878
(3) CONSIDERATIONS.—In promulgating regu-
lations under this subsection, the Secretary may
consider—
(A) oil and gas prices and market trends;
(B) production costs;
(C) abandonment costs;
(D) Federal and State tax provisions and
the effects of those provisions on production ec-
onomics;
(E) other royalty relief programs;
(F) regional differences in average well-
head prices;
(G) national energy security issues; and
(H) other relevant matters.
(f) SAVINGS PROVISION.—Nothing in this section
prevents a lessee from receiving royalty relief or a royalty
reduction pursuant to any other law (including a regula-
tion) that provides more relief than the amounts provided
by this section.
SEC. 2004. INCENTIVES FOR NATURAL GAS PRODUCTION
FROM DEEP WELLS IN THE SHALLOW WA-
TERS OF THE GULF OF MEXICO.
(a) ROYALTY INCENTIVE REGULATIONS FOR ULTRA
DEEP GAS WELLS.—
879
(1) IN
GENERAL.—Not later than 180 days
after the date of enactment of this Act, in addition
to any other regulations that may provide royalty in-
centives for natural gas produced from deep wells on
oil and gas leases issued pursuant to the Outer Con-
tinental Shelf Lands Act (43 U.S.C. 1331 et seq.),
the Secretary shall issue regulations granting royalty
relief 
suspension 
volumes 
of 
not 
less 
than
35,000,000,000 cubic feet with respect to the pro-
duction of natural gas from ultra deep wells on
leases issued in shallow waters less than 400 meters
deep located in the Gulf of Mexico wholly west of 87
degrees, 30 minutes west longitude. Regulations
issued under this subsection shall be retroactive to
the date that the notice of proposed rulemaking is
published in the Federal Register.
(2) DEFINITION
OF
ULTRA
DEEP
WELL.—In
this subsection, the term ‘‘ultra deep well’’ means a
well drilled with a perforated interval, the top of
which is at least 20,000 feet true vertical depth
below the datum at mean sea level.
(b) ROYALTY INCENTIVE REGULATIONS FOR DEEP
GAS WELLS.—Not later than 180 days after the date of
enactment of this Act, in addition to any other regulations
that may provide royalty incentives for natural gas pro-
880
duced from deep wells on oil and gas leases issued pursu-
ant to the Outer Continental Shelf Lands Act (43 U.S.C.
1331 et seq.), the Secretary shall issue regulations grant-
ing royalty relief suspension volumes with respect to the
production of natural gas from deep wells on leases issued
in waters more than 200 meters but less than 400 meters
deep located in the Gulf of Mexico wholly west of 87 de-
grees, 30 minutes west longitude. The suspension volumes
for deep wells within 200 to 400 meters of water depth
shall be calculated using the same methodology used to
calculate the suspension volumes for deep wells in the
shallower waters of the Gulf of Mexico, and in no case
shall the suspension volumes for deep wells within 200 to
400 meters of water depth be lower than those for deep
wells in shallower waters. Regulations issued under this
subsection shall be retroactive to the date that the notice
of proposed rulemaking is published in the Federal Reg-
ister.
(c) LIMITATION.—The Secretary may place limita-
tions on the suspension of royalty relief granted based on
market price.
SEC. 2005. ROYALTY RELIEF FOR DEEP WATER PRODUC-
TION.
(a) IN GENERAL.—For all tracts located in water
depths of greater than 400 meters in the Western and
881
Central Planning Area of the Gulf of Mexico, including
the portion of the Eastern Planning Area of the Gulf of
Mexico encompassing whole lease blocks lying west of 87
degrees, 30 minutes West longitude, any oil or gas lease
sale under the Outer Continental Shelf Lands Act (43
U.S.C. 1331 et seq.) occurring within 5 years after the
date of enactment of this Act shall use the bidding system
authorized in section 8(a)(1)(H) of the Outer Continental
Shelf Lands Act (43 U.S.C. 1337(a)(1)(H)), except that
the suspension of royalties shall be set at a volume of not
less than—
(1) 5,000,000 barrels of oil equivalent for each
lease in water depths of 400 to 800 meters;
(2) 9,000,000 barrels of oil equivalent for each
lease in water depths of 800 to 1,600 meters;
(3) 12,000,000 barrels of oil equivalent for each
lease in water depths of 1,600 to 2,000 meters; and
(4) 16,000,000 barrels of oil equivalent for each
lease in water depths greater than 2,000 meters.
(b) LIMITATION.—The Secretary may place limita-
tions on the suspension of royalty relief granted based on
market price.
SEC. 2006. ALASKA OFFSHORE ROYALTY SUSPENSION.
Section 8(a)(3)(B) of the Outer Continental Shelf
Lands Act (43 U.S.C. 1337(a)(3)(B)) is amended by in-