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By Rachel Tiede December 5, 2016
Back to Require drilling on current oil and gas leases

Early proposals disappeared and never resurfaced

Eight years ago, Democrats were throwing around the phrase "use it or lose it" in regards to oil and gas leases.

In other words, President Barack Obama promised to sign legislation to force companies to develop current oil and gas leases before getting new ones.

In 2010, we rated the status of this promise as Compromise, since Obama had introduced ideas in his budget, and then-House Natural Resources Committee chairman Nick Rahall floated a draft bill. But neither survived to become law.

Six years later, there are no laws requiring drilling on current onshore leases.

"This is certainly an issue of major concern since so many acres of public land are being controlled by the oil and gas industry without benefit to the American taxpayer from production," said Nada Culver, a senior counsel and director for The Wilderness Society.

The story is pretty much the same for offshore wells.

Michael LeVine, an offshore oil and gas regulation expert for Oceana, said that offshore leases are usually sold for five- to ten-year primary terms, and they will expire if no oil is produced. However, the leases can be extended with the production of oil or gas.

Companies are allowed to hold multiple non-producing leases at a time, and are not required to drill on them before bidding on new leases.

LeVine added that the rent increases the longer the lease is held. Therefore, he says, holding on to a non-producing lease could be expensive and cause a company to give it up.

Obama promised to "require drilling on current oil and gas leases" before companies could lease new lands. While early proposals existed, there are no laws that bar companies from bidding on new leases while holding on to non-producing leases. We rate this Promise Broken.

Our Sources

Interview, Amy Mall, Natural Resources Defense Council Land & Wildlife Program senior policy analyst, Nov. 23, 2016

Interview, Michael LeVine, Pacific senior counsel at Oceana, Nov. 30, 2016

Email interview, Nada Culver, senior counsel and director of The Wilderness Society's BLM Action Center, Nov. 28, 2016

Email interview, Connie Gillette, deputy chief, Bureau of Ocean Energy Management OPA and media relations manager, Nov. 17, 2016

Bureau of Ocean Energy Management, Final Rule Summary, Oct. 12, 2016

Bureau of Ocean Energy Management, 30 CFR Parts 550, 556, 559, et al. Leasing of Sulfur or Oil and Gas in the Outer Continental Shelf; Final Rule, Oct. 12, 2016