BLM Dismisses Protests To Oil Lease

[audtatious]

By Susan Montoya Bryan - Associated Press

The U.S. Bureau of Land Management has dismissed protests of a recent oil and gas lease sale by environmentalists who had concerns about the sale's impacts on greenhouse gas emissions and climate change.

The Western Environmental Law Center and WildEarth Guardians had filed protests to the April sale of dozens of parcels in New Mexico, claiming the agency failed to consider greenhouse gas emissions and climate change when determining whether to offer the parcels.

The groups had asked that the BLM prepare an environmental impact statement to determine the leases' impacts.

The BLM said it rejected the protests because the agency already addresses greenhouse gas emissions in environmental assessments prepared by its field offices and that the agency works with the industry to reduce emissions for example, by limiting flaring and venting of natural gas during drilling and production.

"We understand that people are concerned about greenhouse gases and global climate change, as are the BLM and the Department of the Interior," New Mexico BLM director Linda Rundell said Friday. "But we don't feel this protest will help reduce the levels of gases released into the atmosphere. The real issue is worldwide demand and use of fossil fuels."

Greenhouse gas emissions and climate change have become the environmentalists' arguments of choice when challenging recent quarterly oil and gas lease sales by the BLM in New Mexico and other Western states.

The environmental groups argue that the BLM needs to consider that oil and gas production resulting from individual lease sales adds up and can have a regional impact.

The BLM said it examines air quality and other impacts from potential development and that it has determined that issuing the leases offered in April would have no significant impact on regional and global greenhouse gas emission levels.

The agency, in its response to the environmental groups, said the consumption of oil and gas would likely continue at current levels with or without the April leases and that consumption is the greatest source of greenhouse gas emissions.

Even if the BLM stopped leasing, the agency said public demand for oil and natural gas would continue and fuels produced on federal lands would be replaced by other sources.

The BLM said the leases sold at the April 16 sale will be awarded to the winning bidders.

http://www.abqjournal.com/news...8.htm

[smockers83]

Hey! Alright! Someone finally stood up to the environmentalists.

[rn79870]

Note: CNN reported that GW signed the Executive Order today opening up off shore drilling. Finally, GW moves in the right direction.....

[skylndrftr]

Not really the right direction...unless your an oil company.

There is still the matter of this actually being against the law. Its clearly not goign to happen and its simply Bush tryign to yet again make congress the bad guy (not that they are helping themselves).

The major oil companies already actually own (yes own) the rights and leases necessary to drill on enormous swatches of land on and off shore. The issue isn't a lack of supply, its waiting for the price to go higher to maximize profit. ExxonMobil alone owns almost 5700 active capped wells (meaning drilled, and full of oil with the tap shut)

These areas in question wouldn't start producign oil for LONG periods of time (the decade range), this doesn't reallly do what he claims at all.

[audtatious]

They have the right to drill on numerous places and don't have the right to drill on others. Just because they have rights to parcels of land does not mean there is oil there nor that it is even financially possible to get at some of the oil that may exist. Should we force oil companies to work at a loss besides the gambles they already make to sink wells only to come up empty?

[rn79870]

Not really the right direction...unless your an oil company.

There is still the matter of this actually being against the law. Its clearly not goign to happen and its simply Bush tryign to yet again make congress the bad guy (not that they are helping themselves).

The major oil companies already actually own (yes own) the rights and leases necessary to drill on enormous swatches of land on and off shore. The issue isn't a lack of supply, its waiting for the price to go higher to maximize profit. ExxonMobil alone owns almost 5700 active capped wells (meaning drilled, and full of oil with the tap shut)

These areas in question wouldn't start producign oil for LONG periods of time (the decade range), this doesn't reallly do what he claims at all.

There is a school of thought that the mere opening of these areas will have a positive effect on lowering the cost of a barrel of oil. On the other hand, I believe this was more a matter of natural gas supply than oil, but I believe the two go hand and hand.

Consider that we have more oil resources than the middle east and we can easily become an oil exporting nation. That will have a positive effect on the value of the dollar.

[rn79870]

They have the right to drill on numerous places and don't have the right to drill on others. Just because they have rights to parcels of land does not mean there is oil there nor that it is even financially possible to get at some of the oil that may exist. Should we force oil companies to work at a loss besides the gambles they already make to sink wells only to come up empty?

I can't speak as to the entire situation, but I know that the forbidden areas off the California cost are known to be productive areas. I think the oil companies have to pay a pretty penny for the rights to drill in these areas too. I don't see the downside to this assuming that the environmental issues are addressed and the ecology protected.

Am I missing something?

[audtatious]

I was simply responding to the "they have paid for land rights where they are not drilling" style comments. Some of the leased land has no oil and others the oil is minimal or so deep it's not profitable.

[rn79870]

I'm not sure how that works Matt, but I think they purchase leases for areas. I don't think they were precluded from testing those areas for signs of oil even though they couldn't drill. I don't really know tough.

[smockers83]

The funny thing about drilling off of California is that more oil is "spilled" into the water through natural seepage today than any other source. Human-based spills are pretty rare these days--its gone from 3.4 million barrels in the 70s to 1000 barrels between 2000-04.

I'm not entirely sure on how the leases go for oil, but I can tell you how leases work for mining, and I would have to assume its relatively the same for oil. A company can do exploration where ever it wants, whenever it wants, even if it doesn't own the land (given that it is unowned land). If they deem it as resourceful for whatever they're looking for, then they go ahead and get the permits and leases.

Part of the reason there isn't more off-shore drilling going on is environmentalists. Another reason is its not financially smart to go after it now. As prices go up, the more financially responsible it becomes to go after these types of reserves. As prices go up, producers want to produce more in order to make more profit at that price.

Drilling off-shore will increase supply slightly but most of all it will help insulate us from international price volatility and events. In that way it will help reduce the price.

[audtatious]

I'm not sure how that works Matt, but I think they purchase leases for areas. I don't think they were precluded from testing those areas for signs of oil even though they couldn't drill. I don't really know tough.

Here's some interesting info:

http://energytomorrow.org/ener....aspx

[rn79870]

Wow, it's an expensive crap shoot at best isn't it. I wouldn't mind spending 4 bucks a gallon for gas if it was going into exploration and research instead of some speculators pocket. Interesting article.

[audtatious]

There is a show on called Black Gold that is interesting. Look it up and catch it.

[skylndrftr]

They have the right to drill on numerous places and don't have the right to drill on others. Just because they have rights to parcels of land does not mean there is oil there nor that it is even financially possible to get at some of the oil that may exist. Should we force oil companies to work at a loss besides the gambles they already make to sink wells only to come up empty?

They wouldn't buy the leases unless they have solid information that there is oil. The geologists and scientists working for them aren't just guessing. The leases they hold contain oil almost without question, and if they don't want them for whatever reason, then they should give them back and see if anyone else wants them.

There are also a significant number of producing wells throughout the southwest and some in the midwest that are capped because the oil companies decided they were producign to much supply. Obviously that is their perogative as a company, but its just one more reason we should nationalize the oil companies.

Anyone who listens to Ronnie Reagans "the 8 most terrifying words" BS really needs a mental health exam.

I don't really know how black gold comes into play here but I honestly prefer Ice Road Truckers

[OriginalWheelman]

Ok, you obviously don't have a lot of experience int he business world, judging by your posts. Lets say i have the rights to drill oil in your back yard. Now I have to hire a crew, buy machines, build rigging, and then drill to get the oil. You have cost $X to set up a site even before you drill. So I'm a lot of money into this operation before I even pull oil out of the ground. Lets say there are 100,000 barrels there, and I have to pay an average of $1 per barrel in labor to get it out of the ground, and $1 per barrel of maintenance on the rigs. That leaves me with ($X/100,000)+$2 = Cost. So if there is a small amount of oil, or X is high because say, it's an offshore rig, or it's buried deep down, cost is a lot higher. With prices low, these fields simply are not worth drilling in, as cost is higher than sale price, as price goes up, it becomes profitable. If it cost, say $120 a barrel to drill it, it wasn't worth it a few years ago, but today it is. It also takes a long time to set up all the rigging, as it is a very complicated process, and being that you're an oil company the environmentalists are going to try and stop you every chance they get. So even if it's profitable now, you have to gamble that it will still be profitable when you finally get oil. Get it yet?