Restoring Community Input and Public Protections in Oil and Gas Leasing Act of 2021

To amend the Mineral Leasing Act to make certain adjustments in leasing on Federal lands for oil and gas drilling, and for other purposes. 1. Short title This Act may be cited as the Restoring Community Input and Public Protections in Oil and Gas Leasing Act of 2021 2. Leasing process (a) Onshore oil and gas leasing Section 17 of the Mineral Leasing Act ( 30 U.S.C. 226(a) (a) All lands 17. Leasing of land containing oil or gas deposits (a) Leasing authority (1) In general All lands subject to disposition under this Act that are known or believed to contain oil or gas deposits may be leased by the Secretary. (2) Receipt of fair market value Leasing activities under this Act shall be conducted to assure receipt of fair market value for the lands and resources leased and the rights conveyed by the United States. . (b) Competitive bidding Section 17(b)(1) of the Mineral Leasing Act ( 30 U.S.C. 226(b)(1)(A) (A) All lands (b) Bidding (1) In general (A) Competitive bidding (i) In general All lands to be leased under this section shall be leased as provided in this paragraph to the highest responsible qualified bidder by competitive bidding by sealed bid. (ii) Geographic limitation The Secretary shall lease lands under this paragraph in units of not more than 2,560 acres, except in Alaska, where units shall be not more than 5,760 acres. Such units shall be as nearly compact as possible. (iii) Frequency Lease sales under this section shall be held for each State in which there are lands eligible for leasing no more than 3 times each year and on a rotating basis such that the lands under the responsibility of any Bureau of Land Management field office are available for leasing no more than one time each year. (iv) Royalty A lease under this section shall be conditioned upon the payment of a royalty at a rate of not less than 18.75 percent in amount or value of the production removed or sold from the lease, except as otherwise provided in this Act. (v) Issuance of lease The Secretary may issue a lease under this section to the responsible qualified bidder with the highest bid that is equal to or greater than the national minimum acceptable bid. The Secretary shall decide whether to accept a bid and issue a lease within 90 days following payment by the successful bidder of the remainder of the bonus bid, if any, and annual rental for the first lease year. (vi) Rejection of bid The Secretary may reject a bid above the national minimum acceptable bid if, after evaluation of the value of the lands proposed for lease, the Secretary determines that the bid amount does not ensure that fair market value is obtained for the lease. . (c) National minimum acceptable bid Subparagraph (B) of section 17(b)(1) of the Mineral Leasing Act ( 30 U.S.C. 226(b)(1) (B) National minimum acceptable bid (i) In general Except as provided in clause (ii), for purposes of subparagraph (A), the national minimum acceptable bid shall be $10 per acre. All bids under this section for less than the national minimum acceptable bid shall be rejected. (ii) Raising the national minimum acceptable bid The Secretary may establish a higher national minimum acceptable bid— (I) beginning at the end of the 4-year period that begins on the date of enactment of the Restoring Community Input and Public Protection in Oil and Gas Leasing Act of 2021, and once every 4 years thereafter, to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics; and (II) at any time, if the Secretary finds that such a higher amount is necessary to enhance financial returns to the United States or to promote more efficient management of oil and gas resources on Federal lands. (iii) Not a major Federal action The proposal or issuance of any regulation to establish a higher national minimum acceptable bid under clause (ii) shall not be considered a major Federal action that is subject to the requirements of section 102(2)(C) of the National Environmental Policy Act of 1969 ( 42 U.S.C. 4332(2)(C) . (d) Rentals Section 17(d) of the Mineral Leasing Act ( 30 U.S.C. 226(d) (d) Annual rentals All leases issued under this section shall be conditioned upon the payment by the lessee of a rental of— (1) not less than $3.00 per acre per year during the 5-year period beginning on the date the lease begins for new leases, and after the end of such 5 year period not less than $5 per acre per year; or (2) such higher rental rate as the Secretary may establish if the Secretary finds that such action is necessary to enhance financial returns to the United States and promote more efficient management of oil and gas and alternative energy resources on Federal lands. . (e) Elimination of noncompetitive leasing The Mineral Leasing Act ( 30 U.S.C. 181 et seq. (1) in section 17(b) ( 30 U.S.C. 226(b) (2) by amending section 17(c) ( 30 U.S.C. 226(c) (c) Lands for which no bid is accepted Lands made available for leasing under subsection (b)(1) but for which no bid is accepted may be made available by the Secretary for a new round of sealed bidding under such subsection. ; (3) in section 17(e) ( 30 U.S.C. 226(e) (A) by striking Competitive and noncompetitive leases Leases, including leases for tar sand areas, (B) by striking Provided ten years. (4) in section 31(d)(1) ( 30 U.S.C. 188(d)(1) or section 17(c) (5) in section 31(e) ( 30 U.S.C. 188(e) (A) in paragraph (2) by striking , or the inclusion (B) in paragraph (3) by striking (A) (6) by striking section 31(f) ( 30 U.S.C. 188(f) (7) in section 31(g) ( 30 U.S.C. 188(g) (A) in paragraph (1) by striking as a competitive in the same manner as the original lease issued pursuant to section 17. (B) by striking paragraph (2) and redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively; and (C) in paragraph (2), as redesignated, by striking , applicable to leases issued under subsection 17(c) of this Act ( 30 U.S.C. 226(c) , except (f) Lease term Section 17(e) of the Mineral Leasing Act ( 30 U.S.C. 226(e) 10 years: 5 years. (g) Other leasing requirements Section 17(g) of the Mineral Leasing Act ( 30 U.S.C. 226(g) (1) by striking (g) The Secretary of the Interior (g) Other leasing requirements (1) In general The Secretary of the Interior ; and (2) by adding at the end the following: (2) Limitation The Secretary shall not issue a lease or approve the assignment of any lease to any person, or to any subsidiary or affiliate of such person or any other person controlled by or under common control with such person, unless such person has the demonstrated capability to explore and produce oil and gas under the lease. (3) Protection of leased lands for other uses Each lease under this section shall include such terms as are necessary to preserve the United States flexibility to control or prohibit activities that pose serious and unacceptable impacts to the value of the leased lands for uses other than production of oil and gas. . 3. Transparency and landowner protections (a) Disclosure of identities filing disclosures of interest and bids Section 17(b) of the Mineral Leasing Act ( 30 U.S.C. 226(b) (3) Bidder identity The Secretary— (A) shall require that each expression of interest to bid for a lease under this section and each bid for a lease under this section shall include the name of the person for whom such expression of interest or bid is submitted; and (B) shall promptly publish each such name. . (b) Notice requirements Section 17(f) of the Mineral Leasing Act ( 30 U.S.C. 226(f) (f) At least agencies. (f) Requirements prior to offering lands for lease (1) Required notice At least 45 days before offering lands for lease under this section, and at least 30 days before approving applications for permits to drill under the provisions of a lease, modifying the terms of any lease issued under this section, or granting a waiver, exception, or modification of any stipulation of a lease issued under this section, the Secretary shall provide notice of the proposed action to— (A) the general public by posting such notice in the appropriate local office and on the electronic website of the leasing and land management agencies offering the lands for lease; (B) all surface land owners in the area of the lands being offered for lease; and (C) the holders of special recreation permits for commercial use, competitive events, and other organized activities on the lands being offered for lease. (2) Required information . (c) Surface owner protection Section 17 of the Mineral Leasing Act ( 30 U.S.C. 226 (r) Post-Lease surface use agreement (1) In general Except as provided in paragraph (2), the Secretary may not authorize any operator to conduct exploration and drilling operations on lands with respect to which title to oil and gas resources is held by the United States but title to the surface estate is not held by the United States, until the operator has filed with the Secretary a document, signed by the operator and the surface owner or owners, showing that the operator has secured a written surface use agreement between the operator and the surface owner or owners that meets the requirements of subparagraph (B). (2) Contents The surface use agreement shall provide for— (A) the use of only such portion of the surface estate as is reasonably necessary for exploration and drilling operations based on site-specific conditions; (B) the accommodation of the surface estate owner to the maximum extent practicable, including the location, use, timing, and type of exploration and drilling operations, consistent with the operator’s right to develop the oil and gas estate; (C) the reclamation of the site to a condition capable of supporting the uses which such lands were capable of supporting prior to exploration and drilling operations; and (D) compensation for damages as a result of exploration and drilling operations, including— (i) loss of income and increased costs incurred; (ii) damage to or destruction of personal property, including crops, forage, and livestock; and (iii) failure to reclaim the site in accordance with clause (iii). (3) Authorized exploration and drilling operations (A) Authorization without surface use agreement The Secretary may authorize an operator to conduct exploration and drilling operations on lands covered by paragraph (1) in the absence of an agreement with the surface estate owner or owners, if— (i) the Secretary makes a determination in writing that the operator made a good faith attempt to conclude such an agreement, including referral of the matter to arbitration pursuant to paragraph (1)(C), but that no agreement was concluded within 90 days after the referral to arbitration; (ii) the operator submits a plan of operations that provides for the matters specified in paragraph (1)(B) and for compliance with all other applicable requirements of Federal and State law; and (iii) the operator posts a bond or other financial assurance in an amount the Secretary determines to be adequate to ensure compensation to the surface estate owner for any damages to the site, in the form of a surety bond, trust fund, letter of credit, government security, certificate of deposit, cash, or equivalent. (B) Surface owner participation The Secretary shall provide surface estate owners with an opportunity to— (i) comment on plans of operations in advance of a determination of compliance with this Act; (ii) participate in bond level determinations and bond release proceedings under this section; (iii) attend an on-site inspection during such determinations and proceedings; (iv) file written objections to a proposed bond release; and (v) request and participate in an on-site inspection when they have reason to believe there is a violation of the terms and conditions of a plan of operations. (C) Payment of financial guarantee A surface estate owner with respect to any land subject to a lease may petition the Secretary for payment of all or any portion of a bond or other financial assurance required under this section as compensation for any damages as a result of exploration and drilling operations. Pursuant to such a petition, the Secretary may use such bond or other guarantee to provide compensation to the surface estate owner for such damages. (D) Bond release Upon request and after inspection and opportunity for surface estate owner review, the Secretary may release the financial assurance required under this section if the Secretary determines that exploration and drilling operations are ended and all damages have been fully compensated. (4) Surface owner notification The Secretary shall notify surface estate owners in writing— (A) not less than 45 days before lease sales; (B) of the identity of the lessee, not more than 10 business days after a lease is issued; (C) concerning any subsequent request or decision regarding a lease not more than 5 business days after such request or decision, including regarding modification of a lease, waiver of a stipulation, or approval of a right of way; and (D) not more than 5 business days after issuance of a drilling permit under a lease. . 4. Lease stipulations (a) Energy policy Act of 2005 Section 363(b)(3)(C) of the Energy Policy Act of 2005 ( 42 U.S.C. 15922(b)(3)(C) (C) adequately protective of the resource for which the stipulations are applied; . (b) Revision of existing memorandum Not later than 180 days after the date of the enactment of this Act the Secretary of the Interior and the Secretary of Agriculture shall revise the memorandum of understanding under section 363(b)(3)(C) of the Energy Policy Act of 2005 ( 42 U.S.C. 15922 5. Parcel review Section 17(a) of the Mineral Leasing Act ( 30 U.S.C. 226(a) (3) Parcel review The Secretary shall issue oil and gas leases under this Act only in accordance with subsections C through I of section III of Bureau of Land Management Instruction Memorandum No. 2010–117, dated May 17, 2010, as in effect on April 24, 2017. . 6. Acreage limitations Section 27(d)(1) of the Mineral Leasing Act ( 30 U.S.C. 184(d)(1) , and acreage under any lease any portion of which has been committed to a federally approved unit or cooperative plan or communitization agreement or for which royalty (including compensatory royalty or royalty in-kind) was paid in the preceding calendar year, 7. Land management Section 17(g) of the Mineral Leasing Act ( 30 U.S.C. 226(g) (4) Multiple-use management The Secretary, and for National Forest lands, the Secretary of Agriculture, shall manage lands that are subject to an oil and gas lease under this Act in accordance with the principles, policies, and requirements relating to multiple use under the Federal Land Policy and Management Act of 1976 ( 43 U.S.C. 1701 et seq. . 8. Transparency in management of leases Section 17(a) of the Mineral Leasing Act ( 30 U.S.C. 226(a) (4) Transparency in management of leases For each lease under this section, the Secretary shall make available on a public website— (A) the identity of— (i) each person who is or has been a lessee under the lease; and (ii) each person who is or has been an operator under the lease; (B) notice of each transfer of the lease; and (C) notice of each suspension of operations, each suspension of production, and each suspension of operations and production. . 9. Lease cancellation for improper issuance Section 31(b) of the Mineral Leasing Act ( 30 U.S.C. 188(b) if the lease was improperly issued or 30 days notice 10. Fees for Expressions of Interest (a) In general The Secretary shall charge any person who submits an expression of interest, as that term is defined by the Secretary, a fee, in an amount determined by the Secretary under paragraph (2). (b) Amount The fee authorized under paragraph (1) shall be established by the Secretary in an amount that is determined by the Secretary to be appropriate to cover the aggregate cost of processing an expression of interest under this section, but not less than $15 per acre of the area covered by the applicable expression of interest. (c) Adjustment of fees The Secretary shall, by regulation at least every 4 years, establish a higher expression of interest fee— (1) to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics; and (2) as the Secretary determines to be necessary to enhance financial returns to the United States or to promote more efficient management of oil and gas resources on Federal land. 11. Protection of water resources (a) Mineral leasing act requirements Section 17 of the Mineral Leasing Act ( 30 U.S.C. 226 (1) in subsection (g) by striking lands or surface waters adversely surface or ground waters or lands adversely (2) by redesignating subsection (p) as subsection (q); and (3) by inserting after subsection (o) the following: (p) Water requirements (1) An operator producing oil or gas (including coalbed methane) under a lease issued under this Act shall— (A) replace the water supply of a water user who obtains all or part of such user’s supply of water from an underground or surface source that has been affected by contamination, diminution, or interruption proximately resulting from drilling, fracking, or production operations for such production; (B) ensure that if a surface or ground water source is affected by contamination, diminution, or interruption proximately resulting from such production, best management practices and appropriately available technologies are used to prevent, to the maximum extent possible, the long-term or permanent degradation of the surface or ground water source; and (C) comply with all applicable requirements of Federal and State law with respect to— (i) discharge of any water produced under the lease; and (ii) activities that would divert or otherwise alter a surface or ground water source or lead to a discharge not covered by clause (i). (2) An application for a permit to drill under a lease under this Act shall be accompanied by a proposed water management plan including provisions to— (A) protect the quantity and quality of surface and ground water systems, both on-site and off-site, from adverse effects of the exploration, development, and reclamation processes or to provide alternative sources of water if such protection cannot be assured; (B) protect the rights of present users of water that would be affected by operations under the lease, including the discharge of any water produced in connection with such operations that is not reinjected; and (C) identify any agreements with other parties for the beneficial use of produced waters and the steps that will be taken to comply with State and Federal laws related to such use. (3) The Secretary may not approve an application if the Secretary determines that the applicant did not submit a water management plan that meets the requirements described in paragraph (2). . (b) Relation to state law Nothing in this section or any amendment made by this section shall be construed as— (1) impairing or in any manner affecting any right or jurisdiction of any State with respect to the waters of such State; or (2) limiting, altering, modifying, or amending any of the interstate compacts or equitable apportionment decrees that apportion water among and between States. 12. Fracking regulation on Federal lands (a) In general Not later than 1 year after the date of enactment of this Act, the Secretary of the Interior, acting through the Bureau of Land Management, shall issue regulations governing the use of hydraulic fracturing under oil and gas leases for Federal lands. (b) Included provisions The regulations under this section shall require— (1) baseline water testing, the results of which shall be posted on an appropriate internet website; and (2) public disclosure of each chemical used for hydraulic fracturing on an appropriate internet website. (c) Interim Application of prior rule The final rule entitled Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands 13. Environmental analysis Any environmental analysis pursuant to the National Environmental Policy Act ( 42 U.S.C. 4321 et seq. 14. Taxpayer funding stewardship In an effort to be good stewards of taxpayer dollars and conscientious of the demands placed upon public servants, no provisions contained within this Act shall require a duplication of analysis by any government agency, individual, or contractor, at any level including federal, state, local, or tribal and, if so determined, such provision shall be considered non-binding. December 14, 2022 Reported from the Committee on Natural Resources December 14, 2022 Committee on Agriculture

Summary: Restoring Community Input and Public Protections in Oil and Gas Leasing Act of 2021 This bill modifies several provisions related to oil and gas leasing on public lands. Among other requirements, the bill replaces the competitive auction process with a competitive-sealed bidding process. It also eliminates non-competitive bidding. Additionally, the bill increases royalty rates, rental rates, and the minimum bid amount. Further, the bill creates a fee for nominating lands for leasing. Lease sales must be held in each state no more than three times per year instead of quarterly. The bill also decreases lease term durations from 10 to 5 years. Certain lease information must be made available on public websites, including the names of all current and former lessees and operators. The bill also adds a number of new provisions related to protection of private surface estate owners. Finally, the bill establishes requirements to protect water resources, including by requiring oil or gas operators to replace certain water supplies affected by drilling, hydraulic fracturing (i.e., fracking), or production operations. In addition, the Bureau of Land Management must issue regulations governing the use of fracking under oil and gas leases for federal lands. The regulations must require (1) baseline water testing, and (2) public disclosure of each chemical used for fracking.