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June 12th, 2008
Representative Grijalva Supports Responsible Federal Oil and Gas Lease Act of 2008

Washington, D.C. – Representative Raúl M. Grijalva, Chairman of the Subcommittee on  National Parks, Forests and Public Lands joined with House Natural Resources Committee Chairman Nick J. Rahall  and others to sponsor the Responsible Federal Oil and Gas Lease Act of 2008, 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.

“This legislation will require the oil and gas industry to use it or lose it,” stated Rep. Grijalva.  “The oil and gas companies and their allies in Congress are crying wolf, while over 68 million acres of public lands are currently leased or permitted for drilling remain untapped by their own inaction.”

The Responsible Federal Oil and Gas Lease Act of 2008 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 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 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.

“This legislation will require that these lands be used or returned to the American people.  Returned leases can be re-leased so that entities willing to develop these resources on approved public lands will be able to do so for the benefit of the American public.”

 

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