Fri
Jun 20 2008
08:14 am

When your GOP friends start singing about more drilling...

Please refer them to HR 6251, "The Responsible Federal Oil and Gas Lease Act of 2008."

We, the taxpayer, are subsidizing the oil and gas industry with not only these leases, but also with tax breaks, and they are doing nothing but rewarding us with artificially high prices.

From the factsheet produced by its sponsors:

“Responsible Federal Oil and Gas Lease Act of 2008”
Representatives Rahall, Markey, Hinchey, Emanuel and Yarmuth

The Problem

Currently, oil and gas companies hold leases on nearly 68 million acres of federal land (both onshore and under OCS waters) that they are not developing.

Generally speaking, oil and gas leases are issued for a 10-year term that can be renewed.

more after the flip...

Coal leases are issued for 20 years and coal companies have to show that they are “diligently developing” their leases during the initial term of the lease.

While coal companies are required to diligently develop their leases, oil and gas companies are not required to do so.

Because there are no diligent development requirements, oil and gas companies can stockpile leases in a non-producing status.

This has encouraged oil and gas companies to hold nearly 68 million areas of federal land (both onshore and under OCS waters) without producing oil or gas.

The 68 million acres of leased but currently inactive federal land (both onshore and under OCS waters) could produce an additional 4.8 million barrels of oil and 44.7 billion cubic feet of natural gas each day.

That would nearly double total U.S. oil production, and increase natural gas production by 75%.

It would also cut U.S. oil imports by more than a third, and be more than six times the estimated peak production from the Arctic National Wildlife Refuge (ANWR).

By fostering prompt development of oil and gas leases, we will increase domestic production in areas already shown to appropriate for energy development.

The Solution
The “Responsible Federal Oil and Gas Lease Act of 2008” would compel oil and gas companies to either produce or give up federal onshore and OCS leases they are stockpiling by barring the companies from obtaining any more leases unless they can demonstrate that they are producing oil and gas, or are diligently developing the leases they already hold, during the initial term of the leases. The bill directs the Interior Secretary to define what constitutes diligent development.

Companies could avoid this new lease prohibition by relinquishing their non-producing leases, creating an opportunity for another company to explore for and perhaps produce oil or gas from them. Under the bill, the terms of leases which are in production, or which can demonstrate diligent development, are extended.

Companies which lease federal coal resources are by law required to diligently develop their leases. This requirement has discouraged the rampant speculation that once existed in the federal coal leasing program. The same type of speculation that now appears to be plaguing the federal oil and gas leasing program.

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Adam's picture

You're an idiot

First of all, we are not "subsidizing" oil companies with leases. They paid good money for those leases. The Federal government gets billions of dollars every year from competitive lease auctions. The only "subsidy" the oil companies get are various tax deductions and credits for new investment. Hence if they don't drill in a lease, they don't get any tax credits.

Second of all, the idiots that sponsored the legislation you reference have no idea how much oil is in the non-producing leases. Their 4.8 million barrel/day number is pure crap. They got it by assuming all the non-producing leases would produce just as much as the producing leases and then extrapolated it.

That is so stupid, it's breathtaking.

When oil companies bid on a lease, no one knows how much oil is under it. The various bidders make estimates based on geological data, but they can't know how much oil is there until they explore, and they can't explore until they buy a lease.

When an oil company buys a lease, it is in effect taking a gamble that there will be oil there.

Hence Emanuel et al have no idea how much oil is in the unused leases.

In fact, if an oil lease is not producing, it's a good bet that drilling it doesn't make economic sense right now. Oil companies are not in the business of leaving money on the table. If they paid good money for a lease but haven't drilled it, it means one of three things:

1)There's not enough oil in the lease to justify drilling it.

2)There's oil there, but it's so expensive to extract, it doesn't make economic sense given current oil prices and/or technology. The oil company still will hold on to the lease, however, in case drilling will make economic sense in the future as either oil prices may go up or drilling technology may improve.

3) There's oil there, and the oil company knows it, and the oil company is in the process of getting it out. It takes anywhere from 3-10 years to drill a lease and get in producing.

The only thing this Democrat legislation would do is discourage oil companies from bidding on future leases.

Why would you want to bid on a lease if there's a risk the government will force you to drill an money-losing well after you aquire it?

djuggler's picture

4) They are

4) They are speculating.

10,000 barrels at $100/barrel = $1,000,000

At $200/barrel it doubles.

Doug McCaughan
(link...)

gonzone's picture

Look in the mirror

Look in the mirror when calling someone an idiot, you might actually see one.

"When the going gets weird, the weird turn pro."
Hunter S. Thompson

Matthew's picture

"They paid good money for those leases."

They paid GOOD MONEY for those leases? They pay, on average, $2-4 dollars per acres...PER YEAR. That's a give-away!

Made possible by your friends at Hallibu...errr...The White House.

Thank GOD this shameful administration is on its last legs!!!

slugboy's picture

Yeah... leases to oil

Yeah... leases to oil companies started with GW Bush.
Brilliant. <-- sarcasm

Mover's picture

The WHite House Leased the 68M Acres?

That's kind of funny because those leases expire this year and they are 10 year leases. So, would you like to guess again on whose administration leased the 68M acres?

(hint: the Bush Admin has only been in office for 7 years)

metulj's picture

You have no idea how much

You have no idea how much oil is there either? Correct? Again, what if a parcel of land adjoining yours had oil on it and they started drilling? I bet you would not be happy after a couple of weeks of noise and smell.

True happiness is knowing you are a hypocrite. -- Ivor Cutler

Bob Maplethorp's picture

THE "68 MILLION ACRES" CLAIM

The "68 Million Acres" Claim - and the Unofficial Congressional Staff "REPORT" from which is came - is based on a shocking ignorance of geologic science, federal law, and the lengthy bureaucratic processes and rampant litigation that make exploring for oil and gas on federal leases (let alone producing it) so complex and time consuming.

But there's more to the "68 Million Acres" claim than this profound energy ignorance.

The "68 Million Acres" Claim appears to be an attempt by those in Congress who oppose increasing America's energy supply to "demonstrate" that they're actually "doing something" about $5 gasoline and our record high dependence on OPEC oil before they go home for the Independence Day Congressional Recess.

Think about this for a moment... Sadly ironic, isn't it? Make you angry?

You can see the FACTS for yourself here

(link...)

metulj's picture

The Institute for Energy

The Institute for Energy Research is a non-profit "think tank" based in Houston and backed by ExxonMobil. It's president, Bob Bradley, was head of public relations at Enron. Err....

True happiness is knowing you are a hypocrite. -- Ivor Cutler

rocketsquirrel's picture

y'know, if we want to have

y'know, if we want to have local conversations, I'm going to have to start naming posts much more innocuously so that drive bys don't find them in google. I just really appreciate the oil industry lobbyists being so generous and sharing with us shit like Offshore Magazine and the "Institute for Energy Research."

they need to stay on their own blogs.

Texas Dave's picture

LAck of content is your trademark, no?

I haven't seen one fact you've thrown out, you just like attacking the messenger I guess if the message doesn't agree with your pre conceived notions. You certainly exemplify the old adage, "....doesn't let thhe facts get in the way...".

Not very nice to passers by who stop in to add commentary either. Peeps are friendlier in Nashville, by and large, altho I've seen some friendly peeps here.

I'd like to own a squadron of tanks

gonzone's picture

The fact is

The fact is that sorry link above goes to a paid shill of the oil companies and a known liar and fellator of oil company executives. Call them facts if you want but I prefer independent sources that don't have a WELL PAID BIAS to skew "facts" to suit their masters. Now go away troll.

"When the going gets weird, the weird turn pro."
Hunter S. Thompson

cooperhawk's picture

Independent?

There is no such thing as an unbiased independent source. All of them are skewed, you included.

gonzone's picture

Reading Comprehension problem?

No one said squat about "an unbiased independent source".
Try again.

Independent? Check, those sources exist.

Paid to present a biased report? Check, the referred link earlier in the thread above is an excellent example of well paid shills for th oil industry.

Unbiased? No.
At the best one does, even using scientific process, there will be some small margin of bias present. But that's OK, 'cause we should be biased towards truth and fact, or against slanted propaganda and lies from soulless ghouls representing corporate profit at the expense of all else.

I'll never deny I have a bias. I happen to like my biases.
Mine are in emulation of Jesus, who actually cares for people and the earth and our future and disdained wealth and profits.

"When the going gets weird, the weird turn pro."
Hunter S. Thompson

Anonymous's picture

oil

IF I WAS AN OIL MAN AND HAD THE CHOICE TO LOOK FOR AND DRILL ON
68 MILLION ACRES OF LAND TO GET OUT A MAYBE 4 MILLION BARRELS A DAY, OR TO DRILL IN ALASKA WHERE I KNOW THE OIL IS ON A DRILL SITE THE SIZE OF JFK AIRPORT FOR 1 MILLION BARRELS A DAY, HMMM WHICH I CHOOSE TO MAKE MORE PROFIT, OH YES IS THAT WHAT A BUSINESSMAN DOES MAKE MONEY.

BOB G

gonzone's picture

uh

IF I WERE GOING TO POST SOMETHING MAYBE I'D LEARN ABOUT THE CAPS LOCK KEY AND HOW TO TURN THE FUNCTION off so I wouldn't appear a complete neophyte. Oh, yes, is that what a neophyte does, let everyone know?

"When the going gets weird, the weird turn pro."
Hunter S. Thompson

Bob Maplethorp's picture

I'm with Adam - You're an Idiot.

THE "68 MILLION ACRES" TALE begins here: “If we extrapolate from today’s production rates on federal land and waters, we can estimate that the 68 million acres of leased but currently inactive federal land and waters could produce an additional 4.8 million barrels of oil and 44.7 billion cubic feet of natural gas each day.” -- UNOFFICIAL CONGRESSIONAL STAFF "REPORT"

IN ORDER TO ARRIVE AT THESE NUMBERS, THE AUTHORS OF THE "REPORT" HAD TO "EXTRAPOLATE" AS FOLLOWS:

Roughly 23 million acres of federal land are producing 1.6 million barrels each day today.

Roughly 3 times as many federal acres - about 68 million - are leased to oil companies, but are not currently producing oil or gas.

Therefore, the United States could be producing 3 times as much oil - or an additional 4.8 million barrels per day - if the lease holders for the non-producing federal lands started producing oil today.

EXTRAPOLATING THE "EXTRAPOLATION": Using the “report” as a baseline, the Institute for Energy Research (IER) has calculated several ways to achieve American energy independence September 1, 2008:

If we use the very same extrapolation, we can estimate that all 2.45 billion acres of the mostly-inactive federal estate (onshore and offshore) could be leased to produce an additional 160 million barrels of oil each day. That’s almost double the amount that is produced on a daily basis in the entire world.

If we use the very same extrapolation, we can estimate that the 9.4 billion acres of the currently non-producing moon orbiting our earth could produce an additional 654 million barrels each day. That would supply America’s total annual demand in less than 12 days (but the pipeline construction would be a bear).

If we use the very same extrapolation, we can estimate that an extra 182.5 days (12 hours per day x 365 days) of sunlight per year would produce an additional 2,784 megawatt hours of solar electricity each day. That would double our current daily solar energy today, if the government would just outlaw night.

GETTING A HANDLE ON REALITY: The farcical examples above demonstrate the geological absurdity of the “68 million acres” tale (not to mention its convenient omission of the federal leasing, exploration and production processes, which can take a decade or longer). Obviously, oil and gas aren’t going to be found under every each and every acre of land, just as the sun is not going to shine and the wind is not going to blow during every hour of every day. The moon, however, may have oil and gas - we don’t know because, like 97 percent of the U.S. outer-continental shelf, we haven’t looked.

Conclusion: With elected leaders telling tall tales like this one, it’s not surprising that some Americans are admitting to being “confused” about the causes of high gas prices. Maybe that’s exactly what some politicians want.

metulj's picture

Nice. Drive-by oil-company

Nice. Drive-by oil-company backed hackery at its finest. What was IER's president's role in the Enron scandal? How much money did he get ripping off his workers and old ladies?

True happiness is knowing you are a hypocrite. -- Ivor Cutler

rocketsquirrel's picture

Dear Bob Maplethorp

Dear Bob Maplethorp (unverified),

Knoxviews readers would like to kindly introduce your pot to your kettle. Kettle, pot. Pot, kettle.

or are you the same guy that did all those racy photo books?

goodbye, you drive by hack. none of your links to your biased, hackneyed, lobbyist connected tripe means a thing.

PLEASE do not feed the trolls.

Pam Strickland's picture

Maplethorp the photographer

Maplethorp the photographer didn't just do racy photo books. He was actually quite a talented and artistic person when it came to camera work.

The troll guy above, I didn't bother reading.

FWIW.

Pam Strickland

"We are what we pretend to be, so we must be careful about what we pretend to be." ~Kurt Vonnegut

gonzone's picture

funny

He's best known as "the piss Christ."

Reckon who pays "Bob Maplethorpe's" salary to troll stories like this with BS "facts" and drivel? Reckon maybe he works for the above linked source?

"When the going gets weird, the weird turn pro."
Hunter S. Thompson

metulj's picture

No. "Piss Christ" was Andres

No. "Piss Christ" was Andres Serrano. Mapplethorpe took pictures of flowers and, well, some provocative photos of men.

True happiness is knowing you are a hypocrite. -- Ivor Cutler

gonzone's picture

Maybe

Maybe it was fecal matter and the cross then. I'll look it up. I remember the right pitching fits about his exhibit in Cincinnati and that he received National Arts funding.

ADDENDUM: You were correct. Thanks! My review showed the media often conflating the two different artists and it worked, I was confused.

"When the going gets weird, the weird turn pro."
Hunter S. Thompson

Anonymous's picture

You might want to quote

You might want to quote reputable sources. The confusion among the American public comes in large part from information promulgated by organizations like "Institute for Energy Research" I am not likely to believe anything that comes from Robert L. Bradley Jr, former Director for Public Policy Analysis at Enron and speechwriter for Kenneth Lay.

Yet, you're quoting this garbage like it's gospel.

tin cup's picture

Funny thread. When idiot

Funny thread. When idiot Libs are challenged with facts - particularly how business really works - all you get are "stay in your own blogs" and "Enron" and "Urine and Feces Art" and "Pots & Kettles" and "Fly-By's" and "Look in the mirror" Etc. Etc. Etc.

Nice.

Justin's picture

We didnt realize that you

We didnt realize that you were the resident Knox Views blog genius. Please dear sir, enthrall us with more of your conservative manifesto. Pretty please?

tin cup's picture

What do you teach?

...disdained wealth and profits

Gonzo, you must work for one of our fine universities. Certain college professors are the only ones I know who can afford to make this kind of statement. As crazy as it sounds, I believe you have confused Jesus and Ward Churchill. Jesus said nothing about disdaining wealth and profits. If you're referring to the camel and eye of the needle thing, go back and read it all..........

BTW, I know wealth and profits are ugly to many Libs but if you really want to help of people and the earth, they're not bad things to have. A good start anyway.

talidapali's picture

Didn't Jesus say...

Behold, one came to him and said, "Good teacher, what good thing shall I do, that I may have eternal life?"
He said to him, "Why do you call me good? No one is good but one, that is, God. But if you want to enter into life, keep the commandments."
He said to him, "Which ones?"
Jesus said, "'You shall not murder.' 'You shall not commit adultery.' 'You shall not steal.' 'You shall not offer false testimony.' 'Honor your father and mother.' And, 'You shall love your neighbor as yourself.'"
The young man said to him, "All these things I have observed from my youth. What do I still lack?"
Jesus said to him, "If you want to be perfect, go, sell what you have, and give to the poor, and you will have treasure in heaven; and come, follow me." But when the young man heard the saying, he went away sad, for he was one who had great possessions. Jesus said to his disciples, "Most certainly I say to you, a rich man will enter into the Kingdom of Heaven with difficulty. Again I tell you, it is easier for a camel to go through a needle's eye, than for a rich man to enter into the Kingdom of God."

Is that the full context you were talking about????

_________________________________________________
"You can't fix stupid..." ~ Ron White"
"I never said I wasn't a brat..." ~ Talidapali

cooperhawk's picture

Not really

The full context would include...

When the disciples heard this, they were greatly astonished and asked, "Who then can be saved?" Jesus looked at them and said, "With man this impossible, but with God, all things are possible."

Jesus' disdain was not so much with wealth as it was putting it before Him (idolatry). Those who commit murder, adultery, steal, lie, do not honor their father of mother or do not love their neighbor as themselves will have the same problem getting into heaven as the rich idolater will. You're not cherry-picking your Jesus emulations, are you?

So if high-paid biased reports are bad, should I assume the report rocketsquirrel originally posted was made by unpaid researchers who have sold all their possesions & given the money to the poor & went & followed Jesus so that I can trust them?

metulj's picture

I don't see where Jesus used

I don't see where Jesus used the word idolatry. Put words in the Lord's mouth much?

True happiness is knowing you are a hypocrite. -- Ivor Cutler

cooperhawk's picture

Reasonable

Deductive reasoning. Anything you put your trust and/or desire in more than God, as the rich man did, would be idolatry. Kind of like liberals do with government.

metulj's picture

Oh, god. Ward Churchill. You

Oh, god. Ward Churchill. You do know he was dismissed for faking his credentials, never received tenure, and falsified his research. Can't you lame asses come up with a real bugbear?

True happiness is knowing you are a hypocrite. -- Ivor Cutler

tin cup's picture

Disdain for wealth and

Disdain for wealth and profits. OK, Tadpole. You and Gonzo have set me straight. But if there's no wealth, what will you and your Lib heros re-distribute? As far as profits go, what if we do like the Russians did...we won't use a dirty word like "profit." We'll call it "what's left after we subtract expenses from revenues." Is that ok with you?

You have to admit. Ward Churchill would be so proud of you. So would Karl Marx.

metulj's picture

Acts 2:24-7

42They devoted themselves to the apostles' teaching and to the fellowship, to the breaking of bread and to prayer. 43Everyone was filled with awe, and many wonders and miraculous signs were done by the apostles. 44All the believers were together and had everything in common. 45Selling their possessions and goods, they gave to anyone as he had need. 46Every day they continued to meet together in the temple courts. They broke bread in their homes and ate together with glad and sincere hearts, 47praising God and enjoying the favor of all the people. And the Lord added to their number daily those who were being saved.

True happiness is knowing you are a hypocrite. -- Ivor Cutler

cooperhawk's picture

Glad And sincere

Those people did that because they wanted to, thankful over the payment Christ made for them on the cross. Not because they were forced to by the government.

rikki's picture

market correction

a dirty word like "profit."

Nobody around here has any problem with people and corporations making a profit. I would venture to guess that many of us view free markets as a vital component of democracy. The people you so glibly dismiss as "Libs" often argue for increased market freedom, especially with energy markets, but they still get dismissed as "socialists" because that is what idiots do when they don't understand what people are saying.

Since you obviously have not been around KnoxViews long enough to know what anyone actually thinks, I'll give you a synopsis: The primary solution to our energy problems is conservation, and many of us deliberately conserve, whether by drying our clothes on a line or just by purchasing a more efficient dryer. Obviously, this is a free market solution. In fact, we can accomplish significant conservation goals without the government. We could just rally together in sacrifice like Americans do during honest wars.

Beyond conservation, we are concerned by the vast sums energy interests spend on politicians and the complex and obscure contracting, leasing and excise laws in which loopholes and favors can be hidden. Those expenses make little sense on a free-market balance sheet, but you have to be able to distinguish between market freedom and anarchy to understand why this is a concern.

Many of us realize that our country grants plenty of offshore oil leases in the Gulf of Mexico and elsewhere, oil that is an asset of the United States to be valued, not squandered. Our country could sustain itself without taxing income if it valued its assets, but we sell mineral rights at century-old prices instead of market rates. It is actually your whimpering for more drilling that defies the market and reeks of socialism.

Did you know a bureaucratic error in the first round of offshore leases granted under Bush resulted in huge underpayments to the federal government, a problem that took years to correct? I'm not even sure what the settlement was. Maybe you industry insiders can tell us whether the companies that got flawed contracts paid or will pay full royalties to the United States as their wells become proven.

redmondkr's picture

Maybe you should quote from

Maybe you should quote from the gospel of Pat. Now there's a guy who believes that it's Godly to be rich.


Visit us at

The Home

tin cup's picture

Nobody around here has any

Nobody around here has any problem with people and corporations making a profit

I happen to like my biases.
Mine are in emulation of Jesus, who actually cares for people and the earth and our future and disdained wealth and profits.

Rikki, I wouldn't say that nobody around here has a problem with profits. Ask Gonzo. I was simply responding to what he said.

rikki's picture

Like your presumptions and

Like your presumptions and your courage, Jesus ain't here.

tin cup's picture

I believe he is.

I believe he is.

metulj's picture

That's nice. I suggest you

That's nice. I suggest you pray to Jesus for a solution for the world's energy problems, and we'll work on real, meaningful ones. When we actually get the work done, rather than playing hissy-fit politics like the GOP, your prayers will be answered. Deal?

True happiness is knowing you are a hypocrite. -- Ivor Cutler

gonzone's picture

We want them back

If oil companies don't want to drill on these 64 million acres then we want them back. They'd make a nice gift for our children and grandchildren.

No matter the spin and lies from the GOP and their corporate oil masters the plain truth is:

We can't drill our way out of this situation.

Al Gore had the right of it with his speech yesterday. If big oil and their lying lackeys don't like it, then too damn bad.

"When the going gets weird, the weird turn pro."
Hunter S. Thompson

Ken Moyes's picture

Those 68 Million Acres

It is 68 million and not 64 million. Please don't accept the current propaganda coming from the don't drill for any reason crowd, in the name of global warming. Do your home work! There is plenty of information out there refuting the lame arguments of the far left anti-drillers. It is easy to see when one side has a losing and an indefensible cause. It has to resort to fabricating facts, which they have done in abundance. Nancy Pelosi's blog site "The Gavel" has so many invented and twisted facts that it is closed for comment.

(link...)

Ken Moyes's picture

68 Million Acres

The facts about non-producing federal leases:

CLAIM: Oil and natural gas companies are given leases by the government and purposely don’t produce from them to increase prices.

FACT: Companies pay billions of dollars for the right to explore on federal lands. If the company does not produce within the lease term, it must give the lease back to the government, and the company does not recover the billions of dollars it may have invested.

CLAIM: Companies let many of their leases sit idle and don’t produce them

FACT: Companies actively develop their leases – but not every lease contains oil or natural gas in commercial quantities. In many cases, the so-called “idle leases” are not idle at all; they are under geologic evaluation or in development and could be an important source of domestic supply. However, this does not mean all leases have the potential to produce. Companies can evaluate leases for several years only to determine that they do not contain oil or natural gas in commercial quantities. The road to bring the oil and natural gas to market — obtaining the lease, evaluation, exploration and production — is a long and complicated one.

CLAIM: If the lease doesn’t contain oil or natural gas, then the company shouldn’t have bought it.

FACT: There are tremendous risks and challenges involved in finding and producing oil and natural gas. There is no guarantee that a lease will even contain hydrocarbons. It is not unusual for a company to spend in excess of $100 million only to drill a dry hole. A company usually has only has limited knowledge of resource potential when it buys a lease. Only after the lease is acquired, will the company be in the position to evaluate it, usually with a very costly seismic survey followed by an exploration well.

CLAIM: There’s absolutely no reason for a company not to produce if it finds oil or gas on the lease.

FACT: If the company finds resources in commercial quantities, it will produce the lease. But there can sometimes be delays – often as long as seven to 10 years – for environmental and engineering studies, to acquire permits, install production facilities (or platforms for offshore leases) and build the necessary infrastructure to bring the resources to market. Litigation, landowner disputes and regulatory hurdles can also delay the process.

CLAIM: The vast majority of federal and gas resources are already available for development.

FACT: In the Lower 48 states, about 85 percent of the Outer Continental Shelf and 67 percent of onshore federal lands are off-limits or facing significant restrictions to development. There is no way, at this stage, to determine exactly the extent of the resources off-limits because many of these areas have not been subject to inventory studies in decades.

CLAIM: Non-producing leases could provide a major source of new supplies.

FACT: Many of these leases will provide a major source of new domestic supply once they are developed. Companies are actively developing the leases, and in addition to paying for the lease, they must also pay rent to the government while they conduct development and exploration efforts. But this process takes time. Reducing the time companies have to develop a lease or increasing the costs imposed by government will not increase supply for American consumers. Nor will denying access to areas of oil and natural gas potential like the Atlantic and Pacific OCS.

CLAIM: Increased domestic drilling activity has not led to lower gasoline prices, and more leases and drilling won’t help either.

FACT: Our nation needs more supplies of all forms of energy, including domestic oil and natural gas, to meet its growing energy demand. Increased drilling has helped the United States offset the natural declines in domestic oil and natural gas production from older fields. Greater drilling activity tends to produce more supply. Fundamental economics suggest that additional supplies put downward pressure on prices.

CLAIM: Companies should be penalized for not producing from their leases.

FACT: Oil and gas companies take all the risk with federal leases. Not only do they pay billions to obtain leases, they pay to hold them while they are spending even more capital to determine if these leases contain resources. Penalties on leaseholders on top of those fees would only discourage U.S. exploration and production, at a time when the United States needs all the energy it can get.

rikki's picture

Making up myths to debunk

Making up myths to debunk must be hard work. Care to tell us whether the companies that got flawed contracts under Bush have paid or will pay full royalties on their producing wells?

Ken Moyes's picture

68 Million Acres

Read more at (link...)

Factchecker's picture

The burden falls on your side, Ken

Please don't accept the current propaganda coming from the don't drill for any reason crowd, in the name of global warming. Do your home work [sic]!

There are plenty of other reasons not to drill beyond global warming. Given there can be little meaningful increase in domestic production nor an attendant decrease in oil price, even after many years, if all the domestic sites eyed by oil companies and the GOP are opened wide for drilling, why should we open these lands up?

One of the big arguments by the latter group that was supposed to refute the hazards of oil spills--that there hasn't been any spills in decades, was debunked as a lie. So what are your non-lie arguments? Remember to start with relevant facts: More drilling won't significantly affect price, supply, or foreign oil dependency, and energy security would most likely suffer.

rocketsquirrel's picture

Bush concedes offshore

Bush concedes offshore drilling will have no immediate impact.

WASHINGTON - President Bush acknowledged today that expanded drilling in coastal waters would have no immediate impact on oil supplies, but said greater exploration would "change the psychology" of global markets.

"I readily concede that, you know, it's not going to produce a barrel of oil tomorrow, but it is going to change the psychology that…demand will constantly outstrip supply," Bush said of his call to step up drilling off the coasts of California, Florida and other states.

He's basically saying, y'know, that we can't drill our way out, but hopefully, this might run the speculators out of the market on oil futures.

He knows, like everyone else, that there is no Ghawar oil field out there, domestically speaking. And Ghawar, the largest active oil field in the world at 4.5 million barrels a day, is declining at a rate of 8% per year.

Still think we can drill our way out of this? More and more water is being pumped out of Ghawar, which means the oil is declining and the water front is gaining on the reserve.

Ken Moyes's picture

The burden falls on my side?

Here is a question for you, Factchecker? Since you say that it is not a global warming issue, why shouldn't we drill? We can stop sending $500,000,000,000 annually to foreign governments, if we drill, and improve our economy by reducing our trade deficit. That amount is three times what Iraq costs us annually. We can create jobs by stimulating the the oil production supply chain - the kind of jobs that will stimulate areas like Ohio, Pennsylvania, and Michigan, along with Florida and California. California and Florida would receive a third of the lease revenue helping to close there budget deficits. We can insure our own national security, by drilling for domestic oil and natural gas. The spills during Katrina were minor from the platforms. The bulk of the oil seepage and spills were from onshore storage, piping, and refineries.

As far as the worldwide price of oil. An announcement that the US is going to open drilling for the perceived 86 Billion barrels (EIA) underfoot and offshore will drive a spike through the oil FUTURES speculators, because the future oil supplies will have grown substantially.

I do have one caveat. During the next twenty years of heavy drilling, we must simultaneously address the renewable energy deal, and be ready to move this nation off oil and fully onto renewable energy by then.

So, Factchecker, can we get on with drilling, since you seem to have no other objections?

(link...)

Ken Moyes's picture

Those 68 million acres and who holds the leases

The no drill crowd wishes you to believe that the 68 million acres are some conspiracy by big oil to not drill and hold them for a better deal or for more profit. The truth is that the leases on shore and off shore are held by 500 to 621 small, medium, and large companies. All paying royalties for the rights to lease land that did not, will not, or may not have oil in commercially large enough quantities to drill, pump, and distribute to be profitable.

Those oil spills pointed to by those anti-drilling obstructionists are from Katrina and another Gulf related hurricane. The reality is that the bulk of the oil spilled came from refineries, pipelines on shore, and other fuel and oil storage facilities. The oil platforms released a very small amount of oil - negligible compared to the other sources.

Check out the heavily bipartisan bill known as H.R. 6709, it will open up drilling in the Gulf and other OCS locations. Links can be found at (link...)

metulj's picture

"Those oil spills pointed to

"Those oil spills pointed to by those anti-drilling obstructionists are from Katrina and another Gulf related hurricane. The reality is that the bulk of the oil spilled came from refineries, pipelines on shore, and other fuel and oil storage facilities. The oil platforms released a very small amount of oil - negligible compared to the other sources."

Total bullshit. For the oil to be where it is on the sat photos it would have to flow against currents. Your argument is specious as well as it raises the issue as to how safe all of the infrastructure is.

True happiness is knowing you are a hypocrite. -- Ivor Cutler

tin cup's picture

First, your post is too

First, your post is too stupid to respond to, Factchecker, but I'll try. We need to be energy independent. The weak U.S. dollar can be primarily attributed to oil imports. The price we pay at the pump impacts just about everything in our economy. Oil is our economy's lifeblood....today. We need more conservation and domestic oil and liquified coal and nuclear and solar and wind and hydro and whatever else can be invented. To say that more drilling won't significantly affect price, supply and foreign oil dependency is idiotic. That is the lifeblood today. Hopefully in 5 or 10 or 20 or 50 years, it will be obsolete. It ain't today.

I suggest you pray to Jesus for a solution for the world's energy problems

I do, Met.

Factchecker's picture

I'm confused as to who this

I'm confused as to who this tin cup is. The first one told us s/he was banned from here, and I'm sure if that person wanted to be taken seriously that s/he would not deceive us. Besides, isn't it a sin to lie? So I don't know how to respond to someone who is, at best, either an imposter or a liar.

gonzone's picture

Yeah, you nailed it

You got it factchecker.

I've quit attempting to hold a conversation with that lying troll.

And what's up with all these oil company shills posting here on this thread? I hope they're very well paid to have sold their souls.

"When the going gets weird, the weird turn pro."
Hunter S. Thompson

Factchecker's picture

OK, for starters

The weak U.S. dollar can be primarily attributed to oil imports.

Huh!!???? WTF??

To say that more drilling won't significantly affect price, supply and foreign oil dependency is idiotic.

It may sound like it, but it's true. Your position is just based on gut feel--"truthiness."

That is the lifeblood today. Hopefully in 5 or 10 or 20 or 50 years, it will be obsolete. It ain't today.

But production won't come from new wells for years! New nuclear plants can't be online until 10 or more years out. "Clean coal" is total bullshit invented by people like you to promise crap in the future that can't possibly exist because coal is sequestered carbon, nothing more. Etc., etc. Sheesh.

tin cup's picture

OK, Factboy. I was banned

OK, Factboy. I was banned but I must have gotten a reprieve because I'm back in. You are speaking to the real cup. I believe it is a sin to lie. I also believe you are proof that two objects can fill the same space at the same time as you are at once full of yourself and shit.

rikki's picture

Never mind the oil-industry

Never mind the oil-industry shills, adults deal with rising energy costs by using less.

Factchecker's picture

Now Hear This

Thanks for acknowledging my power in this matter. ;>)

You're full of crap, however. Where did I say that GW is not an issue? I said there are plenty of other issues too.

Honestly, is the definition of a wingnut someone who possesses complete inability to reason, and instead is dependent totally on "truthiness" from their gut?

Read my lips. Hear me now or believe me later. Or choose some other SNL phrase. But:

We can't drill our way out of our severe energy dependency or the new price of energy. Cheap energy is a thing of the past. Period. We have to learn to deal with it and get used to it.

Republicans have been driving us in the exact opposite direction from solving this problem ever since President Carter figured things out 30 years ago* and tried to set us on a reasonable and sane course to avert the catastrophe we're inevitably headed for. You people on the right vastly accelerated the arrival of this day and are now in complete denial like a crack head at the end of his supply.

Make fun of and demonize liberals at your own peril. It won't change things or make up for the damage the GOP has done. We're all screwed, mostly thanks to your party, Mr. Moyes. Otherwise, where were you when Carter instituted the opposite energy path scrapped by his successor and not seen since? What sacrifices have you made between then and now to help bring about energy independence in the U.S.? Not including calling for domestic drilling and bashing the left. My guess is you've made the same kind of sacrifices you've made to end the war in Iraq: putting a ribbon magnet on the back of your SUV.

If you think there's enough oil domestically to make any difference in supply or price, you are among the most ignorant people on the face of this earth. Along with the rest of your wingnutty kind.

(* This link was written almost three years ago when SUVs were still hot sellers.)

gonzone's picture

So glad you asked

"Honestly, is the definition of a wingnut someone who possesses complete inability to reason, and instead is dependent totally on "truthiness" from their gut?"

Why, yes, it is! To use Obama's quote:

"It's like these guys take pride in being ignorant."

It's a waste of perfectly good electrons trying to hold any kind of conversation here with someone like Piss Cup.

"When the going gets weird, the weird turn pro."
Hunter S. Thompson

sandiegodan's picture

The Only Real Energy Solution

Bush and Cheney, along with his secret energy company deals, and his no-bid contracts with Halliburton and its' subsidiaries that electrocute our brave troops, have led the country to ruin.

The Republicans have marched lockstep with them, into war, into massive deficits, lies, and the looting of the American Dream. The only solution is that they go. As many Republicans as possible, must be voted out of office so that the Democratic majority, along with President Obama, can establish The Truth And Reconciliation Commission to get to the bottom of the mendacity, murder and violations of the Constitution. Then, we will get real action on hybrids, renewable energy and sanity, where there has only been greed and stupidity.

Is there a Republican in your life? THERE'S your problem: Get rid of them. They have proven themselves to be the kleptocrats we long feared, and they must go. No excuses: they had their moment, they failed, spectacularly, and they must be banished.

Brian's picture

Isn't it amazing how libs

Isn't it amazing how libs (socialists, etc.) manage to change the focus of the discusion when facts get in their way? I shake my head at the juvenile thought process of them.

Anonymous's picture

Okay - here's something from

Okay - here's something from factcheck.org ((link...))on the original subject of this thread. Notice that it's not from an oil company...but then libs never let facts get in the way of their opinions.

Q: Are the Democrats correct in stating that oil companies are leasing 68 million acres in the U.S. that are not being used?

A: Not exactly. More than 4,700 new holes are being drilled on current onshore leases.
...
Obama (June 24): The oil companies already own drilling rights to 68 million acres of federal lands, onshore and offshore, that they haven't touched. 68 million acres that have the potential to nearly double America's total oil production.
...
According to the U.S. Department of the Interior's Mineral Management Service, there are nearly 68 million acres of federal lands (onshore and off) that are part of non-producing leases as of fiscal year 2007. This is in contrast to 25.7 million acres of leased lands that are producing oil. So, there are 68 million acres of leased land on which companies aren't extracting oil, but Obama went too far when he said oil companies "haven't touched" them. As Bureau of Land Management Petroleum Engineer Bill Gewecke, who manages the onshore sites, told us, he "wouldn't say untouched, [I] would say undeveloped."

That's because these leased lands that don't contain productive drilling operations likely are not lying idle as Obama implies. There are a lot of steps and procedures involved in setting up a productive oil well on leased land, both onshore and off. The Bureau of Land Management's Web site lists the regulatory hurdles that need to be cleared as part of the larger five-step life cycle of a well. The path to setting up an offshore drilling operation is even longer, as shown in a large flow chart developed by the MMS.
...
And there is a lot of activity occurring on leased lands that does not qualify as "production." For 2006, the BLM reported that there were 77,257 productive holes onshore in the U.S. Beyond that, there were 6,738 applications for drilling permits, 4,708 holes in which companies had begun drilling and 3,693 where drilling had ended among onshore lands. That's a total of more than 15,000 holes that were being proposed, started or finished that do not count as "productive" holes. And that doesn't even include holes that might have been continually drilled throughout the year for exploratory reasons.
...

Factchecker's picture

Put your calculator where your mouth is

As Bureau of Land Management Petroleum Engineer Bill Gewecke, who manages the onshore sites, told us, he "wouldn't say untouched, [I] would say undeveloped."

THAT'S your distinction? Is that the best you can do?

Pay attention, freepers and trolls. Fact-check me on this. Tell me where I'm wrong. Using this as accepted data taken from EIA (no problem so far?), the U.S. has about 21B bbls of total reserves now remaining. Because I'm lazy, I'm going to charitably assume that does not include ANWR or the Bakken Formation which may have even more oil than ANWR.

We're pumping 5.1M bbls/day from this 21B bbls, and this can't be increased in the short term by Congressional fiat. It's limited by industry, the so-called free market, or whatever.

Let's further establish that the soonest new drilling can start producing is in about 10 years, and in fact the EIA specifies ANWR reserves to last from 2018 to 2030. So let's assume that all of our oil need only last until 2030. We can burn it all up by then and in 2030 Mitt Romney's sons will have pefected fusion, clean coal, and cheap hydrogen production. Are you all still OK with this so far?

But what the hey, let me again charitably allow that maybe we'll start pumping all our new reserves 5 years early, so that would be in 2013. You can think that we can start even earlier than that if you want, but remember that means that it has to be pumped at a slower rate in order to last until 2030. (Are those clean renewables really going to be ready to carry 100% of our energy needs in only 22 yrs?)

So, we're going to keep pumping 5.1M bbls/day for 5 years. How much oil reserves will we have then? Let's, again, charitably say that we can pump the EIA's best case scenario for ANWR of 4.3B bbls, plus the maximum estimate of the Bakken Formation, at 4.5B bbls (using the Romney family's future invention of perfected horizontal drilling--I'm sure that can happen in 5 years).

So the total reserves at 2013 is 21B minus what we've taken from now till then: 5.1M x 365 x 5 = 9.3B bbls. Plus 4.3B (ANWR) + 4.5B (Bakken) = 8.8B new reserves. So, at 2013:

21B [2008 total] -9.3B [used amt] +8.8B [new reserves] = 20.5B [total reserves in 2013]

Still with me? Now, how much can we pump per day from 2013 till 2030, or until the U.S. is bone dry of oil?

Well, that would be 20.5B divided by 17 yrs and then that result divided by 365 days: (20.5B bbls/17yrs)/365days = 3.3M bbls/day

OOPS!!! Oh shit. We can't increase our production. We'll have to decrease it. And this assumes that we have not reduced foreign oil imports by one drop (otherwise these estimates would be even worse!) and has assumed the most rosey of scenarios for our oil reserves and how much oil can be extracted.

OK, freepers and trolls. Where am I wrong? Show me.

R. Neal's picture

Dang. I'm going to copy that

Dang. I'm going to copy that and paste it to a hot key.

Andy Axel's picture

OK, freepers and trolls.

OK, freepers and trolls. Where am I wrong? Show me.

Where's the part where Jesus adds 1 metric kajillion bbl to every dry hole Bush ever punched in Texas?

____________________________

"It's gettin' so a businessman can't expect no return from a fixed fight. Now, if you can't trust a fix, what can you trust?"

Jim Wilke's picture

ANWR

Why would you think it would take TEN YEARS to drill in ANWR? It is 60 miles away from the gathering station at Prudhoe Bay, the beginning of the Alaska Pipeline which is currently running under half of capacity. Drill holes, build a 60 mile stub line, pump the oil. No more than 36 months from lease to production.

How much oil? More than the EIA projects. Only ONE well has ever been drilled in ANWR, a joint project by oil companies who have never made the results public. That test well was done over 25 years ago and since then, oil companies have honed their skills at exploring and estimating and, long story short, oil companies informally say that there is as much oil in ANWR as there was in Prudhoe Bay - which is the single largest field ever found in the United States.

Whigamore's picture

Factchecker's calculator and the Bakken

Regarding the Bakken formation, "Factchecker" wrote:

"[U]sing the Romney family's future invention of perfected horizontal drilling--I'm sure that can happen in 5 years."

Uh, just curious: What does this mean? What does the Romney family have to do with any of this?

And -- to the point -- why would they spend time "inventing" a technology -- horizontal drilling -- that's a highly developed process in use in the petroleum exploration industry for at least 20 years?

Please explain.

Factchecker's picture

Humor?

Satire. As for my calculations, you got some numbers?

Factchecker's picture

Whigamore (not verified)’s post

Regarding the Bakken formation, " Whigamore (not verified)" wrote:

"...horizontal drilling -- that's a highly developed process in use in the petroleum exploration industry for at least 20 years."

Uh, just curious: How does this change the overall point I was making? And -- to the point – what is your real point? Where do you (not verified) people come off skirting any heavy lifting on the issues at hand, and instead pick and choose little nits that reframe the debate to support your positions? Please explain.

Please also answer a specific issue in the original post or one of the questions posed in a previous comment before expecting the courtesy of a response on some new tangent, and you might also try registering with a unique name if you expect some respect.

Bob Maplethorp's picture

Question to All Energy Idiots

Can you name ONE single energy expert or government agency that has confirmed the premise(s) behind the "68 million acres" charade???

Don't bother trying. There aren't any. Unless you count the Wilderness Society as an "energy expert".
I find it fascinating how many people here write off undisputed FACTS as "Big Oil propaganda".

If ignorance is bliss, then willful ignorance is euphoria... And by that standard, this blog must be the happiest, most care free place in the world.

metulj's picture

CalvinBall! True happiness

CalvinBall!

True happiness is knowing you are a hypocrite. -- Ivor Cutler

Charles Moore's picture

68 million acres production is a fraud

Fraud is the method used to derive the 4.9million barrels a day increase in oil production a day from non-producing leases. The method was used by Steve Feldgus, staffer for the subcommittee on Energy and Minerals, Committee on Natural Resources. Feldgus being the creator of the 4.8 million was confirmend to me on 2 Sep 2008 by a female staff on the subcommittee.

The method was confimeed to me by email on 26 Sep 2009 from Mr Romans, policy section of HCNR. I had been trying for 10 weeks to get the method. I came up with the method and Ms Romans confirmend

What Mr Feldgus did was
- create a percentage of the difference between total producing and total non-producing acreage for the two types of leases, onshore and offshore
- Multiply each percentage by the present total production from the applicable lease type (onshore or offshore) to come up with estimated production for each nonproducing lease type
- added the two estimated nonproducing lease types to come up with 4.8 million barrels of oil from nonproducing leases

The method is bogus for no one in the oil and gas industry would ever use such a method and neither would the government agencies that provide such estimates to Congress (US Geological Survey, Energy Information Administration, Minerals Management Service). When oil and gas industry or government agencies make production estimations, it is based on reservoir estimations which was not done by Mr Feldgus. Experts also give production estimates over a range of low, mean and high which reflects uncertainty for reservoir estimates are uncertain which are also made with a low, mean and high estimate,. Yet Mr Feldgus gives a single number, which denotes certainty.

Factchecker's picture

Do tell.

Do tell.

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