I 108th CONGRESS 2d Session H. R. 4515 IN THE HOUSE OF REPRESENTATIVES June 4, 2004 Mr. Pombo introduced the following bill; which was referred to the Committee on Resources A BILL To promote natural gas production from the abundant natural gas hydrate resources on the outer Continental Shelf and Federal lands in Alaska by providing royalty incentives, and for other purposes.

1.

Gas hydrate production incentive

(a)

Purpose

The purpose of this section is to promote natural gas production from the abundant natural gas hydrate resources on the outer Continental Shelf and Federal lands in Alaska by providing royalty incentives. (b)

Suspension of royalties

(1)

In general

The Secretary of the Interior shall grant royalty relief for natural gas produced from gas hydrate resources under any lease issued under the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.), and under any oil and gas lease issued for onshore Federal lands in Alaska, if the lease (eligible lease) is issued prior to January 1, 2016, and production of natural gas from the gas hydrate resources commences prior to January 1, 2018. (2)

Amount of relief

The Secretary shall grant royalty relief to an eligible lease as a suspension volume of at least 50 billion cubic feet of natural gas produced from gas hydrate resources per nine square mile leased tract, in addition to any other royalty relief provisions applicable to the eligible lease not specifically granting a gas hydrate production incentive. The minimum suspension volume for leased tracts that are smaller or larger than nine square miles shall be adjusted on a proportional basis. For purposes of this section, the term gas hydrate resources includes both the natural gas content of the gas hydrates within the hydrate stability zone and the free natural gas trapped by and beneath the hydrate stability zone. (c)

Application to existing leases

Any relief granted under the authority of this section shall fully apply to leases in existence on the date of the enactment of this Act. (d)

Rulemakings

The Secretary shall complete any rulemakings implementing this section within 365 days of the date of the enactment of this Act.