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105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-248
_______________________________________________________________________


 
          METHANE HYDRATE RESEARCH AND DEVELOPMENT ACT OF 1997

                                _______
                                

                 July 13, 1998.--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. 1418]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1418) to promote the research, 
identification, assessment, exploration, and development of 
methane hydrate resources, and for other purposes, having 
considered the same, reports favorable thereon with amendments 
and recommends that the bill, as amended, do pass.
    The amendments are as follows:
    1. On page 2, after line 25, add the following:

          (8) Director.--The term ``Director'' means the 
        Director of the National Science Foundation.

    2. On page 3, strike lines 4 through 12 and insert the 
following:

          (1) Commencement of program.--Not later than 180 days 
        after the date of enactment of this Act, the Secretary, 
        in consultation with the Secretary of Defense, the 
        Secretary of the Interior, and the Director, shall 
        commence a program of methane hydrate research and 
        development.
          (2) Designations.--The Secretary, the Secretary of 
        Defense, the Secretary of the Interior, and the 
        Director shall designate individuals to implement this 
        Act.

    3. On page 6, after line 2, insert the following new 
section 4 and renumber the subsequent section accordingly:

SEC. 4. AMENDMENT TO THE MINING AND MINERALS POLICY ACT OF 1970.

    Section 201 of the Mining and Minerals Policy Act of 1970 
(30 U.S.C. 1901) is amended--
          (1) by redesignating paragraphs (6) and (7) as 
        paragraphs (7) and (8), respectively;
          (2) by inserting after paragraph (5) the following:
          ``(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.''; and
          (3) in paragraph (7) (as redesignated by paragraph 
        (1)--
                  (A) in subparagraph (F), by striking ``and'';
                  (B) by redesignating subparagraph (G) as 
                subparagraph (H); and
                  (C) by inserting after subparagraph (F) the 
                following:
                  ``(G) methane hydrate; and''.

    4. On page 5, line 3, insert ``under'' after the world 
``program''.

                         Purpose of the Measure

    The purpose of S. 1418, 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. 1418 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 Direct of the National Science Foundation.

                          Legislative History

    S. 1418 was introduced by Senators Akaka, Craig and 
Landrieu on November 7, 1997. Senator Graham was added as a 
cosponsor on November 13, 1997. Senator Lott was added as a 
cosponsor on April 21, 1998. The Subcommittee on Energy 
Research, Development, Production and Regulation held a hearing 
on this bill on May 21, 1998.
    On June 24, 1998, the Committee on Energy and Natural 
Resources ordered S. 1418, as amended, favorably reported.

           Committee Recommendations and Tabulation of Votes

    The Committee on Energy and Natural Resources, in open 
business session on June 24, 1998, by a unanimous vote of a 
quorum present, recommends that the Senate pass S. 1418, if 
amended as described herein.
    The roll call vote on reporting the measure was 20 yeas, 0 
nays, as follows:
        YEAS                          NAYS
Mr. Murkowski
Mr. Domenici\1\
Mr. Nickles\1\
Mr. Craig
Mr. Campbell
Mr. Thomas
Mr. Kyl\1\
Mr. Grams
Mr. Smith
Mr. Gorton
Mr. Burns
Mr. Bumpers\1\
Mr. Ford
Mr. Bingaman\1\
Mr. Akaka\1\
Mr. Dorgan
Mr. Graham\1\
Mr. Wyden\1\
Mr. Johnson
Ms. Landrieu

    \1\ Indicates voted by proxy.

                          Committee Amendments

    During the consideration of S. 1418, the Committee adopted 
three amendments. The first amendment defines ``Director'' to 
mean the Director of the National Science Foundation. The 
second amendment adds the National Science Foundation to the 
agencies which will design and implement the methane hydrate 
research and development program established by S. 1418. The 
third amendment expands 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-by-Section Analysis

    Section 1 gives the short title of S. 1418.
    Section 2 provides definitions of terms used in S. 1418.
    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. 1418. The Secretary of Energy shall consult 
with the Secretaries of Defense and the Interior, and the 
Director of the 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, June 29, 1998.
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. 1418, the Methane 
Hydrate Research and Development Act of 1997.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kim Cawley.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

               congressional budget office cost estimate

S. 1418--Methane Hydrate Research and Development Act of 1997

    Summary: S. 1418 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 $35 million over the next five years, 
assuming appropriation of the necessary amounts. S. 1418 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 impose no costs 
on state, local, or tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1418 is shown in the following table. 
The costs of this legislation fall within budget function 270 
(energy).

------------------------------------------------------------------------
                                      By fiscal years, in millions of   
                                                 dollars--              
                                 ---------------------------------------
                                   1999    2000    2001    2002    2003 
------------------------------------------------------------------------
                    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. 1418 will be enacted before the end of fiscal year 1998 
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. 1418 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments. Publicly owned universities would be 
eligible to receive research funds authorized by the 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 the 
Standing Rules of the Senate, the Committee makes the following 
evaluation impact which would be incurred in carrying out S. 
1418. The bill of the regulatory 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. 1418, as ordered reported.

                        Executive Communications

    The pertinent communication received by the Committee from 
the Department of Energy setting forth Executive agency policy 
relating to this measure is set forth below:

Statement of Robert S. Kripowicz, Principal Deputy Assistant Secretary 
              for Fossil Energy, U.S. Department of Energy

    Mr. Chairman and members of the subcommittee, I am pleased 
to represent the Department of Energy and to present our views 
on the potential for methane hydrates as a future source of 
natural gas and more specifically, to review the progress we 
are making in preparing a multi-agency coordinated research 
plan for this potentially vast energy resource. I will also 
discuss our position on S. 1418, the Methane Hydrate Research 
and Development Act of 1997.
The Department's views on S. 1418, the Methane Hydrate Research and 
        Development Act
    S. 1418 would promote the research, identification, 
assessment, exploration, and development of methane hydrate 
resources. This legislation provides a clear endorsement from 
Congress of federal research efforts to better understand the 
true energy potential of methane hydrates. S. 1418 is 
consistent with the goals we have established for the federal 
hydrates R&D; program; therefore, the Department can support 
this legislation.
    We are particularly pleased to see the Congress emphasize 
in Sec. 3(d)(1), the need to facilitate and develop 
partnerships among government, industry and academia in future 
hydrate R&D.; This concept of a public-private partnership, with 
shared responsibilities and resources, is fundamental to our 
fossil energy R&D; program. It is particularly important that 
the private sector, which will ultimately be responsible for 
converting R&D; results into commercially-viable production 
methods, be part of the project team early in the R&D; process. 
We expect to see substantial industry cost-sharing in those 
activities that have significance for current drilling 
practices, such as the studies of hydrate mechanical properties 
and ocean engineering that I mentioned in Goal 4 above. As 
other longer-term technologies mature, we expect the proportion 
of industry cost-sharing in these areas increase to significant 
levels. We also will seek a wide range of private sector and 
academic partners. This will expedite significantly the 
transfer of technology that evolves from this effort.
    We also applaud the Congressional direction to ``ensure 
that data and information developed through the program are 
accessible and widely disseminated. * * * '' Working with the 
Natural Gas Supply Association and the International Centre for 
Gas Technology Information, we are proposing to develop a 
methane hydrates Internet site that will be used to enhance 
information dissemination among the world's community of 
hydrate researchers and technology users, as well as to obtain 
stakeholder input.
    We are also pleased that the Congress has recognized the 
importance of cooperation among Federal agencies in developing 
potentially promising hydrate technologies. We would not be 
nearly as well positioned to begin a new, intensified 
examination of the hydrate potential had it not been for the 
excellent work of the USGS and the Naval Research Laboratory. 
The coordinated involvement of these organizations, along with 
others such as the National Science Foundation, the Minerals 
Management Service, the Interstate Oil and Gas Compact 
Commission, and the Gas Research Institute, will be essential 
in carrying out of productive and effectively managed R&D; 
program.
    This concludes my prepared statement. I will be pleased to 
answer any questions you or Members of the Subcommittee may 
have.

                        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. 1418, 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.

           *       *       *       *       *       *       *