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Florida’s waters may be protected from offshore drilling but the Bahamas plans to start looking for oil in less than a month at an exploratory well just 150 miles off the coast of the Sunshine State.
Bahamas Petroleum Company, or BPC, said in a regulatory filing last week that it contracted the UK-registered Stena IceMAX drill ship to begin work on the Perseverance No. 1 oil well in the southern Bahamas. The ship, currently anchored in Las Palmas in the Canary Islands, is scheduled to arrive in the Bahamas on or around Dec. 15, the company said.
“BPC anticipates that it will take 4-5 days from this start date for the rig to be provisioned, loaded and then transitioned to the drilling location for spud of the well,” said the filing.
Environmentalists say the drilling poses a series of potential threats to marine ecosystems in the Caribbean and in Florida, and are urging Bahamian authorities to cancel oil exploration licenses and permanently ban offshore drilling in the islands. They say the risks involved in oil drilling greatly outweigh the potential benefits to the Bahamian people, and that the government should continue to focus on tourism as a key source of revenue.
“Oil exploration is a very dangerous business that poses huge risks to coastal communities in the Bahamas and in Florida,” said Diane Hoskins, a campaign director for the conservation nonprofit Oceana. “Let’s not forget that Deepwater Horizon was drilling an exploratory well.”
Oceana and several conservation organizations including Waterkeeper Alliance and Bonefish & Tarpon Trust sent a letter to Bahamian Prime Minister Hubert Minnis earlier this month opposing the planned drilling.
Among the concerns expressed in the letter, the organizations mention the lack of a cumulative impact analysis, which they say is “a basic component of any Environmental Impact Assessment.”
The organizations say that the EIA for this particular exploratory drilling project “is at times referring to a single exploratory well, and at times a series of three exploratory wells, but it completely fails to show how it relates to a full drilling program that includes production and pumping of oil at multiple locations, as well as storage and transfer of crude oil from producing wells.”
The Bahamas Ministry of Environment and Housing didn’t reply to requests for comments on the issues raised by advocates about the environmental impact assessment of the Perseverance No. 1 well drilling project.
Though President Donald Trump signed an executive order earlier this year extending a ban on oil drilling off the Florida coastline, advocates argue that the exploration areas in the Bahamas are just too close. They also say the archipelago is in the path of hurricanes and tropical storms that will only become more intense as a result of climate change.
“Please let the Bahamas continue to be known for pristine waterways and a commitment to a sustainable economy, not dirty fossil fuels or another tragic, uncontrolled and economically devastating oil disaster,” the organizations wrote in the letter to Minnis.
An exploratory well is an initial step to check the size and volume of oil deposits in a basin or production area. BPC said that Perseverance No. 1 is a “potentially basin-opening well, with the kind of scale and associated value uplift exposure rarely offered outside of oil majors.” The company said earlier this year that preliminary seismic testing showed the area has potential oil reserves of more than 2 billion barrels.
As the Bahamas struggles to recover from the damage caused by Hurricane Dorian, the monster storm that struck parts of the archipelago with punishing 185 mph sustained winds and 25-feet storm surges in September last year, oil production has emerged as a way to boost economic activity and create jobs.
The storm caused an estimated $3.4 billion in damage, according to a November 2019 report by the Inter-American Development Bank. The economy’s rising debt and persistently high unemployment were exacerbated by Dorian, the IDB said. The COVID-19 crisis further depressed economic activity in the islands as the abrupt halt in tourism caused unemployment to jump and GDP to fall to record low levels.
The argument for economic diversification by investing in the oil and gas industry is gaining strength, especially after ExxonMobil discovered large offshore reserves near Guyana in 2015. Caribbean countries such as Jamaica, Barbados and Grenada have increased efforts to test their basins in recent years. Cuba and Trinidad and Tobago are already producing oil from offshore fields, and the Dominican Republic last year organized its first licensing round for oil exploration contracts.
Simon Potter, BPC’s CEO, said oil and gas exploration can be “economically transformative” for the Bahamas.
“It could ultimately contribute billions of dollars in royalty revenues to the national treasury, at a time when the dual impact of recent hurricanes and the COVID-19 pandemic has been especially hard-felt by most Bahamians,” he said in a statement.
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