Memo-02-13-2018-Item-14

February 13, 2018

MEMO TO:        Mayor Barber and Board of Commissioners

FROM:             Frank A. Rush, Jr., Town Manager

SUBJECT:       Resolution Re-Affirming Opposition to Offshore Oil and Gas Drilling - (Summary & Suggested Motions)

The Board of Commissioners is scheduled to consider the attached Resolution Re-Affirming the Town’s Opposition to Offshore Oil and Gas Drilling at its February 13 meeting.  The attached resolution is presented for Board consideration in response to the inclusion of coastal North Carolina in a new draft 2019-2014 Federal lease plan for offshore oil and gas exploration. 

As you may recall, in 2015 coastal North Carolina was originally considered for the 2017-2022 Federal lease plan for offshore oil and gas exploration.  The Board of Commissioners expressed its opposition to seismic testing associated with oil and gas exploration in April 2015, and then subsequently expressed its opposition to offshore oil and gas drilling in October 2015.  Many coastal local governments, other organizations, and coastal residents also expressed opposition at that time, and coastal North Carolina was ultimately not included in the final 2017-2022 Federal lease plan.

The 2017-2022 Federal lease plan is currently being implemented by the US Department of the Interior / Bureau of Ocean Energy Management (USDOI / BOEM), and does not include coastal North Carolina.  However, as part of President Trump’s “America First – Offshore Energy Strategy”, the USDOI / BOEM has initiated a new 2019-2024 Federal lease plan to replace the current plan sooner than its 2022 expiration.  A draft plan was released on January 4, 2018, and includes coastal North Carolina.  The USDOI / BOEM will receive public comments through March 9, 2018.  Following public comment, the actual “proposed plan” will be developed, and then another public comment period will be scheduled prior to developing the “final plan” that will be reviewed by the US Congress and the President.  This entire process will likely occur over the remainder of 2018 and much, if not all, of 2019.  As such, it is still possible for coastal North Carolina (and other areas) to be removed from the 2019-2024 plan before it is finalized in the next two years.

I have attached several handouts printed from the USDOI / BOEM website that include “Frequently Asked Questions”, maps (1, 2) of the offshore areas under consideration in the draft 2019-2024 plan, and the schedule for lease sales.  As you will note, all offshore areas of the entire United States are included in the draft plan, however, US Secretary of the Interior Ryan Zinke recently announced that areas of Florida will no longer be considered for the 2019-2024 plan.  That decision led to similar requests from several other states, including North Carolina. 

The Board should also note the following as it considers this issue again:

  • the offshore areas include a 25-mile buffer off coastal North Carolina, thus no activity would occur within 25 miles of Emerald Isle, if not further,
  • North Carolina is included in the Mid-Atlantic region, and lease sales are proposed for this area in 2020, 2022, and 2024,   
  • additional planning and testing activities are likely necessary off the North Carolina coast before lease sales occur, and the results of these activities will likely shape the demand for and pricing of future lease sales; at this point the oil and gas industry believes the resources are there, however, additional information is needed to determine how much, where and whether or not it is worthwhile to extract,  
  • there are currently no mechanisms in Federal or State law to share significant revenues with the State and local governments in North Carolina,
  • there is debate about the quantity of oil and gas available, and the economic viability of any significant oil and gas production activities,
  • there is debate about the likelihood and potential impacts of a spill on the North Carolina coast, however, any spill that impacts Emerald Isle (even if the primary impacts are elsewhere in North Carolina) would likely cause serious and prolonged economic harm to our businesses and rental property owners, and would likely reduce property values,
  • actual production, if it occurs, is likely at least 15 years away, or longer, as the Federal lease plan is the initial step toward potential future offshore oil and gas drilling,   
  • it is unclear how much resource may be located offshore of Emerald Isle specifically, and how far away from the Emerald Isle shoreline it may be located (past efforts have been focused more in the northern part of the NC coast), and
  • depending on the location of economically viable resources, onshore production facilities could be located in North Carolina (Morehead City port?, Wilmington port?) or perhaps in Virginia (Norfolk port?) or other states.

As you know, Emerald Isle is fortunate to enjoy the pristine coastal environment within and all around our town, and our quality of life and local economy are nearly completely dependent upon that pristine environment.  During its previous deliberations on this issue, the Board concluded that the risks associated offshore drilling far outweigh the potential benefits.  If the Board approves the attached resolution, and re-affirms the Town’s formal opposition to offshore oil and gas drilling, I will forward the approved resolution to USDOI / BOEM and other interested parties prior to the March 9 deadline. 

I look forward to the Board’s consideration of the attached resolution at the February 13 meeting.