FOR IMMEDIATE RELEASE
July 17, 2008
Brian Kennedy (202) 434-8200
706% inrease in lease protests threatens American energy supplies
WASHINGTON, D.C. – With consumers and the economy suffering the consequences of skyrocketing energy prices, lawmakers in Washington continue to advance sound bites instead of solutions. Daniel Kish, senior vice president of the Institute for Energy Research (IER), issued the following statement:
“While Americans struggle to pay their fuel and utility bills, their government continues to play political games that will only weaken our nation’s economy and our family budgets,” Kish said. “Today’s ‘Drill’ bill is yet another chapter in the epic disconnect between the American people – who understand that more supply is the solution to shortage driven high prices – and their elected leaders, who refuse to lift restrictions on new areas of the country to increase energy supplies.”
On those few areas the government attempts to lease for additional energy production, protests, appeals and lawsuits appear faster than politicians scrambling for a camera. According to the Bureau of Land Management, lease protests averaged 167 per year between 1997 and 2000; between 2001 and 2007, they numbered 1,180 per year. This is a 706% increase.
Yesterday in New Mexico, the Department of Interior held a 78 parcel lease sale on lands already available for drilling. 100% of them were protested by groups opposed to U.S. energy production. These protests will no doubt delay new energy supplies and increase costs to consumers.
Drilling for Real Solutions in the ‘Drill’ Bill: Section by Section, Just More Dry Holes
Section 1: Bill Title
The Act has been dubbed the Drill Responsibly in Leased Lands – or DRILL – Act of 2008. However, nothing in its following sections will increase domestic energy production beyond what is already scheduled.
Section 2. Lease Sales in the National Petroleum Reserve – Alaska
This section requires that lease sales be conducted once a year. This is something that is currently allowed, but not done because NPR-A’s Indiana-sized area has no infrastructure. In addition, a history of dilatory lawsuits has made it an area of limited interest to energy producers. This section also seeks to expedite permits in the NPR-A, a positive step. However, it does nothing to tackle the biggest problem with developing new energy: dilatory protests and lawsuits. Any genuine effort must involve putting a stop to the legal blocking and tackling of groups opposed to American energy production. Incidentally, Congress should address this issue nationwide.
Section 3: Pipeline Construction in the National Petroleum Reserve – Alaska
Pipelines in NPRA have been held up by appeals, protests and lawsuits, not energy producers.
Section 4: Alaska Natural Gas Pipeline Project Facilitation
This section authorizes the president to exercise authority he already has to facilitate something he is already facilitating. In short, this section achieves nothing.
Section 5: Project Labor Agreements
A last minute bonus prize for organized labor, but creates no new energy whatsoever.
Section 6: Ban on Export of Alaskan Oil
A nice talking point, but the United States does not export any Alaskan oil, and has not since 2000. California exports more petroleum products than Alaska.
Section 7: Issuance of New Leases
This section was crafted using synonyms to restate existing laws, including:
- The Mineral Leasing Act (for onshore production), which stipulates that an oil company must have a producing well within 10 years or surrender the leases. Source: 30 U.S.C. 226(e)
- The Outer Continental Shelf Lands Act: (for offshore production), which stipulates that an oil company must produce energy between 5 to 10 years (in the government’s discretion) or surrender the lease. Source: 43 U.S.C. 1337(b)
- Penalties in U.S. Code: The federal government can cancel a lease if a producer fails to live up to the terms of the lease, the law or federal regulations. Source: 30 USC 188(a) and (b) and 43 CFR 3108.3 (a) and (b).
Section 8: Fair Return on Production of Federal Oil and Gas Resources
- This section restates current law and practice. In fact, the government increased royalties on outer continental shelf leases by 50% last year, making it more expensive to produce energy in America.
The Institute for Energy Research (IER) is a not-for-profit public foundation that conducts intensive research and analysis on the functions, operations, and government regulation of global energy markets. Founded in 1989, IER is funded entirely by tax deductible contributions from individuals, foundations and corporations. No financial support is sought for or accepted from government (taxpayers).