News & Record
February 4, 2018
In his opinion column (Jan. 24), John Hood justified the federal government permitting drilling for oil and gas off the North Carolina coast by using the work of university economists. Citing this academic work, Hood argues that in terms of dollars, the state would gain more than it would lose.
The public should be very wary of cost-benefit analysis because it is only as good as the data selected. In this case, the data on benefits are based on oil industry promises, and the costs appear to be underestimated or not included.
I am the president and CEO of the Outer Banks Chamber of Commerce, which has 1,000 small business members that exist because of our vibrant tourism along our 300 miles of barrier island coastline. I am also the co-founder and board member of the Business Alliance for Protecting the Atlantic Coast, which has more than 42,000 business supporters from Maine to Florida that oppose oil and gas offshore drilling and exploration in the Atlantic.
It is not the act of seeing oil rigs that threatens our coastal tourism as Hood suggests. It is seeing the oil washing up on our beautiful beaches.
The reality is that when you drill, you spill. The federal government admits that offshore oil spills are inevitable, predicting one spill a year for every 1,000 barrels of oil produced. This is based on the experience in the Gulf of Mexico.
The U.S. Bureau of Ocean Energy Management reports 2,440 oil spills in the Gulf between 1964 and 2015 with 497 oil “accidents” in 2016. Yet, drilling advocates say that technology and procedures continue to make drilling safer.
Unfortunately, that is not necessarily the case. Following the 2010 Deepwater Horizon oil spill, the federal government did put in place regulations to require oil companies to use specific safety equipment and procedural safeguards to reduce the risk of oil blowouts. But the Trump administration has announced that it wants to loosen restrictions on oil companies and intends to roll back these safety regulations.
But it’s not just faulty equipment and procedures that result in oil spills. According to the federal government’s own records, fully 20 percent of all offshore oil spills are due to human error.
So, what would oil spills and leaks mean to my chamber members and North Carolina’s $3 billion coastal tourism economy with its 33,000 jobs?
In the first year after the Deepwater Horizon oil spill, Louisiana’s leisure visitor spending dropped by $247 million. Six weeks after the spill, Gulf Coast hotel cancellation rates rose to 60 percent, and 84 percent of the hotels reported difficulty booking future events.
Eight years after that oil spill, and after more than $65 billion in claims and clean-up costs for BP, that coast is still recovering.
But even when oil isn’t washing up on the Gulf Coast, the beach experience has been forever harmed. Beachgoers are provided wipes to clean their feet to remove oil and tar balls.
What would be the cost to our local economies and state coffers for this defiling of our North Carolina beaches resulting in tourists finding other destinations?
While Hood’s economists surely did not quantify this cost for their analysis, they did use the oil industry’s estimates of new jobs and revenue to the state.
Hood acknowledges that oil from any offshore drilling must be brought on to North Carolina’s coast via pipelines and storage depots. He doesn’t specifically mention the possibility of refineries, but they would need to be part of the industrialization to create the 17,000 jobs the oil industry promises.
The increase in “annual government revenues would be $116 million,” according to the economists.
However, such industrialization of an area of the North Carolina coast would inevitably result in oil spills on land that would result in clean-up costs to local and state governments.
It would also require a coastal community to sacrifice its tourism economy for the obvious reason that tourists are not going to go to areas that have been industrialized. Since no one advocating for offshore drilling wants to publicly identify where such industrialization would take place along our coast, the economists could not have possibly calculated these costs and lost revenues in their analysis.
As for the $116 million increase in government revenue, that would be far less than 1 percent of North Carolina’s state budget. Even a minor oil spill would use up those dollars quickly.
And don’t look to the federal government sharing any revenue from oil leases to help with cleaning up oil spills or adding to the state coffers. Congress has never passed any law allowing for such sharing for Atlantic Coast states. Plus, the Trump administration has proposed taking this revenue sharing away from the Gulf Coast states.
The bottom line is that drilling for oil off the North Carolina coast would inevitably lead to oil spills and leaks. Our vibrant coastal tourism economy would suffer greatly with no real benefit to the state.
The state’s tourism industry supports Gov. Roy Cooper’s efforts to oppose drilling and exploration for oil off our coast. The economists can play with their oil industry-provided numbers, but we will not allow them to play with our very real tourism numbers that depend on a healthy, oil-free ocean and coast.
Karen Brown is the president and CEO of the Outer Banks Chamber of Commerce