Drilling Congress on Energy

While the Olympic Games, conflict in Georgia, and decreased gasoline prices due to President Bush’s tough talk on offshore drilling has tempered somewhat the furor over energy policy among average Americans, energy independence must be on the top of the GOP’s priority list for issues capable of shifting the balance of power in Congress and the White House.

My feelings on the matter, while I’ve made them known in my own words over the past few weeks and months, are summed up and reinforced nicely by the following two pieces, the first by former Speaker of the House Newt Gingrich, the second by outspoken rock legend, naturalist and Second Amendment activist Ted Nugent.

Certain measures could guarantee energy independence–and the prosperity and security which comes along with it–for the United States of America, but those measures are being shot down by the inexcusable and even traitorous actions of congressional democrats:

  • 90% of House republicans supported oil shale exploration, while 80% of House democrats opposed it.
  • 81% of House republicans supported exploration in the outer continental shelf, while 83% of House democrats opposed it.
  • 91% of House republicans supported exploration in ANWR, while 86% of House democrats were in opposition.
  • 97% of House republicans supported coal-to-oil production, while 78% of House democrats opposed it.
  • 97% of House republicans supported increasing U.S. refining capacity, while 96% of House democrats opposed the measure.

Read both pieces, please. Print them, link to them, share them with friends. What we do in terms of energy policy now will affect America for years beyond the term of the 44th president.

– Jeff

Idle Leases — or Addled Minds?
by Newt Gingrich, Townhall.com

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.

Third, if a commercial discovery is made, more wells must be drilled, to delineate the shape and extent of the deposit. Production facilities and pipelines must be designed, built, brought to the site and installed. Only after oil or gas is actually flowing does the lease become “producing.”

In one example, Shell Oil and its partners leased an area in 7800 feet of water 200 miles off the Texas coast. They spent five years exploring and evaluating the area, punched several “dry holes,” and finally drilled a discovery well in 2002. Three appraisal wells (at $100 million apiece) confirmed a major field, and in 2006 the company ordered a huge floating platform and pipeline system that will initiate production in 2010. Total investment: $3+ billion.

That’s hardly “sitting on their leases.” But those leases will be “non-producing” until 2010. Clearly, a “use it or lose it” law will do nothing to change these hard realities.

Further complications often stymie energy companies from obtaining and using leased land.

Every step in the process must be preceded by environmental studies, oil spill response plans, onsite inspections, and permits. The process takes years, and every step is subject to delays, challenges – and litigation.

In the Rocky Mountains, protests against lease sales rose from 27% of all leases in 2001 to 81% in 2007, according to government and industry records. Numerous additional prospects were never even offered, because land managers feared protests.

The justification used to be endangered species. Now it’s climate change – as though US oil causes global warming, but imported oil substitutes do not.

Where leases are issued, seismic and drilling work is often protested. Some years ago, an endangered plant held up drilling – until companies realized the Astragalis was locoweed, which ranchers had been trying to eradicate because it sickens cattle. This year, the excuses are drilling fluids that are 98% water and clay – and sage grouse, even though hunters shoot thousands of them every year.

The obstructionist tactics mean hundreds of millions of dollars in lease bonuses and rentals, seismic surveys and other exploration work are in limbo. None of this money has been refunded to companies, and no interest is paid to the companies. The money would pay for thousands of wells that drilling opponents say companies refuse to drill.

These lands are non-producing, not because companies are procrastinating – but because politicians and bureaucrats have bowed to pressure from radical environmentalists, and refused to issue permits.

We don’t need a “use it or lose it” law – or more cheap-rhetoric, big-oil conspiracies. Congress simply needs to allow drilling on the 60% of onshore federal oil and gas prospects and 85% of Outer Continental Shelf prospects that it has placed off-limits.

Furthermore, instead of a “drill it or lose it” law, we need a “permit or pay” rule:

  • When the government sits on permit applications for more than six months, companies no longer have to pay lease rents; instead, they get interest on their bonus payments and expenses to date, and lease terms are extended.
  • When environmental groups lose their legal actions, they pay the companies for the court costs, delays and attorney fees.

When you go to the ballot box this fall, remember who’s really behind the outrageous prices you’re paying for the energy that makes your job, home, car and living standards possible.

Remember the simple solution: Issue leases and permits. Drill here. Drill now. Pay less.

Gang of Sellouts
by Ted Nugent, HumanEvents.com

Joining five Democrats to make up the Gang of Ten, five Republican senators tossed Sen. John McCain under his Straight Talk Express Energy bus.

The five Republican senators (Graham, Thune, Chambliss, Corker, and Isakson) should be renamed the Gang of Sellouts.

The Gang of Ten is a bipartisan group of senators who recently offered an energy policy — intentionally or stupidly otherwise — that can only benefit Senator Obama, whose energy policy up until this point was to tell us to keep our tires just as liberals prefer Fedzilla: properly inflated.

McCain had Obama on the energy ropes and was scoring some big-time political points, but the Gang of Sellouts has let Obama off the ropes. Just when McCain was making headway, the Gang of Sellouts let the air out of his energy fight.

According to Kimberly Strassel’s August 8th article in The Wall Street Journal, the Gang of Ten’s energy policy is to allow four states to determine whether or not to allow drilling for oil on offshore federal land and deny drilling within 50 miles of our coasts and any drilling in ANWR. Oil companies would be allowed to explore for oil off Florida’s coasts. You know, like those stalwarts of environmentalism China, Cuba and India are planning to do in the next couple of years.

Additionally, the Gang of Ten would provide over $80 billion in tax credits for alternative fuels by eliminating $30 billion in tax breaks for oil companies, which of course ultimately comes out of American consumer’s pockets. That’s right: raise taxes on the very companies that would invest in finding more real energy to help make America energy independent, while propping up more Fedzilla hoaxes like ethanol. The Emperor not only has no clothes, he’s fat, wart-riddled and ugly.

Increasing taxes is never the right approach if the goal is to provide incentives to expand business, lower prices, and provide jobs. Only Democrats do not understand that raising taxes destroys incentives. One would think, even pray and dream, that Republicans — even the Gang of Sellouts — would know this.

The first rule of Republican economic politics must always be to never cut deals with the Tax Devil. The second economic maxim is that America can not tax and spend its way to prosperity. These two fundamental rules should be burned into the doors of all Republican senators and congressmen’s offices. Even tattooed onto their foreheads.

Unable to drill within 50 miles of our coasts, we will not be able to tap into the rich energy reserves that lay just off of our coasts.

As George Will pointed out in his June 5th op-ed The Gas Prices We Deserve, the US Minerals Management Service restricted offshore areas may contain 86 billion barrels of oil and 420 trillion cubic feet of natural gas, which is ten times the oil and 20 times the natural gas Americans use annually. Read that again. Whose side are these numbskulls on?

The Gang of Ten’s proposal would restrict us from this energy — energy that would help make America more energy independent. Thanks for nothing, Gang of Sellouts.

“America is serious about becoming independent of foreign oil,” said Sen. Saxby Chambliss, a member of the Gang of Sellouts. Either he is lying or he is tremendously stupid. The energy policy he helped create with the Demonrats on the Gang of Ten will make America more dependent on foreign energy, not less.

But energy independence is not what Democrats want. For whatever perverted, anti-American reason, Democrats detest American oil companies and want us to be energy slaves to other countries who, by and large, do not like America. Burn this into your memory: Democrats do not support drilling for oil. Welcome to Planet of the Apes.

At least in the short term, drilling for oil and gas off of our energy-rich coasts and at ANWR is indeed the answer, along with every imaginable energy mining upgrade possible. Ordinary Americans understand this and overwhelmingly support increased drilling. Even McCain, who previously did not support increased drilling, has come around to this reality.

The Gang of Republican Patriots in Congress — who refuse to go home for a five-week vacation and are pressing Speaker Pelosi to order the return of the other congressmen to vote on an energy bill — deserve our admiration and praise. Note to McCain: conduct an energy news conference from the darkened floor of the House of Representatives with these congressional patriots.

Energy independence must be the goal. This goal can not be achieved by endorsing an extremely flawed plan that will not lead to drilling where the energy is located. That’s a fool’s game, which is why the Democrats endorse it.

Energy is, and will remain, the defining issue of the presidential campaign. The Gang of Sellouts has made McCain’s job of capturing the White House more difficult and has added fuel to Obama’s anti-drilling political tank.

Drill now for energy freedom and independence. Meanwhile, send the Gang of Sellouts “Obama for President” bumper stickers and a broken tire gauge. They’ll know where to put it.

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