White House Press Secretary Jen Psaki seemed stumped by a reporter’s question at yesterday’s White House press briefing, asking the reporter to direct the question to oil companies instead. 

  • QUESTION: “You just said that less supply raises prices, it’s not in our strategic interest to reduce the supply… So why not apply the same logic to energy and increase domestic production here?”
  • 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.”

Well, we’re happy to help answer!

Not every lease contains oil or natural gas resources, nor does every non-producing lease represent untapped resource potential. Natural gas and oil resources exist on only a limited number of leases and are economic to produce on an even smaller number.

  • NOTE: We are at a two-decade high for percentage of producing leases on federal lands, according to BLM data.  Nearly 2-out-of-3 leases in effect are producing natural gas and oil.

Think of the federal leasing of natural gas and oil like the start of a minesweeper game: you have a bunch of leased parcels of land before you, but you don’t know what lies beneath yet. Once you’re able to explore your parcels, you’ll narrow it down and discover which ones have natural gas or oil that can be extracted, and which ones are barren or not feasible for production. As a consequence, not every lease would reasonably be expected to be put into production, and as companies learn more about where resources are commercially producible, they often times need new and different leases to further develop those resources.


Minesweeper game

Keep in mind, “use it or lose it” already is the law. Companies are required under government leasing regulations to develop a lease expeditiously or return it to the government. A federal lease terminates if the lessee is not performing diligent drilling operations on or for the benefit of the lease by the end of the primary term of the lease. The problem is regulatory uncertainty is stifling further development at a time of rising energy costs.

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