The Senate Appropriations Committee Thursday unanimously approved a $26.1 billion spending bill for fiscal year 2007 that would prevent the Bureau of Land Management (BLM) and the U.S. Forest Service from offering new oil and natural gas leases on federal land in a portion of the Rocky Mountains.

The language, which was proposed Sen. Conrad Burns (R-MT), was included in the Senate’s fiscal year 2007 appropriations bill for the Department of Interior, Forest Service and the Environmental Protection Agency. It would prevent any new leasing for oil, gas and hard-rock mining in all of the Forest Service land within the Rocky Mountain District of the Lewis and Clark National Forest in central and north central Montana, as well as new leasing on adjoining parcels controlled by the Interior Department’s BLM.

The Commission also approved an amendment, offered by Sen. Dianne Feinstein (D-CA), that would disqualify energy companies from bidding on future leases if they refuse to renegotiate 1998 and 1999 leases on which they are currently paying no royalties to the federal government. In addition it passed a measure offered by Sen. Pete Domenici (R-NM) requiring the Interior secretary to seek to renegotiate leases where no royalties are being paid. The amendment also clarified the intent of Congress to implement price thresholds in certain federal leases to determine when royalties are owed.

The royalty proposals are similar to the ones that were passed by the House in late May as part of its fiscal year 2007 spending bills (see Daily GPI, May 22).

On the heels of the Burns’ provision, Utah-based Questar Corp. donated several of its oil and gas leases on the Rocky Mountain Front to Trout Unlimited, a non-profit conservation group. The lease donation is contingent on the Burns’ provision being approved by Congress, and covers 1,691 acres in the Lewis and Clark National Forest. “We’re pleased to accommodate Trout Unlimited’s request for an assignment of this acreage, which is not located near any of Questar E&P’s active exploration and production,” said Jay B. Neese, company executive vice president.

The two major areas to be affected by the leasing restriction would be the Badger-Two Medicine region adjacent to the Blackfeet Reservation in Montana, and Blackleaf Canyon region in the Lewis and Clark Forest. The committee action would not affect leasing on state and public lands.

Existing leases will not be affected, but if they expire, are traded, donated or purchased back by either the federal government or a third-party group, they will become exempt from releasing, according to Burns, chairman of the Senate Appropriations’ Interior and Related Agencies Subcommittee, which approved the spending bill Tuesday.

The prohibition on new leasing “may be revoked by an act of Congress in the event of a clear and present national emergency resulting from a shortage of oil and gas reserves,” according to the spending bill.

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