner; and
(iii) whether, based on the review,
the Secretary intends to modify the
royalty or rental rates.
(B) Public participation.--In carrying out a
review and preparing a report under
subparagraph (A), the Secretary shall provide
to the public an opportunity to participate.
(2) Comparative review of fiscal system.--
(A) In general.--Not later than 1 year after
the date of enactment of this subsection and
every 4 years thereafter, the Secretary in
consultation with the Secretary of the
Treasury, shall carry out a comprehensive
review of all components of the Federal
offshore oil and gas fiscal system, including
requirements for bonus bids, rental rates,
royalties, oil and gas taxes, income taxes and
other significant financial elements, and oil
and gas fees.
(B) Inclusions.--The review shall include--
(i) information and analyses
comparing the offshore bonus bids,
rents, royalties, taxes, and fees of
the Federal Government to the offshore
bonus bids, rents, royalties, taxes,
and fees of other resource owners
(including States and foreign
countries); and
(ii) an assessment of the overall
offshore oil and gas fiscal system in
the United States, as compared to
foreign countries.
(C) Independent advisory committee.--In
carrying out a review under this paragraph, the
Secretary shall convene and seek the advice of
an independent advisory committee comprised of
oil and gas and fiscal experts from States,
Indian tribes, academia, the energy industry,
and appropriate nongovernmental organizations.
(D) Report.--The Secretary shall prepare a
report that contains--
(i) the contents and results of the
review carried out under this paragraph
for the period covered by the report;
and
(ii) any recommendations of the
Secretary and the Secretary of the
Treasury based on the contents and
results of the review.
(E) Combined report.--The Secretary may
combine the reports required by paragraphs (1)
and (2)(D) into 1 report.
(3) Report deadline.--Not later than 30 days after
the date on which the Secretary completes each report
under this subsection, the Secretary shall submit
copies of the report to--
(A) the Committee on Energy and Natural
Resources of the Senate;
(B) the Committee on Finance of the Senate;
(C) the Committee on Natural Resources of the
House of Representatives; and
(D) the Committee on Ways and Means of the
House of Representatives.
* * * * * * *
Sec. 8. Leases, Easements, and Rights-of-way on the Outer
Continental Shelf.--(a)(1) The Secretary is authorized to grant
to the highest responsible qualified bidder or bidders by
competitive bidding, under regulations promulgated in advance,
any oil and gas lease on submerged lands of the outer
Continental Shelf which are not covered by leases meeting the
requirements of subsection (a) of section 6 of this Act. Such
regulations may provide for the deposit of cash bids in an
interest-bearing account until the Secretary announces his
decision on whether to accept the bids, with the interest
earned thereon to be paid to the Treasury as to bids that are
accepted and to the unsuccessful bidders as to bids that are
rejected. The bidding shall be by sealed bid and, at the
discretion of the Secretary, on the basis of--
* * * * * * *
[(d) No bid for a lease may be submitted if the Secretary
finds, after notice and hearing, that the bidder is not meeting
due diligence requirements on other leases.]
(d) Disqualification From Bidding.--No bid for a lease may
be submitted by any entity that the Secretary finds, after
prior public notice and opportunity for a hearing--
(1) is not meeting due diligence, safety, or
environmental requirements on other leases; or
(2)(A) is a responsible party for a vessel or a
facility from which oil is discharged, for purposes of
section 1002 of the Oil Pollution Act of 1990 (33
U.S.C. 2702); and
(B) has failed to meet the obligations of the
responsible party under that Act to provide
compensation for covered removal costs and damages.
(e) No lease issued under this Act may be sold, exchanged,
assigned, or otherwise transferred except with the approval of
the Secretary. Prior to any such approval, the Secretary shall
consult with and give due consideration to the views of the
Attorney General.
* * * * * * *
Sec. 11. Geological and Geophysical Explorations.--(a)(1)
Any agency of the United States and any person authorized by
the Secretary may conduct geological and geophysical
explorations in the outer Continental Shelf, which do not
interfere with or endanger actual operations under any lease
maintained or granted pursuant to this Act, and which are not
unduly harmful to aquatic life in such area.
* * * * * * *
(c)(1) Except as otherwise provided in the Act, prior to
commencing exploration pursuant to any oil and gas lease issued
or maintained under this Act, the holder thereof shall submit
an exploration plan to the Secretary for approval. Such plan
may apply to more than one lease held by a lessee in any one
region of the outer Continental Shelf, or by a group of lessees
acting under a unitization, pooling, or drilling agreement, and
shall be approved by the Secretary if he finds that such plan
is consistent with the provisions of this Act, regulations
prescribed under this Act, including regulations prescribed by
the Secretary pursuant to paragraph (8) of section 5(a) of this
Act, and the provisions of such lease. The Secretary shall
require such modifications of such plan as are necessary to
achieve such consistency. The Secretary shall approve such
plan, as submitted or modified, [within thirty days of its
submission] by the deadline described in paragraph (5), except
that the Secretary shall disapprove such plan if he determines
that (A) any proposed activity under such plan would result in
any condition described in section 5(a)(2)(A)(i) of this Act,
and (B) such proposed activity cannot be modified to avoid such
condition. If the Secretary disapproves a plan under the
preceding sentence, he may, subject to section 5(a)(2)(B) of
this Act, cancel such lease and the lessee shall be entitled to
compensation in accordance with the regulations prescribed
under section 5(a)(2)(C) (i) or (ii) of this Act.
(2) The Secretary shall not grant any license or permit for
any activity described in detail in an exploration plan and
affecting any land use or water use in the coastal zone of a
State with a coastal zone management program approved pursuant
to section 306 of the Coastal Zone Management Act of 1972 (16
U.S.C. 1455), unless the State concurs or is conclusively
presumed to concur with the consistency certification
accompanying such plan pursuant to section 307(c)(3)(B) (i) or
(ii) of such Act, or the Secretary of Commerce makes the
finding authorized by section 307(c)(3)(B)(iii) of such Act.
[(3) An exploration plan submitted under this subsection
shall include, in the degree of detail which the Secretary may
by regulation require--
[(A) a schedule of anticipated exploration activities
to be undertaken;
[(B) a description of equipment to be used for such
activities;
[(C) the general location of each well to be drilled;
and
[(D) such other information deemed pertinent by the
Secretary.]
(3) Minimum Requirements.--
(A) In general.--An exploration plan submitted under
this subsection shall include, in such degree of detail
as the Secretary by regulation may require--
(i) a complete description and schedule of
the exploration activities to be undertaken;
(ii) a description of the equipment to be
used for the exploration activities,
including--
(I) a description of the drilling
unit;
(II) a statement of the design and
condition of major safety-related
pieces of equipment;
(III) a description of any new
technology to be used; and
(IV) a statement demonstrating that
the equipment to be used meets the best
available technology requirements under
section 21(b);
(iii) a map showing the location of each well
to be drilled;
(iv)(I) a scenario for the potential blowout
of the well involving the highest expected
volume of liquid hydrocarbons; and
(II) a complete description of a response
plan to control the blowout and manage the
accompanying discharge of hydrocarbons,
including--
(aa) the technology and timeline for
regaining control of the well; and
(bb) the strategy, organization, and
resources to be used to avoid harm to
the environment and human health from
hydrocarbons; and
(v) any other information determined to be
relevant by the Secretary.
(B) Deepwater wells.--
(i) In general.--Before conducting
exploration activities in water depths greater
than 500 feet, the holder of a lease shall
submit to the Secretary for approval a
deepwater operations plan prepared by the
lessee in accordance with this subparagraph.
(ii) Technology requirements.--A deepwater
operations plan under this subparagraph shall
be based on the best available technology to
ensure safety in carrying out the exploration
activity and the blowout response plan.
(iii) Systems analysis required.--The
Secretary shall not approve a deepwater
operations plan under this subparagraph unless
the plan includes a technical systems analysis
of--
(I) the safety of the proposed
exploration activity;
(II) the blowout prevention
technology; and
(III) the blowout and spill response
plans.
(4) The Secretary may, by regulation, require that such
plan be accompanied by a general statement of development and
production intentions which shall be for planning purposes only
and which shall not be binding on any party.
(5) Deadline for approval.--
(A) In general.--In the case of a lease issued under
a sale held after March 17, 2010, the deadline for
approval of an exploration plan referred to in the
fourth sentence of paragraph (1) is--
(i) the date that is 90 days after the date
on which the plan or the modifications to the
plan are submitted; or
(ii) the date that is not later than an
additional 180 days after the deadline
described in clause (i), if the Secretary makes
a finding that additional time is necessary to
complete any environmental, safety, or other
reviews.
(B) Existing leases.--In the case of a lease issued
under a sale held on or before March 17, 2010, the
Secretary, with the consent of the holder of the lease,
may extend the deadline applicable to the lease for
such additional time as the Secretary determines is
necessary to complete any environmental, safety, or
other reviews.
[(d) The Secretary may, by regulation, require any lessee
operating under an approved exploration plan to obtain a permit
prior to drilling any well in accordance with such plan.]
(d) Drilling Permits.--
(1) In general.--The Secretary shall, by regulation,
require that any lessee operating under an approved
exploration plan obtain a permit--
(A) before the lessee drills a well in
accordance with the plan; and
(B) before the lessee significantly modifies
the well design originally approved by the
Secretary.
(2) Engineering review required.--The Secretary may
not grant any drilling permit until the date of
completion of a full review of the well system by not
less than 2 agency engineers, including a written
determination that--
(A) critical safety systems (including
blowout prevention) will use best available
technology; and
(B) blowout prevention systems will include
redundancy and remote triggering capability.
(3) Modification review required.--The Secretary may
not approve any modification of a permit without a
determination, after an additional engineering review,
that the modification will not compromise the safety of
the well system previously approved.
(4) Operator safety and environmental management
required.--The Secretary may not grant any drilling
permit or modification of the permit until the date of
completion and approval of a safety and environmental
management plan that--
(A) is to be used by the operator during all
well operations; and
(B) includes--
(i) a description of the expertise
and experience level of crew members
who will be present on the rig; and
(ii) designation of at least 2
environmental and safety managers
that--
(I) are employees of the
operator;
(II) would be present on the
rig at all times; and
(III) have overall
responsibility for the safety
and environmental management of
the well system and spill
response plan; and
(C) not later than May 1, 2012, requires that
all employees on the rig meet the training and
experience requirements under section 21(b)(4).
(e) Disapproval of Exploration Plan.--
(1) In general.--The Secretary shall disapprove an
exploration plan submitted under this section if the
Secretary determines that, because of exceptional
geological conditions in the lease areas, exceptional
resource values in the marine or coastal environment,
or other exceptional circumstances, that--
(A) implementation of the exploration plan
would probably cause serious harm or damage to
life (including fish and other aquatic life),
property, mineral deposits, national security
or defense, or the marine, coastal or human
environments;
(B) the threat of harm or damage would not
disappear or decrease to an acceptable extent
within a reasonable period of time; and
(C) the advantages of disapproving the
exploration plan outweigh the advantages of
exploration.
(2) Compensation.--If an exploration plan is
disapproved under this subsection, the provisions of
subparagraphs (B) and (C) of section 25(h)(2) shall
apply to the lease and the plan or any modified plan,
except that the reference in section 25(h)(2)(C) to a
development and production plan shall be considered to
be a reference to an exploration plan.
[(e)] (f)(1) If a significant revision of an exploration
plan approved under this subsection is submitted to the
Secretary, the process to be used for the approval of such
revision shall be the same as set forth in subsection (c) of
this section.
(2) All exploration activities pursuant to any lease shall
be conducted in accordance with an approved exploration plan or
an approved revision of such plan.
[(f)] (g)(1) Exploration activities pursuant to any lease
for which a drilling permit has been issued or for which an
exploration plan has been approved, prior to ninety days after
the date of enactment of this subsection, shall be considered
in compliance with this section, except that the Secretary may,
in accordance with section 5(a)(1)(B) of this Act, order a
suspension or temporary prohibition of any exploration
activities and require a revised exploration plan.
(2) The Secretary may require the holder of a lease
described in paragraph (1) of this subsection to supply a
general statement in accordance with subsection (c)(4) of this
section, or to submit other information.
(3) Nothing in this subsection shall be construed to amend
the terms of any permit or plan to which this subsection
applies.
[(g)] (h) Any permit for geological explorations authorized
by this section shall be issued only if the Secretary
determines, in accordance with regulations issued by the
Secretary that--
(1) the applicant for such permit is qualified;
(2) the exploration will not interfere with or
endanger operations under any lease issued or
maintained pursuant to this Act; and
(3) such exploration will not be unduly harmful to
aquatic life in the area, result in pollution, create
hazardous or unsafe conditions, unreasonably interfere
with other uses of the area, or disturb any site,
structure, or object of historical or archeological
significance.
[(h)] (i) The Secretary shall not issue a lease or permit
for, or otherwise allow, exploration, development, or
production activities within fifteen miles of the boundaries of
the Point Reyes Wilderness as depicted on a map entitled
``Wilderness Plan, Point Reyes National Seashore'', numbered
612-90,000-B and dated September 1976, unless the State of
California issues a lease or permit for, or otherwise allows,
exploration, development, or production activities on lands
beneath navigable waters (as such term is defined in section 2
of the Submerged Lands Act) of such State which are adjacent to
such Wilderness.
* * * * * * *
Sec. 18. Outer Continental Shelf Leasing Program.--(a) The
Secretary, pursuant to procedures set forth in subsections (c)
and (d) of this section, shall prepare and periodically revise,
and maintain an oil and gas leasing program to implement the
policies of this Act. The leasing program shall consist of a
schedule of proposed lease sales indicating, as precisely as
possible, the size, timing, and location of leasing activity
which he determines will best meet national energy needs and
the need for the protection of the marine and coastal
environment and resources for the five-year period following
its approval or reapproval. Such leasing program shall be
prepared and maintained in a manner consistent with the
following principles:
(1) Management of the outer Continental Shelf shall
be conducted in a manner which [considers] gives equal
consideration to economic, social, and environmental
values of the renewable and nonrenewable resources
contained in the outer Continental Shelf, and the
potential impact of oil and gas exploration on other
resource values of the outer Continental Shelf and the
marine, coastal, and human environments.
* * * * * * *
(3) The Secretary shall select the timing and
location of leasing, [to the maximum extent
practicable,] so as to obtain a proper balance between
the potential for environmental damage, the potential
for the discovery of oil and gas, and the potential for
adverse impact on the coastal zone.
* * * * * * *
(b) The leasing program shall include estimates of the
appropriations and staff required to--
(1) obtain resource information and any other
information needed to prepare the leasing program
required by this section;
(2) analyze and interpret the exploratory data and
any other information which may be compiled under the
authority of this Act;
(3) conduct environmental studies and prepare any
environmental impact statement required in accordance
with this Act and with section 102(2)(C) of the
National Environmental Policy Act of 1969 (42 U.S.C.
4332(2)(C)); [and]
(4) supervise operations conducted pursuant to each
lease in the manner necessary to assure due diligence
in the exploration and development of the lease area
and compliance with the requirement of applicable laws
and regulations, and with the terms of the lease[.];
and
(5) provide technical review and oversight of the
exploration plan and a systems review of the safety of
the well design and other operational decisions;
(6) conduct regular and thorough safety reviews and
inspections, and;
(7) enforce all applicable laws (including
regulations).
* * * * * * *
(d)(1) Within ninety days after the date of publication of
a proposed leasing program, the Attorney General may, after
consultation with the Federal Trade Commission, submit comments
on the anticipated effects of such proposed program upon
competition. Any State, local government, or other person may
submit comments and recommendations as to any aspect of such
proposed program.
(2) At least sixty days prior to approving a proposed
leasing program, the Secretary shall submit it to the President
and the Congress, together with any comments received. Such
submission shall indicate why any specific recommendation of
the Attorney General, the head of an interested Federal agency,
or a State or local government was not accepted.
* * * * * * *
(g) The Secretary may obtain from public sources, or
purchase from private sources, any survey, data, report, or
other information (including interpretations of such data,
survey, report, or other information) which may be necessary to
assist him in preparing any environmental impact statement and
in making other evaluations required by this Act, including
existing inventories and mapping of marine resources previously
undertaken by the Department of the Interior and the National
Oceanic and Atmospheric Administration, information provided by
the Department of Defense, and other available data regarding
energy or mineral resource potential, navigation uses,
fisheries, aquaculture uses, recreational uses, habitat,
conservation, and military uses on the outer Continental Shelf.
Data of a classified nature provided to the Secretary under the
provisions of this subsection shall remain confidential for
such period of time as agreed to by the head of the department
or agency from whom the information is requested. The Secretary
shall maintain the confidentiality of all privileged or
proprietary data or information for such period of time as is
provided for in this Act, established by regulation, or agreed
to by the parties.
(h) The heads of all Federal departments and agencies shall
provide the Secretary with any nonprivileged or nonproprietary
information he requests to assist him in preparing the leasing
program and may provide the Secretary with any privileged or
proprietary information he requests to assist him in preparing
the leasing program. Privileged or proprietary information
provided to the Secretary under the provisions of this
subsection shall remain confidential for such period of time as
agreed to by the head of the department or agency from whom the
information is requested. In addition, the Secretary shall
utilize the existing capabilities and resources of such Federal
departments and agencies by appropriate agreement.
(i) Research and Development.--
(1) In general.--The Secretary shall carry out a
program of research and development to ensure the
continued improvement of methodologies for
characterizing resources of the outer Continental Shelf
and conditions that may affect the ability to develop
and use those resources in a safe, sound, and
environmentally responsible manner.
(2) Inclusions.--Research and development activities
carried out under paragraph (1) may include activities
to provide accurate estimates of energy and mineral
reserves and potential on the outer Continental Shelf
and any activities that may assist in filling gaps in
environmental data needed to develop each leasing
program under this section.
(3) Leasing activities.--Research and development
activities carried out under paragraph (1) shall not be
considered to be leasing or pre-leasing activities for
purposes of this Act.
* * * * * * *
Sec. 20. Environmental Studies.--(a) Comprehensive and
Independent Studies--
(1) In general.--The Secretary shall develop and
carry out programs for the collection, evaluation,
assembly, analysis, and dissemination of environmental
and other resource data that are relevant to carrying
out the purposes of this Act.
(2) Scope of research.--The programs under this
subsection shall include--
(A) the gathering of baseline data in areas
before energy or mineral resource development
activities occur;
(B) ecosystem research and monitoring studies
to support integrated resource management
decisions; and
(C) the improvement of scientific
understanding of the fate, transport, and
effects of discharges and spilled materials,
including deep water hydrocarbon spills, in the
marine environment.
(3) Use of data.--The Secretary shall ensure that
information from the studies carried out under this
section--
(A) informs the management of energy and
mineral resources on the outer Continental
Shelf including any areas under consideration
for oil and gas leasing; and
(B) contributes to a broader coordination of
energy and mineral resource development
activities within the context of best available
science.
(4) Independence.--The Secretary shall create a
program within the appropriate bureau established under
section 32 that shall--
(A) be programmatically separate and distinct
from the leasing program;
(B) carry out the environmental studies under
this section;
(C) conduct additional environmental studies
relevant to the sound management of energy and
mineral resources on the outer Continental
Shelf;
(D) provide for external scientific review of
studies under this section, including through
appropriate arrangements with the National
Academy of Sciences; and
(E) subject to the restrictions of
subsections (g) and (h) of section 18, make
available to the public studies conducted and
data gathered under this section.
[(a)] (b)(1) The Secretary shall conduct every 3 years a
study of any area or region included in any oil and gas lease
sale or other lease in order to establish information needed
for assessment and management of environmental impacts on the
human, marine, and coastal environments of the outer
Continental Shelf and the coastal areas which may be affected
by oil and gas or other mineral development in such area or
region.
(2) Each study required by paragraph (1) of this subsection
shall be commenced not later than six months after the date of
enactment of this section with respect to any area or region
where a lease sale has been held or announced by publication of
a notice of proposed lease sale before such date of enactment,
and not later than six months prior to the holding of a lease
sale with respect to any area or region where no lease sale has
been held or scheduled before such date of enactment. In the
case of an agreement under section 8(k)(2), each study required
by paragraph (1) of this subsection shall be commenced not
later than 6 months prior to commencing negotiations for such
agreement or the entering into the memorandum of agreement as
the case may be. The Secretary may utilize information
collected in any study prior to such date of enactment.
(3) In addition to developing environmental information,
any study of an area or region, to the extent practicable,
shall be designed to predict impacts on the marine biota which
may result from chronic low level pollution or large spills
associated with outer Continental Shelf production, from the
introduction of drill cuttings and drilling muds in the area,
and from the laying of pipe to serve the offshore production
area, and the impacts of development offshore on the affected
and coastal areas.
[(b)] (c) Subsequent to the leasing and developing of any
area or region, the Secretary shall conduct such additional
studies to establish environmental information as he deems
necessary and shall monitor the human, marine, and coastal
environments of such area or region in a manner designed to
provide time-series and data trend information which can be
used for comparison with any previously collected data for the
purpose of identifying any significant changes in the quality
and productivity of such environments, for establishing trends
in the areas studied and monitored, and for designing
experiments to identify the causes of such changes.
[(c)] (d) The Secretary shall, by regulation, establish
procedures for carrying out his duties under this section, and
shall plan and carry out such duties in full cooperation with
affected States. To the extent that other Federal agencies have
prepared environmental impact statements, are conducting
studies, or are monitoring the affected human, marine, or
coastal environment, the Secretary may utilize the information
derived therefrom in lieu of directly conducting such
activities. The Secretary may also utilize information obtained
from any State of local government, or from any person, for the
purposes of this section. For the purpose of carrying out his
responsibilities under this section, the Secretary may by
agreement utilize, with or without reimbursement, the services,
personnel, or facilities of any Federal, State, or local
government agency.
[(d)] (e) The Secretary shall consider available relevant
environmental information in making decisions (including those
relating to exploration plans, drilling permits, and
development and production plans), in developing appropriate
regulations and lease conditions, and in issuing operating
orders.
[(e)] (f) As soon as practicable after the end of every 3
fiscal years, the Secretary shall submit to the Congress and
make available to the general public an assessment of the
cumulative effect of activities conducted under this Act on the
human, marine, and coastal environments.
[(f)] (g) In executing his responsibilities under this
section, the Secretary shall, to the maximum extent
practicable, enter into appropriate arrangements to utilize on
a reimbursable basis the capabilities of the Department of
Commerce. In carrying out such arrangements, the Secretary of
Commerce is authorized to enter into contract or grants with
any person, organization, or entity with funds appropriated to
the Secretary of the Interior pursuant to this Act.
Sec. 21. Safety Regulations.--(a) [Upon the date of
enactment of this section,] Not later than May 1, 2011, and
every 3 years thereafter, the Secretary and the Secretary of
the Department in which the Coast Guard is operating shall, in
consultation with each other and, as appropriate, with the
heads of other Federal departments and agencies, promptly
commence a joint study of the adequacy of existing safety and
health regulations and of the technology, equipment, and
techniques available for the exploration, development, and
production of the minerals of the outer Continental Shelf. The
results of such study shall be submitted to the President who
shall submit a plan to the Congress of his proposals to promote
safety and health in the exploration, development, and
production of the minerals of the outer Continental Shelf.
[(b) In exercising their respective responsibilities for
the artificial islands, installations, and other devices
referred to in section 4(a)(1) of this Act, the Secretary, and
the Secretary of the Department in which the Coast Guard is
operating, shall require, on all new drilling and production
operations and, wherever practicable, on existing operations,
the use of the best available and safest technologies which the
Secretary determines to be economically feasible, wherever
failure of equipment would have a significant effect on safety,
health, or the environment, except where the Secretary
determines that the incremental benefits are clearly
insufficient to justify the incremental costs of utilizing such
technologies.]
(b) Best Available Technologies and Practices.--
(1) In general.--In exercising respective
responsibilities under this Act, the Secretary, and the
Secretary of the Department in which the Coast Guard is
operating, shall require, on all new drilling and
production operations and, to the maximum extent
practicable, on existing operations, the use of the
best available and safest technologies and practices,
if the failure of equipment would have a significant
effect on safety, health, or the environment.
(2) Identification of best available technologies.--
Not later than May 1, 2011, and not later than every 3
years thereafter, the Secretary shall identify and
publish an updated list of best available technologies
for key areas of well design and operation, including
blowout prevention and blowout and oil spill response.
(3) Safety case.--Not later than May 1, 2011, the
Secretary shall promulgate regulations requiring a
safety case be submitted along with each new
application for a permit to drill on the outer
Continental Shelf.
(4) Employee training.--
(A) In general.--Not later than May 1, 2011,
the Secretary shall promulgate regulations
setting standards for training for all workers
on offshore facilities (including mobile
offshore drilling units) conducting energy and
mineral resource exploration, development, and
production operations on the outer Continental
Shelf.
(B) Requirements.--The training standards
under this paragraph shall require that
employers of workers described in subparagraph
(A)--
(i) establish training programs
approved by the Secretary; and
(ii) demonstrate that employees
involved in the offshore operations
meet standards that demonstrate the
aptitude of the employees in critical
technical skills.
(C) Experience.--The training standards under
this section shall require that any offshore
worker with less than 5 years of applied
experience in offshore facilities operations
pass a certification requirement after
receiving the appropriate training.
(D) Monitoring training courses.--The
Secretary shall ensure that Department
employees responsible for inspecting offshore
facilities monitor, observe, and report on
training courses established under this
paragraph, including attending a representative
number of the training sessions, as determined
by the Secretary.
(c) The Secretary of the Department in which the Coast
Guard is operating shall promulgate regulations or standards
applying to unregulated hazardous working conditions related to
activities on the Outer Continental Shelf when he determines
such regulations or standards are necessary. The Secretary of
the Department in which the Coast Guard is operating may from
time to time modify any regulations, interim or final, dealing
with hazardous working conditions on the Outer Continental
Shelf.
* * * * * * *
(f)(1) In administering the provisions of this section, the
Secretary shall consult and coordinate with the heads of other
appropriate Federal departments and agencies for purposes of
assuring that, to the maximum extent practicable, inconsistent
or duplicative requirements are not imposed.
(2) The Secretary shall make available to any interested
person a compilation of all safety and other regulations which
are prepared and promulgated by any Federal department or
agency and applicable to activities on the Outer Continental
Shelf. Such compilation shall be revised and updated annually.
(g) Technology Research and Risk Assessment Program.--
(1) In general.--The Secretary shall carry out a
program of research, development, and risk assessment
to address technology and development issues associated
with outer Continental Shelf energy and mineral
resource activities, with the primary purpose of
informing the role of research, development, and risk
assessment relating to safety, environmental
protection, and spill response.
(2) Specific areas of focus.--The program under this
subsection shall include research, development, and
other activities related to--
(A) risk assessment, using all available data
from safety and compliance records both within
the United States and internationally;
(B) analysis of industry trends in
technology, investment, and interest in
frontier areas;
(C) analysis of incidents investigated under
section 22;
(D) reviews of best available technologies,
including technologies associated with
pipelines, blowout preventer mechanisms,
casing, well design, and other associated
infrastructure related to offshore energy
development;
(E) oil spill response and mitigation;
(F) risks associated with human factors; and
(G) renewable energy operations.
(3) Information sharing activities.--
(A) Domestic activities.--The Secretary shall
carry out programs to facilitate the exchange
and dissemination of scientific and technical
information and best practices related to the
management of safety and environmental issues
associated with energy and mineral resource
exploration, development, and production.
(B) International cooperation.--The Secretary
shall carry out programs to cooperate with
international organizations and foreign
governments to share information and best
practices related to the management of safety
and environmental issues associated with energy
and mineral resource exploration, development,
and production.
(4) Reports.--The program under this subsection shall
provide to the Secretary, each Bureau Director under
section 32, and the public quarterly reports that
address--
(A) developments in each of the areas under
paragraph (2); and
(B)(i) any accidents that have occurred in
the past quarter; and
(ii) appropriate responses to the accidents.
(5) Independence.--The Secretary shall create a
program within the appropriate bureau established under
section 32 that shall--
(A) be programmatically separate and distinct
from the leasing program;
(B) carry out the studies, analyses, and
other activities under this subsection;
(C) provide for external scientific review of
studies under this section, including through
appropriate arrangements with the National
Academy of Sciences; and
(D) make available to the public studies
conducted and data gathered under this section.
(6) Use of data.--The Secretary shall ensure that the
information from the studies and research carried out
under this section inform the development of safety
practices and regulations as required by this Act and
other applicable laws.
Sec. 22. Enforcement.--(a) The Secretary, the Secretary of
the Department in which the Coast Guard is operating, and the
Secretary of the Army shall enforce safety and environmental
regulations promulgated pursuant to this Act. Each such Federal
department may by agreement utilize, with or without
reimbursement, the services, personnel, or facilities of other
Federal departments and agencies for the enforcement of their
respective regulations.
* * * * * * *
(c) The Secretary and the Secretary of the Department in
which the Coast Guard is operating shall individually, or
jointly if they so agree, promulgate regulations to provide
for--
(1) scheduled onsite inspection, at least once a
year, of each facility on the outer Continental Shelf
which is subject to any environmental or safety
regulation promulgated pursuant to this Act, which
inspection shall include all safety equipment designed
to prevent or ameliorate blowouts, fires, spillages, or
other major accidents; and
(2) periodic onsite inspection without advance notice
to the operator of such facility to assure compliance
with such environmental or safety regulations.
(d)(1) The Secretary or the Secretary of the Department in
which the Coast Guard is operating shall make an investigation
and public report on each major fire, each loss of well
control, blowout, activation of the blowout preventer, and
other accident that presented a serious risk to human or
environmental safety, and each major oil spillage occurring as
a result of operations conducted pursuant to this Act, and may,
in his discretion, make an investigation and report of lesser
oil spillages. For purposes of this subsection, a major oil
spillage is any spillage in one instance of more than two
hundred barrels of oil during a period of thirty days. All
holders of leases or permits issued or maintained under this
Act shall cooperate with the appropriate Secretary in the
course of any such investigation as a condition of the lease.
(2) The Secretary or the Secretary of the Department in
which the Coast Guard is operating shall make an investigation
and public report on any death or serious injury occurring as a
result of operations conducted pursuant to this Act, and may,
in his discretion, make an investigation and report of any
injury. For purposes of this subsection, a serious injury is
one resulting in substantial impairment of any bodily unit or
function. All holders of leases or permits issued or maintained
under this Act shall cooperate with the appropriate Secretary
in the course of any such investigation as a condition of
lease.
[(e) The] (e) Review of Alleged Safety Violations.--
(1) In general.--The Secretary, or, in the case of
occupational safety and health, the Secretary of the
Department in which the Coast Guard is operating, may
review any allegation from any person of the existence
of a violation of a safety regulation issued under this
Act.
(2) Investigation.--The Secretary shall investigate
any allegation from any employee of the lessee or any
subcontractor of the lessee made under paragraph (1).
(f) In any investigation conducted pursuant to this
section, the Secretary or the Secretary of the Department in
which the Coast Guard is operating shall have power to summon
witnesses and to require the production of books, papers,
documents, and any other evidence. Attendance of witnesses or
the production of books, papers, documents, or any other
evidence shall be compelled by a similar process, as in the
district courts of the United States. Such Secretary, or his
designee, shall administer all necessary oaths to any witnesses
summoned before such investigation.
(g) Independent Investigation.--
(1) In general.--At the request of the Secretary, the
National Transportation Safety Board may conduct an
independent investigation of any accident, occurring in
the outer Continental Shelf and involving activities
under this Act, that does not otherwise fall within the
definition of an accident or major marine casualty, as
those terms are used in chapter 11 of title 49, United
States Code.
(2) Transportation accident.--For purposes of an
investigation under this subsection, the accident that
is the subject of the request by the Secretary shall be
determined to be a transportation accident within the
meaning of that term in chapter 11 of title 49, United
States Code.
(h) Information on Causes and Corrective Actions.--
(1) In general.--For each incident investigated under
this section, the Secretary shall promptly make
available to all lessees and the public technical
information about the causes and corrective actions
taken.
(2) Public database.--All data and reports related to
an incident described in paragraph (1) shall be
maintained in a database that is available to the
public.
(i) Inspection Fee.--
(1) In general.--To the extent necessary to fund the
inspections described in this paragraph, the Secretary
shall collect a non-refundable inspection fee, which
shall be deposited in the Ocean Energy Enforcement Fund
established under paragraph (3), from the designated
operator for facilities subject to inspection under
subsection (c).
(2) Establishment.--The Secretary shall establish, by
rule, inspection fees--
(A) at an aggregate level equal to the amount
necessary to offset the annual expenses of
inspections of outer Continental Shelf
facilities (including mobile offshore drilling
units) by the Department of the Interior; and
(B) using a schedule that reflects the
differences in complexity among the classes of
facilities to be inspected.
(3) Ocean energy enforcement fund.--There is
established in the Treasury a fund, to be known as the
`Ocean Energy Enforcement Fund' (referred to in this
subsection as the `Fund'), into which shall be
deposited amounts collected under paragraph (1) and
which shall be available as provided under paragraph
(4).
(4) Availability of fees.--Notwithstanding section
3302 of title 31, United States Code, all amounts
collected by the Secretary under this section--
(A) shall be credited as offsetting
collections;
(B) shall be available for expenditure only
for purposes of carrying out inspections of
outer Continental Shelf facilities (including
mobile offshore drilling units) and the
administration of the inspection program;
(C) shall be available only to the extent
provided for in advance in an appropriations
Act; and
(D) shall remain available until expended.
(5) Annual reports.--
(A) In general.--Not later than 60 days after
the end of each fiscal year beginning with
fiscal year 2011, the Secretary shall submit to
the Committee on Energy and Natural Resources
of the Senate and the Committee on Natural
Resources of the House of Representatives a
report on the operation of the Fund during the
fiscal year.
(B) Contents.--Each report shall include, for
the fiscal year covered by the report, the
following:
(i) A statement of the amounts
deposited into the Fund.
(ii) A description of the
expenditures made from the Fund for the
fiscal year, including the purpose of
the expenditures.
(iii) Recommendations for additional
authorities to fulfill the purpose of
the Fund.
(iv) A statement of the balance
remaining in the Fund at the end of the
fiscal year.
* * * * * * *
Sec. 24. Remedies and Penalties.--(a) At the request of the
Secretary, the Secretary of the Army, or the Secretary of the
Department in which the Coast Guard is operating, the Attorney
General or a United States attorney shall institute a civil
action in the district court of the United States for the
district in which the affected operation is located for a
temporary restraining order, injunction, or other appropriate
remedy to enforce any provision of this Act, any regulation or
order issued under this Act, or any term of a lease, license,
or permit issued pursuant to this Act.
[(b)(1) Except as provided in paragraph (2), if any person
fails to comply with any provision of this Act, or any term of
a lease, or permit issued pursuant to this Act, or any
regulation or order issued under this Act, after notice of such
failure and expiration of any reasonable period allowed for
corrective action, such person shall be liable for a civil
penalty of not more than $20,000 for each day of the
continuance of such failure. The Secretary may assess, collect,
and compromise any such penalty. No penalty shall be assessed
until the person charged with a violation has been given an
opportunity for a hearing. The Secretary shall, by regulation
at least every 3 years, adjust the penalty specified in this
paragraph to reflect any increases in the Consumer Price Index
(all items, United States city average) as prepared by the
Department of Labor.
[(2) If a failure described in paragraph (1) constitutes or
constituted a threat of serious, irreparable, or immediate harm
or damage to life (including fish and other aquatic life),
property, any mineral deposit, or the marine, coastal, or human
environment, a civil penalty may be assessed without regard to
the requirement of expiration of a period allowed for
corrective action.]
(b) Civil Penalty--
(1) In general.--Subject to paragraphs (2) through
(3), if any person fails to comply with this Act, any
term of a lease or permit issued under this Act, or any
regulation or order issued under this Act, the person
shall be liable for a civil administrative penalty of
not more than $75,000 for each day of continuance of
each failure.
(2) Administration.--The Secretary may assess,
collect, and compromise any penalty under paragraph
(1).
(3) Hearing.--No penalty shall be assessed under this
subsection until the person charged with a violation
has been given the opportunity for a hearing.
(4) Adjustment.--The penalty amount specified in this
subsection shall increase each year to reflect any
increases in the Consumer Price Index for All Urban
Consumers published by the Bureau of Labor Statistics
of the Department of Labor.
(c) Any person who knowingly and willfully (1) violates any
provision of this Act, any term of a lease, license, or permit
issued pursuant to this Act, or any regulations or order issued
under the authority of this Act designed to protect health,
safety, or the environment or conserve natural resources, (2)
makes any false statement, representation, or certification in
any application, record, report, or other document filed or
required to be maintained under this Act, (3) falsifies,
tampers with, or renders inaccurate any monitoring device or
method of record required to be maintained under this Act, or
(4) reveals any data or information required to be kept
confidential by this Act shall, upon conviction, be punished by
a fine of not more than [$100,000] $10,000,000, or by
imprisonment for not more than ten years, or both. Each day
that a violation under clause (1) of this subsection continues,
or each day that any monitoring devise or data recorder remains
inoperative or inaccurate because of any activity described in
clause (3) of this subsection, shall constitute a separate
violation. The penalty amount specified in this subsection
shall increase each year to reflect any increases in the
Consumer Price Index for All Urban Consumers published by the
Bureau of Labor Statistics of the Department of Labor.
(d) Whenever a corporation or other entity is subject to
prosecution under subsection (c) of this section, any officer
or agent of such corporation or entity who knowingly and
willfully, or with reckless disregard, authorized, ordered, or
carried out the proscribed activity shall be subject to the
same fines or imprisonment, or both, as provided for under
subsection (c) of this section.
(e) The remedies and penalties prescribed in this Act shall
be concurrent and cumulative and the exercise of one shall not
preclude the exercise of the others. Further, the remedies and
penalties prescribed in this Act shall be in addition to any
other remedies and penalties afforded by any other law or
regulation.
Sec. 25. Oil and Gas Development and Production.--(a)(1)
Prior to development and production pursuant to an oil and gas
lease issued after the date of enactment of this section in any
area of the outer Continental Shelf[, other than the Gulf of
Mexico,] or issued or maintained prior to such date of
enactment in any area of the outer Continental Shelf, other
than the Gulf of Mexico, with respect to which no oil or gas
has been discovered in paying quantities prior to such date of
enactment, the lessee shall submit a development and production
plan (hereinafter in this section referred to as a ``plan'') to
the Secretary, for approval pursuant to this section.
* * * * * * *
(b) After the date of enactment of this section, no oil and
gas lease may be issued pursuant to this Act in any region of
the outer Continental Shelf[, other than the Gulf of Mexico,]
unless such lease requires that development and production
activities be carried out in accordance with a plan which
complies with the requirements of this section.
* * * * * * *
(e)(1) At least once the Secretary shall declare the
approval of a development and production plan in any area or
region (as defined by the Secretary) of the outer Continental
Shelf[, other than the Gulf of Mexico,] to be a major Federal
action.
(2) The Secretary may require lessees of tracts for which
development and production plans have not been approved, to
submit preliminary or final plans for their leases, prior to or
immediately after a determination by the Secretary that the
procedures under the National Environmental Policy Act of 1969
shall commence.
* * * * * * *
[Sec. 29. Restrictions on Employment.--No full-time officer
or employee of the Department of the Interior who directly or
indirectly discharged duties or responsibilities under this
Act, and who was at any time during the twelve months preceding
the termination of his employment with the Department
compensated under the Executive Schedule or compensated at or
above the annual rate of basic pay for grade GS-16 of the
General Schedule shall--
[(1) within two years after his employment with the
Department has ceased--
[(A) knowingly act as agent or attorney for,
or otherwise represent, any other person
(except the United States) in any formal or
informal appearance before;
[(B) with the intent to influence, make any
oral or written communication on behalf of any
other person (except the United States) to; or
[(C) knowingly aid or assist in representing
any other person (except the United States) in
any formal or informal appearance before,
[any department, agency, or court of the United States,
or any officer or employee thereof, in connection with
any judicial or other proceeding, application, request
for a ruling or other determination, regulation, order,
lease, permit, rulemaking, or other particular matter
involving a specific party or parties in which the
United States is a party or has a direct and
substantial interest which was actually pending under
his official responsibility as an officer or employee
within a period of one year prior to the termination of
such responsibility or in which he participated
personally and substantially as an officer or employee;
or
[(2) within one year after his employment with the
Department has ceased--
[(A) knowingly act as agent or attorney for,
or otherwise represent, any other person
(except the United States) in any formal or
informal appearance before; or
[[(B) with the intent to influence, make any
oral or written communication on behalf of any
other person (except the United States) to,
[the Department of the Interior, or any officer or employee
thereof, in connection with any judicial, rulemaking,
regulation, order, lease, permit, regulation, or other
particular matter which is pending before the Department of the
Interior or in which the Department has a direct and
substantial interest.]
SEC. 29. CONFLICTS OF INTEREST.
(a) Restrictions on Employment.--No full-time officer or
employee of the department of the Interior who directly or
indirectly discharged duties or responsibilities under this Act
shall--
(1) within 2 years after his employment with the
Department has ceased--
(A) knowingly act as agent or attorney for,
or otherwise represent, any other person
(except the United States) in any formal or
informal appearance before;
(B) with the intent to influence, make any
oral or written communication on behalf of any
other person (except the United States) to; or
(C) knowingly aid, advise, or assist in--
(i) representing any other person
(except the United States in any formal
or informal appearance before; or
(ii) making, with the intent to
influence, any oral or written
communication on behalf of any other
person (except the United States) to,
any department, agency, or court of the United States,
or any officer or employee thereof, in connection with
any judicial or other proceeding, application, request
for a ruling or other determination, regulation, order
lease, permit, rulemaking, inspection, enforcement
action, or other particular matter involving a specific
party or parties in which the United States is a party
or has a direct and substantial interest which was
actually pending under his official responsibility as
an officer or employee within a period of one year
prior to the termination of such responsibility or in
which he participated personally and substantially as
an officer or employee;
(2) within 1 year after his employment with the
Department has ceased--
(A) knowingly act as agent or attorney for,
or otherwise represent, any other person
(except the United States) in any formal or
informal appearance before;
(B) with the intent to influence, make any
oral or written communication on behalf of any
other person (except the United States) to; or
(C) knowingly aid, advise, or assist in--
(i) representing any other person
(except the United States in any formal
or informal appearance before, or
(ii) making, with the intent to
influence, any oral or written
communication on behalf of any other
person (except the United States) to,
the Department of the Interior, or any officer or
employee thereof, in connection with any judicial,
rulemaking, regulation, order, lease, permit,
regulation, inspection, enforcement action, or other
particular matter which is pending before the
Department of the Interior or in which the Department
has a direct and substantial interest; or
(3) accept employment or compensation, during the 1-
year period beginning on the date on which employment
with the Department has ceased, from any person (other
than the United States) that has a direct and
substantial interest--
(A) that was pending under the official
responsibility of the employee as an officer or
employee of the Department during the 1-year
period preceding the termination of the
responsibility; or
(B) in which the employee participated
personally and substantially as an officer or
employee.
(b) Prior Employment Relationships.--No full-time officer
or employee of the Department of the Interior who directly or
indirectly discharged duties or responsibilities under this Act
shall participate personally and substantially as a Federal
officer or employee, through decision, approval, disapproval,
recommendation, the rendering of advice, investigation, or
otherwise, in a proceeding, application, request for a ruling
or other determination, contract, claim, controversy, charge,
accusation, inspection, enforcement action, or other particular
matter in which, to the knowledge of the officer or employee--
(1) the officer or employee or the spouse, minor
child, or general partner of the officer or employee
has a financial interest;
(2) any organization in which the officer or employee
is serving as an officer, director, trustee, general
partner, or employee has a financial interest;
(3) any person or organization with whom the officer
or employee is negotiating or has any arrangement
concerning prospective employment has a financial
interest; or
(4) any person or organization in which the officer
or employee has, within the preceding 1-year period,
served as an officer, director, trustee, general
partner, agent, attorney, consultant, contractor, or
employee has a financial interest.
(c) Gifts From Outside Sources.--No full-time officer or
employee of the Department of the Interior who directly or
indirectly discharged duties or responsibilities under this Act
shall, directly or indirectly, solicit or accept any gift in
violation of subpart B of part 2635 of title V, Code of Federal
Regulations (or successor regulations).
(d) Exemptions.--The Secretary may, by rule, exempt from
this section clerical and support personnel who do not conduct
inspections, perform audits, or otherwise exercise regulatory
or policy making authority under this Act.
(e) Penalties.--
(1) Criminal penalties.--Any person who violates
paragraph (1) or (2) of subsection (a) or subsection
(b) shall be punished in accordance with section 216 of
title 18, United States Code.
(2) Civil penalties.--Any person who violates
subsection (a)(3) or (c) shall be punished in
accordance with subsection (b) of section 216 of title
18, United States Code.
* * * * * * *
SEC. 31. COASTAL IMPACT ASSISTANCE PROGRAM.
* * * * * * *
SEC. 32. STRUCTURAL REFORM OF OUTER CONTINENTAL SHELF PROGRAM
MANAGEMENT.
(a) Leasing, Permitting, and Regulation Bureaus.--
(1) Establishment of bureaus.--
(A) In general.--Subject to the discretion
granted by Reorganization Plan Number 3 of 1950
(64 Stat. 1262; 43 U.S.C. 1451 note), the
Secretary shall establish in the Department of
the Interior not more than 2 bureaus to carry
out the leasing, permitting, and safety and
environmental regulatory functions vested in
the Secretary by this Act and the Federal Oil
and Gas Royalty Management Act of 1982 (30
U.S.C. 1701 et seq.) related to the outer
Continental Shelf.
(B) Conflicts of interest.--In establishing
the bureaus under subparagraph (A), the
Secretary shall ensure, to the maximum extent
practicable, that any potential organizational
conflicts of interest related to leasing,
revenue creation, environmental protection, and
safety are eliminated.
(2) Director.--Each bureau shall be headed by a
Director, who shall be appointed by the President, by
and with the advice and consent of the Senate.
(3) Compensation.--Each Director shall be compensated
at the rate provided for level V of the Executive
Schedule under section 5316 of title 5, United States
Code.
(4) Qualifications.--Each Director shall be a person
who, by reason of professional background and
demonstrated ability and experience, is specially
qualified to carry out the duties of the office.
(b) Royalty and Revenue Office.--
(1) Establishment of office.--Subject to the
discretion granted by Reorganization Plan Number 3 of
1950 (64 Stat. 1262; 43 U.S.C. 1451 note), the
Secretary shall establish in the Department of the
Interior an office to carry out the royalty and revenue
management functions vested in the Secretary by this
Act and the Federal Oil and Gas Royalty Management Act
of 1982 (30 U.S.C. 1701 et seq.).
(2) Director.--The office established under paragraph
(1) shall be headed by a Director, who shall be
appointed by the President, by and with the advice and
consent of the Senate.
(3) Compensation.--The Director shall be compensated
at the rate provided for level V of the Executive
Schedule under section 5316 of title 5, United States
Code.
(4) Qualifications.--The Director shall be a person
who, by reason of professional background and
demonstrated ability and experience, is specially
qualified to carry out the duties of the office.
(c) OCS Safety and Environmental Advisory Board.--
(1) Establishment.--The Secretary shall establish,
under the Federal Advisory Committee Act (5 U.S.C.
App.), an Outer Continental Shelf Safety and
Environmental Advisory Board (referred to in this
subsection as the `Board'), to provide the Secretary
and the Directors of the bureaus established under this
section with independent peer-reviewed scientific and
technical advice on safe and environmentally compliant
energy and mineral resource exploration, development,
and production activities.
(2) Membership.--
(A) Size.--
(i) In general.--The Board shall
consist of not more than 12 members,
chosen to reflect a range of expertise
in scientific, engineering, management,
and other disciplines related to safe
and environmentally compliant energy
and mineral resource exploration,
development, and production activities.
(ii) Consultation.--The Secretary
shall consult with the National Academy
of Sciences and the National Academy of
Engineering to identify potential
candidates for membership on the Board.
(B) Term.--The Secretary shall appoint Board
members to staggered erms of not more than 4
years, and shall not appoint a member for more
than 2 consecutive terms.
(C) Chair.--The Secretary shall appoint the
Chair for the Board.
(3) Meetings.--The Board shall--
(A) meet not less than 3 times per year; and
(B) at least once per year, shall host a
public forum to review and assess the overall
safety and environmental performance of outer
Continental Shelf energy and mineral resource
activities.
(4) Reports.--Reports of the Board shall--
(A) be submitted to Congress; and
(B) made available to the public in an
electronically accessible form.
(5) Travel expenses.--Members of the Board, other
than full-time employees of the Federal Government,
while attending a meeting of the Board or while
otherwise serving at the request of the Secretary or
the Director while serving away from their homes or
regular places of business, may be allowed travel
expenses, including per diem in lieu of subsistence, as
authorized by section 5703 of title 5, United States
Code, for individuals in the Federal Government serving
without pay.
(d) Special Personnel Authorities.--
(1) Direct hiring authority for critical personnel.--
(A) In general.--Notwithstanding sections
3104, 3304, and 3309 through 3318 of title 5,
United States Code, the Secretary may, upon a
determination that there is a severe shortage
of candidates or a critical hiring need for
particular positions, recruit and directly
appoint highly qualified accountants,
scientists, engineers, or critical technical
personnel into the competitive service, as
officers or employees of any of the
organizational units established under this
section.
(B) Requirements.--In exercising the
authority granted under subparagraph (A), the
Secretary shall ensure that any action taken by
the Secretary--
(i) is consistent with the merit
principles of chapter 23 of title 5,
United States Code; and
(ii) complies with the public notice
requirements of section 3327 of title
5, United States Code.
(2) Critical pay authority.--
(A) In general.--Notwithstanding section 5377
of title 5, United States Code, and without
regard to the provisions of that title
governing appointments in the competitive
service or the Senior Executive Service and
chapters 51 and 53 of that title (relating to
classification and pay rates), the Secretary
may establish, fix the compensation of, and
appoint individuals to critical positions
needed to carry out the functions of any of the
organizational units established under this
section, if the Secretary certifies that--
(i) the positions--
(I) require expertise of an
extremely high level in a
scientific or technical field;
and
(II) any of the
organizational units
established in this section
would not successfully
accomplish an important mission
without such an individual; and
(ii) exercise of the authority is
necessary to recruit an individual
exceptionally well qualified for the
position.
(B) Limitations.--The authority granted under
subparagraph (A) shall be subject to the
following conditions:
(i) The number of critical positions
authorized by subparagraph (A) may not
exceed 40 at any 1 time in either of
the bureaus established under this
section.
(ii) The term of an appointment under
subparagraph (A) may not exceed 4
years.
(iii) An individual appointed under
subparagraph (A) may not have been an
employee of the Department of the
Interior during the 2-year period prior
to the date of appointment.
(iv) Total annual compensation for
any individual appointed under
subparagraph (A) may not exceed the
highest total annual compensation
payable at the rate determined under
section 104 of title 3, United States
Code.
(v) An individual appointed under
subparagraph (A) may not be considered
to be an employee for purposes of
subchapter II of chapter 75 of title 5,
United States Code.
(C) Notification.--Each year, the Secretary
shall submit to Congress a notification that
lists each individual appointed under this
paragraph.
(3) Reemployment of civilian retirees.--
(A) In general.--Notwithstanding part 553 of
title 5, Code of Federal Regulations (relating
to reemployment of civilian retirees to meet
exceptional employment needs), or successor
regulations, the Secretary may approve the
reemployment of an individual to a particular
position without reduction or termination of
annuity if the hiring of the individual is
necessary to carry out a critical function of
any of the organizational units established
under this section for which suitably qualified
candidates do not exist.
(B) Limitations.--An annuitant hired with
full salary and annuities under the authority
granted by subparagraph (A)--
(i) shall not be considered an
employee for purposes of subchapter III
of chapter 83 and chapter 84 of title
5, United States Code;
(ii) may not elect to have retirement
contributions withheld from the pay of
the annuitant;
(iii) may not use any employment
under this paragraph as a basis for a
supplemental or recomputed annuity; and
(iv) may not participate in the Thrift
Savings Plan under subchapter III of
chapter 84 of title 5, United States
Code.
(C) Limitation on term.--The term of
employment of any individual hired under
subparagraph (A) may not exceed an initial term
of 2 years, with an additional 2-year
appointment under exceptional circumstances.
(e) Continuity of Authority.--Subject to the discretion
granted by Reorganization Plan Number 3 of 1950 (64 Stat. 1262;
43 U.S.C. 1451 note), any reference in any law, rule,
regulation, directive, or instruction, or certificate or other
official document, in force immediately prior to the date of
enactment of this section--
(1) to the Minerals Management Service that pertains
to any of the duties and authorities described in this
section shall be deemed to refer and apply to the
appropriate bureaus and offices established under this
section;
(2) to the Director of the Minerals Management
Service that pertains to any of the duties and
authorities described in this section shall be deemed
to refer and apply to the Director of the bureau or
office under this section to whom the Secretary has
assigned the respective duty or authority; and
(3) to any other position in the Minerals Management
Service that pertains to any of the duties and
authorities described in this section shall be deemed
to refer and apply to that same or equivalent position
in the appropriate bureau or office established under
this section.
UNITED STATES CODE
TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES
* * * * * * *
PART III--EMPLOYEES
* * * * * * *
Subpart D--Pay and Allowances
* * * * * * *
CHAPTER 53--PAY RATES AND SYSTEMS
* * * * * * *
Subchapter II--Executive Schedule Pay Rates
* * * * * * *
Sec. 5316. Positions at level V
Level V of the Executive Schedule applies to the following
positions, for which the Annual rate of basic pay shall be the
rate determined with respect to such level under chapter 11 of
title 2, as adjusted by section 5318 of this title:
* * * * * * *
[Director, Bureau of Mines, Department of the Interior.]
Bureau Directors, Department of the Interior (2).
Director, Royalty and Revenue Office, Department of the
Interior.
* * * * * * *
ENERGY POLICY ACT OF 2005
PUBLIC LAW 109-58, AS AMENDED
AN ACT To ensure jobs for our future with secure, affordable, and
reliable energy.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Energy
Policy Act of 2005''.
* * * * * * *
TITLE III--OIL AND GAS
* * * * * * *
Subtitle G--Miscellaneous
* * * * * * *
SEC. 388. ALTERNATE ENERGY-RELATED USES ON THE OUTER CONTINENTAL SHELF.
* * * * * * *
(b) Coordinated OCS Mapping Initiative.--
(1) In general.--The Secretary of the Interior, in
cooperation with the Secretary of Commerce, the
Commandant of the Coast Guard, and the Secretary of
Defense, shall establish an interagency comprehensive
digital mapping initiative for the outer Continental
Shelf to assist in decisionmaking relating to the
siting of activities under subsection (p) of section 8
of the Outer Continental Shelf Lands Act (43 U.S.C.
1337) (as added by subsection (a)).
* * * * * * *
(4) Federal agencies.--Any head of a Federal
department or agency shall, on request of the
Secretary, provide to the Secretary all data and
information that the Secretary determines to be
necessary for the purpose of including the data and
information in the mapping initiative, except that no
Federal department or agency shall be required to
provide any data or information that is privileged or
proprietary.
* * * * * * *
TITLE IX--RESEARCH AND DEVELOPMENT
* * * * * * *
Subtitle J--[Ultra-Deepwater and Unconventional Natural Gas
and Other Petroleum Resources] Safer Oil and Gas Production and
Accident Prevention
* * * * * * *
SEC. 999A. PROGRAM AUTHORITY.
(a) In General.--The Secretary shall carry out a program
under this subtitle of research, development, demonstration,
and commercial application of technologies for [ultra-
deepwater] deepwater and unconventional natural gas and other
petroleum resource exploration and production, including
addressing the technology challenges for small producers, safe
operations, well control and accident prevention, and
environmental mitigation (including reduction of greenhouse gas
emissions and sequestration of carbon).
(b) Program Elements.--The program under this subtitle
shall address the following areas, including improving safety
and minimizing environmental impacts of activities within each
area:
[(1) Ultra-deepwater architecture and technology,
including drilling to formations in the Outer
Continental Shelf to depths greater than 15,000 feet.]
(1) Deepwater architecture, well control and accident
prevention, and deepwater technology, including
drilling to deep formations in waters greater than 500
feet.
(2) Unconventional natural gas and other petroleum
resource exploration and production technology.
(3) The technology challenges of small producers.
[(4) Complementary research performed by the National
Energy Technology Laboratory for the Department.]
(4) Safety technology research and development for
drilling activities aimed at well control and accident
prevention performed by the Office of Fossil Energy of
the Department.
(c) Limitation on Location of Field Activities.--Field
activities under the program under this subtitle shall be
carried out only--
(1) in--
(A) areas in the territorial waters of the
United States not under any Outer Continental
Shelf moratorium as of September 30, 2002;
(B) areas onshore in the United States on
public land administered by the Secretary of
the Interior available for oil and gas leasing,
where consistent with applicable law and land
use plans; and
(C) areas onshore in the United States on
State or private land, subject to applicable
law; and
(2) with the approval of the appropriate Federal or
State land management agency or private land owner.
(d) Activities at the [National Energy Technology
Laboratory] Office of Fossil Energy of the Department.--The
Secretary, through the [National Energy Technology Laboratory]
Office of Fossil Energy of the Department, shall carry out a
program of research and other activities complementary to and
supportive of the research programs under subsection (b).
(e) Consultation With Secretary of the Interior.--In
carrying out this subtitle, the Secretary shall consult
regularly with the Secretary of the Interior.
SEC. 999B. [ULTRA-DEEPWATER AND UNCONVENTIONAL ONSHORE NATURAL GAS AND
OTHER PETROLEUM] SAFE OIL AND GAS PRODUCTION AND
ACCIDENT PREVENTION RESEARCH AND DEVELOPMENT
PROGRAM.
(a) In General.--The Secretary shall carry out the
activities under section 999A, to maximize the value of natural
gas and other petroleum resources of the United States[, by
increasing the supply of such resources, through reducing the
cost and increasing the efficiency of exploration for and
production of such resources, while improving safety and
minimizing environmental impacts.] and the safe and
environmentally responsible exploration, development, and
production of hydrocarbon resources.
(b) Role of the Secretary.--The Secretary shall have
ultimate responsibility for, and oversight of, all aspects of
the program under this section.
(c) Role of the Program Consortium.--
(1) In general.--The Secretary shall contract with a
corporation that is structured as a consortium to
administer the programmatic activities outlined in this
chapter. The program consortium shall--
(A) administer the program pursuant to
subsection (f)(3), utilizing program
administration funds only;
(B) issue research project solicitations upon
approval of the Secretary or the Secretary's
designee;
(C) make project awards to research
performers upon approval of the Secretary or
the Secretary's designee;
(D) projects will be selected on a
competitive, peer-reviewed basis;
[(D)] (E) disburse research funds to research
performers awarded under subsection (f) as
directed by the Secretary in accordance with
the annual plan under subsection (e); and
[(E)] (F) carry out other activities assigned
to the program consortium by this section.
(2) Limitation.--The Secretary may not assign any
activities to the program consortium except as
specifically authorized under this section.
* * * * * * *
(d) Selection of the Program Consortium.--
(1) In general.--The Secretary shall select the
program consortium through an open, competitive
process.
* * * * * * *
(6) Eligibility.--To be eligible to be selected as
the program consortium, an applicant must be an entity
whose members have collectively demonstrated
capabilities and experience in planning and managing
research, development, demonstration, and commercial
application programs for [ultra-deepwater] deepwater
and unconventional natural gas or other petroleum
exploration or production.
(7) Focus areas for awards.--
(A) [Ultra-deepwater] Deepwater resources.--
Awards from allocations under section
999H(d)(1) shall focus on the [development and]
research, development, and demonstration of
individual exploration and production
technologies [as well as integrated systems
technologies including new architectures for
production in ultra-deepwater.] aimed at
improving operational safety of drilling
activities, including well integrity systems,
well control, blowout prevention, the use of
non-toxic materials, and integrated systems
approach-based management for exploration and
production in deepwater.
(B) Unconventional resources.--Awards from
allocations under section 999H(d)(2) shall
focus on areas including advanced coalbed
methane, deep drilling, natural gas production
from tight sands, natural gas production from
gas shales, stranded gas, innovative
exploration and production techniques, enhanced
recovery techniques, [and environmental
mitigation] use of non-toxic materials,
drilling safety, and environmental mitigation
and accident prevention of unconventional
natural gas and other petroleum resources
exploration and production.
(C) Small producers.--Awards from allocations
under section 999H(d)(3) shall be made to
consortia consisting of small producers or
organized primarily for the benefit of small
producers, and shall focus on areas including
safety and accident prevention, well control
and systems integrity, complex geology
involving rapid changes in the type and quality
of the oil and gas reservoirs across the
reservoir; low reservoir pressure;
unconventional natural gas reservoirs in
coalbeds, deep reservoirs, tight sands, or
shales; and unconventional oil reservoirs in
tar sands and oil shales.
(D) Safety and accident prevention technology
research and development.--Awards from
allocations under section 999H(d)(4) shall be
expended on areas including--
(i) development of improved cementing
and casing technologies;
(ii) best management practices for
cementing, casing, and other well
control activities and technologies;
(iii) development of integrity and
stewardship guidelines for--
(I) well-plugging and
abandonment;
(II) development of wellbore
sealant technologies; and
(III) improvement and
standardization of blowout
prevention devices.
(8) Study; report.--
(A) Study.--As soon as practicable after the
date of enactment of this paragraph, the
Secretary shall enter into an arrangement with
the National Academy of Sciences under which
the Academy shall conduct a study to
determine--
(i) whether the benefits provided
through each award under this
subsection during calendar year 2011
have been maximized; and
(ii) the new areas of research that
could be carried out to meet the
overall objectives of the program.
(B) Report.--Not later than January 1, 2012,
the Secretary shall submit to the appropriate
committees of Congress a report that contains a
description of the results of the study
conducted under subparagraph (A).
(C) Optional updates.--The Secretary may
update the report described in subparagraph (B)
for the 5-year period beginning on the date
described in that subparagraph and each 5-year
period thereafter.
(e) Annual Plan.--
(1) In general.--The program under this section shall
be carried out pursuant to an annual plan prepared by
the Secretary in accordance with paragraph (2).
(2) Development.--
(A) Solicitation of recommendations.--Before
drafting an annual plan under this subsection,
the Secretary shall solicit specific written
recommendations from the program consortium for
each element to be addressed in the plan,
including those described in paragraph (4). The
program consortium shall submit to the
Secretary for review its recommendations in the
form of a draft annual plan.
(B) Submission of recommendations; other
comment.--The Secretary shall submit the
recommendations of the program consortium under
subparagraph (A) to the [Ultra-Deepwater
Advisory Committee established under section
999D(a) and to the Unconventional Resources
Technology Advisory Committee established under
section 999D(b), and such Advisory Committees]
Program Advisory Committee established under
section 999D(a), and the Advisory Committee
shall provide to the Secretary written comments
by a date determined by the Secretary. The
Secretary may also solicit comments from any
other experts.
(C) Consultation.--The Secretary shall
consult regularly with the program consortium
throughout the preparation of the annual plan.
(3) Publication.--The Secretary shall transmit to
Congress and publish in the Federal Register the annual
plan, along with any written comments received under
paragraph (2)(A) and (B).
(4) Contents.--The annual plan shall describe the
ongoing and prospective activities of the program under
this section and shall include--
(A) a list of any solicitations for awards to
carry out research, development, demonstration,
or commercial application activities, including
the topics for such work, who would be eligible
to apply, selection criteria, and the duration
of awards; and
(B) a description of the activities expected
of the program consortium to carry out
subsection (f)(3).
(5) Estimates of increased royalty receipts.--The
Secretary, in consultation with the Secretary of the
Interior, shall provide an annual report to Congress
with the President's budget on the estimated cumulative
increase in Federal royalty receipts (if any) resulting
from the implementation of this subtitle. The initial
report under this paragraph shall be submitted in the
first President's budget following the completion of
the first annual plan required under this subsection.
(6) Research findings and recommendations for
implementation.--The Secretary, in consultation with
the Secretary of the Interior and the Administrator of
the Environmental Protection Agency, shall publish in
the Federal Register an annual report on the research
findings of the program carried out under this section
and any recommendations for implementation that the
Secretary, in consultation with the Secretary of the
Interior and the Administrator of the Environmental
Protection Agency, determines to be necessary.
* * * * * * *
(i) Activities by the [United States Geological Survey]
Department of the Interior.--The Secretary of the Interior[,
through the United States Geological Survey,] shall, where
appropriate, carry out programs of long-term research to
complement the programs under this section.
(j) Program Review and Oversight.--The [National Energy
Technology Laboratory] Office of Fossil Energy of the
Department, on behalf of the Secretary, shall (1) issue a
competitive solicitation for the program consortium, (2)
evaluate, select, and award a contract or other agreement to a
qualified program consortium, and (3) have primary review and
oversight responsibility for the program consortium, including
review and approval of research awards proposed to be made by
the program consortium, to ensure that its activities are
consistent with the purposes and requirements described in this
subtitle. Up to 5 percent of program funds allocated under
paragraphs (1) through (3) of section 999H(d) may be used for
this purpose, including program direction and the establishment
of a site office if determined to be necessary to carry out the
purposes of this subsection.
SEC. 999C. ADDITIONAL REQUIREMENTS FOR AWARDS.
(a) Demonstration Projects.--An application for an award
under this subtitle for a demonstration project shall describe
with specificity the intended commercial use of the technology
to be demonstrated.
(b) Flexibility in Locating Demonstration Projects.--
Subject to the limitation in section 999A(c), a demonstration
project under this subtitle relating to [an ultra-deepwater
technology or an ultra-deepwater architecture] a deepwater
technology may be conducted in deepwater depths.
* * * * * * *
[SEC. 999D. ADVISORY COMMITTEES.
[(a) Ultra-Deepwater Advisory Committee.--
[(1) Establishment.--Not later than 270 days after
the date of enactment of this Act, the Secretary shall
establish an advisory committee to be known as the
Ultra-Deepwater Advisory Committee.
[(2) Membership.--The Advisory Committee under this
subsection shall be composed of members appointed by
the Secretary, including--
[(A) individuals with extensive research
experience or operational knowledge of offshore
natural gas and other petroleum exploration and
production;
[(B) individuals broadly representative of
the affected interests in ultra-deepwater
natural gas and other petroleum production,
including interests in environmental protection
and safe operations;
[(C) no individuals who are Federal
employees; and
[(D) no individuals who are board members,
officers, or employees of the program
consortium.
[(3) Duties.--The Advisory Committee under this
subsection shall--
[(A) advise the Secretary on the development
and implementation of programs under this
subtitle related to ultra-deepwater natural gas
and other petroleum resources; and
[(B) carry out section 999B(e)(2)(B).
[(4) Compenstation.--A member of the Advisory
Committee under this subsection shall serve without
compensation but shall receive travel expenses in
accordance with applicable provisions under subchapter
I of chapter 57 of title 5, United States Code.
[(b) Unconventional Resources Technology Advisory
Committee.--
[(1) Establishment.--Not later than 270 days after
the date of enactment of this Act, the Secretary shall
establish an advisory committee to be known as the
Unconventional Resources Technology Advisory Committee.
[(2) Membership.--The Secretary shall endeavor to
have a balanced representation of members on the
Advisory Committee to reflect the breadth of geographic
areas of potential gas supply. The Advisory Committee
under this subsection shall be composed of members
appointed by the Secretary, including--
[(A) a majority of members who are employees
or representatives of independent producers of
natural gas and other petroleum, including
small producers;
[(B) individuals with extensive research
experience or operational knowledge of
unconventional natural gas and other petroleum
resource exploration and production;
[(C) individuals broadly representative of
the affected interests in unconventional
natural gas and other petroleum resource
exploration and production, including interests
in environmental protection and safe
operations;
[(D) individuals with expertise in the
various geographic areas of potential supply of
unconventional onshore natural gas and other
petroleum in the United States;
[(E) no individuals who are Federal
employees; and
[(F) no individuals who are board members,
officers, or employees of the program
consortium.
[(3) Duties.--The Advisory Committee under this
subsection shall--
[(A) advise the Secretary on the development
and implementation of activities under this
subtitle related to unconventional natural gas
and other petroleum resources; and
[(B) carry out section 999B(e)(2)(B).
[(4) Compenstation.--A member of the Advisory
Committee under this subsection shall serve without
compensation but shall receive travel expenses in
accordance with applicable provisions under subchapter
I of chapter 57 of title 5, United States Code.
[(c) Prohibition.--No advisory committee established under
this section shall make recommendations on funding awards to
particular consortia or other entities, or for specific
projects.]
SEC. 999D. PROGRAM ADVISORY COMMITTEE.
(a) Establishment.--Not later than 270 days after the date
of enactment of the Safe and Responsible Energy Production
Improvement Act of 2010, the Secretary shall establish an
advisory committee to be known as the Program Advisory
Committee' (referred to in this section as the Advisory
Committee').
(b) Membership.--
(1) In general.--The Advisory Committee shall be
composed of members appointed by the Secretary,
including--
(A) individuals with extensive research
experience or operational knowledge of
hydrocarbon exploration and production;
(B) individuals broadly representative of the
affected interests in hydrocarbon production,
including interests in environmental protection
and safety operations;
(C) representatives of Federal agencies,
including the Environmental Protection Agency
and the Department of the Interior;
(D) State regulatory agency representatives;
and
(E) other individuals, as determined by the
Secretary.
(2) Limitations.--
(A) In general.--The Advisory Committee shall
not include individuals who are board members,
officers, or employees of the program
consortium.
(B) Categorical representation.--In
appointing members of the Advisory Committee,
the Secretary shall ensure that no class of
individuals described in any of subparagraphs
(A), (B), (D), or (E) of paragraph (1)
comprises more than 13 of the membership of the
Advisory Committee.
(c) Subcommittees.--The Advisory Committee may establish
subcommittees for separate research programs carried out under
this subtitle.
(d) Duties.--The Advisory Committee shall--
(1) advise the Secretary on the development and
implementation of programs under this subtitle; and
(2) carry out section 999B(e)(2)(B).
(e) Compensation.--A member of the Advisory Committee shall
serve without compensation but shall be entitled to receive
travel expenses in accordance with subchapter I of chapter 57
of title 5, United States Code.
(f) Prohibition.--The Advisory Committee shall not make
recommendations on funding awards to particular consortia or
other entities, or for specific projects.
* * * * * * *
SEC. 999G. DEFINITIONS.
In this subtitle:
(1) Deepwater.--The term ``deepwater'' means a water
depth that is greater than [200 but less than 1,500
meters] 500 feet.
(2) Deepwater architecture._The term ``deepwater
architecture'' means the integration of technologies
for the exploration for, or production of, natural gas
or other petroleum resources located at deepwater
depths.
(3) Deepwater technology.--The term ``deepwater
technology'' means a discrete technology that is
specially suited to address 1 or more challenges
associated with the exploration for, or production of,
natural gas or other petroleum resources located at
deepwater depths.
[(2)] (4) Independent producer of oil or gas.--
(A) In general.--The term ``independent
producer of oil or gas'' means any person that
produces oil or gas other than a person to whom
subsection (c) of section 613A of the Internal
Revenue Code of 1986 does not apply by reason
of paragraph (2) (relating to certain
retailers) or paragraph (4) (relating to
certain refiners) of section 613A(d) of such
Code.
(B) Rules for applying paragraphs (2) and (4)
of section 613a(d).--For purposes of
subparagraph (A), paragraphs (2) and (4) of
section 613A(d) of the Internal Revenue Code of
1986 shall be applied by substituting
``calendar year'' for ``taxable year'' each
place it appears in such paragraphs.
[(3)] (5) Program administration funds.--The term
``program administration funds'' means funds used by
the program consortium to administer the program under
this subtitle, but not to exceed 10 percent of the
total funds allocated under paragraphs (1) through (3)
of section 999H(d).
[(4)] (6) Program consortium.--The term ``program
consortium'' means the consortium selected under
section 999B(d).
[(5)] (7) Program research funds.--The term ``program
research funds'' means funds awarded to research
performers by the program consortium consistent with
the annual plan.
[(6)] (8) Remote or inconsequential.--The term
``remote or inconsequential'' has the meaning given
that term in regulations issued by the Office of
Government Ethics under section 208(b)(2) of title 18,
United States Code.
[(7)] (9) Small producer.--The term ``small
producer'' means an entity organized under the laws of
the United States with production levels of less than
1,000 barrels per day of oil equivalent.
[(8) Ultra-deepwater.--The term ``ultra-deepwater''
means a water depth that is equal to or greater than
1,500 meters.
[(9) Ultra-deepwater architecture.--The term
``ultradeepwater architecture'' means the integration
of technologies for the exploration for, or production
of, natural gas or other petroleum resources located at
ultra-deepwater depths.
[(10) Ultra-deepwater technology.--The term
``ultradeepwater technology'' means a discrete
technology that is specially suited to address one or
more challenges associated with the exploration for, or
production of, natural gas or other petroleum resources
located at ultra-deepwater depths.]
[(11)] (10) Unconventional natural gas and other
petroleum resource.--The term ``unconventional natural
gas and other petroleum resource'' means natural gas
and other petroleum resource located onshore [in an
economically inaccessible geological formation,
including resources of small producers].
SEC. 999H. [42 U.S.C. 16378] FUNDING.
(a) Oil and Gas Lease Income.--For each of fiscal years
2007 through 2017, from any Federal royalties, rents, and
bonuses derived from Federal onshore and offshore oil and gas
leases issued under the Outer Continental Shelf Lands Act (43
U.S.C. 1331 et seq.) and the Mineral Leasing Act (30 U.S.C. 181
et seq.) which are deposited in the Treasury, and after
distribution of any such funds as described in subsection (c),
$50,000,000 shall be deposited into the [Ultra-Deepwater and
Unconventional Natural Gas and Other Petroleum Research Fund]
Safe and Responsible Energy Production Research Fund (in this
section referred to as the ``Fund''). For purposes of this
section, the term ``royalties'' excludes proceeds from the sale
of royalty production taken in kind and royalty production that
is transferred under section 27(a)(3) of the Outer Continental
Shelf Lands Act (43 U.S.C. 1353(a)(3)).
* * * * * * *
(d) Allocation.--Amounts obligated from the Fund under
subsection (a)(1) in each fiscal year shall be allocated as
follows:
(1) [35 percent] 21.5 percent shall be for activities
under section 999A(b)(1).
(2) [32.5 percent] 21 percent shall be for activities
under section 999A(b)(2).
(3) 7.5 percent shall be for activities under section
999A(b)(3).
(4) [25 percent] 30 percent shall be for
[complementary research] safety technology research and
development under section 999A(b)(4) and other
activities under section 999A(b) to include program
direction funds, overall program oversight, [contract
management, and the establishment and operation of a
technical committee to ensure that in-house research
activities funded under section 999A(b)(4) are
technically complementary to, and not duplicative of,
research conducted under paragraphs (1), (2), and (3)
of section 999A(b).] and contract management.
(5) 20 percent shall be used for research activities
required under sections 20 and 21 of the Outer
Continental Shelf Lands Act (43 U.S.C. 1346, 1347).
(e) Authorization of Appropriations.--In addition to other
amounts that are made available to carry out this section,
there is authorized to be appropriated to carry out this
section $100,000,000 for each of fiscal years 2007 through
2016.
(f) Fund.--There is hereby established in the Treasury of
the United States a separate fund to be known as the [``Ultra-
Deepwater and Unconventional Natural Gas and Other Petroleum
Research Fund''] ``Safer Oil and Gas Production and Accident
Prevention Research Fund''.