You would think that a member of the Senate Committee on Energy and Natural Resources would understand the economics underlying federal oil and gas leasing. Or that if he didn’t, he would bone up before orating about the subject.
And you would certainly think that the member would understand the economics of leasing and drilling before proposing an amendment to legislation regarding the matter.
In Al Franken’s case, you would be wrong on all counts. Michael Bastasch has the details at the Daily Caller.
To summarize, Franken went on a rant about why it doesn’t make economic sense to open more Alaskan lands to drilling, as has once again been proposed, when millions of acres are untapped by oil companies. The rant was in furtherance of an amendment he has proposed that would require the Interior Department to make sure all current drilling leases are used up before offering new ones.
This is a very contentious issue since there’s another million acres that are already leased — oil companies don’t lease land, at least I don’t think they do, it doesn’t make any sense to me
I don’t know the oil business, but why would you lease anything where you didn’t think there was oil? It doesn’t make any business sense.
Joe Manchin, Franken’s Democratic colleague on the committee, tried to educate the ex-comedian. Manchin said:
They get contracts, and the contract might be for 10 years. You gotta show you have the reserves to produce or you won’t get a long term contract. So, if you do deplete what you have, you gotta be able to go somewhere else to complete the contract or you lose it.
So, economically, it’s basically for the leases and to fulfill the contract. If you can’t do that, show that you have the reserves, [you] can’t get the contracts.
Lisa Murkowski, the committee chair, also provided help. She explained that if the oil companies knew exactly where the oil was, life would be easier, but in fact they purchase leases with no certainty that there are productive reserves underneath.
Murkowski also noted that many drilling leases sit unused for years because of lengthy permitting times:
They don’t produce immediately, leases do not produce immediately. Alaska is a pretty telling case of that. It takes 10 years plus, unfortunately, sometimes even longer than that because of the permitting, the NEPA, all of the review, it all takes time.
This may not make sense to Franken, but what truly doesn’t make sense is Franken’s amendment to require that all leases be used up before new ones are granted. The amendment’s effect, over time, would be to stop all drilling in the U.S.
As a friend says, it’s been a long time since Al Franken has been funny, but he has not yet learned to be serious.
The good news is that the committee approved the bill to open Alaska’s Arctic National Wildlife Refuge to drilling, sans Franken’s ridiculous amendment. The vote was 13-10. with Sen. Manchin joining the 12 Republicans on the committee.
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