Houston Chronicle: Obama challenges oil companies to drill existing leases
By Jennifer A. Dlouhy
Published 08:37 p.m., Tuesday, May 15, 2012
WASHINGTON – The White House on Tuesday pushed back against the oil and gas industry’s claims that the Obama administration is blocking domestic energy development, releasing a new analysis showing that 46 million acres of federal lands and waters leased for drilling are sitting idle.
According to the Department of Interior report, oil and gas companies are actively drilling or have launched development on less than a third of the 36 million acres they have leased offshore, and on just over half of their onshore leases.
That includes leases where the companies have not yet filed exploration and development plans with the federal government, and ones where companies have received drilling permits but haven’t launched the work. According to the report, the government has issued about 7,000 permits for exploration not yet under way on federal and Indian lands.
The Interior Department analysis, which updates an assessment issued last year, comes as industry leaders accuse the Obama administration of walling off access to domestic energy resources. In particular, industry leaders and their congressional allies complain about the Interior Department’s decision not to sell drilling leases in the Atlantic and Pacific oceans over the next five years.
With gasoline prices and the economy looming large at the ballot box this year, the administration has been emphasizing its commitment to an “all of the above” energy policy and especially touting its support for domestic natural gas production.
Administration officials said the report underscores the White House’s commitment to allowing oil and gas drilling on federal lands and waters.
“We continue to make millions of acres … available for safe and responsible domestic energy production on public lands and in federal waters,” said Interior Secretary Ken Salazar in a statement. “We also want companies to develop the tens of millions of acres they’ve already leased but have left sitting idle.”
But industry leaders argue that the administration’s numbers don’t reflect the sometimes-long lead times between buying leases and winning federal regulators’ approval to drill on those tracts, or the time needed to assess leases geologically before launching exploration.
American Petroleum Institute President Jack Gerard dismissed the report as “election-year politics” and said it was “absurd to contend the industry pays the government billions of dollars every year in bonus bids and rents to leave land idle.”
On the contrary, Gerard insisted, oil and gas companies develop leases as expeditiously as they can.
“The industry last year alone invested $200 billion in the United States,” Gerard said. “So we’re hardly sitting on anything. We’re waiting for Uncle Sam to give us permission to produce these resources.”
Industry representatives also argue that it takes time for companies to conduct technical research and plan for drilling – generally without any guarantee that they will find oil and gas.
Kathleen Sgamma, vice president of government and public affairs at the Western Energy Alliance, said the administration was trying “to deflect blame for leases that are not producing onto the industry.”
Sgamma said the alliance estimates that about half of non-production on onshore acres results from “redundant regulations and bureaucratic delays,” not industry disinterest.
‘Use it or lose it’
Some congressional Democrats have argued that the onus is on the industry to develop their existing holdings. They have proposed “use it or lose it” fees for undeveloped leases that would be paid on top of existing rental rates.
In a bid to spur development, the Interior Department already has boosted annual rental rates for offshore acres that are leased but haven’t started producing oil. The government also has shortened the leasing times for initial drilling in some shallower water depths and hiked the minimum bid for some offshore tracts from $37.50 to $100 per acre.
Separately Tuesday, the Interior Department’s Bureau of Land Management kicked off the formal planning for a November lease sale in Alaska’s National Petroleum Reserve, when it asked energy companies and other stakeholders to say what parts of the region – if any – should be auctioned for drilling.
As many as 630 tracts covering 7.1 million acres in the reserve could be up for grabs.
Transportation Nation Report: 70 Percent of Offshore Oilfields Unused
By Andrea Bernstein | 05/15/2012 – 3:01 pm
Some 26 million acres of offshore areas currently under lease for oil and gas development are inactive, according to a report issued Tuesday by the Department of the Interior. A DOI press release touts the finding, and pushes oil companies to, umŠdrill, baby, drill.
The report comes as President Barack Obama pushes his so-called “all-of-the-above” energy strategy, which includes development of alternative fuels but also more vigorous oil drilling.
Here’s an excerpt from the release.
According to the report, more than 70 percent of the tens of millions of offshore acres currently under lease are inactive, neither producing nor currently subject to approved or pending exploration or development plans. Out of nearly 36 million acres leased offshore, only about 10 million acres are active – leaving nearly 72 percent of the offshore leased area idle.
In the lower 48 states, an additional 20.8 million acres, or 56 percent of onshore leased acres, remain idle. Furthermore, there are approximately 7,000 approved permits for drilling on federal and Indian lands that have not yet been drilled by companies.
“These lands and waters belong to the American people, and they expect those energy supplies to be developed in a timely and responsible manner and with a fair return to taxpayers,” said Interior Secretary Ken Salazar. “We will continue to encourage companies to diligently bring production online quickly and safely on public lands already under lease.”
Bishop Calls DOI’s Comments on Unused Oil & Gas Leases “Smoke and Mirrors”
Leases remain idle from onerous federal regulations
May 15 -
WASHINGTON- Congressman Rob Bishop (UT-01), Chairman of the House Natural Resources Subcommittee on National Parks, Forests, and Public Lands, responded to comments made today by U.S. Department of Interior Ken Salazar that the DOI “want[s] companies to develop the tens of millions of acres they’ve already leased but have left sitting idleŠ”.
“Secretary Salazar’s is basically telling energy companies to run a marathon with a bus strapped to their back. Maybe if the Secretary would reduce rather than add to the redundant bureaucratic red tape and make necessary policy changes that encourage rather than discourage production, companies would be able to development the resources within the leases. Let’s be serious, these comments are smoke and mirrors attempts to appear as though the Administration supports energy production on federal lands. Their thinly veiled attempts to curb specific forms of domestic energy production over the past three years speak for themselves,” said Congressman Bishop.
This graphic from the American Petroleum Institute (API) illustrates the lengthy process required to develop leases.
According to the Institute for Energy Research (IER), in 2011 oil production on federal lands declined from 2010 levels by 11 percent and natural gas production on federal lands declined by 6 percent. However, there was a 14 percent increase for oil production on private and state lands and a 12 percent increase for natural gas production on private and state lands. Natural gas production on federal lands in FY2011 declined by 27 percent from its FY2009 level, when it peaked at 6.82 trillion cubic feet, while natural gas production on state and private lands increased 28 percent during that same period of time.
NATIONAL POLITICS MAY 15, 2012, 6:09 PM
Big Oil lets leases lie dormant
BY LIBBY SPENCER
Libby Spencer separating fact from fiction
A while back, when I posted about domestic oil drilling being at a historic high under President Obama, my conservative friends complained that all the drilling was happening on private land. Not that there’s anything wrong with that, but as it turns out the reason there isn’t more drilling on federal land is big oil companies aren’t drilling on 2/3rds of federally permitted leases. As a new government report on drilling activity shows:
More than 70 percent of the tens of millions of offshore acres currently under lease are inactive, neither producing nor currently subject to approved or pending exploration or development plans. Out of nearly 36 million acres leased offshore, only about 10 million acres are active – leaving nearly 72 percent of the offshore leased area idle.
In the lower 48 states, an additional 20.8 million acres, or 56 percent of onshore leased acres, remain idle. Furthermore, there are approximately 7,000 approved permits for drilling on federal and Indian lands that have not yet been drilled by companies. [...]
In addition to holding thousands of undeveloped leases while lobbying to drill in the Arctic National Wildlife Refuge, off the New England Coast, and in the Eastern Gulf of Mexico, the big five oil companies produced 12 percent less oil in 2011 than in 2006 – all while making record profits.
In other words, all this wailing coming from Big Oil and Republicans about President Obama blocking domestic drilling is a big, fat lie. Also, the American Petroleum Institute, Big Oil’s propaganda arm, is lying when it says this report doesn’t include initial exploratory work. As the quoted part of the report clearly shows, they counted any planning stage as an active site.
So to review, Big Oil isn’t drilling where they already have permits, they’re spending money lobbying for opening up even more environmentally sensitive areas to leases, and they’ve decreased production overall, one might assume in order to be able to charge us more for their products. And let’s not forget the millions they sink into campaigns to support climate change denialists to the detriment of our children’s future on this fragile planet.
Remind me again, why on earth we should be giving these companies billions in government subsidies?
Special thanks to Richard Charter