Over the past 25 years, if one thing has proven true it’s that one Presidential Administration cannot change our dependence on imported oil.
Tom Fry
Today, the United States continues to import 60% of our oil and we’re more dependent on sources from the Middle East than we ever have been.
But this doesn’t have to be the case. The nation’s Outer Continental Shelf (OCS) holds tremendous energy resources. It is estimated that the OCS contains over 419 trillion cubic feet (tcf) of natural gas and 86 billion barrels (Bbbl) of oil, that’s enough oil to replace Persian Gulf imports for 59 years or natural gas to heat 100 million homes for 60 years. All we have to look at is our South American neighbor, Brazil to see how they completed their turnaround.
Some 50 years ago, Brazil was nearly 100% dependent on foreign oil, with domestic oil production filling only 3% of domestic demand. But, in the next few years they’ll become a net oil exporter. How is this possible? One main reason is because Brazil has been developing their ultra-deep offshore wells some 50 mi into the Atlantic Ocean east of Rio de Janeiro. With the country consuming 2.2 million barrels per day, Brazil is now energy independent and its government has stated its intentions to remain so.
The United States can do the same, but the Members of the 110th Congress need to hear from their constituents, businesses, and agricultural leaders in their districts that this nation needs to open up our offshore for exploration and development.
Cultivating state involvement
More than 130 years ago, painter Vincent van Gogh said, “great things are done by a series of smaller things brought together.” The National Ocean Industries Association (NOIA) recognized that many of the members of Congress felt that offshore energy development wasn’t a major issue back in their states, especially if they were an inland state.
Taking that cue, NOIA embarked on a national grassroots and grasstops campaign to educate governors, state energy directors, state legislators, business and agricultural leaders throughout the nation on the importance of providing access to the Outer Continental Shelf for exploration and development of the nation’s valuable offshore resources.
Virginia was the first state where various end user groups and state legislators recognized that cultivating an offshore industry in the state would help spur economic development and address the rising cost of natural gas that has adversely affected the competitiveness of American industry.
In 2005, the state of Virginia’s legislature broke with decades of coastal opposition to offshore drilling by passing a resolution calling on the governor to lobby for a lifting of offshore moratoria. This effort was rejected by then-governor Mark Warner on procedural grounds, but was passed again the following year and accepted with some alteration by Governor Tim Kaine. On May 18, 2006, Governor Kaine signed the Virginia Energy Plan into law, a Plan that among other things, “provides that it is the Commonwealth’s policy to support federal efforts to determine the extent of natural gas resources 50 miles or more offshore and to support the inclusion of the Atlantic Planning Areas in the MMS 5-Year Plan.”
Over the past year and half, coalitions of energy producers and energy consumers - such as the manufacturing, chemical and agriculture communities - have reached out to state-level leaders around the country to educate them on the negative impact to their economies caused by restrictions on offshore energy development.
One of those groups is the Agriculture Energy Alliance, a broad based coalition of more than 113 farm organizations and agribusinesses working to reach state legislators and policy makers throughout the nation. Included in this alliance are the state farm bureaus, wheat growers, corn growers, agrichemical and fertilizer companies, and poultry and turkey growers.
NOIA staff has visited 17 states to promote lifting the moratoria on the OCS for exploration and production, coordinating visits to governors’ offices, state legislators, county and business officials, and prominent farmers and agribusiness directors. The promise of OCS development and the hurdles imposed by high energy prices is a message that has resonated throughout all of the states.
Visits like these have resulted in the introduction or passage of offshore energy resolutions or legislation in 11 states - Idaho, Kansas, Oklahoma, Tennessee, Utah, Montana, North Dakota, Nevada, Virginia, Georgia and South Carolina - and generated two legislative letters in Arizona and Utah.
In March 2007, I was in Carson City, Nevada to meet with the governor and testify before the State Legislature on the importance of providing access to the OCS’s energy resources for not only Nevada, but the rest of the country as well. In my testimony, I pointed out that between 1990 and 2000, the state’s energy consumption increased nearly 70%. In addition, the “2005 Status of Energy in Nevada” report concluded that natural gas and petroleum prices have risen to the point where the cost of electricity and transportation fuels brings hardship to Nevada’s farmers, ranchers, and rural businesses. I let them know that this doesn’t have to be the case, as the nation’s submerged public lands contain valuable energy resources, but unfortunately they are closed for any exploration or development.
While alone these efforts do not lead to formal changes in federal policy, they do send a vital signal from the state leadership to the Congressional delegation about the intent of the folks on the ground back home. When such a step was undertaken in Virginia, it led both Senators to become vocal supporters of offshore energy legislation.
Along the Atlantic coast, NOIA continues to work with coalitions of various end user groups to promote OCS Development from Virginia to Georgia. Included in the coalitions are the Southeast Energy Alliance, Consumer Energy Alliance and the OCS Coalition. Members of the Southeast Energy Alliance include the North Carolina Farm Bureau - the second largest in the country with 500,000 members, the Rural Electric Cooperatives, rural county associations, area chambers of commerce, and the forest and paper businesses.
Last month, the South Carolina General Assembly introduced a joint resolution to “Create a study committee to examine the feasibility of natural gas exploration in the Atlantic Ocean off the coast of South Carolina.” The resolution has the backing of the Myrtle Beach Chamber of Commerce. This legislation introduced in the Assembly mirrors the bill passed in Virginia last year, to study the possibility of development of natural gas off the state’s coast.
In addition, South Carolina’s southern neighbor, Georgia, unveiled a comprehensive energy strategy in December 2006. The energy strategy called for, among other things, the state to “support prudent exploration of natural gas reserves on the Outer Continental Shelf.”
NOIA continues to bring interested state officials and legislators offshore to highlight offshore technology and the environmental safeguards, conducting two offshore trips last year. These offshore visits are an invaluable opportunity for educating policymakers and NOIA appreciates the efforts of member companies that help make the trips possible.
Moving forward
States can no longer afford to ignore the significant oil and gas resources found beneath the waters off our nation’s coasts. As a nation, we can no longer afford to keep 85% of the OCS off-limits to exploration, particularly when the biggest misconception about our industry relates to the environment. The fact is that the technology employed by the offshore industry is already environmentally safe, a point which cannot be reiterated enough.
Over the past twenty-five years, the industry has built an enviable record of safe, clean operations, as noted in the Oil in the Sea III study performed by the National Academy of Sciences. Less than two% of the oil in U.S. waters comes from drilling and production. Transporting oil by tanker is four times more likely to cause a spill, and thirty times more oil comes from land-based sources.
In fact, between 1985 and 2000, 6.3 Bbbl of oil were produced in federal offshore waters. In that time, according to the US Coast Guard, less than 0.001% spilled - a 99.999% record for clean operations.
That safety extends to hurricane conditions as well. During the 2005 hurricanes, 113 out of 4,000 total platforms in the Gulf of Mexico were destroyed. There were no injuries offshore and the Coast Guard reported that there were no significant spills of oil from offshore storm damage. As Secretary of the Interior Dwirk Kempthorne said, “Americans don’t judge today’s automobile by the 1969 Pinto and they shouldn’t judge today’s offshore oil and gas by the 1969 Santa Barbara oil spill.”
I still believe that working at the state and local levels will help cultivate a push for greater OCS access, which will in turn bring greater pressure to bear on federal lawmakers in Washington.
