42 U.S.C. § 6506a : US Code - Section 6506A: Competitive leasing of oil and gas

Search 42 U.S.C. § 6506a : US Code - Section 6506A: Competitive leasing of oil and gas

(a) In general
The Secretary shall conduct an expeditious program of competitive
leasing of oil and gas in the Reserve in accordance with this Act.
(b) Mitigation of adverse effects
Activities undertaken pursuant to this Act shall include or
provide for such conditions, restrictions, and prohibitions as the
Secretary deems necessary or appropriate to mitigate reasonably
foreseeable and significantly adverse effects on the surface
resources of the National Petroleum Reserve in Alaska.
(c) Land use planning; BLM wilderness study
The provisions of section 1712 and section 1782 of title 43 shall
not be applicable to the Reserve.
(d) First lease sale
The; (!1) first lease sale shall be conducted within twenty
months of December 12, 1980: Provided, That the first lease sale
shall be conducted only after publication of a final environmental
impact statement if such is deemed necessary under the provisions
of the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et
seq.).
(e) Withdrawals
The withdrawals established by section 6502 of this title are
rescinded for the purposes of the oil and gas leasing program
authorized under this section.
(f) Bidding systems
Bidding systems used in lease sales shall be based on bidding
systems included in section 205(a)(1)(A) through (H) (!2) of the
Outer Continental Shelf Lands Act Amendments of 1978 (92 Stat.
629).
(g) Geological structures
Lease tracts may encompass identified geological structures.
(h) Size of lease tracts
The size of lease tracts may be up to sixty thousand acres, as
determined by the Secretary.
(i) Terms
(1) In general
Each lease shall be issued for an initial period of not more
than 10 years, and shall be extended for so long thereafter as
oil or gas is produced from the lease in paying quantities, oil
or gas is capable of being produced in paying quantities, or
drilling or reworking operations, as approved by the Secretary,
are conducted on the leased land.
(2) Renewal of leases with discoveries
At the end of the primary term of a lease the Secretary shall
renew for an additional 10-year term a lease that does not meet
the requirements of paragraph (1) if the lessee submits to the
Secretary an application for renewal not later than 60 days
before the expiration of the primary lease and the lessee
certifies, and the Secretary agrees, that hydrocarbon resources
were discovered on one or more wells drilled on the leased land
in such quantities that a prudent operator would hold the lease
for potential future development.
(3) Renewal of leases without discoveries
At the end of the primary term of a lease the Secretary shall
renew for an additional 10-year term a lease that does not meet
the requirements of paragraph (1) if the lessee submits to the
Secretary an application for renewal not later than 60 days
before the expiration of the primary lease and pays the Secretary
a renewal fee of $100 per acre of leased land, and -
(A) the lessee provides evidence, and the Secretary agrees
that, the lessee has diligently pursued exploration that
warrants continuation with the intent of continued exploration
or future potential development of the leased land; or
(B) all or part of the lease -
(i) is part of a unit agreement covering a lease described
in subparagraph (A); and
(ii) has not been previously contracted out of the unit.
(4) Applicability
This subsection applies to a lease that is in effect on or
after August 8, 2005.
(5) Expiration for failure to produce
Notwithstanding any other provision of this Act, if no oil or
gas is produced from a lease within 30 years after the date of
the issuance of the lease the lease shall expire.
(6) Termination
No lease issued under this section covering lands capable of
producing oil or gas in paying quantities shall expire because
the lessee fails to produce the same due to circumstances beyond
the control of the lessee.
(j) Unit agreements
(1) In general
For the purpose of conservation of the natural resources of all
or part of any oil or gas pool, field, reservoir, or like area,
lessees (including representatives) of the pool, field,
reservoir, or like area may unite with each other, or jointly or
separately with others, in collectively adopting and operating
under a unit agreement for all or part of the pool, field,
reservoir, or like area (whether or not any other part of the oil
or gas pool, field, reservoir, or like area is already subject to
any cooperative or unit plan of development or operation), if the
Secretary determines the action to be necessary or advisable in
the public interest. In determining the public interest, the
Secretary should consider, among other things, the extent to
which the unit agreement will minimize the impact to surface
resources of the leases and will facilitate consolidation of
facilities.
(2) Consultation
In making a determination under paragraph (1), the Secretary
shall consult with and provide opportunities for participation by
the State of Alaska or a Regional Corporation (as defined in
section 1602 of title 43) with respect to the creation or
expansion of units that include acreage in which the State of
Alaska or the Regional Corporation has an interest in the mineral
estate.
(3) Production allocation methodology
(A) The Secretary may use a production allocation methodology
for each participating area within a unit that includes solely
Federal land in the Reserve.
(B) The Secretary shall use a production allocation methodology
for each participating area within a unit that includes Federal
land in the Reserve and non-Federal land based on the
characteristics of each specific oil or gas pool, field,
reservoir, or like area to take into account reservoir
heterogeneity and area variation in reservoir producibility
across diverse leasehold interests. The implementation of the
foregoing production allocation methodology shall be controlled
by agreement among the affected lessors and lessees.
(4) Benefit of operations
Drilling, production, and well reworking operations performed
in accordance with a unit agreement shall be deemed to be
performed for the benefit of all leases that are subject in whole
or in part to such unit agreement.
(5) Pooling
If separate tracts cannot be independently developed and
operated in conformity with an established well spacing or
development program, any lease, or a portion thereof, may be
pooled with other lands, whether or not owned by the United
States, under a communitization or drilling agreement providing
for an apportionment of production or royalties among the
separate tracts of land comprising the drilling or spacing unit
when determined by the Secretary of the Interior (in consultation
with the owners of the other land) to be in the public interest,
and operations or production pursuant to such an agreement shall
be deemed to be operations or production as to each such lease
committed to the agreement.
(k) Exploration incentives
(1) In general
(A) Waiver, suspension, or reduction
To encourage the greatest ultimate recovery of oil or gas or
in the interest of conservation, the Secretary may waive,
suspend, or reduce the rental fees or minimum royalty, or
reduce the royalty on an entire leasehold (including on any
lease operated pursuant to a unit agreement), whenever (after
consultation with the State of Alaska and the North Slope
Borough of Alaska and the concurrence of any Regional
Corporation for leases that include land that was made
available for acquisition by the Regional Corporation under the
provisions of section 1431(o) of the Alaska National Interest
Lands Conservation Act) in the judgment of the Secretary it is
necessary to do so to promote development, or whenever in the
judgment of the Secretary the leases cannot be successfully
operated under the terms provided therein.
(B) Applicability
This paragraph applies to a lease that is in effect on or
after August 8, 2005..(!1)
(2) Suspension of operations and production
The Secretary may direct or assent to the suspension of
operations and production on any lease or unit.
(3) Suspension of payments
If the Secretary, in the interest of conservation, shall direct
or assent to the suspension of operations and production on any
lease or unit, any payment of acreage rental or minimum royalty
prescribed by such lease or unit likewise shall be suspended
during the period of suspension of operations and production, and
the term of such lease shall be extended by adding any such
suspension period to the lease.
(l) Receipts
All receipts from sales, rentals, bonuses, and royalties on
leases issued pursuant to this section shall be paid into the
Treasury of the United States: Provided, That 50 percent thereof
shall be paid by the Secretary of the Treasury semiannually, as
soon thereafter as practicable after March 30 and September 30 each
year, to the State of Alaska for: (1) planning; (2) construction,
maintenance, and operation of essential public facilities; and (3)
other necessary provisions of public service: Provided further,
That in the allocation of such funds, the State shall give priority
to use by subdivisions of the State most directly or severely
impacted by development of oil and gas leased under this Act.
(m) Explorations
Any agency of the United States and any person authorized by the
Secretary may conduct geological and geophysical explorations in
the National Petroleum Reserve in Alaska which do not interfere
with operations under any contract maintained or granted
previously. Any information acquired in such explorations shall be
subject to the conditions of 43 U.S.C. 1352(a)(1)(A).
(n) Environmental impact statements
(1) Judicial review
Any action seeking judicial review of the adequacy of any
program or site-specific environmental impact statement under
section 102 of the National Environmental Policy Act of 1969 (42
U.S.C. 4332) concerning oil and gas leasing in the National
Petroleum Reserve-Alaska shall be barred unless brought in the
appropriate District Court within 60 days after notice of the
availability of such statement is published in the Federal
Register.
(2) Initial lease sales
The detailed environmental studies and assessments that have
been conducted on the exploration program and the comprehensive
land-use studies carried out in response to sections (!3) 6505(b)
and (c) of this title shall be deemed to have fulfilled the
requirements of section 102(2)(c) (!4) of the National
Environmental Policy Act (Public Law 91-190) [42 U.S.C.
4332(2)(C)], with regard to the first two oil and gas lease sales
in the National Petroleum Reserve-Alaska: Provided, That not more
than a total of 2,000,000 acres may be leased in these two sales:
Provided further, That any exploration or production undertaken
pursuant to this section shall be in accordance with section
6504(a) of this title.
(o) Regulations
As soon as practicable after August 8, 2005, the Secretary shall
issue regulations to implement this section.
(p) Waiver of administration for conveyed lands
(1) In general
Notwithstanding section 1613(g) of title 43 -
(A) the Secretary of the Interior shall waive administration
of any oil and gas lease to the extent that the lease covers
any land in the Reserve in which all of the subsurface estate
is conveyed to the Arctic Slope Regional Corporation (referred
to in this subsection as the "Corporation");
(B)(i) in a case in which a conveyance of a subsurface estate
described in subparagraph (A) does not include all of the land
covered by the oil and gas lease, the person that owns the
subsurface estate in any particular portion of the land covered
by the lease shall be entitled to all of the revenues reserved
under the lease as to that portion, including, without
limitation, all the royalty payable with respect to oil or gas
produced from or allocated to that portion;
(ii) in a case described in clause (i), the Secretary of the
Interior shall -
(I) segregate the lease into 2 leases, 1 of which shall
cover only the subsurface estate conveyed to the Corporation;
and
(II) waive administration of the lease that covers the
subsurface estate conveyed to the Corporation; and
(iii) the segregation of the lease described in clause
(ii)(I) has no effect on the obligations of the lessee under
either of the resulting leases, including obligations relating
to operations, production, or other circumstances (other than
payment of rentals or royalties); and
(C) nothing in this subsection limits the authority of the
Secretary of the Interior to manage the federally-owned surface
estate within the Reserve.