The Real Story Behind Offshore Drilling Posted by The Editors

From NSN Intern Max Stoiber, who highlights the blatant nod to oil companies contained within the Bush-McCain policy of expanding off-shore drilling.

One of John McCain’s biggest flip-flops yet has been his reversal on offshore drilling, which he opposed as late as May, but has now dedicated his full blown support to. His arguments have supported the wide-spread misconception that the ban is strangle-holding the energy companies, who so desperately want to drill oil and help poor Americans escape their financial malaise. This assertion is totally wrong. A report by the committee of Natural Resources clears up a few overlooked facts about the issue:

“Combined, oil and gas companies hold leases to nearly 68 million acres of federal land and waters that they are not producing oil and gas. Oil and gas companies would not buy leases to this land without believing oil and gas can be produced there, yet these same companies are not producing oil or gas from these areas already under their control.”

On the Outer Continental Shelf, 79% of federal oil is located in areas that have been open for leasing and production for years. The same goes for natural gas, 82% of which has been open for exploration and development. The statistics get even better:

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

This means that the oil companies are sitting on a giant reserve of oil and gas and are choosing not to develop it.

What is John McCain complaining about? If the energy companies started producing the oil that is already available to them, they could cut US oil imports by a third. So why give them even more land for free? All that lifting the ban would do is give the oil companies more land at less expense for them! Not to add the fact that it would take upwards of 20 years to fully extract and develop oil from these sites, which would, if at all, affect the price of oil 5 presidential terms from now. Lifting the offshore drilling ban has absolutely no discernible merit to anyone except the oil companies, who would save costs and make more profits as a result.

Comments

[Dan Q. Public]

The post seems a bit self-contradictory. I mean, as far as vilifying business, sure, it works, but....

If those leases already held were profitable, or even exploitable, why aren't they being exploited? I respect the acumen of those running such profitable companies (for good or ill), but certainly with oil prices what they are now the oil companies would be working midnight shifts to put those leases into production. If they were profitable. If they are so profitable but not being exploited, why would the oil companies want to sink more money into (offshore) leases which are more expensive to develop (by nature of being far from shore and, y'know, underwater) and have such long lead-times?

Remember, these things aren't free. Leases are not grants, and development costs are not negligible. Hearing Steny Hoyer on NPR this morning parroting this same line--'look at all this untapped wealth already leased!'--made me laugh. Are serious commentators supposed to believe that on one hand, oil companies are rapacious behemoths bent on extracting every dime from the ground as quickly as possible, and on the other hand that they are sneakily not exploiting the resources they have already sunk costs into in a time of unprecedented profit opportunity?

Not to mention this goofy-but-widespread 20 years number. From JFK's challenge it took us less than half that time to put an American on the moon. Are you seriously saying it would take so long, in an environment of perfect motivation, to draw a barrel of oil from the seabed?

[John Hunter]

This is a goofy story. It sagely concludes that 79% of US oil is located on lands that were open for leasing for years. Where is it supposed to be located - on lands that were never opened? This is meaningless tripe.

If one could extrapolate as these autors did the success rate from successful development onto raw exploration lands, we'd all be rich.

[Mainer1776]

Lying Democrat staffers of the House Natural Resources Committee cooked up the phony report about 68 million acres of leased land POTENTIALLY yielding 4.8 million barrels of oil per day. It's TOTAL fabrication. There's not a geologist or petroleum scientist among them. Why are the lying Democrats in Congress working so damn hard to impoverish the American people? Why are the lying Democrats in Congress working so hard to destroy what's left of the American economy?

I hate the Democrats and everything they stand for.

[Carol]

What makes me laugh is the money the government makes from taxes on gas...over a trillion dollars...and yet they talk about the evil oil company empire and the "record breaking" profits they make, totally ignoring the travesty of what they take...

And Obama wants to raise taxes even more...

[Carol]

What makes me laugh is the money the government makes from taxes on gas...over a trillion dollars...and yet they talk about the evil oil company empire and the "record breaking" profits they make, totally ignoring the travesty of what they take...

And Obama wants to raise taxes even more...

[Charles Moore]

Fraud was created by the House Committee on Natural Resources claiming that 4.8 million barrels of additional oil can be produced from the 68 million acres of non-producing leases. The 4.8 million figure is completely bogus because the method to derive the amount is a total fraud.

The fraud was created by the House Committee on Natural Resources, with their June 2008 special report, which was released 18 June 2008. The report provides neither data.or method .I had been trying for 10 weeks to obtain the method. On the rare occasion when someone at CNR would answer the telephone, I was shuffled off to someone else resulting in voice mail and never a return call. Previous attempts through Rahall's office were always back to the CNR switchboard. This time I told Rahall's district staffer I had been trying for 10 weeks and that I watched Rahall on CSPAN talk about this great openness that now exists.

The confirmation as to the CNR method was from Katherine Romans, Policy Section, House Committee on Natural Resources. The confirmation started with a 25 September 2008 telephone call to her that was made via Rahall's district office. I finally came up with the method on my own and Ms Romans confirmed that I was correct in her 26 Sepember 2008 email to me, which is below
The Method
- created a percentage of non-producing acreage to producing acreage for the two lease types, onshore and offshore
- multiplied each percentage by the amount of daily production from each of the two lease types that produce oil
- added the two numbers together

The method is fraud for no one in oil and gas or the government agencies that provide production estimates to the government (US Geological Survey, Energy Information Administration, Minerals Management Service) would ever use such a method. Production estimates are based on estimated reserves, which Mr Feldgus did not use. Production estimates are always given with a low, mean and high amounts, which reflects the uncertainty yet Mr Feldgus issued a single number, which denotes certainty. Production estimates are uncertain because the amount of oil is uncertain and is reflected in reserves being comprised also of three amounts of low, mean and high. The difference between high and low are in the billions of barrels. As a professional staffer who deals with energy matter, Mr Feldgus knows how production estimates are made and why so for him use the method that he did is fraud and he knows it. There is not one shred of validity in the method Mr Feldgus used.

The amount and method was the creation of Steve Fledgus, staffer on the CNR subcommittee on Energy and Natural Resources. On the afternoon of 2 September 2008, Debroah (subcommittee Energy and Minerals) confirmed to me, by telephone, that the data came from Materials Management Service but did not say what the data was. I called back the same afternoon to the subcommittee and spoke to one of the other two subcommittee female staffers who said Steve Feldgus did the work. I left a voice mail twice with Mr Feldgus for the method but did not return my telephone call.

America can not continue using oil as we have and we can not produce enough oil to get us to energy independance. New sources of energy are needed as well as increased efficiencies. But oil and gas will still be the dominate sources even in 2030, according to the Energy Information Administration and even the Wilderness Society.

Though I live in Houston, I do not work in oil and gas and I am not an operative for any group. I am one citizen who delved deeply into the condition of our nation's oil and gas.

Partisan politics is the way the system works because there are different views on issues but that does not give anyone in Congress the right to lie and perpetrate a fraud to further any cause.

Are you open minded enough to contact HCNR (202-225-2761) and ask for the method and all of the needed data? Also ask them to explain the validity of their method when every other organization would not use why HCNR they used and why they claim their method is valid?

[Charles moore]

Change the phone number to 202-225-6065

[rf money]

They supply cheapest rf cp for the player.
They have cheap rf gold. I usually
buy rf gold from them.
rf online goldThey have professional worker help you.

[Anarchy Online credits]

When you have Anarchy credits, you will become strong. With Anarchy Online credits, you can upgrade and admire by others. You can use Anarchy gold to start the journey of the world. So, do not hesitate, let us move to buy AO credits

[dd]

I hope i can get twelve sky Gold in low price,
Yesterday i want to buy 12sky gold for my friend.

[Metin2 gold]

What do you know Metin2 gold. And do you want to know? You can get Metin2 yang here.

[Bottega Veneta Wallets]

What do you know Metin2 gold. And do you want to know? You can get Metin2 yang here

[Balenciaga bags]

What do you know Metin2 gold. And do you want to know? You can get Metin2 yang here

[replica Tiffany Money Clip]

What do you know Metin2 gold. And do you want to know? You can get Metin2 yang here

[Tiffany Necklace]

What do you know Metin2 gold. And do you want to know? You can get Metin2 yang here

[luxury watches]

I am so with you,rolex watch
luxury watch

[luxury watches]

I am so with you,rolex watch
luxury watch

[Louis Vuitton]

Mysterious black bezel and case, case materials for cement and steel production hasLouis Vuitton been the industry standard TEXIN belt do? 985U black rubber information, and the price and spraying mosaics, showing a high hardnessLouis Vuitton steel lesson material, with a special texture satin. Rubber surface show the appearance of fine lines beautifully, from the electro-corrosion to form the inner mold carved.