Bill Overview
Title: Use it or Lose it Act of 2022
Description: This bill requires holders of certain offshore and onshore oil and gas leases to diligently develop their leases. The Department of the Interior may assess an annual fee against a leaseholder who fails to appropriately develop a lease.
Sponsors: Sen. Menendez, Robert [D-NJ]
Target Audience
Population: People employed in oil & gas sector globally
Estimated Size: 2500000
- The bill targets holders of certain offshore and onshore oil and gas leases who are not diligently developing these leases.
- Such leaseholders are typically corporations or companies involved in natural resources extraction.
- The companies involved in oil and gas extraction are usually global in nature, having operations and impacts around the world.
- Because the companies are being targeted for financial penalties (fees) for non-development, this could lead both to increased production activities or financial adjustments within these companies.
Reasoning
- The Use it or Lose it Act directly targets companies and indirectly affects individuals working in those companies.
- Most impact will be seen among those who are directly employed in exploration and development operations of onshore and offshore fields under federal leases.
- The policy would mainly influence corporate strategies leading to possible employment adjustments, development actions, or other financial decisions.
- There will be variation in the impact based on roles - executives and planners may see changes first while field workers might be affected through changes in field operations and investments.
- Considering the budget, the implementation will likely focus on larger leaseholders with significant undeveloped assets, affecting their workforce accordingly.
Simulated Interviews
Field Operations Manager (Houston, TX)
Age: 45 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- I think this policy puts pressure on us to execute projects faster, which can be both good and bad.
- On one hand, it ensures that resources aren't wasted, but it might also lead to fast-tracking projects that aren't ready.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 8 | 9 |
Petroleum Engineer (Midland, TX)
Age: 32 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 15/20
Statement of Opinion:
- This act may lead our company to accelerate some projects, which can mean more work for some of us.
- It'll push the company to make quicker decisions, which could be stressful.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 8 |
Environmental Lawyer (Phoenix, AZ)
Age: 50 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- This is a step in the right direction to ensure environmental responsibility.
- However, the enforcement and real impacts are to be seen. Big oil may find ways around it.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Financial Analyst (Denver, CO)
Age: 29 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- The fines might affect the financial decisions of companies we're investing in.
- Could potentially see an impact on stock performance in this sector.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 8 | 8 |
Maintenance Technician (Dallas, TX)
Age: 23 | Gender: other
Wellbeing Before Policy: 9
Duration of Impact: 3.0 years
Commonness: 14/20
Statement of Opinion:
- I hear talk about reducing downtime to avoid fines.
- If they maintain equipment more regularly, it could make our work both more intensive and secure.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 8 | 9 |
| Year 5 | 8 | 9 |
| Year 10 | 8 | 9 |
| Year 20 | 9 | 9 |
Oil Drilling Supervisor (Baton Rouge, LA)
Age: 41 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- The act might cause some reshuffling of projects on my rig due to cost evaluations.
- It might affect project timelines and potentially create more job openings.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 8 | 8 |
Policy Advisor (Cheyenne, WY)
Age: 38 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- It's good to see a policy pushing for responsible resource management.
- The bigger question is whether this would lead to actual responsible execution.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Investment Banker (New York, NY)
Age: 55 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- Companies may rethink their asset portfolios due to increased costs from this policy.
- Could lead to more turnover in the asset market, which is good for business.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Geothermal Energy Researcher (Oklahoma City, OK)
Age: 36 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 5/20
Statement of Opinion:
- This could be an opportunity for renewables if oil and gas funds shift towards alternative energy due to penalties.
- Hope we see more investment in cleaner technologies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Small Business Owner (San Francisco, CA)
Age: 31 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- Demand for equipment might shift with this policy.
- It might stabilize our order books if companies avoid penalties through active projects.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 10 | 9 |
Cost Estimates
Year 1: $20000000 (Low: $15000000, High: $25000000)
Year 2: $15000000 (Low: $10000000, High: $20000000)
Year 3: $10000000 (Low: $7000000, High: $15000000)
Year 5: $5000000 (Low: $3000000, High: $10000000)
Year 10: $0 (Low: $0, High: $5000000)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The administrative costs associated with implementing and enforcing the policy.
- Impact on leaseholders' business operations and potential shifts in production strategy.
- Overall effect on U.S. energy production and domestic energy prices.
- Comparative effects on U.S. versus foreign operations of major oil and gas firms.