WALLACE: Mr. Cavaney, Democrats point out that for all the talk of drilling, the big oil companies currently hold leases on 68 million acres of federal land, onshore and offshore, that you're not developing. Why not start there?
CAVANEY: Well, we are developing. And there's a big misunderstanding. If they understood the industry, they would appreciate the fact that we bid for those leases competitively in the open market. We pay the government to get them.
We have to pay annual lease fees on those particular leases. And at the end of the lease term — five years, six years, whatever it may be — if we haven't done anything on those leases, they go back to the government to be bid again.
What's going on is they — the first step in our industry is called exploration. In other words, the creator didn't put oil and gas on every plot of land. So we have to go and explore.
We're willing to put our capital at risk to find out whether or not there's oil and gas there. And there's been very few cases where there is oil and gas in amounts that are commercially usable. And those are the ones that you can develop.
The rest of them, why drill where you know there's no oil or gas? And let those things go back to the government.