2008, dollars), the royalty rate shall be 
fixed by the Secretary at 171⁄2 per centum 
in the amount or value of production, re-
moved, or sold; 
‘‘(iii) the royalty rate fixed in the 
lease shall be reduced up to 4 per centum 
as follows: 
‘‘(I) 100 per centum of this 
amount if the first production well is 
spudded within 3 years after issuance 
of the lease, 
‘‘(II) 75 per centum of this 
amount if the first production well is 
spudded between 3 and 4 years after 
issuance of the lease, 
‘‘(III) 50 per centum of this 
amount if the first production well is 
spudded between 4 and 5 years after 
issuance of the lease, and 
‘‘(IV) 25 per centum of this 
amount if the first production well is 
spudded between 5 and 6 years after 
issuance of the lease.’’; 
(4) in subsection (a) by adding the following: 
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‘‘(9) The Secretary shall use only the bidding 
system provided for in paragraph (1)(I) of this sub-
section for all lease sales conducted from January 1, 
2010, through January 1, 2020. However, the Sec-
retary may reduce the royalty rate fixed under that 
bidding system by up to 2 per centum for tracts lo-
cated in frontier areas, as determined by the Sec-
retary, if the Secretary finds that the royalty rate 
otherwise fixed by the bidding system would likely 
significantly reduce production resulting from use of 
such bidding system in frontier areas. 
‘‘(10) The royalty rate for leases in effect on 
January 1, 2010, having a royalty rate of 183⁄4 per 
centum, that have not spudded the first production 
well prior to July 1, 2009, shall be reduced up to 
4 per centum as follows: 
‘‘(A) 100 per centum of this amount if the 
first production well is spudded within 3 years 
after issuance of the lease, 
‘‘(B) 75 per centum of this amount if the 
first production well is spudded between 3 and 
4 years after issuance of the lease, 
‘‘(C) 50 per centum of this amount if the 
first production well is spudded between 4 and 
5 years after issuance of the lease, and 
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‘‘(D) 25 per centum of this amount if the 
first production well is spudded between 5 and 
6 years after issuance of the lease. 
‘‘(11) The royalty rate for leases in effect on 
January 1, 2010, having a royalty rate of less than 
183⁄4 per centum, that have not spudded the first 
production well prior to July 1, 2009, shall be re-
duced by up to 2 per centum as follows: 
‘‘(A) 100 per centum of this amount if the 
first production well is spudded within 3 years 
after issuance of the lease, 
‘‘(B) 75 per centum of this amount if the 
first production well is spudded between 3 and 
4 years after issuance of the lease, 
‘‘(C) 50 per centum of this amount if the 
first production well is spudded between 4 and 
5 years after issuance of the lease, and 
‘‘(D) 25 per centum of this amount if the 
first production well is spudded between 5 and 
6 years after issuance of the lease.’’; 
(5) by adding at the end of subsection (b) the 
following: ‘‘The Secretary may issue more than one 
lease for a given tract if each lease applies to a sepa-
rate and distinct range of vertical depths, horizontal 
surface area, or a combination of the two. The Sec-
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