The Outer Continental Shelf Deepwater Royalty Relief Act — or — Why Big Oil Drills in Deep Water

Originally posted in the Spout-Off Forum of the Cape May County Herald, this post is intended to supplement Matthew J. Novak’s article and blog at mises.org, Bashing BP (For Doing Exactly What Government Led Them to Do), with links to further information about the Outer Continental Shelf Deepwater Royalty Relief Act (DWRRA), and its origin and purpose.  Congress passed DWRRA in 1995 to give Big Oil an economic incentive to drill in deep water.


John Johnston (D-Louisiana) sponsored S.158: Outer Continental Shelf Deep Water Royalty Relief Act in 1995. That bill was not voted on, but its text was incorporated into S. 395: Alaska Power Administration Asset Sale and Termination Act as Title III of that act. It was signed into law by President William Jefferson Clinton (D-Arkansas) on November 28, 1995 and became P.L. 104-58. Seventy-five percent of the Senate voted Yea. Eighty-four percent of the House of Representatives voted Yea on a resolution in support of the legislation. Looking at the vote counts, notwithstanding the stated glitch, I’d say that Democratic incohesion on the bills was slightly less soul-crushing than the Republicans’ near unanimity in favor of the bills. 

There is supposedly a video on C-SPAN of the house debate, but I can not get it to run. The shame. I bet if you had listened closely you would have actually been able to hear the sound of the Gulf being flushed down the toilet and into the septic tank. Fortunately, there is a transcript. On my computer, I must keep clicking “Next Clip” to advance. If the video works for you, the relevant part should begin at 13:30.

C-SPAN | House Session: Conference Report on S 395, Alaska Power Administration Asset Sale and Termination Act, No. 8, 1995.

Introduction to the statute’s text:
P.L. 104-58 wrote:

SEC. 301. SHORT TITLE. (NOTE: 43 USC 1301 note.)
This title may be referred to as the “Outer Continental Shelf Deep Water Royalty Relief Act”.

SEC. 302. AMENDMENTS TO THE OUTER CONTINENTAL SHELF LANDS ACT.
Section 8(a) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)), is amended–
(1) by designating the provisions of paragraph (3) as subparagraph (A) of such paragraph (3); and
(2) by inserting after subparagraph (A), as so designated, the following:

“(B) In the Western and Central Planning Areas of the Gulf of Mexico and the portion of the Eastern Planning Area of the Gulf of Mexico encompassing whole lease blocks lying west of 87 degrees, 30 minutes West longitude, the Secretary may, in order to–
“(i) promote development or increased production on producing or non-producing leases; or
“(ii) encourage production of marginal resources on producing or non-producing leases; through primary, secondary, or tertiary recovery means, reduce or eliminate any royalty or net profit share set forth in the lease(s). With the lessee’s consent, the Secretary may make other modifications to the royalty or net profit share terms of the lease in order to achieve these purposes.

Wooosh! ….gurgle gurgle gurgle…

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2 Responses to The Outer Continental Shelf Deepwater Royalty Relief Act — or — Why Big Oil Drills in Deep Water

  1. Gene Basler says:

    So this is great, but I want to know who wrote the bill? Usually you can find that out right? Does it require a FOIA request? What matters is not that Johnston introduced the legislation, but who wrote it? That’s who has Johnston in his back pocket, and who had the motivation to incentivize Big Oil to drill where it had previously been economically unfeasible? Florida tourism? Louisiana Coastline Preservation Society? Pelican Club?

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