HR 4761 PCS 
publish 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— 
‘‘(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within an area withdrawn from disposition by leas-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 con-
tain 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 Sec-
VerDate Aug 31 2005 
03:38 Sep 06, 2006
Jkt 049200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H4761.PCS
H4761
jcorcoran on PRODPC62 with BILLS
HR 4761 PCS 
retary shall consider, in setting the royalty rates for 
a natural 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 shall apply to a natural gas lease unless other-
wise 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 
following: 
‘‘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 combina-
tion 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.’’; 
VerDate Aug 31 2005 
03:38 Sep 06, 2006
Jkt 049200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H4761.PCS
H4761
jcorcoran on PRODPC62 with BILLS
HR 4761 PCS 
(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 gov-
ernments, of 75 percent of Federal receipts from 
projects authorized under this section located par-
tially or completely within the area extending sea-
ward of State submerged lands out to 4 marine 
leagues from the coastline, and the payment to 
coastal states of 50 percent of the receipts from 
projects completely located in the area more than 4 
marine leagues from the coastline. Payments shall 
be based on a formula established by the Secretary 
by rulemaking no later than 180 days after the date 
of the enactment of the Deep Ocean Energy Re-
sources Act of 2006 that provides for equitable dis-
tribution, 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 
lessee of a natural gas lease shall have the right to 
produce the natural gas from a field on a natural 
VerDate Aug 31 2005 
03:38 Sep 06, 2006
Jkt 049200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H4761.PCS
H4761
jcorcoran on PRODPC62 with BILLS
HR 4761 PCS 
gas leased tract if the Secretary estimates that the 
discovered field has at least 40 percent of the eco-
nomically recoverable Btu content of the field con-
tained within natural gas and such natural gas is ec-
onomical to produce. 
‘‘(2) CRUDE OIL.—A lessee of a natural gas 
lease may not produce crude oil from the lease. 
‘‘(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 re-
sults of a three-dimensional seismic survey of the 
field. The Secretary may not require the lessee to 
further delineate any discovered field prior to mak-
ing such estimates. 
‘‘(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 sepa-
rate out in liquid form from the produced gas 
stream. 
VerDate Aug 31 2005 
03:38 Sep 06, 2006
Jkt 049200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H4761.PCS
H4761
jcorcoran on PRODPC62 with BILLS
HR 4761 PCS 
‘‘(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 
restrictions shall not apply to tracts in other OCS regions 
determined to be ‘frontier tracts’ or otherwise ‘high cost 
tracts’ under final regulations that shall be published by 
the Secretary by not later than 365 days after the date 
of the enactment of the Deep Ocean Energy Resources 
Act of 2006. 
‘‘(s) ROYALTY SUSPENSION PROVISIONS.—The Sec-
retary shall agree to a request by any lessee to amend 
any lease issued for Central and Western Gulf of Mexico 
tracts during the period of January 1, 1998, through De-
cember 31, 1999, to incorporate price thresholds applica-
ble to royalty suspension provisions, or amend existing 
price thresholds, in the amount of $40.50 per barrel (2006 
dollars) for oil and for natural gas of $6.75 per million 
Btu (2006 dollars). Any amended lease shall impose the 
new or revised price thresholds effective October 1, 2005. 
Existing lease provisions shall prevail through September 
30, 2005. After the date of the enactment of the Deep 
Ocean Energy Resources Act of 2006, price thresholds 
shall apply to any royalty suspension volumes granted by 
the Secretary. Unless otherwise set by Secretary by regu-
VerDate Aug 31 2005 
03:38 Sep 06, 2006
Jkt 049200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H4761.PCS
H4761
jcorcoran on PRODPC62 with BILLS