To Drill or Not to Drill: issue for States
By Daniel C. Vock, Staff Writer
Nineteen coastal states face tough decisions involving energy and the environment -whether or not to allow offshore drilling for oil and natural gas.
Why? Because a 26-year federal ban on most offshore drilling was allowed to expire last month. So states along the Atlantic and Pacific coasts will get a bigger say on new drilling projects.
With gasoline prices topping $4 a gallon this summer, the prospect of finding new sources of oil is politically popular. States must decide whether economic and environmental risks outweigh the potential benefits.
Many people dread a repeat of a 1969 accident on an oil rig near Santa Barbara, Calif., that coated 35 miles of some of the nation's most scenic shoreline in oil. To this day, Californians are more wary of offshore drilling than the rest of the country . Gov. Arnold Schwarzenegger (R) opposes more drilling.
Schwarzenegger has bipartisan company. Massachusetts Gov. Deval Patrick (D) worries about the effect drilling would have on his state's fishing industry. South Carolina Gov. Mark Sanford (R) is against offshore drilling because of its potential impact on tourist attractions such as Myrtle Beach.
But drilling has been a boon for six states, primarily on the Gulf Coast, where offshore drilling has been allowed to proceed even after the 1982 federal ban.
The United States has more than 12,000 miles of coastline, but nearly 95 percent of the oil produced in the federal coastal waters comes from wells in the Gulf of Mexico along the 860-mile stretch between the southern tip of Mexico and the Alabama-Florida border.
The oil and gas industry provides more than 430,000 jobs for the region's residents. Unemployment is so low in some coastal Louisiana parishes that oil companies have to recruit people farther inland.
There's also a revenue benefit. States can collect royalties for drilling in their own waters, but activity there is largely constrained to Alaska. States receive a share of the royalties the oil and gas companies pay the federal government for wells in the three-mile zone just outside state-controlled waters. That amounted to an additional $65.6 million for Alabama, Alaska, California, Florida, Louisiana, Mississippi and Texas in federal fiscal year 2007.
After Hurricane Katrina, Congress expanded offshore drilling to a limited area off the western coast of Florida. As part of that deal, it directed an additional $250 million a year through 2010 to help fill the state coffers of Alabama, Alaska, California, Louisiana, Mississippi and Texas. Louisiana is expected to get more than half the money, and its voters decided to spend all of it on coastal wetland restoration.
Proponents say the Gulf Coast's experience shows offshore oil exploration is environmentally safe. When hurricanes Katrina and Rita struck the open-sea drilling platforms in 2005, no major spills resulted.
Despite the lifting of the federal embargo, states don't have the last word on whether to allow offshore drilling. But they do have a lot of power.
They control the coastal waters out to three miles beyond their shores (in some states, it's more). Beyond that, they can use state and federal laws governing the use of their coastlines to slow down or block new drilling.
The question of whether or not to drill will take on added urgency for states once a new president takes office in January. Both Republican presidential candidate John McCain and Democratic presidential candidate Barack Obama agree in principle on additional exploration and more power for states.
Any new oil and gas production in the Atlantic and Pacific oceans would be a long way off, however.
The soonest that leases in newly opened territories could be offered is 2011, but experts say it could be 2015 or later before oil and gas companies survey the new plots and begin drilling.