PDF _ RL33404 - Offshore Oil and Gas Development: Legal Framework
20-Sep-2010; Adam Vann; 26 p.

Update: Previous Releases:
April 6, 2010
August 5, 2008
January 30, 2008
January 30, 2007
September 21, 2007
March 3, 2007
January 3, 2007
July 28, 2006
July 14, 2006

Abstract: The development of offshore oil, gas, and other mineral resources in the United States is impacted by a number of interrelated legal regimes, including international, federal, and state laws. International law provides a framework for establishing national ownership or control of offshore areas, and domestic federal law mirrors and supplements these standards.

Governance of offshore minerals and regulation of development activities are bifurcated between state and federal law. Generally, states have primary authority in the three-geographical-mile area extending from their coasts. The federal government and its comprehensive regulatory regime govern those minerals located under federal waters, which extend from the states’ offshore boundaries out to at least 200 nautical miles from the shore. The basis for most federal regulation is the Outer Continental Shelf Lands Act (OCSLA), which provides a system for offshore oil and gas exploration, leasing, and ultimate development. Regulations run the gamut from health, safety, resource conservation, and environmental standards to requirements for production based royalties and, in some cases, royalty relief and other development incentives.

In 2006, Congress passed a measure that would allow new offshore drilling in the Gulf of Mexico. This measure was incorporated into H.R. 6111, a broad bill passed in the final days of the 109th Congress. President Bush signed the bill into law (P.L. 109-432) on December 20, 2006. Areas of the North Aleutian Basin off the coast of Alaska have also been recently made available for leasing by executive order. The five-year plan for offshore leasing for 2007-2012 adopted by the Minerals Management Service in December of 2007 proposed further expansion of offshore leasing. Several contentious legal issues remain the subject of national debate and legislative proposals, including the possibility of opening up more areas of the Outer Continental Shelf to exploration and production, or encouraging or mandating certain efforts to speed up or enhance exploration and possible production at existing leaseholds. At the same time, the role of the coastal states in deciding whether to lease in areas adjacent to their shores has also received recent attention.

In addition to these legislative and regulatory efforts, there has also been significant litigation related to offshore oil and gas development. Cases handed down over a number of years have clarified the extent of the Secretary of the Interior’s discretion in deciding how leasing and development are to be conducted.

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Topics: Natural Resources, Legislative, Marine

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