SEC. 28. 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. 29. ONSHORE OIL AND GAS ROYALTIES. 
(a) IN GENERAL.—Effective January 1, 2010, the 
royalty rate for all new oil and gas leases issued under 
the authority of the Mineral Leasing Act (30 U.S.C. 181 
et seq.), the Mineral Leasing Act for Acquired Lands (30 
U.S.C. 351 et seq.), and other statutes providing for the 
issuance of oil and gas leases on public lands or other 
lands containing mineral rights owned by the United 
States Government, excluding the Outer Continental Shelf 
Lands Act (43 U.S.C. 1331 et seq.), shall be fixed by the 
Secretary at 15 per centum in the amount or value of pro-
duction saved, removed, or sold, subject to the following 
adjustments— 
(1) if the arithmetic average of the closing 
prices on the New York Mercantile Exchange for 
light sweet crude oil, or a similar index as deter-
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mined by the Secretary, for the 365 days prior to 
issuance of the final notice of lease sale exceeded 
$150.00 per barrel (in January 1, 2008, dollars), 
the royalty rate shall be fixed by the Secretary at 
161⁄4 per centum in the amount or value of produc-
tion, removed, or sold; 
(2) if the arithmetic average of the closing 
prices on the New York Mercantile Exchange for 
light sweet crude oil, or a similar index as deter-
mined by the Secretary, for the 365 days prior to 
issuance of the final notice of lease sale was less 
than $75.00 per barrel (in January 1, 2008, dol-
lars), the royalty rate shall be fixed by the Secretary 
at 133⁄4 per centum in the amount or value of pro-
duction, removed, or sold; and 
(3) the royalty rate fixed in the lease 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 pro-
duction 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 be-
tween 4 and 5 years after issuance of the lease, (D) 
25 per centum of this amount if the first production 
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well is spudded between 5 and 6 years after issuance 
of the lease. 
(b) REDUCTION.—The Secretary may reduce the roy-
alty rate fixed under subsection (a) by up to 2 per centum 
for tracts located in frontier areas, as determined by the 
Secretary, if the Secretary finds that the royalty rate oth-
erwise fixed by subsection (a) would likely significantly re-
duce production resulting from use of such bidding system 
in frontier areas. 
(c) RATE FOR CERTAIN LEASES.—The royalty rate 
for oil and gas leases in effect on January 1, 2010, that 
have not spudded the first production well prior to July 
1, 2009, issued under the authority of the Mineral Leasing 
Act (30 U.S.C. 181 et seq.), the Mineral Leasing Act for 
Acquired Lands (30 U.S.C. 351 et seq.), and other stat-
utes providing for the issuance of oil and gas leases on 
public lands or other lands containing mineral rights 
owned by the United States Government, excluding the 
Outer Continental Shelf Lands Act (43 U.S.C. 1331 et 
seq.) shall be reduced up to 2 per centum as follows: 
(1) 100 per centum of this amount if the first 
production well is spudded within 3 years after 
issuance of the lease, 
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