Energy Law

U.S. House of Representatives Passes Energy Bill

The U.S. House of Representatives passed Speaker Pelosi’s Energy Bill, H.R. 6899, titled “Comprehensive American Energy Security and Consumer Protection Act.” Title I addresses the existing moratoria, future OCS access, exploration, production and royalty questions. Below is a synopsis of the bill.

Subtitle A codifies the existing annual appropriations moratoria, puts a permanent ban on leasing and pre-leasing activities, allows lease sales in the Atlantic and Pacific OCS Planning Areas (100+ offshore), codifies opt-in provision for States to lease between 50 and 100 miles by enacting legislation, and amends OCSLA to require offshore workers, in compliance with immigration statutes, to have worker visas
   

Subtitle B requires diligent development of leases in new regulations to be written by the Secretary and requires annual, detailed data on diligence and resource estimates for onshore and offshore leases.

Subtitle C, entitled “Royalty Relief for Americans Consumers Act of 2008” empowers the Secretary to agree to requests to amend lease terms for GOM leases issued in 1998 and 1999, clarifies authority of the Secretary to vary royalty payments based on price for leases with the suspension of royalties granted under the provisions of the DWRRA (Deep Water Royalty Relief Act), mandates a “Conservation of Resources Fee” aimed at the OCS DWRRA leases awarded in  1998 and 1999 of $9 per barrel and $1.25 per MMBtu, unless lease royalties were renegotiated with the Secretary, imposes Conservation of Resources Fee on nonproducing lease acreage of $3.75 per acre, bans the Secretary from issuing any GOM leases to a company unless that company has renegotiated its leases to include price thresholds (98/99) or paid the “conservation resources fee,” and creates new “Strategic Energy Efficiency and Renewables Reserve” account with the new revenue raised by these provisions; to be appropriated for new and renewable technologies and energy conservation measures.

Subtitle D addresses accountability and integrity issues by mandating a new ethics training program for MMS employees in the RIK office and directs the Secretary to promulgate a new code of ethics.

Subtitle E amends the FOGRMA of 1982 to repeal royalty overpayment interest for lessees by the federal government and mandates that when royalty adjustments are made resulting in an underpayment by lessee the royalty obligation clock starts when the date the adjustment is taken. Further, this section amends royalty liability provisions, making designees liable for royalty obligations and making operating rights owners liable for royalty payments

Subtitle F, entitled “Drill Responsibly in Leased Lands Act of 2008” directs the Secretary to accelerate the leasing of oil and gas in the NPRA, mandating that there be at least one lease sale each year between 2009 through 2013. Further, this section directs FERC with the Secretaries of Energy, Transportation and Interior to “facilitate the…the construction of pipelines necessary to transport oil and natural gas through NPRA to existing transportation of processing infrastructure on the North Slope of Alaska.”

Full post as published by The Energy Law Blog on September 23, 2008 (boomark / email).