Press ReleaseMar 28, 2011
Markey: New Interior Dept. Report on Unused Oil Leases Makes Case for "USE IT" LegislationIssues: Oil
Report requested by President Obama shows oil industry is leaving leases fallow even while requesting more public land to drill.
WASHINGTON (March 29, 2011) – A new report requested by President Obama and released by the Interior Department today shows that oil and gas companies are leaving millions of acres of public land and water unused, even as they claim they don’t have enough to drill. The report makes the case for legislation already introduced by Reps. Ed Markey (D-Mass.) and Rush Holt (D-N.J.) that would compel oil and gas companies to produce on the drilling leases they already own, instead of continuing the practice by the oil and gas industry to “squat” on their leased lands without producing. The legislation is entitled the United States Exploration on Idle Tracts Act, or USE IT, HR 927.
“This isn't Oliver Twist standing up at the orphanage saying 'Please, sir, I want some more.' These are multi-billion dollar corporations, that already have more acres available to them than they can drill, are then asking the public to hand over more of our land and water,” said Rep. Markey, who is the Ranking Member of the Natural Resources Committee. “These companies are warehousing millions of acres of public lands waiting for the price of oil to skyrocket.”
According to the Interior Department’s report, more than 70 percent of the tens of millions of offshore acres under lease are inactive, neither producing nor currently subject to approved or pending exploration or development plans. This includes nearly 24 million leased acres that continue to be inactive in the Gulf of Mexico, which potentially could hold more than 11 billion barrels of oil and 50 trillion cubic feet of natural gas. For onshore leases, the report says that approximately 45 percent of all leases and approximately 57 percent of all leased acres are inactive. That means that out of a total of over 38 million leased onshore acres, almost 22 million leased onshore acres are not being utilized.
The full report can be found HERE.
The USE IT legislation would impose an escalating fee on the oil and gas companies who continue to squat on these drilling leases without producing. The fees would then be sent back to the U.S. Treasury for deficit reduction purposes.
Earlier this month, during a hearing before the Natural Resources Committee, Secretary Ken Salazar of the Department of Interior said the Obama administration would support such legislation. Several states have already instituted such a program for drilling governed by those states.