Offshore Drilling: Just Over The Horizon

In December, when Congress moved the line on offshore drilling closer to Florida’s shores, it was touted as a major victory for Florida’s tourism-based economy because the measure preserved a significant no-drilling zone along Florida’s coastline.

But the area opened to oil and gas drilling was just a fraction of the publicly-owned waters the industry hoped to gain access to in the eastern Gulf of Mexico.

Mark Ferrulo, head of Environment Florida, feared that Congress’ decision to lift the 25-year ban on drilling in waters west of Florida would trigger more attempts to move the line on drilling even closer to Florida’s coast .

His fear was realized last month, when lawmakers filed legislation that would allow exploration and production as close as 45 miles from Florida’s beaches.

That’s a sizable reduction of the buffer zone approved in last year’s compromise bill. In that measure, U.S. Sens. Bill Nelson, D-Orlando, and Mel Martinez, R-Orlando, negotiated a buffer zone that runs 235 miles west of Tampa Bay and 125 miles south of Pensacola.

It was an ill-advised compromise the oil industry is now trying to exploit, Ferrulo said.

“We warned Florida’s congressional delegation that no matter how much they compromised, the oil industry and their cronies in Congress will never be satisfied,” Ferrulo said.

The latest proposal has reignited the debate over offshore drilling in the eastern Gulf of Mexico, a place that holds significant oil and gas reserves that could ease the energy crunch facing Florida and the rest of the nation. But for many Floridians, the potential impact on tourism and the environment is too great a price to pay.

Under the proposed 45-mile buffer, drilling rigs and production platforms would not be visible from Florida’s shores, said Barry Piatt, spokesman for U.S. Sen. Byron Dorgan, D-N.D., who co-wrote the bill.

“The boundary is beyond the curvature of the Earth, so people in Florida won’t be looking at an oil derrick on the horizon,” Piatt said.

Last year, tourists and vacationers spent $65 billion while visiting Florida’s attractions, including its beaches and resorts, according to Visit Florida, the state’s official marketing arm.

Many of those dollars would vanish and businesses would suffer if Florida’s beaches become caked with oil from a major oil spill, a real possibility if drilling is expanded to 45 miles from Florida’s coastline, Ferrulo said.

“It’s not a matter of whether there’s going to be a major spill; it’s a matter of when,” he said. “It will only take one.”

But drilling proponents say the risks are being exaggerated and that exploration and production, like ethanol and wind power, should be part of any national energy plan that aims to reduce America’s reliance on Mideastern oil and satisfy growing demand.

“We need to continue our quest to find more oil and gas,” said David Mica, head of the Florida Petroleum Council. “We are at historic low levels of surplus production because of the growth of petroleum use in India and China.”
Potential Reserves

The problem is the United States contains just 2 percent of the world’s oil reserves but consumes a fourth of what the world produces.

The bill before the Senate, known as the Security and Fuel Efficiency Energy Act of 2007, was introduced by Dorgan, a Democrat, and Republican Sen. Larry Craig of Idaho. In addition to expanded drilling, the bipartisan bill calls for raising gas mileage standards for vehicles and incentives for the production of ethanol and biodiesel.

“Their point is that we need to start thinking differently,” Piatt said. “It’s time for everybody to start chipping in, including Florida.”

Nelson and Martinez have pledged to fight the measure, saying there’s not enough oil and gas off Florida’s west coast to justify the risk of exploration and production.

However, geologist Richard Nehring, who recently led an evaluation of the world’s oil and gas resources for the American Association of Petroleum Geologists, said the waters off Florida’s west coast contain 5 trillion to 10 trillion cubic feet of natural gas.

“You’re talking about a decade’s worth of supply for Florida,” Nehring said. “It could be more than that.”

Nearly 30 percent of the electricity consumed in Florida is produced with natural gas. That figure is expected to rise to 44 percent by 2017, according to the Florida Department of Environmental Protection.

“The need for additional resources is very significant to Florida,” Mica said.

The expanded drilling proposal would boost U.S. oil production by 1 million barrels a day and gas production by 1.5 trillion cubic feet a year, Piatt said. The nation consumes about 21 million barrels of oil daily and about 22 trillion cubic feet of gas annually.

Altogether, the outer continental shelf holds an estimated 420 trillion cubic feet of undiscovered natural gas and 86 billion barrels of undiscovered oil, according to the federal Minerals Management Service. But more than 80 percent of those offshore properties are off-limits to exploration and production.

“That’s enough oil to fuel 120 million cars for 30 years and enough natural gas to heat 60 million homes for 60 years,” Mica said.
Environmental Impact

Environmental groups, including the Sierra Club and Environment Florida, say the Dorgan-Craig bill poses a threat to Florida’s pristine beaches and ecosystems.

But industry representatives say advances in drilling and production technologies have practically eliminated the risk of a major oil spill. They point to the hurricanes of 2005, which destroyed production platforms and drilling rigs in the central Gulf of Mexico, the heart of the nation’s oil and gas industry.

Despite the destruction, the environmental impact from spills was minor, said Lisa Flavin, exploration affairs coordinator for the American Petroleum Institute.

“That’s a testament to the way technology can protect the environment,” Flavin said. “We like to point to that because that was a 100-year storm.”

Although spills from routine oil and gas production have been small, their effect on the environment is significant, Ferrulo said.

“Each drilling rig discharges thousands of pounds of toxic pollution into surrounding waters. That’s a routine part of the drilling process,” Ferrulo said. “Those spills are having a really serious impact on our marine environment.”

If the bill before the Senate wins approval, production would be several years off because of long lead times to obtain leases and conduct exploratory drilling.

Ferrulo said the Dorgan-Craig bill may help unify Florida’s congressional delegation on the issue of expanded drilling in the eastern Gulf of Mexico. In the past, the delegation’s vote was expected to split along party lines, with most of the Democrats opposing expanded drilling and most Republicans favoring it.

What’s more, the bill hasn’t attracted any sponsors from the Democrat-controlled House.

“That’s one indication it doesn’t have a lot of momentum,” Ferrulo said.

But drilling off Florida’s coasts will be harder to prevent thanks to last year’s congressional compromise, which ended the 25-year ban on drilling in the eastern Gulf.

“They shouldn’t have taken that first step,” Ferrulo said. “That was the camel’s nose under the tent.”
SUPPLY AND DEMAND

ӢThe U.S. consumes about 21 million barrels of oil a day but produces only 8 million barrels. The rest is imported from countries including Canada, Mexico, Saudi Arabia, Venezuela, Iraq and Russia.

ӢThe Gulf of Mexico may hold 56 billion barrels of oil and natural gas equivalent, enough to meet U.S. demand for 7.5 years.

ӢThere are an estimated 86 billion barrels of undiscovered oil and 420 trillion cubic feet of undiscovered natural gas off U.S. shores in the outer continental shelf. More than 80 percent of those areas are off-limits to exploration and production.

ӢU.S. energy consumption is expected to grow more than 25 percent in the next 20 years.

Sources: U.S. Minerals Management Service; Department of Energy