Wednesday, June 25, 2008

Obama lies about the 68 million acres

The Democratic talking points about how drilling for oil won't give us more oil (oddly, they don't suggest that shutting down wells will give us more oil either) include an absurd claim that there are 68 million acres of leases that aren't being used.

It is true that there are 68 million acres of leases. The size is because there are vast areas which have little or no oil, so the lease tracts are huge to give the potential for some oil to be found SOMEWHERE.

The leases are not production leases, they are exploration leases. But a lease being explored is not in production -- and that is what the Democrats mean when they say "not being used".

We expect generic Democratic messages to be lies. But it takes on special significance when the candidate for President, Barack Obama, is willing to include the lie in his speech. It is unfortunate that the NEWS ORGANIZATIONS of this country see no reason to actually provide FACTS to their readers.

From Obama's web site:

Meanwhile, the oil companies already own drilling rights to 68 million acres of federal lands, onshore and offshore, that they haven't touched. 68 million acres that have the potential to nearly double America's total oil production, and John McCain wants to give them more.

Here are the facts:

Wall Street Journal: “Companies don’t know how much oil is under the lands they lease, so they buy up large swaths in hope that a fraction will work out. Much of the area that isn’t producing, they say, doesn’t have oil or gas in commercially viable quantities. Moreover, bringing a new field into production can require years of mapping, testing, drilling and construction – during which time the land would show up in statistics as being ‘not in production,’ even as companies spend millions or even billions of dollars to bring it on line.” (6/16/08)

Get it? They aren't untouched. Most of the acres are useless. But on each lease, there is somewhere the companies are exploring, looking for a place where they can drill. It's hard, because just having a lease isn't enough, you need permits and regulatory approval for everything. The idea that oil companies spent money for leases just to watch them sit is stupid. However, there are some leases that they can't renew, and because they are going to lose them, there's little reason to continue exploring, since even if they DO find something, they'll lose the lease.

Further, these leases only allow exploration. If they find oil, they need to sign new leases for the production.

Geological Experts: “’There’s the misconception that every lease has oil,’ added David Curtiss, director of the [American Association of Petroleum Geologists’] Washington office. ‘A lease is a line on a map. It has nothing to do with the geology of where oil is.’” (CQ, 6/16/08)

The Democrats complaint is a twist on the old joke about the guy looking for his ring. He's crawling around at night under a light, and someone says "where did you drop it", and he says "over there", and you say "Why aren't you looking over there", and he says "I can't see over there, it's too dark".

IN this case, we know where there are billions of barrels of oil. So the Democrats make those off-limits, and then pick 68 million other acres of useless land, and say "Here, you can look for oil HERE if you want". Then they pretend those 68 million acres are just like 20+ million acres that were PRIME oil lands where we have wells, and say that we could double our production -- which is an absurd, and most likely false claim. We COULD double our production with the offshore sites, ANWR, and the shale oil.

Further, the Democrats are threatening to "take back the leases", but the law already requires the oil companies to produce on these leases within a period of time, or lose them:

“Oil companies with federal leases already have very defined time limits to produce oil or natural gas on existing leases. If the companies do not produce on those leases within the time limit, they will lose their lease.”

But if you search on "68 million acres oil lease", it's hard to find the truth. Instead, every news organization and blog has simply repeated the false claims of the democratic leadership. It's time the American people demanded better of our elected leaders. They should not be able to lie with impunity.

BTW, the speech had another part that was hilarious:

What we are seeing here – from the solar panels that power this facility to the Bombard workers who built it – is that a green, renewable energy economy isn't some pie-in-the-sky, far-off future, it is now. It is creating jobs, now. It is providing cheap alternatives to $140-a-barrel oil, now. And it can create millions of additional jobs and entire new industries if we act now.

FIrst of all, solar panels are not cheap. They are getting a bit cheaper, but they are by no means the cheap alternative, even for electric use. But the real mistake here is that solar panels don't provide an alternative, cheap or otherwise, to oil. Solar panels generate electricity. And in this country, we essentially have NO oil-burning electric plants anymore. We burn coal and natural gas, but not oil.

Until we have electric cars, solar panels will not be an "alternative" for oil use -- once we have electric cars, solar panels can be used to charge them, and the cars themselves will be an alternative to cars that burn oil.


Anonymous said...

Finally, a clear, rational destruction of the left's number one talking point. I've been trying to fact check this (although not obsessively) and mostly I'm coming up with opinion and conjecture by partisans. I'm sick of the feckless congress villifying legitimate businesses for doing their job and making profits. I'm sick of congress misrepresenting corporate profitability for political gain, and I'm sick of congress stonewalling every constructive solution for serious problems. Just sick of congress, I guess...
Thanks for the informative post.


Anonymous said...

I haven't seen a democrat in years that doesn't lie to the public about anything and everything. Someday the American people will figure them out and every tree will look like an apple tree hanging full of democrat fruits and nuts.

anonymous said...

I heard that 40% of the nation's energy came from petroleum, 23% from coal, and 23% from natural gas. And the remaining 14% was supplied by nuclear power, hydroelectric dams, and miscellaneous renewable sources. If this isnt true, then what are the percentages, or our current energy policy? Curious, not disagreeing. And thanks for facts, instead of opinions.

Anonymous said...

I watched C-Span and witnessed Congress debate on energy. The only defense the Republicans had when the Democrats flew this talking point was that there were 3 million acres in litigations on the 68 million acres that the oil companies are allowed to lease. The Democrates came back with, "Gee, who are these environmentalists and we'll stop them from stoppoing the oil companies." I am fed up with this bait and switch game these Congreemen play! What I'd like to see is the Republicans bring in hard evidence from actual environmental cases; hard evidence from Geologist that say there isn't oil under the majority of these leases; hard evidence that the red tape for drilling on these leases are extreme and hard evidence that these leases are only used for exploration and not for production. I think until this is explained in depth like how this article explains it, we'll go nowhere in this debate. Hell, why can't McCain do it? Here's a perfect opportunity to show the American public that the Republican party has done there research and why we need to drill where we "know" where the oil is!

Anonymous said...

if they want to drill they can continue to do so until all options on the already leased lands are used up. at that point the right and the money hungry oil pricks will have plenty of backup till scream about. till then, pointless.

Anonymous said...

Some of us have heard the old adage about pros and cons; if a "pro" means a beneficial point and "con" means a negative one, then why the heck were we so satisfied with ‘Con’gress before all of this happened? Jokes aside, when have we lost the desire to vote these incompetent out of Congress if they're not representing the people like they're supposed to?

Anonymous said...

Although I agree with this BLOG and I'm glad the post was made, the only argument people need to make so support a ban on drilling is that we need to LOWER oil and gas production globally. The point here is that we NEED to be reducing greenhouse gas emissions anyway - if the government will not legislate this, then high prices should and will.

If we could get serious and significant conservation measures through congress then we'd use less oil, the demand would go down, prices would go down some, and people would use less - saving money in the process!

Anonymous said...

Unfortunately, conservation will not get us very far. We've already reduced our consumption by 2% within the past year, however, India and China have increased their demand by 5%. I'm all for conservation, but you're kidding yourself by thinking that's the solution to the problem.
Conservation with drilling should do the trick because this all still boils down to supply and demand. You cannot decrease demand sufficiently without putting the country back into the stone age. But you can increase the supply by procuring a domestic source of oil.


Anonymous said...

One question: If as is said here, these 68 million acres have *little or no oil,* why do they keep holding these leases, and not just sell the acreage?
Obviously, there is some reason for holding them.
My sense, is that they've been waiting for the price to rise, before fully exploring these assets.

Lastly, come on people. I understand everyone has their agenda, but there really does seem to be an epidemic of amnesia, in the GOP community. If I recall, the GOP controlled all branches of the Fed govt, for quite a few years. They failed to do anything, just as Congress' latest incarnation has.
This is a bipartisan failure, and if anything is ever to get done, people will have to have, at least one foot in reality. Denying the GOP's hand in this mess, really doesn't help.

Anonymous said...

jon, selling leases is not an option. A lease is similar to rent; they pay a specific amount of money and they are allowed exploration on a given parcel of land for a specific amount of time. If the leasing entity does not apply for production permits, the lease simply expires.

I agree with you that the GOP is just as responsible. However, I would like to point out that the Republican controlled Congress voted to allow drilling in ANWAR back in 1996, but was vetoed by Clinton. If not for the veto, we would be enjoying an increased supply today.


Anonymous said...

in the meantime, America's trade deficit still consists of 58 to 60% for oil. A trade deficit that majority if not all economists agree is bad for the country. I do not see why America and democrats in particular feel the need to keep sending $700 billion to other countries and keep touting alternative energy that is literally decades away from even replacing just 25% of our energy consumption. we are using the oil now, replace the oil we improt with domestic oil and we can eliminate at least half of the trade deficit. boost alternative energy at the same time and we can free up domestic oil for export and eliminate the trade deficit once and for all.

Unknown said...


Here's one -- from your post.

"But on each lease, there is somewhere the companies are exploring, looking for a place where they can drill."

Really. What's your reference for that fact? There isn't one, because it is simply not true.

Charles said...

dsc: First, something isn't a lie simply because you don't have a link provided. Your statement that "it's simply not true" is also unsupported by a link, but that doesn't make it a lie, just an unsupported statement of opinion.

From the article I quoted, " “Companies don’t know how much oil is under the lands they lease, so they buy up large swaths in hope that a fraction will work out. Much of the area that isn’t producing, they say, doesn’t have oil or gas in commercially viable quantities."

I imply from that statement that if they spent money on a lease, they looked at the lease enough to know that it doesn't have oil or gas in commercially viable quantities.

However, it is likely that they have some leases they haven't gotten to yet, since you don't wait until the first day of exploration to buy a lease.

So my statement was overly broad. It would be like saying that people don't buy houses to let them sit vacant. That would certainly be a "true" statement, but in fact almost every house that is bought DOES remain vacant for at least a day when the prior owners move out but before the new owners can move in.

There are errors in my post. A friend e-mailed me corrections, but I never got around to them. For one, it turns out the leases are NOT different sizes, but are all about the same sizes. And there are many leases which have not been purchased, because the companies are already pretty certain that they have no oil. This of course is different from leases they purchased but aren't "producing".

Anonymous said...

Artificially inflating gas prices is just the latest ploy to trick the American public into believing we need to open up restricted areas for drilling. The republicans say it’s the democrats fault for high gas prices? You want to drill? Fine, go ahead and drill in the yet untapped 68 millions acres of oil reserves that you ALREADY hold permits for, but haven’t touched. You argue that these are not acres ready for production but only exploration? Yes, and that is exactly what the restricted areas are as well.

The truth is, even if we drilled in every acre of Anwr and every acre of offshore oil fields, we still wouldn't have any more gas than we have right now because we don't have enough refineries to process the oil once it comes out of the ground. If OPEC gave us 300,000 extra barrels of oil a day, we still wouldn't have any more gasoline than we have right now, because we don't have adequate refineries to process it. Supply and demand will always keep the prices up. That’s why the oil companies haven’t explored the 68 million acres of oil fields that they currently hold permits on.

Exxon, BP, Valero, Halliburton and T. Boone Pickens just want to get into the big business of selling oil globally – they don’t care about the price at the pump for Americans. Any oil that they can get their hands on will be sold to China and India, and Americans will STILL be paying unnecessarily high prices.

Nancy Pelosi is absolutely correct. “Use it or Lose it” for the current permits that oil companies already hold. We don’t need to open up any more oil fields on or offshore until the licensed fields are utilized.

Charles said...

No, she is absolutely wrong.

There is nothing that "use it or lose it" does that the current law doesn't already do. It's just an excuse not to allow drilling where the oil actually is.

The current program is like granting salt-water fishing rights, but only in Kansas. And then saying that if you don't catch fish in Kansas, you can't have any other leases.

The supply of gasoline isn't really the problem . We have plenty of gasoline, and we have enough refineries to supply our country with all the gasoline we need for now.

THe problem is the price of the raw materials -- oil. There isn't enough oil, so the people who want the oil bid up the prices to ensure they have a steady supply for the future.

Opening up drilling will alleviate the current long-term oil shortage, dropping the futures prices and making it cheaper for the refineries to get their raw materials.

In fact, until it looked like new oil was going to be drilled, refineries were talking about shutting down, because they couldn't raise their prices any more (because there was too much gasoline) but couldn't make money on the spread between the price of oil they were buying and the price of gasoline they were selling.

Anonymous said...

Even if we drilled 50 billion barrels more of oil a day, we wouldn't have any more gasoline than we already have right now, because we don't have adequate refineries to process it once it's taken out of the ground. You know where I heard that? From a republican oil man! Their whole point in drilling, isn't to give us more gasoline, it's to PSYCHOLOGICALLY effect the price of a barrel of oil. If OPEC's prices were that high, the oil companies wouldn't be making windfall profits. In actuality, they are paying reasonable prices, and then jacking them up sky high once the oil gets into the U.S. because this is where it's refined into gasoline. I've heard a number of pro-drilling oil barons admit that we can't refine anymore oil than we are right now.

John McCain On the effect of more U.S. oil drilling on the price of gas: "I don't see an immediate relief.... Even though it may take some years, the fact that we are exploiting those reserves would have psychological impact that I think is beneficial." Fresno, June 23, 2008

The Department of Energy: The DOE's Energy Information Administration says offshore or Arctic Refuge oil won't flow for ten years and prices won't be affected until at least 2027. The impact on price? "Insignificant."

The Department of the Interior: The number of drilling permits on federal lands doubled in the last five years while the price of gas almost tripled. More drilling does not lower prices.

House Natural Resources Committee: Oil and gas companies hold leases to 68 million acres of federal land and waters - an area the size of Nevada - that are producing nothing. Oil production on these lands could cut U.S. oil imports by more than one-third.

Statement of Carl Pope, Sierra Club Executive Director:
"This is the most cynical of political ploys. Even the Bush administration admits that offshore drilling will do absolutely nothing to lower gas prices, today, tomorrow, or even a decade from now.

Here's the kicker. They want to drill offshore in MD/VA waters, that will have a direct impact on the Chesapeake Bay. The Chesapeake Bay is a national treasure, and we can't afford to damage it.

For every one Hummer SUV, you could drive 3 Ford Focuses. I think we need to look in the mirror. If we want lower gas prices, we all need to show some common sense. Why should we curtail our driving, when all we really need to do is replace gas guzzlers with gas efficient vehicles? I can actually remember when most cars were 8-cylinder. Now they're 4 and 6-cylinder, use less gas and put out less pollution. We've done it before...we can do it again. Necessity is the mother of invention.

MissBubbles said...

Why do the Oil Companies continue to lease (rent) 68 million acres of land if there's no oil? It seems completely useless. I believe there is plenty of oil in the US on dry land, although in 20 years the supply would probably run out. But by then we should have moved onto solely electric, hydrogen, air, or solar cars instead. What I dislike about Offshore Drilling is oil spills that will pollute the Earth further, which effects our health. I believe we can become oil independent without the need for offshore drilling.