A new study published last week should act as a conversation starter about drilling for oil and gas off the Atlantic coast. The U.S. Department of Interior is considering offering lease sales off the Atlantic seaboard for oil and gas production in 2018.
The leases would be offered for the Mid-Atlantic Outer Continental Shelf about 50 miles offshore of states from Georgia to Delaware. Oil and gas production would begin in 2025.
To assist policy makers, the study clarifies some of the uncertainties around oil and gas reserve estimates and the value of production compared to the potential environmental costs.
Depending on production levels, Delaware might see between 1,000 to 5,000 jobs created, and the project could generate up to $400 million in royalties and state taxes over the first 10 years of production.
Expanded oil and gas production have boosted the economies in states like Pennsylvania, North Dakota and Texas, creating tens of thousands of jobs and billions in tax revenues. As a result, the U.S. has become much less dependent on foreign oil production — a big advantage at a time of upheaval in many oil producing countries.
North American production is also providing a real energy cost advantage compared to global competitors and could even lead to a reversal in the outsourcing of manufacturing jobs.
The study is the first to consider the environmental costs of cleaning up potential oil spills and the impact of higher carbon dioxide emissions on global warming from drilling off the East Coast.
Industry experience with oil spills predicts that only about 130 barrels of oil a year would be spilled from Delaware production even in the highest production estimate for 2035.
A specialized oil spill clean-up ship is already permanently docked in Lewes, where large ocean-going oil tankers occasionally spill oil while transferring it to the smaller ships that ply the Delaware River.
The Delaware City Refinery currently refines crude oil delivered in rail cars from North Dakota and Canada. Local oil production could mitigate some of these transport and delivery issues.