Despite Obama’s ban, energy companies could still drill off the North Carolina coast; they’ve tried it before

A map of the Eastern Seaboard showing where oil and gas leases could be auctioned.

This map shows previous areas of interest for offshore leasing, drilling and exploration. President Obama has banned drilling from Norfolk northward, but North Carolina is still vulnerable.

North Carolina has the second-largest coastline on the Eastern Seaboard, but its boundaries extend well into the sea. The state’s administrative borders include 64 million acres in the mid-Atlantic Outer Continental Shelf, a region rich with rare ecosystems and ripe for offshore drilling.

Despite yesterday’s announcement that the Obama administration has banned oil and gas exploration in the Arctic and parts of the Atlantic, North Carolina is not part of the prohibition. This is because the ban doesn’t include the Atlantic Ocean south of Norfolk, Va. (Southeast Energy News has an excellent explainer on the ramifications of that exclusion.)

The threat for offshore drilling, then, persists. And other than enlisting help from its congressional delegation, North Carolina has limited authority over federal approval of exploration or drilling.

Gov.-elect Roy Cooper could review the proposals and comment to the Bureau of Ocean and Energy Management, a division of the Interior Department. However, considering under the drill-friendly attitude of the Trump administration, those overtures could be futile.

Gov. Pat McCrory supported offshore drilling; his predecessor, Gov. Beverly Perdue, while not opposing it outright, wrote a letter to Interior Secretary Ken Salazar in 2009, outlining her reservations. Among them, North Carolina would receive none of the revenue from energy production off its shores because federal law limits revenue sharing to the Gulf States and Alaska.

“Simply put, no state can or should make decisions that could forever alter the state of its coast and economy without a firm commitment as to its share of the revenue,” Perdue wrote.

Gov. Mike Easley also objected to offshore drilling in Virginia because of its proximity to the North Carolina coast.

Although there has been no offshore drilling in North Carolina, energy companies have tried to do so. In 1988, Mobil successfully bid $103 million for the rights to a nine-square mile leasing block near Cape Hatteras. That area is known as the Manteo Unit, a reef 3 miles below the sea floor that geologists believe could hold 6 trillion cubic feet of natural gas. The state nixed the deal on environmental grounds; Mobil appealed to the U.S. Department of Commerce and lost.

In 1990, U.S. Rep. Walter Jones Sr. of North Carolina introduced the Outer Banks Protection Act, which would have shielded the state’s offshore waters from drilling and exploration. The bill died.

In the 1990s, Chevron was interested in a block within the Manteo Unit, but President Bill Clinton issued an executive order removing from consideration all unleased areas of the Atlantic Continental Shelf.




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