837 
HR 6 PCS 
in which production from the specified lease is 
not possible.’’. 
(b) APPLICATION.—The amendment made by this 
section shall apply with respect to an analysis, documenta-
tion, or a related study conducted on or after the date 
of enactment of this Act for any lease entered into before, 
on, or after the date of enactment of this Act. 
(c) DEADLINE FOR REGULATIONS.—The Secretary 
shall issue regulations implementing the amendment made 
by this section by not later than 1 year after the date 
of enactment of this Act. 
SEC. 1809. ASSESSMENT OF GEOTHERMAL ENERGY POTEN-
TIAL. 
The Secretary of Interior, acting through the Direc-
tor of the United States Geological Survey and in coopera-
tion with the States, shall update the 1978 Assessment 
of Geothermal Resources, and submit that updated assess-
ment to Congress— 
(1) not later than 3 years after the date of en-
actment of this Act; and 
(2) thereafter as the availability of data and de-
velopments in technology warrant. 
SEC. 1810. COOPERATIVE OR UNIT PLANS. 
Section 18 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1017) is amended to read as follows:
838 
HR 6 PCS 
‘‘SEC. 18. UNIT AND COMMUNITIZATION AGREEMENTS. 
‘‘(a) ADOPTION OF UNITS BY LESSEES.— 
‘‘(1) IN GENERAL.—For the purpose of more 
properly conserving the natural resources of any 
geothermal reservoir, field, or like area, or any part 
thereof (whether or not any part of the geothermal 
field, or like area, is then subject to any Unit Agree-
ment (cooperative plan of development or oper-
ation)), lessees thereof and their representatives may 
unite with each other, or jointly or separately with 
others, in collectively adopting and operating under 
a Unit Agreement for such field, or like area, or any 
part thereof including direct use resources, if deter-
mined and certified by the Secretary to be necessary 
or advisable in the public interest. A majority inter-
est of lessees under any single lease shall have the 
authority to commit that lease to a Unit Agreement. 
The Secretary of the Interior may also initiate the 
formation of a Unit Agreement, if such action is in 
the public interest. 
‘‘(2) MODIFICATION OF LEASE REQUIREMENTS 
BY SECRETARY.—The Secretary may, in the discre-
tion of the Secretary, and with the consent of the 
holders of leases involved, establish, alter, change, or 
revoke rates of operations (including drilling, oper-
ations, production, and other requirements) of such
839 
HR 6 PCS 
leases and make conditions with reference to such 
leases, with the consent of the lessees, in connection 
with the creation and operation of any such Unit 
Agreement as the Secretary may deem necessary or 
proper to secure the proper protection of the public 
interest. Leases with unlike lease terms or royalty 
rates do not need to be modified to be in the same 
unit. 
‘‘(b) REQUIREMENT
OF
PLANS
UNDER
NEW 
LEASES.—The Secretary— 
‘‘(1) may provide that geothermal leases issued 
under this Act shall contain a provision requiring 
the lessee to operate under such a reasonable Unit 
Agreement; and 
‘‘(2) may prescribe such an Agreement under 
which such lessee shall operate, which shall ade-
quately protect the rights of all parties in interest, 
including the United States. 
‘‘(c) MODIFICATION OF RATE OF PROSPECTING, DE-
VELOPMENT, AND PRODUCTION.—The Secretary may re-
quire that any Agreement authorized by this section that 
applies to lands owned by the United States contain a pro-
vision under which authority is vested in the Secretary, 
or any person, committee, or State or Federal officer or 
agency as may be designated in the Agreement to alter
840 
HR 6 PCS 
or modify from time to time the rate of prospecting and 
development and the quantity and rate of production 
under such an Agreement. 
‘‘(d) EXCLUSION FROM DETERMINATION OF HOLD-
ING OR CONTROL.—Any lands that are subject to any 
Agreement approved or prescribed by the Secretary under 
this section shall not be considered in determining hold-
ings or control under any provision of this Act. 
‘‘(e) POOLING
OF CERTAIN LANDS.—If separate 
tracts of lands cannot be independently developed and op-
erated to use geothermal resources pursuant to any sec-
tion of this Act— 
‘‘(1) such lands, or a portion thereof, may be 
pooled with other lands, whether or not owned by 
the United States, for purposes of development and 
operation under a Communitization Agreement pro-
viding for an apportionment of production or royal-
ties among the separate tracts of land comprising 
the production unit, if such pooling is determined by 
the Secretary to be in the public interest; and 
‘‘(2) operation or production pursuant to such 
an Agreement shall be treated as operation or pro-
duction with respect to each tract of land that is 
subject to the agreement.
841 
HR 6 PCS 
‘‘(f) UNIT AGREEMENT REVIEW.—No more than 5 
years after approval of any cooperative or Unit Agreement 
and at least every 5 years thereafter, the Secretary shall 
review each such Agreement and, after notice and oppor-
tunity for comment, eliminate from inclusion in such 
Agreement any lands that the Secretary determines are 
not reasonably necessary for Unit operations under the 
Agreement. Such elimination shall be based on scientific 
evidence, and shall occur only if it is determined by the 
Secretary to be for the purpose of conserving and properly 
managing the geothermal resource. Any land so eliminated 
shall be eligible for an extension under subsection (g) of 
section 6 if it meets the requirements for such an exten-
sion. 
‘‘(g) DRILLING
OR DEVELOPMENT CONTRACTS.— 
The Secretary may, on such conditions as the Secretary 
may prescribe, approve drilling or development contracts 
made by 1 or more lessees of geothermal leases, with 1 
or more persons, associations, or corporations if, in the 
discretion of the Secretary, the conservation of natural re-
sources or the public convenience or necessity may require 
or the interests of the United States may be best served 
thereby. All leases operated under such approved drilling 
or development contracts, and interests thereunder, shall
842 
HR 6 PCS 
be excepted in determining holdings or control under sec-
tion 7. 
‘‘(h) COORDINATION WITH STATE GOVERNMENTS.— 
The Secretary shall coordinate unitization and pooling ac-
tivities with the appropriate State agencies and shall en-
sure that State leases included in any unitization or pool-
ing arrangement are treated equally with Federal leases.’’. 
SEC. 1811. ROYALTY ON BYPRODUCTS. 
Section 5 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1004) is further amended in subsection (a) by 
striking paragraph (2) and inserting the following: 
‘‘(2) a royalty on any byproduct that is a min-
eral named in the first section of the Mineral Leas-
ing Act (30 U.S.C. 181), and that is derived from 
production under the lease, at the rate of the royalty 
that applies under that Act to production of such 
mineral under a lease under that Act;’’. 
SEC. 1812. REPEAL OF AUTHORITIES OF SECRETARY TO RE-
ADJUST TERMS, CONDITIONS, RENTALS, AND 
ROYALTIES. 
Section 8 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1007) is amended by repealing subsection (b), and 
by redesignating subsection (c) as subsection (b).
843 
HR 6 PCS 
SEC. 1813. CREDITING OF RENTAL TOWARD ROYALTY. 
Section 5 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1004) is further amended— 
(1) in subsection (a)(2) by inserting ‘‘and’’ 
after the semicolon at the end; 
(2) in subsection (a)(3) by striking ‘‘; and’’ and 
inserting a period; 
(3) by striking paragraph (4) of subsection (a); 
and 
(4) by adding at the end the following: 
‘‘(e) CREDITING OF RENTAL TOWARD ROYALTY.— 
Any annual rental under this section that is paid with re-
spect to a lease before the first day of the year for which 
the annual rental is owed shall be credited to the amount 
of royalty that is required to be paid under the lease for 
that year.’’. 
SEC. 1814. LEASE DURATION AND WORK COMMITMENT RE-
QUIREMENTS. 
Section 6 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1005) is amended— 
(1) by striking so much as precedes subsection 
(c), and striking subsections (e), (g), (h), (i), and 
(j); 
(2) by redesignating subsections (c), (d), and 
(f) in order as subsections (g), (h), and (i); and
844 
HR 6 PCS 
(3) by inserting before subsection (g), as so re-
designated, the following: 
‘‘SEC. 6. LEASE TERM AND WORK COMMITMENT REQUIRE-
MENTS. 
‘‘(a) IN GENERAL.— 
‘‘(1) PRIMARY TERM.—A geothermal lease shall 
be for a primary term of 10 years. 
‘‘(2) INITIAL EXTENSION.—The Secretary shall 
extend the primary term of a geothermal lease for 
5 years if, for each year after the fifth year of the 
lease— 
‘‘(A) the Secretary determined under sub-
section (c) that the lessee satisfied the work 
commitment requirements that applied to the 
lease for that year; or 
‘‘(B) the lessee paid in accordance with 
subsection (d) the value of any work that was 
not completed in accordance with those require-
ments. 
‘‘(3) ADDITIONAL EXTENSION.—The Secretary 
shall extend the primary term of a geothermal lease 
(after an initial extension under paragraph (2)) for 
an additional 5 years if, for each year of the initial 
extension under paragraph (2), the Secretary deter-
mined under subsection (c) that the lessee satisfied
845 
HR 6 PCS 
the work commitment requirements that applied to 
the lease for that year. 
‘‘(b) REQUIREMENT
TO SATISFY ANNUAL WORK 
COMMITMENT REQUIREMENT.— 
‘‘(1) IN GENERAL.—The lessee for a geothermal 
lease shall, for each year after the fifth year of the 
lease, satisfy work commitment requirements pre-
scribed by the Secretary that apply to the lease for 
that year. 
‘‘(2) PRESCRIPTION OF WORK COMMITMENT RE-
QUIREMENTS.—The Secretary shall issue regulations 
prescribing minimum equivalent dollar value work 
commitment requirements for geothermal leases, 
that— 
‘‘(A) require that a lessee, in each year 
after the fifth year of the primary term of a 
geothermal lease, diligently work to achieve 
commercial utilization of geothermal resources 
under the lease; 
‘‘(B) describe work that qualifies to meet 
these requirements and factors, such as force 
majeure events, that suspend or modify the 
work commitment obligation; 
‘‘(C) carry forward and apply to work com-
mitment requirements for a year, work com-
846 
HR 6 PCS 
pleted in any year in the preceding 3-year pe-
riod that was in excess of the work required to 
be performed in that preceding year; 
‘‘(D) establish transition rules for leases 
issued before the date of the enactment of this 
subsection, including terms under which a lease 
that is near the end of its term on the date of 
enactment of this subsection may be extended 
for up to 2 years— 
‘‘(i) to allow achievement of produc-
tion under the lease; or 
‘‘(ii) to allow the lease to be included 
in a producing unit; and 
‘‘(E) establish an annual payment that, at 
the option of the lessee, may be exercised in lieu 
of meeting any work requirement for a limited 
number of years that the Secretary determines 
will not impair achieving diligent development 
of the geothermal resource. 
‘‘(3) GEOTHERMAL LEASE OVERLYING MINING 
CLAIM.— 
‘‘(A) EXEMPTION.—The lessee for a geo-
thermal lease of an area overlying an area sub-
ject to a mining claim for which a plan of oper-
ations has been approved by the relevant Fed-
847 
HR 6 PCS 
eral land management agency is exempt from 
annual work requirements established under 
this Act, if development of the geothermal re-
source subject to the lease would interfere with 
the mining operations under such claim. 
‘‘(B) TERMINATION OF EXEMPTION.—An 
exemption under this paragraph expires upon 
the termination of the mining operations. 
‘‘(4) TERMINATION
OF
APPLICATION
OF
RE-
QUIREMENTS.—Work commitment requirements pre-
scribed under this subsection shall not apply to a 
geothermal lease after the date on which the geo-
thermal resource is utilized under the lease in com-
mercial quantities. 
‘‘(c) DETERMINATION OF WHETHER REQUIREMENTS 
SATISFIED.—The Secretary shall, by not later than 90 
days after the end of each year for which work commit-
ment requirements under subsection (b) apply to a geo-
thermal lease— 
‘‘(1) determine whether the lessee has satisfied 
the requirements that apply for that year; 
‘‘(2) notify the lessee of that determination; and 
‘‘(3) in the case of a notification that the lessee 
did not satisfy work commitment requirements for 
the year, include in the notification—
848 
HR 6 PCS 
‘‘(A) a description of the specific work that 
was not completed by the lessee in accordance 
with the requirements; and 
‘‘(B) the amount of the dollar value of 
such work that was not completed, reduced by 
the amount of expenditures made for work com-
pleted in a prior year that is carried forward 
pursuant to subsection (b)(2)(D). 
‘‘(d) PAYMENT
OF
VALUE
OF
UNCOMPLETED 
WORK.— 
‘‘(1) IN GENERAL.—If the Secretary notifies a 
lessee that the lessee failed to satisfy work commit-
ment requirements under subsection (b), the lessee 
shall pay to the Secretary, by not later than the end 
of the 60-day period beginning on the date of the 
notification, the dollar value of work that was not 
completed by the lessee, in the amount stated in the 
notification (as reduced under subsection (c)(3)(B)). 
‘‘(2) 
FAILURE
TO
PAY
VALUE
OF 
UNCOMPLETED WORK.—If a lessee fails to pay such 
amount to the Secretary before the end of that pe-
riod, the lease shall terminate upon the expiration of 
the period. 
‘‘(e) CONTINUATION DURING COMMERCIAL UTILIZA-
TION.—
849 
HR 6 PCS 
‘‘(1) IN GENERAL.—If a geothermal resource 
that is subject to a geothermal lease is utilized in 
commercial quantities within the primary term of 
the lease under subsection (a) (including any exten-
sion of the lease under subsection (a)), such lease 
shall continue until the date on which the geo-
thermal resource is no longer utilized in commercial 
quantities. 
‘‘(2) CONTINUATION OF ASSOCIATED LEASES.— 
If a geothermal lease is for an area in which there 
is injected fluid or steam from a nearby geothermal 
resource for the purpose of maintaining commercial 
utilization of a geothermal resource, such lease shall 
continue until such commercial utilization is termi-
nated. 
‘‘(f) CONVERSION OF GEOTHERMAL LEASE TO MIN-
ERAL LEASE.—A lessee under a lease for a geothermal 
resource that has been utilized for commercial production 
of electricity, has been determined by the Secretary to be 
incapable of any further commercial utilization, and is 
producing any valuable byproduct in payable quantities 
may, within 6 months after such determination— 
‘‘(1) convert the lease to a mineral lease under 
the Mineral Leasing Act (30 U.S.C. 181 et seq.) or 
under the Mineral Leasing Act for Acquired Lands
850 
HR 6 PCS 
(30 U.S.C. 351 et seq.), if the lands that are subject 
to the lease can be leased under that Act for the 
production of such byproduct; or 
‘‘(2) convert the lease to a mining claim under 
the general mining laws, if the byproduct is a 
locatable mineral.’’. 
SEC. 1815. ADVANCED ROYALTIES REQUIRED FOR SUSPEN-
SION OF PRODUCTION. 
Section 5 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1004) is further amended by adding at the end 
the following: 
‘‘(f) ADVANCED ROYALTIES REQUIRED FOR SUSPEN-
SION OF PRODUCTION.— 
‘‘(1) CONTINUATION
OF
LEASE
FOLLOWING 
CESSATION OF PRODUCTION.—If, at any time after 
commercial production under a geothermal lease is 
achieved, production ceases for any cause the lease 
shall remain in full force and effect— 
‘‘(A) during the 1-year period beginning on 
the date production ceases; and 
‘‘(B) after such period if, and so long as, 
the lessee commences and continues diligently 
and in good faith until such production is re-
sumed the steps, operations, or procedures nec-
851 
HR 6 PCS 
essary to cause a resumption of such produc-
tion. 
‘‘(2) ADVANCE ROYALTIES FOLLOWING SUSPEN-
SION OF PRODUCTION.—If production of heat or en-
ergy under a geothermal lease is suspended after the 
date of any such production for which royalty is re-
quired under subsection (a) and the terms of para-
graph (1) are not met, the Secretary shall require 
the lessee, until the end of such suspension, to pay 
royalty in advance at the monthly pro rata rate of 
the average annual rate at which such royalty was 
paid each year in the 5-year-period preceding the 
date of suspension. 
‘‘(3) LIMITATION ON APPLICATION.—Paragraph 
(2) shall not apply if the suspension is required or 
otherwise caused by the Secretary, the Secretary of 
a military department, a State or local government, 
or a force majeure.’’. 
SEC. 1816. ANNUAL RENTAL. 
(a) ANNUAL RENTAL RATE.—Section 5 of the Geo-
thermal Steam Act of 1970 (30 U.S.C. 1004) is further 
amended in subsection (a) in paragraph (3) by striking 
‘‘$1 per acre or fraction thereof for each year of the lease’’ 
and all that follows through the end of the paragraph and 
inserting ‘‘$1 per acre or fraction thereof for each year
852 
HR 6 PCS 
of the lease through the tenth year in the case of a lease 
awarded in a noncompetitive lease sale; or $2 per acre or 
fraction thereof for the first year, $3 per acre or fraction 
thereof for each of the second through tenth years, in the 
case of a lease awarded in a competitive lease sale; and 
$5 per acre or fraction thereof for each year after the 10th 
year thereof for all leases.’’. 
(b) TERMINATION OF LEASE FOR FAILURE TO PAY 
RENTAL.—Section 5 of the Geothermal Steam Act of 
1970 (30 U.S.C. 1004) is further amended by adding at 
the end the following: 
‘‘(g) TERMINATION OF LEASE FOR FAILURE TO PAY 
RENTAL.— 
‘‘(1) IN GENERAL.—The Secretary shall termi-
nate any geothermal lease with respect to which 
rental is not paid in accordance with this Act and 
the terms of the lease under which the rental is re-
quired, upon the expiration of the 45-day period be-
ginning on the date of the failure to pay such rental. 
‘‘(2) 
NOTIFICATION.—The 
Secretary 
shall 
promptly notify a lessee that has not paid rental re-
quired under the lease that the lease will be termi-
nated at the end of the period referred to in para-
graph (1).
853 
HR 6 PCS 
‘‘(3) REINSTATEMENT.—A geothermal lease 
that would otherwise terminate under paragraph (1) 
shall not terminate under that paragraph if the les-
see pays to the Secretary, before the end of the pe-
riod referred to in paragraph (1), the amount of 
rental due plus a late fee equal to 10 percent of such 
amount.’’. 
SEC. 1817. DEPOSIT AND USE OF GEOTHERMAL LEASE REV-
ENUES FOR 5 FISCAL YEARS. 
(a) 
DEPOSIT
OF
GEOTHERMAL
RESOURCES 
LEASES.—Notwithstanding any other provision of law, 
amounts received by the United States in the first 5 fiscal 
years beginning after the date of enactment of this Act 
as rentals, royalties, and other payments required under 
leases under the Geothermal Steam Act of 1970, excluding 
funds required to be paid to State and county govern-
ments, shall be deposited into a separate account in the 
Treasury. 
(b) USE OF DEPOSITS.—Subject to appropriations, 
the Secretary may use amounts deposited under sub-
section (a) to implement the Geothermal Steam Act of 
1970 and this Act. 
SEC. 1818. REPEAL OF ACREAGE LIMITATIONS. 
Section 7 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1006) is repealed.
854 
HR 6 PCS 
SEC. 1819. TECHNICAL AMENDMENTS. 
The Geothermal Steam Act of 1970 (30 U.S.C. 1001 
et seq.) is further amended as follows: 
(1) By striking ‘‘geothermal steam and associ-
ated geothermal resources’’ each place it appears 
and inserting ‘‘geothermal resources’’. 
(2) Section 2(e) (30 U.S.C. 1001(e)) is amend-
ed to read as follows: 
‘‘(e) ‘direct use’ means utilization of geothermal 
resources for commercial, residential, agricultural, 
public facilities, off-grid generation of electricity, or 
other energy needs other than the commercial pro-
duction of electricity; and’’. 
(3) Section 21 (30 U.S.C. 1020) is amended by 
striking ‘‘(a) Within one hundred’’ and all that fol-
lows through ‘‘(b) Geothermal’’ and inserting ‘‘Geo-
thermal’’. 
(4) The first section (30 U.S.C. 1001 note) is 
amended by striking ‘‘That this’’ and inserting the 
following: 
‘‘SECTION 1. SHORT TITLE. 
‘‘This’’. 
(5) Section 2 (30 U.S.C. 1001) is amended by 
striking ‘‘SEC. 2. As’’ and inserting the following: 
‘‘SEC. 2. DEFINITIONS. 
‘‘As’’.
855 
HR 6 PCS 
(6) Section 3 (30 U.S.C. 1002) is amended by 
striking ‘‘SEC. 3. Subject’’ and inserting the fol-
lowing: 
‘‘SEC. 3. LANDS SUBJECT TO GEOTHERMAL LEASING. 
‘‘Subject’’. 
(7) Section 5 (30 U.S.C. 1004) is further 
amended by striking ‘‘SEC. 5.’’, and by inserting im-
mediately before and above subsection (a) the fol-
lowing: 
‘‘SEC. 5. RENTS AND ROYALTIES.’’. 
(8) Section 8 (30 U.S.C. 1007) is amended by 
striking ‘‘SEC. 8. (a) The’’ and inserting the fol-
lowing: 
‘‘SEC. 8. READJUSTMENT OF LEASE TERMS AND CONDI-
TIONS. 
‘‘(a) The’’. 
(9) Section 9 (30 U.S.C. 1008) is amended by 
striking ‘‘SEC. 9. If’’ and inserting the following: 
‘‘SEC. 9. BYPRODUCTS. 
‘‘If’’. 
(10) Section 10 (30 U.S.C. 1009) is amended 
by striking ‘‘SEC. 10. The’’ and inserting the fol-
lowing: 
‘‘SEC. 10. RELINQUISHMENT OF GEOTHERMAL RIGHTS. 
‘‘The’’.
856 
HR 6 PCS 
(11) Section 11 (30 U.S.C. 1010) is amended 
by striking ‘‘SEC. 11. The’’ and inserting the fol-
lowing: 
‘‘SEC. 11. SUSPENSION OF OPERATIONS AND PRODUCTION. 
‘‘The’’. 
(12) Section 12 (30 U.S.C. 1011) is amended 
by striking ‘‘SEC. 12. Leases’’ and inserting the fol-
lowing: 
‘‘SEC. 12. TERMINATION OF LEASES. 
‘‘Leases’’. 
(13) Section 13 (30 U.S.C. 1012) is amended 
by striking ‘‘SEC. 13. The’’ and inserting the fol-
lowing: 
‘‘SEC. 13. WAIVER, SUSPENSION, OR REDUCTION OF RENT-
AL OR ROYALTY. 
‘‘The’’. 
(14) Section 14 (30 U.S.C. 1013) is amended 
by striking ‘‘SEC. 14. Subject’’ and inserting the fol-
lowing: 
‘‘SEC. 14. SURFACE LAND USE. 
‘‘Subject’’. 
(15) Section 15 (30 U.S.C. 1014) is amended 
by striking ‘‘SEC. 15. (a) Geothermal’’ and inserting 
the following:
857 
HR 6 PCS 
‘‘SEC. 15. LANDS SUBJECT TO GEOTHERMAL LEASING. 
‘‘(a) Geothermal’’. 
(16) Section 16 (30 U.S.C. 1015) is amended 
by striking ‘‘SEC. 16. Leases’’ and inserting the fol-
lowing: 
‘‘SEC. 16. REQUIREMENT FOR LESSEES. 
‘‘Leases’’. 
(17) Section 17 (30 U.S.C. 1016) is amended 
by striking ‘‘SEC. 17. Administration’’ and inserting 
the following: 
‘‘SEC. 17. ADMINISTRATION. 
‘‘Administration’’. 
(18) Section 19 (30 U.S.C. 1018) is amended 
by striking ‘‘SEC. 19. Upon’’ and inserting the fol-
lowing: 
‘‘SEC. 19. DATA FROM FEDERAL AGENCIES. 
‘‘Upon’’. 
(19) Section 21 (30 U.S.C. 1020) is further 
amended by striking ‘‘SEC. 21.’’, and by inserting 
immediately before and above the remainder of that 
section the following: 
‘‘SEC. 21. PUBLICATION IN FEDERAL REGISTER; RESERVA-
TION OF MINERAL RIGHTS.’’. 
(20) Section 22 (30 U.S.C. 1021) is amended 
by striking ‘‘SEC. 22. Nothing’’ and inserting the 
following:
858 
HR 6 PCS 
‘‘SEC. 22. FEDERAL EXEMPTION FROM STATE WATER LAWS. 
‘‘Nothing’’. 
(21) Section 23 (30 U.S.C. 1022) is amended 
by striking ‘‘SEC. 23. (a) All’’ and inserting the fol-
lowing: 
‘‘SEC. 23. PREVENTION OF WASTE; EXCLUSIVITY. 
‘‘(a) All’’. 
(22) Section 24 (30 U.S.C. 1023) is amended 
by striking ‘‘SEC. 24. The’’ and inserting the fol-
lowing: 
‘‘SEC. 24. RULES AND REGULATIONS. 
‘‘The’’. 
(23) Section 25 (30 U.S.C. 1024) is amended 
by striking ‘‘SEC. 25. As’’ and inserting the fol-
lowing: 
‘‘SEC. 25. INCLUSION OF GEOTHERMAL LEASING UNDER 
CERTAIN OTHER LAWS. 
‘‘As’’. 
(24) Section 26 is amended by striking ‘‘SEC. 
26. The’’ and inserting the following: 
‘‘SEC. 26. AMENDMENT. 
‘‘The’’. 
(25) Section 27 (30 U.S.C. 1025) is amended 
by striking ‘‘SEC. 27. The’’ and inserting the fol-
lowing:
859 
HR 6 PCS 
‘‘SEC. 27. FEDERAL RESERVATION OF CERTAIN MINERAL 
RIGHTS. 
‘‘The’’. 
(26) Section 28 (30 U.S.C. 1026) is amended 
by striking ‘‘SEC. 28. (a)(1) The’’ and inserting the 
following: 
‘‘SEC. 28. SIGNIFICANT THERMAL FEATURES. 
‘‘(a)(1) The’’. 
(27) Section 29 (30 U.S.C. 1027) is amended 
by striking ‘‘SEC. 29. The’’ and inserting the fol-
lowing: 
‘‘SEC. 29. LAND SUBJECT TO PROHIBITION ON LEASING. 
‘‘The’’. 
SEC. 1820. INTERMOUNTAIN WEST GEOTHERMAL CONSOR-
TIUM. 
(a) PARTICIPATION AUTHORIZED.—The Secretary of 
Energy, acting through the Idaho National Laboratory, 
may participate in a consortium described in subsection 
(b) to address science and science policy issues sur-
rounding the expanded discovery and use of geothermal 
energy, including from geothermal resources on public 
lands. 
(b) MEMBERS.—The consortium referred to in sub-
section (a) shall— 
(1) be known as the ‘‘Intermountain West Geo-
thermal Consortium’’;
860 
HR 6 PCS 
(2) be a regional consortium of institutions and 
government agencies that focuses on building col-
laborative efforts among the universities in the State 
of Idaho, other regional universities, State agencies, 
and the Idaho National Laboratory; 
(3) include Boise State University, the Univer-
sity of Idaho (including the Idaho Water Resources 
Research Institute), the Oregon Institute of Tech-
nology, the Desert Research Institute with the Uni-
versity and Community College System of Nevada, 
and the Energy and Geoscience Institute at the Uni-
versity of Utah; 
(4) be hosted and managed by Boise State Uni-
versity; and 
(5) have a director appointed by Boise State 
University, and associate directors appointed by each 
participating institution. 
(c) FINANCIAL ASSISTANCE.—The Secretary of En-
ergy, acting through the Idaho National Laboratory and 
subject to the availability of appropriations, will provide 
financial assistance to Boise State University for expendi-
ture under contracts with members of the consortium to 
carry out the activities of the consortium.
861 
HR 6 PCS 
TITLE XIX—HYDROPOWER— 
RESOURCES 
SEC. 1901. INCREASED HYDROELECTRIC GENERATION AT 
EXISTING FEDERAL FACILITIES. 
(a) IN GENERAL.—The Secretary of the Interior, the 
Secretary of Energy, and the Secretary of the Army shall 
jointly conduct a study of the potential for increasing elec-
tric power production capability at federally owned or op-
erated water regulation, storage, and conveyance facilities. 
(b) CONTENT.—The study under this section shall in-
clude identification and description in detail of each facil-
ity that is capable, with or without modification, of pro-
ducing additional hydroelectric power, including esti-
mation of the existing potential for the facility to generate 
hydroelectric power. 
(c) REPORT.—The Secretaries shall submit to the 
Committees on Energy and Commerce, Resources, and 
Transportation and Infrastructure of the House of Rep-
resentatives and the Committee on Energy and Natural 
Resources of the Senate a report on the findings, conclu-
sions, and recommendations of the study under this sec-
tion by not later than 18 months after the date of the 
enactment of this Act. The report shall include each of 
the following:
862 
HR 6 PCS 
(1) The identifications, descriptions, and esti-
mations referred to in subsection (b). 
(2) A description of activities currently con-
ducted or considered, or that could be considered, to 
produce additional hydroelectric power from each 
identified facility. 
(3) A summary of prior actions taken by the 
Secretaries to produce additional hydroelectric power 
from each identified facility. 
(4) The costs to install, upgrade, or modify 
equipment or take other actions to produce addi-
tional hydroelectric power from each identified facil-
ity and the level of Federal power customer involve-
ment in the determination of such costs. 
(5) The benefits that would be achieved by such 
installation, upgrade, modification, or other action, 
including quantified estimates of any additional en-
ergy or capacity from each facility identified under 
subsection (b). 
(6) A description of actions that are planned, 
underway, or might reasonably be considered to in-
crease hydroelectric power production by replacing 
turbine runners, by performing generator upgrades 
or rewinds, or construction of pumped storage facili-
ties.
863 
HR 6 PCS 
(7) The impact of increased hydroelectric power 
production on irrigation, water supply, fish, wildlife, 
Indian tribes, river health, water quality, navigation, 
recreation, fishing, and flood control. 
(8) Any additional recommendations to increase 
hydroelectric power production from, and reduce 
costs and improve efficiency at, federally owned or 
operated water regulation, storage, and conveyance 
facilities. 
SEC. 1902. SHIFT OF PROJECT LOADS TO OFF-PEAK PERI-
ODS. 
(a) IN GENERAL.—The Secretary of the Interior 
shall— 
(1) review electric power consumption by Bu-
reau of Reclamation facilities for water pumping 
purposes; and 
(2) make such adjustments in such pumping as 
possible to minimize the amount of electric power 
consumed for such pumping during periods of peak 
electric power consumption, including by performing 
as much of such pumping as possible during off- 
peak hours at night. 
(b) CONSENT OF AFFECTED IRRIGATION CUSTOMERS 
REQUIRED.—The Secretary may not under this section 
make any adjustment in pumping at a facility without the
864 
HR 6 PCS 
consent of each person that has contracted with the 
United States for delivery of water from the facility for 
use for irrigation and that would be affected by such ad-
justment. 
(c) EXISTING OBLIGATIONS NOT AFFECTED.—This 
section shall not be construed to affect any existing obliga-
tion of the Secretary to provide electric power, water, or 
other benefits from Bureau of Reclamation facilities, in-
cluding recreational releases. 
SEC. 1903. REPORT IDENTIFYING AND DESCRIBING THE 
STATUS OF POTENTIAL HYDROPOWER FA-
CILITIES. 
(a) REPORT REQUIREMENT.—Not later than 90 days 
after the date of enactment of this Act, the Secretary of 
the Interior, acting through the Bureau of Reclamation, 
shall submit to the Committee on Resources of the House 
of Representatives and the Committee on Energy and 
Natural Resources of the Senate a report identifying and 
describing the status of potential hydropower facilities in-
cluded in water surface storage studies undertaken by the 
Secretary for projects that have not been completed or au-
thorized for construction. 
(b) REPORT CONTENTS.—The report shall include 
the following:
865 
HR 6 PCS 
(1) Identification of all surface storage studies 
authorized by Congress since the enactment of the 
Reclamation Project Act of 1939 (43 U.S.C. 485 et 
seq.). 
(2) The purposes of each project included with-
in each study identified under paragraph (1). 
(3) The status of each study identified under 
paragraph (1), including for each study— 
(A) whether the study is completed or, if 
not completed, still authorized; 
(B) the level of analyses conducted at the 
feasibility and reconnaissance levels of review; 
(C) identifiable environmental impacts of 
each project included in the study, including to 
fish and wildlife, water quality, and recreation; 
(D) projected water yield from each such 
project; 
(E) beneficiaries of each such project; 
(F) the amount authorized and expended; 
(G) projected funding needs and timelines 
for completing the study (if applicable); 
(H) anticipated costs of each such project; 
and 
(I) other factors that might interfere with 
construction of any such project.
866 
HR 6 PCS 
(4) An identification of potential hydroelectric 
facilities that might be developed pursuant to each 
study identified under paragraph (1). 
(5) Applicable costs and benefits associated 
with potential hydroelectric production pursuant to 
each study. 
TITLE XX—OIL AND GAS— 
RESOURCES 
Subtitle A—Production Incentives 
SEC. 2001. DEFINITION OF SECRETARY. 
In this subtitle, the term ‘‘Secretary’’ means the Sec-
retary of the Interior. 
SEC. 2002. PROGRAM ON OIL AND GAS ROYALTIES IN-KIND. 
(a) APPLICABILITY OF SECTION.—Notwithstanding 
any other provision of law, this section applies to all roy-
alty in-kind accepted by the Secretary on or after the date 
of enactment of this Act under any Federal oil or gas lease 
or permit under section 36 of the Mineral Leasing Act 
(30 U.S.C. 192), section 27 of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1353), or any other Federal law 
governing leasing of Federal land for oil and gas develop-
ment. 
(b) TERMS AND CONDITIONS.—All royalty accruing 
to the United States shall, on the demand of the Sec-
867 
HR 6 PCS 
retary, be paid in oil or gas. If the Secretary makes such 
a demand, the following provisions apply to such payment: 
(1) SATISFACTION OF ROYALTY OBLIGATION.— 
Delivery by, or on behalf of, the lessee of the royalty 
amount and quality due under the lease satisfies the 
lessee’s royalty obligation for the amount delivered, 
except that transportation and processing reimburse-
ments paid to, or deductions claimed by, the lessee 
shall be subject to review and audit. 
(2) MARKETABLE CONDITION.— 
(A) IN
GENERAL.—Royalty production 
shall be placed in marketable condition by the 
lessee at no cost to the United States. 
(B) DEFINITION OF MARKETABLE CONDI-
TION.—In this paragraph, the term ‘‘in market-
able condition’’ means sufficiently free from im-
purities and otherwise in a condition that the 
royalty production will be accepted by a pur-
chaser under a sales contract typical of the field 
or area in which the royalty production was 
produced. 
(3) DISPOSITION
BY
THE
SECRETARY.—The 
Secretary may— 
(A) sell or otherwise dispose of any royalty 
production taken in-kind (other than oil or gas
868 
HR 6 PCS 
transferred under section 27(a)(3) of the Outer 
Continental Shelf Lands Act (43 U.S.C. 
1353(a)(3))) for not less than the market price; 
and 
(B) transport or process (or both) any roy-
alty production taken in-kind. 
(4) RETENTION BY THE SECRETARY.—The Sec-
retary may, notwithstanding section 3302 of title 31, 
United States Code, retain and use a portion of the 
revenues from the sale of oil and gas taken in-kind 
that otherwise would be deposited to miscellaneous 
receipts, without regard to fiscal year limitation, or 
may use oil or gas received as royalty taken in-kind 
(in this paragraph referred to as ‘‘royalty produc-
tion’’) to pay the cost of— 
(A) transporting the royalty production; 
(B) processing the royalty production; 
(C) disposing of the royalty production; or 
(D) any combination of transporting, proc-
essing, and disposing of the royalty production. 
(5) LIMITATION.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), the Secretary may not use 
revenues from the sale of oil and gas taken in-
869 
HR 6 PCS 
kind to pay for personnel, travel, or other ad-
ministrative costs of the Federal Government. 
(B) EXCEPTION.—Notwithstanding sub-
paragraph (A), the Secretary may use a portion 
of the revenues from the sale of oil taken in- 
kind, without fiscal year limitation, to pay sala-
ries and other administrative costs directly re-
lated to the royalty-in-kind program. 
(c) REIMBURSEMENT OF COST.—If the lessee, pursu-
ant to an agreement with the United States or as provided 
in the lease, processes the royalty gas or delivers the roy-
alty oil or gas at a point not on or adjacent to the lease 
area, the Secretary shall— 
(1) reimburse the lessee for the reasonable costs 
of transportation (not including gathering) from the 
lease to the point of delivery or for processing costs; 
or 
(2) allow the lessee to deduct the transportation 
or processing costs in reporting and paying royalties 
in-value for other Federal oil and gas leases. 
(d) BENEFIT TO THE UNITED STATES REQUIRED.— 
The Secretary may receive oil or gas royalties in-kind only 
if the Secretary determines that receiving royalties in-kind 
provides benefits to the United States that are greater
870 
HR 6 PCS 
than or equal to the benefits that are likely to have been 
received had royalties been taken in-value. 
(e) REPORTS.— 
(1) IN GENERAL.—Not later than September 
30, 2005, the Secretary shall submit to Congress a 
report that addresses— 
(A) actions taken to develop businesses 
processes and automated systems to fully sup-
port the royalty-in-kind capability to be used in 
tandem with the royalty-in-value approach in 
managing Federal oil and gas revenue; and 
(B) future royalty-in-kind businesses oper-
ation plans and objectives. 
(2) REPORTS ON OIL OR GAS ROYALTIES TAKEN 
IN-KIND.—For each of fiscal years 2005 through 
2014 in which the United States takes oil or gas 
royalties in-kind from production in any State or 
from the outer Continental Shelf, excluding royalties 
taken in-kind and sold to refineries under subsection 
(h), the Secretary shall submit to Congress a report 
that describes— 
(A) the methodology or methodologies used 
by the Secretary to determine compliance with 
subsection (d), including the performance 
standard for comparing amounts received by
871 
HR 6 PCS 
the United States derived from royalties in-kind 
to amounts likely to have been received had roy-
alties been taken in-value; 
(B) an explanation of the evaluation that 
led the Secretary to take royalties in-kind from 
a lease or group of leases, including the ex-
pected revenue effect of taking royalties in-kind; 
(C) actual amounts received by the United 
States derived from taking royalties in-kind and 
costs and savings incurred by the United States 
associated with taking royalties in-kind, includ-
ing, but not limited to, administrative savings 
and any new or increased administrative costs; 
and 
(D) an evaluation of other relevant public 
benefits or detriments associated with taking 
royalties in-kind. 
(f) DEDUCTION OF EXPENSES.— 
(1) IN
GENERAL.—Before making payments 
under section 35 of the Mineral Leasing Act (30 
U.S.C. 191) or section 8(g) of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1337(g)) of revenues 
derived from the sale of royalty production taken in- 
kind from a lease, the Secretary shall deduct 
amounts paid or deducted under subsections (b)(4)
872 
HR 6 PCS 
and (c) and deposit the amount of the deductions in 
the miscellaneous receipts of the United States 
Treasury. 
(2) ACCOUNTING FOR DEDUCTIONS.—When the 
Secretary allows the lessee to deduct transportation 
or processing costs under subsection (c), the Sec-
retary may not reduce any payments to recipients of 
revenues derived from any other Federal oil and gas 
lease as a consequence of that deduction. 
(g) 
CONSULTATION
WITH
STATES.—The 
Sec-
retary— 
(1) shall consult with a State before conducting 
a royalty in-kind program under this subtitle within 
the State, and may delegate management of any 
portion of the Federal royalty in-kind program to 
the State except as otherwise prohibited by Federal 
law; and 
(2) shall consult annually with any State from 
which Federal oil or gas royalty is being taken in- 
kind to ensure, to the maximum extent practicable, 
that the royalty in-kind program provides revenues 
to the State greater than or equal to those likely to 
have been received had royalties been taken in-value. 
(h) SMALL REFINERIES.—
873 
HR 6 PCS 
(1) PREFERENCE.—If the Secretary finds that 
sufficient supplies of crude oil are not available in 
the open market to refineries that do not have their 
own source of supply for crude oil, the Secretary 
may grant preference to such refineries in the sale 
of any royalty oil accruing or reserved to the United 
States under Federal oil and gas leases issued under 
any mineral leasing law, for processing or use in 
such refineries at private sale at not less than the 
market price. 
(2) PRORATION
AMONG
REFINERIES
IN
PRO-
DUCTION AREA.—In disposing of oil under this sub-
section, the Secretary of Energy may, at the discre-
tion of the Secretary, prorate the oil among refin-
eries described in paragraph (1) in the area in which 
the oil is produced. 
(i) DISPOSITION TO FEDERAL AGENCIES.— 
(1) ONSHORE ROYALTY.—Any royalty oil or gas 
taken by the Secretary in-kind from onshore oil and 
gas leases may be sold at not less than the market 
price to any Federal agency. 
(2) OFFSHORE ROYALTY.—Any royalty oil or 
gas taken in-kind from a Federal oil or gas lease on 
the outer Continental Shelf may be disposed of only
874 
HR 6 PCS 
under section 27 of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1353). 
(j) FEDERAL LOW-INCOME ENERGY ASSISTANCE 
PROGRAMS.— 
(1) PREFERENCE.—In disposing of royalty oil 
or gas taken in-kind under this section, the Sec-
retary may grant a preference to any person, includ-
ing any Federal or State agency, for the purpose of 
providing additional resources to any Federal low-in-
come energy assistance program. 
(2) REPORT.—Not later than 3 years after the 
date of enactment of this Act, the Secretary shall 
transmit a report to Congress, assessing the effec-
tiveness of granting preferences specified in para-
graph (1) and providing a specific recommendation 
on the continuation of authority to grant pref-
erences. 
SEC. 2003. MARGINAL PROPERTY PRODUCTION INCEN-
TIVES. 
(a) DEFINITION OF MARGINAL PROPERTY.—Until 
such time as the Secretary issues regulations under sub-
section (e) that prescribe a different definition, in this sec-
tion the term ‘‘marginal property’’ means an onshore unit, 
communitization agreement, or lease not within a unit or 
communitization agreement, that produces on average the
875 
HR 6 PCS 
combined equivalent of less than 15 barrels of oil per well 
per day or 90 million British thermal units of gas per well 
per day calculated based on the average over the 3 most 
recent production months, including only wells that 
produce on more than half of the days during those 3 pro-
duction months. 
(b) CONDITIONS
FOR
REDUCTION
OF
ROYALTY 
RATE.—Until such time as the Secretary issues regula-
tions under subsection (e) that prescribe different thresh-
olds or standards, the Secretary shall reduce the royalty 
rate on— 
(1) oil production from marginal properties as 
prescribed in subsection (c) when the spot price of 
West Texas Intermediate crude oil at Cushing, Okla-
homa, is, on average, less than $15 per barrel for 90 
consecutive trading days; and 
(2) gas production from marginal properties as 
prescribed in subsection (c) when the spot price of 
natural gas delivered at Henry Hub, Louisiana, is, 
on average, less than $2.00 per million British ther-
mal units for 90 consecutive trading days. 
(c) REDUCED ROYALTY RATE.— 
(1) IN GENERAL.—When a marginal property 
meets the conditions specified in subsection (b), the 
royalty rate shall be the lesser of—
876 
HR 6 PCS 
(A) 5 percent; or 
(B) the applicable rate under any other 
statutory or regulatory royalty relief provision 
that applies to the affected production. 
(2) PERIOD OF EFFECTIVENESS.—The reduced 
royalty rate under this subsection shall be effective 
beginning on the first day of the production month 
following the date on which the applicable condition 
specified in subsection (b) is met. 
(d) TERMINATION OF REDUCED ROYALTY RATE.— 
A royalty rate prescribed in subsection (d)(1)(A) shall ter-
minate— 
(1) with respect to oil production from a mar-
ginal property, on the first day of the production 
month following the date on which— 
(A) the spot price of West Texas Inter-
mediate crude oil at Cushing, Oklahoma, on av-
erage, exceeds $15 per barrel for 90 consecutive 
trading days; or 
(B) the property no longer qualifies as a 
marginal property; and 
(2) with respect to gas production from a mar-
ginal property, on the first day of the production 
month following the date on which—
877 
HR 6 PCS 
(A) the spot price of natural gas delivered 
at Henry Hub, Louisiana, on average, exceeds 
$2.00 per million British thermal units for 90 
consecutive trading days; or 
(B) the property no longer qualifies as a 
marginal property. 
(e) REGULATIONS PRESCRIBING DIFFERENT RE-
LIEF.— 
(1) DISCRETIONARY REGULATIONS.—The Sec-
retary may by regulation prescribe different param-
eters, standards, and requirements for, and a dif-
ferent degree or extent of, royalty relief for marginal 
properties in lieu of those prescribed in subsections 
(a) through (d). 
(2) MANDATORY
REGULATIONS.—Not later 
than 18 months after the date of enactment of this 
Act, the Secretary shall by regulation— 
(A) prescribe standards and requirements 
for, and the extent of royalty relief for, mar-
ginal properties for oil and gas leases on the 
outer Continental Shelf; and 
(B) define what constitutes a marginal 
property on the outer Continental Shelf for pur-
poses of this section.
878 
HR 6 PCS 
(3) CONSIDERATIONS.—In promulgating regu-
lations under this subsection, the Secretary may con-
sider— 
(A) oil and gas prices and market trends; 
(B) production costs; 
(C) abandonment costs; 
(D) Federal and State tax provisions and 
the effects of those provisions on production ec-
onomics; 
(E) other royalty relief programs; 
(F) regional differences in average well-
head prices; 
(G) national energy security issues; and 
(H) other relevant matters. 
(f) SAVINGS PROVISION.—Nothing in this section 
prevents a lessee from receiving royalty relief or a royalty 
reduction pursuant to any other law (including a regula-
tion) that provides more relief than the amounts provided 
by this section. 
SEC. 2004. INCENTIVES FOR NATURAL GAS PRODUCTION 
FROM DEEP WELLS IN THE SHALLOW WA-
TERS OF THE GULF OF MEXICO. 
(a) ROYALTY INCENTIVE REGULATIONS FOR ULTRA 
DEEP GAS WELLS.—
879 
HR 6 PCS 
(1) IN
GENERAL.—Not later than 180 days 
after the date of enactment of this Act, in addition 
to any other regulations that may provide royalty in-
centives for natural gas produced from deep wells on 
oil and gas leases issued pursuant to the Outer Con-
tinental Shelf Lands Act (43 U.S.C. 1331 et seq.), 
the Secretary shall issue regulations granting royalty 
relief 
suspension 
volumes 
of 
not 
less 
than 
35,000,000,000 cubic feet with respect to the pro-
duction of natural gas from ultra deep wells on 
leases issued in shallow waters less than 400 meters 
deep located in the Gulf of Mexico wholly west of 87 
degrees, 30 minutes west longitude. Regulations 
issued under this subsection shall be retroactive to 
the date that the notice of proposed rulemaking is 
published in the Federal Register. 
(2) DEFINITION
OF
ULTRA
DEEP
WELL.—In 
this subsection, the term ‘‘ultra deep well’’ means a 
well drilled with a perforated interval, the top of 
which is at least 20,000 feet true vertical depth 
below the datum at mean sea level. 
(b) ROYALTY INCENTIVE REGULATIONS FOR DEEP 
GAS WELLS.—Not later than 180 days after the date of 
enactment of this Act, in addition to any other regulations 
that may provide royalty incentives for natural gas pro-
880 
HR 6 PCS 
duced from deep wells on oil and gas leases issued pursu-
ant to the Outer Continental Shelf Lands Act (43 U.S.C. 
1331 et seq.), the Secretary shall issue regulations grant-
ing royalty relief suspension volumes with respect to the 
production of natural gas from deep wells on leases issued 
in waters more than 200 meters but less than 400 meters 
deep located in the Gulf of Mexico wholly west of 87 de-
grees, 30 minutes west longitude. The suspension volumes 
for deep wells within 200 to 400 meters of water depth 
shall be calculated using the same methodology used to 
calculate the suspension volumes for deep wells in the 
shallower waters of the Gulf of Mexico, and in no case 
shall the suspension volumes for deep wells within 200 to 
400 meters of water depth be lower than those for deep 
wells in shallower waters. Regulations issued under this 
subsection shall be retroactive to the date that the notice 
of proposed rulemaking is published in the Federal Reg-
ister. 
(c) LIMITATION.—The Secretary may place limita-
tions on the suspension of royalty relief granted based on 
market price. 
SEC. 2005. ROYALTY RELIEF FOR DEEP WATER PRODUC-
TION. 
(a) IN GENERAL.—For all tracts located in water 
depths of greater than 400 meters in the Western and
881 
HR 6 PCS 
Central Planning Area of the Gulf of Mexico, including 
the portion of the Eastern Planning Area of the Gulf of 
Mexico encompassing whole lease blocks lying west of 87 
degrees, 30 minutes West longitude, any oil or gas lease 
sale under the Outer Continental Shelf Lands Act (43 
U.S.C. 1331 et seq.) occurring within 5 years after the 
date of enactment of this Act shall use the bidding system 
authorized in section 8(a)(1)(H) of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1337(a)(1)(H)), except that 
the suspension of royalties shall be set at a volume of not 
less than— 
(1) 5,000,000 barrels of oil equivalent for each 
lease in water depths of 400 to 800 meters; 
(2) 9,000,000 barrels of oil equivalent for each 
lease in water depths of 800 to 1,600 meters; 
(3) 12,000,000 barrels of oil equivalent for each 
lease in water depths of 1,600 to 2,000 meters; and 
(4) 16,000,000 barrels of oil equivalent for each 
lease in water depths greater than 2,000 meters. 
(b) LIMITATION.—The Secretary may place limita-
tions on the suspension of royalty relief granted based on 
market price. 
SEC. 2006. ALASKA OFFSHORE ROYALTY SUSPENSION. 
Section 8(a)(3)(B) of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1337(a)(3)(B)) is amended by in-
882 
HR 6 PCS 
serting ‘‘and in the Planning Areas offshore Alaska’’ after 
‘‘West longitude’’. 
SEC. 2007. OIL AND GAS LEASING IN THE NATIONAL PETRO-
LEUM RESERVE IN ALASKA. 
(a) TRANSFER OF AUTHORITY.— 
(1) REDESIGNATION.—The Naval Petroleum 
Reserves Production Act of 1976 (42 U.S.C. 6501 
et seq.) is amended by redesignating section 107 (42 
U.S.C. 6507) as section 108. 
(2) TRANSFER.—The matter under the heading 
‘‘EXPLORATION OF NATIONAL PETROLEUM RESERVE 
IN
ALASKA’’ under the heading ‘‘ENERGY AND 
MINERALS’’ of title I of Public Law 96–514 (42 
U.S.C. 6508) is— 
(A) transferred to the Naval Petroleum 
Reserves Production Act of 1976 (42 U.S.C. 
6501 et seq.); 
(B) designated as section 107 of that Act; 
and 
(C) moved so as to appear after section 
106 of that Act (42 U.S.C. 6506). 
(b) COMPETITIVE LEASING.—Section 107 of the 
Naval Petroleum Reserves Production Act of 1976 (as 
amended by subsection (a) of this section) is amended—
883 
HR 6 PCS 
(1) by striking the heading and all that follows 
through ‘‘Provided, That (1) activities’’ and insert-
ing the following: 
‘‘SEC. 107. COMPETITIVE LEASING OF OIL AND GAS. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of law and pursuant to regulations issued by the 
Secretary, the Secretary shall conduct an expeditious pro-
gram of competitive leasing of oil and gas in the National 
Petroleum Reserve in Alaska (referred to in this section 
as the ‘Reserve’). 
‘‘(b) MITIGATION OF ADVERSE EFFECTS.—Activi-
ties’’; 
(2) by striking ‘‘Alaska (the Reserve); (2) the’’ 
and inserting 
‘‘Alaska. 
‘‘(c) LAND USE PLANNING; BLM WILDERNESS 
STUDY.—The’’; 
(3) by striking ‘‘Reserve; (3) the’’ and inserting 
‘‘Reserve. 
‘‘(d) FIRST LEASE SALE.—The’’; 
(4) by striking ‘‘4332); (4) the’’ and inserting 
‘‘4321 et seq.). 
‘‘(e) WITHDRAWALS.—The’’; 
(5) by striking ‘‘herein; (5) bidding’’ and insert-
ing
884 
HR 6 PCS 
‘‘under this section. 
‘‘(f) BIDDING SYSTEMS.—Bidding’’; 
(6) by striking ‘‘629); (6) lease’’ and inserting 
‘‘629). 
‘‘(g) GEOLOGICAL STRUCTURES.—Lease’’; 
(7) by striking ‘‘structures; (7) the’’ and insert-
ing 
‘‘structures. 
‘‘(h) SIZE OF LEASE TRACTS.—The’’; 
(8) by striking ‘‘Secretary; (8)’’ and all that fol-
lows through ‘‘Drilling, production,’’ and inserting 
‘‘Secretary. 
‘‘(i) TERMS.— 
‘‘(1) IN GENERAL.—Each lease shall be— 
‘‘(A) issued for an initial period of not 
more than 10 years; and 
‘‘(B) renewed for successive 10-year terms 
if— 
‘‘(i) oil or gas is produced from the 
lease in paying quantities; 
‘‘(ii) oil or gas is capable of being pro-
duced in paying quantities; or 
‘‘(iii) drilling or reworking operations, 
as approved by the Secretary, are con-
ducted on the leased land.
885 
HR 6 PCS 
‘‘(2) RENEWAL OF NONPRODUCING LEASES.— 
The Secretary shall renew for an additional 10-year 
term a lease that does not meet the requirements of 
paragraph (1)(B) if the lessee submits to the Sec-
retary an application for renewal not later than 60 
days before the expiration of the primary lease 
and— 
‘‘(A) the lessee certifies, and the Secretary 
agrees, that hydrocarbon resources were discov-
ered on 1 or more wells drilled on the leased 
land in such quantities that a prudent operator 
would hold the lease for potential future devel-
opment; 
‘‘(B) the lessee— 
‘‘(i) pays the Secretary a renewal fee 
of $100 per acre of leased land; and 
‘‘(ii) provides evidence, and the Sec-
retary agrees that, the lessee has diligently 
pursued exploration that warrants continu-
ation with the intent of continued explo-
ration or future development of the leased 
land; or 
‘‘(C) all or part of the lease—