U.S. Senator Kay Bailey Hutchison (R-Texas) today testified at a Senate Energy and Natural Resources Committee hearing on oil and gas development legislation and urged the Committee to approve her LEASE Act. The LEASE Act, introduced by Sen. Hutchison in March, would grant all exploratory leaseholders who were operating in the Gulf of Mexico at the time of the Deepwater Horizon accident 12 month lease extensions. Gulf oil and gas producers were forced to sit idle during the drilling moratoria and continued to pay while time continued to tick away on their leases.
Watch Sen. Hutchison's testimony here or read excerpts from her testimony below.
Hearing on Oil and Gas Development Legislation
Senate Energy and Natural Resources Committee
Testimony of Senator Kay Bailey Hutchison
"The LEASE Act fairly restores time that was lost as a result of the offshore moratoria by extending the impacted leases by one year. So everyone who has had a lease approved and has gone through all of the effort to do that would have their leases extended for the period of the moratorium so that they would be able to come back and continue to explore.
"The commonsense legislation does have bipartisan support. Recently, President Obama stated that his administration is extending drilling leases in the areas of the Gulf that were impacted by the moratorium. I'm please that the president recognizes that these energy producers need relief. However, the administration has not said that [it] will make them whole. The president's statement leaves a lot of questions unanswered. Which leases will be extended? That wasn't in his statement at all. How long will the selected leases be extended? Senator Landrieu's and my bill makes it very clear, answers those questions, and leaves no room for confusion.
"By passing this legislation we will be ensuring that all moratorium-impacted leases are extended. The Gulf of Mexico is one of the most important regions in the country for the exploration and development. It accounts for 30 percent of the oil produced in America, and 13 percent of the gas produced in our country. Just over a year ago, the president imposed a sweeping offshore moratorium. When the moratorium was put in place, thousands of leases sat idle in the Gulf while the lessees continued to pay the expenses of the lease and the payroll of their employees.
"Since the moratorium was lifted in October, operators have seen a very slow permit process for approval to go back into exploration. The Department of the Interior has issued 53 shallow water and 14 deep water permits since last October. The monthly approval rate before the moratorium was approximately 10 shallow water and 8 deep water every month. This year alone, over 350 offshore leases are due to expire, many of which have not had the opportunity to be developed because of the moratorium.
"I hope that this Committee will insert our legislation into the bills that will go to the floor so that we can assure these companies can get the capital resources and the partnerships to continue the exploration and bring down the price of gasoline at the pump for all of our citizens."