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Rahall to Big Oil: Use It or Lose It

resourcescommittee.house.gov — Washington, D.C. - In an effort to compel oil and gas companies to produce on the 68 million acres of federal lands, both onshore and offshore, that are leased but sitting idle, House Natural Resources Committee Chairman Nick J. Rahall (D-WV) today introduced legislation that gives Big Oil one option - either "use it or lose it."

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bjornski 63 days ago

52 diggs
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Coven, on 06/18/2008, -0/+10Uh oh. Cat's out of the bag now.
- bjornski, on 06/18/2008, -0/+8No kidding. It's hard to take them seriously when they scream about "We need more oil drilling areas!" when they aren't even using the ones they hold the leases to.
  - Coven, on 06/18/2008, -0/+8I was listening to Hannity last night on my way home (car pool, not my choice to listen) and he was going on and on about "These high gas prices are the liberal democrats fault! They wont let the oil companies drill! We need to drill in ANWR. We need to drill off the coast! Drill drill drill oil oil oil now now now! *foaming at the mouth*"
    
    He conveniently failed to mention this legislation or the fact that the oil companies already hold leases on so much land. I hope this legislation goes through and the oil companies are made to either ***** or get off the pot.
    - StaticThunder, on 06/18/2008, -0/+7He also fails to mention that those sources are "drops in the bucket" and won't perceptibly reduce costs.
jamessavik, on 06/18/2008, -2/+5It's obnoxious as hell to US consumers to be forced to stock some Kuwaiti Sheik's harem when we have oil in the ground at home.
- Coven, on 06/18/2008, -0/+6The point of this article is that Big Oil is sitting there screaming "More More More!" while they already sit on more land than they know what to do with.
  We don't need to drill in ANWR. We don't need to drill off the Florida coast. We can cut our dependency on foreign oil by a third!
  We knew that the oil companies were greedy, but we didn't know it was to this extent.
jamessavik, on 06/18/2008, -1/+7To be fair, many older oil fields in the US still have oil in them but the cost of extraction has made those wells not worth pumping.
With oil at $100+ per barrel, those capped wells are well worth revisiting.
- Fordi, on 06/18/2008, -0/+6Meanwhile, they can improve yields, reduce pumping costs, and get carbon credits to boot using the new forced CO2 methods they've devised to sequester carbon while getting oil.
- bjornski, on 06/18/2008, -0/+6Not to mention bringing many of their mothballed refineries up to code and re-opening them.
  
  There's no reason to build more refineries. Half of the existing ones are sitting empty, doing nothing.
  
  But you won't hear Hannity and friends mention that.
  - Coven, on 06/18/2008, -0/+4for the record, and my personal use in debates, do you have sources stating that mothballed refineries are sitting unused? i'd love to have that kind of ammunition.
    - bjornski, on 06/18/2008, -0/+4The only info I've been able to find is a marketing database for contacting people working at the petroleum refineries. I've done plenty of business marketing, and if I was going to be working with the petroleum refineries, this is exactly the database I'd be using.
      
      http://www.industrialinfo.com/prodserv/prodserv.js ...
      
      Plant Details Include:
      
      * Plant Owner and Parent Company Information
      * Physical and Mailing Addresses
      * Phone and Fax Numbers
      * SIC Product Descriptions
      * Start-Up Date
      * Up to Nine Key Management Contacts
      * Quality Information based on Phone Verified Data
      
      North America Plant Database - Petroleum Refining Industry
      Plant Status Plant Count
      Commissioned 724
      Pre-Commissioned 18
      Decommissioned 165
      Total 907
      Functional Management Contacts - 6,012
      
      It's not exactly the type of information that's kept readily available to the public, and it can be hellishly hard to get much info about. But if I was marketing a product to petroleum refineries, I'd have a list of 724 active, 18 in the works, and 165 de-commissioned ones to start finding contacts for. ( so my 'half of them' was a bit overstated. It's more like 1/4).
      
      If you can find more detailed information, please, post that here too. More information is never a bad thing, unless you've got something to hide.
    - Coven, on 06/18/2008, -0/+4That works for me. As you said, this info is hard to come by. I tried a google search but didn't come up with much.
Echosphere, on 06/18/2008, -1/+5Agree with everyone on this post.

That's a lot of land that isn't being used to drill for oil. Those spread out sporadic fields might not contain much and might be hard to get to, but with the increase in oil prices, they will be.

When companies want to make a profit, technology has a quirky way of giving them the means.
Meaning, you'll soon see smaller, easier & faster to deploy drilling technology on the market to meet those demands.

We just have to leverage the playing field. I pray the Feds don't ***** this up.
olejweitz, on 06/18/2008, -4/+2It doesn't work that way. Nice way to get re-elected, but we end up paying for it in the end. One of the main reasons producers do not go after these reserves is because the tax and environmental laws handed down by legislators greatly increase the overall cost of production - to the point where is is much more profitable to operate overseas where the laws are less restrictive. Would you choose to operate your business under a significantly smaller profit margin (especially when you are being threatened with additional taxes and loss of existing tax breaks)? I know I wouldn't.
- Coven, on 06/18/2008, -0/+5Please cite the specific taxes and environmental laws that are in place that prevent the oil companies from exploiting the resources that lie underneath the lands they have leased from the federal government.
- bjornski, on 06/19/2008, -0/+4Yes, please. List those regulations for us.
  
  You're saying this like those exact same laws wouldn't affect ANWAR.
  
  You DO realize there are less than 3 years worth of oil in ANWAR, right? And that once drilled, it will be sold on the GLOBAL COMMODITIES MARKET, and not into the US directly, right?
  
  Nope. Handing out more oil leases, while companies sit on current unexplored ones, is NOT the answer.
  
  But you go on repeating Hannity's talkign points. We don't mind debunking such easy to disprove trash. It really doesn't take any effort at all.
  
  But yeah, please, come back with that list....
  - olejweitz, on 06/19/2008, -2/+1http://taxprof.typepad.com/taxprof_blog/2005/10/ga ...
    - bjornski, on 06/19/2008, -1/+3How is that not going to affect ANWAR?
      
      Are you saying that drilling in ANWAR is "going overseas to avoid regulations"? That they won't drill in the 68,000,000 acres they already hold the lease on because of the taxes, but yet if you give them the rights to ANWAR that they'll magically turn around and do it?
      
      What's different about a 4 year supply they're already holding the leases to, and a 3 year supply that they're claiming will be the "great relief" that everyone needs?
      
      Besides the fact that they already own the rights to one of them and just refuse to use it.
    - olejweitz, on 06/19/2008, -0/+1When did this become about ANWR (only one 'A', btw)? It boils down to the federal gov't taking one more step towards a nationalized energy prorgam (see Mexico and Venezuela). That is what I am trying to say. The results at the end of that road are not good.
    - rearlgrant, on 07/17/2008, -0/+1olejweitz - Your article doesn't say which regulations and laws are keeping oil companies from drilling based on existing leases. The logic of this article is, even if we give oil companies more leases, they won't drill b/c taxes are too high (ok, move the company to a country with less taxes and pass a law that requires CEO and Boards to live there in order to do business here.)
      
      I'm likely to support laws that eliminate red tape for current leases if someone would tell me what these laws and regulations are.
      
      So far, I haven't found anyone who can provide them. So I remain convinced this issue is more about having future leases on the balance sheet as a paper asset than it is about oil supply.
- Echosphere, on 06/19/2008, -0/+1
  
  Olejweitz Does make some good points. It is the same reason manufacturing plants went to China. No unions and no environmental laws. Hell, look at China's air quality and CO2 output since the late 20th Century.
  
  But as I've said before about economics and govs: Oil first, bleeding hearts 2nd.
  
  I would refine "It doesn't work that way" to "It hasn't been the case in the last 15 years". Meaning that in the last decade or so unions and environmental law makers have forced large corporations to move out of the US due to high prices and gov regs. But it hasn't always been that way.
  
  Also, you have to put "smaller profit margins" into perspective. They were smaller profits when gas was as cheap as 99 cents per gallon.
  Now that it is almost $5 a gallon the government is trying to open the playing field to FORCE oil companies to allow new players to enter the market who want a slice of that $5gallion pie.
  
  If you were a smaller/mid size American owned and operated extractive resource company I would yell "Yo, f*** yeah! $5gallon? Give me a slice of that black cherry pie!" (Though, I would like to see how "big" a list there is of companies "wanting" those leases if the oil companies don't use them.... Are there any? I know the Feds can't say or mention any names because then it looks like they are being "bought out")
  
  Anyways, to get back to my original point. Oil is NOT and NEVER has been "business as usual". Oil is a very inelastic commodity and in limited supply. It is a commodity that is needed daily but takes years to start production with.
  To treat it as a commodity like wheat or sugar is foolhardy and is exactly the reason why we are here today with almost $5 a gallon.
  Example: Sugar crops get destroyed by floods and S. America drives up the prices? Call your buyer and tell them to get corn syrup the very next day.
  -BUT- The middle east cuts off oil supply? You pick up the phone and call.... wait what's that number? DAMN RIGHT! There is no other ***** number to call for NEXT DAY OR NEXT MONTH. (yes I know the government has a stash, but c’mon, just play along ;)
  
  So what is going to happen? The Feds in the end aren’t going to end up “pressuring” the oil companies to drill for oil in the leased fields. Subsidies will be given to existing companies and cheap loans will be awarded to new players who do get those unused leases. Environmental regs will be lowered or dropped, unions will be amended. Gas prices will drop. The average American will reduce their stress and stop calling their representatives. Hippies in their $25,000 new Hybrid will scream bloody murder while secretly happy that they now don’t have to worry about the cost of heating their house this coming winter and therefore can buy a 2nd iPhone. Last but not least, soccer moms will start driving their Hummers again.
  
  Now that folks is business as usual.
unitedforchange, on 06/19/2008, -0/+5news-Google the 'Use it or Lose it' bill, then Digg the articles you find. Notably, this bill was introduced a couple of days before Bush/McCain's offshore noise. But it remains the right answer the day after. The MSM has taken Bush/McCain's bait; can the truth bear out? We're going to see. Here's to hoping 'Use it or Lose it' comes back to wake the reactionary right in a cold sweat, since their conscience over flushing the future down the toilet doesn't seem to.

Time to Cross-Digg like you mean it:

http://digg.com/2008_us_elections/Democrats_fire_b ...
http://digg.com/2008_us_elections/Rahall_Says_Use_ ...
http://digg.com/business_finance/Charleston_Daily_ ...
http://digg.com/world_news/Big_Oil_holding_back_fi ...
http://digg.com/politics/Rahall_to_Big_Oil_Use_It_ ...
http://digg.com/2008_us_elections/Dems_to_Bush_Dro ...
http://digg.com/2008_us_elections/Pallone_Assails_ ...
http://digg.com/2008_us_elections/Energy_issues_co ...

- unitedforchange
- http://digg.com/users/unitedforchange/history
BigMrWiggly, on 06/19/2008, -3/+2Companies are not refusing to drill. 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. Democrats know nothing about business or economics.
- Echosphere, on 06/19/2008, -0/+1Agree! thanks for this perspective!
  
  Though, I do have to say that the Dems know quite a bit about business. I personally think it's the Repubs who don't know jack about longterm resource stability and national non-military infrastructure.
  
  Remember when Bush looked surprised when a reporter mentioned that gas might get up to $4.00 a gallon this summer? Like it or not, he's a Republican.....
  
  The historical Republican argument of less government, privatization, and laissez-faire economics just simply doesn't work with oil companies and their big pockets the way it currently is.
- rearlgrant, on 07/17/2008, -0/+1Given what you say is true, how does opening up the Alaskan National Wildlife Refuge change anything?
rearlgrant, on 07/17/2008, -0/+1Where will our grandchildren get their oil?

It's going to take a while to move away from a carbon based energy system.

I'd rather pay $10 per gallon gas now so my grandchildren could do the same rather than paying $5 now so they can pay the market price when these to be leased areas are depleted.

I once read that the Alaskan National Wildlife Refuge areas have enough oil for 20 years of production. If so, if this area had been opened when Prudhoe Bay was opened, we'd have no ANWAR reserves to argue about. What price would oil be then?
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Rahall to Big Oil: Use It or Lose It

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