I 

111TH CONGRESS 

2D SESSION H. R. 4521 

To direct the Secretary of the Interior to agree to requests by lessees to 

amend certain oil and gas leases issued for Central and Western Gulf 

of Mexico tracts, to incorporate price thresholds applicable to royalty 

suspension provisions, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 26, 2010 

Mr. MARKEY of Massachusetts (for himself and Mr. VAN HOLLEN) introduced 

the following bill; which was referred to the Committee on Natural Resources 

A BILL 

To direct the Secretary of the Interior to agree to requests 

by lessees to amend certain oil and gas leases issued 

for Central and Western Gulf of Mexico tracts, to incorporate price thresholds applicable to royalty suspension 

provisions, 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 ‘‘Royalty Relief for 

5 American Consumers Act of 2010’’. 


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1 SEC. 2. PRICE THRESHOLDS FOR ROYALTY SUSPENSION 

2 PROVISIONS. 

3 The Secretary of the Interior shall agree to a request 

4 by any lessee to amend any lease issued for any Central 

5 and Western Gulf of Mexico tract during the period of 

6 January 1, 1998, through December 31, 1999, to incor7 porate price thresholds applicable to royalty suspension 

8 provisions, that are equal to or less than the price thresh9 olds described in clauses (v) through (vii) of section 

10 8(a)(3)(C) of the Outer Continental Shelf Lands Act (43 

11 U.S.C. 1337(a)(3)(C)). Any amended lease shall impose 

12 the new or revised price thresholds effective October 1, 

13 2010. Existing lease provisions shall prevail through Sep14 tember 30, 2010. 

15 SEC. 3. ELIGIBILITY FOR NEW LEASES AND THE TRANSFER 

16 OF LEASES; CONSERVATION OF RESOURCES 

17 FEES. 

18 (a) ISSUANCE OF NEW LEASES.— 

19 (1) IN GENERAL.—The Secretary shall not 

20 issue any new lease that authorizes the production 

21 of oil or natural gas in the Gulf of Mexico under the 

22 Outer Continental Shelf Lands Act (43 U.S.C. 1331 

23 et seq.) to a person described in paragraph (2) un24 less— 

25 (A) the person has renegotiated each cov26 ered lease with respect to which the person is 


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1 a lessee, to modify the payment responsibilities 

2 of the person to include price thresholds that 

3 are equal to or less than the price thresholds 

4 described in clauses (v) through (vii) of section 

5 8(a)(3)(C) of the Outer Continental Shelf 

6 Lands Act (43 U.S.C. 1337(a)(3)(C)); or 

7 (B) the person has— 

8 (i) paid all fees established by the 

9 Secretary under subsection (b) that are 

10 due with respect to each covered lease for 

11 which the person is a lessee; or 

12 (ii) entered into an agreement with 

13 the Secretary under which the person is 

14 obligated to pay such fees. 

15 (2) PERSONS DESCRIBED.—A person referred 

16 to in paragraph (1) is a person that— 

17 (A) is a lessee that— 

18 (i) holds a covered lease on the date 

19 on which the Secretary considers the 

20 issuance of the new lease; or 

21 (ii) was issued a covered lease before 

22 the date of enactment of this Act, but 

23 transferred the covered lease to another 

24 person or entity (including a subsidiary or 


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1 affiliate of the lessee) after the date of en2 actment of this Act; or 

3 (B) any other person or entity who has 

4 any direct or indirect interest in, or who derives 

5 any benefit from, a covered lease. 

6 (3) MULTIPLE LESSEES.— 

7 (A) IN GENERAL.—For purposes of para8 graph (1), if there are multiple lessees that own 

9 a share of a covered lease, the Secretary may 

10 implement separate agreements with any lessee 

11 with a share of the covered lease that modifies 

12 the payment responsibilities with respect to the 

13 share of the lessee to include price thresholds 

14 that are equal to or less than the price thresh15 olds described in clauses (v) through (vii) of 

16 section 8(a)(3)(C) of the Outer Continental 

17 Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)). 

18 (B) TREATMENT OF SHARE AS COVERED

19 LEASE.—Beginning on the effective date of an 

20 agreement under subparagraph (A), any share 

21 subject to the agreement shall not constitute a 

22 covered lease with respect to any lessees that 

23 entered into the agreement. 

24 (b) CONSERVATION OF RESOURCES FEES.— 


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1 (1) IN GENERAL.—Not later than 60 days after 

2 the date of enactment of this Act, the Secretary of 

3 the Interior by regulation shall establish— 

4 (A) a conservation of resources fee for pro5 ducing Federal oil and gas leases in the Gulf of 

6 Mexico; and 

7 (B) a conservation of resources fee for 

8 nonproducing Federal oil and gas leases in the 

9 Gulf of Mexico. 

10 (2) PRODUCING LEASE FEE TERMS.—The fee 

11 under paragraph (1)(A)— 

12 (A) subject to subparagraph (C), shall 

13 apply to covered leases that are producing 

14 leases; 

15 (B) shall be set at $9 per barrel for oil and 

16 $1.25 per million Btu for gas, respectively, in 

17 2005 dollars; and 

18 (C) shall apply only to production of oil or 

19 gas occurring— 

20 (i) in any calendar year in which the 

21 arithmetic average of the daily closing 

22 prices for light sweet crude oil on the New 

23 York Mercantile Exchange (NYMEX) ex24 ceeds $34.73 per barrel for oil and $4.34 


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1 per million Btu for gas in 2005 dollars; 

2 and 

3 (ii) on or after October 1, 2010. 

4 (3) NONPRODUCING LEASE FEE TERMS.—The 

5 fee under paragraph (1)(B)— 

6 (A) subject to subparagraph (C), shall 

7 apply to leases that are nonproducing leases; 

8 (B) shall be set at $3.75 per acre per year 

9 in 2005 dollars; and 

10 (C) shall apply on and after October 1, 

11 2010. 

12 (4) TREATMENT OF RECEIPTS.—Amounts re13 ceived by the United States as fees under this sub14 section shall be treated as offsetting receipts. 

15 (c) TRANSFERS.—A lessee or any other person who 

16 has any direct or indirect interest in, or who derives a 

17 benefit from, a lease shall not be eligible to obtain by sale 

18 or other transfer (including through a swap, spinoff, serv19 icing, or other agreement) any covered lease, the economic 

20 benefit of any covered lease, or any other lease for the 

21 production of oil or natural gas in the Gulf of Mexico 

22 under the Outer Continental Shelf Lands Act (43 U.S.C. 

23 1331 et seq.), unless— 

24 (1) the lessee or other person has— 


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1 (A) renegotiated all covered leases of the 

2 lessee or other person; and 

3 (B) entered into an agreement with the 

4 Secretary to modify the terms of all covered 

5 leases of the lessee or other person to include 

6 limitations on royalty relief based on market 

7 prices that are equal to or less than the price 

8 thresholds described in clauses (v) through (vii) 

9 of section 8(a)(3)(C) of the Outer Continental 

10 Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)); or 

11 (2) the lessee or other person has— 

12 (A) paid all fees established by the Sec13 retary under subsection (b) that are due with 

14 respect to each covered lease for which the per15 son is a lessee; or 

16 (B) entered into an agreement with the 

17 Secretary under which the person is obligated 

18 to pay such fees. 

19 (d) DEFINITIONS.—In this section— 

20 (1) COVERED LEASE.—The term ‘‘covered 

21 lease’’ means a lease for oil or gas production in the 

22 Gulf of Mexico that is— 

23 (A) in existence on the date of enactment 

24 of this Act; 


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1 (B) issued by the Department of the Inte2 rior under section 304 of the Outer Continental 

3 Shelf Deep Water Royalty Relief Act (43 

4 U.S.C. 1337 note; Public Law 104–58); and 

5 (C) not subject to limitations on royalty re6 lief based on market price that are equal to or 

7 less than the price thresholds described in 

8 clauses (v) through (vii) of section 8(a)(3)(C) of 

9 the Outer Continental Shelf Lands Act (43 

10 U.S.C. 1337(a)(3)(C)). 

11 (2) LESSEE.—The term ‘‘lessee’’ includes any 

12 person or other entity that controls, is controlled by, 

13 or is in or under common control with, a lessee. 

14 (3) SECRETARY.—The term ‘‘Secretary’’ means 

15 the Secretary of the Interior. 

Æ 


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