II

105TH CONGRESS

2D SESSION S. 1920

To improve the administration of oil and gas leases on Federal lands, and

for other purposes.

IN THE SENATE OF THE UNITED STATES

APRIL 2, 1998

Mr. MURKOWSKI (for himself, Mr. NICKLES, and Mrs. HUTCHISON) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources

A BILL

To improve the administration of oil and gas leases on

Federal lands, 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 SHORT TITLE

4 SECTION 1. This Act may be referred to as the ‘‘Fed5 eral Oil and Gas Lease Management Improvement Act of

6 1998’’.

7 FINDINGS AND PURPOSES

8 SEC. 2. (a) Congress finds that—

9 (1) State governments have a long and success10 ful history of regulation of operations to explore for
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1 and produce oil and gas. The special role of the

2 States was recognized by Congress in 1935 through

3 its ratification under the Constitution of the Inter4 state Compact to Conserve Oil and Gas.

5 (2) Under the guidance of the Interstate Oil

6 and Gas Compact Commission, States have estab7 lished effective regulation of the oil and natural gas

8 industry and subject their programs to periodic peer

9 review through the Commission.

10 (3) It is significantly less expensive for State

11 governments than for the Federal Government,

12 through its Bureau of Land Management, to regu13 late oil and gas lease operations on Federal lands.

14 (4) Significant cost savings could be achieved,

15 with no reduction in environmental protection or in

16 the conservation of oil and gas resources, by having

17 the Federal Government defer to State regulation of

18 oil and gas lease operations on Federal lands.

19 (5) State governments carry out regulatory

20 oversight on State, private, and Federal lands. Oil

21 and gas companies operating on federal lands are

22 burdened with the additional cost and time of dupli23 cative oversight by both State and Federal conserva24 tion authorities. Additional cost savings could be
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1 achieved within the private sector by having the Bu2 reau of Land Management defer to State regulation.

3 (6) The Federal Government is presently cast

4 in dual opposing roles as a mineral owner and regu5 lator. State regulation of oil and gas operations on

6 Federal lands would eliminate this conflict of inter7 est.

8 (7) It remains the responsibility of the Sec9 retary of the Interior to carry out the Federal policy

10 set forth in the Mining and Minerals Policy Act of

11 1970 (30 U.S.C. § 21a) to foster and encourage pri12 vate sector enterprise in the development of eco13 nomically sound and stable domestic mineral indus14 tries, and the orderly and economic development of

15 domestic mineral resources and reserves, including

16 oil and gas resources.

17 (8) Resource management analyses and surveys

18 conducted under the conservation laws of the United

19 States benefit the public at large and are an expense

20 properly borne by the Federal Government.

21 (b) The purposes of this Act are—

22 (1) to transfer from the Bureau of Land Man23 agement to each State in which the Federal lands

24 are present authority to regulate oil and gas oper25 ations on leased tracts and related operations as
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1 fully as if the operations were occurring on privately

2 owned land,

3 (2) to share the costs saved through more effi4 cient State enforcement among State governments

5 and the Federal treasury,

6 (3) to prevent the imposition of unwarranted

7 delays and recoupments of Federal administrative

8 costs on Federal oil and gas lessees,

9 (4) to effect no change in the administration of

10 Indian lands, and

11 (5) to ensure that those funds deducted from

12 the States’ net receipt share are directly tied to ad13 ministrative costs related to oil and gas on Federal

14 lands.

15 DEFINITIONS

16 SEC. 3. For purposes of this Act—

17 (1) The term ‘‘Federal lands’’ means all lands

18 and interests in lands owned by the United States

19 which are subject to the mineral leasing laws, includ20 ing mineral resources or mineral estates reserved to

21 the United States in the conveyance of a surface or

22 nonmineral estate. The term excludes ‘‘Indian

23 lands’’ as that term is defined in 30 U.S.C.

24 § 1702(3) and submerged lands on the ‘‘Outer Con25 tinental Shelf’’ as that term is defined in the Outer

26 Continental Shelf Lands Act, 43 U.S.C. §§ 1331 et
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1 seq., other than submerged lands subject to section

2 8(g) of that Act, 43 U.S.C. § 1337(g).

3 (2) The term ‘‘oil and gas conservation author4 ity’’ means the agency or agencies in each State re5 sponsible for regulating for conservation purposes

6 operations to explore for and produce oil and natural

7 gas.

8 APPLICATION OF ACT

9 SEC. 4. For the purposes of this Act, Federal lands

10 subject to section 8(g) of the Outer Continental Shelf

11 Lands Act are deemed to be within the state with which

12 revenues from those lands are shared. However, nothing

13 in this Act shall be construed to give a State a property

14 right or interest in any Federal lease or land.

15 TITLE I—DEFERRAL TO STATE REGULATION

16 OF OIL AND GAS LEASE OPERATIONS ON

17 FEDERAL LANDS

18 SEC. 101. (a) No sooner than 6 months from the date

19 of enactment of this Act, a State may notify the Secretary

20 of the Interior of its intent to accept authority for regula21 tion of operations, as described in paragraphs (1) through

22 (11) of this subsection, under oil and gas leases on Federal

23 lands within the State. Effective 6 months after the Sec24 retary receives the state’s notice, the authority is trans25 ferred from the Bureau of Land Management to the State.

26 This authority includes—
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1 (1) processing and approving Applications for

2 Permits to Drill, subject to surface use agreements

3 and other terms and conditions determined by the

4 Secretary;

5 (2) production operations;

6 (3) well testing;

7 (4) well completion;

8 (5) well spacing;

9 (6) communization;

10 (7) conversion of a producing well to a water

11 well;

12 (8) well abandonment procedures;

13 (9) inspections;

14 (10) enforcement activities; and

15 (11) site security.

16 (b) Effective on the date of transfer, the Bureau of

17 Land Management shall no longer include the charges as18 sociated with performing those authorities transferred in

19 subsection (a) in costs charged against the State under

20 section 35(b) of the Mineral Leasing Act (30 U.S.C.

21 § 191(b)).

22 (c) The Bureau of Land Management and the Forest

23 Service shall retain authority over the issuance of leases

24 and the approval of surface use plans, and shall spend ap25 propriated funds to assure that the agency is making time-
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1 ly decisions respecting oil and gas leasing, taking into con2 sideration multiple uses of Federal lands, socioeconomic

3 and environmental impacts, and the results of consulta4 tions with state and local government officials.

5 SEC. 102. (a) Following the transfer of authority, no

6 Federal agency shall exercise the authority formerly held

7 by the Bureau of Land Management as to oil and gas

8 lease operations and related operations on Federal lands.

9 (b) Following the transfer of authority, each State

10 shall enforce its own laws, regulations, and requirements

11 pertaining to oil and gas lease operations and related oper12 ations with due regard to the national interest in the expe13 dited, environmentally sound development of oil and gas

14 resources in a manner consistent with oil and gas con15 servation principles.

16 (c) The Bureau of Land Management may continue

17 to enforce any pending actions respecting acts committed

18 prior to the date authority is transferred to a State under

19 section 101(a) until those proceedings are concluded.

20 (d) All applications respecting oil and gas lease oper21 ations and related operations on federal lands pending be22 fore the Bureau of Land Management on the date author23 ity is transferred shall be immediately transferred to the

24 oil and gas conservation authority of the State in which

25 the given lease is located. The oil and gas conservation
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1 authority shall act on the application in accordance with

2 its own laws, regulations, and requirements.

3 TITLE II—USE OF COST SAVINGS FROM STATE

4 REGULATION

5 SEC. 201. Subject to available appropriations, the

6 Secretary of the Interior shall compensate any State for

7 those costs incurred to carry out the authorities trans8 ferred under section 101(a). Payment shall be made not

9 less than every quarter during the fiscal year. Each State

10 seeking compensation shall report to the Secretary a cost

11 breakdown for the authorities transferred. Compensation

12 to a State may not exceed 50 percent of the Bureau of

13 Land Management’s allocated cost, under section 35(b) of

14 the Mineral Leasing Act, for that State for the fiscal year

15 ending September 30, 1997. The Secretary will adjust the

16 maximum level of cost compensation at least once every

17 two years to reflect any increases in the Consumer Price

18 Index (all items, United States city average) as prepared

19 by the Department of Labor, using 1997 as the baseline

20 year.

21 SEC. 202. Section 35 of the Mineral Leasing Act (30

22 U.S.C. § 191) is amended by adding at the end of sub23 section (b) the following:

24 ‘‘(6) The Secretary shall not include, for the

25 purpose of calculating the deduction under para-
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1 graph (1), costs of preparing resource management

2 planning documents and analyses for areas in which

3 oil and gas leasing is excluded or areas in which the

4 primary activity under review is not oil and gas leas5 ing and development.’’.

6 TITLE III—STREAMLINING AND COST

7 REDUCTION

8 SEC. 301. (a) Notwithstanding sections 304 and 504

9 of Public Law 94–579 (43 U.S.C. §§ 1734 and 1764) and

10 section 9701 of title 31, United States Code, the Depart11 ment of the Interior may not recover its costs with respect

12 to applications and other documents relating to oil and

13 gas leases.

14 (b) The Bureau of Land Management and the Forest

15 Service shall complete any resource management planning

16 documents and analyses within 90 days of the agency’s

17 receipt of any offer, application, or request for which plan18 ning document or analysis must be prepared. If the agency

19 is unable to complete the document or analysis within that

20 time, it shall notify the applicant or lessee of the oppor21 tunity to prepare the required document or analysis for

22 the agency’s review and use in decision making. The agen23 cy for which the document or analysis is prepared shall

24 reimburse the applicant or lessee for costs directly associ25 ated with the preparation of the document or analysis.
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1 SEC. 302. (a) The Bureau of Land Management and

2 the Forest Service shall assure the timely issuance of Fed3 eral agency decisions respecting oil and gas leasing and

4 operations on federal lands.

5 (b) The Bureau of Land Management shall accept

6 or reject an offer to lease within 90 days of the filing of

7 the offer. If an offer is not acted upon within that time,

8 the offer is deemed accepted.

9 (c) The Bureau of Land Management and a State

10 that has accepted transfer under section 101(a) shall ap11 prove or disapprove an Application for Permit to Drill

12 within 30 days of receipt of a complete application. If the

13 application is not acted upon within that time, the applica14 tion is deemed approved.

15 (d) The Bureau of Land Management or the Forest

16 Service, as the case may be, shall approve or disapprove

17 a surface use plan within 30 days of receipt of a complete

18 plan.

19 (e) From the time that a Federal oil and gas lessee

20 or operator files a notice of administrative appeal of a de21 cision or order of an officer or employee of the Depart22 ment of the Interior or the Forest Service respecting a

23 Federal oil and gas Federal lease, the Department or

24 Service shall have two years to issue a final decision in
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1 that appeal. If no final decision has been issued within

2 that time, the appeal is deemed granted.

3 SEC. 303. (a) The Bureau of Land Management and

4 the Forest Service shall assure that unwarranted denials

5 and stays of lease issuance and unwarranted restrictions

6 on lease operations are eliminated from the administration

7 of oil and as leasing on Federal lands.

8 (b) Lands designated as available for multiple use

9 under Bureau of Land Management resource management

10 plans and Forest Service leasing analyses shall be avail11 able for oil and gas leasing without lease stipulations more

12 stringent than restrictions on surface use and operations

13 imposed under the laws and regulations of the relevant

14 State oil and gas conservation authority unless the Bureau

15 or Service includes in its decision approving the manage16 ment plan or leasing analysis a written explanation of why

17 more stringent stipulations are warranted. Any decision

18 to require a more stringent stipulation shall be adminis19 tratively appealable and, following a final agency decision,

20 judicially reviewable under the Administrative Procedure

21 Act.

22 (c) If the Bureau of Land Management or the Forest

23 Service rejects an offer to lease on the ground that the

24 land is unavailable for leasing, the respective agency shall

25 provide a written, detailed explanation of the reasons the
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1 land is unavailable for leasing. Where the determination

2 of unavailability is based on a previous resource manage3 ment decision, the explanation shall include a careful as4 sessment of whether the reasons underlying the previous

5 decision are still persuasive. The agency may not reject

6 an offer to lease lands available for leasing on the ground

7 that the offer includes lands unavailable for leasing, and

8 it must segregate lands available from those unavailable,

9 upon the offeror’s request following notice by the agency,

10 before acting on the offer to lease.

11 (d) The Bureau of Land Management or the Forest

12 Service shall provide a written, detailed explanation of the

13 reasons for disapproving or requiring modifications of any

14 surface use plan or Application for Permit to Drill.

15 (e) A decision of the Bureau of Land Management

16 or the Forest Service respecting an oil and gas lease shall

17 be effective pending administrative appeal to the appro18 priate office within the Department of the Interior or the

19 Department of Agriculture unless that office grants a stay

20 in response to a petition satisfying the criteria for a stay

21 established by 43 CFR § 4.21(b)(1) (1997).

22 SEC. 304. By March 31, 1999, the Secretary of the

23 Interior and the Secretary of Agriculture will jointly sub24 mit a report to the President of the Senate and the Speak25 er of the House of Representatives explaining the most
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1 efficient means of eliminating overlapping jurisdiction, du2 plication of effort, and inconsistent policymaking and pol3 icy implementation as between the Bureau of Land Man4 agement and the Forest Service. The report will include

5 recommendations on changes in statute needed to imple6 ment the report’s conclusions.

7 SEC. 305. (a) By March 31, 1999, the Secretary of

8 the Interior will publish, through notice in the Federal

9 Register, a national inventory of the oil and gas reserves

10 and potential resources underlying Federal lands (other

11 than lands governed by section 8(g) of the Outer Con12 tinental Shelf Lands Act). The inventory will indicate

13 what percentage of those reserves and resources is cur14 rently available for leasing and development. The inven15 tory will further detail what percentage of the reserves and

16 resources are on—

17 (1) lands now open for leasing but which have

18 never been leased;

19 (2) lands open for leasing or development sub20 ject to no surface occupancy stipulations; and

21 (3) lands open for leasing or development sub22 ject to other lease stipulations which have signifi23 cantly impeded or prevented, or are likely to signifi24 cantly impede or prevent, development.
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1 (b) By September 30, 1999, public comments on the

2 inventory will be filed. The Secretary of the Interior shall

3 specifically invite comments on the effect of Bureau of

4 Land Management resource management decisions on

5 past and future oil and gas development.

6 (c) By March 31, 2000, the Secretary of the Interior

7 will file a report with the President of the Senate and the

8 Speaker of the House of Representatives to be comprised

9 of his revised inventory and other responses to the public

10 comments. The report will specifically indicate what steps

11 the Bureau of Land Management will take to increase the

12 percentage of lands open for development of oil and gas

13 resources.

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