H. R. 6—109
(e) REGULATIONS PRESCRIBING DIFFERENT RELIEF.— 
(1) DISCRETIONARY REGULATIONS.—The Secretary may by 
regulation prescribe different parameters, standards, and 
requirements for, and a different degree or extent of, royalty 
relief for marginal properties in lieu of those prescribed in 
subsections (a) through (d). 
(2) MANDATORY REGULATIONS.—Unless a determination is 
made under paragraph (3), not later than 18 months after 
the date of enactment of this Act, the Secretary shall by regula-
tion— 
(A) prescribe standards and requirements for, and the 
extent of royalty relief for, marginal properties for oil and 
gas leases on the outer Continental Shelf; and 
(B) define what constitutes a marginal property on 
the outer Continental Shelf for purposes of this section. 
(3) REPORT.—To the extent the Secretary determines that 
it is not practicable to issue the regulations referred to in 
paragraph (2), the Secretary shall provide a report to Congress 
explaining such determination by not later than 18 months 
after the date of enactment of this Act. 
(4) CONSIDERATIONS.—In issuing regulations 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 economics; 
(E) other royalty relief programs; 
(F) regional differences in average wellhead prices; 
(G) national energy security issues; and 
(H) other relevant matters, as determined by the Sec-
retary. 
(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 regulation) that provides more relief 
than the amounts provided by this section. 
SEC. 344. INCENTIVES FOR NATURAL GAS PRODUCTION FROM DEEP 
WELLS IN THE SHALLOW WATERS OF THE GULF OF 
MEXICO. 
(a) ROYALTY INCENTIVE REGULATIONS FOR ULTRA DEEP GAS 
WELLS.— 
(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 incentives for natural gas produced 
from deep wells on oil and gas leases issued pursuant to the 
Outer Continental 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 billion cubic feet with 
respect to the production 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 sub-
section shall be retroactive to the date that the notice of pro-
posed rulemaking is published in the Federal Register.
H. R. 6—110
(2) SUSPENSION
VOLUMES.—The Secretary may grant 
suspension volumes of not less than 35 billion cubic feet in 
any case in which— 
(A) the ultra deep well is a sidetrack; or 
(B) the lease has previously produced from wells with 
a perforated interval the top of which is at least 15,000 
feet true vertical depth below the datum at mean sea 
level. 
(3) DEFINITIONS.—In this subsection: 
(A) ULTRA DEEP WELL.—The term ‘‘ultra deep well’’ 
means a well drilled with a perforated interval, the top 
of which is at least 20,000 true vertical depth below the 
datum at mean sea level. 
(B) SIDETRACK.— 
(i) IN GENERAL.—The term ‘‘sidetrack’’ means a 
well resulting from drilling an additional hole to a 
new objective bottom-hole location by leaving a pre-
viously drilled hole. 
(ii) INCLUSION.—The term ‘‘sidetrack’’ includes— 
(I) drilling a well from a platform slot 
reclaimed from a previously drilled well; 
(II) re-entering and deepening a previously 
drilled well; and 
(III) a bypass from a sidetrack, including 
drilling around material blocking a hole or drilling 
to straighten a crooked hole. 
(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 incen-
tives for natural gas produced from deep wells on oil and gas 
leases issued pursuant to the Outer Continental Shelf Lands Act 
(43 U.S.C. 1331 et seq.), the Secretary shall issue regulations 
granting royalty relief suspension volumes with respect to produc-
tion 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 degrees, 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 Register. 
(c) LIMITATIONS.—The Secretary may place limitations on the 
royalty relief granted under this section based on market price. 
The royalty relief granted under this section shall not apply to 
a lease for which deep water royalty relief is available. 
SEC. 345. ROYALTY RELIEF FOR DEEP WATER PRODUCTION. 
(a) IN GENERAL.—Subject to subsections (b) and (c), for each 
tract located in water depths of greater than 400 meters in the 
Western and 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 min-
utes West longitude), any oil or gas lease sale under the Outer
H. R. 6—111
Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) occurring 
during the 5-year period beginning on the date of enactment of 
this Act shall use the bidding system authorized under section 
8(a)(1)(H) of the Outer Continental Shelf Lands Act (43 U.S.C. 
1337(a)(1)(H)). 
(b) SUSPENSION
OF ROYALTIES.—The suspension of royalties 
under subsection (a) shall be established 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. 
(c) LIMITATION.—The Secretary may place limitations on royalty 
relief granted under this section based on market price. 
SEC. 346. 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 inserting ‘‘and in the Plan-
ning Areas offshore Alaska’’ after ‘‘West longitude’’. 
SEC. 347. OIL AND GAS LEASING IN THE NATIONAL PETROLEUM 
RESERVE IN ALASKA. 
(a) TRANSFER OF AUTHORITY.— 
(1) 
REDESIGNATION.—The 
Naval 
Petroleum 
Reserves 
Production Act of 1976 (42 U.S.C. 6501 et seq.) is amended 
by redesignating section 107 (42 U.S.C. 6507) as section 108. 
(2) TRANSFER.—The matter under the heading ‘‘EXPLO-
RATION OF NATIONAL PETROLEUM RESERVE IN ALASKA’’ under 
the heading ‘‘ENERGY AND MINERALS’’ of title I of Public Law 
96–514 (42 U.S.C. 6508) is— 
(A) transferred to the Naval Petroleum Reserves 
Production Act of 1976 (42 U.S.C. 6501 et seq.); 
(B) redesignated as section 107 of that Act; and 
(C) moved so as to appear after section 106 of that 
Act (42 U.S.C. 6506). 
(b) COMPETITIVE LEASING.—Section 107 of the Naval Petroleum 
Reserves Production Act of 1976 (as amended by subsection (a)(2)) 
is amended— 
(1) by striking the heading and all that follows through 
‘‘Provided, That (1) activities’’ and inserting the following: 
‘‘SEC. 107. COMPETITIVE LEASING OF OIL AND GAS. 
‘‘(a) IN GENERAL.—The Secretary shall conduct an expeditious 
program of competitive leasing of oil and gas in the Reserve in 
accordance with this Act. 
‘‘(b) MITIGATION OF ADVERSE EFFECTS.—Activities’’; 
(2) by striking ‘‘Alaska (the Reserve); (2) the’’ and inserting 
‘‘Alaska’’. 
‘‘(c) LAND USE PLANNING; BLM WILDERNESS STUDY.—The’’; 
(3) by striking ‘‘Reserve; (3) the’’ and inserting ‘‘Reserve’’. 
‘‘(d) FIRST LEASE SALE.—The;’’; 
(4) by striking ‘‘4332); (4) the’’ and inserting ‘‘4321 et seq.)’’. 
‘‘(e) WITHDRAWALS.—The’’;