“Understanding Mobile’s economy and its ties to the energy sector is essential to preparing and planning for our continued growth and prosperity,” said Bill Sisson, the chamber’s president and chief executive officer, after “Economic Impact of the Energy Sector and Petroleum Tank Storage Industry on Mobile County” was presented to the chamber’s board of directors, Partners for Growth steering committee and energy committee members.

The $30,000 study, conducted by Auburn University Montgomery economist Keivan Deravi and AUM Senior Program manager Barbara Buchanan, was commissioned by the chamber’s nonprofit foundation. Specifically, the study examined the area’s oil and gas sector – both onshore and offshore – as well as chemical manufacturing as it pertains to the industry, oil storage and coal activity.

Connectivity Issue

The study’s release comes within weeks of anticipated recommendations by a three-person subcommittee on what to do with oil storage tanks in Mobile.

Sisson contends, however, that the oil tank issue cannot be viewed singularly but rather as part of the county’s broader energy sector.

“This study makes clear that there is a connectivity as it relates to energy and that extends to everything from storage tanks and our refineries to industry and the Port of Mobile.

None of these stand alone,” he said, noting the chamber has – for nearly a decade – supported a “comprehensive federal energy policy that will increase the supply of energy in a manner that is safe and protective of the environment; improves the regulatory climate; and promotes comprehensive energy conservation and encourages research and development of alternative energy sources.”

Specifically, the report indicates:

• National spending in oil and gas industry infrastructure increased 60 percent from $56.3 billion in 2010 to nearly $90 billion in 2013.
• There is an additional estimated $890 billion in oil and gas infrastructure investment planned in the U.S. from 2014-2025, and Mobile’s economy will be impacted because of it.
• Shutting down Mobile’s oil and gas industry would have unintended consequences for the operation and maintenance of the Port of Mobile, including the loss of federal dollars tied directly to tonnage for necessary dredging.

Oil Storage Tanks Revisited

At issue are the recommendations released in April by an ad hoc committee after American Tank and Vessel Inc. of Mobile proposed a 32-tank project near the historic Africatown community. The project has since been withdrawn.

The ad hoc committee’s recommendations, now under review by three-member subcommittee, recommended that storage tanks be developed between 1,500 feet and a half-mile from residential areas and existing oil tank developments.

Prohibition of companies storing petroleum products that are not used locally, thereby preventing tar sands oil shipped from Canada from going inside the facilities, is also recommended as are the following:

• Minimize projects intended as a “flow through” to remote destinations.
• Recommend capacity limitations on new tank development.
• Prioritize public health while limiting impact to the environment.
• Require a plan for a disaster scenario.
• Demonstrate a significant impact to the local economy.
• Contribute to the aesthetic vision for the community.

Meanwhile, the Mobile City Council, in December, pushed for a moratorium on new oil storage tank facilities after Arc Terminals pursued an oil unloading terminal with the Canadian National Railway near the GM&O building.

Although the moratorium was not granted, the council did vote a temporary requirement instructing new proposals for oil storage tank facilities to go through them, and not the Planning Commission, and no new developments have come before council members since the change was made on New Year’s Eve.

Sisson said the chamber has been vocal from the beginning about opposing any moratorium on additional oil storage tanks, but he said several of the ad hoc committee’s recommendations go “far beyond national and industry standards.”

“We’re not opposing the recommendations, but we are being cautious because some of the recommendations call for immediate improvements to existing tanks, and we have some questions about the amount of time that would be allowed for those improvements to be made because they are well above and beyond industry regulations and could be prohibitively expensive to existing industry,” he said.

Continued Growth

Above all, Sisson said the chamber wants to make certain the Mobile area receives its fair share of the anticipated $890 billion in oil and gas infrastructure investment planned across the nation between now and 2025, as well as the accompanying jobs.

In turn, the commissioned study, he said, estimates the economic impact of the area’s energy sector and its impact on the chamber’s six primary recruiting targets: aerospace, healthcare/biomedical, manufacturing, oil and gas exploration, maritime and transportation/distribution.

“Nearly all of these industry clusters rely heavily on the availability of affordable and abundant energy options, ” Sisson said. “We certainly believe Mobile can take advantage of this pending energy investment in a safe, fair and balanced manner that will provide opportunities for our citizens and children for years to come.”