By Roy Innis and Newt Gingrich

Gasoline prices have doubled since Nancy Pelosi became Speaker of the House. Electricity and natural gas prices have skyrocketed. Energy lock-ups continue to anger Americans and put anti-drilling politicians on the defensive. The American public is increasingly demanding expanded domestic drilling - and disgusted by the Democrats and radical environmentalists’ immoral war on poor families. As Democrat leaders and environmentalists continue to block US energy development, their assertion that oil companies are “sitting on” 68 million acres of “idle” leases often leads their rhetoric.

Senator Jeff Bingaman, Congressman Nick Rahall, House Speaker Nancy Pelosi and other members of Congress who oppose producing more American oil are in a bind.  They know voters are hurting from high gas prices and overwhelmingly want the government to allow more American oil production. But they can’t side with the American people and risk upsetting their left-wing base. So they needed a way to make us think they support more drilling - while effectively preventing us from ever drilling a single new well.

They think they’ve found a solution: a proposed “use it or lose it” law on federal leases for energy exploration. Bingaman, Rahall and fellow drilling opponents accuse the oil industry of “sitting on” 68 million acres of “non-producing” leased land. They want to force energy companies to “use” this leased land within ten years - or lose all exploration and drilling rights.

America can only hope the proposed law is Bingaman and Rahall’s clumsy attempt at political jujitsu. The alternative is that the politicians in charge of committees that determine US energy policy are confused and ludicrously disconnected from reality. 

First, lease agreements already require that leased land be used in a timely manner. The 1992 Comprehensive Energy Policy Act requires energy companies to comply with lease provisions, and explore expeditiously, or risk forfeiture of the lease. So the Bingaman-Rahall “solution” effectively duplicates current law. Second, and more disturbingly, Bingaman and Rahall’s groundless accusation and proposed legislation rely on the absurd assumption that every acre of land leased by the government contains oil. Obviously, that’s not the case.

The truth is, finding oil is a long, complex, cumbersome, expensive process. It starts with an idea - about what kinds of geologic structures are likely to hold this vital resource. Based on that idea, companies purchase leases: agreements that allow them to test their ideas, and hopefully find and produce oil and gas from leased properties. Then geologists look at existing data and conduct seismic, magnetic and geophysical tests of the leased areas. They create detailed 3-D computer models of what subsurface rock formations look like, and whether there might be any “traps” that could hold petroleum.

Most of the time, all this painstaking, expensive initial analysis concludes that the likelihood is too small to justify drilling an exploratory well, since the cost of a single well can run $1-5 million onshore, and $25-100 million in deep offshore waters. Only one of three onshore wells finds oil or gas in sufficient quantities to produce it profitably; in deep water, only one in five wells is commercial. Thus, only a small percentage of the leased acres end up producing oil.

This is important because it means most of those 68 million acres Bingaman and Rahall want to force oil companies to drill actually don’t have enough oil to make it worth drilling. Either they know that, and are trying to deceive us; or they don’t know it, because they haven’t done their homework. Read more here how politicians and environmental groups are putting obstacles in the way of getting at the ready and ample sourcs of energy readily available to us here.

By Anthony Watts, Watts Up With That

Trend of atmospheric oxygen (O2) from Cape Grim, Tasmania. This looks serious, right? Read on.

FOREWORD: I had to chuckle at this. This is the sort of story I would expect in the supermarket tabloids next to a picture of Bat Boy. For the UK Guardian to say there is a “oxygen crisis”, is not only ignorant of the facts, but simple fear mongering riding on the coattails of the “CO2 crisis”. Read the article below, and then read the reasons why myself and others are saying this story is worry over nothing. Physicist Lubos Motl also takes this article and the author to task, here.

The article in question “Could the decline of oxygen in the atmosphere undermine our health and threaten human survival?” by Peter Tatchell guardian.co.uk, Wednesday August 13 2008 tells us “The rise in carbon dioxide emissions is big news. It is prompting action to reverse global warming. But little or no attention is being paid to the long-term fall in oxygen concentrations and its knock-on effects. Compared to prehistoric times, the level of oxygen in the earth’s atmosphere has declined by over a third and in polluted cities the decline may be more than 50%. This change in the makeup of the air we breathe has potentially serious implications for our health. Indeed, it could ultimately threaten the survival of human life on earth, according to Roddy Newman, who is drafting a new book, The Oxygen Crisis.”

Anthony notes: Predictably, once again mankind gets the blame in the article: “Much of this recent, accelerated change is down to human activity, notably the industrial revolution and the burning of fossil fuels.” From a mailing list I subscribe to, there’s been a number of comments made about this story. Read those responses here.

Anthony concludes with the remarks by Australia’s Ray Langenfelds from CSIRO Atmospheric Research who has this to say about the Cape Grim O2 measurement. “The changes we are measuring represent just a tiny fraction of the total amount of oxygen in our air - 20.95 percent by volume. The oxygen reduction is just 0.03 percent in the past 20 years and has no impact on our breathing,” Langenfelds. “Typical oxygen fluctuations indoors or in city air would be far greater than this.”

So there you have it. So much for the “oxygen crisis”. I really wish the media would do a better job of researching and reporting science stories. This example from the Guardian shows how bad science and bad reporting combine to create fear mongering.

See also Alan Caruba’s take on Inventing the Next Phony Environmental Crisis here.

By Richard W. Rahn in the Washington Times

Oil reserves are largely a function of price. Global proven reserves of conventional oil obtainable at prices of less than $40 per barrel are estimated at more than 1.3 trillion barrels, with much of it concentrated in the Middle East. Additionally, reserves of so called “heavy oil,” the largest reserves of which are in Venezuela’s Orinoco area, are estimated at 1.2 trillion barrels, and most of this could probably be recovered for less than $50 per barrel.

The reserves of oil sands, which are actively being mined in Canada’s Alberta Province, are estimated to be 1.8 trillion barrels. Experts estimate that much of this can be produced for $45 per barrel or less. Global reserves of oil shale are estimated at more than 3.3 trillion barrels, with 70 percent in the United States (primarily in Colorado, Utah and Wyoming).

Shell Oil Co. last year announced it has developed a process for extracting the oil from the shale, without mining, at a price of roughly $35 per barrel. The United States also has the world’s largest reserves of coal - enough for hundreds of years of production at present levels. Coal also can be turned into liquid petroleum (as the Germans and South Africans proved decades ago). Current estimates of the conversion cost are as low as $35 per barrel.

Does it seem a bit odd that the current price of oil is more than twice the cost of producing all the oil the world presently needs and will need long into the future? The reason the price is so high is that the supply has been artificially constrained by governments. Most (88 percent) of the conventional oil reserves are owned by governments, and these governments have underinvested in new production. As is well-known, the U.S. government has restricted offshore and onshore drilling, shale development, and coal conversion.

Some politicians argue, even if the U.S. government started to allow increased production, that it would be seven to 10 years or more before there would be additional output. This is nonsense. Oil wells can be drilled at an average rate of 1,000 feet or so per day, which means that the average U.S. well can be drilled in a week. It does take a few weeks to set up the pump and install the separation tanks, etc., but new land wells can be producing within months, even if the product has to be trucked rather than piped away.

The very same politicians who claim we cannot increase oil production quickly are often the same ones who tell us we need to move to alternative forms - windmills and solar, etc. - without seeming to understand these desirable technologies will take far more time to meet the goals of “energy independence” than ramping up oil production. Speaker of the House Nancy Pelosi said she would not allow a vote on more drilling because she wanted “to save the planet,” without seeming to understand, if increased oil production does not take place in the United States with all its environmental safeguards, it will take place where U.S. environmental law cannot be enforced - and that is not healthy for the planet.

Richard W. Rahn is a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth.