House to oil companies: Use it or lose it
Oil rigs in Culver City, Calif.
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Scott Jagow: Oil companies need to use it or lose it. That's the idea behind a bill in the House today. The bill would pressure companies to tap their existing oil leases before buying any new ones.
From the Marketplace Sustainability Desk, Sam Eaton reports.
Sam Eaton: The bill claims oil companies are sitting on some 68 million acres of federal leases both on land and offshore that have yet to produce a single drop of crude. But Sara Banaszak with the American Petroleum Institute says there's a reason.
Sara Banaszak: Leases don't come with MapQuest directions that say "Drill here for 50 million barrels." It takes a process of exploration.
Banaszak says developing an oil lease, especially offshore, can take up to 10 years and cost as much as a billion dollars, money she says oil companies may not be willing to risk if the "use it or lose it" legislation passes.
But Phil Sharp with the energy think tank Resources for the Future says the bill isn't about boosting the domestic oil supply; it's about making a statement.
Phil Sharp: And the statement here appears to be that there is next to nothing that the government can aggressively do that can quickly change the world price of oil.
He says expanding offshore oil production may pay off in the long term, but it's far from a solution for today's high gas prices.
I'm Sam Eaton for Marketplace.