President Barack Obama moved Tuesday to open the Atlantic Ocean to drilling, beginning a mammoth battle over the environmental effects and raising the question of how much oil and gas lies under the sea and whether it’s even economical for it to be drilled.
The Interior Department announced Tuesday that it was proposing a lease sale off the coasts of Virginia, North Carolina, South Carolina and Georgia as part of its new offshore leasing plan, which covers 2017 to 2022. At the same time, the department said it would ban drilling in some environmentally sensitive areas off Alaska.
Interior Secretary Sally Jewell called it a balanced plan that allows energy development “while protecting areas that are simply too special to develop.”
The proposal will incite a furious debate over just what American places are considered too special for drilling rigs – pitting environmental groups against industry as well as some coastal towns against their state leaders, who see jobs and the potential for billions in revenue.
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“It will be a battle royal,” said Charles Ebinger, a senior fellow in the Energy Security and Climate Initiative at the left-leaning Brookings Institution in Washington.
Ebinger expects lawsuits to rage for years. Jewell said the Atlantic drilling lease sale won’t happen until 2021 and could change or even be scrapped.
Sierra Weaver, an attorney at the nonprofit Southern Environmental Law Center, said she hopes communities along the Atlantic seaboard will band together against the drilling plan, which goes to public comment before being finalized. Weaver argued that Obama’s proposal sells out the Southeast, putting at risk the tourism and fishing economies of coastal communities that rely on having clean beaches and water.
“The Obama administration just made the point that these special areas of Alaska are too special to drill,” Weaver said. “The same goes for the Southeast.”
The proposed lease area is a huge swath from Virginia to the southern border of Georgia, but it could be narrowed. So it’s not clear whether drilling might happen off the beaches of North Carolina’s Outer Banks, the Charleston waterfront in South Carolina, or the port of Savannah in Georgia.
Mayors of coastal towns including Charleston, Beaufort, S.C., and communities on the Outer Banks have spoken out against Atlantic drilling.
The governors of Virginia, North Carolina and South Carolina, though, pushed hard for the drilling to be allowed, and Jewell said that made a difference.
North Carolina Gov. Pat McCrory called the plan “a step in the right direction to help North Carolina become a significant energy-producing state.” But McCrory criticized as too limiting a 50-mile buffer between drilling and the East Coast that’s included in the proposal.
The Atlantic Ocean has been off limits to drilling for decades, and it’s a mystery just how much oil and gas actually exist off the East Coast.
The federal government estimates 3.3 billion barrels of oil and 31.28 trillion cubic feet of natural gas along the entire Atlantic seabed. That’s hardly the makings of a boom, and it’s nine times smaller than estimated oil reserves off the Arctic coast of Alaska, if the numbers are right. But those estimates date from the 1970s and 1980s, and industry and other drilling supporters consider them too low.
James Knapp, a professor of earth and ocean sciences at the University of South Carolina, said far more advanced seismic surveys have been developed in the ensuing decades. Compressed air guns blast underneath the sea, and echoes from those blasts are used to produce maps that help companies figure out whether sub-sea rock formations are likely to contain fossil fuels worth drilling.
“There are also a number of other advancements in the acquisition design, processing techniques and interpretation which did not exist 30 or 40 years ago, which also contribute significantly to the ability to understand the subsurface,” Knapp said Tuesday.
The Obama administration endorsed seismic testing in the Atlantic last year, and nine companies have applied and are waiting to be approved.
Doubts about how much is out there adds to uncertainties that could make companies hesitant to drill, said Chris Lafakis, senior energy economist at Moody’s Analytics. Drilling the Atlantic is “uncharted waters,” he said, with unknown costs to produce and transport to market.
If oil prices are as low when it’s time to drill as now, Lafakis said, he doubts companies will rush to potentially spend billions to make it happen.
“There would be a big risk that companies would take by sinking the capital to explore and develop these wells not knowing how productive they will be,” he said.
There is interest among American companies, though, said Erik Milito, director of upstream operations for the American Petroleum Institute. He said oil and gas companies around the world will be scrutinizing the seismic surveys to see whether the U.S. East Coast shares the kind of promising geological trends seen in Atlantic regions like the coasts of Africa and South America.
“You start building up momentum by getting the data out there, and then you start seeing more and more interest by the industry,” he said.
Obama administration has moved once before toward offering the Atlantic for drilling, proposing in 2010 to hold a lease sale in the waters off Virginia. But that plan was abandoned after the Deepwater Horizon explosion and massive BP oil spill in the Gulf of Mexico.
Coastal advocates recalled that calamity in their arguments against Obama’s action. The new plan creates a “looming risk of a Deepwater Horizon-like oil disaster stretching along the East Coast,” said Jacqueline Savitz, vice president of the environmental group Oceana.
The Interior Department said it’s working on blowout prevention rules to help avoid that kind of spill.
“We have done a huge amount of work since the Gulf of Mexico spill to understand what happened there and to ensure we are updating our standards,” said Interior Secretary Jewell.