OTC: Federal, state cooperation vital for offshore energy development

US coastal states and the federal government will have to continue having an open and honest dialogue about the safe and reliable exploration and development of offshore oil and gas resources, panelists agreed May 5 in an opening session at the Offshore Technology Conference in Houston.

North Carolina Gov. Pat McCrory, who also serves as chairman of the Outer Continental Shelf Governors Coalition, said his state is not yet taking full advantage of the development of its energy resources. He said there are four main issues blocking the way for adequate energy development offshore North Carolina and other mid-Atlantic states, namely: adequate (and updated) seismic data for North Carolina, South Carolina, and Virginia; development of a revenue-sharing plan with the federal government; reduction of the 50-mile offshore drilling buffer zone; and the scant few lease sales currently being offered for drilling in offshore federal areas.

Seismic, lease sales needed

Offshore the mid-Atlantic states there hasn’t been seismic data acquired in decades, McCrory said. “Let’s find out what we have” in terms of resources, he said.

Regarding seismic data acquisition, another panelist, Abbey Hopper, newly appointed director of the US Bureau of Ocean Energy Management, said it wouldn’t be appropriate, however, to take the template of how the Gulf Coast works and apply it to other offshore areas.

Another panelist, US Representative Rob Bishop (R-Utah), who also chairs the House Natural Resources Committee, agreed that outdated seismic data will not help the US to develop into an energy powerhouse it’s destined to become. “Forty-year-old seismic data doesn’t help us,” he said.

Bishop also noted that the development of the nation’s energy resources will be necessary to forge ahead with a strong foreign policy. “For every 11 acres closed,” he said, “there is one open for energy development.”

McCrory noted that the number of lease sales being offered for is problematic to resource development offshore his state and others. “It makes no sense for just one lease sale off the Atlantic Coast,” he said.

Other issues

The No. 1 goal for North Carolina moving ahead with offshore energy development—following seismic data acquisition, which is slated to begin in the fall—would be to hammer out a revenue-sharing plan with the federal government, McCrory said. “We have to have the federal government agree to revenue sharing” with North Carolina, he said, just like what is done for states along the Gulf Coast. Funds collected would be used by the state to improve infrastructure projects such as highways and dredging.

State and federal governments also will have to reexamine the Endangered Species Act in the near future, Bishop said. “We need to let states lead the way on this,” he said.

Taking questions from OTC attendees, McCrory noted that the oil and gas industry has to do a better job overall of communicating with the public. “We’ve got to improve the acumen of where energy comes from to energy consumers,” he said. Based on the commercials shown on television, he said, one would assume that consumers think most energy comes from renewables like wind and solar. “They also assume that energy is only needed for their residences,” he said.

Developing resources, offshore or otherwise, will have to be accomplished hand-in-hand with an environmental focus, the panelists agreed.

McCrory said a good course of action for an environmentally balanced development project would be to show a picture of what things would look like in 25 years, and also show what things might look like in that same amount of time without development.

Contact Steven Poruban at stevenp@ogjonline.com.

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