Offshore Energy the ‘Golden Egg’ for Coastal States

Mark Green
Posted March 23, 2018

Safely tapping America’s offshore natural gas and oil reserves could provide billions of dollars for the economies of coastal states – a big reason why the needs and voices across entire states, not just their coastal areas, must be considered in the offshore energy conversation.

For example, federal revenue sharing could help transform state economies by sending billions in royalties, rentals and fees to state coffers. By putting revenue-sharing programs in place – like those already working for the states of Alabama, Louisiana, Mississippi and Texas – North and South Carolina, Virginia, Florida, Georgia and other states could benefit from offshore energy development. And that’s in addition to industry spending and jobs created that would help boost those state economies. South Carolina state Sen. Stephen Goldfinch during U.S. House testimony last fall:

“Natural gas and oil exploration in the Atlantic could be an opportunity for our state to see much-needed additional economic improvements, investment, and job creation. … [I]t is imperative that you remember places like Andrews and Conway, and Georgetown, South Carolina, where the ‘golden egg’ of tourism hasn’t helped eradicate poverty. For those who live in Andrews and Conway and Georgetown, oil and gas would be their ‘golden egg,’ bringing non-seasonal, high-paying jobs … and hope for a prosperous economic future for the generations to come.”

Here’s what that “golden egg” could look like for a sampling of the states, according to economic projections in four regional studies for the Atlantic, Pacific, Eastern Gulf and Alaska outer continental shelf (OCS), recently released by API:

North Carolina

• $4.4 billion in federal revenue sharing over a 20-year forecast period, reaching $495 million per year at the end of the study period.
• $36.1 billion in industry spending over the forecast, reaching $3.5 billion per year by the end of the forecast.
• $41.8 billion added to state GDP over the forecast.
• 55,760 jobs gained by the end of the forecast.

Florida (Eastern Gulf Access)

• $11.7 billion in federal revenue sharing over the forecast, reaching $1.3 billion per year by the end of the forecast.
• $21.7 billion in industry spending over the forecast, reaching $2.6 billion per year by the end of the forecast.
• $40.4 billion added to state GDP over the forecast.
• 56,044 jobs gained by the end of the forecast.

South Carolina

• $3.8 billion in federal revenue sharing over the forecast, reaching $445 million per year at the end of the forecast.
• $20.8 billion in industry spending over the forecast, reaching nearly $2.1 billion by the end of the forecast.
• $24.1 billion added to state GDP over the forecast.
• 33,604 jobs gained by the end of the forecast.

Virginia

• $2.1 billion in federal revenue sharing over the forecast, reaching $236 million per year at the end of the forecast.
• $19 billion in industry spending over the forecast, reaching $1.8 billion by the end of the forecast.
• $22.3 billion added to state GDP over the forecast.
• 24,664 jobs gained by the end of the forecast.

Georgia

• $544 million in federal revenue sharing over a 20-year forecast period, reaching $58 million per year at the end of the study period.
• $2.7 billion in industry spending over the forecast, reaching $272 million per year by the end of the forecast.
• $3.6 billion added to state GDP over the forecast.
• 4,218 jobs gained by the end of the forecast.

Numbers likes these illustrate big economic opportunity for the states above and others whose offshore areas could be included in a new federal offshore leasing plan now under development. Again, economic benefits of this size compel policymakers to consider the needs of entire states when discussing offshore development.

At last fall’s House hearing, former U.S. Sen. Mary Landrieu of Louisiana said natural gas and oil industry employment long has benefited her state:

“We have men and women graduating from high school that are going to work in the oilfield and they don’t make minimum wage. They can make $80, $90, $100,000 a year. And that means a lot to their families, and it sends a lot of kids to college from south Louisiana.”

Offshore energy would be privately financed – reflected in the industry spending numbers above. That’s spending throughout state economies by natural gas and oil companies and their employees. It’s a boost to economic growth for portions of states that haven’t seen much growth for years.

Offshore energy is compatible with other ocean uses, including the military. It is safer than it has ever been and is always improving, thanks to technology, industry standards, safety management systems and employee training. No human enterprise is without risk, but industry’s premium on technology and safety – to protect its workers and the environment – properly manages this risk while producing energy and national security benefits for today and decades into the future. Hunter Hopkins of the Georgia Petroleum Council:

“The Interior’s five-year offshore leasing plan will be the cornerstone for Georgia’s energy and economic future. Many of our communities could benefit greatly from offshore energy exploration and production, which can lead to jobs that pay well-above the state average and millions of dollars in state revenue that can help advance and update our public school systems and infrastructure.”

This is American energy that should be safely harnessed to benefit all Americans – in coastal states and all across the country.