Friday, June 13, 2008

Rahall Bill Compels Oil Companies To "Use It Or Lose It"

Jun 12: 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 Rahall (D-WV) introduced legislation that gives "Big Oil" one option - either "use it or lose it." Rahall said, "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."

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 [See WIMS 6/10/08], 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 Representatives Rahm Emanuel (D-IL), Maurice Hinchey (D-NY), Ed Markey (D-MA), and John Yarmuth (D-KY).

According to the report, 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. Rahall said, "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."

Access a release from Representative Rahall (
click here). Access the complete Truth About America's Energy report (click here). Access legislative details for H.R. 6251 (click here). [*Energy]

No comments: