State wards off drilling

Gov. Bush says the $12.5-million deal sends a strong message that off-shore drilling is "taboo."

By JONI JAMES
Published June 2, 2005

TALLAHASSEE - The governor and Cabinet signed a landmark deal Wednesday to buy back two off-shore drilling leases on the Gulf Coast, protecting the coastline from Apalachicola to Naples.

The $12.5-million settlement, to be finalized next month, includes a drilling lease for Lake Okeechobee.

The deal with Coastal Petroleum Co., which has held the leases since the 1940s and is partially owned by Tampa's Lykes Brothers, will end 18 years of litigation and give the state possession of all mining leases in the coastal waters it controls.

Florida controls just over 10 miles of waterways off the Gulf Coast and 3 miles off the Atlantic Coast.

"I think it sends a very positive, powerful signal that off-shore drilling, particularly in the near waters of our state, is taboo in Florida," said Gov. Jeb Bush.

Environmental advocates embraced the deal Wednesday, but the enthusiasm was tempered becaused the protection extends only to state waters. Escalating oil costs are increasing congressional pressure to expand domestic drilling in federal waters.

Last month, U.S. Sen. Mary Landrieu, D-La., unveiled a proposal to redraw federal water maps so oil-rig-friendly Louisiana's seaward boundary is moved east to encompass 3-million acres of submerged lands off Florida's Panhandle.

The state has enjoyed a presidential moratorium against any new drilling leases since 1995. But there still are nearly 100 in federal waters off Florida's shore.

"Twelve million is a small price to pay to guarantee there will be no drilling within state waters forever," said Mark Ferrulo, director of Florida Public Interest Research Group. "But I hope it doesn't create a false sense of security. We have 99 active (federal) leases off the Florida coast that could mean oil rigs just beyond state waters, within 11 miles."

Bush said he will vigorously fight Landrieu's proposal. He said he spoke with White House Chief of Staff Andrew Card about it Tuesday when Card visited Tallahassee to speak at a fundraiser for the regional Boy Scout council.

The governor said he has not spoken to President Bush about the proposal.

Florida first sold its coastal water mineral rights in the 1940s, prompting then-Attorney General J. Tom Watson to sue his Cabinet colleagues for misusing a state resource. He was unsuccessful.

Since then, most Florida governors have tried to get the rights back.

"It's easy in the environmental field to rhetorically be pro-environment, to have a nice photo op occasionally and to pound your chest and be a strong supporter of the environment," Gov. Bush said Wednesday. "It's harder to do the work necessary to actually have practical solutions for protection."

Joining Bush in unanimously approving the deal Wednesday were Agriculture Commissioner Charles Bronson, Attorney General Charlie Crist and Chief Financial Officer Tom Gallagher, all Republicans.

"You aren't simply settling a lawsuit, you are settling a half-century of litigation," former Assistant Attorney General Monica Reimer told the Cabinet. Reimer has worked on the case since the 1980s and is now a lawyer with the environmental law firm EarthJustice.

Neither attorneys for the state or Coastal Petroleum would comment Wednesday on what prompted the settlement agreement or the price.

Coastal has paid $2.7-million in lease fees since 1947. Simple interest on that amount would equal about $8.7-million, state staff calculated.

A two-man operation run out of Apalachicola, Coastal had sought more than $100-million from the state for the leases in the past. The last time the company drilled was in the 1970s, when exploration efforts found only dry holes. It sought new drilling permits in the 1990s but was denied.

In November 2002, Florida's 1st District Court of Appeal ruled against Coastal, the last court action in the case. The court said the state's denial of drilling requests for a lease extending from Franklin to Pasco counties did not amount to a taking by a government entity.

Senate President Tom Lee said he first heard about a potential deal late in the recently completed legislative session. He quickly agreed with Bush and House Speaker Allan Bense to include the $12.5-million in the 2005-06 budget plan it passed last month.

"It was one of those ones that was easy," Lee said.

[Last modified June 2, 2005, 01:07:17]