Wednesday, August 13, 2008

Idle Leases--Or Addled Minds? First, lease agreements already require timely use of leased land. The 1992 Comprehensive Energy Policy Act requires energy companies to comply with lease provisions, and explore expeditiously, or risk forfeiture of the lease. So the Bingaman-Rahall "solution" effectively duplicates current law. Second, and more disturbingly, Mr. Bingaman and Mr. Rahall's groundless accusation and proposed legislation rely on the absurd assumption that every acre of land leased by the government contains oil. Obviously, that's not the case. Third, if a commercial discovery is made, more wells must be drilled, to delineate the shape and extent of the deposit. Production facilities and pipelines must be designed, built, brought to the site and installed. Only after oil or gas is actually flowing does the lease become "producing." Further complications often stymie energy companies from obtaining and using leased land. Every step in the process must be preceded by environmental studies, oil spill response plans, onsite inspections, and permits. The process takes years, and every step is subject to delays, challenges--and litigation. In the Rocky Mountains, protests against lease sales rose from 27 percent of all leases in 2001 to 81 percent in 2007, according to government and industry records. Numerous additional prospects were never even offered, because land managers feared protests. The justification used to be endangered species. Now it's climate change--as though U.S. oil causes global warming, but imported oil substitutes do not....

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