In Florida, Life Really Is a Beach:
Coastline an economic engine that drilling endangers
By JIM DIPESO, REP Policy Director
AN HISTORICAL DOCUMENT: This article first appeared in the C.E.P (Conservative Environmental Policy) Quarterly, spring 2007, Vol 3, #1
Conservatives, better than most, understand the need to manage capital assets conservatively, so they will continue delivering dividends year after year.
For Florida, beaches are capital assets. The state’s 825 miles of sandy beaches draw 60 million visitors whose spending contributes an estimated $40 billion each year to the state’s economy, totaling approximately 7 percent of Florida’s total annual domestic product. About half of Florida’s 1 million tourism-related jobs are supported by beach tourism, a 2004 study prepared by Florida Atlantic University estimated.
Beach tourism spending is the dividend that supports Florida businesses, creates jobs, and strengthens local tax bases. It’s no wonder that Floridians are wary of any proposal that would increase the risk of harm coming to their beaches.
One such risk is offshore oil and gas drilling, and the danger of spills—both chronic and catastrophic—damaging the beaches and driving away visitors. Florida’s conservative political and business leaders have been in the forefront of efforts to keep the Sunshine State’s coastal waters free of offshore drilling rigs and the onshore infrastructure of pipelines and storage tanks.
“RUSSIAN ROULETTE” WITH BEACHES
The rise in oil and gas prices over the past several years has drawn renewed interest in loosening or ending the offshore protections. State Senator Mike Bennett, who represents a district covering five counties on southwest Florida’s Gulf coast, likens offshore drilling to playing “Russian roulette” with Florida’s beaches.
Senator Bennett is sponsoring a proposed amendment to the Florida Constitution barring drilling within 250 miles of the state’s coast. The referendum, if approved by the state Legislature, would go to the voters for ratification in 2008.
The federal government has jurisdiction over marine waters and the seabed beyond three miles, so enforcement of the amendment would be problematic. Nevertheless, Bennett believes it’s necessary for Floridians to send the federal government a message.
The message is that Floridians are not interested in enabling threats to the golden goose of tourism, one of the state’s leading industries. In 2005, the last year for which complete numbers are available from the state tourism office, nearly 84 million people visited Florida.
Beaches are among the more popular destinations for Florida visitors, according to a 2004 study prepared by Florida Atlantic University’s Center for Urban and Environmental Solutions. In three of Florida’s four coastal regions, substantially more than half the visitors hit the beaches. The percentage of tourists going to the beach exceeds 80 percent in the southwest region, which runs from Tampa Bay south to Collier County, and in the northwest region, which covers much of the state’s Panhandle.
Both regions front the Gulf of Mexico, where energy companies believe that troves of oil and gas remain to be discovered and produced. The Minerals Management Service (MMS), an agency within the Interior Department, estimates that the mean quantity of “technically recoverable” oil remaining beneath the Gulf of Mexico Outer Continental Shelf totals 59 billion barrels, or 7.7 years worth of current U.S. consumption. However, 76 percent of the mean estimate is in “undiscovered” reservesmeaning that no one knows for sure.
Likewise, MMS reports a mean estimate that the Gulf of Mexico contains 291 trillion cubic feet of gas, equivalent to about 13 years of current domestic consumption. Like the oil numbers, however, 80 percent of the mean estimated gas is in “undiscovered” reserves.
The Gulf has been the focus of continual skirmishing between Florida lawmakers and pro-drilling counterparts in other states.
The eastern Gulf, Atlantic, and Pacific waters today have two layers of protection from oil and gas drilling:
- a series of congressional moratoria first enacted in 1982 and renewed annually, and
- a presidential directive, first adopted by President George H. W. Bush and due to expire in 2012.
DERRICKS CREEP CLOSER
In 2006 the House passed the Deep Ocean Energy Resources Act, which would have eased the way for drilling within 50 miles of coasts (100 miles for Florida’s Gulf coast). The legislation did not come up for a vote in the Senate.
Instead, in 2006, Congress passed more circumscribed legislation, the Gulf of Mexico Energy Security Act, directing the Minerals Management Service to offer leases in the eastern Gulf’s 8.3 million-acre Area 181 and an area to the south. Leasing is scheduled to begin in March 2008. The law keeps drilling rigs 125 miles from Florida’s coast in the eastern Gulf and 100 miles away in the central Gulf. In addition, the law mandates a drilling moratorium lasting until 2022 in the remainder of the eastern Gulf and in a portion of the central Gulf within 100 miles of Florida.
For Floridians, however, eternal vigilance is the price of protecting their beach assets. This year, a legislative amendment was proposed that would authorize drilling within 45 miles of Florida’s Gulf coast and allow U.S. companies to work with Cuba’s Castro regime to drill in Cuban coastal waters near Florida. Opposition from Florida’s senators led to withdrawal of the legislation, but the sponsors, Senators Larry Craig (R-ID) and Byron Dorgan (D-ND), indicated that they plan to pursue the proposal at a later time.
Proponents of opening up coastal waters to drilling often say that expanding domestic oil and gas production is essential to ensuring energy security. Their premise is open to question for several reasons.
Deepwater production is the last frontier for American oil production, which has been in general decline since the early 1970s. According to a 2006 Congressional Research Service report, deepwater production (defined as 400 meters or deeper) grew from 16 percent to 70 percent of Gulf oil production between 1995 and 2005. In the same period, deepwater’s share of Gulf gas production rose by a factor of 10, to 38 percent.
DEEPWATER PRODUCTION IS COSTLY
There are significant barriers to expanding deepwater production, however. More than 90 percent of leases purchased in deepwater have not been explored, according to the Congressional Research Service report. Costs and the need for special deepwater rigs are the two most significant barriers. Related to costs is the complexity of financing oil exploration.
Still, the Department of Energy projects that deepwater oil production will more than double, to 2 million barrels daily by 2015. Partly offsetting the growth will be projected declines in older onshore and shallow water fields.
On the other hand, fuel demand is projected to rise by 30 percent between now and 2030. Even if high fuel prices dampen demand and stimulate more deepwater production, Department of Energy projections show that America will still have to import half its liquid fuel in 2030. Continued dependence on the global oil market will leave America vulnerable to price volatility caused by supply disruptions and will entangle the U.S. in the politics of the autocratic regimes running oil exporting countries.
Likewise, lifting the moratoria on offshore gas production will not obviate the need for large-scale liquefied natural gas imports over the next two decades, according to a 2003 report from the National Petroleum Council.
EFFICIENCY AND DIVERSITY KEYS TO SECURITY
An energy policy based on sweeping the cupboards bare of domestic oil and gas does more than risk natural assets, such as Florida’s beaches and their $40 billion annual economic dividend. It sends a message that America can complacently delay steps to improve energy efficiency, which is essential for buying time necessary for transitioning to a more diversified, secure energy economy.
A truly conservative energy policy would not sanction endangering the nation’s natural assets to stubbornly enable wasteful consumption of depletable resources. Instead, a conservative policy would focus on building an energy economy that rewards efficiency, lowers environmental and economic risks, and protects the inheritance of future generations.