S. 5438: Alaska’s Right to Produce Act 2.0

This bill would change how federal oil and gas leasing works in two parts of Alaska: the Coastal Plain of the Arctic National Wildlife Refuge and the National Petroleum Reserve in Alaska (NPR-A).

What it would do for the Coastal Plain leasing program

The bill would make it harder for the federal government to stop or delay oil and gas leasing on the Coastal Plain. It says that any presidential or agency action that pauses or suspends leasing there would have no legal effect.

It would also ratify and approve a set of federal approvals and reviews already issued for the Coastal Plain leasing program, including permits, biological opinions, incidental take statements, and similar actions. It directs agencies to keep processing, reinstating, or maintaining those approvals.

The bill states that these approvals should be treated as satisfying requirements under several environmental and historic-preservation laws, including:

• the Alaska National Interest Lands Conservation Act (ANILCA),
• the National Environmental Policy Act (NEPA),
• the Endangered Species Act,
• the Marine Mammal Protection Act,
• certain federal administrative law provisions, and
• the National Historic Preservation Act, if the Native Village of Kaktovik approves a cultural resources plan with reasonable mitigation measures.

Limits on cancelling leases and on lawsuits

The bill would prevent the President or the Secretary of the Interior from cancelling a Coastal Plain lease after bids have been opened or the high bidder has been announced, unless the lessee violates the lease and does not fix the problem within a reasonable time.

It would also sharply limit court review. In general, courts would not be allowed to review agency actions approving these Coastal Plain leasing documents and permits, including actions already pending in court when the bill becomes law. The U.S. Court of Appeals for the D.C. Circuit would have exclusive authority to hear challenges about whether this section is valid or how far it reaches.

At the same time, the bill gives leaseholders a way to ask a court to order an agency to act if it is failing to do so. If the court agrees, it would have to set a deadline for the agency, usually within 90 days unless more time is needed to comply with the law.

New rules for Coastal Plain development

The bill would require the Interior Department, within one year, to create a unit agreement system for the Coastal Plain. A unit agreement is a way to coordinate development across multiple leases. The system would need to be similar to the one used in the National Petroleum Reserves Production Act and include rules on public interest determinations, production sharing, pooling, and shared operations.

In making those decisions, the Secretary would have to consult with the State of Alaska, affected Alaska Native Regional Corporations, and the North Slope Borough in certain situations.

Financial and operational incentives for lessees

The bill would give the Secretary more discretion to reduce or waive rental fees, minimum royalties, or royalties on Coastal Plain leases if that would help development or if a lease cannot be operated successfully under its current terms. It would apply to leases already in effect when the bill becomes law.

It would also allow the Secretary to approve a suspension of operations and production on a lease or unit if requested by the lessee. If a suspension is approved, rental or royalty payments would be paused during the suspension, and the lease term would be extended by the length of the suspension.

In addition, federal agencies or people authorized by the Secretary could carry out geological and geophysical exploration in the Coastal Plain, so long as they do not interfere with existing operations or production. Data gathered from that work would have to be shared with the Secretary.

National Petroleum Reserve in Alaska

The bill would stop the Interior Department from finalizing, implementing, administering, or enforcing a 2024 Bureau of Land Management rule called Management and Protection of the National Petroleum Reserve in Alaska, as well as any substantially similar rule.

Relevant Companies

• CEO — CNOOC Limited could be indirectly affected through its interest in Alaska oil and gas development projects and partnerships, if any are involved in Coastal Plain or related Arctic leasing activities.
• CVX — Chevron could be affected if its Alaska upstream operations or related development plans are expanded or constrained by changes to Arctic leasing rules.
• XOM — Exxon Mobil could be affected indirectly through broader Alaska exploration and production activity, depending on its involvement in future lease opportunities or infrastructure.
• SLB — SLB could see changes in demand for oilfield services tied to increased or reduced exploration and development activity in Alaska.
• HAL — Halliburton could be indirectly affected through drilling and completion services demand associated with Arctic oil and gas development.
• BKR — Baker Hughes could be indirectly affected through equipment and services used in oil and gas exploration and production in Alaska.