Minds open to offshore drilling

Financial benefit divides opposition

KITTY HAWK -- Along North Carolina's coastline, a new tone is creeping into conversations about offshore drilling.

Where once there was nearly universal opposition to platforms in the ocean, some speak of them in a new way -- as a possibility, an inevitability, even a financial benefit to a region long fearful of the damage drilling could do to tourism and ecology.

That's because Congress is moving closer than ever toward permitting natural gas -- and oil, too, if it's found -- to be pulled from the Outer Continental Shelf. A bill passed the House a week ago; another is in the Senate.

The House measure would give some control to states and includes financial returns to states that allow drilling within 100 miles of shore. That incentive, for some, changes the argument.

"You have to participate to make sure you do get some money for it," said Mike Kelly, who owns three restaurants on the Outer Banks and sits on the region's Chamber of Commerce board. "They're going to do it anyway."

The drilling question is emotional on the barrier islands, where practically every business is connected to the tourism and fishing industries. Natural gas evaporates, but a major oil spill could devastate the environment. Even a small incident could significantly damage tourism.

Two decades ago, when oil companies sought drilling leases on the Outer Continental Shelf, locals came out strongly against them. The last of the companies abandoned their leases in 2000.

But as energy prices rise and talk of energy independence heats up, North Carolina's rock-solid opposition to drilling is beginning to show cracks. Consider:

* Republican members of the state's House delegation voted for a bill last week that would open the Atlantic to offshore drilling, albeit with state approval required for drilling within 100 miles.

*U.S. Sen. Richard Burr, who sits on the Senate Energy Committee, praised the bill. He said through a spokeswoman that it gives control to the states and makes permanent a ban within 50 miles of shore unless states say otherwise.

* Some local leaders along the coast are saying that if offshore drilling is a foregone conclusion, they want to be part of the discussion and collect any benefits.

Still, some local environmentalists and governments are as opposed as ever. The region's tourism director testified against the House bill in Washington last month. And every local government in the Outer Banks passed a resolution in the past six months against offshore drilling.

"I don't think it's worth the cost," said Nags Head Mayor Renee Cahoon. "I don't think localities will get enough out of it. Everybody in the state will be fighting for the money."

Control is the key

For many community leaders, what has changed is a compromise measure that gives states some control on drilling within 100 miles of their coastlines.

The bill allows states to receive some of the revenue the federal government gets from energy companies for leasing rights to tracts of ocean floor.

Some money would come as flat bonus payments for renting ocean space. More would come depending on how much natural gas or oil the companies are able to produce.

The cash would be split between the federal and state governments, which then would decide how to distribute the money.

It's unclear how much money is at stake, but North Carolina could see tens of millions of dollars a year, possibly much more.

U.S. Rep. Walter Jones, a Farmville Republican who represents the Outer Banks, said he voted for the House bill because it would protect the state's independence and offer some financial return.