Given the differences in our views on energy policy, particularly with regard to oil and gas, this WP opinion piece is pretty reasonable. The Post acknowledges the continued need for oil and gas, and the importance of domestic production. That said, two statements in the paragraph pasted below warrant immediate comment.
“In reality, neither argument is convincing. The Biden administration’s proposal — which opens the door to up to 11 potential lease sales, 10 in the Gulf of Mexico and one off the coast of Alaska — would have little impact on current energy prices. It would take between five and 10 years to produce oil after a new offshore lease issuance, according to the Interior Department, while more than three-quarters of already-leased offshore federal waters are not in production.”
WP Opinion
Comments:
- The purpose of the 5 year leasing plan is to minimize future energy supply and security risks, not to reduce current prices. However, acknowledgement of the importance of offshore production and support for regular lease sales could influence market psychology.
- The old and tired arguments about non-producing leases have been frequently addressed on this blog. When you purchase leases, you are not buying oil and gas. You are buying only the opportunity, for a limited period of time, to explore for these commodities. The current percentage of producing leases is actually rather high by historical standards. For more on this topic, see this and this.
Bud's Offshore Energy (BOE) 