[House Report 113-197]
[From the U.S. Government Publishing Office]


113th Congress  }                                             {  Report
  1st Session   }        HOUSE OF REPRESENTATIVES             { 113-197

=======================================================================
 
              NATIONAL PETROLEUM RESERVE ALASKA ACCESS ACT 

                                _______
                                

 September 10, 2013.--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. 1964]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 1964) to amend the Naval Petroleum Reserves 
Production Act of 1976 to direct the Secretary of the Interior 
to conduct an expeditious program of competitive leasing of oil 
and gas in the National Petroleum Reserve in Alaska, including 
at least one lease sale in the Reserve each year in the period 
2013 through 2023, and for other purposes, having considered 
the same, report favorably thereon without amendment and 
recommend that the bill do pass.

                          Purpose of the Bill

    The purpose of H.R. 1964 is to amend the Naval Petroleum 
Reserves Production Act of 1976 to direct the Secretary of the 
Interior to conduct an expeditious program of competitive 
leasing of oil and gas in the National Petroleum Reserve in 
Alaska, including at least one lease sale in the Reserve each 
year in the period 2013 through 2023.

                  Background and Need for Legislation

    The largest state in the union, Alaska, is home to abundant 
natural resources including oil and natural gas. Most have 
heard about Alaska's onshore resources contained in the 1002 
area of the Arctic National Wildlife Refuge (ANWR) or the 
National Petroleum Reserve--Alaska (NPRA) areas that have long 
been part of the energy debate on Capitol Hill.

                                  NPRA

    In 2008, the Department of the Interior anticipated that 
production from the NPRA would finally be realized. Actions 
taken by the Environmental Protection Agency (EPA) have delayed 
that production indefinitely.
    EPA declared the Colville River Delta an ``aquatic resource 
of national importance'' (ARNI) after applications were filed 
to build a bridge over the river to provide access to the 
Conoco-Phillips development project in the NPRA and used the 
ARNI designation to deny and override an Army Corps of 
Engineers 404 permit under the Clean Water Act.

                  TRANS ALASKA PIPELINE SYSTEM (TAPS)

    TAPS is an 800 mile long pipeline that is vital to United 
States energy production. Since 1977, TAPS has successfully 
transported more than 16 billion barrels of oil.
    At its peak of production, Prudhoe Bay produced 2.1 million 
barrels of oil per day that was transported via TAPS, providing 
one-third of the nation's oil production. Today approximately 
620,000 barrels of oil per day flow through TAPS. Without new 
production from Alaska's North Slope, ANWR, NPRA, and the 
Beaufort and Chukchi Seas, there will not be enough oil flowing 
through the pipeline to sustain it. If the pipeline shuts down 
because oil production has not been allowed to take place, the 
pipeline system will have to be removed, thus eliminating a 
valuable national resource and leaving billions of barrels of 
oil stranded in the North Slope of Alaska.

                             CURRENT STATUS

    In November 2012, the Administration held a lease sale in 
the NPRA. While the Administration claimed to make available 
400 tracts comprising approximately 4.5 million acres, due to 
the regulatory uncertainty and administrative roadblocks to 
development in the NPRA, only two companies submitted 14 bids 
for 160,000 acres.
    Development of the NPRA was further compromised with their 
recent announcement of the Record of Decision for the final 
NPRA Integrated Activity Plan and Environmental Impact 
Statement. This obstructive plan effectively serves to take 
land off the table for development that would be essential to 
transport crude oil out of the NPRA, and any production will be 
endlessly held up in environmental law suits and bureaucratic 
red tape.
    This legislation requires the Secretary of the Interior to 
conduct at least one annual lease sale in the reserve and 
directs the Secretary to issue permits for all surface 
development activities, including pipeline and roads, which are 
necessary to develop the NPRA to transport oil and natural gas 
from the reserve and secure the continued operation of TAPS. 
The legislation also nullifies the obstructive Environmental 
Impact Statement and requires the Secretary to issue a new 
proposed integrated activity plan, requires the issuance of new 
regulations for production and timely permit processing, and 
requires an assessment of recoverable fossil fuel resources in 
the NPRA.

                            Committee Action

    H.R. 1964 was introduced on May 14, 2013, by Congressman 
Doc Hastings (R-WA). The bill was referred to the Committee on 
Natural Resources, and within the Committee to the Subcommittee 
on Energy and Mineral Resources. On May 22, 2013, the 
Subcommittee on Energy and Mineral Resources held a hearing on 
the bill. On June 12, 2013, the full Natural Resources 
Committee met to consider the bill. The Subcommittee on Energy 
and Mineral Resources was discharged by unanimous consent. No 
amendments were offered, and the bill was then adopted and 
ordered favorably reported to the House of Representatives by a 
bipartisan roll call vote of 26 to 14, as follows:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

            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. 1964--National Petroleum Reserve Alaska Access Act

    H.R. 1964 would require the Secretary of the Interior to 
conduct certain activities aimed at facilitating the 
development of oil and gas in the National Petroleum Reserve in 
Alaska (NPR-A). Based on information from the Department of the 
Interior and assuming appropriation of the necessary amounts, 
CBO estimates that implementing the legislation would cost $2 
million over the 2014-2015 period. Enacting H.R. 1964 could 
affect direct spending; therefore, pay-as-you-go procedures 
apply. However, CBO estimates that any such effects would be 
negligible. Enacting the legislation would not affect revenues.
    The bill would require the United States Geological Survey 
(USGS) to complete a comprehensive assessment of oil and gas 
resources in the NPR-A. The agency recently completed many of 
the assessments that would be required under the bill. Based on 
information from the agency, CBO expects that the USGS would 
need to complete two additional assessments. Based on 
information regarding the cost of similar USGS assessments and 
assuming appropriation of the necessary amounts, we estimate 
that those assessments would cost $2 million over the 2014-2015 
period.
    H.R. 1964 also would require the Bureau of Land Management 
(BLM) to conduct annual lease sales in the NPR-A. Historically, 
such sales were held every two years; however, because the 
agency began conducting annual sales in 2011 and plans to 
continue them in the future, CBO estimates that implementing 
this provision would not affect the federal budget.
    Finally, the bill would require BLM to reassess a recent 
decision to offer 52 percent of the NPR-A region for oil and 
gas leasing and choose another development option that the 
agency has evaluated. Under the bill, CBO expects that the 
agency would select an alternative development plan for NPR-A 
that would make similar amounts of acreage available for oil 
and gas leasing. In addition. gross annual proceeds from oil 
and gas leasing activities in the NPR-A have been below $5 
million in recent years. Consequently, CBO expects that 
requiring BLM to select a new resource development plan would 
have a negligible impact on direct spending.
    H.R. 1964 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contacts for this estimate are 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, credit authority, or an increase or decrease in 
revenues or tax expenditures. Based on information from the 
Department of the Interior and assuming appropriation of the 
necessary amounts, CBO estimates that implementing the 
legislation would cost $2 million over the 2014-2015 period.
    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 is to amend the Naval Petroleum Reserves 
Production Act of 1976 to direct the Secretary of the Interior 
to conduct an expeditious program of competitive leasing of oil 
and gas in the National Petroleum Reserve in Alaska, including 
at least one lease sale in the Reserve each year in the period 
2013 through 2023.

                           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.

                       Compliance With H. Res. 5

    Directed Rule Making. The Chairman estimates that this bill 
directs the Secretary of the Interior to conduct one 
rulemaking.
    Duplication of Existing Programs. This bill does not 
establish or reauthorize a program of the federal government 
known to be duplicative of another program. Such program was 
not included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-139 
or identified in the most recent Catalog of Federal Domestic 
Assistance published pursuant to the Federal Program 
Information Act (Public Law 95-220, as amended by Public Law 
98-169) as relating to other programs.

                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 (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):

NAVAL PETROLEUM RESERVES PRODUCTION ACT OF 1976

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TITLE I--NATIONAL PETROLEUM RESERVE IN ALASKA

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SEC. 107. COMPETITIVE LEASING OF OIL AND GAS.

  [(a) In General.--The Secretary shall conduct an expeditious 
program of competitive leasing of oil and gas in the Reserve in 
accordance with this Act.]
  (a) In General.--The Secretary shall conduct an expeditious 
program of competitive leasing of oil and gas in the reserve in 
accordance with this Act. Such program shall include at least 
one lease sale annually in those areas of the reserve most 
likely to produce commercial quantities of oil and natural gas 
each year in the period 2013 through 2023.
  (b) Mitigation of Adverse Effects.--Activities undertaken 
pursuant to this Act shall include or provide for such 
conditions, restrictions, and prohibitions as the Secretary 
deems necessary or appropriate to mitigate reasonably 
foreseeable and significantly adverse effects on the surface 
resources of the National Petroleum Reserve in Alaska.
  (c) Land Use Planning; BLM Wilderness Study.--The provisions 
of section 202 and section 603 of the Federal Lands Policy and 
Management Act of 1976 (90 Stat. 2743) shall not be applicable 
to the Reserve.
  (d) First Lease Sale.--The first lease sale shall be 
conducted within twenty months of the date of enactment of this 
Act: Provided, That the first lease sale shall be conducted 
only after publication of a final environmental impact 
statement if such is deemed necessary under the provisions of 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 
et seq.).
  (e) Withdrawals.--The withdrawals established by section 102 
of Public Law 94-258 are rescinded for the purposes of the oil 
and gas leasing program authorized under this section.
  (f) Bidding Systems.--Bidding systems used in lease sales 
shall be based on bidding systems included in section 
205(a)(1)(A) through (H) of the Outer Continental Shelf Lands 
Act Amendments of 1978 (92 Stat. 629).
  (g) Geological Structures.--Lease tracts may encompass 
identified geological structures.
  (h) Size of Lease Tracts.--The size of lease tracts may be up 
to sixty thousand acres, as determined by the Secretary.
  (i) Terms.--
          (1) In general.--Each lease shall be issued for an 
        initial period of not more than 10 years, and shall be 
        extended for so long thereafter as oil or gas is 
        produced from the lease in paying quantities, oil or 
        gas is capable of being produced in paying quantities, 
        or drilling or reworking operations, as approved by the 
        Secretary, are conducted on the leased land.
          (2) Renewal of leases with discoveries.--At the end 
        of the primary term of a lease the Secretary shall 
        renew for an additional 10-year term a lease that does 
        not meet the requirements of paragraph (1) if the 
        lessee submits to the Secretary an application for 
        renewal not later than 60 days before the expiration of 
        the primary lease and the lessee certifies, and the 
        Secretary agrees, that hydrocarbon resources were 
        discovered on one or more wells drilled on the leased 
        land in such quantities that a prudent operator would 
        hold the lease for potential future development.
          (3) Renewal of leases without discoveries.--At the 
        end of the primary term of a lease the Secretary shall 
        renew for an additional 10-year term a lease that does 
        not meet the requirements of paragraph (1) if the 
        lessee submits to the Secretary an application for 
        renewal not later than 60 days before the expiration of 
        the primary lease and pays the Secretary a renewal fee 
        of $100 per acre of leased land, and--
                  (A) the lessee provides evidence, and the 
                Secretary agrees that, the lessee has 
                diligently pursued exploration that warrants 
                continuation with the intent of continued 
                exploration or future potential development of 
                the leased land; or
                  (B) all or part of the lease--
                          (i) is part of a unit agreement 
                        covering a lease described in 
                        subparagraph (A); and
                          (ii) has not been previously 
                        contracted out of the unit.
          (4) Applicability.--This subsection applies to a 
        lease that is in effect on or after the date of 
        enactment of the Energy Policy Act of 2005.
          (5) Expiration for failure to produce.--
        Notwithstanding any other provision of this Act, if no 
        oil or gas is produced from a lease within 30 years 
        after the date of the issuance of the lease the lease 
        shall expire.
          (6) Termination.--No lease issued under this section 
        covering lands capable of producing oil or gas in 
        paying quantities shall expire because the lessee fails 
        to produce the same due to circumstances beyond the 
        control of the lessee.
  (j) Unit Agreements.--
          (1) In general.--For the purpose of conservation of 
        the natural resources of all or part of any oil or gas 
        pool, field, reservoir, or like area, lessees 
        (including representatives) of the pool, field, 
        reservoir, or like area may unite with each other, or 
        jointly or separately with others, in collectively 
        adopting and operating under a unit agreement for all 
        or part of the pool, field, reservoir, or like area 
        (whether or not any other part of the oil or gas pool, 
        field, reservoir, or like area is already subject to 
        any cooperative or unit plan of development or 
        operation), if the Secretary determines the action to 
        be necessary or advisable in the public interest. In 
        determining the public interest, the Secretary should 
        consider, among other things, the extent to which the 
        unit agreement will minimize the impact to surface 
        resources of the leases and will facilitate 
        consolidation of facilities.
          (2) Consultation.--In making a determination under 
        paragraph (1), the Secretary shall consult with and 
        provide opportunities for participation by the State of 
        Alaska or a Regional Corporation (as defined in section 
        3 of the Alaska Native Claims Settlement Act (43 U.S.C. 
        1602)) with respect to the creation or expansion of 
        units that include acreage in which the State of Alaska 
        or the Regional Corporation has an interest in the 
        mineral estate.
          (3) Production allocation methodology.--(A) The 
        Secretary may use a production allocation methodology 
        for each participating area within a unit that includes 
        solely Federal land in the Reserve.
          (B) The Secretary shall use a production allocation 
        methodology for each participating area within a unit 
        that includes Federal land in the Reserve and non-
        Federal land based on the characteristics of each 
        specific oil or gas pool, field, reservoir, or like 
        area to take into account reservoir heterogeneity and 
        area variation in reservoir producibility across 
        diverse leasehold interests. The implementation of the 
        foregoing production allocation methodology shall be 
        controlled by agreement among the affected lessors and 
        lessees.
          (4) Benefit of operations.--Drilling, production, and 
        well reworking operations performed in accordance with 
        a unit agreement shall be deemed to be performed for 
        the benefit of all leases that are subject in whole or 
        in part to such unit agreement.
          (5) Pooling.--If separate tracts cannot be 
        independently developed and operated in conformity with 
        an established well spacing or development program, any 
        lease, or a portion thereof, may be pooled with other 
        lands, whether or not owned by the United States, under 
        a communitization or drilling agreement providing for 
        an apportionment of production or royalties among the 
        separate tracts of land comprising the drilling or 
        spacing unit when determined by the Secretary of the 
        Interior (in consultation with the owners of the other 
        land) to be in the public interest, and operations or 
        production pursuant to such an agreement shall be 
        deemed to be operations or production as to each such 
        lease committed to the agreement.
  (k) Exploration Incentives.--
          (1) In general.--
                  (A) Waiver, suspension, or reduction.--To 
                encourage the greatest ultimate recovery of oil 
                or gas or in the interest of conservation, the 
                Secretary may waive, suspend, or reduce the 
                rental fees or minimum royalty, or reduce the 
                royalty on an entire leasehold (including on 
                any lease operated pursuant to a unit 
                agreement), whenever (after consultation with 
                the State of Alaska and the North Slope Borough 
                of Alaska and the concurrence of any Regional 
                Corporation for leases that include land that 
                was made available for acquisition by the 
                Regional Corporation under the provisions of 
                section 1431(o) of the Alaska National Interest 
                Lands Conservation Act (16 U.S.C. 3101 et 
                seq.)) in the judgment of the Secretary it is 
                necessary to do so to promote development, or 
                whenever in the judgment of the Secretary the 
                leases cannot be successfully operated under 
                the terms provided therein.
                  (B) Applicability.--This paragraph applies to 
                a lease that is in effect on or after the date 
                of enactment of the Energy Policy Act of 2005..
          (2) Suspension of operations and production.--The 
        Secretary may direct or assent to the suspension of 
        operations and production on any lease or unit.
          (3) Suspension of payments.--If the Secretary, in the 
        interest of conservation, shall direct or assent to the 
        suspension of operations and production on any lease or 
        unit, any payment of acreage rental or minimum royalty 
        prescribed by such lease or unit likewise shall be 
        suspended during the period of suspension of operations 
        and production, and the term of such lease shall be 
        extended by adding any such suspension period to the 
        lease.
  (l) Receipts.--All receipts from sales, rentals, bonuses, and 
royalties on leases issued pursuant to this section shall be 
paid into the Treasury of the United States: Provided, That 50 
percent thereof shall be paid by the Secretary of the Treasury 
semiannually, as soon thereafter as practicable after March 30 
and September 30 each year, to the State of Alaska for: (1) 
planning; (2) construction, maintenance, and operation of 
essential public facilities; and (3) other necessary provisions 
of public service: Provided further, That in the allocation of 
such funds, the State shall give priority to use by 
subdivisions of the State most directly or severely impacted by 
development of oil and gas leased under this Act.
  (m) Explorations.--Any agency of the United States and any 
person authorized by the Secretary may conduct geological and 
geophysical explorations in the National Petroleum Reserve in 
Alaska which do not interfere with operations under any 
contract maintained or granted previously. Any information 
acquired in such explorations shall be subject to the 
conditions of 43 U.S.C. 1352(a)(l)(A).
  (n) Environmental Impact Statements.--
          (1) Judicial review.--Any action seeking judicial 
        review of the adequacy of any program or site-specific 
        environmental impact statement under section 102 of the 
        National Environmental Policy Act of 1969 (42 U.S.C. 
        4332) concerning oil and gas leasing in the National 
        Petroleum Reserve-Alaska shall be barred unless brought 
        in the appropriate District Court within 60 days after 
        notice of the availability of such statement is 
        published in the Federal Register.
          (2) Initial lease sales.--The detailed environmental 
        studies and assessments that have been conducted on the 
        exploration program and the comprehensive land-use 
        studies carried out in response to sections 105 (b) and 
        (c) of Public Law 94-258 shall be deemed to have 
        fulfilled the requirements of section 102(2)(c) of the 
        National Environmental Policy Act (Public Law 91-190), 
        with regard to the first two oil and gas lease sales in 
        the National Petroleum Reserve-Alaska: Provided, That 
        not more than a total of 2,000,000 acres may be leased 
        in these two sales: Provided further, That any 
        exploration or production undertaken pursuant to this 
        section shall be in accordance with section 104(a).
  (o) Regulations.--As soon as practicable after the date of 
enactment of the Energy Policy Act of 2005, the Secretary shall 
issue regulations to implement this section.
  (p) Waiver of Administration for Conveyed Lands.--
          (1) In general.--Notwithstanding section 14(g) of the 
        Alaska Native Claims Settlement Act (43 U.S.C. 
        1613(g))--
                  (A) the Secretary of the Interior shall waive 
                administration of any oil and gas lease to the 
                extent that the lease covers any land in the 
                Reserve in which all of the subsurface estate 
                is conveyed to the Arctic Slope Regional 
                Corporation (referred to in this subsection as 
                the ``Corporation'');
                  (B)(i) in a case in which a conveyance of a 
                subsurface estate described in subparagraph (A) 
                does not include all of the land covered by the 
                oil and gas lease, the person that owns the 
                subsurface estate in any particular portion of 
                the land covered by the lease shall be entitled 
                to all of the revenues reserved under the lease 
                as to that portion, including, without 
                limitation, all the royalty payable with 
                respect to oil or gas produced from or 
                allocated to that portion;
                          (ii) in a case described in clause 
                        (i), the Secretary of the Interior 
                        shall--
                                  (I) segregate the lease into 
                                2 leases, 1 of which shall 
                                cover only the subsurface 
                                estate conveyed to the 
                                Corporation; and
                                  (II) waive administration of 
                                the lease that covers the 
                                subsurface estate conveyed to 
                                the Corporation; and
                          (iii) the segregation of the lease 
                        described in clause (ii)(I) has no 
                        effect on the obligations of the lessee 
                        under either of the resulting leases, 
                        including obligations relating to 
                        operations, production, or other 
                        circumstances (other than payment of 
                        rentals or royalties); and
                  (C) nothing in this subsection limits the 
                authority of the Secretary of the Interior to 
                manage the federally-owned surface estate 
                within the Reserve.

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