According to the White House, now too many oil companies “prefer to make super profits without investing additional investments” in increasing their production.
The American authorities intend to seek from local oil companies to start production at fields that they do not use. This was announced on Thursday by U.S. President Joe Biden.
“Now the oil and gas industry has put under the cloth almost 9 thousand unused, but approved permits for production on federal lands,” he said. – Therefore, <…> I call for a “pay or pump” policy. Congress should force companies to pay fees for development sites located on federal lands that they have not used for years.” Biden stressed that those companies that are already developing “will not suffer,” and those “who are sitting on unused lease agreements and idle wells will either have to start production or pay for their inaction.”
According to the White House, now too many oil companies “prefer to make super profits without investing additional investments” in increasing their production. At the same time, at the moment, the oil and gas industry, according to the estimates of the Washington administration, leases territories of almost 5 million hectares that are federally owned. At the same time, 3.5 thousand hectares of them are not involved in any way, although the government of the country has long approved the production of hydrocarbons in these areas.
In this regard, Biden calls on the U.S. Congress to oblige oil and gas companies to pay duties for leased fields that have not been used for years, as well as for hectares of federal lands on which oil and gas production is not conducted. The White House explained that companies that regularly extract hydrocarbons on the territory leased from the state are not threatened by these duties. However, those who do not use the leased land will soon face a dilemma: either start producing hydrocarbons on them, or pay duties for each unused field and hectares of land, the American authorities explained.