Pollution or prosperity: Which will offshore drilling bring to South Carolina?

October 12, 2008 

It's a thorny question: Can a state economy based largely on tourism afford to have oil and natural gas drilling offshore?

The answer, of course, depends on whom you ask.

Some say it could threaten the natural beauty of the beaches that bring so many people to South Carolina and Hilton Head Island.

Others say it could bring in thousands of high-paying jobs to a state struggling with a high unemployment rate and lessen dependence on foreign oil.

THE CASE AGAINST

The case against offshore drilling in South Carolina is being led by environmental groups. They warn of the possibilities of spills, tar balls washing up on the shore and little real change in gas prices or foreign dependency.

But the biggest problem for the environment and tourism could be all the activities that take place onshore, not offshore, said Hamilton Davis, a project manager with the Coastal Conservation League.

The pipelines, refineries and truck traffic needed to serve the offshore rigs would have to be built along the coastal area, and those things mean a decrease in air and water quality, Davis said.

Colin Hagan, federal policy associate for the Southern Alliance for Clean Energy, pointed to his group's research that some 880,000 gallons are spilled per year from current drilling operations in U.S. waters.

Even if a company started the process to be approved for drilling today, it would be a decade before the first drop of oil was pumped, Hagan said.

That, coupled with the possibly meager oil reserves along the Atlantic coast, means any drilling would be too little and too late to change today's energy issues, Hagan said.

TOURISM INTERESTS

The environmental arguments haven't turned state and local tourism officials totally against the idea of offshore drilling.

"No one has a solid opinion yet because we don't know what we're talking about," said Tom Sponseller, president of the Hospitality Association of South Carolina.

When the legislative dust, both federally and in-state, settles, will tourist destinations be facing oil rigs a few miles offshore or the less environmentally risky natural gas drilling operations 50 miles or more offshore?

If it's the latter, drilling might make sense, Sponseller said.

Given that tourism is the No. 1 industry on Hilton Head, Charlie Clark, vice president of communications for the Hilton Head Island-Bluffton Chamber of Commerce, said the state legislature needs to take a very careful look at the issue before acting when and if the time comes.

President Bush lifted an executive ban on offshore drilling this summer, and Congress allowed a legislative ban to lapse at the end of September.

The House passed legislation that would have given states the right to decide to allow drilling between 50 and 100 miles offshore, with the federal Department of the Interior making the call on rigs between 100 and 200 miles out. Drilling would not have been allowed within 50 miles, and states would not have earned royalties on drilling.

But that legislation has fizzled in the Senate and new legislative efforts aren't likely until after the new Congress is elected, according to a Congressional source.

Despite her calls for care and caution, Clark said drilling may become part of a comprehensive energy plan.

"We totally believe that action has to be taken (to create an energy policy)," Clark said.

THE CASE FOR

The need for lower fuel prices and less dependence on foreign oil are cited by the state's business community as part of the case for offshore drilling.

The more important issue for the state, though, is improving the job climate.

The South Carolina Chamber of Commerce is in favor of drilling because of the large number of high-paying jobs the industry could create, said Marcia Purday, vice president of communications for the chamber.

With an unemployment rate above the national average and an average wage below it, the state could use the jobs the drilling industry jobs would bring, Purday said.

Citizens for Sound Conservation, a business group seeking to balance industry with conservation, points to a study by the Mid-Continent Oil and Gas Association that shows extraction, refining and pipeline industries in Louisiana generate some $12.7 billion in household earnings and support more than 300,000 jobs each year.

"We believe it can be done safely and it can be a boon to the economy," said Denver Merrill, executive director of the group.

THE FUTURE

What's not clear is when drilling might eventually happen.

It will take a couple of years, at least, before any oil or natural gas leases are issued, years more before any oil is found and perhaps a decade before any of it begins to flow to refineries.

And there's still doubt as to whether there is enough natural gas or oil offshore to make drilling profitable.

College of Charleston geologist Cassandra Runyon has said that the geology of the South Carolina coast isn't right to have formed significant oil supplies.

But Marvin Odum, president of Shell Oil, a dominant player in deep-water oil exploration in the Gulf of Mexico, has said the data "shows good resources on both coasts."

The Associated Press contributed to this report.

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