To Drill or Not to Drill?

By Barbara Melendez


TAMPA, Fla. (May 13, 2010) – To drill or not to drill? Three University of South Florida professors agree that the massive spreading oil spill in the Gulf of Mexico poses one of the greatest dangers imaginable to the U.S. economy and the environment. But, in light of the accident that caused the leak, they disagree to varying degrees on how it should impact the future of drilling in the Gulf of Mexico and what to do about alternative forms of energy.


USF Economics Professor Christopher Thomas, who worked as an energy economist at Oak Ridge National Laboratory before coming to USF, acknowledging the spill as a “huge environmental and economic disaster” says, “The economic disaster is perhaps even more complicated to assess.” As tar balls begin arriving on U.S. shores, the full extent of the economic damage can only be guessed at, and the potentially hardest-hit direct victims would be the fishing and tourism industries, of course. But Thomas sees the impact at the gas pump as the one that will affect everyone in the country and believes there’s no way to avoid further drilling.


“You just can’t get energy risk-free,” he said. “The search for energy is risky either way, risky if we do drill here, and risky if we don’t drill here. The risk if we don’t is that we will pay a huge price to import even more petroleum. Oil prices could rise sharply and balance of payments problems will certainly grow even worse.”


Thomas sees oil tankers presenting a greater danger than oil rigs.


“The greatest threat to the environment is the breach of oil tankers that ship oil from foreign suppliers to our shores. Oil spills from tankers are rather common, much more so than drilling rig disasters,” he said. “The bottom line: the policy that feels good right now – to shut down Gulf drilling and halt development of the vast oil deposits located there – will increase rather than decrease the safety of our gulf shores, increase the danger to Florida tourism, and add to the threat to fishermen and seafood restaurants. If Floridians wish to consume petroleum energy sources, Floridians should be willing to bear at least some of the risk of supplying this energy. The coastal waters of Texas, Louisiana, Mississippi, and Alabama are teeming with aquatic life, in spite of decades of drilling there.”


What are some of the risks? Ron Chandler, environmental scientist and associate in research in the USF School of Architecture + Community Design, points out that of the 31 hurricanes that entered the Gulf of Mexico since 1900, 14 passed through the areas being sought for Florida offshore drilling.   An oil spill reaching Florida would mean the loss of tens-of-thousands of jobs, and roughly 1 billion dollars income per year for Floridians. He says it would not be worth the risk because the economic impact poses both short- and long-term problems.


“How long will it take to clean up the spill?” The answer is ‘generations’,” he said. “The first wave of impact will be felt in the diminishment, even eradication of harvestable sizes of fish and shellfish in the first year of the spill. It is in subsequent years that ‘generational poverty’ from oil spills will set in. With the spawning grounds contaminated by residual oil and its breakdown components, and the number of spawning adults of all species of fish and shell fish as well as the plants and animals upon which they forage decimated, the harvest – therefore the food source and the economy that it provides – will be cut deeply for the second year, the third, the fourth…”


Thomas disagrees.


“I do not wish to seem uncaring about environmental damage, but let’s be honest about the effectiveness of modern cleanup technology,” he said. “Technically, the last minute microscopic remnants of damage do take generations to heal. However, the majority of the damage is repaired rather quickly, as anyone can see who visits Galveston, Padre Island or the bayous in Louisiana.” 


Chandler counters, “Although there are anecdotal reports of assemblages of fish around drilling rigs especially those in the far south coastal waters off Texas, fisheries are in decline across the Gulf due to over-harvesting and physicochemical loss of spawning areas, that is, estuaries, due to development and contamination. So extensive are both factors that it is difficult to say which is causing the most harm at any given moment. Clearly even one spill tips the majority of destruction toward offshore oil production.”


Meanwhile, the world’s need for oil fuels the desire for further drilling, but Chandler takes issue with where this should happen.


“The irony of drilling off the coast of Florida and of expanded drilling in the Gulf in general is that it cannot significantly affect our oil reserves or fuel independence – fuel conservation alone can more than make up for the all of the oil that might be recoverable from the Gulf – and the massive loss that this hapless venture will inflict on Floridians through the destruction of our coastal fisheries, aquaculture, agriculture and tourism industries is certain.


“Once along the coast and inland, these substances contaminate surface and groundwater systems that are used for fish propagation, irrigation of crops and drinking water sources. Petroleum contaminants are among the most difficult and costly to remove from soil and water, and require extended periods under the best conditions to be assimilated by natural processes.


“In the past 45 years there have been a few hundred of what OMS (Offshore Minerals Management, a branch of the Department of the Interior) refers to as ‘Significant Pollution Incidences’ associated with offshore rigs in the Gulf of Mexico. These spills resulted from pipeline breaks, ‘blowouts,’ human errors and mechanical failures, barge collisions, and hurricanes.”


USF Engineering Professor Yogi Goswami, a pioneering energy researcher, concurs with Chandler.


“Drilling off the coast of Florida is not going to reduce the oil or gasoline prices in Florida or anywhere else one bit, even if the companies strike oil,” he said. “This is because oil prices are dependent on the global production and the oil in the gulf off the coast of Florida will represent a tiny fraction of the global production.”


Chandler says it is “at best naive” to compare traditional offshore drilling that takes place in a few hundred feet of water to deep water drilling, for what he sees as “the last relatively few barrels of Gulf oil” remaining to be added to the world’s supply.


“Drilling equipment at those unforgiving depths is highly susceptible to mechanical failure and human error both of which happen on every drilling rig everywhere in the world. Blowouts and spills such as the recent Deepwater Horizon will come to characterize offshore drilling.”


Goswami says, whoever causes an accident will have to face only part of the consequences.


“The citizens will be stuck with the bill and will have to deal with an environmental disaster for years to come,” he said. “Accidents are bound to happen as we have seen in the recent accident in the BP off-shore well, despite the fact there were three different redundant systems designed to shut off the well in case of an accident.


“Whether we find additional oil in the gulf or not, we have to start moving away from our dependence on oil. This is because the global oil production is almost at its peak, therefore the prices will continue to go up way beyond what we saw a couple of years back,” he added.


Nonetheless, all three professors see eye to eye that alternatives forms of energy need to be developed. They differ, however, on how long it will take and the levels to which they will have an impact.


“We cannot reduce U.S. dependence on oil and natural gas, regardless of whether imported or domestic in origin, for at least 15 to 20 years, if we started right now to accelerate adoption of nuclear and clean coal power,” Thomas said. “I strongly support conservation and development of alternative energy sources, so long as these decisions are made by individual households and businesses in response to rising energy prices, rather than by central planners at the Department of Energy.”


Calls for ending plans to drill worry him. 


“By shutting down Gulf drilling, remember ANWR (Arctic National Wildlife Refuge) is also dead, we will have no choice but to import huge amounts of oil. This is a simple fact that cannot be changed by Congress or the President for 15 to 20 years at a minimum.”


Chandler sees problems with Thomas’ alternative choices.


“Clean coal and nuclear, like methanol are ecologically and economically unsustainable; that is they are profoundly expensive, resource destructive distractions from attaining sustainable energy use/development systems. We can reduce the emission loadings from coal combustion faster through conservation and by devoting our investments (time, intellect and funds) into accelerating alternative energy development and implementation.


“Regarding nuclear: the true cost of centuries of radioactive contamination of the ecosystems that sustain us has never been factored into nuclear energy’s cost per KW. But perhaps equally important is that we do not have the water anywhere on Earth to begin to exchange coal and gas electric generation for nuclear electric generation. The same is true for ethanol. Water is the great equalizer as well as the great reducer. Global water scarcity has become the norm, and half the world’s people including the US are facing regional if not continental water shortage within the next 10 years.”


Thomas argues, “In the 1980s, the U.S. abandoned nuclear power, which essentially removed us from influencing the way the rest of the world designed nuclear reactors and disposed of nuclear waste. This was a costly strategic error for the U.S.,” he said. “The thorium fuel cycle, which is an alternative to the uranium fuel cycle, presents an extremely interesting technology for nuclear power.” He described thorium as a widely-available mineral resource that does not create weapons-grade waste “and can be relatively easily disposed with very little danger to future generations. I believe France is moving rapidly to develop and deploy thorium reactors.”


Goswami believes yet another change is possible. 


“We can start shifting away from liquid fuels for transportation to plug-in hybrids and electric transportation, which will allow us to make better use of our off-peak generation capacity,” he said. “We can use solar PV (photovoltaic) technology for charging electric transportation during the day. This is a simple technology of installing solar panels on parking lots and outlets for plugging in the cars for charging while they are parked. The panels in fact provide shade for the parked cars.


“USF Clean Energy Research Center built the first 20kW solar car charging station in 1994, which is still working fine. You can replicate the same technology and cover all the parking lots in the State with solar panels and do away with the need to import oil. This will obviously take time; however, we can start that transition as soon as electric cars become available. Technologies for biofuels are available now, although newer and better technologies can be developed by research.”


Thomas doesn’t hold out much hope for solar and wind power.


“We are so far from being able to rely on those alternative forms,” he said. “They can certainly help at the margins but they can’t carry the base load of our energy needs and they’re not cost-effective for industry and won’t be for years to come.”


Regarding the overall time frame for a significant shift from oil, Thomas’s 20 years looks like it will take a little longer in Goswami’s opinion.


“New technologies are getting into place right now, although improvements will continue to take place and costs will continue to go down,” he said. “As for solar and wind and biofuels, their contribution will continue to increase. Based on a thorough analysis, we expect that about 50 percent of our energy use in the world will come from the renewable resources by 2050.


“Our national priority should be to replace our imported oil with renewable resources,” Goswami said. “This will require a lot of investment. However, that investment pales in comparison to what we have to spend to keep the resources in the Middle East secure. To achieve the target of 50 per cent of our energy needs coming from renewable resources by 2050 will require an effort on the scale of Apollo program. However, it will also make our energy resources inherently secure.”

And regarding the price tag, “The cost of solar technologies continues to go down,” Goswami responds. “For example, the cost of solar photovoltaic panels which was about $100 per watt about 50 years back and about $30 per watt about 30 years back is now about $1 per watt and is expected to go down further. I must clarify though that the retail price today is about $2/W for the panels and the balance of the system adds another $2 to $3, making the total system cost about $4-$5 at the retail level. I expect these costs to continue to go down and to achieve grid parity within this decade.”


Goswami believes it is possible to reach 100 per cent alternative sustainable energy eventually – by necessity. 

“The resources on the earth are finite and are dwindling with increased use. So eventually we have to depend on the resource that comes to us from outside our earth – that is the Sun. Wind, biomass, ocean etc are indirect forms of sun’s energy. The analysis shows that based on the available conventional resources of coal, oil, natural gas, uranium etc. we will have to get 50 per cent of our energy needs from renewable resources – in other words we don’t have a choice.  However, it will require a lot of effort. Solar, wind and biofuels combined provide less than 1 per cent per year today; and our energy needs continue to increase. Based on a conservative estimate of a 2 per cent increase, the global energy needs will double by 2040 and triple by 2060 from what we are using today.”


Chandler finds this length of time troubling, yet he remains hopeful.


“We do not have until 2050 to make the dramatic shifts that must be made,” he said. “In fact the longer we wait the greater the possibility of us not being able to make the changes necessary to avert the worst of the situations that we have set before us.”


“Disaster need not define our future scenario. Beginning now and with the stark reminder of what petroleum actually costs us we can imagine a very different energy future. Existing renewable energy technology with even some of the subsidies and support given the oil and gas industries can provide a clean, viable energy economy; one that will last for perpetuity, and that compliments rather than compromises our food and water systems. This is our decision to make.”