Biden calls for ‘use it or lose it’ policy for oil leases on federal land

[RetiredUSN]

What a dummy Biden is. He has no clue how that stuff actually works. You get a lease to explore for oil. Thats the point of the lease. Which if you find it then you get the permits to drill pump and transport it.

Many of those leases were on hold because of the incoming administration policy on oil.

Now the very same moronic people in this administration who created these policies blame it on everyone but themselves.

 

[Lord of Planar]

a permit to drill....that comes when they already know oil is there. If they sit on that, they should lose it.

Again, I suggest you learn the topic if you wish to debate it. It takes a long time after after you get the permit to finish exploration of the area with various types of equipment that map the areas underground. Then if it looks viable, you do a test drilling. You don't go immediately into production from a plot of land that might not even have oil. The whole process generally takes about two years once you have the lease before it might produce oil.

 

[Michael Cole]

Amazing how the tunes change.

Prices are too high!

Right: Let's get to drilling.
Left: It takes years to drill.

Biden, okay, the right is right. Lets get to drilling.
Right: It takes years to drill.

My god, we've lost our minds.

 

[Greenbeard]

I don't remember the numbers, but I think the press secretary tried to convince the people, that the oil companies could pump plenrty of oil, that they has I think they said, 9,000 oil permits. At the time I did a little research and found that 2 year number. I also found out that the Biden Adminitration boasting that 9,000 number, was reduced from something like 37,000 permits the prior year.

Sounds like you’re confusing leases, of which there are ~36,000 right now (a very slight dip from a couple years ago) with permits, which the current administration has been issuing at a faster clip than the prior one.

 

[Lord of Planar]

Sounds like you’re confusing leases, of which there are ~36,000 right now (a very slight dip from a couple years ago) with permits, which the current administration has been issuing at a faster clip than the prior one.

I read otherwise. It appears you are listing the numbers before Biden reduced them. Have you seen the latest data?

 

[PirateMk1]

Isn't that a minimum two year process before you know if the location is viable for oil?

Depends on how motivated the company is to find out what's in a particular lease. Like most things more money equals faster progress up to a point.

 

[Gateman_Wen]

To look for it and maybe do a couple of test wells to see what is there quantity wise and determine if it is worth pursuing further. Most leases don't have oil profitable enough to pursue producing.

Can you provide some evidence of your claims?

 

[What if...?]

Outstanding, oil companies will need to either start using the unused federal leases, or pay a fine and lose their rights to the land. That in addition to the new daily releases of crude out of the federal reserves should have start reducing oil company profits and be seen as a reduction at the pumps.

Biden calls for ‘use it or lose it’ policy for oil leases on federal land

US President Joe Biden on Thursday slammed oil companies for refusing to increase production to make up shortfalls caused by the removal of Russian oil from US markets.

www.independent.co.uk

What they will say is the mean old government is making them take risks and they have to keep prices high to cover the potential extra expense.

 

[Lord of Planar]

What they will say is the mean old government is making them take risks and they have to keep prices high to cover the potential extra expense.

Wouldn't that be fact?

 

[What if...?]

What a dummy Biden is. He has no clue how that stuff actually works. You get a lease to explore for oil. Thats the point of the lease. Which if you find it then you get the permits to drill pump and transport it.

Makes me wonder how many leases were bought by big companies to keep smaller companies from exploiting them?

To keep prices higher and hobble potential competitors.

101 level capitalism.

 

[What if...?]

Wouldn't that be fact?

That businesses by nature have to take risks?

Seems it’s not me that disagrees that it is.

 

[Greenbeard]

I read otherwise. It appears you are listing the numbers before Biden reduced them. Have you seen the latest data?

	Now ​	Two Years Ago​
Leases (Total / Producing)	35,871 / 23,803​	37,496 / 23,878​
Permits	8,825​	7,091​

 

[PirateMk1]

Can you provide some evidence of your claims?

I used to work in the field on the logistics side. Specialized in delivery of drilling mud additives and moving drilling equipment from site to site. Been involved in the logistics planning for upcoming exploration wells. So first hand info.

 

[PirateMk1]

Makes me wonder how many leases were bought by big companies to keep smaller companies from exploiting them?

To keep prices higher and hobble potential competitors.

101 level capitalism.

There can be a bit of that, however they are leases which expire and can be expensive over time. Usually when a company takes a lease they are planning to survey it and determine its viability for further exploration and exploitation.

 

[Deuce]

Biden came out swinging on DAY ONE of his presidency against fossil fuel companies by signing EO's to cripple production and increase regulations.

What is the benefit vs. risk on these unexplored leases that may not even produce? Further, why would any industry want to invest in R&D and exploration when the party in power openly speaks out against that industry and made it clear they are going to hobble them in favor of new technology?

Oil production has not decreased, how are you defining "crippled?"

 

[justoneman]

Outstanding, oil companies will need to either start using the unused federal leases, or pay a fine and lose their rights to the land. That in addition to the new daily releases of crude out of the federal reserves should have start reducing oil company profits and be seen as a reduction at the pumps.

Biden calls for ‘use it or lose it’ policy for oil leases on federal land

US President Joe Biden on Thursday slammed oil companies for refusing to increase production to make up shortfalls caused by the removal of Russian oil from US markets.

www.independent.co.uk

My god does Biden ever do anything smart? He is just grand standing. Attempting to force oil companies to drill where they do not decide to, will do absolutely nothing positive at all. This policy will simply inhibit oil exploration. This is yet another demonization of oil companies.

 

[What if...?]

There can be a bit of that, however they are leases which expire and can be expensive over time. Usually when a company takes a lease they are planning to survey it and determine its viability for further exploration and exploitation.

I just know energy companies play games.

Here in SD there was a big kerfuffle where sdg&e claimed they couldn’t build a power plant.

Turned out the objection was really they didn’t want them to build it where it was most convenient for them.

Directly upwind next door to a high use recreational field and a school.

 

[Gateman_Wen]

I used to work in the field on the logistics side. Specialized in delivery of drilling mud additives and moving drilling equipment from site to site. Been involved in the logistics planning for upcoming exploration wells. So first hand info.

So document it.

I'll wait.

 

[PirateMk1]

So document it.

I'll wait.

Wait........it will be awhile. I have to drink coffee, eat a sandwich, play a couple of games, wrench on a project. I promise I will get around to servicing your needs eventually. Perhaps while I am still alive even. Just be patient.

 

[Gateman_Wen]

Wait........it will be awhile. I have to drink coffee, eat a sandwich, play a couple of games, wrench on a project. I promise I will get around to servicing your needs eventually. Perhaps while I am still alive even. Just be patient.

So you can't.

That's pretty much what I expected.

 

[Buckeyes85]

Biden came out swinging on DAY ONE of his presidency against fossil fuel companies by signing EO's to cripple production and increase regulations.

Comments like this prove you didn't read one word of the quoted article.

His proposal is in response to companies who refuse to increase production, which his administration has urged them to do.

Walk me through how that is "crippling" production.

 

[diz]

Why would you purchase an oil lease if you don't know whether there's oil or not?

It’s often done speculatively based on a theory there may be oil. With time and analysis it sometimes doesn’t prove out.

A more rational question would be: why would someone pay for a lease if they did not have some plan to drill it eventually?

The answer is: they wouldn’t.

Paying for a lease and not drilling it is a punishment already.

Biden is tilting at symptoms again. Their stupid talking points about undrilled leases/permits have the ignorant left all up in arms about undrilled/leases permits so now he’s flailing about fixing something that isn’t actually a problem. Worse, the atmosphere of unpredictability and uncertainty and punitive attitude toward oil and gas development from the idiot Biden is actually part of the problem so things like this only makes things worse.

 

[Lord of Planar]

Comments like this prove you didn't read one word of the quoted article.

His proposal is in response to companies who refuse to increase production, which his administration has urged them to do.

Walk me through how that is "crippling" production.

And you believe what comes out of a politicians mouth?

Wow....

 

[diz]

a permit to drill....that comes when they already know oil is there. If they sit on that, they should lose it.

Wrong. It’s far more complicated than you imagine.

Something as simplistic as “the oil is there” is not the issue.

A producer is generally running an economic model that involves drilling multiple wells each costing $5-10 million dollars, and factoring in a large number of other variables like pipeline connections, tariffs, rig availability and price, etc. There is an estimate of the number of barrels the well will produce that is refined as new data from neighboring wells or seismic surveys comes in. The number of barrels the well will produce is always uncertain. Two wells right next to each other will produce different amounts due to variation in the way the well is drilled and localized geology. The other big variable is the price of the commodity you will receive. A well that may produce a positive risk adjusted return at $100 may not at $50 or $75 per bbl.

A permit is one step in a process that involves constantly changing variables and considerable uncertainty. It can be a long time to get a permit processed, and it’s a very cheap step (maybe a few thousands of dollars in a well that will cost millions) so a rational company will often permit wells so that it has the option to drill them later if conditions change.

Conditions that may change include things like: oil price goes up, rig prices come down, a new pipeline comes on line, neighboring wells come in and look great, more capital becomes available, etc.

Again, if you are an oil company drilling wells is the way you make money. You want to drill when it is economically appropriate. You don’t need the government to punish you for not drilling, you need them to have a reasonable predictable process for getting wells permitted and pipelines built. Your goal is to drill. You need the government to stop getting in the way.

 

[Buckeyes85]

Biden is tilting at symptoms again. Their stupid talking points about undrilled leases/permits have the ignorant left all up in arms about undrilled/leases permits so now he’s flailing about fixing something that isn’t actually a problem.

So gas prices are not too high? That's the underlying problem at issue here.
I presume you did not read the article? The discussion about existing leases/permits is to encourage production from operating facilities that refuse to ramp up production because the high cost of oil is making them record profits.