Temporary reduction in Federal oil and gas royalty rates during supply shortage periods

(a) Onshore Federal lands Notwithstanding the Mineral Leasing Act (30 U.S.C. 181 et seq.), including section 17 of that Act (30 U.S.C. 226), or any regulation issued pursuant to that Act, during a supply shortage period, the royalty rate for an oil or gas lease shall be the lesser of— (1) the royalty rate specified in the applicable lease; and (2) 8 percent. (b) Outer Continental Shelf Notwithstanding the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.), any regulation issued pursuant to that Act, or any lease term to the contrary, during a supply shortage period, the Secretary shall offer royalty relief, including royalty suspension volumes, reduced royalty rates, or other equivalent royalty relief, for production from any lease on the outer Continental Shelf if the Secretary determines that royalty relief is likely— (1) to increase domestic production; (2) to accelerate the timing of production; (3) to extend production from an existing field; (4) to avoid shut-in production; or (5) to reduce consumer energy costs. (c) Marginal wells (1) Definition of marginal well In this subsection, the term marginal well means a well that produces not more than— (A) 15 barrels of oil per day; or (B) 90,000 cubic feet of natural gas per day. (2) Royalty rate During a supply shortage period, the royalty rate for production from a marginal well on Federal land shall be 0 percent for the 24-month period beginning on the date that the initial supply shortage period, as applicable, was certified under section 101(a). (d) New production from existing leases (1) Definition of incremental new production In this subsection, the term incremental new production means production from— (A) a new well drilled on an existing lease; (B) a recompleted well; (C) a workover operation; (D) a restimulation operation; (E) a secondary or tertiary recovery activity; or (F) any other activity that increases production above the average daily production from the lease during the 12-month period preceding the supply shortage period. (2) Royalty rate During a supply shortage period, the royalty rate for incremental new production from an existing oil or gas lease shall be reduced by 50 percent for the first 36 months of such incremental production, as applicable, was certified under section 101(a). (e) No effect on existing environmental or reclamation obligations Royalty relief provided under this section shall not affect any obligation relating to well control, safety, spill prevention, reclamation, bonding, plugging, abandonment, or environmental compliance.