Education – Oil Leases Do Not Necessarily Mean Oil Production

August 1, 2008

The most common argument we hear when someone opposes new drilling is the statement that the oil companies already have leases they are not using. Of course, this is because there is no oil where these leases exist. However, here is a Q&A we did with Jane Van Ryan from American Petroleum Institute on oil leases.

Question: This is part of the anti-drilling playbook and comes up from time to time. Opponents say that the oil companies already have leases to drill that they are not using. My intuition tells me there probably is no oil there to extract there. Do you have any figures on this topic? I’d like to get the truth out on our website.

The Reply: You are correct. Oil doesn’t exist everywhere, and buying a lease doesn’t guarantee that the lease holder will find oil. In fact, the lease only gives the lease holder the right to explore for oil. Then, if he/she finds oil, they must go through a long process to get a drilling permit.

I’ve got a couple of links that will help you get the facts about leasing:

http://www.energytomorrow.org/energy/Facts_about_Non_Producing_Leases.aspx?pid=4

http://www.energytomorrow.org/energy/_Idle_Leases_Exploration_and_Process.aspx

Written by Editor · Filed Under Education