II 

112TH CONGRESS 

1ST SESSION S. 205 

To amend the Outer Continental Shelf Lands Act to require that oil produced 

from Federal leases in certain Arctic waters be transported by pipeline 

to onshore facilities and to provide for the sharing of certain outer 

Continental Shelf revenues from areas in the Alaska Adjacent Zone. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 26, 2011 

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

to the Committee on Energy and Natural Resources 

A BILL 

To amend the Outer Continental Shelf Lands Act to require 

that oil produced from Federal leases in certain Arctic 

waters be transported by pipeline to onshore facilities 

and to provide for the sharing of certain outer Continental Shelf revenues from areas in the Alaska Adjacent 

Zone. 

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 ‘‘Alaska Adjacent Zone 

5 Safe Oil Transport and Revenue Sharing Act’’. 


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1 SEC. 2. FINDINGS. 

2 Congress finds that— 

3 (1) the United States is an Arctic nation 

4 with— 

5 (A) an approximately 700-mile border with 

6 the Arctic Ocean; 

7 (B) more than 100,000,000 acres of land 

8 above the Arctic Circle; and 

9 (C) an even broader area defined as Arctic 

10 by temperature, which includes the Bering Sea 

11 and Aleutian Islands; 

12 (2) the Arctic region of the United States— 

13 (A) is home to an indigenous population 

14 that has subsisted for millennia on the abun15 dance of marine mammals, fish, and wildlife in 

16 the Arctic region, many of which are unique to 

17 the region; 

18 (B) is known to the indigenous population 

19 as Inuvikput or the ‘‘place where we live’’; and 

20 (C) has produced more than 

21 16,000,000,000 barrels of oil and, according to 

22 the United States Geological Survey, may hold 

23 an additional 30,000,000,000 barrels of oil and 

24 220,000,000,000,000 cubic feet of natural gas, 

25 making the region of fundamental importance 

26 to the national interest of the United States; 


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1 (3) temperatures in the United States Arctic re2 gion have warmed by 3 to 4 degrees Celsius over the 

3 past half-century, a rate of increase that is twice the 

4 global average; 

5 (4) the Arctic ice pack is rapidly diminishing 

6 and thinning, and the National Oceanic and Atmos7 pheric Administration estimates the Arctic Ocean 

8 may be ice-free during summer months in as few as 

9 30 years; 

10 (5) those changes to the Arctic region are hav11 ing a significant impact on the indigenous people of 

12 the Arctic, the communities and ecosystems of the 

13 people, as well as the marine mammals, fish, and 

14 wildlife on which the people depend; and 

15 (6) those changes are opening new portions of 

16 the United States Arctic continental shelf to possible 

17 development for offshore oil and gas, commercial 

18 fishing, marine shipping, and tourism. 

19 SEC. 3. PRODUCTION OF OIL FROM CERTAIN ARCTIC OFF20 SHORE LEASES. 

21 Section 5 of the Outer Continental Shelf Lands Act 

22 (43 U.S.C. 1334) is amended by adding at the end the 

23 following: 

24 ‘‘(k) OIL TRANSPORTATION IN ARCTIC WATERS.— 

25 The Secretary shall— 


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1 ‘‘(1) require that oil produced from Federal 

2 leases in Arctic waters in the Chukchi Sea planning 

3 area, Beaufort Sea planning area, or Hope Basin 

4 planning area be transported by pipeline to onshore 

5 facilities; and 

6 ‘‘(2) provide for, and issue appropriate permits 

7 for, the transportation of oil from Federal leases in 

8 Arctic waters in preproduction phases (including ex9 ploration) by means other than pipeline.’’. 

10 SEC. 4. REVENUE SHARING FROM AREAS IN ALASKA ADJA11 CENT ZONE. 

12 Section 18 of the Outer Continental Shelf Lands Act 

13 (43 U.S.C. 1344) is amended by adding at the end the 

14 following: 

15 ‘‘(i) REVENUE SHARING FROM AREAS IN ALASKA

16 ADJACENT ZONE.— 

17 ‘‘(1) DEFINITIONS.—In this subsection: 

18 ‘‘(A) COASTAL POLITICAL SUBDIVISION.— 

19 The term ‘coastal political subdivision’ means a 

20 county-equivalent subdivision of the State all or 

21 part of which— 

22 ‘‘(i) lies within the coastal zone (as 

23 defined in section 304 of the Coastal Zone 

24 Management Act of 1972 (16 U.S.C. 

25 1453)); and 


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1 ‘‘(ii) the closest point of which is not 

2 more than 300 statute miles from the geo3 graphical center of any leased tract. 

4 ‘‘(B) DISTANCE.—The terms ‘distance’ 

5 means minimum great circle distance. 

6 ‘‘(C) INDIAN TRIBE.—The term ‘Indian 

7 tribe’ means an Alaska Native entity recognized 

8 and eligible to receive services from the Bureau 

9 of Indian Affairs, the headquarters of which is 

10 located within 300 miles of the geographical 

11 center of a leased tract. 

12 ‘‘(D) LEASED TRACT.—The term ‘leased 

13 tract’ means a tract leased under this Act for 

14 the purpose of drilling for, developing, and pro15 ducing oil or natural gas resources. 

16 ‘‘(E) STATE.—The term ‘State’ means the 

17 State of Alaska. 

18 ‘‘(2) BONUS BIDS.—Subject to paragraphs (4), 

19 (5), and (6), effective beginning on the date that is 

20 5 years after the date of enactment of this sub21 section, the State shall, without further appropria22 tion or action, receive 37.5 percent of any bonus bid 

23 paid for leasing rights for any area in the Alaska 

24 Adjacent Zone. 


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1 ‘‘(3) POSTLEASING REVENUES.—Subject to 

2 paragraphs (4), (5), and (6), in addition to bonus 

3 bids under paragraph (1), the State shall receive, 

4 from leasing of the area, 37.5 percent of— 

5 ‘‘(A) any lease rental payments; 

6 ‘‘(B) any lease royalty payments; 

7 ‘‘(C) any royalty proceeds from a sale of 

8 royalties taken in kind by the Secretary; and 

9 ‘‘(D) any other revenues from a bidding 

10 system under section 8. 

11 ‘‘(4) ALLOCATION AMONG COASTAL POLITICAL

12 SUBDIVISIONS OF THE STATE.— 

13 ‘‘(A) IN GENERAL.—The Secretary shall 

14 pay 20 percent of any allocable share of the 

15 State, as determined under paragraphs (2) and 

16 (3), directly to coastal political subdivisions. 

17 ‘‘(B) ALLOCATION.— 

18 ‘‘(i) IN GENERAL.—For each leased 

19 tract used to calculate the allocation of the 

20 State, the Secretary shall pay the coastal 

21 political subdivisions within 300 miles of 

22 the geographical center of the leased tract 

23 based on the relative distance of the coast24 al political subdivisions from the leased 


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1 tract in accordance with this subpara2 graph. 

3 ‘‘(ii) DISTANCES.—For each coastal 

4 political subdivision, the Secretary shall de5 termine the distance between the point on 

6 the coastal political subdivision coastline 

7 closest to the geographical center of the 

8 leased tract and the geographical center of 

9 the tract. 

10 ‘‘(iii) PAYMENTS.—The Secretary 

11 shall divide and allocate the qualified outer 

12 Continental Shelf revenues derived from 

13 the leased tract among coastal political 

14 subdivisions in amounts that are inversely 

15 proportional to the applicable distances de16 termined under clause (ii). 

17 ‘‘(5) ALLOCATION AMONG REGIONAL CORPORA18 TIONS.— 

19 ‘‘(A) IN GENERAL.—The Secretary shall 

20 pay 33 percent of any allocable share of the 

21 State, as determined under this subsection, di22 rectly to certain Regional Corporations estab23 lished under section 7(a) of the Alaska Native 

24 Claims Settlement Act (43 U.S.C. 1606(a)). 

25 ‘‘(B) ALLOCATION.— 


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1 ‘‘(i) IN GENERAL.—For each leased 

2 tract used to calculate the allocation of the 

3 State, the Secretary shall pay the Regional 

4 Corporations, after determining those Na5 tive villages within the region of the Re6 gional Corporation which are within 300 

7 miles of the geographical center of the 

8 leased tract based on the relative distance 

9 of such villages from the leased tract, in 

10 accordance with this paragraph. 

11 ‘‘(ii) DISTANCES.—For each such vil12 lage, the Secretary shall determine the dis13 tance between the point in the village clos14 est to the geographical center of the leased 

15 tract and the geographical center of the 

16 tract. 

17 ‘‘(iii) PAYMENTS.—The Secretary 

18 shall divide and allocate the qualified outer 

19 Continental Shelf revenues derived from 

20 the leased tract among the qualifying Re21 gional Corporations in amounts that are 

22 inversely proportional to the distances of 

23 all of the Native villages within each quali24 fying region. 


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1 ‘‘(iv) REVENUES.—All revenues re2 ceived by each Regional Corporation shall 

3 be— 

4 ‘‘(I) treated by the Regional Cor5 poration as revenue subject to the dis6 tribution requirements of section 

7 7(i)(1)(A) of the Alaska Native 

8 Claims Settlement Act (43 U.S.C. 

9 1606(i)(1)(A)); and 

10 ‘‘(II) divided annually by the Re11 gional Corporation among all 12 Re12 gional Corporations in accordance 

13 with section 7(i) of that Act. 

14 ‘‘(v) FURTHER DISTRIBUTION.—A Re15 gional Corporation receiving revenues 

16 under clause (iv)(II) shall further dis17 tribute 50 percent of the revenues received 

18 in accordance with section 7(j) of the Alas19 ka Native Claims Settlement Act (43 

20 U.S.C. 1606(j)). 

21 ‘‘(6) ALLOCATION AMONG INDIAN TRIBES.— 

22 ‘‘(A) IN GENERAL.—The Secretary shall 

23 pay 7 percent of any allocable share of the 

24 State, as determined under this subsection, di25 rectly to Indian tribes. 


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1 ‘‘(B) ALLOCATION.— 

2 ‘‘(i) IN GENERAL.—For each leased 

3 tract used to calculate the allocation of the 

4 State, the Secretary shall pay Indian tribes 

5 based on the relative distance of the head6 quarters of the Indian tribes from the 

7 leased tract, in accordance with this sub8 paragraph. 

9 ‘‘(ii) DISTANCES.—For each Indian 

10 tribe, the Secretary shall determine the 

11 distance between the location of the head12 quarters of the Indian tribe and the geo13 graphical center of the tract. 

14 ‘‘(iii) PAYMENTS.—The Secretary 

15 shall divide and allocate the qualified outer 

16 Continental Shelf revenues derived from 

17 the leased tract among the Indian tribes in 

18 amounts that are inversely proportional to 

19 the distances described in clause (ii). 

20 ‘‘(7) CONSERVATION ROYALTY.—After making 

21 distributions under paragraphs (2) and (3) and sec22 tion 31, the Secretary shall, without further appro23 priation or action, distribute a conservation royalty 

24 equal to 6.25 percent of Federal royalty revenues de25 rived from an area leased under this subsection from 


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1 all areas leased under this subsection for any year, 

2 into the land and water conservation fund estab3 lished under section 2 of the Land and Water Con4 servation Fund Act of 1965 (16 U.S.C. 460l–5) to 

5 provide financial assistance to States under section 

6 6 of that Act (16 U.S.C. 460l–8). 

7 ‘‘(8) DEFICIT REDUCTION.—After making dis8 tributions in accordance with paragraphs (2) and (3) 

9 and in accordance with section 31, the Secretary 

10 shall, without further appropriation or action, dis11 tribute an amount equal to 6.25 percent of Federal 

12 royalty revenues derived from an area leased under 

13 this subsection from all areas leased under this sub14 section for any year, into direct Federal deficit re15 duction.’’. 

Æ 


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