Editorials published by the Goffstown Residents
Association are written by various members and
contributing non-members of the GRA.

   
June 20, 2008

GUEST EDITORIAL
Shea-Porter says 'drill!': But not where oil is

     
OF ALL THE dumb ideas to come out of Washington in recent memory, last week Rep. Carol Shea-Porter embraced what might be the dumbest of them all.

Shea-Porter has co-sponsored legislation to force oil companies that hold leases on federal land to commence developing that land or lose the lease.

"The argument that some people make -- that not enough federal land is available for drilling -- is just plain false," Shea-Porter said. "Energy companies aren't using most of the federal land they have already leased. They should get to work."

Simply put, Shea-Porter hasn't the slightest idea what she's talking about.

"Sadly, it just reflects the lack of understanding of our politicians of how the oil business functions," independent petroleum geologist G. Warfield "Skip" Hobbs III of New Canaan, Conn., told us yesterday. 

"The reason companies have such large landholdings is basically to control the (oil fields they've discovered) and keep the competition out. You don't want to spend tens of millions of dollars and have somebody jump in there next door because the land is unleased," Hobbs explained. 

The typical leased plot in the Gulf of Mexico is 5,760 acres, Hobbs said. But the oil under it might be accessible for tens of thousands of acres in all directions. So companies lease as many plots as they can in the surrounding area to protect their investment, which could exceed $100 million. If they didn't lease the surrounding space, competitors could dip into oil fields they spent millions to locate and develop.

"It's just too expensive to just suddenly say, 'OK, you're going to drill every lease you have.' "

That is not the only reason leases aren't always developed. Larry Nation, spokesman for the American Association of Petroleum Geologists (funded by member fees, not the oil companies), points out that oil companies lease land that might have oil, but not all of it does, and it takes years to discover whether the oil is there. To demand that companies develop every leased plot would be to force them to lose tens of millions of dollars on land that has little or no oil. 

Meanwhile, unleased land where drilling is currently prohibited can have much greater potential. "Some of those (prohibited) areas are highly prospective and can come onto the market much sooner," he said. 

Canada drills in the Great Lakes and Atlantic Ocean, but Congress bars American companies from drilling the same oil fields, which stretch into U.S. waters. These known oil supplies could be tapped relatively quickly were Congress to lift the ban. Instead, Shea-Porter wants to force companies to drill in areas that haven't been explored, don't hold large reserves, or are buffers protecting developed fields.

Furthermore, Nation says, current leases already require oil companies to take certain steps to use the land.

The premise behind the bill Shea-Porter is cosponsoring -- that oil companies have huge reserves of untapped oil wealth sitting beneath already leased federal land, which they can tap right away if only Congress orders it -- is unsupported by the facts. Nation called it "laughable."

That's a kind word for it. Shea-Porter's support for this legislation shows, yet again, how economically illiterate she is. 

 


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Copyrightę 2008, Goffstown Residents Association.  All Rights Reserved.