Royalty Relief for U.S. Deepwater Oil and Gas Leases [December 7, 2007]   [open pdf - 71KB]

"The most common incentives for offshore oil and gas development include various forms of royalty relief. The Outer Continental Shelf Lands Act (OCSLA) authorizes the Secretary of the Interior to grant royalty relief to promote increased oil and gas production (43 U.S.C. 1337). The Deep Water Royalty Relief Act of 1995 (DWRRA) expanded the Secretary's royalty relief authority in the Gulf of Mexico outer continental shelf (OCS). […] Under Title II, this bill would, among other things, deny new Gulf of Mexico oil and gas leases to lessees holding leases without price thresholds or payment of or agreement to pay newly established 'conservation of resources' fees. On January 18, 2007, the House passed H.R. 6, without amendment, by a vote of 264-123. On July 30, 2007, the House introduced H.R. 3221, containing language on offshore royalties (under Title VII) nearly identical to Title II of H.R. 6. The House approved H.R. 3221 on August 4, 2007, by a vote of 241-170, but on December 6, 2007 the House approved the Senate-passed version of energy policy legislation (H.R. 6) without the royalty relief provisions discussed above. The bill is now pending in the Senate."

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CRS Report for Congress, RS22567
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