The Outer Continental Shelf Lands Act establishes a procedural framework under which the Department of Interior may lease areas of the Outer Continental Shelf (OCS) to prevent waste and conserve natural resources and to issue leases through competitive bidding. The Act authorizes the Secretary of the Interior to grant oil and gas leases on the submerged lands of the outer continental shelf[i].
The OCS is an important national resource reserve which should be made available for expeditious and orderly development, subject to environmental safeguards, in a manner consistent with the maintenance of competition and other national needs. The rights and responsibilities of the states to preserve and protect their marine, human and coastal environments, through regulation of land, air, and water uses, safety, and related development and activity, should be considered and recognized. The Act shall be construed in such a manner that the character of the waters above the OCS as high seas and the right to navigation and fishing therein are not affected[ii].
The laws governing OCS extend to the subsoil and seabed of the OCS, and includes all artificial islands and installations attached to the seabed that are erected to explore, develop, produce, or transport resources. Mineral leases on the OCS are also governed by this Act. The civil and criminal laws of each adjacent state as long as they are not inconsistent with other federal laws, are the law of the U.S. for that portion of the subsoil and seabed of the OCS which would be within the state if the boundaries of the state extended seaward to the outer margin of the shelf. However, this provision shall not be interpreted as a basis for claiming interest in or jurisdiction on behalf of the state for any purpose over the seabed and subsoil of the OCS, the property and natural resources thereof, or the revenues therefrom[iii].
The Secretary of the Interior shall empower a federal agency or any person to conduct geological and geophysical explorations on outer continental shelf lands, provided such explorations do not interfere with or endanger actual operations under any lease maintained or granted pursuant to the Outer Continental Shelf Lands Act and if the activity is not unduly harmful to aquatic life in the area[iv].
The Secretary shall grant rights-of-way through submerged lands of the OCS for pipelines to transport oil, natural gas, sulphur, or other minerals. The head of a federal agency who takes an action which has a direct and significant effect on the OCS or its development shall promptly notify the Secretary of the action. The Act sets forth that the Secretary has to prevent, through cooperative development of an area, the harmful effects that could result from the unrestrained production of hydrocarbons from a common hydrocarbon-bearing geological area underlying federal and state boundaries[v].
The Secretary is empowered to grant oil and gas leases on submerged lands of the OCS to the highest responsible qualified bidder by competitive bidding, under regulations adopted by the Secretary. Leasing on a competitive bid base is also authorized by the Act, for sulphur and other minerals besides oil and gas, under terms and conditions prescribed by the Secretary. The 1995 amendments make special royalty relief provisions for deep water production in the Gulf of Mexico. Amendments to the Act adopted in 1994 provide that the Secretary shall negotiate agreements for the use of OCS sand, gravel and shell resources for programs of shore protection, beach restoration or coastal wetland protection which is undertaken by federal, state or local government agencies, or for use in federally-funded or authorized construction projects[vi].
The President shall withdraw unleased OCS lands from disposition, especially during the time of war. In such circumstances, the U.S. has the right of first refusal to purchase at market price all or a portion of any mineral produced from the OCS. The U.S. reserves the right to designate areas that are restricted from exploration and operation needed for national defense. The U.S. reserves the right of use of uranium, thorium, and other fissionable materials in whatever concentration. The right to extract all helium is reserved by the U.S[vii].
By the Act, the Secretary should establish procedures regarding receipt and consideration of nominations for areas to be offered for lease or excluded from leasing, public notice of and participation in development of the leasing program, review by state and local governments which may be impacted by the proposed leasing, periodic consultation with state governments and others who are engaged in activity in or on the OCS, and consideration of the coastal zone management program being developed or administered by an affected coastal state under the Coastal Zone Management Act (CZMA) of 1972.
The affected states and local governments may make recommendations regarding the size, timing, or location of a proposed lease sale or a proposed development and production plan within 60 days after receiving notice. The Secretary shall accept the recommendations of the governor and shall accept the local government executive’s recommendations if they provide for a reasonable balance between the national interest and the well-being of local citizens. The Secretary may make cooperative agreements with affected states for purposes consistent with the Act[viii].
Any one who has a valid legal interest which is or may be adversely affected shall commence a civil action in order to compel compliance with the Act against any person. This includes the U.S. for an alleged violation of the Act, regulations, permit, or lease. An action of the Secretary to approve, require modification of, or disapprove an exploration plan or development and production plan is subject to judicial review only in a U.S. court of appeals for a circuit in which an affected state is located[ix].
A person who knowingly and purposely violates the Act, any term of a lease, license, or a regulation issued under the Act to protect health, safety or the environment, or to conserve natural resources, is liable for a criminal penalty which shall extend up to $100,000, imprisonment for up to 10 years, or both. For each day that a violation continues it shall be calculated as a separate violation[x].
[i] 43 USCS § 1337.
[ii] 43 USCS § 1332.
[iii] 43 USCS § 1333.
[iv] 43 USCS § 1340.
[v] 43 USCS § 1334.
[vi] 43 USCS § 1337.
[vii] 43 USCS § 1341.
[viii] 43 USCS § 1344, 1345.
[ix] 43 USCS § 1349.
[x] 43 USCS § 1350.