zepboy wrote:It was pointed out to me that the oil companies are not drilling in already leased land for a variety of reasons. These reasons include lack of cost effective accessibility, wetland designations which prohibit intrusion, lack of proper wilderness zoning to allow drilling.
In fact, though the government has leased much land for drilling, there are restrictions that don't allow drilling in over 50% of these lands. Also, after speculation, much of this leased land isn't worth drilling on.
One thing the drill haters aren't mentioning is that the leased land was leased on speculation, prior to investigating whether it was drillable. That was the only way oil companies could secure the land before special interest groups got involved. Now, these special interest groups are complaining that they aren't drilling on land they have already leased.
Zep, thanks for that info. I really couldn't find it in a web search.
I must admit, I find their excuses to be so lame. Snapping up land blindly, not even checking for oil drilling viability prior to purchase? Wow, sounds entirely "Bush-era." I have a few million acres of swampland they may be interested in. I hope moronic actions such as this are not practiced as much in the near future. We don't have tons of time to mess around anymore.
Simple economics dictates that you don't work where you don't make a profit.
Silly as it sounds, even though big oil is making money hand over fist,
if there are no profits to be made in land already available for drilling...
there will be no drilling. Simple economics.
I think the oil companies have known about the "profit" margins in available
land for decades, but I could be wrong.
I'm sure they have known it for decades. That makes it worse. I meant that it merely sounds "Bush-era," (a term we will all become familiar with in the delicate years to come.)
Big Blue Owl wrote:I'm sure they have known it for decades. That makes it worse. I meant that it merely sounds "Bush-era," (a term we will all become familiar with in the delicate years to come.)
If by Bush-era you mean Bush 41, I couldn't agree more. It was his own father's executive order that Dubya repealed the other day. A lot of us were referring to Bush 41 back in his day as "the regulation president".
Or I could be completely misunderstanding you. I'm still pretty bleary-eyed this morning.
NEW YORK (Reuters) - A U.S. Coast Guard cutter will embark on an Arctic
voyage this week to determine the extent of the continental shelf north of
Alaska and map the ocean floor, data that could be used for oil and
natural gas exploration.
U.S. and University of New Hampshire scientists on the Coast Guard
Cutter Healy will leave Barrow, Alaska, on Thursday on a three-week
journey. They will create a three-dimensional map of the Arctic Ocean
floor in a relatively unexplored area known as the Chukchi borderland.
The Healy will launch again on September 6, when it will be joined by
Canadian scientists aboard an icebreaker, who will help collect data to
determine the thickness of sediment in the region. That is one factor a
country can use to define its extended continental shelf.
With oil at $114 a barrel, after hitting a record $147 in July, and sea ice
melting fast, countries like Russia and the United States are looking north
for possible energy riches.
"These are places nobody's gone before, in essence, so this is a first
step," said Margaret Hays, the director of the oceanic affairs office at the
U.S. State Department. She said the data collected may provide
information to the public about future oil and natural gas sources for the
United States.
My godmother said that if she realized how much she'd be paying for gas, she would not have come. The highest we paid for gas was $1.689/litre. She's averaging $300+ a day for gas! *gasp!*
Senator Jeff Bingaman, Congressman Nick Rahall,
House Speaker Nancy Pelosi and other members of
Congress who oppose producing more American oil
are in a bind.
They know voters are hurting from high gas prices and overwhelmingly
want the government to allow more American oil production. But they
can?t side with the American people and risk upsetting their left-wing
base. So they needed a way to make us think they support more drilling ?
while effectively preventing us from ever drilling a single new well.
They think they?ve found a solution: a proposed ?use it or lose it? law on
federal leases for energy exploration. Bingaman, Rahall and fellow
drilling opponents accuse the oil industry of ?sitting on? 68 million acres
of ?non-producing? leased land. They want to force energy companies
to ?use? this leased land within ten years ? or lose all exploration and
drilling rights.
America can only hope the proposed law is Bingaman and Rahall?s clumsy
attempt at political jujitsu. The alternative is that the politicians in charge
of committees that determine US energy policy are confused and
ludicrously disconnected from reality.
First, lease agreements already require that leased land be used in a
timely manner. The 1992 Comprehensive Energy Policy Act requires
energy companies to comply with lease provisions, and explore
expeditiously, or risk forfeiture of the lease. So the Bingaman-
Rahall ?solution? effectively duplicates current law.
Second, and more disturbingly, Bingaman and Rahall?s groundless
accusation and proposed legislation rely on the absurd assumption that
every acre of land leased by the government contains oil. Obviously,
that?s not the case.
The truth is, finding oil is a long, complex, cumbersome, expensive
process. It starts with an idea ? about what kinds of geologic structures
are likely to hold this vital resource. Based on that idea, companies
purchase leases: agreements that allow them to test their ideas, and
hopefully find and produce oil and gas from leased properties.
Then geologists look at existing data and conduct seismic, magnetic and
geophysical tests of the leased areas. They create detailed 3-D computer
models of what subsurface rock formations look like, and whether there
might be any ?traps? that could hold petroleum.
Most of the time, all this painstaking, expensive initial analysis concludes
that the likelihood is too small to justify drilling an exploratory well, since
the cost of a single well can run $1-5 million onshore, and $25-100
million in deep offshore waters. Only one of three onshore wells finds oil
or gas in sufficient quantities to produce it profitably; in deep water, only
one in five wells is commercial. Thus, only a small percentage of the
leased acres end up producing oil.
This is important because it means most of those 68 million acres
Bingaman and Rahall want to force oil companies to drill actually don?t
have enough oil to make it worth drilling. Either they know that, and are
trying to deceive us; or they don?t know it, because they haven?t done
their homework.
Third, if a commercial discovery is made, more wells must be drilled, to
delineate the shape and extent of the deposit. Production facilities and
pipelines must be designed, built, brought to the site and installed. Only
after oil or gas is actually flowing does the lease become ?producing.?
In one example, Shell Oil and its partners leased an area in 7,800 feet of
water 200 miles off the Texas coast. They spent five years exploring and
evaluating the area, punched several ?dry holes,? and finally drilled a
discovery well in 2002. Three appraisal wells (at $100 million apiece)
confirmed a major field, and in 2006 the company ordered a huge
floating platform and pipeline system that will initiate production in 2010. Total investment: $3+ Billion.
That?s hardly ?sitting on their leases.? But those leases will be ?non-
producing? until 2010. Clearly, a ?use it or lose it? law will do nothing to
change these hard realities.
Thirteen years may sound like a long time. It is longer than usual. But
compared to the decades it will take for wind power to make a
meaningful ? but still unreliable ? contribution, it?s nothing.
Further complications often stymie energy companies from obtaining and
using leased land.
Every step in the process must be preceded by environmental studies, oil
spill response plans, onsite inspections, and permits. The process takes
years, and every step is subject to delays, challenges ? and litigation.
In the Rocky Mountains, protests against lease sales rose from 27% of all
leases in 2001 to 81% in 2007, according to government and industry
records. Numerous additional prospects were never even offered,
because land managers feared protests.
The justification used to be endangered species. Now it?s climate change ?
as though US oil causes global warming, but imported oil substitutes do
not.
If and when leases are issued, seismic and drilling work is often
protested. Some years ago, an endangered plant held up drilling ? until
companies realized the Astragalis was locoweed, which ranchers had
been trying to eradicate because it sickens cattle. This year, the excuses
are drilling fluids that are 98% water and clay ? and sage grouse, even
though hunters shoot thousands of them every year.
The obstructionist tactics mean hundreds of millions of dollars in lease
bonuses and rentals, seismic surveys and other exploration work are in
limbo. None of this money has been refunded to companies, and no
interest is paid to the companies. The money would pay for thousands of
wells that drilling opponents say companies refuse to drill.
These lands are non-producing, not because companies are
procrastinating ? but because politicians and bureaucrats have bowed to
pressure from radical environmentalists, and refused to issue permits.
We don?t need a ?use it or lose it? law ? or more cheap-rhetoric, big-oil
conspiracies. Congress simply needs to allow drilling on the 60% of
onshore federal oil and gas prospects and 85% of Outer Continental
Shelf prospects that it has placed off-limits.
Furthermore, instead of a ?drill it or lose it? law, we need a ?permit or
pay? rule:
* When the government sits on permit applications for more than six
months, companies no longer have to pay lease rents; instead, they get
interest on their bonus payments and expenses to date, and lease terms
are extended.
* When environmental groups lose their legal actions, they pay the
companies for the court costs, delays and attorney fees.
When you go to the ballot box this fall,
remember who?s really behind the outrageous
prices you?re paying for the energy that makes your
job, home, car and living standards possible.
Remember the simple solution: Stop the war on poor families. Issue
leases and permits.
My state is only less expensive than Alaska and Hawaii. We are 30 cents a gallon above the national average. And the citizens are ticked be cause we know we're getting ripped off. And we're also ticked because we don't know what to do about it.
