Menendez Renews Call for Oil Companies to “Use It or Lose It" In Wake of DOI Report that Nearly 2/3 of Fed Lease Areas Undeveloped

Menendez Renews Call for Oil Companies to “Use It or Lose It" In Wake of DOI Report that Nearly 2/3 of Fed Lease Areas Undeveloped

Washington - In the wake of a new report by the U.S. Department of Interior (DOI) which shows that nearly two-thirds of federal lands and waters leased by Big Oil remain unexplored, U.S. Senator Robert Menendez today renewed his call for Congress to require these companies to pass his "Use It Or Lose It" legislation, S.600.

"Today's report should be a wake-up call that Big Oil is sitting on taxpayer land, boosting their stock prices, and sticking it to middle class families struggling with sky-high gasoline prices," said Menendez. "This land and these waters belong to the American taxpayer and it's past time we stood up and told these companies: Use It or Lose It."

According to the report, more than 70 percent of the tens of millions of offshore acres currently under lease are inactive, neither producing nor currently subject to approved or pending exploration or development plans. Out of nearly 36 million acres leased offshore, only about 10 million acres are active - leaving nearly 72 percent of the offshore leased area idle.

In the lower 48 states, an additional 20.8 million acres, or 56 percent of onshore leased acres, remain idle. Furthermore, there are approximately 7,000 approved permits for drilling on federal and Indian lands that have not yet been drilled by companies.

Under current law, oil companies can lease possible oil reserves on Federal land regardless of whether they are producing oil on that land or even have plans to produce oil there. Some have accused oil companies of leasing - but failing to develop - federal land in order to book more reserves on their balance sheets and inflate their stock price. Others allege oil companies are attempting to prevent competitors from producing on those acres.

Menendez introduced "Use It Or Lose It" legislation to require companies to report if, when and how they intend to actually develop federal land as well as report their investments in oil development. The aim of the legislation is to spur production by requiring clear development plans and imposing a modest fee for acres not in production the aim is to spur production.

KEY COMPONENTS OF THE "USE IT OR LOSE IT" LEGISLATION

• Mandates that oil companies submit plans to diligently develop Federal land and water leased by oil companies
• Levies an extra 4 dollar fee per year on acres of federal land or water that go unused

The report is available here.

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