Interior Secretary Ken Salazar has not provided assurances that fees won't be assessed on nonproducing leases being held up by the federal government, said the ranking member of the Senate Energy and Natural Resources Committee.

"Mr. Secretary I did not hear you say that there will not be fees imposed for nonproducing leases if it is, in fact, our own federal agencies that are prohibiting production...I would like the assurance that as long as there is the effort being made, [producers] won't be penalized when it is the federal government that is holding us back," Sen. Lisa Murkowski (R-AK) said during a hearing Wednesday on Interior's budget for fiscal year (FY) 2012.

Exploration projects by ConocoPhillips -- the CD-5 field in the National Petroleum Reserve-Alaska (NPR-A) -- and Shell have been stalled because of federal obstruction, she said. Shell's plan to drill an exploratory well in the Beaufort Sea has been held up for years over an Environmental Protection Agency air permit (see Daily GPI, Jan. 5).

"Is it the position of the department that penalties for not producing, whether onshore in NPR-A or offshore in the Chukchi [and Beaufort seas], would be assessed if it is the agency that is holding up the production or the attempt to produce?" Murkowski asked.

They're "trying their [darnedest] to get to production and it is the federal government, it is the agencies, that are keeping [them] from doing this. But if the department's approach is going to be 'we're going to assess fees...because you haven't been producing,' this is a real issue for us."

The Obama administration has proposed such a fee as part of Interior Department's budget for FY 2012 (see Daily GPI, Feb. 15). And Rep. Edward Markey (D-MA) said he and Rep. Rush Holt (D-NJ) introduced legislation Thursday to establish an escalating fee on the "tens of millions of acres of public lands" that oil and natural gas producers have under leases but which are not producing see (see Daily GPI, March 4).

Salazar said he supported the Markey-Holt measure and would work with them on the "specifics of the legislation." The lawmakers are seeking to compel more production on existing leases and prevent the holders of nonproducing leases from acquiring new leases in the future, a Markey spokeswoman said.

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