CONTACT: Allyson Groff or Blake Androff, 202-226-9019Washington, D.C. -
In an effort to compel oil and gas companies to produce on the 68 million acres of federal lands, both onshore and offshore, that are leased but sitting idle, House Natural Resources Committee Chairman Nick J. Rahall (D-WV) today introduced legislation that gives Big Oil one option - either "use it or lose it.""Big Oil, as many Americans already suspect, are perfectly fine with high gasoline prices at the pump while they hold back domestic production on federal leases and enjoy world record profits. I am calling them on the carpet. I am calling their bluff. We are not going to continue to allow them to speculate and profiteer with public resources to the detriment of the American people," Rahall said.The Responsible Federal Oil and Gas Lease Act of 2008 (H.R. 6251) is a direct response to the facts outlined in the recent House Natural Resources Committee Majority Staff report, "The Truth About America's Energy: Big Oil Stockpiles Supplies and Pockets Profits", that illustrate how energy companies are not using the federal lands and waters that are already open to drilling.
The legislation is co-sponsored by Reps. Rahm Emanuel (D-IL), Maurice Hinchey (D-NY), Ed Markey (D-MA), and John Yarmuth (D-KY).
The 68 million acres of leased but inactive federal land have the potential to produce an additional 4.8 million barrels of oil and 44.7 billion cubic feet of natural gas each day. This would nearly double total U.S. oil production, and increase natural gas production by 75 percent. It would also cut U.S. oil imports by more than one-third, reducing America's dependency on foreign oil.The Rahall bill would force oil and gas companies to either produce or give up federal onshore and offshore leases they are stockpiling by barring the companies from obtaining any more leases unless they can demonstrate that they are producing oil and gas, or are diligently developing the leases they already hold, during the initial term of the leases.Coal companies, which are issued leases for 20-year terms, are required, as a result of the Federal Coal Leasing Amendments Act of 1976 to show that they are diligently developing their leases during the initial lease term.
The law was enacted in an effort to end rampant speculation on federal coal as a result of the energy crises of the 1970's.Oil and gas companies, however, are not required to demonstrate diligent development. Because of this, oil and gas companies have been allowed to stockpile leases in a non-producing status, while leaving millions of acres of leased land untouched. The Rahall legislation directs the Secretary of the Interior to define what constitutes diligent development for oil and gas leases.Companies could avoid this new lease prohibition by relinquishing their non-producing leases, thus creating an opportunity for another company to explore for and perhaps produce oil and gas."As long as oil companies hold oil hostage, they will continue to get away with charging high prices and demanding a greater share of the public's land.
This bill forces their hand by compelling them to produce or hand the over their idle leases for someone who will," Rahall said.
Committee On Natural Resources :: 1324 Longworth Building :: Washington, DC 20515 :: t:202-225-6065 :: f:202-225-1931
"Responsible Federal Oil and Gas Lease Act of 2008" (Use IT or Lose IT)
Representatives Rahall, Markey, Hinchey, Emanuel and Yarmuth
The Problem
Currently, oil and gas companies hold leases on nearly 68 million acres of federal land (both onshore and under OCS waters) that they are not developing.
Generally speaking, oil and gas leases are issued for a 10-year term that can be renewed.
Coal leases are issued for 20 years and coal companies have to show that they are "diligently developing" their leases during the initial term of the lease.
While coal companies are required to diligently develop their leases, oil and gas companies are not required to do so.
Because there are no diligent development requirements, oil and gas companies can stockpile leases in a non-producing status.
This has encouraged oil and gas companies to hold nearly 68 million areas of federal land (both onshore and under OCS waters) without producing oil or gas.
The 68 million acres of leased but currently inactive federal land (both onshore and under OCS waters) could produce an additional 4.8 million barrels of oil and 44.7 billion cubic feet of natural gas each day.
That would nearly double total U.S. oil production, and increase natural gas production by 75%.
It would also cut U.S. oil imports by more than a third, and be more than six times the estimated peak production from the Arctic National Wildlife Refuge (ANWR).
By fostering prompt development of oil and gas leases, we will increase domestic production in areas already shown to appropriate for energy development.
The Solution
The "Responsible Federal Oil and Gas Lease Act of 2008" would compel oil and gas companies to either produce or give up federal onshore and OCS leases they are stockpiling by barring the companies from obtaining any more leases unless they can demonstrate that they are producing oil and gas, or are diligently developing the leases they already hold, during the initial term of the leases.
The bill directs the Interior Secretary to define what constitutes diligent development.
Companies could avoid this new lease prohibition by relinquishing their non-producing leases, creating an opportunity for another company to explore for and perhaps produce oil or gas from them. Under the bill, the terms of leases which are in production, or which can demonstrate diligent development, are extended.
Companies which lease federal coal resources are by law required to diligently develop their leases. This requirement has discouraged the rampant speculation that once existed in the federal coal leasing program. The same type of speculation that now appears to be plaguing the federal oil and gas leasing program.
http://resourcescommittee.house.gov/images/Documents/hr6251.pdf
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