The Washington Post assesses three of the arguments used by opponents of OCS oil and natural gas drilling in a good editorial today, “Snake Oil.” We especially appreciate the rebuttal to “use it or lose it,” the specious argument that oil companies are just sitting on vast lands for drilling and refusing to develop them because…well, there the argument falls short. The Post’s explanation is clear and persuasive:
The oil companies aren’t using the leases they already have. According to the MMS, there were 7,457 active leases as of June 8. Of those, only 1,877 were classified as “producing.” As we pointed out in a previous editorial, the five leases that have made up the Shell Perdido project off Galveston since 1996 are not classified as producing. Only when it starts pumping the equivalent of an estimated 130,000 barrels of oil a day at the end of the decade will it be deemed “active.” Since 1996, Shell has paid rent on the leases; filed and had approved numerous reports with the MMS, including an environmentally sensitive resource development plan and an oil spill recovery plan that is subject to unannounced practice runs by the MMS; drilled several wells to explore the area at a cost of hundreds of millions of dollars; and started constructing the necessary infrastructure to bring the oil to market. The notion that oil companies are just sitting on oil leases is a myth. With oil prices still above $100 a barrel, that charge never made sense.
The Post does bow to the anti-energy shibboleth, ANWR, although it doesn’t really state an argument: “We agree that the Arctic National Wildlife Refuge, with its varied and sensitive ecosystems, should be preserved. In the quest for new sources of energy, there are trade-offs. That pristine area must remain off-limits.” We hope the member of the editorial board who elicited that concession appreciates it.
House Speaker Nancy Pelosi on CNN’s Larry King: “So there are things that Congress can do and we have voted on this over and over again. But the Republicans and the president have resisted. Instead, they have this thing that says drill offshore in the protected areas. Well, we can do that. We can have a vote on that. But it has to be part of something that says we want to bring immediate relief to the public and not just a hoax on them.” Some see in those comments a softening in the Speaker’s until-now resolute opposition to offshore drilling of any sort. That would be great. But we see a flexibile definition of “hoax” that could be called on to prevent action.
As for “immediate relief,” an editorial in Investor’s Business Daily points to a report by Sanford C. Bernstein & Co. From “Don’t Ask, Don’t Drill“:
The Minerals Management Service estimates there are 10 billion barrels waiting off the California coast.
“California could actually start producing new oil within a year,” the Bernstein report said, because the oil is in shallow water, and drilling platforms have been there since before the moratoria.
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