Off-shore drilling moves forward in Va.

By NEIL H. SIMON
Media General News Service
Published: November 13, 2008

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WASHINGTON — The federal government is moving forward with the process to lease land off the Virginia coast for oil and gas exploration.

The announcement Wednesday by the Interior Department’s Minerals Management Service opens a 45-day public comment period, after which the federal agency will consider selling leases in 2011.

“We are moving as fast as we can,” said Randall Luthi, director of the minerals service, which manages oil, natural gas and other resources on the Outer Continental Shelf. The start of the lease process is “an important step in our nation’s energy picture,” he said.

The area considered for drilling is a 2.9 million-acre slice of the ocean floor located more than 50 miles east of Virginia Beach and the state’s Eastern Shore. The Interior Department estimates it could contain 130 million barrels of oil and 1.1 trillion cubic feet of natural gas.

Virginia Gov. Timothy M. Kaine, a Democrat, has supported off-shore exploration for natural gas. He welcomed the news.

“The process is long. There is nothing wrong with listening to public comment,” said Kaine spokesman Gordon Hickey. “The governor strongly believes exploring is the thing to do.”

Rep. Robert C. Scott, D-3rd, said he was “concerned” that the land for lease overlaps with the U.S. Navy’s Virginia Capes Operating Area and violates an agreement between the Departments of Defense and Interior to protect such training ranges.

“I do not think any lease sale should move forward if it infringes on the ability of the United States Navy to train off Virginia’s coast,” Scott said in a statement.

Interior’s announcement comes less than six weeks after Congress let a moratorium on off-shore drilling expire and two months before a change of presidential administrations. 

President-elect Barack Obama has said he is open to off-shore energy exploration.

Virginia is the only state outside Alaska and those on the Gulf of Mexico eligible for leasing under the Minerals Management Service’s five-year plan that guides new off-shore exploration for 2007 to 2012.

Even though the process to sell leases is beginning, off-shore drilling is not a done deal. 

“They (the Obama administration) have the option to not proceed with the sale,” Luthi said.

It likely would be a full year after a lease sale before any drilling would begin, because areas off the Virginia coast currently lack the necessary infrastructure for exploration, he said.

Under current law, Virginia would receive no royalties from any oil and gas drawn from the area. States receive royalties only for leases within three miles of their coastal boundaries.

Environmentalists argue that off-shore drilling rigs would harm tourism and local infrastructure.

“It’s not just what is done in the ocean. It’s the impact of those facilities down the road,” said Kay Slaughter, a senior attorney at the Southern Environmental Law Center. Energy companies will crowd ports and coastal roads, build pipelines and hinder commercial and recreational fishing, Slaughter said.

Environmental groups also see the off-shore debate as a distraction from federal partnerships to invest in alternative energy, like wind and solar power.

The United States uses about 21 million barrels of oil per day. A 2007 report by the federal Energy Information Administration found drilling on the Atlantic shelf would “not have a significant impact” on oil production until 2030. And then, the impact on prices was “expected to be insignificant.”