The Climate Change Costs of Offshore Oil Drilling
by Tim Donaghy
June 9, 2016
A report from Greenpeace and Oil Change International finds that President Obama's proposal to expand offshore oil drilling in the Arctic and the Gulf of Mexico will increase global carbon emissions and impose billions of dollars in social costs.
Download the full report — The Climate Change Costs of Offshore Oil Drilling.
The Obama administration has proposed an expansion of offshore oil and gas leasing, with new lease sales scheduled to take place from 2017 to 2022 for the Arctic Ocean and the Gulf of Mexico.
Consumption of the oil expected to be produced under this Five-Year Proposed Program will lead to a net increase in global carbon emissions of about 850 million metric tons of carbon dioxide (Mt CO2) over the lifespan of the leases. This is equivalent to the annual emissions of 3.6 million passenger vehicles over fifty years.
Of this total, about 440 Mt CO2 will come from Arctic drilling in the Beaufort and Chukchi Seas, and about 384 Mt CO2 will come from the Gulf of Mexico.
These carbon emissions will impose high costs to society in coming decades related to human health, flood damages, agricultural productivity and other impacts. Considering the 50-60 year timescales for the production of this oil and incorporating official government estimates of the Social Costs of Carbon (SCC), we find the net social costs from these downstream emissions range from $58.6 to $179.2 billion (2017 US$).
The Bureau of Ocean Energy Management (BOEM) does not currently include climate change costs in its assessment of the environmental impacts of its Proposed Program. However the net social costs calculated in this report are comparable in magnitude to the estimated economic value generated from selling the oil and gas produced under the plan.
This omission indicates a fundamental flaw in BOEM’s analysis of the environmental impacts of its Five-Year Program. President Obama must ensure that a full accounting for the costs of climate change is incorporated into all environmental reviews for offshore oil and gas drilling.