Energy Supply Act

(Conference report filed in House, H. Rept. 94-1632)

Outer Continental Shelf Lands Act Amendments - =Title I: Findings and Purposes with Respect to Managing the Resources of the Outer Continental Shelf= - Sets forth the purposes of this Act, including the preservation and development of oil and natural gas resources in the Outer Continental Shelf; provision of assistance to States affected by such oil and gas exploration and development; minimization of conflict between such activity and fishing; and establishment of an oil spill liability fund.

=Title II: Amendments to the Outer Continental Shelf Lands Act= - Redefines terms under the Outer Continental Shelf Lands Act, including "lease," "coastal zone," "affected State," "exploration," "development," and "production.

Makes it the policy of the United States that, since exploration, development, and production of mineral resources of the Shelf will significantly affect the various States, such States may require assistance in protecting their coastal zones and other areas, and are entitled to participate in the policy and planning decisions relating to the Shelf.

Makes the civil and criminal law of the adjacent States applicable to the subsoil and seabed of the Shelf.

Directs the Secretary of the Interior to administer the leasing of the Shelf and to prescribe necessary regulations thereto, including: those for the suspension of activities under any lease or permit in the interest of conservation and prevention of harm to the marine or human environment; those for the cancellation of any lease or permit where a threat to human or marine life or to the national security exists; and those for the development of safety regulations. Allows the issuance of pipeline rights-of-way through the submerged lands of the Shelf.

Requires lessees to produce oil and gas, under Shelf leases, at rates issued by the President.

Prohibits lessees from flaring natural gas, except under specified conditions.

Authorizes six new methods of competitive, sealed bidding and two percentage leasing methods for Shelf leases. Directs the Secretary to choose from among such methods so as to accomplish the purposes of this Act, including providing a fair return to the Federal Government, increasing competition, assuring safety, and developing and discovering new oil and gas resources in a timely manner.

Limits use of the bidding system selected to not more than 66 2/3 percent of the total area offered for lease each year during the five year period in each region where there has been no development of oil or gas prior to October 1, 1975.

Authorizes the Secretary, after making specified findings, to exceed such limitation if either the Senate or the House of Representatives passes a resolution of approval of the Secretary's finding. Sets forth the procedural rules to be followed by each House with respect to any such resolution of approval.

Allows the Secretary, during the first year after enactment, without comgressional approval, to use cash bonus bidding for more than two-thirds of the areas offered for lease if he finds that compliance with the limitation would unduly delay OCS oil and gas development.

Requires the Secretary to report annually to the Congress on the use of such bidding methods. Allows submission of joint bids at the Secretary's discretion.

Limits oil and gas leases, under such Act, to five years, with a possible five-year extension. Authorizes lease terms of up to ten years in areas of unusually deep water or unusually adverse weather conditions. Permits lessees to explore, develop, and produce gas and oil under such leases.

Directs the Secretary to provide the Governor of the relevant State an identification and schedule of areas offered for leasing at the time of soliciting nominations for leasing of lands within three miles of the seaward boundary of such a State. Provides that the Governor of such a State and the Secretary may jointly offer an area for lease, or that the Secretary may independently offer a Federal area for lease.

Permits any Federal agency or any person authorized by the Secretary to conduct geological and geophysical explorations in the Shelf which do not interfere with lease operations or unduly harm the marine environment.

Requires lessees to submit exploration plans for approval before beginning any exploration.

Requires annual reports to the Congress on leasing and production in the Shelf and on ways of promoting competition in Shelf leases.

Directs the Secretary to prepare and periodically revise any oil and gas leasing program to implement the purposes of this Act. Requires such program to indicate as precisely as possible the size, timing, and location of leasing activity which will best meet national energy needs for the ensuing five-year period. Requires such program to recognize the principle that management of the Shelf shall consider all of the economic, social, and environmental values of the resources of the Shelf, and shall consider the impact of oil and gas exploration on other resources and on the marine, coastal, and human environments.

Authorizes the Governors of coastal and affected States to establish Regional Outer Continental Shelf Advisory Boards after consultation with the Secretary and the Secretary of Commerce. Provides that if any such Board or the Governor of any affected State makes specific recommendations regarding the size, timing, or location of a proposed lease sale or with respect to a proposed development and production plan, the Secretary shall accept such recommendations unless he determines they are not consistent with national security or with the overriding national interest.

Requires the Secretary of Commerce to conduct a study of any area or region included in any lease sale in order to establish baseline information concerning the status of the human, marine, and coastal environments of the Shelf and other areas which may be affected by lease activities.

Requires the Secretary of the Interior and specified other departmental or agency heads, as appropriate, to develop safety regulations applicable to the construction and operation of any fixed structure and artificial island on the Shelf. Requires the National Academy of Engineering to study the adequacy of existing safety regulations for Shelf lease operations, and requires appropriate Federal officials to promulgate a complete set of safety regulations within one year to apply to such operations. Requires the Secretary and the Secretary of the department in which the Coast Guard is operating to strictly enforce safety and environmental regulations promulgated under this Act. Provides for the development of regulations to permit physical observation, testing, and inspection of lease sites and equipment. Requires reports on major fires and deaths relating to lease activities. Permits cancellation of leases for failure to meet safety requirements.

Authorizes citizen suits by persons adversely affected, or potentially affected, by activities under this Act against any person, including the United States and any Federal official. Permits awarding of attorneys' fees in such suits. Subjects any action of the Secretary relative to approval of leasing program to judicial review in the United States Court of Appeals for the District of Columbia, and subjects the Secretary's actions relating to development and production plans to review in the appropriate circuit court of appeals.

Authorizes the Secretary and other specified officials to require the Attorney General or a United States attorney to institute an action for equitable relief to enforce this Act. Subjects violators of this Act and regulations thereunder, after failure to take corrective action, to a civil penalty of $10,000 per day of continuing violation; and subjects knowing, willfull and fraudulent violators to a fine of $100,000 and ten years' imprisonment, or both.

Requires lessees to submit a development and production plan prior to development and production pursuant to an oil and gas lease. Requires such a plan to specify all proposed facilities and operations. Directs the Secretary to submit each such plan to the Governor of any affected State. Requires an environmental impact statement before major development in areas of the Shelf where there has been no prior development. Requires development and production plans to be submitted to the Governors for comment. Sets forth procedures for the approval or disapproval of such plans by the Secretary.

Requires lessees and permittees to provide access to the Secretary to all data obtained from their activities. Directs the Secretary to transmit such data and other relevant information, as appropriate, to affected States and Regional Advisory Boards.

Requires that any development and production plan submitted to the Secretary pursuant to this Act for the production and transportation of natural gas be submitted to the Federal Power Commission.

Provides for payment of the United States' royalties or net profit shares in oil or gas, if demanded. Grants the United States the right to purchase 16 2/3 percent of the volume of oil and gas produced pursuant to a lease or permit, at the regulated price. Permits the United States to sell by competitive bidding or allocate to small refiners any oil or gas obtained by either of such means.

Provides that before any oil or gas is exported pursuant to the Export Administration Act, the President must find that such an export is in the national interest and is in compliance with such Act. Permits the Congress to disapprove any such export.

Prohibits specified employees of the Department of Interior from accepting for a period of two years employment or compensation from any person, association, corporation, or other entity subject to regulation under this Act.

=Title III: Offshore Oil Spill Pollution Fund= - Defines terms used in this title, including: "cleanup costs," "discharge," and "offshore facility." Establishes the Offshore Oil Pollution Compensation Fund in the Department of Transportation. Prohibits discharge of harmful quantities of oil from any offshore facility or vessel. Requires persons in charge of such facilities or vessels to notify the Secretary of Transportation of a discharge. Directs the President to act to remove any discharged oil unless the owners or operators act to properly remove it. Empowers the Secretary to promulgate such regulations and take other necessary actions as are required to implement this title.

Sets forth what damages may be recovered under this title, including the value of any loss or injury to any real or personal property damaged as a result of an oil discharge and any loss of income incurred thereby.

Imposes the cleanup costs from an offshore facility upon the owners and operators thereof. Limits their liability to $35,000,000, unless such discharge resulted from gross negligence, willful misconduct, or violation of safety standards, whereupon they shall be liable for the full amount. Imposes the costs of cleanup from a discharge from a vessel on the owners and operators thereof, up to $150 per gross registered ton, with full liability accruing under the same circumstances as it does for offshore facility owners and operators.

Makes any damaged party or third party offshore facility or vessel liable for cleanup costs or damages if such party's negligent or intentional act caused such discharge or any resulting damages.

Declares that no person shall be liable under this Act for payment of cleanup costs or damages to any government or citizen of a foreign country unless such payment is authorized by a treaty or a reciprocal remedy is provided to United States claimants against such foreign government or citizen.

Imposes a fee of three cents per barrel of oil obtained from the Shelf in order to bring the Fund to a balance of between $100,000,000 and $200,000,000.

Requires offshore facility and vessel owners and operators to maintain evidence of financial responsibility.

Directs the President or the authorized representative of a State to act as public trustee of the natural resources to recover for damages to them. Directs the Secretary to prescribe a claims procedure for cleanup costs. Requires the Secretary to use the facilities and services of private insurance and claims adjusting organizations in administering this title. Permits class actions by the Attorney General for recovery of claims under this title. Grants the public access to information required and transmitted under this title. Directs the Secretary to report annually to the Congress on activities pursuant to this title.

Authorizes appropriations through fiscal year 1979 to carry out this title.

=Title IV: Miscellaneous Provisions= - Requires submission to the Comptroller General within six months and annually thereafter of a list of all shut-in oil and gas wells and wells flaring natural gas on Shelf leases, so that the Comptroller General may evaluate and report to the Congress on such matters.

Requires submission of a report to the Congress within 90 days and annually thereafter by the Secretary of the Interior on delinquent royalty accounts and recommendations for corrective action.

Directs the Federal Power Commission to permit any natural gas distributing company which engages in development and production of natural gas from the Shelf to transport to its service areas for distribution any natural gas obtained by it from such development and production.

Prohibits discrimination against any person with respect to any activity, sale, or employment conducted pursuant to this Act or the Outer Continental Shelf Lands Act.

Requires each officer or employee of the Secretary of the Interior who performs any function under this Act or the Outer Continental Shelf Lands Act, and who has any known financial interest in enterprises applying for or receiving any permit or lease under, or subject to, this Act or the Outer Continental Shelf Lands Act, to file an annual statement specifying such interest.