EETT - Offshore Drilling (1493 words)

Offshore drilling is a process carried out to explore and extract petroleum found in rocks below the
seabed. There are large oil and gas reservoirs found under the sea offshore from Louisiana, Texas,
California and Alaska. Due to environmental concerns, offshore drilling has been restricted in several of
these areas. It was a major issue in the 2008 presidential election. The debate over whether or not the US
should expand offshore drilling is heated and controversial, and public opinion almost evenly divided.
This paper explores the issue and provides arguments for both sides.

There are several economic benefits to offshore drilling. As stated by the Palmetto Policy Forum’s 20141
report, allowing offshore oil and gas drilling rig systems in Atlantic waters from Delaware to Georgia
would generate more than 10 Billion dollars for these states’ economies, excluding the several billion
dollars in added tax revenues. It would also lead to creation of job opportunities for workers of all skill
levels- after all, you need blue collar workers for the physical labor involved in handling the machines as
well as engineers, managers and supervisors for the entire setup. Even after accounting for the uncertainty
of unseen resources, the possibility of carbon emissions and accidents, the authors of the report calculated
the ratio of benefits and costs to be 2:1.

Now, of course, this study only focused on a few states bordering the atlantic. It wouldn’t be unreasonable
to suppose that we would find similar results in studies done in other states such as Louisiana, Alaska,
Texas and California. So, if we were to extrapolate the results of the aforementioned study to the entire
nation, we are looking at increase in revenues in the order of hundred billion dollars overall. Furthermore,
according to studies from Quest Offshore Resources2, opening the presently off-limit areas to offshore
drilling could create nearly 840,000 new American jobs and grow the economy by up to $70.2 billion per
year between 2017 and 2035.

Some may argue that with offshore drilling, there is high risk of oil spills which are a big threat to marine
life and coastal communities. However, modern technologies have greatly reduced the risk of oil spills
and other hazards to the environment. It is worth noting that since offshore production began in California
in 1950s, far more wildlife has been killed by California’s offshore natural oil seeps than by all of
California’s offshore oil production spills combined.

Apart from the obvious benefits to the national economy as mentioned above, offshore drilling can, in
fact, help the environment as well. One significant positive externality of offshore drilling is that it has
been found to reduce the natural seepage of oil. This occurs due to decreases in subsea oil-reservoir
pressure, which is a consequence of offshore drilling. Natural hydrocarbon seeps have been shown to
have a greater negative impact on marine environment than oil and gas exploration and production.
Natural oil seeps are a much greater cause of concern than most opponents of offshore drilling
acknowledge. They generally result from pressurized hydrocarbon reservoirs that force oil and gas up
through fissures to the earth’s surface either on land or the seabed floor where the hydrocarbons escape in
the form of oil, methane and natural gas. As per the National Academy of Sciences3, 63 percent of

1
‘SC’s Offshore Opportunity Economic & Environmental Impacts of Atlantic Energy Exploration’
http://media.wix.com/ugd/690417_8e89864d046f4d0fa4902e9a4c693f05.pdf
2
http://questoffshore.com/wp-content/uploads/PR%2011.19.14.pdf , http://www.api.org/news-policy-and-
issues/news/2014/11/19/studies-highlight-job-growth-and-govt-re

3
([3]National Academy of Sciences, "Oil in the Sea III," The National Academies, 2002, at
http://books.nap.edu/html/oil_in_the_sea/reportbrief.pdf (October 15, 2009).)
hydrocarbon pollution in the US waters stems from natural seeps while only 1 percent is due to offshore
drilling and extraction. According to the 4NRC, “It is estimated that oil seepage for a single 6-mile stretch,
including Coal Oil Point, averages 10,000 gallons of oil each day (240 barrels). Every 12 months about
86,000 barrels of oil seep into the ocean—the equivalent of the quantity of oil spilled in the 1969 Santa
Barbara oil spill. Since 1970, the quantity of oil that naturally seeps into the Santa Barbara Channel
equals ~ 31 “1969” Santa Barbara oil spills.” It doesn’t take a statistician to conclude than any activity
which reduces natural oil seeps, so long as it doesn’t have any other significant negative impacts, should
be encouraged; and this is precisely the case with offshore drilling.

While the benefits may be several, one simply cannot ignore the threats and potential costs posed by
offshore drilling. Though the improvement of technology may have led to decreased probability of oil
spills as a result of offshore drilling, the costs are simply too high even if there is a low chance of
occurrence. Oil spills impose a serious toll on coastal communities, costing tens of billions of dollars in
economic value. What makes it worse is that spills have a lasting impact. Current cleanup methods can
only remove small fractions of the oil spilled. Studies have shown that even tiny amounts of oil- as little
has one part per billion- can harm pink salmon and cause their eggs to fail. The total direct and indirect
monetary cost of oil spilling on coastal communities alone comes out to be approximately $35 billion on
commercial fishing and $60 billion (indirect) on ocean and coastal tourism. As an example, the damage
and clean up costs following the Exxon Valdez spill5 were so extensive that Exxon was ordered to pay
more than $5 billion in reparation for damages. They ultimately paid out more than one billion dollars to
the federal and state governments for damages and clean-up costs- and still owes fishermen, business
owners and others a billion dollars.

Aside from spills, routine operations involved in offshore drilling produce many toxic wastes which are
sources of pollution. According to a report6 by the NRDC (Natural Resources Defense Council), “each
drill well generates tens of thousands of gallons of wasted drilling muds and cuttings. Drilling muds
contain toxic metals such as mercury, lead, and cadmium that may bioaccumulate and biomagnify in
marine organisms, including in our seafood supply.” Water also comes up along with oil and gas during
extraction from a well. This water is referred to as ‘produced water’ and contains its own toxic brew of
benzene, arsenic, lead, toluene, and varying amounts of radioactive pollutants. Each oil well discharges
hundreds of thousands of gallons of this produced water daily. This leads to contamination of local
waters. A typical oil and gas exploration well expels nearly 50 tons of nitrogen oxides, 13 tons of carbon
monoxide, 6 tons of sulfur oxides, and 5 tons of volatile organic chemicals.

Another argument against offshore drilling has nothing to do with the environment, but rather the security
of the nation. The US military uses the eastern Gulf as a training ground which is U.S. military’s largest
training facility in the world. The federal government has prevented drilling in the area for several
decades, mostly due to military needs. The training of the military necessitates the ban on offshore
drilling, at least in the eastern Gulf.

Drilling exploration activities also harm marine life. Usually, the first step in drilling exploration is
conducting seismic surveys to estimate the size of the reserve. To carry out these surveys, ships tow
multiple airgun rays that emit thousands of high-decibel explosive impulses to map the seafloor. The
radiations emitted have been found to damage or kill fish eggs and larvae and to impair the hearing and
health of fish, making them vulnerable to predators and leaving them unable to locate prey or mates or
communicate with each other. This leads to disruption and displacement of important migratory patterns,
and pushes marine life away from suitable habitats.

4
NRC Report: https://www.nap.edu/read/10388/chapter/1
5
https://en.wikipedia.org/wiki/Exxon_Valdez_oil_spill
6
NRDC Report: https://www.nrdc.org/sites/default/files/offshore.pdf
Furthermore, according to the Department of Energy’s Energy Information Administration7, drilling in
areas previously closed to oil and gas drilling by Presidential and Congressional actions “would not have
a significant impact on domestic crude oil and natural gas production ... before 2030 [the end of the
analysis period].” Even then, “Because oil prices are determined on the international market … any
impact on average wellhead prices is expected to be insignificant.”

In summary, the severe adverse effects on Marine life, water pollution, and damage to coastal
communities are all major reasons why expanding offshore drilling may not be a great idea. On the other
hand, the several economic benefits including increase in revenue for several states, increase in both
white collar and blue collar jobs as well as the likelihood of a reduction in natural seeps makes a
compelling case in favor of offshore drilling. Since there are strong arguments on both sides, a
reconciliation or compromise becomes a challenging goal. Of course, it is more nuanced than I have
assumed for the sake of argument- there may be more than 2 sides: an effective compromise could
involve expanding offshore drilling in certain states but not in others. We would also have to consider
impacts at a very local level as well as those at a state, national and global level. The most optimal
solution is likely not black or white, involving neither a complete ban on offshore drilling everywhere nor
opening up all of the waters for offshore drilling.

7
[Energy Information Administration. 2007. Annual Energy Outlook 2007: Impacts of Increased Access to Oil and
Natural Gas Resources in the Lower 48 Federal Outer Continental Shelf. Accessed 8 Jun. 2009.
http://www.eia.doe.gov/oiaf/aeo/otheranalysis/ongr.html.]