42 U.S.C. § 15904 — Incentives for natural gas production from deep wells in the shallow waters of the Gulf of Mexico
submitted 21 years ago by Pub. L. 109-58 to r/title-42-THE-PUBLIC-HEALTH-AND-WELFARE · 556 words · no verdicts yet
This law required the Secretary to write rules giving royalty relief for natural gas produced from very deep wells in the shallow and moderately deep waters of the western Gulf of Mexico. The relief is measured in "suspension volumes" of gas that owe no royalty, and it applies retroactively to when the rules were first proposed. The Secretary can still limit the relief based on market prices.
(a) Royalty incentive regulations for ultra deep gas wells: (1) Within 180 days of August 8, 2005, the Secretary* had to issue regulations granting royalty relief of at least 35 billion cubic feet of gas — a "suspension volume" that owes no royalty — for natural gas from ultra deep wells on leases in Gulf of Mexico waters less than 400 meters deep, entirely west of 87 degrees, 30 minutes west longitude. These rules apply retroactively to the day the proposed rule was first published. (2) The Secretary may grant that same 35-billion-cubic-foot minimum relief even if (A) the ultra deep well is a "sidetrack," or (B) the lease already produced from wells with a perforation starting at least 15,000 feet straight down from sea level. (3) An "ultra deep well" is one with a perforation starting at least 20,000 feet straight down from sea level. A "sidetrack" is a well drilled to a new bottom-hole spot by branching off a previously drilled hole — this includes drilling from a reused platform slot, re-entering and deepening an old well, and drilling around a blockage or a crooked section of hole.
(b) Royalty incentive regulations for deep gas wells: Within that same 180 days, the Secretary also had to issue regulations granting royalty relief suspension volumes for gas from deep wells on leases in Gulf of Mexico waters between 200 and 400 meters deep, west of 87 degrees, 30 minutes west longitude. These volumes must be calculated the same way as the ultra deep well volumes in (a), and can never be set lower than those for the shallower wells. These rules are also retroactive to when the proposed rule was published.
(c) Limitations: The Secretary may limit the royalty relief under this section based on market prices. This relief does not apply to a lease that already qualifies for separate deep water royalty relief.
Not later than 180 days after August 8, 2005, 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 subsection shall be retroactive to the date that the notice of proposed rulemaking is published in the Federal Register.
The Secretary may grant suspension volumes of not less than 35 billion cubic feet in any case in which—
the ultra deep well is a sidetrack; or
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.
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 true vertical depth below the datum at mean sea level.
The term “sidetrack” means a well resulting from drilling an additional hole to a new objective bottom-hole location by leaving a previously drilled hole.
The term “sidetrack” includes—
drilling a well from a platform slot reclaimed from a previously drilled well;
re-entering and deepening a previously drilled well; and
a bypass from a sidetrack, including drilling around material blocking a hole or drilling to straighten a crooked hole.
Not later than 180 days after August 8, 2005, 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 with respect to 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 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.
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.
Source credit: (Pub. L. 109–58, title III, § 344, Aug. 8, 2005, 119 Stat. 702.)
- 2005Enacted · Pub. L. 109-58 · 119 Stat. 702
A history note hasn’t been published yet. The record shows enactment by Pub. L. 109-58 on 2005-08-08.
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