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Tribune Taps Experts On Drilling For Oil Off Florida

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By MICHAEL SASSO

The Tamp Tribune

Published: June 19, 2008

TAMPA - Once unthinkable in Florida, the possibility of drilling for oil off the coast got much more thinkable this week after Gov. Charlie Crist, presumptive GOP presidential nominee John McCain and President Bush called for an end to a federal moratorium.

Although the idea of lifting the ban and allowing states to decide got a chilly reception in Washington and Tallahassee on Wednesday, it brought to the forefront a series of huge "what if" questions for Floridians:

If oil drilling comes closer to the beaches, what would become of the tourism industry and the economy? What does it portend for a shoreline carved out by hurricanes? What will happen to the price of gas?

The Tribune sought answers to these questions from experts in the oil industry, oceanography and environmental engineering and tourism.

Gas Prices

Offshore drilling's immediate effect on the price at the pump is difficult to quantify. It could be years before consumers feel relief.

President Bush estimates that an extra 18 billion barrels of oil — equivalent to the nation's current oil production for the next 10 years — would be available from drilling in areas now banned, including off the coast of Florida.

Prices might fall as the markets began building in the expectation of a growing supply.

However, on Wednesday, the Florida Democratic Party pointed toward a 2007 report from the federal Energy Information Administration that downplayed any immediate impact.

The report said that drilling in now-restricted portions of the eastern Gulf of Mexico and Atlantic and Pacific oceans would not have a significant effect on domestic crude oil production or prices before 2030. The report refers only to the lower 48 states and does not include Alaska.

The sale of offshore drilling leases probably would not begin before 2012, and production would not be expected to start before 2017, the report says.

Nasir Khilji, a macroeconomist who studies world oil prices for the EIA, said the 2007 report was based on data from 2006, when oil prices were lower. He couldn't say whether the new oil prices would change the report's findings.

Last week, one supporter of drilling and candidate for Congress predicted offshore drilling would have an immediate impact on world markets. Jim King, a retired professor who is seeking to unseat Ginny Brown-Waite in the Republican primary, said energy markets would react and cause prices to fall $20 to $45 a barrel. A barrel is trading about $135 now.

Florida Tourism

Tourism officials worry that a major oil spill could devastate the $65-billion-a-year industry that employs nearly 1 million people.

In 1992, the predecessor of today's Visit St. Petersburg/Clearwater tourism bureau hired a Tampa firm, Research Data Services, to study how a major oil spill would affect Pinellas County. Although the figures are dated, at the time the company's founder, economist Walter Klages, estimated a major spill could cause a 45 percent decrease in visitors over two years.

It could also result in the loss of 7,392 tourism-related jobs in the county, Klages estimated.
He seemed prophetic a year later: In August 1993, the beaches of southern Pinellas County suffered a minor oil spill that nonetheless caused beach hoteliers major headaches. The spill occurred after two barges and a freighter collided.

After the accident, a few large resorts reported that their occupancy rates fell by double digits when compared with the previous year.

State Economy

Florida could benefit from the creation of thousands of well-paying jobs serving the oil industry.
Larry Wall is the public affairs director for the Louisiana Mid-Continent Oil and Gas Association, an oil industry trade group. If Florida developed an offshore drilling industry, he said, it would need workers directly involved in the industry, such as engineers and laborers to work on offshore oil platforms, and companies to service them.

That would range from caterers to feed the platform workers to welders to vessel operators who would transport workers from the mainland to the platform, he said.

According to the organization's estimates, the extraction, pipeline and refining industries employed more than 58,000 workers in Louisiana in 2006. Extraction jobs paid an average weekly wage of $1,804, which was twice as high as Louisiana's average manufacturing sector wage of $984 and Florida's $875. Pipeline industry jobs paid an average weekly wage of $1,345, the organization says.

The Environment

Two environmental scientists said it's unlikely that drilling would cause a major oil spill because of new technologies. Any spill is more likely to come as the oil is transported to shore by tanker.

Joe Delfino, an environmental engineering professor at the University of Florida, said some spilled oil would evaporate, some would create a sheen on the water and some would form "tar balls" — pea- or golf-ball sized balls of oil, sea life and other particles. That's in addition to effects on birds and aquatic life, he said.

How badly the Tampa Bay area would suffer would depend on where a spill took place, said Robert Weisberg, a physical oceanography professor at the University of South Florida-St. Petersburg.

If a spill occurred in the deep water of the Gulf, the currents likely would sweep it south to the Florida Keys and carry it to the east coast of Florida. It might not affect the Bay area much, he said.

However, if the spill occurred over the West Florida Continental Shelf — an area of relatively shallow water that extends as much as 100 miles out from Florida's coast — the currents could sweep it to the Bay area and rest of the West Coast, Weisberg said.

"The actual distance offshore is much less important than if you're on or off the continental shelf," he said.

In 2005, hurricanes Katrina and Rita destroyed 113 oil platforms and damaged 457 pipelines near Louisiana, according to the Minerals Management Service, the federal agency that regulates offshore oil production. The agency reported 124 spills totaling 741,000 gallons of petroleum from offshore rigs, platforms and pipelines.

Oil companies say several thousand other drilling platforms survived Katrina and Rita without spills.
They say that's because of the industry's improvements in technology and safety. Oil wells are shut down if a platform is toppled, and companies must have plans for containing spills.

Information from Tribune wires was used in this report. Reporter Michael Sasso can be reached at (813) 259-7865 or msasso@tampatrib.com.

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