US should changea leasing policy based on ignorance

With limits on supply asserting themselves in oil and gas markets, curiosity runs high about how much fluid hydrocarbon remains to be found and produced.

Reliability of reserves estimates—at company and country levels—has come under scrutiny.

Speculation is rampant about when global oil production will peak and about how rapidly it then will decline. Similar concern has arisen about natural gas.

Because oil and gas are crucial to human well-being, and because demand for them is expected to steadily grow, these are immensely important issues. And they all pivot on a central question: How much economically producible oil and gas exists in nature?

No one knows the answer. Nature jealously guards its geological secrets. And future technical and economic developments are impossible to predict.

Whatever the difficulty, people concerned about the future legitimately seek answers to questions about potential oil and gas supply—or at least better answers than are now at hand.

Most people, anyway.

Some people don't want to know how much energy supply and wealth the US forgoes with its refusal to lease federal land off the US East and West Coasts, in the Gulf of Mexico off most of Florida, and in the US West. They don't want anybody to know.

A year ago, in fact, the US House passed a measure instructing members of a House-Senate conference on comprehensive energy legislation not to consider an inventory of hydrocarbon resources on the Outer Continental Shelf (OGJ Online, Oct. 17, 2003).

The inventory was controversial because its findings might have strengthened the case for leasing.

The idea of studying the oil and gas potential of OCS areas where leasing is now precluded has come up again. It emerged in a meeting of the Minerals Management Service's OCS Policy Committee, which is beginning development of the next 5-year leasing plan (OGJ Online, Nov. 22, 2004).

MMS has been quick to point out that it's not advocating leasing and development and that it will follow instructions of Congress and the administration.

At present, those instructions amount to enforced ignorance on an important question. They need to change.

(Online Nov. 24, 2005; author's e-mail: [email protected])