Untapped potential for oil and gas exploration and wind and solar energy in coastal North Carolina—both offshore and onshore—could significantly contribute to the country becoming energy self-reliant and breaking free of its dependence on foreign energy sources.
But those industries face challenges in governmental policies, economic conditions and public perceptions to fully take advantage of those resources that are turning their attention to the Carolina coast.
Such challenges were the topic of discussion Thursday morning at the inaugural Coastal Energy Summit, put on by the Greater Wilmington Business Journal. The event attracted hundreds of attendees who filled the Wilmington Convention Center, as well as dozens of protesters who picketed outside.
Three protesters disrupted proceedings inside, shouting at speakers Jack Gerard, president of the American Petroleum Institute, and N.C. Gov. Pat McCrory, who responded to their calls against offshore drilling and hydraulic fracturing, also known as “fracking.”
McCrory, who previously worked for Duke Energy, said he welcomes tough questions and encourages dialogue. “But if we want to continue to have the great quality of life that we have, the economic prosperity, and if you want to continue to create jobs, we better—in our United States, North Carolina included—we need to participate in our energy independence.”
That comment prompted applause from the audience, which consisted of industry professionals, local elected officials and representatives of environmental advocacy groups, including the Sierra Club, The Nature Conservancy and the North Carolina Coastal Federation.
Continuing, McCrory added, referring to the protester: “And for that individual and other individuals who will now get in their car and fill up with gas or turn on their air conditioner or heater, they’re using energy from the same sources that they’re protesting against.”
That prompted another protester to call out at McCrory before being escorted out. Rob Kaiser, publisher of the Greater Wilmington Business Journal, who emceed the event and interviewed McCrory, spoke over the outburst to ask the governor how such environmental concerns are balanced with business interests.
“We have to be clearly up-front with the benefits, the return on investment,” McCrory said in response, “and we have to be very up-front about the risk and make sure that we have measures in place—measures of policy, measures of implementation, execution—to limit or eliminate those risks.
“We have to have very honest and direct conversations from both the left and the right on these energy issues. And right now, on the left and the right, we typically only have shouting or TV commercials, as opposed to an intellectual discussion on the pros and cons of” each energy source, McCrory said, listing coal, nuclear, offshore drilling, natural gas exploration, hydro, solar and wind.
“There are pros and cons regarding environmental, cost-effectiveness, disposal, on every one of those,” he said. “But to be naïve and think that there’s one solution that has no risk that allows us to maintain the economic prosperity and the quality of life that we enjoy here…that’s where the education has to be a part of the equation.”
Education and dialogue were points that were reiterated by several speakers during the event, which featured a panel on coastal energy exploration and comments from representatives of energy companies, including GE Hitachi Nuclear Energy, Duke Energy, Strata Solar and Piedmont Natural Gas.
Gerard, who was interrupted at the start of his comments, said a challenge facing the oil industry is changing public perceptions—not only of offshore drilling and impacts on the environment, but also in the industry’s job opportunities for women and minorities.
Gerard said the industry is getting oil with more environmentally friendly practices and using cleaner-burning natural gas that cuts down on carbon emissions. He said the U.S. is now the world’s leading producer of natural gas, having recently surpassed Russia, and is poised to surpass Saudi Arabia as the top producer of oil in the world—a possibility he said was unimaginable just a few years ago.
“If we get our energy policy right today,” Gerard said, “we can be the generation that erases what for decades has been our country’s most potent and impactful vulnerability: dependence on energy resources from less-stable regions and countries hostile to our goals, ideals and way of life.”
Noting a decrease in foreign energy imports from 60 percent five or six years ago to closer to 30 percent today, Gerard added: “We have the chance of a lifetime, perhaps the only chance in our history, to wean ourselves from foreign sources of energy to truly turn the tide to make us the energy superpower of the world.”
Gerard said the Port of Wilmington would play a major role if offshore oil and gas exploration proceeds for North Carolina, “and the positive economic impact would be significant,” he said, mentioning investment in manufacturing and as many as 55,000 new jobs by 2035, according to a study.
Brian O’Hara, president of the Southeastern Coastal Wind Coalition, said in the panel discussion that onshore wind farms are “ready to go,” while offshore wind turbines are “well into the process,” noting turbines have yet to be installed in American waters. He said the first turbine construction is expected in the next couple years in Massachusetts and Rhode Island, though he noted it would probably be 2018 “before you see steel in water and turbines spinning.”
“This is a longer-term industry,” O’Hara said. “There are actions that we can take today that sort of set us up for the opportunities that come with this industry, which are very, very large, especially in the Southeast. W we’re really on the beginning edge of this industry here in the U.S.”
The federal government recently announced more than 185,000 acres’ worth of area off the Cape Fear coast has been designated for commercial development of offshore wind energy. The areas—located 15 nautical miles south of Bald Head Island and 10 nautical miles south of the Brunswick County shoreline—are two of three areas off North Carolina, the third located 24 nautical miles from Kitty Hawk.
Regarding visibility and impacts of hurricanes, speakers said areas being looked at 40 or so miles offshore, well beyond visibility from land. Turbines are also designed to adapt to wind speeds and direction, said Craig Poff of Iberdrola Renewables. O’Hara added the facilities can sustain Category 3 hurricanes.
“There isn’t much that man builds that holds up to a Category 5,” O’Hara said, noting that such risks have to be weighed against the rewards.
“There’s no one in the industry that believes hurricanes are a show-stopper,” he said. “Challenge, yes. Show-stopper, no.”
Panelists also emphasized the need to coordinate wind farms with existing infrastructure and industries, such as tourism, fishing and shipping.
“It’s a big ocean out there, and we can do all of these activities well,” said Jeff Vorberger, vice president of policy and government affairs for the National Ocean Industries Association. “We can do them in a way that’s environmentally friendly and that fosters a growing economy.”
O’Hara added that coastal communities stand to benefit from such activities by attracting manufacturing to support energy industries. With Wilmington’s history with the boatbuilding industry, he said the area could support and benefit from the production of blades for wind turbines, as one example.
McCrory touted such benefits as well, noting funds to be gained through a revenue-sharing agreement with the federal government. He said he would want some of those revenues put toward coastal projects such as beach renourishment and dredging for ports.
“We’re literally talking billions of dollars for our state in the next 15 years,” McCrory said, “and I hope that we get, at a minimum, the same deal that the Gulf Coast states are getting.
“I firmly believe that a fairly large percentage of that money should go to the coastal region of the Carolinas,” he said, “because they’re the ones who are investing the infrastructure and actively involved, and they also have to sell the other industries—travel and tourism and others—that this will do no harm. And it’s going to be a political battle.”
McCrory also touched on environmental concerns regarding seismic testing, which Vorberger previously described as “an ultrasound of the earth.” Environmental groups contend the practice endangers marine life, but Vorberger said the practice has a track record of no injury to marine life.
Fielding questions from the audience, McCrory said: “I know some people will say it may impact fish and other marine life. I feel very confident that the new technology, from all indications in my working with the federal government, is very safe. They have procedures in place when they do it.
“The last thing I want to do is any harm off our coast, because I have other industries that are dependent upon our coast—the fishing industry, the travel and tourism industry, the shipping industry and many others,” he said. “And I have to work around that.”
“Perceived risk is largely built on fear—fear of the new, fear of the unknown,” Vorberger said in the panel discussion. “The offshore oil and gas industry is one that has been operating, not only in the Gulf of Mexico but around the world, for 60-some years. So the technology’s out there. They’re not new. They’ve evolved over time to improve safety, to make sure that we have a safe workforce, a healthy workforce and a clean ocean.
“But it’s certainly new here,” he said, “and it’s new in the Atlantic. So there are understandably very legitimate concerns and questions being raised that demand answers. That’s why opportunities like this are so wonderful, so we can have that conversation. We just want to make sure that that conversation is had on a foundation of science, facts and reasonableness, as opposed to hyperbole.”