II 112th CONGRESS 1st Session S. 600 IN THE SENATE OF THE UNITED STATES March 16, 2011 Mr. Menendez (for himself, Mr. Schumer, Mr. Nelson of Florida, Mr. Whitehouse, Mr. Durbin, Mr. Franken, and Mr. Merkley) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To promote the diligent development of Federal oil and gas leases, and for other purposes.

1.

Short title

This Act may be cited as the Use It or Lose It Act of 2011.

2.

Diligent development of Federal oil and gas leases

(a)

Clarification of existing law

Each lease that authorizes the exploration for or production of oil or natural gas under a provision of law described in subsection (b) shall be diligently developed by the person holding the lease in order to ensure timely production from the lease. (b)

Covered provisions

Subsection (a) shall apply to— (1)section 17 of the Mineral Leasing Act (30 U.S.C. 226); and (2)the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.).

3.

Nonproducing lease fee

(a)

Onshore oil and gas leases

Section 17 of the Mineral Leasing Act (30 U.S.C. 226) is amended by adding at the end the following: (q)

Nonproducing lease fee

In the case of any lease for oil or gas issued on or after the date of enactment of this subsection, as a condition of the lease, the Secretary shall require the lessee to pay an annual fee of $4 per acre on the acres covered by the lease if production is not occurring. . (b)

Outer Continental Shelf oil and gas leases

Section 8 of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(d)) is amended— (1)by striking (d) No bid and inserting the following: (d)

Due diligence

(1)

In general

No bid ; and (2)by adding at the end the following: (2)

Nonproducing lease fee

In the case of any lease for oil or gas issued on or after the date of enactment of this paragraph, as a condition of the lease, the Secretary shall require the lessee to pay an annual fee of $4 per acre on the acres covered by the lease if production is not occurring. .

4.

Regulations

In the case of leases covered by this Act and the amendments made by this Act, not later than 180 days after the date of enactment of this Act, the Secretary of the Interior shall issue regulations that— (1)set forth requirements and benchmarks for oil and gas development that will ensure that leaseholders— (A)diligently develop each lease; and (B)to the maximum extent practicable, produce oil and gas from each lease during the primary term of the lease; (2)require each leaseholder to submit to the Secretary a diligent development plan describing how the lessee will meet the benchmarks; (3)in establishing requirements under paragraphs (1) and (2), take into account the differences in development conditions and circumstances in the areas to be developed; and (4)implement the fee requirements established by the amendments made by section 3.