Offshore drilling, our view: Take a pass on oil and gas

By on June 2, 2015

legasea

Local opponents at rally in March. (Russ Lay)

Look around the Outer Banks.

Four-wheel drive vehicles abound:  Extended-cab pickups, heavy-duty work trucks, sport-utilities.

Our visitors require fossil fuels to get here, and they bring even more of these gas-guzzling machines.

Advertisement

Without oil and fossil fuels, there would be no Outer Banks tourism economy.

Rental homes, restaurants hotels, condos and big box stores consume megawatts of power all summer and through much of the spring and fall.

To deny our reliance on fossil fuels and to expect the rest of the nation, or for that matter, the entire world to supply our appetite for energy along these Outer Banks would, quite frankly open us up to accusations of hypocrisy or hiding behind that old chestnut: NIMBY — Not in My Backyard.

It would also take one hell of a compelling argument to stand up and say no to offshore drilling off our coast.

Advertisement
Commentary

And yet, that is precisely the course of action the Outer Banks Voice is endorsing and we believe that such a compelling argument not only exists, it passes muster on a purely economic risk-reward basis.

One need not buy into the naivety argued by those who somehow believe if we throw money at alternative fuels or make fossil fuels artificially expensive we’d save the world and preserve our national economy at the same time.

Instead, let’s talk facts, especially dollars and cents, which will lead us to dollars and sense conclusion.

Advertisement

We can begin with just the first phase—determining how much oil is out there.

If we knew the totality of those reserves, reason dictates one should have that data before closing the barn door on oil and natural gas extraction off the North Carolina coast.

Unfortunately, the only method that can determine those reserves is something called seismic testing—where very loud sound waves are bounced off the ocean floor to provide the equivalent of a beneath the surface sonogram of fossil fuel deposits.

Contrary to social media rumors, these tests are not yet taking place off our coast, nor are they (or could ever be) the source of the loud booms that occasionally rattle windows and structures here.

However, as local writer Kip Tabb recently revealed in a Coastal Federation story reprinted by the Voice, there have been absolutely no definitive tests undertaken to determine the effects of these loud undersea noises on marine life.

Given the economic value of marine life to our ecosystem, not to mention commercial, recreational, and nature-related tourism, ignorance of the effects of these tests on an important economic resource seems ill-advised and far too risky to undertake while praying nothing goes awry.

We could play devil’s advocate and posit a “what if”, for example, “what if it could be proved that seismic testing will have no adverse effects on marine life?”

Surely we should press on if that outcome could be assured.

Our answer in those circumstances would still be “No”, and the reasons remain purely economic.

Four states on the Gulf Coast — Louisiana, Texas, Mississippi and Alabama — co-exist with hundreds of active wells sitting off their coastline.

Those offshore wells produce thirty percent of America’s domestic oil and eleven percent of our natural gas.

Surely, in the cause of energy independence and cheaper fossil fuels, the Atlantic coastal states, North Carolina included, should be willing to take some risks and do our part.

It’s a compelling argument, but some real facts get in the way.

In the Gulf of Mexico, even after years of extraction, current reserves are still estimated to be at 9 billion barrels of oil and 204 trillion cubic feet of natural gas.

By contrast, the entire Atlantic Coast of the United States, from Maine to Florida is thought to contain, at best, 4.7 billion barrels of oil and 37.5 trillion cubic feet of natural gas.

Current science is pretty good at estimating these totals and seismic testing would only to serve to locate if there are concentrations enough to justify the expense of building rigs and pipelines.

While this sounds as though these are significant reserves, the numbers are quite small in terms of national production and even smaller when the economic impact is calculated.

Moody’s estimated in 2009 that Louisiana and Texas alone employed 438,000 people in oil and gas extraction-related jobs, generating, in 2008, $167 billion dollars of gross domestic product to the two states.

By contrast, the most optimistic estimates for North Carolina, if suspected reserves of oil are located and extracted indicate oil and gas would generate a mere $180 million (not billion as in the Gulf) and generate 1,200 jobs over a seven-year build ip period.

Once oil and gas started flowing, the annual revenues annually would come to about $1.9 billion per year and sustain 16,000 jobs over a thirty-year period.

By contrast, North Carolina’s coastal tourism and commercial fishing industries already generate $3 billion a year and sustain 28,000 jobs.

Add to that the retail and tax value of oceanfront and semi-oceanfront properties that would be lost if our beaches were contaminated by a major oil spill.

Risking a $3 billion and growing industry for a very optimistic $1.9 billion risk of natural disaster with a 30-year lifespan simply doesn’t add up in any risk-management scenario.

Indeed, some estimates place greater revenues and even more jobs if offshore wind is exploited without the attendant risks of a BP Horizon-like event.

North Carolina’s oil and gas economy will never come close to the economic benefits reaped by Texas and Louisiana, nor will the nation as a whole benefit from energy independence in any significant way if these reserves are found and exploited.

The calculus and risk/reward scenario is simply far different in the Gulf of Mexico.

The same argument applies to the entire Atlantic coast.

The risk does not come close to any potential rewards that might accrue to our area and our best advice is really an easy decision.

Take a pass on oil and gas exploitation along our coast.


Recent posts in this category