Speaker discusses offshore drilling
By Steve Herring
Published in News on November 12, 2014 1:46 PM
News-Argus/STEVE HERRING
David McGowan, executive director of the N.C. Petroleum Council, talks to Goldsboro Rotarians Tuesday about what the potential economic benefit of offshore drilling would mean for the state.
Untapped oil and natural gas deposits off the mid-Atlantic Coast would produce "unfathomable" economic impact numbers that would have a "profound impact" on the state, David McGowan, the executive director of the North Carolina Petroleum Council, told Goldsboro Rotarians on Tuesday.
It is projected that tapping those resources would have a $4 billion annual impact, equal to almost a quarter of the state's budget, create 55,000 jobs by 2035, generate $26 billion in capital investments and $885 million annually in revenue sharing revenues, he said.
But before any of that can happen, the state has to be included in the next round of seismic mapping.
If that happens, it could still be at least 10 years before production could start, he said. If the state does not make the current round of mapping, it would be another five years before the next round, he said.
Seismic mapping along the mid-Atlantic Coast will help determine where the deposits are and provide an idea of its size and potential volume.
It has been 30 years since the last mapping indicated there could be the equivalent of up to 3.3 billion barrels of oil and 31.3 trillion cubic feet of natural gas off the coast, he said.
McGowan said new mapping, utilizing better technology and equipment, could show that the totals are considerably more than what the last mapping had suggested.
Rotarians wanted to know about safety risks.
They questioned whether the oil and natural gas would ever reach North Carolina's shores because of the state's lack of deep-water ports that cannot handle the large oil supertankers.
They suggested those products instead would end up at ports at Hampton Roads, Va., Charleston, S.C., or Savannah, Ga. If that is the case, then the state would not benefit as much, they said.
McGowan said the state would still reap benefits regardless of what port is used.
McGowan agreed that the state lacks deep-water ports and that the ships would more likely end up at Charleston or Savannah. He said it is his understanding that the Department of Defense does not want more traffic at an already congested Hampton Roads port.
Even if the gas does not come ashore at North Carolina, the state will still realize that $4 billion annual impact because of the ancillary development that will be spurred by the drilling, McGowan said.
Those companies would want to be close to the drilling and that would be eastern North Carolina, he said.
He admitted there would be risks, but that the industry and federal government are much better prepared than they were during the Gulf of Mexico spill in 2010.
Also, unlike in the Gulf off of Mobile, Ala., where the oil rigs are only a mile or so offshore, the rigs would be up to 60 miles or more off North Carolina's shore and would not be visible from land, he said.
McGowan was asked what would be done to prevent pollution or a blowout.
"Nothing can ever be 100 percent assured," McGowan said. "There is obviously risk involved in everything that we do in our daily lives, and there certainly is risk in industry development, whether it is oil, natural gas or another type of industry."
There were two "main takeaways" from the disastrous event in the Gulf of Mexico, he said.
The first is the industry immediately formed what is called the Center for Offshore Safety to police offshore drilling, he said. It will perform internal audits on company operations of offshore operations to prevent that type of event from happening again, he said.
"They have developed standards," he said. "They have developed new equipment. They have developed new response technologies. They have developed new response procedures. No. 1, to prevent anything like that from happening, and God forbid that it does, to make sure they respond in a more timely fashion and get it taken care of quicker.
"The second thing is the number of federal regulations that have increased since 2010."
Hundreds of new regulations have been implemented to govern offshore development, McGowan said.
That includes providing different types of blowout preventers and different procedures for the use of those devices.
There are also new regulations on the response and cleanup side of things, he said.
All things considered, the industry has a good track record, McGowan said. But even then that does not minimize the impact that the Gulf spill had, he said.