Keep cancelling them leases, Joe!
Posted by lfthndthrds
Why would anyone attempt to develop mineral rights on blocks where there are no minerals? Why would any one put up a facility where it costs more to set up to extract than you'll get from getting it out? I notice the WHY of why these blocks weren't developed isn't mentioned, so this is basically a hit piece for political purposes.
It literally takes years once a block has been bought to get oil out of the ground. It takes lots of money to do that, so much so, that most oil companies go in pardners with other oil companies just to fund the building of a facility. It's not cheap, nor is it quick.
Add to this that CEOs and board members of oil companies have been more focused on stock buy back and returning profits to shareholders than it has been with erecting more facilities. If the money is going for stock buybacks, then it isn't getting invested into new facilities. Buying back stock doesn't increase oil output, it raises the price so that CEOs and board members get a quick pay raise without doing anything more.
Since getting oil out of the ground is years in getting set up, we won't see any relief from the present oil situation any time soon.
I hope you like the present cost of gas. The oil companies do. Why should they drill more, when they are getting substantial returns at present without doing anything more?
Lastly if a block isn't developed within a set period of time, then it returns to the government, even if the mineral rights were paid for.