H.R. 1231: Reversing President Obama's Offshore Moratorium Act

H.R. 1231

Reversing President Obama's Offshore Moratorium Act

Date
May 10, 2011 (112th Congress, 1st Session)

Staff Contact
Sarah Makin

Floor Situation

On Wednesday, May 11, 2011, the House is scheduled to consider H.R. 1231, the Reversing President Obama's Offshore Moratorium Act, under a rule.  The rule provides for one hour of debate equally divided and controlled by the chair and ranking member of the Committee on Natural Resources.  Additionally, the rule makes in order eight amendments, debatable for 10 minutes each, and provides for one motion to recommit with or without instructions.

 H.R. 1231 was introduced by Rep. Doc Hastings (R-WA) on March 29, 2011, and was referred to the House Committee on Natural Resources.  On April 13, 2011, the House Committee on Natural Resources held a markup of H.R. 1230 and ordered the bill to be reported, as amended, by a vote of 29-14. 

Bill Summary

H.R. 1231 would amend the Outer Continental Shelf Lands Act to require that each five-year offshore oil and gas leasing program offer leasing in the areas with the most prospective oil and gas resources, and would establish a domestic oil and natural gas production goal.  The bill would essentially lift the President's ban on new offshore drilling by requiring the Administration to move forward on American energy production in areas estimated to contain the most oil and natural gas resources.

The bill would require that in each oil and gas leasing program, the Secretary make available for leasing and conduct lease sales including:

  • At least 50 percent of the available unleased acreage within each Outer Continental Shelf (OCS) planning area considered to have the largest undiscovered and recoverable oil and gas resources, and

 

  • Any state subdivision of an OCS planning area that the Governor of the state requests be made available for leasing. 

H.R. 1231 would define “available unleased acreage” as any portion of the OCS that is not under lease at the time of a proposed lease sale, and that has not been made unavailable for leasing by law. 

The bill would require that in the 2012-2017 five-year oil and gas leasing program, the Secretary make leasing available for any OCS planning areas that are estimated to contain more than 2.5 billion barrels of oil, or are estimated to contain more than 7.5 trillion cubic feet of natural gas. 

H.R. 1231 would require the Secretary to determine a domestic strategic production goal for the development of oil and natural gas as a result of the five-year oil and gas leasing program.  The bill would require this goal to include the best estimate of possible increases in domestic production of oil and natural gas from the OCS.  The bill would require the goal to focus on meeting domestic demand for oil and natural gas, work to reduce U.S. dependence on foreign energy, and focus on the production increases achieved by the leasing program at the end of the 15-year period.    

The bill would set a new goal for the 2012-2017 five-year oil and gas leasing program by increasing domestic production by no less than three million barrels of oil per day, and no less than 10 billion cubic feet of natural gas per day.  H.R. 1231 would require the Secretary to report to Congress annually on the attainment of this goal.

Finally, the bill would direct the Secretary to issue regulations providing for: (1) issuance of seismic surveying cost credits for the provision of data from seismic surveying of the OCS; and (2) use of such credits for payment of bonus bids owed for oil and gas lease sales in the planning area where the seismic survey was conducted.

Background

According to House Report 112-069, the 1953 Outer Continental Shelf Lands Act (OCSLA) requires the Secretary of the Interior to prepare an oil and natural gas leasing program for the outer continental shelf (OCS) every five years.  The OCS has been divided into 26 planning areas—11 along the lower 48 states, and 15 along Alaska.  Only planning areas that have been included in a current five year plan can be leased for oil and natural gas development.

Beginning in Fiscal Year (FY) 1982, Congress included an annual spending prohibition in appropriations acts preventing the Minerals Management Service (MMS), superseded by the Bureau of Ocean Energy Management Regulation and Enforcement (BOEMRE), from spending money to plan for and conduct oil and natural gas lease sales for significant portions of the OCS.  In addition, an overlapping presidential moratorium for these activities was issued in 1990 and extended to 2012 in 1998.

At the request of the Alaska delegation, the spending moratoria for the North Aleutian Basin was dropped from the FY2004 and subsequent appropriations acts.  In addition, the Gulf of Mexico Energy Security Act of 2006 lifted the Congressional moratoria for the “181 South Area” in the Gulf of Mexico.  President George W. Bush lifted the Presidential moratoria for these areas in January 2007.  In July 2008, President Bush revoked the Presidential moratorium for the OCS with exceptions for the Eastern Gulf of Mexico and designated Marine Sanctuaries.  Congress did not include the annual spending moratorium for leasing activities on the OCS in the Continuing Resolution that funded the government from October 1, 2008, through March 6, 2009.

The actions taken in 2008 by President Bush and Congress to lift the OCS moratoria on oil and natural gas exploration and development was in response to record-high gasoline prices in the spring and summer of 2008.  The Bush administration began work on a new five-year (2010-2015) leasing plan for the OCS to allow oil and natural gas leasing and development activities in the planning areas no longer under moratoria to occur.

Since President Obama took office, he has systematically taken steps to re-impose a new offshore drilling moratorium.  He first abandoned the 2010-2015 leasing plan that would have provided for oil and natural gas leasing in the newly opened areas.  He postponed and cancelled previously scheduled lease sales in the Gulf of Mexico and Virginia identified in the 2007-2012 five-year leasing plan for the OCS.  In December 2010, the President announced a restrictive drilling plan that placed the entire Pacific Coast, the entire Atlantic Coast, the Eastern Gulf of Mexico, and much of Alaska off-limits to future energy production—as it was before record high gasoline prices in 2008 prompted President Bush and Congress to lift the moratoria.

Despite abundant domestic onshore and offshore energy resources, due to development restrictions and the moratorium in the Gulf and other portions of the nation's OCS, the United States continues to import over half of its oil, leaving the nation vulnerable to hostile, unstable foreign countries.  For example, in 2009, the United States imported 347 million barrels of crude oil from Venezuela, 283 million from Nigeria, and 22 million barrels from Libya.  Over three billion barrels of crude oil were imported into the United States in 2009 alone.

According to the American Energy Alliance, permanently lifting the offshore moratoria would result in the creation of 1.2 million private sector U.S. jobs, $8 trillion in additional economic output (GDP), $2.2 trillion in total tax receipts, and $70 billion in additional wages each year.

Cost

According to Congressional Budget Office (CBO) cost estimates, enacting H.R. 1231 would affect direct spending; therefore, pay-as-you-go procedures apply.  CBO estimates that enacting this legislation would reduce direct spending (by increasing offsetting receipts) by about $350 million over the 2012-2016 period and by  $800 million over the 2012-2021 period.  Enacting this legislation would not affect revenues.

In addition, CBO estimates that the administrative costs of implementing the bill would total about $22 million over the 2011-2016 period, assuming appropriation of the necessary amounts.

Amendments

Amendment No. 1—Rep. Hastings (R-WA):  The amendment would make technical corrections (numbering) to the bill.

Amendment No. 2—Reps. Connolly (D-VA), Scott (D-VA), Moran (D-VA):  The amendment would prohibit new offshore drilling leases that would conflict with military operations.

Amendment No. 3—Rep. Markey (D-MA):  The amendment would prohibit any person who already holds a covered lease at the time the Secretary issues a new lease; had a covered lease before the enactment of the bill; or any has any “direct or indirect interest in, or that derives any benefit from,” a covered lease; from acquiring a new lease without first renegotiating each covered lease to increase the lessees’ royalty payments.  According to Rep. Markey, the amendment will raise “more than $2 billion over 10 years.”

Amendment No. 4—Rep. Keating (D-MA):  The amendment would require the Secretary to make information about lessee's executive bonuses (from the most recent quarter) available to the public.  

Amendment No. 5—Rep. Tsongas (D-MA):  The amendment would require the Secretary to include a plan for containment and clean-up of a “worst-case” oil and gas discharge scenario for each lease sale. 

Amendment No. 6—Rep. Brown, Corrine (D-FL):  The amendment would make permanent the current moratorium on drilling in the eastern Gulf of Mexico that expires in 2022.

Amendment No. 7—Rep. Thompson, Mike (D-CA):  The amendment would prohibit oil and gas drilling on the northern coast of California (i.e. the Northern California Planning Area). 

Amendment No. 8—Rep. Inslee (D-WA):  The amendment would prohibit oil and gas drilling off the coast of Washington, unless the Governor and the state legislature approve of such drilling.