Title: Oil and Gas Bonding Reform and Orphaned Well Remediation Act
Policy area: Environmental Protection

Summary:
Oil and Gas Bonding Reform and Orphaned Well Remediation Act
This bill establishes incentives and requirements to clean up orphaned oil and gas wells, including by (1) establishing a program to remediate, reclaim, and permanently plug such wells located on federal land, state land, or land under the jurisdiction of Indian tribes; and (2) revising bonding requirements for oil and gas development on public land leased from the federal government. Such bonds are required to ensure developers have adequate financial resources to remediate and reclaim public land, water, or other resources after wells are abandoned or oil and gas development ceases.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 2177 Introduced in Senate (IS)]

<DOC>






117th CONGRESS
  1st Session
                                S. 2177

   To amend the Mineral Leasing Act to ensure sufficient bonding and 
complete and timely reclamation of land and water disturbed by Federal 
       and Indian oil and gas production, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 22, 2021

  Mr. Bennet 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 sufficient bonding and 
complete and timely reclamation of land and water disturbed by Federal 
       and Indian oil and gas production, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Oil and Gas 
Bonding Reform and Orphaned Well Remediation Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
                   TITLE I--ORPHANED WELL REMEDIATION

Sec. 101. Orphaned well remediation program.
   TITLE II--FEDERAL ONSHORE OIL AND GAS RECLAMATION BONDING PROGRAM

Sec. 201. Declaration of policy.
Sec. 202. Regulation of surface-disturbing activities.
                        TITLE III--MISCELLANEOUS

Sec. 301. Cost recovery.
Sec. 302. Regulations.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) according to the Interstate Oil and Gas Compact 
        Commission, there are in existence not fewer than 56,600 
        orphaned well sites, and as many as 746,000 undocumented 
        orphaned well sites, across the United States on Federal, 
        State, Tribal, and private land;
            (2) as of April 2021, there are at least 14,400 orphaned 
        wells on Federal land, according to the Department of the 
        Interior;
            (3)(A) orphaned well sites--
                    (i) pose significant public health, safety, and 
                environmental risks; and
                    (ii) should be remediated; but
            (B) there are no identified responsible parties to provide 
        for the remediation of those sites;
            (4) it is reasonable for the Federal Government--
                    (A) to provide financial resources to States and 
                Indian Tribes to rectify the long-term public health, 
                safety, and environmental risks described in paragraph 
                (3)(A)(i);
                    (B) to support the creation of jobs relating to the 
                remediation and reclamation of orphaned well sites; and
                    (C) to update policies to ensure that wells are not 
                orphaned in the future;
            (5) under the Mineral Leasing Act (30 U.S.C. 181 et seq.), 
        the Secretary of the Interior (referred to in this Act as the 
        ``Secretary'') is required--
                    (A) to ensure the complete and timely reclamation 
                of all Federal onshore oil and gas leases; and
                    (B) to secure financial assurances in the form of 
                bonds, sureties, or other approved financial 
                arrangements for remediation, reclamation, and well 
                closure;
            (6) with respect to the Federal onshore oil and gas leasing 
        program, the Secretary--
                    (A) is required--
                            (i) regularly to review existing onshore 
                        oil and gas financial assurances; and
                            (ii) to increase the amount of those 
                        assurances, as necessary; but
                    (B) in practice, often fails to carry out the 
                activities described in subparagraph (A);
            (7) the Secretary--
                    (A) implements well and financial assurance 
                adequacy review policies inconsistently across field 
                offices of the Department of the Interior;
                    (B) has failed to track systematically data 
                relating to potential liabilities and the adequacy of 
                financial assurances; and
                    (C) does not maintain information relating to 
                actual reclamation costs incurred for inactive, 
                orphaned, or inadequately reclaimed wells and leases;
            (8) due to the shortcomings in the required minimum 
        financial assurance amounts and the ineffectiveness of the 
        Secretary in tracking and reviewing those financial assurances, 
        the cost of reclaiming existing Federal onshore oil and gas 
        wells and leases far exceeds the amounts posted as financial 
        assurance; and
            (9) the inadequacy of the Secretary in the administration 
        of financial assurances for Federal onshore oil and gas 
        activities--
                    (A) poses a threat to land, water, and other 
                resources; and
                    (B) is a major financial liability to the taxpayers 
                of the United States, who are often responsible for the 
                costs of reclaiming onshore oil and gas wells and 
                leases that are inactive, orphaned, or inadequately 
                reclaimed by lessees.

                   TITLE I--ORPHANED WELL REMEDIATION

SEC. 101. ORPHANED WELL REMEDIATION PROGRAM.

    (a) In General.--Section 17 of the Mineral Leasing Act (30 U.S.C. 
226) is amended by adding at the end the following:
    ``(q) Orphaned Well Remediation Program.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Abandon.--The term `abandon', with respect to 
                a well under an oil or gas lease issued under this Act, 
                means--
                            ``(i) to plug the well;
                            ``(ii) to remove all installations 
                        associated with the well; and
                            ``(iii) to terminate operations for 
                        production from the well.
                    ``(B) Inactive.--The term `inactive', with respect 
                to a well or facility under an oil or gas lease issued 
                under this Act, means that the well or facility does 
                not--
                            ``(i) produce oil or gas, as applicable, in 
                        paying quantities; or
                            ``(ii) actively aid in the production of 
                        oil or gas, as applicable, in paying 
                        quantities.
                    ``(C) Operator.--The term `operator', with respect 
                to an oil or gas operation, means any individual or 
                entity (including a lessee or operating rights owner) 
                that has provided to a relevant authority a written 
                statement that the individual or entity is responsible 
                for the operation (or any portion of the operation).
                    ``(D) Orphaned.--The term `orphaned', with respect 
                to a well or well site under an oil or gas lease issued 
                under this Act, means that the responsible party of the 
                well or well site--
                            ``(i) cannot be located; or
                            ``(ii) cannot provide adequate financial 
                        assurance to permanently plug and reclaim the 
                        well or well site.
                    ``(E) Responsible party.--
                            ``(i) In general.--The term `responsible 
                        party', with respect to a well or well site 
                        under an oil or gas lease issued under this 
                        Act, means an individual or entity (including a 
                        lessee or operator) that is or will be 
                        responsible for--
                                    ``(I) the remediation, reclamation, 
                                and permanent plugging of the well or 
                                well site; or
                                    ``(II) the payment of financial 
                                assurance for the well or well site in 
                                accordance with subsection (g)(4).
                            ``(ii) Inclusions.--The term `responsible 
                        party' includes--
                                    ``(I) an association, corporation, 
                                subsidiary, or affiliate of an 
                                individual or entity described in 
                                clause (i); and
                                    ``(II) any person controlled by, or 
                                under common control with, an 
                                individual or entity described in 
                                clause (i).
                    ``(F) Secretary.--The term `Secretary' means the 
                Secretary of the Interior.
            ``(2) Establishment.--Not later than 180 days after the 
        date of enactment of this subsection, the Secretary shall 
        establish, in accordance with this subsection--
                    ``(A) in cooperation with the Secretary of 
                Agriculture, a program to remediate, reclaim, and 
                permanently plug orphaned oil and gas wells and well 
                sites located on land administered by the land 
                management agencies of the Department of the Interior 
                and the Department of Agriculture, respectively; and
                    ``(B) a program under which the Secretary shall 
                distribute 75 percent of the amounts made available 
                under paragraph (9) to States and Indian tribes that 
                have submitted to the Secretary an application to 
                remediate, reclaim, and close orphaned oil and gas 
                wells and well sites on land under the jurisdiction of 
                the States and Indian tribes.
            ``(3) Activities.--The programs established under paragraph 
        (2) shall--
                    ``(A) use existing and updated inventories of 
                orphaned well sites to establish priority for the 
                distribution of funds under the programs for 
                activities, including--
                            ``(i) remediating, reclaiming, and 
                        permanently plugging orphaned wells and well 
                        sites;
                            ``(ii) remediating and reclaiming related 
                        well pads;
                            ``(iii) reclaiming related access roads; 
                        and
                            ``(iv) restoring land, water, and habitat 
                        impacted by orphaned wells and the prior 
                        operation of the wells;
                    ``(B) provide a public accounting of the costs of 
                remediation, reclamation, and permanent plugging for 
                each applicable orphaned oil or gas well and well site;
                    ``(C) seek to determine the identity, if unknown, 
                of any potential responsible party associated with the 
                orphaned well or well site, or a surety or guarantor of 
                such a responsible party, to the extent such 
                information can be ascertained; and
                    ``(D) seek to obtain from responsible parties 
                reimbursement for applicable expenditures, to the 
                maximum extent practicable.
            ``(4) Cooperation and consultation.--In carrying out the 
        programs established under paragraph (2), the Secretary shall--
                    ``(A) work cooperatively with--
                            ``(i) the Secretary of Agriculture; and
                            ``(ii) each State, local government, and 
                        Indian tribe within the jurisdiction of which 
                        an orphaned well site on Federal land is 
                        located; and
                    ``(B) consult with--
                            ``(i) affected States, local governments, 
                        and Indian tribes;
                            ``(ii) the Secretary of Energy; and
                            ``(iii) the Interstate Oil and Gas Compact 
                        Commission.
            ``(5) Report to congress.--Not later than 1 year after the 
        date of enactment of this subsection, and not less frequently 
        than once every 2 years thereafter, the Secretary, in 
        cooperation with the Secretary of Agriculture and in 
        consultation with affected States and Indian tribes, shall 
        submit to Congress a report describing the expenditures under, 
        and the progress and achievements of, the programs established 
        under paragraph (2).
            ``(6) Use of funds.--
                    ``(A) Initial period.--For the first 2 fiscal years 
                beginning after the date of enactment of this 
                subsection, the funds made available to remediate, 
                reclaim, and permanently plug orphaned wells and well 
                sites under the program established under paragraph 
                (2)(B) shall be allocated based on a demonstration of--
                            ``(i) identified orphaned wells and well 
                        sites in need of remediation, reclamation, or 
                        permanent plugging, with a priority for sites 
                        posing the greatest adverse impacts to--
                                    ``(I) public health and safety; and
                                    ``(II) land, water, and other 
                                resources; and
                            ``(ii) adequate programmatic and 
                        administrative capacity to expend the funds in 
                        a timely and effective manner.
                    ``(B) Subsequent fiscal years.--For the third 
                fiscal year beginning after the date of enactment of 
                this subsection, and each fiscal year thereafter, the 
                Secretary shall make funds available under the program 
                established under paragraph (2)(B) based on--
                            ``(i) the factors described in subparagraph 
                        (A); and
                            ``(ii) a determination by the Secretary 
                        that an affected State or Indian tribe is--
                                    ``(I) using bonds or other 
                                financial assurances that will fully 
                                cover costs associated with remediating 
                                and reclaiming orphaned oil and gas 
                                wells under the jurisdiction of the 
                                State or Indian tribe; or
                                    ``(II) adopting and using--
                                            ``(aa) bonds described in 
                                        subclause (I); or
                                            ``(bb) other financial 
                                        assurances.
                    ``(C) Unused funds.--In any case in which the 
                Secretary determines that, for any fiscal year, a State 
                or Indian tribe cannot effectively use any portion of 
                the funds that otherwise would be made available to the 
                State or Indian tribe under subparagraph (A) or (B), 
                the Secretary shall use those funds--
                            ``(i) to remediate, reclaim, and close 
                        orphaned wells and well sites on land 
                        administered by the Secretary or the Secretary 
                        of Agriculture;
                            ``(ii) to review and update any inventory 
                        of orphaned or inactive wells, including wells 
                        previously identified as idle or abandoned, on 
                        land described in clause (i);
                            ``(iii) to carry out subsection (g)(6)(E);
                            ``(iv) to carry out paragraph (8); or
                            ``(v)(I) to determine the identity of any 
                        potential responsible party associated with an 
                        inactive well or well site, or a surety or 
                        guarantor of such a responsible party, to the 
                        extent such information can be ascertained; and
                            ``(II) to obtain from such a responsible 
                        party reimbursement for applicable 
                        expenditures, to the maximum extent 
                        practicable.
            ``(7) Limitation on re-leasing.--Before conducting any oil 
        and gas leasing of Federal land that contains a well or well 
        site that was remediated, reclaimed, or permanently plugged 
        pursuant to this Act, the Secretary, or the Secretary of 
        Agriculture with respect to National Forest System land, 
        shall--
                    ``(A) determine that--
                            ``(i) re-leasing and development of the 
                        land will not degrade the restored conditions 
                        accomplished pursuant to the remediation, 
                        reclamation, or closure; and
                            ``(ii) the land achieves compliance with 
                        all applicable standards adopted pursuant to 
                        subsection (g)(5) prior to being re-leased; and
                    ``(B) on making a positive determination pursuant 
                to clauses (i) and (ii) of subparagraph (A), require 
                the operator to provide to the applicable Secretary a 
                bond or other financial assurance that will fully cover 
                the costs associated with the plugging and reclamation.
            ``(8) Data collection.--
                    ``(A) In general.--Not later than 2 years after the 
                date of enactment of this subsection, the Secretary and 
                the Secretary of Agriculture shall jointly develop, and 
                make publicly available, a computer database to provide 
                centralized data relating to operations, reclamation 
                activities, and financial assurances for each oil and 
                gas lease in effect under this Act.
                    ``(B) Inclusions.--The database under subparagraph 
                (A) shall include, with respect to each lease described 
                in that subparagraph, information relating to--
                            ``(i) the number, location, and status of 
                        each well subject to the lease;
                            ``(ii) the number, location, and status of 
                        each inactive and orphaned well subject to the 
                        lease, and the length of time that each such 
                        well has not been producing;
                            ``(iii) the names of all responsible 
                        parties for each well, including lessees and 
                        operators;
                            ``(iv) whether the lease is part of a unit;
                            ``(v) the amount of the financial assurance 
                        that has been established for the lease;
                            ``(vi) the history of financial assurance 
                        amounts for the lease, including dates of 
                        review and requested increases;
                            ``(vii) inspection, violations, and 
                        enforcement actions taken with respect to the 
                        lease, including resolution of each violation, 
                        if any;
                            ``(viii) whether the period of liability of 
                        the financial assurance on the lease has been 
                        terminated;
                            ``(ix) payment status for royalties, rents, 
                        and fees; and
                            ``(x) any additional information required 
                        to be collected pursuant to subsection (g)(6).
                    ``(C) Notification.--The Secretary shall--
                            ``(i) ensure that the database under 
                        subparagraph (A) is made available to each 
                        field office of the Bureau of Land Management 
                        and the Forest Service, as applicable; and
                            ``(ii) provide automatic and timely 
                        notification, on a lease-by-lease basis, of 
                        applicable requirements and deadlines to review 
                        financial assurances and inactive well status, 
                        in accordance with subsection (g).
                    ``(D) Provision of data at expense of lessee.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the Secretary may require that 
                        data for the database under subparagraph (A) 
                        shall be provided and entered into the 
                        database--
                                    ``(I) by the applicable lessee; and
                                    ``(II) at the expense of the 
                                lessee.
                            ``(ii) Inspection and enforcement 
                        actions.--Any relevant data relating to a 
                        Federal inspection or enforcement action shall 
                        be provided and entered into the database under 
                        subparagraph (A) by the applicable Federal 
                        enforcement official.
                            ``(iii) Data quality.--The Secretary shall 
                        carry out such activities as the Secretary 
                        determines to be necessary to ensure the 
                        quality of the data included in the database 
                        under subparagraph (A).
            ``(9) Funding.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, from the Federal share of royalty 
                revenues deposited into the Treasury pursuant to 
                section 35, the Secretary of the Treasury shall 
                transfer to the Secretary to carry out the programs 
                established under paragraph (2), to remain available 
                until expended--
                            ``(i) on October 1, 2021, $1,500,000,000;
                            ``(ii) on October 1, 2022, $1,500,000,000; 
                        and
                            ``(iii) on October 1, 2023, and on each 
                        October 1 thereafter through October 1, 2030, 
                        $625,000,000.
                    ``(B) Receipt and acceptance.--The Secretary shall 
                be entitled to receive, shall accept, and shall use to 
                carry out this subsection the funds transferred under 
                subparagraph (A), without further appropriation.''.
    (b) Conforming Amendments.--
            (1) Section 349 of the Energy Policy Act of 2005 (42 U.S.C. 
        15907) is amended by striking the section designation and 
        heading and all that follows through ``Out of any'' in 
        subsection (i) and inserting the following:

``SEC. 349. WELLS DRILLED INTO FEDERALLY MANAGED MINERAL ESTATE.

    ``Out of any''.
            (2) The table of contents for the Energy Policy Act of 2005 
        (Public Law 109-58; 119 Stat. 596) is amended by striking the 
        item relating to section 349 and inserting the following:

``Sec. 349. Wells drilled into federally managed mineral estate.''.

   TITLE II--FEDERAL ONSHORE OIL AND GAS RECLAMATION BONDING PROGRAM

SEC. 201. DECLARATION OF POLICY.

    Congress declares that it is the policy of the United States that--
            (1) pursuant to this title and the amendments made by this 
        title, the Secretary, and the Secretary of Agriculture with 
        respect to National Forest System land, should--
                    (A) require the posting by holders of oil or gas 
                leases under the Mineral Leasing Act (30 U.S.C. 181 et 
                seq.) or the Mineral Leasing Act for Acquired Lands (30 
                U.S.C. 351 et seq.) of financial assurances that are 
                sufficient to pay for the actual costs of remediating, 
                reclaiming, and permanently plugging onshore oil and 
                gas wells, well sites, and lease tracts; and
                    (B) implement a system of tracking and reviewing 
                the financial assurances described in subparagraph (A) 
                that ensures ongoing adequacy and public transparency;
            (2) in ensuring robust onshore oil and gas financial 
        assurances under paragraph (1), the Secretary and the Secretary 
        of Agriculture will--
                    (A) better protect the land, water, and other 
                resources of the United States; and
                    (B) reduce the financial risks to taxpayers of 
                paying for inadequately reclaimed onshore oil and gas 
                wells and leases; and
            (3) in administering this title and the amendments made by 
        this title, the Secretary, and the Secretary of Agriculture 
        with respect to National Forest System land, should ensure that 
        the actions of the applicable Secretary--
                    (A) are in accordance with the goals of multiple-
                use management; and
                    (B) will benefit the fiscal interests of the United 
                States.

SEC. 202. REGULATION OF SURFACE-DISTURBING ACTIVITIES.

    Section 17(g) of the Mineral Leasing Act (30 U.S.C. 226(g)) is 
amended--
            (1) in the sixth sentence--
                    (A) by striking ``such entity'' and inserting ``the 
                responsible party, or to the operator or other entity 
                on behalf of which the responsible party acted''; and
                    (B) by striking ``Once the entity has complied with 
                the'' and inserting the following:
                    ``(C) Issuance of lease after compliance.--On 
                compliance by a responsible party under this paragraph 
                with each'';
            (2) in the fifth sentence, by striking ``Prior to making 
        such determination with respect to any such entity the 
        concerned Secretary shall provide such entity with'' and 
        inserting the following:
                    ``(B) Requirement for notice and opportunity to 
                comply.--Before making a determination under 
                subparagraph (A) with respect to any operator or other 
                entity or responsible party, the Secretary shall 
                provide to the operator, entity, or responsible 
                party'';
            (3) by striking the fourth sentence and inserting the 
        following:
            ``(7) Failure or refusal to comply.--
                    ``(A) In general.--The Secretary shall not issue, 
                or approve the assignment of, any lease under this 
                section to any operator, other entity, or responsible 
                party during any period in which, as determined by the 
                Secretary, the operator, entity, or responsible party 
                has failed or refused to comply in any material respect 
                with a reclamation requirement or other standard 
                established under this section that is applicable to 
                any other lease of the operator, entity, or responsible 
                party.''; and
            (4) by striking the subsection designation and all that 
        follows through ``operations on the lease.'' and inserting the 
        following:
    ``(g) Regulation of Surface-Disturbing Activities.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Abandon.--The term `abandon', with respect to 
                a well under an oil or gas lease issued under this Act, 
                means--
                            ``(i) to plug the well;
                            ``(ii) to remove all installations 
                        associated with the well; and
                            ``(iii) to terminate operations for 
                        production from the well.
                    ``(B) Inactive.--The term `inactive', with respect 
                to a well or facility under an oil or gas lease issued 
                under this Act, means that the well or facility does 
                not--
                            ``(i) produce oil or gas, as applicable, in 
                        paying quantities; or
                            ``(ii) actively aid in the production of 
                        oil or gas, as applicable, in paying 
                        quantities.
                    ``(C) Operator.--The term `operator', with respect 
                to an oil or gas operation, means any individual or 
                entity (including a lessee or operating rights owner) 
                that has provided to a relevant authority a written 
                statement that the individual or entity is responsible 
                for the operation (or any portion of the operation).
                    ``(D) Orphaned.--The term `orphaned', with respect 
                to a well or well site under an oil or gas lease issued 
                under this Act, means that the responsible party of the 
                well or well site--
                            ``(i) cannot be located; or
                            ``(ii) cannot provide adequate financial 
                        assurance to permanently plug and reclaim the 
                        well or well site.
                    ``(E) Responsible party.--
                            ``(i) In general.--The term `responsible 
                        party', with respect to a well or well site 
                        under an oil or gas lease issued under this 
                        Act, means an individual or entity (including a 
                        lessee or operator) that is or will be 
                        responsible for--
                                    ``(I) the remediation, reclamation, 
                                and permanent plugging of the well or 
                                well site; or
                                    ``(II) the payment of financial 
                                assurance for the well or well site in 
                                accordance with paragraph (4).
                            ``(ii) Inclusions.--The term `responsible 
                        party' includes--
                                    ``(I) an association, corporation, 
                                subsidiary, or affiliate of an 
                                individual or entity described in 
                                clause (i); and
                                    ``(II) any person controlled by, or 
                                under common control with, an 
                                individual or entity described in 
                                clause (i).
                    ``(F) Secretary.--The term `Secretary' means the 
                Secretary of the Interior.
            ``(2) Regulation of use and activities.--The Secretary, or 
        the Secretary of Agriculture with respect to National Forest 
        System land, shall--
                    ``(A) regulate all use and activities conducted 
                pursuant to any lease for oil or gas issued under this 
                Act; and
                    ``(B) determine the remediation, reclamation, 
                permanent plugging, and other activities that the 
                responsible party shall be required to carry out in the 
                interest of conservation of land, water, and surface 
                resources, including resources with recreation, range, 
                timber, mineral, watershed, fish or wildlife, natural 
                scenic, scientific, or historical value.
            ``(3) Reclamation and operations plan required.--
                    ``(A) In general.--Each application for a permit to 
                drill submitted for a lease issued under this Act shall 
                include a plan of operations for surface use, 
                disturbance, and reclamation that covers all proposed 
                activities and operations within the lease area.
                    ``(B) Inclusions.--Each plan of operations under 
                subparagraph (A) shall--
                            ``(i) specify--
                                    ``(I) the location of all relevant 
                                facilities, roads, drill pads, 
                                trenches, and pipeline or utility 
                                corridors;
                                    ``(II) details regarding drill pad 
                                construction, methods for containment, 
                                and disposal of waste material;
                                    ``(III) the identification, 
                                location, and condition of any inactive 
                                or orphaned well sites on land covered 
                                by the lease; and
                                    ``(IV) such other information as 
                                the Secretary, or the Secretary of 
                                Agriculture with respect to National 
                                Forest System land, may require; and
                            ``(ii) include the interim reclamation plan 
                        and final reclamation plan developed under 
                        subparagraph (C).
                    ``(C) Interim and final reclamation plans.--
                            ``(i) Interim reclamation plan.--
                                    ``(I) In general.--Each applicant 
                                for a permit to drill under 
                                subparagraph (A) shall develop for 
                                submission with the plan of operations 
                                of the applicant under that 
                                subparagraph an interim reclamation 
                                plan that specifies the reclamation 
                                activities that the applicant will 
                                carry out to address the land, water, 
                                and resources (including resources with 
                                recreation, range, timber, mineral, 
                                watershed, fish or wildlife, natural 
                                scenic, scientific, or historical 
                                value) impacted by activities carried 
                                out pursuant to the permit to drill 
                                that are not needed for active 
                                operations.
                                    ``(II) Requirement.--The Secretary, 
                                or the Secretary of Agriculture with 
                                respect to National Forest System land, 
                                shall--
                                            ``(aa) review each interim 
                                        reclamation plan submitted 
                                        under subclause (I) at regular 
                                        intervals; and
                                            ``(bb) as the applicable 
                                        Secretary determines to be 
                                        necessary, require the 
                                        amendment and reapproval by the 
                                        applicable Secretary of the 
                                        interim reclamation plan.
                            ``(ii) Final reclamation plan.--
                                    ``(I) In general.--Each applicant 
                                for a permit to drill under 
                                subparagraph (A) shall develop for 
                                submission with the plan of operations 
                                of the applicant under that 
                                subparagraph a final reclamation plan 
                                that includes a detailed description of 
                                the reclamation activities the 
                                applicant will carry out prior to final 
                                abandonment or cessation of oil and gas 
                                operations with respect to all land, 
                                water, and resources (including 
                                resources with recreation, range, 
                                timber, mineral, watershed, fish or 
                                wildlife, natural scenic, scientific, 
                                or historical value) impacted by 
                                activities carried out pursuant to the 
                                permit to drill.
                                    ``(II) Review and approval.--The 
                                Secretary, or the Secretary of 
                                Agriculture with respect to National 
                                Forest System land, shall review and 
                                approve a final reclamation plan under 
                                subclause (I) only after determining 
                                that the final reclamation plan is 
                                consistent with the standards 
                                promulgated pursuant to paragraph (5).
                    ``(D) Analysis and approval required.--The 
                Secretary shall not grant a permit to drill under this 
                Act unless the Secretary has--
                            ``(i) analyzed and approved the plan of 
                        operations submitted with the application for 
                        the permit under subparagraph (A), including 
                        the interim reclamation plan and the final 
                        reclamation plan under subparagraph (C); and
                            ``(ii) made the interim and final 
                        reclamation plans under subparagraph (C) 
                        publicly available before that approval.
            ``(4) Financial assurances.--
                    ``(A) Requirement.--
                            ``(i) In general.--The Secretary, or the 
                        Secretary of Agriculture with respect to 
                        National Forest System land, shall promulgate 
                        regulations to require that a financial 
                        assurance shall be provided by the lessee prior 
                        to the commencement of activities on any lease 
                        issued under this Act to ensure the complete 
                        and timely remediation and reclamation of any 
                        land, water, or other resources (including 
                        resources with recreation, range, timber, 
                        mineral, watershed, fish or wildlife, natural 
                        scenic, scientific, or historical value) 
                        adversely affected by lease activities and 
                        operations after the abandonment or cessation 
                        of oil and gas operations on the lease.
                            ``(ii) Elimination of nationwide financial 
                        assurances.--
                                    ``(I) In general.--A lessee may not 
                                provide a financial assurance under 
                                clause (i) on a nationwide basis for 
                                all leases of the lessee in the United 
                                States.
                                    ``(II) Requirement.--With respect 
                                to any nationwide financial assurance 
                                in effect on the date of enactment of 
                                the Oil and Gas Bonding Reform and 
                                Orphaned Well Remediation Act, the 
                                Secretary, or the Secretary of 
                                Agriculture with respect to National 
                                Forest System land, shall require that, 
                                not later than 1 year after that date 
                                of enactment, the lessee shall post 
                                financial assurances in accordance with 
                                this paragraph.
                            ``(iii) Addition of new operators.--
                        Notwithstanding any other provision of law 
                        (including regulations), in any case in which a 
                        lease issued under this Act is assigned or 
                        transferred to a new operator, the previous 
                        operator of the lease shall include the new 
                        operator on the existing financial assurance 
                        provided under this subparagraph until the date 
                        on which the new operator has provided a 
                        financial assurance on behalf of that new 
                        operator in accordance with this paragraph.
                    ``(B) Form.--
                            ``(i) In general.--The financial assurance 
                        under subparagraph (A) shall be provided in the 
                        form of a surety, bond, 1 or more letters of 
                        credit, 1 or more certificates of deposit, or 
                        cashier's or certified check, subject to the 
                        approval of the Secretary, or the Secretary of 
                        Agriculture with respect to National Forest 
                        System land.
                            ``(ii) Limitation.--Self-bonding shall not 
                        be an acceptable form of financial assurance 
                        under subparagraph (A).
                    ``(C) Amount.--
                            ``(i) In general.--Subject to clause (ii), 
                        the amount of a financial assurance required 
                        under this paragraph shall be the amount 
                        determined by the Secretary, or the Secretary 
                        of Agriculture with respect to National Forest 
                        System land, to be sufficient to ensure the 
                        complete and timely remediation and reclamation 
                        required under subparagraph (A)(i) if the work 
                        were to be performed by the applicable 
                        Secretary in the event of forfeiture by the 
                        lessee.
                            ``(ii) Minimum amounts.--
                                    ``(I) In general.--Subject to 
                                subclause (II), the minimum amount of a 
                                financial assurance required under this 
                                paragraph shall be not less than, as 
                                applicable--
                                            ``(aa) $150,000, in the 
                                        case of a financial assurance 
                                        for surface-disturbing 
                                        activities of a responsible 
                                        party on an individual oil or 
                                        gas lease; or
                                            ``(bb) $500,000, in the 
                                        case of a financial assurance 
                                        for all oil and gas leases of a 
                                        responsible party in a State.
                                    ``(II) Adjustments for inflation.--
                                Not later than 3 years after the date 
                                of enactment of the Oil and Gas Bonding 
                                Reform and Orphaned Well Remediation 
                                Act, and not less frequently than once 
                                every 3 years thereafter, the 
                                Secretary, or the Secretary of 
                                Agriculture with respect to National 
                                Forest System land, shall adjust for 
                                inflation the minimum amounts under 
                                items (aa) and (bb) of subclause (I).
                            ``(iii) Additional factors.--The Secretary, 
                        or the Secretary of Agriculture with respect to 
                        National Forest System land, shall establish 
                        the level of a financial assurance required 
                        under this paragraph above the applicable 
                        minimum level required under clause (ii) as the 
                        applicable Secretary determines to be 
                        appropriate or necessary to ensure the complete 
                        and timely remediation and reclamation required 
                        under subparagraph (A)(i), after taking into 
                        consideration the following factors:
                                    ``(I) The depth of each relevant 
                                proposed wellbore.
                                    ``(II) The presence of other 
                                resources (including resources with 
                                recreation, range, timber, mineral, 
                                watershed, fish or wildlife, natural 
                                scenic, scientific, or historical 
                                value).
                                    ``(III) The number of wells to be 
                                drilled on the lease.
                                    ``(IV) The number and percentage of 
                                low-producing and inactive wells on--
                                            ``(aa) the applicable 
                                        lease; and
                                            ``(bb) any other leases 
                                        held by each applicable lessee, 
                                        operator, and responsible 
                                        party.
                                    ``(V) Any current or past 
                                violations by each responsible party.
                                    ``(VI) The anticipated condition of 
                                the applicable well site and the extent 
                                of the remediation and reclamation to 
                                be required.
                                    ``(VII) The ability of each 
                                responsible party to fully carry out 
                                that remediation and reclamation.
                                    ``(VIII) Such other factors as the 
                                applicable Secretary determines to be 
                                relevant.
                    ``(D) Review.--
                            ``(i) Prospective.--
                                    ``(I) In general.--With respect to 
                                any financial assurance provided after 
                                the date of enactment of the Oil and 
                                Gas Bonding Reform and Orphaned Well 
                                Remediation Act, not less frequently 
                                than once every 5 years, and at any 
                                time at which the applicable lease is 
                                assigned or transferred, the Secretary, 
                                or the Secretary of Agriculture with 
                                respect to National Forest System land, 
                                shall review the financial assurance to 
                                determine, after taking into 
                                consideration the factors described in 
                                subparagraph (C)(iii), whether the 
                                amount of the financial assurance is 
                                adequate to ensure the complete and 
                                timely remediation and reclamation 
                                required under subparagraph (A)(i).
                                    ``(II) Authority to increase.--If 
                                the Secretary, or the Secretary of 
                                Agriculture with respect to National 
                                Forest System land, determines under 
                                subclause (I) that the amount of a 
                                financial assurance is not adequate, 
                                the applicable Secretary shall increase 
                                the amount of the financial assurance 
                                in accordance with subparagraph (C), 
                                including making an adjustment for 
                                inflation, as appropriate.
                            ``(ii) Retrospective.--
                                    ``(I) In general.--Not later than 1 
                                year after the date of enactment of the 
                                Oil and Gas Bonding Reform and Orphaned 
                                Well Remediation Act, and not less 
                                frequently than once every 5 years 
                                thereafter, the Secretary, or the 
                                Secretary of Agriculture with respect 
                                to National Forest System land, shall--
                                            ``(aa) review the 
                                        sufficiency of each financial 
                                        assurance provided before that 
                                        date of enactment;
                                            ``(bb) determine, after 
                                        taking into consideration the 
                                        factors described in 
                                        subparagraph (C)(iii), whether 
                                        the amount of the financial 
                                        assurance is adequate to ensure 
                                        the complete and timely 
                                        remediation and reclamation 
                                        required under subparagraph 
                                        (A)(i); and
                                            ``(cc) provide to each 
                                        responsible party a written 
                                        notice, including any relevant 
                                        findings, relating to the 
                                        determination under item (bb).
                                    ``(II) Authority to increase.--If 
                                the Secretary, or the Secretary of 
                                Agriculture with respect to National 
                                Forest System land, determines under 
                                subclause (I) that the amount of a 
                                financial assurance is not adequate, 
                                the applicable Secretary shall increase 
                                the amount of the financial assurance 
                                in accordance with subparagraph (C), 
                                including making an adjustment for 
                                inflation, as appropriate.
                    ``(E) Release.--On request, and after inspection by 
                the Secretary, or the Secretary of Agriculture with 
                respect to National Forest System land, the applicable 
                Secretary may release, in whole or in part, the 
                financial assurance required for a lease under this 
                paragraph if the Secretary determines that--
                            ``(i) the remediation, reclamation, or 
                        permanent plugging covered by the financial 
                        assurance has been completed in accordance 
                        with--
                                    ``(I) subparagraph (A)(i); and
                                    ``(II) the standards established 
                                under paragraph (5); and
                            ``(ii) all other applicable Federal 
                        requirements have been met.
            ``(5) Standards.--
                    ``(A) In general.--The Secretary and the Secretary 
                of Agriculture shall jointly promulgate regulations to 
                establish uniform standards for the complete and timely 
                reclamation of land, water, and other resources 
                (including resources with recreation, range, timber, 
                mineral, watershed, fish or wildlife, natural scenic, 
                scientific, or historical value) adversely impacted, 
                directly or indirectly, by oil and gas activities and 
                operations (including any prior remediation or 
                reclamation efforts that fail to achieve compliance 
                with the standards described in subparagraph (B)) to 
                the condition that existed prior to the adverse impact, 
                including--
                            ``(i) standards for the interim reclamation 
                        plans and final reclamation plans required 
                        under paragraph (3)(C); and
                            ``(ii) timelines for--
                                    ``(I) commencing and completing the 
                                permanent plugging of wells and related 
                                remediation and reclamation activities; 
                                and
                                    ``(II) achieving compliance with 
                                the standards described in subparagraph 
                                (B).
                    ``(B) Requirements.--The standards under 
                subparagraph (A) shall include standards for--
                            ``(i) the remediation and reclamation of 
                        natural vegetation and hydrology;
                            ``(ii) habitat restoration;
                            ``(iii) salvage, storage, and reuse of 
                        topsoils;
                            ``(iv) erosion control;
                            ``(v) reclamation of access roads;
                            ``(vi) control of invasive species and 
                        noxious weeds; and
                            ``(vii) natural contouring.
            ``(6) Inactive wells.--
                    ``(A) In general.--Any lessee the lease of which 
                includes an inactive well (except for a well with an 
                approved suspension of operations pursuant to section 
                39) shall, as soon as practicable after determining 
                that the well has been inactive--
                            ``(i) for a period of more than 30 
                        consecutive days, submit to the Secretary a 
                        notice of that inactivity; and
                            ``(ii) for a period of more than 60 
                        consecutive days--
                                    ``(I) bring the inactive well 
                                into--
                                            ``(aa) production in paying 
                                        quantities; or
                                            ``(bb) the active aid of 
                                        production in paying 
                                        quantities;
                                    ``(II) submit to the Secretary an 
                                application for a delay in the 
                                remediation, reclamation, and permanent 
                                closure of the well in accordance with 
                                this paragraph; or
                                    ``(III) permanently plug the well 
                                and complete the timely remediation and 
                                reclamation required under paragraphs 
                                (4)(A)(i) and (5).
                    ``(B) Period of delay.--
                            ``(i) In general.--Subject to clause (ii), 
                        the Secretary may approve an application under 
                        subparagraph (A)(ii)(II) for a delay in the 
                        remediation, reclamation, and permanent 
                        plugging of an inactive well under subparagraph 
                        (A)(ii)(III) for a period of not more than 1 
                        year.
                            ``(ii) Extensions.--
                                    ``(I) In general.--Subject to 
                                subclause (II) and subparagraph (D), on 
                                receipt of application by a lessee 
                                under subparagraph (A)(ii)(II), the 
                                Secretary may approve 1 or more 
                                additional delays in the remediation, 
                                reclamation, and permanent closure of 
                                an inactive well, each of which 
                                additional delays shall be for a period 
                                of not more than 1 year.
                                    ``(II) Requirements.--Before 
                                approving an application for an 
                                additional delay under subclause (I), 
                                the Secretary shall--
                                            ``(aa) take into 
                                        consideration whether the 
                                        operator is making all required 
                                        royalty, rental, and fee 
                                        payments on time;
                                            ``(bb) review the amount of 
                                        the financial assurance for the 
                                        applicable lease; and
                                            ``(cc) increase the amount 
                                        to ensure the complete and 
                                        timely remediation, 
                                        reclamation, and permanent 
                                        closure required under 
                                        paragraph (4)(A)(i) if the work 
                                        were to be performed by the 
                                        Secretary in the event of 
                                        forfeiture by the lessee.
                    ``(C) Application requirements.--
                            ``(i) In general.--Each application of a 
                        lessee to delay permanent abandonment and 
                        reclamation of a well under subparagraph 
                        (A)(ii)(II) or (B)(ii) shall include a 
                        description of--
                                    ``(I) the period of time during 
                                which the well has been inactive;
                                    ``(II) the justification for 
                                delaying permanent abandonment and 
                                reclamation of the well;
                                    ``(III) the probable duration of 
                                the delay;
                                    ``(IV) the means by which the 
                                wellbore is to be protected during the 
                                delay; and
                                    ``(V) the contemplated eventual 
                                disposition of the well.
                            ``(ii) Special requirements for 
                        applications for extension.--Each application 
                        for a delay under subparagraph (A)(ii) or 
                        (B)(ii) shall demonstrate, through test 
                        results, that the applicable well is--
                                    ``(I) mechanically sound; and
                                    ``(II) capable of--
                                            ``(aa) production in paying 
                                        quantities; or
                                            ``(bb) actively aiding in 
                                        production in paying 
                                        quantities.
                    ``(D) Prohibition.--
                            ``(i) In general.--No well may be inactive 
                        for a period of more than 2 years.
                            ``(ii) Requirement.--With respect to a well 
                        under a lease issued under this Act that has 
                        been inactive for a period of more than 2 
                        years, the applicable lessee shall--
                                    ``(I)(aa) bring the inactive well 
                                into--
                                            ``(AA) production in paying 
                                        quantities; or
                                            ``(BB) the active aid of 
                                        production in paying 
                                        quantities; and
                                    ``(bb) pay any related royalties, 
                                rentals, or other fees due; or
                                    ``(II)(aa) permanently plug the 
                                well; and
                                    ``(bb) complete the timely 
                                remediation and reclamation required 
                                under paragraph (4)(A)(i).
                            ``(iii) Action by secretary.--In any case 
                        in which a lessee has not carried out any 
                        required action under clause (ii) with respect 
                        to a well described in that clause, the 
                        Secretary, or the Secretary of Agriculture with 
                        respect to National Forest System land, shall 
                        execute forfeiture of the financial assurance 
                        associated with the well.
                    ``(E) Inventory.--
                            ``(i) In general.--Not later than 180 days 
                        after the date of enactment of the Oil and Gas 
                        Bonding Reform and Orphaned Well Remediation 
                        Act, and not less frequently than annually 
                        thereafter, the Secretary, or the Secretary of 
                        Agriculture with respect to National Forest 
                        System land, shall complete an inventory of all 
                        wells that, as of the date of publication of 
                        the inventory--
                                    ``(I) are inactive, orphaned, or 
                                abandoned; or
                                    ``(II) have previously been 
                                identified as idled, orphaned, or 
                                abandoned.
                            ``(ii) Inclusions.--Each inventory under 
                        clause (i) shall identify, with respect to each 
                        inactive or orphaned well--
                                    ``(I) the location of the well;
                                    ``(II) the length of time during 
                                which the well has been inactive or 
                                orphaned;
                                    ``(III) the responsible parties 
                                associated with the well; and
                                    ``(IV) any financial assurance 
                                provided to remediate and reclaim the 
                                well, including the most recent date on 
                                which the Secretary reviewed that 
                                financial assurance.''.

                        TITLE III--MISCELLANEOUS

SEC. 301. COST RECOVERY.

    (a) In General.--Section 17 of the Mineral Leasing Act (30 U.S.C. 
226) (as amended by section 101(a)) is amended by adding at the end the 
following:
    ``(r) Cost Recovery Requirements.--
            ``(1) In general.--Before approving an application for a 
        permit to drill pursuant to a lease issued under this Act, the 
        Secretary of the Interior, or the Secretary of Agriculture with 
        respect to National Forest System land, shall determine the 
        cost to the Federal Government of carrying out Federal 
        inspection and enforcement actions for the lease.
            ``(2) Financial assurances.--The Secretary of the Interior, 
        or the Secretary of Agriculture with respect to National Forest 
        System land, shall not release the financial assurance 
        established for a lease under subsection (g)(4)(E) until the 
        applicable lessee has reimbursed the applicable Secretary for 
        the total cost of Federal inspection and enforcement actions on 
        the lease.''.
    (b) Use of BLM Permit Processing Improvement Fund.--Section 
35(c)(3) of the Mineral Leasing Act (30 U.S.C. 191(c)(3)) is amended by 
striking subparagraph (A) and inserting the following:
                    ``(A) In general.--Of the amounts in the Fund, the 
                Secretary of the Interior, in consultation with the 
                Secretary of Agriculture, shall use, without further 
                appropriation or fiscal year limitation--
                            ``(i) 50 percent--
                                    ``(I) to carry out the coordination 
                                and review process for--
                                            ``(aa) financial assurances 
                                        for oil and gas leases under 
                                        this Act; and
                                            ``(bb) bond releases for 
                                        oil and gas leases under this 
                                        Act;
                                    ``(II) to coordinate--
                                            ``(aa) the inventory of 
                                        wells that are orphaned or 
                                        inactive (as those terms are 
                                        defined in subsection (q)(1)); 
                                        and
                                            ``(bb) the processing of 
                                        requests for delays in the 
                                        permanent closure of wells that 
                                        are inactive (as so defined); 
                                        and
                                    ``(III) to coordinate and process 
                                environmental and cultural resource 
                                reviews applicable to oil and gas 
                                activities under this Act; and
                            ``(ii) the remaining amounts for the 
                        coordination and processing of oil and gas use 
                        authorizations on onshore Federal and Indian 
                        trust mineral estate land.''.

SEC. 302. REGULATIONS.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Secretary and the Secretary of Agriculture, acting in 
coordination, shall concurrently promulgate regulations to implement 
this Act and the amendments made by this Act.
    (b) Effect on Funding.--The funds made available pursuant to 
subsection (q)(9) of section 17 of the Mineral Leasing Act (30 U.S.C. 
226) (as added by section 101(a)) shall be disbursed and expended in 
accordance with applicable interim guidance pending completion of the 
rulemaking required under subsection (a).
                                 <all>