Responding to the Obama administration’s rollout of a new five-year plan for potential development of the Outer Continental Shelf (OCS), Rep. Edward Markey (D-MA) said he will reintroduce his “Use It or Lose It” legislation that would levy fees on nonproducing oil and natural gas leases when Congress returns from its spring recess this week.

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

The “Use It or Lose It” legislation, which passed the House in the last two years of the Bush administration, would impose an escalating fee on oil and gas drilling rights not being used by producers (see NGI, Jan. 22, 2007). Currently 1,844 leases, or only one-fourth, of a total of 7,316 leases held by producers on the OCS are producing, according to Markey.

By acreage, he said approximately 8.89 million acres out of a total of 39.3 million acres leased are producing, or about a 22% rate of use. “Oil companies hold the offshore drilling rights to an area the size of Pennsylvania on which they aren’t actually drilling,” Markey said.

In its fiscal year 2011 budget, President Obama proposed imposing a fee on nonproducing leases to push producers to move quickly to get oil to market or release the leases (see NGI, Feb. 8). The budget estimated that the proposed fee would generate more than $400 million over the next decade.

Markey said his legislation would provide the administration with the authority to levy the fee.

©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.