Dept. Of Interior Finds 72 Percent Of Offshore Acreage Leased By The Oil Industry Is ‘Idle’

by Daniel J. Weiss

The Department of Interior released an updated analysis of fossil fuel leases today, finding that more than two thirds of offshore leases and half of onshore leases are sitting idle“neither producing nor under active exploration.”

The report, “Oil and Gas Lease Utilization, Onshore and Offshore Updated Report to the President,” explained that oil and gas companies hold thousands of undeveloped leases. Despite holding these inactive leases, the oil industry continues to demand the opening of new, previously protected federal lands and waters areas to drilling.

The report found that:

More than 70 percent of the tens of millions of offshore acres currently under lease are inactive, neither producing nor currently subject to approved or pending exploration or development plans. Out of nearly 36 million acres leased offshore, only about 10 million acres are active – leaving nearly 72 percent of the offshore leased area idle.

In the lower 48 states, an additional 20.8 million acres, or 56 percent of onshore leased acres, remain idle. Furthermore, there are approximately 7,000 approved permits for drilling on federal and Indian lands that have not yet been drilled by companies.

According to the Energy Information Administration, total federal oil production (offshore and onshore) has increased by 13 percent during the first three years of the Obama administration combined, compared with the last three years of the previous administration. According to independent analysis, the total number of active rigs operating on the U.S. outer continental shelf was higher in January 2012 than any time since May 2010.

The American Petroleum Institute – Big Oil’s lobbying arm — claims that the Department of Interior ignores exploratory work on leases; however, that is clearly included in DOI’s assessment above.

API recently demanded that the Obama Administration open up the North Atlantic to “seismic exploration” for oil. This is an area that supports vital American fisheries.

In addition to holding thousands of undeveloped leases while lobbying to drill in the Arctic National Wildlife Refuge, off the New England Coast, and in the Eastern Gulf of Mexico, the big five oil companies produced 12 percent less oil in 2011 than in 2006 — all while making record profits.

Daniel J. Weiss is Director of Climate Strategy at the Center for American Progress Action Fund.

9 Responses to Dept. Of Interior Finds 72 Percent Of Offshore Acreage Leased By The Oil Industry Is ‘Idle’

  1. Steve says:

    Keep us posted on this one, Dan. Most of us here are livid that oil companies would leave oil in the ground, “idle” of all things.

  2. Linda says:

    So the next logical question for me is –
    why do they want MORE leases? So there is no publically owned land?

  3. Ken Barrows says:

    Oh, but don’t you see that the net energy return on the new leases is much better than on the current ones? /sarc

  4. Sandra says:

    The want more leases so they can add them to the value of the company.

  5. Joan Savage says:

    What’s not in the report are the time-frames of the offshore leases, – when do they expire? – their so called “tiered durational terms” allow a longer time frame for drilling at greater depth. Similar question is what are the options for lease renewal?

    At present, so much domestic exploration and development is on land for oil and gas. From the companies’ perspective they are holding on to the offshore leases, which are more expensive to develop, as reserve.

    It’s fine that the offshore leases are idle, I’d be even happier if they were not renewed.

    Meanwhile,’back at the ranch,’ there’s oil shale extraction and fracking pounding along faster than state inspectors can review them.

  6. Leif says:

    I think the ecocidal fossil industry is just trying a last ditch effort to tie up land before they loose a “bought and payed for” congress as the pieces crumble.

  7. clays says:

    Just because there is a lease doesn’t mean oil and gas has been located on said lease.

  8. Chris Winter says:

    That’s true, clays. But why ask for more leases when half the ones they’ve got haven’t been explored or developed?

    If I owned ten abandoned apartment buildings and only fixed up three of them, should I expect the city to approve my request to purchase more apartments?

    I believe the answer is “No.”

  9. Peggy Trivilino says:

    This is an obvious ploy to keep supply down and maintain elevated prices, here and world wide. The truly cynical part of this story is that, while US production of fossil fuel is being depressed, our fossil fuel industry is doing its damndest to prevent the development of alternative energy sources. There seems to be no limit to the lengths to which the American oil, gas and coal industry will go in order to keep US citizens over a very dirty, expensive barrel. What a civic-minded, patriotic bunch!