Congressional Record, Volume 154 Issue 107 (Thursday, June 26, 2008)

[Congressional Record Volume 154, Number 107 (Thursday, June 26, 2008)]
[House]
[Pages H6110-H6121]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

RESPONSIBLE FEDERAL OIL AND GAS LEASE ACT

Mr. RAHALL. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 6251) to prohibit the Secretary of the Interior from issuing
new Federal oil and gas leases to holders of existing leases who do not
diligently develop the lands subject to such existing leases or
relinquish such leases, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:

H.R. 6251

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Responsible Federal Oil and
Gas Lease Act''.

SEC. 2. ISSUANCE OF NEW LEASES.

(a) In General.--After the date of the issuance of
regulations under subsection (b), the Secretary of the
Interior shall not issue any new lease that authorizes the
exploration for or production of oil or natural gas, under
section 17 of the Mineral Leasing Act (33 U.S.C. 226), the
Mineral Leasing Act for Acquired Lands Act (30 U.S.C. 351 et
seq.), the Outer Continental Shelf Lands Act (43 U.S.C. 1331
et seq.), or any other law authorizing the issuance of oil
and gas leases on Federal lands or submerged lands to a
person, unless the person--
(1) certifies for each existing lease under such Acts for
the production of oil or gas with respect to which the person
is a lessee, that the person is diligently developing the
Federal lands that are subject to the lease in order to
produce oil or natural gas or is producing oil or natural gas
from such lands; or
(2) has relinquished all ownership interest in all Federal
oil and gas leases under which oil and gas is not being
diligently developed.
(b) Diligent Development.--The Secretary shall issue
regulations within 180 days after the date of enactment of
this Act that establish what constitutes ``diligently
developing'' for purposes of this Act.
(c) Failure To Comply With Requirements.--Any person who
fails to comply with the requirements of this section or any
regulation or order issued to implement this section shall be
liable for a civil penalty under section 109 of the Federal
Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 1719).
(d) Lessee Defined.--In this section the term ``lessee''--
(1) includes any person or other entity that controls, is
controlled by, or is in or under common control with, a
lessee; and
(2) does not include any person who does not hold more than
a minority ownership interest in a lease under an Act
referred to in subsection (a) authorizing the exploration for
or production of oil or natural gas.

The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
West Virginia (Mr. Rahall) and the gentlewoman from Oklahoma (Ms.
Fallin) each will control 20 minutes.
The Chair recognizes the gentleman from West Virginia.

General Leave

Mr. RAHALL. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days in which to revise and extend their remarks and
include extraneous material on the resolution under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from West Virginia?
There was no objection.
Mr. RAHALL. I yield myself such time as I may consume.
Mr. Speaker, today this body is considering responsible legislation
aimed at compelling the oil industry to do what it should do best,
drill for oil and bring relief to Americans at the pumps.
That may seem like an odd notion, and certainly we will hear
criticism from our Republican colleagues who continue to coddle Big Oil
and pander to the industry's political agenda. And there are many in
the industry who will not want to hear this side of the aisle say we
are for drilling for oil. My approach is slightly different. Big Oil
does not need to be coddled, it needs a swift kick in the backside.
While Democrats in Congress know that we cannot drill our way to
energy independence and continue to advocate for the development of
alternative fuels and increased energy conservation, we also know that
we must increase our supply of oil in the interim. I repeat; in this
legislation we are not against drilling for oil. That is why today,
with this legislation, we are saying ``Drill it or lose it.''
The Federal Government makes vast swaths of public lands, both
onshore and underlying the Gulf of Mexico, available for oil and gas
development. What we are finding, however, is that the industry is
stockpiling these oil and gas leases. At present, 68 million acres of
Federal lands are being held by oil and gas companies with no
production occurring on these leases. That acreage is equal to the size
of Colorado.
Considering today's oil prices, you would think that they would
either diligently develop that acreage, bring any oil found into
production, or relinquish the leases. The pending legislation would
require this diligent development during the term of an oil and gas
lease, and if it does not occur, the

[[Page H6111]]

leaseholder would not be allowed to lease even more Federal lands. It's
simple, ``use it or lose it,'' and allow another company to make a go
at that leased land.
Obviously, we have a much better chance to bring relief at the pump
by producing oil on Federal lands already held by the oil companies
much quicker than having to go through the environmental lawsuits of
leasing and permitting required if we were to take the President's
method and just open up OCS and ANWR immediately. We have a much better
chance, Mr. Speaker, to help Americans grapple with the high cost of
fuel by drilling in those Federal lands and waters already open to
development.
Over 80 percent of estimated oil and gas resources on Federal lands,
both onshore and offshore, are available for development or will be
shortly, pending the completion of planning documents. The amount of
oil which could be produced from these areas represents 14 years of
current domestic oil consumption. Think about that, 14 years; yet
President Bush and his Republican allies continue to rally behind the
oil industry's political agenda, advocating opening more of America's
Federal land, including coastal areas and pristine environmental areas,
to drilling.
In response to this scheme I say to Big Oil and its allies, ``You've
got 'em. Use 'em.''
Mr. Speaker, I reserve the balance of my time.
Ms. FALLIN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in unhesitant opposition to this misguided and
uninformed legislation. I hope today's debate will allow the American
people to see this legislation for what it is, and that is, a sham, a
shallow attempt of the majority to hide that they lack any solutions
for the American energy crisis facing our Nation.
Let me start by just stating one simple fact: 97 percent of our
Federal offshore areas and 94 percent of our Federal onshore areas are
not leased. Now, let me just say that one more time. Ninety-seven
percent of our Federal offshore areas and 94 percent of our Federal
onshore areas are not even leased.
The Democrat leadership has done everything it could for the last
several decades to stop the leasing in 97 percent of offshore areas and
94 percent of onshore areas since they think America's energy needs can
be supplied by just 3 percent of offshore areas and 6 percent of the
onshore areas. It is no wonder that America is facing an energy crisis.
Let's talk about the legislative process, too, that brings this issue
to the floor today. We are debating legislation that hasn't had a
hearing, it hasn't had a mark-up, no committee report, it hasn't even
been opened up for an amendment, and no Member of this House but for
its author has had more than 5 hours to consider this bill. The Rules
Committee even had to pass a special rule to allow this bill to come to
the floor today, a rule that effectively waives all points of order
against the bill, including PAYGO and earmark bans.
The bill will also cost the American people not only additional
energy domestic production, but reduces revenues to the Federal
Government. Yes, America, in one fell swoop, Congress will increase
energy costs for American consumers and steal from the pocketbooks of
American taxpayers. Is this a way to go into Independence Day and to
celebrate the birth of our country?
The legislation before us is based on the premise that American oil
companies are sitting on resources that they should be developing. The
majority will make claims that millions of acres are not being
produced. However, the reality is that every leased acre is undergoing
some form of exploration, is in the process of getting permits, facing
a legal challenge, or in development. They are all going through those
processes for every acre.
The supporters of this misguided legislation are not offering any
solutions to these challenges. There is no proposal to speed up
development by reducing the waiting times for permits, limiting public
challenges of leases and applications for the permits to drill, or
reducing the frivolous lawsuits. In fact, last year, the Natural
Resources Committee was fighting against, and I quote the chairman,
``rapid oil and gas development that has taken place on our Nation's
public lands in recent years,'' and focused on an agenda to slow, again
quoting the chairman, ``the rampant, nearly unfettered energy
development on Federal lands.''
Last year, oil companies were developing too fast. Today, Congress is
attempting to punish any company that can't squeeze a 10-year
exploration and permitting process into a time frame that suits the
majority. We simply can't have it both ways.
One additional fact: Most of the majority leadership, including the
chairman of the Natural Resources Committee, voted in 1992 to give oil
companies more time to drill on onshore leases. That was done at a time
when the industry actually had a higher percentage of leases in non-
producing status. The majority didn't seem to mind and didn't seem to
be interested in complaining about stockpiling then.
To the contrary, there was a bipartisan recognition that companies
needed longer terms on their onshore leases to get more production. But
these days, as production rates are higher, these same Members think
that companies are stockpiling.
We have had a number of experts in this area come forward and present
expertise on this issue. I would reference a letter from the Department
of Interior which highlights the lengthy, complicated, and often
unsuccessful process a company must undergo to develop oil and gas on
Federal lands and waters.
In addition, I would like to submit for the Record a letter from the
American Association of Petroleum Geologists, America's scientific
experts on exploring for oil and gas. And their letter states,
``Policies that increase exploration costs, decrease the available time
to properly evaluate leases, and restrict access to Federal lands and
the Outer Continental Shelf do not provide the American people with
short-term relief from high prices and undermine the goal of increasing
stable long-term supplies.'' That policy to restrict development and
reduce exploration is exactly what this legislation before us will do.
What America must realize is that the true source of most non-
producing acres in America is the U.S. Congress, which restricts access
to almost 600 million acres of the Outer Continental Shelf. We could
produce more oil from opening up 2,000 acres in ANWR than would likely
be produced from all the onshore acres currently leased but not
producing today, especially when you understand that much of the
onshore resources are natural gas and not crude oil. If we were to open
but a fraction of these acres held up by the congressional majority, we
could reduce our dependence on foreign oil and create jobs right here
in America. However, the majority has decided time and time again that
we should limit our access to our onshore and offshore domestic
resources.
The American public is up in arms against the frivolous restrictions
which Congress has placed on domestic energy production. People
recognize the simple fact that opening up more Federal lands and waters
could lead to lower gasoline prices and they're calling on us to lead
America in this direction. Congress should open up this debate and this
process today and allow each side to present their very best proposals.
And that's what this debate is about today.

[[Page H6112]]

AAPG strives to increase public awareness of the crucial
role that the geosciences, and particularly petroleum and
energy-related geology, play in our society.
Finding and developing oil and natural gas blends science,
engineering, and economics. It has distinct phases:
exploration, development, and production. And it is risky,
because finding oil and natural gas traps, places where oil
and natural gas migrate and concentrate, buried under
thousands of feet of rock is like finding the proverbial
needle in a haystack. Talent and technology increase our
chances of a discovery, but there are no guarantees.
What is exploration? Well, the grid pattern on a block map
makes it tempting to think of exploration as a process of
simply drilling a well in each grid block to determine
whether it contains oil. But because of the natural variation
in regional geology, one cannot assume oil and natural gas
are evenly distributed across a given lease or region.
Rather, exploration is about unraveling the geologic history
of the rock underneath that grid block, trying to understand
where oil or natural gas may have formed and where it
migrated. If the geology isn't right; you won't find oil or
natural gas.
Legendary geologist Wallace Pratt once observed, ``Where
oil is first found is in the minds of men.'' When preparing a
lease bid, geologists use their knowledge to identify the
specific areas in a region that they believe have the highest
likelihood of containing oil and natural gas traps.
Successful exploration begins with an idea--a hypothesis of
where oil may be found.
Since exploration is about developing and testing ideas,
some acreage available for leasing is never leased. That is
because no one develops a compelling idea of why oil or
natural gas should be there. Similarly, some acreage is
leased and drilled repeatedly with no success. Then, one day,
a geologist develops an idea that works, resulting in new oil
or natural gas production from the same land that others
dismissed as barren.
Once a lease is awarded, geologists begin an intensive
assessment. They collect new geological, geophysical, and
geochemical data to better understand the geology in their
lease area. They use this data to construct a geological
model that best explains where they think oil and natural gas
were generated, where it may have been trapped, and whether
the trap is big enough to warrant drilling.
If there is no evidence of a suitable trap, the explorer
will relinquish the lease and walk away. If they see a trap
that looks interesting, they schedule a drill rig to find out
if they are right. Drilling is the true test of the
geologists' model, and it isn't a decision to be made
lightly. Drilling costs for a single well can range from $0.5
million for shallow onshore wells to over $25 million for
tests in deep water offshore.
As the well is drilling, geologists continually collect and
evaluate data to see whether it conforms to their
expectations based on the geological model. Eventually, they
reach the rock layer where they think the trap is located.
If there is no oil or natural gas when the drill reaches
the trap they were targeting, they've drilled a dry hole. At
this point the explorers will evaluate why the hole is dry:
was there never oil and gas here; how was the geological
model wrong; and can it be improved based on what they know
from the drilled well? Depending on the results of this
analysis, they may tweak the exploration idea and drill
another well or decide the idea failed and relinquish the
lease.
If there is oil and/or natural gas, they've drilled a
discovery. Typically, they will test the well to see what
volumes of oil and/or natural gas flow from it. Sometimes the
flow rates do not justify further expenditures and the well
is abandoned. If the results are promising, they will usually
drill several additional wells to better define the size and
shape of the trap. All of this data improves the geological
model.
Based on this revised geological model, engineers plan how
to develop the new field (e.g., number of production wells to
drill, construction of oil field facilities and pipelines).
Using complex economic tools, they must decide whether the
revenue from the oil and natural gas sales will exceed the
past and continuing expenses to decide whether it is a
commercial discovery.
The process of leasing, evaluating, drilling, and
developing an oil or natural gas field typically takes five
to ten years. Some fields come online sooner. Others are
delayed by permitting or regulatory delays or constraints in
the availability of data acquisition and drilling equipment
and crews. Large projects and those in deep water may require
a decade or more to ramp up to full production.
As you can see, oil 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.
U.S. consumers are burdened by high crude oil prices.
Conservation and efficiency improvements are necessary
responses, but equally important is increasing long-term
supply from stable parts of the world, such as our very own
federal lands and Outer Continental Shelf.
As Congress considers measures to deal with high crude oil
prices, I urge caution. Policies that increase exploration
costs, decrease the available time to properly evaluate
leases, and restrict access to federal lands and the Outer
Continental Shelf do not provide the American people with
short-term relief from high prices and undermine the goal of
increasing stable long-term supplies.
I am happy to further discuss these ideas. Please contact
me through our Geoscience and Energy Office in Washington,
DC.
Sincerely,

Willard R. (Will) Green

President,
American Association of Petroleum Geologists.

Mr. Speaker, because we have so many other Members who would like to
speak on this bill, I would like to ask unanimous consent that we
extend the debate on H.R. 6251 to an additional 10 minutes, equally
divided.
I reserve the balance of my time.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from Oklahoma?
Mr. RAHALL. Mr. Speaker, reserving the right to object, did she say
10 minutes on each side?
Ms. FALLIN. Equally divided.
Mr. RAHALL. I have no objection.
The SPEAKER pro tempore. Without objection, each side will control 5
additional minutes.
There was no objection.

{time} 1315

Mr. RAHALL. Mr. Speaker, I yield 5 minutes to the gentleman from
Massachusetts (Mr. Markey).
Mr. MARKEY. I thank the gentleman from West Virginia, and I thank him
for his extraordinary leadership on this issue and for the legislation
he's bringing out here on the House floor, especially with the
gentleman from Illinois (Mr. Emanuel) for his work on this legislation.
Mr. Speaker, right now we are facing an energy crisis. The Bush
administration and Republicans in Congress are perpetuating a myth that
the oil companies don't have access to enough places to drill for oil.
This story is nothing more than a drilling decoy. We might as well put
an aquarium out here in the well, there are so many red herrings that
the Republicans are throwing into this debate about our energy
independence.
Roughly 80 percent of all of the oil and gas are located in areas
where drilling is already allowed, 68 million acres, 80 percent of the
resources in America. So ExxonMobil, everybody in America pulling into
the ExxonMobil station. They made $40 billion last year. Do you know
what they did with their $40 billion? They put $32 billion of it back
into buying their own stock. They were drilling for profits in their
own stock, not on the lands where America wants them to go to find the
oil and gas, where they are already permitted.
Now, what did they do on renewables, ExxonMobil? They took $10
million, million dollars, just millions of dollars, 10 million, and put
it into renewables. Do you know what else the oil industry is doing and
the Bush administration and the Republican Congress? They're blocking
the tax breaks still today for renewables, for solar, for wind, for
geothermal, blocking them.
So there is their agenda: Tip the consumer upside down at the pump,
keep the supply of oil down because they're not drilling on the 80
percent of the land where we say they could go, even offshore, and go
and drill; pocket the profits for themselves; nickle and dime
renewables; and then block the tax breaks for a renewable energy
revolution in America. It's a recipe for disaster. But there is no
mistake why we are here. You cannot have an oil and gas President and
Vice President for 8 years and not have an oil and gas strategy for
America. And the price that we are paying at the pump is the price we
are paying for allowing that policy to be implemented for these 8 long
years.
So, ladies and gentlemen, we have 2 percent of the world's oil
reserves, 2 percent. We consume 25 percent of the oil, which we consume
on a daily basis. Republicans are saying let's drill off the beaches,
let's drill where the polar bear is, although they are not willing
today to put a penalty for the oil industry for not drilling where the
80 percent of oil is. Ladies and gentlemen, this is a big mistake.
OPEC has two-thirds of the oil in the world. That's their strength.
Rather than sending a message to OPEC, we are going to innovate our way
out of this with wind and solar and renewable energy sources. The
Republicans are

[[Page H6113]]

blocking the tax breaks for that and saying give bigger profits to oil
and gas, don't penalize them for not drilling for the oil and gas here
in America where we have access to it, and then go home on the 4th of
July and pretend as though this 8 years of Republican rule where we
have gone from $30 a barrel to $130 a barrel is not on their watch. It
is, ladies and gentlemen. We have gone from 46 percent dependence on
imported oil on the day the Republicans took over Congress to 61
percent dependence upon imported oil on the day they left office 1 year
ago. That's why we are in the mess that we're in right now.
The American public needs help. We need to send a message to Big Oil,
to Big Gas: Start drilling. Start drilling right now or lose the leases
that the American people have given you. Do not warehouse these leases.
Do not warehouse the oil and gas here in America. Let's put the penalty
on them. Let us no longer have the policies set by Big Oil, by Big Gas,
and OPEC. Let us today declare independence from them. Let us say we
are taking those leases back from you. We are taking back the American
land where oil and gas is. If you don't drill on it, you lose it, and
we are going to penalize you for allowing this crisis to build to the
point that it has today.
Ladies and gentlemen, support the Rahall bill. This is the day where
we begin to break and create our own independence from Big Oil in our
country.
Ms. FALLIN. Mr. Speaker, I would like to yield 2 minutes to the
gentleman from Alaska (Mr. Young), our chairman.
Mr. YOUNG of Alaska. Mr. Speaker, I just witnessed one of the
greatest displays of inaccuracies I have ever heard in my life.
It's too bad that the public doesn't understand that this whole bill
is a charade, and I am disappointed in my chairman because there were
no hearings on this. In fact, the testimony that I have heard from the
majority is the reality is not real. The report is not real. And where
he gets the figures about 68 million acres set aside and not utilized,
I don't know. And where do they get the idea of getting 4 billion
barrels?
I've just listened to the gentleman from Massachusetts' tirade. I
have heard that same tirade for as long as he's been in Congress. He
has never supported any energy at all, any development of energy,
including nuclear. Now his people in Massachusetts are paying that
price.
When I first came to Congress, we were in the minority, and the price
of oil for a barrel was $8 a barrel, 39 cents at the pump. Yes, it's
high today because the Trans-Alaska Pipeline was the last big
development we ever had because this Congress would not allow us to
develop any other oil fields. Now, we have a big oil field in Alaska
called ANWR, which is 74 miles away from the existing pipeline that
delivers 17 billion barrels to the American people, and we're not
allowed to drill it because this Congress won't act.
And we have a tirade on this floor about blaming Big Oil. There's
only one group that's to blame, and it's this Congress, both sides of
the aisle, because it's easier to buy it from OPEC countries. And we
stopped trying to figure out how we can get off the dependency. We have
not done that.
Now, if we don't drill, we are going to be in trouble. I predict the
price of oil, if we don't drill and start supply to this demand in the
United States, the price of oil will probably go to $150 a barrel. And
that's going to be under your watch.
Are you proud of what you've done? I say no. This bill is a charade.
It should be voted down, and we should vote ``no, no, no, drill, drill,
drill.''
Mr. RAHALL. Mr. Speaker, just to remind all of my colleagues, if this
administration were not playing politics with oil, why does the
President not just by one stroke of the pen sign an executive order
lifting these lands that the other side claims should be open? That's
all it takes, a stroke of the pen to lift the moratorium on these lands
for drilling. Instead, he puts a political pointer at this body.
Mr. Speaker, I yield 3 minutes to the gentleman from Oregon (Mr.
DeFazio).

Announcement by the Speaker Pro Tempore

The SPEAKER pro tempore. Members are reminded to avoid remarks in the
second person.
Mr. DeFAZIO. Mr. Speaker, this is a little lesson about one of the
largest finds of oil in the United States. We have known about it since
1923.
In 1923 this large area of Alaska was designated as Naval Petroleum
Reserve Number 4. Why? Because we knew there was a huge pool of oil
under it. Estimates are the current figure is up to 15, ``b,'' billion
barrels of oil. That's a lot of oil. So the President, I believe it was
President Harding at the time, designated that as a Naval Petroleum
Reserve.
This little area over here, the one they don't want to talk about,
was designated as a wildlife refuge. Why was that? Well, because we
didn't know there was any oil under it. So the oil's here, make it an
oil preserve. There's wildlife here, make it a wildlife preserve. Now
they say they want to drill in the wildlife preserve, but they're kind
of neglecting this one over here.
Now, it was a Naval Petroleum Reserve until 1996. In 1996 the
Republican Congress voted to open it up to drilling by the oil
industry. Bill Clinton signed the bill, and, in fact, the Clinton
administration let the first 3 million acres of leases in the year
2000. Eight years ago the industry got 3 million acres of land leased
over a pool of 15 billion barrels of oil. They have drilled 25 wells
and capped them. That's it. The Bush administration is going to lease
another 4 million this next year.
If we don't have this bill, maybe they'll drill some more wells and
cap them. They have no plans. Now, they say they want to drill over
here. You will notice actually this area is closer to the existing
pipeline than this area over here, but they want to debate this area
over here with no known oil reserves and no pipeline and neglect this
area over here with massive reserves and no pipeline and apparently no
plans to build a pipeline.
If we pass this bill today, that will all change. They won't be able
to sit on the largest single pool of oil in the United States territory
anymore. They will have to begin in good faith to develop it. But guess
what. The industry really doesn't want to do that because they're
making a bucket of money the way it is now by pretending there's a
shortage and not drilling.
Now, that's just the Alaska issue. If we go offshore and look
elsewhere, as Mr. Markey said earlier, 80 percent, according to the
United States Minerals Management Service, 80 percent of the oil and
gas that's known to exist off of the Continental United States is
accessible from existing leases. Unfortunately, 6,491 of those leases
are sitting idle. On different days you get different excuses: ``Oh, it
takes a really long time.'' Well, if it takes a really long time, why
do we want to let new leases when it's taken a really long time to
develop the old leases that they're sitting on, that have known pools
of oil under them? They're taking a bucket of money now. They don't
want things to change; we do.
Produce American oil for America.
Ms. FALLIN. Mr. Speaker, I would like to yield 2 minutes to the
gentleman from Idaho (Mr. Sali).
Mr. SALI. Mr. Speaker, I would like to include in the Record the
letter from Assistant Secretary Allred relating to this bill that my
colleague from Oklahoma referenced in her remarks.

Department of the Interior,

Office of the Secretary,

Washington, DC, June 25, 2008.
Hon. Don Young,
Ranking Republican Member, Committee on Natural Resources,
House of Representatives, Washington, DC.
Dear Mr. Young: Thank you for your letter of June 19, 2008,
to Secretary Kempthorne regarding a recent report on oil and
gas by the House Committee on Natural Resources. Secretary
Kempthorne has asked me to reply.
In your letter you asked that the Department of the
Interior (Department) address the report's claim that oil
companies hold non-producing leases on 68 million acres which
could produce 4.8 million barrels of oil and 44.7 of natural
gas each day.
The report does not reference specific locations for much
of the data and therefore we cannot ascertain where each of
the numbers was derived. It appears the report took raw data,
some of which can be found on the Department websites, and
then used various formulas to reach certain conclusions. The
report does not disclose the assumptions or formulas used.
The views contained in the report are based on a
misunderstanding of the very lengthy regulatory process. The
existence of a lease does not guarantee the discovery of, or
any particular quantity of oil and gas. To

[[Page H6114]]

truly determine this, lessees must develop data and
eventually explore their leases which requires numerous
permits involving compliance with various environmental laws
and regulations. This process often takes months or years. In
addition, lessees undertake a vast array of business steps
prior to making a decision to move a lease into production,
and must obtain another set of Federal and State permits to
do so. I would like to provide some background on both
points.
Obtaining a lease is just the first step. The lessee must
first obtain the myriad of permits and approvals for
exploration activities and development plans that are
required before production can occur. Exploration, which
occurs after the issuance of the lease, is critical. For
example, after an operator acquires an onshore lease they
must obtain Geophysical Permits, Permits to Drill, Sundry
Notices, and permits that may be required by State
government. In addition to all necessary permits being
obtained, an operator must also file a plan of
development.
Development offshore is equally complex. An operator must
obtain Geological and Geophysical Exploration Permits,
Environmental Protection Agency National Pollutant Discharge
Elimination System Permits, an Army Corps of Engineers
Permit, Permits to Drill, and Marine Mammals/Endangered
Species Permits. If a lessee makes the decision to move to
development, in addition to the myriad of required permits,
an operator must file numerous plans, including Deepwater
Operations Plans, Oil Spill Response Plans, Hydrogen Sulfide
Plans, Development Plans or Development Operations
Coordination Documents.
While these lists are not exhaustive, they illustrate the
efforts that must be undertaken before a lease can be
explored and developed and production comes online. A more
comprehensive list of the various permits, approvals, and
other legal and regulatory prerequisites that may be required
based on site specifics for both onshore and offshore
production is attached for your information.
In addition to the processes mentioned above, other factors
affect potential development and subsequent production. These
factors include capital investments and equipment such as
drilling rigs and platforms.
In shallow water, approximately one in three wells results
in a discovery of a quantity of oil and/or natural gas
sufficient to produce economically In deeper water, one well
in five is economical. Shallow wells cost approximately
$200,000 for just the drilling. In deepwater, the drilling of
one well may cost $100 million to $200 million. A full
development project, including a platform or floater,
involves multiple blocks and has cost as much as $3.5
billion. Onshore development is less expensive. A well cost
10,000 feet or deeper well will $2 million to $3 million. A
shallow well runs about $200,000.
To illustrate further that a lease does not mean the
discovery of oil and gas, it is important to look at the well
success rates. For onshore leases, the well success rate is
about 10 percent for new areas. For areas already developed,
it is much higher--about 95%. For offshore, in shallow water,
the success rate is about 33 percent. In deepwater it is
about 20 percent.
In the Gulf of Mexico, 1132 new deep water exploration
wells have been drilled since 1995, with over 170 new
discoveries. While the government does conduct activities to
determine resource availability, it is the private sector
that funds exploration activities for more refined data and
analysis on a site specific basis that can lead to
production. The lengthy processes we have in place can lead
to more production but it takes time to find the exact
location of those resources.
In today's market, it does not make business sense for
lease holders to defer or forgo pursuing production and
continue to pay rental fees. In addition to the bonus bid
paid at the time of a lease being issued, lessees are
required to pay rentals for leases. In Fiscal Year 2007,
$267.2 million in rental fees was collected as rent for
oil and gas, coal, and other mineral leases.
If a lessee determines that leased acreage does not contain
sufficient resources to produce economically, it will
typically relinquish the lease, and the Federal Government is
free to offer the tract at a subsequent lease sale. However,
only after numerous steps are taken, and leased acreage is
determined to contain economically and technologically
producible oil and gas, can a lessee justify the significant
investment required to bring leased acreage into producing
status.
While increasing the productivity of already leased land is
important, to ensure our country's future security and
economic well being we need to open new areas for
development. The lengthy processes we have in place, which
can lead to more production, means that we need to look to
new areas. We cannot ignore that the world's demand for oil
has grown dramatically. Meanwhile, the supply of oil has
grown much more slowly. As a result, oil prices have risen
sharply, and that increase has been reflected at American
gasoline pumps.
Sincerely,

C. Stephen Allred,

Assistant Secretary,
Land and Minerals Management.
Attachments.

Plans and Permits Required on OCS

The number of required plan and permit approvals is on the
order of 25 to 30. The reason for a range is that the
specific lease holder may not file for certain permits on
their own. For example, they may not file for a G&G
(geological/geophysical) permit but it is certain that no
lease holder will move forward without geophysical data to
guide them. They may obtain sufficient data from a third
party that acquired under their own speculative permit with
the intention to sell the information to successful lease
bidders. Additionally, there may be supplemental plans filed
to cover changes in assumptions based on newer information
and other steps that not all lessees will need to file. The
overview of MMS regulations is at http://www.gomr.mms.gov/
homepg/regulate/regs/reg_sum.html with a discussion of the
plans and permits at http://www.gomr.mms.gov/homepg/regulate/
regs/laws/env safe.html_#perapp. Following is a fairly
complete list of the plans and permits that a lessee may have
to file to bring a lease to production:

List of Typical Plans and Permits Required to Bring a Lease to
Production

Oil and Gas Lease.
Geological and Geophysical Exploration permit.
Exploration Plan.
Coast Guard Compliance review for mobile drilling units.
Oil Spill Response Plan.
Oil Spill Financial Responsibility.
Hydrogen Sulfide Plan (some locations).
Coastal Zone Management Consistency Determination
(Exploration).
Army Corps of Engineers Permit (Navigation and National
Security).
EPA National Pollutant Discharge Elimination System Permit.
EPA Air Emissions Permit (some locations).
Marine Mammals/Endangered Species permits from NOAA or FWS
(some locations).
Application for Permit to Drill (exploratory wells).
Application for Permit to Modify (any changes in drilling
program).
Application for Permit to Modify (to plug and abandon
exploration wells).
Deepwater Operations Plan (for some locations).
Conservation Information Document (for some locations).
Coast Guard Structural Review (for floating production
systems).
Certified Verification Agent Review (for some locations).
Development Plan or Development Operations Coordination
Document (depending on location).
Pipeline Right-of-Way. Coastal Zone Management Consistency
Determination (Development).
Application for Permit to Drill (development wells).
Application for Permit to Modify (any changes in
development drilling program).
Application for Permit to Modify (to plug and abandon
development wells).
Platform Removal Application.
Pipeline Decommissioning Application.

Permits, Plans, and Surveys for Development of an Oil and Gas Lease On-
Shore

BLM Permits, Plans, and Surveys

Geophysical Exploration Permit--Notice of Intent; Notice of
Completion--(Required if the operator chooses to conduct this
optional activity) Purpose: Allows exploration for oil and
gas resources on Federal lands.
National Environmental Policy Act
(NEPA) Review--Environmental review may consist of review and
documentation through a Determination of NEPA Adequacy (DNA),
Categorical Exclusion (CX), Environmental Assessment (EA), or
Environmental Impact Statement (EIS). (May be completed by
the BLM or the Operator to BLM standards. The BLM signs the
Decision).
Land Use Plan Conformance--Project evaluated to ensure it
is in conformance with the BLM's land use plan.
Surveys--(Completed by the BLM or the Operator.)
Cultural Survey--Almost always required. Almost always
completed through an operator-funded contract with a cultural
survey contractor that has been approved by the BLM. May
involve consultation with the State Historic Preservation
Officer.
Wildlife Surveys--Frequently required. May be completed by
the BLM or the operator to BLM standards.
Endangered Species Act Consultation--only required when
endangered species may be affected by the project.
Tribal Consultation--May occur at the Planning or
Permitting stage in areas where Indian tribes have
historically used an area or have expressed an interest in
proposed projects.
Oil and Gas Lease--(Required) Conveys a basic right to
develop oil and gas from Federal Mineral estate pending
approval of additional site-specific permits.
Land Use Plan Conformance--The proposed lease is evaluated
to ensure it is in conformance with the BLM's land use plan.
Tribal Consultation--May occur at the leasing stage if not
current in the land use plan.
Endangered Species Act Consultation--May occur at the
leasing stage if not current in the land use plan and there
are endangered species present.
Communitization/Unitization Approval--(Some Locations)
Creates management units to improve development efficiency.
Plan of Developent--(If operations are located within a
unit agreement) Creates a development management plan for the
Unit.
Application for Permit to Drill (APD)--(Required) Contains
the operator's proposed

[[Page H6115]]

drilling and surface use plans and any additional permit
requirements added by the BLM. The BLM may also require
Cultural and Wildlife surveys.
National Environmental Policy Act (NEPA) Review--
Environmental review may consist of review and documentation
through a Determination of NEPA Adequacy (DNA), Categorical
Exclusion (CX), Environmental Assessment (EA), or
Environmental Impact Statement (EIS). (May be completed by
the BLM or the Operator to BLM standards. The BLM signs the
Decision.)
Land Use Plan Conformance--Project evaluated to ensure it
is in conformance with the BLM's land use plan.
Surveys--(Completed by the BLM or the Operator.)
Cultural Survey--Almost always required. Almost always
completed through an operator-funded contract with a cultural
survey contractor that has been approved by the BLM. May
involve consultation with the State Historic Preservation
Officer.
Wildlife Surveys--Frequently required. May be completed by
the BLM or the operator to BLM standards.
Endangered Species Act Consultation--only required when
endangered species may be affected by the project.
Tribal Consultation--May occur at the Planning or
Permitting stage in areas where Indian tribes have
historically used an area or have expressed an interest in
proposed projects.
Sundry Notice--(Required) Notifies the BLM of the
operator's proposed changes to the APD.
Approval and/or Review--In limited cases may involve NEPA,
Cultural, Wildlife, ESA reviews and consultation.
Hydrogen Sulfide Plan--(Required if the poison gas may be
encountered) Plans for protection of public health land
safety in the event of a hydrogen sulfide leak.
Right-of-Way Grant--(Required for any development that
occurs off the lease area.) Provides legal access for roads,
pipelines, and powerlines.
National Environmental Policy Act (NEPA) Review--
Environmental review may consist of review and documentation
through a Determination of NEPA Adequacy (DNA), Categorical
Exclusion (CX), Environmental Assessment (EA), or
Environmental Impact Statement (EIS). (May be completed by
the BLM or the Operator to BLM standards. The BLM signs the
Decision.) Usually completed in conjunction with the APD
NEPA analysis.
Land Use Plan Conformance--Project evaluated to ensure it
is in conformance with the BLM's land use plan.
Surveys--(Completed by the BLM or the Operator.)
Cultural Survey--Almost always required. Almost always
completed through an operator-funded contract with a cultural
survey contractor that has been approved by the BLM. May
involve consultation with the State Historic Preservation
Officer.
Wildlife Surveys--Frequently required. May be completed by
the BLM or the operator to BLM standards.
Endangered Species Act Consultation--only required when
endangered species may be affected by the project.
Tribal Consultation--May occur at the Planning or
Permitting stage in areas where Indian tribes have
historically used an area or have expressed an interest in
proposed projects.

other federal. state. or local permits and plans

Air Emission Permit--(May be required by State).
National Pollutant Discharge Elimination System Permit--
(May be required by the State or EPA).
Section 404 Permit--(May be required by the Army Corp of
Engineers if the project would potentially dredge or fill
waters of the U.S.).
Storm Water Prevention Plan--(Required in some States).
UIC Permit--(Required for Class II wells--water disposal or
reinjection).
Spill Prevention Countermeasure Control Plan--This is a
permit required by EPA when oil and gas activities have the
potential to impact waters of the United States.

Mr. Speaker, the justification for this legislation is a report from
Democrats on the Natural Resources Committee, and in that report the
conclusion is reached: ``We can estimate that the 68 million acres of
leased but currently inactive Federal land and waters could produce an
additional 4.8 million barrels of oil and 44.7 billion cubic feet of
natural gas each day.''
Mr. Speaker, may I ask that the gentleman controlling the time on the
other side be yielded time to respond to a question?
Mr. RAHALL. Sure. If the gentleman will yield, I will be happy to
answer the question.
Mr. SALI. I understand that the Department of the Interior has issued
a letter saying that they don't agree with the assumptions of your
report.
Can you name a single professional organization or government agency
that has told you that they agree with the assumptions or calculations
used to reach the conclusion that I have just read from the report?
Mr. RAHALL. Our Committee on Natural Resources has extrapolated out
the figures from current production on Federal lands, those figures
coming from the Energy Administration, the same department that the
administration uses.
Mr. SALI. Reclaiming my time, Mr. Speaker, the answer to that
question is ``no.'' There is no professional group or government agency
that agrees with those assumptions.
In his opening remarks, the good chairman said we must ``increase our
supply'' of crude oil and that the answer to our energy needs in the
short term is to increase American production.
Then why aren't we voting on that today? The fact is that the
assumptions that this bill is premised on are false and that there will
be no increased production from this bill.
Congress is to blame for the shortage of American production today,
and this is having a real impact on people. There's a gal who is a
certified nursing assistant in Boise, Idaho, who's taking care of my
mother and my younger sister in a nursing home.
The SPEAKER pro tempore. The gentleman's time has expired.

{time} 1330

Ms. FALLIN. I yield the gentleman 30 seconds.
Mr. SALI. Mr. Speaker, this young lady, who's a CNA, last week took
her husband's bicycle and a few other items to a pawn shop to get $37
so she could put gas in her car to go to work at this nursing home to
take care of my mother and my sister. This is having a horrendous
impact on real life people.
Mr. Speaker, it's time for partisanship to be put aside. It's time
for Congress to get to the real answer, which is increasing American
production.
Mr. RAHALL. Mr. Speaker, I yield 2 minutes to the gentlelady from
California (Mrs. Capps).
Mrs. CAPPS. I thank my colleague for yielding.
I rise in strong support of this legislation. The oil and gas
companies, awash in profits, would have us believe they have nowhere to
drill. That's just plain wrong. It is the Bush administration which
acknowledges that 80 percent of our oil and gas reserves are in areas
where drilling is already allowed. The industry is sitting on nearly 70
million acres of public lands where it could be drilling, but isn't.
The oil and gas industry already owns drilling rights to more than
6,000 untapped leases in the Gulf of Mexico.
If the industry is so eager to produce more oil and gas, it should
get to it. We don't need to open more lands to drilling, when industry
is dragging its feet on producing where it already could.
Mr. Speaker, this recent push by President Bush and Senator McCain to
open up the rest of our coast to offshore drilling is a ruse. It's not
about lowering gas prices today, or even in the future.
In response to the previous statement, yesterday Guy Caruso, head of
the Bush administration's Energy Information Agency, said the following
about the impact of new drilling, and I quote, ``It would be a
relatively small effect because it would take such a long time to bring
those supplies on. It doesn't affect prices that much.''
This push for new coastal drilling is really just a last-ditch effort
to get rid of barriers to drilling everywhere before the Bush
administration leaves office. It's an attempt for favored special
interest to oil companies to get one more favor from its friends. And
the high gas prices Americans are now paying offers the perfect cover.
I urge my colleagues to call this industry's bluff. If Big Oil wants
to drill on public lands, it can do so now. Please vote for this
legislation that tells the industry to use it or lose it.
Ms. FALLIN. Mr. Speaker, I yield 1 minute to the gentleman from Texas
(Mr. Conaway).
Mr. CONAWAY. My first reaction to reading this bill was how could 236
Members of Congress on the Democratic side, their legions of staff, and
their hired guns, know so little about a fundamental industry like
we've got that they would think that these exploration companies would
invest millions and, in some instances, billions of dollars of
shareholder equity and debt and lease bonus payments, regulatory
compliance and bureaucratic compliance costs, geological and
geophysical

[[Page H6116]]

costs, drilling and exploration expenditures, production facilities, to
then sit on these generally unsalvageable investments and not produce
oil and natural gas, which is the only way to recover these investments
and make a profit.
This chart, Mr. Speaker, shows a 14-year timeline of the typical
exploration in the Gulf of Mexico. It is a difficult process to get
through. There are some 27 bureaucratic steps that we go through. This
legislation today will add another ongoing step that these companies
will have to comply with.
My colleagues here on the other side of the aisle know this
discourages exploration. It fits in with their overall attempt to
continue to keep gasoline prices high. It is one more dagger in the
heart of the American lifestyle that has been developed since World War
II that has centered on reasonable gasoline.
Defeat this bill.
Mr. RAHALL. Mr. Speaker, the gentleman has not even read the bill. If
everything he says on that chart is true, that is due diligence. The
companies get to hold their lease, under this legislation.
I am very glad to yield 2 minutes to a member of our Appropriations
Committee, the distinguished gentleman from New York (Mr. Hinchey).
Mr. HINCHEY. Anyone who thinks back just a few years would remember
how this administration and the Members of the Congress who were so
complicit with them has been able to falsify information and get this
country into such deep trouble. The situation in Iraq has got to come
to mind. All of the deep problems we have there, based upon the
falsification of information. That is what we are seeing here again,
falsification of information.
The Republicans are alleging that no one wants the oil companies to
be able to drill for oil offshore when the fact of the matter is that
the oil companies already have leases on 68 million acres, half
offshore, half on the dry land of this country, and they are not using
those 68 million acres.
So what the Republicans want to do, at the request of this White
House, is to continue to do what this administration has been doing
since the meeting of Dick Cheney with the heads of the big oil
companies in this country to continue to have an energy policy that is
not in the interest of America but in the interest of the big oil
companies.
What they want them to do is to be able to get more land, more land,
more public land, and hang on to that public land and not produce
anything on it.
What we are saying in this bill is use it or lose it. You already
have the leases on 68 million acres of public land. Start using it. You
want to drill, start drilling. We want you to drill. Drill on the
leases that you already have. Don't pretend that you have nothing on
which you can drill. You have 68 million acres.
What the Republicans want to do is just put more public land in the
hands of the oil companies so that they can more completely and over a
longer period of time control all of the energy resources, oil and
natural gas, that the people of our country own and possess. They want
the oil companies to possess them for long periods of time, not to use
them. They are not drilling on what they have.
So pay attention to this bill, and vote for it. Use it or lose it.

Announcement By the Speaker Pro Tempore

The SPEAKER pro tempore. Members are reminded to direct their remarks
to the Chair.
Ms. FALLIN. Mr. Speaker, I'd like to yield 1 minute to the gentlelady
from West Virginia (Mrs. Capito).
Mrs. CAPITO. Today, we are considering a bill to make something the
law that is already the law. The majority claims it is necessary to
force energy exploration companies to either use or lose leases they
hold. However, use it or lose it is already the law. The Secretary of
the Interior can already cancel a lease if the lessee fails to comply
with the terms. Federal leaseholders are already required to produce
oil and/or natural gas within 5 to 10 years of beginning the lease.
By blocking some firms from competing for new leases, this
legislation could further increase gas prices that are already
exceeding $4 per gallon. This is frustrating because I believe West
Virginians would rather see us take up legislation that will actually
lead to a new and more forward-thinking energy policy rather than waste
time passing legislation that is already on the books. That means new
exploration, coal-to-liquids, and renewables.
If this is the best the majority can do, is to restate current law,
that's fine. But I think most Americans and West Virginians understand
that the time has come for a more serious and comprehensive debate on
this issue. That's what they deserve.
Mr. RAHALL. I'm glad my colleague from West Virginia answered the
previous speaker on the Republican side and explained the bill. But let
me further clarify what the bill does and does not do, and current law.
Currently, the law allows leaseholders 10 years to develop oil or
gas. Our bill used to cut it down to 5 years. We have now upped it back
up to the 10 years to try to satisfy some of the critics concerned with
this legislation. Yet, they are still not pleased, of course.
Existing leases can be cancelled if leaseholders fail to comply with
lease provisions, such as public safety and environmental requirements.
Yet, there's no law or regulation that requires diligent development on
Federal oil and gas leases. That is what we are doing here, is
requiring this due diligence. As long as the leaseholders paid the
required annual rental fee, the government cannot compel diligent
development of the leased lands.
Our bill requires oil and gas operators to diligently develop oil and
gas leases, as is currently required of coal leaseholders, I might
remind my colleague from West Virginia. We had this same regime in
place for Federal coal leasing. It was put in place when coal was in
its boom days.
What we are doing for oil and gas now is what we have done with coal
and other commodities that are produced on the land that the people of
the United States own.
Mr. Speaker, I yield 1 minute to the gentleman from Kentucky (Mr.
Yarmuth).
Mr. YARMUTH. I thank my colleague.
Mr. Speaker, I rise today in favor of legislation that would pressure
the oil companies to drill, and drill now. In my hometown of
Louisville, people are struggling to pay more than $4.20 for a gallon
of gas. While they search for a way to make ends meet, a few
multinational corporations hold the answers: Permits to drill over 60
million acres of oil and gas reserves today.
These existing leases could double U.S. oil production. But the oil
companies don't want more land to drill, they want more land to
control, which keeps oil off the market and gas prices high. After all,
high gas prices have made them the richest companies in the history of
the world.
Instead, they demand the Arctic National Wildlife Refuge, presumably
so they cannot drill there too. Even this oil-friendly White House
admits that drilling the wildlife refuge won't affect the price of gas
for more than 20 years, and then, only by a couple of pennies.
Mr. Speaker, the American people's problems are measured in dollars,
not pennies, and they can't wait until 2030. I urge my colleagues to
pass this legislation and get American oil into the market as soon as
possible.
Ms. FALLIN. Mr. Speaker, what time remains for each side?
The SPEAKER pro tempore. The gentlewoman from Oklahoma has 11\1/2\
minutes remaining. The gentleman from West Virginia, 6\1/2\.
Ms. FALLIN. Mr. Speaker, I'd like to yield 1 minute to the gentleman
from Texas (Mr. Brady).
Mr. BRADY of Texas. The Democrats claim there's 68 million acres of
energy-rich lands that companies are refusing to explore. Sixty-eight
million acres. Really. So name one. Name an acre of land where vast
reserves of oil are underground and a company refuses to explore.
I will open the mike. One acre. Any takers?
Mr. RAHALL. If the gentleman will yield.
Mr. BRADY of Texas. Absolutely.
Mr. RAHALL. We have these maps that are identified, that we have
shown.
Mr. BRADY of Texas. Well, bring down the map and identify an acre and
tell us how much oil is underground and who has refused to drill.
Mr. RAHALL. Would the gentleman tell us the same about the OCS, where

[[Page H6117]]

the President is proposing to lift this moratorium?
Mr. BRADY of Texas. Do you have an acre you can point to?
Mr. RAHALL. Yes, we do. We will bring it in. Right here.
Mr. BRADY of Texas. That's what I thought. This bill is a shame and
an insult to families who are trying to pay their gas bills.
Mr. RAHALL. Mr. Speaker, I yield 2 minutes to the gentleman from New
York (Mr. Israel).
Mr. ISRAEL. I thank my friend from West Virginia.
Mr. Speaker, if I were a football coach and I had been calling a play
for 7 years and I actually lost yardage, I'd change the play.
Our friends on the other side, Mr. Speaker, they don't want to change
the play. They want to keep the same plays that have been losing yards
and money for the American people for the past 7 years.
In the spring of 2001, Vice President Cheney had this meeting with
the oil and gas industry to create a new energy policy for America.
Then, the cost of a barrel of oil was $23. Now the cost of a barrel of
oil is $139. The policy did not work.
Then, the average price of gasoline was $1.46 a gallon. Today, the
average price of a gallon of gasoline on Long Island is $4.31 a gallon.
It tripled.
The policy didn't work. In all that time, oil and gas companies could
have drilled on the properties which they have leases to. They didn't
do it.
Mr. BOUSTANY. Will the gentleman yield?
Mr. ISRAEL. I will not yield. I only have a little bit of time.
They did not do it. Now what we're saying is we have got to try
something new because what was tried before, didn't work. We need a
change in policy. So what we are saying to the oil companies is use it
or lose it. Drill what you have the right to drill, explore where you
have the right to explore, and if you're not willing to do that, we
will find somebody who can.
It's time to put the sound bites aside and give real relief to the
American people. The fact of the matter is that the policies that have
been tried, have failed. I am not saying that anybody has committed
wrongdoing, I am just saying that they have pursued the wrong policies.
The right policy is to put the American people's pocketbooks ahead of
the oil company profits. Use it or lose it. That's what we are doing
today.
Ms. FALLIN. Mr. Speaker, I yield 2 minutes to the gentleman from
Michigan (Mr. Upton).
Mr. UPTON. Mr. Speaker, nobody likes these high prices, and I think
most folks understand the law of supply and demand. Worldwide, this
last year, we pumped 126,000 fewer barrels of oil and we used a million
barrels more each day.
We have said no to ANWR, we have said no to tar sands, we've said no
to oil shale, we've said no to nuclear. Sierra Club, I'm told, has
opposed solar in California. This Congress has not extended R&D for
renewables. Yet, 85 percent of our offshore sites are off-limits.

{time} 1345

I would like to put a letter that I received a copy of from the
American Association of Petroleum Geologists into the Record that was
sent to the Speaker. They conclude that policies that increase
exploration costs, decrease the available time to properly evaluate
leases and restrict access to Federal lands in the OCS do not provide
the American people with short-term relief from high prices and
undermine the goal of increasing stable long-term surpluses.
We can't waive a magic wand and say here it is. If you say 5 years,
but you still require some 27 different environmentally-mandated
permits that are required, with no shortening of the time that it takes
to get those permits approved, you are not succeeding. In effect, what
you are doing is telling the companies to go look someplace else. They
are not going to look in America. They are going to look someplace
else, because they may not have to comply with these same 25 different
regulations that you have to comply with in this country. You can't
just say 5 years, without shortening that process.
Now, I am sorry that I didn't talk to Mr. DeFazio before I used that
chart, but he cited I think a Shell development in Alaska that doesn't
have access yet to the pipeline that takes that oil down through to the
bottom of Alaska. Without the pipeline permits, they have to cap the
wells.

American Association of

Petroleum Geologists,

June 23, 2008.
Hon. Nancy Pelosi,
Speaker, House of Representatives, Washington, DC.
Hon. Steny Hoyer,
Majority Leader, House of Representatives, Washington, DC.
Hon. John Boehner,
Minority Leader, House of Representatives, Washington, DC.
Dear Speaker Pelosi, Majority Leader Hoyer, and Minority
Leader Boehner: Given the on-going debate about access and
leasing activity on federal onshore lands and the Outer
Continental Shelf, I would like to offer some perspective, on
behalf of the American Association of Petroleum Geologists
(AAPG), on the science and process of finding oil and natural
gas.
AAPG, an international geoscience organization, is the
world's largest professional geological society representing
over 33,000 members. The purpose of AAPG is to advance the
science of geology, foster scientific research, promote
technology and advance the well-being of its members. With
members in 116 countries, more than two-thirds of whom work
and reside in the United States, AAPG serves as a voice for
the shared interests of energy geologists and geophysicists
in our profession worldwide.
AAPG strives to increase public awareness of the crucial
role that the geosciences, and particularly petroleum and
energy-related geology, play in our society.
Finding and developing oil and natural gas blends science,
engineering, and economics. It has distinct phases:
exploration, development, and production. And it is risky,
because finding oil and natural gas traps, places where oil
and natural gas migrate and concentrate, buried under
thousands of feet of rock is like finding the proverbial
needle in a haystack. Talent and technology increase our
chances of a discovery, but there are no guarantees.
What is exploration? Well, the grid pattern on a block map
makes it tempting to think of exploration as a process of
simply drilling a well in each grid block to determine
whether it contains oil. But because of the natural variation
in regional geology, one cannot assume oil and natural gas
are evenly distributed across a given lease or region.
Rather, exploration is about unraveling the geologic history
of the rock underneath that grid block, trying to understand
where oil or natural gas may have formed and where it
migrated. If the geology isn't right, you won't find oil
or natural gas.
Legendary geologist Wallace Pratt once observed, ``Where
oil is first found is in the minds of men.'' When preparing a
lease bid, geologists use their knowledge to identify the
specific areas in a region that they believe have the highest
likelihood of containing oil and natural gas traps.
Successful exploration begins with an idea--a hypothesis of
where oil may be found.
Since exploration is about developing and testing ideas,
some acreage available for leasing is never leased. That is
because no one develops a compelling idea of why oil or
natural gas should be there. Similarly, some acreage is
leased and drilled repeatedly with no success. Then, one day,
a geologist develops an idea that works, resulting in new oil
or natural gas production from the same land that others
dismissed as barren.
Once a lease is awarded, geologists begin an intensive
assessment. They collect new geological, geophysical, and
geochemical data to better understand the geology in their
lease area. They use this data to construct a geological
model that best explains where they think oil and natural gas
were generated, where it may have been trapped, and whether
the trap is big enough to warrant drilling.
If there is no evidence of a suitable trap, the explorer
will relinquish the lease and walk away. If they see a trap
that looks interesting, they schedule a drill rig to find out
if they are right. Drilling is the true test of the
geologists' model, and it isn't a decision to be made
lightly. Drilling costs for a single well can range from $0.5
million for shallow onshore wells to over $25 million for
tests in deep water offshore.
As the well is drilling, geologists continually collect and
evaluate data to see whether it conforms to their
expectations based on the geological model. Eventually, they
reach the rock layer where they think the trap is located.
If there is no oil or natural gas when the drill reaches
the trap they were targeting, they've drilled a dry hole. At
this point the explorers will evaluate why the hole is dry:
was there never oil and gas here; how was the geological
model wrong; and can it be improved based on what they know
from the drilled well? Depending on the results of this
analysis, they may tweak the exploration idea and drill
another well or decide the idea failed and relinquish the
lease.
If there is oil and/or natural gas, they've drilled a
discovery. Typically, they will test the well to see what
volumes of oil and/or natural gas flow from it. Sometimes the
flow rates do not justify further expenditures and the well
is abandoned. If the results are promising, they will usually
drill several additional wells to better define the size and
shape of the trap. All of this data improves the geological
model.

[[Page H6118]]

Based on this revised geological model, engineers plan how
to develop the new field (e.g., number of production wells to
drill, construction of oil field facilities and pipelines).
Using complex economic tools, they must decide whether the
revenue from the oil and natural gas sales will exceed the
past and continuing expenses to decide whether it is a
commercial discovery.
The process of leasing, evaluating, drilling, and
developing an oil or natural gas field typically takes five
to ten years. Some fields come online sooner. Others are
delayed by permitting or regulatory delays or constraints in
the availability of data acquisition and drilling equipment
and crews. Large projects and those in deep water may require
a decade or more to ramp up to full production.
As you can see, oil 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.
U.S. consumers are burdened by high crude oil prices.
Conservation and efficiency improvements are necessary
responses, but equally important is increasing long-term
supply from stable parts of the world, such as our very own
federal lands and Outer Continental Shelf.
As Congress considers measures to deal with high crude oil
prices, I urge caution. Policies that increase exploration
costs, decrease the available time to properly evaluate
leases, and restrict access to federal lands and the Outer
Continental Shelf do not provide the American people with
short-term relief from high prices and undermine the goal of
increasing stable long-term supplies.
I am happy to further discuss these ideas. Please contact
me through our Geoscience & Energy Office in Washington, D.C.
at 202-684-8225 or 202-355-3415.
Sincerely,
Willard R. (Will) Green,
President.

Mr. RAHALL. Mr. Speaker, I yield 30 seconds to the gentleman from
Oregon (Mr. DeFazio) to reply.
Mr. DeFAZIO. The former Naval Petroleum Reserve has 15 billion
barrels of oil under it. It was leased by President Bill Clinton in
1998. There is no pending lengthy application process for the pipeline.
They have no plans to connect to the pipeline.
Mr. UPTON. Mr. Speaker, would the gentleman yield?
Mr. DeFAZIO. Certainly, whatever time I have left.
Mr. UPTON. If the gentleman would yield, it is my understanding that
they haven't been able to conclude the permits that would link those
oil discoveries.
Ms. FALLIN. Mr. Speaker, I would like to yield 2\1/2\ minutes to the
gentleman from Texas (Mr. Gene Green) in bipartisan opposition to the
bill.
Mr. GENE GREEN of Texas. Mr. Speaker, I rise not necessarily in
opposition to H.R. 6251. It is difficult to support or oppose something
that is already current law. We already have use-it-or-lose-it. We have
10-year leases in this bill. That is what the law is.
Americans need Congress to look at real solutions in addressing
energy needs, especially when we have $4 a gallon gas. We need answers,
and not just slogans. We cannot drill our way to energy independence,
we can't conserve our way, and we surely can't use alternatives to have
energy independence. We need to do it all.
The legislation before us today was introduced a week ago with no
committee hearings, no markups. And they raise a valid question: Are
people really sitting on oil leases and not producing?
Now, there may be reasons for it, like there are not permits allowed
to get it from the Navy Petroleum Reserve. I know in the Outer
Continental Shelf, which I am real familiar with because it is off of
Texas, a lot of those leases can't produce because there are no
resources on it, but they still have that lease for 10 years.
Let me tell you, with $140 a barrel oil, everybody wants to drill
everywhere that you can. But we already have 10-year leases. In fact, I
would like to include for the Record a copy of a current lease that is
from Minerals Management on section 4, diligence and rate of
development. We already have a diligence requirement in the 10 year
leases that are there.
What we need to do is actually do everything we can. We need to drill
the leases we have, but we do need to get additional leases available
in some of the most productive areas of the Outer Continental Shelf and
make it available, because we need to make sure that our country is
going to be energy independent and not dependent on Venezuela or Saudi
Arabia or any other country. And we can do it. We have Senators going
to Saudi Arabia begging for them to increase their production, but we
won't increase ours in some of the most potential productive areas.
That is why we need solutions instead of slogans. That is why I have
a hesitation to support the bill or oppose it, because it is already
current law.
Mr. RAHALL. Mr. Speaker, will the gentleman yield?
Mr. GENE GREEN of Texas. I will be glad to yield.
Mr. RAHALL. I appreciate my friend from Texas yielding.
The due diligence requirements or timeline that you asked for
submission into the Record, that is perfectly allowed under my bill. We
would not grab a lease. If a company is showing due diligence, if a
company is moving toward production of oil or gas on Federal leases, we
don't touch them.
Mr. GENE GREEN of Texas. I would be glad to read part of the lease
for you, the fact that they can already take that lease back now under
current law, if they want to.
Mr. Speaker, I include the lease section referred to earlier for the
Record.

Sec. 4. Diligence, rate of development, unitization, and
drainage--Lessee must exercise reasonable diligence in
developing and producing, and must prevent unnecessary damage
to, loss of, or waste of leased resources. Lessor reserves
right to specify rates of development and production in the
public interest and to require lessee to subscribe to a
cooperative or unit plan, within 30 days of notice, if deemed
necessary for proper development and operation of area,
field, or pool embracing these leased lands. Lessee must
drill and produce wells necessary to protect leased lands
from drainage or compensatory royalty for drainage in amount
determined by lessor.

Mr. RAHALL. Mr. Speaker, I reserve the balance of my time.
Ms. FALLIN. Mr. Speaker, I yield 1 minute to the gentleman from Ohio
(Mr. Boehner), our minority leader.
Mr. BOEHNER. Let me thank my colleague for yielding and tell my
colleagues that in 1992 I voted for this bill. In 1992, the chairman of
the committee voted for the bill. In 1992, Mr. Hoyer, the majority
leader, and Ms. Pelosi, the Speaker of the House, voted for the same
bill. This is already the current law.
All this is is another excuse put up by the majority to not go after
more American energy. That is all this is. And we have had more
excuses. We going to blame it on speculators, we are going to blame it
on the oil companies, we are going to blame it on OPEC, when there is
only one group, only one group in this Chamber we ought to blame, and
that is all the liberals in this House who have voted on for no energy
each and every time over the last 18 years that I have been here.
Forty-six votes. Forty-six votes have been brought to this floor over
the last 18 years that I have been here to produce more American-made
energy. I voted yes 46 times out of 46. Ms. Pelosi, as an example,
voted yes twice. Just twice. And how many times did the gentleman from
West Virginia vote to bring more American-made energy to the market?
We are giving $600 billion a year to people in the Middle East, money
that could be spent here in America if we were willing to bring more
oil out of our ground in an environmentally safe way.
Republicans have put forward an all-of-the-above strategy. We need to
conserve more of our energy, we need to develop biofuels, we need to
develop alternative fuels, we need to have nuclear energy, and, yes, we
need to produce more oil and gas here in America in an environmentally
safe way. But all we get from the other side each and every time are
excuses. ``Let's blame somebody else.''
We are about to go home for our Independence Day district work
period. We should not leave here until we take steps that will help us
move our country toward more energy independence. Not more excuses, not
more posing for ``holy pictures,'' as the chairman of the
Appropriations Committee would say. We need to bring bills to the floor
that will actually put Members on record whether they are for more
American-made energy or not.
I am willing to show my constituents how I will vote. Let's let all
of America

[[Page H6119]]

see how our colleagues will vote, for more American made energy, which
is what we need to do to bring gas prices down in America.
Mr. RAHALL. Mr. Speaker, I would simply remind the distinguished
minority leader, if my memory serves me correctly, the minority party
was in control of both ends of Pennsylvania Avenue for some 6 years,
both Houses of Congress. I don't recall this legislation or any serious
energy policy being adopted during that time period.
Mr. Speaker, I fully agree with the minority leader about developing
all of our domestic reserves. Coming from a coal area, certainly I
agree with that scenario, that we need to develop all of our domestic
resources, and in a non-partisan fashion as well.
Mr. Speaker, I yield 2 minutes to the gentleman from Illinois (Mr.
Emanuel).
Mr. EMANUEL. Mr. Speaker, July 28, 2005. The House of
Representatives, one month from now will be the 3-year anniversary of
the House Republican Congress passing their energy bill. The minority
leader, who was just here, said at that time when gas was $2.29 a
gallon, ``It will ultimately lead to lower energy prices for the
consumer and will spur our economy.''
President Bush when it was signed: ``I am confident that one day
Americans will look back on this bill as a vital step toward a more
secure and more prosperous Nation that is less dependent on foreign
sources of energy.''
We have had 3 years of your energy policy, 3 years where you promised
lower prices and a spur to the economy. By any standard of the
imagination, it is a failure. Not because you want it to be. You
thought it was the right policy. But it was a failure.
We have today a policy, because we do not believe this is an either-
or choice, between more drilling or more conservation. We think it
takes both. That is why we passed the standards, which you did not
after 12 years in control, to increase the fuel efficiency standards
for our cars. The first time in 30 years that was done. You all voted
against that in your leadership.
Second, when it comes to drilling, we do believe as it relates to the
oil and gas companies who are having record profits, use it or lose it.
We gave you 68 million acres of public land. I have 3 children, 11, 9
and 8. My middle one, she loves chocolate, really loves chocolate. But
we have a rule in the house: You don't get your desert until you finish
everything on your plate. And to the oil and gas companies that want
those leases in other areas, you don't get those leases until you
finish what is on your plate.
The SPEAKER pro tempore. The time of the gentleman from Illinois has
expired.
Mr. RAHALL. I yield the gentleman 30 additional seconds
Mr. EMANUEL. So see what we have done here. Not only have we given
them 68 million acres with record supplies of oil and gas, you, the
taxpayers, because they refused to agree to this, give them $14
billion, that is the oil companies, to drill, out of your money. $14
billion. They all vote against rescinding that and putting it towards
alternatives. You give them $14 billion. You give them 68 million of
acres of public land. And what is the policy? $4.08 a gallon for gas.
I say it is time for a new direction: More conservation, more
drilling, use it or lose it.

Announcement by the Speaker Pro Tempore

The SPEAKER pro tempore. Members are reminded to direct their remarks
to the Chair.
Ms. FALLIN. I would like to ask how much time remains.
The SPEAKER pro tempore. The gentlewoman from Oklahoma has 5 minutes
remaining. The gentleman from West Virginia has 1 minute remaining.
Ms. FALLIN. Mr. Speaker, I would like to yield 2 minutes to the
gentleman from Missouri (Mr. Blunt), the minority whip.
Mr. BLUNT. Mr. Speaker, I thank the gentlewoman for recognizing me.
I would point out to my good friend the conference chairman on the
now majority side that we often passed pieces of legislation from this
House that are already available to pass again today. Certainly there
is no question that on the other side of this building, that
legislation was often blocked. But we would like to see a comprehensive
solution.
My littlest boy and my grandchildren all love Band-aids. In fact,
sometimes my little boy, Charlie, will fall and bump his head, and he
feels better if we put a band-aid on his arm.
I think that is kind of what we are doing here this week. We are
bringing band-aids to the floor, rather than dealing with the real
problem. We have got bills on the floor that say it is the people who
run the service stations, and maybe there is price gouging; or it is
the people who participate in the market; or it is the people who look
for oil and gas.
I would suggest it may very well be the people that don't bring the
legislation to the floor that would do the things that my friend from
Illinois just said he was for: Production. Those bills are there. We
would like to see them discharged.
We have got the No More Excuses Energy Act that the gentleman from
Texas, Mr. Thornberry, has proposed, that would allow the kinds of
production that the majority has just said they are for.
We have got a refinery siting bill that Mr. Pitts from Pennsylvania
has that would allow more refinery capacity.
We have a repeal on a ban that won't let the government buy any of
these alternative fuels that we are hearing are such a good idea. The
very best way you can get a loan and go to the bank is if you had a
government contract for coal-to-liquid jet fuel or oil shale or the tar
sands. We have a Coal-to-Liquid Fuel Act that we will be trying to
discharge in the future. We would like to see the real solutions come
to the floor.
And on-use-it-or-lose-it, absolutely you do lose it when the lease is
up. Less than 10 percent of the available land is being used now.

{time} 1400

Mr. RAHALL. I reserve the balance of my time.
Ms. FALLIN. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from
Louisiana (Mr. Scalise).
Mr. SCALISE. I thank the gentlewoman from Oklahoma.
Mr. Speaker, I rise in strong opposition to this misguided bill.
Rather than allowing us to bring forth legislation that will allow us
to increase the supply of oil and gas, allow us to lower the price of
gas at the pump, the Democratic leadership brings us this bill that
could now halt leases for up to 3 years.
Section 2(b) of this Act would require that the Department of
Interior publish within 180 days major regulations dealing with
development on Federal lands. If you go look, regulations associated
with the EPA Act of 2005 are still not in place, and that has been 3
years.
Furthermore, with at least two agencies, both the Minerals Management
Service and the Bureau of Land Management, having to conduct separate
rulemaking, I find it hard to believe that with all the public comment
and lawsuits that would be associated with this, it would be impossible
to meet that timetable; and that would mean a delay of 2 years or 3
years in leases.
In Louisiana, the heart of our coast relies heavily on revenues we
receive from offshore activities. We have dedicated in Louisiana that
revenue to restore our vanishing coast. We have lost thousands of miles
of land and acres of our coast to coastal restoration, and we have
dedicated our revenues from leases to coastal restoration. Those funds
are desperately needed.
We cannot afford to wait to lose 3 years to have more leases. Our
Nation cannot afford to lose 3 years of offshore leasing just because
the Democratic leadership is trying to push legislation based on false
assumptions.
We need to defeat this legislation. We need to bring forth a real
plan to increase supply and lower gas prices.
Mr. RAHALL. I reserve the balance of my time.
Ms. FALLIN. Mr. Speaker, I yield the remainder of our time to the
gentleman from Utah (Mr. Bishop).
The SPEAKER pro tempore. The gentleman from Utah is recognized for 90
seconds.
Mr. BISHOP of Utah. Mr. Speaker, we have heard before that Big Oil is
trying to gouge the consumer, and now Big Oil is down there trying to
hide this stuff, in an effort to find another scapegoat or say there is
a big conspiracy that is causing our problems,

[[Page H6120]]

rather than 30 years of failed policies on behalf of this Congress. And
now we are doing this on a suspension where we have half the time to
debate, no amendments are possible in an effort to stop discussion.
The fact of the matter is 68 percent of all oil leases and 87 percent
of all natural gas leases are done by small companies, small companies
who need to produce to put food on the table. Is it logical that they
are actually part of a conspiracy to hide the oil beneath the ground?
This bill is nothing more than another law with a layer of bureaucracy
put on it than we already have.
But maybe, for the gentlelady of Oklahoma, maybe the Democrats have
something here. Maybe we should be looking at this tactic for other
areas. Like we all know 18-year-olds and women have the right to vote.
Maybe we can pass another law to let them vote; this time, they can use
it or lose it.
Or I know free speech is in the Constitution. Maybe we can say we all
have free speech, unless we use it or lose it. I think there are some
Members of this body who would never lose it. Or faith, use it or lose
it. Or maybe a brain. You can use it, or you can become a Member of
Congress.
What we need to do right now is to stop finding scapegoats and find
solutions. This bill is not a solution.
Mr. RAHALL. Madam Speaker, I have said this in my opening comments
and I will say it again. We on the Democratic side are not opposed to
drilling. We are for drilling on leases that oil companies currently
already have in hand. We are for a comprehensive energy policy,
including using all of our domestic resources and our domestic
willpower as an American people.
A comprehensive energy policy is something that this Congress will
address using in a bipartisan fashion the talents of this body and the
talents of American ingenuity and willpower.
This pending legislation is a responsible bill that seeks to say to
the oil companies: Use what you already have or show where you are
moving toward producing that oil; otherwise, give somebody else a
chance that may want to competitively bid on that same lease.
This is a use it or lose it. And I urge a ``yes'' vote for this
responsible piece of legislation.
Mr. YOUNG of Alaska. Madam Speaker, I think it would be instructive
for Members to see this letter from the national organizations
representing the oil producers, oil and gas supply industries and the
off shore oil and gas infrastructure supply industry; the organizations
that supply domestic energy for the American consumer.

Hon. Nancy Pelosi,
Speaker, House of Representatives,
Washington, DC.
Hon. John Boehner,
Minority Leader, House of Representatives,
Washington, DC.
Dear Speaker Pelosi: We write today in opposition of HR
6251, the so-called ``use it or lose it'' legislation under
consideration in the House today. As Americans cope with $4 a
gallon gasoline, it is regrettable that some in Congress
choose to propose diversionary legislation, not based on
facts, instead of focusing on the real issue--the need for
additional energy supplies to meet growing world energy
demand.
Over the past few weeks, rhetoric surrounding our nation's
lack of a coherent energy policy has reached an apex.
Unfortunately, policy proposals like the ``use it or lose
it'' legislation ignore fundamental facts about the oil and
gas industry and jeopardize the long-term energy security of
our nation.
Every energy forecast has predicted that oil and natural
gas will be a critical component of America's growing energy
demands. The federal Energy Information Administration (EIA)
estimates 88% of our nation's energy needs will be met by
oil, natural gas, coal, and nuclear power in the year 2030.
This fact is being lost in the proposals of some members of
Congress. While political candidates talk of energy
independence, some in Congress are offering proposals that
will lead our nation in the opposite direction. These members
ignore the challenges of domestic production, and make
unfounded accusations such as the latest charge that non-
producing leases are the same as inactive leases. This
couldn't be further from the truth.
The U.S. oil and natural gas industry is in the business of
supplying energy, not sitting on it. The industry has
reliably supplied our nation with the necessary energy to
move our cars and fuel our homes and will continue to do so
for decades to come. The industry buys leases with the intent
to produce all commercially viable reserves of oil and
natural gas. Unfortunately, not every acre of land under
lease contains oil or natural gas. In fact, many leases do
not contain any commercially recoverable oil or natural gas
resources.
But these non-commercial leases continue to provide rental
payments for the federal government, on top of bonus bids
paid for the right to explore this land. In fact, the federal
government received more than $9 billion in bonus bids from
the last four offshore lease sales alone.
For the acreage that does include promising reserve
prospects, it can take years and millions, or even billions,
of dollars to develop this resource. The exploration process,
which precedes production, necessarily takes time. Seismic
surveys must be undertaken, delineation wells must be
drilled, government permits must be obtained, environmental
regulations must be adhered to, and complex production
facilities must be engineered and installed.
Oil and gas development is an extensive, expensive and
time-consuming process, even with advances in technology. As
an example, in the U.S. ultra deepwater (greater than 5000
ft) in the Gulf of Mexico--where some of our nation's most
promising new discoveries have been made--only 21% of wells
drilled have resulted in a discovery of oil or natural gas.
However, as a result of this industry's willingness to invest
billions of dollars despite these odds--and because of what
has historically been a stable domestic oil and natural gas
regulatory regime--the U.S. oil and gas industry has
continued to explore the Gulf of Mexico. This exploration has
resulted in an 820% increase in deepwater oil production and
a roughly 1,155% increase in deepwater natural gas production
from 1992 to 2006, while adding billions of dollars in
revenue to the federal treasury.
In fact, royalty payments provide the second-largest
revenue stream to the federal government, behind only federal
taxes administered by the IRS.
The ability to explore in Gulf Coast waters has resulted in
not only a steady stream of major discoveries since the mid
1990s, but also a tripling of estimated undiscovered
potential from 1995 to 2003. Similarly, Prudhoe Bay, Alaska
was initially thought to contain 9 billion barrels of oil,
but the industry has already produced about 12 billion
barrels and it still is estimated to contain reserves of
another 6 billion barrels. Imagine what American industrial
ingenuity could find through environmentally responsible
exploration and development of 85% of Lower 48 Outer
Continental Shelf and 83% of onshore federal lands that are
currently off-limits or facing significant restrictions to
development.
The Outer Continental Shelf Lands Act, the Mineral Leasing
Act, and the Mineral Leasing Act for Acquired Lands already
establish a regulatory system that sets time limits on lease
terms, establishes annual rental payments for leases that are
not yet in production, and requires diligent development of
all available resources. The current debate does not
acknowledge these facts. The American public deserves a
policy discussion grounded in market fundamentals.
Sincerely,
American Petroleum Institute.
American Exploration and Production Council.
International Association of Drilling Contractors.
Independent Petroleum Association of America.
Independent Petroleum Association of Mountain States.
National Ocean Industries Association.
U.S. Oil and Gas Association.

Mrs. MALONEY of New York. Madam Speaker, the administration's answer
to record gas prices today is to allow drilling in Alaska's pristine
wilderness and off our shorelines for little payoff a decade from now.
What they don't tell you is that big oil companies already lease 68
million acres of public lands that they are not developing. Big oil
companies are sitting on 81 percent of America's Federal oil and gas
reserves, but all they are producing are complaints that it's not
enough.
I urge my colleagues to support H.R. 6251--the ``use it or lose it''
bill. This legislation would compel the oil industry to start drilling
on the acreage they already lease before obtaining any new leases.
Madam Speaker, if domestic drilling can bring relief to American
families, what are the oil companies waiting for?
Ms. GINNY BROWN-WAITE of Florida. Madam Speaker, I rise today in
opposition to H.R. 6251, the Democrat ``use it or lose it'' plan.
Leases and drilling permits are not awarded with any certainty that
oil or gas will be found. Just because my Democrat colleagues say oil
and gas is there, does not necessarily make it so. The Democrats in the
majority need to stop playing geologist and start representing the
American people.
Seventy-six percent of the American people believe Congress should
expand domestic production. Gas prices are high because demand is
greater than supply. In fact, U.S. oil production has steadily
decreased since 1970.
Reports by the Bureau of Land Management and the Minerals Management
Service place potential federally managed areas for oil

[[Page H6121]]

and gas exploration at 1.3 billion acres. Currently, only 68 million
acres of Federal land are being explored for oil and gas.
This Congress should be more concerned with opening up Federal land
to energy production than wasting time arguing over the 5 percent of
land that is currently available.
Democrats have pushed for higher gas prices for decades. Now that
they have finally succeeded, Democrats seem determined to keep them
that way.
Madam Speaker, we know increasing supply will lower the price of
gasoline and we have the means to do so. Drill here, drill now, pay
less.
Mr. HOLT. Madam Speaker, I rise today in support of H.R. 6251, the
Responsible Federal Oil and Gas Lease Act.
Over the last few months we have frequently heard claims from our
colleagues on the other side of the aisle that we need to open up more
Federal lands to oil and gas drilling, the magic bullet that will solve
our energy crisis. They have told the American people that Democrats
and environmentalists are protecting our Nation's most sensitive and
special environments at the expense of the American people. They have
claimed that opening up land in the Arctic National Wildlife Refuge
(ANWR) and on the Outer Continental Shelf (OCS) would quickly help
bring down the price of gas. Not only are these claims misleading
American families desperately seeking help with skyrocketing gas
prices, they are completely false.
Currently 81 percent of our Nation's Federal lands are available to
be leased for the purpose of oil and gas drilling. Sixty-eight million
acres of the lands open for drilling both onshore and offshore
currently are leased by oil companies who are not using them for
production. It is estimated that these leased but unused lands could
produce an additional 4.8 million barrels of oil and 44.7 billion cubic
feet of natural gas each day, nearly doubling U.S. oil production and
cutting oil imports by a third. Existing leases can also come online
much faster than any newly leased lands, which would save only pennies
per gallon, more than a decade down the road.
I would like to commend my colleague from West Virginia,
Representative Nick Rahall, for introducing H.R. 6251, the Responsible
Federal Oil and Gas Lease Act. This legislation would require oil
companies to certify to the Department of the Interior that they are
actively developing on the lands that they have already leased. If
these oil companies are not producing on these lands, they either would
have to relinquish these leases or start producing on them before they
could apply to lease additional lands. Also my colleagues who say
``drill, drill, drill'' should support this legislation and they should
stop talking about drilling on our environmentally sensitive coastlines
and wildlife refuges until oil companies have gone as far as they can
towards on these currently leased lands.
This legislation is common sense and I urge my colleagues to support
it. There is no logic to opening up more land to oil and gas drilling
when we are not utilizing the leases we already have. Of course this
legislation is not a long term solution to America's energy needs.
Currently we produce 3 percent of the world's oil and consume 25
percent. Unless we find a way to dramatically reduce our consumption we
will never be able to drill our way to energy independence. I look
forward to working with my colleagues on both sides of the aisle to
develop a long term solution to this crisis.
Mr. UDALL of Colorado. Madam Speaker, I will vote for this bill.
In recent days, discussion of the bill has included statements--by
some supporters and some opponents alike--that I found exaggerated in
their descriptions of the likely effect of its enactment. I regret
that, and think it would be better to avoid the ``use it or lose it''
rhetoric that oversimplifies the issue and fails to reflect the reality
that oil and gas exploration is a complicated commercial and scientific
enterprise involving efforts not easily fitting within strict
regulatory timelines.
But while the bill may not be as far-reaching as some have claimed, I
think it is a reasonable response to current conditions and should be
passed.
In essence, the bill would bar the current holders of Federal mineral
leases--whether for onshore or offshore areas--from obtaining
additional leases unless they are able to show that they are
``diligently developing'' the leases they already hold. The Secretary
of the Interior would be responsible for spelling out in regulations
exactly what would be needed to show such ``due diligence.''
Current Interior Department regulations include provisions addressing
due diligence requirements, so this is not a new concept. But I think
giving it greater emphasis is appropriate in view of the continuing
importance of oil even as we work to increase the availability and use
of alternative energy sources.
More useful in terms of energy policy, this bill will reinforce the
provisions of current law that aim to prevent hoarding of leases, and
by providing an incentive for relinquishment of some leases may
increase the opportunity for others to seek and obtain the right to
explore for and perhaps produce oil or gas from those lands.
This approach is similar to that taken when Congress amended the
coal-leasing laws by passing the Coal Leasing Act Amendments of 1976
over President Ford's veto. That 1976 legislation provided for a due-
diligence requirement as part of a comprehensive overhaul of the laws
governing leasing and development of federally owned coal resources--a
provision that some analysts have said had the most immediate practical
effect of any of the legislation's various provisions.
As a result, for several decades the holders of Federal coal leases
have been required by law to diligently develop their leases, which has
aided in the orderly and efficient development of the Nation's coal. I
think a similar reinforcement of existing law for leasing of other
Federal energy resources makes sense.
This bill alone is certainly not all that needs to be done to improve
our energy policies. But I think it can make at least a modest
contribution to achieving that, and so I will support it.
The SPEAKER pro tempore (Ms. DeGette). The question is on the motion
offered by the gentleman from West Virginia (Mr. Rahall) that the House
suspend the rules and pass the bill, H.R. 6251, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Ms. FALLIN. Madam Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.

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