205 
(n) RENEWABLE ENERGY FROM CELLULOSE AND 
DEPOLYMERIZATION.— 
(1) PROGRAM.—The Secretary of the Interior 
shall establish a grant program for the production of 
liquid fuels from cellulose and depolymerization. 
(2) GRANT PROVISIONS.—All grants under this 
subsection shall require a 50 percent non-Federal 
cost share. 
(3) FUNDING.—The Secretary shall carry out 
this grant program with funds from the Freedom 
Fuels Fund for each of fiscal years 2009 through 
2018, and in each fiscal year thereafter in the dis-
cretion of the Secretary, in the amount of 
$50,000,000 each fiscal year. 
(o) CONVERSION GRANTS FOR MOTOR VEHICLES.— 
(1) PROGRAM.—The Secretary shall establish a 
grant program for the voluntary conversion of gaso-
line-powered motor vehicles to either natural gas or 
gasoline-electric hybrid vehicles. 
(2) GRANT
PROVISIONS.—Each grant under 
this subsection shall be limited to the lesser of 
$1,250 per vehicle, or 50 percent of the cost of the 
conversion. 
(3) ELIGIBLE
MOTOR
VEHICLES.—A grant 
under this subsection may not be used to convert a 
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206 
motor vehicle unless the Administrator of the Envi-
ronmental Protection Agency has determined under 
chapter 329 of title 49, United States Code, that the 
average fuel economy for that model of motor vehicle 
in city driving is 16 miles per gallon or less. 
(4) FUNDING.—The Secretary shall carry out 
this grant program with funds from the Freedom 
Fuels Fund for each of fiscal years 2009 through 
2018, and each fiscal year thereafter in the discre-
tion 
of 
the 
Secretary, 
in 
the 
amount 
of 
$375,000,000 each fiscal year. 
SEC. 228. COASTAL IMPACT ASSISTANCE. 
Section 31 of the Outer Continental Shelf Lands Act 
(43 U.S.C. 1356a) is repealed. Existing grants issued 
under section 31 shall no longer be subject to oversight 
by the Federal Government, and shall not be subject to 
audit by it. 
SEC. 229. OIL SHALE AND TAR SANDS AMENDMENTS. 
(a) ROYALTY RATES FOR LEASES.—Section 369(o) 
of the Energy Policy Act of 2005 (Public Law 109–58; 
119 Stat. 728; 42 U.S.C. 15927) is amended by redesig-
nating paragraphs (1) and (2) as subparagraphs (A) and 
(B), respectively, by designating the existing language as 
paragraph (1), and by adding at the end the following a 
new paragraph: 
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207 
‘‘(2) DEFAULT PROVISIONS.—In the absence of 
the issuance of regulations or other designation by 
the Secretary, the following shall be the royalties, 
fees, rentals, bonus provisions, and other payments 
for research, development, and demonstration leases, 
and commercial leases, issued under the authority of 
this section: 
‘‘(A) ROYALTY
RATES
FOR
COMMERCIAL 
LEASES.—The royalty rate for commercial 
leases shall be 6 percent of the value of produc-
tion at the first sale. 
‘‘(B) ROYALTY RATES FOR RESEARCH, DE-
VELOPMENT, AND DEMONSTRATION LEASES.— 
The royalty rate for research, development, and 
demonstration leases that have been converted 
to full-sized leases, which shall be the same size 
as commercial leases, shall be 5 percent of the 
value of production at the first sale. 
‘‘(C) 
OTHER
PROVISIONS.—Commercial 
tracts shall be leased to the highest bidder 
based on sealed bids. The provisions for depos-
its, rentals, fees, and other matters shall be the 
same for commercial oil shale and tar sands 
leases as for oil and gas leases under the Min-
eral Leasing Act.’’. 
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208 
(b) TREATMENT OF RECEIPTS.—Section 21 of the 
Mineral Leasing Act (30 U.S.C. 241) is amended by add-
ing at the end the following: 
‘‘(f) RECEIPTS.— 
‘‘(1) IN GENERAL.—Notwithstanding the provi-
sions of section 35, all funds received from and 
under an oil shale or tar sands lease shall be dis-
posed of as provided in this subsection. 
‘‘(2) DISPOSITION OF RECEIPTS.— 
‘‘(A) DEPOSIT.—The Secretary shall de-
posit into a separate account in the Treasury 
all receipts derived from any oil shale or tar 
sands lease. 
‘‘(B) ALLOCATIONS TO STATES AND LOCAL 
POLITICAL SUBDIVISIONS.—The Secretary shall 
allocate 50 percent of the receipts deposited 
into the account established under subpara-
graph (A) to the State within the boundaries of 
which the leased lands are located, with a por-
tion of that to be paid directly by the Secretary 
to the State’s local political subdivisions as pro-
vided in this paragraph. 
‘‘(C) TRANSMISSION OF ALLOCATIONS.— 
‘‘(i) IN GENERAL.—Not later than the 
last business day of the month after the 
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209 
month in which the revenues were received, 
the Secretary shall transmit— 
‘‘(I) to each State two-thirds of 
such State’s allocations under sub-
paragraph (B), and in accordance 
with clauses (ii) and (iii) to certain 
county-equivalent and municipal polit-
ical subdivisions of such State a total 
of one-third of such State’s allocations 
under subparagraph (B), together 
with all accrued interest thereon; and 
‘‘(II) to the miscellaneous re-
ceipts account in the Treasury the re-
maining balance of such receipts de-
posited into the account that are not 
allocated under subparagraph (B), to-
gether with interest thereon, except 
that until a lease has been in produc-
tion for 20 years 20 percent of such 
remaining balance derived from a 
lease shall be paid in accordance with 
subclause (I). 
‘‘(ii) 
ALLOCATIONS
TO
CERTAIN 
COUNTY-EQUIVALENT POLITICAL SUBDIVI-
SIONS.—The Secretary shall under clause 
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210 
(i)(I) make equitable allocations of the re-
ceipts to county-equivalent political sub-
divisions that the Secretary determines are 
closely associated with the leasing and pro-
duction of oil shale and tar sands, under a 
formula that the Secretary shall determine 
by regulation. 
‘‘(iii) ALLOCATIONS
TO
MUNICIPAL 
POLITICAL SUBDIVISIONS.—The initial al-
location to each county-equivalent political 
subdivision under clause (ii) shall be fur-
ther allocated to the county-equivalent po-
litical subdivision and any municipal polit-
ical subdivisions located partially or wholly 
within the boundaries of the county-equiva-
lent political subdivision on an equitable 
basis under a formula that the Secretary 
shall determine by regulation. 
‘‘(D) INVESTMENT OF DEPOSITS.—The de-
posits in the Treasury account established 
under subparagraph (A) shall be invested by 
the Secretary of the Treasury in securities 
backed by the full faith and credit of the United 
States having maturities suitable to the needs 
of the account and yielding the highest reason-
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211 
ably available interest rates as determined by 
the Secretary of the Treasury. 
‘‘(E) USE
OF
FUNDS.—A recipient of 
funds under this subsection may use the funds 
for any lawful purpose as determined by State 
law. Funds allocated under this subsection to 
States and local political subdivisions may be 
used as matching funds for other Federal pro-
grams without limitation. Funds allocated to 
local political subdivisions under this subsection 
may not be used in calculation of payments to 
such local political subdivisions under programs 
for payments in lieu of taxes or other similar 
programs. 
‘‘(F) NO ACCOUNTING REQUIRED.—No re-
cipient of funds under this subsection shall be 
required to account to the Federal Government 
for the expenditure of such funds, except as 
otherwise may be required by law. 
‘‘(3) DEFINITIONS.—In this subsection: 
‘‘(A) 
COUNTY-EQUIVALENT
POLITICAL 
SUBDIVISION.—The term ‘county-equivalent po-
litical subdivision’ means a political jurisdiction 
immediately below the level of State govern-
ment, including a county, parish, borough in 
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212 
Alaska, independent municipality not part of a 
county, parish, or borough in Alaska, or other 
equivalent subdivision of a State. 
‘‘(B) 
MUNICIPAL
POLITICAL
SUBDIVI-
SION.—The term ‘municipal political subdivi-
sion’ means a municipality located within and 
part of a county, parish, borough in Alaska, or 
other equivalent subdivision of a State.’’. 
(c) INTERAGENCY COORDINATION AND EXPEDITIOUS 
REVIEW OF PERMITTING PROCESS.— 
(1) DEPARTMENT OF THE INTERIOR AS LEAD 
AGENCY.—Upon written request of a prospective ap-
plicant for Federal authorization to develop a pro-
posed oil shale or tar sands project, the Department 
of the Interior shall act as the lead Federal agency 
for the purposes of coordinating all applicable Fed-
eral authorizations and environmental reviews. To 
the maximum extent practicable under applicable 
Federal law, the Secretary of the Interior shall co-
ordinate this Federal authorization and review proc-
ess with any Indian tribes and State and local agen-
cies responsible for conducting any separate permit-
ting and environmental reviews. 
(2) SCHEDULE.—The Secretary of the Interior, 
in coordination with the agencies with authority over 
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213 
Federal authorizations and, as appropriate, with In-
dian tribes and State and local agencies that are 
willing to coordinate their separate permitting and 
environmental reviews with the Federal authoriza-
tions and environmental reviews, shall establish a 
schedule with prompt and binding intermediate and 
ultimate deadlines, not to exceed 18 months from 
the date of the written request, for the review of, 
and Federal authorization decisions relating to, oil 
shale or tar sands project development and oper-
ation. 
(3) 
CONSOLIDATED
ENVIRONMENTAL
RE-
VIEW.—If the Secretary of the Interior determines 
that two or more environmental impact statements 
are required, the Secretary shall consolidate all or 
some of such statements in order to promote effi-
ciency and timeliness in the permitting process to 
the extent practicable. The Secretary may consoli-
date the environmental reviews of any Federal agen-
cy considering any aspect of the proposed oil shale 
or tar sands project including ancillary surface proc-
essing facilities, electric generation or transmission 
facilities, and other related facilities. 
(4) APPEALS.—In the event any agency has de-
nied a Federal authorization required for an oil 
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214 
shale or tar sands project, or has failed to act by a 
deadline established by the Secretary pursuant to 
paragraph (2) for deciding whether to issue the Fed-
eral authorization, the applicant or any State in 
which the proposed oil shale or tar sands project 
would be located may file an appeal with the Sec-
retary. In consultation with the affected agency, the 
Secretary may then either issue the necessary Fed-
eral authorization with appropriate conditions, or 
deny the appeal. The Secretary shall issue a decision 
within 60 days after the filing of the appeal. 
(5) CONFORMING
REGULATIONS.—Not later 
than 6 months after the date of enactment of this 
Act, the Secretary shall issue any regulations nec-
essary to implement this subtitle. 
(d) OIL
SHALE
AND
TAR
SANDS
LAND
EX-
CHANGES.—Section 206 of the Federal Land Policy and 
Management Act of 1976 (43 U.S.C. 1716) is amended 
by adding at the end the following new subsection: 
‘‘(j) OIL
SHALE
AND
TAR
SANDS
LAND
EX-
CHANGES.—For the purpose of promoting the economic 
recovery of oil shale and tar sands resources, the Secretary 
of the Interior shall identify and pursue to completion ex-
change and disposition of non-park, non-wilderness Fed-
eral lands, including lands having a non-Federal surface 
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215 
owner, containing deposits of oil shale or tar sands (or 
both). The Secretary shall identify blocks of land con-
taining oil shale or tar sands (or both) deposits for the 
purpose of maximizing consolidation of land ownership, 
and mineral interests, into manageable blocks within the 
following geologic basins located in Colorado, Utah, and 
Wyoming: Green River, Piceance Creek, Uinta, and 
Washakie. The Secretary shall consider the geology of the 
basin when determining the size of manageable blocks. 
The Secretary shall conduct exchanges that are favorable 
to and in the overall best interest of the United States.’’. 
(e) PROCUREMENT OF UNCONVENTIONAL FUELS.— 
(1) Section 2922d of title 10, United States 
Code, is amended in subsection (d) by striking ‘‘1 or 
more’’ and inserting ‘‘up to 25’’. 
(2) Section 526 of the Energy Independence 
and Security Act of 2007 (42 U.S.C. 17142) is re-
pealed. 
SEC. 230. BUY AND BUILD AMERICAN. 
(a) BUY AND BUILD AMERICAN.—It is the intention 
of the Congress that this Act, among other things, results 
in a healthy and growing American industrial, manufac-
turing, transportation, and service sector employing the 
vast talents of America’s workforce to assist in the devel-
opment of affordable energy from the Outer Continental 
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216 
Shelf. Moreover, the Congress intends to monitor the de-
ployment of personnel and material in the Outer Conti-
nental Shelf to encourage the development of American 
technology and manufacturing to enable United States 
workers to benefit from this Act by good jobs and careers, 
as well as the establishment of important industrial facili-
ties to support expanded access to American resources. 
(b) SAFEGUARD FOR EXTRAORDINARY ABILITY.— 
Section 30(a) of the Outer Continental Shelf Lands Act 
(43 U.S.C. 1356(a)) is amended in the matter preceding 
paragraph (1) by striking ‘‘regulations which’’ and insert-
ing ‘‘regulations that shall be supplemental and com-
plimentary with and under no circumstances a substi-
tution for the provisions of the Constitution and laws of 
the United States extended to the subsoil and seabed of 
the outer Continental Shelf pursuant to section 4(a)(1) 
of this Act, except insofar as such laws would otherwise 
apply to individuals who have extraordinary ability in the 
sciences, arts, education, or business, which has been dem-
onstrated by sustained national or international acclaim, 
and that’’. 
SEC. 231. REPEAL OF THE GULF OF MEXICO ENERGY SECU-
RITY ACT OF 2006. 
The Gulf of Mexico Energy Security Act of 2006 
(title I of division C of Public Law 109–432) is repealed 
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217 
effective October 1, 2008, except the Secretary of the Inte-
rior shall make any payments to State and local govern-
ments based on fiscal year 2008 receipts under that Act. 
SEC. 232. ROYALTY-IN-KIND. 
Section 27 of the Outer Continental Shelf Lands Act 
(43 U.S.C. 1353) is amended as follows: 
(1) By striking paragraph (3) of subsection (a) 
and inserting the following: 
‘‘(3) Title to any royalty or net profit share oil 
or gas from leases issued under this Act or the Min-
eral Leasing Act may not be transferred by the Sec-
retary to another Federal Government agency except 
by sale for cash at fair market value. If not pur-
chased by another Federal Government agency, such 
oil and gas must be sold under subsections (b), (c), 
or (d). Proceeds from sales under this section shall 
be treated as offsetting receipts and shall be subject 
to any receipts sharing provisions applicable to the 
leases from which the in-kind royalty or net profit 
share production was produced in the same manner 
as if it had been paid in value. After payment of 
such shared receipts, the Secretary shall deposit the 
remainder of the receipts from sales into the Treas-
ury of the United States and they shall be credited 
to miscellaneous receipts.’’. 
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218 
(2) In the first sentence of subsection (d) by 
striking ‘‘transferred’’ and inserting ‘‘sold’’. 
SEC. 233. MANDATORY ISSUANCE OF REGULATIONS PRO-
MOTING 
PRODUCTION 
OF 
NATURAL 
GAS 
FROM GAS HYDRATES. 
(a) IN GENERAL.—Section 353 of the Energy Policy 
Act of 2005 (42 U.S.C. 15909) is amended as follows: 
(1) In subsection (b)(1) by striking ‘‘may’’ and 
inserting ‘‘shall’’. 
(2) In subsection (b)(3) in the first sentence by 
striking ‘‘if the Secretary determines that such roy-
alty relief would encourage production’’. 
(3) By striking subsection (b)(4). 
(b) REGULATIONS.—The Secretary shall issue the 
final regulations under such section not later than 180 
days after the date of enactment of this Act. 
SEC. 234. MANDATORY ISSUANCE OF REGULATIONS PRO-
MOTING ENHANCED OIL AND NATURAL GAS 
PRODUCTION THROUGH CARBON DIOXIDE 
INJECTION. 
(a) IN GENERAL.—Subsection (b)(1) of section 354 
of the Energy Policy Act of 2005 (42 U.S.C. 15910) is 
amended to read as follows: 
‘‘(1) IN GENERAL.—The Secretary shall under-
take a rulemaking to provide for reduction of the 
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219 
royalty under a Federal oil and gas lease that is an 
eligible lease.’’. 
(b) REGULATIONS.—The Secretary shall issue the 
final regulations under such section not later than 180 
days after the date of enactment of this Act. 
SEC. 235. CONSERVATION OF RESOURCES FEE FOR FUTURE 
ONSHORE NONPRODUCING OIL AND GAS 
LEASES. 
The Secretary of the Interior shall establish a con-
servation of resources fee for nonproducing leases that will 
apply to all oil and gas, oil shale, tar sands, and coal leases 
issued under the Mineral Leasing Act (30 U.S.C. 181 et 
seq.) and the Mineral Leasing Act for Acquired Lands (30 
U.S.C. 351 et seq.) after the date of enactment of this 
Act. This fee shall be set at $1.00 per acre per year for 
the first year of the lease and shall increase by $1 per 
acre per year each year until the fee reaches $5. The fee 
shall be paid annually until the lease enters production 
in paying quantities. This fee shall be treated as offsetting 
receipts. The sums generated by this fee shall not be sub-
ject to any law providing for mandatory receipts sharing 
with States and shall be transferred by the Secretary of 
the Interior to the Treasury with one-third allocated to 
the account established by section 217, one-third allocated 
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220 
to the account established by section 225, and one-third 
allocated to the account established by section 227. 
SEC. 236. OUTER CONTINENTAL SHELF CONSERVATION OF 
LIVING AND NONLIVING RESOURCES FEE ON 
LIQUID FUELS. 
Not later than 180 days after enactment of this Act, 
in order to fulfill his or her responsibilities for conserva-
tion of the living and nonliving resources of the outer Con-
tinental Shelf, for oil spill prevention and response, and 
for mitigation of any impacts on air and water resources 
by spills, trash, discharges, and other acts, the Secretary 
of the Interior shall establish by regulation a conservation 
of resources fee to be collected by the Secretary of the 
Treasury on all liquid fuels, including but not limited to 
crude oil, liquefied natural gas, petroleum products, and 
other liquid fuels, offloaded in the United States that 
originated from a location outside of the United States, 
its Exclusive Economic Zone, or its outer Continental 
Shelf. This fee shall be set at $0.40 per barrel of oil equiv-
alent and shall be treated as offsetting receipts. The Sec-
retary of the Treasury shall collect the fee from the im-
porter and deposit into the Freedom Fuels Fund estab-
lished in the Treasury under section 227 of this Act such 
sums as the Secretary of the Interior determines is nec-
essary to fully fund the programs, projects, and activities 
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221 
funded by the Freedom Fuels Fund, and the Secretary 
of the Treasury shall deposit the balance into the miscella-
neous receipts account in the Treasury. 
SEC. 237. OUTER CONTINENTAL SHELF DISCHARGES AND 
EMISSIONS. 
The Secretary of the Interior shall require that all 
operations related to oil and gas exploration, development, 
and production on the outer Continental Shelf utilize the 
best available and safest technology to minimize air emis-
sions and discharges into the water, including but not lim-
ited to drilling muds and fluids, unless the Minerals Man-
agement Service Regional Supervisor determines that the 
interests of safety require such discharges or emissions. 
SEC. 238. OCS JOINT PERMITTING OFFICES. 
(a) ESTABLISHMENT.—The Secretary of the Interior 
(referred to in this section as the ‘‘Secretary’’) shall estab-
lish Federal OCS Joint Regional Permitting Offices (re-
ferred to in this section as the ‘‘Regional Permitting Of-
fices’’). 
(b) MEMORANDUM OF UNDERSTANDING.—Not later 
than 90 days after the date of enactment of this Act, the 
Secretary shall enter into a memorandum of under-
standing for purposes of this section with— 
(1) the Secretary of Commerce; 
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222 
(2) the Administrator of the Environmental 
Protection Agency; and 
(3) the Chief of Engineers. 
(c) DESIGNATION OF QUALIFIED STAFF.— 
(1) IN GENERAL.—Not later than 30 days after 
the date of the signing of the memorandum of un-
derstanding under subsection (b), all Federal signa-
tory parties shall assign to each of the Regional Per-
mitting Offices identified in subsection (d) a suffi-
cient number of employees with expertise to address 
the full spectrum of agency regulatory issues relat-
ing to the Regional Permitting Office in which the 
employee is employed, including, as applicable, par-
ticular expertise in— 
(A) the consultations and the preparation 
of biological opinions under section 7 of the En-
dangered Species Act of 1973 (16 U.S.C. 
1536); 
(B) permits under section 404 of Federal 
Water Pollution Control Act (33 U.S.C. 1344); 
(C) regulatory matters under the Clean Air 
Act (42 U.S.C. 7401 et seq.); 
(D) the consultations and preparation of 
documents under the Marine Mammal Protec-
tion Act of 1972 (16 U.S.C. 1361 et seq.); and 
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(E) the preparation of analyses under the 
National Environmental Policy Act of 1969 (42 
U.S.C. 4321 et seq.). 
(2) DUTIES.—Each employee assigned under 
paragraph (1) shall— 
(A) not later than 90 days after the date 
of assignment, report to the Minerals Manage-
ment Service Regional Director in the Regional 
Permitting Office to which the employee is as-
signed; 
(B) be responsible for all issues relating to 
the jurisdiction of the home office or agency of 
the employee; and 
(C) participate as part of the team of per-
sonnel working on proposed energy projects, 
planning, and environmental analyses. 
(d) REGIONAL
PERMITTING
OFFICES.—The fol-
lowing Minerals Management Service Regional Head-
quarters shall serve as the Regional Permitting Offices: 
(1) Anchorage, Alaska. 
(2) New Orleans, Louisiana. 
(3) MMS Pacific Regional Headquarters. 
(4) MMS Atlantic Regional Headquarters. 
(e) REPORTS.—Not later than 3 years after the date 
of enactment of this Act, the Secretary shall submit to 
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Congress a report that outlines the results of the Regional 
Permitting Offices to date. 
(f) TRANSFER OF FUNDS.—For the purposes of co-
ordination and processing of oil and gas use authorizations 
on the Federal outer Continental Shelf under the adminis-
tration of the Regional Permitting Offices identified in 
subsection (d), the Secretary may authorize the expendi-
ture or transfer of such funds as are necessary, from the 
Funds established by sections 217 and 227 of this Act 
and from any other funds available to the Secretary, to— 
(1) the United States Fish and Wildlife Service; 
(2) the Bureau of Indian Affairs; 
(3) the Environmental Protection Agency; 
(4) the National Oceanic and Atmospheric Ad-
ministration; 
(5) the Corps of Engineers; 
(6) the National Park Service; and 
(7) the United States Geological Survey. 
SEC. 239. APPLICATION OF SECTION 307 OF THE COASTAL 
ZONE MANAGEMENT ACT OF 1972. 
(a) CERTAIN ACTIONS EXEMPT FROM CONSISTENCY 
REVIEW.—Section 307 of the Coastal Zone Management 
Act of 1972 (16 U.S.C. 1456) shall not apply to the fol-
lowing: 
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(1) The following actions conducted under the 
authority of the Outer Continental Shelf Lands Act 
(43 U.S.C. 1331 et seq.), as amended by this Act: 
(A) Approval of the OCS 5-Year Oil and 
Gas Leasing Program. 
(B) Rulemakings. 
(C) Granting or directing of lease suspen-
sions. 
(D) Issuance of permits to conduct seismic 
activities. 
(E) Permission to conduct activities pre-
liminary to exploration drilling. 
(F) Unitization decisions. 
(2) Approval of oil spill response plans under 
the Oil Pollution Act of 1990. 
(b) APPLICATION OF CONSISTENCY TO LEASE SALES 
AND OTHER CONVEYANCES.—Only the Adjacent State, as 
defined in section 2(r) of the Outer Continental Shelf 
Lands Act, as amended by this Act, may assert the right 
for a consistency review under section 307 of the Coastal 
Zone Management Act of 1972 for lease sales, granting 
of rights-of-way, or other permissions to use and occupy 
the outer Continental Shelf for tracts wholly within 75 
statute miles of the coastline under the authority of the 
Outer Continental Shelf Lands Act. No State may assert 
VerDate Aug 31 2005 
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