The National Ocean Industries Association applauds Virginia Governor Bob McDonnell (R) and the Virginia General Assembly for their bipartisan agreement in enacting two state laws supporting energy development off the State's coast. The first enacted bill allocates future offshore royalties and revenues. The second enacted bill expands Virginia's earlier position which supported exploration for offshore natural gas only, and provides a clear statement from the Commonwealth in support of oil and natural gas exploration, development, and production 50 miles or more off Virginia's coast.
"Virginia has opened the door and put out the welcome mat to energy development off its shores. It is now up to the Federal government to decide when they will come through that door and take a seat at the table," said NOIA President Randall Luthi. "Virginia's actions are an important step that will enhance our Nation’s energy security and provide future jobs."
There is still important work to be done before Virginia is likely to achieve its vision of offshore energy leadership on the Atlantic Coast, including environmental work, modern seismic studies of offshore oil and gas resources, federal support for state revenue sharing and an actual lease sale offshore Virginia.
Environmental impact statements are required before any significant seismic work may be conducted or before holding Lease Sale 220 offshore Virginia, which is scheduled to take place in 2011. "These assessments take time, and NOIA encourages the Administration to immediately begin the environmental reviews required to move forward," said Luthi.
Seismic studies are also needed to obtain current estimates of energy resources offshore Virginia. This data is important to both State governments and energy producers in weighing the value of offshore exploration in particular areas. Existing data for the East Coast, including Virginia, is about 30 years old. If history is any guide, there may be many times more oil and gas offshore Virginia than existing estimates indicate. The Gulf of Mexico, for example, has already yielded about six times the resources than were predicted by estimates conducted in the 1980s. "When it comes to offshore oil and gas, it appears that the more you look, the more you find," Luthi said.
Also, allowing states such as Virginia to share in revenue from offshore drilling is an incentive to explore for resources off their shores. "From our perspective, Congressional action in support of revenue sharing is part of the package. It just makes sense," said Luthi.
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