Offshore Oil and Gas Development:
Legal Framework
Adam Vann
Legislative Attorney
May 2, 2011March 21, 2013
Congressional Research Service
7-5700
www.crs.gov
RL33404
CRS Report for Congress
Prepared for Members and Committees of Congress
Offshore Oil and Gas Development: Legal Framework
Summary
The development of offshore oil, gas, and other mineral resources in the United States is impacted
by a number of interrelated legal regimes, including international, federal, and state laws.
International law provides a framework for establishing national ownership or control of offshore
areas, and domestic federal law mirrors and supplements these standards.
Governance of offshore minerals and regulation of development activities are bifurcated between
state and federal law. Generally, states have primary authority in the three-geographical-mile area
extending from their coasts. The federal government and its comprehensive regulatory regime
govern those minerals located under federal waters, which extend from the states’ offshore
boundaries out to at least 200 nautical miles from the shore. The basis for most federal regulation
is the Outer Continental Shelf Lands Act (OCSLA), which provides a system for offshore oil and
gas exploration, leasing, and ultimate development. Regulations run the gamut from health,
safety, resource conservation, and environmental standards to requirements for production based
royalties and, in some cases, royalty relief and other development incentives.
In 2008, both the President and the 110th Congress removed previously existing moratoria on
offshore leasing on many areas of the outer continental shelf. As of the date of this report,
Congress has not reinstated the appropriations-based moratoria that were not renewed by the 110th
Congress. Other recent legislative and regulatory activity suggests an increased willingness to
allow offshore drilling in the U.S. Outer Continental Shelf. In 2006, Congress passed a measure
that would allow new offshore drilling in the Gulf of Mexico. Areas of the North Aleutian Basin
off the coast of Alaska have also been recently made available for leasing by executive order. The
Most
recently, the five-year plan for offshore leasing for 2007-20122012-2017 adopted by the Minerals Management Service
(MMS, now the Bureau of Ocean Energy Management, Regulation, and Enforcement
(BOEMRE)) in December of 2007 proposed further expansion of offshore leasing. In the 112th
Congress, legislation has been introduced that could accelerate the leasing and permitting process
for offshore oil and gas exploration and production. H.R. 1229 would create new deadlines for
review of certain permits for exploration and production; while H.R. 1230 would require
BOEMRE to lease certain offshore areas for oil and natural gas exploration and production on an
accelerated timeline.
In addition to these
Energy Management (BOEM) scheduled 16 more lease sales in the Gulf of Mexico and off the
coast of Alaska, but did not schedule new lease sales in other areas.
In addition to legislative and regulatory efforts, there has also been significant litigation
related to
offshore oil and gas development. Cases handed down over a number of years have
clarified the
extent of the Secretary of the Interior’s discretion in deciding how leasing and
development are to
be conducted.
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Offshore Oil and Gas Development: Legal Framework
Contents
Ocean Resource Jurisdiction ............................................................................................................ 1
Federal Jurisdiction ................................................................................................................... 2
State Jurisdiction........................................................................................................................ 2
Coastal State Regulation ............................................................................................................ 3
Federal Resources .......................................................................................................................3
Moratoria..... 3
Moratoria ................................................................................................................................... 4
Leasing and Development ......................................................................................................... 5
The Five-Year Plan .............................................................................................................. 6
Leasing .............................................................................................................................. 10
Exploration ........................................................................................................................ 11
Development and Production ............................................................................................ 12
Lease Suspension and Cancellation .................................................................................. 13
Lease Transfers.................................................................................................................. 14
13
Legal Challenges to Offshore Leasing .................................................................................... 16 14
Suits Under the Outer Continental Shelf Lands Act ........................................................ 15.. 16
Suits Under the National Environmental Policy Act ........................................................ 18
Figures
Figure 1. Atlantic, Gulf of Mexico, and Pacific Strategies as of December 1, 2010 ......................8
Figure 2. Alaska Strategy as of December 1, 2010 .................. 19
Figures
Figure 1. 2012-2017 Five-Year Plan Planning Areas: Lower 48 States........................................... 8
Figure 2. 2012-2017 Five-Year Plan Planning Area: Alaska ........................................................... 9
Tables
Table A-1. State Laws That Ban or Regulate Offshore Resource Development: Policy and
Statutes ........................................................................................................................................ 2021
Appendixes
Appendix. State Laws That Ban or Regulate Offshore Resource Development ........................... 2021
Contacts
Author Contact Information .......................................................................................................... 22. 23
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Offshore Oil and Gas Development: Legal Framework
T
he development of offshore oil, gas, and other mineral resources in the United States is
impacted by a number of interrelated legal regimes, including international, federal, and
state laws. International law provides a framework for establishing national ownership or
control of offshore areas, and U.S. domestic law has, in substance, adopted these internationally
recognized principles. U.S. domestic law further defines U.S. ocean resource jurisdiction and
ownership of offshore minerals, dividing regulatory authority and ownership between the states
and the federal government based on the resource’s proximity to the shore. This report explains
the nature of U.S. authority over offshore areas pursuant to international and domestic law. It also
describes the laws, at both the state and federal levels, governing the development of offshore oil
and gas and the litigation that has flowed from development under these legal regimes. Also
included is an outline of recent changes to the authorities regulating offshore development, as
well as a discussion of recent executive action and legislative proposals concerning offshore oil
and natural gas exploration and production.
Ocean Resource Jurisdiction
Under the United Nations Convention on the Law of the Sea,1 coastal nations are entitled to
exercise varying levels of authority over a series of adjacent offshore zones. Nations may claim a
12-nautical-mile territorial sea, over which they may exercise rights comparable to, in most
significant respects, sovereignty. An additional area, termed the contiguous zone and extending
24 nautical miles from the coast (or baseline), may also be claimed. In this area, coastal nations
may regulate, as necessary, to protect the territorial sea and to enforce their customs, fiscal,
immigration, and sanitary laws. Further, in the contiguous zone and an additional area, the
exclusive economic zone (EEZ), coastal nations have sovereign rights to explore, exploit,
conserve, and manage marine resources and assert jurisdiction over:
i.
the establishment and use of artificial islands, installations and structures;
ii.
marine scientific research; and
iii.
the protection and preservation of the marine environment.2
The EEZ extends 200 nautical miles from the baseline from which a nation’s territorial sea is
measured (usually near the coastline). This area overlaps substantially with another offshore area
designation, the continental shelf. International law defines a nation’s continental shelf as the
seabed and subsoil of the submarine areas that extend beyond either “the natural prolongation of
[a coastal nation’s] land territory to the outer edge of the continental margin, or to a distance of
200 nautical miles from the baselines from which the breadth of the territorial sea is measured
where the outer edge of the continental margin does not extend up to that distance.”3 In general,
however, under UNCLOS, a nation’s continental shelf cannot extend beyond 350 nautical miles
from its recognized coastline regardless of submarine geology.4 In this area, as in the EEZ, a
1
United Nations Convention on the Law of the Sea III (entered into force November 16, 1994) (hereinafter UNCLOS).
Id. at Art. 56.1.
3
Id. at Art. 76.1.
4
Id. at Art. 76.4-76.7.
2
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Offshore Oil and Gas Development: Legal Framework
coastal nation may claim “sovereign rights” for the purpose of exploring and exploiting the
natural resources of its continental shelf.5
Federal Jurisdiction
While a signatory to UNCLOS, the United States has not ratified the treaty. Regardless, many of
its provisions are now generally accepted principles of customary international law and, through a
series of Executive Ordersexecutive orders, the United States has claimed offshore zones that are virtually
identical identical
to those described in the treaty. 6 In a series of related cases long before UNCLOS, the
U.S.
Supreme Court confirmed federal control of these offshore areas.7 Federal statutes also refer
to to
these areas and, in some instances, define them as well. Of particular relevance, the primary
federal law governing offshore oil and gas development indicates that it applies to the “outer
Continental Shelf,” which it defines as “all submerged lands lying seaward and outside of the
areas ... [under state control] and of which the subsoil and seabed appertain to the United States
and are subject to its jurisdiction and control.... ”8 Thus, the U.S. Outer Continental Shelf (OCS)
would appear to comprise an area extending at least 200 nautical miles from the official U.S.
coastline and possibly farther where the geological continental shelf extends beyond that point.
The federal government’s legal authority to provide for and to regulate offshore oil and gas
development therefore applies to all areas under U.S. control except where U.S. waters have been
placed under the primary jurisdiction of the states.
State Jurisdiction
In accordance with the federal Submerged Lands Act of 1953 (SLA),9 coastal states are generally
entitled to an area extending three geographical miles10 from their officially recognized coast (or
baseline). 11 In order to accommodate the claims of certain states, the SLA provides for an
extended three-marine-league12 seaward boundary in the Gulf of Mexico if a state can show such
a boundary was provided for by the state’s “constitution or laws prior to or at the time such State
became a member of the Union, or if it has been heretofore approved by Congress.”13 After
enactment of the SLA, the Supreme Court of the United States held that the Gulf coast boundaries
5
Id. at Art. 77.1.
Policy of the United States with Respect to the Natural Resources of the Subsoil and Sea Bed of the Continental Shelf,
Proclamation No. 2667, 10 Fed. Reg. 12,303 (September 28, 1945); Exclusive Economic Zone of the United States of
America, Proclamation No. 5030, 48 Fed. Reg. 10,605 (March 14, 1983); Territorial Sea of the United States of
America, Proclamation No. 5928, 54 Fed. Reg. 777 (December 27, 1988); Contiguous Zone of the United States,
Proclamation No. 7219, 64 Fed. Reg. 48,701 (August 2, 1999).
7
See United States v. Texas, 339 U.S. 707 (1950); United States v. Louisiana, 339 U.S. 699 (1950); United States v.
California, 332 U.S. 19 (1947). In accordance with the Submerged Lands Act, states generally own an offshore area
extending three geographical miles from the shore. Florida (Gulf coast) and Texas, by virtue of their offshore
boundaries prior to admission to the Union, have an extended, three-marine-league offshore boundary. See United
States v. Louisiana, 363 U.S. 1, 36-64 (1960); United States v. Florida, 363 U.S. 121, 121-129 (1960).
8
43 U.S.C. § 1331(a).
9
43 U.S.C. §§ 1301 et seq.
10
A geographical or nautical mile is equal to 6,080.20 feet, as opposed to a statute mile, which is equal to 5,280 feet.
11
43 U.S.C. § 1301(b).
12
A marine league is equal to 18,228.3 feet.
13
43 U.S.C. §§ 1312, 1301(b).
6
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of Florida and Texas do extend to the three-marine-league limit; other Gulf coast states were
unsuccessful in their challenges.14
Within their offshore boundaries, coastal states have “(1) title to and ownership of the lands
beneath navigable waters within the boundaries of the respective states, and (2) the right and
power to manage, administer, lease, develop and use the said lands and natural resources.... ”15
Accordingly, coastal states have the option of developing offshore oil and gas within their waters;
if they choose to develop, they may regulate that development.
Coastal State Regulation
State laws governing oil and gas development in state waters vary significantly from jurisdiction
to jurisdiction. Some state laws are limited to a single paragraph and do not differentiate between
onshore and offshore state resources; other states do not distinguish between oil and gas and other
types of minerals. In addition to regulation aimed specifically at oil and gas development, it
should be noted that a variety of other laws could impact offshore development, such as
environmental and wildlife protection laws and coastal zone management regulation. Finally, in
states that authorize offshore oil and gas leasing, the states decide which offshore areas under
their jurisdiction will be opened for development. The Appendix of this report contains a table of
state laws regulating and sometimes banning offshore mineral development. The table indicates
which state agency is primarily responsible for authorizing oil and gas development and if state
oil and gas leasing is limited to specific areas by statute.
Federal Resources
The primary federal law governing development of oil and gas in federal waters is the Outer
Continental Shelf Lands Act (OCSLA).16 As stated above, the OCSLA codifies federal control of
the OCS, declaring that the submerged lands seaward of the state’s offshore boundaries appertain
to the U.S. federal government. More than simply declaring federal control, the OCSLA has as its
primary purpose “expeditious and orderly development [of OCS resources], subject to
environmental safeguards, in a manner which is consistent with the maintenance of competition
and other national needs.... ”17 To effectuate this purpose, the OCSLA extends application of
federal laws to certain structures and devices located on the OCS;18 provides that the law of
adjacent states will apply to the OCS when it does not conflict with federal law; 19 and,
significantly, provides a comprehensive leasing process for certain OCS mineral resources and a
14
United States v. Louisiana, 363 U.S. 1, 66 (1960) (“[P]ursuant to the Annexation Resolution of 1845, Texas’
maritime boundary was established at three leagues from its coast for domestic purposes.... Accordingly, Texas is
entitled to a grant of three leagues from her coast under the Submerged Lands Act.”); United States v. Florida, 363 U.S.
121, 129 (1960) (“We hold that the Submerged Lands Act grants Florida a three-marine-league belt of land under the
Gulf, seaward from its coastline, as described in Florida’s 1868 Constitution.”).
15
43 U.S.C. § 1311.
16
43 U.S.C. §§ 1331-1356.
17
43 U.S.C. § 1332(3).
18
43 U.S.C. § 1333. The provision also expressly makes the Longshore and Harbor Workers’ Compensation Act, the
National Labor Relations Act, and the Rivers and Harbors Act applicable on the OCS, although application is limited in
some instances.
19
Id.
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Offshore Oil and Gas Development: Legal Framework
system for collecting and distributing royalties from the sale of these federal mineral resources.20
The OCSLA thus provides comprehensive regulation of the development of OCS oil and gas
resources.
Moratoria
In general, the OCSLA requires the federal government to prepare, revise, and maintain an oil and
gas leasing program. Until recently, however, manyHowever, some offshore areas werehave been withdrawn from
disposition under
the OCSLA pursuant to two broad categories of moratoria applicable to OCS oil
and gas leasing:
those imposed by the President under authority granted by the OCSLA, 21 and
those imposed
directly by Congress, which have most often taken the form of limitations on the
use of
appropriated funds.22
Appropriations-based congressional moratoria first appeared in the appropriations legislation for
FY1982. The language of the appropriations legislation barred the expenditure of funds by the
Department of the Interior (DOI) for leasing and related activities in certain areas in the OCS.23
Similar language appeared in every DOI appropriations bill through FY2008. However, starting
with FY2009, Congress has not included this language in appropriations legislation. As a result,
the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE (BOEM), the agency
within the Department of the
Interior that administers and regulates the OCS oil and gas leasing the OCS exploration and production
program, is free to use
appropriated funds to fund all leasing, preleasing, and related activities in
most OCS areas (where
such activities are not prohibited by other legislation). 24 Language used in
the legislation that
funds DOI in the future will determine whether, and in what form, budgetbasedbudget-based restrictions on
OCS leasing might return.
In addition to the congressional moratoria, for most of the last 20 years there have been moratoria
issued by the executive branch on offshore drilling in many areas. The first of these was issued by
President George H. W. Bush on June 26, 1990.25 This memorandum, issued pursuant to the
authority vested in the President under Section 12(a) of the OCSLA, placed under presidential
moratoria those areas already under an appropriations-based moratorium pursuant to P.L. 105-83,
the Interior Appropriations legislation in place at that time. That appropriations-based moratorium
prohibited “leasing and related activities” in the areas off the coast of California, Oregon, and
Washington, and the North Atlantic and certain portions of the eastern Gulf of Mexico. The
legislation further prohibited leasing, preleasing, and related activities in the North Aleutian
basin, other areas of the eastern Gulf of Mexico, and the Mid- and South Atlantic. The
presidential moratorium was extended by President Bill Clinton by memorandum dated June 12,
1998.26
20
43 U.S.C. §§
20
43 U.S.C. §§1331(a), 1332, 1333(a)(1).
43 U.S.C. § 1341(a).
22
See, e.g., P.L. 108-447, §§ 107-109.
23
P.L. 97-100, § 109.
24
BOEMRE was formerly calledBOEM, the Bureau of Safety and Environmental Enforcement (BSEE), and the Office of Natural Resources Revenue
(ONRR) are successors to the agency formerly known the Minerals Management Service (MMS). MMS was renamed
the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) pursuant to Secretarial Order
3302, issued on June 18, 2010. The jurisdiction and responsibilities of BOEMRE were subsequently divided among the
newly created BOEM, BSEE, and ONRR in a second reorganization phase completed on October 1, 2011. For further
details about this reorganization, see http://www.boem.gov/About-BOEM/Reorganization/Reorganization.aspx.
25
Statement on Outer Continental Shelf Oil and Gas Development, 26 Weekly Comp. Pres. Doc. 1006 (June 26, 1990. It was renamed pursuant to Secretarial Order
3302, issued on June 18, 2010.
25
Statement on Outer Continental Shelf Oil and Gas Development, 26 Weekly Comp. Pres. Doc. 1006 (June 26, 1990).
26
Memorandum on Withdrawal of Certain Areas of the United States Outer Continental Shelf from Leasing
Disposition, 34 Weekly Comp. Pres. Doc. 1111 (June 12, 1998).
21
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presidential moratorium was extended by President Bill Clinton by memorandum dated June 12,
1998.26
On July 14, 2008, President George W. Bush issued an executive memorandum that rescinded the
executive moratorium on offshore drilling created by the 1990 order of President George H. W.
Bush and renewed by President Bill Clinton in 1998.27 The memorandum revised the language of
the previous memorandum so that only areas designated as marine sanctuaries are withdrawn
from disposition. The withdrawal has no expiration date.
The July 14, 2008, memorandum, taken together with the expiration of the congressional
moratorium, has the effect of opening up areas of the OCS for consideration for exploration and
production where such activities had not previously been allowed. OCS acreage not protected by
other statutory measures can now be considered by BOEMREBOEM for leasing, as described infra.
However, it is important to note that other prohibitions and moratoria on development on
exploration and production in certain areas of the OCS exist. For example, the Gulf of Mexico
Energy Security Act of 2006, enacted as part of H.R. 6111, the Omnibus Tax Relief and Health
Care Act of 2006,28 created a new congressional moratorium over leasing in portions of the OCS
that do not depend on annual renewal in appropriations legislation. The 2006 legislation explicitly
permits oil and gas leasing in areas of the Gulf of Mexico, 29 but also established a new
moratorium on preleasing, leasing, and related activity in the eastern Gulf of Mexico through
June 30, 2022.30 This moratorium is independent of any appropriations-based congressional
moratorium, and thus would continue even if Congress reinstated the annual appropriations-based
moratorium.
Leasing and Development
In 1978, the OCSLA was significantly amended so as to increase the role of the affected coastal
states in the leasing process.31 The amendments also revised the bidding process and leasing
procedures, set stricter criteria to guide the environmental review process, and established new
safety and environmental standards to govern drilling operations.
The OCS leasing process consists of four distinct stages: (1) the five-year planning program; 32
(2) preleasing activity and the lease sale;33 (3) exploration;34 and (4) development and
production.35 This process has been garneringgarnered significant attention in the 112th Congress, where
legislation has been introduced that could legislation
was introduced to accelerate the leasing and permitting process for
offshore oil and gas exploration and production. H.R. 1229, introduced on March 20, 2011, would
create new deadlines for review of certain permits for exploration and production, while H.R.
1230, introduced the same day, would require BOEMRE to lease certain offshore areas for oil and
natural gas exploration and production on an accelerated timeline. Given the interest in offshore
offshore oil and gas
26
Memorandum on Withdrawal of Certain Areas of the United States Outer Continental Shelf from Leasing
Disposition, 34 Weekly Comp. Pres. Doc. 1111 (June 12, 1998).
27
Memorandum on Modification of the Withdrawal of Certain Areas of the United States Outer Continental Shelf from
Leasing Disposition, 44 Weekly Comp. Pres. Doc. 986 (July 14, 2008).
28
P.L. 109-432.
29
Id. at § 103.
30
P.L. 109-432, § 104(a).
31
P.L. 95-372.
32
43 U.S.C. § 1344.
33
43 U.S.C. §§ 1337, 1345.
34
43 U.S.C. § 1340.
35
43 U.S.C. § 1351.
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leasing and permitting in the current Congress, it is worthwhile to explore the details of the
processexploration and production. H.R. 1229 would have created new deadlines for review of certain
permits for exploration and production, while H.R. 1230, introduced the same day, would have
required BOEM to lease certain offshore areas for oil and natural gas exploration and production
on an accelerated timeline. Both bills were passed by the House of Representatives, but were not
passed by the Senate.
The Five-Year Plan
The Secretary of the Interior is required to prepare a five-year leasing plan, subject to annual
revisions, that governs any offshore leasing that takes place during the period of plan coverage. 36
Each five-year plan establishes a schedule of proposed lease sales, providing the timing, size, and
general location of the leasing activities. This plan is to be based on multiple considerations,
including the Secretary’s determination as to what will best meet national energy needs for the
five-year period and the extent of potential economic, social, and environmental impacts
associated with development. 37
During the development of the plan, the Secretary must solicit and consider comments from the
governors of affected states, and at least 60 days prior to publication of the plan in the Federal
Register, the plan is to be submitted to the governor of each affected state for further comments.38
After publication, the Attorney General is also authorized to submit comments regarding potential
effects on competition.39 Subsequently, at least 60 days prior to its approval, the plan is to be
submitted to Congress and the President, along with any received comments and an explanation
for the rejection of any comment.40 Once the leasing plan is approved, areas included in the plan
are to be available for leasing, consistent with the terms of the plan. 41
The development of the five-year plan is considered a major federal action significantly affecting
the quality of the human environment and as such requires preparation of an environmental41
36
43 U.S.C. § 1344(a), (e).
Id.
38
“Affected state” is defined in the act as any state:
(1) the laws of which are declared, pursuant to section 1333(a)(2) of this title, to be the law of the
United States for the portion of the outer Continental Shelf on which such activity is, or is proposed
to be, conducted;
(2) which is, or is proposed to be, directly connected by transportation facilities to any artificial
island or structure referred to in section 1333(a)(1) of this title;
(3) which is receiving, or in accordance with the proposed activity will receive, oil for processing,
refining, or transshipment which was extracted from the outer Continental Shelf and transported
directly to such State by means of vessels or by a combination of means including vessels;
(4) which is designated by the Secretary as a State in which there is a substantial probability of
significant impact on or damage to the coastal, marine, or human environment, or a State in which
there will be significant changes in the social, governmental, or economic infrastructure, resulting
from the exploration, development, and production of oil and gas anywhere on the outer
Continental Shelf; or
(5) in which the Secretary finds that because of such activity there is, or will be, a significant risk of
serious damage, due to factors such as prevailing winds and currents, to the marine or coastal
environment in the event of any oil spill, blowout, or release of oil or gas from vessels, pipelines, or
other transshipment facilities....
43 U.S.C. § 1331(f).
39
43 U.S.C. § 1344(d).
40
Id.; see also 30 C.F.R. §§ 256.16-256.17556.16-556.20.
41
43 U.S.C. § 1344(d).
37
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The development of the five-year plan is considered a major federal action significantly affecting
the quality of the human environment and as such requires preparation of an environmental
impact statement (EIS) under the National Environmental Policy Act (NEPA).42 Thus, the NEPA
review process complements and informs the preparation of a five-year plan under the OCSLA.43
The current Five-Year Plan took effect on July 1, 2007.44 The Plan contemplated leasing in areas
off the coast of Alaska and in the Central and Western Gulf of Mexico, as well as the possibility
of leasing in the mid-Atlantic Ocean Planning Area off the coast of Virginia. In response to calls
to expand offshore exploration and production leasing, in July of 2008 MMS took the
unprecedented step of initiating a new Five-Year Plan that is expected to commence before the
expiration of the previous plan. BOEMRE published notice and a request for comments in the
Federal Register regarding a proposed new Five-Year Plan for mid-2010 to mid-2015 that would
have replaced the existing Plan. 45 The notice sought “comments on areas that ... were removed
from Presidential Withdrawal on July 14, 2008.”46 However, those efforts appear to have stalled.
Instead, the current Administration is focusing on expanding offshore exploration and production
efforts under the Five-Year Plan that will cover mid-2012 to mid-2017.
The initial scoping evaluation for the 2012-2017 Five-Year Plan included eight different OCS
areas, some of which are not currently available for leasing for purposes of oil and natural gas
exploration and production. 47 This included areas in the Beaufort Sea, Chukchi Sea, and Cook
Inlet in Alaska, the Western, Central and Eastern Gulf of Mexico, and the South Atlantic and MidAtlantic Ocean. 48 However, on December 1, 2010, an updated strategy was announced that
removed areas in the Eastern Gulf of Mexico and the South Atlantic and Mid-Atlantic Ocean
from consideration for leasing under the 2012-2017 Five-Year Plan. The scope of existing leasing
activity, as well as areas still under consideration for leasing pursuant to the 2012-2017 Five-Year
Plan, is depicted in Figure 1 and Figure 2 below.
42
42 U.S.C. § August 27, 2012.44 The Plan “includes fifteen
potential lease sales in six planning areas—the Western and Central Gulf of Mexico (GOM),
the portion of the Eastern GOM not currently under Congressional moratorium, and the
Chukchi Sea, Beaufort Sea and Cook Inlet planning areas offshore Alaska.”45 The Planning
Areas for the 2012-2017 Five-Year Plan, as well as areas restricted for leasing activity under
executive or congressional moratoria and areas BOEM deemed to have “low resource potential,”
are depicted in Figure 1 and Figure 2 below.
42
42 U.S.C. §4332(2)(C). In general, NEPA and the regulations that govern its administration require various levels of
environmental analysis depending on the circumstances and the type of federal action contemplated. Certain actions
that have been determined to have little or no environmental effect are exempted from preparation of NEPA documents
entirely and are commonly referred to as “categorical exclusions.” In situations where a categorical exclusion does not
apply, an intermediate level of review, an environmental assessment (EA), may be required. If, based on the EA, the
agency finds that an action will not have a significant effect on the environment, the agency issues a “finding of no
significant impact” (FONSI), thus terminating the NEPA review process. On the other hand, major federal actions that
are found to significantly affect the environment require the preparation of an environmental impact statement (EIS), a
document offering detailed analysis of the project as proposed as well as other options, including taking no action at all.
NEPA does not direct an agency to choose any particular course of action; the primary purpose of an EIS is to ensure
that environmental consequences are considered. For additional information, see CRS Report RS20621, Overview of
National Environmental Policy Act (NEPA) Requirements, by Kristina Alexander.
43
See Natural Resources Defense Council v. Hodel, 865 F.2d 288, 310 (D.C. Cir.1988).
44
The Plan, as revised by Secretary of the Interior Ken Salazar on March 31, 2010, is available on BOEMRE’s website
at http://www.boemre.gov/5-year/PDFs/PRP2007-2012.pdf.
45
73 Fed. Reg. 45065 (August 1, 2008). The notice and request for comment was published by MMS, the predecessor
to BOEMRE.
46
Id.
47
Notice of Intent to Prepare and Scope an Environmental Impact Statement (EIS) for the Outer Continental Shelf
(OCS) Oil and Gas Leasing Program for 2012-2017, 75 Fed. Reg. 16828 (April 2, 2010).
48
Id.
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Figure 1. Atlantic, Gulf of Mexico, and Pacific Strategies as of December 1, 2010
Department of the Interior Outer Continental Shelf Oil and Gas Updated Strategy
Source: http://www.doi.gov/news/pressreleases/loader.cfm?csModule=security/getfile&PageID=78990. Adapted by CRS.
CRS-8
Figure 2. Alaska Strategy as of December 1, 2010
Department of the Interior Outer Continental Shelf Oil and Gas Updated Strategy
Source: http://www.doi.gov/news/pressreleases/loader.cfm?csModule=security/getfile&PageID=78988. Adapted by CRS.
CRS-Documents related to the current Five-Year Plan are available at the BOEM website at http://www.boem.gov/Oiland-Gas-Energy-Program/Leasing/Five-Year-Program/2012-2017/Five-Year-Program.aspx.
45
Proposed Final Outer Continental Shelf Oil & Gas Leasing Program 2012-2017, at 1. Document available at
http://boem.gov/uploadedFiles/BOEM/Oil_and_Gas_Energy_Program/Leasing/Five_Year_Program/20122017_Five_Year_Program/PFP%2012-17.pdf.
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Offshore Oil and Gas Development: Legal Framework
Figure 1. 2012-2017 Five-Year Plan Planning Areas: Lower 48 States
Source: Bureau of Ocean Energy Management, http://www.boem.gov/uploadedFiles/BOEM/
Oil_and_Gas_Energy_Program/Leasing/Five_Year_Program/2012-2017/Program_Area_Maps/
Lower%2048%20State%20Planning%20Areas%20with%20restrictions.pdf.
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Figure 2. 2012-2017 Five-Year Plan Planning Area: Alaska
Source: Bureau of Ocean Energy Management, http://www.boem.gov/uploadedFiles/BOEM/
Oil_and_Gas_Energy_Program/Leasing/Five_Year_Program/2012-2017/Program_Area_Maps/
Alaska%20Planning%20Areas%20with%20restrictions.pdf.
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Leasing
The lease sale process involves multiple steps as well. Leasing decisions are impacted by a
variety of federal laws; however, it is section 8 of the OCSLA and its implementing regulations
that establish the mechanics of the leasing process. 4946
The process begins when the Director of BOEMREBOEM publishes a call for information and
nominations nominations
regarding potential lease areas. The Director is authorized to receive and consider
these various
expressions of interest in lease areas and comments on which areas should receive
special special
concern and analysis.5047 The Director is then to consider all available information and
perform perform
environmental analysis under NEPA in crafting both a list of areas recommended for
leasing and
any proposed lease stipulations. 5148 This list is submitted to the Secretary of the Interior
and, upon
the Secretary’s approval, published in the Federal Register and submitted to the
governors of
potentially affected states.5249
The OCSLA and its regulations authorize the governor of an affected state and the executive of
any local government within an affected state to submit to the Secretary any recommendations
concerning the size, time, or location53location50 of a proposed lease sale within 60 days after notice of the
lease sale. 5451 The Secretary must accept the governor’s recommendations (and has discretion to
accept a local government executive’s recommendations) if the Secretary determines that the
recommendations reasonably balance the national interest and the well-being of the citizens of an
affected state.5552
The Director of BOEMREBOEM publishes the approved list of lease sale offerings in the Federal
Register Register
(and other publications) at least 30 days prior to the date of the sale.5653 This notice must
describe describe
the areas subject to the sale and any stipulations, terms, and conditions of the sale.57 The
bidding 54 The bidding
is to occur under conditions described in the notice and must be consistent with certain
baseline baseline
requirements established in the OCSLA. 5855
Although the statute establishes base requirements for the competitive bidding process and sets
forth a variety of possible bid formats,5956 some of these requirements are subject to modification at
the discretion of the Secretary.6057 Before the acceptance of bids, the Attorney General is also
4946
43 U.S.C. § 1337.
30 C.F.R. §§ 256556.23, 256556.25.
5148
30 C.F.R. § 256556.26.
5249
30 C.F.R. § 256556.29.
50
53
It should be noted that the OCSLA establishes certain minimum requirements applicable to these subjects. For
instance, lease tracts are, in general, to be limited to 5,760 acres, unless the Secretary determines that a larger area is
necessary to comprise a “reasonable economic production unit.... ” Id. at § 1337(b). The law and its implementing
regulations also set the range of initial lease terms and baseline conditions for lease renewal.
5451
43 U.S.C. § 1345(a); see also 30 C.F.R. § 256556.31.
5552
43 U.S.C. § 1345(c).
5653
43 U.S.C. § 1337(l).
5754
30 C.F.R. § 256556.32(1).
5855
43 U.S.C. § 1337.
5956
43 U.S.C. § 1337(a)(1)(A)-(H). For example, bids may be on the basis of “cash bonus bid with a royalty at not less
than 12 ½ per centum fixed by the Secretary in amount or value of the production saved, removed, or sold.... ” See also
30 C.F.R. §§ 256.35-256.47.
60556.35-556.47.
57
43 U.S.C. §§ 1337(a)(1)-(3), (8)-(9).
47
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authorized to review proposed lease sales to analyze any potential effects on competition, and
may subsequently recommend action to the Secretary of the Interior as may be necessary to
prevent violation of antitrust laws.6158 The Secretary is not bound by the Attorney General’s
recommendation, and likewise, the antitrust review process does not affect private rights of action
under antitrust laws or otherwise restrict the powers of the Attorney General or any other federal
agency under other law.6259 Assuming compliance with these bidding requirements, the Secretary
may grant a lease to the highest bidder, although deviation from this standard may occur under
some circumstances.6360
In addition, the OCSLA prescribes many minimum conditions that all lease instruments must
contain. The statute supplies generally applicable minimum royalty or net profit share rates, as
necessitated by the bidding format adopted, subject, under certain conditions, to secretarial
modification. Several provisions authorize royalty reductions or suspensions. Royalty rates or net
profit shares may be reduced below the general minimums or eliminated to promote increased
production.6461 For leases located in “the Western and Central Planning Areas of the Gulf of
Mexico and the portion of the Eastern Planning Area of the Gulf of Mexico encompassing whole
lease blocks lying west of 87 degrees, 30 minutes West longitude and in the Planning Areas
offshore Alaska,” a broader authority is also provided, allowing the Secretary, with the lessee’s
consent, to make “other modifications” to royalty or profit share requirements to encourage
increased production.6562 Royalties may also be suspended under certain conditions by BOEMREBOEM
pursuant to the Outer Continental Shelf Deep Water Royalty Relief Act, discussed infra.
The OCSLA generally requires successful bidders to furnish a variety of up-front payments and
performance bonds upon being granted a lease.6663 Additional provisions require that leases provide
that certain amounts of production be sold to small or independent refiners. Further, leases must
contain the conditions stated in the sale notice and provide for suspension or cancellation of the
lease in certain circumstances.6764 Finally, the law indicates that a lease entitles the lessee to explore
for, develop, and produce oil and gas, conditioned on applicable due diligence requirements and
the approval of a development and production plan, discussed below.6865
Exploration
Exploration for oil and gas pursuant to an OCSLA lease must comply with an approved
exploration plan. 6966 Detailed information and analysis must accompany the submission of an
exploration plan, and, upon receipt of a complete proposed plan, the relevant BOEMREBOEM regional
6158
43 U.S.C. § 1337(c); 30 C.F.R. § 256556.47(d).
43 U.S.C. § 1337(c), (f).
6360
Restrictions include a statutory prohibition on issuance of a new lease to a bidder that is not meeting applicable due
diligence requirements with respect to the bidder’s other leases. See 43 U.S.C. § 1337(d).
6461
Id. at § 1337(a)(3).
6562
43 U.S.C. § 1337(a)(3)(B).
6663
43 U.S.C. § 1337(a)(7); 30 C.F.R. §§ 256.52-256.59.
67556.52-556.59.
64
43 U.S.C. § 1337.
6865
43 U.S.C. § 1337(b)(4).
6966
43 U.S.C. § 1340(b), (c).
6259
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supervisor is required to submit the plan to the governor of an affected state and the state’s
Coastal Zone Management agency.7067
Under the Coastal Zone Management Act, federal actions and federally permitted projects,
including those in federal waters, must be submitted for state review. 7168 The purpose of this review
is to ensure consistency with state coastal zone management programs as contemplated by the
federal law. When a state determines that a lessee’s plan is inconsistent with its coastal zone
management program, the lessee must either reform its plan to accommodate those objections and
resubmit it for BOEMREBOEM and state approval or succeed in appealing the state’s determination to
the the
Secretary of Commerce. 7269 Simultaneously, the BOEMREBOEM regional supervisor is to analyze the
environmental impacts of the proposed exploration activities under NEPA; however, regulations
prescribe that BOEMREBOEM complete its action on the plan review within 30 days. Hence, extensive
environmental review at this stage may be constrained or rely heavily upon previously prepared
NEPA documents.7370 If the regional supervisor disapproves the proposed exploration plan, the
lessee is entitled to a list of necessary modifications and may resubmit the plan to address those
issues.74 Once a71 Even after an exploration plan has been approved, drilling associated with exploration
remains subject to
the relevant BOEMREBOEM district supervisor’s approval of an application for a permit to drill, which
involves analysis of even more specific drilling plans
to drill. This approval hinges on a more detailed review of specific drilling plan filed by the
lessee.
Development and Production
While exploration often will involve drilling wells, the scale of such activities will significantly
increase during the development and production phase. Accordingly, additional regulatory review
and environmental analysis are required by the OCSLA before this stage begins.7572 Operators are
required to submit a Development and Production Plan for areas where significant development
has not occurred before76before73 or a less extensive Development Operations Coordination Document for
those areas, such as certain portions of the Western Gulf of Mexico, where significant activities
have already taken place.7774 The information required to accompany submission of these
documents is similar to that required at the exploration phase, but must address the larger scale of
operations.7875 As with the processes outlined above, the submission of these documents
complements the department’s and BOEMRE’s environmental analysis under NEPA. It may not
always be necessary to prepare
a new EIS at this stage, and environmental analysis may be tied to
previously prepared NEPA
documents.7976 In addition, affected states are allowed, under the
OCSLA, to submit comments on
proposed Development and Production Plans and to review
these plans for consistency with state Coastal Zone Management Programs. 80 Additionally, if the
70
67
30 C.F.R. §§ 250550.226, 250550.227, 250550.232, 250550.235.
16 U.S.C. § 1456(c).
7269
30 C.F.R. § 250550.235.
7370
30 C.F.R. § 250550.232(c).
7471
30 C.F.R. §§ 250550.231-250.233.
7572
43 U.S.C. § 1351.
7673
30 C.F.R. § 250550.201.
7774
Id.
7875
30 C.F.R. §§ 250.24-250.262.
71
79550.24-550.262.
76
The regulations indicate that “at least once in each planning area (other than the western and central Gulf of Mexico
planning areas) we [BOEMREBOEM] will prepare an environmental impact statement (EIS).... ” 30 C.F.R. § 250.269.
80
30 C.F.R. § 250.267.550.269.
68
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coastal zone management programs.77 Additionally, if the drilling project involves “non-conventionalnonconventional production or completion technology, regardless of
water depth,” applicants must
also submit a Deepwater Operations Plan (DWOP) and a
Conceptual Plan.8178 These additional
documents allow BOEMREBOEM to review the engineering,
safety, and environmental impacts associated
with these technologies. 8279
As with the exploration stage, actual drilling requires approval of an Application for Permit to
Drill (APD). 8380 An APD focuses on the specifics of particular wells and associated machinery.
Thus, an application must include a plat indicating the well’s proposed location, information
regarding the various design elements of the proposed well, and a drilling prognosis, among other
things.8481
Lease Suspension and Cancellation
The OCSLA authorizes the Secretary of the Interior to promulgate regulations on lease
suspension and cancellation.8582 The Secretary’s discretion over the use of these authorities is
specifically limited to a set number of circumstances established by the OCSLA. These
circumstances are described below.
Suspension of otherwise authorized OCS activities may generally occur at the request of a lessee
or at the direction of the relevant BOEMREBOEM Regional Supervisor, given appropriate
justification.86 83
Under the statute, a lease may be suspended (1) when it is in the national interest;
(2) to facilitate
proper development of a lease; (3) to allow for the construction or negotiation for
use of
transportation facilities; or (4) when there is “a threat of serious, irreparable, or immediate
harm harm
or damage to life (including fish and other aquatic life), to property, to any mineral deposits
(in
areas leased or not leased), or to the marine, coastal, or human environment....”87 The
regulations ”84 The regulations
also indicate that leases may be suspended for other reasons, including (1) when
necessary to
comply with judicial decrees; (2) to allow for the installation of safety or
environmental environmental
protection equipment; (3) to carry out NEPA or other environmental review
requirements; or (4)
to allow for “inordinate delays encountered in obtaining required permits or
consents....”88 ”85
Whenever suspension occurs, the OCSLA generally requires that the term of an
affected lease or
permit be extended by a length of time equal to the period of suspension.89 This
extension 86 This extension
requirement does not apply when the suspension results from a lessee’s “gross
negligence or
willful violation of such lease or permit, or of regulations issued with respect to
such lease or
permit....”90
81 ”87
77
30 C.F.R. §§ 250.286, 250.287.
30 C.F.R. §§ 250.289, 250.292.
83
30 C.F.R. §§ 250.410-250.469.
84
30 C.F.R. § 250.411.
85
43 U.S.C. § 1334; see also 30 C.F.R. §§ 250.168-250.185.
86
30 C.F.R. §§ 250.168, 250.171-250.175.
87
43 U.S.C. § 1334(a)(1).
88
30 C.F.R. § 250.173-250.175.
89
43 U.S.C. § 1334(a)(1).
90
Id.
82550.267.
30 C.F.R. §§550.286, 550.287.
79
30 C.F.R. §§550.289, 550.292.
80
30 C.F.R. §§550.410-550.469.
81
30 C.F.R. §550.411.
82
43 U.S.C. §1334; see also 30 C.F.R. §§550.168-550.185.
83
30 C.F.R. §§550.168, 550.171-550.175.
84
43 U.S.C. §1334(a)(1).
85
30 C.F.R. §550.173-550.175.
86
43 U.S.C. §1334(a)(1).
87
Id.
78
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If a suspension period reaches five years,9188 the Secretary may cancel a lease upon holding a
hearing and finding that (1) continued activity pursuant to a lease or permit would “probably
cause serious harm or damage to life (including fish and other aquatic life), to property, to any
mineral (in areas leased or not leased), to the national security or defense, or to the marine,
coastal, or human environment”; (2) “the threat of harm or damage will not disappear or decrease
to an acceptable extent within a reasonable period of time”; and (3) “the advantages of
cancellation outweigh the advantages of continuing such lease or permit in force....”92 ”89
Upon cancellation, the OCSLA entitles lessees to certain damages. The statute calculates damages
at the lesser of (1) the fair value of the canceled rights on the date of cancellation93cancellation90 or (2) the
excess of the consideration paid for the lease, plus all of the lessee’s exploration- or developmentrelated expenditures, plus interest, over the lessee’s revenues from the lease. 9491
The OCSLA also indicates that the “continuance in effect” of any lease is subject to a lessee’s
compliance with the regulations issued pursuant to the OCSLA, and failure to comply with the
provisions of the OCSLA, an applicable lease, or the regulations may authorize the Secretary to
cancel a lease as well.9592 Under these circumstances, a nonproducing lease can be canceled if the
Secretary sends notice by registered mail to the lease owner and the noncompliance with the lease
or regulations continues for a period of 30 days after the mailing.9693 Similar noncompliance by the
owner of a producing lease can result in cancellation after an appropriate proceeding in any
United States district court with jurisdiction as provided for under the OCSLA.97
Legal Challenges to Offshore Leasing
Multiple statutes govern aspects of offshore oil and gas development, and therefore, may give rise
to legal challenges. Certainly, violations of the Marine Mammal Protection Act,98 Endangered
Species Act, 99 and other environmental laws have provided mechanisms for challenging actions
associated with offshore oil and gas production in the past.100 Of primary interest here, however,
are legal challenges to agency action with respect to the planning, leasing, exploration, and
development phases under the procedures mandated by the OCSLA itself and the related
environmental review required by the National Environmental Policy Act.
91
43 U.S.C. § 94
Lease Transfers
The OCSLA also provides guidance regarding the transfer of offshore oil and gas exploration and
production leases. Section 5(b) of the OCSLA states that “[t]he issuance and continuance in effect
of any lease, or of any assignment or other transfer of any lease, under the provisions of this Act
shall be conditioned upon compliance with regulations issued under this Act.”95 The OCSLA
further provides that “[n]o lease issued under this Act may be sold, exchanged, assigned, or
otherwise transferred except with the approval of the Secretary [of the Interior, whose authority is
exercised by BOEM]. Prior to any such approval, the Secretary shall consult with and give due
consideration to the views of the Attorney General.”96 These two requirements—of continued
88
43 U.S.C. §1334(a)(2)(B). The requisite suspension period may be reduced upon the request of the lessee.
43 U.S.C. § 1334(a)(2)(A)(i)-(iii). For regulations implementing the cancellation provisions, see 30 C.F.R.
§§ 250550.180-250550.185.
9390
The statute requires “fair value” to take account of “anticipated revenues from the lease and anticipated costs,
including costs of compliance with all applicable regulations and operating orders, liability for cleanup costs or
damages, or both, in the case of an oil spill, and all other costs reasonably anticipated on the lease.... ” 43 U.S.C.
§ 1334(a)(2)(C).
9491
Exceptions from this method of calculation are carved out for leases issued before September 18, 1978, and for joint
leases that are canceled due to the failure of one or more partners to exercise due diligence. 43 U.S.C.
§ 1334(a)(2)(C)(ii)(I), (II); see also 30 C.F.R. §§ 250550.184-250550.185.
9592
43 U.S.C. § 1334(b).
96
43 U.S.C. § 1334(c).
97
43 U.S.C. § 1334(d).
98
16 U.S.C. §§ 1361-1423.
99
16 U.S.C. §§ 1531-1544.
100
Village of Akutan v. Hodel, 869 F.2d 1185 (9th Cir. 1988); Village of False Pass v. Clark, 733 F.2d 605 (9th Cir.
1984); North Slope Borough v. Andrus, 642 F.2d 589 (D.C. Cir. 1980); Conservation Law Foundation v. Andrus, 623
(continued...)
92
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Suits Under the Outer Continental Shelf Lands Act
The Administrative Procedure Act provides for judicial review of agency action alleged to be in
violation of federal law, including the OCSLA, its implementing regulations, and the terms of any
permit or lease. 1011334(b).
93
Id. at §1334(c).
94
Id. at §1334(d).
95
Id. at §1334(b).
96
Id. at §1337(e).
89
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compliance with the OCSLA and the regulations issued pursuant to it, and of obtaining BOEM
approval prior to transfer—are the only restrictions placed upon transfers by the OCSLA.
The terms of the lease itself create obligations for offshore oil and natural gas exploration and
production lessees. BOEM employs a form lease, so all lessees are bound by virtually identical
lease terms and conditions. With respect to transfers, Section 20 of the form lease provides that
“[t]he lessee shall file for approval for with the appropriate field office of the Bureau of Ocean
Energy Management, any instrument of assignment or other transfer of this lease, or any interest
therein, in accordance with applicable regulations.”97 This filing requirement is the only new
restriction or condition placed on transfers by the terms of the lease. However, the regulations
issued by the agency pursuant to its OCSLA authority set forth more detailed requirements
applicable to transfers of all or part of the lease.
Subpart J of 30 C.F.R. Part 556 sets forth the regulatory requirements adopted by BOEM for the
assignment or transfer of offshore oil and natural gas exploration and production leases. Section
556.62(a) lists the requirements for recipients of transferred leases in whole or in part. The
regulation states that BOEM will “approve the assignment to you of the ownership of the record
title to a lease or any undivided interest in a lease, or an officially designated subdivision of the
lease, only if: (1) [y]ou qualify to hold a lease under §256.35 (2); [y]ou provide the bond
coverage required under Subpart I of this part; and (3) [t]he Regional Director [of BOEM]
approves the assignment.”
The criteria cited in this regulation trigger further regulatory obligations. The requirement that the
transferee be qualified to hold a lease under 30 C.F.R. Section 556.35(b) means that the transferee
must be either (i) citizens or nationals of the United States; (ii) aliens lawfully admitted for
permanent residence in the United States; (iii) corporations organized under the laws of the
United States or any state therein (including territories and the District of Columbia); or (iv)
associations of such citizens, nationals, resident aliens, or corporations.98 Only these parties may
be assigned all or part of an offshore lease. Similarly, the regulations require that the transferee
satisfy the regulatory bonding requirements,99 which mandate the satisfaction of several
obligations at varying stages of the exploration and production process. For example, bonding
requirements apply to lessees, and therefore transferees, if various activities are undertaken
pursuant to the lease. Submission of a proposed Exploration Plan for approval triggers a new set
of bonding requirements,100 as does submission of a Development and Production Plan or
Development Operations Coordination Document.101 The amount of bonding necessary can be
adjusted by the Regional Director based on a variety of circumstances.102 The regulations also
provide a number of other requirements applicable to the bonds themselves, including procedures
for lapses in bond coverage103 or upon termination of the lease,104 or for the use of alternative
financial instruments to satisfy the bonding requirements.105 All of these bonding requirements
97
Form BOEM-2005 (October 2011).
30 C.F.R. §556.35(b)
99
Id. at §556.62(a)(2).
100
Id. at §556.53(a).
101
Id. at §556.53 (b).
102
Id. at §556.53 (c)-(f).
103
Id. at §556.55.
104
Id. at §556.58.
105
Id. at §556.52 (f)-(g), §256.56, §256.57.
98
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are applicable to transferees, although as noted previously, in the case of partial transfers another
record title owner of the lease may also satisfy the requirements.
The final criterion for a transfer is the approval of the transaction by the BOEM Regional
Director. 30 C.F.R. Section 556.64 sets forth the procedural requirements for requesting approval
of a transfer from the Regional Director. The regulations also require consultation with the
Attorney General prior to approval of the transfer, although BOEM may act on the transfer if the
Attorney General does not respond to a request for consultation within 30 days.106 While a
separate instrument of assignment must be filed for each lease transfer, if there are multiple
transfers to the same person, association, or corporation, one request for approval of the transfers
is sufficient.107
The regulations also offer some clarification regarding the procedures for partial transfers. When
all of the record title for only a portion of the acreage in a lease is transferred, the transferred and
retained portions are segregated and considered to be separate and distinct leases by BOEM,
making the transferee a lessee from the government’s perspective, with the lease being
maintained under separate records and all provisions of the lease being applicable to the
transferee, including rental requirements, royalty rights, and term of the lease.108
Legal Challenges to Offshore Leasing
Multiple statutes govern aspects of offshore oil and gas development, and therefore, may give rise
to legal challenges. Certainly, violations of the Marine Mammal Protection Act,109 Endangered
Species Act,110 and other environmental laws have provided mechanisms for challenging actions
associated with offshore oil and gas production in the past.111 Of primary interest here, however,
are legal challenges to agency action with respect to the planning, leasing, exploration, and
development phases under the procedures mandated by the OCSLA itself and the related
environmental review required by the National Environmental Policy Act.
Suits Under the Outer Continental Shelf Lands Act
The Administrative Procedure Act provides for judicial review of agency action alleged to be in
violation of federal law, including the OCSLA, its implementing regulations, and the terms of any
permit or lease.112 The following paragraphs provide an overview of the existing case law and
address the limitations applicable to relief at each phase of the leasing and development process.
Jurisdiction to review agency actions taken in approving the five-year plan is vested in the U.S.
Court of Appeals for the D.C. Circuit, subject to appellate review by writ of certiorari from the
106
Id. at §556.65.
Id. at §556.67.
108
Id. at §556.68.
109
16 U.S.C. §§1361-1423.
110
16 U.S.C. §§1531-1544.
111
Village of Akutan v. Hodel, 869 F.2d 1185 (9th Cir. 1988); Village of False Pass v. Clark, 733 F.2d 605 (9th Cir.
1984); North Slope Borough v. Andrus, 642 F.2d 589 (D.C. Cir. 1980); Conservation Law Foundation v. Andrus, 623
F.2d 712 (1st Cir. 1979).
112
43 U.S.C. §1349.
107
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U.S. Supreme Court.113U.S. Supreme Court.102 A few challenges to five-year plans have been brought. The first,
California ex. rel. Brown v. Watt,103114 involved a variety of challenges to the 1980-1985 plan, and,
while the court ultimately found that the Secretary had failed to comply with certain procedural
requirements in making determinations, the court established a relatively deferential standard of
review, which it has continued to apply in later challenges. When reviewing “findings of
ascertainable fact made by the Secretary,” the court will require the Secretary’s decisions to be
supported by “substantial evidence.”104115 However, the court noted that many of the decisions
required in the formulation of the five-year plan will involve the determination of policy in the
face of disputed facts, and that such determinations should be subject to a less searching standard.
In such instances, a court will examine agency action and determine whether “the decision is
based on a consideration of the relevant factors and whether there has been a clear error of
judgment.”105116
The standards for review outlined in Watt have been upheld in subsequent litigation related to the
five-year plan.106117 In these subsequent cases, the Court of Appeals for the D.C. Circuit applied a
deferential standard in reviewing the Secretary’s decisions, particularly in reviewing the
Secretary’s environmental impact determinations, such that the Secretary could perform
environmental analysis using “any methodology so long as it is not irrational.”107118 Further, these
cases indicate that the Secretary is vested with significant discretion in determining which areas
are to be offered for leasing and which areas will not. Thus, while the Secretary must receive and
consider comments related to excluding areas from leasing, the court has clearly stated that the
Secretary need only identify the legal or factual basis for leasing determinations at this stage and
explain those determinations. More searching judicial review of the Secretary’s analysis is not
required.108
(...continued)
F.2d 712 (1st Cir. 1979).
101
43 U.S.C. § 1349.
102
43 U.S.C. § 1349(c).
103
668 F.2d 1290 (D.C. Cir. 1981).
104
Id. at 1302; see also 43 U.S.C. § 1349(c)(6).
105
Id. at 1301-1302 (quoting Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416 (1971) (internal quotations
omitted)).
106
See California v. Watt, 712 F.2d 584 (D.C. Cir. 1983); Natural Resources Defense Council v. Hodel, 865 F.2d 288
(D.C. Cir. 1988).
107
California, 712 F.2d at 596 (internal quotations omitted).
108
Hodel, 865 F.2d at 305.
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119
Litigation under the OCSLA has also challenged actions taken during the leasing phase. As
described above, the OCSLA authorizes states to submit comments during the notice of lease sale
stage and directs the Secretary to accept a state’s recommendations if they “provide for a
reasonable balance between the national interest and the well-being of the citizens of the affected
State.”109120 Courts have typically applied the deferential “arbitrary and capricious” standard to the
Secretary’s decisions with respect to these recommendations. According to the cases from the
Ninth Circuit Court of Appeals, because the OCSLA does not provide clear guidance as to how
balancing of national interest and a state’s considerations is to be performed, agency action will
generally be upheld so long as “some consideration of the relevant factors ...” takes place. 110121
Cases from the federal courts in Massachusetts, including a decision affirmed by the First Circuit
Court of Appeals, have, while embracing the arbitrary and capricious standard, found the
113
43 U.S.C. §1349(c).
668 F.2d 1290 (D.C. Cir. 1981).
115
Id. at 1302; see also 43 U.S.C. §1349(c)(6).
116
Id. at 1301-1302 (quoting Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416 (1971) (internal quotations
omitted)).
117
See California v. Watt, 712 F.2d 584 (D.C. Cir. 1983); Natural Resources Defense Council v. Hodel, 865 F.2d 288
(D.C. Cir. 1988).
118
California, 712 F.2d at 596 (internal quotations omitted).
119
Hodel, 865 F.2d at 305.
120
43 U.S.C. §1345(d).
121
California v. Watt, 683 F.2d 1253, 1269 (9th Cir. 1982); see also Tribal Village of Akutan v. Hodel, 869 F.2d 1185
th
(9 Cir. 1988).
114
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Secretary’s balancing of interests insufficient.122Secretary’s balancing of interests insufficient. 111 However, it should be noted that the
Massachusetts cases reviewed agency action that was not supported by explicit analysis of the
sort challenged in the Ninth Circuit. Thus, it is possible that, given a more thorough record of the
Secretary’s decision, these courts may afford more significant deference to the Secretary’s
determination.
Apart from matters relating primarily to the authority of the Secretary to authorize the various
stages of leasing, recent litigation has focused on the authority of MMS/BOEMREBOEM to require
royalty royalty
payments on certain offshore leases allegedly subject to mandatory royalty relief
provisions. In
Kerr-McGee Oil & Gas Corp. v. Allred, the plaintiff, an oil and gas company
operating offshore
wells in the Gulf of Mexico pursuant to federal leases, challenged actions by
the department to
collect royalties on deepwater oil and gas production.112123 The plaintiff alleged
the department does
not have authority to assess royalties based on an interpretation of the 1995
amendments to the OCSLA
found in the 1995 Outer Continental Shelf DeepwaterDeep Water Royalty Relief Act (DWRRA), that the act
requires royaltyfreeroyalty-free production until a statutorily prescribed threshold volume of oil or gas
production has been
reached, and does not permit a price-based threshold for this royalty relief. 113124
The DWRRA separates leases into three categories based on date of issuance. These categories
are (1) leases in existence on November 28, 1995; (2) leases issued after November 28, 2000; and
(3) leases issued in between those periods, that is, during the first five years after the act’s
enactment. The third category of leases is the source of current controversy. According to KerrMcGee, its leases, which were issued during the initial five-year period after the DWRRA’s
enactment, are subject to different legal requirements from those applicable to the other two
categories. Kerr-McGee argued that the department has a nondiscretionary duty under the
DWRRA to provide royalty relief on its deepwater leases, and that the statute does not provide an
exception to this obligation based on any preset price threshold. To the extent any price threshold
has been included in these leases, Kerr-McGee argued that such provisions are contrary to DOI’s
statutory authority and unenforceable.
109
43 U.S.C. § 1345(d).
110
California v. Watt, 683 F.2d 1253, 1269 (9th Cir. 1982); see also Tribal Village of Akutan v. Hodel, 869 F.2d 1185
(9th Cir. 1988).
111
Conservation Law Foundation v. Watt, 560 F.Supp. 561 (D.Mass. 1983), aff’d sub nom. Massachusetts v. Watt, 716
F.2d 946 (1st Cir. 1983); Massachusetts v. Clark, 594 F.Supp. 1373 (D.Mass. 1984).
112
Kerr-McGee v. Allred, No, 2:06 CV 0439, 2007 WL 3231634 (W.D. La. Oct. 30, 2007).
113
P.L. 104-58.
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Section 304 of the DWRRA, which addresses deepwater leases114leases125 issued within five years after
the DWRRA’s enactment, directs that such leases use the bidding system authorized in section
8(a)(1)(H) of the OCSLA, as amended by the DWRRA. Section 304 of the DWRRA also
stipulates that leases issued during the five-year post-enactment time frame must provide for
royalty suspension on the basis of volume. Specifically, section 304 states:
[A]ny lease sale within five years of the date of enactment of this title, shall use the bidding
system authorized in section 8(a)(1)(H) of the Outer Continental Shelf Lands Act, as
amended by this title, except that the suspension of royalties shall be set at a volume of not
less than the following:
(1) 17.5 million barrels of oil equivalent for leases in water depths of 200 to 400 meters;
122
Conservation Law Foundation v. Watt, 560 F.Supp. 561 (D.Mass. 1983), aff’d sub nom. Massachusetts v. Watt, 716
F.2d 946 (1st Cir. 1983); Massachusetts v. Clark, 594 F.Supp. 1373 (D.Mass. 1984).
123
Kerr-McGee v. Allred, No, 2:06 CV 0439, 2007 WL 3231634 (W.D. La. Oct. 30, 2007).
124
P.L. 104-58.
125
This term refers to “tracts located in water depths of 200 meters or greater in the Western and Central Planning Area
of the Gulf of Mexico, including that portion of the Eastern Planning Area of the Gulf of Mexico encompassing whole
lease blocks lying west of 87 degrees, 30 minutes West longitude.... ” 43 U.S.C. §1337 note.
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(2) 52.5 million barrels of oil equivalent for leases in 400 to 800 meters of water; and
(3) 87.5 million barrels of oil equivalent for leases in water depths greater than 800 meters.115126
It is possible to interpret this provision as authorizing leases issued during the five-year period to
contain only royalty suspension provisions that are based on production volume with no
allowance at all for a price-related threshold in addition. Such an intent might be gleaned from the
language of the quoted section alone; indeed, in this provision, Congress provides for a specific
royalty suspension method and does not clearly authorize the Secretary to alter or supplement it.
Kerr-McGee’s challenge to the Secretary’s authority to impose price-based thresholds on royalty
suspension was based on this interpretation of the statutory language above.
The U.S. District Court for the Western District of Louisiana agreed with Kerr-McGee’s
interpretation of the language discussed above. The court found that the DWRRA allowed only
for volumetric thresholds on royalty suspension for leases issued between 1996 and 2000, and
that the Secretary did not have authority under the DWRRA to attach price-based thresholds to
royalty suspension for those leases.116127 On January 12, 2009, the U.S. Court of Appeals for the
Fifth Circuit issued a decision affirming the district court’s ruling, 117128 and on October 5, 2009, the
U.S. Supreme Court denied a petition for writ of certiorari.118129
In Center for Biological Diversity v. U.S. Department of the Interior,119130 the plaintiff challenged
the five-year plan for 2007-2012 on several grounds. Among these was a claim that DOI had
failed to satisfy the requirement found in Section 18(a)(2)(G) of the OCLSA that, in preparing the
five-year plan, DOI must consider “the relative environmental sensitivity and marine productivity
of different areas of the outer Continental Shelf.”120131 The court found that DOI’s analysis, which
relied solely on “physical characteristics” of different shoreline areas, did not satisfy the
requirements of Section 18(a)(2)(G) because it failed to consider non-shoreline areas of the
114
This term refers to “tracts located in water depths of 200 meters or greater in the Western and Central Planning Area
of the Gulf of Mexico, including that portion of the Eastern Planning Area of the Gulf of Mexico encompassing whole
lease blocks lying west of 87 degrees, 30 minutes West longitude....” 43 U.S.C. § 1337 note.
115
P.L. 104-58.
116
Kerr-McGee v. Allred, slip. op. at 8-9.
117
Kerr-McGee Oil & Gas Corp. v. U.S. Dep’t of Interior, 554 F.3d 1082 (5th Cir. 2009).
118
U.S. Dept. of the Interior v. Kerr-McGee Oil and Gas Corp., 130 S. Ct. 236 (Mem) (2009).
119
563 F.3d 466 (D.C. Cir. 2009).
120
43 U.S.C. § 1344(a)(2)(G).
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OCS.121 The court therefore vacated the five-year program and remanded it to DOI for
reconsideration. In a later order, the court clarified that this relief related only to those portions of
the five-year plan that related to leasing in the Chukchi, Beaufort, and Bering Seas, as the
environmental sensitivity analysis for these areas was the only analysis that was found to be
deficient. 122
Suits Under the National Environmental Policy Act
In the context of proposed OCS development, NEPA regulations generally require publication of
notice of an intent to prepare an Environmental Impact Statement (EIS), acceptance of comments
on what should be addressed in the EIS, agency preparation of a draft EIS, a comment period on
the draft EIS, and publication of a final EIS addressing all comments at each stage of the leasing
process where government action will significantly affect the environment.123OCS.132 The court therefore vacated the five-year program and remanded it to DOI for
reconsideration. In a later order, the court clarified that this relief related only to those portions of
the five-year plan that related to leasing in the Chukchi, Beaufort, and Bering Seas, as the
environmental sensitivity analysis for these areas was the only analysis that was found to be
deficient.133
Suits Under the National Environmental Policy Act
In the context of proposed OCS development, NEPA regulations generally require publication of
notice of an intent to prepare an Environmental Impact Statement (EIS), acceptance of comments
on what should be addressed in the EIS, agency preparation of a draft EIS, a comment period on
the draft EIS, and publication of a final EIS addressing all comments at each stage of the leasing
126
P.L. 104-58.
Kerr-McGee v. Allred, slip. op. at 8-9.
128
Kerr-McGee Oil & Gas Corp. v. U.S. Dep’t of Interior, 554 F.3d 1082 (5th Cir. 2009).
129
U.S. Dept. of the Interior v. Kerr-McGee Oil and Gas Corp., 130 S. Ct. 236 (Mem) (2009).
130
563 F.3d 466 (D.C. Cir. 2009).
131
43 U.S.C. §1344(a)(2)(G).
132
563 F.3d at 488.
133
Center for Biological Diversity v. U.S. Department of the Interior; Order upon consideration of respondent’s
petition for rehearing and/or clarification, No. 07-1247 (D.C. Cir. July 28, 2009).
127
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process where government action will significantly affect the environment.134 As described above,
NEPA figures heavily in the OCS planning and leasing process and requires various levels of
environmental analysis prior to agency decisions at each phase in the leasing and development
process.124135 Lawsuits brought under NEPA are thus indirect challenges to agency decisions in that
they typically question the adequacy of the environmental analysis performed prior to a final
decision.
In Natural Resources Defense Council v. Hodel,125136 the plaintiff challenged the adequacy of the
alternatives examined in the EIS and the level of consideration paid to cumulative effects of
offshore drilling activities. The court held that not every possible alternative needed to be
examined, and that the determination as to adequacy was subject to the “rule of reason.”126137 This
standard appears to afford some level of deference to the Secretary, and his choice of alternatives
was found to be sufficient by the court in this instance.127138 However, without significant
explanation of the standard of review to be applied, the court found that the Secretary’s failure to
analyze certain cumulative impacts was a violation of NEPA.128139 Thus, the Secretary was required
to include this analysis, although final decisions based on that analysis remained subject to the
Secretary’s discretion, with review only under the arbitrary and capricious standard.129140
As mentioned above, NEPA plays a role in the leasing phase as well. BOEMREBOEM often uses NEPA
and its tiering option to evaluate lease sales.130141 The NEPA procedures and standard of review
remain the same at this phase; however, due to the structure of the OCSLA process, more specific
information is generally required. 131142 Still, courts are deferential at the lease sale phase. In
challenges to the adequacy of environmental review, courts have stressed that inaccuracies and
121
563 F.3d at 488.
122
Center for Biological Diversity v. U.S. Department of the Interior; Order upon consideration of respondent’s
petition for rehearing and/or clarification, No. 07-1247 (D.C. Cir. July 28, 2009).
123
40 C.F.R. §§ 1501.7, 1503.1, 1503.4, 1506.10.
124
42 U.S.C. § 4332.
125
865 F.2d 288 (D.C. Cir. 1988).
126
Id. at 294.
127
Id. at 296.
128
Id. at 297-300.
129
See California ex. rel. Brown v. Watt, 668 F.2d 1290, 1301-1302 (D.C. Cir. 1981).
130
See 30 C.F.R. § 256.26(b); 40 C.F.R. § 1508.28.
131
Tribal Village of Akutan v. Hodel, 869 F.2d 1185, 1191 (9th Cir. 1988).
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more stringent NEPA analysis will be available at later phases. 132more stringent NEPA analysis will be available at later phases.143 Thus, because there will be an
opportunity to cure any defects in the analysis as the OCSLA process continues, challenges under
NEPA at this phase are often unsuccessful.
It is also possible to challenge exploration and development plans under NEPA. In Edwardsen v.
U.S. Department of the Interior, the Ninth Circuit Court of Appeals applied the typical “rule of
reason” to determine if the EIS adequately addressed the probable environmental consequences of
the development and production plan, and held that, despite certain omissions in the analysis and
despite an MMS decision to tier its NEPA analysis to an EIS prepared for a similar lease sale, the
requirements of NEPA were satisfied.133144 Thus, while additional analysis was required to account
for the greater specificity of the plans and to accommodate the “hard look” at environmental
impacts NEPA mandates, the reasonableness standard applied to what must be examined in an
EIS did not allow for a successful challenge to agency action.
132
134
40 C.F.R. §§1501.7, 1503.1, 1503.4, 1506.10.
42 U.S.C. §4332.
136
865 F.2d 288 (D.C. Cir. 1988).
137
Id. at 294.
138
Id. at 296.
139
Id. at 297-300.
140
See California ex. rel. Brown v. Watt, 668 F.2d 1290, 1301-1302 (D.C. Cir. 1981).
141
See 30 C.F.R. §256.26(b); 40 C.F.R. §1508.28.
142
Tribal Village of Akutan v. Hodel, 869 F.2d 1185, 1191 (9th Cir. 1988).
143
Id. at 1192; Alaska v. Andrus, 580 F.2d 465, 473 (D.C. Cir. 1978); Village of False Pass v. Clark, 733 F.2d 605,
612-616 (9th Cir. 1984); North Slope Borough v. Andrus, 642 F.2d 589, 594-905 (D.C. Cir. 1980).
133144
268 F.3d 781, 784-790 (9th Cir. 2001).
135
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Appendix. State Laws That Ban or Regulate
Offshore Resource Development
Table A-1. State Laws That Ban or Regulate
Offshore Resource Development: Policy and Statutes
State
Policy
Statutes
AL
Drilling is authorized in Alabama’s state waters. The State Lands Division
of the Department of Conservation & Land Resources is charged with
leasing offshore oil and gas in state waters. In addition, the Alabama State
Oil and Gas Board regulates oil and gas production to ensure the
conservation and proper development of oil and gas resources.
Authorization:
Ala. Code §§ 9-15-18; 9-17-1 et
seq.; 40-20-1 et seq.
AK
The Alaska Department of Natural Resources is responsible for leasing
oil and gas on state lands, including offshore areas. Certain areas are
specifically designated as off limits to oil and gas leasing, and
administrative decisions may further limit access.
Ban:
Alaska Stat. §§ 38.05.140(f);
38.05.184.
The State Lands Commission is generally responsible for oil and gas
leasing. California currently has a general ban in place restricting any
state agency from issuing new offshore leases, unless the President of the
United States determines that there is a “severe energy supply
interruption and has ordered distribution of the Strategic Petroleum
Reserve ... , the Governor finds that the energy resources of the
sanctuary will contribute significantly to the alleviation of that
interruption, and the Legislature subsequently acts to amend...[the law]
to allow that extraction.” The ban is limited to areas that are not
currently subject to a lease.
Ban:
Cal. Pub. Res. Code §§ 6871.1-.2
.2 (repealed 1994); 6870 (Santa
Barbara limitations); 6243
(general ban).
CA
Authorization:
Alaska Stat. §§ 38.05.131 et seq.
Authorization:
Cal. Pub. Res. Code §§ 6870 et.
seq.; 6240 et seq.
CT
Connecticut does not appear to have laws addressing oil and gas
development in state waters.
DE
The governor and the secretary of the Department of Natural Resources
and Environmental Control are authorized to lease oil and gas in state
waters. Lands “administered by the Department of Natural Resources
and Environmental Control” may not be leased by the secretary.
Ban:
Del. Code Ann. tit. 7 ch. 61
§ 6102(e).
In general, the Department of Natural Resources is vested with the
authority to permit oil and gas development on state lands and
submerged lands; in 1990, Florida enacted a broad ban on offshore oil
and gas development by prohibiting oil and gas drilling structures in a
variety of locations, including Florida’s territorial waters. The
development ban provides an exception for valid existing rights.
Ban:
Fla. Stat. Ann. § 377.242.
GA
The State Properties Commission is authorized to issue leases for stateowned oil and gas. The statute does not distinguish between onshore
and offshore minerals.
Authorization:
Ga. Stat. § 50-16-43.
HI
The Board of Land and Natural Resources is authorized to lease oil and
gas on state lands, including submerged lands. There would not appear to
be a statutory ban in place.
Authorization:
Hawaii Rev. Stat. §§ 182-1 et
seq.
LA
The state Mineral Board is responsible for leasing oil and gas in Louisiana
and its offshore territory. Development is limited to areas offered by the
Board for leasing.
Authorization:
La. Rev. Stat. §§ 30:121 et seq.
FL
Congressional Research Service
Authorization:
Del. Code. Ann. tit. 7 ch. 61.
Authorization:
Fla. Stat. Ann. §§ 377.01 et seq.;
253.001 et seq.
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Offshore Oil and Gas Development: Legal Framework
State
Policy
Statutes
ME
The Bureau of Geology and Natural Areas has primary authority over oil
and gas development on all state lands. The Bureau is authorized to issue
exploration permits and mineral leases.
Authorization:
Me. Rev. Stat. tit. 12 §§ 549 et
seq.
MD
The Department of the Environment regulates oil and gas development.
The areas underlying the Chesapeake Bay, its tributaries, and the
Chesapeake Bay Critical Area are unavailable for oil and gas
development.
Ban:
Md. Code, Envt. § 14-107.
The Division of Mineral Resources is charged with administering the
leasing of oil and gas on state lands. The law requires a public hearing
before any license to explore or lease for extraction is issued for mineral
resources located in coastal waters. Many of the state’s offshore areas
are designated as ocean sanctuaries in which oil and gas development is
prohibited.
Authorization:
Mass. Gen. Laws Ann. Ch. 21
§§ 54 et seq.
The Mississippi Major Economic Impact Authority is responsible for
administering oil and gas leases on state lands. Offshore oil and gas
development is generally permissible. Specific areas are not available for
leasing. No development may occur in areas north of the coastal barrier
islands, except in Blocks 40, 41, 42, 43, 63, 64, and 66 through 98.
Further, “surface offshore drilling operations” may not be conducted
within one mile of Cat Island.
Authorization:
Miss. Code. Ann. §§ 29-7-1 et
seq.
MA
MS
Authorization:
Md. Code, Envt. §§ 14-101 et
seq.
Ban:
Mass. Gen. Laws Ann. Ch. 132A
§ 15.
Ban:
Miss. Code. Ann. § 29-7-3.
NH
New Hampshire does not appear to have laws addressing offshore oil
and gas development in state waters.
NJ
State law authorizes the removal of sand and other materials from lands
under tidewaters and below the high water mark if approved by the
Tidelands Resource Council. Offshore oil and gas development is not
addressed.
Authorization:
N.J. Stat. Ann. §§ 12:3.-12.1 et
seq.
NY
Leases and permits for the right to use state-owned submerged lands for
navigation, commerce, fishing, bathing, and recreation are authorized for
specified submerged areas. General authority for issuing oil and gas
leases leases
is vested in the Department of Environmental Conservation.
Certain Certain
submerged lands underlying specified lakes are excluded from
exploration and leasing, but offshore areas would not appear to be
subject to a similar ban.
Authorization:
N.Y. Pub. Lands Law § 75; N.Y.
Envt’l & Conserv. Law §§ 230101 et seq.
NC
State law authorizes the sale or lease of any state-owned mineral
underlying the bottoms of any sounds, rivers, creeks, or other waters of
the state. The state is authorized to sell, lease, or otherwise dispose of
oil and gas at the request of the Department of Environment and Natural
Resources.
Authorization:
N.C. Gen. Stat. § 146-8.
OR
The Department of State Lands is generally responsible for leasing state
owned minerals, including oil and gas. Leasing of tidal and submerged
lands is governed by separate provisions of law. There does not appear
to be a ban in place.
Authorization:
Or. Rev. Stat. §§ 274.705 et seq.;
273.551 (for submerged lands
seaward more than 10 miles
easterly of the 124th West
Meridian).
RI
The Coastal Resources Management Council is charged with identifying,
evaluating, and determining which uses are appropriate for the state’s
coastal resources and submerged lands.
Authorization:
R.I. Gen. Laws §§ 46-23-1 et seq.
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State
Policy
Statutes
SC
The State Budget and Control Board is authorized to “negotiate for
leases of oil, gas and other mineral rights upon all of the lands and waters
of the State, including offshore marginal and submerged lands.”
Authorization:
S.C. Code. Ann. §§ 10-9-10 et
seq.
TX
The School Land Board is authorized to lease those portions of the Gulf
of Mexico under the state’s jurisdiction for oil and gas development.
Authorization:
Tex. Nat. Res. Code §§ 52.011
et seq.
VA
The Marine Resources Commission is authorized to grant easements or
to lease “the beds of the waters of the Commonwealth outside of the
Baylor Survey” for oil and gas development.
Authorization:
Va. Code Ann. § 28.2-1208.
WA
In general, the Department of Natural Resources is responsible for
mineral development on state lands. State law prohibits leasing of tidal or
submerged lands “extending from mean high tide seaward three miles
along the Washington coast from Cape Flattery south to Cape
Disappointment, nor in Grays Harbor, Willapa Bay, and the Columbia
river downstream from the Longview bridge, for purposes of oil or gas
exploration, development, or production.”
Ban:
Wash. Rev. Code Ann.
§§ 43.143.005 et seq.
Source: CRS.
Author Contact Information
Adam Vann
Legislative Attorney
avann@crs.loc.gov, 7-6978
Congressional Research Service
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