[image-1]If current market prices hold, an estimated $4.59 billion worth of oil could potentially be mined off the South Atlantic coast. Of course, the cost of doing business could be much greater for communities along the shore — especially in Charleston where the threat of spills would devastate what has become a $3.7 billion-a-year tourism industry.
On Friday, President Donald Trump signed a new executive order that could possibly open up portions of the Atlantic coast to drilling for oil and natural gas for the first time in more than 30 years. In a move that would roll back bans put in place by the Obama administration to protect the Atlantic Ocean from energy exploration until at least 2022, Interior Secretary Ryan Zinke told reporters at the White House Thursday that the decision would “cement our nation’s position as a global energy leader.”
Speaking before members of Congress Friday during the signing of the new executive order, Trump said his “America-First Offshore Energy Strategy” would open up the 94 percent of offshore areas that the federal government has closed to energy exploration and production. While the Trump administration see the restrictions previously in place as a hindrance to the nation’s energy independence, officials on the coast could only imagine the troubling possibilities of what the reversal could mean to South Carolina.
“The disruption to tourism in this state would be substantial. One out of 10 workers in the state of South Carolina now play some role in the tourism industry, so the risks are just too great to our aquatic life, to our ecology, and to our economy. Oil and water don’t mix in South Carolina,” said Charleston Mayor John Tecklenburg, who joined the mayors of Sullivan’s Island, Isle of Palms, and Edisto Beach on Friday to speak out against the possibility of coastal energy exploration and drilling.
Tecklenburg called on citizens opposed to offshore drilling to “voice their outrage” to their elected representatives. For leaders throughout the Lowcountry and all along the East Coast who desperately fought the previous attempt to open coastal waters to drilling, the shift in policy means returning to a battle they thought was already won.
“About a year ago, we were celebrating a victory — having found that even though you can’t fight city hall, if you have enough city halls you can take on the White House. It feels like Groundhog’s Day. We’re going to have to do it all over again, but we certainly hope we can have the same result this time,” said Sullivan’s Island Mayor Pat O’Neil.
[image-2]To date, no commercial oil and gas production has ever taken place off the Atlantic coast. Between 1976 and 1983, following a brief period of seismic testing, 51 exploratory wells were set up off the Atlantic coast, but only a tract off the coast of New Jersey showed any viable resources. As far as South Carolina was concerned, the closest exploratory drilling occurred south, off the coast of Georgia.
Offshore leases for energy exploration are managed by the United States’ Bureau of Ocean Energy Management (BOEM), which released an updated estimate of undiscovered offshore resources in November of 2016. With no recent exploration efforts, current resource estimates are based off of data gathered in the late ’70s coupled with information gathered from recent oil and gas discoveries in analogous portions of the African coast. The reason for this being that, as you may recall, the continents all used to be connected.
So, what would South Carolina be looking at in terms of oil and gas resources off the coast?
According to BOEM, the South Atlantic region — which consists of around 54 million acres off the coasts of South Carolina, Georgia, and parts of Florida — is expected to hold 414,000 million barrels of oil and less than 1.78 trillion cubic feet of natural gas. In relation to the entire U.S. Atlantic region, the southern portion is estimated to hold 9 percent of the projected oil supply and less than 5 percent of potential gas resources. But these totals don’t factor in the financial viability of actually recovering oil and gas. Fortunately, BOEM factors this into their estimates, as well.
At the current price of oil, which sits just under $50 per barrel, an estimated 93 million barrels would be worth the cost of drilling. This adds up to about $4.59 billion dollars in oil throughout the entire South Atlantic region in total. If oil prices were to climb to $100 per barrel, the amount of viable resources increases to 177 million barrels. The price of oil has remained under $100 per barrel since 2014. Economically, the South Atlantic region’s estimated natural gas supply is a much more viable option, but coupled together, there would still only be the equivalent of 130 million barrels of oil worth mining at the current market rate, according to BOEM’s estimates.
Those hoping to open the Atlantic back up to energy exploration argue that the current estimates of what resources may be available are based on outdated data and that more modern techniques would reveal the true size of the energy stockpile. While BOEM handles the leases with exploratory companies that survey for resources, what information is collected is deemed proprietary. This means that even if new testing took place, South Carolinians would have no way of knowing what resources were discovered off the state’s coast.
The problem for many coastal leaders is that the risk of a potential spill poses a major threat to the area’s tourism industry — which in Charleston’s case brought in $3.7 billion in 2015, according to the College of Charleston’s Office of Tourism Analysis’ most recent study. Immediately following the signing of Trump’s executive order, Congressman Mark Sanford filed a bill that would suspend offshore drilling and all related activities in the waters off the East Coast for the next 10 years.
“The administration’s proposal is disappointing and at odds with the overwhelming chorus of voices at home speaking out against offshore drilling. I have joined local leaders, advocates, organizations, and individuals up and down the South Carolina coast in opposing offshore drilling because it poses a real threat to tourism, quality of life, and our environment,” Sanford said in a public statement. “Drilling the Atlantic Outer Continental Shelf hasn’t been allowed in over 30 years, and the administration hasn’t made a good enough case to change this policy. One of every 10 jobs in South Carolina comes from tourism, and this means $13 billion in impact every year to our coastal counties alone. Drilling would put this economic driver at risk. Purely from a numbers standpoint, the decision doesn’t add up.”