Energy Policy Op-ed: ‘Just Let Us Do Our Job’

U.S. oil and gas producers and exporters are well-positioned to bring much-needed energy supplies to the global market and here are several examples that prove just that.

(Source: Hart Energy; Shutterstock.com)

[Editor's note: A version of this story appears in the April 2022 issue of Oil and Gas Investor magazine.]

One of the more frustrating things I have experienced in my work over the years is watching politicians and talking heads, most of whom normally ignore the oil and gas business or energy policy, suddenly become experts when energy becomes big news. I have seen it happen over and over for 30-plus years. Statements such as “We can’t drill our way out of high prices” and “We are running out of oil” always seem to turn out wrong.

Once again, we suddenly find ourselves in a global crisis, in part due to the Russian invasion of Ukraine, and political “experts” are on television repeating their talking points. One of the more frustrating mantras is this notion that the industry is squandering unused leases and that they must “use it or lose it.” Such a position reflects a fundamental misunderstanding of the oil and gas business.

In simple terms, obtaining a lease is not like buying a six pack of beer, when every can guarantees 12 fluid ounces. When a company purchases a lease, one does not know whether the leased area will include any oil and gas to produce. Of course, we find that out by exploring and drilling, and we do not drill every lease all at once. Instead, businesses purchase leases in an area and explore. If a productive play is discovered, then leases are developed where hydrocarbons exist. On the other hand, if oil or gas is not found, adjacent leases are unlikely to be developed. Hence there are always leases that are not being utilized. It’s a basic tenet of oil and gas exploration.

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