The People of America's Oil and Natural Gas Indusry

Energy Tomorrow Radio: Episode 81 - Offshore Drilling in Virginia

Jane Van Ryan

Jane Van Ryan
Posted May 12, 2009

In this episode of Energy Tomorrow Radio, I speak with David Schnare from the Center for Environmental Stewardship at the Thomas Jefferson Institute for Public Policy about plans to drill for oil and natural gas off Virginia's coast. Although no one can say how much oil might exist there, the estimates are quite impressive. David provides a great overview of the potential benefits.

You can listen to the podcast in its entirety by using the player below and reading highlights of the episode in the Show Notes.

Show Notes:

00:57 Jane welcomes David to EnergyTomorrow radio and asks him to tell the listeners about the Center for Environmental Stewardship at the Thomas Jefferson Institute for Public Policy.

01:00 The Institute's mission is to provide Virginia's political, business, academic and community leadership with thoughtful and realistic analysis of public policy issues that affect Virginia. The policies are based on the Institute's belief in free markets, limited government and individual responsibility. The Center for Environmental Stewardship examines environmental and resource issues from the perspective of the steward, embracing free market environmentalism.

02:05 The federal government's initial estimates of how much oil is off Virginia's coast have been dramatically conservative. Currently the federal government estimates there are approximately 130 million barrels of oil off Virginia's coast. The federal estimate for natural gas is approximately 1.14 trillion cubic feet; enough to support the needs of Virginians for approximately 4,000 years and the entire country for 55 years. The federal government previously underestimated the amount of resources available in other offshore areas, including Alaska's Prudhoe Bay, the Bakken Formation and the Gulf of Mexico. Federal estimates of how much oil is off Virginia's coast are low and there could be a great deal more than the amount they propose.

4:20 Nobody really knows how much oil and natural gas is out there, but comparisons can provide the best insight. By taking Nova Scotia's original estimates as compared to their actual produced estimates and applying that multiplier to the federal government's estimate for Virginia, the estimate becomes 900 billion barrels of oil. This is an extremely high estimate, but even if the actual amount was 1/20th that amount, it is well in excess of the federal government's current estimate. Until we look, then we won't know.

07:11 Looking at how oil fields are operated, they drill and take what is available. As prices go up, they take more. As technology develops, they get more. The reality is that natural gas will be the best resource to look for off Virginia's coast because where you find natural gas, you find oil.

07:57 The United States imports about 60 percent or 11 million barrels of its oil every day, of which 600,000 barrels come from OPEC. The Gulf Coast has 45 billion barrels and produces a quarter of our total domestic output. If the nation produced 1/20th of the high end estimate on the East Coast, it would produce an amount equal to what is produced in the Gulf Coast. That is 1.2 million barrels a day, twice the amount of oil we import every day from OPEC nations. Drilling off Virginia's coast has the potential to erase the need to import from OPEC.

09:07 If Virginia were able to produce the same amount of natural gas as Texas, its economy could grow by almost 10 percent, raising $35 billion in revenue per year. Virginia has wonderful resources, but this helps the entire country in creating new jobs and more wealth. Drilling off the cost of Virginia would create new jobs. We would be bringing jobs back to the United States from OPEC nations.

10:38 The Center for Environmental Stewardship is very concerned about environmental protection. The citizens of Santa Barbara, home of one of the worst oil spills ever, now believe the technology is safe enough to drill off the coast of their own beaches. Oil and gas production is now viewed as being safe by a majority of people, including Virginians. Environmental impacts of offshore drilling have been cited as negligible by an independent scientific review in Australia. The U.S. National Academy of Science has produced similar findings.

12:22 The lease sale proposed for the Virginia shore includes a request for comments on environmental risks. The reality is no one has seen the oil spills that used to happen because the technology has improved and the commitment to environmental quality has grown.

12:57 There is not a lot of reason to believe that offshore drilling will affect Virginia's tourism industry; it hasn't affected Texas or Louisiana. The oil rigs would not be seen from the beach.

14:00 Surveys show that voters believe offshore development is safe and should be done. In March 2009, 72 percent of North Carolina voters supported offshore development. The Thomas Jefferson Institute for Public Policy has found extremely strong support within Virginia. It should come as no surprise that Americans want to drill here and want to drill now. The majority of people that support offshore development don't ask "should we do it" but "why haven't we started yet?"