[Senate Report 112-64]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 144
112th Congress                                                   Report
                                 SENATE
 1st Session                                                     112-64

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



 
                      OIL AND GAS FACILITATION ACT

                                _______
                                

  August 30 (legislative day, August 2), 2011.--Ordered to be printed

   Filed under authority of the order of the Senate of August 2, 2011

                                _______
                                

   Mr. Bingaman, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 916]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 916) to facilitate appropriate oil and 
gas development on Federal land and waters, to limit the 
dependence of the United States on foreign sources of oil and 
gas, and for other purposes, having considered the same, 
reports favorably thereon with amendments and recommends that 
the bill, as amended, do pass.
    The amendments are as follows:
    1. Beginning on page 11, strike line 15 and all that 
follows through page 13, line 12, and insert the following:

SEC. 301. EXEMPTION OF TRANS-ALASKA OIL PIPELINE SYSTEM FROM CERTAIN 
                    REQUIREMENTS.

    2. On page 15, strike lines 3 and 4 and insert the 
following:

SEC. 302. PERMITS FOR NATURAL GAS PIPELINE IN DENALI NATIONAL PARK AND 
                    PRESERVE.

  3. At the end of the bill, add the following:

SEC. 304. ENERGY INFORMATION ADMINISTRATION REPORTING ON IRANIAN 
                    IMPORTS OF REFINED PETROLEUM PRODUCTS.

  (a) In General.--The Administrator of the Energy Information 
Administration shall submit to Congress a report, which shall 
be updated periodically, that, to the maximum extent 
practicable, describes--
          (1) the annual volume of refined petroleum products 
        imported to and exported from Iran;
          (2) the identity and national origin of persons 
        selling and transporting refined petroleum products to 
        Iran;
          (3) the sources of financing for imports to Iran of 
        refined petroleum products; and
          (4) the involvement of foreign persons in efforts to 
        assist Iran in--
                  (A) importing advanced technology to upgrade 
                existing Iranian refineries;
                  (B) converting existing chemical plants to 
                petroleum refineries; or
                  (C) constructing new refineries.
  (b) Applicability.--The reporting requirements under 
subsection (a) shall remain in effect until the date on which 
the President determines that all economic sanctions imposed by 
the United States with respect to Iran have been lifted.

                                Purpose

    The purpose of S. 916 is to facilitate appropriate oil and 
gas development on Federal land and waters and to limit the 
dependence of the United States on foreign sources of oil and 
gas.

                      Summary of Major Provisions


Facilitation of Permit Processing

    Sections 101 and 202 facilitate the efficient processing of 
authorizations necessary for oil and gas development, 
inspection, and enforcement on Federal land, and for oil and 
gas leasing and permitting on the Outer Continental Shelf (OCS) 
in the Alaska region. These sections create or authorize 
funding for interagency teams in key areas on and offshore so 
that review of requests for oil and gas development can proceed 
in a coordinated and timely manner.

Inventory of Outer Continental Shelf Resources

    Section 201 provides for a comprehensive inventory of oil 
and natural gas resources for the waters of the Outer 
Continental Shelf in the Atlantic Region, the Eastern Gulf of 
Mexico, and the Alaska Region. It prioritizes the Secretary's 
inventory activities so that areas not yet leased and that are 
estimated to have the greatest potential for energy development 
will be analyzed first. It also authorizes funding to carry out 
those activities.

Alaska Oil and Natural Gas Pipelines

    Sections 301 and 302 facilitate maintenance or construction 
of pipelines to transport oil or natural gas in Alaska. Section 
301 provides that the owners of the trans-Alaska pipeline 
system may carry out construction, maintenance, restoration, or 
rehabilitation activities on or for sections of the system 
considered to be a historic site. Section 302 authorizes the 
Secretary of the Interior to issue permits for a natural gas 
transmission line in non-wilderness areas within the boundary 
of Denali National Park near the road that runs through the 
Park.

                          Background and Need

    Domestic oil and gas production is an important component 
of our nation's energy policy and will remain so for decades to 
come even as the nation transitions to renewable and cleaner 
fuels. For this reason, it is important to take reasonable to 
steps to facilitate appropriate development of oil and gas 
resources in the right places on our Federally owned lands and 
waters, while taking care to do so in a safe, sustainable way 
that protects our environment for future generations.
    While some of the policies related to these issues are 
controversial and difficult to resolve, S. 916 would advance 
less controversial, but important steps. The bill is intended 
to take reasonable steps to improve the process and to 
understand the resources available to us.
    Many of the provisions of this bill are drawn from S. 1462, 
reported on a bipartisan vote by the Energy and Natural 
Resources Committee in the last Congress but never considered 
by the full Senate. S. 916 would, among other things, take a 
number of useful steps to understand our offshore oil and gas 
resources, to coordinate the permitting processes for onshore 
and offshore oil and gas on Federal properties, and to 
facilitate the production of geothermal energy on public lands. 
These legislative actions are necessary and reasonable measures 
to encourage the right kind of domestic oil and gas production.

                          Legislative History

    Senator Bingaman introduced S. 916 on May 9, 2011. The 
Committee on Energy and Natural Resources held a hearing on S. 
916 on May 17, 2011 (S. Hrg. 112-51). At its business meeting 
on July 21, 2011, the Committee ordered S. 916 to be favorably 
reported with amendments.
    During the 111th Congress, the Committee considered 
legislation containing similar provisions, as part of S. 1462, 
sponsored by Senator Bingaman. On June 17, 2010, the Committee 
ordered S. 1462, as amended, favorably reported as an original 
bill (S. Rpt. 111-48).

                        Committee Recommendation

    The Senate Committee on Energy and Natural Resources, in 
open business session on July 21, 2011, by voice vote of a 
quorum present, recommends that the Senate pass S. 916, if 
amended as described herein.

                          Committee Amendments

    During its consideration of S. 916, the Committee adopted 
three amendments. The first strikes section 301 of the bill, 
relating to the Alaska natural gas pipeline; the second is a 
conforming amendment to renumber a subsequent section; and the 
third, offered by Senator Cantwell, adds reporting requirements 
regarding the import and export of refined petroleum products 
to Iran and the upgrading and construction of petroleum 
refineries in Iran.

                      Section-by-Section Analysis

    Section 1 provides a short title and table of contents.
    Section 2 defines ``Secretary'' as the Secretary of the 
Interior.

                      TITLE I--OIL AND GAS LEASING

    Section 101 adds a new paragraph (4) to section 35(c) of 
the Mineral Leasing Act to extend the current oil and gas 
permit processing pilot offices by an additional five years by 
authorizing $20,000,000 for each of fiscal years 2016 through 
2020. The new paragraph (4) clarifies that funds may be used 
for the oil and gas inspection and enforcement program as well 
as for permit processing.
    Section 102 adds a new paragraph (4) to section 4(b) of the 
Geothermal Steam Act of 1970 to provide that a lease for the 
development of geothermal energy may be available on a 
noncompetitive basis to the holder of an oil and gas lease for 
lands subject to an approved permit to drill oil and gas where 
production is occurring under the existing federal oil and gas 
lease: (1) if the Secretary determines that geothermal energy 
will be produced from a well producing or capable of producing 
oil and gas and the public interest will be served thereby; and 
(2) in order to provide for the coproduction of geothermal 
energy with oil and gas.

                   TITLE II--OUTER CONTINENTAL SHELF

    Section 201 amends section 357 of the Energy Policy Act of 
2005 to require the Secretary of the Interior to conduct a 
comprehensive inventory of Outer Continental Shelf (OCS) oil 
and gas resources in the Atlantic Region, the Eastern Gulf of 
Mexico, and the Alaska Region. This effort is to include 
executing or otherwise facilitating seismic studies of 
resources, and using and preparing a summary of existing 
inventories and mapping of marine resources and any other 
available data regarding alternative energy potential, 
navigation uses, fisheries, aquaculture uses, recreational 
uses, habitat, conservation and military uses, including data 
available from other Federal agencies. It also clarifies that 
2-D as well as 3-D seismic may be used.
    Subsection (a)(2) amends section 375(b) to require the 
Secretary to carry out the inventory in three phases, with 
priority given to all or part of the applicable planning areas 
of the OCS that are estimated to have the greatest energy 
potential, on a barrel-of-oil-equivalent basis, and are out of 
any area scheduled for leasing prior to 2011. It also adds a 
new subsection (c) to section 375. Paragraph (1) of the new 
subsection requires that not later than 90 days after the date 
of enactment the Secretary must submit to the relevant 
Committees in the House and Senate a plan for executing or 
otherwise facilitating the seismic studies, including an 
estimate of the costs by region and the environmental and 
permitting activities involved. Paragraphs (2) and (3) of 
subsection (c) require the Secretary to submit to Congress a 
report describing the results of the first phase of the 
inventory within 2 years of enactment, and to submit reports 
describing the results of the second and third phases within 
the next 2 and 4 years, respectively. Paragraph (4) requires 
the inventory to be made publicly available and updated at 
least every 5 years.
    Subsection (b) states that undertaking the inventory shall 
not be considered to require, authorize, or provide a basis or 
justification for delay of the issuance of any OCS leasing 
program or amended program or any lease sale.
    Subsection (c) states that nothing in the section or the 
amendment made by the section precludes the issuance by the 
Secretary of a permit to conduct geological or geophysical 
exploration of the OCS in accordance with applicable law or 
otherwise alters the requirements of applicable law with 
respect to any activities undertaken by the Secretary in 
connection with the inventory.
    Subsection (d) authorizes appropriations to carry out the 
section in the amounts of $100,000,000 for each of fiscal years 
2012 through 2017; and $50,000,000 for each of fiscal years 
2018 through 2022, to be available until expended.
    Section 202(a) requires the Secretary of the Interior to 
establish a regional joint OCS lease and permit processing 
office for the Alaska OCS region.
    Subsection (b)(1) requires the Secretary to enter into a 
memorandum of understanding (MOU) with the Secretary of 
Commerce, the Chief of Engineers, the Administrator of the 
Environmental Protection Agency, and other federal agencies 
that may have a role in permitting activities. Subsection 
(b)(2) requires the Secretary of the Interior to request that 
the Governor of Alaska sign the MOU.
    Subsection (c) requires that, not later than 30 days after 
the signing of the MOU, each federal agency is to assign, if 
appropriate, an employee to the coordination office to be 
responsible for all issues relating to the jurisdiction of the 
employee(s home office or agency and to participate as part of 
a team of personnel working on proposed oil and gas permitting.
    Subsection (d) allows the Secretary to transfer funds to 
the participating federal agencies and the State of Alaska for 
purposes of permit coordination and processing.
    Subsection (e) sets forth a savings provision.
    Subsection (f) authorizes appropriations of $2,000,000 per 
year for each of fiscal years 2012 through 2022 to carry out 
the section, to remain available until expended.
    Section 203(a) repeals sections 344 and 345 of the Energy 
Policy Act of 2005, requiring royalty relief for production 
from certain ultra deep gas wells and certain deep water oil 
and gas production in the Gulf of Mexico.
    Subsection (b) provides that the Secretary is not required 
to provide for royalty relief in the lease sale terms beginning 
with the first lease sale held on or after the date of 
enactment of this Act for which a final notice of sale has not 
been published.

                        TITLE III--MISCELLANEOUS

    Section 301 adds a new section 208 to the Trans-Alaska 
Pipeline Authorization Act to provide that no part of the 
trans-Alaska oil pipeline shall be considered to be a district, 
site, building, structure, or object for purposes of section 
106 of the National Historic Preservation Act (16 USC 470f), 
regardless of whether all or part of the pipeline system may be 
listed on, or eligible for, the National Register of Historic 
Places. The new section 208(b) authorizes the Secretary of the 
Interior to identify up to 3 sections of the pipeline that 
shall be considered historic sites. In doing so, the Secretary 
shall consider the views of the pipeline owners, the State 
Historic Preservation Officer, the Advisory Council on Historic 
Preservation and the Federal Coordinator for Alaska Natural Gas 
Transportation Projects. The new section 208(c) provides that 
the owners of the trans-Alaska oil pipeline system may carry 
out construction, maintenance, restoration, or rehabilitation 
activities on or for a section of the system considered to be a 
historic site pursuant to this section. The Committee 
previously approved section 301 as section 355 of S. 1462, the 
American Clean Energy Leadership Act of 2009, during the 111th 
Congress. It is intended to allow the removal of the Trans-
Alaska Oil Pipeline at the end of its useful life, 
notwithstanding the National Historic Preservation Act, and to 
make it possible to site a natural gas pipeline on existing the 
oil pipeline right-of-way.
    Section 302(a) defines terms used in the section.
    Subsection (b) authorizes the Secretary of the Interior to 
issue rights-of-way permits for a high-pressure natural gas 
transmission pipeline in non-wilderness areas within the 
boundary of Denali National Park within, along, or near the 
approximately 7-mile segment of the George Parks Highway that 
runs through the Park and for any distribution and transmission 
pipeline including appurtenances that the Secretary determines 
to be necessary to provide natural gas supply to the Park.
    Subsection (c) sets forth terms and conditions for the 
issuance of any permit, including requirements that it must 
comply with applicable regulations, the Alaska National 
Interest Lands Conservation Act, the National Environmental 
Policy Act, must be the route with the least adverse 
environmental effects for the Park, and must comply with any 
other terms and conditions as the Secretary determines to be 
necessary.
    Section 303(a) provides that the Administrator of the 
Energy Information Administration shall periodically submit a 
report to Congress relating to the import, export or production 
of refined petroleum by Iran. Specifically, the report is to 
describe, to the maximum practicable extent, the annual volume 
of refined petroleum products imported to and exported from 
Iran; the identity and national origin of persons selling and 
transporting refined petroleum products to Iran; the sources of 
financing for such imports by Iran; and any involvement of 
foreign persons providing assistance to Iran in the import of 
advanced refinery technology, conversion of existing chemical 
plants to petroleum refineries, or construction of new 
refineries. The provision is intended to assist in the 
enforcement of the Comprehensive Iran Sanctions, Accountability 
and Divestment Act of 2010 (P.L. 111-195, 124 Stat. 1312 (July 
1, 2010)).
    Subsection (b) provides that the reporting requirements 
will continue until the date on which the President determines 
that all economic sanctions imposed on Iran have been lifted.

                   Cost and Budgetary Considerations

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office.

S. 916--Oil and Gas Facilitation Act of 2011

    Summary: S. 916 would authorize appropriations for various 
oil and gas programs at the Department of the Interior (DOI) 
and establish policies governing the issuance of certain 
permits and leases. It also would raise the limit on the amount 
of debt that the Department of Energy (DOE) may guarantee for a 
pipeline to transport natural gas from Alaska to the 
continental United States and direct DOE to submit reports on 
the volume of petroleum products imported to and exported from 
Iran. Finally, S. 916 would repeal provisions in the Energy 
Policy Act of 2005 that increased the quantity of oil and gas 
eligible for royalty relief under federal leases on the Outer 
Continental Shelf (OCS).
    CBO estimates that enacting S. 916 would reduce direct 
spending by $10 million over the 2012-2021 period; therefore, 
pay-as-you-go procedures apply to this bill. In addition, CBO 
estimates that implementing the bill would have a discretionary 
cost of $447 million over the 2012-2016 period, assuming 
appropriation of the authorized amounts. Enacting S. 916 would 
not affect revenues.
    S. 916 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 916 is shown in the following table. The 
costs of this legislation fall within budget functions 270 
(energy), 300 (natural resources and environment), and 950 
(undistributed offsetting receipts).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By fiscal year, in millions of dollars--
                                                             -------------------------------------------------------------------------------------------
                                                               2012   2013   2014   2015   2016   2017   2018   2019   2020   2021  2012-2016  2012-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING

Estimated Budget Authority..................................      0      0      0      0      0     -1     -1     -2     -3     -3         0        -10
Estimated Outlays...........................................      0      0      0      0      0     -1     -1     -2     -3     -3         0        -10

                                                      CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Oil and Gas Inventories:
  Authorization Level.......................................    100    100    100    100    100    100     50     50     50     50       500        800
  Estimated Outlays.........................................      5     40    175    100    100    100     90     50     50     50       420        760
Management Activities:
  Authorization Level.......................................      0      0      0      0     20     20     20     20     20      0        20        100
  Estimated Outlays.........................................      0      0      0      0     18     20     20     20     20      2        18        100
Interagency Permit Office:
  Authorization Level.......................................      2      2      2      2      2      2      2      2      2      2        10         20
  Estimated Outlays.........................................      1      2      2      2      2      2      2      2      2      2         9         19
  Total Changes in Discretionary Spending:
    Authorization Level.....................................    102    102    102    102    122    122     72     72     72     52       530        920
    Estimated Outlays.......................................      6     42    177    102    120    122    112     72     72     54       447        879
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that S. 
916 will be enacted near the end of fiscal year 2011, that the 
authorized amounts will be appropriated each year, and that 
outlays will occur at the historical rates for similar 
activities.
    Direct Spending: The Energy Policy Act of 2005 increased 
the volume of oil and gas eligible for relief from paying the 
federal royalty on production from OCS leases, subject to 
market prices and other conditions. It granted a five-year 
exemption for certain quantities of oil and gas produced from 
wells located in deep water (water depths of more than 400 
meters) and a permanent exemption for specific amounts of 
natural gas produced from ultradeep gas wells (those deeper 
than 20,000 feet) in water less than 400 meters deep. CBO 
estimates that repealing those two provisions would increase 
offsetting receipts (a credit against direct spending) by about 
$10 million over the 2012-2021 period. By way of comparison, 
CBO projects that receipts from OCS leases will total over $100 
billion over that 10-year period under current law.
    CBO estimates that enacting S. 916 would have a small 
effect on federal royalties for several reasons. The bill would 
have no effect on federal receipts from deep-water leases, for 
example, because the type of relief provided in the 2005 act 
expired in 2010. The impact on royalties from ultradeep wells 
would depend on quantities produced from leases issued after 
the date of enactment and whether the market price of natural 
gas is above or below the price thresholds used to determine 
eligibility for an exemption. Based on historical trends, CBO 
expects that few ultradeep wells would be drilled on new leases 
because much of the acreage in shallow water has already been 
leased and the supply of drilling rigs for those 
technologically advanced projects is limited. Similarly, the 
probability of firms receiving royalty relief would be 
relatively low under CBO's baseline projections of future 
natural gas prices.
    Spending Subject to Appropriation: S. 916 would 
specifically authorize the appropriation of $530 million over 
the 2012-2016 period and additional amounts for several years 
after 2016 for DOI to carry out certain activities. The 
specified amounts include:
           $100 million for each of fiscal years 2012 
        through 2017 and $50 million for each of fiscal years 
        2018 through 2022 for comprehensive inventories of oil 
        and gas resources of the OCS, including seismic studies 
        of resources in the Atlantic, Eastern Gulf of Mexico, 
        and Alaska regions;
           $2 million for each of fiscal years 2012 
        through 2022 for an interagency office that would be 
        responsible for processing permits and leases for the 
        OCS in Alaska; and
           $20 million for each of fiscal years 2016 
        through 2020 for activities related to managing federal 
        onshore oil and gas resources.
    Assuming appropriation of those amounts, CBO estimates that 
implementing S. 916 would have a discretionary cost of $447 
million over the 2012-2016 period, with additional spending 
occurring in later years.
    The above estimate does not include any costs related to 
provisions that would increase, from $18 billion to $30 
billion, the aggregate amount of loans and other debt 
obligations that DOE could guarantee to support the 
construction of a pipeline that would transport natural gas 
from Alaska to the continental United States. While CBO 
estimates that the subsidy costs of such loan guarantees would 
be significant--perhaps requiring the appropriation of billions 
of dollars--CBO expects that the construction of such a 
pipeline would not occur until after 2016.
    Pay-as-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in the following table.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, in millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2011   2012   2013   2014   2015   2016   2017   2018   2019   2020   2021  2011-2016  2011-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT

Statutory Pay-As-You-Go Impact.......................      0      0      0      0      0      0     -1     -1     -2     -3     -3         0        -10
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: S. 916 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal Costs: Kathleen Gramp, Jeff 
LaFave, and Megan Carroll; Impact on State, Local, and Tribal 
Governments: Melissa Merrill; Impact on the Private Sector: Amy 
Petz.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis.

                      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 the Oil and Gas Facilitation Act of 2011.
    The bill would facilitate domestic oil and gas production 
by, among other things, coordinating the permitting processes 
involved, obtaining an inventory of certain offshore oil and 
gas resources, and facilitating natural gas pipeline 
construction in Alaska. The Committee does not anticipate that 
implementation of this Act would impose additional regulatory 
burdens on any participants in these activities.
    For the same reason, the Committee does not believe that 
additional paperwork would result from the enactment of S. 916 
as ordered reported.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.

                   Congressionally Directed Spending

    S. 916, 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. 916 are included in 
the testimony of the Secretary of the Interior received by the 
Committee at its May 17, 2011, hearing, which is set forth 
below.

          Statement of Ken Salazar, Secretary of the Interior

    Chairman Bingaman, Ranking Member Murkowski, and Members of 
the Committee, I am happy to appear before you today to discuss 
legislation intended to promote the Department of the 
Interior's reform of the offshore energy program and facilitate 
the development of oil and gas resources from our public lands 
and waters.
    I am joined here today by Deputy Secretary David J. Hayes 
and Bureau of Ocean Energy Management, Regulation and 
Enforcement Director Michael R. Bromwich. Both Deputy Secretary 
Hayes and Director Bromwich have contributed critical hard work 
and played key roles in the Department's work to identify and 
implement key reforms that are advancing the Administration's 
commitment to safe and responsible domestic production.
    As the President has stressed, the Administration is 
committed to promoting safe and responsible domestic oil and 
gas production as part of a broad energy strategy that will 
protect consumers and reduce our dependence on foreign oil. 
When President Obama took office, America imported 11 million 
barrels of oil a day. The President has put forward a plan to 
cut that by one-third by 2025. We are already making progress 
towards that goal. Last year, America produced more oil than at 
any time since 2003. To encourage production, the 
Administration is taking a series of steps to leverage existing 
authorities. These initiatives are part of the Administration's 
overall Blueprint for a Secure Energy Future, a broad effort to 
secure America's energy future and protect consumers by 
producing more oil at home and reducing our dependence on oil 
by using cleaner, alternative fuels and improving our energy 
efficiency.
    As President Obama has said, ``we cannot keep going from 
shock to trance on the issue of energy security, rushing to 
propose action when gas prices rise, then hitting the snooze 
button when they fall again.'' We are working to expand cleaner 
sources of energy, including renewables like wind, solar, and 
geothermal, as well as clean coal and natural gas on public 
lands. But domestic oil and gas production remain critical to 
our nation's energy supply and to reducing our dependence on 
foreign oil.
    In his radio address just this past Saturday, the President 
laid out the next steps of this strategy, highlighting some of 
the actions that the Administration is taking using existing 
authorities to expand responsible and safe domestic oil 
production. But we also need to go further, which is why the 
Administration is also calling on Congress to act on a series 
of legislative principles, which I will outline today.
    Much of the content of these proposals overlaps with the 
legislative proposals that we are here today to discuss. We 
generally support S. 916, the Oil and Gas Facilitation Act of 
2011, and S. 917, the Outer Continental Shelf Reform Act of 
2011, and, as we will discuss, have begun to address a number 
of the provisions in these bills administratively. We support 
much of the intent of S. 843, the Outer Continental Shelf 
Permit Processing Coordination Act, and S. 516, the Lease 
Extension and Energy Security Act of 2011, and agree that 
facilitating the efficient, responsible development of our oil 
and gas resources is a necessary component of energy security. 
Other involved agencies may have additional views.


           legislation to facilitate development of resources


    The Oil and Gas Facilitation Act of 2011, S. 916, is 
intended to facilitate the responsible development of oil and 
gas on Federal land and waters and reduce our dependence on 
energy developed by foreign sources through increasing our 
understanding of domestic oil and gas resources, coordinating 
interagency activity on permitting for oil and gas development, 
and facilitate transportation of Alaskan oil and natural gas.
    The President and I are in complete agreement with you 
regarding the principles embodied in this legislation, and we 
support many of the provisions that are consistent with the 
principles discussed above. We agree that a better 
understanding of the oil and gas resources on the OCS is 
critical to ensuring that development takes place in the right 
ways and the right places. In response to the President's call 
for action, the Department is taking steps to expedite the 
evaluation of resource potential in the mid- and south 
Atlantic, including moving forward with the environmental 
analysis necessary to allow industry to proceed with seismic 
testing in the region as soon as possible.
    S. 916 also contains provisions that would create an Outer 
Continental Shelf Permit Processing Coordination office in 
Alaska. S. 843, the Outer Continental Shelf Permit Processing 
Coordination Act, also being heard today, is nearly identical 
to these provisions but would broaden the authorization to 
include the establishment of regional OCS permit processing 
coordination offices to the Atlantic and Pacific regions, to be 
established at the point that lease sales are held there. These 
provisions are similar to a pilot program that has been in 
place in the Bureau of Land Management for several years that 
addresses onshore oil and gas permitting.
    Interagency coordination is important for the efficient 
processing of permits throughout the OCS. As the 
Administration's Blueprint specifically notes, interagency 
coordination is necessary and important to facilitate 
responsible oil and gas development in Alaska. As mentioned 
above, the President has requested that a high level, cross-
agency team be assembled in order to facilitate a more 
efficient permitting process in Alaska while ensuring that all 
standards are fully met. We believe that this specifically 
tailored approach will result in a better coordinated, more 
efficient, safe, and environmentally responsible offshore 
permitting process.
    We also strongly support the repeal in section 203 of the 
deepwater royalty relief provisions of the Energy Policy Act of 
2005, which is consistent with the President's 2012 Budget. We 
note that the Budget also proposes to terminate the Permit 
Processing Improvement Fund.
    Finally, S. 516, the Lease Extension and Secure Energy Act 
of 2011, would require a one-year extension of leases in the 
Gulf of Mexico that were either not producing as of April 30, 
2010, or were suspended from operations or other action in 
accordance with the May 30, 2010, NTL No. 2010-N04 issued by 
the Minerals Management Service or the suspension notice issued 
on July 12, 2010. As the president said Saturday, the 
Administration fully supports extensions for Gulf of Mexico 
leaseholders directly impacted by the drilling moratorium, and 
ten such suspensions have already been granted using 
administrative procedures to leaseholders who have demonstrated 
that they were affected by the moratoria.


                               conclusion


    Mr. Chairman, we have made significant strides in reforming 
the way the offshore oil and gas program is carried out here at 
the Department of the Interior and on the Outer Continental 
Shelf. We have raised standards and promoted safety and science 
in offshore oil and gas operations. The changes we have made 
will provide industry with the tools to help prevent an 
accident like this from happening again. Consistent with the 
framework presented by the Blueprint for a Secure Energy 
Future, we are working to secure our energy future by ensuring 
the potential for renewable energy development on our public 
lands and waters is realized. And we are pursuing the safe and 
responsible development of our conventional energy resources 
here at home.
    Mr. Chairman, Senator Murkowski, this concludes my 
statement and I am happy to answer any questions you or other 
Members of the Committee may have.

                        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 S. 916, 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):

                          MINERAL LEASING ACT


                  Act of February 25, 1920, as Amended


 AN ACT To promote the mining of coal, phosphate, oil, oil shale, and 
sodium on the public domain.

           *       *       *       *       *       *       *


SEC. 35.

    (a) * * *

           *       *       *       *       *       *       *

  (c)(1) Notwithstanding the first sentence of subsection (a), 
any rentals received from leases in any State (other than the 
State of Alaska) on or after the date of enactment of this 
subsection shall be deposited in the Treasury, to be allocated 
in accordance with paragraph (2).
  (2) Of the amounts deposited in the Treasury under paragraph 
(1)--
          (A) 50 percent shall be paid by the Secretary of the 
        Treasury to the State within the boundaries of which 
        the leased land is located or the deposits were 
        derived; and
          (B) 50 percent shall be deposited in a special fund 
        in the Treasury, to be known as the ``BLM Permit 
        Processing Improvement Fund'' (referred to in this 
        subsection as the ``Fund'').
  (3) For each of fiscal years 2006 through 2015, the Fund 
shall be available to the Secretary of the Interior for 
expenditure, without further appropriation and without fiscal 
year limitation, for the coordination and processing of oil and 
gas use authorizations on onshore Federal land under the 
jurisdiction of the Pilot Project offices identified in section 
365(d) of the Energy Policy Act of 2005.
  (4) Authorization of Appropriations.--There is authorized to 
be appropriated from the Fund, or to the extent adequate funds 
in the Fund are not available from miscellaneous receipts of 
the Treasury, for the coordination and processing of oil and 
gas use authorizations and for oil and gas inspection and 
enforcement on onshore Federal land under the jurisdiction of 
the Pilot Project offices described in section 365(d) of the 
Energy Policy Act of 2005 (42 U.S.C. 15924(d)) $20,000,000 for 
each of fiscal years 2016 through 2020, to remain available 
until expended.

           *       *       *       *       *       *       *


                      GEOTHERMAL STEAM ACT OF 1970


       Public Law 91-581, Approved December 24, 1970, as Amended


 AN ACT To authorize the Secretary of the Interior to make disposition 
of geothermal steam and associated geothermal resources, and for other 
purposes.

           *       *       *       *       *       *       *


SEC. 4. LEASING PROCEDURES.

           *       *       *       *       *       *       *


    (b) Competitive Lease Sale Required.--
          (1) In general.--Except as otherwise specifically 
        provided by this Act, all land to be leased that is not 
        subject to leasing under subsection (c) shall be leased 
        as provided in this subsection to the highest 
        responsible qualified bidder, as determined by the 
        Secretary.
          (2) Competitive lease sales.--The Secretary shall 
        hold a competitive lease sale at least once every 2 
        years for land in a State that has nominations pending 
        under subsection (a) if the land is otherwise available 
        for leasing.
          (3) Lands subject to mining claims.--Lands that are 
        subject to a mining claim for which a plan of 
        operations has been approved by the relevant Federal 
        land management agency may be available for 
        noncompetitive leasing under this section to the mining 
        claim holder.
          (4) Land subject to oil and gas lease.--Land under an 
        oil and gas lease issued pursuant to the Mineral 
        Leasing Act (30 U.S.C. 181 et seq.) or the Mineral 
        Leasing Act for Acquired Lands (30 U.S.C. 351 et seq.) 
        that is subject to an approved application for permit 
        to drill and from which oil and gas production is 
        occurring may be available for leasing under subsection 
        (c) by the holder of the oil and gas lease--
                  (A) on a determination that--
                          (i) geothermal energy will be 
                        produced from a well producing or 
                        capable of producing oil and gas; and
                          (ii) the public interest will be 
                        served by the issuance of such a lease; 
                        and
                  (B) in order to provide for the coproduction 
                of geothermal energy with oil and gas.

           *       *       *       *       *       *       *


                       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.

           *       *       *       *       *       *       *


TITLE III--OIL AND GAS

           *       *       *       *       *       *       *


Subtitle E--Production Incentives

           *       *       *       *       *       *       *


[SEC. 344. INCENTIVES FOR NATURAL GAS PRODUCTION FROM DEEP WELLS IN THE 
                    SHALLOW WATERS OF THE GULF OF MEXICO.

    [(a) Royalty Incentive Regulations for Ultra Deep Gas 
Wells.--
          [(1) In general.--Not later than 180 days after the 
        date of enactment of this Act, in addition to any other 
        regulations that may provide royalty incentives for 
        natural gas produced from deep wells on oil and gas 
        leases issued pursuant to the Outer Continental Shelf 
        Lands Act (43 U.S.C. 1331 et seq.), the Secretary shall 
        issue regulations granting royalty relief suspension 
        volumes of not less than 35 billion cubic feet with 
        respect to the production of natural gas from ultra 
        deep wells on leases issued in shallow waters less than 
        400 meters deep located in the Gulf of Mexico wholly 
        west of 87 degrees, 30 minutes west longitude. 
        Regulations issued under this subsection shall be 
        retroactive to the date that the notice of proposed 
        rulemaking is published in the Federal Register.
          [(2) Suspension volumes.--The Secretary may grant 
        suspension volumes of not less than 35 billion cubic 
        feet in any case in which--
                  [(A) the ultra deep well is a sidetrack; or
                  [(B) the lease has previously produced from 
                wells with a perforated interval the top of 
                which is at least 15,000 feet true vertical 
                depth below the datum at mean sea level.
          [(3) Definitions.--In this subsection:
                  [(A) Ultra deep well.--The term ``ultra deep 
                well'' means a well drilled with a perforated 
                interval, the top of which is at least 20,000 
                true vertical depth below the datum at mean sea 
                level.
                  [(B) Sidetrack.--
                          [(i) In general.--The term 
                        ``sidetrack'' means a well resulting 
                        from drilling an additional hole to a 
                        new objective bottom-hole location by 
                        leaving a previously drilled hole.
                          [(ii) Inclusion.--The term 
                        ``sidetrack'' includes--
                                  [(I) drilling a well from a 
                                platform slot reclaimed from a 
                                previously drilled well;
                                  [(II) re-entering and 
                                deepening a previously drilled 
                                well; and
                                  [(III) a bypass from a 
                                sidetrack, including drilling 
                                around material blocking a hole 
                                or drilling to straighten a 
                                crooked hole.
    [(b) Royalty Incentive Regulations for Deep Gas Wells.--Not 
later than 180 days after the date of enactment of this Act, in 
addition to any other regulations that may provide royalty 
incentives for natural gas produced from deep wells on oil and 
gas leases issued pursuant to the Outer Continental Shelf Lands 
Act (43 U.S.C. 1331 et seq.), the Secretary shall issue 
regulations granting royalty relief suspension volumes with 
respect to production of natural gas from deep wells on leases 
issued in waters more than 200 meters but less than 400 meters 
deep located in the Gulf of Mexico wholly west of 87 degrees, 
30 minutes west longitude. The suspension volumes for deep 
wells within 200 to 400 meters of water depth shall be 
calculated using the same methodology used to calculate the 
suspension volumes for deep wells in the shallower waters of 
the Gulf of Mexico, and in no case shall the suspension volumes 
for deep wells within 200 to 400 meters of water depth be lower 
than those for deep wells in shallower waters. Regulations 
issued under this subsection shall be retroactive to the date 
that the notice of proposed rulemaking is published in the 
Federal Register.
    [(c) Limitations.--The Secretary may place limitations on 
the royalty relief granted under this section based on market 
price. The royalty relief granted under this section shall not 
apply to a lease for which deep water royalty relief is 
available.]

[SEC. 345. ROYALTY RELIEF FOR DEEP WATER PRODUCTION.

    [(a) In General.--Subject to subsections (b) and (c), for 
each tract located in water depths of greater than 400 meters 
in the Western and Central Planning Area of the Gulf of Mexico 
(including the portion of the Eastern Planning Area of the Gulf 
of Mexico encompassing whole lease blocks lying west of 87 
degrees, 30 minutes West longitude), any oil or gas lease sale 
under the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et 
seq.) occurring during the 5-year period beginning on the date 
of enactment of this Act shall use the bidding system 
authorized under section 8(a)(1)(H) of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1337(a)(1)(H)).
    [(b) Suspension of Royalties.--The suspension of royalties 
under subsection (a) shall be established at a volume of not 
less than--
          [(1) 5,000,000 barrels of oil equivalent for each 
        lease in water depths of 400 to 800 meters;
          [(2) 9,000,000 barrels of oil equivalent for each 
        lease in water depths of 800 to 1,600 meters;
          [(3) 12,000,000 barrels of oil equivalent for each 
        lease in water depths of 1,600 to 2,000 meters; and
          [(4) 16,000,000 barrels of oil equivalent for each 
        lease in water depths greater than 2,000 meters.
    [(c) Limitation.--The Secretary may place limitations on 
royalty relief granted under this section based on market 
price.]

           *       *       *       *       *       *       *


SEC. 357. COMPREHENSIVE INVENTORY OF OCS OIL AND NATURAL GAS RESOURCES.

    (a) In General.--[The Secretary shall conduct an inventory 
and analysis of oil and natural gas resources beneath all of 
the waters of the United States Outer Continental Shelf 
(``OCS'').]The Secretary shall conduct a comprehensive 
inventory of oil and natural gas (including executing or 
otherwise facilitating seismic studies of resources) and 
prepare a summary (the latter prepared with the assistance of, 
and based on information provided by, the heads of appropriate 
Federal agencies) of the information obtained under paragraph 
(3), for the waters of the United States Outer Continental 
Shelf (referred to in this section as the ``OCS'' in the 
Atlantic Region, the Eastern Gulf of Mexico, and the Alaska 
Region. The inventory and analysis shall--
          (1) use available data on oil and gas resources in 
        areas offshore of Mexico and Canada that will provide 
        information on trends of oil and gas accumulation in 
        areas of the OCS;
          (2) use any available technology, except drilling, 
        but including [3--D] 2-D and 3-D seismic technology to 
        obtain accurate resource estimates; and
          [(3) analyze how resource estimates in OCS areas have 
        changed over time in regards to gathering geological 
        and geophysical data, initial exploration, or full 
        field development, including areas such as the 
        deepwater and subsalt areas in the Gulf of Mexico;
          [(4) estimate the effect that understated oil and gas 
        resource inventories have on domestic energy 
        investments; and
          [(5) identify and explain how legislative, 
        regulatory, and administrative programs or processes 
        restrict or impede the development of identified 
        resources and the extent that they affect domestic 
        supply, such as moratoria, lease terms and conditions, 
        operational stipulations and requirements, approval 
        delays by the Federal Government and coastal States, 
        and local zoning restrictions for onshore processing 
        facilities and pipeline landings.]
          (3) use existing inventories and mapping of marine 
        resources undertaken by the National Oceanographic and 
        Atmospheric Administration and with the assistance of 
        and based on information provided by the Department of 
        Defense and other Federal and State agencies possessing 
        relevant data, and use any available data regarding 
        alternative energy potential, navigation uses, 
        fisheries, aquaculture uses, recreational uses, 
        habitat, conservation, and military uses.
  [(b) Reports.--The Secretary shall submit a report to 
Congress on the inventory of estimates and the analysis of 
restrictions or impediments, together with any recommendations, 
within 6 months of the date of enactment of the section. The 
report shall be publicly available and updated at least every 5 
years.]
  (b) Implementation.--The Secretary shall carry out the 
inventory and analysis under subsection (a) in 3 phases, with 
priority given to all or part of applicable planning areas of 
the outer Continental Shelf--
          (1) estimated to have the greatest potential for 
        energy development in barrel of oil equivalent; and
          (2) outside of any leased area or area scheduled for 
        leasing prior to calendar year 2011 under any outer 
        Continental Shelf 5-year leasing program or amendment 
        to the program under section 18 of the Outer 
        Continental Shelf Lands Act (43 U.S.C. 1344).
  (c) Plan.--
          (1) In general.--Not later than 90 days after the 
        date of enactment of this paragraph, 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 that 
        provides a plan for executing or otherwise facilitating 
        the seismic studies required under this section, 
        including an estimate of the costs to complete the 
        seismic inventory by region and environmental and 
        permitting activities to facilitate expeditious 
        completion.
          (2) First phase.--Not later than 2 years after the 
        date of enactment of this paragraph, the Secretary 
        shall submit to Congress a report describing the 
        results of the first phase of the inventory and 
        analysis under subsection (a).
          (3) Subsequent phases.--Not later than 2 years after 
        the date on which the report is submitted under 
        paragraph (2) and 2 years thereafter, the Secretary 
        shall submit to Congress a report describing the 
        results of the second and third phases, respectively, 
        of the inventory and analysis under subsection (a).
          (4) Public availability.--A report submitted under 
        paragraph (2) or (3) shall be--
                  (A) made publicly available; and
                  (B) updated not less frequently than once 
                every 5 years.

           *       *       *       *       *       *       *


              THE TRANS-ALASKA PIPELINE AUTHORIZATION ACT


                     Public Law 93-153, as Amended


 AN ACT To amend Section 28 of the Mineral Leasing Act of 1920, and to 
authorize a Trans-Alaska Oil Pipeline, and for other purposes.

           *       *       *       *       *       *       *


                                TITLE II


                              Short Title

    Sec. 201. This title may be cited as the ``Trans-Alaska 
Pipeline Authorization Act''.

           *       *       *       *       *       *       *


SEC. 208. EXEMPTION OF TRANS-ALASKA OIL PIPELINE SYSTEM FROM CERTAIN 
                    REQUIREMENTS.

    (a) In General.--Except as provided in subsection (b), no 
part of the trans-Alaska oil pipeline system shall be 
considered to be a district, site, building, structure, or 
object for purposes of section 106 of the National Historic 
Preservation Act (16 U.S.C. 470f), regardless of whether all or 
part of the trans-Alaska oil pipeline system may otherwise be 
listed on, or eligible for listing on, the National Register of 
Historic Places.
    (b) Individual Elements.--
          (1) In general.--Subject to subsection (c), the 
        Secretary of the Interior may identify up to 3 sections 
        of the trans-Alaska oil pipeline system that possess 
        national or exceptional historic significance, and that 
        should remain after the pipeline is no longer used for 
        the purpose of oil transportation.
          (2) Historic site.--Any sections identified under 
        paragraph (1) shall be considered to be a historic 
        site.
          (3) Views.--In making the identification under this 
        subsection, the Secretary shall consider the views of--
                  (A) the owners of the pipeline;
                  (B) the State Historic Preservation Officer;
                  (C) the Advisory Council on Historic 
                Preservation; and
                  (D) the Federal Coordinator for Alaska 
                Natural Gas Transportation Projects.
    (c) Construction, Maintenance, Restoration, and 
Rehabilitation Activities.--Subsection (b) does not prohibit 
the owners of the trans-Alaska oil pipeline system from 
carrying out construction, maintenance, restoration, or 
rehabilitation activities on or for a section of the system 
described in subsection (b).

           *       *       *       *       *       *       *


                                  
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