Worth the risk? Debate on offshore drilling heats up

ByABC News
July 14, 2008, 5:42 AM

PORT FOURCHON, La. -- From his perch at the southern tip of Louisiana, port director Ted Falgout sees green: the color of money that comes from the nation's busiest haven of offshore drilling.

"It's OK to have an ugly spot in your backyard," Falgout says, "if that spot has oil coming out of it."

From her vantage point in Santa Barbara, Calif., a city known for beautiful beaches and wealthy residents, Mayor Marty Blum recalls black: the color of more than 3 million gallons of oil that flowed from a drilling rig blowout in 1969 and covered 35 miles of coastline with a thick layer of goo.

"The people of Santa Barbara don't want any more oil drilling. That's just pretty plain," she says. "But everybody's got a price, and at a certain price per gallon, we're all going to want more drilling."

Environmental hazard or energy bonanza: Oil and natural gas trapped beneath the USA's ocean floor mean different things to different people. As gasoline soars beyond $4 a gallon, President Bush and his would-be Republican successor, John McCain, see a viable source of domestic production. Democrat Barack Obama and the nation's environmentalists see a threat to pristine waters and beaches and little help at the pump from offshore drilling.

It's a debate with a rising decibel level, thanks to an energy crisis fueled by rising demand halfway around the world.

The United States consumes nearly one-fourth of the world's oil but produces only about 10%. Its 1.76 billion-acre Outer Continental Shelf, which extends from about 3 to 200 miles offshore, is prime hunting ground.

In 2006, a consortium led by Chevron proved that oil could be produced from a geological area about 175 miles from Louisiana that's estimated to hold 3 billion to 15 billion barrels of oil.

Since Congress imposed a moratorium on new drilling in 1981, most of the nation's coastline has been off-limits a type of ban that does not exist in countries such as Brazil and Norway, which have found large oil deposits offshore. As prices rise, polls show two-thirds of Americans favor new drilling for oil and gas.

"The big discoveries are happening offshore," says Robert Bryce, managing editor of Energy Tribune. "This is where the action is."

By most estimates, at least 18 billion barrels of oil can be produced from areas that are off-limits, on top of 68 billion barrels in areas where drilling is allowed. The 18 billion barrels would be enough to fuel the country for 2½ years.

Randall Luthi, director of the Minerals Management Service, says the estimate is "extremely conservative, because it's been 20 or 30 years since we've had the opportunity to look and see what's there."

A tale of two coasts

No two places illustrate the two sides of the debate better than Louisiana and California, where much oil has been produced but much more lies below: