New drilling law spares Florida — for now

A compromise by Florida that led to the opening of a large chunk of the Gulf of Mexico to oil and gas drilling draws keen interest from Big Oil, but criticism from other sectors.

Under a new law that opens 8.3 million acres in the Gulf of Mexico to offshore drilling, four coastal states — Louisiana, Texas, Alabama and Mississippi — will get 37.5 percent of the royalties to fund coastal protection and conservation efforts.

Although Florida is closer to the drilling area than the other states, it won’t get a dime of that revenue.

What Florida will get is a reprieve of sorts. The law, signed by President Bush on Dec. 20, extends until the year 2022 a buffer zone against drilling along Florida’s west coast.

Florida’s existing protections — jealously guarded by a diverse section of Floridians from environmentalists to real estate developers to tourism interests — were set to expire in 2012.

While Florida has a long history of fighting any drilling in the Eastern Gulf of Mexico, some advocates say the law was the best the state could hope for in the face of intense pressure to find new energy sources. And it will be several years before the new area of the Gulf can be exploited.

But many environmentalists are fuming that such a big swath in the U.S. Gulf has been opened to drilling. They say the risk of an oil spill — along with the impact of routine discharges related to drilling — poses too great a threat to Florida’s precious coast, which is environmentally sensitive and a huge engine of tourism and real estate development.

Under the law, the no-drill barrier stretches 125 miles off Pensacola, some 235 miles from Tampa and nearly 325 miles off Naples. The area east of the Military Mission Line, where U.S. troops practice, is also off limits to rigs.

”Some argue more could have been done for Florida,” said Florida Republican Sen. Mel Martinez when the legislation he was pushing passed Dec. 9. “Others protest that Florida is afforded far too many protections.”

Now crude oil prices have plunged by a dramatic 31 percent since they hit a record high last July and put pressure on Congress to rethink bans on offshore drilling.

NO QUICK FIX

But few believe the offshore drilling authorized by the legislation will play any role in lowering fuel prices any time soon.

Once the government doles out the oil and gas leases, it typically takes another four to seven years for oil and gas production to begin, according to the American Petroleum Institute.

Early next fall, the Minerals Management Service, the arm of the Interior Department that administers offshore leases, will put some 2 million acres up for grabs in the Gulf.

That patch, which has already cleared the hoops of an environmental review, was slated for leasing between 2007 and 2012 even without the new law.

The MMS says it will immediately begin an environmental review of a second section — some 580,000 acres located 125 miles from the Florida Panhandle. The agency plans public hearings in Florida and elsewhere, though none have been scheduled so far. A third section called 181 South Area, comprising 5.8 million acres, will be put through an environmental review later, MMS says.

The agency expects keen bidding from oil companies — especially for the natural gas potential. MMS estimates the area opened under the law holds 5.831 trillion cubic feet of gas and 1.257 billion barrels of oil. A barrel equals 42 gallons.

FUELING THE FUTURE

Drilling advocates say that is enough oil to fill the tanks of 1.7 billion cars for a 400-mile trip and enough natural gas to generate electricity for the state of Florida for nine years.

Once the leases are awarded, the oil and gas firms must lay out details of their exploration and development plans. After the federal government clears those plans, they can begin exploratory drilling.

”Everyone is very excited. I think all the companies will look at the area with interest,” says Karen Matusic, a spokeswoman for the American Petroleum Institute in Washington. “It’s not very often we get to drill in areas that have been off limits. ”

The Florida Keys and Florida’s east coast aren’t covered by the law, but they remain protected until 2012 under prior bans on drilling. But that doesn’t mean the waters near the Florida Keys will be rig-free. Under a 1977 treaty with the United States, Cuba has an Exclusive Economic Zone that reaches to within about 50 miles of Key West, and it has been auctioning blocks in the Florida Straits to foreign firms interested in oil and gas exploration.

Environmentalists assert the oil companies exploited high gasoline prices and worries over U.S. energy prospects to justify risky expansion of drilling in the Gulf and passage of the new legislation.

”I’m not being dramatic when I say it breaks my heart,” says Linda Young of the Clean Water Network of Florida. “They can drill to their heart’s content, and it’s not going to lower gas prices. The oil companies will keep trying to expand. They’ll never stop until they’re everywhere, like in Alabama and Louisiana, right up to the beach.”

The bill — rushed through in the final hours of the last Congress — followed two years of relentless lobbying by big oil to lift a ban on new offshore drilling.

PRESSING ISSUES

With gasoline topping $3 a gallon last summer and rising strife in the Middle East, the argument gained momentum in many corners as Congress struggled with the nation’s dependence on foreign oil.

The biggest push came from Sen. Mary Landrieu, a Louisiana Democrat, who was intent on getting a share of offshore oil royalties to fund post-hurricane restoration projects.

The royalty-sharing helped advocates to pitch the bill as environmentally balanced, although many interests objected to funneling revenue to just four states.

Until the November election, the oil industry was hoping to get even more. The House had passed a separate bill that would have opened virtually the entire U.S. coast to drilling 50 miles beyond the shore — empowering states to opt for boundaries of 100 miles or even less than 50 miles.

SENATE SUPPORT

Despite heavy lobbying, the industry couldn’t muster support for that measure in the Senate.

Still, big oil’s momentum persuaded Martinez in July to strike a deal with then Senate Majority Leader Bill Frist, R-Tenn., and Sen. Pete Domenici, R-New Mexico, then chairman of the Senate Energy Committee, to back the more modest drilling measure — so long as it extended protections along Florida’s Gulf coast until 2022.

”After the relentless attempts and growing pressure in Congress to open drilling as close as 50 miles from our coast, this agreement gives Floridians the concrete assurances we need that our coasts are protected now and well into the future,” Martinez said in July.

Sen. Bill Nelson, who was so against drilling he had filibustered in 2005, also came to support the compromise.

”Extending protections for the Outer Continental Shelf is a highly volatile issue,” said Bridget Walsh, the Florida Democrat’s deputy legislative director. “If you have something in hand to provide your state with advantages, you have to take it. Even getting this passed in the environment in Congress was miraculous.”

But many environmentalists say such compromise was unnecessary. Florida was already protected until 2012 under existing drilling bans, they say, and with Democrats taking control of both houses this year, oil interests likely face a tougher audience.

”I think Martinez and Nelson thought we were going to get something bad,” because of the bill that had passed the House, says Susan Glickman, a Florida consultant for the Natural Resources Defense Council. ”Once the election happened, it didn’t seem necessary to go forward” with the Senate bill.

”Senators Nelson and Martinez back in the summer agreed to this, saying a compromise bill was not as damaging as the House bill, but we’re in a different environmental climate now,” says Tiernan Sittenfeld, legislative director of the League of Conservation Voters in Washington.

With the Democrats in charge of Congress, she adds: “It’s like snatching defeat from the jaws of victory.”

Reaction has been split in Florida’s tourism industry. ”We don’t want to be like Texas, where you go to the beach and get black tar on your feet,” says Keith Overton, a vice president at TradeWinds Island Resort in St. Petersburg Beach. Still, he added, the new law “sounds like a good compromise.”

Greg Nicklaus, an owner of the Sirata Beach Resort, also on St. Petersburg Beach, says, “I’m not sure of the necessity of putting it forward when they did.”