Environment America Research & Policy Center
In the long debate over management of the outer continental shelf (OCS), the oil industry and some policy makers have claimed that our tax base and coastal jobs rely on expanding oil and gas drilling to new places. However, one set of issues –- critical to healthy oceans — that has largely been ignored in this debate is the potential economic losses that new offshore drilling creates for our existing coastal economies and the potential for damage to treasured coasts and marine resources.
This report makes it clear in dollars and cents that our clean beaches, coasts and oceans are worth too much to risk another drilling disaster like BP’s oil spill in the Gulf. In fact, the annual value of tourism and fishing in most coastal regions is many times higher than the annual value of any oil or gas that might be found there. Offshore drilling is incompatible with more sustainable activities like tourism and fishing because drilling inevitably results in large oil spills, chronic pollution, and industrializing the coast for oil facilities. We only have to look at the immense damage that the BP Deepwater Horizon spill did to the Gulf of Mexico’s fishing, tourism and wildlife to recognize what impact drilling would have on other coasts.
In addition to the large economic benefits that flow from use and enjoyment of the ocean, the report highlights the special marine ecosystems, treasured beaches, and extraordinary marine life in our waters. Our coasts are lined with beaches visited by tens of millions annually, national wildlife refuges, parks, and sensitive marshes and bays. Offshore in the ocean, some underwater environments rival rain forests in biological diversity and exceed the productivity of grasslands. Our coastal oceans have sea grass beds, kelp forests, submarine canyons, rich fishing grounds, shallow corals, and deepwater corals, all of which can be damaged by oil spills.
Both the Bush and Obama administrations have proposed expanding offshore drilling outside the Central and Western Gulf of Mexico. But for economic and environmental reasons, we believe that offshore drilling should not be expanded beyond the Central and Western Gulf to areas like the Eastern Gulf of Mexico, the Atlantic Ocean, the Pacific coast, or Alaskan waters. BP’s Deepwater Horizon spill in the Gulf provides us with a very tangible example of the huge economic and environmental damage that a large spill can cause.
Our Oceans and Coasts Are Worth More Wild Than As Oil Field.
- According to U.S. government data, the annual value of tourism in coastal counties of the U.S. exceeds $190 billion, not including any indirect economic multiplier effects. The annual value of commercial and recreational fishing in the ocean exceeds $34 billion. Altogether, coastal businesses dependent on clean oceans and beaches generated $225 billion in 2008.
- The annual value of tourism and fishing in states on the Atlantic and Pacific coasts and the west coast of Florida –-regions that are threatened by the expansion of offshore drilling– is $204 billion, which is almost 4 times larger than the annual value of any oil and gas that might be found off their coasts.
- Nationwide, more than 4.5 million people are employed in coastal counties in the tourism industry and in recreational and commercial fishing and processing.
- In coastal counties of the Gulf of Mexico, the heart of the offshore drilling industry, jobs dependent on tourism and fishing (777,000) exceed all natural resource extraction and mining (which includes oil and gas drilling) employment (154,000) by five times.
- The annual value of businesses dependent on clean oceans and beaches like tourism and fishing exceeds the annual value of estimated oil and natural gas resources in all regions with one exception.
- In the North Atlantic and Mid-Atlantic states, the value of sustainable activities is approximately twelve times and four times larger, respectively, than the value of any oil and gas production.
- In the South Atlantic, coastal tourism and fishing have a yearly economic yield twenty times larger than the yield from potential offshore drilling.
- In the Eastern Gulf of Mexico, the most hotly contested area for new drilling, sustainable businesses like tourism and fishing generate almost three times the value that new oil and gas drilling would.
- The ability of the oceans and certain coastal ecosystems to capture and hold atmospheric carbon and store it for very long periods of time as long as they are not degraded, makes clear the global importance of healthy oceans and coasts. Onshore oil facilities and offshore spills threaten the health of those ecosystems. Our estimates of the value of coastal dependent businesses do not include the value of the environmental services like carbon removal that oceans and coasts provide. If added in, the ratio of renewable activities compared to oil and gas value would be even more lopsided.
Damage from Oil Production and Spills Is Real and Costly.
Numerous reports detail damages from oil and gas exploration, drilling, production and refining. Catastrophic oil spills from platforms, pipelines, tankers/barges, and onshore facilities show that these activities are not compatible with healthy oceans, beaches or coasts. Chronic releases from the drilling process also pollute our oceans. Despite technological advances, the drilling business is still risky. For the ten year period from 2000-2009:
- The industry spilled 65,000 barrels of oil and drilling material (2.7 million gallons). In 2010, the BP Deepwater Horizon accident spilled almost 200 million gallons into the Gulf.
- There were 172 spills over 50 barrels (2,100 gallons), an average of 17 spills per year.
- There were 4,552 incidents which include fatalities, reportable injuries, spills, collisions, pipeline leaks, explosions, times when personnel were gathered for potential evacuation, etc. Of these:
- 65 were fatalities,
- 61 were blowouts and loss of well control events which is the kind of accident that led to the Deepwater Horizon tragedy,
- 1048 were fires and explosions, and
- 148 (only data for 2009-2006) were events requiring potential or real evacuation of the facility.
- The BP Deepwater Horizon spill in the Gulf gushed oil for 87 days in the spring and summer of 2010. Approximately 200 million gallons escaped from BP’s well, spreading across over 40,000 square miles of the Gulf of Mexico, oiling over 600 miles of coast, and creating the largest environmental disaster in our country’s history.
The economic impact from this spill is huge: approximately $2 billion in damage claims already have been paid, and tens of thousands of claims are pending. BP has committed to a $20 billion fund for economic and other losses. Over 250,000 claims have been filed.
- A respected economics consulting firm puts damage to tourism in the Gulf over the next three years at $7.6 to 22.7 billion. Additional damages to commercial fishing and recreational fishing and natural resources have been very large.
- According to government data, the BP Deepwater Horizon oil spill is responsible for heavy wildlife damage: 6,100 dead birds, 605 dead sea turtles and almost 100 dead marine mammals, though many experts think the toll is much higher because most dead wildlife is never recovered.
- Prevention is the only effective way to stop oil spills. Crude oil is difficult or impossible to clean up in open oceans and many coastal environments, especially if it gets into sandy, muddy or marshy areas. During the BP Deepwater Horizon spill, BP spent over $8 billion on cleanup and only was able to capture less than 10% of the oil released into the Gulf. This is not an unusual result for a spill in the open ocean. Using the word “cleanup” to describe the process of skimming, burning, and booming to capture this small percentage of oil is misleading.
- Oil exploration and production has been blamed for some of Louisiana’s loss of wetlands. The state loses a football field’s worth of wetland every 38 minutes, or 25 square miles per year. Since the 1930’s, Louisiana has lost 1,900 square miles of wetland, about the size of Rhode Island. The consensus estimate by scientists is that one third of those losses is due to subsidence and dredging for canals and pipelines by the oil industry.
If Drilling Occurs On Other Coasts, a BP Sized Oil Spill Would Cause Immense Damage.
- A BP sized oil spill off the coasts where drilling does not occur today would cause substantial economic damage. Applying the same ratio of damage from a study of Gulf tourism to other regions yields the following potential damages for the first year after the spill only.
- For example, a BP-sized spill off the North Atlantic coast (ME to DE) would cost the tourism industry between $7 to $14 billion in the first year alone. Research shows that the impact of large spills on tourism lasts up to three years.
Many Special Places Are Threatened by Drilling, Potential Spills and Coastal Industrialization.
- Each area on our coasts has an abundance of special marine ecosystems, unique coastal habitats and beaches, commercially important species, and extraordinary marine life that would be threatened should offshore drilling spread to new areas.
- The risk of oil spills and ecological damage from coastal industrialization continues to threaten our coastal beaches, beach communities, estuaries, and other important marine habitats. Special areas of the ocean and specific unique marine wildlife that would be threatened by the expansion of offshore drilling are presented in each chapter of the report and summarized in Table 3 below. The list in Table 3 is meant to be illustrative, not exhaustive, as there are many important coastal and marine environments not listed which require protection. An exhaustive listing of special marine habitats and coastal areas for each region would be quite lengthy and beyond the scope of this report.
Offshore Wind, An Alternative to Drilling for Oil, Offers the Potential to Generate Enormous Amounts of Renewable Electricity for Cars, Homes and Factories.
- Instead of using the ocean to produce fossil fuels, we can use them where appropriate to generate enormous amounts of renewable energy. The potential for generating electricity in the U.S. with offshore wind in shallow waters (less than 100 feet deep), using technology employed widely in European systems, is remarkable and untapped. Across all U.S. coasts, the potential for offshore wind is over 1,000 gigawatts. One gigawatt is approximately what two average sized coal or natural gas plants would generate.
- Various European countries including Denmark, Germany, the Netherlands, Sweden and the United Kingdom have pioneered this technology off their coasts with a total of 2,377 megawatts (2.3 gigawatts) of capacity already installed and almost 55,000 megawatts (55 gigawatts) permitted or under construction.
- The Atlantic coast and Gulf of Mexico have the largest offshore wind capacities of any region, with a potential of 532 and 340 gigawatts, respectively.
- Offshore wind energy from shallow water could supply nearly two times more generating capacity (532 gigawatts) than all the electrical generating capacity that now exists on the entire East Coast (287 gigawatts).
- Some coasts can generate more electricity with offshore wind projects than they can generate using the oil and gas under the ocean in the region.
- Offshore wind from the Atlantic could power nearly twice as many vehicles as new oil and gas drilling off the Atlantic coast.
- Offshore wind potential, particularly off the Atlantic coast, could replace oil, gas and some coal generating capacity on the East coast making our air cleaner and reducing global warming pollution. It also could be used to supplement existing generating capacity and to power very large numbers of electric vehicles, thereby reducing U.S. demand for oil.
Protect Our Coasts From Offshore Drilling; It Is Risky for the Environment and A Poor Economic Choice.
We have the power to decide how to utilize our oceans. We can continue to do more and more offshore drilling, affecting the health, diversity and resilience of our oceans. Alternatively, we can decide to use our oceans and beaches for more sustainable activities like wind power, coastal tourism and carefully managed fishing with much smaller impacts on the oceans and coasts. The choice is ours to make. But in making the choice, we should be aware of all the different values, environmental and economic, that are at stake. When factoring in these different values, this report shows that increasing and expanding offshore drilling is not the right economic or environmental choice to make.