IB 
Union Calendar No. 295 
109TH CONGRESS 
2D SESSION 
H. R. 4761 
[Report No. 109–531] 
To provide for exploration, development, and production activities for mineral 
resources on the outer Continental Shelf, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 15, 2006 
Mr. JINDAL (for himself, Mr. BAKER, Mr. BOUSTANY, and Mrs. DRAKE) in-
troduced the following bill; which was referred to the Committee on Re-
sources 
JUNE 26, 2006 
Additional sponsors: Mr. ALEXANDER, Mr. BROWN of South Carolina, Mr. 
FORTUN˜O, Mr. WICKER, Mr. GIBBONS, Mr. BONNER, Mr. PICKERING, 
Mr. FALEOMAVAEGA, Mr. JEFFERSON, Mr. MCCRERY, Mr. BACHUS, Mr. 
COLE of Oklahoma, Mr. CANTOR, Mr. SAM JOHNSON of Texas, Mr. 
BLUNT, Mr. HERGER, Mr. MCCAUL of Texas, Mr. CONAWAY, Mr. 
MCHENRY, Mr. WESTMORELAND, Mr. WAMP, Mr. DOOLITTLE, Mr. ROG-
ERS of Alabama, Mr. YOUNG of Alaska, Mr. EVERETT, Mr. THORN-
BERRY, Mr. MARCHANT, Mr. BRADY of Texas, Mr. WILSON of South 
Carolina, Mr. SHUSTER, Mr. CUELLAR, Mr. BONILLA, Mr. POE, Mr. 
GOHMERT, Mr. BURGESS, Mr. OTTER, Mr. NUNES, Mr. GOODLATTE, Mr. 
CRAMER, Mr. DAVIS of Alabama, Ms. GRANGER, Mr. SESSIONS, Mr. 
SOUDER, Mr. GINGREY, Mr. GILCHREST, Mr. ROGERS of Michigan, Mr. 
SULLIVAN, Mr. ISTOOK, Mr. ADERHOLT, Mr. REHBERG, Mr. TOM DAVIS 
of Virginia, Mr. HALL, Mr. PEARCE, Mrs. CUBIN, Mr. PORTER, Mr. 
SIMPSON, Mr. BOREN, Mr. PRICE of Georgia, Mr. BEAUPREZ, Mr. 
OXLEY, Mr. PETERSON of Minnesota, Mr. NORWOOD, Mr. DEAL of Geor-
gia, Mr. CARTER, Mr. GENE GREEN of Texas, Mr. DAVIS of Kentucky, 
Ms. FOXX, Ms. PRYCE of Ohio, Mr. TAYLOR of Mississippi, Mr. BUYER, 
Mrs. CAPITO, Mr. BARRETT of South Carolina, Mr. PAUL, Ms. HART, 
Mr. SMITH of Texas, Mr. MELANCON, Mr. CALVERT, Mr. GOODE, Mr. 
MCHUGH, Mr. CANNON, Mr. BURTON of Indiana, Mr. LUCAS, Mr. 
RADANOVICH, Mr. ORTIZ, Mr. HOSTETTLER, Mr. MANZULLO, Mr. 
FORTENBERRY, Mr. GILLMOR, Mr. GARY G. MILLER of California, Mr. 
VerDate Aug 31 2005 
03:12 Jun 27, 2006
Jkt 049200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6652
E:\BILLS\H4761.RH
H4761
bajohnson on PROD1PC69 with BILLS
BISHOP of Utah, Mr. THOMPSON of Mississippi, Mr. BOOZMAN, Mrs. 
SCHMIDT, Mr. OSBORNE, Mr. TERRY, Mr. FRANKS of Arizona, Mrs. 
MUSGRAVE, Mr. HAYWORTH, Mr. PENCE, Mr. SHADEGG, Miss 
MCMORRIS, Mr. KLINE, Mr. AL GREEN of Texas, Mr. FLAKE, Mr. 
FORD, Mr. ENGLISH of Pennsylvania, Mr. CULBERSON, Mr. ABER-
CROMBIE, Mr. MURPHY, and Mr. GRAVES 
JUNE 26, 2006 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on February 15, 2006] 
A BILL 
To provide for exploration, development, and production ac-
tivities for mineral resources on the outer Continental 
Shelf, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Deep Ocean Energy Re-
sources Act of 2006’’. 
SEC. 2. POLICY. 
It is the policy of the United States that— 
(1) the United States is blessed with abundant 
energy resources on the outer Continental Shelf and 
has developed a comprehensive framework of environ-
mental laws and regulations and fostered the develop-
ment of state-of-the-art technology that allows for the 
VerDate Aug 31 2005 
03:12 Jun 27, 2006
Jkt 049200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6203
E:\BILLS\H4761.RH
H4761
bajohnson on PROD1PC69 with BILLS
responsible development of these resources for the ben-
efit of its citizenry; 
(2) adjacent States are required by the cir-
cumstances to commit significant resources in support 
of exploration, development, and production activities 
for mineral resources on the outer Continental Shelf, 
and it is fair and proper for a portion of the receipts 
from such activities to be shared with Adjacent States 
and their local coastal governments; 
(3) the existing laws governing the leasing and 
production of the mineral resources of the outer Con-
tinental Shelf have reduced the production of mineral 
resources, have preempted Adjacent States from being 
sufficiently involved in the decisions regarding the al-
lowance of mineral resource development, and have 
been harmful to the national interest; 
(4) the national interest is served by granting 
the Adjacent States more options related to whether or 
not mineral leasing should occur in the outer Conti-
nental Shelf within their Adjacent Zones; 
(5) it is not reasonably foreseeable that explo-
ration of a leased tract located more than 25 miles 
seaward of the coastline, development and production 
of a natural gas discovery located more than 25 miles 
seaward of the coastline, or development and produc-
VerDate Aug 31 2005 
03:12 Jun 27, 2006
Jkt 049200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6203
E:\BILLS\H4761.RH
H4761
bajohnson on PROD1PC69 with BILLS
tion of an oil discovery located more than 50 miles 
seaward of the coastline will adversely affect resources 
near the coastline; 
(6) transportation of oil from a leased tract 
might reasonably be foreseen, under limited cir-
cumstances, to have the potential to adversely affect 
resources near the coastline if the oil is within 50 
miles of the coastline, but such potential to adversely 
affect such resources is likely no greater, and probably 
less, than the potential impacts from tanker transpor-
tation because tanker spills usually involve large re-
leases of oil over a brief period of time; and 
(7) among other bodies of inland waters, the 
Great Lakes, Long Island Sound, Delaware Bay, 
Chesapeake Bay, Albemarle Sound, San Francisco 
Bay, and Puget Sound are not part of the outer Con-
tinental Shelf, and are not subject to leasing by the 
Federal Government for the exploration, development, 
and production of any mineral resources that might 
lie beneath them. 
SEC. 3. DEFINITIONS UNDER THE OUTER CONTINENTAL 
SHELF LANDS ACT. 
Section 2 of the Outer Continental Shelf Lands Act 
(43 U.S.C. 1331) is amended— 
VerDate Aug 31 2005 
03:12 Jun 27, 2006
Jkt 049200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6203
E:\BILLS\H4761.RH
H4761
bajohnson on PROD1PC69 with BILLS
(1) by amending paragraph (f) to read as fol-
lows: 
‘‘(f) The term ‘affected State’ means the Adjacent 
State.’’; 
(2) by striking the semicolon at the end of each 
of paragraphs (a) through (o) and inserting a period; 
(3) by striking ‘‘; and’’ at the end of paragraph 
(p) and inserting a period; 
(4) by adding at the end the following: 
‘‘(r) The term ‘Adjacent State’ means, with respect to 
any program, plan, lease sale, leased tract or other activity, 
proposed, conducted, or approved pursuant to the provi-
sions of this Act, any State the laws of which are declared, 
pursuant to section 4(a)(2), to be the law of the United 
States for the portion of the outer Continental Shelf on 
which such program, plan, lease sale, leased tract or activ-
ity appertains or is, or is proposed to be, conducted. For 
purposes of this paragraph, the term ‘State’ includes Puerto 
Rico and the other Territories of the United States. 
‘‘(s) The term ‘Adjacent Zone’ means, with respect to 
any program, plan, lease sale, leased tract, or other activity, 
proposed, conducted, or approved pursuant to the provi-
sions of this Act, the portion of the outer Continental Shelf 
for which the laws of a particular Adjacent State are de-
VerDate Aug 31 2005 
03:12 Jun 27, 2006
Jkt 049200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6203
E:\BILLS\H4761.RH
H4761
bajohnson on PROD1PC69 with BILLS
clared, pursuant to section 4(a)(2), to be the law of the 
United States. 
‘‘(t) The term ‘miles’ means statute miles. 
‘‘(u) The term ‘coastline’ has the same meaning as the 
term ‘coast line’ as defined in section 2(c) of the Submerged 
Lands Act (43 U.S.C. 1301(c)). 
‘‘(v) The term ‘Neighboring State’ means a coastal 
State having a common boundary at the coastline with the 
Adjacent State.’’; and 
(5) in paragraph (a), by inserting after ‘‘con-
trol’’ the following: ‘‘or lying within the United States 
exclusive economic zone adjacent to the Territories of 
the United States’’. 
SEC. 4. DETERMINATION OF ADJACENT ZONES AND PLAN-
NING AREAS. 
Section 4(a)(2)(A) of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1333(a)(2)(A)) is amended in the 
first sentence by striking ‘‘, and the President’’ and all that 
follows through the end of the sentence and inserting the 
following: ‘‘. The lines extending seaward and defining each 
State’s Adjacent Zone, and each OCS Planning Area, are 
as indicated on the maps for each outer Continental Shelf 
region entitled ‘Alaska OCS Region State Adjacent Zone 
and OCS Planning Areas’, ‘Pacific OCS Region State Ad-
jacent Zones and OCS Planning Areas’, ‘Gulf of Mexico 
VerDate Aug 31 2005 
03:12 Jun 27, 2006
Jkt 049200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6203
E:\BILLS\H4761.RH
H4761
bajohnson on PROD1PC69 with BILLS
OCS Region State Adjacent Zones and OCS Planning 
Areas’, and ‘Atlantic OCS Region State Adjacent Zones 
and OCS Planning Areas’, all of which are dated September 
2005 and on file in the Office of the Director, Minerals 
Management Service.’’. 
SEC. 5. ADMINISTRATION OF LEASING. 
Section 5 of the Outer Continental Shelf Lands Act 
(43 U.S.C. 1334) is amended by adding at the end the fol-
lowing: 
‘‘(k) VOLUNTARY PARTIAL RELINQUISHMENT
OF
A 
LEASE.—Any lessee of a producing lease may relinquish 
to the Secretary any portion of a lease that the lessee has 
no interest in producing and that the Secretary finds is 
geologically prospective. In return for any such relinquish-
ment, the Secretary shall provide to the lessee a royalty in-
centive for the portion of the lease retained by the lessee, 
in accordance with regulations promulgated by the Sec-
retary to carry out this subsection. The Secretary shall pub-
lish final regulations implementing this subsection within 
365 days after the date of the enactment of the Deep Ocean 
Energy Resources Act of 2006. 
‘‘(l) NATURAL GAS LEASE REGULATIONS.—Not later 
than July 1, 2007, the Secretary shall publish a final regu-
lation that shall— 
VerDate Aug 31 2005 
03:12 Jun 27, 2006
Jkt 049200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6203
E:\BILLS\H4761.RH
H4761
bajohnson on PROD1PC69 with BILLS
‘‘(1) establish procedures for entering into nat-
ural gas leases; 
‘‘(2) ensure that natural gas leases are only 
available for tracts on the outer Continental Shelf 
that are wholly within 100 miles of the coastline 
within an area withdrawn from disposition by leas-
ing on the day after the date of enactment of the Deep 
Ocean Energy Resources Act of 2006; 
‘‘(3) provide that natural gas leases shall contain 
the same rights and obligations established for oil and 
gas leases, except as otherwise provided in the Deep 
Ocean Energy Resources Act of 2006; 
‘‘(4) provide that, in reviewing the adequacy of 
bids for natural gas leases, the value of any crude oil 
estimated to be contained within any tract shall be 
excluded; 
‘‘(5) provide that any crude oil produced from a 
well and reinjected into the leased tract shall not be 
subject to payment of royalty, and that the Secretary 
shall consider, in setting the royalty rates for a nat-
ural gas lease, the additional cost to the lessee of not 
producing any crude oil; and 
‘‘(6) provide that any Federal law that applies 
to an oil and gas lease on the outer Continental Shelf 
VerDate Aug 31 2005 
03:12 Jun 27, 2006
Jkt 049200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6203
E:\BILLS\H4761.RH
H4761
bajohnson on PROD1PC69 with BILLS
shall apply to a natural gas lease unless otherwise 
clearly inapplicable.’’. 
SEC. 6. GRANT OF LEASES BY SECRETARY. 
Section 8 of the Outer Continental Shelf Lands Act 
(43 U.S.C. 1337) is amended— 
(1) in subsection (a)(1) by inserting after the 
first sentence the following: ‘‘Further, the Secretary 
may grant natural gas leases in a manner similar to 
the granting of oil and gas leases and under the var-
ious bidding systems available for oil and gas 
leases.’’; 
(2) by adding at the end of subsection (b) the fol-
lowing: 
‘‘The Secretary may issue more than one lease for a given 
tract if each lease applies to a separate and distinct range 
of vertical depths, horizontal surface area, or a combination 
of the two. The Secretary may issue regulations that the 
Secretary determines are necessary to manage such leases 
consistent with the purposes of this Act.’’; 
(3) by amending subsection (p)(2)(B) to read as 
follows: 
‘‘(B) The Secretary shall provide for the pay-
ment to coastal states, and their local coastal govern-
ments, of 75 percent of Federal receipts from projects 
authorized under this section located partially or 
VerDate Aug 31 2005 
03:12 Jun 27, 2006
Jkt 049200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6203
E:\BILLS\H4761.RH
H4761
bajohnson on PROD1PC69 with BILLS
completely within the area extending seaward of State 
submerged lands out to 4 marine leagues from the 
coastline, and the payment to coastal states of 50 per-
cent of the receipts from projects completely located in 
the area more than 4 marine leagues from the coast-
line. Payments shall be based on a formula estab-
lished by the Secretary by rulemaking no later than 
180 days after the date of the enactment of the Deep 
Ocean Energy Resources Act of 2006 that provides for 
equitable distribution, based on proximity to the 
project, among coastal states that have coastline that 
is located within 200 miles of the geographic center 
of the project.’’. 
(4) by adding at the end the following: 
‘‘(q) NATURAL GAS LEASES.— 
‘‘(1) RIGHT TO PRODUCE NATURAL GAS.—A les-
see of a natural gas lease shall have the right to 
produce the natural gas from a field on a natural gas 
leased tract if the Secretary estimates that the discov-
ered field has at least 40 percent of the economically 
recoverable Btu content of the field contained within 
natural gas and such natural gas is economical to 
produce. 
‘‘(2) CRUDE OIL.—A lessee of a natural gas lease 
may not produce crude oil from the lease. 
VerDate Aug 31 2005 
03:12 Jun 27, 2006
Jkt 049200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6203
E:\BILLS\H4761.RH
H4761
bajohnson on PROD1PC69 with BILLS
‘‘(3) ESTIMATES OF BTU CONTENT.—The Sec-
retary shall make estimates of the natural gas Btu 
content of discovered fields on a natural gas lease 
only after the completion of at least one exploration 
well, the data from which has been tied to the results 
of a three-dimensional seismic survey of the field. The 
Secretary may not require the lessee to further delin-
eate any discovered field prior to making such esti-
mates. 
‘‘(4) DEFINITION OF NATURAL GAS.—For pur-
poses of a natural gas lease, natural gas means nat-
ural gas and all substances produced in association 
with gas, including, but not limited to, hydrocarbon 
liquids (other than crude oil) that are obtained by the 
condensation of hydrocarbon vapors and separate out 
in liquid form from the produced gas stream. 
‘‘(r) REMOVAL OF RESTRICTIONS ON JOINT BIDDING 
IN
CERTAIN
AREAS
OF
THE
OUTER
CONTINENTAL 
SHELF.—Restrictions on joint bidders shall no longer apply 
to tracts located in the Alaska OCS Region. Such restric-
tions shall not apply to tracts in other OCS regions deter-
mined to be ‘frontier tracts’ or otherwise ‘high cost tracts’ 
under final regulations that shall be published by the Sec-
retary by not later than 365 days after the date of the enact-
ment of the Deep Ocean Energy Resources Act of 2006. 
VerDate Aug 31 2005 
03:12 Jun 27, 2006
Jkt 049200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6203
E:\BILLS\H4761.RH
H4761
bajohnson on PROD1PC69 with BILLS