The Greenville News
April 21, 2017
The search for oil and gas in the Atlantic Ocean off the coast of North and South Carolina could be months, rather than years, away.
That would put the first wells in the Atlantic in as little as three years, and major oil drilling infrastructure a decade or so off, under the most aggressive timelines. And some projections show by 2035 the oil industry could add $850 million a year to the state’s budget.
There is broad consensus that President Donald Trump is preparing a plan to reverse actions by former President Barack Obama’s that effectively banned oil and gas exploration in the South Atlantic Outer Continental Shelf, a region three to 200 miles off the coasts of the Carolinas, Georgia and Florida.
Trump’s actions could hasten the approval process for six companies that sought permits to conduct seismic surveys in the region to give energy companies a better idea where oil or gas may be located. Obama denied all six of those permits two weeks before he left office, ending a years-long process.
Trade organizations representing oil and gas companies and the surveyors who map the ocean floor said they completed nearly every step of the rigorous process before Obama denied their applications, and they shouldn’t have to start over.
They were on the final step when the denials were handed out, said Gail Adams-Jackson, a spokeswoman for the International Association of Geophysical Contractors, the surveying companies’ trade group.
“There is no reason why companies should have to begin another extensive process when the denial of the applications were not based on any deficiencies in the application or the process,” Adams-Jackson said.
Environmental groups are concerned Trump might allow those companies to skip the line, said Ingrid Biedron, a marine scientist with Oceana, the ocean-protection advocacy group that is opposed to offshore exploration or drilling.
With other pro-drilling decisions likely to come from the Trump administration, those on the South Carolina coast who experienced victory just months ago are now staring at another fight over the future of the coast.
It’s not a fight Rick Baumann expected when, just over a year ago, he stood with neighbors, business owners and friends on a sun-draped South Carolina beach and sipped celebratory champagne from paper cups to toast Obama’s decision to leave the Atlantic out of the next five year offshore drilling plan.
Baumann hung a photo of the celebration on the wall of the store he founded, Murrells Inlet Seafood, and felt relief. Then Trump took office, and Baumann learned how fragile Obama’s efforts to stave off oil and gas exploration along the coast could be.
What might be under the sea
No one is certain how much recoverable oil or gas is beneath the Atlantic. The most recent estimates by the Interior Department’s Bureau of Ocean Energy Management say there could be 4.6 billion barrels of oil in federal waters off the entire Atlantic coast. That’s one-fifth of what is estimated to be in the Gulf of Mexico and would be enough to supply all U.S. oil consumption for 234 days.
But it’s almost certainly a low estimate, oil proponents say.
The last time the Atlantic was surveyed more than 30 years ago. Those surveys were done using out-of-date imaging and before recent technological advances in oil and gas production were invented, said Andy Radford, senior policy adviser with the American Petroleum Institute, an oil and gas industry trade group. Energy hawks say they need to be able to survey using modern technologies that will give them a more accurate picture of what may be there and whether it’s commercially feasible to drill.
The Department of the Interior, which manages offshore leasing of the Outer Continental Shelf, is focused on increasing offshore revenue, said Heather Swift, an Interior Department spokeswoman. In 2008, the year before Obama took office, the United States brought in $18 billion in offshore revenues, Swift said. In fiscal year 2016, offshore revenues had fallen to $2.8 billion, she said.
“This administration prioritizes all-of-the-above energy and putting American energy first,” she said.
The oil industry says if it’s able to start exploring, estimates of oil and natural gas deposits will likely rise as companies discover more recoverable sources. A 2013 survey prepared for the industry shows that oil and gas could bring jobs and cash to the region.
The industry in South Carolina could add 11,000 oil and gas jobs by 2035 and indirect and induced employment could add another 24,000 jobs in careers such as retail, waste management, healthcare and food services as the industry brings people to the state, according to the API and National Ocean Industries Association report. That could add $2.7 billion in gross domestic product per year to South Carolina by 2035, the report states.
At first, Obama, with his “all of the above” energy platform, seemed to be on board. But after the 2010 BP Deepwater Horizon oil spill, the administration hit pause and never really hit play again.
Between March and May of 2014, six companies applied for permits through the Bureau of Ocean Energy Management to conduct seismic tests in the Atlantic, a process where boats drag nets with hundreds of sonic cannons across wide swaths of the ocean surface at a time. The applications drew fierce opposition from environmentalists and eventually from many of the seaside towns and businesses. When BOEM denied all six applications on Jan. 6, two weeks before Obama left office, it said the surveys were unneeded because the Atlantic wasn’t in the five-year lease plan.
None of those companies has withdrawn its request and each could appeal and ask for the permitting process to start where it left off.
In seismic surveying, airguns emit acoustic pulses from the surface into the seafloor over large areas and long periods of time. The pulses penetrate several thousand meters beneath the seafloor to create a map of crevices where oil or gas deposits may be located.
“Those are things we need to make an informed decision out there,” Radford said. “And in turn, that’s information our companies would need before they’d go in and buy leases in those areas.”
But those sonic blasts can damage the hearing of whales, turtles, fish and invertebrates, said Oceana’s Biedron.
“There are scientific peer-reviewed studies that show that seismic noise impacts marine life,” she said.
Oil and gas advocates like API say there is no scientific evidence seismic blasts harm marine life. That is technically true, Biedron said, because studies haven’t documented any significant population loss from the use of airguns.
“It’s technical, but in order to show that populations are impacted you have to show impacts of many, many animals,” she said. That’s practically impossible to document, because researchers would have to follow thousands of whales or fish for months at a time throughout the ocean to measure effects of the noise, she said.
But “research shows that catch rates of commercial fish decline when seismic testing is taking place,” while studies have shown drastic effects on individual fish, she said.
Aaron Rice, an expert on marine life and communication, and science director of the bioacoustics program at Cornell University, said seismic blasts have been shown to affect migratory patterns and can kill fish or mammals that swim too close to the blasts.
A single airgun generates a pulse at about 230 decibels about every 10 seconds, he said. Strings of airguns pulled by a boat can set off hundreds of pulses every few minutes as the vessels “mow the lawn” over an area of ocean, he said.
Even though the government regulates the duration of the impulses, scientists say the noise morphs into a constant rumbling in the water that can be detected up to 435 miles away, Rice said. For fish and whales that use their ears to navigate, find food and keep tabs on their young, the constant noise could be devastating, he said.
The industry takes precautions to protect marine life. For instance, vessels won’t turn on airguns if whales are spotted within 500 yards, and they have spotters on board to scan for marine life nearby.
“Industry will say that this is basically like a lightning strike. The sound of a lightning strike, because it’s such a short duration, isn’t going to kill you,” Rice said, “Our response is ‘yeah, well imagine living through a nine-month lightning storm.’”
An oil and gas future
If the Trump administration gives approval of seismic permits and reopens the Atlantic coast for leases, oil exploration could begin in 18 months and drilling for exploratory wells could conceivably start by 2020, Radford said.
A critical mass of oil and gas could bring more infrastructure – refinement facilities, pipelines and more — to industrial locations along the coast, he said. But that would depend on what’s found off the coast and how costly it would be to retrieve, and it would at least a decade away.
“It’s not like the pipeline would be going through the middle of Hilton Head Island,” he said.
During the Obama administration, the industry had settled on a 50-mile buffer from the coast to begin exploration. That buffer is not set in stone though, Radford said. Federal waters go from three miles offshore to 200 miles out and it’s possible a five-year plan could include that entire area.
Beach goers standing on the sand can see about five miles out while someone standing on the balcony of the tallest hotels in Myrtle Beach would be able to make out the top of a platform about 20 miles offshore, Radford said.
Drilling opponents such as Frank Knapp take a long-term view, as do the oil interests. Knapp is the president, CEO and co-founder of both the Business Alliance for Protecting the Atlantic Coast (BAPAC) and the South Carolina Small Business Chamber of Commerce.
He’s coordinating an effort along the entire Eastern Seaboard to show how many people oppose any exploration for oil and gas in the Atlantic. So far, more than 35,000 businesses and 500,000 commercial fishing families represented by BAPAC, along with 1,200 local governments, have stated opposition.
“The oil that is spilled or leaked knows no boundaries,” Knapp said. “Three miles or 50 miles or 100 miles, it knows no boundaries. It doesn’t belong on the East Coast. That is not our economy and it threatens our economy.”
Atlantic coast economies support 1.4 million jobs and contribute $95 billion to the annual gross domestic product, according to a study by Oceana using U.S. Census Bureau data. That study said tourism provides 78,180 jobs and $4.38 billion to South Carolina’s gross domestic product while the fishing industry provides 1,049 jobs and $14.76 million.
The oil and gas industry has made great strides toward safety since Deepwater Horizon, developing better ways to cap leaks and putting in more protocols to prevent spills, Radford said.
“People can rest easy,” he said.
Knapp said those safety measures don’t account for human error, hurricanes or equipment failure. Through 2012, federal data show 20 percent of offshore spills resulted from human error, he said.
There’s little that states can do to oppose offshore exploration, because the decision ultimately rests at the federal level, he said. They can weigh in, but the president is not bound to listen, Radford said.
Right now, none of the states on the East Coast would receive revenue sharing for oil or gas production, Radford said, though it’s possible some states would agree to revenue sharing if the industry comes to their shores.
If South Carolina negotiated with the oil and gas industry for the federal/state revenue sharing models in place now for four Gulf Coast states, it would see a 37.5 percent share of bonuses, rents and royalties generated by leases and production, according to the 2013 API study. With ramped-up production by 2035, that could add another $850 million to the state budget.
Baumann, at Murrells Inlet Seafood, watched Trump’s victory speech in November and was hopeful when Trump declared he would be a president for “all the people.”
Now, in between ringing out customers buying just-caught shrimp and fresh offerings like sea bass, mahi-mahi and triggerfish, Baumann’s hope has turned to anger.
“We are dead-set against this and the president is not listening,” he said.
Reported by Nathaniel Cary, The Greenville News