(a) The term Arctic offshore projects as used in § 589.205 means projects that have the potential to produce oil in areas that—

(1) Involve drilling operations originating offshore, and

(2) Are located above the Arctic Circle.

(b) The term Arctic offshore projects as used in § 589.205 does not apply to horizontal drilling operations originating onshore where such drilling operations extend under the seabed to areas above the Arctic Circle.