Section 1 Short title
This Act may be cited as the “Accounting for Methane in Production through Loophole Elimination with Oil and Gas Royalties” or the “AMPLE Oil and Gas Royalties Act”.
Accounting for Methane in Production through Loophole Elimination with Oil and Gas Royalties
A BILL
To require Federal oil and gas leases to report and pay royalties on oil and gas production based on the actual volume of oil and gas withdrawn under a lease, and for other purposes.
Sec. 2 Findings
The Congress finds the following:
Some of the mineral resources owned by the Federal Government on behalf of United States taxpayers are being developed inefficiently, costing taxpayers millions of dollars in lost royalties, especially with respect to vented, flared, and leaked natural gas. The Government Accountability Office estimates that approximately 40 percent of natural gas could be economically captured from Federal onshore leases, which would increase Federal royalty payments by approximately $23,000,000 and reduce greenhouse gas emissions equivalent to up to 16.5 million metric tons of carbon dioxide, which is equivalent to annual emissions from 3.1 million cars.
Significant emissions of natural gas are associated with oil and gas production and transportation, including oil and gas produced on Federal lands. According to a University of Maryland study, these emissions can negatively impact air quality hundreds of miles away.
Methane has a much greater impact on climate change than carbon dioxide, and the methane emissions from oil and gas production can greatly diminish the benefit of using natural gas to help reduce the carbon intensity of the United States fuel mix.
Available control technologies exist to economically capture a considerable amount of natural gas and resulting in taxpayers being delivered the royalties they deserve.
Requiring royalty payments on natural gas that is currently flared, vented, unavoidably lost, and used for beneficial purposes will lead to more efficient use of Federal resources, reduce greenhouse gas emissions, and increase royalty payments to the Federal Government.
Sec. 3 Volume allocation of oil and gas production
In general— Section 111(k) of the Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 1721(k)) is amended to read as follows:
“(k) Volume allocation of oil and gas production
“(1) In general—Except as otherwise provided by this subsection—
“(A) a lessee or its designee of a lease in a unit or communitization agreement that contains only Federal leases with the same royalty rate and funds distribution shall report and pay royalties on oil and gas production for each production month based on the actual volume of oil and gas withdrawn from the reservoir by or on behalf of that lessee, including all oil and gas not sold by or on behalf of that lessee;
“(B) a lessee or its designee of a lease in any other unit or communitization agreement shall report and pay royalties on oil and gas production for each production month based on the volume of oil and gas produced from such agreement and allocated to the lease in accordance with the terms of the agreement; and
“(C) a lessee or its designee of a lease that is not contained in a unit or communitization agreement shall report and pay royalties on oil and gas production for each production month based on the actual volume of oil and gas withdrawn from the reservoir by or on behalf of that lessee, including all oil and gas not sold by or on behalf of that lessee.
“(2) Definition—In this subsection the term “oil and gas withdrawn from the reservoir” means any oil and gas that is produced, sold, vented, flared, used for beneficial purposes, leaked, or otherwise emitted during production.”
Conforming amendments— The Mineral Leasing Act is amended—
in section 17(b)(1)(A) (30 U.S.C. 226(b)(1)(A)), by striking “the production removed or sold from the lease” and inserting “oil and gas withdrawn from the reservoir in accordance with section 111(k) of the Federal Oil and Gas Royalty Management Act of 1982”;
in section 17(c)(1) (30 U.S.C. 226(c)(1)), by striking “the production removed or sold from the lease” and inserting “oil and gas withdrawn from the reservoir in accordance with section 111(k) of the Federal Oil and Gas Royalty Management Act of 1982”;
in section 31(e)(3) (30 U.S.C. 188(e)(3))—
in subparagraph (A), by striking “production per well per day” and inserting “oil and gas withdrawn from the reservoir per well per day in accordance with section 111(k) of the Federal Oil and Gas Royalty Management Act of 1982”; and
in subparagraph (B), by striking “all production removed or sold from such lease” and inserting “all oil and gas withdrawn from the reservoir in accordance with section 111(k) of the Federal Oil and Gas Royalty Management Act of 1982”; and
in section 31(f)(4) (30 U.S.C. 188(f)(4)), by striking “production removed or sold from the oil placer mining claim” and inserting “oil and gas withdrawn from the reservoir in accordance with section 111(k) of the Federal Oil and Gas Royalty Management Act of 1982”.
Application— This section, including the amendments made by this section, shall not apply with respect to any lease issued before the date of the enactment of this Act.