[House Report 118-376]
[From the U.S. Government Publishing Office]


118th Congress }                                                {  Report
                        HOUSE OF REPRESENTATIVES
 2d Session    }                                                { 118-376

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



 
                RESTORING AMERICAN ENERGY DOMINANCE ACT

                                _______
                                

February 7, 2024.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Westerman, from the Committee on Natural Resources, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 6009]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 6009) to require the Director of the Bureau of 
Land Management to withdraw the proposed rule relating to fluid 
mineral leases and leasing process, and for other purposes, 
having considered the same, reports favorably thereon with an 
amendment and recommends 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 ``Restoring American Energy Dominance 
Act''.

SEC. 2. WITHDRAWAL OF BLM PROPOSED RULE.

  (a) In General.--Not later than 30 days after the date of enactment 
of this Act, the Director of the Bureau of Land Management shall 
withdraw the proposed rule of the Bureau of Land Management entitled 
``Fluid Mineral Leases and Leasing Process'' (88 Fed. Reg. 47562 (July 
24, 2023)).
  (b) No Further Action.--The Director of the Bureau of Land Management 
may not take any action to finalize, implement, or enforce the proposed 
rule described in subsection (a) or any substantially similar rule.

                       PURPOSE OF THE LEGISLATION

    The purpose of H.R. 6009 is to require the Director of the 
Bureau of Land Management to withdraw the proposed rule 
relating to fluid mineral leases and leasing process, and for 
other purposes.

                  BACKGROUND AND NEED FOR LEGISLATION

    At the end of July 2023, the Bureau of Land Management 
(BLM) issued a proposed rule to update its oil and gas leasing 
regulations.\1\ The proposed rule would formally implement 
provisions from the Inflation Reduction Act (IRA), which 
increased the royalty rate for production on federal lands, 
while also increasing and creating new fees on producers. While 
the rule codified pieces of the IRA, it also made major, non-
statutory changes to the BLM's onshore leasing program. 
Specifically, the rule proposes ending nationwide bonding and 
increasing the minimum bond amounts for individual lease bonds 
and statewide lease bonds from $10,000 to $150,000 and from 
$25,000 to $500,000 respectively. Simply put, this significant 
increase is an attempt by the Biden administration to further 
disincentivize oil and gas production on federal lands by tying 
up capital that would otherwise be put back into production. 
Additionally, it is unjustifiable as there are only 37 orphaned 
oil and gas wells on BLM-managed lands\2\ and the BLM has only 
utilized bonds to plug wells on federal lands 40 times over the 
last decade.\3\
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    \1\Bureau of Land Management, Fluid Mineral Leases and Leasing 
Process, 88 FR 47562, 7/24/23, https://www.federalregister.gov/
documents/2023/07/24/2023-14287/fluid-mineral-leases-and-leasing-
process.
    \2\United States Department of the Interior, Questions for the 
Record Response for the Senate Energy and Natural Resources Committee 
Full Committee Hearing ``To Examine the Department of the Interior's 
Implementation of the Infrastructure Investment and Jobs Act'' held on 
December 13, 2022, June 22, 2023.
    \3\Id.
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    The proposed rule also introduces the idea of using 
``preference criteria''\4\ to inform the BLM's selection of 
lands for lease sales. The BLM's stated rationale for this 
change is preserving agency resources and avoiding conflict in 
areas ``with sensitive cultural, wildlife, and recreation 
resources.''\5\ This nebulous methodology could be especially 
problematic if BLM field offices avoid leasing in all areas 
with endangered or threatened species, critical habitat, or a 
nearby recreation area, a move that would greatly limit leasing 
on federal lands. The Biden administration also plans to avoid 
leasing in areas where production is not currently occurring. 
This will prevent operators from unlocking new discoveries that 
help solidify long-term American energy security.
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    \4\Bureau of Land Management, Fluid Mineral Leases and Leasing 
Process, 88 FR 47562, 7/24/23, https://www.federalregister.gov/
documents/2023/07/24/2023-14287/fluid-mineral-leases-and-leasing-
process.
    \5\Id.
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                            COMMITTEE ACTION

    H.R. 6009 was introduced on October 20, 2023, by Rep. 
Lauren Boebert (R-CO). The bill was referred to the Committee 
on Natural Resources. On October 25, 2024, the Subcommittee on 
Energy and Mineral Resources held a hearing on a discussion 
draft of the bill. On December 6, 2023, the Committee on 
Natural Resources met to consider the bill. Representative 
Boebert (R-CO) offered an Amendment in the Nature of a 
Substitute designated Boebert__236 ANS. The amendment was 
adopted by voice vote. Ranking Member Raul Grijalva (D-AZ) 
offered an amendment to the Amendment in the Nature of a 
Substitute designated Grijalva #1. The amendment was not 
adopted by a roll call vote of 18 to 23, as follows:


    H.R. 6009, as amended, was ordered favorably reported to 
the House of Representatives by roll call vote of 23 to 18, as 
follows:


                                HEARINGS

    For the purposes of clause 3(c)(6) of House rule XIII, the 
following hearing was used to develop or consider this measure: 
hearing by the Subcommittee on Energy and Mineral Resources 
held on October 25, 2024.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Short title

    Section 1 establishes the short tile of the bill as the 
``Restoring American Energy Dominance Act''.

Section 2. Withdrawal of BLM Proposed Rule

    Section 2 would force the BLM to withdraw its onshore oil 
and gas leasing regulation and would prevent the BLM from 
finalizing a substantially similar rule in the future.

            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 AND CONGRESSIONAL BUDGET ACT

    1. Cost of Legislation and the Congressional Budget Act. 
With respect to the requirements of clause 3(c)(2) and (3) of 
rule XIII of the Rules of the House of Representatives and 
sections 308(a) and 402 of the Congressional Budget Act of 
1974, the Committee has received the following estimate for the 
bill from the Director of the Congressional Budget Office:




    H.R. 6009 would direct the Bureau of Land Management (BLM) 
to withdraw the proposed rule, ``Fluid Mineral Leases and 
Leasing Process,'' as published in the Federal Register in July 
2023.\1\ The bill also would prohibit BLM from implementing any 
substantially similar rule.
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    \1\See Bureau of Land Management, ``Fluid Mineral Leases and 
Leasing Process,'' Proposed Rule, 88 Fed. Reg. 47562 (July 24, 2023), 
http://tinyurl.com/39bjtnme.
---------------------------------------------------------------------------
    The proposed rule would restate in regulation provisions of 
the 2022 reconciliation legislation (Public Law 117-169) that 
established a fee for expressions of interest and adjusted 
royalty rates, rental rates, and minimum bids for BLM-issued 
oil and gas leases. Because those requirements would not be 
affected by the bill, CBO estimates that withdrawing the 
proposed rule would not affect those statutory fees and rates.
    The proposed rule also would establish new fees and 
increase existing fees for certain lease applications and 
permits and would increase the minimum bond amounts required 
for onshore leases. Receipts from such fees and any forfeited 
bonds are classified in the budget as discretionary offsetting 
collections; that is, as a reduction in discretionary spending. 
Spending of those collections is subject to annual 
appropriation. Assuming appropriation of those future 
collections, CBO expects that any additional amounts collected 
under the proposed rule would be spent soon thereafter so that 
the net effect on discretionary spending would be negligible.
    On that basis, CBO estimates that eliminating the 
collection and spending of those collections under H.R. 6009 
would, on net, have a negligible effect on spending subject to 
appropriation.
    The CBO staff contact for this estimate is Lilia Ledezma. 
The estimate was reviewed by H. Samuel Papenfuss, Deputy 
Director of Budget Analysis.
                                         Phillip L. Swagel,
                             Director, Congressional Budget Office.

    2. 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 require the Director of the Bureau 
of Land Management to withdraw the proposed rule relating to 
fluid mineral leases and leasing process, and for other 
purposes.

                           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.

                 UNFUNDED MANDATES REFORM ACT STATEMENT

    According to the Congressional Budget Office, H.R. 6009 
contains no unfunded mandates as defined in the Unfunded 
Mandates Reform Act.

                           EXISTING PROGRAMS

    Directed Rule Making. This bill does not contain any 
directed rule makings.
    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.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

    Any preemptive effect of this bill over state, local, or 
tribal law is intended to be consistent with the bill's 
purposes and text and the Supremacy Clause of Article VI of the 
U.S. Constitution.

                        CHANGES IN EXISTING LAW

    As ordered reported by the Committee on Natural Resources, 
H.R. 6009 makes no changes in existing law.

                            DISSENTING VIEWS

    H.R. 6009 would withdraw BLM's proposed oil and gas rule, 
undermining Inflation Reduction Act--directed reforms, and 
would prohibit any implementation or enforcement of any 
substantially similar rule.
    In July 2023, BLM proposed updated regulations for the 
onshore oil and gas leasing program. The proposed rule 
incorporates the updates from the Inflation Reduction Act (IRA) 
and the recommendations from the 2021 report and is consistent 
with Executive Order 14008, ``Tackling the Climate Crisis at 
Home and Abroad.'' The rulemaking is the first comprehensive 
re-evaluation of the federal onshore oil and gas program since 
1988.
    The long overdue reforms in the rule address longstanding 
problems identified by independent and nonpartisan entities and 
the agency itself and move toward aligning the oil and gas 
program with our climate goals.
    The proposed rule would:\1\
---------------------------------------------------------------------------
    \1\U.S. Department of the Interior, Press Release, July 2023, 
Interior Department Takes Steps to Modernize Oil and Gas Leasing on 
Public Lands, Ensure Fair Return to Taxpayers https://www.doi.gov/
pressreleases/interior-department-takes-steps-modernize-oil-and-gas-
leasing-public-lands-ensure-
fair#::text=Key%20elements%20of%20the%20proposed,eliminate%20 
nationwide%20and %20unit%20bonds.
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          1. Modernize bonding requirements for leasing, 
        development, and production to reduce the future burden 
        on American taxpayers.
          2. Prioritize development on lands with existing 
        infrastructure or high potential for production and 
        away from important environmental and cultural sites.
          3. Implement key fiscal reforms, including 
        modernizing royalty rates, rental rates, and minimum 
        bids to align with the IRA.
    This rule is a common sense and long overdue rulemaking 
with popular support across the West. Ninety-one percent of 
Western voters support requiring oil and gas companies, not 
taxpayers, to pay for cleaning up and reclaiming public lands 
after they drill. Seventy-two percent support allowing drilling 
on public lands only where there is a high likelihood of 
producing oil and gas.\2\
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    \2\Colorado College Stage of the Rockies Project. January 2023, Key 
Findings: The 2023 Survey of the Attitudes of Voters in Eight Western 
States. https://www.coloradocollege.edu/other/stateoftherockies/
conservationinthewest/2023.html pp. 52, 49.
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    Natural Resources Committee Republicans oppose this rule, 
claiming it would increase costs for American energy producers 
and discourage investment in drilling on public lands. However, 
recent state experience shows otherwise: officials in Colorado 
and Texas found no clear impact of raising their state royalty 
rates on production on state lands. Notably, Texas raised its 
rates to 25 percent on most leases without a noticeable impact 
on production or leasing.\3\ BLM's increased federal royalty 
rate (16.67 percent, as mandated by the IRA) is on the low end 
of what states charge to extract on state lands (16.67-25 
percent).\4\ Taxpayers for Commonsense estimates that the 
American public lost up to $12.4 billion in revenue from oil 
and gas drilling on federal lands between 2010 and 2019 because 
of the outdated federal royalty rate.\5\
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    \3\U.S. Government Accountability Office, June 2017, Raising 
Federal Royalty Rates Could Decrease Production on Federal Lands but 
Increase Federal Revenue https://www.gao.gov/assets/gao-17-540.pdf.
    \4\U.S. Department of the Interior, November 2021, Report on the 
Federal Oil and Gas Leasing Program, https://www.doi.gov/sites/doi.gov/
files/report-on-the-federal-oil-and-gas-leasing-program-doi-eo-
14008.pdf.
    \5\Taxpayers for Common Sense, February 2020, Royalty Losing: 
Higher Royalties on State and Offshore Oil and Gas Production Reap 
Billions More than Drilling on Federal Lands https://www.taxpayer.net/
wp-content/uploads/2020/02/TCS-Royally-Losing-2020.pdf.
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    Republicans have repeatedly claimed that the increased 
bonding requirements will harm small producers and are 
unnecessary for preventing wells from being abandoned or 
orphaned. Western Energy Alliance President Kathleen Sgamma 
testified in an oversight hearing on the rule that ``the 
bonding provisions are an arbitrary and capricious solution to 
a problem that doesn't exist'' because DOI had identified 
``only 37 orphan wells on federal lands''' and there had been 
only ``40 calls on bonds over the last decade.''\6\
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    \6\Testimony of Ms. Kathleen Sgamma before the Subcommittee on 
Energy and Mineral Resources, September 19, 2023. https://
docs.house.gov/meetings/II/II06/20230919/116322/HHRG-118-II06-Wstate-
SgammaK-20230919.pdf.
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    This is a misrepresentation of the problem. Although BLM 
has stated that they have identified only 37 orphaned wells--
abandoned, unplugged wells with no current or former 
identifiable owner capable of paying for reclamation--this does 
not mean oil and gas producers are promptly and completely 
plugging non-producing wells.
    Federal law holds all past owners and operators of federal 
wells liable for reclamation if the current owner or operator 
does not have the resources to reclaim the well. An unplugged 
well can sit idled or even abandoned for years before a federal 
agency seeks to enforce reclamation requirements; if the bond 
is insufficient to cover reclamation and the current owner does 
not have the resources, BLM must contact all remaining liable 
parties to enforce reclamation.\7\ Although this typically 
results in reclamation without a well officially being declared 
orphaned, it can take years and large amounts of agency staff 
time and resources to enforce the reclamation of a single oil 
and gas well. Meanwhile, these unplugged wells can cause severe 
environmental and public health issues for nearby 
communities.\8\ In a 2019 report, GAO identified 2,294 
unplugged wells that had not produced in over ten years and 
were at increased risk of becoming orphaned.\9\ Nonpartisan 
experts at GAO and the DOI Office.\10\ of Inspector General 
have repeatedly recommended increasing bond amounts to ensure 
complete and prompt reclamation of oil and gas wells.\11\
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    \7\Bureau of Land Management. ``Instruction Memorandum 2021-039, 
Orphaned Well Identification, Prioritization, and Plugging and 
Reclamation.'' July 13, 2021. https://www.blm.gov/policy/im-2021-039.
    \8\LA Times, ``The toxic legacy of old oil wells: California's 
multibillion-dollar problem,'' February 6, 2020 https://
www.latimes.com/projects/california-oil-well-drilling-idle-cleanup/.
    \9\U.S. Government Accountability Office, September 2019. ``Bureau 
of Land management Should Address Risks from Insufficient Bonds to 
Reclaim Wells.'' https://www.gao.gov/assets/gao-19-615.pdf.
    \10\Ibid.
    \11\U.S. Department of the Interior Office of Inspector General. 
``BLM Oil and Gas Bonding Procedures.'' September 25, 2012. https://
www.doioig.gov/sites/default/files/2021-migration/
BLM%2520Oil%2520and%2520Gas%2520Bonding%2520Procedures.pdf.
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    While Republicans claim the proposed rule harms ranchers 
and other small businesses that use public lands--in reality, 
the rule does not undermine any valid existing land rights and 
levels the playing field for important local economic drivers 
like the recreation industry. For decades, BLM's land 
management has prioritized oil and gas development despite 
their multi-use mandate: over 90 percent of public lands are 
open to oil and gas leasing.\12\ The practice of speculative 
leasing of low-potential lands, which the IRA and the BLM 
rulemaking would end, pads industry profits while discouraging 
other uses of the lands.
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    \12\The Wilderness Society, Fixing the BLM's Indiscriminate Energy 
Leasing https://www.wilderness.org/sites/default/files/media/file/
Report-No%20Exit-Fixing%20BLM%20Leasing
.pdf.

                                          Raul M. Grijalva,
                                                    Ranking Member.