President Barack Obama’s recent move to allow seismic exploration of oil and gas reserves off the shores of Georgia and the Atlantic Coast has left many hopeful that the offshore drilling moratorium currently in place may soon be lifted. A new study by University of Wyoming energy economist Dr. Tim Considine indicates the degree to which such a move would benefit Georgians and our Mid-Atlantic counterparts.
The study — “Economic and Environmental Impacts of Oil and Gas Development Offshore the Delmarva, Carolinas and Georgia” — was jointly released by the Georgia Public Policy Foundation and five other Mid-Atlantic think tanks. It paints a promising picture of economic development, job creation and increased tax revenues from oil and gas development. Savannah and Brunswick are among the port cities that stand to reap the benefits from corresponding capital-expenditure upgrades.
Unfortunately, there is no end in sight to the moratorium, in place since the early 1980s and maintained by the Bureau of Energy and Ocean Management. It remains despite vast technological advances over the past three decades in prospecting and mapping that have made extraction safer and more efficient.
In 2010, Obama recognized the potential benefits and moved to lift the moratorium. But in the middle of this process, the Deepwater Horizon spill occurred in the Gulf of Mexico, leading him to backtrack, cancel planned lease sales and extend the moratorium through 2017.
The spill was a reminder that offshore drilling is not 100 percent safe. No industrial process is. It’s important, however, to put such accidents in context: They are the exception, not the rule, no matter what environmental activists would lead Americans to believe.
Without a doubt, environmental considerations must be factored into any analysis of the impacts of offshore drilling. Considine’s study does just this. Even when accounting for the rare spill and pricing carbon at a generous rate, any environmental impact of offshore oil and gas development pales in comparison to the corresponding economic benefits.
The economic benefits to the state and the region are immense. Considine projects that development would increase Georgia’s gross state product by up to $281 million by 2035 under the most likely oil and gas production scenario. Corresponding job gains reach 3,356, including hundreds on the Savannah docks and in industries not directly related to the oil and gas industry.
Georgia’s treasury would benefit both from increased oil and gas lease royalties and increased state and local taxes. The report puts these benefits at $116 million and $11 million respectively by 2035.
For the Mid-Atlantic region as a whole, oil and gas development increases cumulative GSP by $6.9 billion by 2035 and increases jobs by 88,000 under the most likely production scenario. Corresponding environmental impacts are $1.5 billion, or less than one-quarter of the economic benefits.
Considine’s study demonstrates how opening up the Atlantic Coast to offshore drilling could be one of the most beneficial policy decisions currently on the table for Georgians and our Mid-Atlantic friends. Aside from the economic positives, consider what Considine does not even discuss in his study: the national security advantages in this next step toward energy security for Americans. Clearly, it’s time to lift this moratorium and let the benefits flow.