Sens. Murkowski and Begich Opposed to ‘Use it or Lose it’

Unwarranted Fees on Energy Companies Will Result in Less Production, More Imports, and Higher Prices

WASHINGTON, DC – U.S. Sens. Lisa Murkowski, R-Alaska, and Mark Begich, D-Alaska, today blasted proposed legislation – the so-called “Use It or Lose It” bill offered by Democratic Senators Bill Nelson, Bob Menendez and Chuck Schumer – that would penalize companies for leasing federal lands and waters for energy production.

Murkowski, the ranking member of the Senate Energy and Natural Resources Committee, said the bill was an attempt to shift blame for rising gasoline prices to energy producers. 

“While I don’t accept my colleagues’ analysis, I am glad to see them acknowledge that increasing domestic oil production will help address rising energy prices,” Murkowski said. “Unfortunately, their bill is misguided. Our laws already reflect a use-it-or-lose-it policy; that’s why we have lease terms and a range of lease fees.  It is the current administration’s intentional slowdown of the permitting process that is stopping millions of acres onshore and offshore from producing the energy we need. In Alaska, ConocoPhillips and Shell have both seen work on promising oil projects blocked by government obstruction. To hold them responsible – and force them to pay for delays that are not their fault – is simply absurd.”

Sen. Begich:

“I’m glad to hear that some of my Senate colleagues are as impatient as I am to develop our domestic oil and gas reserves,” Begich said. “However, the most important thing we can do to encourage oil companies to develop existing leases is to clear the bureaucratic red tape in federal agencies and minimize the roadblocks to development. In Alaska, responsible development efforts on federal land have regularly been stalled or stopped in their tracks. Before we impose new punishments on the industry, let’s reexamine what’s not working with leases in the National Petroleum Reserve-Alaska, federal land set aside specifically for oil and gas development, and efforts to develop reserves in the Beaufort and Chukchi Seas.”

Shell has invested nearly $4 billion in leases off Alaska’s northern coast, but its exploration plans have been blocked for five years by permitting delays and environmental lawsuits.

“Shell’s willingness to invest such a massive amount of money shows they’re serious about producing energy for this nation,” Murkowski said. “They didn’t buy those leases so they could hold company picnics in the Chukchi Sea.” 

Murkowski also pointed out that opening new lands to leasing – instead of claiming that existing leases could produce more – would be a far more effective approach for increasing domestic oil production.

“The reality is that more than 90 percent of federal offshore and onshore areas that could be leased are not,” Murkowski said. “We have billions of barrels of oil within our own borders just waiting to be discovered and developed. That all adds up to very real amounts of revenue and thousands of well-paying American jobs. It’s time the federal government sends the market a signal that we’re serious about producing our own resources by taking steps to encourage companies to produce instead of trying to run them off leases.”

The Interior Department already gives federal leaseholders a deadline of five to 10 years to develop an area’s oil and natural gas resources, and the Secretary of the Interior has the authority to cancel leases of companies that fail to comply with federal regulations.

The Mineral Leasing Act requires companies with onshore leases to begin production within 10 years or surrender the leases. The Outer Continental Shelf Lands Act requires companies with offshore leases must produce energy between five to 10 years or surrender the lease.