Murkowski Questions Secretary Salazar over Punitive Fees on Oil Leases

WASHINGTON, D.C. – U.S. Sen. Lisa Murkowski, R-Alaska, on Wednesday questioned Interior Secretary Ken Salazar on whether the Department of Interior will fine energy companies for failing to produce oil and natural gas on federal leases if those companies have been blocked from exploration or production by the actions of federal agencies.

Exploration projects by ConocoPhillips – the CD-5 field in the National Petroleum Reserve-Alaska – and Shell have been stalled because of federal obstruction, Murkowski said. Shell’s plan to drill an exploratory well in the Beaufort Sea has been held up for years over a EPA air permit.

“Is it the position of the department that penalties for not producing, whether onshore in NPR-A or offshore in the Chukchi [and Beaufort seas], would be assessed if it is the agency that is holding up the production or the attempt to produce?” Murkowski said. They’re “trying [their] darndest to get to production and it is the federal government, it is the agencies, that are keeping [them] from doing this. But if the department’s approach is going to be we’re going to assess fees, we’re going to assess penalties, because you haven’t been producing, this is a real issue for us.”

Salazar failed to provide Murkowski, the ranking Republican on the Senate Energy and natural Resources Committee, assurances that penalties would not be assessed when the lack of production was due to delays caused by federal agencies.

“Mr. Secretary, I did not hear you say that there will not be fees imposed for non-producing leases if it is, in fact, our own federal agencies that are prohibiting this production. In both of these cases it has been the EPA that has held [development] off at every turn.” Murkowski said. “I would like the assurance that as long as there is the effort being made, [they] won’t be penalized when it is the federal government that is holding us back.”

“I would suggest that a [nearly $4] billion [investment] by Shell demonstrates due diligence over a 5-year period,” Murkowski added.

Video of the full interaction can be viewed here.