Virginia Business Leaders Bullish on Offshore Energy

Mark Green
Posted March 29, 2018

Recent analysis of the potential economic benefits of offshore natural gas and oil, finding that coastal states and the nation could see billions in annual industry spending, job creation and federal revenue sharing dollars over a 20-year period, has the attention of leaders in one of those key states – Virginia.

A group of 21 Virginia businesses, associations and other organizations have written to federal officials in support of opening more of the U.S. outer continental shelf (OCS) to safe development. The comments were filed with the Bureau of Ocean Energy Management (BOEM), which is putting together a new federal offshore leasing plan that will blueprint development from 2019-2024. From the letter:

The development of our nation’s offshore energy provides tremendous benefits for all industries, as it helps build our supplies, making energy more affordable for consumers and businesses.  As a result, expanding the opportunities to explore offshore will help every state in the country, including Virginia.

For Virginia, developing the Atlantic OCS could spur an additional $1.8 billion in annual spending every year over 20-year study period, as well as support 25,000 jobs. According to research by Calash, the commonwealth also could realize nearly $235 million annually in revenue sharing with implementation of an arrangement similar to the current Gulf of Mexico federal/state revenue sharing agreement.

Miles Morin, executive director of the Virginia Petroleum Council, one of the letter’s signatories:

“The solidarity and support exhibited by these 21 groups demonstrates that the business community believes offshore exploration and development of American energy resources will serve as a catalyst for economic growth and investment in our state. The proposal could create thousands of high-paying jobs as well as a new revenue stream for the Commonwealth that could be used for bolstering our public education system and infrastructure.”

Other signers: Advance Integrated Technologies; Columbia Gas of Virginia; Domestic Fuels & Lubes; Dominion Energy; Environmental Standards, Inc.; NFIB-Virginia; NSC Technologies, Inc.; Prince William Chamber of Commerce; Thomas Jefferson Institute for Public Policy; Virginia Agribusiness Council; Virginia FREE; Virginia Hispanic Chamber of Commerce; Virginia Manufacturers Association; Virginia Marine Trades Association; Virginia Oil and Gas Association; Virginia Petroleum, Convenience and Grocery Association; Virginia Propane Gas Association; Virginia Ship Repair Association; Virginia Trucking Association; and Washington Gas.

Bill Crow, Virginia Ship Repair Association president, said safe offshore development represent direct growth opportunity for his group’s members, which would help lift the state’s economy:

“As a coastal state, Virginia has long possessed a strong marine repair industry. The members we represent are dependent on businesses and industries that rely on the vessels on our public waters.  With today’s advanced technologies offshore oil and gas exploration can be done in a safe manner.  Those advanced technologies and the best practices developed and implemented over the past decade have provided minimized impact to marine life and their respective ecosystems. … Knowing that our member companies, in support of their potential customers, can support repairs to the offshore oil and gas operations, we believe this will help to stimulate Virginia’s economy and business activity.”

Nicole Riley of the National Federation of Independent Business Virginia said developing the OCS is important for the future security of the commonwealth and the nation:

“Opening the U.S. Outer Continental Shelf for offshore oil and gas exploration would spur significant economic activity for localities and businesses along the coast and throughout Virginia. It would also help secure the Commonwealth’s energy future through domestic energy production, which is a critical component in ensuring Virginia’s small businesses operate in an affordable and efficient manner now and in the future.”

The public comment period on BOEM’s draft leasing program ended earlier this month. The draft proposal could fundamentally change the trajectory of U.S. offshore development, with 94 percent of the OCS under federal control off limits to development. The Interior Department has proposed opening up 90 percent of that off-limits acreage for consideration for future lease sales.

As we’ve posted, safe offshore development could be huge economically for entire states, and the needs of entire states need to be considered as BOEM finalizes its plan.

For more, see the offshore economic studies for the Atlantic, Pacific, Eastern Gulf and Alaska OCS areas.