Does BP lease where they drill in the Gulf --

[xchrom]

Or do they own those spots?

If they lease -- who owns those leases?

[amborin]

1. good questions

[Ruby the Liberal]

2. They lease from the US. We own the rights 200 miles from shore.

Someone put up a good map the other day. I'll try to find it.

[Ruby the Liberal]

3. Found the link

From here: http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=8383505

[xchrom]

4. Do we know the details of the leasing agreements? Nt

[Ruby the Liberal]

5. That I can't answer.

I am just learning all of this as we go. Such a wealth of invaluable resources on this site - who are taking a lot of time patiently explaining our questions!

[Statistical]

6. They lease them.

Technically they just lease the oil resource rights (they don't own the water, the fish, the whales, etc).

Usually leases are 10 to 20 years in length with renewal options and the terms are pretty complex.

[xchrom]

7. What are the responsibilities of who ever holds

The lease?

Can the the holder of the lease break the lease
and under what circumstance?

[Statistical]

8. I don't know enough to answer that.

Logic would say yes but the govt isn't always logical.

I would imagine there are conditions where the property owner (in the case of public land = federal govt) can break the lease.

Of course I wonder how "weak" the leases signed over the last 3 decades have been.
I remember reading an article that oil leases today go for about 1/3 of what they went for in 1960s despite dollar being worth less and oil being priced higher.

[NYC_SKP]

9. Lease from US, but need each state's OK, too. You won't see holes off Florida's West Coast...

...for example.

Of off California's coast.

Not like off Texas, Louisiana, Alabama, Mississippi.

See first graphic in this OP:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x8385057

There are 50,686 holes in Outer Continental Shelf off these four states alone.

And 43,656 miles of underwater gas and oil pipeline.

:patriot:

[xchrom]

10. What are the responsibilities of the lease holder/s?

Can the holder/s break the leases?

Does a spill like this violate any of the terms?

[NYC_SKP]

11. Check through these links, I don't know offhand.

I would expect that these contracts have to be public, but that doesn't make them easy to find.

Kos article: http://www.dailykos.com/story/2010/5/4/863320/-The-MMS-and-Deepwater-Horizon

There are tons of individual leases, but I would imagine many of the terms of these are standard boiler plate.

This link seemed to have a bit of language on liability: http://webcache.googleusercontent.com/search?q=cache:pKldGXTKxD4J:www.landman.org/landmanarchive/archive/1996604.doc+mms+contract+ocs+doc&cd=19&hl=en&ct=clnk&gl=us

Well referenced, too. (OCS is Outer Continental Shelf)

Obligations of the Federal Lessee

The OCS Lease

The liability of the federal lessee for obligations relating to well abandonment, platform removal and site clearance arise under a combination of the OCS lease, the Outer Continental Shelf Lands Act2 and regulations promulgated by the Department of the Interior, Minerals Management Service.3 There are several different versions of the OCS lease in effect today, depending on the date of issuance. Because of the different vintages and forms of OCS leases, each lease at issue must be carefully examined to determine how it addresses abandonment obligations.

The current OCS lease form4 addresses removal of structures in Section 22, Removal of Property on Termination of Lease, as follows:
Within a period of one year after termination of this lease in whole or in part, the lessee shall remove all devices, works and structures from the premises no subject to the lease in accordance with applicable regulations and orders of the director. However, the lessee may, with the approval of the director, continue to maintain devices, works and structures on the leased area for drilling or for producing on other leases.5
Abandonment obligations are also mention in Section 21 of the OCS lease which provides that “o surrender of this lease or any portion of the leased area shall relieve the lessee or its surety of the obligation to pay all accrued rentals, royalties and other financial obligations or to abandon all wells on the area to be surrendered in a manner satisfactory to the director.”

All of the obligations imposed by the OCS lease are obligations of the “lessee.” The term “lessee” is defined in the lease by reference to the original lessees named in the lease. The term is not further defined in the regulations which generally govern leasing of federal offshore lands.6

However, it is defined in the regulations governing operations on OCS leases as “the party authorized by a lease, or an approved assignment thereof, to explore for and develop and produce the leased deposits in accordance with the regulations…”7 The term “lessee” is also defined in the regulations which govern leasing of federal onshore lands as the “person or entity holding record title in a lease issued by the United States.”8

Because liability under an OCS lease is imposed on the lessee, it is important to distinguish the lessee from operators or operating rights owners. An “operator” is defined as “the individual, partnership, firm or corporation having control or management of operations on the leased area or a portion thereof. The operator may be a lessee, designated agent of the lessees, or holder of operating rights under an approved operating agreement.”9 The term “operator” is also defined in the regulations governing federal onshore leasing as ‘any person or entity, including, but not limited to, the lessee or operating rights owner, who has stated in writing in the to the authorized officer that is responsible under the terms and conditions of the lease for the operations conducted on the leased lands or a portion thereof.”10

The owner of an “operating right” is authorized to enter upon the federal lease to conduct drilling and related operations.11 However, operating rights are subject to being extinguished if the record title holder fails to meet its lease obligations or chooses to relinquish the lease.12 Generally, only the record title holder is entitled to receive notices from the MMS regarding essential matters effecting the lease.13

“Record title” is specifically defined as “a lessee’s interest in a lease which includes the obligation to pay rent, and the rights to assign and relinquish the lease.”14 The regulations specifically provide that overriding royalty interests and operating rights are severable from record title interests.

Federal Regulations which Govern Well Abandonment, Removal of Structures and Site Clearance

Platform removal and location clearance are specifically addressed in the regulations implementing OCSLA.15 The regulations generally provide that the “lessee” shall remove all structures and clear all obstructions to other activities in the area. The regulations further provide that platforms, including casings, wellhead equipment, templates, and pilings be removed to a depth of at least 15 feet below the ocean floor. Clearance of obstructions must be verified by appropriate means to the regional supervisor. The regulations concerning site clearance requirements and verification are supplemented in Notice to Lessees 92-02 (Ma 28, 1992).16

:patriot:

[xchrom]

12. Kick

[Toucano]

13. They're leased. They pay royalties.

The need to be forced to pay royalties on all the spilled oil PLUS clean up the spilled oil.

[Cleita]

14. Then it shouldn't be difficult to nationalize them. Time to do so NOW!

I also noticed that PG & E holds a lease from our local government to operate their nuke plant. There is a big brouhaha going on because PG & E are trying to get the leases extended and renewed way ahead of schedule. So I think that somewhere in those leases there should be some language that states that if they cause a disaster through incompetence and through not adhering to regulations, and apparently this is what happened, that the government can move in and move them out. Now this of course is something for the lawyers to tackle and I believe Bobby Kennedy and Mike Papantonio are starting some lawsuits, but the Atty. General really needs to step in here where the gulf oil volcano is happening.

[KharmaTrain]

15. And Watch Our Economy Go To Shits Overnight...

The moment you nationalize, the price of oil will shoot through the roof as the panic and speculation begins...gas goes to $5 or more a gallon and the sudden rise all but paralyzes the economy. The oil companies and the banksters have us by the short hairs here. I just want them to plug that gusher and then we'll let the chips fall where they may...lawsuits and possible prosecutions. Our government doesn't have the capabilities to do this job...thus I want continued pressure on BP and or others with the knowledge to fix the immediate problem.

[Cleita]

16. It's going to do that any way if we don't do something. Wait and see.

We don't need to actually do the job, but we need to hire the contractors that do, like the military hires the contractors that make their airplanes. There will be better oversight when various agencies have to go in and do their jobs of inspections and making sure of compliance to laws and safety regulations. I have seen nationalization of natural resources in other countries that have worked out quite well and have not tanked the stock market because of it.

[KharmaTrain]

17. Here's The Rub...

Yes, we should get the best minds and equipment on this disaster...and guess what. The best people qualified to do the job...the contractor best suited to deal with plugging the hole (not with other elements) is BP or another major oil company. So we dance around the block and then end up back where we currently are.

Unfortunately there is no quick fix here...as we're learning. And to complicate matters, there's a hurry up push on this that means shortcuts and risks are being taken. This is truly uncharted waters.

A sudden nationalization, like many here are suggesting, isn't the same as a gradual government take over. And other countries aren't the US who sneezes and the rest of the world catches cold. Unfortunately until something succedes in stoping the gusher, we're all but at BP's mercy as they have the equipment and expertise on site. They're drilling a second hole that most agree will shut down this thing but it's going to take several months for the well to be dug.

The government can and should take a far more active role in attempting to capture and control the oil lakes that are the real danger...get BP and others away from the coasts and let the locals and others with expertise in limiting the damage or cleaning up to do their thing. Build a sand wall around the Gulf to trap oil, like they want to do in Lousiana. This the government can and should be doing.

Yep, we're stuck in wait and see and it appears no one in a position of responsibility has any plan but to blame others.

Cheers...

[Cleita]

I'm talking about whose calling the shots and it shouldn't be BP executives.

We can conceivably contract BP and other oil companies under our rules and regulations, not theirs. Also, it would be best to have other experts on hand, not just theirs. They are totally mishandling this and have a one shot solution that does nothing about protecting the ocean, only their profits and potential blame in this situation. New players are needed and a variety of experts, not just theirs.

[Cleita]

18. Hiccup.

[xchrom]

19. Kick