H. R. 6—121
(2) PROGRAM.—The term ‘‘Program’’ means the National 
Geological and Geophysical Data Preservation Program carried 
out under this section. 
(3) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 
of the Interior, acting through the Director of the United States 
Geological Survey. 
(4) SURVEY.—The term ‘‘Survey’’ means the United States 
Geological Survey. 
(k) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 
to be appropriated to carry out this section $30,000,000 for each 
of fiscal years 2006 through 2010. 
SEC. 352. OIL AND GAS LEASE ACREAGE LIMITATIONS. 
Section 27(d)(1) of the Mineral Leasing Act (30 U.S.C. 184(d)(1)) 
is amended by inserting after ‘‘acreage held in special tar sand 
areas’’ the following: ‘‘, and acreage under any lease any portion 
of which has been committed to a federally approved unit or coopera-
tive plan or communitization agreement or for which royalty 
(including compensatory royalty or royalty in-kind) was paid in 
the preceding calendar year,’’. 
SEC. 353. GAS HYDRATE PRODUCTION INCENTIVE. 
(a) PURPOSE.—The purpose of this section is to promote natural 
gas production from the natural gas hydrate resources on the outer 
Continental Shelf and Federal lands in Alaska by providing royalty 
incentives. 
(b) SUSPENSION OF ROYALTIES.— 
(1) IN GENERAL.—The Secretary may grant royalty relief 
in accordance with this section for natural gas produced from 
gas hydrate resources under an eligible lease. 
(2) ELIGIBLE LEASES.—A lease shall be an eligible lease 
for purposes of this section if— 
(A) it is issued under the Outer Continental Shelf 
Lands Act (43 U.S.C. 1331 et seq.), or is an oil and gas 
lease issued for onshore Federal lands in Alaska; 
(B) it is issued prior to January 1, 2016; and 
(C) production under the lease of natural gas from 
gas hydrate resources commences prior to January 1, 2018. 
(3) AMOUNT
OF
RELIEF.—The Secretary shall conduct a 
rulemaking and grant royalty relief under this section as a 
suspension volume if the Secretary determines that such royalty 
relief would encourage production of natural gas from gas 
hydrate resources from an eligible lease. The maximum suspen-
sion volume shall be 30 billion cubic feet of natural gas per 
lease. Such relief shall be in addition to any other royalty 
relief under any other provision applicable to the lease that 
does not specifically grant a gas hydrate production incentive. 
Such royalty suspension volume shall be applied to any eligible 
production occurring on or after the date of publication of 
the advanced notice of proposed rulemaking. 
(4) LIMITATION.—The Secretary may place limitations on 
royalty relief granted under this section based on market price. 
(c) APPLICATION.—This section shall apply to any eligible lease 
issued before, on, or after the date of enactment of this Act. 
(d) RULEMAKINGS.— 
(1) REQUIREMENT.—The Secretary shall publish the 
advanced notice of proposed rulemaking within 180 days after 
the date of enactment of this Act and complete the rulemaking
H. R. 6—122
implementing this section within 365 days after the date of 
enactment of this Act. 
(2) GAS HYDRATE RESOURCES DEFINED.—Such regulations 
shall define the term ‘‘gas hydrate resources’’ to include both 
the natural gas content of gas hydrates within the hydrate 
stability zone and free natural gas trapped by and beneath 
the hydrate stability zone. 
(e) REVIEW.—Not later than 365 days after the date of enact-
ment of this Act, the Secretary, in consultation with the Secretary 
of Energy, shall carry out a review of, and submit to Congress 
a report on, further opportunities to enhance production of natural 
gas from gas hydrate resources on the outer Continental Shelf 
and on Federal lands in Alaska through the provision of other 
production incentives or through technical or financial assistance. 
SEC. 354. ENHANCED OIL AND NATURAL GAS PRODUCTION THROUGH 
CARBON DIOXIDE INJECTION. 
(a) PRODUCTION INCENTIVE.— 
(1) FINDINGS.—Congress finds the following: 
(A) Approximately two-thirds of the original oil in place 
in the United States remains unproduced. 
(B) Enhanced oil and natural gas production from the 
sequestering of carbon dioxide and other appropriate gases 
has the potential to increase oil and natural gas production. 
(C) Capturing and productively using carbon dioxide 
would help reduce the carbon intensity of the economy. 
(2) PURPOSE.—The purpose of this section is— 
(A) to promote the capturing, transportation, and injec-
tion of produced carbon dioxide, natural carbon dioxide, 
and other appropriate gases or other matter for sequestra-
tion into oil and gas fields; and 
(B) to promote oil and natural gas production from 
the outer Continental Shelf and onshore Federal lands 
under lease by providing royalty incentives to use enhanced 
recovery techniques using injection of the substances 
referred to in subparagraph (A). 
(b) SUSPENSION OF ROYALTIES.— 
(1) IN GENERAL.—If the Secretary determines that reduction 
of the royalty under a Federal oil and gas lease that is an 
eligible lease is in the public interest and promotes the purposes 
of this section, the Secretary shall undertake a rulemaking 
to provide for such reduction for an eligible lease. 
(2) RULEMAKINGS.—The Secretary shall publish the 
advanced notice of proposed rulemaking within 180 days after 
the date of enactment of this Act and complete the rulemaking 
implementing this section within 365 days after the date of 
enactment of this Act. 
(3) ELIGIBLE LEASES.—A lease shall be an eligible lease 
for purposes of this section if— 
(A) it is a lease for production of oil and gas from 
the outer Continental Shelf or Federal onshore lands; 
(B) the injection of the substances referred to in sub-
section (a)(2)(A) will be used as an enhanced recovery tech-
nique on such lease; and 
(C) the Secretary determines that the lease contains 
oil or gas that would not likely be produced without the 
royalty reduction provided under this section.
H. R. 6—123
(4) AMOUNT OF RELIEF.—The rulemaking shall provide for 
a suspension volume, which shall not exceed 5,000,000 barrels 
of oil equivalent for each eligible lease. Such suspension volume 
shall be applied to any production from an eligible lease occur-
ring on or after the date of publication of any advanced notice 
of proposed rulemaking under this subsection. 
(5) LIMITATION.—The Secretary may place limitations on 
the royalty reduction granted under this section based on 
market price. 
(6) APPLICATION.—This section shall apply to any eligible 
lease issued before, on, or after the date of enactment of this 
Act. 
(c) DEMONSTRATION PROGRAM.— 
(1) ESTABLISHMENT.— 
(A) IN GENERAL.—The Secretary of Energy shall estab-
lish a competitive grant program to provide grants to pro-
ducers of oil and gas to carry out projects to inject carbon 
dioxide for the purpose of enhancing recovery of oil or 
natural gas while increasing the sequestration of carbon 
dioxide. 
(B) PROJECTS.—The demonstration program shall pro-
vide for— 
(i) not more than 10 projects in the Willistin Basin 
in North Dakota and Montana; and 
(ii) 1 project in the Cook Inlet Basin in Alaska. 
(2) REQUIREMENTS.— 
(A) IN GENERAL.—The Secretary of Energy shall issue 
requirements relating to applications for grants under para-
graph (1). 
(B) RULEMAKING.—The issuance of requirements under 
subparagraph (A) shall not require a rulemaking. 
(C) MINIMUM REQUIREMENTS.—At a minimum, the Sec-
retary shall require under subparagraph (A) that an 
application for a grant include— 
(i) a description of the project proposed in the 
application; 
(ii) an estimate of the production increase and 
the duration of the production increase from the 
project, as compared to conventional recovery tech-
niques, including water flooding; 
(iii) an estimate of the carbon dioxide sequestered 
by project, over the life of the project; 
(iv) a plan to collect and disseminate data relating 
to each project to be funded by the grant; 
(v) a description of the means by which the project 
will be sustainable without Federal assistance after 
the completion of the term of the grant; 
(vi) a complete description of the costs of the 
project, including acquisition, construction, operation, 
and maintenance costs over the expected life of the 
project; 
(vii) a description of which costs of the project 
will be supported by Federal assistance under this 
section; and 
(viii) a description of any secondary or tertiary 
recovery efforts in the field and the efficacy of water 
flood recovery techniques used.