Summary and
Background
On July 20, 2006, Senators
Domenici, Landrieu, Vitter, Frist, McConnell, Martinez, Cochran, Lott,
Shelby, Sessions, Cornyn, and Hutchison introduced S. 3711, a bill to
require the Secretary of the Interior to offer certain areas of the Gulf of
Mexico for oil and gas leasing and to distribute a portion of the revenues
generated by new leases to Alabama, Louisiana, Mississippi, and Texas, with
certain restrictions.
The 181 Area as defined in S. 3711 is part of the original Lease Sale 181 contained in the
Outer Continental Shelf (OCS) 1996-2001 Five-Year Leasing Program before the
area was scaled back by the Secretary of the Interior. The Minerals Management
Service (MMS) already plans to offer a lease sale for the 181 Area. The 181 South Area is currently under
the OCS leasing moratoria but is under consideration by the MMS for oil and gas
leasing in its proposed 2007-2012 Five-Year Leasing Program. Areas that would
be placed under moratorium until 2022 by S.
3711, with the
exception of areas within the boundaries of the original Lease Sale 181, are currently under a Presidential moratorium that expires in 2012 and
a Congressional moratorium enacted annually through the appropriations process.
Major Provisions
S. 3711 would require the
Secretary of the Interior to offer, except as otherwise specified, the planned
lease sale in the 181 Area within one year of the date of enactment and the 181
South Area as soon as practicable for oil and gas leasing. The bill would:
- Exclude
sections in the 181 Area that are east of the Military Mission Line, in
the New Eastern Gulf of Mexico Planning Area within 125 miles of the State
of Florida, or in the New Central Gulf of Mexico Planning Area within 100
miles of the State of Florida;
- Exclude
sections of the 181 South Area that are east of the Military Mission Line
or in the New Eastern Gulf of Mexico Planning Area;
- Prohibit
oil and gas leasing, pre-leasing, and any related activity until June 30,
2022 in areas of the New Eastern Gulf of Mexico Planning Area that are
within 125 miles of the coastline of the State of Florida;
- Prohibit
oil and gas leasing, pre-leasing, and any related activity until June 30,
2022 in areas that are in the New Central Gulf of Mexico Planning Area and
east of the western boundary of the 181 Area or within 100 miles of the
coastline of the State of Florida;
- Prohibit
oil and gas leasing, pre-leasing, and other activities in areas east of
the Military Mission Line until June 30, 2022, after which time the
Department of Defense may veto leasing; and
- Require
the Secretary of the Interior to establish a rule within one year of
enactment to provide for an option to exchange already-purchased leases in
areas made unavailable for leasing within 125 miles of the coastline of
the State of Florida in the New Eastern Gulf Planning Area for leases in
areas available for leasing in the Gulf of Mexico.
Under
current law, all royalty revenues generated by offshore oil and gas leases are
directed to the federal Treasury. S. 3711 would require revenues
generated by new leases in new areas of production that are made available by
this bill, beginning in Fiscal Year 2007, to be distributed as described below between
the federal government, state conservation programs, and the states of Alabama,
Louisiana, Mississippi, and Texas with certain restrictions. The bill would:
- Direct
50 percent of revenues to the federal Treasury;
- Direct
37.5 percent of revenues to the states of Alabama, Louisiana, Mississippi,
and Texas, with each state receiving a minimum of 10 percent of shared
revenue and coastal political subdivisions of each state receiving 20
percent of the state’s revenue;
- Limit
the use of revenues received by the states to coastal protection,
mitigation of damage to wildlife or natural resources, implementation of a
federally-approved marine, coastal, or comprehensive conservation
management plan, onshore infrastructure projects, or up to three percent
of funds for planning assistance and administrative costs of compliance;
and
- Direct
12.5 percent of revenues to the Stateside Land and Water Conservation Fund
(LWCF).
Beginning
in Fiscal Year 2016, S. 3711 would apply the revenue distribution formula
to revenues from leases awarded within the 2002-2007 planning area, including
historical leases throughout the Gulf of Mexico.
S. 3711 would limit the
revenue distributed to states and the LWCF as laid out in this bill to $500 million
per year plus the net amount of oil and gas receipts from new leasing on the
181 and 181 South Areas between 2016 and 2055. The bill would also allow the
Secretary of the Interior to reduce the amount of revenue provided to each
recipient on a pro rata basis.
Legislative History
Senators
Domenici, Landrieu, Vitter, Frist, McConnell, Martinez, Cochran, Lott,
Shelby, Sessions, Cornyn, and Hutchison introduced S. 3711 on July 20,
2006.
On
February 7, 2006, Senators Domenici and Bingaman introduced S. 2253,
a bill to require the Secretary of the Interior to offer the 181 Area of the
Gulf of Mexico for oil and gas leasing. S. 2253, which does not include
revenue sharing or moratoria-related provisions, passed the Senate Energy and
Natural Resources Committee on March 8, 2006 by a vote of 16-5.
On
June 29, 2006, the House of Representatives passed H.R. 4761, the Deep Ocean
Energy Resources Act of 2006, by a vote of 232-187. H.R. 4761 contains changes
to onshore and offshore drilling laws and proposes revenue distribution formulas
for both new and existing oil and gas leases.
Statement of Administration Policy
The Administration has not issued a Statement of
Administration Policy (SAP) for S. 3711.
Expected Amendments
The
DPC will release information on amendments when it becomes available.
