Randall Luthi | Posted
Forty years ago, the oil embargo awakened our nation to a harsh reality. Our natural resource-rich country was unable to meet its growing energy needs and was dependent on foreign energy sources, mainly oil. Without international trade and commerce, few economies would survive, let alone thrive; however, in 1973, we learned the hard way that even though the U.S. could pay for foreign oil, our sources could make the political decision not to supply it.
Today, the U.S. is experiencing an awakening; we are on the verge of “energy independence,” which was once seen as an overused political catch-phrase. Now, even diehard skeptics are starting to see the possibility of it — and if not independence, then certainly North American energy security.
But this opportunity could slip by us, if we don’t make the right decisions now. The good news is that today, instead of relying heavily on politically unpredictable countries halfway around the world, our major exporter of oil is our neighbor to the north, Canada. We also continue to work with our neighbor to the south, Mexico, to assist where we can under its political process to increase oil and natural gas production. Increased production for Mexico is likely another stable energy source for the United States.
At home, thanks to the tremendous increase in production from private and state onshore lands within our own borders, we are close to being an exporter of natural gas. Our vast untapped offshore areas also hold immense potential. We must open those areas to exploration to see if that potential is myth or reality.
A recent study by Quest Offshore Inc. shows that developing oil and natural gas off the Atlantic coast makes economic and energy sense. Co-sponsored by the National Ocean Industries Association, the study shows that opening the offshore Atlantic to oil and natural gas exploration could create nearly 280,000 jobs along the East Coast and across the country by 2035. Companies are predicted to add nearly $200 billion in additional investments, contributing up to $23 billion per year to the U.S. economy, including $17 billion to the Atlantic Coast states alone. Bonus bids, rents and royalties from offshore oil and gas leases could generate more than $50 billion in new revenue to state and federal treasuries. The added benefit is the addition of 1.3 million barrels of oil equivalent per day. That’s more than a million barrels of oil equivalent we wouldn’t need to import.
That means more than 25,000 jobs to Virginia, estimated economic contributions of $2.2 billion per year and nearly $2 billion to the commonwealth’s treasury. These benefits are predicted to cross many state industries, including, but not limited to, construction, manufacturing, transportation, real estate, retail, professional, wholesale finance and food service. And, this does not include the economic benefit of continued development of wind projects along the Atlantic Coast as well.
Because Virginia has a strong maritime background, including the bustling Port of Virginia and one of the largest dry docks in the U.S., much of the engineering activity associated with East Coast exploration and production will take place in the commonwealth — as much as $400 million by 2035.
Responsible, consistent and safe development of all energy sources should be a no-brainer for all policymakers. The benefits to our economy and our energy security are without question, and technology and safety systems are evolving to meet the challenges of offshore conditions. Industry has the responsibility to develop these resources safely, and it is a responsibility that polls show most Americans support.
Now is the time for the U.S. to truly be a leader in all energy production. But we can’t be a leader if we aren’t in the game. The U.S. is on the sidelines when compared with other countries with offshore energy programs. About 85 percent of our offshore areas are not being explored due to a political embargo of our own domestic oil and natural gas. Our politicians can lift this embargo, and a good first step would be allowing for oil and gas exploration and development in the Atlantic outer continental shelf. The economic and energy benefits speak for themselves.