Offshore Energy Essential for US National Security, Economic Prosperity
It is self-evident that improved living standards around the world and a growing global economy will only continue with increased access to energy, of all sorts. We know from past experience that any interruption in our energy needs, temporary or otherwise, affects every one of us personally. Such interruptions also can have dramatic effects on our economy and on our national security. While alternate energy sources are welcome additions to maintaining our energy leadership, for the foreseeable future, the better economics and reliability in this regard are expected to come principally from oil and natural gas.
Projections show that natural gas and oil will supply an estimated 60 percent of U.S. energy needs in 2040, even under optimistic scenarios for renewables. Energy requirements in the rest of the world will be increasing as well. American ingenuity and productivity has been meeting this challenge, in addition to efforts in alternate energy programs. According to Secretary of Energy Rick Perry, in August of this year the U.S. became the world’s No. 1 oil producer. To understand how important full energy independence is to every American, one need only look at the turbulence in our recent relations with big oil producers such as Iran, Russia, and even Saudi Arabia, who would otherwise have the potential to disrupt our economy, our national security strategy, and our very way of life.
Fueled by advanced technology and determined productivity, U.S. oil and gas producers are setting records. But to date, the American energy revolution has been primarily an onshore juggernaut, even as worldwide oil exploration in offshore areas has been increasing. Government policy has limited offshore efforts here at the same time as other countries have expanded their efforts, encouraged by vastly improved technology and by the demand for more energy to fully develop the growing, competitive economies of countries such as China.
Several Latin American countries, led by Mexico and Brazil, have reformed their regulatory approaches and are aggressively pursuing offshore projects from the Gulf of Mexico to the Atlantic seaboard. Here in the U.S., government policy has kept as much as 94 percent of federally controlled offshore acreage off limits even to energy exploration. With modern technology it is possible to locate potentially productive sites far offshore – well beyond visibility from the coastline – and to develop them using vastly improved safety practices and working closely with federal regulators and state and local governments.
The Gulf of Mexico has great potential for such safe expansion of offshore exploration, and the Mexican government is pursuing this potential even as much of the Gulf remains off-limits to American exploration. In 2017, the areas in the Gulf of Mexico currently available for our development supplied 1.7 million barrels of oil per day, which amounts to about 18 percent of U.S. total production. Government estimates indicate there could be billions of barrels of oil, and natural gas supply measuring in the trillions of cubic feet, in offshore areas that are now restricted.
Mexico, having passed energy reform legislation in 2013, is aggressively pursuing such projects on its side of the Gulf. In February its government awarded 19 contracts for exploration, including one to a Chinese bidder. Brazil has passed similar legislation and is pursuing multiple projects in the South Atlantic.
Contrary to current U.S. policies, offshore exploration is a growing international business endeavor. Our outmoded policies in the U.S., do not reflect today’s technological expertise and capabilities any more than a cell phone or computer from the 1980s reflect our ability to communicate today. Developing offshore resources can also generate enormous revenue and new well-paying jobs here at home. Recent studies show energy development in the Atlantic and Eastern Gulf of Mexico could contribute tens of thousands of jobs and $1 - $2 billion in annual tax revenue in each of the states of Florida, South Carolina, North Carolina and Virginia within 20 years of leasing.
The time has come to take advantage of our Outer Continental Shelf. Why should the United States operate with one arm tied behind its back? Other countries are aggressively harnessing their oil and natural gas resources in the Outer Continental Shelf. Shouldn’t we be at least quantifying it now, and carefully planning for its possible development in the future?
For our national security, for our economic security, and for thousands of American jobs, we should move forward, and we should do so soon. It takes about ten years to research, gain approvals, and deliver to market the offshore oil and natural gas products that will service America’s energy needs. We should not wait until an emergency several years down the road forces us to act in a crisis mode.
Americans have been asking for good leadership and careful planning on many fronts. Here is a perfect place to stand up and lead and protect our economy and national security, so beholden to an assured energy supply.
Jim Webb is Former Secretary of the Navy and former Democratic Virginia Senator. Jim Nicholson is Former Secretary of Veterans Affairs and Former U.S. Ambassador to the Holy See. They are National Chairs of Explore Offshore.