Nov/Dec 2006

Full of Energy

Virginia legislators take the lead as the national debate on offshore drilling and alternative fuel heats up

By Kip Tabb

The Atlantic Ocean has always been a bountiful sea, with all the stuff fishermen's dreams are made of swimming in its waters-citation-size rockfish, tuna, cobia, wahoo and more game and commercial fish than one could imagine.

The shoreline of Virginia is teeming with life. Its bays and estuaries are the spawning grounds and nesting sites of species that know no other place to reproduce their kind and find refuge from the winter winds and harsh conditions farther north.

And the riches of the sea are not limited to the waters. In the summer, the beaches seem to overflow with vacationers and residents alike who love the smell of saltwater, the feel of warm sand and the beauty of an endless horizon. That love of the ocean has created a multi-billion-dollar industry and created tens of thousands of jobs.

But the bounty of the waters holds more than game fish and tourist revenues, for beneath the waters of the Atlantic lies a potential treasure of such immense promise that it cannot be ignored. Increasingly, businesses and legislators are eyeing the Atlantic Outer Continental Shelf (OCS) as both an energy and financial resource of such immense proportion that the numbers become truly mind numbing.

According to the Minerals Management Service (MMS) of the U.S. Department of the Interior, there are some 33 billion cubic feet of natural gas and may be up to 3.5 million barrels of oil under the OCS. Virginia, with claim to about 11 percent of that area, could be looking at more than 10 billion dollars in revenue throughout the duration of a drilling project.

If, of course, anything is actually found in the Virginia OCS. And there is no guarantee that anything will be found. In fact, the likelihood is that there is nothing there that can be recovered.

It seems almost counterintuitive that at a time of diminishing resources and soaring prices, the exploration of reserves of that magnitude has not been undertaken. The question of whether or not we should extract energy from beneath the seas is one of philosophy, not economics. "Is this about profits for oil and gas companies?" asks Michael Town, director of the Virginia chapter of the Sierra Club. "Or is this about developing our energy resources?"

Both the Atlantic and Pacific shorelines have been off limits to all exploration and drilling for oil or natural gas since 1990 when Congress enacted a moratorium on all activities on both the eastern and western seaboard. At the time the ban was enacted, it was hailed as a watershed event in environmental protection, preserving our coastlines and seas from a potential source of pollution.

That vision of our shorelines as a treasure, both environmental and recreational, is at the heart of the moratorium, and that prohibition-in force until 2012-has survived three presidents, dramatic shifts in the nation's body politic and innumerable legislative challenges.

The ban on exploration and drilling off the OCS may survive this Congress (although that is questionable), but it is very doubtful it will survive much longer. Increasingly, the potential gas and oil reserves beneath the sea are being touted as a part of the answer to our nation's energy woes. "It's the solution to a very significant problem in this country," says Congresswoman Thelma Drake, the House of Representative delegate for Virginia Beach and parts of Norfolk, Hampton and the Eastern Shore. "We are the only developed nation that has shut down these resources. Why are we letting other nations take this production that we could take just as well?"

But is this a solution? What are the implications to increasing domestic production of gas and oil? Is extracting energy from the OCS going to affect energy prices? Are there alternatives, and are they being explored?

In the short term, there is a consensus that there is little or nothing that can be done to influence the price of a gallon of gas at the pump. In fact, even if energy reserves were identified tomorrow, the permitting process was expedited and gas or oil were being extracted within three or four years, it is very doubtful that there would be any influence on the price of fuel. Fuel costs are determined by international markets and commodity prices, not domestic production.

However, increasing domestic production of energy does decrease reliance on foreign producers. Increasingly, the debate about energy is being argued in terms of security, not cost. "America can no longer be chained to one energy source, predominately located in hostile, unstable regions literally thousands of miles away," Sen. and former Virginia Gov. George Allen said in a June speech to the Edison Electric Institute. "We need to strengthen our energy security through energy diversity."

It is that diversity that has become the heart of the energy debate, one that is a complex interweaving of science, philosophy and politics and that is creating a national energy policy. And without fanfare, and perhaps with little public notice, the state of Virginia has moved into a leadership position on this issue.

For the rest of this story, see the Nov/Dec issue of Hampton Roads Magazine, currently available on newsstands.