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the "overriding national interest” finding provided for by that Act. Under the Coastal Zone Management Act, each State with an approved coastal zone management plan has 6 months to approve or disapprove a development and production plan. The committee believes that this is an unnecessarily long period, which should be shortened. Accordingly, as described in the analysis discussion of section 507 of the 1977 Act, the committee also amended the Coastal Zone Management Act to reduce the review and approval period for States to 90 days (or 3 months) in conformity with new section 25 of the OCS Act.
The committee expects that Federal, State, and industry cooperation will resolve almost every dispute over proposed development and production plans. Once a lease has been issued, it should be the unusual case where an acceptable plan cannot eventually be agreed upon. Reasonable modifications, in light of comments and recommendations, and any hearings, would provide protection to the environment, to any affected State, and also allow prompt and efficient development.
However, the Secretary is given the authority to dissapprove a plan, but only for four specified reasons. The Secretary shall disapprove a plan only: (1) If a lessee fails to demonstrate that he can comply with the requirements of Federal law, including this Act; (2) if a plan cannot be modified so as to be, to the maximum extent possible, consistent with approved coastal zone management programs of coastal States; (3) if operations threaten national security or national defense; or (4) if, because of exceptional geological conditions, exceptional resource values, or other exceptional circumstances, the proposed plan would be subject to cancellation under the criteria described earlier as to section 5 (a) (2).
If a plan is disapproved because lessee cannot demonstrate compliance with the law or Federal “consistency” requirements, where the Iessee should have known of applicable coastal zone plans approved prior to issuance of the lease, the Secretary may cancel the lease immediately and the lessee is not entitled to any compensation.
If a plan is disapproved for national security, national defense, or environmental reasons or for inconsistency with an applicable coastal zone plan approved after issuance of the lease, the Secretary shall allow 5 years, with appropriate lease extensions, to determine if compliance is possible. At any time during the 5 year extension, the lessee can submit or be required to submit the same or a new plan for approval, which shall be reviewed in the same manner as an original plan. Ordinarily, if no plan is approved at the end of the 5 year period, or after a shorter period when requested by the lessee and agreed to by the Secretary, the lease is to be canceled and the lessee is entitled to compensation in accordance with the standards detailed in section 5(a) (2). However, compensation can be denied under section 5(c) of the Act if the lessee does not act in good faith and is, therefore, not duly diligent. : In addition, subsection 25(i) provides that the Secretary may cancel or terminate a lease, without compensation, for failure of an owner to submit a plan, or comply with a plan, after notice is given of such failure, a reasonable period allowed for corrective action, and an administrative hearing is held. Ordinarily, as described in subsection 5(d),
failure to comply with the Act, lease terms, or applicable regulations on a producing lease, can result in cancellation only after an appropriate proceeding in the U.S. district court. The committee was concerned that applying this type of judicial proceeding to the development and production plan might lead to delay. Therefore, under subsection (i), the termination or cancellation is in effect at the completion of the administrative proceedings. Judicial review, rather than judicial approval, is to occur in the U.S. district court.
Again, it was the committee's belief that disapproval for environmental reasons would be most unusual. In almost all cases, if an area was leased, operations pursuant to a lease should be able to be modified so as to insure safe operation. Only if such modifications are impossible would the extreme remedy of disapproval, followed by cancellation and reimbursement be necessary.
Of course, even if activities on a lease pursuant to a development and production plan are approved, or modified and then approved, such activities can later be suspended, and such lease can be cancelled or terminated, as provided for in regulations pursuant to subsection 5(a) of this Act.
The committee recognizes that, of necessity, some flexibility is needed in administering the development and production activities pursuant to a plan. Some exploration activities will continue during development and production phases, pursuant to a plan. Later discoveries, or other events, might indicate the need to have a plan revised.
Periodic review of the plan in light of changes in available information and other onshore or offshore conditions is required, and if the review indicates that a plan should be revised in light of such changes, the Secretary shall require revision. In addition, the Secretary can allow revisions, requested by an operator, if such revision will lead to greater recovery of oil or gas, improve the efficiency, safety and environmental protection of operations, will be the only means available to avoid substantial economic hardship to the lessee, or generally is not otherwise inconsistent with the OCS Act. Such revisions can be allowed only if it is consistent with the protection of the environment. Any revision of an approved plan which is significant is to be reviewed after the comment and recommendation procedures applicable to the initial decision on a plan, and if necessary, through the NEPA procedures for a “major Federal action.”
Finally, to continue the committee's policy of limiting duplicative or unnecessary requirements, subsection 25(j) provides for submission of any portion of a plan, providing for production and transportation of natural gas, to the Federal Power Commission. The Secretary of the Interior and the Commission shall coordinate activities so as to avoid duplication of effort, especially as to be preparation of any environmental impact statement. Section 26.-Outer Continental Shelf Oil and Gas Information
Program Section 26 describes the procedures and requirements for obtaining and releasing information from lessees and permittees.
Subsecton 26(a) requires lessees and permittees to grant the Secretary of the Interior access to all data obtained from OCS activities.
Copies of specific data and interpretations are to be furnished upon request to the Secretary. If interpretations are supplied, the lessee or permittee is not to be held responsible for any consequence of its use or for any reliance upon them, provided they are made in good faith.
Federal agencies are to provide the Secretary with relevant information in their possession. Also, any information furnished in the same manner and form as used in the normal conduct of a lessee's business, are to be supplied free of charge, except for the reasonable reproduction costs. If information is requested in some other form, however, or if any information is requested from a permittee generally, the Secretary is to pay the reasonable costs of both processing and reproduction.
Planning information to States Subsection 26(b) requires that information from lessees and permittees be processed, analyzed, and interpreted by the Secretary and then a summary of data made available to affected States. Such summary shall include estimates of the amount of oil and gas, the size and timing of development if and when oil and gas is found, and the expected locations of facilities and pipelines.
The intent of this subsection is to ensure that affected states are provided summaries of all information relating to potential or existing OCS production in order to assist them in planning for any onshore impact. Recognizing that all states may not have the resources to review information or may not be supplied with certain information because of confidentiality provisions, this subsection would ensure that the states have comprehensive and timely information available as soon as feasible for comment and planning purposes.
Confidentiality Subsection 26(c) requires the Secretary to promulgate regulations to assure the confidentiality of privileged information received under this section. These rules must set forth the time periods and conditions for any eventual release of such information. The regulations must also include a provision that privileged information itself is only transmitted to States if a lessee or permittee and all owners of the information so agree.
If there is no agreement as to release of information, the Governor of the affected State or his designee has the right as provided in subsection 26(d) (2) to inspect such information at regional offices of the Department of the Interior. However, no such inspection of confidential information is permitted prior to a lease sale covering the area about which the information was developed.
Subsection 26(d) requires the Secretary to transmit to affected States all relevant information received or prepared by the Secretary under this section, subject to applicable confidentiality regulations. This includes all relevant programs, plans, summaries, reports, EIS's, tract nominations( including negative nominations), lease sale information, including all modifications, revisions and comments.
Any privileged information transmitted to the States or knowledge obtained by the States through inspection is subject to confidentiality regulations.
Subsections 26(e) and 26 (f) are intended to further insure the confidentiality of information by providing procedures for actions and restrictions against State and Federal officials who “leak” privileged data, and make the governments and not just the employees responsible for such leaks. If any State or Federal official reveals information in violation of confidentiality regulations, the State or Federal Government may be sued for appropriate damages. The State and the Federal Government may not raise defenses of sovereign immunity or defenses based on the "ultra vires” nature of the employee's or official's action. The committee realizes that precluding defenses, especially of sovereign immunity, by a State or by a Federal statute is unusual. It, therefore, made such a preclusion voluntary-in effect a waiver, if a State wishes to receive or gain access to privileged information, it must enter into a written agreement agreeing to waive these defenses as a condition precedent to receipt or access.
Finally, subsection 26 (g) preempts any State law which might provide for public access to privileged information obtained by the State from the Secretary.
Subsection 26 (h) requires the Secretary to withhold privileged information from any State which he finds cannot or does not comply with confidentiality regulations. Transmittal may be resumed when such situation no longer exists.
Finally, under this section, any geological and geophysical information obtained in the conduct of exploration by any Federal agency (or Federal contractor) may not be withheld from the public. Section 27.–Federal Purchase and Disposition of Oil and Gas
Section 5 of the Outer Continental Shelf Lands Act of 1953, allows the Secretary of the Interior to reserve oil and gas accrued or reserved to the United States as royalty. Present regulations issued by the Department of the Interior, 30 C.F.R. Section 225A, provide for the disposal or distribution of such royalty oil. The 1976 Amendments to the Outer Continental Shelf Lands Act provide many new bidding options, involving royalties and net profit shares. Section 27 is intended to provide the procedures for the securing of royalty and net profit share oil and gas, and if no royalty or net profit share is part of an accepted bid, for purchase of oil and gas, and the distribution of such oil and gas.
Section 27(a) provides that the Secretary of the Interior can demand that all royalty or net profit shares, or both, accruing under any lease or permit issued or maintained under the Outer Continental Shelf Lands Act is to be paid in oil and gas. Paragraph (2) of this subsection provides that in those cases where there is a royalty or net profit share amounting to less than 1623 per centum by volume of the oil and gas produced, the Secretary shall have the right to purchase oil or gas from leases at the regulated price, or if there is no regulated price, at the fair market value. This paragraph allows the Secretary to purchase oil and gas so that he can make it available as he would otherwise make available royalty or net profit share oil or gas, when he accepts bids with a low or no royalty or net profit share, or where after production on a lease has commenced, the Secretary agrees to reduce or eliminate the royalty or net profit share. However, the Secretary cannot obtain, either by purchase or royalty or net profit share,
no more than 1623 per centum by volume of the oil and
gas percentage of the royalty or net profit share, which ever is greater.
Paragraph (3) of this subsection also provides that the Secretary, instead of selling royalty, net profit share, or purchased oil and gas under this section, can transfer it to other agencies for disposal within the federal government.
Subsections (b) and (c) provide for the distribution of royalty, net profit share, or purchased oil and gas respectively. Under both subsections, if any law provides for the mandatory allocation of either oil or gas, or provides for a regulated price for such oil or gas, or provides for both, those provisions of law dealing with allocation and regulated price are to apply. Procedures established in regulations by the Secretary for distribution of oil or gas apply only in the absence of any statutory provision setting a mandatory allocation or a regulated price for OCS oil and gas.
Subsection (b) provides that oil obtained pursuant to this section not otherwise allocated or regulated, is to be offered to the public and sold by competitive bidding at not less than its fair market value. Fair market value is defined in section 2 of this Act.
In accordance with the Small Business Act (15 U.S.C. 631), the present regulations for the disposition of royalty oil provide for allocation of such oil to “small refiners." It is the intention of the committee that such disposition be continued. Therefore, section (b) also provides that if the Secretary determines that small refiners do not have access to adequate supplies of oil at equitable prices, he is to make the oil he has obtained available, either through a lottery or an equitable allocation, in such a way as to insure sufficient amounts of such oil to small refiners.
A "small refiner" is defined in subsection (e) (2) as an owner of a refinery or of refineries “who qualifies as a small business concern under the rules of the Small Business Administration and who is unable to purchase in the open market an adequate supply of crude oil. * * *999
It is intended that the Secretary, from time to time, classify these refiners eligible for preferential access to OCS oil obtained under section 27 and that, while the refiner must be a small business concern, the Secretary is to have the discretion to adopt the definitions of "small refiner", either as employed by the Small Business Administration, or in any other manner consistent with Federal policy as to refineries reflected in the Mineral Leasing Act of 1920, as amended on July 13, 1946; in the Small Business Act; in the Emergency Petroleum Allocation Act of 1973; and in various federal antitrust laws and federal programs.
Subsection (c) provides that, in the absence of mandatory allocation, the Secretary is to sell to the public by competitive bidding any gas obtained pursuant to this section. If the Secretary finds that there is an emergency shortage of gas in any particular region of the United States, the Secretary may allocate or conduct a lottery for such gas and limit participation in such sale, allocation, or lottery to persons or business concerns serving regions suffering such a shortage.
There is, of course, the possibility that oil or gas obtained will not receive acceptable bids, and not be able to be otherwise transferred to