Wednesday, September 10, 2008

American Oil

Dan Kish at Human Events explains the realities of oil exploration, and the disinformation being endlessly recycled by the media and Congressional Democrats opposed to exploring for domestic energy resources. The biggest myth is that America uses 25% of the world's oil with only 3% of the reserves. But you have no idea of what percentage of the world reserves are within US control if oil companies are forbidden to even look for additional energy supplies, which is currently the case (at least until September 30, when the Congressional moratorium is scheduled to expire).

"We will never increase our oil reserves if we can never look. A huge amount of acres are owned by the federal government off our shores and onshore, principally in the western states, but instead of addressing that problem and helping to bring down energy prices, politicians have been making up stories and trying to fool Americans with wild allegations. The truth is, over 96% of the lands that belong to the taxpayer haven’t even been leased by the government so that energy exploration might occur."

Then there is the other lie that the 68 million acres (of 91 miilion acres total) under lease that aren't producing any energyis because the oil companies are simply sitting on these leases and refuse to drill. The truth is that the lease is only the start of the process, and that 1/3 of offshore leases near the shore actually wind producing energy economically, while only about 1/5 of deep water leases prove to do so. Onshore is actually only about 1/10, so the vast majority of leases never wind up discovering and producign any energy whatsoever.

"So, if the chances of finding oil under leases in various categories of lands are 33%, 20% and 10%, it probably makes sense that they’re only producing oil on 25.6% of the leases they hold. In fact, that’s pretty good, and well within the historic range of lands producing versus lands leased. The problem is the government is leasing much less land than it did several decades ago. If oil explorers could look in more places for oil and gas, the chances are they would find more of it. With more supply, prices would come down."

Then there are the environmental activist convinced they are saving the planet from the evil oil corporations tying up any activity from occuring via their favorite arm of the government, the endless judicial process. Just since 2000, lawsuits relating to energy exploration have increased over 700%. There are over 1.7 billion acres of government controlled areas offshore and another 700 million acres onshore, yet the government allows exploration and leasing of only 91 million acres, less than 4% of the total.

The fact of the matter is, unless we look, we'll never know.

1 comment:

ptg said...

You won't catch any fish if you never cast your net.