The supposed economic benefits of offshore drilling are being debunked by a new report released today. The analysis in the Blue Economy report breaks down how the existing coastal economy would be threatened if drilling moved forward on both a state and county level. This information comes as the Obama Administration is reevaluating its plan to open the Atlantic coast to offshore oil and gas drilling.
“The oil industry is asking our elected officials to jeopardize the tourism and fishing economies that mean so much to the Southeast with promises of jobs that have no basis in reality,” said Senior Attorney Sierra Weaver. “Communities all along the coast have already said that there’s too much to lose and too little to gain from offshore drilling. This report confirms what these coastal residents have known, and shows that oil and gas drilling is a bad deal for the Southeast.”
The new analysis from the Center for the Blue Economy at the Middlebury Institute of International Studies at Monterey dissects a 2013 report commissioned by industry groups like the American Petroleum Institute and the National Ocean Industries Association. Oil and gas proponents often use this 2013 report, commonly referred to as the Quest report, to justify support for offshore drilling in the Atlantic. This industry-sponsored analysis significantly overstates the potential economic benefits from offshore drilling by basing calculations on non-existent leasing scenarios, outdated oil prices, and unknown amounts of Atlantic oil.
Key findings in the Blue Ecomony report include:
- The oil industry’s Quest report assumes drilling in all federal waters in the Atlantic, but the area under consideration is limited to the coasts of Virginia, the Carolinas, and Georgia, and includes a buffer of 50 miles from the coast.
- The Quest report projects that revenue sharing with the federal government would bring in nearly $19 billion to the states between 2017 and 2035, but it’s more likely to bring in $0. Federal law does not allow revenue sharing with Atlantic coast states, and legislative efforts to change this have failed and remain politically improbable.
- The Quest report assumes annual lease sales in the Atlantic beginning in 2018, but the Administration’s plan only includes one lease sale in 2021.
- The Quest report assumes a significant percentage of the economic activity related to drilling would take place in the Atlantic region, but much activity is likely to remain in the nearby Gulf region, which already has the existing infrastructure and skilled workforce needed.
In addition, industry projections in the Quest report are based on near record-high oil prices of more than $120 per barrel, which is more than triple current prices.
The report comes at a time when local opposition in the Southeast to offshore drilling is at a fever pitch. Since the Department of Interior announced a plan earlier this year to open the Southeast coast to offshore oil and gas drilling, opposition along the coast has steadily been growing—with more than 80 anti-drilling resolutions passed in communities up and down the South Atlantic coast, including major coastal cities like Charleston, S.C., Myrtle Beach, S.C., Savannah, G.A., and Wilmington N.C. Various business associations, including the Virginia Restaurant, Lodging, and Travel Association, the Southeastern Fisheries Association, and the South Carolina Small Business Chamber of Commerce have also come out against the plan.
Meanwhile drilling proponents tout the supposed economic benefits of this proposal while failing to take into account the catastrophic damage to valuable coastal economies that a major oil spill would cause—or even the effects of the industrialization of the coast. The Blue Economy report spells out the importance of the existing coastal economy, providing numbers and county and state breakdowns of sectors and jobs that would be jeopardized if offshore drilling gets a green light. In 2012, there were nearly 250,000 ocean-related jobs in Virginia, North Carolina, South Carolina and Georgia, and the ocean economy contributed $14.6 billion to the economies in the region. The ocean economy provided more than $7.5 billion in wages in the same year.
“Our coast is built around a thriving tourism industry that attracts visitors from around the world to the pristine beaches, unique coastal communities, and natural wetlands,” said Frank Knapp, South Carolina Small Business Chamber of Commerce President & CEO. “This report proves that these industries are invaluable to the prosperity of our coastal communities and the entire Southeast region. Offshore drilling is incompatible with our thriving small business coastal tourism economy, and we simply can’t afford that.”