December 30, 2015
By Rodney Welch
A 2013 report sponsored by the petroleum industry grossly exaggerated the benefits and underestimated the negative effects of offshore drilling along the Southeast coast, according to a new study.
The study comes as the Obama administration gears up to decide by the end of 2016 whether to allow oil drilling off the coast of South Carolina and three other Southern states.
The so-called Quest Report, prepared by Quest Offshore Resources for the American Petroleum Institute and the National Ocean Industries Association in December of 2013, made huge claims for oil production along the coast that have been quoted by drilling proponents.
The original report estimated that offshore oil production could begin by 2026 and that within a decade could produce 1.3 million barrels of oil a day, generate up to 280,000 jobs, contribute $23.5 billion to the U.S. economy and generate $51 billion in government revenue.
But those figures, according to a new study released by the Center for the Blue Economy at the Middlebury Institute of International Studies at Monterey, are either based on faulty assumptions or fail to account for how offshore drilling would affect the ocean economy.
The Quest report, prepared well before the Department of the Interior released its leasing proposals this year, is also based on a scenario that permits more drilling activity than is actually under consideration by the Obama administration.
“The report assumes that Atlantic drilling can take place in all federal waters,” the Blue Economy report notes, “but the Department of the Interior is proposing to limit oil and gas activity to areas off the coasts of Virginia, North Carolina, South Carolina and Georgia, and has proposed a 50-mile buffer from the coastline within which drilling would be prohibited.”
Also, the Blue Economy report says that the Quest report doesn’t take into account that the ocean economies of the four-state region already account for 249,000 jobs, which could be adversely affected by offshore drilling.
“Any predicted employment and economic gains must be weighed against possible losses to existing economies as a result of onshore industrialization, routine contamination, construction activities and the threat of major oil spills,” the report states.
The Blue Economy report also dismisses the idea that states would receive revenue sharing from the federal government.
“Under current law,” according to the report, “Atlantic coast states would not receive any such revenues.”
Changing that fact would require an act of Congress, and neither Congress nor the Obama administration would likely welcome the idea.
“The oil and gas industry has widely cited the Quest report to boast the economic benefits of drilling in the Atlantic, but the report presents too optimistic a view of the gains to the regional economy and fails to place oil and gas activity in the context of the larger ocean economy that may be vulnerable to disruptions from oil and gas,” says CBE’s Director of Research Charles S. Colgan.
Christopher DeScherer, an attorney with the Southern Environmental Law Center in Charleston, tells Free Times that besides pointing out analytical flaws, the Blue Economy Report highlights “all the resources, all the existing tourism and recreation-based economies that already provide billions in revenue to the Southeastern states, which oil and gas drilling would jeopardize.”
According to information provided by the Southern Environmental Law Center, well over 50 local governments in the Carolinas and Georgia have expressed opposition to drilling.
Among them are the cities of Charleston, Columbia, Georgetown and Myrtle Beach.
South Carolina politicians, including conservative U.S. Rep. Mark Sanford, have also come out in opposition to offshore drilling and to the seismic testing used to search for oil. And 430 small business members of the South Carolina Small Business Chamber of Commerce recently signed on to a letter opposing offshore drilling and seismic testing.
But on the industry side, Consumer Energy Alliance Executive Vice President Michael Whatley takes a dim view of the Blue Economy report.
“Their basic assumption that they’re working from is that if you move forward with oil and gas development, then you are going to lose all the other economic activity in the coastal states,” he says. “We just don’t believe that that’s true. We’ve never seen oil and gas development being mutually exclusive with environmental protection or with coastal tourism.”
For both sides in the ongoing debate over whether or not to drill, the coming year will be critical. Whatley said that in March, two documents will be released: a proposed plan and an environmental impact statement.
Following a public comment period, the administration will decide by the end of the year whether to drill along the Atlantic coast.