doodlebug2 wrote:Why are they not being used? (most likely a dumb question) Anyway, I just wanted to find more info about these leases as they seem to be in the news.
Its not a dumb question....the dems in Congress are claiming they won't open up ANWR or new offshore areas in the lower 48 to new drilling because there are huge amounts of leased acreage that aren't being drilled now.
What gives?
It turns out that when the U.S. Government puts land up for lease, they divide it into multiple lease blocks.
Some of these are good --- seismic evidence may suggest they contain oil....but some are bad, and there is nothing about them to suggest they might have oil.
When the lease sale occurs, the oil majors will bid on the "good" parcels of land. In one auction I was involved in Chevron bid almost a billion dollars for a couple of parcels in the Santa Barbara Channel. Chevron has since built an offshore platform and is producing oil from their lease.
The oil majors usually ignore the adjacent "bad" parcels, and these are typically leased for a few dollars per acre by individuals or small companies. These people have no plans and no intention to develop this land. They lease it because they hope that at some time in the future one of the majors may reconsider and decide they want to drill on the "bad" parcel. Then they will re-lease to the major and make big bucks. This has happened a few times.
It is either extremely ignorant or extremely dishonest of the dems in Congress to demand that all the "bad" parcels of land already leased by the government should be producing oil and to then refuse to allow more leasing or exploration because older parcels that don't have any oil potential aren't producing oil.