Out Slicked

A few years from now, when you hop on your fishing boat at Naples Beach and head out three miles or so, you might have to navigate around a few buoy-size shutoff-valve platforms, and—if the water is clear—you might see the contours of underwater rigs and pipelines 30 feet below, on the bottom of the Gulf. Florida is already the nation’s fourth-largest consumer of fossil fuel, but now the fight is on to make the state one of the largest oil and gas producers as well. The battle is on in Tallahassee, and the political and economic fundamentals point toward the oil industry prevailing. For some locally, one question arises: Would drilling off our shores pose any risk to Southwest Florida?

“Concerned” may be an understatement to describe the players in the billion-dollar tourism industry in Southwest Florida. Jack Wert, executive director of the Naples, Marco Island and Everglades Convention and Visitors Bureau, evokes images of oil-lump spoiled beaches around Naples, and sunsets littered with drilling rigs on the horizon.

“Look at the Texas and Louisiana coast,” Wert says. “They have daily, ongoing issues such as tar balls. The hotels even put specialty chemicals into rooms so guests can clean their feet.”

But a glimpse at a world oil map makes it clear what kind of pressure Florida’s no-drill resistance is under: Of some 6,500 offshore oil- and gas-production rigs worldwide that pump the fuel from the seabed, more than 4,000 already are in the Gulf of Mexico.

At a time when the United States’ military activity in Iraq has raised awareness about the side effects of rising U.S. dependency on import oil, Florida’s no-drill zone increasingly looks like a leftover from good old times we can’t afford anymore.

All around the United States, the federal government owns the oil in the outer continental shelf, from 3.45 miles to 230 miles from shore, with the exception of Florida’s west coast, where the state owns the seabed from shore to 10.5 miles into the Gulf; the state’s 3- to 10.5-mile zone is what the oil industry is targeting.

In April 2009, the Florida House passed a bill that would have allowed drilling in this historically off-limits zone. However, the measure died in the Senate, due to inaction. The fight now goes into the second round, and it doesn’t look good for drilling opponents.

The two legislators sponsoring a new bill that could open state waters happen to be the two most influential officials: House Speaker designate Dean Cannon and incoming Senate President Mike Haridopolos. What’s more, foremost on legislators’ minds is a budget crunch that won’t be over until at least 2012, according to forecasts.

And the fast-rising use of natural gas is likely to increase the pressure on Wert and his tourism peers.

The oil industry hasn’t wielded the argument yet, but the state is increasingly hooked on natural gas—a byproduct of oil drilling. Since the 1990s, the state’s utilities have been in a dash to the other fossil fuel, which in turn resulted in fast-rising dependency. While the oil share in FPL’s power generation mix declined over the years to currently 8 percent, the share of gas skyrocketed from near nothing in the early 1990 to currently 52 percent. FPL plans to increase the share of natural gas to nearly 70 percent by 2017. That translates to fast-rising import needs by the state’s biggest utility—from 450 million cubic feet of natural gas in 2008 to a projected 600 million cubic feet by 2017.

So it shouldn’t come as a surprise if drilling proponents were to argue that we need to get natural gas from sources closer to home.

Having few answers to the state’s fossil fuel addiction, and competing with the promise of billions of dollars in oil revenue, tourism players at the frontlines of the battle against drilling are far removed from the categorical “no” that was their stance throughout decades past.

“Our chances of winning are probably not good,” Wert admits. “For legislators, it will be a money issue.”

MONEY MATTERS
A study by Orlando’s Fishkind & Associates predicts state revenues from severance taxes and royalties could amount from $2.3 billion to $12 billion a year, depending on the quantity of oil and gas found and the methods the state chooses for compensation. The study was commissioned by Florida Energy Associates, the oil-industry consortium leading the charge to open state waters for drilling.

In the wake of the real estate crash, Sarasota, Lee and Collier counties have redoubled efforts to diversify their local economies, and alternative energy research and development have become objects of desire for economic development officials and venture capital investors alike.

Some environmentalists and economists argue that the billion-dollar investments necessary to get offshore drilling going will compete for the same funding and suck away resources from renewable energy initiatives.

Florida Energy Associates, however, implies that oil revenues will help finance renewable energy research. “We have no way to fund renewables unless we get another revenue stream, and this could be it,” says David Rancourt of Southern Strategy Group’s Tallahassee office. Along with Frank Matthews of Hopping Green & Sams, Rancourt is heading up Florida Energy Associates.

The Florida Solar Energy Industries Association seems to be buying into that theory. The group endorsed opening state waters to drilling in the hope of getting a deal that assigns a fixed, permanent share of oil revenues to solar research and state programs that directly subsidize the purchase and installing of solar equipment. The largest such program did not receive state funding in 2009.

The Fishkind & Associates analysis estimates that offshore drilling would directly and indirectly inject $7 billion to $41 billion into Florida’s economy and create 40,000 to 231,000 new jobs.

“Offshore drilling would create many types of jobs, from manual labor to highly sophisticated technical jobs,” says David Mica, executive director of the Florida Petroleum Association. Although most oil engineers and geologists would come from out of state, depending on the size of oil discoveries, some would relocate, and Florida companies could provide surveying, environmental, archeological and other consulting services.