More Jobs, Money, and Tax Benefits on the Horizonor Loss of Tourism, Fisheries, and Ecosystem Services

(Truths, ½ Truths, Lies?)

A FEW Facts and Questions: Offshore

Oil/Gas and Wind

Roger D. ShewEarth and Ocean

Sciences/Env. Sciences Depts.

UNC-WilmingtonWilmington, NC

https://www.wsj.com/articles/trumps-offshore-oil-drilling-plan-sidelined-indefinitely-11556208950

The End? Any Questions?

Has that ship sailed?

“this may be discombobulatingto our plans”

• January 27, 2015: BOEM announces next step to expand safe and responsible domestic energy production with development of nation’s OCS Oil and Gas Leasing Program for 2017-2022.

Secretary Zinke Signs Orders Implementing America-First Offshore Energy Strategy5/1/2017

5/3/2017 -Environmentalists Concerned new Executive Order would allow drilling within previous 50-mile buffer

12/20/2016

2019-2024

President-elect Donald J. Trump has pledged to increase domestic oil and gas production, including more offshore drilling and leases on federal lands.

Barack Obama permanently bans offshore drilling in Atlantic and Arctic before Trump takes officeThe White House made a joint announcement with Canada to protect the waters along their coasts20 December 2016

“Beaufort and Chukchi seas saying they were “too environmentally sensitive to drill.”

March 29, 2019: U.S. District Court Judge Sharon Gleason said President Donald Trump exceeded his authority when he issued a 2017 executive order that reopened large parts of the Beaufort and Chukchi seas to offshore oil leasing.

The decision blocks oil development in some 128 million acres of the Arctic and Atlantic Oceans.

Ruling, yes, but other reality/realities also:1. Political (Republicans opposed)/Public opinion2. Reserves/Onshore Black Shale (hydraulic

fracturing and horizontal drilling)

Lawsuit hinged on a single line in the Outer Continental Shelf Lands Act of 1953, which governs offshore leasing: “The President of the United States may, from time to time, withdraw from disposition any of the unleased lands of the outer Continental Shelf.”

Section 12-A. It allows a president to remove ocean areas from leasing consideration.

More Americans oppose than favor increased

offshore drilling JANUARY 30, 2018

• NATIONAL: Oppose: 51% Favor: 42%• 10% change since 2014• Democrats Oppose (71%); Republicans Favor (70%)• Younger Oppose; Older Favor• Coastal Zone (<25 miles) more opposed

http://www.pewresearch.org/fact-tank/2018/01/30/more-americans-oppose-than-favor-increased-offshore-drilling/

NC Poll: 2/2018 (Favor 37%, Oppose 53%)

South Carolina Polls

Opinion 2015 2018*

For 68% 50%

Against 34% 50%

Don’t Know 7%

*Winthrop College

Emerald Isle passed resolution 2015

• DOE forecast: U.S. oil production rises from 10.9 mmbpd in 2018 to 12.9 mmbpd in 2020This is the most oil that has ever been produced in U.S.

• U.S. will be exporting more crude/fuel than it imports in 2020

• Natural gas output will see all-time record highs

https://www.cnbc.com/2019/01/15/surging-oil-output-will-push-us-towards-energy-independence-in-2020.html

Jan. 19, 2019

http://boemoceaninfo.com/learn/

• BOEM manages 1.7 billion acres of OCS

• 36 million acres (6,186 leases; 70% in

GOM) of the OCS currently under lease

that produce

• ~3% of OCS under lease

• Revert to 2017-2022 Five year lease plan

except that Beaufort, Chukchi, and

Atlantic plans now on hold

X

X

X

7/3/17 8/17/17 1/4/18 3/9/18 SOON - SOON - SOON - SOON - Who Knows? NO for NOW!Ended Ended

2019 – 2024 5 year plan

2020Mid and South Atlantic

Mid-Atlantic 2020, 2022, 2024

Estimated Timing

Exploration and Assessment and

Drilling2021 – 2028

Planning and Delineation2028 – 2030

Development and Production

>2030

Mars Field Statistics

- Leased: 1986

- Discovered: 1989

- Drilling delineation wells through 1996

- Platform Set: 1996; Production Begins

- Water Depth: 3000 ft (914 m)

- Platform Cost: ~$1.0 billion

- Production Capacity: 220,000 BOPD;

220 MMCFG (Current 75,000 BOPD)

- Reserves: Original est. 700 MMBO

- Produced to Date: 850 MMBO

- Stacked Pliocene to Miocene Turbidites

Area so prolific an additional Mars B

Platform was set

- Mars B/Olympus Platform largest in GOM

- First production began 2014

- Extend life of field to 2050

Pros Cons

Reduce Dependency on Foreign Oil Limited Impact with Volumes PresentNot Dependent on OPEC/Others

Lower Oil Prices Not enough product to lower prices

Jobs Jobs go to large ports; Endangers other jobs

Stimulate the Economy (U.S., N.C.); Adding Infrastructure

Loss of Revenue from Tourism, Fisheries (both Recreational and

Commercial)

Artificial Reef Potential Oil SpillsHurricane Damage

Diversify Supply in Case of Natural Disasters

Ecosystem Damage/ImpactsBiodiversity Threatened (Ecological

Services)

?Provide State Funding for Other Project – Revenue Sharing

No Guarantee of Revenue Sharing nor amounts suggested in study

Adding Infrastructure – Benefits other Business

Location Dependent; Do you want Port Fourchon

Newer Technologies and Safety Measures (effective)

Technology, Hardware, and Humans = Chances for Error

Oil and Gas Cheap Relative to Other Fuels

Reliable 24/7 Fuel

Continues Dependency on Fossil Fuels; Conservation and Efficiencies

Reducing Need

Seismic Surveys Safe/Low Impact Seismic Survey Impacts

Some Want It Coastal Counties OpposeGov./NC more oppose than support

Offshore Energy Issues: Pros/Cons

NOTE: Arguments usually fall along economic vs environmental lines depending on your “affiliation”

Questions:- Are they Wanted?- What are the volumetrics?- Tourism/Fisheries- Seismic Impacts- Visuals, Birds, Mammals, etc.

Manteo Leases Offshore N.C. were the last leases that were held by Mobil Oil

This is one of the more prospective areas for development based on current geologic knowledge

• 35 – 45 miles offshore• Water depth 200 – 1000m (610 ft - >3000ft)

Depth 250 m to 1500 m most prospective

ShelfEdge

35 miles

https://www.boem.gov/BOEM-OCS-Report-2016-071/

BOE (bbbl)

1.207

2.023

1.154

3.751

1.835

0.414

0.343

0.288

0.249

0.122

1

2

4 5 3

6

7

8

9 10

http://www.sciencedirect.com/science/article/pii/S1464343X05001196

Late Triassic/Early Jurassic Reconstruction of Continents

Continents once joined; Conjugate boundary/analog suggests possible reserves in NC OCS like those in Africa

May 2018: Future potential: Mauritania and Senegal are set

to become new players in natural gas supply

Tortue Field: 15 TCFG; Total Area Est. 50 – 100 TCFGhttps://www.bp.com/en/global/corporate/bp-magazine/conversations/emma-delaney-mauritania-senegal-gas-development.html

Shell Stones Oil Field – Deepest Water Depth Well in Gulf

• Water depth: 2900 m (9,500 ft) Reservoir depth: 8,077 m (26,500 ft) or 5,181 m

(17,000 ft) below mudline

• Location: 322 km (201 mi) from New Orleans, LA

• Production began 2016; ultimate processing of ~50,000 BOE/Day

• Use the FPSO (Floating Production, Storage, and Offloading) Ship Turritella

• Cost: $1 billion

• Use two subsea stations to collect oil/gas; high pressure 4,500 psi

Note: Deepest total depth drilled in GOM: Kakikas = 10,516 m (34,500 ft)

Deepest water depth drilled: Uruguay is 3400 m (10,907 ft)

https://www.ft.com/content/c5f464ac-9e0b-11e8-85da-eeb7a9ce36e4

April 26, 2019 PricesCrude Oil: $69.10 / barrelNatural Gas: $2.58 / MCF

Break-even price now as low as $30

Atlantic Share of OCS Mean UTRR

Oil: 5.1%

Natural Gas: 11.7%

BOE: 7.7%Mean Undiscovered Technically Recoverable Resources

U.S. used (2018):27.5 TCFG/yr7.5 BBO/yr (20.5 MMBOPD

https://www.boem.gov/National-Assessment-2016/

Resource Volumes?

Oil and gas that may be produced by different methods, but without any consideration of economic viability

https://www.eia.gov/tools/faqs/faq.cfm?id=33&t=6

NC hasLargest Share4.25BBOE

Resource Estimates and Supply/Demand – WE Use A Lot • Mid-Atlantic Resource Estimate UTRR = 2.41 BBO 24.63 TCFG • Mid-Atlantic Resource Estimate @ UERR $60/bbl and $3.20/mcf = 2.06 BBO 4.38 TCFG

Energy Type Total Resources from Mid-Atlantic and NC

UTRR Supply for US

Total Resources from Mid-Atlantic

UERR to supply US@ $60/bbl, $3.20/mcf )

Oil117 days

86 days

Gas297 days217 days

YEARLY Usage for the U.S. OIL: U.S. = 7.48 Billion Barrels Oil (20.5 MMBOPD) GAS: U.S. = 30.30 Trillion Cubic Feet Gas

100 days

53 days

How many days/years would the NC Resource Estimate supply the U.S.?NC Est. of 1.76 BBO and 18.0 TCFG

• Coal reduced by 4% and Renewables increased by 3% - Woohoo!

• Natural gas consumption reached record high 83.1 Bcf/d or 30.3 Tcf/yr rising

10% from 2017– Oh My!

• Petroleum consumption increased to 20.5 MMBO/D or 7.48 BBO/yr – Oh My, My!

• Consumption of fossil fuels (petroleum, natural gas, and coal) grew by 4% in

2018 accounting for 80% of U.S. total energy consumption – Oh Crap!!!

https://www.eia.gov/todayinenergy/detail.php?id=39092

There’s some good news and perhaps not so good news –Depends on who you ask.

This means less days of reserves but perhaps more need for them.

2018 Data

Seismic Acquisition Reflection Seismic Data

Prospect Exploration and Development Exploratory Drilling

$1.1 billion $300,000 – $1 million/day

“New” Shelf to Slope SeismicWhat do you SEE?

What is the Real Story on Seismic Surveys in Our Oceans

• Impacts of seismic not fully known but repeated and largest “sounds” may and probably do have impact

• But Saying that seismic kills and injures in all cases is not true

• Need to take mitigation steps:

1. Spotters on ships/Thermal Imaging2. Passive acoustic monitoring3. Ramp up seismic signal4. Time of year avoidance5. Exclusion zones (critical areas)6. Spacing

Need more studies of effects/new results give cautions

PURPOSE of EIS is assessment

Sonar is not Seismic TestingWind does require testing but more local/less energy

• Researchers have found that the noise from air-gun blasts can kill zooplankton

at distances of up to 1.2 kilometres away — more than two orders of magnitude

farther than previously thought.

• Zooplankton abundance dropped 64% within 1 hour of survey and there were

200-300% more dead plankton than measured before the survey (up to 1.2 km away)

• US Bureau of Ocean Energy Management is

considering 6 permit requests to conduct seismic

surveys - As part of that process, the National Oceanic

and Atmospheric Administration (NOAA) must also

evaluate permit requests from those companies since

their proposed activities could affect marine mammals.

• Comment period over for seismic and leasing

https://www.nature.com/news/air-guns-used-in-offshore-oil-exploration-can-kill-tiny-marine-life-1.22167

Research Cruise Mapping

?180 - 230 dB similar to seismic testing

During seismic surveying, reef-fish

abundance declined by 78% during

evening hours (time of maximum

activity before seismic activity)

https://ac.els-cdn.com/S0308597X16307382/1-s2.0-S0308597X16307382-main.pdf?_tid=1a0007fa-c7a1-11e7-afd7-00000aab0f27&acdnat=1510488220_82e421f93f37ca3c3e5cd13b437a3b2fMarine Policy

Volume 78, April 2017, pp. 68-73

Seismic Track (black line); reefs with hydrophones (blue), reef with video (orange)

Before Testing

Survey vessel 8 km away - During Testing

http://publicradioeast.org/post/local-scientists-study-sesimic-testing-impacts-fish

County Tourism Expenditures

($millions)

Mecklenburg 5,161

Wake 2,171

Guilford 1,348

Dare 1,100

Buncombe 1,070

Forsyth 846

Durham 775

New Hanover 578

Brunswick 562

Cumberland 525

Economic Impact of Tourism – 20173 Coastal Counties in Top 10

https://partners.visitnc.com/economic-impact-studies

https://portcitydaily.com/local-news/2018/03/23/brunswick-county-ranked-as-fastest-growing-county-in-the-state-once-again/

https://www.southernenvironment.org/news-and-press/news-feed/oil-drilling-infrastructure-drives-away-tourism-dollars

Value$17,776,188$29,597826$ 6,315,997$ 999,629$ 5,655,489

Other Shellfish FinfishOysters 158,184 bushels $5,571,391 Tuna (Yellowfin) $2.33 millionClams 273,280 lbs $2,174,491 Sea Bass $1.86 millionScallops 104,181 lbs $ 913,116 Tuna (Big Eyd) $1.35 million

Total Shellfish: $60,910,405 Total Finfish: $35,598,383 Total Catch: $96,508,788

# Finfish Est. Harvested

Est. lbsHarvested

Est. # Released

5,541,629 11,024,294 15,392,295

Recreational Fishing

Trip Estimates: 4,538,858Fishing Licenses: 469,574

http://portal.ncdenr.org/c/document_library/get_file?uuid=c28c00c7-c6d8-4550-b40b-07ca24f2ef96&groupId=38337

Gulf of Mexico Fisheries (NOAA 2015) US: 1.6 million jobs; $208 billion revenue

Revenues dramatically up since 2009; Landings are mixed: >2010 but in some cases <2009

Gulf of Mexico Revenue: $1,027,884,000 (Finfish = $184,448,000; Shellfish = $843,437,000)

State Revenue #Jobs

Alabama $68,793,000 14,329

Florida $203,372,000 12,241

Louisiana $451,371,000 42,901

Mississippi $25,995,000 4,704

Texas $278,353,000 26,496

Total $1,027,884,000 100,671

4.9 MMBO205.8 million gallons

Largest offshore spill ever.

4.9 MMBO is ~1/4 of what the U.S. uses daily.

Macondo: 4.88MMBO (205,000,000 gal) estIxtoc: 3.29 MMBO (138,000,000 gal)Valdez: 0.25 MMBO ( 10,800,000 gal)Katrina: 0.19 MMBO ( 7,980,000 gal)Santa Barbara: 0.10 MMBO ( 4,200,000 gal)

Collapsed Gulf oil platform has been

leaking since 2004, investigation finds

http://www.nola.com/environment/index.ssf/2015/04/gulf_oil_spill_hidden_2004.html

Up to 16 oil wells are possibly leaking at the

site where a company’s platform toppled during Hurricane Ivan in 2004,

Wind Energy Areas

Wind Energy Potential

Block Island (30 MW; $290 million) only offshore wind farm in U.S.Successfully survived winds of 70+ mph (shuts down at 55 mph)

NC could provide all electricity needs if………1. Cover more area2. Closer to shore

http://gwec.net/global-figures/graphs/

- A record 4,331 MW of new offshore wind power installed in nine global markets in 2017

(95% increase from 2016)

- 18,814MW of installed offshore wind capacity in 17 markets around the world

- 84% or 15,780 MW are in European waters with the UK at 36% and Germany at 28.5%

- China is third with ~15%

http://gwec.net/global-figures/global-offshore/

Offshore 22,814 ÷ Onshore 539,193 = 4.1%

March 16, 2017, U.S. Secretary of the Interior Ryan Zinke and Bureau of Ocean

Energy Management (BOEM) Acting Director Walter Cruickshank announced the

completion of the nation’s seventh competitive lease sale for renewable wind

energy in federal waters. A Wind Energy Area of 122,405 acres offshore Kitty

Hawk, North Carolina received the high bid of $9,066,650 from Avangrid

Renewables, LLC, the provisional winner.

3 MW/km2 (1km2 = 250 acres; ~300 acres/turbine)

122,405 acres = 191 mi2 or 495 km2

1,485 MW (Project Capacity listed at 1500 MW)

~ 300 acres/turbine = >400 turbines possible

BUT - Why not closer to shore and more turbines

1. NPS requested that areas within 33.7 nm of Bodie Island Lighthouse be excluded from development2. Kitty Hawk passed a resolution requesting that BOEM exclude areas within 20 nm

Oak Island Visualization: 200 Turbines; monopole design; Afternoon; Seimens 3.5 MW; Total Height 481 ftVestas 7.0 MW; Total Height 656 ft (Views: No Turbine view, 10, 15, 20 nm for each design)

The “break-even” point, or the distance

where tourism aesthetics/rentals “change

over” from positive to negative turned out

to be 15 miles offshore.

https://www.udel.edu/udaily/2019/january/offshore-wind-turbines-tourism-beach-recreation-impact/

Capacity Additions- Wind: 10.9 GW (46%) mostly in Texas, Iowa, Illinois- Natural Gas: 6.1 GW (34%) mostly in PA, FL, LA- Solar: 4.3 GW (18%) mostly in TX, CA, NC; There is expected 3.9 GW of small scale PV added capacity- Other: 0.5 GW (2%) of other renewables

Capacity Additions are 23.7 GW; Capacity Retirements = 8.3 GW

http://www.publicconsultation.org/wp-content/uploads/2018/05/Offshore_Drilling_Slides_050118.pdf