Commentary: Questions U.S. Rep. Giffords’ position on oil drilling
Published: Tuesday, August 5, 2008 5:45 PM CDT
Kenneth F. Moyes
In the interest of balance, let us look at the report of the town hall meeting held by Congresswoman Gabrielle Giffords reported in the July 30th Vail Sun.
Representative Giffords, intentionally or due to a lack of knowledge, seriously misrepresented those 68 million acres under lease - a Democratic talking point. Her argument to prevent drilling seems materially bogus. The real agenda appears to be the elimination of fossil fuels from our energy diet at all cost, now, and to do this without regard to who is hurt and what it does to our national security and economy.
Renewable energy will not be ready to fully power this nation for 15 years or more. That is why Barack Obama wants to invest $150 billion in renewable research over the next 10 years. Today we send nearly $450 billion to foreign governments annually, which we can eliminate over the next five to 10 years by drilling here and now, and then slide to a fossil fuel - renewable energy mixture over 20 years - when renewable energy is fully ready. Drilling here and now will dramatically open up the job market, as well.
Not only big oil, but 400 companies hold and pay for leases on shore and 121 companies hold and pay for the leases off shore.
This writer received permission of the American Petroleum Institute to use these rebuttal points, verbatim, as found on the API Web site. Believe either Representative Giffords or the API, but learn both sides.
Claim: Oil and natural gas companies are given leases by the government and purposely don’t produce from them to increase prices
Fact: Companies pay billions of dollars for the right to explore on federal lands. If the company does not produce within the lease term, it must give the lease back to the government, and the company does not recover the billions of dollars it may have invested
Claim: Companies let many of their leases sit idle and don’t produce them
Fact: Companies actively develop their leases - but not every lease contains oil or natural gas in commercial quantities.
Claim: If the lease doesn’t contain oil or natural gas, then the company shouldn’t have bought it.
Fact: There are tremendous risks and challenges involved in finding and producing oil and natural gas. There is no guarantee that a lease will even contain hydrocarbons. It is not unusual for a company to spend in excess of $100 million only to drill a dry hole.
Claim: There’s absolutely no reason for a company not to produce if it finds oil or gas on the lease
Fact: If the company finds resources in commercial quantities, it will produce the lease. But there can sometimes be delays - often as long as seven to 10 years - for environmental and engineering studies, to acquire permits, install production facilities (or platforms for offshore leases) and build the necessary infrastructure to bring the resources to market. Litigation, landowner disputes and regulatory hurdles can also delay the process.
Claim: The vast majority of federal and gas resources are already available for development.
Fact: In the Lower 48 states, about 85 percent of the Outer Continental Shelf and 67 percent of onshore federal lands are off-limits or facing significant restrictions to development. There is no way, at this stage, to determine exactly the extent of the resources off-limits because many of these areas have not been subject to inventory studies in decades.
Claim: Non-producing leases could provide a major source of new supplies.
Fact: Many of these leases will provide a major source of new domestic supply once they are developed.
Claim: Increased domestic drilling activity has not led to lower gasoline prices, and more leases and drilling won’t help either
Fact: Our nation needs more supplies of all forms of energy, including domestic oil and natural gas, to meet its growing energy demand.
Claim: Companies should be penalized for not producing from their leases.
Fact: Oil and gas companies take all the risk with federal leases. Not only do they pay billions to obtain leases, they pay to hold them while they are spending even more capital to determine if these leases contain resources. If you wish to learn more on the oil drilling controversy, the Democrats’ new argument is “that we only have 3 percent of the world’s oil and we use 25 percent of the world’s oil.
(Kenneth F. Moyes is a Vail resident.)
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