News Media Contact:
Jeff Eshelman /
202.857.4722 / 800.433.2851

For Immediate Release
July 15, 2010

Earlier today, the U.S. House of Representatives' Natural Resources Committee approved (27-21) the Consolidated Land, Energy, and Aquatic Resources (CLEAR) Act, legislation that will add layers of burdensome red-tape to domestic oil and natural gas production. In addition to the ongoing offshore moratorium put forth by the White House - which could ultimately result in the loss of tens of thousands of good-paying jobs - this misguided legislation will unnecessarily curtail responsible American oil and natural gas production on taxpayer-owned land and in waters offshore.

Barry Russell, president and CEO of the Independent Petroleum Association of America (IPAA), which represents 5,000 U.S. oil and natural gas producers that drill 90 percent of the nation's wells, wrote a letter to Congressman Nick Rahall (D-WV), chairman of the House panel and the lead sponsor of the legislation, this week expressing opposition to the CLEAR Act, and issued this statement today regarding the CLEAR Act's devastating economic and national security consequences:

"IPAA and its members - who are responsible for drilling 90 percent of the nation's wells - understand full-well that an exhaustive investigation must take place to determine what caused the tragedy in the Gulf, and we support commonsense policies that will help ensure that such incidents do not occur again.

"However, the CLEAR Act is focused more on perceived short-term political gain than on actual solutions. Following the Exxon-Valdez incident, Congress took appropriate and well-thought out action over nearly 15 months, evaluating the causes of that accident, and what needed to be done to address and mitigate those problems, before enacting sweeping legislation. Unfortunately, leaders in Congress are now legislating in a vacuum, as the cause of the ongoing Gulf incident has yet to be determined.

"This legislation, coupled with the Administration's offshore moratorium, will continue to lead to fewer good-paying American jobs, and less stable and less secure supplies of energy needed to grow our economy. Just this week, in fact, the second rig operating in the Gulf left our oceans for foreign waters, with no plans to return. Every rig that sits idle, and every rig that leaves American waters, represents more energy that our nation will be forced to import from some of the world's most unfriendly regimes.

"The uncertainty that leaders in Washington are creating for America's independent oil and natural gas producers is not justifiable, and flies in the face of commonsense."

Summary of some negative CLEAR Act Provisions: 

• Broadly, the legislation will make offshore and onshore leasing more expensive, increase uncertainty, implement a "Washington down approach to federal land management" and create new layers of bureaucracy.

• The legislation will sever the leasing, permitting and environmental analysis from the overall control of the Bureau of Land Management on onshore federal lands.  This will create more bureaucracy and make it more difficult for independent producers to obtain leases.

• Bill places a higher value on other land uses over oil and natural gas exploration.  This turns the "multiple use" concept of federal land management outlined in FLPMA on its head.

• Diligent development language - "Use-it-or-lose-it" in the legislation (if you don't begin exploration within a given amount of time, you lose the lease that you legally acquired).  This language displays a clear lack of understanding of the business of exploration and production of oil and natural gas on federal lands.  "One-size-fits-all" approach to federal land management will not work.

• Makes significant changes to the oil and gas leasing system on federal lands.

• Eliminates the Royalty in Kind (RIK) program for both onshore and offshore lands.  The payment of royalties through the RIK simplifies the complex royalty evaluation process that must be done under a valuation system (you pay the government royalties in product versus monetary payments). 

• Implements a $2 per barrel fee on American oil and $20 per Btu of natural gas from production on existing leases.  This will only further discourage production on federal lands in the United States and increase imports.

• Creates federal disclosure requirements of certain hydraulic fracturing information for public land operations.