I 

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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Outer Continental 

5 Shelf Shallow Water Deep Gas Royalty Relief Act’’. 

6 SEC. 2. PURPOSES. 

7 The purposes of this Act are the following: 
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1 (1) To accelerate natural gas exploration, devel2 opment, and production from wells drilled to deep 

3 depths on existing shallow water lease tracts on the 

4 Outer Continental Shelf. 

5 (2) To provide royalty incentives for the pro6 duction of natural gas from such tracts. 

7 (3) To provide royalty incentives for develop8 ment of new technologies and the exploration and 

9 development of the new frontier of deep drilling on 

10 the Outer Continental Shelf. 

11 SEC. 3. ROYALTY INCENTIVES UNDER EXISTING LEASES 

12 FOR PRODUCTION OF DEEP GAS IN SHALLOW 

13 WATER IN THE GULF OF MEXICO. 

14 (a) SUSPENSION OF ROYALTIES.—

15 (1) IN GENERAL.—The Secretary of the Inte16 rior shall grant royalty relief for natural gas pro17 duced under leases issued under the Outer Conti18 nental Shelf Lands Act (43 U.S.C. 1301 et seq.) 

19 prior to January 1, 2001, from deep wells on oil and 

20 gas lease tracts in shallow waters of the Gulf of 

21 Mexico located wholly west of 87 degrees, 30 min22 utes west longitude. 

23 (2) AMOUNT OF RELIEF.—The Secretary shall 

24 grant royalty relief to eligible leases in the following 

25 amounts: 
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1 (A) A suspension volume of at least 15 bil2 lion cubic feet of natural gas produced from a 

3 successful deep well with a total vertical depth 

4 of 15,000 feet to 17,999 feet. 

5 (B) A suspension volume of at least 25 bil6 lion cubic feet of natural gas produced from a 

7 successful deep well with a total vertical depth 

8 of 18,000 feet to 19,999 feet. 

9 (C) A suspension volume of at least 35 bil10 lion cubic feet of natural gas produced from 

11 any ultra deep well. 

12 (D) A suspension volume of at least 5 bil13 lion cubic feet of natural gas per well for up to 

14 2 unsuccessful wells drilled to a depth of at 

15 least 18,000 feet on a lease tract that subse16 quently produces natural gas from a successful 

17 deep well. 

18 (3) LIMITATION.—The Secretary shall not 

19 grant the royalty incentives outlined in this section 

20 if the average annual NYMEX natural gas price ex21 ceeds for one full calendar year the threshold price 

22 of $5 per million Btu, adjusted from the year 2000 

23 for inflation.

24 (b) DEFINITIONS.—For purposes of this section: 
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1 (1) The term ‘‘deep well’’ means a well drilled 

2 with a perforated interval, the top of which is at 

3 least 15,000 feet true vertical depth below the 

4 datum at mean sea level. 

5 (2) The term ‘‘eligible lease’’ means a lease 

6 that—

7 (A) was issued in a lease sale held before 

8 January 1, 2001;

9 (B) is for a tract located in the Gulf of 

10 Mexico entirely in water depths less than 200 

11 meters on a block wholly west of 87 degrees, 30 

12 minutes west longitude; and

13 (C) is for a tract that has not produced 

14 gas or oil from a well that commenced drilling 

15 before March 26, 2003, with a completion 

16 15,000 feet true vertical depth below the datum 

17 at mean sea level or deeper. 

18 (3) The term ‘‘shallow water’’ means water less 

19 than 200 meters deep. 

20 (4) The term ‘‘ultra deep well’’ means a well 

21 drilled with a perforated interval, the top of which 

22 is at least 20,000 feet true vertical depth below the 

23 datum at mean sea level.

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