I am a strong supporter of the exploration and development of Virginia’s offshore energy resources. I am convinced that this can be done safely and in an environmentally sensitive manner.
In addition, the development of these resources would contribute greatly to Virginia’s economy and the national economy, create thousands of new jobs and advance our efforts to achieve a higher degree of domestic energy independence.
Unfortunately, Governor Kaine recently asked the Secretary of the Interior to delay an offshore lease sale that had been planned for 2011. This lease sale would have allowed Virginia to take the first steps toward developing our offshore energy resources.
In 1978 Congress passed legislation that required the Secretary of the Interior to maintain a five-year program for offshore oil and natural gas leasing on the Outer Continental Shelf (OCS). Unfortunately, the implementation of this five year program was delayed by a federal moratorium on offshore energy development that was instituted in 1983.
However, in October of 2008 the federal moratorium on 85% of the OCS, including the coast of Virginia, was allowed to expire by the U.S. Congress and a similar Presidential ban was also lifted. Therefore, it is now possible for the lease sales contemplated in the five year plan to proceed.
The 2007-2012 Five-Year Plan includes 21 lease sales in Alaska, the Gulf of Mexico and one in the Atlantic, off Virginia’s coast. The lease sale off the Virginia coast is scheduled for 2011.
In the final days of the Bush administration the outgoing Secretary of Interior initiated a 60-day public comment period on the Virginia lease sale. This must be completed before a lease sale can occur. This public comment period was scheduled to end on March 23, 2009.
However, on February 10, 2009, the current Secretary of Interior extended the public comment period for an additional 180 days.
In his recent letter to the Secretary, Governor Kaine expressed his opposition to proceeding with the Virginia lease sale. While I certainly respect the Governor’s prerogative to express his views on this issue, I do not believe that his position is in Virginia’s best interests.
If the Virginia lease sale is approved, the Commonwealth would achieve an extremely valuable advantage over other states along the Eastern Seaboard as the first state to move forward with offshore exploration and result in significant benefits for our state.
According to one estimate, there are 130 million barrels of oil and 1.14 trillion cubic feet of natural gas off Virginia’s coast. This obviously represents significant deposits of long term energy resources that could produce a tremendous economic benefit to Virginia and the nation.
A recent study by Old Dominion University concluded that gas production off the Atlantic coast near Virginia would, over a 10-year period, help create 25,778 jobs, induce capital investment of $7.84 billion, yield $644 million in direct and indirect payroll, and result in $271 million in state and local taxes.
There would also be enhanced state and local revenues from royalties and impact fees. These revenues are estimated at $3.5 billion or more over the next 30 years.
Because of this positive economic impact, the development of our offshore energy resources could help Virginia address a number of critical needs that exist across the Commonwealth.
For example, we have proposed legislation that would dedicate a significant portion of any revenues generated from the development of our offshore energy resources to Virginia’s Transportation Trust Fund, where it could help pay for critical transportation infrastructure throughout our state.
Given our current economic challenges, our highest priority should be getting our economy moving again. One way to do that is to position Virginia as the nation’s leader in energy development.
I believe that we should proceed with the exploration and development of our offshore energy resources as quickly as possible. The first step in that process is approving the lease sale contemplated in the 2007-2012 Five Year Plan.
In order to move forward with the exploration and production of oil or natural gas in the OCS, a private company must first purchase a lease from the federal government. This is merely the first step in an exhaustive process that must take place before actual development of these offshore energy resources can occur. It does not guarantee development and production.
When a company receives a lease it believes the area contains enough oil or gas to be beneficial to consumers and economically advantageous for the company. However, until the company completes the expansive exploration process, it does not know if the lease is viable.
In other words, we will never be able to develop our offshore energy resources until we determine how economically viable they are, and we will not be able to make that determination without the issuance of a lease.
Given our desire to proceed with the responsible development of our offshore energy resources at the earliest possible opportunity, it is imperative that the leasing process be completed on schedule and not delayed. That’s why I have written to the Secretary of the Interior and encouraged him to move forward with this lease sale in 2011.
If we are really serious about positioning Virginia as the nation’s leader in energy development, reducing our reliance on foreign sources of energy and providing a much needed boost to our economy, we should be supporting this lease sale, not asking that it be delayed.
Leave a Reply