Highlights of Schauer’s “Drill Responsibly-Create New Energy Jobs” include:

• Demand responsible oil production in currently leased land
• If no production in five years, land goes back to state to be re-leased
• Financial penalties for stockpiling land to profit from reserves without producing
• No new leases unless current ones are used
• Modernize lease system to make sure taxpayers and consumers benefit from production
• Switch from the outdated 1/6 royalty system to a 50/50 "working interest" model - as the federal government and other countries are moving toward. Other states like Alaska, Colorado, Texas, Wyoming, Oklahoma, and Louisiana all make more compensation for their taxpayers from production
• Create fund where additional revenue is used to transition to renewable energy projects and job creation

According to Legislative Service Bureau estimates, there are approximately 4,187 active leases in Michigan on which oil is not being produced, 1,667 pending leases on which oil is not being produced, and only 3,773 that are actually producing oil. This legislation would force companies to make use of the resources they have or allow them to go to companies who will.

LANSING, Mich. - Oil and gas companies would pay Michigan higher royalty fees when leasing government-owned land under a plan by a top Democrat who wants to spend the extra revenue on renewable energy projects.

[...]

The "use-it-or-lose-it" approach is needed because oil companies are claiming leases as assets but letting the land sit dormant, said the proposal's sponsor, Democratic state Sen. Mark Schauer of Battle Creek. There are more than 4,000 active leases in Michigan where oil or gas isn't being produced, he said.

"They're making money on Wall Street, but they're not generating oil and not increasing supplies to reduce the cost at the pump," Schauer said.

Labels: 2008 Election, Energy, Issues, Mark Schauer, Michigan Senate, Oil, Tim Walberg

posted by Fitzy  # 9:37 PM