INTRODUCTION OF THE FEDERAL OIL AND GAS LEASE MANAGEMENT IMPROVEMENT ACT OF 1999 -- HON. BARBARA CUBIN (Extensions of Remarks - May 27, 1999)

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HON. BARBARA CUBIN OF WYOMING IN THE HOUSE OF REPRESENTATIVES THURSDAY, MAY 27, 1999

Mrs. CUBIN. Mr. Speaker, production of oil and gas from our public lands is fast becoming a rarity. Today I am introducing a bill, together with Rep. JOE SKEEN of New Mexico, which we trust will stem this decline, and encourage investment in federal mineral leases. We call it the Federal Oil and Gas Lease Management Improvement Act of 1999. Senator MURKOWSKI has already introduced a companion bill in the other body.

The ``oil patch'' in the United States is in tough shape. Consumers blissfully enjoyed record low gasoline prices until very recently, but producers have suffered immeasurably from the diminished proceeds they have received for their crude oil for many, many months. Even the recent slow climb back to semi-respectable oil and gas prices in the last few weeks has turned back down again in the last week of trading. Our bill, is will provide some incentives to federal oil and gas lessees to ``stay the course'' when prices drop below $18 per barrel, or $2.30 per million BTU's for natural gas. Furthermore, our bill says to producers ``you know better than the government what your make or break price threshold is, so if low prices are sustained your lease terms are suspended, at your option, not the Secretary of the Interior's.''

But, Mr. Speaker, its not just producers who are being squeezed by today's global oil price environment. So are the oil patch states for which their share of federal mineral receipts are critical in meeting budget priorities. For many public land states, these receipts are dedicated to education trust funds, yet since 1991 these states have had to ``share'' in the burden of the federal government's costs to administer the Mineral Leasing Act before receiving their half of the remaining revenue. My home state of Wyoming has had over seven million dollars annually taken from the receipts flowing into its Treasury because of this law. And, these states, until now have had no option to take over the federal government's responsibilities and perform the same tasks more cost effectively.

That will change with the Federal Oil and Gas Lease Management Improvement Act. This bill offers states the opportunity to take over post-lease issuance duties from the federal Bureau of Land Management and allow the state's oil and gas conservation commission to perform those functions on federal leases within their borders, if they so choose. As an incentive to take over the fed program, thereby saving federal budget outlays, volunteering states would no longer have to share in the federal administrative burden which unfairly diminishes their school funds.

Mr. Speaker, I urge my colleagues from other public land states to cosponsor this legislation and work with me toward its passage. This bill seeks the balance necessary to keep a domestic oil and gas industry working to explore and develop our public mineral resources. Without such balance, the long term decline in domestic production will continue to worsen and the royalties the taxpayers receive for such production will decline as well. Our oil patch states have shown the way this year by passing numerous severance tax reductions and other legislation designed to keep production on-stream and the workers associated with that production paying taxes. The Federal Oil and Gas Lease Management Improvement Act of 1999 is a small step in that direction by the federal government, and I urge its adoption.
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