Gulf oil back on Senate's reserve list

The once dominant grocer's market share has steadily shrunk as competitors, particularly Wal-Mart, expand.

WASHINGTON - With oil prices nearing $60 a barrel, the good will toward Florida finally ran dry.

After agreeing last week to maintain the existing moratorium on oil and gas drilling off Florida's shores, the U.S. Senate on Tuesday moved forward with conducting an inventory of energy reserves in all U.S. waters, including the eastern Gulf of Mexico.

By a vote of 52-44, the Senate rejected an amendment sponsored by Florida's senators that would have deleted the inventory from the comprehensive energy bill now moving through the Senate.

The energy bill still must pass, and the Senate will have to reconcile its version with the House energy bill, which doesn't include the offshore inventory. But Tuesday's decision to mandate government-sponsored seismic testing for gas and oil reserves marked a historic victory for the petroleum industry and its backers in Congress, who have been pushing for an extensive inventory for at least 20 years.

Environmentalists and the senators who oppose the inventory say it is a thinly-veiled precursor to drilling in waters that are now off limits. They also point to studies showing that seismic testing - blasting the sea floor with sound waves, to find geological formations indicative of pockets of gas and oil - harms marine life.

"Why would we inventory an area where we are never going to drill?" said Sen. Mel Martinez, R-Fla., who with Sen. Bill Nelson, D-Fla., led the opposition. "The inventory is a huge problem for Florida. It tantalizes pro-drilling interests. It's like saying to pro-drilling states, "Come and get it.' "

The emotional debate, which began Monday night, defied party lines and pitted senators from coastal states against senators from oil states. Twenty-seven of the 44 votes against the inventory came from senators whose states are covered by an offshore drilling moratorium until 2012. If it passes, the inventory would begin within six months after the bill is signed into law. It would map all waters within 200 nautical miles of the nation's Atlantic, Pacific and Gulf coasts.

Nelson said the inventory isn't worth the environmental or taxpayer costs, which could approach $1-billion.

Tuesday's vote "tells me there are a lot of senators who don't have a coastal state who aren't listening to the arguments, and don't understand the issue," Nelson said afterward. "They're making this argument at a time that oil is approaching 60 bucks a barrel. Drilling in the gulf isn't going to help."

Nelson and Martinez were joined by senators from North Carolina, California, New Jersey and several other coastal states. But after preserving the moratorium on drilling off Florida's shores last week, other senators were less sympathetic to Nelson's and Martinez's plea.

Nelson also had angered several colleagues by threatening to filibuster the energy bill unless the moratorium was preserved. With rising gas prices and unrest in the Middle East, senators say they're under increased pressure from voters to boost domestic energy production.

"We have a crisis. Jobs are moving oversees. Why do we not want to know how much natural gas we have?" Sen. Lamar Alexander, R-Tenn., said during debate.

The inventory's primary advocates were Sen. Pete Domenici, R-N.M., chairman of the Energy and Natural Resources Committee, and Sen. Mary Landrieu, D-La., whose state has thousands of drilling rigs off its gulf shores.

If the nation finds itself in a security or economic emergency, "we most certainly would like to know what's there, so we can make good decisions," Landrieu said. "The people of the United States . . . depend on us, us right here, to give them good information about their country, about their land, about their water, about their oceans, about their resources . . . not to hide things from them."

The National Ocean Industries Association, which represents the offshore drilling industry, lauded Tuesday's vote, noting it has been 30 years since any serious attempt to catalog fuel reserves. Although the government conducts assessments every five years, they're not extensive, and new three-dimensional seismic testing could "allow future public policy to be crafted on the basis of accurate scientific data," the association said in a statement.

The association also countered the argument by environmentalists that the testing is harmful to wildlife, citing an Interior Department study that found seismic surveys have "no significant impact."

The International Whaling Commission and other marine research groups have raised concerns about how seismic testing affects fish and marine mammals, especially after whale beachings in the Caribbean and Pacific following such tests.

Andrew Wetzler, who studies the effects of undersea noise for the Natural Resources Defense Council, said several studies have found that testing drives marine life away and disrupts feeding and migration patterns. Commercial fishing catch rates drop temporarily after testing, he said.

"The sounds they produce are incredibly intense," he said. "They're some of the loudest sounds people make. And they're traveling through an environment where almost everything depends on their hearing to live."

Congress has been trying to pass similar legislation since the 1980s, but it always failed because opponents say it's the first step toward drilling in areas that long have been protected.

The eastern gulf is also used for Navy and Air Force training from several Florida bases, and Nelson and Martinez said seismic testing could interfere with that, too.

With a final vote on the energy bill expected late this week, Florida's senators and their allies haven't abandoned all hope. Both are asking the Senate leadership to exempt Florida from the inventory, but they acknowledge that's unlikely. There's also a chance the bill won't pass, because many senators say it doesn't provide enough incentives for developing alternative energy sources and increasing conservation.

If it does pass, they hope to seek a compromise on the inventory when House and Senate negotiators meet to reconcile the differences in their energy bills later this summer.

Sen. George Allen, R-Va., voted for the inventory, but said he supports allowing states like Florida, North Carolina and New Jersey to opt out if they like. Such a compromise may persuade House leaders to include an inventory of waters off willing states, like Virginia's, in the final version of the energy bill, Allen said.

"It's a logical compromise," he said. "No matter what's out there, it doesn't matter since they aren't going to drill" off their coasts.

Nelson was less optimistic. Tuesday morning, just after the vote, he said he heard Domenici, who is driving the energy bill, tell Landrieu that "we will keep this provision in" the final bill.

"When I hear Sen. Domenici say that, I think that pretty well seals the deal," Nelson said.

Retreating once again, Winn-Dixie Stores Inc. on Tuesday said it will pull out of 14 more metro markets across the Southeast, close almost a third of its 913 stores and wipe out 22,000 jobs.

The plan, which would have to be approved as part of the struggling chain's Chapter 11 bankruptcy proceedings, also singles out 44 more stores in Florida for closing - including 12 in the Tampa Bay area.

Of the Florida stores on the latest hit list, 27 of them are in the Tampa Bay or Orlando markets where Wal-Mart has been the most aggressive in opening new supercenters. Many small towns and neighborhoods already were mourning the loss of their last Winn-Dixie as word spread.

Shopper Dan Sanborn, 50, for instance, can negotiate his wheelchair two blocks to a Winn-Dixie in downtown St. Petersburg that will be closing. But a Publix six blocks away is too far.

"The sidewalks are crumpled up (hex blocks), so I can't just ride the wheelchair there," Sanborn said, figuring he will be forced to use a bus or cab.

Winn-Dixie will pull out of the Carolinas and Tennessee completely along with Atlanta; Huntsville, Ala.; and about half of Mississippi, where the chain bought the Jitney Jungle chain less than a decade ago.

The shrunken Winn-Dixie will try to maintain a foothold in its strongest markets in New Orleans, Birmingham, the rural Deep South and its home state of Florida. Winn-Dixie also will try to sell all of its Astor and Deep South food products plants, three of 10 distribution centers and six dairy plants.

The 22,000-job cutback is the second largest announced this year, behind 25,000 at General Motors, according to Challenger, Gray & Christmas, a Chicago firm that tracks workplace trends.

The grocer, which has not set a closing date for any stores, said it will shutter those that cannot be sold, a process that would be completed within several weeks. A Winn-Dixie dairy plant in Plant City, however, will remain open even if a buyer does not surface.

"It's tough news for a lot of people," said Peter Lynch, the Jacksonville-based chain's president and chief executive officer. "But this is a critical step, a major league step, in stabilizing this company."

It will be the third major downsizing in the past eight years for a company that lost its grip as one of the once dominant grocers across much of the Deep South years ago and has never been able to regain it. Winn-Dixie had just shy of 1,200 stores in 1998. Now it will have 587 in five states. Meanwhile Wal-Mart and Publix Super Markets Inc. continue to siphon off customers from a one-time giant whose sales decline has displayed no sign of hitting bottom.

"I don't see where Winn-Dixie can carve out a niche," said Britt Beemer, president of America's Research Group, an Orlando retailing consultant.

Winn-Dixie is pinning its future on a remodeling and remerchandising strategy that was tested last year in many South Florida stores. But while the company said sales there rebounded, the performance has yet to show up in the market share gains. In South Florida, Winn-Dixie also is less exposed to competition from Wal-Mart. In contrast, Winn-Dixie is the biggest grocer in New Orleans with 28 percent of the market, but valiantly fighting off Wal-Mart, which grew to 26 percent after being in the grocery business only about 15 years.

"How they do in Miami and Fort Lauderdale is going to tell us whether Winn-Dixie has a future," said Chuck Gilmer, publisher of the Shelby Report of the Southeast, an industry trade journal. "If they fail there, they won't have anything to shovel out to the rest of their markets."

In the past decade, Winn-Dixie has fallen from a strong No. 3 in the Tampa Bay area market to a weak No. 4 that's now battling Albertsons to keep from dropping to No. 5. Albertsons and Winn-Dixie each had about 10 percent of the retail food business in April, according to the most recent figures from Marketscope/Trade Dimensions, which tallies checkout scanner data.

With 16 percent, Wal-Mart surged past Kash n' Karry to second place behind Publix, which had 37 percent. Kash n' Karry's share, however, edged up slightly to 15 percent as the company's remake into Sweetbay Super Market began to show results.

Prospective buyers for Winn-Dixie are all over the board, but only a few of them are traditional supermarket operators. Winn-Dixie has been hoping some of the big national chains such as Safeway Inc. or Kroger Co. will be interested in buying into or filling in metro markets they don't fully serve. Private equity firms also have been bidding for some retail companies based on the value of their real estate.

Save-A-Lot, the no-frills, limited assortment chain owned by wholesaler SuperValu Inc., has been setting up shop in the abandoned carcasses of grocery stores. Dollar General, the biggest of the dollar store chains, also has been testing a version of a Save-a-Lot. One of the first ones opened recently in Orlando.

Times staff writer Sharon Bond contributed to this report. Mark Albright can be reached at albright@sptimes.com or 727 893-8252.

Even though Winn-Dixie is trying to concentrate its resources in its stronghold markets in Florida, it plans to close 44 stores in the state. Here are the 12 stores slated for closing in the Tampa Bay area:

BRANDON

1945 Lumsden Road

CLEARWATER

2514 McMullen-Booth Road

INVERNESS

2675 Gulf to Lake Highway

OLDSMAR

3705 Tampa Road

NEW PORT RICHEY

8615 Little Road

ST. PETERSBURG

850 Third Ave. S

TAMPA

5715 Gunn Highway

8702 Hunters Lake Drive

1601 W Kennedy Blvd.

VALRICO

1971 State Road 60

3236 Lithia Pinecrest Road

WESLEY CHAPEL

5351 Village Market SOURCE: Winn-Dixie Stores Inc.

14: Metro markets across the Southeast it will leave

22,000: Jobs to be cut

326: Stores closing altogether

44: Stores closing in Florida

12: Stores closing in the Tampa Bay area

4th: Its rank in the Tampa Bay area market share

3rd: Major downsizing in the past eight years

587: Number of stores it now will have in . . .

5: States

Florida headlines

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