§15904 Incentives for Natural Gas Production From Deep Wells in the Shallow Waters of the Gulf of Mexico

Summary

The Secretary must, within 180 days after August 8, 2005, issue rules that give at least 35 billion cubic feet of royalty relief for natural gas from ultra deep wells on leases in the Gulf of Mexico wholly west of 87 degrees, 30 minutes west longitude in waters less than 400 meters deep. These rules add to any other royalty-incentive rules and must be retroactive to the date the proposed rule was published in the Federal Register. The Secretary may also give the same 35 billion cubic feet relief when the well is a sidetrack or the lease has already produced from a well whose perforated interval top is at least 15,000 feet true vertical depth below mean sea level. “Ultra deep well” means the top of the perforated interval is at least 20,000 feet true vertical depth below mean sea level. A “sidetrack” is drilling a new hole from an old one and includes re-entering and deepening, using a reclaimed platform slot, or drilling around blockages. The Secretary must also issue rules, within the same 180 days, for wells in waters more than 200 meters but less than 400 meters deep in the same Gulf area. Those suspension volumes must be calculated the same way as for shallower waters and cannot be lower than the shallower-water volumes, and must be retroactive to the proposed-rule date. The Secretary may limit relief based on market price, and the relief does not apply to leases already eligible for deep water royalty relief.