Oil and gas companies hold leases on 68 million acres of federal land they are not developing
June 30th, 2008 at 08:21am Pat Cunningham
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Sixty-eight million acres is a whole lot of territory — more than the size of Illinois and Pennsylvania put together.
It’s also 45 times the size of the area the energy companies want to explore in the Arctic National Wildlife Refuge (ANWR)Â in northeastern Alaska.
The question arises: Why don’t the oil and gas companies explore in some of the 68 million acres of federal land on which they hold leases rather than risk environmental damage to ANWR?
The answer: They’re not sure there’s much oil and gas in those 68 million acres, and they don’t want to spend the money finding out.
Another question: If they’re not sure, why have they bothered getting leases?
Answer: Hey, mind your own business.
Yet another question: What’s the Responsible Federal Oil and Gas Lease Act?
Answer: It’s legislation that would forbid the granting of new leases on public land to oil companies that aren’t using the leases they currently have to actually drill for oil.Â
The bill came up for a vote in the U.S. House last week and failed. Nearly all the Democrats voted for it, and nearly all the Republicans voted against it.
HERE’s the roll call.
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22 Comments Add your own
1. Margo Morgan | June 30th, 2008 at 8:33 am
Pat,
How did you like WALL•E? You should write about it. I’d love to hear what you thought.
- MM
2. Pat Cunningham | June 30th, 2008 at 8:54 am
MM: I liked it. Three-and-a-half stars from me.
3. hokumboy | June 30th, 2008 at 10:13 am
Pat,
it’s a good thing you guys aren’t union or Will’d be filing a grievance about now.
4. Millard Fillmore | June 30th, 2008 at 12:41 pm
Wait. You want them to drill in an area where they say there probably isn’t any oil? That can’t be what you’re saying, is it?
5. Kaus | June 30th, 2008 at 12:48 pm
Yep…sounds like Pat is screaming for Nationalizing the Oil companies.
The US government has no concept of profit and would be more than happy to drill in my back yard at a higher cost versus where no one lives to save the polar bears.
You see this same logic in action with using corn to make ethanol.
6. Pat Cunningham | June 30th, 2008 at 1:29 pm
Kaus: What would happen to the oil companies if they got no more handouts and tax breaks from the government and had to operate under an actual free-enterprise system? They’re welfare leeches, Kaus, but you seem not to understand that. You don’t even recognize when you’re getting gouged.
7. Craig Knauss | June 30th, 2008 at 1:59 pm
Why do the oil companies need to drill new holes? There are thousands of capped wells that stretch clear across the country. Wyoming is full of them. So are parts of Illinois , Indiana, Ohio and Pennsylvania. To say nothing of Texas and Oklahoma. And lots of other places. The wells are not used because after they were drilled, the cost of using them went up faster than the price of crude. That’s no longer true. The big issue here is existing wells don’t qualify for exploration tax credits. Oh, and here’s a hot flash: Oil companies can drill dry holes in Alaska, too! There’s no such thing as a “sure thing”.
8. Mike Carroll | June 30th, 2008 at 2:10 pm
I know this is a complicated subject Patrick but stay with me.
Having a lease does not mean that there is any recoverable oil and gas within the lease confines. They know there are recoverable assets in Anwar and offshore. Where would you spend billions in development if you had the title of CEO? All of this involves risk and huge investments with no quarantee of return.
As far as the “use it or lose it” legislation that you reference, its window dressing to make the public think the Dems are actually doing something to curtail gas prices. With your party in the pocket of the tree huggers, I hope you enjoy $8 a gallon.
9. Kaus | June 30th, 2008 at 2:17 pm
Pat….you act like Oil Companies don’t pay any taxes. Welfare leeaches? Everyone gets tax breaks…even you. Go back to your Karl Marx book you were reading on the perfect Utopian World you want to build.
Over the past 25 years, oil companies directly paid or remitted more than $2.2 trillion in taxes, after adjusting for inflation, to federal and state governments—including excise taxes, royalty payments and state and federal corporate income taxes. That amounts to more than three times what they earned in profits during the same period, according to the latest numbers from the Bureau of Economic Analysis and U.S. Department of Energy.
These figures do not include local property taxes, state sales and severance taxes and on-shore royalty payments.
Thanks for my Pat fix….it’s been a whole week. I feel better now.
10. Pat Cunningham | June 30th, 2008 at 4:23 pm
The fact that oil companies pay zillions in taxes doesn’t mean they’re not getting plenty of breaks. The astonishing profits they make result from gouging, which results in great part from the horizontal and vertical consolidation of the industry in recent years. There’s no real competition. Little guys have to buy the stuff from the big guys and consequently can’t retail the stuff at a discount. Look, if McDonald’s has to pay more for beef, I expect the price for a burger to rise by roughly the same percentage. Because of competition, Mickey D’s profits per burger are likely to stay the same. In the oil industry, it doesn’t work that way. When gas was two bucks a gallon a few years ago, Big Oil was making a profit of about 11 cents a gallon. Today, the profit is about 42 cents a gallon. The per-gallon price has roughly doubled; the profit per gallon has roughly quadrupled. Moreover, Big Oil is using lots of its profits to buy back stock and to pay dividends rather than invest in development of alternative energy sources.
11. Menlo Bob | June 30th, 2008 at 7:30 pm
Tax breaks? Examples please.
12. Pat Cunningham | June 30th, 2008 at 9:02 pm
Here are a few: http://64.233.167.104/search?q=cache:y8rkhsQh3DMJ:www.ctj.org/pdf/energytaxloopholes.pdf+%22oil+companies%22+tax+break%27&hl=en&ct=clnk&cd=52&gl=us
13. Menlo Bob | July 1st, 2008 at 2:18 am
Your list is unexceptional. It’s like the tax accounting rules for any type of business involving depreciation schedules for a range of unique situations. They’re often bizarre and incomprehenisible as befitting nearly any governmental activity. I’ll guarantee that newspaper publishers had a bunch of them too, and that was back in the days–2006–that their ‘windfall profits’ were 17-18% compared with oil companies 9%. Large numbers aren’t large profits.
http://www.taxfoundation.org/publications/show/1168.html855955
14. Pat Cunningham | July 1st, 2008 at 7:21 am
Gee, I’m sorry the tax breaks enjoyed by the oil companies aren’t simple enough for you to understand. I’ll speak to them immediately about your complaint. This is just unacceptable.
15. Mike Carroll | July 1st, 2008 at 9:15 am
Face it Pat-the oil companies are not the big bad villains that the left is trying to sell. Good politics I suppose in that the voting public, fed this nonsense by the MSM, are probably dumb enough to buy it. As I said above, I hope you and they enjoy the $8 a gallon that is coming our way.
16. Menlo Bob | July 1st, 2008 at 11:05 am
Discussing oil leases that are not developed ignores the fact that those in process of being developed are included in the ‘undeveloped’ category. When a lease is shown not to have oil, oil companies return the lease to the government.
17. Pat Cunningham | July 1st, 2008 at 11:21 am
By the way, Bob, quit using the name “Saddam Hussein Cunningham” on your comments. I’ve deleted the latest such comment I’ve received from you and will delete others as they arrive. I don’t want anyone thinking that your addled thoughts are mine.
18. Pat Cunningham | July 1st, 2008 at 11:23 am
I’ve also changed the name on the first two of your comments bearing the SHC moniker.
19. Saddam Hussein Olbermann | July 1st, 2008 at 3:24 pm
Pat Hussein Cunninghan, yes, but I don’t believe you announced that you’d be using Saddam Hussein Cunningham. Sounds like you like the option use it. Have at it.
20. Craig Knauss | July 1st, 2008 at 10:50 pm
“…compared with oil companies 9%. Large numbers aren’t large profits.” Really? So explain how last year ALL the oil companies reported record profits. Profits can be increased by two means. A) Increase the operating margin, or B) increase the amount of product sold. The oil companies did NOT drasically increase the number of barrels of oil sold. While the cost of producing oil obviously increased, the oil companies increased their prices even more. Therefore, more margin and more profit. Look how many “panics” were created the last few years which resulted in big price increases. Some examples were the Venezuelan oil workers strike, the Northeast blackout, the Phoenix pipe break, etc. All resulted in big increases which were applied IMMEDIATELY to gas that was already in station tanks. When the “problems” were resolved, prices went down only a fraction of the previous increase. The biggest joke was the NE blackout. The oil companies’ excuse was that refining capacity was reduced due to refinery shutdowns. They failed to mention that EVERYTHING out there was shut down, including the gas stations. Therefore, demand was reduced also.
What it’s really about is the part of Supply and Demand that is called “What the market will bear.” I.E., they’ll jack up prices until reduced demand starts to hurt their profits.
21. Kaus | July 2nd, 2008 at 8:38 am
Record profits?….big deal…more tax money in the governments pockets…take a look at the balance sheet Craig. Stockholders of exxon can’t be too happy…stock price and pe are down….explain why?
22. Menlo Bob | July 2nd, 2008 at 11:48 am
Included in the amount of leases that are said to be undeveloped are those leases where drilling and development is underway. Unless oil is being pumped it’s listed as not developed.
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