I
104TH CONGRESS
1ST SESSION
H. R. 817
To authorize the Secretary of Energy to lease lands within the naval oil
shale reserves to private entities for the development and production
of oil and natural gas.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 3, 1995
Mr. HEFLEY introduced the following bill; which was referred to the Commit-
tee on National Security and, in addition, to the Committee on Re-
sources, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned
A BILL
To authorize the Secretary of Energy to lease lands within
the naval oil shale reserves to private entities for the
development and production of oil and natural gas.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. OIL AND GAS LEASES INVOLVING NAVAL OIL
SHALE RESERVES.
(a) AUTHORITY
TO
ENTER
INTO
LEASES.—(1)
Chapter 641 of title 10, United States Code, is amended
by adding at the end the following new section:
‘‘§ 7439. Naval oil shale reserves: lease of lands for oil
and gas exploration, development, and
production
‘‘(a) AUTHORITY TO LEASE.—The Secretary of En-
ergy may lease lands owned or controlled by the United
States inside a naval oil shale reserve to a private entity
for the purpose of the exploration for, and development
and production of, petroleum (other than in the form of
oil shale) from such lands. In leasing lands under this sub-
section, the Secretary shall use competitive bidding proce-
dures.
‘‘(b) USE OF BLM AS LEASING AGENT.—For the
purpose of exercising the authority provided by subsection
(a), the Secretary of Energy may enter into a cooperative
agreement with the Secretary of the Interior under which
employees of the Bureau of Land Management serve as
leasing agents of the Secretary of Energy. Use of Bureau
of Land Management employees shall not relieve the Sec-
retary of Energy of management responsibilities over the
naval oil shale reserves.
‘‘(c) ROYALTY.—A lease of lands under subsection
(a) in an oil shale reserve shall be conditioned upon the
payment of a royalty at a rate, to be established by the
Secretary, equivalent to the prevailing royalty rate for
similar leases in the State in which the reserve is located.
The royalty rate shall be expressed as a percentage of the
amount or value of the production removed or sold pursu-
ant to the lease. The Secretary may require all or a por-
tion of the United States share of the royalty to be paid
in the form of petroleum produced pursuant to the lease.
At the request of the Secretary of Defense, the Secretary
may provide petroleum obtained under this subsection to
the Department of Defense for the purposes and in the
manner specified in section 7430(l) of this title, including
the requirement of appropriate reimbursement.
‘‘(d) SHARE OF ROYALTY TO STATE.—Notwithstand-
ing section 7433(b) of this title or any other provision of
law, 50 percent of the proceeds received from royalty and
other payments made by a lessee pursuant to a lease under
subsection (a) shall be paid to the State within the bound-
aries of which the leased lands are located. A payment
under this subsection shall be made in the manner, and
at the times, provided in section 35 of the Mineral Leasing
Act (30 U.S.C. 191).
‘‘(e) TRANSFER
OF EXISTING EQUIPMENT.—The
lease of lands by the Secretary under subsection (a) may
include the transfer of wells, gathering lines, and related
equipment owned by the United States inside a naval oil
shale reserve and suitable for use in the exploration, devel-
opment, or production of petroleum on such lands upon
the condition that the lessee assume responsibility for any