Watching Government: Deepwater rule changes

The 1995 Deep Water Royalty Relief Act surely has been the most constructive energy legislation the US has enacted in the past few years.The law allows Minerals Management Service to suspend royalties on 17.5 million bbl of oil for fields in 200-400 m of water in the Gulf of Mexico, 52.5 million bbl for fields in 400-800 m, and 87.5 million bbl for fields in water deeper than 800 m.That law netted the government many millions of dollars more in lease bonuses and has fueled an exploration boom. Just last month, MMS said, a record 34 rigs were drilling in more than 1,000 ft of water.But MMS apparently thinks the law has been too much of a good thing.The legislation expires Nov. 28, and alth...

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