19–006 

112TH CONGRESS REPT. 112–520 " ! HOUSE OF REPRESENTATIVES 2d Session Part 1 

STRATEGIC ENERGY PRODUCTION ACT OF 2012 

JUNE 8, 2012.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. UPTON, from the Committee on Energy and Commerce, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 4480] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Energy and Commerce, to whom was referred 

the bill (H.R. 4480) to provide for the development of a plan to increase oil and gas exploration, development, and production under 

oil and gas leases of Federal lands under the jurisdiction of the 

Secretary of Agriculture, the Secretary of Energy, the Secretary of 

the Interior, and the Secretary of Defense in response to a drawdown of petroleum reserves from the Strategic Petroleum Reserve, 

having considered the same, report favorably thereon with an 

amendment and recommend that the bill as amended do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 2 

Background and Need for Legislation .................................................................... 3 

Hearings ................................................................................................................... 5 

Committee Consideration ........................................................................................ 6 

Committee Votes ...................................................................................................... 6 

Committee Oversight Findings ............................................................................... 14 

Statement of General Performance Goals and Objectives .................................... 14 

New Budget Authority, Entitlement Authority and Tax Expenditures .............. 14 

Earmark ................................................................................................................... 14 

Committee Cost Estimate ....................................................................................... 14 

Congressional Budget Office Estimate ................................................................... 15 

Federal Mandates Statement ................................................................................. 17 

Advisory Committee Statement .............................................................................. 17 


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Applicability to Legislative Branch ........................................................................ 17 

Section-by-Section Analysis of Legislation ............................................................ 17 

Changes in Existing Law Made by the Bill, as Reported ..................................... 18 

Dissenting Views ..................................................................................................... 20 

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 ‘‘Strategic Energy Production Act of 2012’’. 

SEC. 2. PLAN FOR INCREASING DOMESTIC OIL AND GAS EXPLORATION, DEVELOPMENT, AND 

PRODUCTION FROM FEDERAL LANDS IN RESPONSE TO STRATEGIC PETROLEUM 

RESERVE DRAWDOWN. 

Section 161 of the Energy Policy and Conservation Act (42 U.S.C. 6241) is amended by adding at the end the following new subsection: 

‘‘(k) PLAN.— 

‘‘(1) CONTENTS.— 

‘‘(A) IN GENERAL.—Not later than 180 days after the date on which the 

Secretary executes, in accordance with the provisions of this section, the 

first sale after the date of enactment of this subsection of petroleum products in the Reserve the Secretary shall develop a plan to increase the percentage of Federal lands (including submerged lands of the Outer Continental Shelf) under the jurisdiction of the Secretary of Agriculture, the Secretary of Energy, the Secretary of the Interior, and the Secretary of Defense 

leased for oil and gas exploration, development, and production. The percentage of the total amount of the Federal lands described in the preceding 

sentence by which the plan developed under this paragraph will increase 

leasing for oil and gas exploration, development, and production shall be 

the same as the percentage of petroleum in the Strategic Petroleum Reserve that was drawn down. 

‘‘(B) REQUIREMENTS.—The plan developed under this paragraph shall— 

‘‘(i) be consistent with a national energy policy to meet the present 

and future energy needs of the Nation consistent with economic goals; 

and 

‘‘(ii) promote the interests of consumers through the provision of an 

adequate and reliable supply of domestic transportation fuels at the 

lowest reasonable cost. 

‘‘(C) ENERGY INFORMATION.—The Secretary shall base the determination 

of the present and future energy needs of the Nation, for purposes of subparagraph (B)(i), on information from the Energy Information Administration. 

‘‘(2) LIMITATION.—The plan developed under paragraph (1) shall not provide 

for oil and gas exploration, development, and production leasing of a total of 

more than 10 percent of the Federal lands described in paragraph (1)(A). 

‘‘(3) CONSULTATION.—The Secretary shall develop the plan required by paragraph (1) in consultation with the Secretary of Agriculture, the Secretary of the 

Interior, and the Secretary of Defense. Additionally, in developing the plan, the 

Secretary shall consult with the American Association of Petroleum Geologists 

and other State, environmentalist, and oil and gas industry stakeholders to determine the most geologically promising lands for production of oil and natural 

gas liquids. 

‘‘(4) COMPLIANCE WITH REQUIREMENTS.—Each Federal agency described in 

paragraph (1)(A) shall comply with any requirements established by the Secretary pursuant to the plan, except that no action shall be taken pursuant to 

the plan if in the view of the Secretary of Defense such action will adversely 

affect national security or military activities, including preparedness and training. 

‘‘(5) EXCLUSIONS.—The lands referred to in paragraph (1)(A) shall not include 

lands managed under the National Park System or the National Wilderness 

Preservation System. 

‘‘(6) SAVINGS CLAUSE.—Nothing in this subsection shall be construed to limit 

or affect the application of existing restrictions on offshore drilling or requirements for land management under Federal, State, or local law.’’. 

PURPOSE AND SUMMARY

H.R. 4480, the ‘‘Strategic Energy Production Act of 2012,’’ was introduced by Representative Cory Gardner (together with RepVerDate Mar 15 2010 18:25 Jun 09, 2012 Jkt 019006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\HR520P1.XXX HR520P1

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resentatives Canseco, Olson, Coffman, Blackburn, Johnson of Ohio, 

Landry, McMorris Rodgers, Terry, and Berg) on April 24, 2012. The 

legislation would require the Secretary of Energy to develop a plan 

to increase the percentage of Federal lands under the jurisdictions 

of the Secretary of Agriculture, Secretary of Energy, Secretary of 

the Interior, and the Secretary of Defense leased for oil and gas exploration, development, and production following the first drawdown of the Strategic Petroleum Reserve (SPR). The bill requires 

that the plan: 

• Increase the total percentage of Federal lands leased for 

oil and gas exploration, development, and production commensurate with the percentage of petroleum in the SPR that was 

drawn down; 

• Limit the total percentage of Federal lands leased as a result of the plan to 10 percent; 

• Exclude lands managed under the National Park System 

or that are part of the National Wilderness Preservation System; 

• Be consistent with a national energy policy to meet 

present and future energy needs of the U.S.; and 

• Promote the interests of consumers through the provision 

of an adequate and reliable supply of domestic transportation 

fuels at the lowest reasonable cost. 

BACKGROUND AND NEED FOR LEGISLATION

The President is authorized to release oil from the Strategic Petroleum Reserve (SPR) upon a finding that there is a ‘‘severe supply disruption’’ of crude oil supplies. Originally established in response to the oil shock caused by the 1973–1974 Arab oil embargo, 

in recent years there has been increasing political pressure to authorize SPR drawdowns to increase oil supply and thereby reduce 

market pressures that contribute to increases in the price of oil and 

gasoline. These drawdowns provide transitory relief to oil and gasoline price increases and do not have a long term effect. 

During this same period of increasing political pressure to utilize 

SPR for short term price manipulation, the production of crude oil 

on Federal lands has declined. Specifically, oil production on lands 

under the jurisdictions of the Secretary of Agriculture, Secretary of 

Energy, Secretary of the Interior, and the Secretary of Defense, 

which collectively total 2.4 billion acres both onshore and offshore, 

is experiencing a precipitous decline that shows little sign of reversing course in the current climate. Like the SPR, these lands 

are ultimately under the management control of the President. 

H.R. 4480 will couple the short term necessity of a decision to 

drawdown from the SPR to a long term solution of having a sustainable supply of oil production from Federal lands. If a supply 

disruption is large enough to necessitate releasing reserves from 

the SPR then it is acknowledged that a long term plan for increasing oil production on Federal lands is required. The bill requires 

that upon the first drawdown from the SPR, the Secretary of Energy must develop a plan to increase the percentage of Federal 

lands leased for oil and gas exploration, development, and production. 


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The history of the SPR 

The SPR was created in 1975 under the Energy Policy and Conservation Act (EPCA) to help prevent a repetition of the economic 

harm caused by the 1973–1974 Arab oil embargo. The original purpose of the SPR was to help the U.S. manage a large, physically 

discernible disruption from the Persian Gulf region. The SPR provides the President with the ability to utilize a large pool of emergency oil reserves in the event of an oil supply disruption that 

threatens the economy. 

The EPCA authorized a drawdown from the SPR upon a finding 

by the President that there is a ‘‘severe supply disruption.’’ This requirement is deemed to exist if three conditions are met: 

1. An emergency situation exists and there is a significant 

reduction in supply which is of significant scope and duration; 

2. A severe increase in the price of petroleum products has 

resulted from such emergency situation; and 

3. Such price increase is likely to cause major adverse impact 

on the national economy. 

Congress provided the President with additional authority in 

1990 (under the Energy Policy and Conservation Act Amendments 

of 1990), to permit use of the SPR for short periods to resolve supply interruptions stemming from situations internal to the United 

States. The intention was to provide for an SPR drawdown under 

a less rigorous finding than that mandated by original Act. This allows the President to use the SPR for a short period without having to declare the existence of a ‘‘severe energy supply interruption.’’ 

The SPR is managed by the Department of Energy, but releases 

from the SPR can only be authorized by the President. According 

to the most recent information provided by the Department of Energy, the May 2012 SPR inventory was 696 million barrels. At that 

level, the SPR holds the equivalent of about 80 days of import protection. The Energy Policy Act of 2005 authorized SPR expansion 

to a capacity of 1 billion barrels, but the physical expansion of the 

SPR has not surpassed 727 million barrels. The SPR is comprised 

of five oil storage facilities in Louisiana and Texas. There have 

been three releases from the SPR since its creation in order to combat supply disruptions that threaten the economy: 

1. January 1991: 17 million barrels were released in response to the beginning of Operation Desert Storm; 

2. September 2005: 11 million barrels were released in response to the aftermath of Hurricane Katrina; and 

3. June 2011: 30 million barrels were released in response to 

the Libyan civil war. 

The SPR is likely to be most effective as a short-term device to 

help bridge a temporary supply shortfall until other sources can become available. Without new supply, any decrease in the price of 

oil from an SPR drawdown likely will be fleeting. This is evidenced 

in the most recent SPR release which took place in June of 2011. 

On the day of the President’s announcement of his decision to allow 

for a drawdown from the SPR, the price of West Texas Intermediate Crude decreased 4 percent. A week later the price was 

above where it had been prior to the President’s announcement. 


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Oil production on Federal land 

The total amount of lands under the jurisdictions of the Secretary of Agriculture, Secretary of Energy, Secretary of the Interior, and the Secretary of Defense collectively total 2.4 billion acres 

both onshore and offshore. According to the most recent data made 

available by the Department of the Interior, there are 36 million 

acres of offshore Federal land and 37 million acres of onshore Federal land that is currently leased for oil and gas development. This 

represents 3% of the total Federal lands of the aforementioned 

agencies. In recent years this number has remained stagnant despite an increase in the price per barrel of oil over both 5 and 10 

year periods. 

In addition to the relatively small percentage of Federal lands 

leased for oil and gas production, there has also been a decline in 

the amount of oil produced on Federal lands. According to the Congressional Research Service, oil production on Federal land decreased by average of 275,000 barrels per day in 2011. This contrasts greatly with the recent increase in production that is now occurring on non-Federal lands. For example, about 96 percent of the 

increase of oil production in the U.S. took place on non-Federal 

lands since 2007. According to the Energy Information Administration, oil production declined 14 percent on Federal lands during fiscal year 2011. 

The most striking example of the declining utilization of Federal 

lands in a long term energy plan for our Nation is an examination 

of the average annual number of leases issued by the Bureau of 

Land Management (BLM) during the previous 5 Administrations. 

During the Reagan Administration, an average of 8,821 leases were 

issued annually by BLM. Each subsequent Administration saw a 

decline in the number of leases issued annually from the previous 

Administration. Under the Obama Administration, there has been 

an average of 1,856 leases issued annually by BLM. This is a 36 

percent decrease from the Bush Administration, a 51 percent decrease from the Clinton Administration, and a 79 percent decrease 

from the Reagan Administration. 

H.R. 4480 is needed to move towards a long term plan of tapping 

into the Nation’s abundant oil supply on Federal lands by increasing the amount of Federal land that is leased for oil production. 

Simply relying on a drawdown from the SPR, without increasing a 

domestic supply, will produce only short-lived drops in the price of 

oil and a heavy reliance on sources abroad. This legislation will increase a longer term, sustainable, domestic supply of oil. 

HEARINGS

On March 28, 2012, the Subcommittee on Energy and Power held 

a legislative hearing on ‘‘The American Energy Initiative: A Focus 

on Legislative Responses to Rising Gasoline Prices’’ including discussion drafts of the ‘‘Gasoline Regulations Act of 2012’’ and the 

‘‘Strategic Energy Production Act of 2012,’’ and received testimony 

from: • Gina McCarthy, Assistant Administrator for Air and Radiation, U.S. Environmental Protection Agency; • Robert Abbey, Director, Bureau of Land Management, U.S. 

Department of the Interior; 


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• Christopher A. Smith, Deputy Assistant Secretary of Oil 

and Natural Gas, Office of Fossil Energy, U.S. Department of 

Energy; • James Burkhard, Managing Director-Global Oil Group, 

IHS Cambridge Energy Research Associates; • Jackson Coleman, Managing Partner and General Counsel, EnergyNorthAmerica, LLC; • Matthew L. Smorch, Vice President-Strategy, 

CountryMark Cooperative, LLC; • George Schink, Managing Director and Principal, Navigant 

Economics; • Robert Meyers, Senior Counsel, Crowell & Moring; • Niger Innis, Co-Chairman, Affordable Power Alliance; and • Joseph Romm, Senior Fellow, Center for American 

Progress. 

COMMITTEE CONSIDERATION

On April 17, 2012, the Subcommittee on Energy and Power forwarded a committee print entitled the ‘‘Strategic Energy Production Act of 2012,’’ as amended, to the full Committee by a roll call 

vote of 9 yeas and 7 nays. The committee print was subsequently 

introduced on April 24, 2012, by Representative Gardner together 

with Representatives Canseco, Olson, Coffman, Blackburn, Johnson, Landry, McMorris Rodgers, Terry, and Berg. 

On May 16 and 17, 2012, the Committee on Energy and Commerce met in open markup session and ordered H.R. 4480 reported 

to the House, as amended, by a roll call vote of 31 yeas and 16 

nays. 

COMMITTEE VOTES

Clause 3(b) of rule XII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. A motion by Mr. 

Upton to order H.R. 4480, reported to the House, as amended, was 

agreed to by a record vote of 31 yeas and 16 nays. The following 

reflects the record votes taken during the Committee consideration, 

including the names of those Members voting for and against. 


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COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee made findings that are reflected 

in this report. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

H.R. 4480 requires that upon the first drawdown from the Strategic Petroleum Reserve (SPR), the Secretary of Energy (in consultation with the Secretaries of Agriculture, Interior, and Defense) 

must develop a plan to increase the percentage of Federal lands 

leased for oil and gas exploration, development, and production. It 

requires the plan (i) be consistent with a national energy policy to 

meet present and future energy needs of the U.S.; (ii) promote the 

interests of consumers through the provision of an adequate and 

reliable supply of domestic transportation fuels at the lowest reasonable cost; and (iii) not result in the percentage of Federal lands 

leased to exceed 10 percent or include lands managed under the 

National Park System or the National Wilderness Preservation 

System. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee finds that H.R. 4480, the 

‘‘Energy Production Security Act of 2012,’’ would result in no new 

or increased budget authority, entitlement authority, or tax expenditures or revenues. 

EARMARK

In compliance with clause 9(e), 9(f), and 9(g) of rule XXI, the 

Committee finds that H.R. 4480, the ‘‘Energy Production Security 

Act of 2012,’’ contains no earmarks, limited tax benefits, or limited 

tariff benefits. 

COMMITTEE COST ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974. 

JUNE 6, 2012. 

Hon. FRED UPTON, Chairman, Committee on Energy and Commerce, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 4480, the Strategic Energy Production Act of 2012. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Kathleen Gramp and 

Jeff LaFave. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

Enclosure. 


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1The Bureau of Land Management acts as the leasing agent for mineral rights on all onshore 

federal lands, including those administered by the Department of Agriculture and the DepartContinued 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

H.R. 4480—Strategic Energy Production Act of 2012 

Summary: H.R. 4480 would direct the Department of Energy 

(DOE) to develop a plan to increase the amount of acreage leased 

for oil and gas development on federal lands if the department sells 

oil from the Strategic Petroleum Reserve (SPR). DOE would be required to develop that plan within 180 days after the first sale of 

oil from the SPR that occurs after the bill is enacted, with a goal 

of increasing the acreage under lease by the percentage change in 

the size of the SPR resulting from the sale. This one-time plan 

would be developed in consultation with certain federal and nonfederal entities and would be implemented by agencies responsible 

for managing federal lands, including the Departments of the Interior (DOI), Agriculture, and Defense. We estimate that implementing the bill would have negligible discretionary costs over the 

2013–2017 period. 

Pay-as-you-go procedures apply to this legislation because it 

could affect offsetting receipts from oil and gas leasing, which are 

recorded as a credit against direct spending. CBO estimates, however, that the net effect on direct spending would be insignificant 

over the 2013–2022 period. Enacting H.R. 4480 would not affect 

revenues. 

H.R. 4480 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: CBO estimates that 

enacting H.R. 4480 would not have a significant impact on net direct spending. 

For this estimate, CBO assumes that H.R. 4480 will be enacted 

by the end of 2012 and that the necessary amounts to implement 

it will be appropriated. Since 1985, DOE has sold oil from the SPR 

on eight occasions; three of those sales were triggered by international events (in 1990, 1991, and 2011), three by Congressional 

directives (all in 1996), one by a hurricane (in 2005), and one sale 

was implemented to test systems and procedures (in 1985). Past 

sales have involved relatively small volumes of oil, ranging from 

less than 1 percent to about 4 percent of the oil in the SPR, or an 

average of about 2 percent per sale. Proceeds from those sales— 

which are used to replenish stocks in the reserve—have ranged 

from less than $50 million to $3.2 billion. 

Based on past trends, CBO expects there is a chance that another sale will occur over the 2013–2022 period under current law. 

In that case, H.R. 4480 would require DOE to complete a plan to 

increase the amount of federal land leased for oil and gas development. The timing of any future sales and when the report would 

be prepared are uncertain, however. 

Direct spending 

Under this bill, DOI would be required to implement any recommendations in the plan developed by DOE.1 CBO estimates that 


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ment of Defense and would implement any recommendations in the DOE plan that affect those 

lands. The Bureau of Ocean Energy Management is the leasing agent for all OCS lands. 

enacting H.R. 4480 would have no significant net effect on offsetting receipts from federal leasing activity over the 2013–2022 period. 

Several factors would limit the impact of DOE’s plan on federal 

leasing activity. For example, the legislation would not repeal the 

current statutory prohibition on leasing in the Arctic National 

Wildlife Refuge and national parks or the temporary ban on leasing 

in the Outer Continental Shelf (OCS) in the Eastern Gulf of Mexico. Similarly, the plan developed under H.R. 4480 would not supersede other policies in existing law that affect federal leasing activity, such as requirements that development be consistent with 

state coastal zone management plans, preserve antiquities, and 

protect certain environmentally sensitive areas. CBO assumes that 

DOI would implement DOE’s plan in a manner consistent with the 

statutory and administrative policies in effect at the time the plan 

is developed. 

In addition, there is no single benchmark for measuring changes 

in future leasing activity because of policy considerations and fluctuations in market conditions. Under current law, within areas 

open for such activities, private firms nominate onshore parcels believed to have economic value, and the relevant agencies prepare 

to offer most of those lands for lease. DOI routinely offers leases 

for virtually all of the acreage in the most geologically promising 

regions of the OCS—the Central and Western Gulf of Mexico and 

Chukchi and Beaufort Seas. Decisions about leasing in most other 

areas of the Alaska OCS largely depend on the recommendations 

of potential bidders. Administrations have taken different positions 

on whether to offer leases off the California and Atlantic coasts, 

taking into account the resource development policies of the affected states. Ultimately, the amount of additional acreage leased 

would depend on decisions made by private firms in light of both 

federal and state policies. 

CBO expects that DOI’s primary option for increasing leasing 

under this bill would be to offer acreage that was not nominated 

by industry. That approach would allow DOI to comply with the 

plan without changing other administrative policies that prevent 

leasing off the Pacific or Atlantic coasts and in other sensitive 

areas. Even if a future Administration opens areas currently not 

available for leasing, offering such acreage may be the only option 

to implement a DOE report because there would be no other alternatives to increasing the acreage offered. 

CBO estimates offering such areas for leasing would have a negligible effect on offsetting receipts because, by choosing not to nominate or recommend the areas or parcels for leasing, firms indicate 

that they believe those prospects have little economic value. 

Spending subject to appropriation 

CBO estimates that implementing this bill would have a negligible impact on spending subject to appropriation over the 2013– 

2017 period. Based on the cost of similar studies, developing the 

plan required by H.R. 4480 would cost about $1 million. However, 

those expenditures are uncertain and would depend on SPR oil 


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sales that may or may not occur in the next five years. CBO also 

estimates that implementing the bill would have no significant impact on DOI’s administrative expenses, assuming any DOE recommendations are implemented through the department’s routine 

planning processes. 

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. CBO estimates 

that enacting H.R. 4480 would not have a significant impact on net 

direct spending over either the 2012–2017 period or the 2012–2022 

period. Enacting the bill would not affect revenues. 

Intergovernmental and private-sector impact: H.R. 4480 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 and Jeff 

LaFave; Impact on state, local, and tribal governments: Melissa 

Merrell; Impact on the private sector: Amy Petz. 

Estimate approved by: Theresa Gullo, Deputy Assistant Director 

for Budget Analysis. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

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. 

SECTION-BY-SECTION ANALYSIS OF LEGISLATION

Section 1—Short title 

Section 1 provides the short title of ‘‘Strategic Energy Production 

Act of 2012.’’ 

Section 2—Plan for increasing domestic oil and gas exploration, development, and production from Federal lands in response to 

Strategic Petroleum Reserve drawdown 

Section 2 amends the Energy Policy and Conservation Act to require the Secretary of Energy upon the first drawdown from the 

SPR to develop a plan to increase the percentage of Federal lands 

under the jurisdiction of the Secretary of Agriculture, Secretary of 

Energy, Secretary of the Interior, and Secretary of Defense leased 

for oil and gas exploration, development and production. 

Section 2 also requires that the plan developed by the Secretary: 

(1) be consistent with a national energy policy to meet present and 

future energy needs of the U.S. and consistent with economic goals, 


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and (2) promote the interests of consumers through the provision 

of an adequate and reliable supply of domestic transportation fuels 

at the lowest reasonable cost. 

Section 2 also provides that the plan shall not result in the percentage of Federal lands leased to exceed 10 percent or include 

lands managed under the National Park System or the National 

Wilderness Preservation System. 

Section 2 requires the Secretary of Energy to consult with the 

Secretary of Agriculture, Secretary of Energy, Secretary of the Interior, and Secretary of Defense in development of the plan and requires these Secretaries to comply with the plan. 

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 (new matter is printed in italic 

and existing law in which no change is proposed is shown in 

roman): 

ENERGY POLICY AND CONSERVATION ACT 

* * * * * * * 

TITLE I—MATTERS RELATED TO DOMESTIC SUPPLY 

AVAILABILITY 

* * * * * * * 

PART B—STRATEGIC PETROLEUM RESERVE

* * * * * * * 

DRAWDOWN AND SALE OF PETROLEUM PRODUCTS

SEC. 161. (a) * * * 

* * * * * * * 

(k) PLAN.— 

(1) CONTENTS.— 

(A) IN GENERAL.—Not later than 180 days after the date 

on which the Secretary executes, in accordance with the 

provisions of this section, the first sale after the date of enactment of this subsection of petroleum products in the Reserve the Secretary shall develop a plan to increase the percentage of Federal lands (including submerged lands of the 

Outer Continental Shelf) under the jurisdiction of the Secretary of Agriculture, the Secretary of Energy, the Secretary 

of the Interior, and the Secretary of Defense leased for oil 

and gas exploration, development, and production. The percentage of the total amount of the Federal lands described 

in the preceding sentence by which the plan developed 

under this paragraph will increase leasing for oil and gas 

exploration, development, and production shall be the same 

as the percentage of petroleum in the Strategic Petroleum 

Reserve that was drawn down. 

(B) REQUIREMENTS.—The plan developed under this 

paragraph shall— 


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(i) be consistent with a national energy policy to meet 

the present and future energy needs of the Nation consistent with economic goals; and 

(ii) promote the interests of consumers through the 

provision of an adequate and reliable supply of domestic transportation fuels at the lowest reasonable cost. 

(C) ENERGY INFORMATION.—The Secretary shall base the 

determination of the present and future energy needs of the 

Nation, for purposes of subparagraph (B)(i), on information 

from the Energy Information Administration. 

(2) LIMITATION.—The plan developed under paragraph (1) 

shall not provide for oil and gas exploration, development, and 

production leasing of a total of more than 10 percent of the Federal lands described in paragraph (1)(A). 

(3) CONSULTATION.—The Secretary shall develop the plan required by paragraph (1) in consultation with the Secretary of 

Agriculture, the Secretary of the Interior, and the Secretary of 

Defense. Additionally, in developing the plan, the Secretary 

shall consult with the American Association of Petroleum Geologists and other State, environmentalist, and oil and gas industry stakeholders to determine the most geologically promising 

lands for production of oil and natural gas liquids. 

(4) COMPLIANCE WITH REQUIREMENTS.—Each Federal agency 

described in paragraph (1)(A) shall comply with any requirements established by the Secretary pursuant to the plan, except 

that no action shall be taken pursuant to the plan if in the view 

of the Secretary of Defense such action will adversely affect national security or military activities, including preparedness 

and training. 

(5) EXCLUSIONS.—The lands referred to in paragraph (1)(A) 

shall not include lands managed under the National Park System or the National Wilderness Preservation System. 

(6) SAVINGS CLAUSE.—Nothing in this subsection shall be 

construed to limit or affect the application of existing restrictions on offshore drilling or requirements for land management 

under Federal, State, or local law. 

* * * * * * * 


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1 Committee on Energy and Commerce, Testimony of Robert Abbey, Director, Bureau of Land 

Management, United States Department of the Interior, The American Energy Initiative: A 

Focus on Legislative Responses to Rising Gasoline Prices, 112th Cong. (Mar. 28, 2012). 2 Id. 

3 Id. 

4 Id. 

DISSENTING VIEWS 

I. PURPOSE OF THE LEGISLATION 

H.R. 4480 requires the Secretary of Energy to develop a plan to 

increase domestic oil and gas leasing from onshore and offshore 

federal lands that are under the jurisdiction of the Departments of 

Agriculture, Energy, Interior, and Defense within 180 days of a release of petroleum from the Strategic Petroleum Reserve (SPR). 

A new government bureaucracy at the Department of Energy 

(DOE) would develop this plan which duplicates the oil and gas 

leasing programs at the Departments of Interior and Agriculture. 

The bill requires the Secretary of Energy to develop a plan to increase the acreage of federal lands leased by a percentage equaling 

the percentage of SPR petroleum released. 

II. H.R. 4480 DOES NOT GUARANTEE ADDITIONAL OIL 

PRODUCTION 

If petroleum is released from the SPR, H.R. 4480 requires a plan 

to expand the acreage of public lands available for oil and gas production. However, this plan will not guarantee any specific amount 

of increased domestic production. That’s because the amount of oil 

and gas produced each year from federal lands depends on factors 

that are not addressed in the legislation. These factors include 

whether private parties choose to bid for leases, whether, once 

leased, leaseholders develop leased land for oil and gas production, 

and how much oil or gas is economically recoverable on leased land. 

At the Subcommittee hearing on this bill, Robert Abbey, the Director of the Bureau of Land Management at the Department of the 

Interior (DOI) testified that the offering of leases will not necessarily lead to leasing, and that in the event land is leased, there 

is no guarantee that industry will develop those leases. Instead, he 

testified, production levels fluctuate based on ‘‘market conditions 

and industry decisions.’’ 1

According to the Department’s testimony, of the 37 million acres 

of offshore land offered for lease in 2010, 93.5% of the land received 

no bids from industry.2 In 2011, in a lease sale of 21 million acres 

in the Western Gulf of Mexico, 95.2% of the offered land received 

no bids from industry.3 Abbey testified that in total there are now 

38 million acres of onshore federal land under lease, but only 32% 

of those leased lands are currently in production.4 Offshore there 


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5 Id. 

6 Id. 

7 Energy Information Administration, Sales of Fossil Fuels Produced from Federal and Indian 

Lands, FY 2003 through FY 2011 (Mar. 2012) at 3. 8 Energy Information Administration, Crude Oil Production (online at www.eia.gov/dnav/pet/ 

pet_crd_crpdn_adc_mbblpd_a.htm); Energy Information Administration, Annual Energy Outlook 

2012 Early Release, Table 11: Liquid Fuels Supply and Disposition (Jan. 2012). 9More Drilling Won’t Lower Gas Prices, Study Shows, Associated Press, (Mar. 22, 2012). 

Available online through various news outlets. See, e.g. http://www.cbsnews.com/8301- 

505145_162-57401456/more-us-drilling-didnt-drop-gas-price/, (accessed on June 4, 2012). 10 U.S. Congressional Budget Office, Energy Security in the United States, (May 9, 2012) (online at http://www.cbo.gov/publication/43012). 

are 38 million acres of land under lease, but only 26% is currently 

being explored or developed.5

Finally, it is unclear that leasing promoted by this bill will open 

areas of federal land with substantial amounts of technically recoverable oil or gas reserves. For instance, existing offshore lease sale 

plans already cover more than 75% of technically recoverable oil 

and gas in the Outer Continental Shelf.6

III. H.R. 4480 PROPOSES A RADICAL CHANGE IN FEDERAL 

POLICY REGARDING PUBLIC LANDS 

The majority has asserted that there are 2.4 billion acres of federal land. Therefore, releasing 10 percent of the SPR (about 70 million barrels of oil) would appear to require DOE to plan for expanded oil and gas production on 240 million acres of land. Leasing 

this many acres of federal land would more than quadruple the 

amount of land currently leased for production. The legislation requires the Departments of Agriculture, Defense and Interior to follow the Energy Department’s plan. 

IV. H.R. 4480 WILL NOT LOWER GASOLINE PRICES 

Even if this bill increased domestic production of oil and gas, it 

would not lower gasoline prices. According to the Energy Information Administration (EIA), crude oil production on offshore and onshore federal lands in 2011 was higher than in 2006, 2007, or 

2008—the last three years of the Bush Administration.7 Additionally, crude oil production on all lands in the United States is currently at an eight-year high.8 Despite this increase in production, 

oil and gasoline prices are still on the rise in the United States, because oil prices are set on a global market that the United States 

has little power to control. 

The Associated Press conducted a statistical analysis of 36 years 

of gasoline prices and U.S. domestic oil production data and found 

no statistical correlation between the volume of oil produced and 

the price of gasoline at the pump.9 On May 9, 2012, the Congressional Budget Office (CBO) released a report drawing the same 

conclusion. The CBO report states, ‘‘Even if the United States increased production and became a net exporter of oil, U.S. consumers would still be exposed to gasoline prices that rose and fell 

in response to disruptions around the world.’’ 10

Canada is largely energy independent when it comes to oil. In 

fact, according to data from Statistics Canada, last year Canada exVerDate Mar 15 2010 18:04 Jun 09, 2012 Jkt 019006 PO 00000 Frm 00021 Fmt 6604 Sfmt 6604 E:\HR\OC\HR520P1.XXX HR520P1

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11Statistics Canada, Table 126-0001: Supply and disposition of crude oil and equivalent (online at www5.statcan.gc.ca/cansim/a05?lang=eng&id=1260002&pattern= 

1260002&searchTypeByValue=1&p2=35) (accessed Mar. 19, 2012). 12 Id. 13 Committee on Energy and Commerce, Testimony of Christopher Smith, Deputy Assistant 

Secretary for Oil and Natural Gas, Office of Fossil Energy, United States Department of Energy, 

The American Energy Initiative: A Focus on Legislative Responses to Rising Gasoline Prices, 

112th Cong. (Mar. 28, 2012). 14 Id., at pages 5–6. 15 U.S. Department of Energy, Releasing Crude Oil from the Strategic Petroleum Reserve, (online at http://fossil.energy.gov/programs/reserves/spr/spr-drawdown.html) (accessed on June 4, 

2012). 

ported more than 70% of the oil it produced.11 Between 2000 and 

2011, Canada increased its production of crude oil by more than a 

third and tripled its net exports of crude oil.12 Even as Canada produced more and more oil over the last decade, Canadian consumers 

have faced the same gasoline price spikes as consumers in the 

United States. 

In both Subcommittee and full Committee markup of H.R. 4480, 

Rep. Rush offered an amendment to ensure that the requirements 

of this bill would not go into effect if it is determined that the legislation would not reduce gasoline prices within 10 years. At the full 

Committee markup, the amendment was defeated by a roll call 

vote of 17–31. 

V. H.R. 4480 WILL IMPACT THE OPERATION OF THE 

STRATEGIC PETROLEUM RESERVE 

The Strategic Petroleum Reserve serves an essential function in 

protecting American consumers and businesses from the effects of 

global oil supply disruptions. On March 28, 2012, the Department 

of Energy, which manages the SPR, testified before the Energy and 

Power Subcommittee that this legislation would complicate use of 

the SPR and would potentially reduce its effectiveness in providing 

strategic and economic security for the nation.13

The Department of Energy testified before the Energy and Power 

Subcommittee that: 

imposing a requirement to coordinate future increases in 

leased Federal lands as a consequence of releasing crude 

oil from the SPR will have a negative impact on the decision-making process to employ the SPR, which should be 

based solely on protecting the U.S. from the consequences 

of severe supply interruptions, and could lead to an inability to respond quickly to such threats.14

Consider the aftermath of Hurricane Katrina. In September 

2005, President Bush authorized the release of up to 30 million 

barrels of oil from the SPR to respond to Hurricane Katrina.15 Had 

H.R. 4480 been in effect at that time, this decision would have triggered a requirement to plan for the additional leasing of 100 million acres. Such a monumental task would act as a significant deterrent for deployment of the SPR. 

VI. H.R. 4480 WILL CREATE WASTEFUL GOVERNMENT 

BUREAUCRACY 

Land management agencies within the Department of the Interior, such as the Bureau of Land Management and the Bureau of 


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16See Committee on Energy and Commerce, Testimony of Robert Abbey, Director, Bureau of 

Land Management, United States Department of the Interior, The American Energy Initiative: 

A Focus on Legislative Responses to Rising Gasoline Prices, 112th Cong. (Mar. 28, 2012). 17Outer Continental Shelf Lands Act, Section 18, 43 U.S.C. 1344. 18 U.S. Department of Interior, 5 Year OCS Oil and Gas Leasing Program, (online at 

www.boem.gov/Oil-and-Gas-Energy-Program/Leasing/Five-Year-Program.aspx) (accessed on June 

4, 2012). 19See, U.S. Department of Interior, Leasing Process, (online at www.boemre.gov/ld/PDFs/ 

LeasingProcess.pdf) (accessed on June 4, 2012). 20 Id. 21 Committee on Energy and Commerce, Testimony of Christopher Smith, Deputy Assistant 

Secretary for Oil and Natural Gas, Office of Fossil Energy, United States Department of Energy, 

The American Energy Initiative: A Focus on Legislative Responses to Rising Gasoline Prices, 

112th Cong. (Mar. 28, 2012). 

Ocean Energy Management, have many years of experience and a 

great deal of expertise in managing and leasing federal lands for 

energy production. They have extensive processes in place which 

involve public notice and comment and the opportunity for local 

input. The Department of Energy does not have any experience in 

leasing activities. 

The Department of the Interior’s land management agencies employ multi-year processes to manage leasing on millions of acres of 

land.16 For example, under the Outer Continental Shelf Lands Act, 

the Interior Department is required to prepare a 5-year oil and gas 

leasing program including a schedule that shows the size, timing, 

and location of leasing activity as precisely as possible.17 The indepth, statutorily mandated process for developing that leasing 

program generally takes about 21⁄2 years and includes 3 separate 

comment periods, 2 separate draft proposals, a final proposal, and 

development of an environmental impact statement.18 DOI invites 

and considers input from the governors of affected states, and in 

some cases local governments as well.19 Finally, after approval by 

the Secretary of the Interior, DOI sends the plan to Congress 

where, absent legislation to modify within 60 days, the program becomes final.20

Under H.R. 4480, the Department of Energy would have to engage in a duplicative planning process, requiring significant resources, redundant with those already housed at the Department 

of the Interior. As Christopher Smith, DOE’s Deputy Assistant Secretary for Oil and Natural Gas, testified before the Energy and 

Power Subcommittee, implementing this bill would ‘‘require a large 

investment of resources at DOE.’’ 21

An amendment to address this duplication of resources was offered by Rep. DeGette during full Committee consideration. The 

amendment would have nullified the requirements of the bill if the 

Secretary of Energy, in consultation with the Secretaries of Agriculture, Interior, and Defense, determined that the plan would 

waste government resources by duplicating other federal activities. 

The amendment failed, with no support from the Committee’s Republican members. 

VII. H.R. 4480 IS NOT NECESSARY TO REPLENISH THE 

STRATEGIC PETROLEUM RESERVE 

This bill’s sponsor has said that ‘‘the entire purpose of the bill 

is to make sure that we are replenishing the energy that we reVerDate Mar 15 2010 18:04 Jun 09, 2012 Jkt 019006 PO 00000 Frm 00023 Fmt 6604 Sfmt 6604 E:\HR\OC\HR520P1.XXX HR520P1

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22 Committee on Energy and Commerce, Statement of Rep. Cory Gardner, Markup of H.R. 

4471, The Gasoline Regulations Act of 2012, and H.R. 4480, The Strategic Energy Production 

Act of 2012, 112th Cong. (May 17, 2012). 

move from the Strategic Petroleum Reserve.’’ 22 However, new production is not required to replenish the SPR, and the legislation 

contains no requirement that oil produced as a result of the planning requirements of this bill be sold to the federal government to 

replenish the SPR. 

VIII. DEMOCRATIC AMENDMENTS TO H.R. 4480 WILL 

PROTECT NATIONAL SECURITY AND NATURAL RESOURCES 

Two amendments offered by Democratic members of the Committee were accepted during full Committee consideration of H.R. 

4480. The first, offered by Rep. Dingell, will ensure that existing 

land management requirements and restrictions on offshore drilling are preserved. The second, offered by Ranking Member Waxman, will prevent lease sales and drilling that might adversely impact our national security and military preparedness. These 

amendments passed the Committee by voice vote. 

IX. CONCLUSION 

Because H.R. 4480 will impair the functioning of the Strategic 

Petroleum Reserve and waste public resources with new bureaucratic and redundant government programs while providing no benefits to the public, we dissent from the decision to favorably report 

the legislation. 

HENRY A. WAXMAN. 

BOBBY L. RUSH. 

Æ 


sroberts on DSK5SPTVN1PROD with REPORTS