II_CRD ._SENT RECOMMENDATIONS_NN2 
What_DTQ follows_VVZ is_VBZ a_AT0 high-level_AJ0 blueprint_NN1 to_TO0 begin_VVI to_TO0 modernize_VVI the_AT0 onshore_AJ0 and_CJC offshore_AJ0 oil_NN1 and_CJC gas_NN1 leasing_NN1 programs_NN2 in_PRP order_NN1 to_TO0 better_AV0 restore_VVI balance_NN1 and_CJC transparency_NN1 to_PRP public_AJ0 land_NN1 and_CJC ocean_NN1 management_NN1 and_CJC deliver_VVB a_AT0 fair_AJ0 and_CJC equitable_AJ0 return_NN1 to_PRP American_AJ0 taxpayers_NN2 ._SENT 
Providing_VVG a_AT0 Fair_AJ0 Return_NN1 to_PRP American_AJ0 Taxpayers_NN2 and_CJC States_NN2 
Onshore_AJ0 
Adjusting_VVG and_CJC modernizing_VVG the_AT0 fiscal_AJ0 terms_NN2 used_VVN in_PRP the_AT0 Federal_AJ0 onshore_AJ0 oil_NN1 and_CJC gas_NN1 program_NN1 increases_VVZ returns_NN2 to_PRP the_AT0 public_NN1 and_CJC disincentivizes_VVZ speculators_NN2 or_CJC less_AV0 responsible_AJ0 actors_NN2 ._SENT The_AT0 GAO_NP0 has_VHZ reported_VVN extensively_AV0 that_CJT taxpayers_NN2 have_VHB not_XX0 received_VVN a_AT0 fair_AJ0 rate_NN1 of_PRF return_NN1 due_AJ0 to_PRP outdated_AJ0 fiscal_AJ0 terms_NN2 ._SENT For_PRP example_NN1 ,_PUN Federal_AJ0 onshore_AJ0 oil_NN1 and_CJC gas_NN1 royalty_NN1 rates_NN2 are_VBB consistently_AV0 lower_AJC than_CJS on_PRP State-issued_AJ0 leases_NN2 and_CJC Federal_AJ0 offshore_AJ0 leases_NN2 (_PUL see_VVB Tables_NN2 1_CRD and_CJC 2_CRD )_PUR ;_PUN in_PRP fact_NN1 ,_PUN onshore_AJ0 royalty_NN1 rates_NN2 have_VHB never_AV0 been_VBN raised_VVN ._SENT Likewise_AV0 ,_PUN bonding_NN1 levels_NN2 have_VHB not_XX0 been_VBN raised_VVN for_PRP 60_CRD years_NN2 ,_PUN and_CJC minimum_AJ0 bids_NN2 and_CJC rents_NN2 have_VHB been_VBN the_AT0 same_DT0 for_PRP over_AV0 30_CRD years_NN2 ._SENT If_CJS a_AT0 lease_NN1 is_VBZ not_XX0 sold_VVN competitively_AV0 at_PRP auction_NN1 ,_PUN for_PRP two_CRD years_NN2 it_PNP can_VM0 be_VBI sold_VVN non-competitively_AV0 for_PRP a_AT0 modest_AJ0 administrative_AJ0 fee_NN1 ,_PUN with_PRP no_AT0 bonus_NN1 bid_NN1 required_VVN ._SENT These_DT0 noncompetitive_AJ0 leases_NN2 are_VBB frequently_AV0 less_AV0 diligently_AV0 developed_VVN as_CJS competitively_AV0 issued_VVN leases_NN2 ._SENT From_PRP 2013_CRD to_PRP 2019_CRD ,_PUN average_AJ0 revenues_NN2 from_PRP competitive_AJ0 leases_NN2 were_VBD nearly_AV0 three_CRD times_NN2 greater_AJC than_CJS revenues_NN2 from_PRP noncompetitive_AJ0 leases_NN2 ._SENT 
Such_DT0 low_AJ0 prices_NN2 for_PRP leases_NN2 ,_PUN coupled_VVN with_PRP generous_AJ0 10-year_AJ0 lease_NN1 initial_AJ0 terms_NN2 that_CJT are_VBB frequently_AV0 extended_VVN ,_PUN encourage_VVB speculators_NN2 to_TO0 purchase_VVI leases_NN2 with_PRP the_AT0 intent_NN1 of_PRF waiting_VVG for_PRP increases_NN2 in_PRP resource_NN1 prices_NN2 ,_PUN adding_VVG assets_NN2 to_PRP their_DPS balance_NN1 sheets_NN2 ,_PUN or_CJC even_AV0 reselling_VVG leases_NN2 at_PRP a_AT0 profit_NN1 rather_AV0 than_CJS attempting_VVG to_TO0 produce_VVI oil_NN1 or_CJC gas_NN1 ._SENT In_PRP one_CRD particularly_AV0 egregious_AJ0 recent_AJ0 case_NN1 ,_PUN an_AT0 individual_NN1 purchased_VVN nearly_AV0 300_CRD oil_NN1 and_CJC gas_NN1 leases_NN2 and_CJC resold_VVD many_DT0 of_PRF them_PNP almost_AV0 immediately_AV0 for_PRP up_AVP to_PRP 13_CRD times_NN2 the_AT0 original_AJ0 purchase_NN1 price_NN1 ._SENT Speculators_NN2 ,_PUN not_XX0 taxpayers_NN2 ,_PUN receive_VVB the_AT0 profits_NN2 from_PRP these_DT0 resales_NN2 ._SENT Because_CJS information_NN1 on_PRP lease_NN1 resales_NN2 is_VBZ not_XX0 easily_AV0 accessible_AJ0 ,_PUN local_AJ0 communities_NN2 are_VBB often_AV0 in_PRP the_AT0 dark_NN1 when_CJS it_PNP comes_VVZ to_PRP who_PNQ has_VHZ the_AT0 right_NN1 to_TO0 develop_VVI oil_NN1 and_CJC gas_NN1 nearby_AV0 ._SENT 
The_AT0 BLM_NP0 should_VM0 improve_VVI the_AT0 return_NN1 to_PRP taxpayers_NN2 and_CJC create_VVB an_AT0 oil_NN1 and_CJC gas_NN1 program_NN1 that_DT0 is_VBZ more_AV0 consistent_AJ0 with_PRP BLM_NP0 's_POS multiple-use_AJ0 and_CJC sustained_AJ0 yield_NN1 mandates_NN2 ._SENT Consideration_NN1 should_VM0 be_VBI given_VVN to_PRP raising_VVG royalty_NN1 rates_NN2 and_CJC ,_PUN to_PRP the_AT0 extent_NN1 allowed_VVN by_PRP statute_NN1 ,_PUN to_PRP increasing_VVG the_AT0 current_AJ0 minimum_AJ0 levels_NN2 for_PRP bids_NN2 ,_PUN rents_NN2 ,_PUN royalties_NN2 ,_PUN and_CJC bonds_NN2 ._SENT Congressional_AJ0 passage_NN1 of_PRF pending_AJ0 bipartisan_AJ0 legislation_NN1 could_VM0 further_AV0 modernize_VVI fiscal_AJ0 terms_NN2 ._SENT States_NN2 will_VM0 also_AV0 benefit_VVI from_PRP a_AT0 modernized_AJ0 fiscal_AJ0 system_NN1 since_CJS they_PNP receive_VVB 49_CRD percent_NN0 of_PRF all_DT0 oil_NN1 and_CJC gas_NN1 revenues_NN2 generated_VVN from_PRP public_AJ0 lands_NN2 within_PRP their_DPS borders_NN2 ._SENT Onshore_AJ0 revenues_NN2 also_AV0 fund_VVB water_NN1 reclamation_NN1 projects_NN2 throughout_PRP the_AT0 West_NN1 through_PRP contributions_NN2 to_PRP the_AT0 Reclamation_NN1 Fund_NN1 ,_PUN and_CJC may_VM0 also_AV0 contribute_VVI to_PRP the_AT0 National_AJ0 Parks_NN2 and_CJC Public_AJ0 Land_NN1 Legacy_NN1 Restoration_NN1 Fund_NN1 ._SENT 
Royalties_NN2 
The_AT0 Mineral_NN1 Leasing_NN1 Act_NN1 was_VBD passed_VVN in_PRP 1920_CRD and_CJC set_VVD royalties_NN2 at_PRP a_AT0 minimum_NN1 of_PRF 12.5_CRD percent_NN0 for_PRP oil_NN1 and_CJC gas_NN1 produced_VVN from_PRP public_AJ0 lands_NN2 ._SENT Today_AV0 ,_PUN 100_CRD years_NN2 later_AV0 ,_PUN leases_NN2 are_VBB still_AV0 being_VBG sold_VVN using_VVG these_DT0 low_AJ0 rates_NN2 ,_PUN which_DTQ are_VBB out_AVP of_PRF step_NN1 with_PRP modern_AJ0 times_NN2 ._SENT Numerous_AJ0 public_AJ0 reports_NN2 provide_VVB 
support_VVB for_PRP raising_VVG royalty_NN1 rates_NN2 for_PRP leasing_NN1 on_PRP public_AJ0 lands_NN2 ,_PUN and_CJC nearly_AV0 all_DT0 State_NN1 and_CJC private_AJ0 lands_NN2 require_VVB that_CJT operators_NN2 pay_VVB a_AT0 royalty_NN1 rate_NN1 higher_AJC than_CJS 12.5_CRD percent_NN0 ._SENT In_PRP June_NP0 2017_CRD ,_PUN GAO_NP0 reported_VVD that_CJT studies_NN2 showed_VVD that_CJT raising_VVG Federal_AJ0 royalty_NN1 rates_NN2 for_PRP onshore_AJ0 oil_NN1 and_CJC gas_NN1 could_VM0 "_PUQ decrease_VVI production_NN1 on_PRP federal_AJ0 lands_NN2 by_PRP a_AT0 small_AJ0 amount_NN1 or_CJC not_XX0 at_PRP all_DT0 but_CJC could_VM0 increase_VVI overall_AJ0 federal_AJ0 revenue_NN1 ._SENT 
Taxpayers_NN2 for_PRP Common_AJ0 Sense_NN1 released_VVD a_AT0 report_NN1 last_ORD year_NN1 stating_VVG that_CJT the_AT0 Federal_AJ0 Government_NN1 "_PUQ lost_VVN up_AVP to_PRP $_NN0 12.4_CRD billion_CRD in_PRP revenue_NN1 from_PRP oil_NN1 and_CJC gas_NN1 drilling_VVG on_PRP federal_AJ0 lands_NN2 from_PRP 2010_CRD through_PRP 2019_CRD "_PUQ because_CJS Federal_AJ0 royalty_NN1 rates_NN2 are_VBB too_AV0 low_AJ0 ._SENT Additionally_AV0 ,_PUN the_AT0 same_DT0 report_NN1 found_VVD little_DT0 evidence_NN1 supporting_VVG claims_NN2 that_CJT increasing_VVG the_AT0 Federal_AJ0 onshore_AJ0 royalty_NN1 rate_NN1 would_VM0 drive_VVI developers_NN2 away_AV0 and_CJC reduce_VVB overall_AJ0 revenues_NN2 ._SENT This_DT0 finding_NN1 aligns_VVZ with_PRP the_AT0 results_NN2 seen_VVN in_PRP Colorado_NP0 and_CJC Texas_NP0 ,_PUN where_AVQ there_EX0 was_VBD no_AT0 significant_AJ0 effect_NN1 on_PRP production_NN1 from_PRP State_NN1 lands_NN2 after_PRP State_NN1 royalty_NN1 rates_NN2 were_VBD raised_VVN ._SENT 
The_AT0 BLM_NP0 should_VM0 begin_VVI to_TO0 adjust_VVI royalties_NN2 for_PRP competitive_AJ0 leases_NN2 offered_VVN in_PRP individual_AJ0 lease_NN1 sales_NN0 and_CJC initiate_VVB a_AT0 rulemaking_NN1 to_TO0 establish_VVI a_AT0 higher_AJC minimum_AJ0 royalty_NN1 for_PRP onshore_AJ0 oil_NN1 and_CJC gas_NN1 leases_NN2 ._SENT The_AT0 BLM_NP0 also_AV0 should_VM0 consider_VVI limiting_AJ0 discretionary_AJ0 royalty_NN1 relief_NN1 ,_PUN which_DTQ it_PNP has_VHZ provided_VVN extensively_AV0 to_PRP lessees_NN2 in_PRP the_AT0 recent_AJ0 past_NN1 ,_PUN while_CJS it_PNP updates_VVZ its_DPS current_AJ0 royalty_NN1 relief_NN1 guidance_NN1 and_CJC reassesses_VVZ the_AT0 economic_AJ0 assumptions_NN2 used_VVN during_PRP royalty_NN1 relief_NN1 application_NN1 evaluations_NN2 ._SENT 
Bonus_NN1 Bids_NN2 
A_AT0 bonus_NN1 bid_NN1 is_VBZ the_AT0 price_NN1 paid_VVN at_PRP a_AT0 lease_NN1 sale_NN1 for_PRP an_AT0 oil_NN1 and_CJC gas_NN1 lease_NN1 ._SENT The_AT0 minimum_AJ0 bonus_NN1 bid_NN1 is_VBZ set_VVN at_PRP $_NN0 2_CRD per_PRP acre_NN1 —_PUN an_AT0 amount_NN1 that_CJT has_VHZ not_XX0 been_VBN changed_VVN since_PRP 1987._CRD If_CJS an_AT0 area_NN1 offered_VVN for_PRP lease_NN1 does_VDZ not_XX0 receive_VVI a_AT0 bid_NN1 during_PRP the_AT0 lease_NN1 sale_NN1 ,_PUN the_AT0 bonus_NN1 bid_NN1 is_VBZ waived_VVN ,_PUN and_CJC the_AT0 area_NN1 can_VM0 be_VBI acquired_VVN during_PRP the_AT0 next_ORD two_CRD years_NN2 by_PRP the_AT0 first_ORD party_NN1 that_CJT pays_VVZ a_AT0 nominal_AJ0 application_NN1 fee_NN1 ._SENT 
The_AT0 GAO_NP0 found_VVD that_CJT leases_NN2 purchased_VVN with_PRP a_AT0 higher_AJC bonus_NN1 bid_NN1 of_PRF more_AV0 than_CJS $_NN0 100_CRD per_PRP acre_NN1 are_VBB over_AV0 20_CRD times_NN2 more_AV0 likely_AJ0 to_TO0 be_VBI developed_VVN in_PRP their_DPS first_ORD lease_NN1 term_NN1 than_CJS leases_NN2 purchased_VVN with_PRP the_AT0 minimum_AJ0 bid_NN1 of_PRF $_NN0 2_CRD per_PRP acre_NN1 ._SENT The_AT0 BLM_NP0 should_VM0 initiate_VVI rulemaking_AJ0 to_TO0 increase_VVI the_AT0 minimum_AJ0 bid_NN1 to_TO0 discourage_VVI speculators_NN2 and_CJC to_TO0 provide_VVI a_AT0 better_AJC return_NN1 to_PRP the_AT0 taxpayer_NN1 ._SENT 
Rental_NN1 Rates_NN2 
Companies_NN2 pay_VVB rent_NN1 until_PRP the_AT0 lease_NN1 is_VBZ in_PRP production_NN1 ,_PUN and_CJC then_AV0 they_PNP pay_VVB royalties_NN2 on_PRP the_AT0 oil_NN1 and_CJC gas_NN1 produced_VVN ._SENT The_AT0 rental_NN1 rates_NN2 ,_PUN which_DTQ have_VHB not_XX0 changed_VVN since_PRP 1987_CRD ,_PUN are_VBB $_NN0 1.50_CRD per_PRP acre_NN1 per_PRP year_NN1 for_PRP the_AT0 first_ORD five_CRD years_NN2 ,_PUN then_AV0 $_NN0 2_CRD per_PRP acre_NN1 per_PRP year_NN1 for_PRP the_AT0 next_ORD five_CRD years_NN2 ,_PUN at_PRP which_DTQ point_NN1 a_AT0 non-_AJ0 producing_AJ0 lease_NN1 would_VM0 expire_VVI ._SENT The_AT0 lease_NN1 is_VBZ automatically_AV0 extended_VVN as_CJS long_AV0 as_CJS production_NN1 continues_VVZ ._SENT 
A_AT0 GAO_NP0 report_NN1 from_PRP 2009_CRD concluded_VVD that_CJT :_PUN 
Interior_NN1 does_VDZ less_AV0 to_TO0 encourage_VVI development_NN1 of_PRF federal_AJ0 oil_NN1 and_CJC gas_NN1 leases_NN2 than_CJS some_DT0 state_NN1 and_CJC private_AJ0 landowners_NN2 ._SENT Interior_AJ0 officials_NN2 cited_VVD one_CRD lease_NN1 provision_NN1 that_CJT may_VM0 encourage_VVI development_NN1 –_PUN –_PUN escalating_AJ0 rental_NN1 rates_NN2 ._SENT ..._PUN Compared_VVN to_PRP Interior_NN1 ,_PUN the_AT0 eight_CRD states_NN2 we_PNP reviewed_VVD undertook_VVD more_DT0 efforts_NN2 to_TO0 encourage_VVI development_NN1 on_PRP their_DPS oil_NN1 and_CJC gas_NN1 leases_NN2 ,_PUN using_VVG increasing_AJ0 rental_NN1 rates_NN2 as_CJS well_AV0 as_CJS shorter_AJC lease_NN1 terms_NN2 and_CJC escalating_AJ0 royalty_NN1 rates_NN2 ._SENT Some_DT0 states_NN2 also_AV0 do_VDB more_DT0 than_CJS Interior_AJ0 to_PRP structure_NN1 leases_NN2 to_TO0 reflect_VVI the_AT0 likelihood_NN1 of_PRF oil_NN1 and_CJC gas_NN1 production_NN1 ,_PUN which_DTQ may_VM0 encourage_VVI faster_AJC development_NN1 ._SENT 
The_AT0 BLM_NP0 should_VM0 initiate_VVI a_AT0 rulemaking_NN1 in_PRP order_NN1 to_TO0 increase_VVI rental_NN1 rates_NN2 for_PRP future_AJ0 lease_NN1 sales_NN0 ._SENT 
Bonding_NN1 
Current_AJ0 regulations_NN2 require_VVB financial_AJ0 assurance_NN1 from_PRP all_DT0 lessees_NN2 to_TO0 ensure_VVI compliance_NN1 with_PRP lease_NN1 terms_NN2 and_CJC requirements_NN2 ,_PUN which_DTQ is_VBZ generally_AV0 provided_VVN in_PRP the_AT0 form_NN1 of_PRF a_AT0 lease_NN1 surety_NN1 bond_NN1 ._SENT A_AT0 lease_NN1 surety_NN1 bond_NN1 remains_VVZ in_PRP place_NN1 until_PRP all_DT0 lease_NN1 obligations_NN2 have_VHB been_VBN met_VVN ,_PUN including_PRP decommissioning_NN1 ,_PUN which_DTQ can_VM0 extend_VVI beyond_PRP the_AT0 expiration_NN1 of_PRF the_AT0 lease_NN1 ._SENT A_AT0 surety_NN1 bond_NN1 can_VM0 be_VBI issued_VVN as_PRP a_AT0 lease-specific_AJ0 bond_NN1 ,_PUN a_AT0 statewide_AJ0 bond_NN1 ,_PUN or_CJC a_AT0 nationwide_AJ0 bond_NN1 ,_PUN and_CJC additional_AJ0 bonds_NN2 may_VM0 be_VBI necessary_AJ0 to_TO0 ensure_VVI compliance_NN1 with_PRP lease_NN1 obligations_NN2 and_CJC regulations_NN2 ._SENT 
Insufficient_AJ0 bonding_NN1 levels_NN2 provide_VVB an_AT0 inadequate_AJ0 incentive_NN1 for_PRP companies_NN2 to_TO0 meet_VVI their_DPS reclamation_NN1 obligations_NN2 and_CJC increase_VVB the_AT0 risk_NN1 that_CJT taxpayers_NN2 will_VM0 be_VBI required_VVN to_TO0 cover_VVI the_AT0 cost_NN1 of_PRF reclaiming_VVG wells_NN2 in_PRP the_AT0 event_NN1 that_CJT the_AT0 operator_NN1 refuses_VVZ to_TO0 do_VDI so_AV0 or_CJC declares_VVZ bankruptcy_NN1 ._SENT According_VVG to_PRP a_AT0 2019_CRD GAO_NP0 report_NN1 :_PUN 
..._PUN weaknesses_NN2 with_PRP bonds_NN2 for_PRP coal_NN1 mining_NN1 and_CJC for_PRP oil_NN1 and_CJC gas_NN1 development_NN1 pose_VVB a_AT0 financial_AJ0 risk_NN1 to_PRP the_AT0 federal_AJ0 government_NN1 as_PRP laws_NN2 ,_PUN regulations_NN2 ,_PUN or_CJC agency_NN1 practices_NN2 have_VHB not_XX0 been_VBN adjusted_VVN to_TO0 reflect_VVI current_AJ0 economic_AJ0 circumstances_NN2 ._SENT We_PNP have_VHB also_AV0 reported_VVN that_CJT BLM_NP0 has_VHZ no_AT0 mechanism_NN1 to_TO0 pay_VVI for_PRP reclaiming_VVG well_AJ0 sites_NN2 that_CJT operators_NN2 have_VHB not_XX0 reclaimed_VVN ._SENT 
The_AT0 risks_NN2 associated_VVN with_PRP low_AJ0 bonding_NN1 rates_NN2 have_VHB become_VVN more_AV0 apparent_AJ0 in_PRP light_NN1 of_PRF the_AT0 recent_AJ0 increase_NN1 in_PRP bankruptcies_NN2 ._SENT Company_NN1 liquidations_NN2 often_AV0 result_VVB in_PRP wells_NN2 becoming_VVG orphaned_AJ0 ,_PUN which_DTQ then_AV0 fall_VVB to_PRP the_AT0 Federal_AJ0 Government_NN1 or_CJC States_NP0 to_TO0 address_VVI ,_PUN while_CJS some_DT0 companies_NN2 have_VHB used_VVN Chapter_NN1 11_CRD restructuring_NN1 to_TO0 get_VVI out_AVP of_PRF reclamation_NN1 obligations_NN2 ._SENT 
According_VVG to_PRP the_AT0 same_DT0 2019_CRD GAO_NP0 report_NN1 ,_PUN oil_NN1 and_CJC gas_NN1 lease_NN1 bonds_NN2 do_VDB not_XX0 provide_VVI sufficient_AJ0 financial_AJ0 assurance_NN1 because_CJS ,_PUN among_PRP other_AJ0 things_NN2 ,_PUN most_AV0 individual_AJ0 ,_PUN statewide_AJ0 ,_PUN and_CJC nationwide_AJ0 lease_NN1 bonds_NN2 are_VBB set_VVN at_PRP regulatory_AJ0 minimum_AJ0 values_NN2 that_CJT have_VHB not_XX0 been_VBN adjusted_VVN for_PRP inflation_NN1 since_PRP the_AT0 1950s_CRD and_CJC 1960s_CRD ._SENT These_DT0 minimum_AJ0 bond_NN1 amounts_NN2 and_CJC the_AT0 year_NN1 calculated_VVN are_VBB :_PUN individual_AJ0 lease_NN1 ,_PUN $_NN0 10_CRD ,_PUN 000_CRD —_PUN 1960_CRD ;_PUN statewide_AV0 ,_PUN $_NN0 25_CRD ,_PUN 000_CRD —_PUN 1951_CRD ;_PUN nationwide_AV0 ,_PUN $_NN0 150_CRD ,_PUN 000_CRD —_PUN 1951._CRD The_AT0 National_AJ0 Petroleum_NN1 Reserve_NN1 —_PUN Alaska_NP0 bonds_NN2 were_VBD set_VVN in_PRP 1981_CRD ;_PUN an_AT0 individual_AJ0 lease_NN1 is_VBZ $_NN0 100_CRD ,_PUN 000_CRD ,_PUN and_CJC a_AT0 reserve-wide_AJ0 bond_NN1 is_VBZ $_NN0 300_CRD ,_PUN 000._CRD While_CJS individual_AJ0 States_NN2 have_VHB bonding_NN1 levels_NN2 that_CJT are_VBB often_AV0 too_AV0 low_AJ0 to_TO0 fully_AV0 reclaim_VVI modern_AJ0 horizontally-drilled_AJ0 wells_NN2 ,_PUN most_DT0 States_NN2 require_VVB significantly_AV0 higher_AJC bonds_NN2 than_CJS the_AT0 Federal_AJ0 Government_NN1 ,_PUN often_AV0 with_PRP bonding_NN1 requirements_NN2 that_CJT adjust_VVB based_VVN on_PRP the_AT0 depth_NN1 and_CJC number_NN1 of_PRF wells_NN2 covered_VVN ._SENT 
The_AT0 BLM_NP0 should_VM0 increase_VVI minimum_AJ0 bond_NN1 amounts_NN2 and_CJC set_VVB the_AT0 appropriate_AJ0 levels_NN2 taking_VVG into_PRP consideration_NN1 changes_NN2 in_PRP technology_NN1 ,_PUN the_AT0 complexity_NN1 and_CJC depth_NN1 of_PRF modern_AJ0 wells_NN2 ,_PUN inflation_NN1 ,_PUN and_CJC the_AT0 risk_NN1 of_PRF abandonment_NN1 ._SENT While_CJS such_DT0 regulations_NN2 are_VBB being_VBG developed_VVN ,_PUN BLM_NP0 should_VM0 adjust_VVI bonds_NN2 for_PRP individual_AJ0 ,_PUN high_AJ0 risk_NN1 leases_NN2 through_PRP adequacy_NN1 reviews_NN2 and_CJC when_CJS leases_NN2 are_VBB reinstated_VVN or_CJC applications_NN2 for_PRP permits_NN2 to_PRP drill_NN1 are_VBB extended_VVN ._SENT 
Offshore_AV0 
Royalties_NN2 and_CJC Royalty_NN1 Relief_NN1 
The_AT0 BOEM_NN1 evaluates_VVZ lease_NN1 terms_NN2 on_PRP a_AT0 sale-by-sale_AJ0 basis_NN1 to_TO0 ensure_VVI they_PNP are_VBB consistent_AJ0 with_PRP current_AJ0 market_NN1 or_CJC resource_NN1 conditions_NN2 ._SENT The_AT0 OCSLA_NN1 sets_VVZ the_AT0 minimum_AJ0 offshore_AJ0 royalty_NN1 rate_NN1 at_PRP 12.5_CRD percent_NN0 and_CJC directs_VVZ that_DT0 leasing_NN1 be_VBI conducted_VVN in_PRP a_AT0 way_NN1 that_CJT ensures_VVZ the_AT0 government_NN1 receives_VVZ fair_AJ0 market_NN1 value_NN1 (_PUL FMV_NP0 )_PUR ._SENT OCSLA_NP0 also_AV0 directs_VVZ that_CJT management_NN1 of_PRF the_AT0 OCS_NP0 be_VBI conducted_VVN in_PRP a_AT0 way_NN1 that_CJT considers_VVZ economic_AJ0 ,_PUN social_AJ0 ,_PUN and_CJC environmental_AJ0 values_NN2 ,_PUN and_CJC protects_VVZ the_AT0 human_AJ0 ,_PUN marine_AJ0 ,_PUN and_CJC coastal_AJ0 environments_NN2 ._SENT 
A_AT0 2019_CRD GAO_NP0 report_NN1 that_CJT assessed_VVD BOEM_NP0 's_POS process_NN1 to_TO0 evaluate_VVI whether_CJS it_PNP was_VBD receiving_VVG FMV_NP0 for_PRP offshore_AJ0 leases_NN2 recommended_VVD that_CJT BOEM_NP0 take_VVB steps_NN2 to_TO0 reform_VVI its_DPS methodology_NN1 to_TO0 ensure_VVI that_CJT it_PNP was_VBD capturing_VVG the_AT0 full_AJ0 value_NN1 of_PRF the_AT0 lease_NN1 tracts_NN2 it_PNP was_VBD offering_VVG ._SENT The_AT0 BOEM_NN1 is_VBZ in_PRP the_AT0 process_NN1 of_PRF responding_VVG to_PRP several_DT0 of_PRF GAO_NP0 's_POS recommendations_NN2 concerning_PRP oil_NN1 and_CJC gas_NN1 valuation_NN1 procedures_NN2 ._SENT 
Revenues_NN2 from_PRP lease_NN1 sales_NN0 ,_PUN royalties_NN2 on_PRP production_NN1 ,_PUN and_CJC rental_NN1 fees_NN2 are_VBB distributed_VVN to_PRP the_AT0 U.S._NP0 Treasury_NN1 ,_PUN several_DT0 coastal_AJ0 States_NN2 through_PRP OCSLA_NP0 section_NN1 8_CRD (_PUL g_ZZ0 )_PUR and_CJC the_AT0 Gulf_NN1 of_PRF Mexico_NP0 Energy_NN1 Security_NN1 Act_NN1 ,_PUN the_AT0 Historic_AJ0 Preservation_NN1 Fund_NN1 ,_PUN the_AT0 Land_NN1 and_CJC Water_NN1 Conservation_NN1 Fund_NN1 ,_PUN and_CJC Legacy_NN1 Restoration_NN1 Fund_NN1 ._SENT 
As_CJS with_PRP BLM_NP0 ,_PUN BOEM_NP0 ,_PUN and_CJC BSEE_NN1 will_VM0 be_VBI continuing_AJ0 to_TO0 study_VVI the_AT0 most_AV0 appropriate_AJ0 method_NN1 for_PRP revising_VVG royalty_NN1 rates_NN2 and_CJC other_AJ0 fiscal_AJ0 terms_NN2 to_TO0 monetarily_AV0 account_VVI for_PRP the_AT0 costs_NN2 of_PRF carbon_NN1 dioxide_NN1 ,_PUN methane_NN1 ,_PUN and_CJC nitrous_AJ0 oxide_NN1 ._SENT 
Also_AV0 similar_AJ0 to_PRP BLM_NP0 ,_PUN BOEM_NP0 and_CJC BSEE_NP0 have_VHB the_AT0 authority_NN1 to_TO0 provide_VVI discretionary_AJ0 royalty_NN1 relief_NN1 depending_VVG on_PRP economic_AJ0 circumstances_NN2 ,_PUN and_CJC those_DT0 agencies_NN2 likewise_AV0 will_VM0 be_VBI reevaluating_VVG existing_AJ0 royalty_NN1 relief_NN1 guidance_NN1 and_CJC the_AT0 economic_AJ0 assumptions_NN2 used_VVN to_TO0 evaluate_VVI royalty_NN1 relief_NN1 applications_NN2 ,_PUN insofar_CJS as_PRP royalty_NN1 relief_NN1 can_VM0 have_VHI the_AT0 effect_NN1 of_PRF subsidizing_VVG uneconomic_AJ0 production_NN1 at_PRP taxpayers_NN2 '_POS expense_NN1 ._SENT The_AT0 BSEE_NN1 recently_AV0 determined_VVN ,_PUN for_PRP example_NN1 ,_PUN that_CJT the_AT0 April_NP0 2020_CRD Special_AJ0 Case_NN1 Royalty_NN1 Relief_NN1 guidance_NN1 neither_AV0 formalized_AJ0 application_NN1 and_CJC evaluation_NN1 procedures_NN2 nor_CJC provided_VVD adequate_AJ0 training_NN1 to_TO0 implement_VVI them_PNP ,_PUN and_CJC BSEE_NP0 has_VHZ discontinued_VVN this_DT0 specific_AJ0 royalty_NN1 relief_NN1 option_NN1 ._SENT 
Financial_AJ0 Assurances_NN2 
Financial_AJ0 assurance_NN1 requirements_NN2 for_PRP operators_NN2 offshore_AV0 are_VBB similar_AJ0 to_PRP those_DT0 onshore_AJ0 :_PUN all_DT0 lessees_NN2 must_VM0 provide_VVI a_AT0 general_AJ0 lease_NN1 surety_NN1 bond_NN1 ,_PUN which_DTQ covers_VVZ all_DT0 terms_NN2 and_CJC conditions_NN2 of_PRF a_AT0 lease_NN1 and_CJC remains_VVZ in_PRP place_NN1 until_PRP all_DT0 lease_NN1 obligations_NN2 have_VHB been_VBN met_VVN ,_PUN including_PRP decommissioning_NN1 ,_PUN which_DTQ can_VM0 extend_VVI beyond_PRP the_AT0 expiration_NN1 of_PRF the_AT0 lease_NN1 ._SENT A_AT0 surety_NN1 bond_NN1 can_VM0 be_VBI issued_VVN as_PRP a_AT0 lease-specific_AJ0 bond_NN1 or_CJC as_PRP an_AT0 area-wide_AJ0 bond_NN1 that_CJT guarantees_VVZ obligations_NN2 on_PRP all_DT0 leases_NN2 held_VVN by_PRP a_AT0 lessee_NN1 within_PRP a_AT0 specified_AJ0 area_NN1 ._SENT Additional_AJ0 bonds_NN2 may_VM0 be_VBI necessary_AJ0 to_TO0 ensure_VVI compliance_NN1 with_PRP lease_NN1 obligations_NN2 and_CJC regulations_NN2 ._SENT 
Lessees_NN2 ,_PUN owners_NN2 of_PRF operating_NN1 rights_NN2 ,_PUN and_CJC ROW_NN1 holders_NN2 are_VBB jointly_AV0 and_CJC severally_AV0 responsible_AJ0 for_PRP decommissioning_VVG obligations_NN2 and_CJC are_VBB required_VVN to_TO0 perform_VVI this_DT0 duty_NN1 in_PRP a_AT0 timely_AJ0 manner_NN1 ,_PUN consistent_AJ0 with_PRP regulations_NN2 and_CJC guidance_NN1 ._SENT 
Recent_AJ0 bankruptcies_NN2 have_VHB in_PRP some_DT0 cases_NN2 resulted_VVN in_PRP companies_NN2 being_VBG unable_AJ0 to_TO0 cover_VVI their_DPS decommissioning_NN1 liabilities_NN2 ,_PUN leading_VVG to_PRP orphaned_AJ0 wells_NN2 and_CJC idle_AJ0 infrastructure_NN1 ._SENT The_AT0 BSEE_NN1 estimates_VVZ that_CJT the_AT0 liability_NN1 for_PRP currently_AV0 orphaned_AJ0 infrastructure_NN1 on_PRP the_AT0 OCS_NP0 is_VBZ approximately_AV0 $_NN0 65_CRD million_CRD ,_PUN with_PRP the_AT0 potential_NN1 to_TO0 increase_VVI if_CJS more_DT0 companies_NN2 go_VVB bankrupt_AJ0 and_CJC create_VVB additional_AJ0 orphaned_AJ0 infrastructure_NN1 ._SENT The_AT0 GAO_NP0 recently_AV0 found_VVD that_CJT there_EX0 were_VBD approximately_AV0 $_NN0 2.3_CRD billion_CRD in_PRP decommissioning_NN1 liabilities_NN2 on_PRP the_AT0 OCS_NP0 that_CJT were_VBD not_XX0 covered_VVN by_PRP bonds_NN2 ,_PUN and_CJC roughly_AV0 $_NN0 33_CRD billion_CRD in_PRP liabilities_NN2 had_VHD bonds_NN2 waived_VVN because_CJS the_AT0 financial_AJ0 condition_NN1 of_PRF the_AT0 leaseholder_NN1 was_VBD considered_VVN strong_AJ0 enough_AV0 ._SENT 
