[Congressional Record Volume 155, Number 122 (Thursday, August 6, 2009)]
[Senate]
[Pages S9020-S9022]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FEINGOLD (for himself, Mr. Dodd, and Mr. Menendez):
  S. 1623. A bill 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 land subject to the existing leases 
or relinquish the leases, and for other purposes; to the Committee on 
Energy and Natural Resources.
  Mr. FEINGOLD. Mr. President, today I am reintroducing legislation 
that seeks to answer a question more and more Americans are asking in 
light of our economic woes and our struggle toward energy independence: 
Why aren't the oil companies developing 65 million acres, or nearly 75 
percent, of land that they are leasing from the U.S. Government? Those 
same companies and some of my colleagues continue to argue that we need 
to open more Federal lands to drilling and recently have been insisting 
on opening up part of the Gulf of Mexico off Florida's coast that 
Congress agreed to keep closed during debate in 2005 for military and 
security purposes. I would first like to know why the oil companies are 
not producing on most of the Federal lands they already have under 
lease.
  Last year, at a Senate Judiciary Committee hearing, I had the chance 
to ask top oil executives just that question. They couldn't come up 
with a good explanation. In fact, one of the executives told me that 
they have the manpower and infrastructure to put all their existing 
leases of Federal lands into oil production.
  I find this troubling. No one is talking about pulling oil out of a 
hat. But with nearly 75 percent of currently leased Federal lands and 
waters not producing oil and gas, Congress must insist on some 
accountability. This is why today I am introducing--along with Senators 
Dodd and Menendez--the Responsible Federal Oil and Gas Lease Act, also 
known as ``Use It or Lose It'' legislation. This bill says that if oil 
and gas companies want to lease additional Federal lands, they must 
either be producing or diligently developing their existing Federal 
leases, or they have to first give up those leases. Under my bill, the 
Department of the Interior is required to establish diligent 
development benchmarks, which will encourage leaseholders to 
demonstrate they are taking steps that may lead to oil and gas 
production. This is a responsible way to increase production and keep 
the private sector accountable for production of existing Federal 
resources.
  Last fall, the Government Accountability Office issued a report, 
``Oil and Gas Leasing: Interior Could Do More to Encourage Diligent 
Development,'' that looked at whether enough is being done to ensure 
oil companies are taking steps to develop Federal oil and gas leases. 
The report found that the Department of the Interior--whose Minerals 
Management Service manages offshore leases and Bureau of Land 
Management manages onshore and National Petroleum Reserve leases--lags 
behind State and private landowner efforts to encourage development of 
land leased for oil and gas development. The GAO recommends that the 
Secretary of the Interior ``develop a strategy to evaluate options to 
encourage faster development of its oil and gas leases.''
  Though both MMS and BLM require ``reasonable diligence'' in 
developing and producing oil and gas on Federal leases, the GAO found 
that the Interior Department has not clearly defined what activities or 
timeframes constitute reasonable diligence--something my bill requires 
the agency to do. Currently, the GAO concludes that leaseholders, in 
general, are not required to take actions to develop a

[[Page S9022]]

lease during the primary term. The only specific diligent development 
requirement that Interior officials identified to the GAO applies only 
to lessees of 8-year leases in the Gulf of Mexico and requires drilling 
to occur before the end of the fifth year or else the lease terminates. 
However, these leases represent less than 1 percent of the total lease 
universe.
  In addition to the GAO evaluation, the Department of the Interior's 
Office of the Inspector General issued a report in February 2009 on its 
investigation of whether oil and gas companies were adequately 
developing Federal leases and whether the Department of the Interior 
was ensuring companies bring their leases into production. The 
inspector general concluded that, while there is no guarantee that a 
particular lease contains oil and gas in commercial quantities, there 
are no requirements to ensure lessees are taking steps to reach this 
conclusion and to ensure the development of leases capable of 
production. Specifically, the inspector general found there are no 
requirements for the Department to monitor production progress or 
compel companies to develop leases and there is no requirement to 
detail activity on nonproducing leases. My bill will ensure the Federal 
Government develops diligent development requirements for oil and gas 
leases.
  With over 100 billion barrels of oil under Federal lands and waters 
that are being leased or are available for leasing, Congress must 
properly encourage their development. This won't solve our energy 
problems--the unfortunate truth is that in today's global market, gas 
prices are dictated less by our domestic production and more by OPEC's 
actions. Nevertheless, Congress must ensure appropriate oversight of 
our Federally leased lands and waters, as we simultaneously reduce our 
dependence on foreign oil through continuing to be a world leader in 
oil and gas production, decreasing our demand of oil and gas since we 
are the No. 1 consumer of both in the world, and pursuing alternative 
energy sources especially in the transportation sector.
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