Title: Leasing Market Efficiency Act
Policy area: Energy

Summary:
Leasing Market Efficiency Act
This bill requires the Bureau of Land Management (BLM) to issue all onshore oil and gas leasing through a competitive bidding process.
The BLM must ensure the receipt by the United States of fair market value for any land or resources leased and any rights covered by the United States.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 4223 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  2d Session
                                S. 4223

   To amend the Mineral Leasing Act to ensure market competition in 
          onshore oil and gas leasing, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 20, 2020

  Mr. Tester introduced the following bill; which was read twice and 
       referred to the Committee on Energy and Natural Resources

_______________________________________________________________________

                                 A BILL


 
   To amend the Mineral Leasing Act to ensure market competition in 
          onshore oil and gas leasing, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Leasing Market Efficiency Act''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) pursuant to the Federal Land Policy and Management Act 
        of 1976 (43 U.S.C. 1701 et seq.) and the Forest and Rangeland 
        Renewable Resources Planning Act of 1974 (16 U.S.C. 1600 et 
        seq.), public land and National Forest System land are to be 
        managed for multiple uses, including recreation, range, timber, 
        minerals, watershed, wildlife and fish, and natural scenic, 
        scientific, and historical values;
            (2) existing oil and gas leases, even if undeveloped, can 
        and do prevent the Bureau of Land Management from managing 
        tracts of land for other multiple uses;
            (3) oil and gas lease parcels that do not receive bids at 
        competitive auction have been tested by the competitive market 
        and found to have minimal or no present value for oil and gas 
        development;
            (4) noncompetitive leasing does not provide a fair return 
        to taxpayers since noncompetitive leasing allows companies and 
        individuals to pay less than the minimum $2 bid for the use of 
        public land;
            (5) noncompetitively issued leases are usually not 
        developed and account for only a small fraction of royalty-
        generating production;
            (6) companies and individuals frequently purchase oil and 
        gas leases noncompetitively, despite lacking the intent or 
        capability to develop them, as a form of speculation;
            (7) relative to leases issued competitively, leases issued 
        noncompetitively are significantly more likely to be terminated 
        for failure to pay rent;
            (8) the noncompetitive leasing program drains 
        administrative resources from the Bureau of Land Management, in 
        the form of personnel time and effort to issue, monitor, and 
        frequently terminate and reinstate noncompetitive leases;
            (9) noncompetitive leasing has increased in recent years, 
        with the number of leases issued noncompetitively in calendar 
        year 2018 marking a 10-year high;
            (10) several States, including Colorado and portions of New 
        Mexico, do not regularly issue leases noncompetitively, and yet 
        maintain a robust and profitable oil and gas program; and
            (11) the Federal onshore oil and gas leasing program is 
        best served by--
                    (A) issuing oil and gas leases only through a 
                competitive process; and
                    (B) leaving land that does not receive bids at 
                competitive auction to be managed for other uses.

SEC. 3. POLICY OF THE UNITED STATES; SENSE OF CONGRESS.

    (a) Policy of the United States.--It is the policy of the United 
States that the Secretary of the Interior shall not issue onshore oil 
and gas leases except through a competitive bidding process.
    (b) Sense of Congress.--It is the sense of Congress that the policy 
of the United States described in subsection (a)--
            (1) will discourage speculation in the Federal onshore oil 
        and gas leasing program;
            (2) will conserve limited Federal resources that can be 
        better applied elsewhere;
            (3) will avoid opportunity costs that impact the management 
        of other resources, such as wildlife habitat management;
            (4) will benefit taxpayers from the receipt by the 
        Secretary of the Interior of at least the minimum bid value for 
        onshore oil and gas leases issued by the Secretary of the 
        Interior;
            (5) is in keeping with the goals of multiple use land 
        management; and
            (6) is not to the detriment of the fiscal interests or 
        energy security of the United States.

SEC. 4. ELIMINATION OF NONCOMPETITIVE LEASING.

    (a) Oil and Gas Leasing.--Section 17 of the Mineral Leasing Act (30 
U.S.C. 226) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Leasing Authority.--
            ``(1) In general.--All land subject to disposition under 
        this Act that is known or believed to contain oil or gas 
        deposits may be leased by the Secretary.
            ``(2) Receipt of fair market value.--In conducting leasing 
        activities under this Act, the Secretary shall ensure the 
        receipt by the United States of fair market value for--
                    ``(A) any land or resources leased by the United 
                States; and
                    ``(B) any rights conveyed by the United States.'';
            (2) in subsection (b)--
                    (A) in paragraph (1)(A)--
                            (i) in the first sentence, by striking 
                        ``paragraphs (2) and (3) of this subsection'' 
                        and inserting ``paragraph (2)''; and
                            (ii) by striking the last sentence; and
                    (B) by striking paragraph (3);
            (3) by striking subsection (c) and inserting the following:
    ``(c) Additional Rounds of Competitive Bidding.--Land made 
available for leasing under subsection (b)(1) for which no bid is 
accepted or received may be made available by the Secretary for a new 
round of competitive bidding under that subsection.''; and
            (4) in subsection (e)--
                    (A) in the third sentence, by striking ``Any 
                lease'' and inserting the following:
            ``(3) Additional extensions.--Any lease'';
                    (B) in the second sentence, by striking ``Each such 
                lease'' and inserting the following:
            ``(2) Extension of lease after primary term.--A lease 
        described in paragraph (1)''; and
                    (C) by striking the subsection designation and all 
                that follows through the period at the end of the first 
                sentence and inserting the following:
    ``(e) Term of Lease.--
            ``(1) In general.--Any lease issued under this section, 
        including a lease for tar sand areas, shall be for a primary 
        term of 10 years.''.
    (b) Failure To Comply With Provisions of Lease.--Section 31 of the 
Mineral Leasing Act (30 U.S.C. 188) is amended--
            (1) in subsection (d)(1), in the first sentence, by 
        striking ``or section 17(c) of this Act'';
            (2) in subsection (e)--
                    (A) in paragraph (2)--
                            (i) by striking ``either''; and
                            (ii) by striking ``or the inclusion'' and 
                        all that follows through ``, all''; and
                    (B) in paragraph (3)--
                            (i) in subparagraph (A), by adding ``and'' 
                        after the semicolon;
                            (ii) by striking subparagraph (B); and
                            (iii) by striking ``(3)(A) payment'' and 
                        inserting the following:
            ``(3) payment'';
            (3) in subsection (g)--
                    (A) in paragraph (1), by striking ``as a 
                competitive'' and all that follows through ``of this 
                Act'' and inserting ``in the same manner as the 
                original lease issued pursuant to section 17'';
                    (B) by striking paragraph (2);
                    (C) by redesignating paragraphs (3) and (4) as 
                paragraphs (2) and (3), respectively; and
                    (D) in paragraph (2) (as so redesignated), by 
                striking ``applicable to leases issued under subsection 
                17(c) of this Act (30 U.S.C. 226(c)) except,'' and 
                inserting ``except'';
            (4) in subsection (h), by striking ``subsections (d) and 
        (f) of this section'' and inserting ``subsection (d)'';
            (5) in subsection (i), by striking ``(i)(1) In acting'' and 
        all that follows through ``of this section'' in paragraph (2) 
        and inserting the following:
    ``(i) Royalty Reduction in Reinstated Leases.--In acting on a 
petition for reinstatement pursuant to subsection (d)'';
            (6) by striking subsection (f); and
            (7) by redesignating subsections (g) through (j) as 
        subsections (f) through (i), respectively.
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