The government 'use it or lose' survey scam
Image via WikipediaThe Department of Interior’s so-called “use it or lose it” report was delivered to the White House yesterday. Rather than being an unbiased analysis of the status of oil and natural gas leases in the United States, the report sadly perpetuates the misguided charge that the oil and gas industry is not developing its existing leases.The argument of the government is one that Democrats have made before. It contains an inordinate amount of ignorance at its core. Why would any company invest millions in a track and not develop it if it had recoverable oil and gas. The proposition is just preposterous.
For the record, ExxonMobil is actively producing or working 93 percent of its federal leases. Of the remaining 7 percent that are currently inactive, the majority of those leases expires this year and will be returned to the U.S. government.
Back to the report. It claims that “more than two-thirds of offshore leases in the Gulf of Mexico and more than half of onshore leases on federal lands remain “idle.”
A sensational charge – until you read the fine print. To support the claim that the leases are “idle,” the DOI defies common sense to define “inactive leases” as follows:
“Inactive leases,” or leased areas that are not producing nor currently covered by an approved exploration or development plan. These areas may be subject to certain ancillary activities such as geophysical and geotechnical analysis, including seismic and other types of surveys.
Did they just call a seismic survey – one of the most fundamental activities of finding oil and natural gas – ancillary? Meaning it’s not essential, secondary in nature, or extra activity?
Yes, they did. And that proves my point. You don’t have to be an industry expert to know that seismic surveys – along with a whole host of other activities – are among the most essential activities in oil and gas exploration, and anything but a sign of “inactivity.”
It is hard to escape the conclusion that this study, along with the “use it or lose it” legislation, is a thinly veiled political ploy – not only for the discrepancy that I just pointed out, but also because there’s already a “use it or lose it” law on the books. Politicians who don’t want to open up access to U.S. energy resources also don’t want to be blamed for high gas prices – so trying to convince Americans that oil companies are sitting on precious oil resources is their strategy. We’ve seen this before, and we’re seeing it again now.
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This is clearly a ploy to cover for the fact that the administration has been actively trying to strangle domestic production of oil and gas both on and offshore. It they would open up the areas they have made off limits there would be significant investment in producing oil and gas and it would create thousands of jobs and produce billions of dollars of royalties to the government.
The good news about this report is that the administration is clearly on the defensive with its energy policy. This report gives us and opportunity to demonstrate how out of touch with reality those policies are.
Here is a statement from API on the survey.
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