[Senate Report 106-33]
[From the U.S. Government Publishing Office]





                                                        Calendar No. 71

106th Congress                                                   Report
  1st Session                    SENATE                          106-33

=======================================================================



 
          METHANE HYDRATE RESEARCH AND DEVELOPMENT ACT OF 1999

                                _______
                                

                March  22, 1999.--Ordered to be printed

                                _______


  Mr. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 330]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 330) to promote the research, 
identification, assessment, exploration, and development of 
methane hydrate sources, and for other purposes, having 
considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                         Purpose of the Measure

    The purpose of S. 330, as ordered reported, is to direct 
the Secretary of Energy, in consultation with the Secretaries 
of Defense and the Interior, and the Director of the National 
Science Foundation, to commence a program of methane hydrate 
research and development

                          Background and Need

    Methane hydrates are molecules of natural gas trapped 
inside the crystalline cages formed by frozen water molecules. 
They exist where low temperatures and high pressures squeeze 
water and methane into a solid form. Methane hydrates are found 
in many areas throughout the world. Preliminary studies by the 
U.S. Geological Survey indicate the presence of enormous 
quantities of methane hydrates along the Eastern seaboard of 
the United States, under the permafrost and off the coast of 
Alaska, and in the Gulf of Mexico. It is estimated that methane 
hydrates located in the United States contain about 300,000 
trillion cubic feet of natural gas. By comparison, the U.S. 
annually consumes about 22 trillion cubic feet of natural gas.
    Given the great potential for energy and scientific 
benefits from methane hydrate research, S. 330 authorizes the 
establishment of a methane hydrate research and development 
program within the Department of Energy, to be carried out in 
consultation with the Departments of Defense and the Interior, 
and the Director of the National Science Foundation.

                          Legislative History

    S. 330 was introduced on January 28, 1999 by Senators 
Akaka, Lott, Landrieu, Craig, and Graham, It is similar to 
legislation (S. 1418) that passed the Senate last session. In 
the 105th Congress, the Subcommittee on Energy Research, 
Development, Production and Regulation held a hearing on the 
bill on May 21, 1998. The bill was favorably reported, with 
amendments, on June 24, 1998. On July 17, it was reported to 
the Senate, with written report No. 105-248 and placed on the 
Senate Legislative Calendar. S. 1418 passed the Senate by 
Unanimous Consent on July 17, 1998.
    At the business meeting on March 4, 1999, the Committee on 
Energy and Natural Resources ordered S. 330 favorably reported.

                       Committee Recommendations

    The Committee on Energy and Natural Resources, in open 
business session on March 4, 1999, by a unanimous voice vote of 
a quorum present, recommends that the Senate pass S. 330, as 
described herein.

                      Section-by-Section Analysis

    Section 1 gives the short title of S. 330.
    Section 2 provides the definitions of terms used in S. 330.
    Section 3 directs the establishment of the methane hydrate 
research and development program. Paragraph (a) states that the 
Secretary of Energy shall commence a methane hydrate research 
and development program no later than 180 days after the date 
of enactment of S. 330. The Secretary of Energy shall consult 
with the Secretaries of Defense and the Interior, and the 
Director of National Science Foundation. These individuals, or 
their designees, are directed to meet not less frequently than 
every 120 days to review the progress of the program and to 
make recommendations on future activities.
    Paragraph (b) permits the Secretary of Energy to award 
grants or contracts to, or enter into cooperative agreements 
with, universities and industrial enterprises for purposes of 
implementing the methane hydrate research and development 
program. The Secretary of Energy may also establish an advisory 
panel of experts from industry, academia, and Federal agencies 
to provide advice on implementing the methane hydrate program.
    Paragraph (c) provides limitations on the use of funds made 
available to carry out the methane hydrate research and 
development program.
    Paragraph (d) lists the responsibilities of the Secretary 
of Energy in implementing the methane hydrate research and 
development program.
    Section 4 amends the definition of ``marine mineral 
resource'' in the Mining and Mineral Policy Act of 1970 (as 
added by the Marine Mineral Resources Research Act of 1996) to 
include methane hydrates.
    Section 5 authorizes the appropriation of such funds as are 
necessary to carry out the methane hydrate research and 
development program.

                   Cost and Budgetary Considerations

    The following estimate of the cost of this measure has been 
provided by the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, March 9, 1999.
Hon. Frank H. Murkowski,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 330, the Methane 
Hydrate Research and Development Act of 1999.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kim Cawley.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

S. 330--Methane Hydrate Research and Development Act of 1999

    Summary: S. 330 would authorize the Department of Energy 
(DOE) to begin a program of research and development in the use 
of methane hydrate as a source of energy, through grants, 
contracts, and cooperative agreements with universities and 
industrial enterprises. Deposits of methane hydrate occur in 
deep ocean and permafrost areas of the world and consist of 
methane-water ice-like crystalline material. Based on 
information from DOE, CBO estimates that the proposed research 
program would cost about $45 million over the next five years, 
assuming appropriation of the necessary amounts. S. 330 would 
not affect direct spending or receipts; therefore, pay-as-you-
go procedures would not apply.
    The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would have no costs on the budgets of state, local, or 
tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 330 is shown in the following table. The 
costs of this legislation fall within budget function 270 
(energy).

----------------------------------------------------------------------------------------------------------------
                                                                   By fiscal year, in millions of dollars
                                                          ------------------------------------------------------
                                                              2000       2001       2002       2003       2004
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Estimated authorization level............................          5          5         11         12         12
Estimated outlays........................................          2          4          7         10         12
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For purposes of this estimate, we assume 
that S. 330 will be enacted before the end of fiscal year 1999 
and that outlays from the new program would occur at the same 
rate as observed for similar existing programs. The bill would 
authorize the appropriation of such sums as are necessary to 
conduct a research and development program. Based on 
information in DOE's 1998 program plan for methane hydrate, CBO 
estimates this activity would require appropriations totaling 
about $45 million over the next five years.
    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: S. 330 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on the budgets of 
state, local, or tribal governments. State universities may 
benefit from research grants, contracts, or cooperative 
agreements provided with funds authorized by this bill.
    Estimate prepared by: Kim Cawley.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of Standing 
Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 330. The bill is not a regulatory measure in 
the sense of imposing Government-established standards or 
significant economic responsibilities on private individuals 
and businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 330, as ordered reported.

                        Executive Communications

    On March 11, 1999, the Committee on Energy and Natural 
Resources requested legislative reports from the Department of 
Energy and the Office of Management and Budget setting forth 
Executive agency recommendations on S. 330. These reports had 
not been received at the time the report on S. 330 was filed. 
When the reports become available, the Chairman will request 
that they be printed in the Congressional Record for the advice 
of the Senate.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill S. 330, as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

                   Public Law 104-325 104th Congress

    AN ACT To promote the research, identification, assessment, and 
    exploration of marine mineral resources, and for other purposes

    Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Marine Mineral Resources 
Research Act of 1996''.

           *       *       *       *       *       *       *


SEC. 201, DEFINITIONS.

    In this title:
          (1) The term `contract' has the same meaning as 
        `procurement contract' in section 6303 of title 31, 
        United States Code.
          (2) The term `cooperative agreement' has the same 
        meaning as in section 6305 of title 31, United States 
        Code.
          (3) The term `eligible entity' means--
                  (A) a research or educational entity 
                chartered or incorporated under Federal or 
                State law;
                  (B) an individual who is a United States 
                citizen; or
                  (C) a State or regional agency.
          (4) The term `grant' has the same meaning as `grant 
        agreement' in section 6304 of title 31, United States 
        Code.
          (5) The term `in-kind contribution' means a noncash 
        contribution provided by a non-Federal entity that 
        directly benefits and is related to a specific project 
        or program, An in-kind contribution may include real 
        property, equipment, supplies, other expendable 
        property, goods, and services.
          (6) The term `methane hydrate' means a methane 
        clathrate that--
                  (A) is in the form of a methane-water ice-
                like crystalline material; and
          (B) is stable and occurs naturally in deep-ocean and 
        permafrost areas.
          [(6)](7) The term `marine mineral resource' means--
                  (A) sand and aggregates;
                  (B) placers;
                  (C) phosphates;
                  (D) manganese nodules;
                  (E) cobalt crusts;
                  (F) metal sulfides;
                  (G) methane hydrate; and
                  [(G)] (H) other marine resources that are 
                not--
                          (i) oil and gas;
                          (ii) fisheries; or
                          (iii) marine mammals.
          [(7)] (8) The term `Secretary' means the Secretary of 
        the Interior.

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