II 

Calendar No. 529 

109TH CONGRESS 

2D SESSION S. 3711 

To enhance the energy independence and security of the United States by 

providing for exploration, development, and production activities for mineral resources in the Gulf of Mexico, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 20, 2006 

Mr. DOMENICI (for himself, Ms. LANDRIEU, Mr. VITTER, Mr. FRIST, Mr. 

MCCONNELL, Mr. MARTINEZ, Mr. COCHRAN, Mr. LOTT, Mr. SHELBY, 

Mr. SESSIONS, Mr. CORNYN, and Mrs. HUTCHISON) introduced the following bill; which was read the first time 

JULY 21, 2006 

Read the second time and placed on the calendar 

A BILL 

To enhance the energy independence and security of the 

United States by providing for exploration, development, 

and production activities for mineral resources in the 

Gulf of Mexico, 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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Gulf of Mexico Energy 

3 Security Act of 2006’’. 

4 SEC. 2. DEFINITIONS. 

5 In this Act: 

6 (1) 181 AREA.—The term ‘‘181 Area’’ means 

7 the area identified in map 15, page 58, of the Pro8 posed Final Outer Continental Shelf Oil and Gas 

9 Leasing Program for 1997–2002, dated August 

10 1996, of the Minerals Management Service, available 

11 in the Office of the Director of the Minerals Man12 agement Service, excluding the area offered in OCS 

13 Lease Sale 181, held on December 5, 2001. 

14 (2) 181 SOUTH AREA.—The term ‘‘181 South 

15 Area’’ means any area— 

16 (A) located— 

17 (i) south of the 181 Area; 

18 (ii) west of the Military Mission Line; 

19 and 

20 (iii) in the Central Planning Area; 

21 (B) excluded from the Proposed Final 

22 Outer Continental Shelf Oil and Gas Leasing 

23 Program for 1997–2002, dated August 1996, of 

24 the Minerals Management Service; and 

25 (C) included in the areas considered for oil 

26 and gas leasing, as identified in map 8, page 37 


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1 of the document entitled ‘‘Draft Proposed Pro2 gram Outer Continental Shelf Oil and Gas 

3 Leasing Program 2007–2012’’, dated February 

4 2006. 

5 (3) BONUS OR ROYALTY CREDIT.—The term 

6 ‘‘bonus or royalty credit’’ means a legal instrument 

7 or other written documentation, or an entry in an 

8 account managed by the Secretary, that may be used 

9 in lieu of any other monetary payment for— 

10 (A) a bonus bid for a lease on the outer 

11 Continental Shelf; or 

12 (B) a royalty due on oil or gas production 

13 from any lease located on the outer Continental 

14 Shelf. 

15 (4) CENTRAL PLANNING AREA.—The term 

16 ‘‘Central Planning Area’’ means the Central Gulf of 

17 Mexico Planning Area of the outer Continental 

18 Shelf, as designated in the document entitled ‘‘Draft 

19 Proposed Program Outer Continental Shelf Oil and 

20 Gas Leasing Program 2007–2012’’, dated February 

21 2006. 

22 (5) EASTERN PLANNING AREA.—The term 

23 ‘‘Eastern Planning Area’’ means the Eastern Gulf of 

24 Mexico Planning Area of the outer Continental 

25 Shelf, as designated in the document entitled ‘‘Draft 


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1 Proposed Program Outer Continental Shelf Oil and 

2 Gas Leasing Program 2007–2012’’, dated February 

3 2006. 

4 (6) 2002–2007 PLANNING AREA.—The term 

5 ‘‘2002–2007 planning area’’ means any area— 

6 (A) located in— 

7 (i) the Eastern Planning Area, as des8 ignated in the Proposed Final Outer Conti9 nental Shelf Oil and Gas Leasing Program 

10 2002–2007, dated April 2002, of the Min11 erals Management Service; 

12 (ii) the Central Planning Area, as des13 ignated in the Proposed Final Outer Conti14 nental Shelf Oil and Gas Leasing Program 

15 2002–2007, dated April 2002, of the Min16 erals Management Service; or 

17 (iii) the Western Planning Area, as 

18 designated in the Proposed Final Outer 

19 Continental Shelf Oil and Gas Leasing 

20 Program 2002–2007, dated April 2002, of 

21 the Minerals Management Service; and 

22 (B) not located in— 

23 (i) an area in which no funds may be 

24 expended to conduct offshore preleasing, 

25 leasing, and related activities under secVerDate Aug 31 2005 00:08 Jul 22, 2006 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3711.PCS S3711

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1 tions 104 through 106 of the Department 

2 of the Interior, Environment, and Related 

3 Agencies Appropriations Act, 2006 (Public 

4 Law 109–54; 119 Stat. 521) (as in effect 

5 on August 2, 2005); 

6 (ii) an area withdrawn from leasing 

7 under the ‘‘Memorandum on Withdrawal 

8 of Certain Areas of the United States 

9 Outer Continental Shelf from Leasing Dis10 position’’, from 34 Weekly Comp. Pres. 

11 Doc. 1111, dated June 12, 1998; or 

12 (iii) the 181 Area or 181 South Area. 

13 (7) GULF PRODUCING STATE.—The term ‘‘Gulf 

14 producing State’’ means each of the States of Ala15 bama, Louisiana, Mississippi, and Texas. 

16 (8) MILITARY MISSION LINE.—The term ‘‘Mili17 tary Mission Line’’ means the north-south line at 

18 86°41′ W. longitude. 

19 (9) QUALIFIED OUTER CONTINENTAL SHELF

20 REVENUES.— 

21 (A) IN GENERAL.—The term ‘‘qualified 

22 outer Continental Shelf revenues’’ means— 

23 (i) in the case of each of fiscal years 

24 2007 through 2016, all rentals, royalties, 

25 bonus bids, and other sums due and payVerDate Aug 31 2005 00:08 Jul 22, 2006 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3711.PCS S3711

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1 able to the United States from leases en2 tered into on or after the date of enact3 ment of this Act for— 

4 (I) areas in the 181 Area located 

5 in the Eastern Planning Area; and 

6 (II) the 181 South Area; and 

7 (ii) in the case of fiscal year 2017 and 

8 each fiscal year thereafter, all rentals, roy9 alties, bonus bids, and other sums due and 

10 payable to the United States received on or 

11 after October 1, 2016, from leases entered 

12 into on or after the date of enactment of 

13 this Act for— 

14 (I) the 181 Area; 

15 (II) the 181 South Area; and 

16 (III) the 2002–2007 planning 

17 area. 

18 (B) EXCLUSIONS.—The term ‘‘qualified 

19 outer Continental Shelf revenues’’ does not in20 clude— 

21 (i) revenues from the forfeiture of a 

22 bond or other surety securing obligations 

23 other than royalties, civil penalties, or roy24 alties taken by the Secretary in-kind and 

25 not sold; or 


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1 (ii) revenues generated from leases 

2 subject to section 8(g) of the Outer Conti3 nental Shelf Lands Act (43 U.S.C. 

4 1337(g)). 

5 (10) COASTAL POLITICAL SUBDIVISION.—The 

6 term ‘‘coastal political subdivision’’ means a political 

7 subdivision of a Gulf producing State any part of 

8 which political subdivision is— 

9 (A) within the coastal zone (as defined in 

10 section 304 of the Coastal Zone Management 

11 Act of 1972 (16 U.S.C. 1453)) of the Gulf pro12 ducing State as of the date of enactment of this 

13 Act; and 

14 (B) not more than 200 nautical miles from 

15 the geographic center of any leased tract. 

16 (11) SECRETARY.—The term ‘‘Secretary’’ 

17 means the Secretary of the Interior. 

18 SEC. 3. OFFSHORE OIL AND GAS LEASING IN 181 AREA AND 

19 181 SOUTH AREA OF GULF OF MEXICO. 

20 (a) 181 AREA LEASE SALE.—Except as provided in 

21 section 4, the Secretary shall offer the 181 Area for oil 

22 and gas leasing pursuant to the Outer Continental Shelf 

23 Lands Act (43 U.S.C. 1331 et seq.) as soon as practicable, 

24 but not later than 1 year, after the date of enactment of 

25 this Act. 


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1 (b) 181 SOUTH AREA LEASE SALE.—The Secretary 

2 shall offer the 181 South Area for oil and gas leasing pur3 suant to the Outer Continental Shelf Lands Act (43 

4 U.S.C. 1331 et seq.) as soon as practicable after the date 

5 of enactment of this Act. 

6 (c) LEASING PROGRAM.—The 181 Area and 181 

7 South Area shall be offered for lease under this section 

8 notwithstanding the omission of the 181 Area or the 181 

9 South Area from any outer Continental Shelf leasing pro10 gram under section 18 of the Outer Continental Shelf 

11 Lands Act (43 U.S.C. 1344). 

12 (d) CONFORMING AMENDMENT.—Section 105 of the 

13 Department of the Interior, Environment, and Related 

14 Agencies Appropriations Act, 2006 (Public Law 109–54; 

15 119 Stat. 522) is amended by inserting ‘‘(other than the 

16 181 South Area (as defined in section 2 of the Gulf of 

17 Mexico Energy Security Act of 2006))’’ after ‘‘lands lo18 cated outside Sale 181’’. 

19 SEC. 4. MORATORIUM ON OIL AND GAS LEASING IN CER20 TAIN AREAS OF GULF OF MEXICO. 

21 (a) IN GENERAL.—Effective during the period begin22 ning on the date of enactment of this Act and ending on 

23 June 30, 2022, the Secretary shall not offer for leasing, 

24 preleasing, or any related activity— 


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1 (1) any area east of the Military Mission Line 

2 in the Gulf of Mexico; 

3 (2) any area in the Eastern Planning Area that 

4 is within 125 miles of the coastline of the State of 

5 Florida; or 

6 (3) any area in the Central Planning Area that 

7 is— 

8 (A) within— 

9 (i) the 181 Area; and 

10 (ii) 100 miles of the coastline of the 

11 State of Florida; or 

12 (B)(i) outside the 181 Area; 

13 (ii) east of the western edge of the Pensa14 cola Official Protraction Diagram (UTM X co15 ordinate 1,393,920 (NAD 27 feet)); and 

16 (iii) within 100 miles of the coastline of 

17 the State of Florida. 

18 (b) MILITARY MISSION LINE.—Notwithstanding sub19 section (a), the United States reserves the right to des20 ignate by and through the Secretary of Defense, with the 

21 approval of the President, national defense areas on the 

22 outer Continental Shelf pursuant to section 12(d) of the 

23 Outer Continental Shelf Lands Act (43 U.S.C. 1341(d)). 

24 (c) EXCHANGE OF CERTAIN LEASES.— 


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1 (1) IN GENERAL.—The Secretary shall permit 

2 any person that, as of the date of enactment of this 

3 Act, has entered into an oil or gas lease with the 

4 Secretary in any area described in paragraph (2) or 

5 (3) of subsection (a) to exchange the lease for a 

6 bonus or royalty credit that may only be used in the 

7 Gulf of Mexico. 

8 (2) VALUATION OF EXISTING LEASE.—The 

9 amount of the bonus or royalty credit for a lease to 

10 be exchanged shall be equal to— 

11 (A) the amount of the bonus bid; and 

12 (B) any rental paid for the lease as of the 

13 date the lessee notifies the Secretary of the de14 cision to exchange the lease. 

15 (3) REVENUE DISTRIBUTION.—No bonus or 

16 royalty credit may be used under this subsection in 

17 lieu of any payment due under, or to acquire any in18 terest in, a lease subject to the revenue distribution 

19 provisions of section 8(g) of the Outer Continental 

20 Shelf Lands Act (43 U.S.C. 1337(g)). 

21 (4) REGULATIONS.—Not later than 1 year after 

22 the date of enactment of this Act, the Secretary 

23 shall promulgate regulations that shall provide a 

24 process for— 


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1 (A) notification to the Secretary of a deci2 sion to exchange an eligible lease; 

3 (B) issuance of bonus or royalty credits in 

4 exchange for relinquishment of the existing 

5 lease; 

6 (C) transfer of the bonus or royalty credit 

7 to any other person; and 

8 (D) determining the proper allocation of 

9 bonus or royalty credits to each lease interest 

10 owner. 

11 SEC. 5. DISPOSITION OF QUALIFIED OUTER CONTINENTAL 

12 SHELF REVENUES FROM 181 AREA, 181 SOUTH 

13 AREA, AND 2002–2007 PLANNING AREAS OF 

14 GULF OF MEXICO. 

15 (a) IN GENERAL.—Notwithstanding section 9 of the 

16 Outer Continental Shelf Lands Act (43 U.S.C. 1338) and 

17 subject to the other provisions of this section, for each ap18 plicable fiscal year, the Secretary of the Treasury shall 

19 deposit— 

20 (1) 50 percent of qualified outer Continental 

21 Shelf revenues in the general fund of the Treasury; 

22 and 

23 (2) 50 percent of qualified outer Continental 

24 Shelf revenues in a special account in the Treasury 

25 from which the Secretary shall disburse— 


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1 (A) 75 percent to Gulf producing States in 

2 accordance with subsection (b); and 

3 (B) 25 percent to provide financial assist4 ance to States in accordance with section 6 of 

5 the Land and Water Conservation Fund Act of 

6 1965 (16 U.S.C. 460l–8), which shall be con7 sidered income to the Land and Water Con8 servation Fund for purposes of section 2 of that 

9 Act (16 U.S.C. 460l–5). 

10 (b) ALLOCATION AMONG GULF PRODUCING STATES

11 AND COASTAL POLITICAL SUBDIVISIONS.— 

12 (1) ALLOCATION AMONG GULF PRODUCING

13 STATES FOR FISCAL YEARS 2007 THROUGH 2016.— 

14 (A) IN GENERAL.—Subject to subpara15 graph (B), effective for each of fiscal years 

16 2007 through 2016, the amount made available 

17 under subsection (a)(2)(A) shall be allocated to 

18 each Gulf producing State in amounts (based 

19 on a formula established by the Secretary by 

20 regulation) that are inversely proportional to 

21 the respective distances between the point on 

22 the coastline of each Gulf producing State that 

23 is closest to the geographic center of the appli24 cable leased tract and the geographic center of 

25 the leased tract. 


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1 (B) MINIMUM ALLOCATION.—The amount 

2 allocated to a Gulf producing State each fiscal 

3 year under subparagraph (A) shall be at least 

4 10 percent of the amounts available under sub5 section (a)(2)(A). 

6 (2) ALLOCATION AMONG GULF PRODUCING

7 STATES FOR FISCAL YEAR 2017 AND THEREAFTER.— 

8 (A) IN GENERAL.—Subject to subpara9 graphs (B) and (C), effective for fiscal year 

10 2017 and each fiscal year thereafter— 

11 (i) the amount made available under 

12 subsection (a)(2)(A) from any lease en13 tered into within the 181 Area or the 181 

14 South Area shall be allocated to each Gulf 

15 producing State in amounts (based on a 

16 formula established by the Secretary by 

17 regulation) that are inversely proportional 

18 to the respective distances between the 

19 point on the coastline of each Gulf pro20 ducing State that is closest to the geo21 graphic center of the applicable leased 

22 tract and the geographic center of the 

23 leased tract; and 

24 (ii) the amount made available under 

25 subsection (a)(2)(A) from any lease enVerDate Aug 31 2005 00:08 Jul 22, 2006 Jkt 049200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S3711.PCS S3711

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1 tered into within the 2002–2007 planning 

2 area shall be allocated to each Gulf pro3 ducing State in amounts that are inversely 

4 proportional to the respective distances be5 tween the point on the coastline of each 

6 Gulf producing State that is closest to the 

7 geographic center of each historical lease 

8 site and the geographic center of the his9 torical lease site, as determined by the Sec10 retary. 

11 (B) MINIMUM ALLOCATION.—The amount 

12 allocated to a Gulf producing State each fiscal 

13 year under subparagraph (A) shall be at least 

14 10 percent of the amounts available under sub15 section (a)(2)(A). 

16 (C) HISTORICAL LEASE SITES.— 

17 (i) IN GENERAL.—Subject to clause 

18 (ii), for purposes of subparagraph (A)(ii), 

19 the historical lease sites in the 2002–2007 

20 planning area shall include all leases en21 tered into by the Secretary for an area in 

22 the Gulf of Mexico during the period be23 ginning on October 1, 1982 (or an earlier 

24 date if practicable, as determined by the 


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1 Secretary), and ending on December 31, 

2 2015. 

3 (ii) ADJUSTMENT.—Effective January 

4 1, 2022, and every 5 years thereafter, the 

5 ending date described in clause (i) shall be 

6 extended for an additional 5 calendar 

7 years. 

8 (3) PAYMENTS TO COASTAL POLITICAL SUB9 DIVISIONS.— 

10 (A) IN GENERAL.—The Secretary shall pay 

11 20 percent of the allocable share of each Gulf 

12 producing State, as determined under para13 graphs (1) and (2), to the coastal political sub14 divisions of the Gulf producing State. 

15 (B) ALLOCATION.—The amount paid by 

16 the Secretary to coastal political subdivisions 

17 shall be allocated to each coastal political sub18 division in accordance with subparagraphs (B), 

19 (C), and (E) of section 31(b)(4) of the Outer 

20 Continental Shelf Lands Act (43 U.S.C. 

21 1356a(b)(4)). 

22 (c) TIMING.—The amounts required to be deposited 

23 under paragraph (2) of subsection (a) for the applicable 

24 fiscal year shall be made available in accordance with that 


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1 paragraph during the fiscal year immediately following the 

2 applicable fiscal year. 

3 (d) AUTHORIZED USES.— 

4 (1) IN GENERAL.—Subject to paragraph (2), 

5 each Gulf producing State and coastal political sub6 division shall use all amounts received under sub7 section (b) in accordance with all applicable Federal 

8 and State laws, only for 1 or more of the following 

9 purposes: 

10 (A) Projects and activities for the purposes 

11 of coastal protection, including conservation, 

12 coastal restoration, hurricane protection, and 

13 infrastructure directly affected by coastal wet14 land losses. 

15 (B) Mitigation of damage to fish, wildlife, 

16 or natural resources. 

17 (C) Implementation of a federally-approved 

18 marine, coastal, or comprehensive conservation 

19 management plan. 

20 (D) Mitigation of the impact of outer Con21 tinental Shelf activities through the funding of 

22 onshore infrastructure projects. 

23 (E) Planning assistance and the adminis24 trative costs of complying with this section. 


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1 (2) LIMITATION.—Not more than 3 percent of 

2 amounts received by a Gulf producing State or 

3 coastal political subdivision under subsection (b) 

4 may be used for the purposes described in paragraph 

5 (1)(E). 

6 (e) ADMINISTRATION.—Amounts made available 

7 under subsection (a)(2) shall— 

8 (1) be made available, without further appro9 priation, in accordance with this section; 

10 (2) remain available until expended; and 

11 (3) be in addition to any amounts appropriated 

12 under— 

13 (A) the Outer Continental Shelf Lands Act 

14 (43 U.S.C. 1331 et seq.); 

15 (B) the Land and Water Conservation 

16 Fund Act of 1965 (16 U.S.C. 460l–4 et seq.); 

17 or 

18 (C) any other provision of law. 

19 (f) LIMITATIONS ON AMOUNT OF DISTRIBUTED

20 QUALIFIED OUTER CONTINENTAL SHELF REVENUES.— 

21 (1) IN GENERAL.—Subject to paragraph (2), 

22 the total amount of qualified outer Continental Shelf 

23 revenues made available under subsection (a)(2) 

24 shall not exceed $500,000,000 for each of fiscal 

25 years 2016 through 2055. 


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1 (2) EXPENDITURES.—For the purpose of para2 graph (1), for each of fiscal years 2016 through 

3 2055, expenditures under subsection (a)(2) and shall 

4 be net of receipts from that fiscal year from any 

5 area in the 181 Area in the Eastern Planning Area 

6 and the 181 South Area. 

7 (3) PRO RATA REDUCTIONS.—If paragraph (1) 

8 limits the amount of qualified outer Continental 

9 Shelf revenue that would be paid under subpara10 graphs (A) and (B) of subsection (a)(2)— 

11 (A) the Secretary shall reduce the amount 

12 of qualified outer Continental Shelf revenue 

13 provided to each recipient on a pro rata basis; 

14 and 

15 (B) any remainder of the qualified outer 

16 Continental Shelf revenues shall revert to the 

17 general fund of the Treasury. 


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Calendar No. 529 

109TH CONGRESS 

2D SESSION S. 3711 

A BILL 

To enhance the energy independence and security 

other purposes. eral resources in the Gulf of Mexico, and for development, and production activities for minof the United States by providing for exploration, 

JULY 21, 2006 

Read the second time and placed on the calendar 


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