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Virginia leaders express interest in offshore drilling

By Anita Kumar
Washington Post Staff Writer
Wednesday, March 17, 2010; B01

RICHMOND -- Never has the political climate in Virginia so favored offshore drilling.

Most Virginia leaders -- regardless of their political party -- have expressed interest in joining Alaska, Texas, Louisiana and other states in setting up offshore platforms to drill for oil and natural gas.

Gov. Robert F. McDonnell and fellow elected Republicans strongly back the proposal, as do most members of the state's congressional delegation, including both U.S. senators, who are Democrats.

The General Assembly passed a pair of bills during its annual session that show the divided legislature's support for drilling -- one that backs exploration, development and production 50 miles off the coast, and another that directs 70 percent of any future drilling royalties to state road improvements.

Even Virginia Beach, the state's largest city and one that relies heavily on tourism, passed a resolution recently that supports oil and gas drilling off its shore.

The political shift comes as pressure builds for the United States to search for alternative energy sources while creating new jobs and revenue during the economic slowdown.

"This is common sense. Why not use our resources so we don't have to depend on fluctuating political realities in the Mideast to determine the cost of gasoline?" McDonnell said in an interview. "We have a tremendous arsenal of assets, and they all need to be used."

Virginia is in line to be the first Atlantic Coast state to drill off its shore, although it will probably be years before it starts, even if it receives the necessary approval from the Obama administration.

Congress would still need to pass a bill to allow Virginia to receive any royalties from offshore oil or gas drilling, as it did in 2006 when it allowed Gulf Coast states to begin taking home 37.5 percent of revenue.

Skeptics still abound. Environmental groups and some Democratic members of Congress, including U.S. Reps. James P. Moran Jr. of Northern Virginia and Robert C. Scott of Hampton Roads, say they worry that possible spills and new infrastructure onshore and off could harm plants, animals, tourism and the naval base in Norfolk, the world's largest.

"It's a dirty and dangerous business," said Athan Manuel, the Sierra Club's offshore drilling expert. "It's not where we should be going as a nation."

But in recent years, as public opinion polls have shown that many Americans favor offshore drilling, Republicans have pushed to open more of the country's coastline as a way to reduce energy prices and create jobs. In 2008, former Maryland lieutenant governor Michael Steele, now chairman of the Republican National Committee, popularized the phrase "Drill, baby, drill!" -- which became a rallying cry for the GOP's desire to drill offshore.

Some Democrats have agreed that drilling needs to be part of a broad energy plan. In January's State of the Union Address, President Obama spoke of making "tough decisions" about opening new offshore areas for development.

"I think this needs to be looked at. We need to find out what's out there," said U.S. Sen. Mark R. Warner (D-Va.). "We need to look at it and do it in a responsible way. It's not a silver bullet. It's a recognition that if you're really going to get yourself off foreign oil, and if you're going to try to deal longer term with our energy mix, then you have to have a portfolio approach."

But Manuel said that there is no proof that significant oil or natural gas exist off Virginia's coast and that companies are generally attracted to areas where such resources are more likely to be, such as the Gulf of Mexico off Florida's coast, where drilling is not allowed.

The last study of the Atlantic Ocean by the federal government, conducted two decades ago, estimates that at least 130 million barrels of oil and at least 1.14 trillion cubic feet of natural gas could be off Virginia's coast. That's equal to the amount of oil used in a week and the amount of gas used in a year in the United States.

But many experts think tests on similar geographic areas in other parts of the world and limited seismic work off Virginia's coast indicate that there is far more oil and natural gas offshore, although no one has been able to accurately show what is there because of federal restrictions. In 2000, the federal government estimated that 1.2 billion to 3.7 billion barrels of oil and 16.12 trillion to 43.5 trillion cubic feet of natural gas could be available in the Atlantic Ocean, including off Virginia's coast.

The 25-year-old federal moratorium on energy exploration and development off the coast of Virginia and other states expired in 2008. The Minerals Management Service, part of the Interior Department, included Virginia in its five-year plan and began soliciting companies to drill off the coast next year. It is the only state on the East Coast included in the plan.

Mike Ward, executive director of the Virginia Petroleum Council, part of a national group that represents 400 companies, said many companies expressed an interest in working off the state's coast when the federal government began the process.

"I think when gas got to $4, it got someone's attention," said Virginia Beach Mayor Will Sessoms.

Early last year, Interior Secretary Ken Salazar halted the process to review the plan and get public input. That public comment period ended.

Later in the year, then-Gov. Timothy M. Kaine (D) asked Salazar to continue to put on hold any plans for oil and gas development off the state. Virginia "policies do not support exploration for oil or production of gas or oil," Kaine wrote.

But McDonnell met with Salazar recently to tell him that Virginia's position on drilling had changed and urged him to allow leases next year.

"I made a fairly bold pledge that I wanted Virginia to be the energy capital of the East Coast," McDonnell said. "An important piece of that was using our own God-given resources right off the Virginia coast."

The state's senators, Warner and James Webb (D), in addition to the five Republican members of Virginia's U.S. House delegation and state House Speaker William J. Howell (R-Stafford), have also written letters of support.

"Developing these resources would create thousands of new jobs in our Commonwealth, arriving at the right time to assist in lifting our workers, families and communities out of this economic recession," Howell wrote to Salazar.

Salazar said last month that he was 30 to 45 days away from making an announcement about the Obama administration's policy on offshore drilling.

But even if he approves drilling off Virginia, Virginia still would not be any closer to receiving royalties from it -- that would take congressional approval.

The General Assembly narrowly passed a bill directing that 70 percent of any future drilling royalties go to state road improvements, although many Democrats remain opposed to the measure. Moran recently wrote McDonnell a letter saying that Congress has rejected repeated attempts for Atlantic Coast states to receive royalties.

Senate Majority Leader Richard L. Saslaw (D-Fairfax) voted against the bill after saying he doubted that the state would see offshore royalties anytime soon.

"Will we ever see a dime of royalties?" he asked. "Maybe your great-great-great-grandchildren, when they're on Social Security. But it's doubtful it will come before then."

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