Bill Overview
Title: Bonding Reform and Taxpayer Protection Act of 2021
Description: This bill revises bonding requirements for oil and gas development on public land leased from the federal government. Such bonds are required to ensure oil and gas developers have adequate financial resources for implementing reclamation plans to restore public land after oil and gas development (e.g., drilling operations) ceases. Specifically, the bill increases the bond amounts that oil and gas developers must provide prior to conducting surface-disturbing activities and requires such amounts to adjust at least once every three years for inflation. In addition, the bill sets fees to cover the cost for inspection and enforcement with respect to such leases. The bill also requires the Bureau of Land Management (BLM) and the U.S. Forest Service (USFS) to establish uniform standards for all interim and final reclamation plans. BLM and USFS may not release any bond amounts until the standards have been met by oil and gas developers and the inspection fees have been paid. Finally, the bill gives the U.S. Fish and Wildlife Service the authority to obtain and retain adequate financial assurances (e.g., bonds) from nonfederal entities to repair potential damages to resources of the National Wildlife Refuge System prior to the commencement of activities related to mineral development, such as oil and gas operations.
Sponsors: Rep. Lowenthal, Alan S. [D-CA-47]
Target Audience
Population: People affected by bonding reform for oil and gas development on public lands
Estimated Size: 25000000
- The bill affects oil and gas developers who operate on public lands because it changes bonding requirements, increasing the costs of operations.
- It impacts government agencies like the Bureau of Land Management (BLM), U.S. Forest Service (USFS), and U.S. Fish and Wildlife Service (FWS) who are involved in the implementation and enforcement of the new regulations.
- Environmental and wildlife protections are also impacted; improved bonding and reclamation requirements seek to reduce negative impacts on public lands, benefiting ecosystems and wildlife.
- Federal taxpayers may indirectly benefit because the reforms aim to minimize unreclaimed lands, potentially reducing the need for publicly funded remedial measures.
Reasoning
- The Bonding Reform and Taxpayer Protection Act impacts oil and gas developers by increasing operational costs due to higher bonding requirements. This may either discourage or financially constrain smaller developers while larger firms might better absorb the costs.
- Federal agencies see increased workloads and enforcement roles, ensuring developers meet set standards before bonds are released. This necessitates greater oversight but strengthens environmental protections.
- Local communities, particularly those adjacent to public lands with ongoing or potential oil and gas development, could experience improved environmental conditions and safety due to stricter reclamation requirements.
- Environmental groups and wildlife advocates may see this as a positive move toward reducing ecological damages and ensuring land is restored post-exploration.
- Taxpayers may indirectly benefit from reduced future financial liabilities for unreclaimed sites, leading to cost savings for federal expenditures.
- Some oil and gas developers may pass increased costs onto consumers, depending on market conditions, which could affect fuel prices.
Simulated Interviews
Oil and Gas Developer (Houston, Texas)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- The new bonding requirements will make it challenging for mid-sized companies to operate profitably, especially given fluctuating oil prices.
- Increased fees for inspection could strain operating budgets and delay project timelines.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 5 | 7 |
| Year 5 | 5 | 6 |
| Year 10 | 5 | 5 |
| Year 20 | 6 | 5 |
Environmental Scientist (Denver, Colorado)
Age: 38 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 3/20
Statement of Opinion:
- The policy represents an important step in ensuring oil and gas developers are accountable for land restoration.
- This could lead to more sustainable land use practices that benefit ecosystems and wildlife.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 6 |
Rancher (Cheyenne, Wyoming)
Age: 52 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- Increased reclamation standards should protect the land and water resources adjacent to my ranch.
- However, I'm concerned about any potential impact on the local economy if oil activities slow down.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Policy Analyst (Los Angeles, California)
Age: 29 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- This reform sets a good precedent for responsible energy policy across the nation.
- It aligns regulatory costs with environmental accountability, which is crucial for public trust.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 9 | 6 |
Federal Employee (BLM) (Washington, D.C.)
Age: 60 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 2/20
Statement of Opinion:
- The increased bonding requirements mean greater administrative duties for agencies like ours, which will require more resources and staff training.
- Improving reclamation standards could be a lasting benefit to public lands.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Energy Economist (New Orleans, Louisiana)
Age: 48 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- The cost implications for developers could shift prices in the energy markets.
- It’s important to balance energy costs with environmental responsibilities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Small Oil Operator (Oklahoma City, Oklahoma)
Age: 35 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- Increased bond costs are a huge burden on small operators like us and could push us out of the market.
- Meeting new standards might be difficult without financial assistance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 8 |
| Year 2 | 5 | 8 |
| Year 3 | 5 | 7 |
| Year 5 | 5 | 7 |
| Year 10 | 5 | 6 |
| Year 20 | 6 | 6 |
Wildlife Conservationist (Salt Lake City, Utah)
Age: 42 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 2/20
Statement of Opinion:
- Stricter reclamation conditions are vital for protecting wildlife habitats on public lands.
- But, oversight and actual enforcement will be crucial in making this effective.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 9 | 5 |
Community Leader (Billings, Montana)
Age: 58 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- While environmental protections are needed, there’s fear among community members about potential job losses.
- Balance is key; the policy should ensure jobs aren’t placed at unnecessary risk.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
University Researcher (Helena, Montana)
Age: 30 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- This policy is likely to become a model for future regulations aimed at sustainable management of public resources.
- Ongoing research and monitoring will be needed to evaluate its success or areas that need refinement.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Cost Estimates
Year 1: $15000000 (Low: $10000000, High: $20000000)
Year 2: $17000000 (Low: $12000000, High: $22000000)
Year 3: $19000000 (Low: $14000000, High: $24000000)
Year 5: $22000000 (Low: $18000000, High: $26000000)
Year 10: $25000000 (Low: $20000000, High: $30000000)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The scale and complexity of implementing revised bonding standards require an increase in administrative resources within BLM and USFS.
- Uncertainty in oil and gas market dynamics might affect future compliance costs and potential savings.
- Coordination across multiple federal agencies is required to enact and enforce changes effectively.