To the editor:
Why aren't the oil companies drilling?
Nancy Pelosi and others, responding to the "drill here, drill now" movement, have pointed out that the oil companies hold leases on which they are not drilling. This statement is true, as far as it goes. What is not stated is why the lack of drilling.
Chevron's experience in Florida in the 1980s may be instructive. Chevron had a lease over an area off shore of Florida. Studies showed that a major oil and/or natural gas deposit lay beneath the water. Chevron sank a few exploratory wells and found that the studies were accurate. But no production followed. While Chevron had permission for exploration, they did not have permission for production.
Chevron spent nearly 10 years attempting to get the needed permits to start production and never obtained those permits. Ultimately, they agreed to a government buyback of their lease. So, the reason those oil companies may not be drilling is that they know they have permission to explore, but not permission to produce. Why spend the dollars to explore if they will never be given permission to produce?
So, Pelosi's statement is accurate, but it does not tell the entire story.
Also, you "drill here, drill now" folks should make sure that IF any such law passes, that it grants production rights at the same time it grants exploration rights. Otherwise, you will be left with the same situation that exists now.