(B) institutions of higher education;
(C) companies; and
(D) consortia formed among institutions
and companies described in subparagraphs (A)
through (C) for the purpose of conducting re-
search, development, and demonstration of un-
conventional and ultra-deepwater natural gas or
other petroleum exploration and production
technologies; and
(2) review activities under those grants to en-
sure that they comply with the requirements of this
Act and serve the purposes for which the grant was
made.
SEC. 7. GRANTS.
(a) TYPES OF GRANTS.—
(1) UNCONVENTIONAL.—The Research Organi-
zation shall award grants for research, development,
and demonstration of technologies to maximize the
value of the Government’s natural gas and other pe-
troleum resources in unconventional reservoirs, and
to develop technologies to increase the supply of nat-
ural gas and other petroleum resources by lowering
the cost and improving the efficiency of exploration
and production of unconventional reservoirs, while
improving safety and minimizing environmental im-
pacts.
(2) ULTRA-DEEPWATER.—The Research Orga-
nization shall award grants for research, develop-
ment, and demonstration of natural gas or other pe-
troleum exploration and production technologies
to—
(A) maximize the value of the Federal
Government’s natural gas and other petroleum
resources in the ultra-deepwater areas;
(B) increase the supply of natural gas and
other petroleum resources by lowering the cost
and improving the efficiency of exploration and
production of ultra-deepwater reservoirs; and
(C) improve safety and minimize the envi-
ronmental impacts of ultra-deepwater develop-
ments.
(3) ULTRA-DEEPWATER
ARCHITECTURE.—The
Research Organization shall award a grant to one or
more consortia described in section 6(d)(1)(D) for
the purpose of developing and demonstrating the
next generation architecture for ultra-deepwater pro-
duction of natural gas and other petroleum in fur-
therance of the purposes stated in paragraph (2)(A)
through (C).
(b) CONDITIONS
FOR GRANTS.—Grants provided
under this section shall contain the following conditions:
(1) If the grant recipient consists of more than
one entity, the recipient shall provide a signed con-
tract agreed to by all participating members clearly
defining all rights to intellectual property for exist-
ing technology and for future inventions conceived
and developed using funds provided under the grant,
in a manner that is consistent with applicable laws.
(2) There shall be a repayment schedule for
Federal dollars provided for demonstration projects
under the grant in the event of a successful commer-
cialization of the demonstrated technology. Such re-
payment schedule shall provide that the payments
are made to the Secretary with the express intent
that these payments not impede the adoption of the
demonstrated technology in the marketplace. In the
event that such impedance occurs due to market
forces or other factors, the Research Organization
shall renegotiate the grant agreement so that the ac-
ceptance of the technology in the marketplace is en-
abled.
(3) Applications for grants for demonstration
projects shall clearly state the intended commercial
applications of the technology demonstrated.
(4) The total amount of funds made available
under a grant provided under subsection (a)(3) shall
not exceed 50 percent of the total cost of the activi-
ties for which the grant is provided.
(5) The total amount of funds made available
under a grant provided under subsection (a)(1) or
(2) shall not exceed 50 percent of the total cost of
the activities covered by the grant, except that the
Research Organization may elect to provide grants
covering a higher percentage, not to exceed 90 per-
cent, of total project costs in the case of grants
made solely to independent producers.
(6) An appropriate amount of funds provided
under a grant shall be used for the broad dissemina-
tion of technologies developed under the grant to in-
terested institutions of higher education, industry,
and appropriate Federal and State technology enti-
ties to ensure the greatest possible benefits for the
public and use of government resources.
(7) Demonstrations of ultra-deepwater tech-
nologies for which funds are provided under a grant
may be conducted in ultra-deepwater or deepwater
locations.
(c) ALLOCATION OF FUNDS.—Funds available for
grants under this Act shall be allocated as follows:
(1) 15 percent shall be for grants under sub-
section (a)(1).
(2) 15 percent shall be for grants under sub-
section (a)(2).
(3) 60 percent shall be for grants under sub-
section (a)(3).
(4) 10 percent shall be for carrying out section
4.
SEC. 8. PLAN AND FUNDING.
(a) TRANSMITTAL TO SECRETARY.—The Research
Organization shall transmit to the Secretary an annual
plan proposing projects and funding of activities under
each paragraph of section 7(a).
(b) REVIEW.—The Secretary shall have 1 month to
review the annual plan, and shall approve the plan, if it
is consistent with this Act. If the Secretary approves the
plan, the Secretary shall provide funding as proposed in
the plan.
(c) DISAPPROVAL.—If the Secretary does not approve
the plan, the Secretary shall notify the Research Organiza-
tion of the reasons for disapproval and shall withhold
funding until a new plan is submitted which the Secretary
approves. Within 1 month after notifying the Research Or-
ganization of a disapproval, the Secretary shall notify the
appropriate congressional committees of the disapproval.
SEC. 9. AUDIT.
The Secretary shall retain an independent, commer-
cial auditor to determine the extent to which the funds
authorized by this Act have been expended in a manner
consistent with the purposes of this Act. The auditor shall
transmit a report annually to the Secretary, who shall
transmit the report to the appropriate congressional com-
mittees, along with a plan to remedy any deficiencies cited
in the report.
SEC. 10. FUND.
(a) ESTABLISHMENT.—There is established in the
Treasury of the United States a fund to be known as the
‘‘Ultra-Deepwater and Unconventional Gas Research
Fund’’ which shall be available for obligation to the extent
provided in advance in appropriations Acts for allocation
under section 7(c).
(b) FUNDING SOURCES.—
(1) LOANS FROM TREASURY.—There are au-
thorized to be appropriated to the Secretary
$900,000,000 for the period encompassing fiscal
years 2002 through 2009. Such amounts shall be
deposited by the Secretary in the Fund, and shall be
considered loans from the Treasury. Income received
by the United States in connection with any ultra-
deepwater oil and gas leases shall be deposited in
the Treasury and considered as repayment for the
loans under this paragraph.
(2) ADDITIONAL APPROPRIATIONS.—There are
authorized to be appropriated to the Secretary such
sums as may be necessary for the fiscal years 2002
through 2009, to be deposited in the Fund.
(3) OIL AND GAS LEASE INCOME.—To the ex-
tent provided in advance in appropriations Acts, not
more than 7.5 percent of the income of the United
States from Federal oil and gas leases may be de-
posited in the Fund for fiscal years 2002 through
2009.
SEC. 11. SUNSET.
No funds are authorized to be appropriated for car-
rying out this Act after fiscal year 2009. The Research
Organization shall be terminated when it has expended all
funds made available pursuant to this Act.
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