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.
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