Now is not the time for Congress and the oil and gas industry to press for leasing in the eastern Gulf of Mexico. Next March would be better.
A collision looms between national interests and Florida’s opposition to assessment and development of the nation’s hydrocarbon resource off its coast. If the clash happens now the Floridian congressional delegation and state government can too easily claim exploitation of Hurricanes Katrina and Rita. While production losses from the storms do highlight the need for more energy from new places, they don’t tell the whole story.
Winter fuels
By March, especially if winter is normally cold or colder, that story will have more poignancy and be more distant from the storms. A cold winter will strain supplies of heating oil and natural gas, both of which represent large, growing, but heretofore little-noticed casualties of the hurricanes. Zooming prices and possible shortage will give winter-fuel consumers reason to ask why the country has denied itself access to the gas potential thought to exist in the eastern Gulf of Mexico. The answer will be Florida.
Also by March, the national economy will be showing effects from the run-up in energy prices. Extent of the damage remains to be seen. But attention to economic health will be intensifying as the government gets serious about paying for its recent spending spree. Pressure will grow to raise tax rates. That will be the time to point out how much revenue the government denies itself by refusing to lease and allow drilling not only off Florida but on vast stretches of federal land elsewhere.
Florida, though, is the ideological battleground. It epitomizes the phobia under which much of the country labors about oil and gas work. Its governor, Jeb Bush, insists that no drilling occur on existing leases within 100 miles of Florida’s coast and wants a permanent ban on activity within 125 miles. He and the state’s congressional delegation helped remove from a recent House energy bill a provision that would have relaxed leasing moratoriums for gas (OGJ Online, Oct. 10, 2005). Applauding support in the House Resources Committee for a proposal to strengthen state influence over federal leasing, he said, “This provision is important to Floridians, the majority of whom oppose drilling off the coast of Florida in order to protect the sensitive natural resources of our state, as well as our tourist-based economy, which depends on a clean and healthy environment.” That view results from unwarranted fear and leaves no room for the industry’s demonstrated ability to drill offshore with little environmental consequence. The Texas tar balls and Louisiana wetland erosion to which Floridians point with alarm don’t come from OCS drilling or production.
The Floridian position also asserts control not grounded in law over federal resources. Florida doesn’t own the OCS or the resources in it. The US owns the OCS. And the US has a large and growing need for the oil, gas, and associated revenue that would come from expanded OCS leasing and production. On the basis of skewed environmental judgment, Florida claims the right to obstruct activities with potential to address national energy and fiscal problems.
Other states are awakening to this usurpation of their interests. During debate over the omnibus energy bill enacted in August, several states with industries hurt by the rising price of natural gas supported relaxation of leasing moratoriums. Trade groups representing industries other than oil and gas joined the effort. Although the initiative survived in neither the omnibus legislation nor the more recent bill passed by the House, it reflected important recognition from new sources that leasing and domestic production serve vital national interests.
Showdown inevitable
With gas prices likely to remain high at least through next year’s first quarter, this welcome interest lifting the leasing moratoriums won’t disappear. Neither will rigid leasing opposition by Florida and kindred coastal states. A showdown is inevitable.
Facts don’t support wholesale leasing opposition, based as it is on distortion of the environmental risks of drilling and production. The nation needs whatever energy may be producible from untested federal waters. It needs whatever revenue may result. The stakes in this issue are clear. They’ll be even clearer in March.✦
