Order Code RL33404
Offshore Oil and Gas Development:
Legal Framework
Updated August 5, 2008
Adam Vann
Legislative Attorney
American Law Division

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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 2006, Congress passed a measure that would allow new offshore drilling in
the Gulf of Mexico. This measure was incorporated into H.R. 6111, a broad bill
passed in the final days of the 109th Congress. President Bush signed the bill into law
(P.L. 109-432) on December 20, 2006. Areas of the North Aleutian Basin off the
coast of Alaska have also been recently made available for leasing by executive
order. The five-year plan for offshore leasing for 2007-2012 adopted by the Minerals
Management Service in December of 2007 proposed further expansion of offshore
leasing. Several contentious legal issues remain the subject of national debate and
legislative proposals, including the possibility of opening up more areas of the Outer
Continental Shelf to exploration and production, or encouraging or mandating certain
efforts to speed up or enhance exploration and possible production at existing
leaseholds. At the same time, the role of the coastal states in deciding whether to
lease in areas adjacent to their shores has also received recent attention.
In addition to these 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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Contents
Ocean Resource Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Federal Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
State Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Coastal State Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Federal Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Moratoria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Leasing and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Five-Year Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Leasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Development and Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Lease Suspension and Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Legal Challenges to Offshore Leasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Suits Under the Outer Continental Shelf Lands Act . . . . . . . . . . . . . . 14
Suits Under the National Environmental Policy Act . . . . . . . . . . . . . . 17
Appendix. State Laws That Ban or Regulate
Offshore Resource Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
List of Tables
Table 1. State Laws That Ban or Regulate Offshore Resource Development:
Policy and Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

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Offshore Oil and Gas Development:
Legal Framework
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 United States 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 the changes
to the authorities regulating offshore development wrought by the Energy Policy Act
of 2005 and subsequent legislation and executive action as well as a discussion of
recent executive action and legislative proposals to encourage further offshore
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 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
1 United Nations Convention on the Law of the Sea III (entered into force November 16,
1994) (hereinafter UNCLOS).
2 Id. at Art. 56.1

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The EEZ extends 200 nautical miles from a nation’s recognized 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 the Convention 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 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 Orders, the United
States has claimed offshore zones that are virtually identical to those described in the
treaty.6 In a series of related cases, the U.S. Supreme Court confirmed federal control
of these offshore areas.7 Federal statutes also refer 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
further 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
3 Id. at Art. 76.1.
4 Id. at Art. 76.4-76.7.
5 Id. at Art. 77.1.
6 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,
121-29 (1960).
8 43 U.S.C. § 1331(a).

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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 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, they decide which lands will be opened
9 43 U.S.C. §§ 1301 et seq.
10 A geographical or nautical mile is equal to 6,080.20 feet, as opposed to the typical 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).
14 United States v. Louisiana, 363 U.S. 1, 66 (“[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.

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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 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
Although in general the OCSLA requires the federal government to prepare,
revise, and maintain an oil and gas leasing program, many offshore areas are
withdrawn from disposition under the OCSLA. Until recently, there were 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 The congressional moratorium first appeared in the
appropriations legislation for Fiscal Year 1982. The language of the appropriations
legislation barred the expenditure of funds by the Department of the Interior, or DOI
(of which MMS is a part), for leasing and related activities in certain areas in the
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.
20 43 U.S.C. §§ 1331(a), 1332, 1333(a)(1).
21 43 U.S.C. § 1341(a).
22 See, e.g., P.L. 108-447, §§ 107-109.

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Outer Continental Shelf.23 Similar language has appeared in every DOI
appropriations bill since the legislation for FY1982.
In addition to the congressional moratoria, for most of the last 20 years there
have been parallel executive branch moratoria on offshore drilling. The first of these
was issued by President George H. W. Bush on June 26, 1990. 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.
The Gulf of Mexico Energy Security Act of 2006, enacted just before
adjournment of the 109th Congress as part of H.R. 6111, the Omnibus Tax Relief and
Health Care Act of 2006,24 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,25 but also established a new moratorium on preleasing, leasing, and
related activity in the eastern Gulf of Mexico through June 30, 2022.26 This
moratorium is independent of the annual appropriations-based congressional
moratorium, and thus would continue even if Congress decided not to renew the
annual appropriations-based moratorium.
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. 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 did not have the effect of opening up new
areas of the OCS for exploration and production. Both the moratorium on leasing and
preleasing in the eastern Gulf of Mexico found in the 2006 Gulf of Mexico Energy
Security Act and the appropriations-based moratorium on leasing and preleasing
remain in effect, although the appropriations moratorium must be renewed annually.
However, if Congress were not to include an appropriations-based moratorium on
offshore drilling for FY2009, OCS acreage not protected by other statutory measures
23 P.L. 97-100, § 109.
24 P.L. 109-432.
25 Id. at § 103.
26 P.L. 109-432, § 104(a).

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could be considered by the Minerals Management Service for leasing, as described
infra.
Leasing and Development
The Secretary of the Interior oversees OCS mineral leasing, with the leasing of
tracts and royalty collection performed by the Minerals Management Service (MMS),
a bureau of DOI.27 In 1978, the OCSLA was significantly amended so as to increase
the role of the affected coastal states in the leasing process.28 The amendments also
revised the bidding process and leasing procedures, set stricter criteria to guide the
DOI 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;29 (2) preleasing activity and the lease sale;30 (3) exploration;31 and
(4) development and production.32
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.33 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.34
During the development of the plan, the Secretary must solicit and consider
comments from the Governors of affected states, and at least sixty 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.35 After publication, the
27 43 U.S.C. §§ 1331(b), 1334; 30 C.F.R. § 250.101.
28 P.L. 95-372.
29 43 U.S.C. § 1344.
30 43 U.S.C. §§ 1337, 1345.
31 43 U.S.C. § 1340.
32 43 U.S.C. § 1351.
33 43 U.S.C. § 1344(a), (e).
34 Id.
35 “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;
(continued...)

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Attorney General is also authorized to submit comments regarding potential effects
on competition.36 Subsequently, at least sixty 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.37 Once the leasing plan is
approved, areas included in the plan are to be available for leasing, consistent with
the terms of the plan.38
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
35 (...continued)
(3) which is receiving, or in accordnace [sic] 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 oilspill,
blowout, or release of oil or gas from vessels, pipelines, or other transshipment
facilities....
43 U.S.C. § 1331(f).
36 43 U.S.C. § 1344(d).
37 Id.; see also 30 C.F.R. §§ 256.16-.17.
38 43 U.S.C. §1344(d).

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Environmental Policy Act (NEPA).39 Thus, the NEPA review process complements
and informs the preparation of a five-year plan under the OCSLA.40
The current Five-Year Plan was took effect on July 1, 2007.41 However, 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. MMS has
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 replace the
existing Plan.42 According to MMS, the notice particularly seeks “comments on
areas that are restricted from leasing by Congressional Moratorium but were removed
from Presidential Withdrawal on July 14, 2008.”43
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.44
The process begins when the Director of MMS publishes a call for information
and 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 concern and analysis.45 The
Director is then to consider all available information and perform environmental
analysis under NEPA in crafting both a list of areas recommended for leasing and any
39 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 NEPA Requirements, by
Kristina Alexander.
40 See Natural Resources Defense Council v. Hodel, 865 F.2d 288, 310 (D.C. Cir.1988).
41 The Plan is available on MMS’s website at [http://www.mms.gov/offshore/PDFs/
OMMStrategicPlan2007-2012.pdf].
42 73 Fed. Reg. 45065 (August 1, 2008).
43 Id.
44 43 U.S.C. § 1337.
45 30 C.F.R. §§ 256.23, 256.25.

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proposed lease stipulations.46 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.47
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 location48 of a proposed
lease sale within sixty days after notice of the lease sale.49 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.50
The Director of MMS publishes the approved list of lease sale offerings in the
Federal Register (and other publications) at least thirty days prior to the date of the
sale.51 This notice must describe the areas subject to the sale and any stipulations,
terms, and conditions of the sale.52 The bidding is to occur under conditions
described in the notice and must be consistent with certain baseline requirements
established in the OCSLA.53
Although the statute establishes base requirements for the competitive bidding
process and sets forth a variety possible of bid formats,54 some of these requirements
are subject to modification at the discretion of the Secretary.55 Before the acceptance
of bids, the Attorney General is also 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.56 The Secretary is not bound by the Attorney General’s
recommendation, and likewise, the antitrust review process does not affect private
46 30 C.F.R. § 256.26.
47 30 C.F.R. § 256.29.
48 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. § 1337(b). The law and its implementing regulations also
set the range of initial lease terms and baseline conditions for lease renewal.
49 43 U.S.C. § 1345(a); see also 30 C.F.R. § 256.31.
50 43 U.S.C. § 1345(c).
51 43 U.S.C. § 1337(l).
52 30 C.F.R. § 256.32(1).
53 43 U.S.C. § 1337.
54 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.
55 43 U.S.C 1337(a)(1)-(3), (8)-(9).
56 43 U.S.C. § 1337(c); 30 C.F.R. § 256.47(d).

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rights of action under antitrust laws or otherwise restrict the powers of the Attorney
General or any other federal agency under other law.57 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.58
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.59 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.60 Royalties may also be suspended
under certain conditions by MMS 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.61 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.62 Finally, the law indicates that a lease entitles the lessee to explore,
develop and produce oil and gas, conditioned on applicable due diligence
requirements and the approval of a development and production plan, discussed
below.63
Exploration. Exploration for oil and gas pursuant to an OCSLA lease must
comply with an approved exploration plan.64 Detailed information and analysis must
accompany the submission of an exploration plan, and, upon receipt of a complete
proposed plan, the relevant MMS Regional Supervisor is required to submit the plan
57 43 U.S.C § 1337(c), (f).
58 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).
59 Id. § 1337(a)(3).
60 43 U.S.C. § 1337(a)(3)(B).
61 43 U.S.C § 1337(a)(7); 30 C.F.R. §§ 256.52 - 256.59.
62 43 U.S.C § 1337.
63 43 U.S.C § 1337(b)(4).
64 43 U.S.C § 1340(b), (c).

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CRS-11
to the Governor of an affected state and the state’s Coastal Zone Management
agency.65
Under the Coastal Zone Management Act (CZMA), federal actions and federally
permitted projects, including those in federal waters, must be submitted for state
review.66 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 MMS and state approval or succeed in appealing the state’s determination to the
Secretary of Commerce.67 Simultaneously, the MMS Regional Supervisor is to
analyze the environmental impacts of the proposed exploration activities under
NEPA; however, regulations prescribe that MMS complete its action on the plan
review within thirty days. Hence, extensive environmental review at this stage may
be constrained or rely heavily upon previously prepared NEPA documents.68 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.69 Once a plan has been approved, drilling associated with exploration remains
subject to the relevant MMS District Supervisor’s approval of an Application for a
Permit to Drill, which involves analysis of even more specific drilling plans.
Development and Production. While exploration often will rinvolve
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.70
Operators are required to submit a Development and Production Plan for areas where
significant development has not occurred before71 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.72 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.73
As with the processes outlined above, the submission of these documents
complements the department’s and MMS’s environmental analysis under NEPA. As
with the exploration plan review process, it may not always be necessary to prepare
a new EIS at this stage, and environmental analysis may be tied to previously
65 30 C.F.R. §§ 250.226, 250.227, 250.232, 250.235.
66 16 U.S.C. § 1456(c).
67 30 C.F.R. § 250.235.
68 30 C.F.R. § 250.232(c).
69 30 C.F.R. §§ 250.231 - 250.233.
70 43 U.S.C. § 1351.
71 30 C.F.R. § 250.201.
72 Id.
73 30 C.F.R. §§ 250.24 - 250.262.

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CRS-12
prepared NEPA documents.74 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.75 Additionally, if the drilling project involves “non-conventional
production or completion technology, regardless of water depth” applicants must also
submit a Deepwater Operations Plan (DWOP) and a Conceptual Plan.76 These
additional documents allow MMS to adequately review the engineering, safety, and
environmental impacts associated with these technologies.77
As with the exploration stage, actual drilling requires approval of an Application
for Permit to Drill (APD).78 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.79
Lease Suspension and Cancellation. The OCSLA authorizes the
Secretary of the Interior to promulgate regulations on lease suspension and
cancellation.80 The Secretary’s discretion over the use of these authorities is
specifically limited to a set number of circumstances established by the OCSLA.
These authorities 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 MMS Regional Supervisor,
given appropriate justification.81 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 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....”82 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 protection equipment; (3) to carry out NEPA or other
environmental review requirements; or (4) to allow for “inordinate delays
74 The regulations indicate that “at least once in each planning area (other than the western
and central Gulf of Mexico planning areas) we [MMS] will prepare an environmental impact
statement (EIS) ....” 30 C.F.R. § 250.269.
75 30 C.F.R. § 250.267.
76 30 C.F.R. §§ 250.286, 250.287.
77 30 C.F.R.§§ 250.289, 250.292.
78 30 C.F.R. §§ 250.410 - 250.469.
79 30 C.F.R. § 250.411.
80 43 U.S.C. § 1334; see also 30 C.F.R. §§ 250.168 - 250.185.
81 30 C.F.R. §§ 250.168, 250.171-250.175.
82 43 U.S.C.§ 1334(a)(1).

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CRS-13
encountered in obtaining required permits or consents....”83 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.84 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....”85
If a suspension period reaches five years,86 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....”87
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 cancellation88 or (2) the excess of the consideration paid for the lease, plus all of
the lessee’s exploration- or development-related expenditures, plus interest, over the
lessee’s revenues from the lease.89
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.90 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
83 30 C.F.R. § 250.173 - 250.175.
84 43 U.S.C.§ 1334(a)(1).
85 Id.
86 43 U.S.C. § 1334(a)(2)(B). The requisite suspension period may be reduced upon the
request of the lessee.
87 43 U.S.C. § 1334(a)(2)(A)(i)-(iii). For regulations implementing the cancellation
provisions, see 30 C.F.R. §§ 250.180 - 250.185.
88 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 oilspill,
and all other costs reasonably anticipated on the lease ....” 43 U.S.C. § 1334(a)(2)(C).
89 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.
§§ 250.184 - 250.185.
90 43 U.S.C. § 1334(b).

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CRS-14
regulations continues for a period of 30 days after the mailing.91 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.92
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,93 Endangered Species Act,94 and other environmental laws
have provided mechanisms for challenging actions associated with offshore oil and
gas production in the past.95 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 OCSLA
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.96 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 to the U.S. Supreme Court.97 A few challenges to five-year plans
have been brought in federal courts. The first, California ex. rel. Brown v. Watt,98
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.”99
However, the court noted that many of the decisions required in the formulation of
91 43 U.S.C. § 1334(c).
92 43 U.S.C. § 1334(d).
93 16 U.S.C. §§1361- 1423.
94 16 U.S.C. §§ 1531-1544.
95 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).
96 43 U.S.C. § 1349.
97 43 U.S.C. § 1349(c).
98 668 F.2d 1290 (D.C. Cir.1981).
99 Watt, 668 F.2d at 1302; see also 43 U.S.C. § 1349(c)(6).

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CRS-15
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.”100
The standards for review outlined in Watt have been upheld in subsequent
litigation related to the five-year plan.101 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.”102 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.103
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.”104 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.105 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 Secretary’s
balancing of interests insufficient.106 However, it should be noted that the
Massachusetts cases reviewed agency action that was not supported by explicit
100 Watt, 668 F.2d at 1301-1302 (quoting Citizens to Preserve Overton Park v. Volpe, 401
U.S. 402, 416 (1971) (internal quotations omitted)).
101 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).
102 California, 715 F.2d at 96 (internal quotations omitted).
103 Hodel, 865 F.2d at 305.
104 43 U.S.C. § 1345(d).
105 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).
106 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).

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CRS-16
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 to require royalty payments on certain offshore leases allegedly subject to
mandatory royalty relief provisions. In Kerr-McGee Oil & Gas Corp. v. Burton, 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.107 The plaintiff alleged the department does not
have authority to assess royalties based on an interpretation of the 1995 Outer
Continental Shelf Deepwater Royalty Relief Act (DWRRA) that the act requires
royalty-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.108
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, during the
first five years after the act’s enactment. The third category of leases is the source
of current controversy. According to Kerr-McGee, its leases, which were issued
during the initial five year period after the DWRRA’s enactment, are subject to
different legal requirements than 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.
Section 304 of the DWRRA, which addresses deepwater leases109 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:
107 Kerr-McGee Oil & Gas Corp. v. Burton, No. CV06-0439 LC (W.D. La. March 17, 2006).
108 P.L. 104-58.
109 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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CRS-17
(1) 17.5 million barrels of oil equivalent for leases in water depths of 200 to 400
meters;
(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.110
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.111 The U.S. government has appealed this decision to the U.S. Court of
Appeals for the Fifth Circuit, and that appeal is pending.
Suits Under the National Environmental Policy Act. In the context of
proposed OCS development, NEPA generally requires 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.112 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.113 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.
There has only been one NEPA-based challenge to a five-year plan, Natural
Resources Defense Council v. Hodel.114 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
110 P.L. 104-58.
111 Kerr-McGee Oil & Gas Corp. v. Burton, slip. op. at 8-9.
112 40 C.F.R. §§ 1501.7, 1503.1, 1503.4, 1506.10.
113 42 U.S.C. § 4332.
114 Natural Resources Defense Council, Inc. v. Hodel, 865 F.2d 288 (D.C. Cir. 1988).

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CRS-18
subject to the “rule of reason.”115 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.116 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.117 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.118
As mentioned above, NEPA plays a role in the leasing phase as well. MMS
often uses NEPA and its tiering option to evaluate lease sales.119 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.120
Still, courts are deferential at the lease sale phase. In challenges to the adequacy of
environmental review, courts have stressed that inaccuracies and more stringent
NEPA analysis will be available at later phases.121 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.122
It also appears 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.123 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.
115 Id. at 294.
116 Id. at 296.
117 Id. at 297-300.
118 See California ex. rel. Brown v. Watt, 668 F.2d 1290, 1301-1302 (D.C. Cir.1981).
119 See 30 C.F.R. § 256.26(b); 40 C.F.R. § 1508.28.
120 Tribal Village of Akutan v. Hodel, 869 F.2d 1185, 1191 (9th Cir.1988).
121 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, 612-16 (9th Cir.1984); North Slope Borough v. Andrus, 642 F.2d
589, 594-905 (D.C. Cir.1980).
122 But see Conservation Law Foundation v. Clark, 560 F.Supp. 561 (D. Mass. 1983).
123 Edwardsen v. U.S. Department of the Interior, 268 F.3d 781, 784-790 (9th Cir. 2001).

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CRS-19
Appendix. State Laws That Ban or Regulate
Offshore Resource Development
Table 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
Authorization:
State Lands Division of the Department of Conservation
Ala. Code §§ 9-
& Land Resources is charged with leasing offshore oil
15-18; 9-17-1 et
and gas in state waters. In addition, the Alabama State
seq.; 40-20-1 et
Oil and Gas Board regulates oil and gas production to
seq.
ensure the conservation and proper development of oil
and gas resources.
AK
The Alaska Department of Natural Resources is
Ban:
responsible for leasing oil and gas on state lands,
Alaska Stat. §§
including offshore areas. Certain areas are specifically
38.05.140(f);
designated as off limits to oil and gas leasing, and
38.05.184.
administrative decisions may further limit access.
Authorization:
Alaska Stat. §§
38.05.131 et seq.
CA
The State Lands Commission is generally responsible for
Ban:
oil and gas leasing. California currently has a general
Cal. Pub. Res.
ban in place restricting any state agency from issuing
Code §§ 6871.1-
new offshore leases, unless the President of the United
.2 (repealed
States determines that there is a “severe energy supply
1994); 6870
interruption and has ordered distribution of the Strategic
(Santa Barbara
Petroleum Reserve ..., the Governor finds that the energy
limitations);
resources of the sanctuary will contribute significantly to
6243 (general
the alleviation of that interruption, and the Legislature
ban).
subsequently acts to amend...[the law] to allow that
extraction.” The ban is limited to areas that are not
currently subject to a lease.
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
Ban: Del. Code
Natural Resources and Environmental Control are
Ann. tit. 7 ch. 61
authorized to lease oil and gas in state waters. Lands
§ 6102(e).
“administered by the Department of Natural Resources
and Environmental Control” may not be leased by the
Authorization:
Secretary.
Del. Code. Ann.
tit. 7 ch. 61.

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CRS-20
State
Policy
Statutes
FL
In general, the Department of Natural Resources is
Ban:
vested with the authority to permit oil and gas
Fla. Stat. Ann.
development on state lands and submerged lands; in
§377.242.
1990 Florida enacted a broad ban on offshore oil and gas
development by prohibiting oil and gas drilling
Authorization:
structures in a variety of locations, including Florida’s
Fla. Stat. Ann. §§
territorial waters. The development ban provides an
377.01 et seq.;
exception for valid existing rights.
253.001 et seq.
GA
The State Properties Commission is authorized to issue
Authorization:
leases for state-owned oil and gas. The statute does not
Ga. Stat. § 50-
distinguish between onshore and offshore minerals.
16-43.
HI
The Board of Land and Natural Resources is authorized
Authorization:
to lease oil and gas on state lands, including submerged
Hawaii Rev. Stat.
lands. There would not appear to be a statutory ban in
§§ 182-1 et seq.
place.
LA
The state Mineral Board is responsible for leasing oil
Authorization:
and gas in Louisiana and its offshore territory.
La. Rev. Stat. §§
Development is limited to areas offered by the Board for
30:121 et seq.
leasing.
ME
The Bureau of Geology and Natural Areas has primary
Authorization:
authority over oil and gas development on state lands,
Me. Rev. Stat.
including tidal and submerged lands. The Bureau is
tit. 12 §§ 549 et
authorized to issue exploration permits and mineral
seq.
leases.
MD
The Department of the Environment regulates oil and
Ban:
gas development. The areas underlying Chesapeake Bay,
Md. Code, Envt.
its tributaries, and the Chesapeake Bay Critical Area are
§14-107.
unavailable for oil and gas development.
Authorization:
Md. Code, Envt.
§§ 14-101 et seq.
MA
The Division of Mineral Resources is charged with
Authorization:
administering the leasing of oil and gas on state lands.
Mass. Gen. Laws
The law requires a public hearing before any license to
Ann. Ch. 21 §§
explore or lease for extraction is issued for mineral
54 et seq.
resources located in coastal waters. Many of the state’s
offshore areas are designated as ocean sanctuaries in
Ban:
which oil and gas development is prohibited.
Mass. Gen. Laws
Ann. Ch. 132A §
15.

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CRS-21
State
Policy
Statutes
MS
The Mississippi Major Economic Impact Authority is
Authorization:
responsible for administering oil and gas leases on state
Miss. Code. Ann.
lands. Offshore oil and gas development is generally
§§ 29-7-1 et seq.
permissible. Specific areas are not available for leasing.
No development may occur in areas north of the coastal
Ban:
barrier islands, except in Blocks 40, 41, 42, 43, 63, 64
Miss. Code. Ann.
and 66 through 98. Further, “surface offshore drilling
§ 29-7-3.
operations” may not be conducted within one mile of Cat
Island.
NH
No statute appears to address offshore oil and gas
development.
NJ
State law authorizes the removal of sand and other
Authorization:
materials from lands under tidewaters and below the
N.J. Stat. Ann.
high water mark if approved by the Tidelands Resource
§§ 12:3-12-1 et
Council. Offshore oil and gas development is not
seq.
addressed.
NY
Leases and permits for the right to use state-owned
Authorization:
submerged lands for navigation, commerce, fishing,
N.Y. Pub. Lands.
bathing, and recreation are authorized for specified
Law § 75; N.Y.
submerged areas. General authority for issuing oil and
Envt’l &
gas leases is vested in the Department of Environmental
Conserv. Law §§
Conservation. Certain submerged lands underlying
23-0101 et seq.
specified lakes are excluded from exploration and
leasing, but offshore areas would not appear to be
subject to a similar ban.
NC
State law authorizes the sale or lease of any state-owned
Authorization:
mineral underlying the bottoms of any sounds, rivers,
N.C. Gen. Stat. §
creeks, or other waters of the state. The state is
146-8.
authorized to sell, lease, or otherwise dispose of oil and
gas at the request of the Department of Environment and
Natural Resources.
OR
The Department of State Lands is generally responsible
Authorization:
for leasing state owned minerals, including oil and gas.
Or. Rev. Stat. §§
Leasing of tidal and submerged lands is governed by
274.705 et seq.;
separate provisions of law. There would not appear to
273.551 (for
be a ban in place.
submerged lands
seaward more
than 10 miles
easterly of the
124th West
Meridian).
RI
The Coastal Resources Management Council is charged
Authorization:
with identifying, evaluating, and determining which uses
R.I. Gen. Laws.
are appropriate for the state’s coastal resources and
§§ 46-23-1 et
submerged lands.
seq.

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CRS-22
State
Policy
Statutes
SC
The State Budget and Control Board is authorized to
Authorization:
“negotiate for leases of oil, gas and other mineral rights
S.C. Code. Ann.
upon all of the lands and waters of the State, including
§§ 10-9-10 et
offshore marginal and submerged lands.”
seq.
TX
The School Land Board is authorized to lease those
Authorization:
portions of the Gulf of Mexico under the state’s
Tex. Nat. Res.
jurisdiction for oil and gas development.
Code §§ 52.011
et seq.
VA
The Marine Resources Commission is authorized to
Authorization:
grant easements or to lease “the beds of the waters of the
Va. Code Ann. §
Commonwealth outside of the Baylor Survey” for oil
28.2-1208.
and gas development.
WA
In general, the Department of Natural Resources is
Ban:
responsible for mineral development on state lands. State
Wash. Rev. Code
law prohibits leasing of tidal or submerged lands
Ann. §§
“extending from mean high tide seaward three miles
43.143.005 et
along the Washington coast from Cape Flattery south to
seq.
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.”

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