[House Report 112-531]
[From the U.S. Government Publishing Office]


112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     112-531

======================================================================



 
      PROVIDING LEASING CERTAINTY FOR AMERICAN ENERGY ACT OF 2012

                                _______
                                

 June 15, 2012.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Hastings of Washington, from the Committee on Natural Resources, 
                        submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 4382]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 4382) to ensure Federal oil and natural gas 
lease sales occur, eliminate redundant leasing bureaucracy, and 
provide leasing certainty, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Providing Leasing Certainty for 
American Energy Act of 2012''.

SEC. 2. MINIMUM ACREAGE REQUIREMENT FOR ONSHORE LEASE SALES.

  In conducting lease sales as required by section 17(a) of the Mineral 
Leasing Act (30 U.S.C. 226(a)), each year the Secretary of the Interior 
shall perform the following:
          (1) The Secretary shall offer for sale no less than 25 
        percent of the annual nominated acreage not previously made 
        available for lease. Acreage offered for lease pursuant to this 
        paragraph shall not be subject to protest and shall be eligible 
        for categorical exclusions under section 390 of the Energy 
        Policy Act of 2005 (42 U.S.C. 15492), except that it shall not 
        be subject to the test of extraordinary circumstances.
          (2) In administering this section, the Secretary shall only 
        consider leasing of Federal lands that are available for 
        leasing at the time the lease sale occurs.

SEC. 3. LEASING CERTAINTY.

  Section 17(a) of the Mineral Leasing Act (30 U.S.C. 226(a)) is 
amended by inserting ``(1)'' before ``All lands'', and by adding at the 
end the following:
  ``(2)(A) The Secretary shall not withdraw any covered energy project 
issued under this Act without finding a violation of the terms of the 
lease by the lessee.
  ``(B) The Secretary shall not infringe upon lease rights under leases 
issued under this Act by indefinitely delaying issuance of project 
approvals, drilling and seismic permits, and rights of way for 
activities under such a lease.
  ``(C) No later than 18 months after an area is designated as open 
under the current land use plan the Secretary shall make available 
nominated areas for lease under the criteria in section 2.
  ``(D) Notwithstanding any other law, the Secretary shall issue all 
leases sold no later than 60 days after the last payment is made.
  ``(E) The Secretary shall not cancel or withdraw any lease parcel 
after a competitive lease sale has occurred and a winning bidder has 
submitted the last payment for the parcel.
  ``(F) Not later than 60 days after a lease sale held under this Act, 
the Secretary shall adjudicate any lease protests filed following a 
lease sale. If after 60 days any protest is left unsettled, said 
protest is automatically denied and appeal rights of the protestor 
begin.
  ``(G) No additional lease stipulations may be added after the parcel 
is sold without consultation and agreement of the lessee, unless the 
Secretary deems such stipulations as emergency actions to conserve the 
resources of the United States.''.

SEC. 4. LEASING CONSISTENCY.

  Federal land managers must follow existing resource management plans 
and continue to actively lease in areas designated as open when 
resource management plans are being amended or revised, until such time 
as a new record of decision is signed.

SEC. 5. REDUCE REDUNDANT POLICIES.

  Bureau of Land Management Instruction Memorandum 2010-117 shall have 
no force or effect.

                          Purpose of the Bill

    The purpose of H.R. 4382, as ordered reported, is to ensure 
Federal oil and natural gas lease sales occur, eliminate 
redundant leasing bureaucracy, and provide leasing certainty.

                  Background and Need for Legislation

    The Department of the Interior is required by law under the 
Mineral Leasing Act to hold competitive auctions to allow oil 
and natural gas developers the opportunity to acquire federal 
land for energy development. Each year, millions of acres 
throughout the nation are nominated as areas where there is 
interest in oil and natural gas development to give the Bureau 
of Land Management (BLM) a general idea of where to hold lease 
sales. While many states depend on the energy industry as a 
chief driver of their economies, statistics show the percentage 
of land leased by BLM versus the number of acres nominated have 
drastically decreased over the course of the Obama 
Administration. In fact, in some states BLM has not leased a 
single acre for energy development, despite abundant interest 
from industry.
    For example, in 2011 in Colorado, interest was expressed in 
219,651 acres for development. However, BLM chose to only lease 
5,527 acres--equating to 3 percent. In California, BLM only 
leased 8 percent of the nominated acreage (10,299 of 128,140 
acres). Furthermore, in Arizona the Obama Administration has 
not held single lease sale since coming into office, despite 
interest in nearly 50,000 acres for development.
    H.R. 4382 would ensure that a minimum number of acres are 
leased to guarantee that onshore leasing continues to move 
forward in the United States.
    The Department of the Interior is to promote a ``multiple 
use policy'' for federal lands. This policy allows federal 
lands to be enjoyed by all citizens and used for a variety of 
purposes--recreation, hunting, ranching, grazing, and energy 
development. These land uses have historically been compatible 
on public lands and this legislation does not impact the 
multiple land use policy under the Federal Land Management and 
Policy Act (FLPMA). It gives the Secretary of the Interior the 
flexibility under FLPMA to continue to manage federal lands in 
a way that accommodates all activities Americans have come to 
enjoy on these lands.
    A variety of other bureaucratic actions have delayed energy 
development and made leasing uncertain for developers who no 
longer have assurance that they will actually be able to move 
forward with development on the land they lease. Since coming 
into office, the Obama Administration has withdrawn leases 
after selling them at public auction despite having received 
full payment for these leases, deferred lease nominations 
indefinitely, added unexpected and additional lease terms and 
stipulations following lease sales, and taken years to issue 
leases despite language in the Mineral Leasing Act that 
specifies that the federal government shall issue leases sixty 
days after accepting payment. In 2009, the Department of the 
Interior went so far as to completely withdraw 77 oil and gas 
leases in Utah after the lease parcels had been sold and final 
payment received. In September 2010, a U.S. District Court 
judge ruled that Interior Secretary Salazar had exceeded his 
authority by withdrawing these leases.
    In 2012, Secretary Salazar issued BLM Instruction 
Memorandum 2010-117. This Master Leasing Plan (MLP) policy 
required a new layer of environmental analysis for certain 
federal land areas, even though the new analysis is redundant 
with analysis already required in the Resource Management Plans 
(RMP) for these lands. The intent of the MLPs was to re-do RMPs 
completed since 2005 by requiring RMP amendments. These 
amendments routinely take several years to complete. The MLP 
seems intended to simply identify new restrictions on lands 
available for oil and natural gas development beyond those 
identified in the previously existing analysis.
    The ``Providing Leasing Certainty for American Energy Act 
of 2012'' would encourage companies to seek out federal land 
for production by creating certainty that they would receive 
their leases in a timely fashion, lease terms would not be 
changed after the lease has been issued, and leases could not 
be withdrawn after they have been paid for.
    While the Obama Administration has recently attempted to 
take credit for our nation's increase production in oil and 
gas, the reality is that production on federal lands has, in 
fact, decreased under the Administration--while production on 
state and private lands has increased significantly, North 
Dakota being a prime example. According to a study recently 
released by the American Petroleum Institute, ``at no time in 
the last 25 years has the number of new onshore federal oil and 
gas leases been lower than the number of new leases issued in 
2009 and 2011,'' with new leases numbering 44 percent less in 
2009 and 2010 when compared to 2007 and 2008.
    The policies of this Administration have made it more 
difficult, time consuming and expensive to bring a lease 
through to production--and in some cases have even cast doubt 
on whether the lease, once paid for, will even be able to be 
developed. This legislation seeks to provide certainty and 
efficiency to the BLM leasing process which has fallen into 
disrepair under the current Administration. By doing so, the 
bill can foster increased energy development on federal lands.
    Because there are no guidelines to ensure regular leasing 
occurs, the number of acres leased has been extremely sporadic 
through the years and has varied greatly as Administrations 
have changed. This gives industry little certainty that new 
areas will regularly be leased and new development can occur. 
Currently, the federal government leases less than 3 percent of 
the federal offshore areas and less than 6 percent of the 
federal onshore areas for oil and gas production. Furthermore, 
the Obama Administration has issued fewer new federal leases 
than any administration in nearly thirty years.

                            Committee Action

    H.R. 4382 was introduced on April 18, 2012, by Congressman 
Mike Coffman (R-CO). The bill was referred to the Committee on 
Natural Resources, and within the Committee to the Subcommittee 
on Energy and Mineral Resources. On April 26, 2012, the 
Subcommittee held a hearing on the bill. On May 16, 2012, the 
Full Natural Resources Committee met to consider the bill. The 
Subcommittee on Energy and Mineral Resources was discharged by 
unanimous consent. Congressman Coffman offered amendment 
designated #1 to the bill; the amendment was adopted by voice 
vote. Congressman Rush Holt (D-NJ) offered amendment designated 
.007 to the bill; the amendment was not adopted by a bipartisan 
roll call vote of 14 to 25, as follows:


    Congressman Ben Lujan (D-NM) offered amendment designated 
.004 to the bill; the amendment was not adopted by a roll call 
vote of 18 to 22, as follows:


    Congressman Paul Tonko (D-NY) offered amendment designated 
.003 to the bill; the amendment was not adopted by a bipartisan 
roll call vote of 15 to 25, as follows:


    Congressman Ed Markey (D-MA) offered amendment designated 
.002 to the bill; the amendment was not adopted by a roll call 
vote of 16 to 25, as follows:


    Congressman Ed Markey (D-MA) offered amendment designated 
.005 to the bill; the amendment was not adopted by a bipartisan 
roll call vote of 14 to 27, as follows:


    The bill, as amended, was then adopted and ordered 
favorably reported to the House of Representatives by a 
bipartisan roll call vote of 24 to 17, as follows:


                      Section-by-Section Analysis


Section 1. Short title

    The title of the bill is the ``Providing Leasing Certainty 
for American Energy Act of 2012.''

Section 2. Minimum acreage requirement for onshore lease sales

    Section 2 requires the Secretary of the Interior to 
annually lease at least 25% of nominated acreage not previously 
made available for lease.

Section 3. Leasing certainty

    This section prohibits the Secretary from withdrawing lease 
parcels after they have been leased or adding additional lease 
stipulations after the lease sale. It also sets timelines for 
the adjudication of lease protests and requires the Secretary 
to issue leases in a timely fashion.

Section 4. Leasing consistency

    Section 4 requires land managers to continue leasing in 
open areas when they are amending current resource management 
plans.

Section 5. Reduce redundant policies

    This section overturns the Bureau of Land Management's 
Instruction Memorandum 2010-117 (Master Leasing Plans).

            Committee Oversight Findings and Recommendations

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

                    Compliance With House Rule XIII

    1. Cost of Legislation. Clause 3(d)(1) of rule XIII of the 
Rules of the House of Representatives requires an estimate and 
a comparison by the Committee of the costs which would be 
incurred in carrying out this bill. However, clause 3(d)(2)(B) 
of that rule provides that this requirement does not apply when 
the Committee has included in its report a timely submitted 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974. Under clause 3(c)(3) of rule 
XIII of the Rules of the House of Representatives and section 
403 of the Congressional Budget Act of 1974, the Committee has 
received the following cost estimate for this bill from the 
Director of the Congressional Budget Office:

H.R. 4382--Providing Leasing Certainty for American Energy Act of 2012

    CBO estimates that enacting H.R. 4382 would increase 
offsetting receipts from bonus bids by $2 million over the 
2013-2022 period; therefore, pay-as-you-go procedures apply. We 
estimate that implementing the bill would not affect 
discretionary spending. Enacting H.R. 4382 would not affect 
revenues.
    H.R. 4382 would require the Secretary of the Interior to 
offer for sale at least 25 percent of onshore federal lands 
nominated by firms for oil and gas leasing. Based on 
information provided by the Bureau of Land Management (BLM) 
about the amount of nominated lands leased, CBO estimates that 
implementing that provision would not affect the federal budget 
because, under current law, the agency already offers for sale 
more than 25 percent of the acreage nominated. The bill also 
would prevent the Secretary from taking certain actions that 
would delay or cancel leases, lease sales, or project 
approvals. CBO estimates that this provision also would not 
affect the federal budget because, under current law, the 
Secretary rarely takes such actions and the budgetary effects 
of those actions are typically small.
    H.R. 4382 would prohibit the Secretary from deferring lease 
sales in areas where BLM is revising existing land use plans. 
Because leasing is deferred for up to five years in areas 
undergoing land use planning, CBO expects that certain areas 
would be leased sooner under H.R. 4382 than under current law. 
Based on information provided by BLM, CBO expects that leasing 
activities are deferred on about 150,000 new acres per year. 
Based on information about the amount of acres leased annually 
relative to the amount of acres available for lease, CBO 
estimates that accelerating leasing of those lands would 
increase offsetting receipts from bonus bids by $2 million over 
the 2013-2022 period.
    H.R. 4382 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Jeff LaFave. The 
estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.
    2. Section 308(a) of Congressional Budget Act. As required 
by clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives and section 308(a) of the Congressional Budget 
Act of 1974, this bill does not contain any new budget 
authority, spending authority, credit authority, or an increase 
or decrease in revenues or tax expenditures. CBO estimates that 
enacting H.R. 4382 would increase offsetting receipts from 
bonus bids by $2 million over the 2013-2022 period; therefore, 
pay-as-you-go procedures apply. CBO estimates that implementing 
the bill would not affect discretionary spending.
    3. General Performance Goals and Objectives. As required by 
clause 3(c)(4) of rule XIII, the general performance goal or 
objective of this bill, as ordered reported, is to ensure 
Federal oil and natural gas lease sales occur, eliminate 
redundant leasing bureaucracy, and provide leasing certainty.

                           Earmark Statement

    This bill does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined 
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of 
the House of Representatives.

                    Compliance With Public Law 104-4

    This bill contains no unfunded mandates.

                Preemption of State, Local or Tribal Law

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

         Changes in Existing Law Made by the Bill, as Reported

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

                          MINERAL LEASING ACT




           *       *       *       *       *       *       *
  Sec. 17. (a)(1) All lands subject to disposition under this 
Act which are known or believed to contain oil or gas deposits 
may be leased by the Secretary.
  (2)(A) The Secretary shall not withdraw any covered energy 
project issued under this Act without finding a violation of 
the terms of the lease by the lessee.
  (B) The Secretary shall not infringe upon lease rights under 
leases issued under this Act by indefinitely delaying issuance 
of project approvals, drilling and seismic permits, and rights 
of way for activities under such a lease.
  (C) No later than 18 months after an area is designated as 
open under the current land use plan the Secretary shall make 
available nominated areas for lease under the criteria in 
section 2.
  (D) Notwithstanding any other law, the Secretary shall issue 
all leases sold no later than 60 days after the last payment is 
made.
  (E) The Secretary shall not cancel or withdraw any lease 
parcel after a competitive lease sale has occurred and a 
winning bidder has submitted the last payment for the parcel.
  (F) Not later than 60 days after a lease sale held under this 
Act, the Secretary shall adjudicate any lease protests filed 
following a lease sale. If after 60 days any protest is left 
unsettled, said protest is automatically denied and appeal 
rights of the protestor begin.
  (G) No additional lease stipulations may be added after the 
parcel is sold without consultation and agreement of the 
lessee, unless the Secretary deems such stipulations as 
emergency actions to conserve the resources of the United 
States.

           *       *       *       *       *       *       *


                            DISSENTING VIEWS

    We oppose H.R. 4382 because it would set an arbitrary 
requirement that the Department of the Interior offer oil 
companies at least 25 percent of whatever onshore areas 
industry nominates every year, regardless of whether or not 
drilling in these areas would be appropriate. Under this 
legislation, the Interior Department could no longer lease in 
areas nominated by the industry that have the greatest resource 
potential and where drilling makes the most sense. Under H.R. 
4382, there is no limit to the acreage that can be nominated by 
the oil industry. This legislation would therefore threaten 
other important uses of our public lands such as hunting, 
fishing, livestock grazing and recreational shooting by 
requiring leasing in areas that may threaten these important 
values.
    This arbitrary requirement that a certain percentage of 
acres be offered for lease also completely disregards the fact 
that industry already has 25 million acres of public land under 
lease onshore on which it is not producing. As we have seen, 
handcuffing the Department by requiring that we give away more 
public land to the oil industry in no way guarantees that the 
industry will actually begin producing on those leases.
    This misguided legislation would also invalidate the BLM's 
new leasing reforms, which are designed to increase certainty 
for the oil and gas industry and reduce the number of lease 
areas that are protested. Under the BLM's leasing reforms, the 
number of protested parcels has already dropped by 8 percent. 
Yet, this bill would throw out those reforms and instead create 
a process with less public involvement and less certainty for 
industry.
    H.R. 4382 would also require the BLM to continue ``actively 
leasing'' in areas where land use plans are being updated or 
revised to protect wildlife or other resource values, deal with 
a growing population, or incorporate a new recreational 
activity. Land-use planning is a proactive tool to ensure that 
we protect various land uses under the Federal Lands Policy and 
Management Act of 1976 (FLPMA). According to the Interior 
Department ``continuing to lease in some open areas in which 
recreational or ecological values are at risk could prevent the 
BLM from protecting important resource values. It could be 
counterproductive to efforts to develop energy resources on 
Federal lands if the result is greater near-term resource 
damage that, in turn, would necessitate more onerous 
restrictions on future energy development activities.'' Rather 
than allowing for smart planning ahead of time that includes 
greater public participation, this legislation would reduce 
public participation and certainty for the oil industry in the 
leasing process.
    The Majority rejected an amendment from Representative 
Lujan (D-NM) that would have allowed the Secretary to offer 
less than 25 percent of the areas nominated by the oil and gas 
industry if it was necessary to protect hunting, fishing, 
grazing or recreational shooting. The Majority also rejected an 
amendment from Representative Tonko (D-NY) that would have 
required oil companies seeking new leases under this bill to 
disclose all political contributions over the previous five 
years, in the wake of the Citizens United Supreme Court 
decision. These oil and gas resources on public lands belong to 
the American people and they have a right to know how companies 
benefiting from accessing those resources are influencing 
elections. The Majority voted down an amendment from Ranking 
Member Markey (D-MA) that would have made drilling safer by 
increasing the fines that can be assessed for oil companies who 
violate regulations for things such as drilling without a 
blowout preventer; fines which were set 30 years ago and which 
the Department cannot raise through administrative action. The 
Majority also rejected an amendment from Ranking Member Markey 
to ensure that all the oil and natural gas produced from the 
leases issued under this bill could not be exported. Finally, 
the Majority rebuffed an amendment from Energy and Mineral 
Resources Subcommittee Ranking Member Holt (D-NJ) that would 
have sought to end the royalty free drilling in the Gulf that 
is projected to cost American taxpayers nearly $10 billion over 
the next decade.
    We shouldn't be seeking to shut the public out of the 
management of our public lands as this bill would do. There is 
also no reason to threaten hunting, fishing and the other uses 
of our public lands when oil companies already have 25 million 
acres of public lands onshore under lease on which they are not 
producing.

                                   Edward J. Markey.
                                   Rush D. Holt.
                                   Paul Tonko.
                                   Grace F. Napolitano.
                                   Madeleine Z. Bordallo.
                                   Raul M. Grijalva.
                                   Ben Ray Lujan.

                                  
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