Click here to read a letter from Willard R. Green, president of the American Association of Petroleum Geologists, an independent, international geosciences organization devoted to advancing the science of geology, fostering scientific research, and promoting technology about "Use It or Lose It."
CLAIM:
“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.’” (Release, 6/12/08)
THE FACTS: “Use It or Lose It” is already the law of the land.
• The Secretary of the Interior ALREADY can “cancel” a lease if the lessee “fails to comply” with the law, regulations or the terms of the lease.
• The Law on Cancelling Leases: According to Title 30, Subsection 188(a) and (b) of the United States Code, “any lease … may be forfeited and canceled … whenever the lessee fails to comply with any provisions of this chapter, of the lease, or of the general regulations … Any lease … shall be subject to cancellation by the Secretary of the Interior after 30 days notice upon failure of the lessee to comply with any of the provisions of the lease….”
• The Regulations on Cancelling Leases: According to Title 43, Sec. 3108.3 (a) and (b) of the Code of Federal Regulations, “Whenever the lessee fails to comply with any of the provisions of the law, the regulations issued thereunder, or the lease, the lease may be canceled by the Secretary, if the leasehold does not contain a well capable of production of oil or gas in paying quantities …. Whenever the lessee fails to comply with any of the provisions of the law, the regulations issued thereunder, or the lease, and if the leasehold contains a well capable of production of oil or gas in paying quantities … the lease may be canceled only by judicial proceedings in the manner provided by section 31(a) of the Act.”
• Federal energy lease holders ALREADY must produce oil or natural gas within 5-10 years to live up to the terms of the lease and the law. They can only be extended if “actual drilling operations were commenced … and are being diligently prosecuted” or because of “unusually deep water.”
• The Law on Land Exploration Time Limits: According to Title 30, Subsection 226(e) of the United States Code, “Competitive and noncompetitive leases issued under this section shall be for a primary term of 10 years. … Any lease issued under this section for land on which, or for which under an approved cooperative or unit plan development or operation, actual drilling operations were commenced prior to the end of its primary term and are being diligently prosecuted at that time shall be extended for two years and so long thereafter as oil or gas is produced in paying quantities.”
• The Law on Deep-Water Exploration Time Limits: According to Title 43, Sec. 1337 (b) of the United States Code, “An oil and gas lease issued pursuant to this section shall (2) be for an initial period of (A) five years; or (B) not to exceed ten years where the Secretary finds that such longer period is necessary to encourage exploration and development in areas because of unusually deep water or other unusually adverse conditions, and as long after such initial period as oil or gas is produced from the area in paying quantities, or drilling or well reworking operations as approved by the Secretary are conducted thereon.”
With American families and small businesses continuing to feel the pain at the pump, House Democrats today have begun offering a series of hollow bills that will do nothing to reduce gas prices. Today’s bill – purportedly meant to address price gouging – serves no purpose other than to provide political cover to Democrats who continue to defy the will of the American people, who are calling on Congress to increase the supply of American energy. In fact, today’s bill is a rehashed version of a similar “price gouging bill” passed by the House last year.
MYTH: If the American people want increased production of American energy, Congress must force energy companies to “use” their leased federal lands to produce oil – or “lose” those leases.
FACT: “Use it or lose it” is already the law of the land. As a matter of fact, in a bipartisan vote, Speaker Pelosi, Majority Leader Hoyer, and Natural Resources Committee Chairman Rahall each voted for it in 1992. Under the law, federal energy lease holders already must produce oil or natural gas within five to 10 years after drilling on the land begins – and the Secretary of the Interior has the power to cancel the lease if the energy company fails to comply.
MYTH: Oil companies are sitting on 68 million acres of federal lands without drilling for oil or gas on any of it.
FACT: This false claim has become one of the Democrats’ top talking points, but they can’t back it up with any facts. Energy companies already are actively exploring their currently-leased lands to find oil or gas. Once they determine that oil or gas is present, only then can they actually begin drilling. The entire process can take years.
As the independent American Association of Petroleum Geologists noted in a letter to House leaders yesterday, “[O]il and natural gas exploration is not simple and it is not easy. It requires geological ingenuity, advanced technologies, and the time to do the job right. It also requires access to areas where exploration ideas can be tested – the greater the number of areas available for exploration, the higher the chance of finding oil and natural gas traps.” In other words, energy companies cannot be expected to drill on every acre of land every single day.
MYTH: 4.8 million barrels of oil per day and 44.7 billion cubic feet of natural gas per day may be “extrapolated” from the oil companies’ “unused” federally-leased lands.
FACT: No Democrat can explain where they got these figures. In fact, Democrats have refused to respond to a written request from Natural Resources Committee Republicans for this information.
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