Oil, Natural Gas and Wind: Not an Either – Or, but A Win-Win for the Environment and Economy

On July 21, Politico ran a story entitled “Greens gird to oppose opening Atlantic to oil drilling,” noting that the environmental community plans to mobilize all its resources in an effort to block the process by which the Interior Department determines where to allow leasing of offshore oil and natural gas tracts between 2017 and 2022. In the words of Yogi Berra, it’s deja vu all over again.

Whenever the policy question arises of developing the domestic energy resources of the nation’s Outer Continental Shelf (OCS), the environmental community pulls out hysteria-inducing arguments about how this cannot be allowed. But, a quick look at the map shows that it is being embraced elsewhere. Virtually every nation abutting the Atlantic Ocean in this hemisphere is benefitting from offshore energy: Canada, Brazil, Mexico, Trinidad and Tobago, Venezuela, Colombia, and even Cuba. The United States stands virtually alone in ignoring the vast resources beneath the sea floor.

These intentional blinders to our domestic resources are hardly limited to offshore oil and natural gas, however. Just look at the 12 year plus permitting saga that has delayed construction of the Cape Wind project offshore Massachusetts. When it comes to offshore energy, environmental organizations have gone beyond NIMBY: Not in My Backyard, to BANANA: Build Absolutely Nothing Anywhere Near Anything – even an offshore wind farm.

The United States would benefit more by charting a sound and comprehensive policy that avoids such stark black-and-white and exclusive thinking. Considering the current and future energy needs of the United States and the world, aren’t we better off with a more positive proactive and inclusive view?  Why not at least explore the potential of all of our offshore energy resources so that we can make informed decisions as to whether we should actually develop them or not?

Consider the opportunity presented by the vast wind resources of the Atlantic coast. A recent report by the National Wildlife Federation notes that Europe, which has been actively promoting offshore wind development, has seen the creation of 58,000 new jobs. With a much longer coastline and higher rates of energy consumption, the United States could see job creation results that are larger by orders of magnitude, if only consensus and permitting pave the path forward. And the positive benefits transcend job creation, important though that is. There is vast renewable energy to be harnessed off our coasts. Meteorological studies have confirmed strong, consistent winds off of New England and New York that correspond to periods of greatest demand in those markets. Additionally, the federal government has already completed environmental reviews for over 1.5 million acres along the Atlantic coast, a solid first step in cultivating this nascent industry.

Renewable offshore energy can — and should — coexist with the exploration for and production of conventional offshore oil and natural gas. In a report released in December 2013, the National Ocean Industries Association and the American Petroleum Institute quantified the significant potential benefits to our economy that would stem from opening the Atlantic OCS to oil and natural gas exploration. Federal offshore lease sales would be expected to lead to high levels of offshore oil and natural gas activity. This activity would drive investment estimated at up to $195 billion cumulative between 2017 and 2035, directly benefitting economies of the United States and the Atlantic coast states. If seismic activity were to begin in 2017 and lease sales in 2018, first production could be expected as early as 2026. By 2035, offshore oil and natural gas development could produce an incremental 1.3 million barrels of oil equivalent per day, generate nearly 280,000 jobs, contribute up to $23.5 billion per year to the U.S. economy, and generate $51 billion in cumulative government revenue.  Combine those numbers with the estimated benefits of offshore wind production, and it is easy to see the United States as the potential world leader in energy production and energy related jobs and income.

Environmental concerns are absolutely valid, as is the need to ensure that energy exploration and production are conducted safely. But these challenges can be met.  Over the last four years, regulators and the industry together have enhanced spill prevention, containment and response, revised existing standards and regulations and created new ones, and worked hard to foster a strong industry safety culture.

In the coming months and years, as the 2017-2022 OCS Oil and Gas Leasing Program is developed, expect to hear loud choruses protesting offshore oil and natural gas. Whenever anyone rails loudly against the potential pitfalls, remember that there also exists tremendous potential. As a nation with an ever-growing demand for energy and a deep need for well-paying jobs and new streams of government revenue, we cannot afford to exclude the amazing potential offered by offshore energy exploration in the Atlantic.  The positive impacts on the economy, job market, energy supply, federal and state revenue, and greater energy independence and security are much too real to be ignored.

Wind, oil and natural gas, should not be evaluated as either/or propositions, but as the combined elements of a winning all-of-the-above energy recipe for a secure economic and energy future.


Randall Luthi is the President of the National Ocean Industries Association (NOIA) in Washington, DC.

Morning Consult