As decision nears, opposition builds to offshore drilling along Atlantic Coast

The Washington Post
December 21, 2015

By Joby Warrick

VIRGINIA BEACH — When then-Gov. Robert F. McDonnell (R) first pushed the idea in 2010, it was easy to find Virginians who favored oil and gas drilling along the Virginia coast, even in this tourism-dependent city of 450,000. The Virginia Beach City Council voted 8 to 3 that year in support of the giant offshore rigs, betting, along with the mayor, that “there’s going to be money made.”

But that was before the Deepwater Horizon oil spill in the Gulf of Mexico and before oil prices began their historic slide. At its December meeting two weeks ago, the same city council abruptly reversed course, voting to rescind its 2010 resolution after some of the city’s biggest business alliances campaigned against drilling.

“Why should we put ourselves at risk?” Laura Wood Habr, vice president of the city’s restaurant association, said in an interview after the vote.

The Virginia Beach council’s reversal is the latest blow to a plan that could bring offshore drilling to the Southeast Atlantic coast as early as 2017.

In recent months, at least 93 coastal communities — from small beach towns on the Delmarva Peninsula to the wealthy and politically powerful cities of Charleston and Myrtle Beach in South Carolina and Savannah, Ga. — have joined a revolt against a pro-drilling movement that once seemed unstoppable in the Republican-dominated South.

The Obama administration is expected to finalize by early spring a plan that could allow limited oil and gas development off the coasts of four Southeastern states — Virginia, North and South Carolina, and Georgia. All four have heavily supported drilling in the past. But lately, resistance to the plan appears to be growing, particularly in coastal towns where politicians and business leaders are expressing doubts about whether oil and gas can deliver the economic benefits the industry’s backers claim.

In Columbia, South Carolina’s capital, representatives of 400 businesses held a news conference outside the office of Gov. Nikki Haley (R) last week demanding that she withdraw her support for the drilling plan. The list of opponents has grown to include Columbia’s city council and South Carolina’s Small Business Chamber of Commerce. Even Republican Lt. Gov. Henry McMaster has publicly expressed doubts about the plan.

“If I had to make the choice right now? No,” McMaster told the State newspaper.

In Virginia Beach, the opposition includes virtually the entire hospitality industry — hotel owners, restaurateurs and shop owners who depend on the city’s 6 million visitors a year for their living. Opponents ask whether tourism — the city’s lifeblood — should be jeopardized to allow room for a new industry whose benefits to the city are uncertain.

“It was promoted as a way to diversify the economy, but tourism is already so strong here,” said Habr, co-owner of Croc’s 19th Street Bistro, a neighborhood eatery where diners sampled fresh crab cakes and shrimp and grits on an outdoor patio on an unseasonably warm December day. “We all saw what happened in the Gulf of Mexico. We don’t want tar balls on our beaches.”

Backers and attackers

Many of the region’s most prominent elected officials continue to support offshore drilling, which industry officials say would bring thousands of jobs and billions of dollars in economic revenue. Virginia Gov. Terry McAuliffe (D), who took office in 2014, has expressed support for offshore development as part of what he describes as a comprehensive energy strategy that includes wind farms.

“If we proceed in a smart and safe way, we can unlock gas, oil and wind assets offshore while protecting our environment,” McAuliffe said in a statement in January after the Interior Department unveiled its proposal for Atlantic drilling.

In North Carolina, Gov. Pat McCrory (R) went further, saying at a congressional hearing this year that the Obama administration’s plan was not nearly ambitious enough. The White House’s proposal for a 50-mile buffer between the drilling rigs and beaches was a bad idea because it would put too much of the state’s “undiscovered resources, frankly, under lock and key.”

But other politicians, regionally and nationally, have spoken against the plan. Reps. Mark Sanford and Tom Rice, both Republicans from South Carolina coastal districts, now oppose drilling, as do the municipal councils of every coastal town in that heavily Republican state. Last week, Hillary Clinton, the former secretary of state and now Democratic presidential hopeful, said in South Carolina that she was “very skeptical” about the drilling plan put forward by the administration for which she once worked.

“The move carries real environmental risks and helps delay a move to renewable energy,” Clinton said.

A dispute over gains

The oil and gas industry promotes polls showing that drilling has strong support across the region, and it argues that offshore rigs along the southeastern Atlantic coast would be safe and economically beneficial.

“More access [to the Atlantic oil fields] means more jobs and more revenue to the government, while strengthening our energy security,” said Carlton Carroll, a spokesman for the American Petroleum Institute, the industry’s leading trade association.

But exactly how many jobs and how much revenue are in dispute.

An industry-sponsored study conducted in 2013 by Quest Offshore Resources estimated that offshore wells could yield the equivalent of 1.3 million barrels of oil a day by 2035 while generating 280,000 jobs. The study also projected cumulative government revenue of $51 billion by 2035, including $19 billion for state coffers.

But other studies have dismissed such findings as either wildly optimistic or based on misleading assumptions.

It is unclear how much oil and gas exists in the Atlantic continental shelf, but government and industry estimates suggest that the quantities are small compared with those in the highly developed Gulf of Mexico. Studies by supporters of the wind industry argue that installing wind turbines in the area instead of oil platforms would yield more jobs and more energy without risking a catastrophic spill that could shut down beaches for months or years.

“Offshore wind is a much better bet, economically,” said Jacqueline Savitz, a vice president at Oceana, a nonprofit environmental organization.

A report by the Center for the Blue Economy, at the Middlebury Institute of International Studies, disputes Quest’s estimate of billions of dollars in direct tax revenue for states. The real earnings would be closer to zero, the report said, since all the drilling would take place in federally owned waters well offshore.

Moreover, projections of enormous profits from coastal drilling have been deflated by falling prices. A barrel of oil sold today would fetch less than a third of the $120 it would have yielded when the Quest study was produced two years ago, noted Derb Carter, director of the Chapel Hill, N.C., office of the Southern Environmental Law Center, a nonprofit environmental group.

Carter said industry studies and the region’s own governors “ignore the fact that there is already an existing economy along the Atlantic coast,” a $15 billion-a-year ocean economy that “is built on things like tourism and fisheries.”

“All of that would be put in jeopardy by oil and gas development,” Carter said. “It seems to us that the governors are not in close touch with their own coasts.”

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