Sen. Hutchison Calls for Expanded & Expedited Domestic Energy Production as Americans Face Soaring Gas Prices

Press Release

Today, U.S. Senator Kay Bailey Hutchison (R-TX), Texas' senior Senator, and Senator Mary Landrieu (D - La.) called for expanded and expedited domestic energy production as U.S. gas prices surge. The lawmakers introduced the Lease Extension and Secure Energy (LEASE) Act of 2011 to grant a one year extension on all oil and gas exploration leases in the Gulf of Mexico that were impacted by the Department of Interior's deep water and shallow water drilling moratoria. Sen. John Cornyn (R-TX) is the lead Republican cosponsor of this bill.

The LEASE Act will allow leaseholders to use the full length of their lease by extending their lease for 12 months. Companies working in the Gulf of Mexico invest millions of dollars exploring and typically spend nearly a decade in the exploration phase before "first oil" is reached. Following a precise and meticulous timeline is extremely important and time lost can sabotage an entire operation impacting energy supply and jobs.

"The LEASE Act is one critical way we can help to bring down gas prices, increase domestic production, and protect American jobs. All offshore energy producers in the Gulf of Mexico are currently being penalized for the mistakes of a few companies responsible for the Deepwater Horizon accident. The drilling moratoria forced energy producers with exploratory leases to sit idle while still having to pay the expenses of the lease and their employees. This is fundamentally unfair," said Sen. Hutchison. "Though the moratoria were lifted, there have been few permits issued. We are trying to restore the time that energy producers lost during the moratoria, at no fault of their own. We have the opportunity to provide greater certainty so that offshore drilling will be able to continue with their energy production plans and invest with confidence in the American workforce - protecting and creating jobs."

"If President Obama refuses to remove the current permitorium blocking jobs along the Gulf Coast, he clearly isn't serious about clearing the road to economic recovery. These American businesses bolster our nation's energy security, provide jobs for thousands of men and women, and fuel the local economy. We need to encourage their growth, not hinder it by putting them at a competitive disadvantage. The longer this Administration chooses to delay on issuing permits, the longer they endanger jobs for thousands of America's Gulf Coast workers" said Sen. Cornyn.

In the wake of the BP Deepwater accident, the DOI ordered lease holders in the Gulf of Mexico to halt all exploration operations - including seismic and drilling operations. At that time 33 leaseholders were conducting exploration drilling, while thousands of leaseholders were in the earlier stages of exploration. While the moratoriums were in place all of the leaseholders continued to pay "rent" as time ticked away on the length of each lease. Today only one deepwater permit and 37 shallow water permits have been approved, while the rest are waiting for their permits to be approved. The LEASE Act extends offshore leases impacted by the U.S. Department of Interior's drilling moratorium for an additional 12 months. In this way, the LEASE Act returns to lessees the lease time taken from them during the moratorium.

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