What the oil companies really do with those leases.

I have very mixed feelings about Newt Gingrich, but his Townhall article on what oil companies have to do to explore and develop their leases is superb. You can find it at townhall.com (I cannot get the link to work for some reason).

As he points out, oil companies cannot hoard their leases, because those leases expire after a specified period (usually 10 years), unless the oil company begins commercial production on them. In fact, this "use it or lose it" requirement is common in the industry, where leases are "held by production."

Moreover, the federal government does not give these leases to the oil companies as Harry Reid claims. The oil companies buy them, often paying tens or even hundreds of millions of dollars for a single lease. If they do not, or cannot, commercially produce their leased acreage, that money is a dead loss.

Gingrich also shows that a lot of "idle" acreage is anything but. Oil companies may be exploring, testing, even drilling leased acreage, but until they actually begin commercial production, that acreage is classified as idle. Of course, if a company decides that a lease is not commercially viable, the lease simply reverts to the government.

Once you know the facts, the statistics bandied about by those who oppose opening additional acreage to drilling are neither surprising nor sinister. Nor do they support the argument against allowing additional drilling.