II 

116TH CONGRESS 

2D SESSION S. 4223 

To amend the Mineral Leasing Act to ensure market competition in onshore 

oil and gas leasing, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 20, 2020 

Mr. TESTER introduced the following bill; which was read twice and referred 

to the Committee on Energy and Natural Resources 

A BILL 

To amend the Mineral Leasing Act to ensure market competition in onshore oil and gas leasing, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Leasing Market Effi5 ciency Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds that— 

8 (1) pursuant to the Federal Land Policy and 

9 Management Act of 1976 (43 U.S.C. 1701 et seq.) 

10 and the Forest and Rangeland Renewable Resources 


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1 Planning Act of 1974 (16 U.S.C. 1600 et seq.), pub2 lic land and National Forest System land are to be 

3 managed for multiple uses, including recreation, 

4 range, timber, minerals, watershed, wildlife and fish, 

5 and natural scenic, scientific, and historical values; 

6 (2) existing oil and gas leases, even if undevel7 oped, can and do prevent the Bureau of Land Man8 agement from managing tracts of land for other 

9 multiple uses; 

10 (3) oil and gas lease parcels that do not receive 

11 bids at competitive auction have been tested by the 

12 competitive market and found to have minimal or no 

13 present value for oil and gas development; 

14 (4) noncompetitive leasing does not provide a 

15 fair return to taxpayers since noncompetitive leasing 

16 allows companies and individuals to pay less than 

17 the minimum $2 bid for the use of public land; 

18 (5) noncompetitively issued leases are usually 

19 not developed and account for only a small fraction 

20 of royalty-generating production; 

21 (6) companies and individuals frequently pur22 chase oil and gas leases noncompetitively, despite 

23 lacking the intent or capability to develop them, as 

24 a form of speculation; 


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1 (7) relative to leases issued competitively, leases 

2 issued noncompetitively are significantly more likely 

3 to be terminated for failure to pay rent; 

4 (8) the noncompetitive leasing program drains 

5 administrative resources from the Bureau of Land 

6 Management, in the form of personnel time and ef7 fort to issue, monitor, and frequently terminate and 

8 reinstate noncompetitive leases; 

9 (9) noncompetitive leasing has increased in re10 cent years, with the number of leases issued non11 competitively in calendar year 2018 marking a 10- 

12 year high; 

13 (10) several States, including Colorado and por14 tions of New Mexico, do not regularly issue leases 

15 noncompetitively, and yet maintain a robust and 

16 profitable oil and gas program; and 

17 (11) the Federal onshore oil and gas leasing 

18 program is best served by— 

19 (A) issuing oil and gas leases only through 

20 a competitive process; and 

21 (B) leaving land that does not receive bids 

22 at competitive auction to be managed for other 

23 uses. 


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1 SEC. 3. POLICY OF THE UNITED STATES; SENSE OF CON2 GRESS. 

3 (a) POLICY OF THE UNITED STATES.—It is the pol4 icy of the United States that the Secretary of the Interior 

5 shall not issue onshore oil and gas leases except through 

6 a competitive bidding process. 

7 (b) SENSE OF CONGRESS.—It is the sense of Con8 gress that the policy of the United States described in sub9 section (a)— 

10 (1) will discourage speculation in the Federal 

11 onshore oil and gas leasing program; 

12 (2) will conserve limited Federal resources that 

13 can be better applied elsewhere; 

14 (3) will avoid opportunity costs that impact the 

15 management of other resources, such as wildlife 

16 habitat management; 

17 (4) will benefit taxpayers from the receipt by 

18 the Secretary of the Interior of at least the min19 imum bid value for onshore oil and gas leases issued 

20 by the Secretary of the Interior; 

21 (5) is in keeping with the goals of multiple use 

22 land management; and 

23 (6) is not to the detriment of the fiscal interests 

24 or energy security of the United States. 


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1 SEC. 4. ELIMINATION OF NONCOMPETITIVE LEASING. 

2 (a) OIL AND GAS LEASING.—Section 17 of the Min3 eral Leasing Act (30 U.S.C. 226) is amended— 

4 (1) by striking subsection (a) and inserting the 

5 following: 

6 ‘‘(a) LEASING AUTHORITY.— 

7 ‘‘(1) IN GENERAL.—All land subject to disposi8 tion under this Act that is known or believed to con9 tain oil or gas deposits may be leased by the Sec10 retary. 

11 ‘‘(2) RECEIPT OF FAIR MARKET VALUE.—In 

12 conducting leasing activities under this Act, the Sec13 retary shall ensure the receipt by the United States 

14 of fair market value for— 

15 ‘‘(A) any land or resources leased by the 

16 United States; and 

17 ‘‘(B) any rights conveyed by the United 

18 States.’’; 

19 (2) in subsection (b)— 

20 (A) in paragraph (1)(A)— 

21 (i) in the first sentence, by striking 

22 ‘‘paragraphs (2) and (3) of this sub23 section’’ and inserting ‘‘paragraph (2)’’; 

24 and 

25 (ii) by striking the last sentence; and 

26 (B) by striking paragraph (3); 


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1 (3) by striking subsection (c) and inserting the 

2 following: 

3 ‘‘(c) ADDITIONAL ROUNDS OF COMPETITIVE BID4 DING.—Land made available for leasing under subsection 

5 (b)(1) for which no bid is accepted or received may be 

6 made available by the Secretary for a new round of com7 petitive bidding under that subsection.’’; and 

8 (4) in subsection (e)— 

9 (A) in the third sentence, by striking ‘‘Any 

10 lease’’ and inserting the following: 

11 ‘‘(3) ADDITIONAL EXTENSIONS.—Any lease’’; 

12 (B) in the second sentence, by striking 

13 ‘‘Each such lease’’ and inserting the following: 

14 ‘‘(2) EXTENSION OF LEASE AFTER PRIMARY

15 TERM.—A lease described in paragraph (1)’’; and 

16 (C) by striking the subsection designation 

17 and all that follows through the period at the 

18 end of the first sentence and inserting the fol19 lowing: 

20 ‘‘(e) TERM OF LEASE.— 

21 ‘‘(1) IN GENERAL.—Any lease issued under this 

22 section, including a lease for tar sand areas, shall be 

23 for a primary term of 10 years.’’. 


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1 (b) FAILURE TO COMPLY WITH PROVISIONS OF

2 LEASE.—Section 31 of the Mineral Leasing Act (30 

3 U.S.C. 188) is amended— 

4 (1) in subsection (d)(1), in the first sentence, 

5 by striking ‘‘or section 17(c) of this Act’’; 

6 (2) in subsection (e)— 

7 (A) in paragraph (2)— 

8 (i) by striking ‘‘either’’; and 

9 (ii) by striking ‘‘or the inclusion’’ and 

10 all that follows through ‘‘, all’’; and 

11 (B) in paragraph (3)— 

12 (i) in subparagraph (A), by adding 

13 ‘‘and’’ after the semicolon; 

14 (ii) by striking subparagraph (B); and 

15 (iii) by striking ‘‘(3)(A) payment’’ and 

16 inserting the following: 

17 ‘‘(3) payment’’; 

18 (3) in subsection (g)— 

19 (A) in paragraph (1), by striking ‘‘as a 

20 competitive’’ and all that follows through ‘‘of 

21 this Act’’ and inserting ‘‘in the same manner as 

22 the original lease issued pursuant to section 

23 17’’; 

24 (B) by striking paragraph (2); 


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1 (C) by redesignating paragraphs (3) and 

2 (4) as paragraphs (2) and (3), respectively; and 

3 (D) in paragraph (2) (as so redesignated), 

4 by striking ‘‘applicable to leases issued under 

5 subsection 17(c) of this Act (30 U.S.C. 226(c)) 

6 except,’’ and inserting ‘‘except’’; 

7 (4) in subsection (h), by striking ‘‘subsections 

8 (d) and (f) of this section’’ and inserting ‘‘subsection 

9 (d)’’; 

10 (5) in subsection (i), by striking ‘‘(i)(1) In act11 ing’’ and all that follows through ‘‘of this section’’ 

12 in paragraph (2) and inserting the following: 

13 ‘‘(i) ROYALTY REDUCTION IN REINSTATED

14 LEASES.—In acting on a petition for reinstatement pursu15 ant to subsection (d)’’; 

16 (6) by striking subsection (f); and 

17 (7) by redesignating subsections (g) through (j) 

18 as subsections (f) through (i), respectively. 

Æ 


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