By NOELLE STRAUB of Greenwire
Published: September 9, 2009
"House Energy and Natural Resources Chairman Nick Rahall (D-W.Va.) introduced a bill yesterday to forge a new Interior agency to govern oil and gas leasing on federal lands and to overhaul the federal royalty system.
The far-reaching bill also includes measures to improve planning for offshore energy development, address wind and solar programs, and boost funding for ocean conservation and land acquisition. It comes largely as a response to a series of scandals and scathing government watchdog reports on the federal agencies that handle oil and gas drilling on public lands.
Trying to build immediate momentum for the measure, Rahall announced today that his committee will hold a two-part legislative hearing next Wednesday and Thursday on H.R. 3534 (pdf). The measure as introduced contains some changes from a draft bill released by the House Natural Resources Committee's Democratic staff in May.
The legislation would create a new agency called the "Office of Federal Energy and Minerals Leasing" to handle onshore and offshore lease sales, inspection, enforcement and revenue collection. It would consolidate the oil and gas, wind, wave and solar programs now carried out by the Bureau of Land Management and the Minerals Management Service. The Interior inspector general would take over the current functions of the MMS audit and compliance management section.
The office's director would require Senate confirmation, unlike the head of MMS, which currently is the only major Interior bureau whose top official does not require confirmation. All employees of the new office who conduct audits or compliance reviews would have to meet professional auditor qualifications.
The bill would also eliminate the royalty-in-kind program, which allows industry to provide petroleum directly to Interior in lieu of royalty payments. A report by the Interior inspector general last year found that 19 employees, nearly one-third of the entire staff of the royalty-in-kind program, socialized with and received a wide array of gifts and gratuities from oil and gas companies with which the agency was conducting official business.
Other provisions include new "regional planning councils" for the outer continental shelf that would be made up of federal and state officials, industry, tribes and other stakeholders to undertake new strategic planning. The bill would also replace the current administrative process for onshore public-lands wind and solar projects with a commercial leasing program."
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