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Why Do Oil Companies Refuse To Drill On 38,317,322 Acres Already Leased?

Resources Committee Draws Wrong Conclusions

This story just keeps getting better and better. Read this new legislation.

Imagine for a second that you own a small movie theater. You think it is a good idea to start selling hot dogs. You go buy the roller and the initial supply of hot dogs. You pay to train your employees. You pay for the advertising. Then no one buys any. You don't sell one. Do you keep spending money to heat them and throw them away, or do you stop?

Now imagine after that, the you want to start selling caramel popcorn. Well, the government tells you that before you can buy a caramel popcorn popper, you have to keep spending money, buying, heating and throwing away hot dogs. No caramel popcorn unless you are.

Here is the kicker.

The Responsible Ownership of Public Lands Act will assess an escalating fee on land that oil companies have leased but are not using for production. This fee would be a mere $5 per acre for the first 3 years that a lease is not producing, but increase to $25 per acre in the fourth year and $50 per acre in subsequent years, providing a strong incentive for oil companies to stop stockpiling these leases and begin using them. The revenue raised from these fees will go towards renewable energy and energy efficiency investments that will reduce our dependence on oil, as well as the Low Income Home Energy Assistance Program (LIHEAP).

Not only are your hot dogs not selling, you will have to pay $25 to a windmill owner for every hour you are not heating them. What hot dogs have to do with windmills I will NEVER know!

This is the same with the oil companies. They cannot look at the land before they lease it. They have to jump in and buy a lease. Then they find it has no oil, or not enough to be profitable, so they move on. They still have to pay the lease. Now you want them pay for a totally unrelated industry also? For what? What have they done? They government set up the rules. Now the government wants to change them in the middle of the game.

laissez faire