By Mark Greene
According to a recent study, safely tapping Virginia’s offshore natural gas and oil reserves could provide nearly $1.8 billion of private investment annually in the Commonwealth. While many are quick to judge this initiative, all of the facts should first be considered.
For example, federal revenue sharing could help transform the state economy by sending billions in royalties, rentals and fees to our state coffers. By putting revenue-sharing programs in place -– like those already working for the states of Alabama, Louisiana, Mississippi and Texas -–Virginia could benefit from offshore energy development to the tune of $235 million per year, according to the study. And that’s in addition to industry spending and high-paying jobs created that would help boost our economy.
“So, what’s trying to stop a reasonable exploration of what job creating resources might be available off our coast?,” asks former delegate Chris Saxman in a Roanoke Times editorial. “Fear. Fear accelerates order to disorder and hinders economic growth that will pay for the promises we have made.” He goes on: “Done properly, offshore exploration can create thousands of jobs that pay an average over $100,000 a year while providing tax revenue to also pay our hard working public employees like teachers, police, fire, and rescue personnel or we can dedicate that revenue to fixing interstates like I-81.”
To elaborate on Saxman’s point about the kinds of economic benefits offshore access could bring – here’s the picture of the Virginia projections if we were to develop oil and natural gas off of our coast, recently released by API:
- $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.
Numbers likes these illustrate big economic opportunity for the whole state if we are included in a new federal offshore leasing plan now under development. Despite any kneejerk reactions that may have taken place initially, economic benefits of this size should compel policymakers to consider the needs of entire states when discussing offshore development.
At a House hearing last fall, 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,” Landrieu said. ”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 our state, like Southwest Virginia, 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.
“Interior’s offshore proposal is a critical first step to advancing a strong energy future for Virginia,” said Miles Morin of the Virginia Petroleum Council. “Not only can offshore energy exploration and development help provide reliable and affordable energy for Virginia’s consumers, but it can also be the cornerstone for economic growth and investments in our state.”
This is American energy that should be safely harnessed to benefit all Virginians – both on the coast and all across the Commonwealth.
Mark Green is editor of Energy Tomorrow, a publication of the American Petroleum Institute.