During last Tuesday's Presidential debate, President Barack Obama called out oil companies for leaving oil drilling leases of public land idle, repeating calls from his administration and Congressional Democrats for the oil companies to "Use It or Lose It."
A new investigative report released today tells Americans for the first time exactly which companies are not using -- and also not losing -- oil drilling leases in offshore areas in the Gulf of Mexico, withholding oil production from the American people while holding onto their taxpayer-owned land. Previously, only aggregate information was available regarding the overall number and size of unused offshore leases, without a company-specific breakdown.
"Use It or Lose It: Big Oil not using drilling leases in the Gulf of Mexico" was prepared by the Democratic staff of the Natural Resources Committee, at the direction of the top Democrat on the committee, Rep. Ed Markey (D-Mass.), based on data requested by Rep. Markey over the last several months from the Department of Interior regarding all leases held in the Gulf of Mexico.
Major findings of the report include:
--More than 100 companies currently hold, but are not drilling on, nearly 3,700 drilling leases in the Gulf of Mexico comprising an area the size of South Carolina.
--The top 5 oil companies (BP, ExxonMobil, Chevron, ConocoPhillips and Shell) hold 8 million of those acres, or almost 40 percent of those leases. BP leads the group, holding unused more than 2.5 million acres with no development taking place; Chevron, 1.4 million acres; Exxon, 1.4 million acres; Shell, 1.3 million acres; and Conoco, 1.1 million acres.
"The oil companies are sitting on huge reserves of oil that they're not even using, and then they come back asking for more areas to be opened up for them to drill," said Rep. Markey. "President Obama is right. When it comes to the oil drilling leases these companies hold on America's public land, they need to use it or lose it to a company that will drill."
Rep. Markey and Rep. Rush Holt (D-N.J.) introduced the "USE IT" Act in 2011 (HR 927) to compel oil companies to produce on the drilling leases they already own by imposing an escalating fee after the first few years. House Republicans have failed to schedule action on this legislation, and in fact have twice voted this session of Congress to allow companies to keep holding these leases without producing.
The Obama administration has also put in place new incentives to spur development of currently idle offshore drilling leases. Specifically, the administration increased rental rates for offshore leases, raising the cost of sitting idle, and raised the minimum required bid in offshore lease auctions, so that companies "invest in leases that they are more likely to develop," according to the Interior Department.
A report released by the Department of Interior in May also underscores the scope of the idle leases issue. The Interior Department report found that more than 70 percent of the tens of millions of offshore acres currently under lease are inactive, neither producing nor currently subject to approved or pending exploration or development plans. Out of nearly 36 million acres leased offshore, only about 10 million acres are active -- leaving nearly 72 percent of the offshore leased area idle, according to the report.
Under President Obama, oil production in America is at an 18-year high. The Interior Department recently issued a five-year offshore leasing plan that would make available more than 75 percent of recoverable offshore oil and gas resources, and in 2011 the department held three of the top five largest onshore lease sales in its history.