Mississippi debates cashing in on relaxed offshore drilling news meridianstar.com electricity projects ks2

Renee Orr, a strategic resources chief with the U.S. Bureau of Ocean Energy Management, said the 2017-2022 Outer Continental Shelf Oil and Gas Leasing Program, which the Obama administration approved last year, blocks new offshore oil and gas leases from being offered in the Alaskan Arctic through 2022. That program also blocks expansion in the Atlantic and Pacific oceans, while allowing some new leasing in the Gulf of Mexico.

The land in question is the Outer Continental Shelf, 1.7 billion acres of submerged federal lands, subsoil, and seabed starting some three nautical miles off the coastline for most states and extending for about 200 nautical miles in some cases. The acres are divided in four regions: the Atlantic Region, Gulf of Mexico Region, Pacific Region and Alaska Region.

Patrick Sullivan, president of the Mississippi Energy Institute, added that while the energy market goes up and down, investing in infrastructure now and using down periods to promoting a welcoming business environment to the energy sector would help when times are good, naming the Mississippi State Port Authority as an example.

Jonathan Daniels, Port authority executive director and CEO, said the Port of Gulfport has adapted to the changing trends of the industry in the past four years. Diversification with energy has become the cornerstone of the authority’s development, Daniels said.

At the state level alone, attempts in recent years to expand offshore energy production in Mississippi waters turned into a legal battle. In 2012, environmental groups The Sierra Club and the Gulf Restoration Network sued to block the state’s attempts to formulate rules for how the state would conduct offshore gas and oil leasing in its own waters.

The leasing program was halted when Hinds County Chancery Judge William H. Singletary ruled that the Mississippi Development Authority improperly developed rules for mineral testing, exploration and, ultimately, drilling off the coast in the Mississippi Sound, stating drilling leases did not contain a complete, adequate economic impact statement.

According to an Associated Press report, the National Park Service at the time opposed the offshore drilling rules proposed by the Mississippi Development Authority, saying allowing drilling within one mile of Horn and Petit Bois islands would spoil the islands’ wilderness character. Casino operators were also concerned with tourist areas overrun by industrial equipment, boats and workers.

“All you have to do is go to Dauphin Island, Alabama and see what oil and gas drilling has done over there to that economy, Miller said. “There is no substantive tourism over there because of all of the impacts from oil and gas drilling that occurred in that area.”

He also said risks and consequences are far too great should things go wrong, such as the 2010 Deepwater Horizon oil spill. A March 2017 report from the Mississippi Development Authority shows that all tourism in the state has generated an average of $385.8 million per year over the last decade.

Another attempt at boosting Mississippi’s energy economy in other areas include Gov. Phil Bryant’s 2013 legislation that reduced the state’s tax rate for oil and natural gas companies that use horizontal drilling as part of his Energy Works: Mississippi’s Energy Roadmap plan aimed at strengthening the state’s pro-business environment.

This affected oil and gas severance taxes, which produce revenues based on the value of oil, natural gas and other raw materials produced normally make up a little more than one percent of general fund revenue the Mississippi Department of Revenue collects year after year. A portion of oil and gas revenues also goes to Mississippi counties.

Despite Mississippi’s energy economy seeing a downturn after events like Hurricane Katrina, the Great Recession, the Deepwater Horizon oil spill and a dip in oil prices, Edwards said more diversification and investment in the energy industry could “insulate” South Mississippi’s energy economy.

“We’ve not yet fully found a way on the Mississippi Gulf Coast to capitalize on opportunities inherent in that area of the economy,” Edwards said. “If we look at today at what’s going on in the parishes of South Louisiana, there are nearly tens of billions of dollars in new industrial development and programming surrounding the energy industry. A lot of that has to do specifically with natural gas. … Those opportunities also exist here on the Mississippi Gulf Coast.”