,,ii #aaith ,,congress #b;d ,session ,s4 #edeh ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,september #bb1 #bjbf,mr4 ,cotton introduced the following bill2 which was read twice and referred to the ,committee on ,energy and ,natural ,resources ,a ,,bill ,to reduce energy supply shortages and consumer fuel costs by lowering production cost barriers for domestic upstream oil and natural gas producers1 providing temporary royalty and tax relief during periods of supply stress1 streamlining permitting for additional production1 encouraging ,state severance tax relief1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,supply ,relief and ,domestic ,production ,cost ,reduction ,act4 #b4 ,purposes ,the purposes of this ,act are-- 7#a7 to increase the availability of domestic crude oil1 natural gas1 condensate1 and natural gas liquids during periods of supply shortage or elevated consumer fuel costs2 7#b7 to reduce marginal production costs for upstream producers capable of bringing additional supply to market2 7#c7 to lower ,federal fiscal1 regulatory1 and permitting barriers that discourage domestic exploration1 drilling1 completion1 recompletion1 workover1 and production activities2 7#d7 to ensure that relief provided under this ,act is tied to domestic production1 supply availability1 and consumer cost reduction2 and 7#e7 to preserve environmental1 safety1 and reclamation obligations while ensuring that such obligations are implemented in a timely1 predictable1 and non-duplicative manner4 #c4 ,definitions ,in this ,act3 7#a7 ,covered energy commodity ,the term covered energy commodity means crude oil1 natural gas1 condensate1 natural gas liquids1 or any other hydrocarbon produced from an oil or gas well in the ,united ,states4 7#b7 ,covered producer ,the term covered producer means a person that-- 7,a7 holds a working interest1 operating interest1 record title interest1 operating right1 leasehold interest1 or other right to explore for1 develop1 drill1 complete1 recomplete1 work over1 produce1 or sell a covered energy commodity2 and 7,b7 conducts1 or proposes to conduct1 covered upstream production activity in the ,united ,states4 7#c7 ,covered upstream production activity ,the term covered upstream production activity means-- 7,a7 geologic1 geophysical1 engineering1 surveying1 staking1 site preparation1 exploration1 drilling1 completion1 recompletion1 workover1 plugging back1 stimulation1 artificial lift1 produced water handling1 gathering1 separation1 compression1 metering1 storage1 or transportation activity carried out upstream of the point of sale or custody transfer of a covered energy commodity2 7,b7 construction1 maintenance1 replacement1 modernization1 or operation of equipment1 roads1 pads1 tank batteries1 flowlines1 gathering lines1 compressor units1 separators1 dehydrators1 meters1 produced water systems1 power supply1 and other appurtenant facilities necessary for the production of a covered energy commodity2 and 7,c7 any activity that the ,secretary determines is reasonably necessary to increase1 maintain1 restore1 or avoid the curtailment of domestic production of a covered energy commodity4 7#d7 ,oil and gas lease ,the term oil and gas lease means a lease of ,federal land for oil and gas production issued pursuant to the ,mineral ,leasing ,act 7#cj ,u4,s4,c4 #aha et seq474 7#e7 ,outer ,continental ,shelf ,the term outer ,continental ,shelf has the meaning given the term in section #b of the ,outer ,continental ,shelf ,lands ,act 7#dc ,u4,s4,c4 #acca74 7#f7 ,secretary ,the term ,secretary means the ,secretary of the ,interior4 7#g7 ,supply shortage period ,the term supply shortage period means a period certified under section #aja4 7#h7 ,united ,states ,the term ,united ,states means-- 7,a7 the ,states2 7,b7 the ,district of ,columbia2 7,c7 the ,commonwealth of ,puerto ,rico2 7,d7 ,guam2 7,e7 ,american ,samoa2 7,f7 the ,commonwealth of the ,northern ,mariana ,islands2 7,g7 the ,united ,states ,virgin ,islands2 and 7,h7 any other territory or possession of the ,united ,states1 including the outer ,continental ,shelf4 ,i ,supply shortage determination #aja4 ,certification of supply shortage period 7a7 ,in general ,the ,secretary of ,energy shall certify a supply shortage period for purposes of this ,act if the ,secretary of ,energy determines that #a or more of the following conditions exists3 7#a7 ,the average retail price of gasoline1 diesel fuel1 home heating oil1 or natural gas for residential1 commercial1 industrial1 agricultural1 or electric generation use exceeds the #e-year average price for such fuel by more than #ae percent for a period of not fewer than #cj consecutive days4 7#b7 ,domestic inventories of crude oil1 petroleum products1 or natural gas are below the #e-year seasonal average for a period of not fewer than #cj consecutive days4 7#c7 ,domestic production of crude oil1 natural gas1 condensate1 or natural gas liquids is constrained by insufficient permitting1 leasing1 transportation1 gathering1 processing1 or field-service capacity4 7#d7 ,the ,president has declared an energy emergency1 fuel supply emergency1 national emergency affecting energy markets1 or other emergency that materially affects the availability or cost of covered energy commodities4 7#e7 ,the ,secretary of ,energy determines that additional domestic production of covered energy commodities would materially reduce the risk of shortage1 price escalation1 or regional supply disruption4 7b7 ,duration ,a certification by the ,secretary of ,energy under subsection 7a7 shall remain in effect for #ahj days unless terminated earlier under subsection 7d74 7c7 ,extension ,the ,secretary of ,energy may extend a certification under subsection 7a7 for additional periods of not more than #ahj days if the ,secretary of ,energy determines that the conditions described in that subsection continue to exist4 7d7 ,termination ,the ,secretary of ,energy may terminate a supply shortage period if the ,secretary of ,energy determines that the conditions described in subsection 7a7 no longer exist4 7e7 ,publication ,a certification1 extension1 or termination under this section shall be published in the ,federal ,register4 7f7 ,savings clause ,a certification under this section does not authorize any activity that is otherwise prohibited by ,federal law1 except to the extent expressly provided in this ,act4 #ajb4 ,covered relief period ,for purposes of this ,act and the amendments made by this ,act1 relief available during a supply shortage period shall apply to-- 7#a7 any covered upstream production activity initiated1 permitted1 approved1 modified1 extended1 renewed1 drilled1 completed1 recompleted1 or placed into production during the supply shortage period2 and 7#b7 any cost1 payment1 royalty1 fee1 or expenditure incurred during the supply shortage period in connection with a covered upstream production activity4 ,,ii ,federal royalty and lease payment relief #bja4 ,temporary reduction in ,federal oil and gas royalty rates during supply shortage periods 7a7 ,onshore ,federal lands ,notwithstanding the ,mineral ,leasing ,act 7#cj ,u4,s4,c4 #aha et seq471 including section #ag of that ,act 7#cj ,u4,s4,c4 #bbf71 or any regulation issued pursuant to that ,act1 during a supply shortage period1 the royalty rate for an oil or gas lease shall be the lesser of-- 7#a7 the royalty rate specified in the applicable lease2 and 7#b7 #h percent4 7b7 ,outer ,continental ,shelf ,notwithstanding the ,outer ,continental ,shelf ,lands ,act 7#dc ,u4,s4,c4 #acca et seq471 any regulation issued pursuant to that ,act1 or any lease term to the contrary1 during a supply shortage period1 the ,secretary shall offer royalty relief1 including royalty suspension volumes1 reduced royalty rates1 or other equivalent royalty relief1 for production from any lease on the outer ,continental ,shelf if the ,secretary determines that royalty relief is likely-- 7#a7 to increase domestic production2 7#b7 to accelerate the timing of production2 7#c7 to extend production from an existing field2 7#d7 to avoid shut-in production2 or 7#e7 to reduce consumer energy costs4 7c7 ,marginal wells 7#a7 ,definition of marginal well ,in this subsection1 the term marginal well means a well that produces not more than-- 7,a7 #ae barrels of oil per day2 or 7,b7 #ij1jjj cubic feet of natural gas per day4 7#b7 ,royalty rate ,during a supply shortage period1 the royalty rate for production from a marginal well on ,federal land shall be #j percent for the #bd-month period beginning on the date that the initial supply shortage period1 as applicable1 was certified under section #aja7;a74 7d7 ,new production from existing leases 7#a7 ,definition of incremental new production ,in this subsection1 the term incremental new production means production from-- 7,a7 a new well drilled on an existing lease2 7,b7 a recompleted well2 7,c7 a workover operation2 7,d7 a restimulation operation2 7,e7 a secondary or tertiary recovery activity2 or 7,f7 any other activity that increases production above the average daily production from the lease during the #ab-month period preceding the supply shortage period4 7#b7 ,royalty rate ,during a supply shortage period1 the royalty rate for incremental new production from an existing oil or gas lease shall be reduced by #ej percent for the first #cf months of such incremental production1 as applicable1 was certified under section #aja7;a74 7e7 ,no effect on existing environmental or reclamation obligations ,royalty relief provided under this section shall not affect any obligation relating to well control1 safety1 spill prevention1 reclamation1 bonding1 plugging1 abandonment1 or environmental compliance4 #bjb4 ,temporary reduction of ,federal lease rentals1 minimum bids1 and related payments 7a7 ,rental payments ,during a supply shortage period1 the ,secretary shall reduce by #ej percent any rental payment otherwise due under applicable law with respect to an oil or gas lease if the lessee certifies to the ,secretary that the savings resulting from the #ej percent reduction will be used to support covered upstream production activity4 7b7 ,minimum bid ,during a supply shortage period1 the minimum acceptable bid for an oil or gas lease shall be #b per acre4 7c7 ,administrative fees ,during a supply shortage period1 the ,secretary shall waive1 reduce1 or defer nonessential administrative fees associated with applications for permits to drill1 sundry notices1 rights-of-way1 communitization agreements1 unitization agreements1 lease reinstatements1 lease extensions1 and related approvals for covered upstream production activity4 7d7 ,certification ,a lessee receiving relief under this section shall certify to the ,secretary that the relief will be used to support-- 7#a7 additional drilling1 completion1 recompletion1 workover1 or production activity2 7#b7 maintenance or restoration of production2 7#c7 avoidance of shut-in production2 7#d7 reduction of delivered energy costs2 or 7#e7 employment1 equipment1 or field-service activity directly related to domestic production4 #bjc4 ,expedited royalty relief for supply-constrained basins 7a7 ,definition of supply-,constrained basin ,in this section1 the term supply-constrained basin means a basin for which the ,secretary of ,energy1 in consultation with the ,secretary1 has made a determination that-- 7#a7 additional production from that basin would materially increase domestic supply2 7#b7 production from that basin is constrained by production costs1 transportation constraints1 lease economics1 permitting delays1 or field-service limitations2 or 7#c7 production from that basin would materially reduce regional or national fuel prices4 7b7 ,expedited process 7#a7 ,establishment ,during a supply shortage period1 the ,secretary shall establish an expedited process for applicants to submit an application for royalty relief for ,federal leases located in a supply-constrained basin4 7#b7 ,application ,an application submitted under paragraph 7#a7 shall be in such form and contain such information as the ,secretary may require4 7#c7 ,deadline 7,a7 ,in general ,not later than #cj days after the date on which a complete application is submitted by an applicant under paragraph 7#a71 the ,secretary shall-- 7i7 approve or deny the application for relief2 and 7ii7 notify the applicant of the determination made under clause 7i74 7,b7 ,missed deadline approval ,if the ,secretary fails to approve or deny an application by the deadline under subparagraph 7,a71 the application shall be considered approved for a period of #bd months4 ,,iii ,federal lease terms #cja4 ,lease term extensions 7a7 ,in general ,during a supply shortage period1 the ,secretary shall extend by #b years the primary term of any oil or gas lease if production1 drilling1 completion1 or related operations were delayed by-- 7#a7 ,federal permitting delay2 7#b7 administrative protest2 7#c7 litigation2 7#d7 supply-chain disruption2 7#e7 lack of field-service availability2 7#f7 delay in obtaining a ,federal right-of-way or other ,federal authorization2 or 7#g7 any other cause outside the reasonable control of the lessee4 7b7 ,no additional payment ,an extension under subsection 7a7 shall not require the payment of any additional bonus1 rental1 fee1 or other consideration not otherwise required under the lease4 ,,iv ,consumer cost and supply accountability #dja4 ,producer certification 7a7 ,in general ,a covered producer receiving relief under this ,act shall certify to the applicable ,federal agency that the relief will be used to support #a or more of the following3 7#a7 ,increased domestic production4 7#b7 ,maintenance or restoration of existing production4 7#c7 ,avoidance of shut-in production4 7#d7 ,reduction in production costs4 7#e7 ,expansion of drilling1 completion1 recompletion1 workover1 or field-service activity4 7#f7 ,reduction of delivered energy costs to refiners1 utilities1 industrial consumers1 commercial consumers1 agricultural users1 or households4 7b7 ,form ,the certification required under subsection 7a7 shall be in such form and contain such information as the ,secretary of ,energy may require4 7c7 ,false statements ,a certification under subsection 7a7 shall be subject to section #ajja of title #ah1 ,united ,states ,code4 #djb4 ,report to ,congress ,not later than #ahj days after the first certification of a supply shortage period under section #aja7;a71 and annually thereafter1 the ,secretary of ,energy1 in consultation with the ,secretary and the ,secretary of the ,treasury1 shall submit to ,congress and make publicly available a report describing-- 7#a7 the effect of this ,act on-- 7,a7 domestic production of covered energy commodities2 and 7,b7 consumer fuel and energy costs2 7#b7 the number of permits1 leases1 rights-of-way1 sundry notices1 and related approvals issued or determined approved under this ,act2 and 7#c7 recommendations for additional legislative action to reduce supply shortages and consumer costs4 #djc4 ,,gao review ,not later than #b years after the date of enactment of this ,act1 the ,comptroller ,general of the ,united ,states shall submit to ,congress a report evaluating-- 7#a7 whether relief provided under this ,act-- 7,a7 increased domestic supply2 7,b7 reduced production costs2 and 7,c7 reduced consumer prices2 7#b7 whether ,federal agencies complied with permitting deadlines required under this ,act2 and 7#c7 whether additional reforms are necessary to reduce supply shortages4