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Why isn’t Big Oil using leases it already has?
Published Thursday, June 26, 2008
Tim Walz
Heading out to the lake for the weekend will be a more expensive proposition this summer, as Minnesotans feel the pain at the pump. Whether you drive a gas guzzler or a hybrid vehicle, the cost of gas hurts.
My hope was that as oil prices rose, so too would the ire of my colleagues in Congress for the oil companies that are gouging middle-class Americans. Unfortunately, many in Congress are casting about to put the responsibility on just about everyone but Big Oil.
As Big Oil’s cheerleaders explain it, gas prices are high because oil companies just aren’t drilling enough. But domestic oil supplies aren’t stagnant because oil companies lack access to oil-rich areas; it’s because oil companies are deliberately choosing not to use the leases they’ve already got.
Today, oil companies hold leases to about 92 million acres of federal land, both onshore and offshore. Roughly 67 million of those acres — more than 70 percent of the area they own the rights to — are not being used for production. These are areas that oil companies are authorized to start drilling, which have the potential to produce an additional 4.8 million barrels of oil and 44.7 billion cubic feet of natural gas each day. This would nearly double total U.S. oil production!
Why is Big Oil sitting on all this unused land? Simple: Because increasing production would increase supply and threaten the record profits the five major oil companies posted last year — $40.6 billion for Exxon-Mobile alone.
What’s less clear is why President Bush and his allies in Congress are talking about giving Big Oil access to even more land, when the companies aren’t using what they’ve already got.
It’s time to call Big Oil on the carpet. Instead of political gimmicks that give oil companies the right to drill on even more taxpayer-owned land, we need to insist they first make use of the land that they’ve already leased. That’s why I’m co-sponsoring “use it or lose it” legislation that will force oil companies to either produce oil on the land they’re leasing or turn the leases over to a company that will.
As the price of gasoline increased, Congress succeeded in forcing the president to stop adding even more oil into the Strategic Petroleum Reserve, putting more oil back on the market. And the House recently passed legislation to permit the Justice Department to take action against foreign governments and oil tycoons that engage in oil price-fixing.
And just this week, the House passed legislation to crack down on price-gouging by Big Oil and give the Federal Trade Commission authority to investigate and punish companies that artificially inflate the price of energy. These are common-sense solutions that may help ease the burden of skyrocketing gas prices, and I am disappointed that President Bush has opposed each and every one of them.
But more remains to be done. We need to be honest about our situation: Americans can’t drill our way out of this energy crisis, so we need to change our priorities and use American ingenuity to develop affordable new fuels.
Even while reaping record profits, the major oil companies are still receiving billions of dollars annually in subsidies from the taxpayers. I think we should shift that money into research and development of new energy sources, but so far, we’ve been unable to overcome the opposition of President Bush and his allies in Congress.
Real solutions to our energy crisis won’t be found by simply giving Big Oil access to more taxpayer-owned land. We can start by going after the price-fixers, energy market speculators, price-gougers and others who are driving oil prices higher.
And we can start by sending a simple message to Big Oil: It’s time to use it or lose it.
Tim Walz, DFL-Mankato, is the 1st District congressman.
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Comments
Posted by Burt (anonymous) on June 26, 2008 at 5:58 p.m. (Suggest removal)
Interesting to see the talking points change. When drilling first came up the DEMS said....."it won't have an impact for 10 years so why do it." Now they are changing to "hey we want to drill to just not where they want to".
Posted by DexterDawg (anonymous) on June 26, 2008 at 10:48 p.m. (Suggest removal)
I'm so sick of the out of touch liberals spouting off. While these companies are exploring for "potential" oil reserves. In areas we know with certainty that contain oil, China, with their agreement with Cuba is drilling closer to our soil than Mr. Walz and his far left cronies will allow us. How much sense does that make? The people of the US overwhelming support allowing the states to decide whether or not to allow the drilling. Why not let them decide? Drill here, drill now, pay less!!!!!!!!
Posted by Derek_Nelson (anonymous) on June 27, 2008 at 12:24 p.m. (Suggest removal)
It would help if Walz would do his own research and write his own articles rather than leaving it to DNC interns trained in media spin.
First of all, he is complaining about an American corporation making a profit. Oh the horror. (millions of Americans benefit by owning oil stock in their retirement plans)
Second of all Exxon Mobil feeds thousands of families by employing thousands of people.
Third of all Waltz fails to mention that the federal government is making more money per gallon of gas than the actual companies producing it. Where is Tim's outrage with this?
Forth of all the $40.6 Billion Exxon made is only 10% of of their total revenue while Microsofts profits were 29% of their total revenue. Kind of puts things in perspective doesn't it.
Hey Tim, Nice spin...
Posted by awooduck (anonymous) on June 27, 2008 at 12:56 p.m. (Suggest removal)
Rep Walz is right big oil need to first drill on land they already hold rights to.
With profits of the big five oil companies at 123 billion dollars last year it's hard to feel sorry for poor old big oil.
they need to explore the land they already have first and goverment needs to stop dishing out billions of our tax dollars to big oil and start investing those dollars to search for new energy sources.
Posted by Burt (anonymous) on June 28, 2008 at 11:48 a.m. (Suggest removal)
Duck,
When did the talking points shift from we should not drill since it won't help for ten years to explore what they have under lease now? Let me tell you....when they poll results came back. I don't care if Walz is against big oil or does not want to drill, fine we don't have to agree on everything. It's the spin that I find so troublesome.
Posted by DexterDawg (anonymous) on June 30, 2008 at 12:55 p.m. (Suggest removal)
Duck,
What does the amount of profit have anything to do with drilling to increase our domestic production? You should also know that there isn't a bank account somewhere in the name of "big oil" that these profits go to. The big ones you are referring to are owned by everyday people that invest some of their money in them by purchasing shares on the stock exchange. Do you also understand that the number of dollars of profit is only relative if you look at the percentages? A 14% profit is hardly something that should raise concern. I know of many businesses that operate on a MUCH higher margin of profit than that (and congrats if you are able to). I don't hear you complaining about them.
Posted by craze (anonymous) on June 30, 2008 at 3:49 p.m. (Suggest removal)
Out of touch liberals!? Please tell me what planet you live on! It is people like you that need a reality check, you see just because you say something doesn't make it true. Drill here, Drill now Pay less.......what is wrong with you, don't you care about the welfare of our country and our planet. What about your children, and your children's children. You're attitude scream's SCREW THEM, ME MINE ME!
Yeah, it is true that we can not depend on China, as their own demand on supply is growing. That is what happen's when "right winged cronies" destroy America's economic health while countries such as China prosper off of our poverty.
And you Derek Nelson, maybe you should take into consideration that these American oil companies and CEO's that are making a profit are making unreal profits of us-ya know their fellow Americans. They are raping our financial security and leaving us to die economically speaking. Meanwhile these people you are sticking up for are living fat off the hog (the hog being you, me, and everybody else).
Waltz is absolutely right, and time will prove it! Big oil companies are sitting on unused land because they want to ensure that they will be VERY RICH for years to come.
Waltz is also right that the solution to the problem is not through drilling taxpayer owned land. I feel that in the long run this is only going to hurt us. The oil companies are smart enough to sit on their comodities, why do we have to prove to them that their smart and we are dumb. The problem is only going to get worse. We need to change. We need to wise up. The way that we use energy has become part of our culture and clearly it needs an overhaul.
Okay, so I'm really long winded. Thanks for reading.
Posted by craze (anonymous) on June 30, 2008 at 3:51 p.m. (Suggest removal)
awooduck: RIGHT ON! you remind me of somebody else I know...hmm
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