§6506a Competitive Leasing of Oil and Gas

Summary

The Secretary must run a quick, competitive oil and gas leasing program in the National Petroleum Reserve in Alaska. Leasing must include rules needed to avoid or reduce harm to surface resources. Some land-use planning laws do not apply to the Reserve. The first lease sale had to be held within 20 months of December 12, 1980, and only after a final environmental impact statement if one was needed. Earlier withdrawals were ended for this leasing program. Lease bids must follow certain established bidding systems. Tracts may include known geologic structures and can be up to 60,000 acres. Leases last up to 10 years at first and continue as long as oil or gas is produced, capable of being produced, or approved drilling or reworking is happening. If a leaseholder applies at least 60 days before the lease ends, the Secretary must renew it for another 10 years if there was a discovery that a reasonable operator would keep. If there was no discovery, renewal for 10 years is possible with a $100 per acre fee plus proof of diligent exploration or if the land is part of a unit. This applies to leases in effect on or after August 8, 2005. A lease expires if it produces nothing within 30 years of issue, but it won’t expire if failure to produce was beyond the lessee’s control. Lessees may form unit agreements or pool lands for conservation and efficient development, with consultation with Alaska and local interests and specific ways to allocate production. The Secretary may waive, suspend, or reduce rents or royalties to encourage development, after consulting the State and North Slope Borough and, when required, a Regional Corporation. Suspensions stop payments and extend lease time. Money from sales, rentals, bonuses, and royalties generally goes to the U.S. Treasury, but 50 percent must be paid to the State of Alaska twice a year for planning, public facilities, and services, with priority to areas most affected. Starting in fiscal year 2034, for receipts from leases issued after July 4, 2025, 70 percent goes to Alaska and 30 percent to the Treasury. Federal agencies and authorized people may do non‑interfering geological surveys. Lawsuits over environmental statements must be filed within 60 days after the notice appears in the Federal Register. Studies already done count for the first two lease sales, which together cannot exceed 2,000,000 acres. The Secretary must issue implementing regulations as soon as possible after August 8, 2005. If the subsurface of leased land was conveyed to the Arctic Slope Regional Corporation, the Secretary must waive federal administration over that subsurface; if only part of a lease was conveyed, the lease is split and the conveyed part’s administration is waived, while the federal surface remains managed by the government.