The Associated Press April 21, 2011, 10:33AM ET

3-state compact for offshore energy in NC bill

North Carolina's Republican majority wants Democratic Gov. Beverly Perdue to join neighboring states in working toward offshore energy exploration it says would give the state the chance to cash in on energy royalties and create thousands of jobs in the long term.

Senate Republicans, holding a news conference Wednesday exactly one year after the Deepwater Horizon oil rig explosion in the Gulf of Mexico, said the proposed "Energy Jobs Act" would ensure North Carolina doesn't fall behind in efforts to expand exploration for natural gas and oil in federal waters off the U.S. coast.

The bill introduced this week would direct Perdue to enter a compact with the governors of South Carolina and Virginia to develop a unified strategy for the federal government to hear exploration permits and proposals. They also would lobby together to get Congress approve a plan whereby states would share revenues from natural gas or oil production as they do on the Gulf coast.

While it couldn't come quickly, the offshore energy sector could create more than 6,700 jobs and $484 million in state and local revenues annually through 2030 if the state received the same royalty share that Gulf states receive, according to a 2009 report from the Southeast Energy Alliance, comprised of businesses, trade associations and nonprofits.

Experts believe waters off the North Carolina coast are home mostly to natural gas deposits and some oil.

"It's a long term endeavor. It's not something that's going to happen next year," said Sen. Harry Brown, R-Onslow, one of the bill's primary sponsors. "But we've got to start some time and we think today is the day to start."

Sen. Bob Rucho, R-Mecklenburg, one of the bill's primary sponsors, acknowledged the meeting was on the anniversary of the explosion, which killed 11 people and ultimately sent 200 million gallons of oil into the Gulf. The explosion delayed until 2017 a planned lease sale of East Coast waters to energy exploration.

Rucho said the industry has learned from mistakes and he expects improved safety features if exploration resumes off the North Carolina coast. Meanwhile, gasoline approaching $4 per gallon and uncertainty with foreign suppliers exacerbates the need for energy independence, he said.

"We really don't have a choice but to go out there and find this new energy if our economy is to continue to grow," he said.

Environmental groups criticized the bill, saying the senators are threatening the tourism and fishing industries by increasing the chances for a disaster similar to the Gulf explosion. The state's travel and tourism industry directly employed more than 185,000 people last year, according to the Southern Environmental Law Center.

"To the extent this drill bill puts tens of thousands of jobs in the state's coastal tourism and fishing industries at risk, I guess the senators could call it a jobs bill," said Derb Carter, director of the center for the Carolinas.

Initially opposed to offshore exploration in 2008, Perdue changed her mind during her gubernatorial campaign and later organized a panel of experts to advise her on the issue as well as generating energy from the wind and sun.

Perdue spokesman Mark Johnson said the governor hasn't made a decision yet about the bill but "has clearly insisted that any revenue generated from drilling off our coast should be shared with the state and its people."

The Legislature also directed a study on whether offshore drilling is feasible when the Democrats were in charge of the General Assembly until earlier this week. The study panel last year didn't reach a definitive decision but a subcommittee did recommend that North Carolina consider working together with South Carolina and Virginia.

The Republican chief executives of both states have been active in the offshore drilling debate. Virginia Gov. Bob McDonnell wanted a planned lease sale for next year to go forward even after the Deepwater Horizon spill.

North Carolina should be more focused on alternative energy forms such as wind turbines, said Molly Diggins with the state Sierra Club chapter. The North Carolina Sustainable Energy Association has said the state has the greatest potential for harnessing wind energy on the East Coast and could potentially create 10,000 related jobs over the next decade.

The bill also would reaffirm the work of a renamed Energy Policy Council to present and future uses of solar, wind and biomass energy. But it would also direct the "Energy Jobs Council" to examine natural gas, coal and nuclear energy options.


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