Use it or Lose it, Play or Pay, Drill or Get out of Dodge….Fails

By June 26, 2008Energy

H.R. 6251, the winsomely titled Responsible Federal Oil and Gas Lease Act, fell far short of the two-thirds margin needed to pass under a suspension of the rules, 223-195. Reuters story here.

The White House issued a tough and clearly worded veto threat earlier today. From the Statement of Administration Policy:

Some have argued that leaseholders are “sitting on” leases rather than producing oil from them. This absurd claim ignores the tremendous incentive for a firm to drill when oil prices exceed $130 per barrel. Firms want to drill where they can most profitably extract oil. A firm that is not drilling in a particular area either cannot find recoverable oil there, or thinks it can find oil that can be extracted at lower cost, or has not yet completed the more than a dozen plans and permits needed to allow drilling. Congress should be allowing firms to find oil where it will produce the least expensive gasoline for the American driver.

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