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Friday, June 20, 2008
The ‘Idle’ Oil Field Fallacy

By Red Cavaney, Wall Street Journal

A bill introduced in Congress this week would “compel” oil and natural gas companies to produce from federal lands they are leasing. If only it were that easy to find and produce oil. Imagine, an act of Congress that could do what geology could not. These lawmakers ask why oil and gas companies want more access to federal lands to drill if they aren’t using all of the 68 million acres they already have? Anyone with even the most basic understanding of how oil and natural gas are produced - and this should include many members of Congress - knows that claims of “idle” leases are a diversionary feint.

Our companies have made tremendous strides in developing cutting-edge exploration technology. But they are not magicians. They cannot produce oil or natural gas where it does not exist. A significant percentage of federal leases simply may not contain oil and natural gas, especially in commercial quantities. As I’ve often said, the first step in our business is called “exploration” for a reason. Exploration is time consuming, very costly and involves a great deal of risk. And it happens in the minds of those who use the undeveloped-lease argument as a smokescreen to mask their intent to keep America’s vast energy resources locked up underground, despite increasingly strong consumer demand for oil and natural gas. For exploration to take place, our companies need access to the areas - offshore and onshore - that we know have the potential to produce the oil and natural gas consumers will need, if ours is to remain a viable economy in an increasingly competitive global marketplace.

Today’s short-term need was yesterday’s long-term opportunity. If Congress had acted on that opportunity years ago, America would not be in the energy bind it finds itself in today. Working with industry, Congress now has the opportunity to help secure America’s energy future. It should not miss the chance again. Read more here.

Mr. Cavaney is president and CEO of the American Petroleum Institute, the trade association that represents America’s oil and natural gas industry.

Posted on 06/20 at 08:56 PM
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