News & Observer | newsobserver.com | Offshore drilling could touch N.C.

Published: Jun 19, 2008 12:30 AM
Modified: Jun 19, 2008 06:12 AM

Offshore drilling could touch N.C.

Some in state pan President Bush's call to tap offshore oil supplies; others say it's time to do it

 

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MORE OIL, MORE REFINERIES

President Bush called on Congress on Wednesday to clear the way for offshore oil drilling, saying that it could match current production for 10 years and that new methods allow drilling that protects habitats against spills.

Bush also called for:

* Exploration of Alaska's Arctic National Wildlife Refuge.

* A new push for refineries (he blamed "lawsuits and red tape" for the fact that no new refineries have been built in 30 years).

* Mining of shale rock for oil.

LOS ANGELES TIMES

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An old debate over offshore drilling for oil and gas, once and possibly again focused on the North Carolina coast, picked up speed Wednesday with President Bush's call for expanded exploration.

Fueled by $4-a-gallon gas, the growing clamor for new energy sources still faces opponents who envision oil spills, blighted ocean views and shorelines industrialized by pipelines and refineries.

Bush, in reversing his long-held position, talked tough: "Our nation must produce more oil, and we must start now."

He said that expanding drilling offshore could produce enough oil to "match America's current oil production for 10 years."

Experts agree that any benefits would take as long as a decade. And the Democratic-controlled Congress, which for years has refused to lift a ban on most offshore drilling, is unlikely to support the president.

Rep. Sue Myrick, a Charlotte Republican, ripped Bush for not repealing an executive order -- initially signed by the first President Bush -- that prohibits drilling until 2012. Myrick wants states to be able to choose whether to allow drilling off their shores and to share any profits produced by it.

"It really bothers me that if he's going to get in the debate he should step up to the plate and literally do what he can do, which is lift the executive ban," she said.

Molly Diggins, state director of the Sierra Club, dismissed the renewed call for offshore exploration as "a tired refrain that benefits the energy industry and would be of very little help to consumers, particularly in the short run."

Mobil's plan in 1990 to drill in a biologically rich area about 45 miles off Cape Hatteras called the Point led to years of controversy. The state fought back, ruling that drilling is not consistent with state laws regulating the coast.

Mobil and Marathon sued the federal government, claiming federal legislation protecting the Outer Banks from exploration violated their leases. The U.S. Supreme Court ordered the government to repay the companies $158 million.

"There's still the same concerns that came up originally," said Steve Ross, a UNC-Wilmington fish scientist who explored the area targeted for exploration.

Rich with sea creatures

At the Point, the warm Gulf Stream meets the cold Labrador Current. Rich in nutrients, the area is dense with sea life -- birds, turtles, dolphins, tuna -- over a bottom of deep canyons. It has been named an area of essential fish habitat by the South Atlantic Fishery Management Council.

The Point would also pose significant challenges for drillers: water 3,000 feet deep, strong currents and stormy weather.

"To me, the issue never was exploratory drilling because that has relatively little impact," Ross said. "The problem is what comes after that, and people weren't really willing to think that far ahead."

He referred to the pipelines, refineries and other infrastructure needed to get the oil or gas to shore, store it and distribute it.

Conoco gave up the last of 21 leases for exploration in the area in 2000. Conoco, Chevron, Mobil and Marathon had leases in the area but had never explored.

State policy now calls for assessments to ensure that energy exploration would "avoid significant adverse impact" on coastal resources.

The energy industry says it's past time for finding more supplies.

With rising demand for natural gas closely matching available supplies, disruptions such as 2005's Hurricane Katrina make prices shoot up, said David Trusty of Charlotte's Piedmont Natural Gas Co. Piedmont serves more than 1 million customers in the Carolinas and Tennessee.

Natural gas, which sold at wholesale for an average of $2.34 per thousand cubic feet in 1999, went for $13.26 Wednesday. Retail gasoline prices rose in that period from $1.15 to $4.02 a gallon.

"Here is a source of energy that's domestically, readily available, that doesn't take new technology to bring to market, and you don't have access to it," Trusty said. "Energy policy needs to be a holistic approach. Access to supply is a key tenet of that."

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