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

Summary

Requires the Secretary to write rules, within 180 days after August 8, 2005, that give royalty relief for natural gas from very deep wells on Gulf of Mexico leases west of 87 degrees, 30 minutes west longitude. For ultra deep wells in waters less than 400 meters deep, the rules must give suspension volumes of at least 35 billion cubic feet. The Secretary may also give at least 35 billion cubic feet when the ultra deep well is a sidetrack or the lease has already produced from a well whose perforated interval begins at 15,000 feet true vertical depth or deeper. An "ultra deep well" is a well whose perforated interval starts at 20,000 feet true vertical depth. A "sidetrack" is drilling a new hole from an old one and includes re-entering, deepening, or bypassing a blocked or crooked hole. The Secretary must also make rules, within the same 180 days, for deep wells in 200 to 400 meters of water using the same calculation method and not giving smaller suspension volumes than for shallower waters. Those rules must be retroactive to when the rulemaking notice first appears in the Federal Register. The Secretary may limit relief based on market price, and the relief does not apply to leases that already qualify for deep water royalty relief.