Offshore Drilling

In his State of the State address in February 2013, Governor Pat McCrory reaffirmed his campaign promise to push for drilling off the coast of North Carolina. Just a few days after his address, McCrory joined the Outer Continental Shelf Governors Coalition, a group comprised of coastal state governors that promotes offshore oil and gas exploration. A week prior, McCrory, along with the governors of South Carolina and Virginia, submitted a letter to the Department of Interior secretary designate, asking for a reversal of the Obama administration’s prohibition on offshore drilling, and calling for new policy “that is committed to safely harnessing our coast’s vast natural resources.”

But we have some questions:

 

Is it worth it?

The question is, are there really “vast” supplies of oil and gas off of North Carolina’s coast, and, if so, can they be safely extracted? The truth is, probably not. The U.S. Geological Survey estimates that the area of greatest potential holds, at best, 690 million barrels of crude oil, or enough for 36 days, and 16.25 trillion cubic feet of natural gas, enough for 246 days of consumption. At worst, it may only contain seven million gallons of oil and less than a trillion cubic feet of gas.

This uncertainty around supply, and the cost of building the necessary infrastructure to access it, will severely limit the viability of exploration and extraction anytime soon. But even if its coast were opened to drilling, there’s no guarantee that North Carolina would receive any revenue. The federal Bureau of Ocean Energy Management is not expected to offer leases for drilling in the Atlantic Ocean before 2017, and, without federal legislation, Atlantic Coast states would only be granted lease-sharing agreements if the deposits are located within the first three miles of federal waters.

 

Will drilling put valuable industries at risk?

Compare this with the myriad industries that are already serving the coastal and state economies:

  • Tourism: North Carolina’s beaches and inlets generate $3 billion in revenue each year, and directly support 39,000 jobs in coastal-area communities. Expenditures for recreation and tourism in 2009 in the state’s oceanfront counties were over $2 billion and accounted for 28,000 jobs.

  • Boating and marinas: The economic impact of private boating in 2008 was $140 million, supporting 2,532 jobs. In the same year, coastal marinas had direct sales of $90 million, supporting 2,252 jobs.

  • Commercial and recreational fishing: The economic impact of North Carolina’s seafood industry in 2008 totaled more than $336 million, supporting 5,821 jobs. Sport fishing contributed more than $446 million, supporting 6,368 jobs.

  • State and federal parks: North Carolina’s four oceanfront parks draw millions of visitors every year. In 2004, non-local tourists spent $14.5 million on park visits, and added nearly $22 million to local residents’ incomes. North Carolina’s national seashores, Cape Hatteras National Seashore and Cape Lookout National Seashore, along with two national park facilities in Dare County, attract over three million visitors per year.

Even during a period of economic downturn, North Carolina’s coastal industries are thriving. The natural resources found along North Carolina’s coast are the lifeblood for these industries. If compromised by the pollution produced by normal drilling activities, not to mention a major accident or spill, the economic impact would be devastating.

 

Is there a better offshore energy option?

North Carolina does have a better offshore energy option, one that could generate real economic and environmental benefits: wind. In fact, North Carolina is home to the best wind energy resource on the East Coast, with enough potential to meet 130% of its energy needs. The offshore wind industry stands to create 45,000 jobs in construction and 9,100 jobs in permanent maintenance over the next 20 years, delivering $22 billion in total economic benefits to the state.

And the good news is, Gov. McCrory has publicly acknowledged offshore wind as a viable resource. In January 2013, Governor McCrory sent a letter to the Bureau of Ocean Energy Management announcing his support for the designation of three sites off of North Carolina’s coast for development of wind energy infrastructure. The agency issued a call for information in December 2012, to assess interest by wind developers within the three designated areas, and is preparing an environmental assessment of the impacts to natural resources and wildlife. In other words, wind energy can move forward faster, and with safer results, than drilling. This is the better bet for North Carolina.