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The recent news that Obama is reversing his stance on offshore drilling in the southeast Atlantic coast and Alaskan coast is great [1]! Last year the Obama administration shocked environmentalist [2], by directing the Department of Interior to develop a plan to open these areas to offshore drilling [3]. The move has been described as an olive branch [4] to the Republicans and U.S. energy companies, which have been opposing his efforts to cut CO2 emissions. However, the environmental repercussions of the initial exploration, using seismic tests, may be far greater than previously thought, with the number of animals being harmed by such test being grossly underestimated [5]. This is especially true for the marine mammal populations, who's densities have been underestimated in the past. Furthermore, with the current price of oil and gas there is serious doubts about the economic viability of developing these resources. Historical surveys have estimated that the total oil and gas reserves, of the Atlantic outer continental shelf, add up to approximately 1.5 percent each of total U.S. oil and gas reserves [6]. New survey's may be able to find greater reserves of oil and gas, due to improved technologies, but a much longer list of economic reasons for not drilling exist.

The most obvious reason for not drilling on the southeast Atlantic coast is that tourism is the mainstay of the economy. For example, in North Carolina tourism spending, on the coast, injects over $3 billion to the economy each year, and supports over 80,000 jobs [7]. The tourism is very sensitive to environmental degradation, for instance over 18,000 people are employed in recreational fishing, along the North Carolina coast.

Ironically, offshore wind energy could produce twice the amount of energy, and twice the jobs that offshore drilling could [8]. The biggest advantage of wind energy is that the energy and jobs come with out any chance of an environmental disaster, which could kill the tourist industry. The energy produced from wind is also eternal, as long as the wind blows. Onshore wind has been growing rapidly, in the U.S. from generating 26.59 Giga kWh, in 2006, to over 190.93 Giga kWh, in 2015, which is over 4.67% of total U.S. electric energy generation [9]. To put this into perspective hydro electric generation, in the U.S., provides 6.76% of total U.S. electric energy generation, and that is after well over a hundred years of development. However, offshore wind has just started being developed in the U.S., but Europe already has 1.8 GW of installed capacity, and is planning to install another 3 GW by 2020 [10].

The dramatic drop in the price of oil and gas over the last couple of years [11] has had a dramatic impact on the number of oil rigs operating in the U.S., where the count has gone from a high of over 1,600 rigs in 2014, to just over 500 rigs currently [12]. If this trend continues one third of oil companies could go bankrupt this year [13]. However, this may just be the tip of the ice berg! If the World is going to truly deal with global warming, than most of the World's fossil fuel reserves have to stay in the ground. This understanding is starting to gain acceptance in the financial world [14]. The technologies are being developed to replace these energy reserves, and if you want to be on the right side of history, and financial profits then you must embrace the new technology and reject the old technology. Politically this view is still controversial, but with the increase competitiveness of renewable energy, and continued increase in global temperatures, it is just a mater of time that this view will be conventional.

References

  1. http://www.nytimes.com/2016/03/15/us/politics/in-reversal-us-plan-on-drilling-to-be-pulled.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news
  2. http://www.theatlantic.com/politics/archive/2014/07/did-obama-just-signal-that-hell-open-the-atlantic-coast-to-drilling/447033/  
  3. http://www.politico.com/story/2015/01/atlantic-oil-natural-gas-drilling-obama-114631
  4. http://www.chicagotribune.com/lifestyles/sns-green-obama-drilling-plan-story.html
  5. http://www.southernstudies.org/2015/10/feds-underestimated-risks-of-atlantic-offshore-oil.html
  6. http://www.ibtimes.com/obama-administration-proposes-offshore-oil-gas-drilling-along-east-coast-1796680
  7. http://www.businessnc.com/clientuploads/Archive_Images/2014/06/PDFs/Coastal%20Carolinas.pdf
  8. http://www.windsystemsmag.com/article/detail/840/report-atlantic-offshore-wind-economic-impact-would-outshine-drilling
  9. https://en.wikipedia.org/wiki/Renewable_energy_in_the_United_States
  10. https://www.rolandberger.com/media/pdf/Roland_Berger_Offshore_Wind_Study_20130506.pdf
  11. http://www.nasdaq.com/markets/crude-oil.aspx?timeframe=2y
  12. http://www.businessinsider.com/baker-hughes-rig-count-january-22-2016-1
  13. http://fortune.com/2016/02/16/oil-companies-bankrupt/
  14. http://www.bloomberg.com/news/articles/2014-12-02/oil-investors-may-be-running-off-a-cliff-they-can-t-see

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