Senator, Congressman Seek to Open South Carolina to Offshore Drilling

South Carolina Senator Lindsey Graham (R-S.C.) and South Carolina Third District Congressman Jeff Duncan (R-S.C.) on Monday unveiled plans to introduce legislation into the U.S. Senate and U.S. House of Representatives to allow oil and gas drilling offshore South Carolina.

The South Carolina Offshore Drilling Act would open acreage 50 to 100 miles offshore the state's coast for oil and gas leasing. Acreage 10 to 50 miles offshore the South Carolina coast would be designated as an opt-in zone, and would be available for leasing with the approval of the state's governor and the state legislature.

"By authorizing offshore leasing for oil and gas exploration, South Carolina will lead a long, overdue effort to open up American-owned energy reserves," said Graham in a statement, noting that the legislation would help reduce the national debt and break the United States' dependence on imports from unstable areas such as the Middle East.

Two months ago, Duncan introduced the EXPAND Act, which includes plans to expand nuclear power and other energy sources and the opening of the entire Outer Continental Shelf for energy leases and permits. Duncan said he specifically included in the legislation the Southern Atlantic Outer Continental Shelf to ensure that South Carolina gained access to its natural resources.

"Utilizing our abundant natural resources is a crucial step in ending our dependence on Middle Eastern oil, and creating thousands of jobs right here in South Carolina," said Duncan in a statement. "This legislation will help our state continue to lead the nation in energy innovation."

South Carolina Gov. Nikki Haley also spoke out in support of the bill.

The South Carolina Offshore Drilling Act also calls for revenue sharing from the lease sales. Fifty percent of revenues would be returned to the federal government for deficit reduction, 37.5 percent would go to South Carolina and 12.5 percent would be directed to the Land and Water Conservation Fund. The funding formula is consistent with current federal law governing revenue sharing from offshore drilling leases.

Upon approving the lease, the state of South Carolina would then submit a petition to the Secretary of the Interior Ken Salazar requesting the area be added to any five-year plan. If the secretary fails to approve the petition within 90 days of receipt, the petition would be considered approved.

The Bush administration in early 2009 included areas of offshore South Carolina in a proposed five-year plan for increasing offshore energy production, according to the South Carolina Energy Forum website, a community of citizens and partners committed to improving public understanding and support of opportunities presented by domestic energy access, including offshore South Carolina.

However, the Obama administration in December 2010 placed a moratorium on offshore production in the Atlantic and Eastern Gulf of Mexico through 2017 following the Deepwater Horizon incident earlier that year, according to the website. The decision followed the administration's six-month suspension on deepwater drilling permits, suspension of exploration offshore Alaska until 2011, and cancelled lease sales in the western Gulf of Mexico and offshore Virginia.

Sen. Graham in a news conference Monday said President Obama had failed to move aggressively to pursue offshore oil and gas reserves, The State reported on June 11.

The Atlantic Outer Continental Shelf (OCS) holds mean undiscovered, technically recoverable oil reserves of 3.30 billion barrels and mean undiscovered, technically recoverable natural gas reserves of 31.28 Trillion cubic feet (Tcf), according to a 2011 national assessment by the Bureau of Ocean Energy Management (BOEM).

The South Atlantic OCS has mean undiscovered technically recoverable oil resources of .53 billion barrels of oil and mean undiscovered technically recoverable gas resources of 2.04 Tcf, according to BOEM's assessment.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com

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bill | Jun. 14, 2012
It will be an uphill fight but you never know...another Tupi type field may be discovered that would add tens of thousands of jobs and billions in royalties. At one time, if memory serves, Brazil assessed that Tupi would require 24,000 personnel.


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