By Dan McCue
Staff Writer

As a showdown nears over whether a portion of the continental shelf—including submerged land off the South Carolina coast—should be opened to oil and natural gas exploration, supporters of the move assert that those who oppose the measure are misstating the potential threats associated with such activity.

“Natural gas exploration shouldn’t even be an argument,” said Rep. John Peterson, R-Pa., at a news conference held outside the Capitol by Republican lawmakers.

Peterson and scores of both Republican and Democratic lawmakers contend that while they understand environmentalists and others’ fears about the potential risks of oil drilling, natural gas is not a threat to beaches, habitats or coastal states’ tourism industries.

But Richard Charter, co-chairman of the National Outer Continental Shelf Coalition, said those statements fudge the truth.

Charter maintains that a careful reading of House Bill 4761, the most hotly debated of a host of offshore drilling bills currently making their way through Congress, includes a provision that will allow gas drilling leases to automatically be converted to oil drilling leases.

Under the provision, if an energy company discovers crude oil while drilling for natural gas, its lease automatically becomes an oil-drilling lease unless the governor or attorney general of the state issuing the original lease objects to the new designation within 180 days.

“That’s the trouble with these bills; they just don’t ensure protection for either the environment or local economies,” Charter said. “They just don’t. As a result, some very serious questions about South Carolina’s future will be answered within the next 60 days.”

Bill has local support

Rep. Bobby Jindal, R-La., the principle sponsor of House Bill 4761, said his goal in introducing the measure was to secure additional revenues to rebuild his state after last year’s devastating hurricanes.

It would allow drilling for natural gas to occur 25 miles—and drilling for crude oil to occur 50 miles—off the coast of any state that opts to provide leases for exploration in return for royalties from the energy companies.

What’s more, the bill would transfer authority to grant leases to drill from the U.S. Department of Interior to individual states and would allow not only states, but also local coastal governments affected by the exploration to share in any revenue.

It also states that the closer the exploration is to shore, the more the state and local governments stand to gain.

South Carolina’s coast may be a desirable place to look for natural gas because methane deposits have been found offshore, and methane is a telltale sign of natural gas in the area. Generally, where there’s natural gas, there’s also at least some amount of crude, according to the U.S. Geological Survey.

The concept has some political goodwill in the Palmetto State, as House Bill 4761’s 71 co-sponsors include South Carolina congressmen Henry Brown and Joe Wilson.

Brown has explained his support as a way to deal with mounting world competition for fuel and petroleum products.

“We’ve got too many people chasing limited resources,” he said.

Brown’s support of the bill has become an issue in his re-election campaign, but Charter, for one, said he plans to stay above the political fray, noting that he simply doesn’t want to see the existing moratoriums against expanding drilling off the U.S. coast lifted.

“It’s not a Republican or Democratic issue, nor is it something that you can fly off the handle and attack an individual candidate about,” Charter said. “People vote for legislation for any number of reasons, including simply because a neighbor or friend asked them to do so.”

Currently, two mechanisms protect the South Carolina coast from offshore oil and natural gas exploration. One is a 25-year-old congressional moratorium that has been renewed each year as part of the Department of Interior’s budget. If the moratorium is not renewed, it sunsets on Oct. 1.

The other mechanism prohibiting drilling off the coast is a presidential moratorium put in place by President George H.W. Bush. President Clinton extended that moratorium to June 30, 2012.

The bill, if passed, would rescind both of those protections, Charter said.

“In a sense, it’s a sign that those who want to expand drilling are feeling desperate, that they feel a window of opportunity may close with the November elections,” he said.

Economics is also a big part of the appeal of House Bill 4761. Advocates for it in the Southeast have said that money generated by the leases can be earmarked for economic development.

However, a review of the bill’s text reveals no mandated conduit for the money.

“The way it’s written, the money can be used for anything from mitigating the onshore impacts of offshore drilling, to building infrastructure, refineries and piers, to assisting the oil industry’s efforts,” Charter said. “In that way, 4761 is the worst kind of revenue sharing bill because it has a loophole that allows for infrastructure to be built in support of an activity it essentially creates.”

Dan McCue is a staff writer for the Business Journal. E-mail him at dmccue@charlestonbusiness.com.

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