Deep Gas in Shallow Water

In August 2005, Congress passed the Energy Policy Act, which provided for more royalty relief to encourage deep gas production. The regulations implementing these provisions were published on Nov. 18, 2008.

Over the previous several years there had been steep decline in natural gas production from the shallower water in the Gulf of Mexico OCS. Beginning in 2001, BOEM adopted some incentives for new leases that would encourage drilling for deeper deposits of natural gas in the shallow waters. BOEM offered incentives of royalty relief for drilling below 15,000 TVD. On January 26, 2004 BOEM published a new incentive for existing leases. 

Final Rule

 Amended Deep Gas Royalty Relief Regulations (November 18, 2008) 

Supporting Documents

• Correction to the Deep Gas in Shallow Water Final Rule - Technical Amendments (Federal Register Notice) 
• Deep Gas in Shallow Water Rule – Technical Amendments (Federal Register Notice) 
• Relief or Reduction in Royalty Under Certain Federal Oil and Gas Leases on the Outer Continental Shelf (Federal Register Notice) 
• Rocky Mountain Mineral Law Foundation Paper – Deep Gas Royalty Relief (Final Rule) 
• Slide Presentation - Deep Gas Royalty Relief(Final Rule) 
• Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Relief or Reduction in Royalty Rates—Deep Gas Provisions – 30 CFR Part 203, January 26, 2004 

 News Releases and Fact Sheets

• MMS Releases Summary of Lower Tertiary Play in Gulf October 10, 2006 
• Secretary Norton Unveils New Incentives to Boost Domestic Natural Gas Production, Save Americans $570 Million a Year January 23, 2004 
• Deep Shelf Gas May Be More Abundant in Gulf than Earlier Forecast Probabilistic Estimate Increases by 175% November 19, 2003 
• Americans Stung by High Fuel Prices: Government Expert Cites Offshore Natural Gas as Potential Solution, September 17, 2003 

 Background Materials

• Gulf of Mexico OCS Deep Shelf Gas Update: 2001-2002 – OCS Report MMS 2003-026 
• The Promise of Deep Gas in the Gulf of Mexico – OCS Report MMS 2001-037