Chamber Facilitates Discussion on Offshore Energy

Chamber Facilitates Discussion on Offshore Energy
Chris Saxman, director of the Virginia Energy Forum, led a discussion on September 9 on the potential benefits associated with proposed offshore natural gas and oil development and what the region could stand to gain.

The Hampton Roads Chamber of Commerce hosted nearly two dozen representatives of industry and public officials September 9 to discuss the potential benefits associated with the proposed offshore natural gas and oil development in the Atlantic.

The Chamber’s role in the discussion was as an integrator, facilitating discussion on issues that have an impact on Hampton Roads businesses and the community as a whole.  This is in keeping with the Chamber’s long-standing position on improving all sources of energy for the Commonwealth.

“While there is much work still yet to be done, the Chamber is committed to spurring any conversation on energy as it has clear impact on business and quality of life in the community,” said Bryan K. Stephens, President and CEO of the Hampton Roads Chamber of Commerce.  “We are optimistic at the prospect of good paying jobs this kind of exploration suggests, but just as importantly, efforts that allow our region, our country, to develop energy independence by investigating new sources equates to national security.  That is something we can’t take lightly.”

Chris Saxman leads a discussion at the Chamber on September 9 regarding coastal energyChris Saxman, director of the Virginia Energy Forum led the dialog on the issues, briefing the audience on what the region could stand to gain from offshore natural gas drilling, to include the creation of as many as 25,000 jobs for the Commonwealth by 2035.

Several participants representing skilled labor and minority groups expressed a desire to ensure new employment opportunities be focused on available local labor, not simply hiring talent from outside the region.  It was noted that the actual seismic tests would include the efforts from areas such as the Gulf of Mexico and North Atlantic because of the specialized technical expertise involved.

Saxman said that in June, the federal government started the multi-year process that sets out the federal offshore leasing program for the 2017-2022 time period, which is the first step toward Virginia advancing industry diversification goals for the region.  During the first open comment period, leaders across Virginia expressed support for including Virginia in the next Five Year offshore leasing plan, including our bipartisan congressional delegation, local elected officials and business groups such as the Hampton Roads Chamber of Commerce.

Should Virginia be included in the natural gas and oil exploration and development lease activity, it is projected by Quest Offshore that Virginia could receive the third highest levels of spending, employment and gross domestic product.  At its peak in 2035, Virginia could stand to realize $1.8 billion in annual revenue.  Virginia is expected to see high spending levels due to the significant oil and gas development activity, to include such opportunity as the transportation of resulting energy product to support services needed for exploration service workers such as food services, transportation improvements, housing and communications support.

Beyond jobs creation, the establishment of oil and natural gas exploration off Virginia means a much needed economic expansion for Hampton Roads into the maritime sector.  The region already has a strong marine background, thanks to the shipbuilding and repair industry and operations at the Port of Virginia.  Additionally such exploration would see an increase in intensive engineering activity in the region.

Such exploration has been advocated by Virginia’s U.S. Senators Mark Warner and Tim Kaine, Governor Terry McAuliffe and a majority of our members in the House of Representatives.  There is strong support to push for legislative action to allow for revenue sharing to the states, much like the system the Gulf of Mexico has in place, which would allow for Virginia to see 37.5% of the bonuses, rents and royalties generated, estimated to be $400 million annually.

Saxman also covered the timeline associated with the effort, as mandated by systematic Federal government procedures.  The next action in this multi-step process will be the release of the Draft Proposed Plan and is expected in the first quarter of 2015.  The Commonwealth will have a role to play in the federal government’s decision making process at several stages.  In addition, a number of comment periods and scoping hearings throughout the country will take place before the final program is announced and finalized. At the same time, the Commonwealth by direction of the General Assembly’s annual budget will soon begin conducting a study and review of Virginia’s preparedness for future offshore oil and natural gas exploration, which will be released in April 2015. 

As more details become available, the Hampton Roads Chamber will make that information available to the membership body.  You can learn more about the efforts by visiting www.API.org.

Read more about the benefits of U.S. offshore oil and natural gas development in the Atlantic.

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