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119-s-5458119th CongressWALLET

Supply Relief and Domestic Production Cost Reduction Act

Sponsored By: Senator Cotton, Tom [R-AR]

Introduced

Summary

Would provide temporary, targeted relief to boost domestic oil and natural gas production during certified supply shortage periods. Relief would apply only when the Secretary of Energy certifies a supply shortage and would preserve environmental, safety, and reclamation obligations.

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  • Producers and operators: Covered producers could receive royalty relief, including a 50 percent cut on incremental new production for 36 months, and could seek reduced or waived rentals, minimum bids, and administrative fees.
  • Permitting and lease rules: The bill would create an expedited review for supply-constrained basins with a 30-calendar-day decision window and default approval if not decided in time, and it allows a two-year extension of primary federal lease terms for specified delays without extra payments.
  • Oversight, consumers, and environment: Producers must certify that relief expands or sustains production under penalty of 18 U.S.C. 1001, environmental and safety obligations remain in force, the Energy Secretary must report within 180 days of the first certification and annually, and the Government Accountability Office must review results 2 years after enactment.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 2 benefits, 0 costs, 1 mixed.

When relief starts and who qualifies

If enacted, the bill would let the Secretary of Energy certify a national supply shortage when certain numeric tests or conditions occur. One trigger is fuel prices more than 15% above the five-year average for at least 30 days. Another is inventories below the five-year seasonal average for at least 30 days; other triggers include production constraints, a Presidential emergency, or a Secretary determination. A certification would run 180 days and may be extended in up to 180-day increments. The bill would define covered producers and covered energy commodities, require producers to certify how they will use relief, and make false statements subject to penalties under 18 U.S.C. 1001. The bill also says a certification does not override other Federal legal prohibitions unless the bill expressly says so.

Lower rents, fees, and lease delays

If enacted, the bill would lower several near-term lease costs for producers during a certified shortage. Lessees who certify use of the savings could pay 50% less rent during a shortage. The minimum acceptable bid for leases would be $2 per acre during a shortage. The Secretary could waive, reduce, or defer nonessential administrative fees for permit and related applications. The government would also extend a lease's primary term by two years when delays are caused by specified disruptions, with no extra payment required.

Lower royalties and faster approvals

If enacted, the bill would cut royalties and speed royalty approvals for oil and gas production during a certified supply shortage. Incremental new production on an existing lease would pay 50% less royalty for the first 36 months. Onshore Federal leases would be capped at an 8% royalty during a shortage. Marginal wells (≤15 barrels oil/day or ≤90,000 cubic feet gas/day) would pay 0% royalty for 24 months after the first certification. The Secretary could also offer royalty relief for Outer Continental Shelf leases and must decide expedited basin relief applications within 30 days or the application is deemed approved for 24 months.

Sponsors & CoSponsors

Sponsor

Cotton, Tom [R-AR]

AR • R

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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