Earlier this year, we joined together to introduce bipartisan and bicameral legislation, the Marginal Well Production Preservation and Enhancement Act. We believe — as most Oklahomans do — that we need to take advantage of domestic resources of oil and natural gas. One such opportunity we can take advantage of in Oklahoma is marginal wells.
While a marginal well is defined as one that produces 15 barrels or less of oil per day, the average marginal well produces less than 2.2 barrels of oil per day. Yet, according to the Interstate Oil and Gas Compact Commission, these marginal wells contribute nearly 18 percent of the oil and 9 percent of the natural gas produced in America.
Here in Oklahoma, it is the small independents, basically mom-and-pop operations that produce the majority of oil and natural gas with 85 percent of Oklahoma's oil coming from marginal wells. In fact, marginal wells produced more than 335 million barrels of oil in the United States in 2006. That's equivalent to more than 60 percent as much as the United States imports annually from Saudi Arabia or 67 percent as much as the nation imports annually from Venezuela.
In addition to reducing our dependence on foreign oil, a producing well provides state and federal taxes, pays royalties to land and mineral owners, and keeps jobs and dollars on American soil and in American pockets. A plugged well provides none of this. On the contrary, the IOGCC reported that in 2006, plugged and abandoned marginal wells resulted in the loss of $1.77 billion in economic output, $369.2 million in earnings reductions and 8,223 lost jobs.
These statistics testify to the importance of America's marginal well production. With gasoline prices at record highs, Congress must ensure that government policies don't discourage, and instead, prolong and enhance production from these low-volume wells.
Our legislation will help reduce the United States' dependence on foreign oil by streamlining and clarifying government regulations, prolonging economic feasibility, and enhancing production volumes from marginal wells. Every onshore oil and gas well in the nation eventually declines into marginal production. Our bill ensures that the nation's policies recognize and reflect the economic importance of those marginal wells.
To be sure, our bill is just one component of what must be a comprehensive approach to new energy production that will ensure we have an abundant, domestic and affordable energy supply. Both of us have long advocated for producing energy from proven reserves in Alaska, offshore and the Rocky Mountain West. At the same time, we must continue the effort of developing new renewable fuels and further production of natural gas — of which Oklahoma continues to be a leader. Importantly, developing and expanding domestic energy will translate into energy independence and well-paying jobs for Oklahomans and Americans.
INHOFE/BOREN INTRODUCE BI-PARTISAN “MARGINAL WELL PRODUCTION PRESERVATION AND ENHANCEMENT ACT” WASHINGTON, DC – Sen. James Inhofe (R-Okla.), Ranking Member of the Environment and Public Works Committee, today introduced with Rep. Dan Boren (D-OK), the Marginal Well Production Preservation and Enhancement Act. This bipartisan and bicameral bill ensures that the nation’s policies recognize and reflect the economic importance of marginal well production. The average marginal well produces less than 2.2 barrels of oil per day.
INHOFE LANDS A 1-2 PUNCH FOR LOWER FUEL PRICES AND BETTER ROADS WASHINGTON, DC - Sen. James Inhofe (R-Okla.), Ranking Member of the Environment and Public Works Committee, joined fellow GOP Senators and members of the U.S. trucking industry to call for lower gas prices to help truckers ship goods, met with Oklahoma business leader Dan Ustian, President and CEO of NAVISTAR to discuss diesel prices, and pressed Federal Highway Administrator nominee Thomas J. Madison, Jr. to help adopt a highway and energy policy to lower gas and diesel prices.