The economic case for exploratory drilling off South Carolina
BY OTIS RAWL
An “all-of-the-above” energy strategy must include increased access to the nation’s vast oil and gas resources, including those resources off of South Carolina’s coast. Time and again, our nation has seen that responsible development of our nation’s oil and gas resources creates jobs, tax revenue and energy security.
Despite widespread in-state support for opening the waters off of South Carolina to oil and gas exploration, the Obama administration recently released a new five-year plan for offshore leasing that limits development to the areas where it historically has always been: a section of the Gulf of Mexico and offshore of Alaska.
This approach is a missed opportunity as 85 percent of the Outer Continental Shelf remains off limits to development.
Without increased access to our offshore resources, we simply will not know what is there.
Oil and gas exploration and development takes time. Lease sales are the first step in a process that can take a decade or more to bring new production online.
It is only with active exploration, made possible by lease sales, that oil and gas companies can understand what resources may be deep beneath the ocean’s floor.
Current estimates of the oil and gas available off the Eastern seaboard likely do not reflect reality. In the Gulf of Mexico, due to increased access and technological innovation, we have produced six times more oil and gas than experts in the 1980s believed would ever be available. Increased domestic oil and gas production means less dependence on fuel from unstable regions of the world, new jobs here at home and billions in revenue for states and the federal treasury. Our recent shale gas and oil revolution underscores the benefits of increased energy development.
In just the last half decade, technological innovation has opened up vast reserves of oil and gas trapped deep in shale rock once thought inaccessible. States across the country, from Texas and Louisiana to North Dakota and Pennsylvania, have reaped the benefits of new oil and gas production.
In Texas, development of the Eagle Ford Shale produced $25 billion in 2011. In Louisiana, development of the Haynesville Shale generated 57,000 new jobs in 2009.
When Pennsylvania’s economy was reeling, production in the Marcellus Shale created 72,000 jobs between the close of 2009 and early 2011. And in North Dakota, development of the Bakken Shale is the key driver in producing a projected $2 billion budget surplus and the lowest unemployment rate in the country.
Despite these remarkable numbers we do not have policies in place that encourage greater access to our energy reserves on federal lands and waters. The shale revolution has been confined almost entirely to private land. While energy production is booming in the U.S., production on federal property was down 14 percent onshore and 17 percent offshore in 2011.
We need greater access to our energy resources both onshore and offshore. Opening up development off South Carolina’s coast should be a central part of a new U.S. energy strategy that reflects the promise of increased oil and gas development.
Gov. Nikki Haley, Sen. Lindsey Graham and Rep. Jeff Duncan have all put their support behind developing South Carolina’s offshore resources. In addition, the U.S. House just passed H.R. 6082, which would replace the Obama administration’s five-year plan with an approach that provides far greater access to our offshore resources, including those off South Carolina’s coast. Senators from both sides of the aisle have now introduced complimentary legislation in the Senate.
Increased access to the nation’s offshore resources could provide tens of thousands of jobs, billions of dollars in desperately needed revenue and a more secure supply of fuel for the country.
Congress should continue to push for a revised five-year plan that provides the nation with greater access to our vast energy resources and a true “all-of-the-above” energy strategy.
Otis Rawl is president and CEO of the South Carolina Chamber of Commerce.