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Feb 1, 2016

Understanding North Carolina’s Offshore Energy Potential

Sponsored Content provided by David McGowan, III - Executive Director , N.C. Petroleum Council; American Petroleum Institute-NC

Have you noticed anything different about your recent receipts at the gas pump? If you’re anything like me, you have likely spent time traveling to see family in the last three months. If there’s anything I dislike more on a long car ride than a screaming child in the backseat, it’s when I have to spend a small fortune on gas. But in the last few months, I have been surprised to see my transaction total when I hear the gas gauge click. The lower cost of gas at the pump is due in large part to the increase in oil production on American soil – and North Carolina has the possibility to contribute to America’s energy security.
 
Over the next several months, my goal is to begin a conversation with you about the potential benefits of and concerns about an industry in North Carolina for energy production. As a Wilmington native, I have heard many of your concerns for this prospect. What about our beaches? Will the enjoyment of our coast be hindered? Would these offshore opportunities be a threat to tourism?

I know firsthand the beauty and value of our coastal resources. My children enjoy many of the same places and experiences I grew up appreciating, whether it is at the beach, boating in the sounds or exploring inland. I want the same for their children one day, and I’m committed to seeing our resources protected.
 
Last January, the Obama administration included the Atlantic for consideration in a proposal for a lease sale. Over the last year, the Bureau of Ocean Energy Management has been contemplating opening waters in the Atlantic. The biggest question still remains: What is the energy potential within the waters of the Atlantic? Existing estimates are based on surveys that were conducted more than 30 years ago – before significant technological advances.
 
Energy is already critically important to North Carolina, serving as a key engine for the state economy – expanding job opportunities and offering the hope of prosperity to individual North Carolinians and their families. The industries of oil and natural gas are driving the U.S. economy through a major energy boom, and that boom is rippling through the economy of North Carolina and supporting business activity across the state. A recent study found that the oil and natural gas industry in North Carolina supports some 146,100 jobs, which is 2.8 percent of the state’s total employment.
 
According to a study identifying the potential impact of the industry, safe and responsible offshore oil and natural gas exploration could generate up to 55,000 jobs and $4 billion in economic growth in North Carolina alone by the year 2035, including $600 million in manufacturing spending per year - more than any other Atlantic Coast state. Offshore development in the Atlantic could support nearly 280,000 jobs and $51 billion in government revenue within 18 years of lease sales, and the state and local governments could receive up to an additional $890 million per year with revenue sharing from the federal government. It is important to note that this study reflects what could be possible for North Carolina’s job creation if the right policies are put into place by the federal government.
 
At this point, the goal is to better understand the type, quantity and location of our resources. America is already the highest natural gas producer will soon surpass Saudi Arabia as the world leader in crude oil production. All of this is possible thanks to technological advances that allow us to locate and tap oil and gas reserves that we couldn’t see or weren’t able to access before. Higher U.S. production has helped shield us from the crises and instability that have hit key oil producing regions around the world, from the Middle East to Russia to Venezuela. It is important for our nation's energy security that we better understand what is out there.
 
While it is important to recognize valid concerns and mitigate risk to the absolute greatest extent possible, we can continue to maintain a thriving tourism industry, likely even enhance our commercial and recreational fishing opportunities, and safely produce energy resources from which all citizens can benefit. While doing so, we can generate much needed jobs and economic development for areas of our state that so desperately need them. Our coastal and metropolitan areas are thriving, but many inland areas of our state, particularly in eastern North Carolina, are still suffering. These possibilities are real and they are significant.
 
As part of this ongoing series, we will identify the role of the oil and natural gas industry to secure America’s energy security. We look forward to continuing this discussion in the months to come.
 
David McGowan III is executive director of the North Carolina Petroleum Council. The North Carolina Petroleum Council is a division of American Petroleum Institute, which represents all segments of America's technology-driven oil and natural gas industry. Its 500-plus members provide most of the nation's energy. For more information, go to http://www.api.org or contact McGowan at [email protected].

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