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Jen Psaki: “There are 9,000 approved oil leases that the oil companies are not tapping into
tl;dr - Those are lease blocks that have come up dry, or show no sign of recoverable reserves.
Jen Psaki: “There are 9,000 approved oil leases that the oil companies are not tapping into currently”
https://wattsupwiththat.com/2022/03...oil-companies-are-not-tapping-into-currently/
by David Middleton
This post is the first sequel to: Democrat Senators Demand That Oil Companies Increase Production.
As I write this post (the morning of March 7, 2022), West Texas Intermediate (WTI) is right around $120/bbl. It actually topped $130/bbl over the weekend. This morning, I paid $3.999/gal for regular unleaded gasoline in Houston, Texas. While I make my living finding oil & gas and high oil prices are good for the bottom line right now. These prices are likely to be unsustainable and could trigger a recession and subsequent oil price crash.
The Brandon maladministration is increasingly facing questions about why they aren’t taking measures to increase domestic oil production. This is a typically moronic Democrat political hack response to the questions:
Q We also know, you know, the President, as recently as yesterday, talked about increasing domestic manufacturing to bring down prices on inflated items like goods. So why not apply the same logic to energy and increase domestic production here?
MS. PSAKI: Well, there are 9,000 approved oil leases that the oil companies are not tapping into currently. So I would ask them that question.
Q Is there nothing that the administration can do to get those providers back to pre-pandemic levels?
MS. PSAKI: Do you think the oil companies don’t have enough money to drill on the places that have been pre-approved?
Q Just asking.
MS. PSAKI: I would — I would point that question to them. And we can talk about it more tomorrow when you learn more.
Press Briefing by Press Secretary Jen Psaki, March 3rd, 2022
First off, WTF IS Ms. Psaki referring to here?
MS. PSAKI: Well, there are 9,000 approved oil leases that the oil companies are not tapping into currently. So I would ask them that question.
As an employee of “them,” I would try to answer that question. However, the “9,000 approved oil leases that the oil companies are not tapping into” bit is a non sequitur, if not totally wrong. Ms. Psaki was asked, “Is there nothing that the administration can do to get those providers back to pre-pandemic levels?” Well, Permian Basin oil production has already exceeded pre-shamdemic levels. Her response was idiotic. The number of “approved oil leases” (presumably Federal mineral leases) is not an answer to that question. The only thing that “the administration” could do to increase oil production, would be to get the hell out of the way. From cancelling the Keystone XL pipeline, to refusing to hold Federal leases sales, to threatening to refuse to approve drilling permits, they have been getting in the way as often as they can.
I will focus on Federal oil & gas leases in the Gulf of Mexico, because that’s the area I have worked since 1988, I have easy access to detailed lease & production data and the GOM accounts for about two thirds of the oil production from Federal acreage.
If Ms. Psaki is referring to tracts that are open for leasing, there are 10,638 open tracts in the Central Gulf of Mexico planning area.
According to Lexco OWL, approximately:
38% of those Central GOM tracts have never been leased in the history of Gulf of Mexico US lease sales… A pretty good indication that those tracts are not prospective.
28% of the tracts are deepwater leases that were drilled. These wells were either dry holes or failed to find economically recoverable hydrocarbons and were subsequently relinquished.
15% of the tracts are shelf leases that used to be productive… Old fields that have been plugged, abandoned and the infrastructure has been removed due to BSEE’s Idle Iron rule.
81% of the currently open leases in the Central GOM have never been leased, leased and unsuccessfully drilled or are abandoned oil & gas fields. This doesn’t mean that none of them are prospective. A lot of oil & gas gets discovered in old fields. There’s an old adage, “The best place to look for oil, is where it’s already been found.” That said, most of these leases have been recycled many times through annual leases sales over the past 50+ years. The prospects of large discoveries on currently open Central GOM acreage are fairly slim. And, until they resume holding lease sales, as they are legally required to do, the open acreage is about as useful as mammary glands on a bull.
If Ms. Psaki was referring to leases currently held by oil companies, there are 1,771 active leases in the Central Gulf of Mexico planning area.
About 40% of the currently active leases are either held by production or held by a production unit. About 2% of the leases have been extended beyond primary term by active operations, suspension of operations (SOO) or suspension of production (SOP). It takes a long time to finalize the work to the point the prospect is drillable, file all of the necessary plans and permits and sanction development.
About 45% are primary term leases (generally 5 years on the shelf and 10 years in deepwater). The vast majority of these leases had been previously leased and then relinquished. Just because we bid on a block, doesn’t mean there’ll be an economically drillable prospect on it during the primary lease term. Some of these leases will probably get drilled, some will expire and get recycled through future lease sales (if there are any).
Over 300 “pre-approved” leases are currently being unlawfully blocked by a corrupt Obama judge. These tracts received bids in the November 2020 lease sale.
None of these leases have been awarded.
Regarding onshore production…
About 26 million Federal acres were under lease to oil and gas developers at the end of FY 2018. Of that, about 12.8 million acres are producing oil and gas in economic quantities. This activity came from over 96,000 wells on about 24,000 producing oil and gas leases.
About half of the leased acreage is “producing oil and gas in economic quantities.” The other half would consist of leases no longer producing economic quantities of oil & gas, prospects that haven’t been drilled yet and “trend”, “play” or “protection” acreage. Oil companies will often bid on whatever is open in hot plays and trends, with the notion of possibly working up drillable prospects. They will also lease acreage around good prospects and new discoveries to prevent other companies from “corner shooting.” Most of these sorts of leases will usually expire undrilled.
Rare is the occasion that an oil company bids on a “ready to drill” prospect. After leases are awarded, companies will start spending money on additional geophysical data, reprocessing existing data and performing the detailed geological and engineering work required to bring the prospect to a drillable stage. Even then, it will only get drilled if it is still economically attractive and can be budgeted by the oil company, provided the Federal government approves all of the required permits. So far, the only thing the Brandon maladministration hasn’t been doing to hamstring US oil production is in drilling permit approvals. So far, they haven’t been blocking or slow-walling drilling permits on existing Federal oil and gas leases. I just pulled up the BSEE APD (application for permit to drill) data for the Gulf of Mexico. In 2017, BSEE approved 820 APD’s. In 2021, they approved 794 APD’s. This isn’t surprising because they haven’t been blocking permits. It would be blatantly illegal if they did. Under President Trump, BOEM held at least 2 GOM lease sales every year, as required by law. Under Brandon, we’ve only had 1 GOM lease sale. We only had that sale because a Federal judge ordered them to hold it. That sale is currently in limbo because another Federal judge blocked it… Because climate change.
So Jen, exactly which leases are “oil companies are not tapping into”?
Are you so ignorant that you think an “oil lease” has oil & gas just because it’s an “oil lease”?
Are you so dumb that you think we can just “tap into it” because it’s an “oil lease”?
Yes, those were rhetorical questions…
tl;dr - Those are lease blocks that have come up dry, or show no sign of recoverable reserves.
Jen Psaki: “There are 9,000 approved oil leases that the oil companies are not tapping into currently”
https://wattsupwiththat.com/2022/03...oil-companies-are-not-tapping-into-currently/
by David Middleton
This post is the first sequel to: Democrat Senators Demand That Oil Companies Increase Production.
As I write this post (the morning of March 7, 2022), West Texas Intermediate (WTI) is right around $120/bbl. It actually topped $130/bbl over the weekend. This morning, I paid $3.999/gal for regular unleaded gasoline in Houston, Texas. While I make my living finding oil & gas and high oil prices are good for the bottom line right now. These prices are likely to be unsustainable and could trigger a recession and subsequent oil price crash.
The Brandon maladministration is increasingly facing questions about why they aren’t taking measures to increase domestic oil production. This is a typically moronic Democrat political hack response to the questions:
Q We also know, you know, the President, as recently as yesterday, talked about increasing domestic manufacturing to bring down prices on inflated items like goods. So why not apply the same logic to energy and increase domestic production here?
MS. PSAKI: Well, there are 9,000 approved oil leases that the oil companies are not tapping into currently. So I would ask them that question.
Q Is there nothing that the administration can do to get those providers back to pre-pandemic levels?
MS. PSAKI: Do you think the oil companies don’t have enough money to drill on the places that have been pre-approved?
Q Just asking.
MS. PSAKI: I would — I would point that question to them. And we can talk about it more tomorrow when you learn more.
Press Briefing by Press Secretary Jen Psaki, March 3rd, 2022
First off, WTF IS Ms. Psaki referring to here?
MS. PSAKI: Well, there are 9,000 approved oil leases that the oil companies are not tapping into currently. So I would ask them that question.
As an employee of “them,” I would try to answer that question. However, the “9,000 approved oil leases that the oil companies are not tapping into” bit is a non sequitur, if not totally wrong. Ms. Psaki was asked, “Is there nothing that the administration can do to get those providers back to pre-pandemic levels?” Well, Permian Basin oil production has already exceeded pre-shamdemic levels. Her response was idiotic. The number of “approved oil leases” (presumably Federal mineral leases) is not an answer to that question. The only thing that “the administration” could do to increase oil production, would be to get the hell out of the way. From cancelling the Keystone XL pipeline, to refusing to hold Federal leases sales, to threatening to refuse to approve drilling permits, they have been getting in the way as often as they can.
I will focus on Federal oil & gas leases in the Gulf of Mexico, because that’s the area I have worked since 1988, I have easy access to detailed lease & production data and the GOM accounts for about two thirds of the oil production from Federal acreage.
If Ms. Psaki is referring to tracts that are open for leasing, there are 10,638 open tracts in the Central Gulf of Mexico planning area.
According to Lexco OWL, approximately:
38% of those Central GOM tracts have never been leased in the history of Gulf of Mexico US lease sales… A pretty good indication that those tracts are not prospective.
28% of the tracts are deepwater leases that were drilled. These wells were either dry holes or failed to find economically recoverable hydrocarbons and were subsequently relinquished.
15% of the tracts are shelf leases that used to be productive… Old fields that have been plugged, abandoned and the infrastructure has been removed due to BSEE’s Idle Iron rule.
81% of the currently open leases in the Central GOM have never been leased, leased and unsuccessfully drilled or are abandoned oil & gas fields. This doesn’t mean that none of them are prospective. A lot of oil & gas gets discovered in old fields. There’s an old adage, “The best place to look for oil, is where it’s already been found.” That said, most of these leases have been recycled many times through annual leases sales over the past 50+ years. The prospects of large discoveries on currently open Central GOM acreage are fairly slim. And, until they resume holding lease sales, as they are legally required to do, the open acreage is about as useful as mammary glands on a bull.
If Ms. Psaki was referring to leases currently held by oil companies, there are 1,771 active leases in the Central Gulf of Mexico planning area.
About 40% of the currently active leases are either held by production or held by a production unit. About 2% of the leases have been extended beyond primary term by active operations, suspension of operations (SOO) or suspension of production (SOP). It takes a long time to finalize the work to the point the prospect is drillable, file all of the necessary plans and permits and sanction development.
About 45% are primary term leases (generally 5 years on the shelf and 10 years in deepwater). The vast majority of these leases had been previously leased and then relinquished. Just because we bid on a block, doesn’t mean there’ll be an economically drillable prospect on it during the primary lease term. Some of these leases will probably get drilled, some will expire and get recycled through future lease sales (if there are any).
Over 300 “pre-approved” leases are currently being unlawfully blocked by a corrupt Obama judge. These tracts received bids in the November 2020 lease sale.
None of these leases have been awarded.
Regarding onshore production…
About 26 million Federal acres were under lease to oil and gas developers at the end of FY 2018. Of that, about 12.8 million acres are producing oil and gas in economic quantities. This activity came from over 96,000 wells on about 24,000 producing oil and gas leases.
About half of the leased acreage is “producing oil and gas in economic quantities.” The other half would consist of leases no longer producing economic quantities of oil & gas, prospects that haven’t been drilled yet and “trend”, “play” or “protection” acreage. Oil companies will often bid on whatever is open in hot plays and trends, with the notion of possibly working up drillable prospects. They will also lease acreage around good prospects and new discoveries to prevent other companies from “corner shooting.” Most of these sorts of leases will usually expire undrilled.
Rare is the occasion that an oil company bids on a “ready to drill” prospect. After leases are awarded, companies will start spending money on additional geophysical data, reprocessing existing data and performing the detailed geological and engineering work required to bring the prospect to a drillable stage. Even then, it will only get drilled if it is still economically attractive and can be budgeted by the oil company, provided the Federal government approves all of the required permits. So far, the only thing the Brandon maladministration hasn’t been doing to hamstring US oil production is in drilling permit approvals. So far, they haven’t been blocking or slow-walling drilling permits on existing Federal oil and gas leases. I just pulled up the BSEE APD (application for permit to drill) data for the Gulf of Mexico. In 2017, BSEE approved 820 APD’s. In 2021, they approved 794 APD’s. This isn’t surprising because they haven’t been blocking permits. It would be blatantly illegal if they did. Under President Trump, BOEM held at least 2 GOM lease sales every year, as required by law. Under Brandon, we’ve only had 1 GOM lease sale. We only had that sale because a Federal judge ordered them to hold it. That sale is currently in limbo because another Federal judge blocked it… Because climate change.
So Jen, exactly which leases are “oil companies are not tapping into”?
Are you so ignorant that you think an “oil lease” has oil & gas just because it’s an “oil lease”?
Are you so dumb that you think we can just “tap into it” because it’s an “oil lease”?
Yes, those were rhetorical questions…
