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1 1 (March 8, 2021)

handle is hein.crs/govecnq0001 and id is 1 raw text is: h $~rvk~a ~ UpdatedMarch8, 2021 Federal Offshore Oil and Gas Revenues During the COVID-19 Pandemic The economic effects of the Coronavirus Disease 2019 (COVID-19) pandemic included a reduction in demand for oil and natural gas, resulting in lower prices and decreased production. These changes have affected federalrevenues derived fromoil and gas leasing onthe U.S. outer continental shelf (OCS). Such revenues consistof royalties on oil and gas sold fromfederal leases, bids at federallease auctions (known as bonus bids), rents paid prior to production, and other fees. Revenue amounts can fluctuate widely from year to year owing to a mix of factors affecting leasing, prices, andproduction, with the pandemic being a significant factor during FY2020 and FY2021. Changes in federal offshore oil and gas revenues can affect amounts shared with coastal states under the Outer Continental Shelf Lands Act (OCSLA; 43 U.S.C. § § 1331-1356b) and the Gulf of Mexico Energy Security Act of 2006 (GOMESA; 43 U.S.C. § 1331 note), as well as funding for several federal programs. FY2020 Offshore oil and gas revenues for the second half of FY2020 (April-September) reflect impacts of the pandemic. Data from the Department ofthe Interior's (DOI's) Office of Natural Resources Revenue (ONRR) show that revenues for the secondhalfofFY2020 were lower than revenues from the comparable period in any of the past five fiscal years and significantly lower than the comp arable period in FY2019 (Figure 1). For example, May 2020 revenues- generally reflecting sales of offshoreoil and gas in April- were 85% lower than those for May 2019, and June 2020 revenues were 71% below June 2019. Figure I. Federal Offshore Oil and Gas Revenues for April Through September, 2016-2020 ($ in millions) $3,500 S3,000 =20 $2,500 $2,000 $~9 $1,500 $500 so 201 20 2018 201 2020 Source: ONRR, Revenue by Month, at https://revenuedata.doi.gov/ downloads/revenue-by-month/. Includes bonuses, rents, royalties, and other revenues forthe commodity categories Oil, Gas, Oil & Gas, and NGL (natural gas liquids). Does not include inspection fees. The pandemic's impacts are less pronounced when comparing revenues for the entirety ofFY2020 with those of previous fiscal years (Figure 2), given that the pandemic's widespread economic disruptions started partway through the fiscal year. Figure 2. Federal Offshore Oil and Gas Revenues for the Full Fiscal Year, FY20 1 6-FY2020 ($ in millions) $6,000 $5,566 $5,000 $41704 $4,00 $3,534 $3,708 $3,000 $2,793 $2,000 $1,000 so FY2016 FY2017 FY2018 FY2Q19 fY202O Source: ONRR annual data query, at https://reven uedata.doi.gov/ query-data. See Figure I source notes for commodity categories. Royalties. Revenues fromroyalties constitute the majority of federal offshore oil and gas revenues. Royalty collections for April-September 2020 totaled $1.079 billion, compared with April-September royalties of $2.571 billion for 2019, $2.381 billion for 2018, $1.554 billion for 2017, and $1.247 billion for 2016. (The totals include royalties on natural gas liquids.) The April-September 2020 amount is 58% lower than that for the same months in 2019, 55% lower than 2018, 31% lower than 2017, and 13% lower than 2016. Bonus Bids. DOI's Bureau of Ocean Energy Management (BOEM) held two offshore oil and gas lease s ales during FY2020, both for the Gulf of Mexico region, in March and November 2020. The s ales drew high (winning) bids totaling $93 million (March 2020) and $121 million (November 2020), which compare with high bids of $159 million (August 2019), $244 million (March 2019), $178 million (August 2018), $125 million (March 2018), and $121 million (August 2017) for other Gulf lease s ales in DOI's offshore oiland gas leasing programfor 2017-2022. Each sale offered all leg ally available unleased areas in federal waters of the Gulf. Rents. Rentalpayments, collected annually on active but nonproducing leases, typically account for a smallerportion of totalrevenues than do royalties orbonuses. Thenumber and acreageofnonproducing offshore leases have varied tps:/cr sr pcrtscong ress

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