May 17, 1995 CONGRESSIONAL RECORD — SENATE S6835

SEC. 207. EFFECTIVE DATE.

This title and the amendments made by it

shall take effect on the date of enactment.

TITLE III

SEC. 301. SHORT TITLE.

This Title may be referred to as the ‘‘Outer

Continental Shelf Deep Water Royalty Relief

Act’’.

SEC. 302. AMENDMENTS TO THE OUTER CONTINENTAL SHELF LANDS ACT.

Section 8(a) of the Outer Continental Shelf

Lands Act (43 U.S.C. 1337(a)(3)), is amended

by striking paragraph (3) in its entirety and

inserting the following:

‘‘(3)(A) The Secretary may, in order to—

‘‘(i) promote development or increased production on producing or non-producing

leases; or

‘‘(ii) encourage production of marginal resources on producing or non-producing

leases; through primary, secondary, or tertiary recovery means, reduce or eliminate

any royalty or net profit share set forth in

the lease(s). With the lessee’s consent, the

Secretary may make other modifications to

the royalty or net profit share terms of the

lease in order to achieve these purposes.

‘‘(B)(i) Notwithstanding the provisions of

this Act other than this subparagraph, with

respect to any lease or unit in existence on

the date of enactment of the Outer Continental Shelf Deep Water Royalty Relief Act

meeting the requirements of this subparagraph, no royalty payments shall be due on

new production, as defined in clause (iv) of

this subparagraph, from any lease or unit located in water depths of 200 meters or greater in the Western and Central Planning

Areas of the Gulf of Mexico, including that

portion of the Eastern Planning Area of the

Gulf of Mexico encompassing whole lease

blocks lying west of 87 degrees, 30 minutes

West longitude, until such volume of production as determined pursuant to clause (ii)

has been produced by the lessee.

‘‘(ii) Upon submission of a complete application by the lessee, the Secretary shall determine within 180 days of such application

whether new production from such lease or

unit would be economic in the absence of the

relief from the requirement to pay royalties

provided for by clause (i) of this subparagraph. In making such determination, the

Secretary shall consider the increased technological and financial risk of deep water development and all costs associated with exploring, developing, and producing from the

lease. The lessee shall provide information

required for a complete application to the

Secretary prior to such determination. The

Secretary shall clearly define the information required for a complete application

under this section. Such application may be

made on the basis of an individual lease or

unit. If the Secretary determines that such

new production would be economic in the absence of the relief from the requirement to

pay royalties provided for by clause (i) of

this subparagraph, the provisions of clause

(i) shall not apply to such production. If the

Secretary determines that such new production would not be economic in the absence of

the relief from the requirement to pay royalties provided for by clause (i), the Secretary

must determine the volume of production

from the lease or unit on which no royalties

would be due in order to make such new production economically viable; except that for

new production as defined in clause (iv)(aa),

in no case will that volume be less than 17.5

million barrels of oil equivalent in water

depths of 200 to 400 meters, 52.5 million barrels of oil equivalent in 400–800 meters of

water, and 87.5 million barrels of oil equivalent in water depths greater than 800 meters.

Redetermination of the applicability of

clause (i) shall be undertaken by the Secretary when requested by the lessee prior to

the commencement of the new production

and upon significant change in the factors

upon which the original determination was

made. The Secretary shall make such redetermination within 120 days of submission of

a complete application. The Secretary may

extend the time period for making any determination or redetermination under this

clause for 30 days, or longer if agreed to by

the applicant, if circumstances so warrant.

The lessee shall be notified in writing of any

determination or redetermination and the

reasons for and assumptions used for such

determination. Any determination or redetermination under this clause shall be a final

agency action. The Secretary’s determination or redetermination shall be judicially

reviewable under section 10(a) of the Administrative Procedures Act (5 U.S.C. 702), only

for actions filed within 30 days of the Secretary’s determination or redetermination.

‘‘(iii) In the event that the Secretary fails

to make the determination or redetermination called for in clause (ii) upon application

by the lessee within the time period, together with any extension thereof, provided

for by clause (ii), no royalty payments shall

be due on new production as follows:

‘‘(I) For new production, as defined in

clause (iv)(I) of this subparagraph, no royalty shall be due on such production according to the schedule of minimum volumes

specified in clause (ii) of this subparagraph.

‘‘(II) For new production, as defined in

clause (iv)(II) of this subparagraph, no royalty shall be due on such production for one

year following the start of such production.

‘‘(iv) For purposes of this subparagraph,

the term ‘new production’ is—

‘‘(I) any production from a lease from

which no royalties are due on production,

other than test production, prior to the date

of enactment of the Outer Continental Shelf

Deep Water Royalty Relief Act; or

‘‘(II) any production resulting from lease

development activities pursuant to a Development Operations Coordination Document,

or supplement thereto that would expand

production significantly beyond the level anticipated in the Development Operations Coordination Document, approved by the Secretary after the date of enactment of the

Outer Continental Shelf Deep Water Royalty

Relief Act.

‘‘(v) During the production of volumes determined pursuant to clauses (ii) or (iii) of

this subparagraph, in any year during which

the arithmetic average of the closing prices

on the New York Mercantile Exchange for

light sweet crude oil exceeds $28.00 per barrel, any production of oil will be subject to

royalties at the lease stipulated royalty

rate. Any production subject to this clause

shall be counted toward the production volume determined pursuant to clause (ii) or

(iii). Estimated royalty payments will be

made if such average of the closing prices for

the previous year exceeds $28.00. After the

end of the calendar year, when the new average price can be calculated, lessees will pay

any royalties due, with interest but without

penalty, or can apply for a refund, with interest, of any overpayment.

‘‘(vi) During the production of volumes determined pursuant to clause (ii) or (iii) of

this subparagraph, in any year during which

the arithmetic average of the closing prices

on the New York Mercantile Exchange for

natural gas exceeds $3.50 per million British

thermal units, any production of natural gas

will be subject to royalties at the lease stipulated royalty rate. Any production subject

to this clause shall be counted toward the

production volume determined pursuant to

clauses (ii) or (iii). Estimated royalty payments will be made if such average of the

closing prices for the previous year exceeds

$3.50. After the end of the calendar year,

when the new average price can be calculated, lessees will pay any royalties due,

with interest but without penalty, or can

apply for a refund, with interest, of any overpayment.

‘‘(vii) The prices referred to in clauses (v)

and (vi) of this subparagraph shall be

changed during any calendar year after 1994

by the percentage, if any, by which the implicit price deflator for the gross domestic

product changed during the preceding calendar year.’’.

SEC. 303. NEW LEASES.

Section 8(a)(1) of the Outer Continental

Shelf Lands Act, as amended (43 U.S.C.

1337(a)(1)) is amended as follows:

(1) Redesignate section 8(a)(1)(H) as section

8(a)(1)(I); and

(2) Add a new section 8(a)(1)(H) as follows:

‘‘(H) cash bonus bid with royalty at no less

than 12 and 1⁄2 per centum fixed by the Secretary in amount or value of production

saved, removed, or sold, and with suspension

of royalties for a period, volume, or value of

production determined by the Secretary.

Such suspensions may vary based on the

price of production from the lease.’’.

SEC. 304. LEASE SALES.

For all tracts located in water depths of

200 meters or greater in the Western and

Central Planning Area of the Gulf of Mexico,

including that portion of the Eastern Planning Area of the Gulf of Mexico encompassing whole lease blocks lying west of 87 degrees, 30 minutes West longitude, any lease

sale within five years of the date of enactment of this title, shall use the bidding system authorized in section 8(a)(1)(H) of the

Outer Continental Shelf Lands Act, as

amended by this title, except that the suspension of royalties shall be set at a volume

of not less than the following:

(1) 17.5 million barrels of oil equivalent for

leases in water depths of 200 to 400 meters;

(2) 52.5 million barrels of oil equivalent for

leases in 400 to 800 meters of water; and

(3) 87.5 million barrels of oil equivalent for

leases in water depths greater than 800 meters.

SEC. 305. REGULATIONS.

The Secretary shall promulgate such rules

and regulations as are necessary to implement the provisions of this title within 180

days after the enactment of this Act.

SUPPORTING THE ANGOLA PEACE

fPROCESS

Mr. DOLE. Mr. President, I ask unanimous consent that the Senate proceed

to consideration of Senate Resolution

121, a resolution submitted earlier

today by Senators FEINGOLD, KASSEBAUM, HELMS, PELL, and SIMON, regarding the Angola peace process, that the

resolution and the preamble be agreed

to, the motion to reconsider be laid on

the table en bloc, and any statements

thereon appear at the appropriate place

in the RECORD as though read.

The PRESIDING OFFICER. Without

objection, it is so ordered.

The resolution (S. Res. 121) was

agreed to.

The preamble was agreed to.

The resolution, with its preamble,

reads as follows:

Whereas Angola has suffered one of the

most violent and longest-running civil wars;

Whereas the United States was actively engaged in the war in Angola, has provided

more than $200 million in humanitarian assistance to Angola since 1992, and has been a
S6836 CONGRESSIONAL RECORD — SENATE May 17, 1995

key facilitator on the ongoing peace negotiations;

Whereas Angola is the last civil conflict in

southern Africa, and regional leaders including South African President Nelson Mandela

consider its resolution to be a top priority;

Whereas an enduring peace in Angola, a potentially wealthy country that is central to

regional stability and economic development, is in the national interest of the United States;

Whereas the Government of Angola and

National Union for the Total Independence

of Angola (UNITA) entered into the Lusaka

Protocol in November 1994 to secure a U.N.-

supervised peace settlement;

Whereas the United Nations Security

Council voted in February to send a U.N.

peacekeeping mission to Angola to monitor

and enforce the peace process, and more than

600 international monitors are deployed

throughout the country;

Whereas continuing progress toward peace

makes it more likely that further deployment of UNAVEM III will occur soon;

Whereas the meeting between President

Eduardo dos Santos and Dr. Jonas Savimbi

on May 6, 1995, at which both parties reiterated their commitment to the Lusaka Protocol, demonstrated that they possess the essential political will to resolve outstanding

issues, and encouraged all who want peace in

Angola;

Whereas achieving a lasting peace will require that all Angolans work together to

overcome bitter legacies of war, which include a devastated infrastructure, millions

of unexploded landmines, a profound distrust

between the parties, weakened civil institutions, a crippled economy, and a generation

of young Angolans who have never known a

peaceful, civil society;

Whereas strong leadership is essential to

ensure that the wealth of Angola, long spent

on war, now is used to consolidate peace.

Now therefore be it

Resolved, That the Senate:

(1) Congratulates the people of Angola for

the courageous and determined steps their

leaders have taken in support of peace;

(2) Urges all parties in Angola to continue

to strengthen their commitment to the

Lusaka process, which constitutes the last,

and best, chance for securing an enduring

peace;

(3) Affirms that the United States will hold

both Angolan parties responsible for abiding

by their commitment to peace; and

(4) Calls upon the international community to remain actively engaged in support

of national reconciliation, removal of landmines, economic development, and democratization in Angola.

ORDERS FOR THURSDAY, MAY 18,

f1995

Mr. DOLE. Mr. President, I ask unanimous consent that when the Senate

completes its business today it stand in

recess until the hour of 9:15 a.m. on

Thursday, May 18, 1995; that following

the prayer, the Journal of proceedings

be deemed approved to date, the time

for the two leaders be reserved for their

use later in the day, and there be a period for the transaction of morning

business not to extend beyond the hour

of 12 noon, with Senators to speak for

up to 5 minutes each except for the following: Senator SPECTER, 45 minutes;

Senator THOMAS, 20 minutes; Senator

DORGAN, 20 minutes; Senator CAMPBELL, 15 minutes; Senator REID, 10 minutes; Senator SANTORUM, 20 minutes.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. DOLE. I further ask unanimous

consent that at the hour of 12 noon tomorrow the Senate begin consideration

of Senate Concurrent Resolution 13,

the concurrent budget resolution.

The PRESIDING OFFICER. Without

objection, it is so ordered.

fPROGRAM

Mr. DOLE. Mr. President, for the information of all Senators, the Senate

will begin consideration of the budget

resolution tomorrow at noon, so I

think Senators can expect rollcall

votes throughout the day tomorrow,

probably late into the evening, and

again on Friday and, as I said earlier,

on Monday. Because it is our desire to

finish the budget resolution either on

late Tuesday or Wednesday. And then

if possible, take up the antiterrorism

measure before the recess, which begins on Friday of next week. I just urge

my colleagues, alert my colleagues

there will be votes unless something

happens I am not aware of on Friday

and on Monday.

So, please plan your schedules accordingly.

RECESS UNTIL 9:15 A.M.

fTOMORROW

Mr. DOLE. Mr. President, if there is

no further business to come before he

Senate, I now ask unanimous consent

that the Senate stand in recess under

the previous order.

There being no objection, the Senate,

at 6:10 p.m., recessed until Thursday,

May 18, 1995, at 9:15 a.m.