Outer Continental Shelf Shallow Water Deep Gas Royalty Relief Act

Outer Continental Shelf Shallow Water Deep Gas Royalty Relief Act - Instructs the Secretary of the Interior to suspend royalties under certain leases issued prior to January 1, 2001, for natural gas produced from deep wells on oil and gas lease tracts in certain shallow waters of the Gulf of Mexico.

Prescribes the amount of royalty relief for specified suspension volumes of production.

Prohibits the Secretary from granting the royalty incentives if the average annual NYMEX natural gas price exceeds for one full calendar year the threshold price of $5 per million Btu, adjusted from the year 2000 for inflation.

[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1570 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 1570

To accelerate natural gas exploration, development, and production from 
 oil and gas wells drilled to deep depths on existing lease tracts on 
          the Outer Continental Shelf, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 2, 2003

   Mr. John introduced the following bill; which was referred to the 
                         Committee on Resources

_______________________________________________________________________

                                 A BILL


 
To accelerate natural gas exploration, development, and production from 
 oil and gas wells drilled to deep depths on existing lease tracts on 
          the Outer Continental Shelf, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Outer Continental Shelf Shallow 
Water Deep Gas Royalty Relief Act''.

SEC. 2. PURPOSES.

    The purposes of this Act are the following:
            (1) To accelerate natural gas exploration, development, and 
        production from wells drilled to deep depths on existing 
        shallow water lease tracts on the Outer Continental Shelf.
            (2) To provide royalty incentives for the production of 
        natural gas from such tracts.
            (3) To provide royalty incentives for development of new 
        technologies and the exploration and development of the new 
        frontier of deep drilling on the Outer Continental Shelf.

SEC. 3. ROYALTY INCENTIVES UNDER EXISTING LEASES FOR PRODUCTION OF DEEP 
              GAS IN SHALLOW WATER IN THE GULF OF MEXICO.

    (a) Suspension of Royalties.--
            (1) In general.--The Secretary of the Interior shall grant 
        royalty relief for natural gas produced under leases issued 
        under the Outer Continental Shelf Lands Act (43 U.S.C. 1301 et 
        seq.) prior to January 1, 2001, from deep wells on oil and gas 
        lease tracts in shallow waters of the Gulf of Mexico located 
        wholly west of 87 degrees, 30 minutes west longitude.
            (2) Amount of relief.--The Secretary shall grant royalty 
        relief to eligible leases in the following amounts:
                    (A) A suspension volume of at least 15 billion 
                cubic feet of natural gas produced from a successful 
                deep well with a total vertical depth of 15,000 feet to 
                17,999 feet.
                    (B) A suspension volume of at least 25 billion 
                cubic feet of natural gas produced from a successful 
                deep well with a total vertical depth of 18,000 feet to 
                19,999 feet.
                    (C) A suspension volume of at least 35 billion 
                cubic feet of natural gas produced from any ultra deep 
                well.
                    (D) A suspension volume of at least 5 billion cubic 
                feet of natural gas per well for up to 2 unsuccessful 
                wells drilled to a depth of at least 18,000 feet on a 
                lease tract that subsequently produces natural gas from 
                a successful deep well.
            (3) Limitation.--The Secretary shall not grant the royalty 
        incentives outlined in this section if the average annual NYMEX 
        natural gas price exceeds for one full calendar year the 
        threshold price of $5 per million Btu, adjusted from the year 
        2000 for inflation.
    (b) Definitions.--For purposes of this section:
            (1) The term ``deep well'' means a well drilled with a 
        perforated interval, the top of which is at least 15,000 feet 
        true vertical depth below the datum at mean sea level.
            (2) The term ``eligible lease'' means a lease that--
                    (A) was issued in a lease sale held before January 
                1, 2001;
                    (B) is for a tract located in the Gulf of Mexico 
                entirely in water depths less than 200 meters on a 
                block wholly west of 87 degrees, 30 minutes west 
                longitude; and
                    (C) is for a tract that has not produced gas or oil 
                from a well that commenced drilling before March 26, 
                2003, with a completion 15,000 feet true vertical depth 
                below the datum at mean sea level or deeper.
            (3) The term ``shallow water'' means water less than 200 
        meters deep.
            (4) The term ``ultra deep well'' means a well drilled with 
        a perforated interval, the top of which is at least 20,000 feet 
        true vertical depth below the datum at mean sea level.
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