The differences between the House and Senate versions of the Big Beautiful Bill are summarized in the table below. (See the previous post on the House version.)
The Senate bill includes royalty and lease terms that favor deepwater lessees, but excludes the provisions in the House bill that streamline the leasing process and minimize litigation risks. At least some of those House provisions were rejected by the Senate Parliamentarian.
The House will vote on the version that passes the Senate. So the Senate version is more likely to be enacted.
| House | Senate | Comment |
| royalty: 12.5% to 18.75% | royalty: 12.5% to 16 2/3% | Lowering the royalty cap to 1/6 (16 2/3%) unduly limits the Secretary’s discretion and may reduce revenues without significantly increasing production. |
| 2 GOA sales/yr over next 15 yrs. | same as House | Would have liked the opportunity for consideration of very limited Atlantic leasing or stratigraphic test drilling, but that is not politically feasible at this time. |
| use Sale 254 form and stips 4-10, may update stips 1-3 | sale 254 lease form and stips 4-9, may update stips 1-3 and 10 | The minor difference favors the Senate version. Stip 10 pertains to restrictions due to Rights-of-Use and Easement for Floating Production Facilities, and needs to be updated with each sale |
| mandates 10 year lease term for water depths >800 m | Although a 10 year term for deepwater leases is generally prudent, the Secretary should be able to choose a shorter term if concerns about timely exploration and diligent development arise (more likely given the increase in leases that could be issued as a result of the 2 sales/yr mandate). | |
| requires approval of subsurface commingling unless there is “conclusive evidence” of safety or ultimate recovery issues | Although BSEE’s policy change on downhole commingling was warranted, the legislative change removes essentially all discretion by mandating approval unless there is “conclusive evidence” to the contrary. Conclusive evidence is dependent on production history, at which point it may be too late. | |
| Adherence with the Biological Opinion shall satisfy the Secretary’s obligations under the Endangered Species Act of 1973 and the Marine Mammal Protection Act of 1972 | This provision reduces govt/lessee litigation risks | |
| Previous EIS’s for the Gulf of Mexico shall satisfy the Secretary’s NEPA obligation. | Rejected by the Senate Parliamentarian. | |
| Consistency determinations prepared by BOEM for Lease Sale 261 for the States of Texas, Louisiana, Mississippi, Alabama, and Florida will satisfy the Secretary’s CZMA obligations. | The States or Parliamentarian may not have been comfortable with this provision which simplifies plan approval processes. | |
| The Secretary may waive any requirement under the Outer Continental Shelf Lands Act that the Secretary determines would delay issuance of a lease. | Rejected by the Senate Parliamentarian? | |
| A lease must be issued to the highest responsible qualified bidder not later than 90 days after the sale date. | Rejected by the Senate Parliamentarian. | |
| A Governor may nominate for leasing under a lease sale held under this section an area of the OCS that is adjacent to the waters of the State | Never understood the need for this provision. | |
| G&G surveys must be approved within 30 days after a complete application is received. | Not feasible in some cases given endangered species concerns. | |
| A lease awarded under Lease Sale 259 or Lease Sale 261 shall not be set aside, vacated, enjoined, suspended, or cancelled except in accordance with section 5 the Outer Continental Shelf Lands Act (43 U.S.C. 1334). Also, new terms or conditions may not be added to these leases. | Reduces litigation risks. | |
| Any action to approve, require modification of, or disapprove any exploration plan, development and production plan, bidding procedure, lease sale, lease issuance, or permit or authorization related to oil and gas exploration, development, or production, or any inaction resulting in the failure to hold a lease sale shall be subject to judicial review only in a United States court of appeals for a circuit in which an affected State is located. | This provision significantly reduces litigation risks. Rejected by Parliamentarian? | |
| 6+ Cook Inlet sales over next 10 yrs. | 6+ Cook Inlet sales over the next 7 years | |
| 90% of Cook Inlet revenues to the State of Alaska. | 70% of Cook Inlet revenues to the State of Alaska. | The percentages are high, but the revenues are likely to be low. |
Bud's Offshore Energy (BOE) 