Forces push for offshore oil and natural gas development at Myrtle Beach forum

sjones@thesunnews.comMay 1, 2013 

— Representatives for the oil and gas industries were in Myrtle Beach Wednesday to urge South Carolinians to pressure Congress to allow development of the state’s offshore resources.

The state needs to begin work now, representatives said, to gets its name among those that could have offshore leases available in the five-year period that begins in 2017.

“If you don’t move in the next three years,” said Scott Noble of Noble Royalties Inc., “you’ll miss out on where the money goes.”

And the money is considerable, speaker after speaker said during an energy forum at the Myrtle Beach Convention Center. Not only could the state reap $250 million in lease royalty payments, but thousands of jobs directly tied to the effort and thousands more created by the production will come with the development.

The royalty payments will require that Congress extend a rule giving Gulf Coast states a healthy portion of the royalties set by the federal government, but the S.C. delegation is already working to make that happen.

Hamilton Davis, energy director for the S.C. Coastal Conservation League who was not at the forum, said the state is being pulled into a national discussion that really has more to do with potential drilling in the eastern Gulf of Mexico and off the coast of California than it does with what may lie off South Carolina’s shore.

Davis said that Shell Oil did studies in the 1980s that found no oil deposits and some methane hydrates – basically natural gas encased in ice – that are difficult to extract.

If substantial oil deposits were found, then the state could be facing the need to allow construction of a refinery and pipelines to exploit it.

“That’s a real threat to tourism and our coastal economy,” he said.

But exploratory technology has advanced so much since the 80s that no one can say what lies offshore. said Randall Luthi of the National Ocean Industries Association.

“We don’t know,” he said. “You could have a bonanza off the state of South Carolina. You could have nothing.”

Former U.S. House Speaker Newt Gingrich said current estimates are that there is little oil off the state’s coast. But the story with natural gas is different.

Congressman Tom Rice, R-Myrtle Beach, citing figures from ICF International, said the current estimate for natural gas is 3.5 trillion cubic feet that could be tapped from the state’s offshore waters.

Charlotte Randolph, president of Lafourche Parish in Louisiana, said that despite the BP disaster that spilled millions of barrels of crude oil along its coast as well as in Alabama and Florida, that Gulf Coast oil and natural gas is the lifeblood of her community. It provides good-paying jobs to scores of residents, ancillary jobs to scores more, contributes donations to things such as the parish’s children’s museum and through royalties 10 percent of the parish budget.

She said that when residents have good-paying jobs, they don’t mind paying taxes that enhance the entire community.

“What BP did was wrong,” she said.

But she added that the overall safety record of the companies that drill in the Gulf is exemplary. And, she said, the parish’s unemployment rate is just 3.8 percent.

It is statistics like those that at least some local officials want to see in South Carolina.

“When we talk about energy production, then we’re talking jobs,” Rice said.

Davis of the Coastal Conservation League wrote in an op-ed piece last year that the state’s focus on oil and natural gas exploration draws attention away from onshore and offshore green energy such as wind and solar that could provide 20 percent of the state’s energy needs.

That, too, deserves vigorous development.

Jen Banks of the Southeastern Wind Coalition said at the forum that wind energy development would require facilities to manufacture the components for wind farms, which would provide jobs and a healthy boost to coastal economies.

But, argued Noble, wind energy comes with a 300 percent increase in the cost of electricity.

The time to act is now, said Tim Charters, staff chief of the U.S. House Natural Resources Committee.

“You have to push the bureaucracy,” he said, “say we want it, we need it, bring it to us.”

Contact STEVE JONES at 444-1765.

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