Agenda 12/16/2008 Item #16F 6
Agenda Item No. 16F6
December 16, 2008
Page 1 of 38
EXECUTIVE SUMMARY
Recommendation that the Board of Connty Commissioners adopt a Resolution in support
of the tourism industry position on drilling for natural gas and oil off the shoreline of
Florida.
OBJECTIVE: For the Board of County Commissioners to approve a resolution in support of
the tourism industry position on offshore drilling for natural gas and oil off the coast of Florida.
CONSIDERATIONS: There has been a great deal of discussion both nationally and within the
State of Florida on the merits of drilling for gas and oil in the Gulf of Mexieo. As a coastal
tourism destination, this issue has major impact on our current and future ability to promote our
most important visitor amenity- Collier County's award-winning beaches.
The Florida Association of Convention and Visitors Bureaus (F ACVB) held a workshop on the
subject in September with representatives of the oil and environmental community. The FACVB
Board has now adopted a position on this subject that is attaehed to this Executive Summary.
In short, F ACVB endorses state and federal energy policies allowing the production of oil and
natural gas from existing leases within the Gulf of Mexieo out of sight of Florida's eoast - at
least 30 miles offshore - under the following conditions:
-
I. Any Florida offshore drilling must be a component of a comprehensive energy policy
dedicated to reducing America's dependence on foreign oiL
2. Produetion facilities must incorporate the most advanced zero discharge natural gas and
oil production systems.
3. The Federal revenue sharing plan affecting Gulf of Mexico resomces, which currently
does not include revenue to the state of Florida, must be ehanged by the U.S. Congress to
include signifieant revcnue to Florida.
4. A five-year moratorium on new leases in the eastern Gulf of Mexico must be established
so State officials can cvaluate oil production safety and impact on Florida's natural
resourees. This moratorium should permit exploration by scismic and geophysical
scientific testing to identify potential future oil and natural gas reserves.
5. The military mission of the U.S. Department of Defense must have first priority in the
Gulf of Mexico.
ADVISORY BOARD RECOMMENDATION: The Collier County TDC reviewed this
F ACVB position on offshore drilling at their November 24,2008 meeting and recommended ( 7-
I) that the County Commission adopt a Resolution supporting the FACVB position, with
provision # 4 deleted whieh conccrns the establishment ofa five-year moratorium on new leases
in the eastern Gulf of Mexico.
,-
FISCAL IMPACT: There is no immediate fiscal impact to this discussion. However, possible
environmental damage to our beaches and inlets from an offshore oil disaster could have
enormous finaneial impact on tourist tax funds in the future.
--T
/\;;enda Item ~~o. i 6:=6
December 16, 2008
Pa;18 2 of 38
GROWTH MANAGEMENT IMPACT: There is no impact to the Growth Management Plan
related to this action.
COUNTY ATTORNEY FINDING: This item has been reviewed and approved by the County
Attorney's Office. This item is not quasi judicial, and as such cx parte disclosure is not required.
This item requires majority vote only. This item is legally sufficient for Board action. - CMG
RECOMMENDATION: Staff requests that the Board of County Commissioners adopt the
Resolution in support of the F ACVB position on offshore drilling for natural gas and oil as
recommended by the TDC and authorize the Chairman 10 sign the Resolution and transmit it to
FACVB.
PREPARED BY: Jack Wert, Tourism Directur
-
Page I of 1
Agenda Ilem 1\)0. 16F6
December 16, 2008
Page 3 of 38
COLLIER COUNTY
BOARD OF COUNTY COMMISSIONERS
Item Number:
Item Summary:
16F6
Recommendation that the Board of County Commissioners adopt a Resolution in support of
the tourism Industry position on drilling for natural gas and oil off the shoreline of Florida.
Meeting Date:
12116/200890000 AM
Prepared B)'"
Jack Wert
Tourism Director
Date
County Manager's Office
Tourism
1213120082:45:25 PM
Approved By
Jack Wert
Tourism Director
Date
County Manager's Office
Tourism
12141200812:47 PM
Approved By
Colleen Greene
Assistant County Attorner
Date
County Attorney
County Attorney Office
1214/20081 :06 PM
Appro\-'cd By
OMB Coordinator
Applications Analyst
Date
Administrative Services
Information Technoiogy
12/4120082:05 PM
Approved B)""
John A. Y onkosky
County Manager's Office
Director of the Office of Management
Date
Office of rll'ianagement & Budget
1214;20085:33 PM
Approved By
James V. Mudd
County Manager
Date
Board of County
Commissioners
County Manager's Office
12/5/20085:52 PM
file://C:\AgendaTest\Export\ 118-December%20 16.%202008\ 16.%20CONSENT%20AGE... 12/1 0/2008
-----,-.""--~,--_._-- '--T-
Agenda :tem No. 16F6
Decsmber 16, 2008
Page 4 of 38
RESOLUTION NO. 2008-
A RESOLUTION OF THE COLLIER COUNTY BOARD OF
COUNTY COMMISSIONERS SUPPORTING THE
FLORIDA A.sSOCIA TlON OF CONVENTION AND
VISITORS BUREAU'S (FACVB) POSITION ON
OFFSHORE DRILLING FOR OIL AND NA TURAL GAS.
WHEREAS, Florida's economy depends on its multi-billion dollar tourism industry.
Over 84 million visitors came to Florida in 2007, and they generated over S65 billion in taxable
sales. Tax revenues from tourism that year exceeded $4.0 billion. Over 991.000 people were
employed by the tourism industry in 2007; and,
WHEREAS the Naples, Mareo Island, Everglades Convention & Visitors Bureau
estimates 1.4 million tourists visited Collier County in 2007. The total visitor expenditures
exceeded $1. I billion. The direct economic impact f)'om visitors supported over 31,000 jobs and
over S897 million in tourism wages. The local hotel tax alone exceeded S14.5 million during
fiscal year 2007; and
WHEREAS, the risk to Florida's economy posed by oil and natural gas disaster off
Florida's eoast could be substantiaL For example, a small oil spill in the Gulf of Mexico, off
Collier County could be devastating to Collier's coastline, our most important visitor amenity;
and
WHEREAS. reeent improvements and advanced safeguards in zero discharge technology
instituted by the oil and gas industry has significantly reduced the potential impact to Florida's
beaches; and
WHEREAS, tax revenues generated from Florida's growing tourism industry are critieal
to continued funding of essential governmental services, including transportation, schools, and
public safety; and
WHEREAS, The Florida Association of Convention and Visitors Bureaus (FACVB) after
carefully considering all factors, endorses state and Federal energy policies allowing the
production of oil and natural gas fi'om cxisting leases within the Gulf of Mexico out of sight of
Florida's Coast with certain conditions; and
WHEREAS, a comprehensive, long term energy poliey, including conservation,
efficieney, renewable and alternative fuels and increased domestic oil and natural gas production
is essential in maintaining a healthy and vital FIOlida economy: and
WHEREAS, the Collier County Tourist Development Council (TOe) carefully
considered the F ACVB proposal at its Novcmbcr 24, 2008, meeting and recommends that the
Board of County Commissioners accept the FACVB proposal with thc exception of provision
[our on a mandatory moratorium; and
Agenda Item No. 16F6
December 16, 2008
Page 5 of 38
WHEREAS, the Board of County Commissioners has reviewed the TDC
recommendation and the F ACVB proposal and finds that the County Commissioners are in favor
of supporting the F ACVB proposal with the exception of the moratorium as recommended by the
TOe.
NOW THEREFORE, BE IT RESOLVED, that the Board of County Commissioners of
Collier County supports the F ACVB position on offshore oil and natural gas drilling, minus the
five year moratorium on new leases in the eastern Gulf of Mexico provision.
BE IT FURTHER RESOLVED, that the Chairman of the Board of County
Commissioners of Collier County shall execute and transmit a eopy of this resolution to the
Florida Assoeiation of Convention and Visitors Bureaus as evidence of the County's support of
the F ACVB position on offshore drilling.
THIS RESOLUTION ADOPTED this _ day of
second and majority vote favoring same.
2008 after a motion,
DATED:
ATTEST
DWIGHT E. BROCK, Clerk
BOARD OF COUNTY COMMISSIONERS
OF COLLIER COUNTY, FLORIDA
By:
TOM HENNING, Chairman
Approved as to form and
Legal suffieiency:
Colleen M. Greene
Assistant County Attorney
f"
.~
:::$ ,;"
~",_"."'JI ..J
r"i,_~_')- ~
1~1 ~~ ~
.1,,;} :;,
--
,~genda Item ~~o. 16,:::6
December 16, 2008
Page 6 of 38
FLORIDA ASSOCIATION OF
GIllNVErmCN & VISITORS BUREAUS
Contact: Robert Skrob
Phone: 850/222-6000
For Release
October 29, 2008
F ACVB Endorses
Limited Oil and Gas Production within the
Gulf of Mexico off Florida's Coastline
Tallahassee, FL - After carefully considering all factors, the Florida Association of Convention
and Visitors Burcaus (FACVB) endorscs state and federal energy policies allowing the
production of oil and natural gas from cxisting lcases within the Gulf of Mexico out of sight of
Florida's coast (at least 30 miles offshore). with the following conditions imposed by state and
federal lawmakers:
I. Any Florida offshore drilling must be a component of a comprehensive energy policy
dedicatcd to reducing America's dependence on foreign oil.
2. Production facilities must incorporate the most advanced zero discharge natural gas and oil
production systems.
3. The federal revenue sharing pian affecting Gul f of Mexico rcsourees. which currently does
not include revenue sharing to Florida. must be changed by the U.S. Congress to include
significant revenue dedicated to the statc.
4. A five-year moratorium on new leases in the eastern Guif of Mcxico must be established so
state officials can cvaluate oil production safety and cvaluatc any impact on Florida's natural
resources. This moratorium should pennit cxploration by seismic and geophysical scientific
testing to idcntify potcntial futurc rescrves.
5. The military mission of the U.S. Departmcnt of Defense shall have the first priority in the
offshorc in the Gulf of Mexico.
The FACVB has been monitoring impacts on Florida's tourism industry associated with
recent trends in energy affordability and reliability. The F ACVB recognizes that a
comprchensive, iong-term encrgy policy, including conscrvation, efficiency, renewable and
alternative fuels as wcll as incrcased U.S. domcstic oil and natural gas production. is essential to
maintain a healthy, vital Florida tourism industry.
- more-
www.FACVB.org
Post Office Box 14629 . Tallahasscc. FL 32317. 850/222-6000. FAX 850/222-6002
Agenda Item No. 16F6
December 16, 2008
Page 7 of 38
"Florida's beaehes are our most precious natural resource, and their vitality is essential to
the health of our state's tourism industry and our state's eeonomy." said Robert Skrob, executive
director of the F ACVR "After considering the environmental impacts and risks associated with
offshore oil drilling as well as the importance of energy resources to Florida's tourism industry,
with today's technology, our government should permit oil production within existing leases out
of sight, beyond the horizon as part of a comprehensive strategy for the United States to achieve
energy independence."
The FACVB serves as the single unifying voice for all of Florida's eonvention and visitor
bureaus, providing leadership, insight and direction as we enter a new millennium marked by an
increasingly competitive tourism marketplace. Organized in 1996, F ACVB strives to increase
the overall effectiveness of Florida CVBs' destination management efforts. Its stated mission is
to provide cooperative action to enhance and encourage the growth of Florida's convention and
visitor industry through promoting tourism industry education, enhancing professionalism,
faeilitating the cooperative exchange of information between Florida CVB's, developing an
awareness of legislative issues and unifying the state's CVB industry through publie relations.
# # #
The full3-page position statement of the Florida Association of Convention and Visitors
Bureaus is available at www.FACVRorg
The Florida Association of Convention Visitors Bureaus published an analysis of the
impacts of offshore oil production for its members titled, Comprehensive Analysis of Off,hore
Oil Drilling Debate - A Discussion Tool for Florida '.I' Communities. F ACVB is making that
available to the public at www.FACVB.org.
Page 2 0[2
'.~
.~;"
,jj
II 'ij
;>.:::;;;,.\{'
/\~en,ja item No. 16F6
'- December 16. 2008
Page 8 of 38
FlQRIDA ASSOCIATION OF
CONVeNTION & VISITORS 8UREAUS
...
~
.J
.J
.-
--
Position on Offshore Oil Drilling
Introduction
Serving as the single unifying voice for all of Florida's convcntion and visitor bureaus,
the Florida Association of Convention and Visitors Bureaus (F ACVB) strives to provide
insight and direction on emerging trends that may impact the effectiveness of Florida CVBs'
destination managcmcnt efforts. Energy availability is a key factor in Florida's tourism
industry. Affordable and available fucl makcs it casier for consumers to consider Florida as
their vacation destination.
The F ACVB has been monitoring impacts on Florida's tourism industry associated
with reccnt trcnds in encrgy affordability and reliability. The F ACVB recognizes that a
comprchensive. long-tcnn energy policy, including conservation, efficiency. renewable and
alternative fuels as well as inereased u.S. domestic oil and natural gas production, is essential
to maintain a healthy, vital Florida tourism industry.
Tourism Trends in Florida
During 2007, Florida tourism gencrated $65.5 billion in revenues from 84.5 million
visitors and was responsible for directly employing 99J .300 Floridians. according to VISIT
FLORIDA research. Over thc five-ycar period between 2003 and 2007, revenues increased
21.4 perccnt and visitors incrcascd 11.7 pcrcent. Effectivc marketing efforts combined with
Florida's attractions and natural resourccs continuc to make Florida a favored destination
throughout the world and tourism a pJime contributor to Florida's growing cconomy.
Howcver, thc five-year growth trcnd statistics also indicate a flattening of the growth trcnd
bctwecn 2005 and 2007. In particular, visitor and revenue growth grcw only 0.8 percent
dUling 2007, and visitors arriving via automobilc actually declined 2.3 perccnt during 2007.
It is important to note the cOlTclation bctwcen thc flattening growth in FlOlida tourism and the
concurrent rise in energy costs.
Energy in Florida
Florida's tourism industry heavily relics on consistently afTordable energy from
dcpcndable sources. The state's residents and visitors consume approximatcly 23 million
gallons of gasoline pcr day. morc than 8 billion gallons pcr year. Tn ",irlition to meeting rhe
transportation needs of Floridians, products arc ncccssary to fuel vchicles for more than 40
-. -\ "~
h'"\L /') l
FLORIDA ASSOCl4TIONOF -
~ONVENTIIIN S. \/ISITORS RUREAUS
~
Position on Offshore Oil Drilling
,~.genda Item r~o. 16F6
December 16, 2008
Page 9 of 38
million tourists arriving via automobiles; to fuel eruise ships, fishing and recreational
watercraft; and to fuel the airplanes servicing Florida's numerous airports.
While U.S. demand has slowed over the past decade, global demand for crude oil, the
raw material of most refined transportation fuels, has increased dramatically due to emerging
markets in Asia and other parts of the world. This has led to a tightening of supplies. Many of
the congressional and presidential moratoria that prevented domestic oil and natural gas
exploration and production were either recently withdrawn or expired; however, the long-term
status of the moratoria will probably remain unclear for some time after the eleetions in
November. During the duration of the various moratoria over the previous three decades, our
country's dependence on imported oil has increased from 40 percent to 60 percent of our total
consumption.
Signifieant state and federal legislation and efforts of the Governors Climate Aetion
Team are designed to address global climate change and have established aggressive
renewable fuel mandates for transportation fuels. Florida has been a leader in reeognizing the
importanee of alternative fuels, and this year has mandated that by December 31, 20 I 0, all
gasoline must contain at least 10 percent ethanol. Additionally, federal mandates dictate that
9 billion gallons of renewable fuels must be blended with transportation fuels in 2008,
expanding to 36 billion gallons by 2022. Further, increasing amounts of the renewable fuels
must originate from eellulosic sources beginning in 2011; however, it is questionable as to
whether adequate commercial cellulosic fuel refining plant production will be available to
meet the mandate. No commercial cellulosic product is available in Florida or the United
States at this time.
Florida is eommitted to taking a new direction in energy production, requiring utilities
to meet stringent air emission guidelines amid concerns about global climate change. Florida
utilities have always been more reliant on natural gas for power generation than our
surrounding states; this commitment to clean-burning natural gas will only grow stronger
through the next decade. According to Florida Public Service Commission statistics, total
utility generation capacity that uses natural gas will increase from 29 percent to 44 percent by
2014. Many sources for natural gas fall under the same moratoria that had been issued for oil
produetion; therefore, the industty has had to rely more on imported natural gas to meet
growing demand. Recent tightening of supplies in the natural gas markets, evidenced by the
increased price of natural gas and the subsequent rise in utility rates, ultimately increases
operating costs of airlines, cruise ships, attractions, convention centers and hotels.
FACVB Position on Offshore Oil and Natural Gas
Production
The state and federal governments, along with entrepreneurs and major energy
companies, have made a long-term commitment to the development of alternative energy
sources; the F ACVB endorses the diversification of energy sources, particularly lower carbon
alternative and renewable fuels. as a means to address global climate necessities. However,
petroleum products will remain a key energy source for our countlY as we make necessary
Page 2 of3
1'---"
;- A-
rl~"
~
.f"'" '\ '-\~.....
/ "~) ~
.Agenda :tern No. 16F6
December 16. 2008
Page 10 of 38
FLORWr. A,:tOtl~jIOI' OF -
t;ONVH."IIll.i I;. \/'SITOr.5 ~UO<AlJS
~--
Position on Offshore Oil Drilling
technological advancements so alternative energy sources become cost efficient. Recognizing
that affordable and reliable energy is essential to nourish the future growth of Florida tourism
and the state's economy, the FACVB evaluated domestic oil and natural gas access, including
off Florida's coasts. The FACVB conducted an Offshore Oil Drilling Summit on October 2,
2008, allowing members to discuss issues in depth with representatives from the
environmental community and the petroleum industry. The discussions covered long-term
energy projections, the local and global environmental impaets of drilling, impacts to fishing
industries, advanced drilling and production technologies, mitigation of risks through
redundant systems, regulatory oversight, revenue sharing. impacts of hurricanes, and the
availability of oil and natural gas based on previous seismic and geophysical data.
After carefully considering all factors, the Florida Association of Convention and Visitors
Bureaus (FACVB) endorses state and fedcral energy policies allowing the production of oil
and natural gas from existing leases within the Gulf of Mexieo out of sight of Florida's coast
(at least 30 miles offshore), with the following conditions imposed by state and federal
lawmakers:
1. Any Florida offshore drilling must be a component of a comprehensive energy policy
dedicated to reducing America's dependence on foreign oil.
2. Production facilities must incorporate the most advanced zero discharge natural gas and
oil production systems.
3. The federal revenue sharing plan affecting Gulf of Me xi eo resources, which currently
does not include revenue sharing to Florida, must be changed by the U.S. Congress to
include significant rcvenue dedicated to the state for 1) beach renourishment projects; 2)
alternative energy investments for the state of Florida; 3) tourism promotion to attract
more visitors to Florida to bolster the state's economy and tax collections; and 4) a
catastrophe fund to reimburse Florida for expenses related to any oil release into the
environment as a result of these oil production activitics;
4. A five-year moratorium on new leases in the eastern Gulf of Mexico must be established
so state officials can evaluate oil production safety and evaluate any impact on Florida's
natural resources. This moratorium should pel111it exploration by seismic and geophysical
scientific testing to identify potential future reserves.
5. The military mission of the U.S. Department of Defense shall have the first priority
offshore in the Gulf of Mexico.
Conclusion
Changes in global energy markets have affected thc price and supply of oil and natural
gas and subsequently may have a future impact on Florida's tourism industry. The FACVB
recommends that environmentally responsible exploration and production of domestic oil and
natural gas from current Icases be an essential clement of state and federal encrgy policies.
Experts expect production from existing leascs could commence as early as within 2 years
from the date leaseholders are permitted to proceed.
Page 3 of 3
rr.A(..""'" \/t.p?-
, /$ ~;" _1;> \;~ D-,
-'
FLORIDA ASSOCIATION OF --
CONVENTION & VISITORS BUREAUS
Agenda Item No, 16F6
December 16, 2008
Page 110138
-
-
~- ~-
Comprehensive Analysis of the
Offshore Oil Drilling Debate
A Discussion Tool for
Florida's Communities
October 27,2008
2008 cg Florida Association of Convention and Visitors Bureaus
You have pennission to reproduee this repmt and disseminate it in any foml,
in any quantity providing no alterations, additions or omissions are made.
.;"\genda item r<Jo. 16F6
December 16, 2008
Page 12 of 38
EXECUTIVE SUMMARy.......... ................. .......................................................... .......... 1
FLORIDA'S 70-YEARS OF ONSHORE OIL PRODUCTION HISTORy........................ 3
North Florida Dominates Onshore Oil Production ........... ........... .............. ...3
Oil Production in Florida on the Decline ..................... ..........................4
WHERE OIL COMPANIES WANT TO EXPLORE FOR OIL ........................................ 5
Chevron loses leases for Deslin Dome in thc Gulf ................................................ .................................................6
TWENTY-SEVEN YEAR BAN ON OFFSHORE DRILLING LIFTED............................ 9
President Bush Signs GulfofMexico Energy Security Act (GOMESA).""."" ,""","""""""". '""."""""""""""" ,"",""""""""""""."".""""9
Presidential Ban on Offshore Drilling Lifted """""""""""""""""""""""""". ,"""""","". "",""""""'"" """""""","""""". ,"","""""""""""""" 1 0
Congress Moves to Lift Federal Ban. ..................... ............... ................ ................ ...........10
Congress Will Decide if States Should Have the Authority to Approve or Reject Offshore Drilling ....................11
AS ENERGY DEMANDS RISE, SHOULD WE DRILL'! ...............................................12
EIA Projects Energy Demands Will Rise ."""" '""""'"""""","""""","""""""" ,"","","""""". ."""""""","""" """""""""""""""" ""."" 12
A Rapidly Growing World Demands More Supply"""""""""""""""""""""""""" "","","""""""","""""""","""" "","""".""."",13
Our Depcndence on Oil............ ..................... .......... ............................... ................ .......................... .13
Should We "Drill Here. Drill Now'.' ,"""""","""""". "",""""'"""" "","""","""""","""","""""""""" ,""""."""""""""",14
Offshore Oil Drilling Truths vs, Myths '"""""""""""""""""""""""' "","","",."",""""","""""",""."""". ,"",""."""""""" """"15
RISKS AND IMPACT TO FLORIDA'S NATURAL RESOURCES ...............................17
Natural Seepage Input-! Marc Oil Into the Marine Environment than Spills ...........17
Effects of Drilling off Louisiana's Shores .... ........................ .................... .............] 8
Hurricanes Destroy Platfomls and Spill Oil.. .......................................... ............. . 1 8
Oil Companies: Technological AJvances Have Greatly Reduced Spills .............. ................. ..20
Worth Risking Our Katural Re~ources? ........... _.................................... .....20
Scientist from Sheil Oil Defends Drilling Practices and Procedures ............................. .21
MMS: No Environmental Consequence from Recent Spills ................................................. ..................... .......22
Seismic Surveys May Be Threatening To Marine Animals .................................................. ............... .23
ALTERNATIVE ENERGY SOURCES FOR FLORIDA ................................................ 24
Pickens Plan Advocates Replacing Natural Gas Use with \Vind
........24
i'.genda Item No. 16F6
December 16. 2008
Page 13 of 38
Executive Summary
With our state and national economy facing challenges caused in part by soaring
gasoline prices, offshore oil drilling has become an increasingly important topic for
Floridians. The intent of this report is to serve as a comprehensive and unbiased analysis
of the offshore oil drilling debate, focusing on the issues that affcct Florida and tourism.
Oil and gas have been valuable to the state of Florida throughout its seventy-year
production history. Sinee 1983, when the last well in Florida was drilled on a state lease
in Pensacola's East Bay, Florida laws and federal drilling moratoria have prevented
exploration in state and federal waters. Florida's existing oil fields are declining in
production. However, there are an estimated 3.88 billion barrels of oil and 21.51 trillion
eubie feet of natural gas located in the Eastern Gulf of Mexico, aecording to Minerals
Management Services.
The U.S. Energy Information Administration projects that U.S. demand for
refined petroleum products will grow by over 35 pereent in the next two decades. A
rapidly growing world will require large increases in energy supplies over the next
quarter-eentury. On September 30, 2008, the federal moratorium on offshore drilling
expired. It is now up to Congress to dccide if individual states will get the authority to
approve or reject new drilling.
The potential economic benefits of offshore dlilling are significant. If the Energy
Information Administration's estimate of projected total recoverable oil off Florida's
coasts is correct, Floridians could generate billions of dollars in revenue. Historically,
coastal states have resisted new offshore drilling. There are concerns about the impaet of
oil spills on tourism and coastal industries and the "visual pollution" of oilrigs looming
off the coast. Environmental action organizations maintain that offshore oil and gas
operations have detrimental effects onshore because these operations require roads,
pipelines, and processing facilities on America's beaches, wetlands and coastal areas.
Significarlt advances in oil exploration and production technology has greatly
reduced the risk of oil spills. Through new seismic exploration and extended reach
drilling technologies, geologists can see and survey underground oil and natural gas
deposits more effectively than in days past. Oil exploration and production companies
Agenda item No. ; GF6
December 16. 2008
Page 14 of 38
cite advancements in technology as the main reason why over the last decade, more than
99.9 per cent of oil delivered by tankers has reached its destination in the U,S. without
incident.
2
Agenda Item No, 16F6
December 16, 2008
Page 15 of 38
Florida's 70- Years of Onshore Oil Production History
Florida has a 70-year history of oil and natural gas exploration and produetion.
Florida's first oil field, Sunniland, was discovered by the Humble Oil & Refining
Company (later known as Exxon-Mobil) in Collier County in 1943. The 11,800-foot well
was the first of nine wells drilled in South Florida, and has since produced over 18
millions barrels of oiL Subsequently, eight more fields were found to lie along the
northwest-southeast trend through Lee, Hendry, Collier, and Dade eounties. The highest
producing of these fields were the three Felda fields: Sunoco Felda (1964), West Felda
(1966), and Mid-Felda (1977) in Hendry County. Although these fields are relatively
small, production has been significant. The three Felda Fields together, have produced
more than 54 million barrels of oil since the Sunoeo Felda was discovered in 1964,
These fields, together with the Lake Trafford, Bear Island, Lehigh Park, Raeoon Point
and Corkscrew fields, came to be known as the "Sunniland Trend", extending from the
Everglades National Park through the Big Cypress Swamp in the Gulf of Mexico.
North Florida Dominates Onshore Oil Production
The Florida Panhandle has also been an excellent source of oiL Produetion in the
western panhandle began in 1970, when Exxon discovered the largest oil field east of the
Mississippi River near Jay in Santa Rosa County and then discovered Blackjack Creek
just south of Jay in 1972, Since then, an additional six oil fields have been diseovered in
the western panhandle including Sweetwater Creek (1977), Bluff Springs (1982) and
McLellan (1986). The discovery of these fields, known as the "Jay Trend," established
North Florida as the dominant force in oil production in Florida, and propelled Florida to
the ninth largest oil producing state in the country for a short period of time.]
The production of oil and gas has been valuable. In 1945, Governor Millard F.
Caldwell urged the Legislature to pass regulations that would allow exploration to
continue with "thoughtful and orderly planning." The venture was so successful that
1 Fiorida Department of Environmentai Protection, Florida Geological Survey, 1 YY4
3
Agenda item No. 16F6
December 16, 2008
Page 16 of 38
several million acres offshore in the Gulf of Mexico between Apalachicola and the Keys
were leased, The last well in Florida waters was drilled in 1983 on a state lease in
Pensacola's East Bay'" Since then, Florida laws and federal drilling moratoria have
prevented exploration in state and federal waters,
Oil Production in Florida on the Decline
Throughout Florida's production history, more than 585 million barrels of oil
(almost 25 billon gallons) have been extracted from our state. This oil would be valued at
around 530 billion at $50 per barrel. As of July 2008. only Jay Field and Blackjack Creck
in Northwest Florida's Jay Trend, and a handful of fields in South Florida's Sunniland
Trend are still producing, According to Steve Spencer ofthe Department of
Environmcntal Protection's Bureau of Mining and Minerals Regulation, "The fields are
old, Many of the wells are plugged and abandoned; we're down towards the end," In
2007, FlOlida oil wells produced 5.600 balTels per day, down from 7,800 in 2004 and
l2,DOO in 20D 1. J
: Information provided b:y David Mica. executive din:ctor, National Petroleum Council
~, Florida Depal1l11cnt of Environmental Protection. Mining & Minerals. Florida Oil and Gas
Rq)()rt. 2001-2()(j7
4
,/l,genda Item No, 16F6
December 16, 2008
Page 17 of 38
Where Oil Companies Want to Explore for Oil
The continental Shelf is the shallow extension of landmass that surrounds nearly
all continents and extends to the eontinental slope, where the deep oeean truly begins.
The term "Outer Continental Shelf' (OCS) is a political tenn. Title 43, Chapter 29
"Submerged Lands," Subchapter III "Outer Continental Shelf Lands" of the U,S. Code
governs the OCS, The term "Outer Continental Shelf' refers to all submerged lands, the
subsoil and seabed that belong to the United States and are lying outside of the states'
jurisdiction (nine nautical miles off the Florida coast), the latter defined as the "lands
beneath navigable waters.,,4
The OCS supplies more than 25 pereent of the country's natural gas production
and more than 30 percent of total domestic oil production, The offshore areas of the
United States contain the majority of future oil and gas resourees, It is estimated that 60
percent of the oil and 59 percent of the gas yet to be discovered in the United States is
located in the OCS. Estimates from the Minerals Management Serviees Annual Energy
Outlook indicate that technically recoverable resources currently off-limits in the lower
48 OCS total 18 billion barrels of crude oil and 77 trillion cubic feet of natural gas.5
There are four separate regions of the OCS, including the Gulf of Mexico OCS
Region, the Atlantic OCS Region, the Pacific OCS Region, and the Alaskan OCS
Region. The Gulf of Mexico OCS Region is currently divided into three separate offshore
drilling areas: the Western Planning Area, the Central Planning Area, and the Eastern
Planning Area. The Eastern Planning Area starts on the western coastline of Florida and
extends west to a line that is south of Pensacola, Florida into the Gulf.
<I u.s. Code Collection: Title 43, Chapter 29 "Submerged Lands"
5 U.S. Departmellt of the interior httn://ww\>v.I1lTl).;>.:!.!ov/offsnore/
5
I ,-
/'.\,a8n~a item No. 16[='5
- December 16, 20G8
Page 18 of 38
The MMS estimates that there are 3,88 billion barrels of oil and 21.51 trillion
eubic feet of natural gas located in the Eastern Gulf of Mexico Planning Area. 6
The Eastern Gulf of
Mexico Planning
Area extends along
the Gulfs
northeastern eoast for
,.,"-....~
-.-
r;;di"\::l
some 700 miles, from
Baldwin County,
Alabama, southward
to the Florida Keys,
The area
MMS Gulf of Mexico Region
Planning Areas and Activc Leases
March 19, 2008
cncompasses
! approximately 76
~
million acres, with
I water depths ranging
from tens of meters to over 3,000 meters (9,900 fcet). Seaward of the Statc/Federal
boundary (3 leagues or roughly 9 miles off the Florida coast) the area extcnds southward
for more than 300 miles.
TotalBloclui TotalAcrn Blocks LAaed ""- L.....
Westen Planning Area S,240 28,576,583 1.858 10.396,865
Central Planning Anla 12.370 66.4.52,086 5,359 28,491,798
Eastern Planning Arae 11,486 64,556,650 92 52U20
TotoI. 29,096" 159.585,319 7.309 39,418,583
.1_...II>l'_...D'O......fP~
Chevron loses leases for Destin Dome in the Gulf
Drilling for natural gas and oil has been OCCUlTing in the Eastern Gulf of Mexico
offshore Alabama and Florida for more than three decades, The first of 13 natural gas
and oil lease sales held offshore Florida occurred in 1959 and resulted in the issuance of
23 lcases, Currently, there arc 241 activc leases in the Eastcrn Gulf of Mexico Planning
Area, To datc. over 81 exploratory wells have bccn drilled in the Eastern Gulf of Mexico,
Thirteen wells discovercd natural gas. condensate, and crude oiL ExploratOl)' drilling
statied in the Eastern GulfofMexico in thc mid-1970's with thc drilling of Destin Dome
() hUp:/"v.,'v.'w. rnms .gov/5- year.'P D F s,/jvIIvl SProposedF ina j Prograrn200 7 - 20 12. pd f
6
Agenda item No, 16F6
December 16, 2008
Page 19 of 38
Bloek 162 40 miles south of Panama City, Florida. After two years of drilling and 15 dry
holes, exploration ground to a halt. The 1980's ushered in three Eastern Gulf lease sales
and renewed industry interest in this area, Finally, in the late 1980's, Chevron U.S.A. and
Gulfstar made natural gas diseoveries in the area.
Offshore Drilling Activity In The
Florida Panhandle
\
....
,
I
"
,
I
I
I
_OIlY
i .
Pens:Jcola EER
--- ~;..._._..~..lJ.JR, ~';L'~-LI::r
~ '"' , , ~[IJ ~
,. ' ,'.
-_._,~ CHf\IOCJNS ~ & : ,.. : Lr-
fJlP1J)IIAT/ON cf l3 IEP
---.--- \Nf'LL L-' EP. n !
'::J
_"_,, i
r_-5~~?1n Dcm~______i
-'C" DeSoto Canyon i
"
SClJ.i't.lldUS
~:
Leaend
1. Destin Dome Block 56, Chevron Well No. 001
2. Destin Dome Block 56, Chevron Well No. 002
3, Destin Dome Block 97, Chevron Well No. 001
4. Destin Dome Block 1, Gulfstar Well No. 001
5. Destin Dome Block 2, Gulfstar Well No. 001
6. Pensacola Block 881, Gulfstar Well No. 001
7. Desoto Canyon Block 133, Amoco Well No. 001
8. Destin Dome Block 111, Amoco Well No. 001
In October 1995, 73 oil and gas
leases were returned to the Federal
Government as part of a litigation
settlement. Consequently, no active
Federal natural gas and oil leases
exist off southwest Florida.
Likewise, no active leases exist in
the Straits of Florida Planning Area
or off Florida's east coast (South
Atlantic Planning Area).
In the latter part of 1996, a
development plan was filed by
Chevron U,S.A. and partners on the
Destin Dome 56 Unit. On July 24,
2000, Chevron U.S.A. and partners filed
a lawsuit against the U,S, government
for denying the companies "timely and
fair review" of plans and permits, and an
appeal eoncerned with its Destin Dome
56 Unit. 7 On May 29, 2002, Chevron and Conoco relinquished seven of nine leases in the
unit that were the subject of the litigation, in exchange for $115 million. The remaining
two leases, Destin Dome Blocks 56 and 57 are to be held in suspension until at least
2012, under the terms of the agreement. Under the ternlS of the agreement, the leases
cannot be developed unless approved by both the Federal Government and State of
http:// wwv,,'. gomr. mms.gov/homepg/o ffshorc/egom/ eastern. html
7
/^\genda Item No. j 6t=6
December 16, 2008
Page 20 of 38
Florida. MMS estimates that there are 2.7 trillion cubic feet of natural gas in the Destin
Dome.
8
Agenda Item No, 16F6
December 16, 2008
Page 21 of 38
Twenty-seven Year Ban on Offshore Drilling Lifted
In 1981, Congress adopted the Outer Continental Shelf (OCS) Moratorium, which
prevents the leasing of coastal waters off the Atlantic and Pacific coasts for fossil fuel
development In 1989, after the Exxon Valdez oil spill, Alaska's fishery-rich Bristol Bay
was added to the nearly nationwide moratorium on offshore oil and gas dcvelopment. In
the 1990's, President George H.W. Bush, Sf. used his power under the Outer Continental
Shelf Lands Act to withdraw the majority of the eastern Gulf Coast of Mexico as well as
areas offshore California, the North Atlantie states, Washington and Oregon from leasing
consideration until 2002, President Bill Clinton extended those executive protections
until June 30, 2012. Thus, Florida's authority to regulate offshore leasing in the Gulf of
Mexico OCS Region is limited by the authority designated to it by Congress; within nine
nautical miles in the Gulf of Mexico, 8
President Bush Signs Gulf of Mexico Energy Security Act (GOMESA)
In December 2006, Congress passed and President Bush signed the Gulf of
Mexico Energy Security Act (GOMESA), Instead of affecting all coastal states,
GOMESA applied to areas within the Gulf of Mexico, This law bans leasing in some
areas of the western Gulf of Mexico, partly because of the potential impact on
environmentally scnsitive areas along Florida's coastline, It temporarily halts leasing for
oil or natural gas drilling in any Gulf of Mexieo region east of the Military Mission Line,
which is 234 miles off Tampa Bay and 300 miles off Naples, Florida, 9 The 181 South
Area was included in the 2007-2012 OCS Oil and Gas Proposed Program. In January
2007, President Bush removed the 181 South Area from presidential withdrawal. The
area will be included in the 2009 Central Gulf Sale scheduled for March 2009.
GOMESA opens up 8.3 million acres in the Gulf of Mexico for oil and gas
leasing, which the Minerals Management Service estimates contains at least] ,26 billion
barrels of oil and 5,8 trillion cubic feet of natural gas, Revenue sharing on new areas of
"See US, v, Louisiana, el al. 363 U,S, 1, t29 (1960)
q U.S. Department of the Interior. Minerals Management Services, DeS Five Year Oil and
Gas Leasing Program, January 2008
9
I --''-.
,L\g'2n:Ja :lem ~;O. 16F6
Decembm 16, 2008
Page 22 of 38
production made available by the agreement appropriates 37,5 percent to the produeing
Gulf States, 12,5 percent to the Land and Water Statewide Conservation Fund and 50
percent to the Federal Treasury. 10
Presidential Ban on Offshore Drilling Lifted
On July 14, 2008, President Bush lifted the Executive Order banning the drilling
of offshore oil wells in the United States. At the time~ the move appeared to be largely
symbolic and having no effect on the current regulations because of the prohibitions
imposed by Congress and the executive order signed by George W, Bush, Sr. in 1990.
The Supremacy Clause of the United States Constitution prevented Florida from
interfering with federal drilling prohibitions.
Congress Moves to Lift Federal Ban
On August], 2008, a bipartisan group of senators calling themselves the "Gang
ofTen" announced an energy proposal to allow ofI,hore drilling near Florida, Georgia,
South Carolina, North Carolina and Virginia, This legislation, the Security and Consumer
Protection Act (H,R. 6899), exempts California and the Alaska National Wildlife Refuge.
On September 16,2008, H.R, 6899 passed in the House. If passed in the Senate
and signed by the president, the bill will allow drilling to be conducted 100 miles
offshore, or 50 miles offshore if a state opts-in to allow leasing ofT its coastline by
enacting a state law. H,R, 6889 requires oil companies to develop leases they already
own or lose the opportunity, and strengthens requirements that oil companies produce oil
on federal lands leased for drilling during the initial tenn of their lease, At the same time,
HR 6899 calls for repealing tax breaks for large oil companies and using the money to
create new credits for energy efficiency programs, clean coal and electric-hybrid
vehicles, II
Critics of H,R, 6899. which sOlne refer to as the "drill nothing" bilL point out that
although states cuuld decide ill drill bel\-veen 50 and 100 lniks, ihey would be offered no
HI Information provided by the office of Senator Bill Neison
II GovTrack.us. H.R. 6899--110111 Congress (2008): Comprehensive American Energy
Security and Consumer Protection Act, Gm'Track.lls (database offcdera//cgislatioll)
httr_:/"W\\~\\'.g{1_~1ril~k'll:i/com!n;~~s'biUdDd?bjj1~hl1U-6k99 (accessed Sep 2Y, 20m<)
10
Agenda Item No, 16F6
December 16, 2008
Page 23 of 38
financial incentives, such as a share of oil royalties, for taking the environmental risk of
putting oil and gas rigs off their shores, The bill would let the federal government decide
to drill more than] 00 miles offshore, but drilling supporters note that the distant location
of the areas would make it more diffieult to drill and to deliver oil and gas to shore,
According to John Hoffmeister, fonner president of Shell Exploration and Production
Company, "taxing the oil companies and taking money away from the oil companies,
meaning they cannot invest in new energy, is going to result in less supply."
Congress Will Decide if States Should Have the Authority to Approve or
Reject Offshore Drilling
On September 27,2008, the Department of Homeland Security Appropriations
Aet (H.R. 2638) passed. The continuing resolution to fund the government until next
March did not include a moratorium on oil and gas drilling off the Atlantic and Pacifie
coasts, With the expiration of the moratorium on September 30, 2008 and the presidential
ban on offshore drilling lifted, it is unclear what will happen next. It is up to Congress to
decide if individual states will get the authority to approve or rejeet new drilling. If they
do, there are many tough questions to address, This brings us to the heart of the offshore
drilling debate:
Do the economic benefits of drilling for oil in the Gulf of Mexico outweigh the
economic risks and environmental impact to Florida's natural resources?
I]
r y---"_.
Agenda item No. 16 6
December 16. 20 8
Page 24 of 8
As Energy Demands Rise, Should We Drill?
Trends in energy supply and demand are affected by many factors that are
difficult to predict including energy prices, U.S, and worldwide economic growth,
advances in technologies, and future public policy decisions in the United States and in
other countries. Additionally, changing public perceptions on issues related to emissions
of air pollutants and greenhouse gases and the use of alternative fuels, as well as the
economic viability of various energy technologies all add to the uncertainty of our energy
future. The Energy Infonnation Administrations' forecast and analysis, Annual Energy
Outlook 2008 (AE02008), evaluates a wide range of trends and issues that could have
major implications for U,S. energy markets between today and 2030,
EIA Projects Energy Demands Will Rise
The U,S, Energy Information Administration (EIA) projects that U.S. demand for
refined petroleum products will grow by over 35 percent in the next two decades,
increasing from 18,0 million barrels per day in 1996 to 24.6 million barrels per day by
2020, Natural gas demand is expected to rise even faster, by at least 45 pereent, from 22
trillion cubie feet per year in 1996 to between 32 and 37 trillion cubic feet in 2020,
Actual rates of growth will depend on the effects of ongoing electric utility restructuring,
more stringent air emission controls, advances in transportation technology and
infrastructure, and cff0l1s to minimize the potential impacts of global climate change,12
In 2007, The National Petroleum Council conducted a comprehensive study
considering the future of oil and natural gas to 2030 in the context of the global energy
system, Oil and natural gas now provide nearly 60 percent of the world's energy. and the
demand for energy is projected to grow by 50 to 60 percent by 2030 as populations grow
and expand,
I: Energy Infomlation Administration (US Dept. of Energy) Energy Statistics, Data, and
Analysis. Annuul Encrb.TJ' Outlook, .!()()? & _'(JON
12
Agenda !tem No. 16F6
December 16, 2008
Page 25 of 38
A Rapidly Growing World Demands More Supply
Historically, energy consumption has been coneentrated in the developed world,
where economic activity has been centered. Today, the developed world, represented by
the Organization for Economic Co-operation and Development (OECD)13, uses half of
the world's total energy to produce half of the world's Gross Domestic Product. Many
developing countries are just reaching the point where individual wealth and energy
consumption are starting to accelerate. U ,5, and global energy security depend on
reliable, sufficient energy supplies freely traded among nations, This dependence will rise
with the growth required in oil and natural gas trade, and may be increasingly influenced
by political goals and tensions, With oil and natural gas resources increasingly
coneentrated in a handful of non-OECD countries, producers may increasingly leverage
their assets when dealing with oil companies and consumer nations.
A rapidly growing world will require large increases in energy supplies over the
next quarter-century. Over the next 25 years coal, oil and natural gas will remain
indispensable to meeting total projected energy demand growth, Although the world is
not running out of energy resources, according to the National Petroleum Council, "there
are accumulating risks to the supply of reliable, affordable energy to meet this growth,
including political hurdles, infrastructure requirements, and availability of a trained work
force. We will need all economic, environmentally responsible energy sources to assure
adequate, reliable supply,,,14
Our Dependence on Oil
John Hoffmeister, former president of Shell Exploration and Production
Company, has been outspoken in his views on government policies that place domestic
oil and gas resources off limits. which has caused oil and gas production to fall steadily
for the last 35 years:
13 The OECD (Organization for Economic Co-operation and Development) includes
Australia, Austria. Belgium, Canada, Czech Republic, Denmark, Finland, France,
Germany, Greece, Hungary, Iceland, Italy, Japan, Korea, Luxembourg, Mexico,
Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden,
Switzerland, Turkey, United Kingdom and the United States of America.
14 National Petroieum Council, "Hard Truths: Facing the hard Truths ahout Energy", 2007
13
l:\uenda ~tem No. 16:=6
~ Dec9mber 16. 2008
Page 26 of :;8
'There's an opportunity there, I think to get more revenue for the
federal government, more revenue for state governments. Bring more oil
to the American people, which the oil companies will make profit doing,
so you can grow the oil business in the V,S" and you can lower prices
because we'll have more supply, It's win-win-win:'
"Very little is not touched by oil. The fact is we have chosen it. We
have chosen it and it has created the world's greatest economy, It has
created the world's leading country because of the infrastructure that has
been built, the natural resources that have been put to work and we will
continue to need it for decades to come, You can't fly a plane on wind
power or solar power. not yet. And you ean't really replace the trucking
system in this country nor can you replace what the Department of
Defense needs"
Opponents of offshore drilling, like Dr. Enid Sisskin of Gulf Coast Environmental
Defense, believe that it would take years before we could reap any economic benefits __
increased supply of oil and natural gas. lower prices at the gas pump, smaller utility bills
and potentially thousands of new energy-related jobs, As Dr. Sisskin puts it, "It's not
even going to help uS.lfit lowers [gas prices] at all, it will be by a few cents a gallon,"
Estimates from the Minerals \1anagement Services' Annual Outlook Energy Analysis
also indicate that access to the Pacific, Atlantic, and eastern Gulf of Mexico regions
would not have a significant impact on domestic crude oil and natural gas production or
prices before 2030.15 One reason for this is that oil exploration and development take
years, not months.
Should We "Drill Here, Drill Now"?
Advocates of offshore drilling, like Amelican Solutions, a grassroots
organization nm by fonner Speakel' ofthe House Newt Gingrich, promote a "Drill
Here, Drill Nov/' approach. According to Rick Tyler, a spokesperson for
American Solutions, the idea that dlilling will not provide any shOJi-term relief in
15 For l003. per the EIA's \\lorld Energy Outlook 2005 and the EIA's Intemational Energy
Outlook 20CJ6
14
Agenda Item No, 16F6
December 16, 2008
Page 27 of 38
the price of oil is just one of several myths surrounding offshore drilling. Tyler
believes it comes down to simple economies: "Drilling more now will increase
supplies in the future, and higher supplies lead to lower prices." He maintains that
because the world is currently operating near full capacity, there is very little
slack in the system, so any disruption eauses a spike in the price of oil. With the
way the market is right now, oil investors recognize that demand will continue to
increase and that current supply is limited, and thus they set prices highcr. Tyler
believes that opening up new oil fields in the United States, even if new supplies
will not actually reach our gas tanks for several years, will cause oil prices to drop
because "oil speeulators will see a greater supply ahead and the future of oil is
then less constrained on the supply side."
Offshore Oil Drilling Truths vs. Myths
Another myth, according to Tyler, is that oil companies currently have 68
million acres of leased public lands that contain large amounts of economically
recoverable oil, which could generate 4.8 million barrels a day, so opening up
more land is not necessary, He refutes this, saying, "The estimates on the amount
of oil available in the 68 million acrcs assume that the unused area can produce
the same amount as those acres being used. However, mueh of the land leased to
oil companies has already been explored and detcrmincd not to carry cnough
recoverable oil to justify drilling."
Tyler also advocates drilling for unconventional sources, such as tar sands
or shale oil. He says that the idea that the United States only has a small
perccntage of the world's oil supplies does not hold up to scrutiny. In oil shale
alone, he says, "the U ,S, has approximately 800 billion banels ofrecoverable oil,
over three times the proven reservcs of Saudi Arabia. In the past oil shale was
considered too costly to extract, but according to Tyler, "I f the cost of a barrcl of
oil \vas as high as $90, current technology would make oil shale competitive in
the market."
The potential economic benefits of offshore drilling are significant. If the
Energy Information Administration's estimate of 16 billion banels of projected
15
l\genc~a item ~~o. 16FS
December 16, 2008
Page 28 of J8
total recoverable oil off of the east and west coasts of Florida is correet, Floridians
stand to generate billions of dollars in revenue from drilling. Tyler estimates
somewhere between a low of$35 billion and a high 0[$]47 billion.
16
Agenda Item No, 16F6
December 16, 2008
Page 29 of 38
Risks and Impact to Florida's Natural Resources
Historically, coastal states have resisted new offshore drilling. There are coneerns
about the impact of oil spills on tourism and coastal industries and the "visual pollution"
of oilrigs looming off the coast. Environmental action organizations, like the Natural
Resources Defense Council (NRDC), maintain that offshore oil and gas operations have
detrimental effects onshore because these operations require roads, pipelines and
proeessing facilities to be built on America's beaches, wetlands and coastal areas.
Natural Seepage Inputs More Oil Into the Marine Environment than Spills
The biggest pollution risk involved in offshore drilling is in transporting the oil
back to shore -- by pipeline, barge or tanker. In 2002, the National Research Council
(NRC) ofthe National Academy of Sciences completed its third examination of
petroleum inputs into marine waters worldwide, The report found that marine
transportation was responsible for one-third of worldwide petroleum spillage, about eight
times the amount caused by drilling platforms and pipelines; however, only 3 per cent of
inputs in North Ameriean waters are due to marine transportation. 16
Total petroleum input estimates decreased from 43 million banels per year in
1975 to 9 million barrels per year by 2002, Aceording to the 2002 report, worldwide
offshore oil and gas development is responsible for only 4 pereent of the petroleum in the
world's marine environment. The report goes on to say that natural seepage is the largest
single source of petroleum in the worldwide marine environment, contributing more than
4 million barrels per year, In NOlih America, natural seepage is the largest input,
contributing 63 pereent of total inputs to the marine environment. Municipal and
industrial waste is responsible for 12 percent of worldwide petroleum inputs and 22
percent of petroleum inputs in NOlih American marine waters.
Ih u.s. Department of the Interior, Minerals Management Services, oes Oil Spill racts,
September 2002
17
/\genca 1tem f\lo. i6F6
C'9cember 16 2008
Page 30 of 38
Effects of Drilling off Louisiana's Shores
Louisiana has allowed offshore drilling since 1947, About 172 active rigs dot the
Gulf of Mexico waters off the coast, producing about 79 percent of the oil and 72 percent
ofthe natural gas that comes from drilling off the nation's coastlines. The state gets about
$1,5 billion annually in oil and gas revcnue, a figure that will grow when it starts
receiving part of oil cO!npanies' royalty payments in 20! 7 under federal law.
An estimated 10,000 miles of canals, dug by the oil and gas companies to
transport oil and lay pipeline, crisscross the coastal wctlands of Louisiana,
Environmentalists, like Dr. Enid Sisskin, say the canals and lack of marshland removed
an important natural buffer against storms and amplified hurrieane Katrina's damage.
Hurricanes Destroy Platforms and Spill Oil
In May 2006, the U.S, Minerals Management Service (MMS) issued a news
release stating that as a result hWTicanes Katrina and Rita together, the number of
pipelines damaged was 457 and the number of onshore platfonns destroyed was 113. At
that time, the MMS reported that "Six spills of 1,000 barrels or greater were reported; the
largest of these was 3,625 barrels of condensate, A total of ] 46 spiils of one barrel or
greater have been reported in the Federal OCS waters; 37 of these were 50 barrels or
greater. No shoreline or wildlife impacts were noted from these spills, IJ At the time, there
were no major oil spills attributed to hurricanes Katrina and Rita because the MMS
defines a "major oil spill" as more than 100,000 gallons,
However, on June 23, 2008, the MMS released a revised rep0l1 of petroleum
spills resulting from dan1ages caused by hurricanes Katrina and Rita, In thc revised
report, the MMS identificd 165 spills of petroleum products of one bancl or greater
totaling 14,676 bancls (roughly three-quarters ofa million gallons) that were lost from
platformsl rigs. and pipelines uIl the CeueI'al OCS. Approximately 90 percent ofihc
spillage, 13,214 barrels, was released during the hunicanes, An estimated 4.707 barrels
were lost during Katrina, and 8.507 barrels were lost during Rita from damaged,
I ~ Imp:i :~'.l'0:L m 1l1~~QYL(l_()C RL~o~_';J--,-(J(:)' pr<;,ss(J ~~1.,i11 m
18
Agenda Item No, 16F6
December 16, 2008
Page 31 of 38
destroyed, and lost oes facilities. The intensity of the hurricanes instantaneously forced
the dispersion and dilution of the released petroleum into the open ocean, which
precluded the formation of voluminous slicks. Approximately 10 pereent of the spillage
eame from 1,462 barrels in small leaks and chronic seepage from damaged structures
between October 2005 and December 2007, Damaged platforms were responsible for
1,455 barrels of this reported seepage, only 7 barrels were attributed to pipelines. The
ongoing salvage efforts from hunicanes Katrina and Rita oceasionallv cause releases as
- - - -'
structures are cut up and removed and the wells are being plugged and abandoned. These
activities will continue throughout 2008 into 2009 and some final abandonments may not
be completed until 2010.18
The MMS also reports that an estimated 8 million gallons of oil spilled from nine
onshore faeilities in the Louisiana Delta, where large holding tanks were breached by
Katrina.19
On September 30, 2008, the same day the moratorium on offshore drilling
expired, the MMS released details of drilling rigs destroyed by Hunicane Ike. Aceording
to the press release, 52 of the 3,800 offshore oil and gas produetion platforms and 4
drilling rigs were destroyed, However, it is important to make the distinction that there
was only one confirmed offshore oil spill of 8,400 gallons (200 barrels). The larger spills
came from onshore facilities, platform storage tanks on land and from tankers striking
submerged drilling platfOlms -- but less than 10 percent of that came from federal
offshore operations.
18 Minerals Management Service (MMS). Petroleum Spills olOne Barrel and Greaterfi'om
Federal Oufer Continental Shelf Facilities Resultingfrom Damages Caused by 2005
Hurricanes KatrinQ and Rita Including Post-Hurricane Seepage through December
]007. Revised June 23, 2008
h!!I:1 ://\\; ~~:,rn n1~.gQ\(jns:jdcnts/PD F s:/IiurrKAtrin;1RitaS pj I lauc R~~JJJnr.g)OORC omh( 2) - n
df
19 M;erals Management Service, DNV Technical Report
hllir/i\",,::^'w.mm~.2ovitarplTliects/581/44R141 83 MMS Katrina Rita PL Finalo;(l20Reno
rJ:_~;)20Rcv i .pdf
19
,b,genda item No. 16F6
D9"'Ol11ber 16, 2008
Page 32 of 38
Oil Companies: Technological Advances Have Greatly Reduced Spills
According to Lisa Flavin, Senior Policy Advisor for the American Petroleum
Institute (API), "The oil and natural gas industry has worked hard to achieve a
harmonious relationship with the environment and surrounding wildlife, In faet, the
industry has invested nearly S 1 00 billion in emerging technologies that allow offshore
operations to be cleaner, safer and n10re efficient."
Through new seismic exploration and cxtended reach drilling technologies, API's
geologists can see and survey underground oil and natural gas deposits more effectively
than in days past. This improves exploration success rates while reducing environmental
impact. Electronic navigation and physical oceanographic systems also help safeguard
our natural resources and are a large part of the reason why over the last decade, more
than 99,9 percent of oil delivcred by tankers has reached its destination in the United
States without incident. Today's technology, such as automatic shutoff valves on the
seabed floor and mechanical devices that can prevent blowouts caused by uncontrolled
buildups of pressure, has grcatly reduced the risk of oil spills,
Worth Risking Our Natural Resources?
Despite the improvements in tcchnology and better government oversight,
dctractors of oil drilling rcmain unconvinced, According to Dr. Sisskin, "They make it
sound as though there are no more accidents anymore, but that is not true, In 2006, there
were 133 fires and explosions in the Gulf of Mexico, People say we won't have spills
bccause we're using pipelines instead of tankers. That's not true because they will need
tankers for deep sea drilling." The MMS predicts there will be no less than one oil spill a
ycar of 1,000 barrels or more in the Gulf of Mexico ovcr the next 40 years, A spill of
10,000 barrcls or more can be expected cvery threc to four years. Oil is toxic for most
marine species and, according to the National Academy of Sciences, cleanup methods
can only remove a small fraction of oil spiikJ in marine waters.
According to the NRDC, "Drilling muds and cuttings removed from wells contain
toxic metals, including mercury, lead and cadmium. Each well creates 180,000 gallons of
waste and most of it is dumped untreated into sUlTounding waters, Each well also
20
Agenda Item No, 16F6
December 16, 2008
Page 33 of 38
discharges hundreds of thousands of gallons of 'produced water.' Studies show that this
byproduct contains toxic and radioactive pollutants, which can contaminate fish and
marine life consumed by humans. These activities can hurt local communities and
damage economies that depend upon these resources for tourism, coastal recreation and
fi h' ,,"0
IS lng. ~
Scientist from Shell Oil Defends Drilling Practices and Procedures
Dr. Rick van Oort, a scientist for Shell Exploration and Production Company
specializing in well control and drilling fluid application, refutes these assertions.
According to van Oort, "The technology we are using today, rivals NASA and the
technology they are using in space, We put emphasis on training and certification
practices, particularly with respect to well control practices, We do extensive planning for
our wells, and in planning we can mitigate a lot of risks, We use sonar and seismie
surveys to map the seafloor, and we also look for sensitive benthic communities that we
want to stay away from,"
van Oort assures that all stages of drilling are monitored using sophisticated data
sensors on the rigs that send data, in real-time, back to the operations center where there
are experts that analyze it 2417. "As soon as they see something that is not right, let's say
we're entering into an area that has highcr pressure, they'll start alerting the rig to take
action. "
Aecording to van Oort, the drilling fluids' primary functions are cooling and
lubrieating the drill bit and holding the oil, gas and produced water pressures back ~ away
from the surface. There are three types of fluids: seawater-based mud, inhibitor-based
mud, and synthetic-based mud. After a certain depth, seawater-based mud ean no longer
be used, and synthetic-mud becomes the primary fluid. Synthetic mud eontains barite
(barium sulfate), a natural mineral.
The EPA regulates the use of drilling fluids very strictly, says van Oort. "In order
to discharge these muds, they must have verj low toxicity to marine life. They cannot be
contaminated by oil of any kind and the trace metals need to be strictly controlled to very
20 The National Resources Defense Council, Legislative Facts. July 2008
\\i\\/\\,. nrdc .Or!!,iPOj i_ ~y
21
I ,..-'"
i\::;e:-ida item ~~o. 16F6
- December 16, 2008
Page 34 of ~"J8
low values. The EP A also monitors how many cuttings are discharged, "We cannot
discharge cuttings in bulk; if we do, it counts as a spill and goes against our permanent
record, and we are fined by the MMS,"
In response to environmental concerns regarding barite, which contains mercury
and cadmium, van Oort maintains that the allowable amount of mercury is strictly
regulated, The maximum amount of mercury that can be present in barite is one part per
million. and the maximum amount of cadmium is three parts per million, Lead and
copper correlate to mercury and cadmium levels; therefore, if mercury and cadmium are
low, so are lead and copper. Thus, according to van Oort, by regulating mercury and
cadmium, we are regulating all the other trace elements as welL van Oort also maintains
that "the mercury in drilling fluids is not eonverted to methyl-mercury, which is really
dangerous to marine life. Methyl-mercury in the environment mainly comes from
industrial run-off from power plants,
MMS: No Environmental Consequence from Recent Spills
According to the MMS, the loss of hydrocarbons from wells on the federal OCS
during hurrieanes Katrina and Rita was minimized due to the successful operation of the
safety valves that are required to be installed at least 100 feet below the mud line in each
wcllbore, The check valves on pipelinc safety joints automatically activated when
pipelines were breached which limitcd thc potcntiallosscs to thc volumcs within the
damaged sections, All OCS facilities in areas threatened by the stonns' approach were
shut prior to the hurricanes so that oil losses were mostly limited to the oil stored on the
damaged platfornls and rigs or contained in damaged pipeline sections between the check
valves. The hydrocarbons lost during the hun'icanes were thoroughly dispersed offshore
by the hostile sea conditions, which eliminated the potential for oil reaching the shores,
The MMS maintains that there wcre no accounts of cnvironmcntal consequence resulting
from spills from OCS facilities: no spill cuntacts to the shureline, no oiling of marine
mammals, birds or other 'vvildlife, no large volumes of oil on the ocean surface to be
collected or cleaned up, and no identified environmental impacts fi'om any OCS spills
from Hurricanes Katrina or Rita,
12
Agenda Item No, 16F6
December 16, 2008
Page 35 of 38
Seismic Surveys May Be Threatening To Marine Animals
There may be another environmental threat connected with drilling, noise-related
injuries to marine animals, Seismic surveys record the vibrations of the earth. By
recording the time interval between the source of the shock wave and the reflected or
refracted shock waves from various formations, geophysicists are able to define the
underground configurations, According to the NRDC, "Seismic work involves the use of
underwater air guns that generate extremely loud noise -- a single blast is ] 0 times louder
than a rocket launch, and the blasts occur every 10 to ] 5 seeonds for days, weeks and
even months at a time, These sounds carry through the water for hundreds of miles and
have been known to cause permanent hearing loss in marine mammals. They ean disrupt
their feeding, migration, social bonding predator avoidanee, and have been associated
with stranded whales. This past June, Exxon-Mobil had to suspend exploration efforts
near Madagascar after more than 100 whales beached themselves.21 The company has
denied any link between its operation and the stranding,
21 BBe News online report, H7wles stranded off Madagascar, June 9, 2008
bun ://nc\\'s. b hc.~o. ukI2.'~bjL1Iirica/7 44 3 5 59-,5~m
23
Agenda item t.~o. 16r6
December 16. 20CI8
Page 36 of 38
Alternative Energy Sources for Florida
Solar energy is one of the richest sources of energy for the future. One of the
reasons for this is that the energy from the sun is around 35,000 times the total energy
used by humans, (However, about one-third of this energy is either absorbed by the outer
atmosphere or reflected back into space.) Solar energy is presently used on a small scale
for such things as heating honles and swimming pools. On a larger scale, solar energy
could be used to run cars and power plants,
Geothermal energy is an alternative energy source, although it is not resourceful
enough to rcplace morc than a minor amount of our future energy needs. Geothermal
energy is obtaincd from the internal heat of the planet and can be used to generate steam
to TUn steam turbines. This in turn generates electricity, Geothern1al encrgy systems are
more inefficient than other alternative energy sources because of the costs required in
upkeep and the shortage of potential sites.22
Pickens Plan Advocates Replacing Natural Gas Use with Wind
Wind power is another alternative encrgy sourcc that can be used to produce
electricity, The powcr that could be produced when a windmill is facing a wind of 10
mi/hr. is around 50 watts, The tins of a windmill rotate in a vertical plane, which is kept
perpendicular to the wind by means of a tail tin, As wind-flow crosses the blades of the
windmill, it is forced to rotate and can be used to generate electricity. Another type of
wind power generator is the two hollow halt~drum-type wind collectors. This wind
collector rotates on a single vertical axis, making this device independent of the wind
direction, which may generate more electricity. 23
In 2008, T. Boone Pickens, an American businessman and advocate for
alternative energy, announced an encrgy policy proposal, called the Pickens Plan. A
major feature of the plan is replacing the 22 percent of the electricity that the United
States gets irom natural gas, which would then allow that natural gas to provide 38
:: Essay by University of Utah graduate student P. Tran entitled, Geothermal Enerb,T)' as an
A ltcrnative Source/or Ellergl' hl!]r(\V~'~\S' ,cc.uliJh.e~h-!i'~pt!2,5J~_60"z_~~,Q, htm,!
~,' Vlintcringharn, F. Peter W. Energy Us(' and th(' Etll'ironment. 1991
24
Agenda Item No, 16F6
December 16, 2008
Page 37 of 38
percent of the nation's fuel for transportation thus reducing dependence on foreign oil.
The Piekens Plan calls for the United States to use its wind corridor in the middle of the
country, which stretches from Texas through the Great Plains to the Canadian border.
25
-'----,-- ,--
;\aenda :tem ~~o. 16F6
~ December 16, 2009
Pa;]8 38 of 38
,~
.J
~
J
....,I
-'
i=LiJRmA ASSOGiAT!€HI! tit: --
C:!H~VErrrrQ!1! 8, VrSiTORS l:;;URE,~~S
~L
'---/' '
1008 :{> Florida Association of Convention and Visitors Bureaus
You have penl1ission to reproduce this report and disseminate it in any fonn,
in any quantity providing 110 alterations, additions or omissions are made,