First of two parts

Though drilling for oil or natural gas off the East Coast coast is currently off the table, the federal government is still evaluating permits from several companies to use sonic air guns to survey the Atlantic seabed for oil and gas deposits.

The National Marine Fisheries Service, known as NOAA Fisheries, is currently reviewing applications from the companies to harm or harass whales and other animals protected by federal law. These permits, which would put limits on disturbances to marine mammals, is one of the final requirements before seismic projects are approved.

The testing off the N.C. coast could begin later this year.

Air gun noise is believed by marine scientists to have potentially detrimental effects on fish, sea turtles and marine mammals, including the endangered North Atlantic right whale that migrates off the southeast U.S. East Coast.

Proponents, on the other hand, say that there is no evidence that directly link the tests to harmed whales, fish or turtles. Such tests, they say, are needed to allow oil companies to better judge the locations and quantities of oil or gas deposits.

Over the next two days, Coastal Review Online will present interviews to people on both sides of the issue. We start today with Richie Miller, executive vice president at Spectrum-Geo’s office in Houston, Texas. The Norwegian-based seismic survey company is one of five applicants seeking permission from the Bureau of Ocean Energy Management to do seismic surveys off the southeast Atlantic coast to look for oil and gas deposits under the ocean floor.

Miller, 53, has more than two decades of experience in the seismic industry

The transcribed telephone interview that follows has been edited for clarity and space only. Miller didn’t receive the questions in advance.

Q. The last time the Atlantic was surveyed for oil and gas prospects was in the ’70s, is that correct? Was the equipment used then the same type of technology?

Yes, in the ’70s-’80s. Yeah, it’s the same physics, a lot of the same equipment. Really, the big difference is it’s just a longer cable.

Q. As a prospective contractor, can you explain why, in the absence of a planned lease sale, it is useful to do surveying now in the Atlantic, rather than waiting until there is a planned sale?

There’s a new play – it’s four or five years old, what we call the Atlantic margin. So what science has found is that the hydrocarbons that are discovered in say, offshore Brazil, you have this the same type of geology, the same age rocks, the same type of oil in Angola. It’s the transatlantic margin, is what we call it.

The Atlantic margin play is what we call its congregate, it’s what lines up (with ancient continents) Pangaea, Gondwanaland. When everything split apart, the congregate of the East Coast of the U.S. is really from Georgia northward is Guinea-Bissau, where Morocco hits more up toward Maine and Canada. Then you actually have Spain and Ireland and all that kind of mashes up farther into Canada and Greenland.

The reason I would be out to acquire data is to get a regional framework of the U.S. Atlantic – that is a marketable product to help understand the exploration that’s going on in West Africa. That’s the bottom line.

Q. What parts of the puzzle would match up with the N.C. coastline?

It’s probably right around Guinea-Bissau or Gambia and Senegal. It’s the northwest coast of Africa.

Q. So there’s been new discoveries of hydrocarbons there?

There are other theories that where there’s hydrocarbons on one side, there’s not hydrocarbons on the other. So people are playing that on down in South America. It’s a relatively new play. People are looking at new science to try to help understand it.

That’s one reason. There’s still is a want to understand with new data – what’s the resource base of the East Coast?

Q. If a permit is issued to you to work in the Atlantic, please describe what you plan to do: how large an area totally, where specifically would you survey off the coast of North Carolina, how close to shore? Has Spectrum or any company in the industry surveyed an area as large before at one time?

I’ll take the last question first, and the answer is yes. If you go and look in Mexico at what’s been done in the last 12 months, the whole Mexican side of the Gulf of Mexico has been acquired (that is, acquire a surveyor and the data) at once. Yes, there are larger programs – we’ve done some quite large ones. Yes, there have definitely been surveys as big or bigger.

How far away from coast?  A lot of that is going to depend on what the final permit says. Because what came out of the PEIS (Programmatic Environmental Impact Study) BOEM will take recommendations from NMFS (National Marine Fisheries Service) and they can maybe alter that. Right now, our plan is to come in to about the 30-meter depth water, so almost 100 feet of water is the limit towards the shore. And that depends on how quick the water drops off, on what the shelf looks like on where that is. So it’s almost about the bathometric contour. It comes pretty close in North Carolina.  So we have had some discussions with NMFS about pulling that distance farther off, so I would say, 20-30 miles if the bathometry drops pretty quick we may be a little bit closer, but in general terms, it’s probably 20 to 30 miles to the shore.

Q. And what about the perimeter of the entire area?

What we have is a grid that is from Maryland and it incorporates part of Florida, basically the central Atlantic area and it’s a grid that originally was permitted with say 36,000 kilometers – reduced down to more a regional work to 15,000. So the lines might be parallel lines that run from the coast and go out 4,000 meters – go out deep – and then there’s going to be lines that are perpendicular that we call strike lines that are more or less run along the coast and those are probably 20 kilometers apart – maybe 40k apart. Those will be finalized when we see the final permit.

Q. When are you expecting to get the Incidental Harassment Authorization permit?

This month, next month – we may not get that. We as a business – ourselves and other companies – we look to do work all around the world. Some of them work out, some of them don’t.  Again, this survey may never happen.

Q. What will you be looking for?

Just a regional geologic picture. You can take the wells that were drilled before and somewhat correlate what sections you’re in. But you’re looking for a regional framework to understand what we call the basin. You’re looking for the different layers beneath the ocean bottom. Nothing specific – with the regional 2-D grid you’re not going to find oil or gas with one 2-D line in this day and age.

Q. Is this technology – say, two arrays dragged behind a boat – done like a lawnmower, covering a whole area? Or is it done by looking at charts and going to specific spots?

I haven’t heard that before – I’m going to use that. We’re going to leave parts unmowed. We’re the bad lawnmower guy. So we’re going to start down the curve. Then we’re going to go in five tracks of where the lawnmower should have gone, and then we’re going to come back the other direction. And then we’re going to go up and do the same thing and go up your lawn in the same direction. We’re going to shoot a grid. You shoot out one line, and then you ‘re cutting that. Then we would turn left and then we come right back into the coast. Then you do a line change. Just turn and then you go back up to the line, back offshore.

Q. Do you have more interest in areas north of Cape Hatteras – the Point – where Mobil Oil and Chevron USA were focused in the ’80s and ’90s?

No, ours is more regional. If you were looking for that area, you would be what we call prospect-oriented.  We’re looking more regional – trying to understand the regional framework. That helps you understand the whole – if there is a petroleum system. It’s a regional look. An example for that would be we’re pulling the X-ray through the bottom of the ocean floor. Where Manteo is a gas discovery – you would need to do a 3-D seismic, which is many lines close together – it’s like a MRI. You get a block. So we’re not doing prospect-specific acquisition.

Q. Is there some point in time where that would be done? When would it be appropriate to look more for the prospect?

You won’t see anything like that unless there’s a lease sale. So there’s nobody that’s going to be in that close looking … nobody’s going to be out there shooting 3-D, it makes no economic sense. You could shoot 2-D, but it’s been kind of proven that there’s something there, so you’d want to shoot 3-D.

Q. When do you expect to start, and how long would it take to complete?

If everything fell in place, probably in September. You would probably want to wait until summer is over. It would take four or five months. General rule of thumb is you acquire 3, 000-4,000 kilometers a month. With a 15,000- to 18,000-kilometer program – maximum six months.

Q. When would you be off the N.C. coast, and how long would you be working off the N.C. coast?

I can’t answer that – until we see what the permit looks like. Depending on what time of year and fishing seasons, there’s so much coordination to do, we can’t pinpoint it. You might find you’re off of North Carolina one day, acquiring one line and we decide to go further south because there’s fishing activity or some other environmental activity that we move south and go toward Florida and work two months and come back. It’s too early to start planning on. It would be very nice to start a program and go up a line and down a line like you were weaving in and out, but in the real world it changes. It’s something that we would work with the local stakeholders where we’re going to be once we get closer – if we get down to that point.

Q. How does this type of testing provide a clearer understanding of the undersea oil or natural gas prospects? Does it reduce the number of “dry holes” that the exploration companies may later drill?

That’s a good question. The technology in the oil and gas industry is getting better every day. It’s not unlike telecommunications and the medical field. If we look at what was acquired in the ’80s, that’s when there was MS-DOS (Microsoft Disk Operating System) running on PCs. Remember the Motorola bag phones? Just like that, our technology has come a long way. So that’s we would expect – to be able to image the subsurface cleaner and deeper than what’s out there right now. The process that we’re going through – especially a regional grid without a lease sale in sight – I think all seismic helps eliminate dry holes. But what you would see in a normal cycle, if there was ever a lease round, is there would be 3-D data acquired as well. It significantly reduces the number of holes drilled, whether they’re dry or successful. That’s been a huge cost savings to the business.

Q. How will Spectrum address possible conflicts with commercial and recreational fishing, particularly offshore fishing tournaments and commercial seasons? Will fishermen be allowed to fish while you are working? Is there a general expectation that all survey companies will coordinate with fishermen and boaters and other users?

I can speak for Spectrum, but not the other guys. We all work the same. For one, there’s going to be mitigating factors that we all have to work to.

This is some of the misinformation that was thrown around early on. There’s not going to be six boats or nine boats at one time working off of North Carolina at the same spot. Or in South Carolina or Georgia – it doesn’t matter. There’s not going to be nine companies that go out and acquire a survey.

The way our business works, it’s very capital intensive. It’s an investment that the companies make, and it’s usually one or two companies that work – when you get funding from different sources and you go out and acquire the program. So, even though there may be two boats within a year that are working off North Carolina, they’re going to have two different style programs going on. I guess my point is there’s not going to be a whole bunch of boats out there at one time – the market doesn’t allow that.

About the stakeholders, the fishermen, commercial and recreational, we’ve had discussions with the state, which gave us the lists. You stay away, you go farther offshore. So during those weekend tournaments, for one, you’re communicating (with the stakeholders.) Find out where a tournament might be.

And then, there are facilities to communicate with fishermen. And you work around them. There’s nothing to keep anybody from fishing while we’re working. More than likely, we’ll move out of the way, or we’ll talk to the fishermen and we’ll find where they’re going to be, when they pick up their gear, when they go in. Then we’ll go in there and work. So there’s lots of different ways to do it.

The key word there is communication – there’s got to be a two-way communication.

Q. How do you plan to coordinate with the other survey companies working at the same time in the ocean?

That’s standard. With other survey companies, there are mitigating factors where we can’t get within certain distances of each other. We email each other You communicate multiple different ways.

Q. What will it cost and who will pay?

I can’t really give you a number on that, but that’s an investment; that’s our business model. We call it multi-client data. I think that’s what everybody that’s applied for a permit has in mind. It’s like the movie business – they go out and spend all this money on a movie with the hope that somebody else is going to come in and look at it.

That’s how our business is. We try to get the E&P (exploration and production) businesses to pre-fund the surveys, and with that it helps us finance our surveys.

Sometimes, we’ll take the risk, sometimes we’ll get funding from those companies.  It really depends on the economics of a certain area – there could be areas where our business model would take 100 percent risk. There are other areas where you’d want to get almost your whole program paid for before you started. In this case, we wouldn’t start unless we had people helping people pay for it.

Q. I assume that would be the oil and gas companies, and you have them in line

No, no. That’s who it would be, but none of that is in line yet. That’s where I keep going on – there’s a lot of metrics to still fall in place to make this thing actually happen.

Q. What do you do with the information after it’s collected and analyzed? Who will buy it? Does BOEM get the data as well? I assume it’s not just raw data?

No, we process it. Then it comes out in a standard format that’s loaded into work stations that have software that read it.

Q. Who would buy it – the oil and gas companies?

Yes, and then we’re also required by our permit to also give BOEM a copy.

Q. So the government is not paying you for the data, but they’re providing support for you to work in the public resource – is that the exchange there?

We have an exclusive with the government for 25 years before they can actually disclose the data publicly. Anything in the studies they can disclose, but the actual data they have to keep confidential. It’s because of the commercial value. We’re not trying to hide anything. It’s we’re trying to make our investment back.

Q. How long does it take to do that process – doing the survey, analyzing the data and getting it in the hands of the client?

It would be say, four to six months to acquire the program. Another four to six months to process the data.

Q. How would you describe the volume of sound the animals would encounter and will people hear and/or feel the blasts?

No one will feel or hear the blasts. We’re going to be so far offshore. And there’s been no documented impact to marine mammals ever with use of this technology. We stand by that. It’s a safe science we’ve used around the world for 40-50 years. We see no impact to marine mammals. And a lot of that is due to the mitigating factors the governments put on the surveys – acoustic exclusion zones, visual monitoring by observers, halting air gun use, passive monitoring by microphones, ramping up air guns.

Q. How would you describe the sound? Some have described it as loud as a jet engine.

It makes some sound, but I’ve worked on the boats for five years when I first got out of college. You sleep on those boats for two months at a time. So it’s a thud.

You have sound in air and you have sound in water.  I can’t tell you what they (the marine animals) are going to hear. Unfortunately, we can’t talk to them. It’s a sound that dissipates extremely quickly. And by use of these mitigating factors, you’re keeping these animals out of any potential impact.

Q. Does the testing have the potential to harm or drive fish away? Concussive noise is believed by some biologists to scare schools of fish and change their behavior. If so, how do you plan to mitigate for that possibility?

If you look at the Gulf of Mexico, it all happens together: seismic, oil and gas and fishing industries. And they’re still catching a bunch of fish. We’re not expecting any effects. We don’t see that impact at all. Ships impact fishing. So if we’re coming through there, I would imagine they are going to get out of the way a little bit. But they’re going to come back to where they were, just like when a ship passes through. That’s something I’ve never seen a study of. It would be nice to have a Go-Pro (camera) put on a fish head.

Q. Do you expect animals to be harmed under the definition of the federal Endangered Species Act? If so, how many “takings” do you estimate will result during the surveying?

We don’t expect any harm to any wildlife during this operation. We don’t see it anywhere around the world. The problem with this information and what is out in the public is the word “take.” The word take under the ESA is very gray. It doesn’t explain exactly what a take is. A take is the same as a ship sailing down a line and fish or marine mammal moving out of the way. I’m not even talking about a seismic ship. But that is a take – you’re altering the behavior of that animal. So based on what we had to follow on our permit with the regulations that were in place, and the modelings that were done, these takes are calculated. They’re not, by no means, an exact science. It’s modeling. But in general operational experience, we don’t expect any takes. You don’t hear of a survey happening and then the fishing stopping.

Q. Sonar used by the Navy has been associated in the past with causing strandings of marine mammals. How is 2-D seismic different?

It’s a completely different technology. Do you how much seismic is acquired off the coast every year, every summer? There’s seismic acquired every summer off the East Coast – there has been for the last seven years. The universities do it. Now, they don’t have to get an IHA. It’s the same equipment, the same technology. And we don’t see strandings. A lot of it is they are doing geologic research, the canyons, near-surface … They’re out there every year. Same technology and everything.

Q. Environmental groups such as Oceana are pushing the Obama administration to delay or cancel seismic survey work in the Atlantic. Part of the argument in favor of waiting is the likelihood of improvements in seismic technology, such as a marine vibrator, that could prevent possible damaging effects to marine mammals and fisheries. What is your view on the future of improved technology?

The marine vibrator is not a commercial unit and it won’t be in the foreseeable future.  I’m talking five or 10 years out. There’s no money to spend on it. This is a typical Oceana distraction. If you saw the hydraulic hoses attached to a marine vibrator, you’d be pretty scared. What a marine vibrator does is shake. It has its own issues. The technology we use is safe now. If we could develop one, it would’ve been already working. They’ve been talking about this thing for 20 years. But I don’t see it being commercially, or even in R&D mode, I don’t see it being developed.

Part II: Seismic Testing Q&A: Whales and Fishermen

MOREHEAD CITY — If offshore drilling took place off the East Coast, it’s unlikely that the N.C. coast would transform into the industrialized nightmare of beaches lined with oil refineries many locals fear. That’s because neither of the state’s port cities make appealing choices for the industry to bring oil or natural gas ashore.

That’s according to David McGowan, the executive director of the N.C. Petroleum Council. The council is a subsidiary of the American Petroleum Institute, the largest trade group for the oil and natural gas industry in the country. “I think the reality is, here in North Carolina, we’re much more likely to see the types of shore-basing and supply operations that would support the offshore industry but not the major infrastructure complexes, like refineries or processing facilities, that a lot of folks anticipate that we might,” McGowan said.

North Carolina doesn’t have refineries to process oil or natural gas or pipelines to transport them. Given there hasn’t been a new refinery built in the United States since 1976, McGowan says there’s a slim chance industry would build one a new one here.

Early this year the state Department of Commerce presented a report to the N.C. General Assembly on the feasibility of building a liquid natural gas export plant at either the Wilmington or Morehead City ports. The report notes that major hurdles would first have to cleared, including a lengthy permitting and review process, building a network of pipelines, an exporting facility and subsurface natural gas storage and keeping channels to the ports dredged to a depth of about 50 feet to accommodate the ships loading the gas. A more technical analysis is needed to determine profitability.

Here’s another good reason why there’s a slim chance that will happen: “We have fairly robust refining infrastructure right now on the East Coast in the Delaware and Philadelphia area,” said McGowan. “And so, most likely any resource that was produced off the East Coast would make its way to that existing refining infrastructure.”

What Morehead City or Wilmington could offer the industry is a port to supply and service offshore drilling operations with, for example, storage space, supply boats, helicopter bases or equipment manufacturing facilities, McGowan said.

Of the two state ports, Morehead City’s would finally be the golden child, and not the redheaded stepdaughter some in Carteret County have labeled it. Unlike its sister Wilmington port that 26 miles from open sea on the Cape Fear River, the Morehead City port is only four miles from the sea buoy – and less than a mile from Beaufort Inlet.

Morehead City is also closer to where the resources are expected to be found, based on offshore geology and previous industry interest. The last time the oil industry considered drilling off North Carolina was in the early 1980s, when several companies bought leases off Hatteras Island on the Outer Banks.

“From an efficiency standpoint,” McGowan said, “Morehead is certainly in a good situation. And I think, based on the little bit we know of the resource from the previous studies and information that’s been gathered offshore, the Morehead port is probably better geographically situated than Wilmington in that regard.”

Although Morehead City’s port is the closest port to open sea on the East Coast, it does present some challenges to any major industry wanting to settle in. As David Whitlow, the city manager of Morehead City, explained, there are a few big reasons why the city and its port might not be the obvious or immediate choice for the industry. “We don’t have an interstate highway, so we’re a tough place to get to by truck in volume,” Whitlow said.

Also, the only railroad line runs right through downtown. “Our rail is not an extensive rail system and doesn’t offer a lot of opportunities unless somebody wants to put a lot of money into coming up with a second route,” he said.

“Even the port here,” continued Whitlow, “the main part of the port is pretty well fully developed and committed, so that only leaves Radio Island as a possibility. And Radio Island isn’t the most accessible spot they can have for a port because they have a couple different bridges they have to cross to get there and it doesn’t have a lot of services out there. Access to the existing Route 70, Arendell Street, is challenging at best, even as Radio Island is currently developed. “So without a lot of additional infrastructure going into place there I can’t even see from a highway standpoint how Radio Island would serve to play a significant role. So what does that leave us with?”

Gov. Pat McCrory’s proposed bond referendum, Connect N.C., might be the answer to that question. The bond’s budget includes spending $125 million upgrading Morehead City’s port infrastructure to accommodate larger vessels, $75 million at Wilmington’s port for improvements and repairs and $50 million on expanding the rail system. Part of the governor’s 25-year vision for the region includes upgrading U.S. 70 to interstate standards and building a new rail and highway access bypassing Morehead City and reaching the port from the eastern side.

The channel to the port has also faced years of ongoing challenges with shoaling. “Getting the dredging situation under control is critical,” said McGowan, no matter the activity taking place, he added.

Whitlow said he was present earlier this year at a meeting of the Morehead City Port Committee, a nonprofit group interested in developing port business, when members of the American Petroleum Institute discussed the potential economic benefits of offshore drilling.

N.C. Ports Authority spokesman Cliff Pyron, said port officials are prepared to react if drilling plans move forward. “We could be the receiving facility for these types of projects but have not been approached by any particular business ventures at this point in time,”Pyron said Monday in an email.

Whether Morehead City is prepared to handle the population growth from the industry is another question.

“We’re pretty well fixed for water and sewer, so we have that infrastructure in place,” said Whitlow, “but let’s say 2,000 or 3,000 people came in to support the oil industry. Obviously under our current conditions we don’t have that kind of housing available.”

Both private and public sectors would have to pour their resources into building up for the big influx of workers and their families, he said. More emergency medical personnel, firefighters, police officers, sanitation workers, teachers and doctors would be required. Also, further expansion of the county hospital may be needed, Whitlow noted.

The growing pains expected if industry and jobs were to come and the stress on city resources weren’t Whitlow’s greatest fears. It’s, by nature of the industry, that all those people could be sent packing again a few years later. It’s the typical oil industry “boom and bust” seen in some Oklahoma and Texas towns that’s a bigger concern, he said.

“When (the industry) is growing it has a positive economic impact, although it doesn’t necessarily have a positive community impact; and when it’s dying, it certainly has a negative economic and community impact,” said Whitlow. “Growing too fast is not a good approach to things.”

If the industry selects a site in Morehead City, then city officials would have some say in what the industry could or couldn’t do, said Whitlow. However, if a firm becomes a tenant at the port, “the state does not have to go through a lot of our processes, and we don’t have any particular domain over some of what the state does,” he said.

Ultimately, site selection depends on a number of variables, many of which remain unknown, McGowan said. “All of that is dependent in large part upon what the resource is – is it oil? Is it natural gas, dry gas, is it wet gas? Where is it located exactly? What are some of the potential challenges to not only exploring and producing that product but then getting it to shore to refine and to make into the end product?”

Opponents of offshore drilling edged out supporters among the North Carolinians who would likely be most affected by drilling for oil and natural gas off the state’s coast, according to the results of the first opinion poll on drilling in the state’s eight oceanfront counties.

Forty-six percent of the respondents in the poll commissioned by Coastal Review Online were opposed to drilling, while 42 percent favored it. The rest were undecided.  With the poll’s four point margin of error, it’s pretty much a toss-up.

The poll does, though, contrast sharply with a statewide industry poll done earlier in the year that found that more than 70 percent of the state’s residents favored offshore drilling.

“I don’t think it’s a slam dunk for a lot of people unless you’re a die-hard environmentalist or in the drill-baby-drill crowd,” noted Jim Williams, who conducted the poll for Public Policy Polling of Raleigh.  “For most people, there’s a lot of gray.”

The poll surveyed 868 residents in Brunswick, Carteret, Currituck, Dare, Hyde, New Hanover, Onlsow and Pender counties. The telephone poll was done Monday and Tuesday.

In keeping with similar polls, the survey found huge differences in opinions based on party affiliation and gender. Almost six in 10 self-identified Republicans favored offshore drilling, while 27 percent of Democrats did. Support for drilling among those who said they weren’t affiliated with either major party fell in between at 38 percent.

A third of the women surveyed supported offshore drilling and more than half opposed it.  The numbers for men were reversed at 51/40.

Most of the poll numbers are in line with national and statewide polls on offshore drilling, noted David McGowan, executive director of the N.C. Petroleum Council. The council is affiliated with the American Petroleum Institute, the largest industry group in the country.  He was, though, a bit surprised by the big gap in support between Republicans and Democrats. The statewide poll that the institute commissioned in January found support by party affiliation was 90 percent among Republicans, 65 percent among independents and 55 among Democrats.

“People on the coast have heard more about this, and due to their proximity, they have more at stake and have more concerns about this,” McGowan said. “So it makes sense that there would be a little more opposition in those eight counties.”

Todd Miller, the executive director of the N.C. Coastal Federation, draws a deeper message from the poll results. The federation has historically opposed drilling off the state’s coast.

“These results confirm that the more people learn about the facts of offshore oil and gas development the less they like it. Earlier polls showed much less public opposition,” he said. “It will be interesting to watch how this issue plays out politically since there appears to be a pretty strong, almost seismic shift, in public attitudes regarding drilling.”

About 60 percent of the respondents thought that drilling would likely lead to positive benefits for the state: more jobs, increased revenues for state and local governments and greater energy independence for the country.

But they also worried about the possible negative effects. More than half thought that the coast’s multi-billion-dollar tourism industry would likely be adversely affected. More than six in 10 thought recreational and commercial fishing would likely suffer and almost that many thought that a major spill or accident was likely. Almost three-quarters of the respondents said drilling would likely lead to an oil refinery, pipelines, gas processing plants or other oil infrastructure being built on the N.C. coast.

“Even people who are inclined to support development offshore are concerned about the possibility of a spill,” McGowan said. “I’m concerned about it, but that’s the reality of the situation.”

The mixed poll results reflect the emotions and opinions that we saw expressed in the last four days of CRO’s series on offshore drilling. Reporters traveled the coast from Calabash to Corolla, talking to dozens of people about offshore drilling. The reactions and opinions were mixed and many who said they supported drilling had misgivings about what its adverse consequences could be.

Large numbers of poll respondents also thought drilling would be both good and bad, Williams noted. “I was a little surprised that people sort of believed everything, the good stuff and the bad stuff,” he said. “I think you have competing emotions. People want the jobs and the added energy independence, but they’re worried about the environment and the tourist economy. At the end the day, though, the bad stuff outweighed the good stuff because opponents outnumbered supporters.”

Support for drilling was highest in Onslow County, where more than half of the respondents were in favor of it, and lowest in New Hanover County, where about a third of those surveyed favored drilling. Hyde was the only other county where supporters outnumbered opponents, 45/31. Some of the individual county results, though, have to be viewed cautiously because of the small sample size, Williams said. Those Hyde numbers, for instance, are based on fewer than 10 respondents.

Never do I tire of Ocracoke Island, I thought as my Mini Cooper bumped over the ferry ramp onto N.C. 12 to drive the 13 miles to the village.  It has a vibrant native community mixed with “come-here’s” that all passionately support its fishing heritage, culture and maritime history. And thanks to being part of Cape Hatteras National Seashore, the beach is pristine.

The next morning, I took advantage of the lull in the flood of tourists to chat with some locals about oil drilling.

“It’s like completely unsafe,” said owner Tara Grey, owner of Bead by the Sea, overlooking Silver Lake Harbor, “and it will ruin the environment. It will ruin everything what the whole world comes here to enjoy.”

Grey, 39, a long-time visitor to the island, had tired of her fast-paced career in the film industry. She recently moved full-time to the island, opening her shop in an old cedar shake house at the end of Community Square docks. Now she can look out her window and see sea turtles and dolphin.

Drilling technology, she said, is clearly not foolproof. “We should learn from our mistakes.”

But Grey faulted “a machine of oil corruption” for the continued risk.

“It’s criminal what’s going on – that the government supports this kind of industry because it’s about making money. They’re ripping off the entire country and ruining it.”

Mixed Feelings

Down the road at his shop on the harbor, David O’Neal, a native carver who owns Downpoint Decoy Shop, said he has mixed feelings about drilling. Surrounded by his meticulously crafted and lifelike ducks, O’Neal seemed to share Grey’s cynicism.

“To tell the truth,” he said, “fishing is shot anyway, so let them drill, if it will lower our taxes.”

Although he concedes a spill would be bad, if drilling is done right “at least it would keep the money in the United States.”

“It’s all politics anyway,” O’Neal said. “They don’t care what I think or what you think. Money controls everything.”

I caught Greg Honeycutt, who chairs the board of the community radio station, WOVV FM, as he was about to leave. Honeycutt said he signed a petition against oil drilling that was circulating around the island.

“My gosh, just think of the negativity of the press, of all the things that can happen environmentally, weather-wise,” he said. “I think it would provide more harm than anything.”

Before I headed off the island, I stopped at Ocracoke Oyster Co., where I met owner Janille Turner sitting at the darkened bar, doing paperwork.

Turner and her husband had run a popular eatery, the Topless Oyster Restaurant, on Dolphin Island in Alabama when the BP well exploded in the Gulf of Mexico in 2010. Businesses, including theirs, were devastated. It wasn’t just the oil that was harmful, she said. The dispersants that were sprayed to break it down burned your body, she said, and caused nosebleeds and respiratory distress.

“BP, they did nothing for any of us, business-wise, to recover,” she said. “It killed us. We hung in there for 11 months. It was terrible.”

Down East

After quick good-byes, I hurried to catch the late afternoon Cedar Island ferry, a 2-hour 15-minute cruise across Pamlico Sound that cost $15 and serves as an alternate route to Beaufort and Morehead City.

Disembarking at the tip of Carteret County, I drove for miles through the vast, flat and extraordinarily isolated marshlands of Cedar Island National Wildlife Refuge.

Eventually, I come upon some small homes with porches and tidy yards.  Fishing still provides some of the few jobs on the island.

One native fisherman, Bradley Styron, talked about how, when looking at the big picture, he can see some value in drilling.

“We would be hopefully less dependent on foreign countries for our source of energy,” he said, “but I think it would have to be done with a lot of caution.”

And there are more safeguards now than there used to be, he added.

“I think it has merits and certainly nobody wants to ruin the environment, but you know sometimes you have to take chances and have to weigh the options.”

In the tiny whistle stop of Davis, Joe Taylor, 74, was catching up with a friend at J.D’s Gas at the corner of U.S. 70 and N.C. 12.  But he didn’t seem to mind my interruption.

As far as opening the coast to drilling, Taylor, who works at James Styron Fish Co., said he would “love for it” to happen. For one thing, he said, the platforms would only make fishing better.

“Drilling for oil don’t hurt anything,” he said. “This country can’t live in a bubble anyway.”

Maybe there’s no way to completely prevent a spill, he said, but all the fears about disastrous consequences to tourism and the ecosystem are exaggerated. “That’s just down-minded people that think that,” he said. “It’s like you don’t cut your grass because you might spill some gas.”

A little down the road in Smryna, another speck on the map, Arlene Wood, also 74, said she wouldn’t have a problem with drilling, although she definitely would not want oil marring the beaches.

“It’s a double-edged sword,” said Wood, who was working at Lookout Grocery store. “We need the economy here. It’s very poor and we need to tap into it because it’s a resource and we should keep the money here.”

Beaufort

But even in the small coastal city of Beaufort, a pretty maritime community with a lot more commerce, folks put hopes for economic gain above concerns about pollution.

“If it’s going to benefit us, yeah,” said Robert Utley Jr., a forklift operator at Radio Island Marina. “The thing I’d be worried about is the leaks and stuff. If they could do it without spills, it’d be great. It would bring jobs.”

Desiree Rouse, 32, from Morehead, with her two young children in tow at Radio Island beach access, similarly favored offshore exploration, but worried about whether it could be done without an accident.

“I hope that they could,” she said. “But you can’t guarantee that.”

Rouse’s brother has fought in Iraq and Afghanistan, and her father is a retired Marine Corps sergeant major, so she is keenly sensitive to oil’s connection to U.S. conflicts in the Mideast and the benefit of domestic oil.

“I think that’s why we’re constantly going over there,” she said. “Yes, it’s good, we’ll have our own fuel. We’ll deal with our own resources. But you think of the future for our kids. Are they going to live in a world where they can’t swim in the ocean? And you want the country to stay safe.”

Marissa Chadwick, who was also enjoying a day at the Radio Island beach, said she believes drilling could bring jobs.

Chadwick, 16, said her father, a boatbuilder from Harker’s Island, has done shrimping off Ocracoke and has traveled to New Jersey to fish. Now, he’s trying to get a job on an oil rig in the Great Lakes.

“I think it would be a good thing,” she said, “because a lot of people around here can’t make money fishing or what-not.”

Pamlico County

Next, I headed inland to Cherry Point to take the 20-minute free ferry to Minnesott Beach, a Pamlico County community of 400 along the Neuse River that actually has no beach.

I stopped at Town Hall and found the sole person in the building, town manager Carolyn Braly, who good-naturedly switched gears without even a flicker of annoyance.

“After seeing what happened in the Gulf,” she said, responding to my inquiry about drilling, “I don’t trust many of the big businesses or the government to take care of us. I know there are little spills going on all the time. There’s leakage.”

Braly, 72 said she moved to Minnesott Beach in 2001 after being flooded out from Rocky Mount by Hurricane Floyd.  So she’s seen water pollution. It’s bad enough, she said,  that sewage dumped by some upstream communities, as well as diapers and kitchen garbage dumped by boaters, shows up in the Neuse River off Minnesott Beach.

“There’s so much pollution going on everywhere,” she said, “to make something else available to pollute the area.”

With just 800 or so residents, and up to 5,000 sailboats that dock there annually, the nearby waterfront town of Oriental, favored by sailors for its protected harbor, has its own version of tourism.

Peter Christiansen, 21, working his summer job at Inland Waterway Provision Co. in Oriental, is a business major at Western Carolina University whose parents have a home in Oriental. He said he is “not a fan” of drilling.

“I’m pretty protective of ocean waters, because I like to go out on the water and I like it clean,” said Christiansen, who enjoys sailing.  “Being out on the water, you know how pretty it is. And water should be pretty.”

Christiansen said he would be willing to pay more for gasoline, but he is not expecting dramatic improvements in U.S. energy policies. “I’m not optimistic, no. I think people are greedy.”

New Bern

Finally, the next morning, I arrive at my destination – New Bern, a lovely historic town on the upper Neuse River.

Even though it is tucked in from the ocean, people I spoke with here didn’t pause for an instant in considering the possible impacts of Atlantic oil drilling on their community.

“I moved here from Texas,” said Dean Quadir, manager of Persimmons Waterfront Restaurant in New Bern. “I spent some time in Galveston. There were dirty beaches – very, very dirty beaches,” he said.  “All you see is the platforms and the big boats. I wouldn’t want to see that here.”

Down the road from Tryon Palace, at the tail end of the historic district, I visited Linda Murrell’s beauty shop, Natural Creations Hair Salon.  Inside, Murrell, a 43-year-old mother of three, was in the process of braiding 12-year-old Gabrielle McRae’s hair.

But she said she’d be happy to talk about oil drilling.

“The first thing that jumped to my mind: ‘Are they crazy?’” she said, relating her initial reaction to the proposal. “North Carolina is a hidden treasure. Oh my god, just leave it alone!”

Murrell said that the money would not be worth the risk to the coast. “Not when it’s going to take away from the beauty,” she said. “Nobody’s going to come to the coast if they do this. Who wants to see an oil well?”

Gabrielle, who lives in Jones County, agreed with Murrell.

“I don’t think they should do it because it would kill the animals in the sea,” she said. “It will hurt the animals. There’s a lot more jobs they can do out here. Just don’t harm the water.”

Joyce Price, owner of Stanly Hall Ballroom near the riverfront, could see both sides. “Well it has to be done somewhere,” she said. “I would love for our country to be energy independent. If it’s a high risk to our environment, then I’d certainly have to consider that.”

But until people become more efficient in their energy use, and good alternatives are found, it would be nice to not depend on foreign oil.

“You see all the mayhem in the Middle East,” she said. “It just would be great to be free of them. We wouldn’t even have to go to war if nobody bought their oil anymore.”

Tess Malijenovsky contributed to this report.

North Carolina is one of the leading producers of commercial-scale solar energy in the nation. The state has also been selected by the federal Bureau of Ocean Energy Management for a potential offshore wind project off Kitty Hawk or at one of two locations off Wilmington.

But opponents of offshore oil drilling do not necessary favor alternative energies such as solar and wind. Some, in fact, are nearly as skeptical of alternative energy production in the state as they are offshore oil production.

“I don’t think wind energy has been thought out, because I know that other areas that have it, you have to bury (turbine footings) so deep in the ground – our soil is so sandy,” said Carolyn Braly, the town manager at Minnesott Beach.

And Braly said that she has heard “horrible things” about solar farms. “The birds flying over – they’re just fried in the air,” she said.

“I don’t know,” she said. “We’re screwing around with our environment these days. We’re going to destroy what we have. I haven’t heard anything lately that swings me in either direction firmly. A little bit of this, a little bit of that. But massive anything isn’t good, I don’t think.”

Alternative energy is still too impractical as a substitute for oil, said Desiree Rouse, from Morehead City. “I guess in the future someone smart will invent something, but I don’t see that happening in my lifetime.”

On the other hand, some also expressed impatience with leadership that has discouraged development of alternative energy production in the state.

“On the Outer Banks, wind farms would be great,” said Hadley Twiddy, owner of an outdoor recreational business in Corolla. “Why in the world would we invest in something that we know could damage our shoreline when we have other options with less far-reaching ramifications?”

“People need to come to a higher universe about energy – period,” said Tara Grey, owner of Bead by the Sea in Ocracoke village. “There’s so many sustainable sources. There’s wind power. There’s solar power. For anything out there, it’s expensive, but the government should subsidize solar. The sun’s out everyday. I mean, it’s free.”

“I think it is shortsighted of our government,” said Debbie Price, a real estate broker in Corolla. “They need to invest more in wind power and solar.”

Greg Honeycutt, owner of Ocean Atlantic Rentals, said it’s not only wind and solar that would make a difference. Biofuels, for instance, could provide a sustainable way to power cars, trucks and boats.

“We have a lot of vehicles in our business,” he said. “Sure, it’s nice that gas prices here have dropped. I’m very much for alternative fuels.”

One of the oft-repeated arguments against offshore oil development is the detrimental effects on fishing, but fishermen are not always opposed to drilling. Some even think that because fish congregate around oil rigs, that recreational fishing actually is improved.

Joe Taylor, a 74-year-old fisherman from Davis in Carteret County, said that he has worked in the Gulf of Mexico and seen for himself that drilling doesn’t harm fishing.

“It’s all a bunch of bull, anyway,” he said. “I’ve been all around those oil wells – the closer I got, the better the fishing was. Drilling for oil don’t hurt anything. They got better fishing down in Mobile Bay than they ever did.”

Bradley Styron comes from generations of fishermen on Cedar Island in Carteret County, where he still makes a living fishing. He said that offshore oil drilling has its merits.

“We would be hopefully less dependent on foreign countries for our source of energy, but I think it would have to be done with a lot of caution,” he said. “And now, with that being said, there are a lot more safeguards than there has been before in the way they do things.”

Styron said it would be “speculation” to predict how a spill would affect his business and the community.

“But let me say this,” he said. “My father told me when World War II started, it was nothing to see oil tankers off here afar, burning, and he said the beach would be covered with oil, or crude or you know, the oil tankers exploded. This may have been a coincidence, but when the war ended and people came home, that’s when everybody started building trawlers and all kinds of stuff because the shrimp and the fish were so abundant.”

The N.C. Fisheries Association, a nonprofit advocacy group for the state’s commercial fishermen, has decided not to take a stand on offshore wind or oil development for the time being. In a statement, the group said that it will continue to participate in stakeholder meetings to ensure their concerns are addressed “and to keep our options open for changes in our position as we learn more.”

Tess Malijenovsky contributed to this report.

It was on the 5 o’clock ferry from Aurora, heading back to the Outer Banks, when a conversation took place that encapsulated the divergent viewpoints I had heard during my 450-mile trek combing the coast.

The passenger in the adjacent white pickup truck leaned out his window, asking where I was going, and I told him about my adventure talking with local folk about oil drilling. A spigot opened.

“Drill!” he exclaimed with gusto. Why not? Better than buying it from the Mideast.

He and the driver next to him, a dark-haired younger man, worked at PotashCorp, a large phosphate-mining operation in Aurora in Beaufort County on the Pamlico River.

After a week of reporting, I had tucked my notebook away in a safe place.  I could tell that the men would be spooked (“A reporter? I’d better shut up,” said one.) if I pulled it back out and started taking notes.

So for the rest of the 30-minute ride, I just listened and watched.

The thing is, he continued, we need fuel, so why not get it here and keep it here?

But what if there’s a spill? the driver interjected. It’ll ruin fishing and spoil the coast. I don’t like the idea of drilling, he said firmly.

The older man scoffed. We’re all doomed, anyway. All that stuff they’re doing – the drilling, the fracking, the pumping – the Earth is going to go up in flames one day, just like the Bible says. So we might as well get the oil while we can.

To that, the younger man shrugged and shook his head silently while his friend talked on.  Soon, the ferry approached its terminal in the Bayview community and the conversation ended as abruptly as it began.

Unpredictable Responses

From Corolla to New Bern, winding from outer to inner banks on the northern half of the N.C. coast, people’s opinions on the prospect of drilling for oil off their beaches – as with these two men returning from working at a mine all day – reflected their life and work experiences and their relationships with family, community, government and the environment. There was no consistent or predictable response: People who made their living on the water were as likely to favor drilling as not. Remarkably, despite the controversial subject, only one person in the three dozen or so I approached declined to talk.

Some viewed spills as a necessary risk; to others it was an unacceptable, needless threat. But a number of folks – even those whose paychecks were dependent on happy tourists – were of two minds: fearing pollution but impatient with not-in-my-back-yard or NIMBY attitudes and wanting the purported jobs and local revenue drilling could bring.

“I think it’s like a lot of technology – it’s a double-edged sword,” said Sharron Frink, a novelist who lives in Kill Devil Hills. “You have to be realistic. You can’t live in a fantasy world where everything is perfect.”

Frink, a middle-aged woman with a soft, South Carolina drawl, said the income from drilling could be used to build new bridges and other infrastructure. “I’m pragmatic about the whole thing,” she said. “You want oil. It has to come from somewhere. And I don’t know anyone who’s willing to give up their SUVs.”

Manufacturing Vacations

In Corolla, where I started my jaunt, those I spoke with were adamantly opposed to oil exploration in the Atlantic.

A late bloomer to tourism – the first hotel was built in 1995 – Corolla today provides about $10 million annually in occupancy tax revenue and 55 percent of the tax base to rural Currituck County.

Despite its abundance of “McMansions,” Corolla still has historic charm and wide, beautiful beaches.  Unlike much of the Outer Banks, it has a tiny year-round population and is essentially closed in the winter.

Tucked off the tree-lined back road through the old village, kayaks and bicycles were visible in the yard of Coastal Explorations, an outdoor adventure business owned by Hadley Twiddy, one of the community’s rare locals.

“I feel like if there is an oil spill, it’s not going to be isolated. It’s going to be spread out,” said Twiddy, a young woman with long dark hair. “It’s still not safe. It’s hard for them to tell us there is no risk when we can see the risk in the news.”

To Twiddy, oil drilling is anathema to a place that attracts visitors by the millions for its environment. “If tourism fails here, we have no leg to stand on,” she said. “On the Outer Banks, there is no alternate industry. We manufacture vacations.”

[su_quote cite=”Hadley Twiddy, Corolla”]If tourism fails here, we have no leg to stand on. On the Outer Banks, there is no alternate industry. We manufacture vacations.[/su_quote]When I strolled into Corolla Real Estate, broker Debbie Price was intently working at her computer, but she couldn’t resist giving her opinion on the subject.  “I think that it jeopardizes one of our most valuable natural resources – which is the beach,” said Price, an Outer Banks resident since 1976.  “It jeopardizes the livelihoods so many people on the Outer Banks, and it jeopardizes the investments here in real estate, basically from all over the country. And there are a lot of people who invested a lot of money here.”

Moving to the bustling main street, I stopped at Corolla Surf Shop in Corolla Light shopping plaza, where Phil Clayton was able to opine between customers. Clayton, 26, a resident of South Swan Beach, a nearby off-road community, said offshore drilling is a hot issue for his generation.

“Most people in my age group,” he said, “are kind of on the liberal side and are against it.”

A surfer as well as a trained geologist, Clayton said it makes no sense when the risk of a spill is weighed against the minimal advantages to the state.  “I totally don’t want oil drilling out there,” he said. “It’s important to me that our coastal economy stays with the tourists.”

Heading down N.C. 12 toward Dare County, I pass elegantly landscaped subdivisions and a stream of traffic coming north. On every Saturday and Sunday in the summer, traffic on this two-lane road – the only access to Corolla – will be bumper-to-bumper.

Southern Shores: Trees and Activists

A few miles farther south, I’m in Southern Shores, the first planned community on the Outer Banks, also notable for its tree-shaded neighborhoods, as well as its educated, activist citizenry.

Ursula Bateman, 71, who has lived in the town with her husband for 22 years, is a vocal opponent of offshore oil projects, especially considering the powerful currents and weather conditions off the Outer Banks.

“If we really need it – fine,” she said about oil. “But let’s have it done where it’s very, very safe. They’re constantly having accidents with it. There are other places they can go. It should not be the ocean.”

Long-time Outer Bankers like Bateman are well-schooled in opposition to oil drilling, with the community having fought off proposals to drill exploratory wells 45 miles off Cape Hatteras, one in the late 1980s from Mobil Oil Corp., and another in the 1990s from Chevron USA.

A recent federal meeting in Kill Devil Hills drew a record crowd of Outer Banks residents, nearly every one opposed to drilling.  But on Hatteras Island, with nearly 50 miles of beach within Cape Hatteras National Seashore, people are already exhausted by struggles with the government and environmental groups over beach driving, beach nourishment, bridge and road projects and inlet dredging, on top of the continual challenges of fisheries regulations and storm damages.

“I don’t see why they need any more issues around here,” said L.T. Eure, a Southern Shores resident who services pools in Rodanthe, Waves and Salvo, communities to the south along the banks.

Chatting from his truck outside Island Convenience in Rodanthe, Eure, 56, said that during his 20 years as a shipbuilder in Norfolk, Va., he saw the corrosive effects of saltwater on pipes. Offshore, that leads to leaks or spills. “There’s always a mistake – inevitably,” he said.

Oil Derricks & Tar Balls

Richard Byrd, a 60-year-old surfer who works at Rodanthe Surf Shop, recalls how ugly oil derricks and tar balls spoiled the beach at his former home in southern California.

“This place, we have enough problems keeping the road open when there’s a storm,” he said. “If the beaches were shut because of oil, we’d be done for. Economically, an oil spill would ruin this place.”

Byrd, who has the classic lean surfer build and long, sun-streaked hair, also dismissed promises of jobs. The expertise required for offshore projects, he said, would result in a work crew that included “not a soul from around here.”

One of the special things about Hatteras is its unspoiled environment, making a dirty industry like oil especially counterproductive, said another shop owner. And the recent oil spill on the California coast proves that the risk is real.

“It’s a horrible idea,” said Jeanie Taft, owner of Sandcastles in Avon. “And it’s very frightening to think of what happened in Santa Barbara happening here.”

Seismic surveys are expected to provide updated details on offshore Atlantic deposits.  Although only one lease will be offered in the 2017-22 Atlantic lease, it is not yet known where that will be.

“What if there was an accident?” said Sharon Flowers, 60, chatting after her shift at St. Waves Seafood & Steaks in Waves. “There’s so many wildlife who would be killed.”

Despite the dire consequences of a spill, she said drilling is not a topic among residents who are jaded by the heavy presence of government on the island. Many have adopted a “why bother?” attitude about speaking out, she said.

“To be honest, if it comes up, people just shake their heads,” she explained. “It’s throw up your hands and look the other way.”

But not every islander is against drilling and some are on the fence.

Gracie Gray, 60, owner of the Sands of Time Campground in the historic village of Avon, said it’s hypocritical for people who drive everywhere to oppose drilling. Then again, she added, strict management of protected birds has already limited beach access during certain times of the year, so it would be bad if the effects of oil drilling added to the island’s woes.

“We love birds, except one bird lays an egg and the whole beach is closed,” said Gray, who moved 40 years ago to Avon – her parents’ native home – from Norfolk, Va. “Yeah, if oil spilled, it would kill us. But it would be fast death, not an egg here and an egg there.”

No Problems With Drilling

Heading through Avon, except for a Dairy Queen and a Food Lion grocery store, there are few chain stores on the island, a point of pride for islanders. There were also a number of shuttered businesses, which may explain why some residents view an oil project as an economic booster.

“I don’t have a problem with drilling – there’s only been one or two spills,” said Robert Henry, 67, at Red Drum Service Center in Buxton, just north of the Cape Hatteras Lighthouse.

Yet, Henry agreed that an oil accident could hurt the island.

“I’d just as soon not have it out there,” he said, “because there’s so much available on land. This is a precious resource. This place is barely holding on by a thread because of those damn tree-huggers.”

Over at Pop’s Raw Bar, a popular local hangout in Buxton, two gents sitting next to each other at the bar did not see offshore drilling as a threat.

“That’s the American future,” said Kevin Morris, owner of Cape Wood Campground in Buxton. “It takes it away from the Arabs. I don’t have a problem with it.”

Ollie Jarvis, owner of Dillon’s Corner, a tackle and gift shop in Buxton, and a resident for 65 years, seconded his friend’s assessment. “I think it’s great for the economy of the United States to not depend on foreign oil,” Jarvis said. “Maybe it would help bring more people to the island if the gas prices were cheaper. The wells offshore, I mean, you’ve got to take the good with the bad.”

Traffic was slow-going on two-lane N.C. 12 through Frisco and Hatteras, but it’s at the ferry dock at the tip of Hatteras where tourism makes itself most evident. Since I was catching the free ferry to Ocracoke Island late on a Sunday afternoon, I knew that the crowds wouldn’t be bad because weekly renters had just arrived. In the height of summer on mid-week day, the line of vehicles waiting to take the one-hour trip can back up for miles.

I was in one of the first vehicles in line, and boarded the vessel just as the evening sun started tinting Pamlico Sound pink.  Sunburned tourists walked to the rail to photograph one another in front of the panorama of water. As the ferry churned toward Hyde County, I took out my veggie wrap and watched the show.

Thursday: Back on the mainland

KITTY HAWK — The Outer Banks has a history going back to the late 1980s of vocal and well-organized opposition to offshore oil exploration. Many communities on the Banks have added their names to the growing list of coastal town officially opposed to drilling. Some barrier-island communities, though, have yet to take a position on opening the Atlantic seaboard to drilling.

“We’re not going to take a stand one way or another at this time,” said Gary Perry, the mayor of Kitty Hawk, the northern Dare County town the Wright brothers made famous more than 100 years ago.

It’s not that the town doesn’t have apprehension about damage from potential spills, he said, or that its board of commissioners is unaware that most of its residents likely oppose drilling. But for the time being, he said, the town is waiting and watching as more is learned about the lease proposal.

“If there was a deposit, and they really wanted to pursue it,” Perry said, “then we would want them to prove that it can be done safely.”

In Currituck County, where tourist haven Corolla on the Currituck Outer Banks bankrolls much of the county coffers, county commissioners are also holding back taking a stand until more is understood, said Vance Aydlett, the commissioner who represents the Outer Banks.

Aydlett said that several county officials recently met with U.S. Sen. Richard Burr, R-N.C., to discuss the topic, but he is not aware of any specific outcome from their conversation.

“From my perspective, I am very hesitant to see oil drilling there,” he said, “simply because of some of the disasters we have seen in other parts of the country and other parts of the world.”

Aydlett, 62, said that he and his wife have a family home in Carova, the off-road area between the Virginia line and Corolla, and he appreciates the beauty – and value – of the beach.

“I don’t think a person on vacation wants to look out their window and see an oil rig, or see big balls of tar on the beach,” he said.

Even the most sincere assurances, he added, cannot guarantee that there won’t be an accident. “Safe as it possibly can be,” he said, “doesn’t mean that it doesn’t happen.”

Southern Shores, a mostly residential town between Duck and Kitty Hawk, has yet to address drilling at the council level, said Mayor Tom Bennett – although several members have spoken about the issue individually.

Bennett, however, said that he is opposed to drilling primarily because of the potential detriment to the “very dynamic” tourism business.

“It could really be devastating to the whole industry and the whole state,” he said. “I think it would be a mistake to drill offshore.”

Bennett said that most of his contemporaries have voiced opposition to drilling. He said that the best approach is to coordinate with the local community and send a delegation to Raleigh to speak to the governor about slowing down the process.

“You organize, you mobilize, you try to analyze what your options are,” he said.

On the southern tip of the Outer Banks, Ocracoke villagers are solidly against drilling, but the Hyde County Board of Commissioners has yet to take a position on it, said county manager Bill Rich.

“I would say that they’re waiting to see what’s going to happen,” he said of the board.

Rich said that several county officials recently met with Burr to discuss the pros and cons of drilling. He said that Burr did not promote one side or the other.

Similar to Corolla and Currituck County, tiny Ocracoke Island is a mega-engine of tourism revenue for rural and otherwise poor mainland Hyde County.

Rich hesitated to speak for the commissioners, but he did say that when it came down to it, he is “pretty sure” they would vote against offshore drilling.

“There’s no question to me that Ocracoke is totally against it,” he said, “and that mainland Hyde County doesn’t see much value to it.”

WILMINGTON — The wind blew ferociously on the second floor of the Southport-Fort Fisher ferry where two young men working onboard stood side by side in khaki uniforms wearing dark sunglasses. Coby Benson and Chris Pittman agreed, drilling for oil and natural gas off the N.C. coast would be a good thing.

“I’m for it,” said Benson, a native of nearby Wilmington.

“The only way it would affect us would be positive,” said Pittman.

The men expressed how great it would be if more jobs came to the area, particularly maritime jobs. “The local economy would pick up, too, from more restaurants and housing,” Benson suggested.

A number of people I talked with on my travels along North Carolina’s southern coastline also supported offshore drilling. Old salts in Sneads Ferry, a fishing village in Onslow County, for instance, thought the industry could benefit the younger, local captains looking for work.

I found the group of fishermen on the last day of the weeklong road trip, hanging out in Mitchell’s Seafood Market. It wasn’t until I spoke the magic words, “Sammy Corbett sent me,” — the name of a Hampstead fisherman who chairs the Southeast Marine Fisheries Commission — that I was let into the circle.

“It might create a lot of jobs for the fishermen around here because this industry is going bad to the wayside, and it could give some options for some younger captains,” said Randy Millets, who runs the fish house, which is just down the street from where he was raised.

He sat back in his office chair within a white room that had nothing more than a soda machine in the corner and a tall counter against which a handful of other fishermen leaned. A middle-aged man, he looked to be the youngest of the group. He wore a light blue shirt and cap that magnified the ocean color of his eyes.

In Oil We Trust

“They had that bad thing happen in Louisiana, but BP took care of them,” said Millets about the oil company responsible for the Deepwater Horizon spill in 2010.

Ray Liberman, an older man standing near me, joined in. “Yeah, I know one guy that become a millionaire over it,” he said, referring to a shrimper who was paid to help clean the spill.

The fishermen were fairly confident that the oil industry would look out for them in the event of a spill and any resulting effects to their livelihoods, but they wanted some reassurance. “We all kind of got an idea of what went on in Louisiana, but we’re not from Louisiana so we didn’t truly experience it, see. There would be a lot of questions we’d like to ask somebody,” Millets said.

Like, if there were pipelines, where would they run on the seafloor and how many? The fishermen wouldn’t be able to drag their trawling nets over a pipeline, and they could easily lose their rigs if they ran across one by mistake, Millets said.

“Most times us guys will sit around and we’ll talk about it, and this one will bring this view up and that view up,” he said. “I might could change tomorrow if we got to talking about it. But, one thing they won’t change my mind on is I do want this country to depend on itself.

“Me, personally, I’m a patriot,” said Millet. “So whether I benefit anything at all from it, at least we’re dependent on our own country.”

Energy independence was the one dominant argument expressed by those not opposed to offshore drilling. So, how dependent is the United States on foreign oil?

In the U.S., net imports of petroleum amounted to 27 percent of what we consumed in 2014 — the lowest annual average since 1985. This has largely been driven by both a boom in natural gas production, more fuel-efficient vehicles and other factors.

You may find it surprising that 90 percent of the petroleum we consumed last year was either produced domestically or imported from Canada, according the Energy Information Administration. We import more petroleum from our Canadian neighbors than all the Persian Gulf countries combined.

Alternatives Instead

A prevailing mantra of those against offshore drilling was the need to aggressively find alternative sources of energy.

That’s what Wilmington native Dan Brawley said on the morning we met near downtown. Wilmington is the largest city on the N.C. coast with a university, a college and roughly 112,000 residents. The slender man with a handlebar mustache, shoulder-length, wiry blond hair and eyeglasses is a leader in Wilmington’s arts community. He’s the executive director of the annual independent Cucalorus film festival and the founder and manager of the Independent Art Co.

“The compelling argument for drilling and exploring for energy in delicate ecosystems is going to become more urgent and more convincing over time,” said Brawley. “So as we’re discussing offshore drilling energy exploration, we should be putting a lot more of our resources into supporting scientists and other inventors, researchers to discover that thing that might just save our ability to live on this planet.”

Brawley and I took a walk with his dog Izzy over to Folks Café on Princess Street. Inside, we chose a seat by a large window to keep an eye out for his dog, which was lying on the ground and tied to a post.

In a way, Brawley said, knowing how animalistic humans can be makes him feel a little better about practices like offshore drilling and fracking. He compared it to a colony of ants incapable of conserving a discovered mound of sugar. “In some ways it seems a little bit inevitable that we’re going to go out and tear the earth apart to find energy,” he said.

“Can we come up with a reasonable way to do that?” he wondered, stating the importance of getting back to a place where both political parties can negotiate and find common ground. For many locals, including Brawley, entertaining whether to drill off the N.C. coast feels like a one-sided conversation in which the only the titan fossil fuel industry will be heard.

“It feels to me like this conversation is about ‘How does it feel to be a loser’ a little bit, you know?” he said. “Given the people who are in power. I mean we have a 25-year-set-with-Duke-Energy as our governor, and we know how incredibly powerful the energy sector is in Washington.

“So it’s a David and Goliath battle,” said Brawley.

“People Power”

Even so, Carolina Beach’s Ethan Crouch believes in “people power.”

“It becomes inspiring, to be honest,” Crouch said, “that the people’s voice is still loud and the people want to really, in spite of the literally unlimited amount of dollars that we’re fighting against, people are still coming out; people are still voicing their opinions; people are still signing petitions; people are still calling their senators, still writing letters and still doing whatever they can as citizens to protect what we love so much.”

He was among the more than 300 people who crowded into a Kure Beach town council meeting in January 2014 to voice their opposition to drilling. It was the beginning of a grassroots movement throughout East Coast towns to begin passing resolutions against seismic surveys and offshore drilling. Kure Beach Mayor Dean Lambeth may have lit the match when he signed onto an industry-sponsored letter endorsing exploration for oil and natural gas without any public input.

Crouch has had a large role in spearheading Pleasure Island’s opposition effort as the local chair of Surfrider, an environmental nonprofit organization dedicated to protecting oceans and beaches.

“It comes down to I love the ocean. It’s not worth putting at risk,” said Crouch. “And our — not just love — but our existing economy thrives in this area off clean and healthy beaches, not off an industrialized coastline. You look to the Gulf Coast and that’s where you see the industrialized beaches, literally refineries on the beach.

“That’s not the vibe of North Carolina. That’s not what makes North Carolina great. That’s not why people move here. That’s not why people start businesses here. It’s for those pristine and clean beaches,” he said.

Sean Cook is one of those people who decided to move to Carolina Beach and start a few businesses. He owns Pleasure Island Rentals, which rents out everything from kayaks and paddle boards to beach chairs and umbrellas. He said, “Our rental shop depends 100 percent on tourism dollars and there’s so many other businesses that are the same way all the way up and down the coast.”

I met Cook for a drink at his other business, an oyster bar restaurant. This one was in downtown Wilmington. He’s not for offshore drilling for several reasons. A spill, he said, could potentially affect the local tourism economy.

“If I’m not making money in Carolina Beach and I’m struggling to survive, I’m not coming downtown (to Wilmington) to spend money. I’m not going to Mayfair to buy overpriced clothing. The trickledown effect is so enormous,” Cook said.

Visitors spent roughly $4 billion along  North Carolina’s coast in 2013, according to the state Department of Commerce. And every year, more than 11 million people visit the state’s beaches and coastal towns. Kure Beach, for example, has roughly 2,000 year-round residents, but swells to a population between 400,000 and 700,000 during the summer. This goes for most of the towns along the state’s southern coastline. It appears tourism not only drives their economies but greatly shapes their culture.

Cook asked, where will those 11 million tourists vacation if there was an oil spill of the N.C. coast? Nobody wants to come to the coast to swim in sludge, he said.

However, not all those who work in North Carolina’s coastal tourism industry worry about such accidents. The pier owners of Kure Beach and Oak Island weren’t opposed to drilling offshore. In reference to the BP Horizon oil spill in the Gulf of Mexico, Mike Robertson, Kure’s pier owner, said, “You have to consider all the gas and oil we’ve gotten from the Gulf and all the times it didn’t fail.”

If we’re going to keep using oil and gas products, we need to keep exploring for them, he said. Robertson pointed out that the oil-producing states on the Gulf Coast have some of the best inshore fishing today. He justified the risk of oil spills for the sake of the country’s dominant source of energy with this, “Sometimes you have to break an egg, and bad things happen to good people.”

Born and raised in Kure Beach, he remembers oil washing up on the sand during World War II. “Nature bounces back,” he said. “It ain’t pretty … Now there’s more people to see it and more press to report it.”

No NIMBYs Here

Like Robertson, other coastal residents thought it was unfair to have a “not in my backyard” attitude. Marty Evans of Wilmington doesn’t like the idea of drilling off the N.C. coast and wants the state and country to pursue alternatives, but, he said, “Until I totally swear off cars or oil, I can’t say, ‘How dare you collect oil in my backyard. Go do it somewhere else.’”

There are other tourism-based jobs that stand to potentially benefit from offshore drilling, namely recreational fishing. Oil rig structures create artificial reef habitats that can attract fish. Fishing near rigs – both active and inactive – is legal and popular along the Gulf Coast.

Jon Huff, a recreational fishing guide, lives in a quiet, middle-class neighborhood in Ogden, a suburb north of Wilmington. “In the short term,” he said, “I know if there were offshore platforms out of here it’d be great fishing spots. That’s the first thing you think about.”

“Louisiana is still much more of a destination than we are for recreational fishing,” Huff said. “If it was going to hurt my business from an ecological standpoint, you know, it hasn’t in Louisiana, so how?”

Still, Huff said he had mixed thoughts about drilling and confessed that he didn’t know what the environmental ramifications would be if North Carolina pursued offshore drilling.

If there were three questions people most often said they wanted answers to, they were these: What is the “real” need; what are the “real” environmental effects; and what are the “real” benefits of offshore drilling?

North to Pender

Driving north into Pender County, traffic and roadside development dissipates while the pine forests stretch farther and farther without interruption. The county has fewer than half as many people living in it as Brunswick, New Hanover and Onslow counties and also a smaller population than Carteret County, with roughly 56,000 residents, according to the N.C. Office of Budget and Management. Its percentage of people living below the poverty level was greater than the state and national averages and its average annual income level was lower, too.

Pender County traditionally had an agriculture-based economy. Today however, only about 3 percent of the population is in agriculture, forestry, fishing, hunting or mining. The greatest employment sector is in educational services, health care and social assistance, around 19 percent, followed by retail and construction. Along its coastline though, I met nearly a dozen commercial fisherman, all with different things to say.

Sammy Corbett, of Hampstead, said, “I can’t be against anything that helps the economy.” He feels confident that the fisheries would benefit from the habitat created by the structure of rigs, and that drilling can be done without harming the environment or ecosystem. “I think the [safety] measures have already been taken to make it a lot better,” he said.

I met him at the fish market in Surf City, at the Crab Shack restaurant and fishing dock. There, I talked to watermen from various corners of Pender County’s coast, including those working that day, scaling fish and prepping iced coolers. Ethan Thomas, a tall, slender man wearing dark green waders and a faded orange visor, kept moving around the group discussion, smoking one cigarette after the other. His skin, like the others, had a rough, darkened tint from working under the sun at sea. I didn’t think he was paying any mind to the ongoing conversation about offshore drilling until he said, “I wouldn’t recommend it,” as he passed by.

Thomas used to be a commercial fisherman. Now he works at the market where the pay is more stable. The open seas off this coast are tumultuous, he explained. Commercial fishermen are lucky if they can fish offshore five times in January or February or March, he said, whereas conditions in the Gulf make for access to deep water easier throughout the year. Despite the habitat rigs or platforms could create for fisheries, Thomas said he doesn’t think it’s worth the risk of a spill.

With a sharp glance and one long drag of his cigarette, he concludes, “Oil and water don’t mix.”

By the time the road trip wrapped up in Morehead City, I was left with an array of responses from the 80 people I talked to about offshore drilling. Nearly half of them were against it. While there were an equal number of men opposed as not opposed, no women decidedly supported offshore drilling. The remainder were either undecided or said they were too uninformed to have an opinion.

Wednesday: The Outer Banks

Tony Morris pulled up and docked his green boat by the open-air seafood market in Surf City. The commercial fisherman was getting ready to go to work offshore catching grouper, just as he has for the last 35 years.

Before he headed out, Morris walked inside the fish market to look for a reporter who he had agreed to meet. It didn’t take long to spot me. I was holding a notebook and tape recorder with a bulky camera bag slung over my shoulder.

The Topsail native responded to my question about drilling off the N.C. coast with one of his own. “How’re you going to stop it?” he asked. “It’s big money.”

Drilling could take place at the heart of grouper bottom. The fish come in from the deep sea to spawn near the continental shelf break. That’s where Morris was headed that day. It’s a narrow band he fishes, between 45 and 60 miles offshore. The draft, federal offshore leasing proposal released last winter restricts drilling to 50 miles from shore.

“I would say, ‘Yeah, I would fight it,’ but you can’t,” said Morris. “It’s oil. It dominates. There’s just no way around it. It’s the Koch Brothers … You just can’t stop it.”

Morris’ sentiment stayed with me like an echo as I traveled North Carolina’s southern coastline. From Calabash, near South Carolina’s border, to Morehead City, I talked to 80 people about the prospect of offshore drilling during a five-day road trip. While the majority did not support drilling off the N.C. coast, the responses varied tremendously.

Some people were passionate about fighting it, others like Morris thought the fight hopeless. Some  argued drilling would be in the best interest of the local economy and the country. Several were caught in the middle and undecided and a few admitted they were too uninformed to make a decision.

A Rainy Start

It all began on a rainy Monday morning in mid-April when I met Jim Barber of Sunset Beach. From his balcony on the third floor, you could see South Carolina. The spacious condo overlooked the nature reserve Bird Island — the last bit of beach before Little River Inlet separates the Carolinas. It’s a view of salt marsh, tidal creek, sand dune and open ocean.

Barber offered me a cup of coffee and we settled into two leather-cushioned seats in the corner of his living room. He retired here from Raleigh with his wife, Linda. On his list of major things to worry about, offshore drilling isn’t one of them, he said.

“My view,” said Barber, “is under the best scenarios, it’d be 10-plus years before there’s any serious [oil or gas] production off the coast, if everything went well. There are things that I see more on my one- or two-year horizon that are much more important.”

Barber wouldn’t be the last person I met that week who had more pressing coastal issues on his mind than the prospect of offshore drilling. Other folks who live on the island, for example, said they were worried about a terminal groin proposed for the south end of Ocean Isle, the neighboring island to the northeast. A groin, they feared, could trigger the erosion of Sunset Beach’s north end.

[su_quote cite=”John Corbett, Sunset Beach”]Most of us who are down here came down here because it’s really a beautiful, pristine beach. We really don’t want to lose any of that. If you had an oil spill, the tourism would stop completely.[/su_quote]Sunset Beach is at the base of Brunswick County, which was the fastest-growing county in the state last year after Mecklenburg. Historically, the economy and culture of Brunswick has centered on agriculture and fishing. Today, tourism is its leading economic engine. It’s also become a magnet for retirees looking to escape the snow. There are twice as many people aged 65 and over who live in Brunswick County than the state’s average, according to the U.S. Census Bureau.

Nearly everyone from Sunset Beach I spoke to that first day expressed a fear of an oil spill despoiling the town’s natural beauty, which drives its tourism. As army veteran John Corbett of Sunset Beach explained, “The economy of this little town is heavily dependent upon renting beach houses during the six to 11 weeks during the summertime. There ain’t a whole lot else here that supports it.

“Most of us who are down here came down here because it’s really a beautiful, pristine beach,” Corbett said. “We really don’t want to lose any of that. If you had an oil spill, the tourism would stop completely.”

Risk vs. Reward

The town’s mayor pro-temp, Lou DeVita, agreed. “Most of us move to the coast to enjoy the beauty and serenity,” he said. “Towns establish themselves because tourists get attracted there, and they have an economic engine that drives them.”

He worried that small coastal communities won’t be rewarded in proportion to the risks they’d be taking with offshore drilling. So, Sunset Beach’s town council passed a resolution proposing that the ocean be cherished as are national parks.

“We believe that the oceans should likewise be regarded as a natural treasure to be preserved and protected,” the resolution states. “If drilling for oil is offensive and dangerous to the environment and wildlife in Alaska and the Western states, why is this and other invasive projects safe off our coastlines where containment in the event of a disaster is near impossible?”

As the day began to reveal, this hot-button topic was not a partisan issue. “I’m a conservative guy. I am big time,” said Dave Nelson, a longtime local of Sunset Beach who sells real estate and owns a hotel. He calls himself a “car guy” who likes gasoline and is all for oil independence.

“I’m a firm believer — and man, I’m really stepping out on the line here,” Nelson said, sitting on the couch in his hotel’s lobby, “but it’s about time that we stop this business. There’s no doubt in my mind that we don’t have the ability to come up with some type of other energy source besides just continuing down the same road — a new energy source that’s cleaner.

“When they can convince me that we’re going to get something that’s actually worthwhile besides just money, that it’s worth the effort, that it’s worth the risk, then I believe I’ll side on I’m not for it,” he said.

I ate lunch that first day in Calabash on the state border with South Carolina. In Calabash, you eat fried seafood. It’s so ubiquitous that “Calabash style” means battered, deep-fried fish anywhere on the N.C. coast. That day, however, was the first time I’d actually sampled the real thing in its namesake town.

Captain Nance’s Calabash Seafood Restaurant is on the waterfront. A shrimp trawler is docked outside. The family restaurant, built originally in 1975, is one of the oldest in Calabash and many of its employees are related. My waitress, Donna Nance Morgan was born and raised here. Her short, brown hair was spiked and she wore a bright pink T-shirt with the logo of her aunt’s restaurant. Like a handful of others I talked to later that afternoon in Calabash, Donna hadn’t heard about this proposal to drill offshore.

“I don’t think I could form an opinion because I’ve never lived anywhere that produces oil,” she said. “I don’t know the pros or cons, but I’d be concerned about an oil spill and how that’d affect the ecosystem and also what would happen if a hurricane came through the oil rigs.”

The N.C. coast juts out into the warm water of the Atlantic Ocean, an area nicknamed “Hurricane Alley” because of its track record of damaging hurricanes. Other people I later interviewed also worried how rigs off the coast would survive repeated hurricane seasons.

Donna brought me the lunch special: fried shrimp, fried flounder, fries and hushpuppies with honey butter and, of course, iced tea as sweet as syrup. Mainly, she’d like to know how offshore drilling would affect the seafood restaurant industry, the lifeline of her hometown.

Don’t Sully the View

U.S.  17 through Brunswick County is a monotonous stretch of asphalt past billboards, fast-food restaurants and sporadic shopping centers. Beyond the road are unseen housing subdivisions. I ended the first day inside one of them in Ocean Isle, in a gated community called Ocean Ridge Plantation, complete with four award-winning golf courses. The subdivision bills itself as “southeastern North Carolina’s most exclusive and luxurious beach and golf community.”

Tom and Jeanne Oxenfeld welcomed me for the night. They retired here early from Pennsylvania where they raised their two, now-grown, children, one of whom was visiting from out of town. After dinner, we got to talking about the heavier stuff.

I think for the community here the mindset would be if they go down to Sunset Beach and sit on the upstairs of their private beach house, and if they can see a [wind turbine] or an oil rig, forget it.[/su_quote]Tom was born and raised in nearby Wilmington. He said he’s in favor of  the country becoming more independent from foreign oil but isn’t convinced of the need to drill off North Carolina’s coast, especially in light of its lack of infrastructure.

Tom Oxenfield, Ocean Isle

And, while he thinks that offshore drilling is not good for the environment, he said, he doesn’t know enough about that — something I heard many coastal residents say throughout the week. Unless it fouled swimming waters, oil isn’t something that’s going to personally affect him, he said.

“I think for the community here,” Tom said, “the mindset would be if they go down to Sunset Beach and sit on the upstairs of their private beach house, and if they can see a [wind turbine] or an oil rig, forget it.”

One of the main amenities of the area is the beach, he added, where the young retirees like to take their grandchildren when they come to visit in the summer.

Tom’s daughter, Laura, interjected. “If it doesn’t disturb the day-to-day life of the conservatives that live in this extremely wealthy enclave,” she said facetiously, “then why would it be a problem?”

The following morning I drove to Holden Beach and waited for the rain to stop inside a coffee shop on the mainland. Curt Bolden sat across from me in the café.

“There’s no industry in Holden Beach,” he said. “Most people here are retired or veterans on disability.”

Bolden was a manager of automotive plants for General Motors and Ford Motor Co. before he retired. Now he is a regular at Cappuccino by the Sea, as the shop was named, and said he moved down here largely because it was still affordable. This shop is one of the few that stays open throughout winter, and even then only on certain days because it has no heat.

“It’s a delicate balance,” Bolden said of offshore drilling. “Energy independence is important, but it’s a big ‘oops’ you have to worry about.”

He said he’s not convinced the benefits of drilling offshore outweigh the risks. As a volunteer on the sea turtle patrol, he also worries about how the sea turtles might be affected by spills. “Sea turtles are already endangered,” Bolden said. “Offshore drilling would put them at risk when their populations are already stressed.”

Sea Turtles and Oil

Patrolling the beaches for sea turtle nests and watching hatchlings enter the ocean for the first time is a significant ecotourism business along the N.C. coast. It brings in $30 million annually, for example, just to Bald Head Island, which sticks out in the Atlantic at the state’s most southern cape.

“I invest $200,000 a year and I get a return of $30 million — give me a Wall Street investor that can beat that,” Suzanne Dorsey would tell me later. She’s the executive director of the Bald Head Island Conservancy, which is well known for its sea turtle conservation work.

She based the figure on a 2012 study by Gladys Delgadillo of Stanford University. The report shows that residents and visitors place a high value on the sea turtles that nest on Bald Head Island beaches as an economic factor that should be considered in decisions about development of the island. “These are my constituents who value and preserve their environment, and it pays them back”, Dorsey said.

“I’m less concerned about a giant spill,” she said, “and much more concerned about what I know will happen, and that’s the small to medium spills.”

Dorsey explained, just as ocean currents form island-like patches of sargassum seaweed on the ocean’s surface — the food source for and habitat in which hatchling sea turtles hide — the currents would direct oil there, too.

“So if sargassum is coated by oil, it dies. It then sinks. Then their habitat is gone,” she said, adding that the seaweed is also a food source and important habitat for seabirds.

I left the foggy strand of Holden Beach and drove about 24 miles to Oak Island on the other, east side of the Lockwoods Folly Inlet. The spot to find locals on a Tuesday afternoon, I was told, is a restaurant called Russell’s Place. It looked like your all-American diner. Only two middle-aged women were working the front end, pacing to and from a dining counter and passing handwritten orders through the kitchen window to the cooks. The women seemed to know most of their customers by first name, and though they remarked that business was slow, their gait suggested anything but. The menu, by no surprise, was Southern fare.

Marsha put a menu and napkin-rolled silverware in front of me at the counter and recommended the fried okra and creamed potatoes with gravy. She hadn’t heard of the plan to drill off the coast. Others throughout the week would tell me the same thing. It seems that some people are too busy worrying about the realities of today to worry about possibilities of tomorrow.

Unlike these people, there were others I encountered who were simply indifferent to offshore drilling. As one Carolina Beach resident later said to me, “Most people are ignorant to it and just don’t care. Until it actually happens in their backyard and all of a sudden sludge is coming up on the beach, then they’re going to give a shit.

“Don’t get me wrong,” he said, “there’s a lot of intelligent people on the island who care a lot about this. But the vast majority, they got other shit to worry about, like what the Kardashians are doing or what’s on Facebook.”

Tuesday: Wilmington to Morehead City

“Everyone goes immediately to the environmentalists,” she says, “because we can clearly articulate the impacts to our species that we’re concerned [about] and the environmental impacts at the physiological and habitat level. What astounds me is that our coastal tourism, coastal real estate industries have not stepped up here because there’s also very clear evidence that the broad economy that supports conservation is at risk.

“Where is their voice as our governor, I think, rightly so explores opportunities for this state to have more jobs and more diverse economy?” she asks.

To find out what those in the real estate business south of Morehead City had to say on the issue, I first met with Steve Candler, the executive vice president and director of governmental affairs of the Brunswick County Association of Realtors.

The association, based in Supply, represents around 900 Realtors whom have expressed different views on offshore drilling, Candler said. Realtors stand to benefit from any kind of economic development in their area, he said; but at the same time, they’re selling Brunswick County, so if there are any drastic changes that make it hard to sell, that affects Realtors, too.

Later in Wilmington I spoke with a real-estate salesman who said he “feared” offshore drilling would be a good thing for his business. “I’m for progress,” said Juan Santos, “but it has to be positive.”

“If it creates business and wealth, yeah that’s good for real estate. But, I’m not willing to pay just any price to do business,” Santos said. “Maybe I’m unusual that way.”

The Wilmington Regional Association of Realtors declined to interview.

In the weeks following my interview with Candler, the N.C. Petroleum Council’s executive director, David McGowan, came to speak to the Brunswick realty group about how the oil and gas money might be able to help fund beach re-nourishment projects if offshore royalties are shared with the state.

This possibility at least piqued the interest of Candler. “The municipalities and the counties are looking at different sources of funding even now for beach nourishment—property taxes, parking, all that kind of stuff,” he said. “We think that’s nickel and diming a million-dollar solution. So we need to think of something long term and big — big.”

As recently as May, the Obama administration opposed bills in the U.S. Senate that would allow North Carolina and other states to receive a share of federal revenue from the energy produced off their coasts. Director of the Department of Interior’s Bureau of Ocean Energy Management, Abigail Hopper, said the administration opposes the bills because they would “divert offshore energy development revenue from the Treasury, reducing the net return to taxpayers and adding to the federal deficit.”

MANTEO – Sen. Richard Burr sent some of his people to the N.C. coast a few weeks ago to get a feel for what locals think about the prospect of offshore drilling. In Dare County, they got an earful.

Lee Nettles, the executive director of the county’s Visitors’ Bureau, was among the 20 or so local people invited to meet with Burr’s aides. He sat at a long conference table along with county commissioners, mayors, tourism and chamber of commerce officials and members of environmental groups. No one supported drilling.

Why? Nettles brought up the specter of an oil spill, like the one then ongoing off the California coast. “If that were to happen here, we’d become a wasteland,” Nettles told the visitors from Washington. “We don’t think offshore drilling is a smart risk.”

The fear of what an oil spill might do to the coast’s tourism industry is at the center of much of the opposition among local governments. In North Carolina, from the Outer Banks in the north to Sunset Beach in the south, beaches and coastal towns draw more than 11 million visitors each year. In 2013 alone, visitors spent just shy of $3 billion in the eight oceanfront counties, according to the state Department of Commerce.

Almost 20 cities, towns, counties and tourism agencies along the coast have passed resolutions against drilling or it’s kissing cousin, seismic testing.

Include the Dare County commissioners and every town in the county on that list. “The tourism board passed five resolutions opposed to drilling,” Nettles said. “It’s no secret where we stand.”

And it’s not hard to figure out why. If coastal tourism were the Internet business, Dare would be the Google of the coast. Tourists spent almost a billion dollars in the county in 2013, according to state figures. That’s more than double what was spent in Dare’s closest coastal competitors, New Hanover and Brunswick counties. Local governments in Dare received almost $45 million in sales taxes that year, again far outdistancing other coastal counties.

That’s real money, Nettles told the Burr people, not the estimates that the oil industry and its supporters like to use. If drilling were allowed off the coast, an industry study done in 2013 estimates that oil and natural gas production would have a statewide economic effect of $1 billion to about $5 billion annually by 2035, depending on how much is produced and the prices it sells for. The median estimate is just shy of $3 billion.

The economic impact of tourism in those eight ocean counties will be worth almost $4.5 billion a year by 2035, Nettles noted at the meeting.

Tom Bennett, the mayor of Southern Shores, spoke for everyone around the table. “It would be a tragedy to throw all that aside for the interests of offshore drilling,” he said. “I don’t think any of us support this.”

Warren Judge, a Dare County commissioner, agreed. “The risk-reward just isn’t there,” he said. “You can’t look down the path and see at any point an amount of revenue that would compare to what tourism will provide over the next decades.”

In Carteret County, municipalities including Beaufort and Emerald Isle have passed resolutions opposing offshore oil exploration. Other towns and agencies here have shied away from stating a position, due in part to the prickly politics involved.

Visitors to Carteret County spent nearly $303 million in 2013, according to the N.C. Commerce Department. Those expenditures generated $13.38 million and $ 17.76 in state and local sales taxes, respectively.

The Carteret County Tourism Development Authority has yet to formally oppose offshore exploration. The authority discussed taking a position as early as 2008, but members of the board at the time chose not to vote to approve a resolution proposed by then-chairman Art Schools stating that offshore oil exploration and drilling would be acceptable as long as it doesn’t impact tourism. Board members said at the time the oil industry would not be in the best interest of coastal tourism.

More recently, the TDA has been asked again to consider a resolution, this time firmly opposed to exploration and drilling, but Director Carol Lohr said Thursday TDA board members have expressed concerns that it’s too early to take a firm stance and more information is needed. That said, there is consensus that tourism must be protected.

“From the comments I’ve heard, we would never support anything that would harm the tourism industry in any way shape or form,” Lohr said, adding that, based on past accidents such as the Exxon Valdez and the Deepwater Horizon, N.C. beaches would take years to recover from a spill of that magnitude. “This county is so dependent on tourism that we can’t afford to risk that, even if it’s a minimal risk and I don’t think anyone can guarantee that.”

At the statewide level, North Carolina broke its tourism records last year, Gov. Pat McCrory announced earlier this month, with domestic travelers spending a record $21.3 billion in 2014, a 5 percent increase over 2013. State figures show that tourism in 2013 supported more than 3,000 jobs, with a payroll of $52.9 million in Carteret County, home of Morehead City’s state port. In New Hanover County, home to the state port in Wilmington, comparable figures the same year were more than 5,000 jobs and more than $105 million in pay.

Although some in the immediate aftermath of Deepwater Horizon predicted as much as a 33 percent decline in tourism along the Gulf for an extended period, and 2010 was filled with reports of nearly empty hotels and motels and heavily impacted restaurants and retail businesses, it was by no means uniform. New Orleans, for example, received $5 million of $15 million in tourism-marketing money BP gave Louisiana to counteract negative publicity from the spill, and the city used that money to advertise that it was 100 miles from the spill. And 2010, according to Louisiana figures, turned out to be New Orleans’ best year since Hurricane Katrina five years earlier, with 8.3 million visitors in the second half of the year alone.

By 2011, by most accounts, the visitors were back, with Florida’s Panhandle beaches reporting numbers up 61 percent over 2010, and Alabama up 51 percent and Mississippi 7 percent. Some attribute the rebound to ramped-up tourism marketing in the months following the BP spill.

One town councilman in Kure Beach, Emily Swearingen, was so concerned about the potential impact of an oil spill that she went to Congress on April 15 and testified to the U.S. House Subcommittee on Energy and Mineral Resources during the same session that McCrory appeared and pushed to move the 50-mile buffer in to 30 miles, and for the feds to share oil revenue with the state. McCrory noted that Kure Beach Mayor Dean Lamberth had supported, by letter, offshore energy development, but Swearingen said that letter didn’t reflect the feelings of the townspeople.

She said in early May that on Jan. 27, 2014, more than 300 residents turned out for a town meeting in protest of the mayor’s letter.

Any significant decline, even short-term, in tourism revenue, she said, would severely impact the town.

Sales tax and occupancy tax receipts, she said, help pay for street maintenance, police and fire service, among other things, in Kure Beach. The municipality shares Pleasure Island with another town, Carolina Beach, and together, they generate more than $120 million a year in income. Another $11 million comes from charter and head boats and seafood processing and packing, which also would be impacted if oil were found in the area offshore and an accident occurred.

“People would lose jobs and homes and businesses,” she said. “We can’t afford that. It just isn’t worth the risk.”

A relatively small accident – like the four-mile-long oil strip on the beaches of Santa Barbara, Calif., after an onshore pipeline burst two days before the Memorial Day Weekend – would cause significant hardships, and a Deepwater-scale disaster would cause incalculable harm.

There’s also historical basis for this concern. The red tide in 1987, some say, might be an instructive case. The dinoflagellate algae bloom came in on Halloween day that year, swept north from the Gulf off Florida, where red tides are common.

The algae, first spotted in Emerald Isle on the central coast, eventually forced the closing of more than 350,000 acres of shellfishing waters from Hatteras Island to Calabash, near the South Carolina border. The problem persisted for more than six months, to varying degrees in varying locations. An estimated 9,000 commercial fishermen were out of work, and figures prepared by the state for disaster relief estimated $4.5 million in losses by December.

In addition, official estimated hotels and motels, big and small, during this peak fall fishing season, lost $200 to $2,500 a day; restaurants, $200 to $1,800 a day.

Brad Rich, Frank Tursi and Mark Hibbs contributed to this report.

Kendra Daniels of Atlantic Beach grew up in Port Neches, a Texas town about 45 miles from Houston and about 20 miles from the Gulf of Mexico.

It’s a relatively small town — about 13,000, according to the 2010 census — but is part of the much larger Beaumont-Port Arthur metropolitan area. It’s also near what might be considered the epicenter of the Texas-Louisiana portion of the Gulf of Mexico oil and gas industry.

Most of the big players are in Port Neches or in the metropolitan area: Shell, Exxon Mobil, Huntsman, Valero and Koch. You couldn’t pay Daniels enough to abandon the Crystal Coast of North Carolina and go home.

“I grew up there, and you didn’t think much about the oil industry at the time,” she said recently. “It was all around you, but that was your world. You were surrounded by refineries, several of the largest, and everything else that goes with oil, and it smelled all the time. But people just told you it was the smell of money, and you just accepted it.”

Daniels went off to college, and when she came back, her perspective had changed. “After you go away and see what it’s like not to have it, and then come back, you notice everything,” she said. “You notice that sometimes when you get in the water at the Gulf, you come out with some oil on you. Maybe not much, but something. And you can almost always see it on the beach, the little tar balls, or big ones. It’s just about always there.”

She moved to Denver but longed for the ocean. She then settled on Bogue Banks on the N.C. coast.

While many natives consider Atlantic Beach overdeveloped, to Daniels, banks town was pristine. She couldn’t see oil wells from the beach, she didn’t see refineries in town, she didn’t see pipelines and waste plants, or oil on the beach or in the water, and she saw much more marine life.

In short, it wasn’t Port Neches. “There are all the companies and plants that service the industry, more than you can imagine,” she said. “There are waste facilities and chemical plants. You really can’t imagine it all unless you’ve been there. And once it starts, there’s no turning back. You’ll just have to live with it: the pipes, the refineries, the waste facilities, the noise and smoke. All of it.”

Wilma Subra also knows the Gulf Coast oil industry; she’s been involved in it for decades. A Louisiana native, she holds degrees in microbiology and chemistry from the University of Southwestern Louisiana.  She founded a chemistry lab and environmental consulting firm, Subra Co., in New Iberia, La., in 1981. She’s served terms on key Environmental Protection Agency panels and has won a MacArthur “Genius Award” for helping ordinary citizens understand, cope with and combat environmental issues related to oil and gas in their communities.

Subra is familiar with the N.C. coast, and said there’s no way the state’s residents can comprehend the changes that would take place – slowly at first, but later at breakneck pace – if the state becomes a hub for offshore oil.

“Everything, literally everything, could change,” she said. “The coast of North Carolina is known worldwide for its beautiful, unspoiled beaches and fishing and a relatedly slow pace, where people can come and relax. Oil would change all of that. And it wouldn’t take that long.”

New docks will be needed at the state ports in Morehead City and Wilmington and elsewhere, Subra said. But that’s just for starters. There will have to be places to store the waste from the drilling rigs, she said, and all the chemicals and additives used on the rigs.

“There will have to be injection wells for the water and brine,” Subra said. “You have a shallow water table and you’re going to have to be concerned about that. To be honest, it’s one thing to tell someone all that goes into oil wells – what you have to have onshore – but you have to see it.”

One of the biggest needs of the industry, she said, is that wide array of facilities to handle the waste. There will, she said, need to be “land farms” for soil and semi-solid waste, new landfills, chemical treatment plants, oil and gas waste-recycling plants. There will have to be crude oil separation facilities to remove the produced water and production sands from the oil, as well as crude oil storage, processing and distribution facilities.

More than just oil and natural gas comes out of a hole drilled in the seafloor. For every barrel of oil comes about seven to 10 barrels of what the industry calls “produced water.” Natural gas wells typically produce less water. It’s mostly a mixture of salt and oil but can contain heavy metals such as lead and chromium, residues of the chemicals used to drill the hole and naturally occurring radioactive elements.

Another major byproduct of drilling is what’s called, drilling muds or fluids. These fluids are continuously pumped down the hole to lubricate and cool the drill bit and control pressure in the shaft. The mud is typically made up of a base fluid, such as water or diesel or mineral oil, chemical weighting agents, bentonite clay, lignites to keep the mud in a fluid state and various additives that serve specific functions.

At offshore wells in the United States, the produced waters are dumped overboard if they meet EPA discharge standards. The muds are recycled but can also be dumped in the ocean if they don’t violate standards.

The types of businesses that the rigs attract, Subra said, are not the “clean and quiet” types that coastal towns have traditionally sought to lure tourists. Many of those companies, she said, will build in low-income areas, where land is cheapest and residents and business owners have fewer resources to fight rezoning petitions and plans.

Enforcement of environmental rules will likely slacken, she said, and the state may rush to weaken the rules. This is not a one-time occurrence, Subra added, because as it becomes the “economic driver” in an area, Big Oil becomes more powerful and is not hesitant to use its increasing influence to get what it wants and needs.

“A network of pipelines will be required to connect the offshore rigs to the mainland to move the oil and/or gas, and in some cases to transport waste,” she said.  “Unless the state and local governments have very strict regulations and enforce them – and that’s not likely if those governments invite oil in – they will go through your estuaries. Marshes and wetlands will be disrupted or destroyed, erosion will occur. The coastline moves inward, and you get more flooding.”

Obviously, not everyone agrees, with her assessment. A 1982 N.C. State University report on pipelines, conducted during the last big offshore oil debate in North Carolina in the mid-1980s, concluded that, “the resources and activities that are sensitive to pipeline construction and operation are for the most part small and scattered; they do not cover large areas encompassing most of the coastal zone. As a result, it should be possible to thread a pipeline through these areas across almost any section of the coast with minimal impact … It is our impression that, for the most part, acceptable windows may be found throughout the coastal zone at distances of no more that 5 to 10 miles apart.”

Still, the report, co-authored by Drs. F. Yates Sorrell and Richard R. Johnson of the school’s engineering department, included a daunting list of areas and things to avoid, including: habitat of threatened or endangered species, productive wildlife areas, recognized natural areas, state and national parks and seashores, productive game lands, visually important landscapes, historic places, military-activity areas, artificial reefs and wrecks, major ship anchorages, live ocean bottoms, large areas of barrier island dunes, wetlands, turtle-nesting beaches, oyster reefs, grass beds, waterbird nesting sites and major wintering sites, maritime forests. The list goes on.

“The oil companies will tell you all these things can be avoided, but if they can’t, there will be enormous pressure to go ahead anyway,” Subra said. “And pipes break.”

Most recently, for example, a 24-inch pipeline owned by Plains All American Pipeline ruptured on May 19 in Santa Barbara, Calif., spilling an estimated 105,000 gallons of heavy crude and fouling miles of shoreline, closing beaches from the Memorial Day weekend into June.

The ongoing cleanup could last months, and it was not the first in Santa Barbara. A February 1969 spill there became what was, at the time, the nation’s worst offshore oil disaster. About 3 million gallons of oil spewed from a Union Oil drilling rig five miles off the coast of nearby Summerland, Calif. The oil plume killed thousands of seabirds and fish and coated about 35 miles of coastline with oil up to six inches thick. Nearly 800 square nautical miles of ocean were affected and the incident spawned the first Earth Day the following year.

According to the website Pipeline 101, though, the safety performance of the oil pipeline industry has improved over the last 15 years or so. In 2013, pipelines transported more than 14 billion barrels of crude oil, gasoline, diesel and jet fuel across the nation. Almost all of them reached their destinations safely, the site indicates.

From 1999-2012, the number of spills from onshore liquid petroleum pipelines was reduced by about 62 percent while volumes spilled were reduced by about 4 percent based on reports from pipeline operators to the Pipeline Performance Tracking System, an industry pipeline database.

Subra doesn’t doubt the improvements, but she said oil industry spokesmen will tell you the chances of pipeline ruptures or breaks are infinitesimal, when in truth small ones occur with alarming frequency.

The bottom line on infrastructure, she said, “is that there is no doubt there are economic benefits, but there are also great costs. And whatever the oil companies might say, life as you have enjoyed it will not be the same.”

But David McGowan, director of the N.C. Petroleum Council, said not much of the “Gulf scenario” is likely to be seen along North Carolina’s coast, for a variety of reasons.

Refineries, he noted, are expensive to build – there haven’t been any new ones in 25 years or so – and there is existing infrastructure, including refineries, along the Delaware River in the Philadelphia area. It’s more logical to send oil or gas there, McGowan said.

The industry, he said, is increasingly moving toward servicing rigs onsite, pulling a tanker right up to the platform, loading the oil and hauling it to places like those Delaware River refineries.

But if oil or gas is found, McGowan said, Norfolk, Va., is likely off-limits because of military conflicts, and the ports at Charleston and Savannah are probably too far south to make sense. Wilmington, he said, might get some activity if the production takes place near the North Carolina-South Carolina border, but the more likely scenario is some development – but not refineries – in Morehead City, if production takes place in the central or northern part of North Carolina.

“What you would be likely to see, if dredging issues are involved in and around Morehead, would be basing of supply vessels, some fabrication – light manufacturing, putting pieces together – and maybe some helicopter operations and things associated with that,” he said.

McGowan said he grew up in Wilmington and still has close ties there, and is cognizant of and to some degree shares coastal residents’ concerns about rapid industrialization.

But, he added, “I absolutely think that if you did see oil- or gas-related development in Morehead City, it wouldn’t be anything like what you see along the Gulf.”

Friday: Oil and tourism

One source of funds is the Oil Spill Liability Trust Fund, created in 1990 by Congress after the Exxon Valdez spill in Alaska. Most of the money in the fund comes from an 8-cent tax oil companies pay on each barrel of oil. The tax is set to rise a penny in 2017.

The Coast Guard administers the fund, which can be used for such things reimbursing the Coast Guard for oil removal costs; payments to federal and state governments and to Indian tribes to assess damage to natural resources; and payment of claims for uncompensated oil removal costs and damages.

Congress, however, set a liability cap of $134 million on individual companies. Although BP has shelled out far more than that after the Deepwater Horizon spill in 2010, Bob Deans, associate communications director of the Natural Resources Defense Council and author of a book about the disaster believes the cap is absurdly low. He also wonders is North Carolina is ready should a disaster occur.

North Carolina does have an oil spill emergency response plan, according to Julia Jarema, spokesperson for N.C. Division of Emergency Management, but it was last practiced just after Deepwater Horizon. The state, she said, is in the process of updating that plan and should be finished in a few months.

Dr. Larry Cahoon, a UNC-Wilmington marine scientist who was worked around the oil industry for years, agrees the liability cap is ridiculous, but notes that companies clearly can end up paying far more, especially if they are found, or expect to be found, either negligent or criminally negligent.  Cahoon, however, thinks there’s another route North Carolina and other states should consider: Bonding.

“North Carolina’s state assets – its tourism and other economic engines, its marine life, its aesthetics – are at risk, and all of those things have great value,” he said. “It would seem appropriate that you look at the value of those things – it’s hard, but it can be done – and you go to an oil company and you reach an agreement on an amount of a bond the company would have to put up in the event those things are significantly damaged or destroyed for a period of time.

“Yes, this would be a big undertaking,” Cahoon concluded. “But we do place values now on some of these things. It’s not impossible. It would seem reasonable to do this upfront, have this money ‘set aside,  instead of waiting and having to react to events.”

On April 20, 2010, a cascading series of errors resulted in the largest oil disaster in history.

The Deepwater Horizon, a British Petroleum well 50 miles offshore in the Gulf of Mexico in 5,000 feet of water, exploded and began discharging oil. The federal government estimated that by the time the well was finally capped almost five months later, 4.9 million barrels of oil, or 210 million gallons, had leaked into the Gulf. A 2015 court proceeding put those numbers at 3.19 million barrels, or 134 million gallons.

The report by a national commission appointed by President Barack Obama to determine the cause of the worst oil spill in the history of the petroleum industry put the blame on a host of human and mechanical mistakes and failures. BP tried various measures to stop it, used 1.86 million gallons of a toxic chemical dispersant and eventually spent billions of dollars on cleanup, mitigation and compensation efforts that continue to this day.

Hundreds of miles of Gulf shoreline were oiled. Beaches were closed because of health threats, thousands of birds and marine mammals were sickened or killed and tourism and commercial fishing were disrupted in countless communities heavily dependent on them.

Time passed. The Gulf and its shoreline at least partly healed. And, eventually, in a world and nation still heavily dependent upon petroleum, thoughts of tapping the oil and gas believed to be in the Atlantic became less unpalatable. Finally, in July 2014, the Obama Administration, committed to an “all of the above” energy strategy, announced that it had given the go-ahead for a program that might lease tracts of the Atlantic beyond 50 miles from shore, including off North Carolina, for oil and natural gas drilling.

Could It Happen Here?

The announcement triggered praise from many, but the words on the lips of countless others were largely only two: “Deepwater Horizon.” And as companies gear up to test the waters off the Tar Heel state for oil and gas, the lingering question is: Could it happen here?

Harvey Seim, chairman of the Department of Marine Sciences at the University of North Carolina at Chapel Hill and a man who was on the Deepwater Horizon response team, said that the 50-mile buffer offers some protection from potential problems if a disaster were to happen north of Cape Hatteras, in the area believed most likely to hold commercially significant undersea oil and gas deposits.

But, he said recently, there’s no guarantee, and there are many factors that would come into play, the largest of which are the position and flow of the Gulf Stream at the time accident and afterward.

The river of water flowing north off the East Coast could in theory take spilled oil thousands of miles to the English coast … or just a few miles away to Cape Hatteras.

“There are eddies, or rings, off the Gulf Stream every week,” Seim said. “They push water onto the continental shelf. If it (a spill) happens north of Hatteras, the chances are lower than south of Hatteras, but there is definitely chance oil will get in to our shores.”

Eddies off the Gulf Stream – although farther south, near Carteret County –  brought North Carolina’s first known toxic red tide ashore in 1987, he noted.

The dinoflagellate algae bloom came in on Halloween day, brought from the Gulf off Florida, where red tides are common. While it’s a wholly different kind of event than an oil spill or oil well blow-out, it illustrates that potential transport mechanism.

Generally speaking, the Gulf Stream passes closest to shore off North Carolina’s Outer Banks. The exact distance varies, but can be as little as 12 miles.

Oil on the Beaches

Larry Cahoon, a marine biologist at UNC-Wilmington, said it was once thought highly unlikely that oil from a spill outside the Gulf Stream, north of Hatteras, would make it to the N.C. shore and its estuaries. But more recent studies indicate there is at least a 30 percent chance.

“I wouldn’t put a number on it,” Seim said, “and it depends on the character of the oil, and the wind direction and speed at the time, what kind of weather you’re having. It also depends on how you try to clean it up.”

After the Deepwater explosion, cleanup crews sprayed almost 2 million gallons of a chemical dispersant called Corexit on the surface to break up oil slicks. The oil, though, likely ended on the bottom of the Gulf, and the chemical was still being found in oil on Louisiana beaches months later.

That’s important, Seim said, because there are times when wind direction would push surface oil in to shore, and times when the same wind might push subsurface oil ashore.

Where that oil might come ashore is even more problematic. Seim thinks it would likely end up south of Oregon Inlet if the rigs were north of Cape Hatteras because since water over the continental shelf “generally” moves north to south.

The risk of oil making it to the North Carolina shore after a major spill “is significant,” he said.

Seim also think that drilling 50 miles off the N.C. coast will be technically challenging, especially north of Cape Hatteras. “That’s going to put you in waters 2,000 meters deep, maybe as deep as 3,000,” he said. “Deepwater Horizon was about 1,500 meters. And the Gulf of Mexico is like a bathtub compared to the Atlantic off North Carolina.”

Seim said that until recently, there was little urgency to determine where spilled oil might go in the Atlantic.

“I still don’t think we have a very good sense of that circulation at times,” he said. “And I think there were a lot of people who were surprised at the results of what has been done recently.”

Charles “Pete” Peterson of the UNC Institute of Marine Sciences in Morehead City cited a simple rule to determine the potential for spilled oil reaching N.C. beaches: If you see sargassum on your beach, you could see oil.

Sargassum is a brown algae found in large masses in the Sargasso Sea, a region in the middle of the Atlantic Ocean, and in tropical waters around the world. It is distinguished by its brown color and small leaves resembling appendages that allow it to float. A cursory Google search shows that it’s found on virtually all of the state’s beaches at times, especially in the summer, when prevailing winds are south and southwest.

BP Spill as a Yardstick

So what could one reasonably expect if oil entered the Gulf Stream, crossed onto the continental shelf and made it to North Carolina’s estuaries and beaches?

Bob Deans, associate communications director of the Natural Resources Defense Council and author of the book, Deepwater Horizon: The Oil Disaster, Its Aftermath, and Our Future, said one can’t assume any disaster would be as bad as that one. But he said it’s fair to look to Deepwater as a harbinger of the kinds, if not the extent, of damage likely to occur.

“With Deepwater, you had 1,100 miles of shoreline impacted,” he said. “On the East Coast, that’s from Savannah to Boston. If you ask me if it’s worth the risk, I’d ask you to ask someone walking on the beach at Holden Beach or Nags Head if they’d like to see a 25,000-pound tar mat roll upon the beach, like happened 50 miles or so from New Orleans in March, five years after the blow-out.

“I’d suggest that you ask them how they’d like to see dead dolphins, and oil-covered sea birds, and bluefin tuna with birth defects and abnormalities in their hearts. I’d suggest that you ask them how things like these are going to help the tourism industry or the commercial and recreational fishing industries in North Carolina.”

Since the BP blowout, nearly 1,200 dolphins have been found dead in the affected area. Experts estimate that as many as 800,000 seabirds died, including 12 percent of the brown pelican population and 15 percent of the royal terns. Some say 25,000 marine mammals might have died. Hard figures are difficult to obtain.

The National Wildlife Federation, Deans said, reported that strandings of endangered and threatened sea turtles jumped from an average of about 100 per year before the spill to more than 500 a year for several years after the disaster.

“I’d just ask people in North Carolina if they think it’s worth risking these kinds of things for what most say could – could – be a six-month supply of oil, about 3.3 billion barrels,” Deans said.

Peterson is also worried about activities that might disrupt avian and marine life off Cape Hatteras, which is the area in which the Gulf Stream separates from the continental slope to the deep ocean, and where southward-flowing continental shelf water from the Middle Atlantic Bight converges with northward-flowing continental shelf water from the South Atlantic Bight, resulting in an up-welling of nutrient-rich water.

Marine mammals, such as bottle-nosed dolphin, tend to congregate in the area. Sea birds flock there in large numbers at certain times of the year, Peterson said. It’s also where northern marine fish species and southern species overlap, a big reason North Carolina has such rich commercial and recreational fisheries.

Seafood and Oil

It’s difficult to ascertain impacts an oil spill would have on fishing and fish.

Seafood safety is one issue. On May 3, 2010, less than two weeks after the BP spill, the National Oceanic and Atmospheric Administration, or NOAA, closed more than 6,800 square miles of the Gulf of Mexico to commercial and recreational fishing. The closure centered largely between the mouth of the Mississippi River and Pensacola Bay in Florida. By June 2, the area closed to commercial and recreational fishing grew to more than 88,000 square miles, or more than a third of Gulf of Mexico’s federal waters. NOAA started reopening waters a month later.

Generally, according to a NOAA fact sheet, fish are less likely to become contaminated or tainted because they typically are either not exposed or are exposed only briefly to the spilled oil.

The legacy of oil production, though, has plagued some areas of the Gulf Coast well before the BP disaster. For example, Texas health officials, advise against eating speckled trout and red drum caught in Galveston Bay because of PCB contamination. And Louisiana occasionally issues consumer advisories based on the presence of PCBs.

Shellfish are more likely than fish to become contaminated from spilled oil because they are more vulnerable to exposure and less efficient at metabolizing petroleum compounds once exposed. Shellfish are generally less mobile and have more contact with sediments, which can become contaminated and serve as a long-term source of exposure.

Among crustaceans, species that burrow are at the highest risk of exposure at spill sites where bottom sediments are contaminated, followed by species that use nearshore and estuarine benthic habitats, according to NOAA’s National Marine Fisheries Service.

Bivalves – oysters, clams, scallops – are at the highest risk of contamination because they are filter feeders and live primarily in shallow tidal and intertidal areas that are more likely to become contaminated.

However, just because fish and shellfish are eventually deemed safe to eat, that doesn’t mean their stocks won’t suffer long-term consequences from Deepwater Horizon or another major oil spill.

Disturbing Research

Field and lab studies published in 2013 by Fernando Galvez and others at Louisiana State University found that oil buried in sediments in the shallow waters of the Gulf triggered genetic reactions in the gills and livers of local populations of killifish, a prey for marine species vital to the region’s economy.

Embryos that were exposed to oiled sediments hatched at a rate 40 percent lower than those cultivated in samples from oil-free sites, and those that did hatch were smaller than they should be and had little “vigor.”

Galvez said this month that his team has continued its research primarily in the lab, and the evidence of effects has continued to mount. He also noted that some of his research indicates some organisms have started to develop a tolerance of hydrocarbons, “but we’re trying to tease out what the costs of that tolerance might be. Is there going to be reduced fecundity (reproductive rate)? They do seem to be smaller than the same species in the wild.”

Other research, he said, indicates that the toxicity of oil and its likely effects on fish eggs are increased by ultraviolet light, which of course is a normal condition.

He cautioned, however, that it’s too early to say whether the oil from the Deepwater Horizon disaster will have long-term effects on the stocks of fish in the area. He noted that industry officials have and are likely to continue to cast doubt on research that shows lasting effects on fish, just as they have cast doubt on studies that link dolphin deaths, even now, with Deepwater oil.

“They point out that there are a lot of toxins out there, and that there is no absolute proof,” he said. “Certainly, to a degree, they are correct. But the bottom line is that there isn’t any evidence of anything else, any major event or change, that would have had these impacts.”

Peterson, the UNC scientist, said he was aware of Galvez’ research, but said the findings appeared to apply only to the most heavily oiled marsh. Still, he said, it’s consistent with other research that shows that oil lingers in sediments in marshes for long periods of time, even decades.

Peterson worked for years on the team that studied the Exxon Valdez tanker oil spill in 1989 in Alaska. Despite the BP’s claims that much of the Gulf has returned to normal, he said, there’s plenty of evidence that if oil gets into wetlands – the breeding grounds for shellfish and countless finfish – impacts can linger for up to 20 years, if not more, in sediments, affecting fiddler crabs and the benthic organisms at the bottom of the food chain.

The red tide in North Carolina wiped out most of the state’s prized bay scallops – found in sea grass beds – in 1987, and Peterson and others have said that’s a good part of the reason the fishery has never recovered.

Even after two decades, he said, the crabs studied in Alaska don’t burrow as deeply and don’t display their normal response mechanism when threatened.

Thursday: Pipelines and refineries

“It’s been a $2 billion commitment, and it’s ongoing,” said Charlie Williams, the executive director of the Center for Offshore Safety. “We have designed, built, tested – with the government watching – and deployed, capping stacks that can be placed on blowouts that are far superior to those we had before, and are easier to deploy and install. There is permanent staff to maintain them, train companies to install them and to keep them ready to be deployed.”

Williams worked for 40 years for Shell Oil Co., where he was chief scientist for well engineering and production technology until 2012.  He took over that year as head of the center, which the industry created after 2010 Deepwater Horizon disaster in the Gulf of Mexico.

The biggest strides have been in subsea well-containment equipment and in spill preparedness and response, Williams said.

“The Marine Well Containment Company and the Helix Well Containment Group were founded in 2010,” Williams said, “with the goal to provide containment technology and response capabilities for the unique challenges of capping a well that is releasing oil thousands of feet below the water’s surface.”

Currently, the equipment is based in Houston, Williams said, but can be deployed anywhere quickly. Some of the equipment would likely move east if drilling were to occur in the Atlantic, he added.

The new systems, he said, can capture oil flowing from leak thousands of feet deep using remotely-controlled equipment. Risers and containment vessels that can safely capture, store and offload the oil, Williams said.

Equally important, he said, the center and its parent organization, the American Petroleum Institute, have dramatically raised industry standards and created more than 100 new ones. These set tougher rules for such things as blowout prevention equipment design, operation, repair and maintenance and associated control systems and protective equipment for oil spill response workers.

The idea is to promote reliability and safety through the use of proven engineering practices, and even more importantly, these standards are now reviewed on a regular basis to ensure they remain current, Williams added.

The organization has also spearheaded guidance on creation of offshore oil spill response plans; an evaluation of the mechanical recovery systems used at sea during the Deepwater incident; a report and field guide for spills on sand beaches and shoreline sediments, including protection techniques and detection and response capabilities; and an evaluation of the process by which alternative technologies are reviewed for use during an oil spill.

But, Williams said, the human factor is also crucial, and so a key is to make sure all of this is sustainable, so training of those who work on and manage the offshore facilities has taken on a new focus.

He also noted that the federal Department of the Interior reorganized its widely-criticized industry oversight organization, breaking it into two new agencies: the Bureau of Ocean Energy Management, to oversee federal leasing of offshore areas to oil and gas companies, and the Bureau of Safety and Environmental Enforcement, responsible for ensuring compliance with safety and environmental standards.

The bureau increased the number of safety inspectors in the Gulf to 92, up from 55 at the time of the BP disaster

But Bob Deans, associate communications director of the Natural Resources Defense Council and author of  Deepwater Horizon: The Oil Disaster, Its Aftermath, and Our Future,  said the improvements are good, and long overdue, but not enough. He said statistics back up that conclusion, if you look at them honestly.

The number of hazardous incidents at offshore well in the Gulf dropped about 14 percent last year compared to 2009, Deans noted. The number of wells that pumped oil and gas dropped almost 20 percent during the same period, he said. The number of incidents at each of the remaining wells increased more than 7 percent, Deans explained.

“That’s not getting safer, not really,” he said.” It’s like saying there are fewer concussions in football games, but there are fewer games played. What this tells us is that no matter what they do, it’s going to a dirty and dangerous business, something we need to be getting out of, not something we need to be expanding.”

Deans also worries that not enough attention is being paid to the potential damage to rigs from hurricanes. For example, Hurricane Katrina in 2005 damaged 67 platforms and rigs, according to federal estimates. Hurricane Ivan a year earlier destroyed seven offshore platforms damaged 100 underwater.

According to an Associated Press story on April 2016, 28 Taylor Energy Co. offshore wells buried by a mudslide caused by during Ivan were still leaking oil this year. AP said that according to the U.S. Coast Guard, since last September 2014, the estimated daily volume of oil discharged from the site has ranged from roughly 42 gallons to 2,329 gallons, with a daily average of more than 84 gallons.

More than 25 years ago, Congress ordered a scientific assessment of the research that needed to be done to better inform decision about opening up the N.C. coast to offshore oil and gas drilling.

The scientists met and filed their report, which sits somewhere in an archives of the U.S. Department of Interior.

Nothing much was done with it, noted Charles “Pete” Peterson, one of those scientists. The scientific issues it raised, he said, are still prevalent today as the federal government once again considers allowing drilling off the state’s coast.

“It really hasn’t been pursued to any large degree,” said Peterson, a researcher at the University of North Carolina’s Institute of Marines Sciences in Morehead City.  “And it’s fairly easy to see why. There just wasn’t any need, as long as oil production in the area was not seen as a real, immediate likelihood.”

That wasn’t the case in the early 1990s. Mobil Oil’s Corp’s plan to drill a test well off the Outer Banks raised a considerable public and political fight, and the Exxon Valdez tanker spill in 1989 spurred action in Washington.

Congress adopted the Oil Pollution Act in 1990, which included a section known as the Outer Banks Protection Act. It prohibited drilling off the N.C. coast until a panel of scientists submitted a report to the secretary of Interior. Peterson was on that panel.

The panel was charged with reviewing existing information and preparing a list of recommended studies to fill in the gaps. The idea, explained Peterson, was to advise the Interior department about research that was needed to better evaluate the environmental implications of oil and gas exploration and production off the N.C. coast.

Specifically, the panel was directed to assess the adequacy of information about the physical oceanography, the ecology and the socio-economics of the people who lived on the coast, and who would be affected by the oil and gas industry.

In general, Peterson said, the panel found significant gaps in the information in all of those areas, and recommended a number of studies, among them efforts to better understand the dynamics of meanders of the Gulf Stream; the importance of sargassum as habitat for whales, dolphin and sea turtles; the ecological processes on the continental shelf and slope; and the socio-economics.

The panel submitted its report to Interior in 1992. The secretary was to certify that the research would be done or wasn’t needed before drilling off the N.C. coast could begin, but Congress rescinded the act in 1996.

In the years that followed, Peterson said, there was not a tremendous impetus to fill in those science gaps, as pressure for offshore oil exploration and production off North Carolina faded. A lot has been learned since the report was completed, he noted.  Research, for instance, has revealed the significance of The Point off Hatteras and the meanders of the Gulf Steam.

The bottom line, Peterson said, is that there is still not a clear understanding – not really even adequate baseline data – on such things as the numbers of people who would be affected, and the numbers of jobs lost and people displaced – if oil and its infrastructure came into the area.

“There obviously has been some work done, but nowhere nearly enough,” he said. “I would say in general that while we have made good progress on the oceanographic and ecological information that was needed back in the 1990s, we really no very little more about the socio-economics than we did at that time. And it’s still very important to know those things if we’re going to move forward.”

It’s only fair.

That is the sentiment of coastal states, where politicians say that providing infrastructure and expanding public services to support offshore oil and gas development deserves a cut of the multibillion-dollar pie.

Last year, companies paid $7.3 billion in royalties to the federal government for oil and natural gas drilled at least three miles from shore.

But if oil or natural gas were now being produced in federal waters off the N.C. coast, the state wouldn’t receive a dime. For the state to cash in, Congress would first have to change the law.

With the possibility of the first lease sale in the Atlantic six years away, Republican Gov. Pat McCrory and U.S. Sens. Thom Tillis, R-N.C., and Richard Burr, R-N.C., are joining a chorus of coastal states pushing to secure a share of federal oil royalties.

Their efforts thus far have been met with opposition from the Obama administration, which included in its draft budget plan this year a proposal to spread offshore revenue sharing among all states. The oil and gas are on public property, the administration has argued, and thus any federal fees collected from private companies that drill for it should be used to benefit all taxpayers. Some of it, for instance, could finance research of alternative energies, as Obama has proposed.

Qualifying coastal states have for years received 27 percent of federal oil subsidy revenues generated from offshore production within the first three-mile stretch of ocean seaward of state coastal waters.

The administration would like to replace that deal with a broader sharing proposal and do away with the arrangement Congress approved in the 2006 Gulf of Mexico Energy Security Act, which broadened the area where states receive a cut of federal shares. The law shares 37.5 percent of bonus bids, rentals and production royalties with Alabama, Louisiana, Mississippi and Texas.

Alaska’s exclusion from the deal stiffened tensions over offshore oil production in that state.

“It’s very contentious,” said Jim Stouffer, Alaska Department of Natural Resources royalty accounting manager. “What’s on shore, the feds have tied up much of the land so that we can’t even drill on it. It’s our lifeblood. Over 90 percent of our general fund revenue is in oil and gas. Royalties amount to about 40 percent.”

Alabama, Alaska, California, Louisiana and Mississippi take home all of the royalties for oil and gas extracted within their state waters, which extend three nautical miles from shore. Texas’ and Florida’s waters extend to nine miles offshore.

Revenues disbursed from federal royalties have been significantly less than what Texas receives from shares in its state waters. In Texas, about $1.2 billion was collected in revenues generated within state waters last year, according to Jim Suydam, a spokesman for the Texas General Land Office. The state received about $1.5 million last year in federal offshore royalties, according to the U.S. Office of Natural Resources Revenue.

Yet in North Carolina much emphasis is being placed on federal oil royalties expected if drilling occurs off the coast – so much so politicians say they will not support drilling if the state does not get some of the money.

“It is incumbent upon me to take the costs and benefits into account when considering whether to support offshore activity in North Carolina,” McCrory said in an April 15 statement to the congressional Subcommittee on Energy and Mineral Resources. “Considering these facts, North Carolina will not support offshore energy development without revenue sharing.”

Revenue sharing would be vital to “frontier” coastal states and beach communities in the new areas of energy exploration to help offset spending on infrastructure, services and the implementation of environmental-protection measures, he said. McCrory’s office did not respond to interview requests.

Meanwhile, Tillis told CRO the economic benefits would bring relief to N.C. taxpayers.

“We’re talking about billions of dollars of revenue over time that can be used to reduce the tax burden,” Tillis said in a telephone interview. “In many ways North Carolina, because we already have such a diversified economy, it could create one of the most diversified economies in the nation. It is a long-term process. In the statutes we have to create how they would be allocated so that we would get the distributions right.”

Tillis is one of five cosponsors of the Southern Atlantic Energy Security Act, a bill recently introduced by Sen. Mark Warner, D-Va., to the Senate Energy and Natural Resources Committee. The bill allocates half of offshore revenues to the federal treasury and the remainder to Virginia, North Carolina, South Carolina and Georgia with each state receiving not less than 10 percent of available revenue. States would have to use 10 percent of the money to enhance land and water conservation efforts, improve public transportation, establish alternative energy production and enhance beach nourishment.

“I think that the majority of people in Congress support this not only for the economic benefit but for the strategic benefit of creating a greater stream of revenue,” Tillis said. “The challenge is whether we have an administration that’s willing to enter into that dialogue.”

In response to CRO’s query, Burr’s office released this statement: “Senator Burr is continuing to engage coastal communities on exploration and believes that revenue sharing much be channeled specifically to our communities along the coast to provide for beach re-nourishment and other important priorities. Senator Burr is committed to ensuring that any exploration off our coasts would protect our coastal communities and our vital tourism industry.”

Warner’s bill and two others aiming to open more federal waters to oil and gas production and allocate those revenues to states were met with a cool reception from the administration, according to media reports.

The bills are the latest in a lengthy battle over oil revenue allocations.

“Basically up to now we haven’t really seen a lot of federal royalties,” said Patrick Courreges, a spokesman with the Louisiana Department of Natural Resources. “Starting in 2017, that’s when there would actually be some money. It’s capped, but it’s more than pennies.”

Revenue amounts fluctuate based on offshore activity and the price of a barrel of oil. Lower production and oil prices equate to a decline in revenues.

An American Petroleum Institute-funded Quest report released in December 2013 projects offshore oil and gas production resulting from opening the Atlantic outer continental shelf will generate as much as $51 billion in total cumulative economic benefits to the country from 2017 to 2035. East Coast states would be the biggest recipients of the economic benefits, especially those from capital investment and jobs, according to the report, which also assumes Congress will change the law and that federal revenue shares would be split 37.5 percent to the states. Those states would receive a combined estimated $4.5 billion a year by 2035.

Revenue sharing is the big assumption here, but industry proponents say even if the law isn’t changed, it shouldn’t be a deal breaker for offshore drilling in the Atlantic.

“People get so focused on the revenue sharing and that’s important,” said David McGowan, executive director of the N.C. Petroleum Council. “With the revenue sharing, that’s money paid directly to the state government. You see it. The direct and indirect economic impact, it’s obviously a little more nebulous. That’s really where the most significant benefits lie for the state. Even without that revenue-sharing agreement, taking the Quest numbers at value, it’s still $4 billion a year.”

Wednesday: Could a Deepwater Horizon happen here?

The federal government in the past 12 years has disbursed more than $754 million in oil royalties to coastal states with offshore drilling.

Checks cut to qualifying states – seven in all – have ranged from as little as $803 to as much as $45.8 million in one year between 2003 and 2014, according to the U.S. Office of Natural Resources Revenue. Though eligible states received a cut of federal offshore oil royalties prior to 2003, that is the year the agency began keeping track electronically, according to an agency spokesman.

The pathway for coastal states receiving federal offshore royalties has been blazed by state leaders and their congressional delegates who’ve argued the states should get a return on the infrastructure investments made to support offshore activities.

Under the Outer Continental Shelf Lands Act, first passed in 1953, eligible coastal states receive 27 percent of the revenue generated from offshore leases within the first three-mile stretch of ocean seaward of state coastal waters. These are classified as 8(g) waters.

Four states in the Gulf of Mexico – Texas, Louisiana, Alabama and Mississippi – got a larger percentage following the 2006 passing of the Gulf of Mexico Energy Security Act. The law grants a 37.5 percent cut to those states in lease areas beyond the three-mile zone.

Gulf states received first received money generated from federal royalties under that act in 2009.

Those states with the highest federal offshore oil and gas subsidy revenues between 2003 and 2014 include: Louisiana, more than $339.7 million; Alabama, nearly $132 million; Texas, more than $100.1 million; Alaska, nearly $88 million; and California, more than $80.6 million.

The remaining states trail well behind in shares. Mississippi received about $14.3 million and Florida only $14,731.38.

The longstanding battle to give states a bigger share of royalty money is heating up once again as the Obama administration pushes to disburse federal royalties more evenly throughout the country.

Administration officials have so far dismissed proposals that would secure federal disbursements to Atlantic coast states.

Proponents of offshore drilling predict that a massive new workforce could be on North Carolina’s horizon if oil and gas resources are tapped in the Atlantic Ocean.

The creation of new jobs – tens of thousands of them – would be one of the greatest economic gains to North Carolina from offshore drilling, proponents say.

Critics of drilling charge that the rosy job numbers are based on a flawed economic study commissioned by the oil industry. Reaching even those lofty numbers, they note, will requires hundreds of drilling rigs and a significant buildup of infrastructure that now doesn’t exist. Half of the revenue that the report predicts offshore drilling would contribute to the state’s budget relies on Congress changing federal law.

If proponents are right, this is a process that will take years and is highly dependent on the natural resources available, the success of striking oil and natural gas and where it will come ashore. It seems clear to everyone that the industry will be dependent on pulling trained workers from places like the Gulf of Mexico states through the foreseeable future.

Jobs, Jobs Jobs

The oil and gas industry’s labor force is a broad spectrum of higher educated petroleum engineers and geologists to “blue collar” drillers and mechanics, all well-paying positions essential to daily operations.

Those jobs create a complex myriad of onshore support services – helicopter companies that shuttle rig employees to and from shore, supply vessels, caterers, fabrication companies – the list goes on and on.

This translates into a projected 55,000 jobs in North Carolina by 2035, according to a report prepared for the American Petroleum Institute and National Ocean Industries Association.

The report forecasts North Carolina would benefit the most in oil and gas industry jobs of any state along the Eastern Seaboard with an estimated $4 billion increase in economic activity.

“It is four times the impact of revenue sharing on an annual basis,” said David McGowan, executive director of the N.C. Petroleum Council.

McGowan emphasized that the jobs created from offshore drilling will likely be more of an economic benefit to the state than federal royalty shares, which, unlike the jobs, are more of an uncertainty, he said.

The oil and gas industry workforce is aging and substantial turnover is anticipated in the next five to six years, adding to an already increasing demand for workers.

“We don’t have a tremendous knowledge base right now,” McGowan said of the state’s current natural oil and gas workforce. “As an industry we’ve been working with the community college system and university systems to see how we can get the programs in place in some of these schools. That’s all work that has to be done. I don’t know that it has to be done before the first activity starts.”

Don Briggs, president of the Louisiana Oil and Gas Association, said the growth of industry jobs in North Carolina will depend on how successful drilling is off the coast.

“You have to put this into perspective,” he said. “Right now if they start some leasing off of North Carolina and drill some wells right in the beginning those would be mostly transit jobs in engineering and things like that. They’re going to have to use people from areas where the rigs are coming from and trained employees to work on those rigs. In the deep-water Gulf of Mexico when they start a project from the beginning to the end it’s around eight to 10 years. It takes a long time. It is a very complex procedure in drilling. It takes a lot of technology. It will be several years before you really know how good of a potential it could be.”

Growth Industry

The oil and gas industry grew by 71 percent between 2003 and 2011, according to the U.S. Bureau of Labor Statistics. In 2011, the industry employed nearly half a million workers nationwide. Forty-eight percent of those consisted of jobs that supported oil and gas activities and 34 percent accounted for oil and gas extraction.

The bureau projects the oil and gas industry will employee 220,000 people by 2022. That number does not specifically factor into Atlantic drilling, said Andrew Hogan with bureau’s Employment Projections Office.

“It could be more than that, but we can’t say with certainty right now,” he said.

The API-funded Quest Offshore Resources report projects that by 2025 the industry will produce 78,098 jobs for offshore oil and natural gas exploration and production in the Atlantic outer continental shelf.

That number is forecasted to more than triple to more than 279,500 jobs by 2035, according to the Quest report.

To reach the numbers projected for North Carolina, about 15 oil and gas projects – a combination of permanent installations and mobile drilling rigs – would have to be operating off the coast by 2035, according to Sean Shafer, the report’s project director.

“A lot of goods and services probably would be coming from Texas and Louisiana and other Gulf Coast states,” he said. “A lot of the services that are basically required to operate drilling rigs and production platforms, you have to have that locally.”

Oil Rig Jobs

Deep-water rigs hold a workforce upwards of 400 people – engineers, drillers, welders, floor hands, machinists, mechanics and cooks to name a few. Then there’s the supply stream –truck drivers hauling equipment to and from ports, offshore vessels to get supplies and equipment to the rigs, fabrication facilities to provide steel pipes.

“There’s a lot of different jobs,” said Patrick Courreges, communications director for the Louisiana Department of Natural Resources. “If you’re in Louisiana you’re in the oil and gas business because this one industry touches everything. It doesn’t even matter if you have a furniture store – you’re in the oil and gas business.”

He recalled the six-month deep-water drilling moratorium imposed in 2010 after the BP accident that killed 11 workers and spewed nearly five million barrels of oil into the Gulf of Mexico.

“You could feel it,” he said. “It affected even real estate because people tightened their wallets.”

In an effort to secure an oil and natural gas workforce in the mid and south-Atlantic states, U.S. Mark Warner, D-Va., recently submitted a bill that would, in part, secure funding for higher-education aimed at offshore energy resources.

The proposed Southern Atlantic Energy Security Act would require 2.5 percent of state-allocated funds to be used on a public-private partnership between industry, schools and historically black colleges and universities to “enhance and broaden” geological and geophysical sciences and new studies of offshore energy resources. The bill calls for each state’s governor to nominate participating schools.

A Closer Look

Doug Wakeman, a professor of economics at the Meredith College School of Business in Raleigh and a member of the N.C. Coastal Federation’s Board of Directors, breaks down Quest’s data in his report “The Economics and Uncertainty of Offshore Drilling.”

“There’s a question of how many of those jobs that are created would be filled by people already in North Carolina as opposed to people who would migrate in.” he said. “It’s a matter of where they actually expect to be most successful in terms of drilling. The places where the most attractive oil deposits are is fairly well north along our coast. Does that mean oil production and those jobs would go to more to places like Virginia Beach and the Norfolk area?”

The future price of oil is also a critical factor in trying to determine the economic benefits of drilling for the state, Wakeman explained. Higher prices not only mean greater profits for the oil companies, he said, but they also encourage drilling in economically marginal places.

When oil sells at $120 a barrel, as it did a couple of years ago, deposits that are expensive to drill, such as those in the deep-water Atlantic, are profitable, Wakeman said. They become less profitable as the price drops. He notes.

The Quest report uses federal estimates to predict the future price of oil, Wakeman said, but it’s unclear what range of prices through 2040 was use – high, low or a median.

“All economic estimates in the API report may be regarded as overestimates,” he writes.

The Quest report and industry proponents suggest untapped natural oil and gas resources in the Atlantic could prove to be huge – 1.34 million barrels of oil equivalent per day by 2035.

That report was released in December 2013 before the federal Bureau of Ocean Energy Management, or BOEM, announced its proposed leasing program for the mid-Atlantic.

The 2017-2022 offshore oil and gas leasing program unveiled in January includes a 50-mile barrier and one lease sale in 2021 in federal waters off the Atlantic coast stretching from Virginia to Georgia.

Quest’s report does not include the 50-mile buffer, assumes leasing in the mid and south Atlantic would begin in 2018 and does not include the single lease sale cap.

Those restrictions have an effect on the numbers in the Quest report, which has been routinely cited by politicians, including Gov. Pat McCrory.

Shafer said the unaccounted restrictions in the report will have some effect, but “I don’t know that it would be significant,” he said.

After running the numbers factoring in the 50-mile buffer, 38 percent of reserves would be excluded off the North Carolina coast, he said.

“Sixty percent could still be tapped,” Shafer said. “You never really know until you drill. More likely than not we’ll likely see more oil than has been suspected.”

That’s not necessarily the case, Wakeman said.

“Nobody knows for sure how much oil and gas is in the ground,” he said. “The API report simply assumed that the amount of oil there that would be found with new technology would mimic what’s been found in other places.”

API at this time has no plans to update the numbers.

“Ideally we would be able to update it to have it exactly reflect what the BOEM draft proposed plan was,” McGowan said. “At this point we’re going to wait and not update it. I think the concept still applies that North Carolina has the potential to benefit more than any other state in the mid-Atlantic. You’ve got the potential number of lease sales that could change. You’ve got the timing of the lease sales that could change. What we would assume is they’ll do a lease sale in 2021 and probably another in 2023. It would probably make the region a lot less attractive if they have to wait until 2030. I don’t think it’s possible for there to be just one lease sale.”

That’s what supporters of offshore drilling, including McCrory and U.S. Sen. Tom Tillis, R.-N.C., hope to revise through Congress, though the Obama administration is making clear its opposition to such changes.

In a March 30 letter to U.S. Department of the Interior Secretary Sally Jewell, McCrory urged the buffer be changed to 30 miles, that the proposed lease sale date be moved to earlier in the five-year program and that a second lease sale be added to the end of the program.

Whatever the case, consumers aren’t necessarily going to notice a difference at the pump. Though nearly all domestic oil is kept in the U.S. the Organization of Petroleum Exporting Counties still sets gas prices.

Consumers in Alaska, which has the lowest gas tax in the country, still pay about 50 cents more per gallon than in North Carolina. Gas prices in other oil producing states like Texas and Louisiana aren’t much cheaper than what North Carolinians pay for today.

Tuesday: Revenue sharing: The elusive pot of gold

Jobs directly tied to oil and gas production can be highly technical, complex, demanding and, in many cases, come with high-paying salaries.

Employees in the oil- and gas-extraction industry made an average hourly wage of $42.90 in March, the latest figures available from the U.S. Bureau of Labor Statistics. The bureau projected that hourly average to be $41.62 in April.

Non-supervisory employees in the industry made an average of $29.95 in March with projections of $29.18 an hour for April.

The numbers are well above the state average, where the median hourly wage is $15.63, according to the bureau’s May 2014 occupational employment and wage estimates.

The annual wage in the state is $43,280, more than $10,000 below the gross income of non-supervisory employees in the oil and gas extraction industry.

“In the oil industry the jobs, especially those on the rigs, they are high-paying jobs,” said Don Briggs, president of the Louisiana Oil and Gas Association. “They’re some of the best jobs you can get.”

Oil and natural gas extraction, petroleum refineries and pipeline transportation jobs fall well within the range of six-figure salaries.

The top-paying jobs in the industry, listed according to salary levels, include:

1. Managerial positions – Topping the pay chart, managerial jobs pull in an annual average salary of more than $159,000. These are chief executives, which average well over $200,000 a year, general and operations managers, marketing and sales managers, financial and purchasing managers, architectural and engineering managers and natural sciences managers.

2. Petroleum engineers – These professionals design the equipment used to extract oil. Their average annual income is more than $157,000.

3. Geoscientists – These scientists make an average of $147,140 a year. Petroleum geoscientists search for oil and gas deposits suitable for extraction.

4. Toolpushers – A “pusher” is the foreman for a drilling crew. Toolpushers make an average of $91, 420.

5. Business and financial operations – Making an annual average salary of $88,330, these positions entail everything from accountants to logisticians and purchasing agents.

6. Industrial Machinery Mechanics – These mechanics repair, install, adjust and maintain production and processing machinery, refinery and pipeline distribution systems. They rake in an average of $61,830.

7. Petroleum pump system operators, refinery operators and gaugers – Oil and gas rotary drill operators made Forbes’ list of 15 high-paying blue-collar jobs of 2014 with an annual mean salary of $61,110.

8. Derrick, rotary drill and service unit operators – These operators make an average annual salary of $57,830.

9. Office and administrative support – Though the average annual income in this group of employees is a little more than $44,700, first-line supervisors make upwards of nearly $73,000 a year and payroll clerks clear an average of $54,000 a year.

10. Roustabouts – Roustabout is a general term for laborers on a rig. These entry-level positions pay an average annual salary of $38,170.

All the geological ingredients may be there under the roiling waters off Cape Hatteras for the makings of one of the largest natural gas fields in America.

At least, that’s what geologists for Mobil Oil Corp. and seven other oil companies hoped in the 1980s when the companies leased 120,000 acres about 40 miles off the cape. Their scientists thought one in 10 wells drilled there would strike gas. Back then in the oil business, those were pretty good odds, good enough anyway to persuade the companies to commit at least $25 million – about $72 million today — to sink a few test wells. Public and political opposition eventually killed those plans, but the geology hasn’t changed.

But even the best odds have a way of diminishing as the drill bit goes deeper and deeper, especially off the East Coast where no modern seismic surveying has been done that could better identify prospects. Fifty-one offshore wells were dug in the 1970s and ‘80s, mostly along the Northeast coast. Almost all were dry holes.

“But they were going after the Cretaceous,” said Stan Riggs over a plate of Mexican at Chico’s in downtown Greenville. “The Cretaceous is empty.”

Riggs, a researcher and professor emeritus at East Carolina University, is one of the most renowned marine geologists in the state. No one knows more about the complex geology of the N.C. coast.

He’s talking here about sediments laid down in a period of geologic history that started more than 145 million years ago as the super-continent Pangea was breaking apart and the Atlantic Ocean was forming. It ended 66 million years later with the disappearance of the dinosaurs. It was a time of great forests of ferns, cycads and conifers. Giant marine reptiles hunted ammonites, belemnites, other mollusks and fish, and pterosaurs soared in the air above.

But it wasn’t particularly a good time, at least on what is now the western margins of the Atlantic, for the ancient algae and bacteria that have powered an industrial world for more than a century now. For that, said Riggs, you need sediment and rocks from an earlier period.

“The Jurassic is where it’s at,” he said. “And the only place where you might get Jurassic within 50 miles of the North Carolina coast and that’s not in 12,000 feet of water is small area off Cape Hatteras.”

How Oil and Gas Form

They’re called fossil fuels for a reason. Oil and natural gas come from ancient organisms – tiny plants, algae and bacteria mainly – that were powered by the sun during various stages of Earth’s geologic history.

The deltas of big rivers like the Mississippi, the Amazon and the Niger are now the sites of some of the greatest oil and gas fields in the world because of all that sun-drenched organic matter that flowed down the rivers and settled in the deltas millions of year ago.

In that anoxic environment, the algae and plant matter in the sediment changed into a substance scientists call kerogen. And when the temperatures rose to at least 230 degrees the kerogen gradually changed into oil. Natural gas is oil that continues to cook – maturate in oil science lingo – at higher temperatures. The process from algae to crude or gas takes at least a million years.

Crude oil is a complex mixture of hydrocarbons – hydrogen, carbon and traces of other substances. Its texture varies, but it’s generally liquid. Natural gas is mainly made up of the chemical compound methane. It’s gaseous, or lighter than air.

Even after oil has formed in the rock, pressure continues to rise, squeezing the oil out or upwards through rocks that have more pores, or spaces, within them. Some of it eventually reaches the surface and seeps out naturally into land or water, but most of it eventually comes up against a layer of rock that it can’t move through. This impermeable rock forms a seal or trap, and slowly, very slowly, the oil builds up. As it does, it forms a reservoir.

These reservoir rocks are like fossilized sponges that usually hold both oil and natural gas within their pores. Gas, being less dense than oil, rises to the top of the reservoir. Then comes oil and then seawater, the most dense of the three, at the bottom.

The search for petroleum, then, is a search for those reservoirs, which can be massive. Some may be as large as the world’s greatest cities.

Jurassic Muck and Coral Reefs

As Pangea started to break up in the early Jurassic, about 200 million years ago, great chunks of granite separated from what is now North America, leaving behind huge holes along the new continent’s margins. Water — the nascent Atlantic – filled the gap being left by the breakup and sediment from the land started filling the holes.

One of those big holes is the now called the Baltimore Canyon Trough that extends from the mouth of the Chesapeake Bay all the way to the tip of Long Island. Another hole, the Carolina Trough, runs south of there, from Cape Hatteras to about the middle of the South Carolina coast.

In those basins, covered by tens of thousands of feet of younger sediment, are salt domes and rocks formations, called shale, that are compressed organic muck from the Jurassic. Both almost certainly contain petroleum, Riggs notes. But they are in very deep water, 12,000 feet and more. Drilling at that depth is considered experimental even using the most modern methods.

Between the two holes off what is now the Outer Banks, there is high ground, a bit of Jurassic bedrock that didn’t make the long journey to Africa. It’s called the Norfolk Arch. It’s in relatively shallow water and 30-40 miles from shore. It’s where Mobil wanted to drill.

“They knew what they were looking for,” Riggs said. “That area is about the only place off our coast where you can drill into the Jurassic without getting into really deep water.”

The Jurassic was a good time for oil creation. Forget the dinosaurs that appear in the series of movies that have made the geologic period the only one most people know. Almost all of those reptiles appeared on the scene later, but “Cretaceous Park” doesn’t have same ring to it. The Jurassic was for plants and bacteria and algae.

The young Atlantic was calm and far from shore. The Appalachians were also young, and rivers brought its organic-rich sediment to the sea. Coral reefs grew abundantly. Think of the Florida Keys or the Bahamas. One such reef extended for 30 miles between two developing basins in the ocean floor, crossing a plateau between them. Mobil had targeted that high spot in the reef.

“In the Jurassic, we had this quiet, very shallow ocean that was full of limestone,” Riggs said. “It was a perfect setup.”

The sea rose by the late Cretaceous and over time the reef between the two basins got buried by sediment that is now 12,000 feet thick in places.

To Drill or Not to Drill

As promising as it looked to Mobil geologists, the old reef is currently untouchable by their successors. The proposed leasing plan for the Atlantic that the federal government released earlier this year includes a 50-mile buffer along the shoreline. That would put the reef off limits. Gov. Pat McCrory has urged that the buffer be moved 20 miles closer to shore to allow companies to drill into the old reef, but Congress would have to amend the leasing plan to make that happen.

If the buffer remains in place, Riggs thinks the oil companies will be reluctant to bid on leases in very deep water while oil and gas prices are depressed.

James Knapp isn’t so sure about that. He’s a former oil company geologist who is now a professor of earth and ocean sciences at the University of South Carolina. It all depends on the results of the seismic testing scheduled for late this year or next year.

“There may still be aspirations to pursue leases if the buffer remains in place,” he said. “They’re certainly interested to get out there and look. If you’re not replacing your reserve base, you’re going to go out of business.”

The federal government estimates the amount of recoverable oil in the Atlantic at about 4.7 billion barrels. Natural gas stands at 37.5 trillion cubic feet.

The truth? Nobody really knows.

The latest estimates by the Bureau of Ocean Energy Management, or BOEM, has most of the oil and gas coming from its mid-Atlantic planning region, which stretches from the mouth of the Chesapeake Bay to the South Carolina-Georgia line. More than half of the recoverable oil – 2.4 billion barrels – and almost two-thirds of the gas – 23.4 trillion cubic feet – would be drilled off that section of shoreline.

The estimates, though, aren’t based on seismic surveys or exploratory drilling. Limited seismic work was done in the 1980s with equipment that would be considered primitive today. The 51 offshore wells that have been drilled along the East Coast were sunk in shallow sediments and probably in the wrong places. Most came up dry.

In coming up with these estimates, BOEM makes some assumptions about the underlying geology and then makes a prediction based on oil and gas finds at similar geologic structures around the world. The estimates keep going up as more oil and gas are found and as drilling technology improves.

No one really knows until seismic surveys are done sometime late this year or next year, said James Knapp, a former oil company geologist who is now a professor of earth and ocean sciences at the University of South Carolina.

“The BOEM estimates have some validity,” he said “I continue to submit, though, that if anything they’re conservative. They’re based on 30-year-old data and play concepts that are out of date.”

Modern seismic survey, especially the very sophisticated 3-D studies, will almost certainly increase the estimates, Knapp said.

Critics of drilling like to point out that BOEM’s estimates amount to about a year of oil at current U.S. consumption rates and 18 months of natural gas.

Any find off the East Coast would be close to consumers in some of the America’s largest cities, Knapp pointed out, and far from the despots that make some of the oil-producing countries a high risk.

“People tend to rattle off those kinds of volumes with disdain, but they would constitute 10 percent of the national undiscovered reserves,” he said. “If they’re conservative, it could be considerably more than that. The industry wouldn’t be willing to explore for it if they didn’t consider it valuable.”

Reprinted from the Tideland News

Don’t expect to see – or hear – any seismic testing for oil and gas off North Carolina or other mid-Atlantic states this summer.

That was the word recently from John Filostrat, public affairs spokesman for the Gulf regional office of the Bureau of Ocean Energy Management, or BOEM, the federal agency responsible for considering and approving permits for oil and gas testing and production.

“I could be wrong – I’ve been wrong before – but given how the process is going now, and the fact that we haven’t done this in the Atlantic in close to four decades, I seriously doubt if there will be any testing by the end of the summer,” said Filostrat.

The Gulf office in New Orleans is handling the permitting because of the newness of the oil-and-gas testing and leasing program in the Atlantic, which was last the target of oil companies in the early 1980s. The Atlantic is a ‘frontier,’” Filostrat said.

The one exception to the “not likely by end-of-summer” scenario, he added, might be an application from ARKeX, a testing company that maps potential oil and gas resources by magnetic imaging from an airplane instead of using seismic guns, which are towed by ships and blast sound waves into the sea bottom. The ARKeX method may be less effective in identifying oil and gas reserves, but it’s believed to not be harmful to marine mammals, a concern with seismic guns.

As a result, Filostrat said, ARKeX is not subject to the same review or permitting processes before it can begin its operations.

ARKeX’s testing plan could get agency approval within 30 days, and the company could begin testing as soon as it wants after that, he said.

The N.C. Division of Coastal Management has approved “consistency review” applications for three companies, Spectrum Geo Inc., CGG Services and GX Technology, that want to test the waters off the state. A decision on a fourth application, TGS, is expected to follow.

Michelle Walker, an agency spokeswoman, said that because all of the proposed seismic testing plans are similar, approval of one most likely means all will be approved. The state reviews the applications because it receives federal money for its coastal zone-management program.

State approval doesn’t necessarily translate into BOEM approval. A key requirement is a federal marine mammal permit from NOAA’s National Marine Fisheries Service to allow the companies to interact with the animals.

So far, according to Kate Brogan, a spokeswoman for NOAA’s Office of Protected Resources, five seismic testing companies have applied for those permits, and none have been approved. NOAA deemed the applications incomplete.

“There should be some applications that are considered complete soon,” she said. “The next step after that is development by our office of a ‘proposed authorization.’ And once that is done, those proposals go out for public comment.”

Filostrat said BOEM’s approval process for seismic testing includes many hurdles. One company that applied for a permit in the Atlantic has already withdrawn its application, leaving nine, including ARKeX.

“The consistency review (approval) by the states is a big step, and the marine mammal permit is another big step, but they aren’t the only ones,” Filostrat said.

For example, in order to grant the testing permits, BOEM must be satisfied with a company’s “strike avoidance” method – assurance that it won’t hit the mammals – and convinced that it will honor specific closure areas and times for right whales. It also must be satisfied that the company will have passive acoustic monitors, which listen for marine mammals, on board to augment the required human observers who watch for marine mammals and can order testing to halt.

Finally, Filostrat said, BOEM must be satisfied that a company’s plans don’t overlap with any other company’s plans, a requirement that has created confusion. A BOEM map, which Filostrat said was badly designed and inadequate, appeared to show a high degree of overlap, leading to fears that multiple companies might be firing off the seismic guns at the same time in the same place.

“It isn’t allowed,” he said.

Also, the testing companies must show that they will avoid significant hard-bottom areas where marine resources can be damaged, and that they will avoid archaeological sites, such as shipwrecks.

Filostrat said the agency rarely rejects testing applications in the Gulf, where seismic activity has been routine for many years. Instead, it usually identifies problems in the application and works with company officials to resolve them. The Atlantic, he reiterated, is a whole different story, since there’s no recent history of testing.

Filostrat dismissed worries that BOEM is likely to approve any and all applications and ease the way for an Atlantic oil-drilling program initiated by the Obama administration and supported by governors. The agency, he said, takes seriously its mission to balance development of ocean energy resources and protection of marine life.

RALEIGH — North Carolina’s rise as a potential energy producing state didn’t come easily or overnight.

There was, however, a pivot point. Whether you’re looking at the course of legislation, the tenor of policy or the rise in campaign contributions, the time of the transition from a state wary of the consequences oil and gas exploration to its full-throated champion is pretty easy to pin down. It coincides with a major political shift in the state that saw an equally huge shift in energy policy.

From 2011 to 2013, with Republicans now in charge in the N.C. General Assembly, official offshore energy policy went from how to manage and respond should the federal government open up areas off the coast for exploration to new infrastructure plans, the creation of pro-exploration policy-making bodies and even a proposed royalty structure for dividing up future proceeds.

With the shift came a dramatic increase in campaign donations from the oil and gas industry. Donations from the sector more than doubled between 2010 and 2012 with Gov. Pat McCrory being the main beneficiary.

The election of McCrory, a Republican, as governor in 2012 put a longtime supporter of oil and gas interests in office. His predecessor, Democrat Bev Perdue had acknowledged the potential in offshore energy, but her administration’s policies were more cautious, aimed at responding to moves at the federal level rather than encouraging them.

The change at the legislature was also a study in contrasts as a GOP majority elected in 2010 rose to supermajorities in both the House and Senate after the 2012 election.

In 2010, before the election that shook up the balance of power in Raleigh, the major piece of offshore energy legislation was a bill written in reaction to that year’s Deepwater Horizon disaster. It tightened the state’s legal framework on recovering damages from oil spills and offshore drilling.

When the legislature returned to work in 2011, a different party with a much different view of offshore energy was in the majority.

Exactly a year to the day after the explosion that began the Deepwater Horizon disaster, the Senate read in the Energy Jobs Act, a bill developed by a special energy subcommittee led by new Senate Finance Committee chair Bob Rucho, R-Mecklenburg, that proposed to open the state oil and gas exploration both inland and offshore.

Although much of the public controversy around the bill centered on provisions that would fast-track hydraulic fracturing, or fracking, for natural gas in the Piedmont, there was also an extensive section on offshore exploration. The bill encouraged setting up a compact with other southeastern Atlantic coast states and proposed a way to handle potential royalties should wells ever start producing and should the federal government decide to share the royalty payments.

Ultimately, the Energy Jobs Act fell a handful of votes short after the House failed to find the votes to override a Perdue veto. Her veto held into the next year as the House failed again to muster enough votes. Eventually, compromise language that moved the fracking portion of the bill forward was found.

But it wouldn’t be until a stronger GOP majority and McCrory arrived in Raleigh in 2013 that the offshore provisions became law.

The 2013 session yielded the Domestic Energy Jobs Act, which in its preface emphasized North Carolina’s role in participating in a national drive to energy independence. Among other things, it encouraged the state to work with Virginia and South Carolina to work to get some royalty money flowing to the states and proposed ways to spend those potential funds.

Follow the Money

Oil and gas companies and their political action committees have played a limited role in state politics and have been almost dormant since the potential for offshore energy exploration ended in early 1990s.

But tracking the renewed support for oil and gas in the legislature and the administration shows a surge of new money from oil and gas political action committees, or PACs, and nonprofit political groups and a distinct rise in campaign contributions. Oil and natural gas interests contributed $324,000 to candidates for state office in 2010, according to the Follow the Money database compiled by National Institute on Money in State Politics. Those contributions more than doubled to $747,000 in 2012 and held steady two years later at $649,000.

The diversity of the oil and gas sector has grown, too, going from a narrow group that represented mainly gasoline retailers and regional suppliers to companies involved in drilling and exploration and major, international players in both fracking and offshore exploration. An important point to note here is that the industry sector defined by the institute as “oil and natural gas” includes such entities as Piedmont Natural Gas that have no direct involvement in offshore drilling.

McCrory has been the biggest beneficiary of the increased donations. Oil and natural gas interests contributed more than $172,000 to McCrory’s 2012 gubernatorial campaign, according to Follow the Money. That was more than double the industry’s $57,000 in contributions to McCrory’s failed 2008 run for governor.

Republican Thom Tillis, who was elected to the U.S. Senate last year but was speaker of the state House since 2011, has received more than $148,000 from oil and gas industries during his state election campaigns. For his U.S. Senate campaign, the industry was the sixth largest industry group contributing to Tillis’ win over incumbent Democrat Kay Hagan, with $237,500 in PAC contributions.

Sen. Phil Berger, a Republican from Eden and the Senate president, has received more than $85,000 from the industry during his campaigns, according to the database. Among coastal legislators, Rep. Rick Catlin, R-New Hanover, and Sen. Bill Rabon, R-Brunswick, topped the list with $17,750 and $17,701, respectively, in 2012 and 2014. Sen. Harry Brown, R-Onslow, the Senate majority leader, received $13,700 from the industry during those elections, and newcomer Sen. Michael Lee, R-New Hanover, got over $10,000 from the industry for his election last year. His predecessor in that seat, retired Republican Thom Goolsby received more than $23,000 from oil and gas interests in 2010 and 2012.

A review of campaign reports by Coastal Review Online shows an increase in campaign contributions to key legislators starting in 2010 as the General Assembly began its most recent courtship of the oil and gas industry.

The oil and gas contributions were not widely distributed. Those receiving the funds were mainly members of the leadership, committee chairs or key sponsors of energy legislation. Some contributions went to Democrats who later bucked their party and voted for GOP-backed energy proposals. Some funds also went to GOP legislators facing tough re-election fights.

The group of industry supporters included three companies with substantial offshore interests — Williams Industries, BP and Marathon Oil. In the past five years, all three ratcheted up their contributions to bill sponsors and the House and Senate leadership as the legislature moved — and fought over — major energy bills.

Records show Marathon’s PAC started giving as far back as 1996, but in small amounts of less than $500, to both Democratic and Republican leaders in the legislature. In 2010, the PAC upped its level of contributions and started giving almost exclusively to GOP leaders. In September 2010, just before the GOP’s big election victory, Marathon’s PAC sent out $9,500 in contributions, mostly in the form of $1,000 checks to the group that would rise to leadership in the Senate, Berger, Rucho and Brown.

Marathon’s money didn’t stop flowing after the election. The PAC continued to contribute to both Rucho and Tillis’ in 2011.

By the 2012 election cycle the Marathon PAC distributed more than $16,000, mostly to Senate oil- and gas-exploration proponents. Although final reports for 2014 are not complete, the PACs contribution rose to at least $28,000.

Williams Cos., which operates a number of deep-water rigs in the Gulf of Mexico, spread around small contributions totaling about $5,000 in 2000 and 2004 and did not contribute again until 2012, when the PAC gave $5,500 total to key Senate and House committee chairs. It followed up with $7,500 last year to roughly the same group of legislators.

BP’s PAC started contributing as early as 1990 in small amounts, but gave $8,000, mostly to Democratic leaders, in the 2000 campaign cycle.

After that, contributions all but ended for several years until the PAC began giving to state legislators again in 2010 with contributions to Tillis and Rucho. In 2011, the PAC sent another 3,500 to the pair and other members of the new House and Senate leadership. Contributions to legislative leaders and McCrory from BP reached $6,000 in both the 2012 and 2014 election cycles. BP’s PAC also contributed more than $5,000 to Senate and House leaders in late 2013.

Bob Phillips, executive director of Common Cause, North Carolina, said the increases in contributions are not surprising given the change in policy and political parties.

“Money follows power,” Phillips said. “The industry has also found a much more receptive audience so they are more willing to invest.”

The amounts contributed by the oil and gas PACs are just a portion of the oil and gas money moving into campaign accounts of state legislators. It doesn’t account for individual contributions from industry executives and supporters, which are far more difficult to track given the state’s antiquated reporting systems.

The campaign finance system also doesn’t keep track of the growing amount of dark money, unlimited donations from undisclosed donors, flowing into the state. Much of the dark money comes from groups with strong financial support from oil and gas interests.

Phillips said since the U.S. Supreme Court’s ruling in Citizens United that allowed the formation of the groups, their money and increased influence have become much harder to discern. The first full election cycle to see the impact was in 2014 and next year will be the first presidential race in which the rules are in place.

“It is much more difficult to track the money, especially in real time, and these groups have overtaken the traditional money,” he said. “They are definitely affecting the debate and the issues in a way we’ve not seen before.”

Quiet so far

This year, the legislative session has not featured major controversies or legislation on offshore energy policy. Cassie Gavin, director of government relations for the N.C. Sierra Club, said that after the flurry of legislation in 2012 and 2013 there isn’t much the legislature can do regarding offshore energy until there is more movement at the federal level.

McCrory has said he’s interested in seeing the legislature change the distribution formula for any potential royalties, but Gavin noted that since the Obama administration is cool to the idea of Atlantic states sharing in royalties in a way akin to Gulf states, there is not much point in doing so.

With the groundwork in place, legislators are watching for clues as the federal process moves ahead and occasionally weighing in with federal authorities and congressional representatives. Most recently there’s been support for McCrory’s efforts to change the proposed 50-mile buffer for offshore exploration to include areas closer to shore where North Carolina’s oil or gas resources are more likely located.

There’s also been continued opposition to the plans. Forty-six legislators, all Democrats, signed a letter in late March to Bureau of Ocean Energy Management Director Abigail Ross Hopper calling for removal of the Atlantic coast from federal plans for exploration.

2007-2008 Session

SJR1987 — ERC Study Offshore Drilling for Energy Needs.

Primary sponsors: Sen. James Forrester

The first in a series of similar proposals, the bill was a joint resolution that read: “The Environmental Review Commission may study the desirability of encouraging the offshore drilling exploration for oil or natural gas in coastal waters within the State’s jurisdiction and may study whether to urge the United States Congress to pass legislation to lift the federal moratoria on the offshore drilling exploration for oil or natural gas in waters within federal jurisdiction.”

Outcome:  Referred to the Senate Rules Committee and not seen again.

HR2806 — Offshore Drilling

Primary sponsors: Reps. Stam, McGee, Folwell and Justice

A joint resolution that included a number of policy findings urging the state’s congressional delegation to support H.R. 6108, the Deep Ocean Energy Resources Act of 2008, which would open up the Atlantic to offshore exploration.

Outcome: Referred to the House Rules Committee and did not receive a hearing.

2009-2010 Session

HJR1232 and SJR 879

Primary sponsors: Rep. Gibson, Sens. Atwater and Hartsell

Another resolution aimed at getting a study started on benefits, including any revenue possibilities “in the event that the offshore drilling exploration for oil or natural gas were to take place in coastal waters off North Carolina sometime in the future.” The study would look at “offshore drilling exploration for oil or natural gas to take place in waters within the jurisdiction of North Carolina, within the jurisdiction of another state, or within federal jurisdiction.”

Outcome: The House version passed first reading and was referred to House Committee on Environment and Natural Resources, which did not vote on the bill. The Senate version was sent to the Rules Committee and was not voted on.

S836 — Oil Spill Liability, Response, & Preparedness

Primary sponsor: Sen. Charles Albertson

The legislature’s response to BP’s Deepwater Horizon spill, the bill outlined state emergency response and legal liabilities for potential polluters. The bill also established the Legislative Research Commission Advisory Subcommittee on Offshore Energy Exploration to study issues related to oil and natural gas exploration and development off the North Carolina coast, as well as the potential impacts of alternative offshore energy projects on the nation’s energy supply.

Outcome: The bill passed with near unanimous support and was signed by Gov. Bev Perdue in late August.

2011-2012 Session

S680 — Constitutional Convention on Hydrocarbons

Primary sponsor: Sen. David Rouzer

Called on the federal government to increase offshore and onshore oil and gas exploration, including federally controlled waters off the N.C. coast.

Outcome: Referred to Senate Rules Committee and was not heard.

S709 Energy Jobs Act

Primary sponsors: Sens. Rucho, Brown and Tucker

Known mainly because of controversial provisions that would speed up the process to permit fracking inland, the bill also included specific language on negotiations with other states and the federal government on offshore exploration. It encourages royalty sharing from offshore resources and sets out a system for the state to collect the royalties and how they could be used. The bill also has symbolic elements. It changed the name of the state’s Energy Policy Council to the Energy Jobs Council.

Outcome: The bill narrowly passed both chambers, but was vetoed by Gov. Perdue. The Senate voted to override the veto, but the House could not find enough votes to override the veto in both the 2011 and 2012 sessions and the bill did not become law.

H177 – Clean Energy Transportation Act

Primary sponsors: Reps. Samuelson and McElraft

Modifies Energy Policy Act to “strongly” urge the governor to join with the governors of South Carolina and Virginia to create a regional pact for offshore issues.

Outcome: The bill, which included numerous other provisions in addition to the offshore language, was signed into law, but the offshore language was moot given the failure of the legislature to override Gov. Bev Perdue’s veto of S709.

S820 — Clean Energy and Economic Security Act

Primary sponsors: Sens. Rucho, Blake

Another energy omnibus, the bill included duplicate language from earlier fracking and offshore energy bills, including a new royalty structure that split any future royalties as follows: 30 percent to the General Fund; 10 percent to the Highway Trust Fund; 10 percent to the Community Colleges System Office; 10 percent to the University of North Carolina Board of Governors; 30 percent to the Department of Environment and Natural Resources; 8 percent to the State Ports Authority; and 2 percent to the Department of Commerce.

Outcome: The bill, which had some key protections regarding fracking, was vetoed in early July 2012 by Perdue, but had enough support that both the House and Senate voted to quickly override the veto.

2013-2014 Session

S76 — Domestic Energy Jobs Act

Primary sponsors: Sens. Newton, Rucho and Brock

The bill included similar language as energy policy acts from the previous year, but was much more extensive in creating a new commission to oversee mining and energy issues as well as additional resources to support oil and gas exploration. Sections of the bill spell out a proposed royalty structure for offshore energy as well as guidelines for the development of a regional interstate offshore energy policy compact.

The new split for any potential royalties was changed to 75 percent to the General Fund; 5 percent to the Highway Trust Fund; 5 percent to the Community Colleges System Office; 5 percent to the UNC Board of Governors; 5 percent to DENR; 3 percent to the State Ports Authority; and 2 percent to the Department of Commerce.

Outcome: The bill passed the legislature in late July of 2013 and was signed into law by Gov. Pat McCrory.

This story first appeared in Facing South, a publication of the Institute for Southern Studies. 

When the BP Deepwater Horizon oil rig exploded in flames off the Louisiana coast five years ago, the disaster killed 11 workers, injured 17 others and unleashed an undersea geyser that spewed more than 160 million gallons of oil into the Gulf of Mexico.

The BP disaster would go on to pollute 1,100 miles of coastline and has been blamed for long-term damage to marine life and the health of cleanup workers and coastal residents, as well as costing the tourism and fishing industries an estimated $30 billion through 2020.

The scale of the calamity — the biggest oil spill in history — led many lawmakers and Gulf Coast advocates to not only call for safer approaches to offshore drilling, but to rethink the nation’s reliance on offshore oil. After a halting response that drew criticism, President Obama declared two months after the spill began that “no matter how much we improve our regulation of the industry, drilling for oil these days entails greater risk. […] The tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now.”

Five years later, however, little has changed. Oil and gas production in the Gulf is expected to reach pre-spill levels this year. Congress has not passed any far-reaching new safety legislation for offshore oil and gas drilling, and the U.S. Interior Department has implemented only piecemeal reforms, on well casings in 2010 and cementing of wells in 2012. Earlier this month, it announced new safety requirements for blowout preventers for oil and gas wells — a reform the industry had already adopted voluntarily.

Indeed, instead of moving away from risky offshore oil, the U.S. is now poised to expand exploration and drilling in vast new areas of the ocean. Earlier this year, energy interests scored a major victory when the Obama administration announced it would include waters off the coasts of Georgia, North Carolina, South Carolina and Virginia in a draft five-year plan for offshore oil and gas leasing beginning in 2017 — the first time a federal lease has been proposed for the Atlantic since the early 1980s.

The oil and gas industry’s success in getting Atlantic drilling back on the agenda can be traced in large part to the full-throttle lobbying efforts of the Outer Continental Shelf Governors Coalition — a secretive group founded in 2011 to revive and expand offshore drilling in the wake of the BP disaster.

Based in the offices of its chairman, Republican Gov. Pat McCrory of North Carolina, the Governors Coalition now includes member governors from nine coastal states. The group describes itself as the voice of these state leaders in their efforts to “foster a productive dialogue” with the federal government over the future of offshore oil policy.

However, an 18-month investigation by Facing South finds that despite its image of being a group of publicly-elected state officials, the Governors Coalition is largely run and managed by two groups tied to the oil and gas industry.

Drawing on thousands of pages of documents obtained through public records requests to the offices of Gov. McCrory and other officials, Facing South has uncovered new details about the Governors Coalition and its close but largely concealed ties to HBW Resources, a corporate lobbying and public relations firm representing some of the nation’s biggest energy interests, and the company’s sister group the Consumer Energy Alliance, a “dark money” nonprofit organization that doesn’t have to disclose its backers. Our findings add to previous details about the groups’ connections reported last year by the Center for Public Integrity.

For government ethics watchdogs, the unusual relationship between the Governors Coalition and oil and gas industry representatives raises troubling questions about transparency, the blurring of lines between public and private interests, and who is driving the national debate about offshore drilling.

“The until-now hidden connection between energy interests and the Governors Coalition illustrates how big money all too often calls the tune in today’s public policy debates,” says Common Cause President Miles Rapoport. “Unfortunately, it appears these governors have surrendered their independence and are providing a front for the energy industry’s drive to expand drilling for offshore oil and natural gas.”

Capitol Crusade: Big Oil joins forces with key governors

Soon after the BP disaster, oil and gas interests sprung into action to refurbish the industry’s image and ensure their long-term plans for expanding offshore drilling weren’t derailed.

In the face of skepticism about offshore drilling and calls to shift towards clean energy, the oil and gas industry spent unprecedented sums of money on political influence. According to OpenSecrets.org, the industry more than doubled its campaign contributions to federal candidates from the 2010 to the 2012 election cycle to more than $70 million. Oil and gas companies also dramatically expanded their independent or “outside” political spending following the U.S. Supreme Court’s 2010 Citizens United decision, from about $2.5 million in 2010 to almost $18.9 million in 2014. The industry’s spending on electing sympathetic lawmakers was complemented by more than $141 million spent on federal lobbying in 2014 alone.

Then in 2011, just over a year after the BP disaster, a new lobbying force appeared: the Outer Continental Shelf Governors Coalition, a group of coastal state governors who, according to the group’s website, “support policies that encourage an expansion of American energy, particularly U.S. offshore energy resources.”

The Governors Coalition, launched by Republican governors of Alaska, Louisiana, Mississippi and Texas, now includes, in addition to chairman Gov. McCrory, Republicans Greg Abbott of Texas, Robert Bentley of Alabama, Phil Bryant of Mississippi, Nikki Haley of South Carolina, Bobby Jindal of Louisiana and Paul LePage of Maine. Democrat Terry McAuliffe of Virginia joined shortly after his election in 2013, and Independent Bill Walker of Alaska came on board after his victory last year. Each governor’s office pays $1,000 a year, presumably taxpayer money, for membership in the Coalition.

From the beginning, the Governors Coalition has been open about its agenda: to expand offshore oil and gas drilling, both in areas where it is currently allowed in the Gulf Coast and Arctic Ocean, as well as opening up the untapped waters of the Atlantic Ocean. The position of governors is especially critical in deciding the fate of Atlantic drilling, since the Outer Continental Shelf Lands Act that guides the federal offshore leasing process gives significant weight to governors’ recommendations.

The Governors Coalition has been less open, however, about its close relationship to the oil and gas industry, which stands to reap immense profits if the elected officials are successful in promoting their pro-drilling agenda.

According to documents obtained by Facing South, the Governors Coalition — despite being ostensibly led by elected state officials and based in McCrory’s office — is largely managed and operated by two interrelated private outfits directly tied to the energy industry: the Consumer Energy Alliance, a 501(c)(4) “social welfare” nonprofit that under law is not required to disclose its donors, and HBW Resources, a corporate lobbying and public relations firm.

The Consumer Energy Alliance bills itself as the “voice of the energy consumer.” The dark-money group counts more than 90 energy companies and industry associations among its members, including the five so-called “oil supermajors”: BP, Chevron, ConocoPhillips, ExxonMobil and Shell. The Alliance has been a vocal advocate of fracking, the construction of the Keystone XL pipeline, and expanded offshore oil drilling. The watchdog Center for Media and Democracy calls the Alliance a “front group for the energy industry.”

Documents obtained by Facing South show the Consumer Energy Alliance has an especially close relationship with one leading figure in the oil and gas industry’s political network: HBW Resources, a lobbying and public relations firm founded in 2005 that specializes in energy development. HBW Resources’ current lobbying clients include Noble Energy, a major oil and gas exploration and production company based in Houston and a member of the Alliance; its previous clients include the American Petroleum Institute, the oil and gas industry’s leading advocacy group.

The Consumer Energy Alliance and HBW Resources are so closely intertwined that it’s difficult to tell where one group ends and the other begins:

• All of the staff listed on CEA’s website are also employees of HBW Resources.
• CEA was officially registered as a tax-exempt organization by David Holt, the “H” in HBW Resources and the firm’s managing partner, in 2008, according to an IRS letter confirming the group’s nonprofit status. Holt currently serves as CEA’s president.
• CEA’s mailing address is 2211 Norfolk St., Suite 614 in Houston — the same address as one of HBW Resources’ main offices.
• Websites for HBW Resources and CEA are hosted at the same IP address as dholtlaw.com and several other pro-drilling sites.
• CEA has also paid HBW Resources a substantial amount of money in contracting fees. According to CEA’s latest tax filing for 2013, of the group’s $3 million in income, $1.3 million was paid to HBW Resources for “management & professional services.”

Blurred Lines: Public vs. private

After the BP spill, the energy lobbyists at HBW Resources and the Consumer Energy Alliance sought new messengers to promote the offshore drilling agenda. They found the allies they needed in four Republican leaders from coastal states who would launch the Outer Continental Shelf Governors Coalition — a group in which the lobby firm and the dark-money nonprofit have played a central and often secretive role.

The Governors Coalition made its public debut on May 2, 2011 at the Offshore Technology Conference in Houston, one of the oil and gas industry’s largest trade shows.

The group’s original members — Bobby Jindal of Louisiana, Rick Perry of Texas, Haley Barbour of Mississippi and Sean Parnell of Alaska, all Republicans — wrote a letter to their fellow governors inviting them to join the group:

[W]e are forming the OCS Governors Coalition as a mechanism to foster an appropriate dialogue between the coastal states and the Administration and ensure that future actions are done with adequate state input.

Though the governors’ announcement letter did not mention any involvement by the Consumer Energy Alliance, the group was quick to celebrate the Coalition’s formation. Alliance President and HBW partner David Holt issued a statement that “CEA applauds the collaboration of these governors in promoting an open dialogue about the need to and realities of producing American energy offshore, not only for their individual states, but for the entire nation.”

The Consumer Energy Alliance began working with the Governors Coalition, then chaired by Alaska Gov. Parnell, the following year. According to emails obtained by Facing South, on April 23, 2012, Frank Collins — a former spokesperson for Louisiana Gov. Bobby Jindal who was then serving as policy coordinator for the state’s Coastal Protection and Restoration Authority, and who now serves as deputy chief of staff for Florida Gov. Rick Scott (R) — wrote an email to the Coalition membership, which by then had expanded to include Govs. Bentley of Alabama, Haley of South Carolina and McDonnell of Virginia.

Collins proposed “a handful of initiatives” to help the group “coordinate and communicate more effectively.” Among them:

David Holt and his volunteer team have offered to assist the Coalition to organize monthly status calls, bimonthly bulletin alerts, face-to-face meetings, and messaging opportunities, among other items. In order to start moving the ball forward, David and Natalie Joubert will be reaching out to each member state in the next few weeks to hold a status call.

Like David Holt, Joubert symbolized the blurred relationship between HBW Resources, the Consumer Energy Alliance and the Governors Coalition. At the time, Joubert was both the policy director for the Alliance and vice president for policy at HBW Resources. (She left both organizations earlier this year.) The signature line in her emails to the governors’ group identified her as being affiliated with the Alliance, but she often used an HBW Resources email address (for an example click here). According to her (now-deleted) HBW Resources bio, Joubert is a former associate at the Clinton Foundation and in 2012 served as an adviser for the Obama for America Energy and Environmental Team.

It wouldn’t be until August 2013 that the OCSGC would adopt a memorandum of understanding to formalize its relationship with the Consumer Energy Alliance, an agreement that underscored the Alliance’s central role in running the governors’ group. The document characterizes the Alliance’s role as “volunteer staff” for the Governors Coalition, which includes “[e]xecuting all day-to-day administrative, writing and research needs of the Coalition” and “[a]ssisting in the conceptualization and execution of all internal and external communication and media engagement of the Coalition.”

Yet the overlapping relationship between the three groups was largely concealed from the public. When Facing South first began looking into the Governors Coalition in 2013, its website did not mention the connection to the Consumer Energy Alliance at all; for example, see this version of the Governors Coalition’s “About” page from November 2013. In August 2014, however, the page had been edited to acknowledge that the Alliance provides the Governors Coalition with “information and administrative support.” The edit came after investigative reporter Lee Fang of The Republic Report used metadata from a letter sent by the Coalition to former U.S. Sen. Mary Landrieu (D-Louisiana) to reveal that the letter originated from HBW Resources.

Today, the website of the Outer Continental Shelf Governors Coalition — which is hosted at the same IP address as the Consumer Energy Alliance and HBW Resources — still does not disclose the Consumer Energy Alliance’s close relationship with HBW Resources. Nor does the Alliance’s “About” page disclose its relationship with the energy lobbying firm.

However, emails and other documents obtained by Facing South reveal the full extent to which the Governors Coalition has been largely run and driven by the oil and gas industry representatives at the Consumer Energy Alliance and HBW Resources. Among the initiatives the two outfits have spearheaded for the Governors Coalition:

• Drafting newspaper op-eds. Collins’ April 23, 2012 email to the Governors Coalition noted that “volunteer staff” — that is, the Alliance/HBW Resources — was “drafting op-ed for OCSGC use.” A week later, an op-ed titled “Virginia Could Be an Energy Power — If Washington Would Let It” ran in the Wall Street Journal under Gov. McDonnell’s signature, calling for Atlantic drilling as the Obama administration was in the process of finalizing its offshore leasing plan for the 2012-2017 period.
• Drafting lobbying letters. In July 2012, Joubert sent Governors Coalition members a draft of a letter urging President Obama to “advance the dialogue between federal and state officials,” asking them to review it and send edits “our way.” And as previously noted, The Republic Report used metadata from another letter sent by the Coalition to former U.S. Sen. Landrieu of Louisiana promoting expanded drilling to show the letter’s original author was “NJoubert” of HBW Resources.
• Connecting the governors to oil and gas industry insiders. For example, the Alliance/HBW Resources organized what it called a “closed-door session” for the governors with “industry leaders” at the Offshore Technology Conference in Houston in May 2013. When the Governors Coalition convened again that October in Biloxi, Mississippi at the Beau Rivage Resort and Casino, the Alliance/HBW Resources organized an “Industry Roundtable Luncheon” that was also closed to the press; among those who attended were representatives of Shell, ExxonMobil and Chevron. Prior to the October meeting, Joubert sent Coalition members what she called “Industry Briefing Read-Aheads” from Shell and ExxonMobil making the case for expanded drilling. In the documents obtained by Facing South, there is no evidence that the Governors Coalition solicited or received information for their meetings from environmentalists or scientists concerned about the impacts of offshore drilling.
• * Connecting governors with energy industry donors. Following the “closed-door session” with “industry leaders” at the May 2013 conference in Houston, Governors Coalition members headed to a fundraiser for Gov. Haley at the upscale Hotel ZaZa in the city’s Museum District. That same day, Haley’s campaign reported receiving a contribution of $2,319.22 from HBW Resources, listed as a “fundraising expense.”

The following day Haley’s campaign registered contributions of $2,500 each from HBW Resources partners Holt and Michael Whatley and $1,000 from Paul Looney, HBW vice president for strategic development who specializes in working with state regulators on permitting and exporting of petroleum products.

Haley also reported a contribution of $2,500 from Richmond “Richie” Miller, president of Spectrum Geo, a Houston-based company that conducts seismic testing for oil and gas reserves. He was among those who attended the industry roundtable earlier that day. Spectrum Geo later filed applications with both the state of South Carolina and the Bureau of Ocean Energy Management to move ahead with seismic testing for oil and gas reserves in federal waters off the South Carolina coast. Scientists have expressed concerns that the practice, which involves using underwater air blasts nearly as loud as conventional explosives, is harmful to marine life.

Earlier this month, Spectrum Geo and another seismic testing company, GX Technology, received approval from the McCrory administration to conduct testing off North Carolina’s coast.

Facing South contacted McCrory’s office to discuss the relationship between the Governors Coalition, the Consumer Energy Alliance and HBW Resources, but Communications Director Josh Ellis declined to comment on that specifically.

“Gov. McCrory is proud to chair this bipartisan group of governors working to find environmentally sound solutions for energy exploration,” Ellis said in an email.

‘Speaking for the oil industry’

In its push to open Atlantic waters for oil and gas drilling, the Outer Continental Shelf Governors Coalition, along with the Consumer Energy Alliance and HBW Resources, have focused their lobbying efforts on the U.S. Interior Department, which houses the Bureau of Ocean Energy Management, the agency that oversees offshore leasing.

In early 2013, when President Obama initially nominated Sally Jewell to replace Ken Salazar as Interior secretary, coalition members Haley of South Carolina, McCrory of North Carolina and McDonnell of Virginia wrote to Jewell congratulating her on the nomination and asking her to support Atlantic drilling. The following month, Jewell — a former CEO and president of outdoor retailer REI and a former Mobil Oil engineer — responded on personal letterhead that she appreciated hearing their concerns but as a nominee was “not yet in a position to be involved in policy matters before the agency.”

But the Governors Coalition didn’t give up. Instead, it sent a list of questions to U.S. Sens. Ron Wyden, D-Oregon, and Lisa Murkowski, R-Alaska, then the chair and ranking member respectively of the Committee on Energy and Natural Resources, to ask Jewell at her nomination hearings. “Fortunately, Senator Murkowski did include all of the proposed questions,” Natalie Joubert enthused in an email to Governors Coalition members.

After Jewell was confirmed, three members of the Governors Coalition — Bentley of Alabama, Bryant of Mississippi, and McCrory, who had become the group’s chair following Alaska Gov. Parnell’s defeat — traveled to Washington in February 2014 to meet with her in person to further press the case for Atlantic drilling. “As chair of the OCS Governors Coalition, I am encouraged with the opportunity to meet with Secretary Jewell and better advance the Coalition’s common mission of greater federal-state communication,” McCrory said at the time.

Five months later, the Interior Department announced plans to open the Atlantic to seismic testing for oil and gas reserves, the first step toward offshore drilling. Six months after that, in January 2015, it released a drilling lease plan for 2017-2022 that included the Atlantic outside of a 50-mile protective coastal buffer zone. The plan excluded parts of the Arctic and Eastern Gulf of Mexico near Florida, where Gov. Scott and other elected leaders have long opposed offshore drilling as a threat to the Sunshine State’s $67 billion annual tourism industry.

In a statement on behalf of the Governors Coalition, McCrory thanked Jewell “for taking a step in the right direction” by considering Atlantic drilling — but he criticized the proposal for allowing “many other resource-rich areas [to] remain under lock and key by the Obama administration.” McCrory continued that line of attack in testimony he gave earlier this month before a U.S. House subcommittee (in photo), where he criticized the 50-mile buffer zone for “unnecessarily put[ting] much of North Carolina’s most accessible and undiscovered resources, frankly, under lock and key.” He also called on BOEM to offer more than one drilling lease in the Atlantic, as it proposed.

In his statements, McCrory did not mention the considerable public opposition to Atlantic drilling in his own state — including unprecedented crowds that turned out for BOEM hearings earlier this year in Wilmington and Kill Devil Hills, or the resolutions opposing seismic testing and/or offshore drilling passed by more than a dozen North Carolina coastal communities as well as local chambers of commerce, tourism boards, and fishing industry associations.

The Southern Environmental Law Center, a nonprofit law firm opposed to Atlantic drilling, pointed to the disconnect between the governor’s statements and the outpouring of public opposition, issuing a statement blasting McCrory for “speaking for the oil industry.”

Additional research and reporting by Chris Kromm. This story was produced in part with support from the Fund for Investigative Journalism.

The federal process for permitting offshore drilling is long, tortuous and confusing to those of us in North Carolina who haven’t had to deal with it before. Just look at the flow chart that accompanies this story. Rube Goldberg would be proud.

But take heart. The plans to drill for oil or natural gas off the N.C. coast are at the very beginning of the process. There will be a number of environmental studies and plenty of opportunities for public involvement before production wells – if it ever comes to that – are drilled.

In areas like the Gulf of Mexico where drilling is common and the infrastructure exists, It takes anywhere from four to 10 years after companies lease the seafloor from the federal government for production to start. In a so-called “frontier area” like the East Coast, where there are no wells currently and no undersea pipelines or other needed infrastructure, it’s anybody’s guess as to how long it would take for oil or natural gas to reach consumers.

Under the draft leasing plan announced by the federal government in January, only one lease is planned in the Atlantic in 2021. Don’t expect, then, to see any oil or natural gas from production wells until the 2030s at the earliest. And that’s barring any lawsuits or permit challenges.

The Process

The process involves a series of well-defined steps that are supposed to protect the interests of the public, the federal government and businesses.

Waters more than three miles from the shoreline and to the end of the continental shelf —about 200 miles — are considered the property of the United States government, legally defined as the country’s exclusive economic zone. Like any property owner who wants to insure their property will be used in a manner consistent with their wishes, the government establishes rules and regulations for its use and offers leases for the development of those resources.

The process for offering leases is spelled out in the Outer Continental Shelf Lands Act and follows a proscribed schedule. Congress first passed the law in 1953 and has amended it several times since.

The law divides the outer continental shelf into four major management areas — Alaska, Pacific, Gulf of Mexico and Atlantic. Lease sales occur in five-year blocks with each area allotted a timeframe in which leases are available for purchase.

The current program, 2012-2017, includes only the Alaska and Gulf of Mexico management areas. The proposed 2017-2022 lease program that the Obama administration announced earlier this year includes a portion of the Atlantic region from the Chesapeake Bay to the Georgia-Florida line, the western Gulf of Mexico and the north shore of Alaska.

The new lease plan is still in draft form while the federal agency in charge of managing offshore leases, the Bureau of Ocean Energy Management, or BOEM, prepares an environmental study on the plan.

The next step in the process will be the release sometime next year of a so-called “Proposed Program.” It’s not the final document, although it will contain many of the final elements. There will be public meetings during a 90-day comment period. Then, BOEM will issue a “Proposed Final Program.” Congress will then have 60 days to act on the plan. The “Final Program and the Record of Decision” will follow, probably by the end of next year. Leasing in the Gulf of Mexico would begin in 2017.

The Devil and the Details

Because it is a multi-step process, the BOEM permitting procedure can seem confusing. To know when one phase ends and another begins can be difficult for the public to follow. Adding to the confusion, an environmental-impact statement, or EIS, required by the federal National Environmental Policy Act, runs parallel to and in conjunction with the development of the leasing plan. That process focuses on environmental effects and mitigation strategies and is integrated into the final leasing plan.

It’s important to remember that while they run concurrently, the environmental study and the leasing plan don’t follow the same schedules. As an example, the proposed leasing plan released by BOEM had a 90-day comment period, while the public had 45 days to comment on the EIS. The final EIS will have a 30-day waiting period, allowing for last-minute editing and informational changes that do not alter the content of the study. The leasing plan will reflect the EIS’ conclusions, but Congress will have 60 days to act on it before it becomes final.

Although the processes are integrated and the BOEM can’t develop a leasing plan without an environmental assessment, the two documents address different issues, said Caryl Fagot with BOEM’s public affairs office in the Gulf of Mexico region. She noted in an email that the U.S. secretary of the Interior considers eight factors in determining the size, timing and location of leasing. They include things like the geology and geography of the seafloor, the location of regional and national energy markets and needs, competing uses of the ocean surface and bottom and the interests oil and gas producers.

By comparison, based on information on the BOEM website, the EIS process focuses mainly on environmental and social issues, such as water and air quality, biology, physical oceanography and archaeology.

There is some overlap in the two processes, but there are also areas that are distinct from one another. NEPA permitting does not typically examine “interest of potential oil and gas producer” and BOEM has no provision for looking at undersea archaeological sites.

No Expansions

After the draft leasing plan is issued, the area under consideration can’t be expanded, although areas may be removed from plan. “Proposed areas and sales in the Draft Proposed Program can be deleted but not added,” Fagot wrote.

Enlarging the lease plan’s footprint would require restarting the entire process, BOEM officials say.

Expanding to proposed leasing plan for the Atlantic is particularly relevant because Gov. Pat McCrory is urging BOEM to move the current 50-mile buffer in the plan closer to shore.

If the leasing plan moves forward as presented, the sale of one lease in the Atlantic won’t take place until 2021. It is important to remember, the sale of a lease does not give the leaseholder permission to drill — only the right to submit a plan to drill, with another set of permits to be filed.

The permitting process for drilling for oil can be very lengthy, according to Fagot. “Even after the sale of a lease, there is a permitting process for exploration or drilling for resources,” she writes. “Many steps must be taken . . . and the time frame varies greatly depending on the lease location, water-depth, lease stipulations, availability of equipment, company priorities and the level of analysis and approvals needed at each step. It could take a year to 10 years.”

A drilling permit is a two-step process that introduces a new player in the permit mix: the Bureau of Safety and Environmental Enforcement, or BSEE. Created in response to what was seen as lax oversight following the BP Deepwater Horizon spill in 2010, the BSEE has more autonomy to enforce regulations than regulators had under the Minerals Management Service, the predecessor to BOEM.

The first permit is for an exploratory well with BOEM and BSEE issuing permits. Another EIS will be done and the state must certify that the drilling is consistent with its coastal-management program. If the company thinks the site has potential, a Development and Production Plan is created that will allow for a production well to be drilled. Again, another EIS and another consistency review. If BOEM signs off on the NEPA review and the state finds the use of the site consistent with its guidelines, the plan is submitted to BSEE who must approve the production well application.

This timeline of offshore leasing and drilling was compiled from material supplied from the American Petroleum Institute, the country’s largest oil industry trade group.

An offshore lease is only a rental agreement with no guarantee that the leased area contains any oil or natural gas. In fact, most leased areas don’t contain oil and gas in commercial quantities.

Companies invest as much as hundreds of millions of dollars to acquire and maintain their offshore leases. When it buys a lease, a company gets the right to risk its limited investment capital to explore for resources and to produce them if the search yields a commercial discovery.

Since the only way for a company to recover this initial investment is to start production on a lease, there is a significant financial incentive to develop these resources in a timely manner. Companies are required under government leasing regulations to develop a lease between five and 10 years depending on the area and water depth or return it to the government. In general, leases not producing by the end of their term are relinquished back to the government, which can then re-lease them. All the money spent by the company to acquire and keep the lease is then lost.

The timeline from lease to production can vary from four to 10 years depending on water depth at the lease location, the drilling depth needed to reach the target reservoir, the distance from shore and from infrastructure, the geological characteristics of the reservoir and complexity of production facilities design.

Capital costs can be considerable for offshore projects, particularly those in deep water. Marine seismic surveys can cost upwards of $200,000 a day. The cost of offshore exploratory wells can range from $25 million to more than $100 million for some deep water prospects. It’s not unusual for a company to spend more than $100 million on an exploratory well only to come up empty with a dry hole.

If a company finds commercial quantities of oil or natural gas, the subsequent design and installation of the deep water production rigs may cost in excess of $1 billion.

In general, from purchase of the lease to first production can take anywhere from 7 to 10 years in areas that have existing infrastructure. In those instances, the timeline for exploration and production can include:

• Six months to a year for federal administration and execution of lease sales in unleased areas.
• One year for preliminary geological investigation and selection of areas of interest for additional seismic data acquisition.
• One year to two years to acquire and to process 3D (and new wide azimuth) seismic data, and to identify drillable prospects from this data.
• As much as a year or more to contract and schedule a drilling rig.
• Six to 10 months for drilling and completion of an exploratory well.
• Six months to a year for follow up evaluation of drilling results, which can include drilling a sidetrack well.
• Another two to three years for additional delineation drilling, and formulation of a plan for reservoir development if the exploratory well proves successful. During this time, the company also is working on pre-permit studies, permitting and design and procurement for production facilities, including surface and subsurface equipment and systems.
• One year or more for facilities installation, followed by development drilling, which may take from one to two additional years. During this period, the company is involved in design, permitting, engineering, procurement and installation of a pipeline or offshore mooring system to bring the production to market.

One recent example is Anadarko’s Independence Hub, a natural gas facility in 8,000 feet of water about 120 miles from Mississippi. The lease was purchased in the Sale 181 area in December 2001. The first exploratory well was drilled in 2003, with first production seen in mid- 2007.

If gas and oil are somewhat speculative outer continental shelf energy resources, wind energy is not. A January 2015 Bureau of Ocean Energy Management environmental assessment identified three areas off Kitty Hawk and Wilmington that are suitable for commercial development.

The areas comprise almost 200 square miles of ocean and are considered the most promising wind energy resource in the mid-Atlantic region.

Because wind is an energy resource, BOEM is responsible for overseeing its development. Similar to the oil and gas process, the agency sells leases for industrial use.

The permitting process for wind energy is comparable to the procedures used for oil and gas exploration, including state consistency reviews, although there are some significant differences.

The Energy Policy Act of 2005 governs how BOEM sells wind-energy leases and how they are permitted. However, the law does not supersede other laws governing the use of the ocean. “EP Act . . . makes clear that federal agencies with permitting authority under other federal laws retain their jurisdiction,” Adam Vann, legislative attorney for the Congressional Research Service, wrote in a 2012 report to Congress.

Although the permitting process for wind energy is similar to oil and gas, it is not as time-consuming and lease sales for wind could occur by summer.

The sale of a lease gives the leaseholder the right to develop the resource, following a two-step permitting process. The first step is a test site to determine if the wind at that location is economically viable. If so, a permit for a permanent turbine site is required.

Any time an oil or gas company drills for energy reserves, it is speculative; modern technology, however, has significantly reduced the guesswork in siting oil and gas rigs.

The most accurate, and controversial, means of determining if petroleum reserves exist is a geological and geophysical survey. Those in the business call it G&G; the rest of us refer to them as seismic surveys.  Advances in G&G technology have dramatically increased the oil industry’s ability to locate oil and natural gas.

Ships towing an array of “air guns” transit a grid pattern on the ocean. The guns emit a very low frequency but loud blast of sound directed at the seabed. Because the sound waves are very long – lower frequencies have longer waves – they can penetrate deep into the earth’s crust. As the sound rebounds, the data is analyzed and a map of the substrata of the ocean up to 10,000 feet below the surface can be created.

G&G surveys do not mean drilling is imminent, and the permitting for a G&G survey is completely separate from the lease-sale process. Nonetheless, it is an important part of the search for petroleum reserves. Private companies will develop maps of the seabed substrata and sell that information to oil companies.

It is a controversial means of mapping the seabed. Marine biologists have pointed out that whales, dolphins, porpoises, turtles and almost all marine mammals and reptiles navigate and communicate using sound. The blasts of sound emitted from the air guns have the potential to damage the hearing of marine animals.

Although there have been coincidental reports of injured and dead marine mammals during seismic surveying, proponents of the method point out that there have been no peer-reviewed studies establishing a link.

Because of potential harm to marine life, the federal government requires an Incidental Harassment Authorization within the G&G permitting process. The authorization requires the company seeking the permit to have a mitigation plan in place to avoid or minimize contact with marine life. Typically that includes having a spotter on the survey ship and generally requiring a 500-meter buffer zone between the use of an air gun and any marine mammals or sea turtles.

Ten companies have applied to the Bureau of Ocean Energy Management, or BOEM, to conduct seismic tests in the Atlantic. Four want to test off the N.C. coast. Because the G&G activity will be occurring beyond the three-mile state zone, companies seeking a BOEM permit do not need a state permit. They are required, however, to have a consistency review under the state’s Coastal Zone Management Act.

The state has so far approved three applications.

Numerous federal and state laws govern the development of oil and natural gas off the N.C. coast. These are the major ones. For the entire list, see the report on offshore energy that was prepared for former Gov. Beverly Perdue.

Federal

Clean Air Act: The law regulates emissions from offshore energy facilities.

Clean Water Act:  Offshore oil wells may be subject to several sections of this law, which is administered by the U.S.  Environmental Protection Agency. A Section 404 permit is required for dredging and filling of waters and wetlands. A Section 401 water quality certification from the state with jurisdiction and a National Pollutant Discharge Elimination System permit may be needed for discharging process water and other pollutants into the ocean. The Spill Prevention Control and Countermeasure Regulations authorize the EPA to require regulated facilities to develop and implement oil-spill prevention, control and countermeasures to prevent oil spills from reaching navigable waters.

Endangered Species Act: This law prohibits the killing of listed species within the United States or in its territorial waters. It also requires federal agencies to consult with the U.S. Fish and Wildlife Service and National Marine Fisheries Service, where appropriate, to ensure that federal action is not “likely to jeopardize the continued existence” of a listed species.

National Environmental Policy Act: This law requires the federal government to evaluate environmental effects when issuing permits. A proposed federal action triggers an assessment to determine whether the project’s effects are significant enough to warrant a more in-depth review called an Environmental Impact Statement.

Magnuson-Stevens Fishery Conservation and Management Act: The law requires federal agencies to consult with the National Oceanic and Atmospheric Administration to avoid affecting areas necessary for spawning, breeding, feeding or growth to maturity of marine fish species. These “essential fish habitats” have been identified by the Mid-Atlantic Fishery Management Council.

Marine Mammal Protection Act: The law prohibits the killing or harassing of any marine mammal, such as whales and dolphins.

The Oil Pollution Act of 1990: The law establishes the Bureau of Ocean Energy Management, Regulation and Enforcement, formerly the Minerals Management Service, as the agency responsible for oil-spill planning, preparedness and response. The act requires oil-spill response plans, oil-spill risk analysis and establishes liability for spills.

The Outer Continental Shelf Lands Act and the Energy Policy Act of 2005: This is the latest version of the original laws passed in 1953. It’s the primary federal statute permitting drilling and leasing activity beyond the states’ three-mile territorial limit. The law grants the U.S. secretary of the Interior authority over offshore energy and mineral leasing activities, authorizes regulations and procedures for offshore leasing and for environmental analysis, requires that the U.S. government receives fair market value for oil and gas production and governs rents and royalties from leasing activities.

State

N.C. Coastal Area Management Act: Any federal or state activity affecting North Carolina’s coast must be consistent with the state’s coastal management program. No federal permit can be issued for an activity that the state’s Division of Coastal Management deems to be inconsistent without approval from the U.S. secretary of the Interior or the U.S. courts.

N.C. Oil Pollution and Hazardous Substances Pollution Control Act:  This is the state analogue to the federal Clean Water Act and imposes liability for spills of petroleum products. It requires reporting spills to N.C. Department of Environment and Natural Resources, corrective actions, restitution to the state and local governments for cleanup, liability for damages and civil penalties for intentional or negligent discharges.

N.C. State Environmental Policy Act:  Meant to compliment the federal National Environmental Policy Act, the law requires environmental reviews of state projects or actions, such as issuing a permit, or projects that require public money or land to undergo a review if they could substantially threaten the environment. The N.C. General Assembly is considering a bill that would weaken the law.

N.C. Submerged Lands Act: The N.C. Department of Administration is vested with responsibility for the management, control and disposition of all state-owned submerged lands. They can’t be sold, but the state can grant easements to cooperate with the federal government, use natural resources or any other use that is in the public’s interest.

Second in a series

MANTEO – Yogi Berra came to mind as I sat among the old activists, who had gathered one night recently to plan for a fight they thought they had won almost three decades ago.

Michael McOwen sat in a chair on the other side of the living room, cradling his granddaughter in his arms.

I had first met McOwen in 1989 at Manteo Elementary School while covering a public meeting on Mobil Oil Corp.’s proposal to drill an exploratory oil well off the Outer Banks. He was holding his daughter, who was then about the same age as her daughter now in her grandpa’s arms.

“It’s frustrating that here we are again more than 25 years later,” McOwen told the others.

He stopped and looked at his granddaughter.

“But there’s a whole new generation now to fight for,” he said.

Yogi, a beloved baseball icon, a Hall of Fame catcher and an unintentional philosopher noted for his malapropisms, famously summed it up once. “It’s like déjà vu all over again,” he said.

McOwen and most of the others in the room had, indeed, been here before. The grassroots group they formed in the late 1980s, LegaSea, had been instrumental in galvanizing public opinion on the Outer Banks against the Mobil proposal. They were successful then after several years of fighting, but their vanquished enemy had arisen.

Grandmothers and grandfathers now, they met to regroup for a new fight, this time against the federal government’s recently announced plan to open much of the East Coast, including offshore North Carolina, to oil and natural gas drilling. It’s the first time since the Mobil days that drilling off the N.C. coast may again be a reality.

Some of the old activists had brought along some reminders of those old days – the cardboard box they used to collect donations; the bumper stickers, buttons and T-shirts with the “Save Our Oceans” and “No Offshore Drilling” messages; the newspaper clips and flyers.

“It brings back a lot of memories,” noted Lucille Lamberto-Egan, who now lives in Salvo on Hatteras Island, “and not all them are good.”

They shared some of those memories: the packed public meetings, wearing out U.S. 64 on drives to Raleigh to cajole legislators, the prickly governor who slowly became an ally, the phalanx of lawyers and public-relations people that Mobil threw at them, trips to Washington to meet with federal officials, senators and representatives; and the wreck of the Exxon Valdez that turned the tide.

“That history is important,” McOwen noted, “so we remember what we had to do and what we’re now up against again.”

Manteo Wildcat Well 467-1

The 1973 Arab oil embargo triggered gasoline shortages and long lines at gas stations across America. In response, President Richard Nixon ordered his Department of Interior to triple the amount of offshore acreage available for oil and natural gas exploration.

For the first time, the East Coast was in play. Oil companies bought leases in 1976 and again three years later for tracts off the Northeast coast. They drilled 10 wells. All were dry or contained non-commercial quantities of oil or natural gas.

Given that track record, the bidding war that erupted when the first tracts in the south Atlantic were sold in August 1981 surprised many. Sale No. 56 became a landmark for East Coast leasing because of the aggressive bidding by a three-company partnership of Mobil, Marathon Oil and Amerada Hess. It bid a record $103.8 million, or about $266 million in current dollars, for one nine-square-mile block, called 467-1 on the map, that was about 35 miles east of Salvo. The partnership along with five other companies also leased 20 other adjacent blocks for $260 million — about $667 million in 2015 equivalent dollars.

The eight companies formed the Manteo Exploration Unit and chose Block 467-1 as the best place for an exploratory well. It was at the edge of the continental shelf in more than 3,000 feet of water. Below it, buried deep beneath the seafloor, was a 100-million-year-old limestone reef that formed when the ocean was much lower than it is today. Porous limestone can make excellent traps, or reservoirs, for oil and natural gas.

The companies estimated that the reef could hold as much as six trillion cubic feet of natural gas, or the energy equivalent of a billion barrels of oil. That would have made it at the time one of the largest gas fields in the world.

As majority owner of the block, Mobil was named operator of the exploration unit.

Federal offshore leases normally give companies five years to explore, but most of the leases owned by the eight companies had 10-year terms. Longer leases were needed, the government reasoned, in so-called “frontier areas” where no infrastructure existed and where deep water, swift currents and other environmental conditions required greater lead times for exploration.

Mobil released the exploration plan for the Manteo unit in early 1989. Drilling was scheduled to start the following year.

Reaction on the Outer Banks was swift.

The Fight Begins

Michael McOwen had an ad agency in Manteo in 1988, the year he first heard of Mobil’s plan. His wife, Beth, had started the community’s first domestic-violence shelter. They had just had their first child.

“We were involved with the community in fundamental ways and cared about the Outer Banks,” he said, “but I don’t think anyone would have called us activists.”

That changed after he attended a meeting where a Mobil lobbyist explained the company’s plans. “It was the first time anyone had heard about this stuff,” McOwen said. “I was shocked.”

And so the organizing began. McOwen and other opponents formed North Carolinians for a Clean Coast. They later changed the name to LegaSea.

“Mobil meanwhile was taking to local politicians and leaders. They came back about how great it would be,” he said. “People told us ‘This is Mobil Oil. You can’t kick them out. They’ve got resources and politicians and lobbyists.’ We heard that a lot, but we just didn’t believe it. We just couldn’t envision this happening here.”

LegaSea’s first task, McOwen explained, was to find out more about offshore drilling and what it might mean to the Outer Banks.

Halfway across the state, then-Gov. Jim Martin had the same idea. Only the second Republican elected governor since Reconstruction, Martin was in the final year of his first term in 1988. A Princeton-educated chemist, he had taught chemistry at Davidson College before being elected. Like any good scientist, Martin wanted answers about what drilling might mean to his state.

Clark Wright was hired to get them. Wright was then a young lawyer in private practice in Raleigh. He had caught the eye of the state attorney general’s office after he successfully defended development permits at North Topsail Beach. An assistant called. Would he be interested in becoming the special counsel to the governor on offshore drilling? Wright told him that he knew next to nothing about the issue. He got the job anyway.

“That was literally my full-time job,” Wright said recently over lunch at a noisy restaurant in New Bern where he is now a partner in his own firm. “Nothing else was initially in my realm than the offshore drilling issue.  That was an amazing time.”

For the next two years, he collected studies and reports on everything from offshore drilling techniques to Gulf Stream eddies. He interviewed the top scientists on the subject and toured offshore platforms in Mobile Bay in Alabama.

“I amassed a four-drawer file cabinet on everything,” he said. “The information I amassed helped us put together a pretty compelling case that we didn’t know enough about what Mobil was trying to do.”

A Game Changer

Federal law didn’t require companies to do full-blown environmental studies for an exploration well. Officials at Mobil and at the old Minerals Management Service, which at the time was the federal agency that managed drilling in U.S. waters, assured Martin that there had never been a major spill or accident at a test well. An environmental-impact statement, or EIS, they said, would be done if Mobil decided to pursue production wells.

Martin wasn’t persuaded and neither was he pleased that he had only 30 days to respond to Mobil’s drilling plan. In a handwritten note at the bottom of his formal letter to the agency objecting to the process, Martin wrote: “Unless you find some basis for a more patient and thorough approach to some of the major environmental fears, it forces us to adopt the most defensive posture at every turn.”

The company and the government ignored Martin’s demand. They learned what many legislators, reporters and staffers already knew. “Jim Martin did a good thing and said, ‘No. We need to know more,’” Wright said. “And the more Mobil got snotty about it, the more that man, who could be very stubborn, got his back up.”

There things stood on March 24, 1989, when the Exxon Valdez sailed into Prince William Sound on the southeast Alaskan coast a little after midnight and struck Bligh Reef. The tanker was carrying about 55 million gallons of crude oil from Alaska’s Prudhoe Bay oil field. As many as 25 million gallons ended up in the remote sound, covering 300 miles of shoreline and killing an untold number of wildlife. Oil from the Valdez was still washing up on beaches 470 miles from the sound more than a year after the accident.

The effects in North Carolina were more immediate, noted Derb Carter, who heads the Southern Environmental Law Center’s office in Chapel Hill. At the time he served on a task force that Martin empaneled to study the Mobil proposal.

“The Exxon Valdez happened in the middle of all this,” he said. “It was significant because it was a pretty stark demonstration of what could happen if a similar spill happened on the N.C. coast. Even though it was a tanker spill, it focused pretty dramatically what the effects of a spill could be.”

Martin called a press conference in Raleigh less than a week after the accident. I stood at the back of the packed room in the Administration Building. A Mobil lawyer and public relations guy stood next to me.

The governor approached the podium. He didn’t look happy. Martin wasted little time in announcing that the state would seek an injunction to stop Mobil’s drilling plan.

“And then we’re going to sue you,” Martin said, pointing to the Mobile guys.

He took a few questions and strode purposely out of the room.

The lawyer and PR guy looked stunned.

“What the hell just happened?” the PR guy asked.

“The Exxon Valdez,” I replied.

This Is the End

Martin got his study after Mobil and the government agreed to a voluntary process that mimicked an EIS. Opposition mounted in the seven months that it took to complete the study.

“Some of the bigger communities like Morehead wanted the staging business,” Wright remembered. “Most everybody, even the business folks, were appalled at the idea of seeing the Outer Banks become Louisiana.”

Despite the study, which was completed in 1990, state officials still argued to the National Oceanic and Atmospheric Administration that year that they didn’t know enough about drilling’s effects to determine if the Mobil proposal was consistent with North Carolina’s coastal-management program. A positive review was needed before Mobil could get federal permits for their project.

“No one had ever won a consistency appeal dealing with offshore drilling,” Wright said. “There were several that had been tried, but they always lost to the trump card in that process, which is national security. It has a veto factor over any other issue.”

Mobil appealed to the U.S. secretary of the Interior, who agreed with the state.

It was over. U.S. Rep. Walter Jones Sr., a Democrat who represented the Outer Banks, pounded in the final nail when he successfully added the Outer Banks Protection Act to an appropriations bill in 1991. It barred drilling off the N.C. coast until a long list of studies was completed.

Mobil waved the white flag and then went to federal court to get its leasing money back. There, it won.

“We were all committed to seeing this through,” McOwen said as the meeting wound down that night in Manteo. “It turned out that the people of the Outer Banks didn’t need much prodding. Opposition was nearly universal. You know that famous line in the movie Field of Dreams: ‘Build it and they will come’? We built it and they came. Now we have to rebuild it.”

Wednesday: The long, winding federal process.

The history of oil drilling off the East Coast and in North Carolina has been one of dashed hopes and dry holes.

Ten oil and gas lease sales have been held in the Atlantic between 1976 and 1983, according to federal records, and 51 wells have been drilled along the continental shelf. Five were deepwater test wells commissioned by the federal government, and the rest were drilled by oil companies. Almost all were dry holes.

The exceptions were five wells off New Jersey that showed some evidence of natural gas, but they were all abandoned because the companies didn’t think the wells would be commercially viable with the technology then in use.

Currently there are no active oil and natural gas leases in the Atlantic.

The track record on land has been even worse in North Carolina. Since 1925, 129 oil or natural gas wells were drilled in the state. All but 13 were plugged as dry holes, and no commercial quantities of oil or natural gas were found in any of them.

In Eastern North Carolina, Esso dug two tests near Cape Hatteras soon after World War II. Both were dry and abandoned. A well in Camden County in 1952 went down 6,500 feet before some natural gas was detected. It, too, was plugged and abandoned. About 86 wells were drilled in and near Albemarle and Pamlico sounds. All were dry.

1896: Offshore drilling for oil began off the coast of Summerfield, Calif., just south of Santa Barbara. Rows of narrow wooden piers that looked like boardwalks extended up to 1,350 feet from the shoreline, their piles reaching 35 feet to the floor of the Pacific Ocean. Using the same techniques then used on land, steel pipes were pounded 455 feet below the seabed. The field produced a modest yield, peaked in 1902 and was abandoned several years later. The project left behind a beach blackened by oil and marred by rotting piers and derricks. A winter storm in 1903 destroyed many of the derricks.  The remnants of America’s pioneering offshore rigs were wiped out by a strong tidal wave in 1942.

1947: An offshore milestone was reached when Kerr-McGee Oil Industries drilled the first productive well beyond the sight of land, in shallow water about 10.5 miles off the Louisiana coast.

1950: Congress failed to pass a bill authorizing the federal leasing of subsea drilling, bringing offshore drilling to the halt. States had leased areas off their coasts, but President Harry Truman asserted in 1945 exclusive federal jurisdiction over the entire continental shelf. The U.S. Supreme Court in 1947 and 1950 upheld Truman’s claim, but no federal law allowed the U.S. Department of Interior to issue offshore leases.

1953: Two landmarks bills were passed to settle the impasse. The Submerged Lands Act gave most states the right to lease up to three nautical miles from the coast. It allowed two states, Florida and Texas, to claim a nine-mile jurisdiction. The Outer Continental Shelf Lands Act then gave the federal government the authority to issue leases beyond state jurisdiction. The federally administrated area became known as the Outer Continental Shelf, or OCS. It’s a legal designation that’s more reflective of legislative negotiations than the actual geology of the seafloor.

1954: Offshore production of oil in federal waters stood at only 133,000 barrels a day, or about 2 percent of total U.S. production.

1968: The Prudhoe Bay State No. 1 exploratory well discovered what would become the largest oil field in North America in state waters off the north coast of Alaska. Regular production began the following year, exceeding a million barrels a day by 1978.

1969: A blowout at a Union Oil Co. well located in the Santa Barbara Channel produced an 800-square-mile slick of oil that blackened an estimated 30 miles of Southern California beaches and soaked a substantial number of sea birds in the gooey mess. The blowout lasted 11 days and ultimately released about 80,000 barrels of oil. It was at the time the greatest offshore drilling accident in American waters. It prompted stronger federal protections and inspired the first Earth Day.

1971: Offshore production in federal waters reached 1.7 million barrels a day, roughly 20 percent of U.S. production.

1975: The first discovery in deep water — depths of 1,000 feet or more, though definitions vary — came at Shell Oil Co.’s Cognac field in the Gulf of Mexico. Technology had yet to evolve from shallow to deep water, just as it took a while to develop from land to sea. Advances in that technology in the 1980s would begin shifting production in the Gulf to deeper water.

1982: Congress started including a provision in appropriations bills that prohibited offshore oil and gas development in the majority of the OCS. President George H.W. Bush in 1990 issued a similar directive that also banned offshore drilling in the majority of the OCS, which was extended by President Clinton in 1998 until 2012. Despite these moratoriums, drilling was allowed to continue in large portions of the Gulf of Mexico and off the Alaskan coastline. President George W. Bush subsequently rescinded the executive branch offshore drilling moratorium and in 2008 introduced an updated schedule for 2010-2015 that contained proposals to lease lands for drilling off the Atlantic and Pacific coasts.

1990: Offshore production in federal waters stood at only 1.1 million barrels a day – just 5 percent more than a decade earlier. A collapse in world oil prices in the mid-1980s had stalled the expansion of onshore and offshore drilling and had struck a devastating blow to the economies of Louisiana and Texas.

1997: More than half of the exploratory wells in U.S. waters proved successful thanks in large part to improvements in 3-D seismic technology.

Late 1990s: Production in deep water – a minor factor just 10 years earlier – surpassed that in shallow water for the first time. Five years later, deep water produced twice as much as shallow water, and an increasing amount of oil was coming from ultra-deep water — 5,000 feet and deeper.

2002: Offshore oil in federal waters topped two million barrels a day after 13 consecutive years of increased production.

2006: New federal legislation allotted Texas, Louisiana, Mississippi and Alabama a 37.5 percent share of the revenues derived from leasing activity in the so-called 181 South area off the coast of Alabama.

2008: Lease and royalty payments to the federal government reached a record $18 billion. The payments have become the second-largest source of federal revenue after income taxes.

2010: A blowout at BP’s Deepwater Horizon well in the Gulf of Mexico is the largest accidental marine oil spill in the history of the petroleum industry. The U.S. government estimates that 4.9 million barrels gushed from the leak for 87 days before it was sealed. The Obama administration put a halt to all deepwater lease sales after the spill, including one scheduled off Virginia.

2014: The Obama administration opens the Atlantic to seismic testing. Offshore oil production in federal waters falls to 1.3 million barrels a day – almost all from the Gulf of Mexico – after reaching a high of almost 1.7 million before the BP blowout.

2015: The federal government releases a draft offshore leasing plan for 2017-2022 that for the first time in decades includes portions of the Atlantic OCS, including offshore North Carolina.

First of a series

For the first time in almost three decades, the federal government is considering opening up the Atlantic Ocean off the N.C. coast to oil and natural gas drilling. The first of the many environmental studies has been drafted, the first of the many public hearings has been held. And the first of many questions has been raised.

How much oil or gas is out there? When will they go get it and where will they drill? Will it come ashore somewhere along our coast? Will the price of gasoline drop as a result? Will drilling generate any jobs for local people or much money for the state treasury? Where will that oil go if there is an accident or spill?

Coastal Review Online this week begins to answer those questions and many more. This is the first of more than 40 stories that we will publish over the next two months on offshore drilling and its potential effects on the N.C. coast. In our most ambitious reporting project, seven reporters have spent several months talking to dozens of people trying to determine what drilling might mean to the state’s coastal environment, economy and lifestyle.

The Schedule

Week 1 — Science, Politics & Process

June 8: General overview of series, introduction of authors.

June 9: The history of oil exploration along the N.C. coast, including Mobil Oil Corp.’s proposal for an exploratory well off the Outer Banks in the 1980s.

June 10: The federal process for leasing and permitting wells offshore and why it will likely take more than a decade to play out. The geology of the continental shelf of the East Coast and why oil or natural gas might lie beneath the sea and in what quantities.

June 11: The politics of oil in the N.C. General Assembly and what drives Gov. Pat McCrory’s push for   drilling.

June 12: The geology of the continental shelf of the East Coast and why oil or natural gas might lie beneath the sea and in what quantities.

Week 2 — Pros, Cons & Reality

June 22: The pros of drilling: jobs and gas pump relief. Job creation and lower gasoline prices are among the main benefits of drilling, say its proponents. How realistic are their job forecasts and will gas prices fall if oil is found off North Carolina?

June 23: The pros of drilling: money, money, money. An oil industry study that is often quoted by proponents forecasts that North Carolina could reap more than $9 billion a year by 2035 in oil royalties and increased tax revenue. We take a hard look at the numbers.

June 24: The cons of drilling: oil spills and accidents. How likely is a spill or accident from an offshore rig and where would the oil likely go?

June 25: The cons of drilling. Intense industrialization is required to transport, store and process oil or natural gas. Is that likely to occur in North Carolina and what would the effects be on the coastal environment if it does?

June 26: Tourism and oil. The fear of what an oil spill might do to the coast’s tourism industry is at the center of much of the opposition among local governments. In North Carolina, from the Outer Banks in the north to Sunset Beach in the south, beaches and coastal towns draw more than 11 million visitors each year. In 2013 alone, visitors spent just shy of $3 billion in the eight oceanfront counties, according to the state Department of Commerce.

Week 3 — Pulse of the Coast

July 6-7:  Calabash to Morehead City. We poll coastal residents about their support for offshore drilling and send a reporter to spend a week traveling along the southern coast talking to people about the prospects of drilling off our shores.

July 8-9: Corolla to Morehead City. Another reporter travels the northern coast to gauge the sentiments of residents there.

July 10: Morehead City or Wilmington. We explore whether these port cities along the central coast could become a staging and supply port for the drilling rigs and what that mean for a tourist town.

Week 4 — America’s Oil Coast

Fall: We send a reporter to the heart of the country’s oil region along the Gulf of Mexico where he reports back on life amid the oil rigs and refineries.[/su_shaded_box_right]

We’ll run the results of all that reporting on alternate weeks, starting this week with stories about the history of drilling in North Carolina, the geology of the Atlantic Ocean and why oil or gas might be out there, the federal process that manages offshore drilling and the politics in Raleigh that are promoting it.

Other stories in the series will explore the potential benefits of drilling to the state’s economy and the likely environmental effects on the coast in the event of a spill or accident. We’ll poll coastal residents to gauge their support for drilling, and two reporters traveled the coast, from Calabash to Corolla, talking to people about the subject.

Setting the Stage

First, though, let’s catch up as to where we are.

The Obama Administration did the expected in late January and announced plans to potentially open portions of the Atlantic coast, including offshore North Carolina, to oil and natural gas drilling for the first time since Mobil Oil proposed an exploratory well off the Outer Banks in the mid-1980s.

In keeping with Obama’s all-of-the above approach to energy development, the federal Bureau of Ocean Energy Management, or BOEM, released a draft five-year leasing plan that would begin in 2017. The plan includes all federal waters 50 miles off the mid- and south-Atlantic coasts, from the mouth of the Chesapeake Bay to the Georgia-Florida border. Also included in the plan are areas in the central and western Gulf of Mexico and off the north coast of Alaska.

The proposed leasing plan is the initial step in a long, tortuous federal permitting and review process for offshore leasing, exploration and finally production. That process for the Atlantic, where no wells exist, will take more than a decade to play out if it continues to move forward.

The announcement followed a decision by the Obama administration last year to allow companies to use sound waves to survey the seafloor in the Atlantic in search of oil and natural gas. These so-called seismic tests are controversial because critics charge that they can harm marine mammals, such as whale and dolphins.

BOEM has since received 10 applications from companies to conduct the tests. Four of those applicants want to survey off North Carolina’s coast and more applications are expected, according to state regulators. The state has approved three of the applications so far, and testing could begin later this year.

Battle Lines Form

Offshore drilling has a contentious history along the N.C. coast, and it soon became clear that a fight is brewing this time as well. The first skirmish was in Wrightsville Beach about a month after BOEM announced the leasing plan. The spark was the first of the agency’s two public hearings in North Carolina on the plan.

Drilling proponents gathered that afternoon across the waterway in downtown Wilmington. Over boxed lunches supplied by the country’s largest oil industry trade group, the crowd of mostly businessmen listened to speakers extol the benefits of drilling: good-paying jobs, money for state and local budgets, energy independence and strengthened national security.

The message mirrored the one that Gov. Pat McCrory has been taking all across North Carolina. As the leading drilling cheerleader in the state, McCrory has promoted offshore drilling in testimony before Congress, urged BOEM to allow exploration closer to shore and supported exploring for oil and natural gas within three miles of the state’s coastline. He also heads a group of East Coast governors who have been urging Obama to open up the Atlantic to drilling.

Using an industry-sponsored economic study, McCrory has said offshore drilling will provide thousands of new jobs in the state and contribute more than $9 billion to the state treasury by 2035. In later stories, we’ll explore the accuracy of those predictions and the oil industry’s close ties to the governors’ group that McCrory heads.

There wasn’t much talk about jobs at the press conference that 10 environmental groups held at the hotel where BOEM had its meeting that day in Wrightsville Beach. The BP Deepwater Horizon was the featured attraction. One wall was dominated by a huge photograph of the oil rig that exploded in the Gulf of Mexico in 2010 in the worst oil spill in U.S. history. It was engulfed in flames and ringed by fire boats spewing jets of water.

Speaker after speaker raised the specter of oil-encased seabirds, blackened beaches and a dying tourism economy if something like that were to happen here. We’ll examine the likelihood of all that during the second week of the series.

More than 400 people attended the BOEM hearing that day in Wrightsville Beach. Almost 700 showed up a month later at a similar hearing in Nags Head, the largest turnout in BOEM’s five-year history.

“I would say we have heard from a lot of people who are opposed,” an agency spokeswoman said afterwards.

At least a dozen communities along the coast have passed resolutions opposed to offshore drilling, seismic testing or both.

And in Manteo a group of old oil warriors began organizing again for a fight they thought they had won 25 years ago.

Tuesday: Mobil Oil and the history of drilling along the N.C. coast.

Covering the Issue

Seven reporters and editors will be involved in this series on offshore drilling as it unfolds over the next two months.

Here they are:

Frank Tursi: The editor of Coastal Review Online, Tursi conceived of this project, was its lead editor and wrote several of its stories. The author of three books, Tursi was a 30-year newspaper journalist before joining the N.C. Coastal Federation in 2002. He was the senior environmental reporter in North Carolina and was among the lead reporters of Mobil Oil Corp.’s proposal in the mid-1980s to drill an exploratory well of the N.C. coast. His environmental journalism has won numerous awards, including three Public Service Awards from the N.C. Press Association and the Scripps-Howard National Environmental Journalism Award. An avid fishermen and model boat builder, Frank lives with his wife, Doris, in Swansboro.

Catherine Kozak: A longtime reporter on the Outer Banks, Kozak also traveled the coast talking to residents about offshore drilling. Born and raised in the suburbs outside New York City, Kozak worked for 15 years for The Virginian Pilot. During her career, she has written about dozens of environmental issues, including oil and gas exploration, wildlife habitat protection, sea level rise, wind energy production, shoreline erosion and beach nourishment. Kozak has a journalism degree from the State University of New York at New Paltz. She lives in Nags Head and covers the Outer Banks and the northeast coast for Coastal Review Online.

Tess Malijenovsky:  The assistant editor of Coastal Review Online, Malijenovsky helped plan the project and edit its stories. She was also one of two reporters who traveled the coast talking to residents about offshore drilling. Malijenovsky joined the N.C. Coastal Federation in 2013. She grew up in Charlotte and received her bachelor in fine arts degree in creative writing at the University of North Carolina Wilmington where she was editor-in-chief of the university’s literary arts magazine, Atlantis.

Brad Rich: Rich has written about fishery and environmental issues along the central N.C. coast for 30 years. For this series, he delved into the potential environmental and social effects of offshore drilling. Currently a reporter for the Tideland News in Swansboro, Rich covers the central coast for Coastal Review Online. He lives in Hubert with his wife, Gwen, their 18-year-old daughter and a rambunctious black lab named Satchmo.

Kirk Ross: A longtime N.C. journalist based in Chapel Hill, Ross is the lead legislative reporter for Coastal Review Online. He explored the political support for offshore drilling in the N.C. General Assembly. Ross’ reporting and opinion pieces have appeared in multiple publications, including the Independent Weekly, in Durham. He is also the founder of The Carolina Mercury, an online N.C. politics website.

Kip Tabb: Every reporting project like this needs a guy like Tabb. He’s fascinated by process and how things work. So he was given the job of explaining the byzantine federal permitting and monitoring process that will play out over the next decade or more if offshore drilling is pursued on the East Coast. A freelance writer on the Outer Banks, Tabb has covered transportation, environmental and related topics for a number of publications. He writes regularly for Coastal Review Online. He’s the former editor of the North Beach Sun, a quarterly newspaper on the northern Outer Banks covering community interest issues.

Trista Talton: Talton covers the southeastern N.C. coast for Coastal Review Online. Her assignment for this project was to explore the potential benefits of drilling, including the jobs it could spawn and the money it could provide to state and local governments. Talton is a native North Carolinian who, after graduating from Appalachian State University in 1996, pursued a career in journalism. She has covered everything from education and local governments to law enforcement and military. She embedded with Marines in Kuwait for the start of the Iraqi war in 2003, spent time in New Orleans with N.C. National Guardsmen in the aftermath of Hurricane Katrina and lived on a Coast Guard cutter to write about patrolling the shores of New York and New Jersey following the Sept. 11 attacks. She lives with her husband and two sons in Jacksonville.