IB
Union Calendar No. 95
107TH CONGRESS
1ST SESSION
H. R. 2436
[Report No. 107–160, Part I]
To provide secure energy supplies for the people of the United States, and
for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 10, 2001
Mr. HANSEN (for himself, Mr. YOUNG of Alaska, Mr. TAUZIN, Mrs. CUBIN,
Mr. THORNBERRY, Mr. OTTER, and Mr. CALVERT) introduced the fol-
lowing bill; which was referred to the Committee on Resources, and in
addition to the Committee on Energy and Commerce, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee con-
cerned
JULY 25, 2001
Additional sponsors: Mr. PETERSON of Pennsylvania and Mr. SOUDER
JULY 25, 2001
Reported from the Committee on Resources with an amendment
[Strike out all after the enacting clause and insert the part printed in italic]
JULY 25, 2001
Referral to the Committee on Energy and Commerce extended for a period
ending not later than July 25, 2001
JULY 25, 2001
The Committee on Energy and Commerce discharged; committed to the Com-
mittee of the Whole House on the State of the Union and ordered to be
printed
[For text of introduced bill, see copy of bill as introduced on July 10, 2001]
A BILL
To provide secure energy supplies for the people of the
United States, 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 ‘‘Energy Security Act’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I—GENERAL PROTECTIONS FOR ENERGY SUPPLY AND
SECURITY
Sec. 101. Study of existing rights-of-way on Federal lands to determine capa-
bility to support new pipelines or other transmission facilities.
Sec. 102. Inventory of energy production potential of all Federal public lands.
Sec. 103. Review of regulations to eliminate barriers to emerging energy tech-
nology.
Sec. 104. Interagency agreement on environmental review of interstate natural
gas pipeline projects.
Sec. 105. Enhancing energy efficiency in management of Federal lands.
TITLE II—OIL AND GAS DEVELOPMENT
Subtitle A—Offshore Oil and Gas
Sec. 201. Short title.
Sec. 202. Lease sales in Western and Central Planning Area of the Gulf of Mex-
ico.
Sec. 203. Savings clause.
Sec. 204. Analysis of Gulf of Mexico field size distribution, international competi-
tiveness, and incentives for development.
Subtitle B—Improvements to Federal Oil and Gas Management
Sec. 221. Short title.
Sec. 222. Study of impediments to efficient lease operations.
Sec. 223. Elimination of unwarranted denials and stays.
Sec. 224. Limitations on cost recovery for applications.
Sec. 225. Consultation with Secretary of Agriculture.
Subtitle C—Miscellaneous
Sec. 231. Offshore subsalt development.
Sec. 232. Program on oil and gas royalties in kind.
Sec. 233. Cooperative oil and gas research and information centers.
Sec. 234. Marginal well production incentives.
Sec. 235. Reimbursement for costs of NEPA analyses, documentation, and studies.
TITLE III—GEOTHERMAL ENERGY DEVELOPMENT
Sec. 301. Royalty reduction and relief.
Sec. 302. Exemption from royalties for direct use of low temperature geothermal
energy resources.
Sec. 303. Amendments relating to leasing on Forest Service lands.
Sec. 304. Deadline for determination on pending noncompetitive lease applica-
tions.
Sec. 305. Opening of public lands under military jurisdiction.
Sec. 306. Application of amendments.
Sec. 307. Review and report to Congress.
Sec. 308. Reimbursement for costs of NEPA analyses, documentation, and studies.
TITLE IV—HYDROPOWER
Sec. 401. Study and report on increasing electric power production capability of
existing facilities.
Sec. 402. Installation of powerformer at Folsom power plant, California.
Sec. 403. Conservation through pump modernization.
Sec. 404. Study and implementation of increased operational efficiencies in hy-
droelectric power projects.
Sec. 405. Shift of project loads to off-peak periods.
TITLE V—ARCTIC COASTAL PLAIN DOMESTIC ENERGY
Sec. 501. Short title.
Sec. 502. Definitions.
Sec. 503. Leasing program for lands within the Coastal Plain.
Sec. 504. Lease sales.
Sec. 505. Grant of leases by the Secretary.
Sec. 506. Lease terms and conditions.
Sec. 507. Coastal Plain environmental protection.
Sec. 508. Expedited judicial review.
Sec. 509. Rights-of-way across the Coastal Plain.
Sec. 510. Conveyance.
Sec. 511. Local government impact aid and community service assistance.
TITLE VI—HISTORIC PRESERVATION
Sec. 601. Prohibition.
Sec. 602. Removal from eligibility.
TITLE VII—CONSERVATION OF ENERGY BY THE DEPARTMENT OF
THE INTERIOR
Sec. 701. Energy conservation by the Department of the Interior.
TITLE 
I—GENERAL 
PROTEC-
TIONS FOR ENERGY SUPPLY
AND SECURITY
SEC. 101. STUDY OF EXISTING RIGHTS-OF-WAY ON FEDERAL
LANDS TO DETERMINE CAPABILITY TO SUP-
PORT NEW PIPELINES OR OTHER TRANS-
MISSION FACILITIES.
(a) IN GENERAL.—Within one year after the date of
enactment of this Act, the head of each Federal agency that
has authorized a right-of-way across Federal lands for
transportation of energy supplies or transmission of elec-
tricity shall review each such right-of-way and submit a
report to the Secretary of Energy and the Chairman of the
Federal Energy Regulatory Commission regarding—
(1) whether the right-of-way can be used to sup-
port new or additional capacity; and
(2) what modifications or other changes, if any,
would be necessary to accommodate such additional
capacity.
(b) CONSULTATIONS AND CONSIDERATIONS.—In per-
forming the review, the head of each agency shall—
(1) consult with agencies of State, tribal, or local
units of government as appropriate; and
(2) consider whether safety or other concerns re-
lated to current uses might preclude the availability
of a right-of-way for additional or new transportation
or transmission facilities, and set forth those consider-
ations in the report.
SEC. 102. INVENTORY OF ENERGY PRODUCTION POTENTIAL
OF ALL FEDERAL PUBLIC LANDS.
(a) INVENTORY REQUIREMENT.—The Secretary of the
Interior, in consultation with the Secretary of Agriculture
and the Secretary of Energy, shall conduct an inventory
of the energy production potential of all Federal public
lands other than national park lands and lands in any wil-
derness area, with respect to wind, solar, coal, and geo-
thermal power production.
(b) LIMITATIONS.—
(1) IN GENERAL.—The Secretary shall not in-
clude in the inventory under this section the matters
to be identified in the inventory under section 604 of
the Energy Act of 2000 (42 U.S.C. 6217).
(2) WIND AND SOLAR POWER.—The inventory
under this section—
(A) with respect to wind power production
shall be limited to sites having a mean average
wind speed—
(i) exceeding 12.5 miles per hour at a
height of 33 feet; and
(ii) exceeding 15.7 miles per hour at a
height of 164 feet; and
(B) with respect to solar power production
shall be limited to areas rated as receiving 450
watts per square meter or greater.
(c) EXAMINATION
OF RESTRICTIONS
AND IMPEDI-
MENTS.—The inventory shall identify the extent and nature
of any restrictions or impediments to the development of
such energy production potential.
(d) GEOTHERMAL POWER.—The inventory shall in-
clude an update of the 1978 Assessment of Geothermal Re-
sources by the United States Geological Survey.
(e) COMPLETION AND UPDATING.—The Secretary—
(1) shall complete the inventory by not later
than 2 years after the date of the enactment of this
Act; and
(2) shall update the inventory regularly there-
after.
(f) REPORTS.—The Secretary shall submit to the Com-
mittee on Resources of the House of Representatives and to
the Committee on Energy and Natural Resources of the Sen-
ate and make publicly available—
(1) a report containing the inventory under this
section, by not later than 2 years after the effective
date of this section; and
(2) each update of such inventory.
SEC. 103. REVIEW OF REGULATIONS TO ELIMINATE BAR-
RIERS TO EMERGING ENERGY TECHNOLOGY.
(a) IN GENERAL.—Each Federal agency shall carry
out a review of its regulations and standards to determine
those that act as a barrier to market entry for emerging
energy-efficient technologies, including fuel cells, combined
heat and power, and distributed generation (including
small-scale renewable energy).
(b) REPORT TO CONGRESS.—No later than 18 months
after date of enactment of this Act, each agency shall pro-
vide a report to the Congress and the President detailing
all regulatory barriers to emerging energy-efficient tech-
nologies, along with actions the agency intends to take, or
has taken, to remove such barriers.
(c) PERIODIC REVIEW.—Each agency shall subse-
quently review its regulations and standards in this man-
ner no less frequently than every 5 years, and report their
findings to the Congress and the President. Such reviews
shall include a detailed analysis of all agency actions taken
to remove existing barriers to emerging energy technologies.
SEC. 104. INTERAGENCY AGREEMENT ON ENVIRONMENTAL
REVIEW OF INTERSTATE NATURAL GAS PIPE-
LINE PROJECTS.
(a) IN GENERAL.—The Secretary of Energy, in coordi-
nation with the Federal Energy Regulatory Commission,
shall establish an administrative interagency task force to
develop an interagency agreement to expedite and facilitate
the environmental review and permitting of interstate nat-
ural gas pipeline projects.
(b) TASK FORCE MEMBERS.—The task force shall in-
clude a representative of each of the Bureau of Land Man-
agement, the United States Fish and Wildlife Service, the
Army Corps of Engineers, the Forest Service, the Environ-
mental Protection Agency, the Advisory Council on Historic
Preservation, and such other agencies as the Secretary of
Energy and the Federal Energy Regulatory Commission
consider appropriate.
(c) TERMS OF AGREEMENT.—The interagency agree-
ment shall require that agencies complete their review of
interstate pipeline projects within a specific period of time
after referral of the matter by the Federal Energy Regu-
latory Commission.
(d) SUBMITTAL OF AGREEMENT.—The Secretary of
Energy shall submit a final interagency agreement under
this section to the Congress by not later than 6 months after
the effective date of this section.
SEC. 105. ENHANCING ENERGY EFFICIENCY IN MANAGE-
MENT OF FEDERAL LANDS.
(a) SENSE OF THE CONGRESS.—It is the sense of Con-
gress that Federal land managing agencies should enhance
the use of energy efficient technologies in the management
of natural resources.
(b) ENERGY EFFICIENT BUILDINGS.—To the extent
economically practicable, the Secretary of the Interior and
the Secretary of Agriculture shall seek to incorporate energy
efficient technologies in public and administrative build-
ings associated with management of the National Park Sys-
tem, National Wildlife Refuge System, National Forest Sys-
tem, and other public lands and resources managed by such
Secretaries.
(c) ENERGY EFFICIENT VEHICLES.—To the extent eco-
nomically practicable, the Secretary of the Interior and the
Secretary of Agriculture shall seek to use energy efficient
motor vehicles, including vehicles equipped with biodiesel
or hybrid engine technologies, in the management of the Na-
tional Park System, National Wildlife Refuge System, and
other public lands and managed by the Secretaries.
TITLE II—OIL AND GAS
DEVELOPMENT
Subtitle A—Offshore Oil and Gas
SEC. 201. SHORT TITLE.
This subtitle may be referred to as the ‘‘Royalty Relief
Extension Act of 2001’’.
SEC. 202. LEASE SALES IN WESTERN AND CENTRAL PLAN-
NING AREA OF THE GULF OF MEXICO.
(a) IN GENERAL.—For all tracts located in water
depths of greater than 200 meters in the Western and Cen-
tral Planning Area of the Gulf of Mexico, including that
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 occurring within 2
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 
(30 
U.S.C.
1337(a)(1)(H)), except that the suspension of royalties shall
be set at a volume of not less than the following:
(1) 17.5 million barrels of oil equivalent for
fields in water depths of 200 to 400 meters.
(2) 52.5 million barrels of oil equivalent for
fields in 400 to 800 meters of water.
(3) 9 million barrels of oil equivalent for each
lease in water depths of 800 to 1,600 meters.
(4) 12 million barrels of oil equivalent for each
lease in water depths greater than 1,600 meters.
(b) RELATIONSHIP TO EXISTING AUTHORITY.—Except
as expressly provided in this section, nothing in this section
is intended to limit the authority of the Secretary of the
Interior under the Outer Continental Shelf Lands Act (43
U.S.C. 1301 et seq.) to provide royalty suspension.
SEC. 203. SAVINGS CLAUSE.
Nothing in this subtitle shall be construed to affect any
offshore pre-leasing, leasing, or development moratorium,
including any moratorium applicable to the Eastern Plan-
ning Area of the Gulf of Mexico located off the Gulf Coast
of Florida.
SEC. 204. ANALYSIS OF GULF OF MEXICO FIELD SIZE DIS-
TRIBUTION, INTERNATIONAL COMPETITIVE-
NESS, AND INCENTIVES FOR DEVELOPMENT.
(a) IN GENERAL.—The Secretary of the Interior and
the Secretary of Energy shall enter into appropriate ar-
rangements with the National Academy of Sciences to com-
mission the Academy to perform the following:
(1) Conduct an analysis and review of existing
Gulf of Mexico oil and natural gas resource assess-
ments, including—
(A) analysis and review of assessments re-
cently performed by the Minerals Management
Service, the 1999 National Petroleum Council
Gas Study, the Department of Energy’s Offshore
Marginal Property Study, and the Advanced Re-
sources International, Inc. Deepwater Gulf of
Mexico model; and
(B) evaluation and comparison of the accu-
racy of assumptions of the existing assessments
with respect to resource field size distribution,
hydrocarbon potential, and scenarios for leasing,
exploration, and development.
(2) Evaluate the lease terms and conditions of-
fered by the Minerals Management Service for Lease
Sale 178, and compare the financial incentives offered
by such terms and conditions to financial incentives
offered by the terms and conditions that apply under
leases for other offshore areas that are competing for
the same limited offshore oil and gas exploration and
development capital, including offshore areas of West
Africa and Brazil.
(3) Recommend what level of incentives for all
water depths are appropriate in order to ensure that
the United States optimizes the domestic supply of oil
and natural gas from the offshore areas of the Gulf
of Mexico that are not subject to current leasing mor-
atoria. Recommendations under this paragraph
should be made in the context of the importance of the
oil and natural gas resources of the Gulf of Mexico to
the future energy and economic needs of the United
States.
(b) REPORT.—Not later than 180 days after the date
of enactment of this Act, the Secretary of the Interior shall
submit a report to the Committee on Resources in the House
of Representatives and the Committee on Energy and Nat-
ural Resources in the Senate, summarizing the findings of
the National Academy of Sciences pursuant to subsection
(a) and providing recommendations of the Secretary for
new policies or other actions that could help to further in-
crease oil and natural gas production from the Gulf of Mex-
ico.
Subtitle B—Improvements to
Federal Oil and Gas Management
SEC. 221. SHORT TITLE.
This subtitle may be cited as the ‘‘Federal Oil and Gas
Lease Management Improvement Demonstration Program
Act of 2001’’.
SEC. 222. STUDY OF IMPEDIMENTS TO EFFICIENT LEASE
OPERATIONS.
(a) IN GENERAL.—The Secretary of the Interior and
the Secretary of Agriculture shall jointly undertake a study
of the impediments to efficient oil and gas leasing and oper-
ations on Federal onshore lands in order to identify means
by which unnecessary impediments to the expeditious explo-
ration and production of oil and natural gas on such lands
can be removed.
(b) CONTENTS.—The study under subsection (a) shall
include the following:
(1) A review of the process by which Federal
land managers accept or reject an offer to lease, in-
cluding the timeframes in which such offers are acted
upon, the reasons for any delays in acting upon such
offers, and any recommendations for expediting the
response to such offers.
(2) A review of the approval process for applica-
tions for permits to drill, including the timeframes in
which such applications are approved, the impact of
compliance with other Federal laws on such time-
frames, any other reasons for delays in making such
approvals, and any recommendations for expediting
such approvals.
(3) A review of the approval process for surface
use plans of operation, including the timeframes in
which such applications are approved, the impact of
compliance with other Federal laws on such time-
frames, any other reasons for delays in making such
approvals, and any recommendations for expediting
such approvals.
(4) A review of the process for administrative
appeal of decisions or orders of officers or employees
of the Bureau of Land Management with respect to
a Federal oil or gas lease, including the timeframes
in which such appeals are heard and decided, any
reasons for delays in hearing or deciding such ap-
peals, and any recommendations for expediting the
appeals process.
(c) REPORT.—The Secretaries shall report the findings
and recommendations resulting from the study required by
this section to the Committee on Resources of the House of
Representatives and to the Committee on Energy and Nat-
ural Resources of the Senate no later than 6 months after
the date of the enactment of this Act.
SEC. 223. ELIMINATION OF UNWARRANTED DENIALS AND
STAYS.
(a) IN GENERAL.—The Secretary shall ensure that un-
warranted denials and stays of lease issuance and unwar-
ranted restrictions on lease operations are eliminated from
the administration of oil and natural gas leasing on Fed-
eral land.
(b) LAND DESIGNATED FOR MULTIPLE USE.—Federal
land available for oil and natural gas leasing under any
Bureau of Land Management resource management plan
or Forest Service leasing analysis shall be available without
lease stipulations more stringent than restrictions on sur-
face use and operations imposed under the laws (including
regulations) of the oil and natural gas conservation author-
ity of the State in which the lands are located, unless the
Secretary includes in the decision approving the manage-
ment plan or leasing analysis or in the Secretary’s accept-
ance of an offer to lease a written explanation why more
stringent stipulations are warranted.
(c) REJECTION OF OFFER TO LEASE.—
(1) IN
GENERAL.—If the Secretary rejects an
offer to lease Federal lands for oil or natural gas de-
velopment on the ground that the land is unavailable
for oil and natural gas leasing, the Secretary shall
provide a written, detailed explanation of the reasons
the land is unavailable for leasing.
(2) PREVIOUS
RESOURCE
MANAGEMENT
DECI-
SION.—If the determination of unavailability is based
on a previous resource management decision, the ex-
planation shall include a careful assessment of wheth-
er the reasons underlying the previous decision are
still persuasive.
(3) SEGREGATION OF AVAILABLE LAND FROM UN-
AVAILABLE LAND.—The Secretary may not reject an
offer to lease Federal land for oil and natural gas de-
velopment that is available for such leasing on the
ground that the offer includes land unavailable for
leasing. The Secretary shall segregate available land
from unavailable land, on the offeror’s request fol-
lowing notice by the Secretary, before acting on the
offer to lease.
(d) DISAPPROVAL OR REQUIRED MODIFICATION OF
SURFACE USE PLANS OF OPERATIONS AND APPLICATION
FOR PERMIT TO DRILL.—The Secretary shall provide a
written, detailed explanation of the reasons for dis-
approving or requiring modifications of any surface use
plan of operations or application for permit to drill with
respect to oil or natural gas development on Federal lands.
SEC. 224. LIMITATION ON COST RECOVERY FOR APPLICA-
TIONS.
Notwithstanding sections 304 and 504 of the Federal
Land Policy and Management Act of 1976 (43 U.S.C. 1734,
1764) and section 9701 of title 31, United States Code, the
Secretary shall not recover the Secretary’s costs with respect
to applications and other documents relating to oil and gas
leases.
SEC. 225. CONSULTATION WITH SECRETARY OF AGRI-
CULTURE.
Section 17(h) of the Mineral Leasing Act (30 U.S.C.
226(h)) is amended to read as follows:
‘‘(h)(1) In issuing any lease on National Forest Sys-
tem lands reserved from the public domain, the Secretary
of the Interior shall consult with the Secretary of Agri-
culture in determining stipulations on surface use under
the lease.
‘‘(2)(A) A lease on lands referred to in paragraph (1)
may not be issued if the Secretary of Agriculture deter-
mines, after consultation under paragraph (1), that the
terms and conditions of the lease, including any prohibition
on surface occupancy for lease operations, will not be suffi-
cient to adequately protect such lands under the National
Forest Management Act of 1976 (16 U.S.C. 1600 et seq.).
‘‘(B) The authority of the Secretary of Agriculture
under this paragraph may be delegated only to the Under-
secretary of Agriculture for Natural Resources and Envi-
ronment.’’.
Subtitle C—Miscellaneous
SEC. 231. OFFSHORE SUBSALT DEVELOPMENT.
Section 5 of the Outer Continental Shelf Lands Act
of 1953 (43 U.S.C. 1334) is amended by adding at the end
the following:
‘‘(k) SUSPENSION OF OPERATIONS FOR SUBSALT EX-
PLORATION.—Notwithstanding any other provision of law
or regulation, to prevent waste caused by the drilling of un-
necessary wells and to facilitate the discovery of additional
hydrocarbon reserves, the Secretary may grant a request for
a suspension of operations under any lease to allow the re-
processing and reinterpretation of geophysical data to iden-
tify and define drilling objectives beneath allocthonus salt
sheets.’’.
SEC. 232. PROGRAM ON OIL AND GAS ROYALTIES IN KIND.
(a) APPLICABILITY
OF SECTION.—Notwithstanding
any other provision of law, the provisions of this section
shall apply to all royalty in kind accepted by the Secretary
of the Interior 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 mineral leasing law, in the
period beginning on the date of enactment of this Act
through September 30, 2006.
(b) TERMS AND CONDITIONS.—All royalty accruing to
the United States under any Federal oil or gas lease or per-
mit under the Mineral Leasing Act (30 U.S.C. 181 et seq.)
or the Outer Continental Shelf Lands Act (43 U.S.C. 1331
et seq.) shall, on the demand of the Secretary of the Interior,
be paid in oil or gas. If the Secretary of the Interior makes
such a demand, the following provisions apply to such pay-
ment:
(1) Delivery by, or on behalf of, the lessee of the
royalty amount and quality due under the lease satis-
fies the lessee’s royalty obligation for the amount de-
livered, except that transportation and processing re-
imbursements paid to, or deductions claimed by, the
lessee shall be subject to review and audit.
(2) Royalty production shall be placed in mar-
ketable condition by the lessee at no cost to the United
States.
(3) The Secretary of the Interior may—
(A) sell or otherwise dispose of any royalty
oil or gas taken in kind for not less than the
market price; and
(B) transport or process any oil or gas roy-
alty taken in kind.
(4) The Secretary of the Interior may, notwith-
standing section 3302 of title 31, United States Code,
retain and use a portion of the revenues from the sale
of oil and gas royalties taken in kind that otherwise
would be deposited to miscellaneous receipts, without
regard to fiscal year limitation, or may use royalty
production, to pay the cost of—
(A) transporting the oil or gas,
(B) processing the gas, or
(C) disposing of the oil or gas.
(5) The Secretary may not use revenues from the
sale of oil and gas royalties taken in kind to pay for
personnel, travel, or other administrative costs of the
Federal Government.
(c) REIMBURSEMENT OF COST.—If the lessee, pursuant
to an agreement with the United States or as provided in
the lease, processes the royalty gas or delivers the royalty
oil or gas at a point not on or adjacent to the lease area,
the Secretary of the Interior 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) at the discretion of the Secretary of the Inte-
rior, allow the lessee to deduct such 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 such royalties
provides benefits to the United States greater than or equal
to those that would be realized under a comparable royalty
in value program.
(e) REPORT TO CONGRESS.—For each of the fiscal
years 2002 through 2006 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 of the Interior shall provide a report to the
Congress describing—
(1) the methodology or methodologies used by the
Secretary to determine compliance with subsection
(d), including performance standards for comparing
amounts received by the United States derived from
such royalties in kind to amounts likely to have been
received had royalties been taken in value;
(2) an explanation of the evaluation that led the
Secretary to take royalties in kind from a lease or
group of leases, including the expected revenue effect
of taking royalties in kind;
(3) 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; and
(4) an evaluation of other relevant public bene-
fits 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 (30 U.S.C. 1337(g)) of revenues de-
rived from the sale of royalty production taken in
kind from a lease, the Secretary of the Interior shall
deduct amounts paid or deducted under subsections
(b)(4) and (c), and shall deposit such amounts to mis-
cellaneous receipts.
(2) ACCOUNTING FOR DEDUCTIONS.—If the Sec-
retary of the Interior allows the lessee to deduct trans-
portation or processing costs under subsection (c), the
Secretary 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 Secretary of
the Interior—
(1) shall consult with a State before conducting
a royalty in kind program under this title within the
State, and may delegate management of any portion
of the Federal royalty in kind program to such 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 which would
be realized under a comparable royalty in value pro-
gram.
(h) PROVISIONS FOR SMALL REFINERIES.—
(1) PREFERENCE.—If the Secretary of the Inte-
rior determines that sufficient supplies of crude oil
are not available in the open market to refineries not
having 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 PRODUC-
TION AREA.—In disposing of oil under this subsection,
the Secretary of the Interior may, at the discretion of
the Secretary, prorate such oil among such refineries
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 department or agency of the United
States.
(2) OFFSHORE
ROYALTY.—Any royalty oil or
gas taken in kind from Federal oil and gas leases on
the Outer Continental Shelf may be disposed of only
under section 27 of the Outer Continental Shelf Lands
Act (43 U.S.C. 1353).
(j) PREFERENCE FOR FEDERAL LOW-INCOME ENERGY
ASSISTANCE PROGRAMS.—In disposing of royalty oil or gas
taken in kind under this section, the Secretary may grant
a preference to any person, including any State or Federal
agency, for the purpose of providing additional resources
to any Federal low-income energy assistance program.
SEC. 233. COOPERATIVE OIL AND GAS RESEARCH AND IN-
FORMATION CENTERS.
(a) IN GENERAL.—The Secretary of the Interior may
establish and operate in accordance with this section re-
gional centers administered by the United States Geological
Survey. Each such center shall be known as a United States
Geological Survey Cooperative Oil and Gas Research and
Information Center.
(b) PARTNERSHIP.—Each Center shall be established
and operated under a partnership with the government of
the State in which the Center is located, through the agency
of the State that is responsible for geological survey activi-
ties.
(c) FUNCTIONS.—The Secretary, through each such
Center, shall—
(1) conduct oil and natural gas exploration and
production research in the region in which the Center
is located; and
(2) archive and provide public access to data re-
garding oil and natural gas reserves and production
in the region, including information developed
through research under paragraph (1).
(d) RESEARCH.—
(1) COST SHARING.—The Federal share of the
cost of research conducted under this section may not
exceed 50 percent.
(2) PRIVATE CONTRIBUTIONS.—The Secretary—
(A) may accept private contributions of
property and services for research conducted
under this section; and
(B) shall apply the value of such contribu-
tions to the non-Federal share of the costs of such
research.
SEC. 234. MARGINAL WELL PRODUCTION INCENTIVES.
To enhance the economics of marginal oil and gas pro-
duction by increasing the ultimate recovery from marginal
wells when the cash price of West Texas Intermediate crude
oil, as posted on the Dow Jones Commodities Index chart,
is less than $15 per barrel for 180 consecutive pricing days
or when the price of natural gas delivered at Henry Hub,
Louisiana, is less than $2.00 per million British thermal
units for 180 consecutive days, the Secretary shall reduce
the royalty rate as production declines for—
(1) onshore oil wells producing less than 30 bar-
rels per day;
(2) onshore gas wells producing less than 120
million British thermal units per day;
(3) offshore oil wells producing less than 300
barrels of oil per day; and
(4) offshore gas wells producing less than 1,200
million British thermal units per day.
SEC. 235. REIMBURSEMENT FOR COSTS OF NEPA ANALYSES,
DOCUMENTATION, AND STUDIES.
The Mineral Leasing Act (30 U.S.C. 181 et seq.) is
amended by inserting after section 37 the following:
‘‘REIMBURSEMENT FOR COSTS OF CERTAIN ANALYSES,
DOCUMENTATION, AND STUDIES
‘‘SEC. 38. (a) IN GENERAL.—The Secretary of the In-
terior shall reimburse a person who is a lessee, operator,
operating rights owner, or applicant for an oil or gas lease
under this Act for costs incurred by the person in preparing
any project-level analysis, documentation, or related study
required under the National Environmental Policy Act of
1969 (42 U.S.C. 4321 et seq.) with respect to the lease,
through royalty credits attributable to the lease, unit agree-
ment, or project area for which the analysis, documentation,
or related study is prepared.
‘‘(b) CONDITIONS.—The Secretary shall provide reim-
bursement under subsection (b) only if—
‘‘(1) adequate funding to enable the Secretary to
timely prepare the analysis, documentation, or re-
lated study is not appropriated;
‘‘(2) the person paid the costs voluntarily; and
‘‘(3) the person maintains records of its costs in
accordance with regulations prescribed by the Sec-
retary.’’.
(c) APPLICATION.—The amendments made by this sec-
tion shall apply with respect to any lease entered into be-
fore, on, or after the date of the enactment of this Act.
(d) DEADLINE
FOR REGULATIONS.—The Secretary
shall issue regulations implementing the amendments made
by this section by not later than 90 days after the date of
the enactment of this Act.
TITLE III—GEOTHERMAL
ENERGY DEVELOPMENT
SEC. 301. ROYALTY REDUCTION AND RELIEF.
(a) ROYALTY REDUCTION.—Section 5(a) of the Geo-
thermal Steam Act of 1970 (30 U.S.C. 1004(a)) is amended
by striking ‘‘not less than 10 per centum or more than 15
per centum’’ and inserting ‘‘not more than 8 per centum’’.
(b) ROYALTY RELIEF.—
(1) IN GENERAL.—Notwithstanding section 5 of
the Geothermal Steam Act of 1970 (30 U.S.C.
1004(a)) and any provision of any lease under that
Act, no royalty is required to be paid—
(A) under any qualified geothermal energy
lease with respect to commercial production of
heat or energy from a facility that begins such
production in the 5-year period beginning on the
date of the enactment of this Act; or
(B) on qualified expansion geothermal en-
ergy.
(2) 3-YEAR
APPLICATION.—Paragraph (1) ap-
plies only to commercial production of heat or energy
from a facility in the first 3 years of such production.
(c) DEFINITIONS.—In this section:
(1) QUALIFIED
EXPANSION
GEOTHERMAL
EN-
ERGY.—The term ‘‘qualified expansion geothermal
energy’’—
(A) subject to subparagraph (B), means geo-
thermal energy produced from a generation facil-
ity for which the rated capacity is increased by
more than 10 percent as a result of expansion of
the facility carried out in the 5-year period be-
ginning on the date of enactment of this Act; and
(B) does not include the rated capacity of
the generation facility on the date of enactment
of this Act.
(2) QUALIFIED GEOTHERMAL ENERGY LEASE.—
The term ‘‘qualified geothermal energy lease’’ means
a lease under the Geothermal Steam Act of 1970 (30
U.S.C. 1001 et seq.)—
(A) that was executed before the end of the
5-year period beginning on the date of the enact-
ment of this Act; and
(B) under which no commercial production
of any form of heat or energy occurred before the
date of the enactment of this Act.
SEC. 302. EXEMPTION FROM ROYALTIES FOR DIRECT USE
OF LOW TEMPERATURE GEOTHERMAL EN-
ERGY RESOURCES.
Section 5 of the Geothermal Steam Act of 1970 (30
U.S.C. 1004) is amended—
(1) in paragraph (c) by redesignating subpara-
graphs (1) and (2) as subparagraphs (A) and (B);
(2) by redesignating paragraphs (a) through (d)
in order as paragraphs (1) through (4);
(3) by inserting ‘‘(a) IN GENERAL.—’’ after
‘‘SEC. 5.’’; and
(4) by adding at the end the following new sub-
section:
‘‘(b) EXEMPTION FOR USE OF LOW TEMPERATURE
RESOURCES.—
‘‘(1) IN GENERAL.—In lieu of any royalty or
rental under subsection (a), a lease for qualified de-
velopment and direct utilization of low temperature
geothermal resources shall provide for payment by the
lessee of an annual fee of not less than $100, and not
more than $1,000, in accordance with the schedule
issued under paragraph (2).
‘‘(2) SCHEDULE.—The Secretary shall issue a
schedule of fees under this section under which a fee
is based on the scale of development and utilization
to which the fee applies.
‘‘(3) DEFINITIONS.—In this subsection:
‘‘(A) LOW TEMPERATURE GEOTHERMAL RE-
SOURCES.—The term ‘low temperature geo-
thermal resources’ means geothermal steam and
associated geothermal resources having a tem-
perature of less than 195 degrees Fahrenheit.
‘‘(B) QUALIFIED
DEVELOPMENT
AND
DI-
RECT UTILIZATION.—The term ‘qualified devel-
opment and direct utilization’ means develop-
ment and utilization in which all products of
geothermal resources, other than any heat uti-
lized, are returned to the geothermal formation
from which they are produced.’’.
SEC. 303. AMENDMENTS RELATING TO LEASING ON FOREST
SERVICE LANDS.
The Geothermal Steam Act of 1970 is amended—
(1) in section 15(b) (30 U.S.C. 1014(b))—
(A) by inserting ‘‘(1)’’ after ‘‘(b)’’; and
(B) in paragraph (1) (as designated by sub-
paragraph (A) of this paragraph) in the first
sentence—
(i) by striking ‘‘with the consent of,
and’’ and inserting ‘‘after consultation with
the Secretary of Agriculture and’’; and
(ii) by striking ‘‘the head of that De-
partment’’ and inserting ‘‘the Secretary of
Agriculture’’; and
(2) by adding at the end the following:
‘‘(2)(A) A geothermal lease for lands withdrawn or ac-
quired in aid of functions of the Department of Agriculture
may not be issued if the Secretary of Agriculture, after the
consultation required by paragraph (1), determines that no
terms or conditions, including a prohibition on surface oc-
cupancy for lease operations, would be sufficient to ade-
quately protect such lands under the National Forest Man-
agement Act of 1976 (16 U.S.C. 1600 et seq.).
‘‘(B) The authority of the Secretary of Agriculture
under this paragraph may be delegated only to the Under-
secretary of Agriculture for Natural Resources and Envi-
ronment.’’.
SEC. 304. DEADLINE FOR DETERMINATION ON PENDING
NONCOMPETITIVE LEASE APPLICATIONS.
Not later than 90 days after the date of the enactment
of this Act, the Secretary of the Interior shall, with respect
to each application pending on the date of the enactment
of this Act for a lease under the Geothermal Steam Act of
1970 (30 U.S.C. 1001 et seq.), issue a final determination
of—
(1) whether or not to conduct a lease sale by
competitive bidding; and
(2) whether or not to award a lease without com-
petitive bidding.
SEC. 305. OPENING OF PUBLIC LANDS UNDER MILITARY JU-
RISDICTION.
(a) IN GENERAL.—Except as otherwise provided in the
Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) and
other provisions of Federal law applicable to development
of geothermal energy resources within public lands, all pub-
lic lands under the jurisdiction of a Secretary of a military
department shall be open to the operation of such laws and
development and utilization of geothermal steam and asso-
ciated geothermal resources, as that term is defined in sec-
tion 2 of the Geothermal Steam Act of 1970 (30 U.S.C.
1001), without the necessity for further action by the Sec-
retary or the Congress.
(b) CONFORMING AMENDMENT.—Section 2689 of title
10, United States Code, is amended by striking ‘‘including
public lands,’’ and inserting ‘‘other than public lands,’’.
(c) TREATMENT OF EXISTING LEASES.—Upon the ex-
piration of any lease in effect on the date of the enactment
of this Act of public lands under the jurisdiction of a mili-
tary department for the development of any geothermal re-
source, such lease may, at the option of the lessee—
(1) be treated as a lease under the Geothermal
Steam Act of 1970 (30 U.S.C. 1001 et seq.), and be
renewed in accordance with such Act; or
(2) be renewed in accordance with the terms of
the lease, if such renewal is authorized by such terms.
(d) REGULATIONS.—The Secretary of the Interior,
with the advice and concurrence of the Secretary of the mili-
tary department concerned, shall prescribe such regulations
to carry out this section as may be necessary. Such regula-
tions shall contain guidelines to assist in determining how
much, if any, of the surface of any lands opened pursuant
to this section may be used for purposes incident to geo-
thermal energy resources development and utilization.
(e) CLOSURE FOR PURPOSES OF NATIONAL DEFENSE
OR SECURITY.—In the event of a national emergency or for
purposes of national defense or security, the Secretary of
the Interior, at the request of the Secretary of the military
department concerned, shall close any lands that have been
opened to geothermal energy resources leasing pursuant to
this section.
SEC. 306. APPLICATION OF AMENDMENTS.
The amendments made by this title apply with respect
to any lease executed before, on, or after the date of the en-
actment of this Act.
SEC. 307. REVIEW AND REPORT TO CONGRESS.
The Secretary of the Interior shall promptly review
and report to the Congress regarding the status of all mora-
toria on and withdrawals from leasing under the Geo-
thermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) of
known geothermal resources areas (as that term is defined
in section 2 of that Act (30 U.S.C. 1001), specifying for
each such area whether the basis for such moratoria or with-
drawal still applies.
SEC. 308. REIMBURSEMENT FOR COSTS OF NEPA ANALYSES,
DOCUMENTATION, AND STUDIES.
(a) IN GENERAL.—The Geothermal Steam Act of 1970
(30 U.S.C. 1001 et seq.) is amended by adding at the end
the following:
‘‘REIMBURSEMENT FOR COSTS OF CERTAIN ANALYSES,
DOCUMENTATION, AND STUDIES
‘‘SEC. 30. (a) IN GENERAL.—The Secretary of the In-
terior shall reimburse a person who is a lessee, operator,
operating rights owner, or applicant for a lease under this
Act for costs incurred by the person in preparing any
project-level analysis, documentation, or related study re-
quired under the National Environmental Policy Act of
1969 (42 U.S.C. 4321 et seq.) with respect to the lease,
through royalty credits attributable to the lease, unit agree-
ment, or project area for which the analysis, documentation,
or related study is prepared.
‘‘(b) CONDITIONS.—The Secretary shall provide reim-
bursement under subsection (a) only if—
‘‘(1) adequate funding to enable the Secretary to
timely prepare the analysis, documentation, or re-
lated study is not appropriated;
‘‘(2) the person paid the costs voluntarily; and
‘‘(3) the person maintains records of its costs in
accordance with regulations prescribed by the Sec-
retary.’’.
(b) APPLICATION.—The amendments made by this sec-
tion shall apply with respect to any lease entered into be-
fore, on, or after the date of the enactment of this Act.
(c) DEADLINE
FOR REGULATIONS.—The Secretary
shall issue regulations implementing the amendments made
by this section by not later than 90 days after the date of
the enactment of this Act.
TITLE IV—HYDROPOWER
SEC. 401. STUDY AND REPORT ON INCREASING ELECTRIC
POWER PRODUCTION CAPABILITY OF EXIST-
ING FACILITIES.
(a) IN GENERAL.—The Secretary of the Interior shall
conduct a study of the potential for increasing electric
power production capability at existing facilities under the
administrative jurisdiction of the Secretary.
(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 Secretary shall submit to the Con-
gress a report on the findings, conclusions, and rec-
ommendations of the study under this section by not later
than 12 months after the date of enactment of this Act. The
Secretary shall include in the report the following:
(1) The identifications, descriptions, and esti-
mations referred to in subsection (b).
(2) A description of activities the Secretary is
currently conducting or considering, or that could be
considered, to produce additional hydroelectric power
from each identified facility.
(3) A summary of action that has already been
taken by the Secretary to produce additional hydro-
electric power from each identified facility.
(4) The costs to install, upgrade, or modify
equipment or take other actions to produce additional
hydroelectric power from each identified facility.
(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.
(7) A description of actions that are planned,
underway, or might reasonably be considered to in-
crease hydroelectric power production by performing
generator uprates and rewinds.
(8) The impact of increased hydroelectric power
production on irrigation, fish, wildlife, Indian tribes,
river health, water quality, navigation, recreation,
fishing, and flood control.
(9) Any additional recommendations the Sec-
retary considers advisable to increase hydroelectric
power production from, and reduce costs and improve
efficiency at, facilities under the jurisdiction of the
Secretary.
SEC. 402. INSTALLATION OF POWERFORMER AT FOLSOM
POWER PLANT, CALIFORNIA.
(a) IN GENERAL.—The Secretary of the Interior may
install a powerformer at the Bureau of Reclamation Folsom
power plant in Folsom, California, to replace a generator
and transformer that are due for replacement due to age.
(b) REIMBURSABLE COSTS.—Costs incurred by the
United States for installation of a powerformer under this
section shall be treated as reimbursable costs and shall bear
interest at current long-term borrowing rates of the United
States Treasury at the time of acquisition.
(c) LOCAL COST SHARING.—In addition to reimburs-
able costs under subsection (b), the Secretary shall seek con-
tributions from power users toward the costs of the
powerformer and its installation.
SEC. 403. CONSERVATION THROUGH PUMP MODERNIZA-
TION.
(a) PUMP REPLACEMENT PROGRAM.—The Secretary
of the Interior shall—
(1) conduct a study to determine what pumps
associated with water delivery projects should be re-
placed, based on a cost-benefit analysis of modern-