I
106TH CONGRESS
1ST SESSION
H. R. 2250
To establish and implement a competitive oil and gas leasing program that
will result in an environmentally sound and job creating program for
the exploration, development, and production of the oil and gas resources
of the Coastal Plain, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 16, 1999
Mr. YOUNG of Alaska introduced the following bill; which was referred to the
Committee on Resources
A BILL
To establish and implement a competitive oil and gas leasing
program that will result in an environmentally sound
and job creating program for the exploration, develop-
ment, and production of the oil and gas resources of
the Coastal Plain, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Arctic Coastal Plain
Domestic Energy Security Act of 1999’’.
SEC. 2. FINDINGS AND POLICY.
(a) FINDINGS.—Congress finds the following:
(1) The Nation’s domestic oil and gas produc-
tion is in substantial decline and dependence upon
unreliable foreign sources of energy is growing at an
alarming rate.
(2) The oil-rich Middle East is a highly volatile,
turbulent region of the world, upon which the
United States cannot continue to grow more depend-
ent for its energy resources critical to our industrial
and economic might.
(3) The United States currently spends over
$100,000,000,000 per year for foreign energy and
equally significant amounts on our military presence
in the Persian Gulf oil arena.
(4) Within the next decade, world production of
conventional oil is expected to peak and enter a de-
cline phase that will increase the cost of imported oil
and the value of domestic oil.
(5) Production from the Prudhoe Bay fields on
Alaska’s North Slope, which now constitutes 21 per-
cent of the Nation’s total domestic crude oil produc-
tion, has declined 50 percent from its peak output.
(6) In 1980, Congress designated almost 1⁄2 of
the 19,600,000 acre Arctic National Wildlife Refuge
in Alaska as wilderness and directed the Secretary
of the Interior to study the oil and gas potential and
the fish and wildlife resources of the Refuge’s
1,500,000 acre Coastal Plain, which lies east of
Prudhoe Bay.
(7) Reports prepared by the Department of the
Interior and other Federal, State, and private stud-
ies clearly indicate that the Coastal Plain is the
most outstanding oil and gas prospect in the United
States, onshore or offshore, with potential resources
in place estimated to be from 11,600,000,000 to
31,500,000,000 barrels of oil.
(8) The results of over 20 years of operations
at Prudhoe Bay and other North Slope fields are
compelling evidence that carefully planned and exe-
cuted oil and gas exploration, development, produc-
tion, and transportation are compatible with the
North Slope’s fish and wildlife resources and the
needs of subsistence users of those resources. Fur-
ther, environmental care and protection practiced in
the North Slope fields equals or exceeds that of any
other oil field worldwide.
(9) Technological advancements have substan-
tially reduced the impacts of arctic oil and gas oper-
ations on the North Slope. A new well pad, using
current technology, utilizes 75 percent less surface
area than pads used 25 years ago. Winter oper-
ations, using technological advances like ice roads,
protect vegetation, fish, and wildlife.
(10) The long lead time of 10 or more years re-
quired for development of a new North Slope field
requires a prompt decision by the Congress on the
future use of available Federal lands in the Coastal
Plain.
(11) Several significant fields have been discov-
ered to underlie State lands adjacent to the 1002
area of the Arctic National Wildlife Refuge, high-
lighting the promise of the area. The presence of
these fields raises the possibility of drainage of the
Federal mineral estate from adjacent State lands.
(12) Exploration, development, production, and
transportation of the Coastal Plain’s oil and gas re-
sources, which are supported by the State of Alaska,
the North Slope Borough and other local govern-
ments in Alaska, and the Inupiat Eskimo people of
the North Slope, serve vital interests of the Nation,
including—
(A) national security interests, by pro-
viding dependable new sources of domestic oil
production outside of the control and influence
of the Organization of Petroleum Exporting
Countries;
(2) that exploration, development, production,
and transportation of the oil and gas resources of
the Coastal Plain, the Nation’s foremost prospect for
the discovery of significant new oil and gas accumu-
lations, should proceed with dispatch; and
(3) that such activities should be conducted in
a manner consistent with the protection of the
Coastal Plain’s fish and wildlife resources and envi-
ronment and the needs of the area’s subsistence
users.
SEC. 3. DEFINITIONS.
When used in this Act the term—
(1) ‘‘Coastal Plain’’ means that area identified
as such in the map entitled ‘‘Arctic National Wildlife
Refuge’’, dated August 1980, as referenced in sec-
tion 1002(b) of the Alaska National Interest Lands
Conservation Act of 1980 (16 U.S.C. 3142(b)(1)),
comprising approximately 1,549,000 acres; and
(2) ‘‘Secretary’’ except as otherwise provided,
means the Secretary of the Interior or the Sec-
retary’s designee.
SEC. 4. LEASING PROGRAM FOR LANDS WITHIN THE
COASTAL PLAIN.
(a) AUTHORIZATION.—The Secretary shall take such
actions as are necessary to establish and implement a com-
petitive oil and gas leasing program that will result in an
environmentally sound program for the exploration, devel-
opment, and production of the oil and gas resources of
the Coastal Plain and to administer the provisions of this
Act through regulations, lease terms, conditions, restric-
tions, prohibitions, stipulations and other provisions that
ensure the oil and gas exploration, development, and pro-
duction activities on the Coastal Plain will result in no
significant adverse effect on fish and wildlife, their habi-
tat, subsistence resources, and the environment, and shall
require the application of the best available technology for
oil and gas exploration, development, and production, on
all new exploration, development, and production oper-
ations, and whenever practicable, on existing operations,
and in a manner to ensure the receipt of fair market value
by the public for the mineral resources to be leased.
(b) REPEAL.—The prohibitions and limitations con-
tained in section 1003 of the Alaska National Interest
Lands Conservation Act of 1980 (16 U.S.C. 3143) are
hereby repealed.
(c) COMPATIBILITY.—Congress hereby determines
that the oil and gas leasing program and activities author-
ized by this section in the Coastal Plain are compatible
with the purposes for which the Arctic National Wildlife
Refuge was established, and that no further findings or
decisions are required to implement this determination.
(d) SOLE AUTHORITY.—This Act shall be the sole au-
thority for leasing on the Coastal Plain: Provided, That
nothing in this Act shall be deemed to expand or limit
State and local regulatory authority.
(e) FEDERAL LAND.—The Coastal Plain shall be
considered ‘‘Federal land’’ for the purposes of the Federal
Oil and Gas Royalty Management Act of 1982 .
(f) SPECIAL AREAS.—The Secretary, after consulta-
tion with the State of Alaska, the city of Kaktovik, and
the North Slope Borough, is authorized to designate up
to a total of 45,000 acres of the Coastal Plain as Special
Areas and close such areas to leasing if the Secretary de-
termines that these Special Areas are of such unique char-
acter and interest so as to require special management
and regulatory protection. The Secretary may, however,
permit leasing of all or portions of any Special Areas with-
in the Coastal Plain by setting lease terms that limit or
condition surface use and occupancy by lessees of such
lands but permit the use of horizontal drilling technology
from sites on leases located outside the designated Special
Areas.
(g) LIMITATION
ON CLOSED AREAS.—The Sec-
retary’s sole authority to close lands within the Coastal
Plain to oil and gas leasing and to exploration, develop-
ment, and production is that set forth in this Act.
SEC. 5. RULES AND REGULATIONS.
(a) PROMULGATION.—The Secretary shall prescribe
such rules and regulations as may be necessary to carry
out the purposes and provisions of this Act, including rules
and regulations relating to protection of the fish and wild-
life, their habitat, subsistence resources, and the environ-
ment of the Coastal Plain. Such rules and regulations
shall be promulgated no later than 10 months after the
date of enactment of this Act and shall, as of their effec-
tive date, apply to all operations conducted under a lease
issued or maintained under the provisions of this Act and
all operations on the Coastal Plain related to the leasing,
exploration, development and production of oil and gas.
(b) REVISION
OF REGULATIONS.—The Secretary
shall periodically review and, if appropriate, revise the
rules and regulations issued under subsection (a) of this
section to reflect any significant biological, environmental,
or engineering data which come to the Secretary’s atten-
tion.
SEC. 6. LEASE SALES.
(a) LEASE SALES.—Lands may be leased pursuant
to the provisions of this Act to any person qualified to
obtain a lease for deposits of oil and gas under the Mineral
Leasing Act (30 U.S.C. 181 et seq.).
(b) PROCEDURES.—The Secretary shall, by regula-
tion, establish procedures for—
(1) receipt and consideration of sealed nomina-
tions for any area in the Coastal Plain for inclusion
in, or exclusion (as provided in subsection (c)) from,
a lease sale; and
(2) public notice of and comment on designa-
tion of areas to be included in, or excluded from, a
lease sale.
(c) LEASE SALES ON COASTAL PLAIN.—The Sec-
retary shall, by regulation, provide for lease sales of lands
on the Coastal Plain. When lease sales are to be held, they
shall occur after the nomination process provided for in
subsection (b). For the first lease sale, the Secretary shall
offer for lease those acres receiving the greatest number
of nominations, but no less than 200,000 acres and no
more than 300,000 acres shall be offered. If the total acre-
age nominated is less than 200,000 acres, the Secretary
shall include in such sale any other acreage which he be-
lieves has the highest resource potential, but in no event
shall more than 300,000 acres of the Coastal Plain be of-
fered in such sale. With respect to subsequent lease sales,
the Secretary shall offer for lease no less than 200,000
acres of the Coastal Plain. The initial lease sale shall be
held within 12 months of the date of enactment of this
Act, with additional sales conducted no later than 12
months thereafter so long as sufficient interest in develop-
ment exists to warrant, in the Secretary’s judgment, the
conduct of such sales.
SEC. 7. GRANT OF LEASES BY THE SECRETARY.
(a) IN GENERAL.—The Secretary may grant to the
highest responsible qualified bidder by sealed competitive
cash bonus bid any lands to be leased on the Coastal Plain
upon payment by the lessee of such bonus as may be ac-
cepted by the Secretary and of such royalty as may be
fixed in the lease, which shall be not less than 121⁄2 per-
cent in amount or value of the production removed or sold
from the lease.
(b) ANTITRUST REVIEW.—Following each notice of
a proposed lease sale and before the acceptance of bids
and the issuance of leases based on such bids, the Sec-
retary shall allow the Attorney General, in consultation
with the Federal Trade Commission, 30 days to perform
an antitrust review of the results of such lease sale on
the likely effects the issuance of such leases would have
on competition and the Attorney General shall advise the
Secretary with respect to such review, including any rec-
ommendation for the nonacceptance of any bid or the im-
position of terms or conditions on any lease, as may be
appropriate to prevent any situation inconsistent with the
antitrust laws.
(c) SUBSEQUENT
TRANSFERS.—No lease issued
under this Act may be sold, exchanged, assigned, sublet,
or otherwise transferred except with the approval of the
Secretary. Prior to any such approval the Secretary shall
consult with, and give due consideration to the views of,
the Attorney General.
(d) IMMUNITY.—Nothing in this Act shall be deemed
to convey to any person, association, corporation, or other
business organization immunity from civil or criminal li-
ability, or to create defenses to actions, under any anti-
trust law.
(e) DEFINITIONS.—As used in this section, the
term—
(1) ‘‘antitrust review’’ shall be deemed an
‘‘antitrust investigation’’ for the purposes of the
Antitrust Civil Process Act (15 U.S.C. 1311); and
(2) ‘‘antitrust laws’’ means those Acts set forth
in section 1 of the Clayton Act (15 U.S.C. 12).
SEC. 8. LEASE TERMS AND CONDITIONS.
An oil or gas lease issued pursuant to this Act shall—
(1) be for a tract consisting of a compact area
not to exceed 5,760 acres, or 9 surveyed or pro-
tracted sections which shall be as compact in form
as possible;
(2) be for an initial period of 10 years and shall
be extended for so long thereafter as oil or gas is
produced in paying quantities from the lease or unit
area to which the lease is committed or for so long
as drilling or reworking operations, as approved by
the Secretary, are conducted on the lease or unit
area;
(3) require the payment of royalty as provided
for in section 7;
(4) require that exploration activities pursuant
to any lease issued or maintained under this Act
shall be conducted in accordance with an exploration
plan or a revision of such plan approved by the Sec-
retary;
(5) require that all development and production
pursuant to a lease issued or maintained pursuant
to this Act shall be conducted in accordance with de-
velopment and production plans approved by the
Secretary;
(6) provide that the Secretary may close, on a
seasonal basis, portions of the Coastal Plain to ex-
ploratory drilling activities as necessary to protect
caribou calving areas and other species of fish and
wildlife;
(7) contain such provisions relating to rental
and other fees as the Secretary may prescribe at the
time of offering the area for lease;
(8) provide that—
(A) the Secretary may direct or assent to
the suspension of operations and production
under any lease granted under the terms of this
Act in the interest of conservation of the re-
source or where there is no available system to
transport the resource; and
(B) if such a suspension is directed or as-
sented to by the Secretary, any payment of
rental prescribed by such lease shall be sus-
pended during such period of suspension of op-
erations and production, and the term of the
lease shall be extended by adding any such sus-
pension period thereto;
(9) provide that whenever the owner of a non-
producing lease fails to comply with any of the pro-
visions of this Act, or of any applicable provision of
Federal or State environmental law, or of the lease,
or of any regulation issued under this Act, such
lease may be canceled by the Secretary if such de-
fault continues for more than 30 days after mailing
of notice by registered letter to the lease owner at
the lease owner’s record post office address of
record;
(10) provide that whenever the owner of any
producing lease fails to comply with any of the pro-
visions of this Act, of any applicable provision of
Federal or State environmental law, of the lease, or
of any regulation issued under this Act, such lease
may be forfeited and canceled by any appropriate
proceeding brought by the Secretary in any United
States district court having jurisdiction under the
provisions of this Act;
(11) provide that cancellation of a lease under
this Act shall in no way release the owner of the
lease from the obligation to provide for reclamation
of the lease site;
(12) allow the lessee, at the discretion of the
Secretary, to make written relinquishment of all
rights under any lease issued pursuant to this Act,
and provide that the Secretary shall accept such re-
linquishment by the lessee of any lease issued under
this Act where there has not been surface disturb-
ance on the lands covered by the lease;
(13) provide that for the purpose of conserving
the natural resources of any oil or gas pool, field, or
like area, or any part thereof, and in order to avoid
the unnecessary duplication of facilities, to protect
the environment of the Coastal Plain, and to protect
correlative rights, the Secretary shall require that, to
the greatest extent practicable, lessees unite with
each other in collectively adopting and operating
under a cooperative or unit plan of development for
operation of such pool, field, or like area, or any
part thereof, and that the Secretary is also author-
ized and directed to enter into such agreements as
are necessary or appropriate for the protection of
the United States against drainage;
(14) require that the holder of a lease or leases
on lands within the Coastal Plain shall be fully re-
sponsible and liable for the reclamation of lands
within the Coastal Plain and any other Federal
lands adversely affected in connection with explo-
ration, development, production, or transportation
activities on a lease within the Coastal Plain by the
holder of a lease or as a result of activities con-
ducted on the lease by any of the leaseholder’s sub-
contractors or agents;
(15) provide that the holder of a lease may not
delegate or convey, by contract or otherwise, the rec-
lamation responsibility and liability to another party
without the express written approval of the Sec-
retary;
(16) provide that the standard of reclamation
for lands required to be reclaimed under this Act be,
as nearly as practicable, a condition capable of sup-
porting the uses which the lands were capable of
supporting prior to any exploration, development, or
production activities, or upon application by the les-
see, to a higher or better use as approved by the
Secretary;
(17) contain the terms and conditions relating
to protection of fish and wildlife, their habitat, and
the environment, as required by section 4(a);
(18) provide that the holder of a lease, its
agents, and its contractors use best efforts to pro-
vide a fair share, as determined by the level of obli-
gation previously agreed to in the 1974 agreement
implementing Section 29 of the Federal Agreement
and Grant of Right of Way for the Operation of the
Trans-Alaska Pipeline, of employment and con-
tracting for Alaska Natives and Alaska Native Cor-
porations from throughout the State; and
obtained under this section shall not be subject to judicial
review in any civil or criminal proceeding for enforcement.
SEC. 10. RIGHTS-OF-WAY ACROSS THE COASTAL PLAIN.
Notwithstanding title XI of the Alaska National In-
terest Lands Conservation Act of 1980 (16 U.S.C. 3161
et seq.), the Secretary is authorized and directed to grant,
in accordance with the provisions of subsections (c)
through (t) and (v) through (y) of section 28 of the Min-
eral Leasing Act (30 U.S.C. 185), rights-of-way and ease-
ments across the Coastal Plain for the transportation of
oil and gas under such terms and conditions as may be
necessary so as not to result in a significant adverse effect
on the fish and wildlife, subsistence resources, their habi-
tat, and the environment of the Coastal Plain. Such terms
and conditions shall include requirements that facilities be
sited or modified so as to avoid unnecessary duplication
of roads and pipelines. The regulations issued as required
by section 5 shall include provisions granting rights-of-way
and easements across the Coastal Plain.
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