Democrats mislead public about "idle" oil and gas leases

Winningreen ENERGY Alert

Democrats mislead public about “idle” oil and gas leases

By Gretchen Randall

Date:
June 18, 2008

Issue:  Democrats in the U.S. House claim that oil companies have “stockpiled” 10,000 oil and gas leases on 68 million acres that are sitting idle and unproductive on purpose.  They therefore plan legislation to force companies to “use it or lose it.”    What they decline to say is that energy lease holders on federal land already must produce oil or natural gas within 5-10 years to live up to the terms of the lease.  If not, the lease may be cancelled.   Years of mapping, testing, drilling exploratory wells and construction are required before wells actually produce oil or gas.  Democrats are mistakenly calling these “idle” leases rather than leases that are simply not yet in production.

In addition, because of the uncertainty of exactly where and how much oil or gas is in an area, companies often buy a large amount of leases in an area in hopes that some are productive.  Until a well comes on line, those leases are in the “unproductive” stage but not lying unused on purpose.

The federal government requires companies to pay rent annually on the leased areas regardless of whether they produce oil and gas.  If the annual payment is not made, the leases are forfeited so it is in the companies’ interest to work to produce oil or gas from them.
 
Response 1: Democrats are opposed to opening more areas of federal land to oil and gas exploration for fear of losing the support and funding of the so-called environmental groups.

Response 2: Consumers want more oil and gas production to help ease the high price of gasoline and Democrats and their allies are the ones to blame for not allowing more production in the outer continental shelf (OCS).

Contact: Gretchen Randall
Winningreen LLC
3712 N. Broadway – PMB 279
Chicago, IL 60613
Phone: 773-857-5086
e-mail: grandall@winningreen.com