Markey: When It Comes to New Drilling, Oil Companies Should First “Use It or Lose It"

Following Obama Admin. Drilling Plan, Chairman Announces Re-Introduction of “Use It or Lose It” Legislation Included in Obama Budget; Hails Obama Decision to Keep New England Safe from Drilling

Following President Obama’s announcement of his 5-year offshore drilling plan, Rep. Edward J. Markey (D-Mass.) announced that he would re-introduce his “Use It or Lose It” legislation when Congress returns from its spring recess. The legislation would provide a strong incentive to oil companies to drill in offshore leases they already own before purchasing new leases, and the concept was included in the Obama administration’s budget.

“Before oil companies drill off thousands of miles of pristine coastline, they should first use the thousands of drilling leases they already own,” said Rep. Markey, chair of the Select Committee on Energy Independence and Global Warming.

The “Use It or Lose It” legislation, which passed the House of Representatives several times during the 110th Congress, would impose an escalating fee on oil drilling rights not being used by oil companies. Currently, there are 1844 producing leases out of 7316 total leases on the major offshore area of America’s coast, the so-called Outer Continental Shelf, or about a 25 percent rate of use. By area, there are 8,894,428 acres producing on the OCS out of 39,331,641 total acres leased to oil companies, or about a 22 percent rate of use.

“Oil companies hold the offshore drilling rights to an area the size of Pennsylvania on which they aren’t actually drilling,” said Rep. Markey.

The Obama administration included the “Use It or Lose It” concept in their recent budget request. The administration’s budget proposed a fee on non-producing oil leases to provide an incentive to oil companies to move quickly to get oil to the market or to release the leases. The budget estimated the offshore program would generate more than $400 million over the next ten years. Rep. Markey’s bill would provide the administration with the authority to levy such a fee.

“President Obama’s announcement today demonstrates his commitment to a comprehensive view of our energy policy,” said Rep. Markey. “I hope and trust that today's announcement will soon be followed by others that approve development of offshore wind energy resources, such as the Cape Wind project. For far too long, development of offshore wind and onshore wind and solar energy projects on public lands has had a lower priority than exploitation of oil and gas resources on public lands. That needs to change.”

Rep. Markey also thanked President Obama for keeping the shores of New England safe from new oil drilling. After the Congressional moratorium on offshore drilling was lifted in 2009, Rep. Markey introduced legislation that passed the House that would protect Georges Bank – a key economic and environmental area off New England.

“The only time oil and fish should mix is in fish and chips,” said Rep. Markey. “We must ensure that iconic places like Georges Bank never become ExxonMobil’s bank.”

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