Rep. Calvert: When it Comes to Oil, What Does “Use-It-Or-Lose-It” Mean?

Dear Friends,

            As gas prices continue to hover around $4.50 in California, I know many of you are following the debate in Congress on the various efforts to bring down the price of oil and gasoline. One argument being made by Democrats is that Congress should not expand domestic energy production because energy companies are not fully utilizing the 68 million acres of federal lands that have already been leased for energy production. To that end, the Majority has been attempting to pass so-called “Use-It-Or-Lose-It” legislation that would impose time limits on non-producing leases. 

            Sounds like something that should be law doesn’t it? Well, in fact, it already is the law. Energy leaseholders are already required to begin producing energy on leases within either a five or ten year period or the Secretary of the Interior has the right to revoke the lease (established by the Comprehensive National Policy Act of 1992).

            There are a few reasons why a leaseholder may not be in production   When an energy company bids on a lease, there is no guarantee that oil or natural gas exists or can be extracted. If a leaseholder fails to find the resources it expected then there obviously will not be production on the lease. If resources are present, it can take many years to recover them. 

According to the U.S. Minerals Management Service (MMS), leaseholders are required to obtain 25 to 30 different plan and permit approvals before production can begin. Jumping through the necessary regulatory hoops is a lengthy process that is only stretched further by lawsuits and other formal protests. The number of formal protests filed with MMS to restrict energy production has increased by over 700% over the past five years.

At a time when Congress should be considering all options to increase the supply of oil – conservation, alternative resources, offshore exploration (see my bill, the MORE Act), and domestic exploration in ANWR – Congress is trying to pass laws already on the books that have done nothing to lower the price of gas. Time is running out before a month-long August Congressional recess that will leave Americans stranded at the pump and the U.S. transferring a substantial amount of its wealth to the Middle East. The time to act is now and I will continue to push the Majority to bring meaningful legislation to the floor that will have a positive impact on your wallet.

As I’ve stated before, the solution to our energy problems require an all-of-the-above approach that includes both domestic development of energy resources, conservation, alternative fuels and a move away from an oil-based energy economy. I welcome your input on this issue as I know gas prices are on everyone’s mind. 

Sincerely,

KEN CALVERT

Member of Congress