[AlCzervik]

Thom Hartmann has been beating on this on Air America. Apparently, a ton of drilling permits are going unused. This is a pretty interesting twist to all the drilling rhetoric we hear now. This production info has to be bull----.

Since the 1990s, drilling on federal lands has steadily increased as a result of federal government policies that encourage development. The number of drilling permits has exploded in recent years, rising from 3,802 five years ago to 7,561 in 2007. Between 1999-2007, the number of drilling permits issued in public lands increased by over 361%, yet gasoline prices have also risen dramatically, contradicting the argument that more drilling means lower gasoline prices. There is simply no correlation between the two.

Even if increased domestic drilling could reduce gas prices, there's no justification to open additional federal lands because oil and gas companies can't keep pace with the number of drilling permits the federal government is handing out.

Over the past four years, the Bureau of Land Management has issued 28,776 permits to drill on public land - 18,954 wells were actually drilled. That means companies have stockpiled nearly 10,000 extra permits. The Feds have made 47.5 million acres of on-shore federal lands available to developers - about 13 million acres are in production. Similar trends are evident offshore where only 10.5 million of the 44 million available acres are currently producing oil or gas.

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 if they didn't believe oil and gas could be produced there, yet they are not producing oil or gas from these areas already under their control.

Current inactive leases 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).

The Truth About America's Energy: Big Oil Stockpiles Supplies and Pockets Profits.
U.S. House of Reps. Study PDF.

[Aaron]

Ahem...

[aahala2]

All the numbers in the Hartmann article could be correct and
most of his conclusions and opinions are unconnected to the
numbers.

His statement that drilling and production(or gas prices) are
not highly related I agree with, but so what? Only a fool would
claim it, so it's just a straw man.

His statement that we can't drill our way out of the oil problem,
excellent! He's smarter than John McCain! Big deal.

[ROCKMAN]

aahala2,

You right about McCain. It really irritates me when he talks about "energy independence" as if there were any possibility. I've been a petroleum geologist for 33 years and know better than most what our limitations are.

On the other hand, all this chatter about "stockpiled” drilling permits and leases being undrilled is all just an effort to confuse the reality. First you can't stockpile drilling permits: they expire after a period of time…usually a year. Second, if I'm going to drill an exploratory well offshore I might apply for half a dozen permits initially. It can take over a year to get a permit approved. If I make a discovery I might want to offset it right away thus I would have a permit already approved. If I drilled a dry hole then I would throw the unused permits away. Thirdly, there's a reason a lot of the offshore leases are available but no one wants. Many of these leases have already been drilled, produced and abandoned. These are the lease that have already provided the billions of bbls of oil and trillions of cubic ft of gas we’ve produced from the offshore areas over the last 50 years. And lastly, there's another reason a company may be holding on to a lease without drilling it. They may have already sunk a dry hole on it. The lease will expire anyway in a fixed numbers of years. In the meantime, the company would retain the lease even if they didn't think it had value. Over half the wells I've drilled in the Gulf of Mexico were leased to another company that didn’t want to drill anymore for whatever reason. These are called "farmins" in the industry. Essentially like subleasing an apartment from someone.

As far as drilling rig availability goes, such rigs that can drill in the shallower shelf waters have been leaving the Gulf of Mexico for years going overseas. There's not much acreage left there to drill in the shallow waters. The Deep Water Gulf of Mexico is where the action is today and new drillings rigs are arriving here as fast as they can build them. Open up other shallow water areas of the OCS for drilling and there will be plenty of rigs to drill it.

Now, whether we should open up these areas or not is a different issue altogether and is debated here extensively. But using such totally misleading stories does not benefit the discussion at all. Both sides of the debate have their straw men doing just that on a daily basis.