Down by the Offshore

by James Mosca

 

Residents and tourists alike hold the North Carolina coast as one of the most beautiful locations in the state. State revenue statistics show that coastal counties brought in billions of dollars for North Carolina in 2013 alone. If the beaches don’t change significantly, they will remain a source of enjoyment and economic stimulus for years to come.

 

However, their pristine condition may be threatened by a new federal plan. Currently, a debate rages over whether oil drilling should be allowed in the Atlantic. It has been banned since 1984, but just recently the federal government appeared to be set to reinstate the practice. A proposal was expected from President Obama, which would have allowed offshore drilling at least 50 miles off the coast.[1] The President has since reversed his stance on the issue; however, the pros and cons of Atlantic drilling will remain the same if the proposal is reconsidered in the near future. There is significant support for such a plan, since it would likely bring in jobs for coastal states, including North Carolina. Supporters of offshore Atlantic drilling also point out that the rigs would be out of sight; so drilling would not impact the ocean view from the beach.

 

Clearly, there is economic benefit that stems from offshore drilling. So much so that Governor McCrory would like to see the allowed buffer zone between the coastline and the rigs shrink from 50 miles to 30 miles.[2] An industry report speculated that the addition of the offshore drilling could create up to 100,000 jobs. Looking at a figure such as this one, it seems hard to argue with the proposal. Additionally, spills seem like such rare events that it must be worth the small risk.

 

One must always consider the worst case though. Average national rates put the annual cost to North Carolina for spills at about $80 million dollars.[3] This does not approach the cost of a disastrous spill though. For example, the Deepwater Horizon spill is still fresh in our minds. A spill of that magnitude would be devastating to the North Carolina economy, coastal environment, and coastal beauty. More than 400 miles of coastline were affected by the spill and BP accumulated more than $40 billion dollars in charges to pay for damages from the spill.[4] These damages were accumulated from a spill that happened 50 miles off the coast, so the proposed buffer zone would not protect North Carolina from an event like this one.[5] It’s possible more coastline damage would have occurred if the spill had happened with a smaller buffer zone. It’s too early to analyze the long-term impact of Deepwater Horizon, but we can use the Exxon Valdez spill from more than 25 years ago as an example. In a few months, oil migrated hundreds of miles from the spill, so area impacted was large.[6] Whale and heron populations in the area still have not returned to their previous levels.[7] Today, one can dig a hole in the beach and watch it fill with oil.[8] Exxon spent more than 4 billion in damages, but it clearly would have taken more to return the beaches to a condition that would attract tourists.

 

The issue at hand pits economic value against potential environmental impact. However, in this case there does not seem to be an easy compromise on the issue. Placing the rigs will create substantial economic benefit, but every rig presents the possibility of an oil spill. The reason that the Atlantic states have resisted drilling off the coast for the past 30 years has been the risk of destroying the economic and sentimental value that the shores have.[9] The only way to guarantee that such a tragedy is avoided is to continue the opposition to the Atlantic drilling that has already been occurring for the past 30 years.

 

Proponents of the drilling will argue that, as rig technology improves, the likelihood of a spill will also decrease. However, oil companies have not been uniformly accepting of new, safer technologies. A double-hulled ship would probably have saved some or most oil leakage from the Exxon Valdez, yet many single-hulled oil tankers remained in operation for 25 more years.[10] The Exxon Valdez itself remained in operation under different names for almost two more decades. More sustainable energy technologies will also become more effective in coming years. Consistent with thinking about the long-term health of the coastline, North Carolina and other Atlantic states should not place all their eggs in the basket of an energy source that may be too dirty to defend in the future. The Atlantic states should weigh their short-term economic interest with the long-term advantages of keeping the coastline clean.

Comments:

Micaela

Outer banks– for this is what North Carolina is known for. Miles of rolling dunes, native grasses, and endless coastline define the state, drawing tourists and bringing in revenue. As North Carolina’s seashores are so pertinent to the state, the proposal of offshore oil rigging itself greatly surprised me. How could one even think of posing a threat to the health of an environmental already plagued by erosion and development? I found your economic argument especially intriguing, as it is often the environmental cost that is motivation enough for ceasing oil efforts. Yet, on top of the danger posed to the North Carolina coastline is the drastic economic cost. This raises the question, is there an alternate location offshore of a less fragile environment that may serve as an alternative? For although spill relief efforts are in place, there is certainly more that can be done to preserve a clean coastline. The disguised Exxon Valdez also struck me, as it would seem a clear choice to decommission the ship responsible for wreaking havoc on Alaska’s marine environments. Because of the continued spill accidents and apparent lack of efforts made to ensure oil containment, I found your opposition to any establishment of oil drilling off the North Carolina coast to be a most effective one.

Jonathan

I completely agree that offshore drilling in North Carolina shouldn’t even be considered as an option for the future of energy in the state. North Carolina’s beaches are some of the most pristine on the eastern seaboard, thanks mainly in part to decades of conservation efforts on the state’s coast. The question then arises: where would the state turn instead, especially if the government remains in control of folks with more conservative values. The state already has a ban on wind farms on mountain peaks, thus eliminating one of the most viable choices for clean power. With a Republican supermajority in both chambers of the General Assembly one can predict that the next option for the state would be gas harvesting via hydraulic fracturing. This has already drawn up many local complaints of residents living in regions where the shale layer lies. Perhaps the most viable option, then, is solar farms. I believe in an ideal world the state would offer grants to the state’s public universities for research into improving solar panel efficiency and subsidies to farmers in the coastal plain who convert unused farmland into solar farms. One can only dream, I suppose.

Delaney

This blog provided a great overview of the pros and cons of offshore drilling, because such an endeavor would undoubtedly provide tempting economic gains for the states it would involve. However, as you have pointed out, North Carolina’s coastline is particularly well known and well loved, and the potential for an oil spill is likely too great to risk it. The unfortunate fact of the matter is that ultimately, governments like those under McCrory will get to decide for an entire state (and beyond) of people who may feel strongly against such a decision.
I think the most convincing argument to postpone (indefinitely, ideally) such drilling would be the point you made about safer technology. I don’t think it makes sense to risk a spill when quality technology could be one step of innovation away. Perhaps if the state established a position allowing only rigs with the latest, safest, spill-proof technology to drill, it could allow for the economic benefits while doing its best to protect against spills. The fact that single-hulled oil tankers were allowed to continue drilling even after the Exxon spill seems unreasonable to me, and I think it should be in all host states’ best interest to make sure only the safest technology enters their beloved coastline regions.

Dipro

 

Great article! It’s interesting to see how offshore drilling debates get framed around costs and probabilities: while national energy security is important (and offshore drilling MAY be a way to secure that), fossil fuels may turn out to be a bad investment from a market dynamics viewpoint. Various agencies have written about a carbon bubble effect, the idea that current fossil fuel assets are overvalued because current market conditions do not take into account the costs of releasing carbon into the atmosphere. When we start coming close to our 2-degree limit on global temperature change, rapid divestment from dirty industries could cause the the carbon bubble to very well burst. Plus, the current structure of the oil and gas market relies on oil prices staying relatively high – something that is less and less likely with the current increase in supply from OPEC. If oil prices continue to plummet, the value of assets in oil (both the value of US oil companies as well as the value of extraction operations) may become very volatile and drop significantly.

Brittany

 

The last sentence of your blog summarizes and highlights the debate with energy sources such as coal, nuclear, natural gas, and oil. There are usually always two sides of the energy debate- economic and environmental. Economic is usually pro and environmental usually against. It’s impossible to decide who’s right and who’s wrong. On top of that, gridlock in Congress makes it impossible for anything to get done.

It’s hard to say what the future will look like in terms of our energy demands and new technologies but I think what is known is that the world’s population is rising. Energy demands are going to increase and a lot of people care primarily about the short term economic benefit. People want immediate benefits and if that mean thousands of jobs at the cost of an accident that may or may nor happen, that is the risk people are willing to take. Only once an accident happens are people prone to care more about the environment. Like we learned in class, focus events make way for policy change, but there is a very brief window for this to happen. Like you stated, the Exxon Valdez spilled 25 years ago and you can still see the effects. The question is who is actually looking? It is not on the news anymore and it’s definitely not in the headlines. It is sad for the locals who are still affected by this catastrophe. People make decisions when their wallets are hit. Moving forward, it’s important to maybe attack at the federal and state level.

[1] The New York Times, Divide Grows in Southeast Over Offshore Drilling Plan, (Accessed March 29, 2016); available from http://www.nytimes.com/2016/03/04/us/politics/divide-grows-in-southeast-over-offshore-drilling-plan.html?_r=0

[2] ThinkProgress, North Carolina’s Governor Says Offshore Drilling Should Be Closer to Beaches, (Accessed March 29, 2016); available from http://thinkprogress.org/climate/2015/04/16/3647737/offshore-drilling-at-the-beach/

[3] North Carolina League of Conservation Voters, Five Truths About Oil & Gas Drilling off North Carolina’s Coast, (Accessed March 28, 2016); available from http://www.baldheadassociation.com/Images/bhinews/site/news/5_Truths_About_Oil_Fact_Sheet_NCLCV.pdf

[4] bp Global, BP reports fourth quarter and full year 2014 results, (Accessed March 29, 2016); available from http://www.bp.com/en/global/corporate/press/press-releases/fourth-quarter-2014-results.html

[5] ThinkProgress

[6] The Atlantic, The Exxon Valdez Oil Spill: 25 Years Ago Today, (Accessed April 5, 2016); available from http://www.theatlantic.com/photo/2014/03/the-exxon-valdez-oil-spill-25-years-ago-today/100703/

[7] Yale Environment 360, Twenty Years Later, Impacts of the Exxon Valdez Linger, (Accessed April 3, 2016); available from http://e360.yale.edu/feature/twenty_years_later_impacts__of_the_exxon_valdez_linger/2133/

[8] Yale Environment 360

[9] North Carolina League of Conservation Voters

[10] Yale Environment 360

 

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