Developing domestic offshore conventional and renewable energy resources should not be a partisan issue, according to the head of the trade group National Ocean Industries Association (NOIA), a trade group whose membership includes offshore oil and gas and wind producers.
“America’s offshore region is a strategic asset that is intended to promote economic and national security by providing Americans with home-grown oil and gas and wind resources,” Erik Milito, NOIA’s president, told Rigzone. “Energy – including oil and gas – can and should be nonpartisan. The Biden team should recognize this. American security and economic well-being is strengthened through the offshore industry.”
In a recent conversation with Rigzone, Milito elaborated on his organization’s views on the energy development proposals advanced by the campaign of Democratic former Vice President Joe Biden. Read on for his insights.
Rigzone: From NOIA’s perspective, where is there agreement with the Biden campaign’s proposals?
Erik Milito: Vice President Biden’s energy proposal is the second plank in his economic recovery plan. Vice President Biden is correct in recognizing that some of the most critical investments we can make for the health and vitality of the economic and of the direct quality of life for the American people is through energy development.
Vice President Biden has also called for the construction of “thousands” of offshore wind turbines. NOIA and several other wind-centric groups just released a paper commissioned through Wood Mackenzie on what the economic and energy impacts of 2020-2022 offshore wind lease sales could look like. With five lease sales, we could see 37 gigawatts (GW), 80,000 jobs supported annually and $166 billion in capital investment through 2035. More offshore wind leasing opportunities is welcome, no matter which administration we are talking about.
We also recognize the importance of environmental justice and working on solutions to address the climate challenge. U.S. offshore oil and gas development has a comparatively smaller environmental footprint than other producing regions, occurs under the highest level of regulations and standards and does not give rise to issues of environmental justice. In fact, offshore oil and gas development has been proven to lift communities along the Gulf Coast through employment of hundreds of thousands of Americans in high-paying jobs.
Rigzone: What’s most concerning to NOIA regarding Biden’s energy platform?
Milito: The rhetoric surrounding oil and gas production, especially offshore leasing or drilling bans, is problematic. While Vice President Biden explicitly called for a ban on offshore drilling during his debate with (U.S.) Sen. (Bernie) Sanders, we are hopeful that there is a realistic chance that this is nothing more than election year rhetoric, especially considering the strategic national importance of the offshore Gulf of Mexico for economic and national security reasons.
Now that he has the Democratic nomination, we hope Vice President Biden follows a path that acknowledges the energy realities for our country and the vital need for the U.S. to obtain its energy supplies domestically. The more extreme Green New Deal policies – namely, blanket bans on oil and gas leasing – are in no way realistic or serious policy options. In fact, these policies could wipe out billions of dollars in revenues that have been earmarked for land and water conservation and for maintaining our national parks.
A recent NOIA study found that in 2019 the offshore oil and gas industry was responsible for 345,000 jobs, $28 billion gross domestic product contributions and $5.3 billion in government revenues – including $1 billion to the Land and Water Conservation Fund, on top of 2.3 million barrels of oil equivalent per day production. That disappears under a Green New Deal. The study estimated that, by 2040, an offshore leasing ban would cost 194,000 jobs while an offshore drilling ban would lock away 286,000 jobs.
Even discounting immediate job and economic losses, Green New Deal-style proposals do nothing about energy demand. Independent estimates from places like the U.S. Energy Information Administration find that oil and gas is still going to be the dominant source of energy in the U.S. and the world for the foreseeable future. Blanket energy bans eliminate American energy production, forcing consumers to turn abroad, possibly to state-backed oil and gas production from places like Russia and Venezuela, countries that don’t share U.S. environmental and worker safety standards, to meet their energy needs. The irony is that the Green New Deal would lead to a dirtier future. The U.S. offshore should be the region of choice for the U.S. to meet its energy needs.
Rigzone: What is NOIA looking for from presidential – and congressional – candidates in terms of policy measures to help restore growth in the offshore industry?
Milito: America needs more leaders that recognize the irreplaceable benefits the offshore oil and gas and wind industries provide. This is a nonpartisan issue. The American offshore industry is exceedingly good at safety and affordably providing the energy that fills our gas tanks and heats and cools our homes.
Beyond that there is an almost infinite list of products that we all take for granted, but modern life depends on, that is produced with oil and gas products. Textiles, home goods, smartphones and laptops, medicine and medical equipment like MRI machines and the very products that we are using to combat the spread of the coronavirus are made from oil and natural gas products.
To contact the author, email mveazey@rigzone.com.
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