Unused Oil Leases by Marymenti

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									The Truth on Unused Oil Leases

Hat tip: American Anachronism

Former Congressman Ernest Istook took time out his busy schedule to reply to a blogger’s misgivings concerning the new Democrat mantra against “Big Oil,” in particular, their criticism that the oil companies are not exploiting the vast majority of already granted oil drilling leases. Below is Mr. Istook’s reply: Col. Ward — First, thank you for your service to our country. We can never express that often enough. Your general description of the oil and gas business is on-target. And the congressional comment you cite sounds to me like it came straight out of the playbook of environmentalists who want to mislead Americans. Rep. Tim Ryan (D-OH) is not alone in the claims he makes. (And here’s a weblink to his comments) Evidently, talking points are being circulated encouraging a lot of Congressmen to make claims like this. Here’s another example from a floor speech by Rep. David Wu (D-OR): ―WHY SHOULD WE OPEN LAND FOR DRILLING WHEN BIG OIL ISN’T EVEN DRILLING WHERE THEY HAVE LEASES?‖ (Mr. WU asked and was given permission to address the House for 1 minute and to revise and extend his remarks.) Mr. Wu goes on: ―Madam Speaker, it is no wonder that the only Republican solution to our record high gas prices is more drilling. Who would expect anything less when two former oil executives occupy the White House? The problem is that this has been the Republican energy plan for the last 7 years. It was created in secret by Vice President CHENEY and oil executives. And it is responsible for the record high oil prices that we all face at the pump today. Republicans claim that we could lower the price at the pump if we would only approve more and more drilling leases. That is their rhetoric. Here are the facts. Oil companies do not need new areas to drill. They need to focus on areas that are already opened to them. Of the 42 million acres of Federal land currently leased by oil and gas companies, only about

12 million acres are actually being drilled to produce oil and natural gas. Madam Speaker, if the Republican claims about more drilling are correct, why aren’t they demanding Big Oil explore drilling on the 30 million acres of Federal land that are already open to them but that they refuse to explore?‖ Believe me, with oil at $130 per barrel, they would drill on those lands if it made sense to do so! No, not all oil and gas leases are ―being used‖, because not all of them have production-worthy quantities of oil or gas. Lots of people have property that is not being used, but government doesn’t use it as an excuse to take it away, or to forbid the owners from buying other property. First, a company may lease property, but never have the funds to properly explore it or drill an exploratory well. Second, after paying for further tests (such as seismic), they often decide the lease isn’t worth the high, high costs of drilling after all. Or they may hold onto the lease for years until either higher oil prices or new technology makes it feasible to drill. Third, a company may lease property but drill on another tract (which drains a ―pool‖ that covers multiple leased tracts), so perhaps they’re counting it as ―not used‖ if no well is sunk on that particular piece of property. Fourth, they may try to drill and be blocked by government bureaucrats, environmental lawsuits, etc. Finally, not all acres are alike. Some have lots of oil. Others have virtually known. Saying they’re not drilling for oil everywhere is like faulting them for not digging a gold mine on every acre. I’ll also check around to see if there’s a more specific comeback to that. Thanks for writing. –Ernest Istook Related: Hat tip: Gateway Pundit


								
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