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The Domestic Drilling Myth Exposed

By David Sassoon

Jun 12, 2008

Boy did Wall Street Journal columnist Daniel Henninger get it wrong in his column called today. It's a long diatribe on the need for the US to drill for domestic oil to get out of energy trouble.

At this point in time, is there another country on the face of the earth that would possess the oil and gas reserves held by the United States and refuse to exploit them?

He blames regulatory restriction for the lapse. If only we could get all that oil in the Arctic National Wildlife Refuge. And the oil and gas tucked away around the US continental shelf. And so on.

He obviously didn't read the that contains this shocking bit of evidence: oil and gas companies hold leases to 68 million acres of federal land and waters that they are not exploiting.

That's right. Permits in hand for 68 million acres and they aren't drilling! drilling! drilling! and here's what that means.

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%. 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).

That's why House Natural Resources Chairman Nick Rahall of West Virginia introduced a bill in the House today -- the Responsible Federal Oil and Gas Lease Act of 2008 -- that would essentially force oil and gas companies to "use it or lose it."

That's the way it already is in the coal industry. Coal leases are issued for 20 years and coal companies have to show that they are “diligently developing” their leases. Oil and gas companies are not required to do so, and as a result, they've stockpiled leases and 68 million acres worth are non-producing.

Seems like the bill would foster prompt development of oil and gas leases in areas already chosen by oil and gas compnaies to be appropriate for energy development, enough to double US production, without disturbing the Arctic.

What say you, Mr. Henninger? Time to get serious?

See also

The Domestic Drilling Lie Blown Apart in One Graph

Drill

I just think drilling will help us be a . There are so many ways to get good energy source.

Fraud claiming 4.8 million barrels of oil a day from nonproducin

Congressman Rahall perpetuated a fraud that was created by his House Committee on Natural Resources claiming that 4.8 million barrels of oil a day could be produced from the 68 million acres of nonproducing leases. His claim 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.

If you want verification, contact HCNR (202-225-6065) and ask for the method and all of the needed data? Also ask them to explain the validity of their method when no other organization would use it

Charles Moore
Houston, Tx

Hardly a fraud

The oil industry holds 68 million acres of leases it is not exploiting. If you believe 4.8 million barrels a day is an inflated number for what those lands could produce, what is the correct number?

Calling the number a "fraud" is neither accurate nor constructive. The oil companies bought the leases. Why, if not for the oil they would find?

And the fundamental point remains: the oil companies really don't need access to new offshore fields until they're done with the 68 million acres they've already got the rights to.

Take another look...

The leases held by these companies allows for exploration, but they don't allow them to take any oil out of the ground. It's not the oil companies, it's congress.

Don't Empty the Pantry before Armageddon!

We've been exhausting our reserves since the late 1800s. Since 1970 we've been on the down-slope of production because WE'VE EXHAUSTED ALL THE CHEAP AND EASY RESERVES in the U.S. Why don't the oil companies drill the 68 million acres of federal land and water? Because they KNOW world oil prices will be doing nothing but going UP, UP, UP over the next 30 years as world reserves play out and world production peaks and begins to fall with greater and greater demand.

Sure. Drill and consume every drop of American oil RIGHT NOW so I can go on long Sunday drives with my big SUV. 20 years from now when we have NO domestic reserves in a very ugly situation with world shortages, our generation will look like self-absorbed irresponsible idiots.

If the US wants to continue its role as a world superpower we'd better get off our butts and get alternative energy and oil conservation up and running SOON. In the world lottery for oil reserves, we came up on the short end, and we've managed to squander a big portion of that in the last 30 years.

Just Democratic Pandering

This is just Dems pandering to their base. And it makes no sense, from the bad use of statistics to the mere fact that it doesn't make economic sense.

Read about here.

How is it that Bush talks

How is it that Bush talks about taking action and getting something done about oil production but doesn't criticize the oil companies for NOT TAKING ACTION DRILLING ON THE 68 MILLION ACRES that they already have. If he's really concern with the crisis going on here in America than he should urge those who have the access to REALLY do something (like the oil companies' 68 mil acres of land) to REALLY DO SOMETHING!!!

No Crisis Just Politics

In America we don't have a lack of oil reserves and highly potential sites to drill.
What we have is political mayhem. In our rural town alone we have a substantial radius of pure sweet oil - drilled and capped off just waiting for permission to come and get it. We alone as a community in NW Florida have known for 25 years that we have oil. Geologist's have confirmed it. Wildcatter's and big oil companies have leased and drilled until they were fined so much by the EPA that they had no choice except fold their tent and go home.
As long as we as a nation keep buying the oil crisis spin and depend on foreign markets, then get used to paying permanently at least 5 to 6 dollars a gallon at the pump.
We HAVE it...let's USE it. Can you imagine the jobs that would open to a generation
that at this moment are unemployed, disallusioned and so financially insecure they are one step away from the poor house. Some have NO poor house as we speak.
No oil crisis exists. A political one DOES, however.

HUH?

In response to the guy above, YES they would pay the lease and not drill. Why not? That is a tax deduction for them and I am sure the royalty they must pay is a lot higher if they do drill and start pumping oil. Listen, the BIG corporations are ripping us off thru the politicians.....when are we going to take off the stupid blinders we wear and wake up and see the government and the corporations are selling us down the river and there aint no net! Wake up America.....read the constitution about it being "our duty" to make change in the government when it is not doing the right thing......or, quit complaining let them sell us down the river and roll over and die! THEY DON'T CARE ABOUT US! If they did they would do something. Not only is fuel hurting....but think for a minute......everything is shipped by rail,ship,truck or air. That means EVERYTHING we use is going to go up in price........NOW DO YOU GET IT?

moron

Oil companies are asking for more land to drill on. Do you really think that they pay hundreds of thousands of dollars per acre to lease land and then not use it and ask for more, if that land was profitable?

They have to lease it before they can explore it and do the necessary research on it. Most of the time they find it is not profitable to drill there. They also know it is more profitable to pay out the ten year lease and not use it than to try drilling on it. Oil is just business. If they say they need more land, then they can use it.

Oil lease prices

In response to the aptly named poster above, what are you thinking? "hundreds of thousands of dollars an acre"?? The actual prices are just a little lower, more in the 3 dollars an acre range..

It's a giveaway, and it's because the oil companies believe in peak oil. They know that the Saudis are declining in their production, and it's only a matter of time before China and India come online as super consumers and drive prices even higher. Then it WILL be profitable to drill there, or anywhere else for that matter.

Most companies are not disclosing whether they have explored AT ALL. "they can use it" indeed. Use it to keep their Saudi friends in business.

Want more of the Same? Vote McCain

I'll vote for Cindy as Ms Buffalo chips though...

Good Morals

Oil companies get richer off profits while hard working Americans suffer and struggle to make ends meet. Selfishness over selflessness. I MEAN REALLY....IS THAT WHAT THIS COUNTRY THAT WAS FOUNDED ON CHRISTAIN PRINCIPLES IS ALL ABOUT? Give me a brake!!!! We are becoming divided as a nation like back during the civil war. Only this time its about INTEGRITY and DISHONOR instead of slavery.

Transition to Solar Power and Electric Transportation

We all are painfully aware that we will continue to need fossil fuel while we transition to clean energy. However, there is not a clear energy plan from our central government to make this a policy. The next President and our Congress must rid themselves of scientific ignorance and address this issue full on with the zeal we had when we implemented the Manhattan Atom Bomb project...it's that serious!

I don't think even if we allowed the oil companies to drill on all the sensitive areas of the U.S. it would make that much difference because that oil won't come on line for 5 to 10 years and because the price of oil is set globally and not locally, we would remain at the mercy of governments like China that subside gasoline directly for their consumers. I truly don't understand why our Senate republicans continue to be driven by allegiance to the oil companies and continue to block all attempts to move the country to clean power.

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