NGI The Weekly Gas Market Report / NGI All News Access

Drilling Barriers Weaken Along Southeast Coast

September 7, 2009
/ Print
| Share More
/ Text Size+

The prospect of offshore natural gas drilling could gain traction in a few coastal states. In South Carolina lawmakers are expected to endorse soon a pro-exploratory drilling recommendation of a legislative panel; in Florida the issue could come up in a special legislative session next month and drilling advocates are girding for battle, having failed to defeat a drilling moratorium earlier this year; and a Virginia lawmaker is keeping the pressure on for a 2011 lease sale.

In South Carolina Republican State Sen. Paul Campbell, chairman of the committee recommending drilling, has claimed drilling would bolster state revenues while not impacting South Carolina's $16 billion tourism industry or the environment. As drilling would be done 60 miles from shore the operations would not be visible to those on the coastline, he said.

Campbell wants his state to be included in the U.S. Minerals Management Service's (MMS) 2010-2015 draft plan for the Outer Continental Shelf (OCS). The draft, issued in January following the lifting of an offshore drilling moratorium, provides for 31 OCS lease sales in all or portions of 12 of the 26 federal planning areas. New areas proposed under the plan would include four areas offshore Alaska, two off the Pacific Coast, three areas in the Gulf of Mexico (GOM) and three in Atlantic waters (see NGI, Jan. 19).

The federal plan is currently in its comment period, which expires Sept. 21. South Carolina Gov. Mark Sanford has opposed offshore oil drilling but is said to be willing to consider natural gas drilling.

The South Carolina legislative committee, which was formed by the General Assembly in June 2007, was charged with examining the benefits and detriments of drilling for gas off the state's coast if the federal ban on offshore drilling was lifted. South Carolina Republican Sen. Shane Massey has said it's time for states to step up and take action on offshore energy resources. "We can't keep waiting for Congress to solve our energy problems," Massey said.

MMS estimates unexplored areas of the OCS contain around 420 Tcf of natural gas and 86 billion bbl of oil in yet-to-be-discovered fields. However, the agency acknowledged that the estimates may be conservative because exploration has been limited in most of the areas for more than two decades because of the federal restrictions. In response to the lifting of the executive ban last October, industry has submitted requests to MMS to conduct geological and geophysical studies, such as seismic surveys, in the Atlantic planning areas.

Drilling opponents claim there are not enough resources to justify endangering the environment. Citing statistics from the Energy Information Administration, the Southern Environmental Law Center claims that the entire Atlantic Coast would yield just short of 37 Tcf of natural gas. "If all this gas were extracted and processed, it would be exhausted in 18 months," the center said in an position paper last fall. "Drilling in the Atlantic Ocean for oil and natural gas would damage marine ecosystems, cause the loss of coastal wetlands and increase air pollution. These impacts would, in turn, undermine the tourist economy in coastal states, as well as the commercial and recreational fishing industries."

In Florida a plan to allow offshore drilling that was approved by the state's House in April was quickly crushed in the Senate (see NGI, May 4). Gov. Charlie Crist was said to be concerned about the bill's timing and the fact that it would allow activity near the shore. The bill (HB 1219), sponsored by state Rep. Dean Cannon, would have permitted Crist and the Florida cabinet to consider and accept oil and gas exploration bids (see NGI, April 27).

However, drilling proponents are ready to come back for another try. "I predict we'll pass the bill and the governor will sign it," advocate Barney Bishop, president of the Associated Industries of Florida, said, as reported by The Miami Herald newspaper last week. Legal and lobbying work is under way in anticipation of the next legislative session, Bishop said.

A survey completed a year ago and touted by Associated Industries found that 73.2% of 600 Floridians polled favored drilling, either "anywhere," 32.7%; or "125 miles off the coast," 40.5%; while 23% opposed drilling and 3.8% did not have an opinion.

According to The Herald, the pro-drilling Florida Energy Associates, composed of business groups, energy companies and lawmakers, has been donated $35,000 to Republicans and $20,000 to Democrats since May.

While HB 1219 would have allowed drilling within three miles of shore, Cannon has said a revamped version of his bill would require that drilling take place at least five miles from shore. Rigs would not be visible to those on shore, he said.

While some worry that drilling would threaten Florida's tourism industry, economist Hank Fishkind of Fishkind & Associates, who is affiliated with EnergyFLA has projected that offshore drilling and production could add between $7 billion and $41 billion per year to the state's economy and create 40,000 to 230,000 jobs.

Meanwhile in Virginia, House Speaker William J. Howell, a Republican, late last month wrote to Secretary of Interior Ken Salazar in support of the previously scheduled lease of Virginia's offshore exploration rights -- specifically known as federal Sale 220 -- in 2011. The public comment period on the proposed schedule of offshore lease sales concludes at the end of September.

"The removal of previous obstacles in the form of congressional and presidential moratoria presents Virginia with an ideal opportunity to advance the exploration of natural gas and oil off our shores," wrote Howell. "While we, as a commonwealth, have made strides to encourage the development and production of renewable energy, the reality is fossil fuel-based sources will continue to be the major energy supplier for the near term. The expedited lease of the 2.9 million acres 50 miles offshore of Virginia would significantly improve Virginia's -- and America's -- energy security as well as assist in meeting that growing demand...I urge you to move forward on the lease Sale 220 in an expedited manner without delay so that Virginians can begin benefiting from the new jobs the development will create as well as the safe, affordable energy it will produce."

©Copyright 2009 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus