Stop Giving Big Oil Free Money Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 5186 To prohibit the Secretary of the Interior from issuing new oil or natural gas production leases in the Gulf of Mexico under the Outer Continental Shelf Lands Act to a person that does not renegotiate its existing leases in order to require royalty payments if oil and natural gas prices are greater than or equal to specified price thresholds, and for other purposes. IN THE HOUSE OF REPRESENTATIVES NOVEMBER 20, 2019 Mr. GRIJALVA (for himself and Mr. LOWENTHAL) introduced the following bill; which was referred to the Committee on Natural Resources A BILL To prohibit the Secretary of the Interior from issuing new oil or natural gas production leases in the Gulf of Mexico under the Outer Continental Shelf Lands Act to a person that does not renegotiate its existing leases in order to require royalty payments if oil and natural gas prices are greater than or equal to specified price thresholds, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 01:20 Nov 28, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5186.IH H5186 kjohnson on DSK79L0C42 with BILLS 2 •HR 5186 IH SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Stop Giving Big Oil 2 Free Money Act of 2019’’. 3 SEC. 2. ELIGIBILITY FOR NEW LEASES AND THE TRANSFER 4 OF LEASES. 5 (a) DEFINITIONS.—In this section: 6 (1) COVERED LEASE.—The term ‘‘covered 7 lease’’ means a lease for oil or gas production in the 8 Gulf of Mexico that is— 9 (A) in existence on the date of enactment 10 of this Act; 11 (B) issued by the Secretary under section 12 304 of the Outer Continental Shelf Deep Water 13 Royalty Relief Act (43 U.S.C. 1337 note; Pub- 14 lic Law 104–58); and 15 (C) not subject to limitations on royalty re- 16 lief based on market price that are equal to or 17 less than the price thresholds described in 18 clauses (v) through (vii) of section 8(a)(3)(C) of 19 the Outer Continental Shelf Lands Act (43 20 U.S.C. 1337(a)(3)(C)). 21 (2) LESSEE.—The term ‘‘lessee’’ includes any 22 person or other entity that controls, is controlled by, 23 or is in or under common control with, a lessee. 24 (3) SECRETARY.—The term ‘‘Secretary’’ means 25 the Secretary of the Interior. 26 VerDate Sep 11 2014 01:20 Nov 28, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5186.IH H5186 kjohnson on DSK79L0C42 with BILLS 3 •HR 5186 IH (b) ISSUANCE OF NEW LEASES.— 1 (1) IN GENERAL.—The Secretary shall not 2 issue any new lease that authorizes the production 3 of oil or natural gas under the Outer Continental 4 Shelf Lands Act (43 U.S.C. 1331 et seq.) to a per- 5 son described in paragraph (2) unless the person has 6 renegotiated each covered lease with respect to which 7 the person is a lessee, to modify the payment re- 8 sponsibilities of the person to require the payment of 9 royalties if the price of oil and natural gas is greater 10 than or equal to the price thresholds described in 11 clauses (v) through (vii) of section 8(a)(3)(C) of the 12 Outer Continental Shelf Lands Act (43 U.S.C. 13 1337(a)(3)(C)). 14 (2) PERSONS DESCRIBED.—A person referred 15 to in paragraph (1) is— 16 (A) a lessee that— 17 (i) holds a covered lease on the date 18 on which the Secretary considers the 19 issuance of the new lease; or 20 (ii) was issued a covered lease before 21 the date of enactment of this Act, but 22 transferred the covered lease to another 23 person or entity (including a subsidiary or 24 VerDate Sep 11 2014 01:20 Nov 28, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5186.IH H5186 kjohnson on DSK79L0C42 with BILLS 4 •HR 5186 IH affiliate of the lessee) after the date of en- 1 actment of this Act; or 2 (B) any other person that has any direct 3 or indirect interest in, or that derives any ben- 4 efit from, a covered lease. 5 (3) MULTIPLE LESSEES.— 6 (A) IN GENERAL.—For purposes of para- 7 graph (1), if there are multiple lessees that own 8 a share of a covered lease, the Secretary may 9 implement separate agreements with any lessee 10 with a share of the covered lease that modifies 11 the payment responsibilities with respect to the 12 share of the lessee to include price thresholds 13 that are equal to or less than the price thresh- 14 olds described in clauses (v) through (vii) of 15 section 8(a)(3)(C) of the Outer Continental 16 Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)). 17 (B) TREATMENT OF SHARE AS COVERED 18 LEASE.—Beginning on the effective date of an 19 agreement under subparagraph (A), any share 20 subject to the agreement shall not constitute a 21 covered lease with respect to any lessees that 22 entered into the agreement. 23 (c) TRANSFERS.—A lessee or any other person who 24 has any direct or indirect interest in, or who derives a 25 VerDate Sep 11 2014 01:20 Nov 28, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5186.IH H5186 kjohnson on DSK79L0C42 with BILLS 5 •HR 5186 IH benefit from, a lease shall not be eligible to obtain by sale 1 or other transfer (including through a swap, spinoff, serv- 2 icing, or other agreement) any covered lease, the economic 3 benefit of any covered lease, or any other lease for the 4 production of oil or natural gas in the Gulf of Mexico 5 under the Outer Continental Shelf Lands Act (43 U.S.C. 6 1331 et seq.), unless the lessee or other person— 7 (1) has renegotiated each covered lease with re- 8 spect to which the lessee or person is a lessee, to 9 modify the payment responsibilities of the lessee or 10 person to include price thresholds that are equal to 11 or less than the price thresholds described in clauses 12 (v) through (vii) of section 8(a)(3)(C) of the Outer 13 Continental Shelf Lands Act (43 U.S.C. 14 1337(a)(3)(C)); or 15 (2) has entered into an agreement with the Sec- 16 retary to modify the terms of all covered leases of 17 the lessee or other person to include limitations on 18 royalty relief based on market prices that are equal 19 to or less than the price thresholds described in 20 clauses (v) through (vii) of section 8(a)(3)(C) of the 21 Outer Continental Shelf Lands Act (43 U.S.C. 22 1337(a)(3)(C)). 23 VerDate Sep 11 2014 01:20 Nov 28, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5186.IH H5186 kjohnson on DSK79L0C42 with BILLS 6 •HR 5186 IH SEC. 3. PRICE THRESHOLDS FOR ROYALTY SUSPENSION 1 PROVISIONS. 2 (a) IN GENERAL.—The Secretary of the Interior shall 3 agree to a request by any lessee to amend any lease issued 4 for any Central and Western Gulf of Mexico tract during 5 the period of January 1, 1996, through November 28, 6 2000, to incorporate price thresholds applicable to royalty 7 suspension provisions, that are equal to or less than the 8 price thresholds described in clauses (v) through (vii) of 9 section 8(a)(3)(C) of the Outer Continental Shelf Lands 10 Act (43 U.S.C. 1337(a)(3)(C)). 11 (b) NEW OR REVISED PRICE THRESHOLDS.—An 12 amended lease under subsection (a) shall impose the new 13 or revised price thresholds effective on October 1, 2021. 14 (c) EXISTING LEASE PROVISIONS.—Lease provisions 15 in effect on the date of enactment of this Act shall prevail 16 through September 30, 2020. 17 Æ VerDate Sep 11 2014 01:20 Nov 28, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H5186.IH H5186 kjohnson on DSK79L0C42 with BILLS