The National Conservation, Environment and Energy Independence Act is a comprehensive energy package that first removes the existing moratoria on oil and natural gas production in the Outer Counter Shelf for waters 25 miles offshore and beyond.  For waters that are 25 to 50 miles from shore, the bill gives states the right to opt-out and remove those areas from leasing.  The bill prohibits leasing within 25 miles of a coastline.  States who choose to drill off their coast will receive 30% of the royalties from oil and gas production.

This legislation uses the royalties generated by the off-shore oil and gas production to fund the development of alternative fuels and renewable energy technologies.  In fact, 15% of the royalty funds will go to the Renewable Energy Reserve fund, created within the legislation, and 5% will go to the carbon capture/sequestration fund.  The bill also extends numerous existing tax incentives for cleaner energy production and conservation, including solar and wind power, energy efficiency measures and alternative fuel vehicles.  

Total projected royalties for all the oil and natural gas estimated to be in the areas opened by the bill are approximately $2.6 trillion.  These revenues will be distributed to the state and federal government, as well as to a variety of environmental and energy programs, as follows:

●          30% to the General Fund of the U.S. Treasury
●          30% to Producing States
●          8% for the Conservation Reserve
●          10% to the Environmental Restoration Reserve
●          15% to the Renewable Energy Reserve
●          5% to the Carbon Capture/Sequestration and Nuclear Waste Reserve
●          2% to the Low Income Home Energy Assistance Program

In addition, the bill modifies the Strategic Petroleum Reserve to today's refining capabilities by exchanging 10% (70 million barrels) of the reserve's content and dedicates funds received from the exchange of supply and existing SPR funds ($1.4 billion estimated) to existing conservation, energy research and development, and energy assistance programs.  Specifically, funds received will go toward programs such as wind energy research, solar energy research, marine and hydrokinetic renewable energy, geothermal energy development, and many more.

The bill also extends numerous existing tax incentives for cleaner energy production and conservation, including solar and wind power, energy efficiency measures and alternative fuel vehicles.  

To read about the bill in full, please click here: HR 6709

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