914
umentation, or related study required pursuant to the Na-
tional Environmental Policy Act of 1969 (42 U.S.C. 4321
et seq.) with respect to the lease.
‘‘(b) CONDITIONS.—The Secretary may provide reim-
bursement under subsection (a) only if—
‘‘(1) adequate funding to enable the Secretary
to timely prepare the analysis, documentation, or re-
lated study is not appropriated;
‘‘(2) the person paid the costs voluntarily;
‘‘(3) the person maintains records of its costs
in accordance with regulations issued by the Sec-
retary;
‘‘(4) the reimbursement is in the form of a re-
duction in the Federal share of the royalty required
to be paid for the lease for which the analysis, docu-
mentation, or related study is conducted, and is
agreed to by the Secretary and the person reim-
bursed prior to commencing the analysis, docu-
mentation, or related study; and
‘‘(5) the agreement required under paragraph
(4) contains provisions—
‘‘(A) reducing royalties owed on lease pro-
duction based on market prices;
915
‘‘(B) stipulating an automatic termination
of the royalty reduction upon recovery of docu-
mented costs; and
‘‘(C) providing a process by which the les-
see may seek reimbursement for circumstances
in which production from the specified lease is
not possible.’’.
(b) APPLICATION.—The amendment made by this
section shall apply with respect to an analysis, documenta-
tion, or a related study conducted on or after the date
of enactment of this Act for any lease entered into before,
on, or after the date of enactment of this Act.
(c) DEADLINE FOR REGULATIONS.—The Secretary
shall issue regulations implementing the amendment made
by this section by not later than 1 year after the date
of enactment of this Act.
SEC. 2015. GAS HYDRATE PRODUCTION INCENTIVE.
(a) PURPOSE.—The purpose of this section is to pro-
mote natural gas production from the abundant 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 of the Inte-
rior shall grant royalty relief in accordance with this
section for natural gas produced from gas hydrate
916
resources under any lease that is an eligible lease
under paragraph (2).
(2) ELIGIBLE LEASES.—A lease shall be an eli-
gible lease for purposes of this section if—
(A) it is issued under the Outer Conti-
nental Shelf Lands Act (43 U.S.C. 1331 et
seq.), or is an oil and gas lease issued for on-
shore Federal lands in Alaska;
(B) it is issued prior to January 1, 2016;
and
(C) production under the lease of natural
gas from the gas hydrate resources commences
prior to January 1, 2018.
(3) AMOUNT OF RELIEF.—The Secretary shall
grant royalty relief under this section as a suspen-
sion volume of at least 50 billion cubic feet of nat-
ural gas produced from gas hydrate resources per 9
square mile leased tract. Such relief shall be in addi-
tion to any other royalty relief under any other pro-
vision applicable to the lease that does not specifi-
cally grant a gas hydrate production incentive. The
minimum suspension volume under this section for
leased tracts that are smaller or larger than nine
square miles shall be adjusted on a proportional
basis.