You can’t go wrong blaming the oil companies for the current troubles with fuel. Apparently that’s what Congressman Peter DeFazio figures.
He claims that the oil industry is hoarding untapped oil resources by not bringing millions of acres of federal oil and gas leases into production. To hammer home that point, he and other Democrats have introduced a bill that would force lease holders to perform or give up their leases.
This hoarding claim sounds pretty far out. Actually, what it sounds like is an attempt to find somebody to blame so that the people won’t blame him and other Democratic opponents of off-shore drilling for the price of gas.
DeFazio points to a congressional committee’s report claiming that the millions of acres of unexploited federal oil and gas leases could sharply increase domestic supplies of those commodities and, of course, wipe out a big share of our energy imports. Well, you have to wonder, if that’s so and the dastardly oil companies won’t do their duty, why doesn’t the government just cancel those leases and hire someone to produce those copious amounts of oil and gas? Wouldn’t that go a long way toward not just making us independent of Venezuela and the Arabs but also shore up the sagging federal budget?
The American Petroleum Institute has a more plausible explanation.
The industry points out that companies pay lots of money — “billions” in the API talking points — for the right to explore on federal land. “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.”
According to the institute, in many cases the so-called idle leases are not truly idle. “They are under geologic evaluation or in development and could be an important source of domestic supply.”
Exploring for oil, though, is a chancy proposition met by failure more often than success. Remember the oil company trucks that crawled around the mid-
valley some 30 years ago, thumping the ground in a fruitless hunt for oil or gas-bearing strata deep underground?
The industry invokes common sense: “If the company finds resources in commercial quantities, it will produce the lease.” But often there are delays, which can be 10 years or more, for environmental and engineering studies, permits, installing platforms and other gear, not to mention litigation and regulatory disputes.
The industry points out something else: Two-thirds of federal lands and 85 percent of the continental shelf are off-limits or face severe restrictions, and there’s no way to tell if there’s any oil or gas there because exploration has not been allowed.
As long as we must rely on fossil fuels to keep our economy going, we ought to develop everything we can. It sounds positively stupid and selfish at the same time to urge the Saudis to produce more oil while we refuse to look for oil even in places where we think we have some.
Accusing the oil companies of deceit may be Rule No. 1 of clever politics. But that’s all it is. (hh)

Comments
July 2nd, 2008
I'm grumpy
Of course they need to take blame. Look at it from their perspective. Why spend your money exploring property that MAY have resources when you can just stockpile your profits for years, at reduced tax rates. Then, when the Iraq oil deal is finally struck by your Washington buddies, you can maximize your profits. Iraq already has millions of barrels in the proven and probable reserves. Why invest billions in American exploration when you don't have to?