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In addition to politics, I am very interested in energy and things related. I deal with energy-producers in my "real" job on a daily basis, I am a member of my town’s Energy Committee, and of course, like most Americans these days, above all, I am mostly interested in energy at the moment due to its escalating cost. When you think about it, energy affects pretty much everything. Along with food and water, plentiful energy is among the necessities of life. After all, it takes energy to GET the food and water…
Thursday afternoon, I participated in a Bloggers’ Conference Call hosted by our friends at the American Petroleum Institute. The biggest point I came away with is that there is much more to the topic of energy, its supply, and the exploration of, than you could imagine. While some politicians rail against "big oil" day in and day out, the fact is, "big oil" is an extremely complex industry made up of great numbers of skilled Americans, held together in a logistical system that is undoubtedly as intricate and complicated as anything one would find in almost any other human endeavor on the planet.
If you believe that "big oil" is nothing more than wealthy fatcats that work for a single handful of well-known corporate symbols like Exxon or Mobil, etcetera, hanging out all day in large, air conditioned buildings scheming ways of taking our money, you need to think about these matters for more than a nanosecond. And consider the whole concept of energy and its impact on our individual lives. It is my belief that without affordable, portable sources of energy, we would all but lose the freedoms we hold dear. The freedom to travel about when YOU want to, and go almost anywhere you want in short order, is nothing to take lightly. The freedom to live in your own home and rely on yourself to stay warm in the winter and cool in the summer is about as American as it gets. Are we ready to live in Soviet-style housing to stay warm? I think not. When the refrigerator replaced the icebox and became widely available and affordable to ordinary people, it was hailed as an advance directly responsible for the improvement of peoples’ health through better, safer diets. Without energy, there would be no such thing.
Anyway, during the call, there was much discussion about the lengthy, expensive, and risky process involved with the successful discovery and delivery of oil and gas to the marketplace. We also learned about how some areas presently off-limits contain already existing wells constructed before banning new offshore exploration and drilling came into vogue. These can be quickly brought into production.
One of the people participating was David Mica, the executive director of the Florida Petroleum Council. I was particularly intrigued by recent news of the attitude change in Florida on the part of Governor Crist and wondered if it reflected a shift shared by many Floridians. Here is the transcript of our exchange at the beginning of the call:
MR. LAMBERT: This is Doug from Granite Grok, and again, like the last time I did one of these, I will announce that I am just a blogger and I know nothing about oil or gas other than I am a consumer. That being said, one of the things that I hear in the news, as a news consumer, is that with the announcement of Senator McCain and others being in favor of offshore drilling – we keep hearing in the news that the reason that Governor Crist is so popular is because he is opposed to it in that Floridians oppose drilling off the coast. Now, my parents live in Florida and I know a lot of their friends. And I am not aware of anybody who is in opposition to that. Do you have any real statistical polling?
MR. MICA: Well, it – Doug, it has actually changed. As far as giving you specific polling data, there are polls out there that have shown an increased change significantly. And I will give you a perspective on it. This isn’t as factual as you might like, but ever since 2004, when Florida took the direct hit from Hurricanes Charlie and stuff, we had some outages of no fuel available to Floridians. And consumers’ attitudes, I believe having been around the industry for several decades now, began to change significantly. And consumers more and more have moved there. And then when they saw what happened in Katrina, and we took a category-five hit right at the heart of the industry, I think Floridians took notice of that. And I began to see even a change in public policy-makers’ attitudes toward the idea of increased exploration and development near our coast.
And I think that that has continued and I think that Governor Crist, while he is very, very, very sensitive to Florida’s environment, I think that he has seen that shift as well. I don’t speak for him and don’t know what led to his decision-making process. But I can tell you that attitudinal change from consumers and from organizations throughout the state has been a sea tide of change. Groups like the Florida Chamber of Commerce, the manufacturing group Associated Industries of Florida, consumer groups like the Consumer Energy Alliance of Florida have approached us in recent years and their attitudes have not only changed, they have become supportive to great magnitudes in trying to get more increased access to exploration and production in Florida.
MR. LAMBERT: Now, what would be the – I guess, with the change of the federal government, is it something that could happen overnight? Or would there be a series of steps that would have to take place at the state level, as well, in order to see any type of drilling begin?
MR. MICA: I will start with the Florida perspective of what would have to take. Florida currently has laws in place that prohibit the exploration and development of oil and gas resources in state waters, which in the Gulf of Mexico go out about three leagues or 10 miles. And it would take a legislative change that would be required to happen. However, I had heard a lot of the rhetoric that has been spouted around in the last couple days that I disagree with personally with regards to what could happen if there was, in fact, a major change in some places. And that one place that might really be changed in quick order might be in a geological area south of Panama City about 30 miles called the Destin Dome, like the city, D-E-S-T-I-N D-O-M-E.
And Destin Dome has an interesting oil and gas history. Back in the ’80s, that area was leased by the federal government, and Florida – and I am not partisan at all, I am not interested in partisan — but I will mention that the governor and cabinet, Governor Bob Graham and the cabinet, authorized through the state’s participation and their avenues. They had no problem with that moving forward at the time. They did happen to all be Democrats, but that is secondary. That happened and exploration took place down there. And the leaseholder spent over $100 million looking for oil and gas 30 miles south of Panama City. And they made a very significant discovery. And I can.t remember how they quantified the therms and cubic feet of natural gas that was discovered, but they proceeded to not only discover that, but to look at the expanse of that area and developed – had permitted wells all the way up to the point of getting to a production plan before the issue became politicized. And they ultimately had to sell those leases back to the federal government in the ’90s.
However, some companies did not sell their leases back. And the only thing that is in the way of going back to those capped wells where we know the gas is, is a letter of agreement between the leaseholder, the state of Florida, and the Minerals Management Service that nothing would take place to 2012. Well, it is my understanding that those parties could change that just with another letter and you could begin to move forward.
And that is not an area that would be a frontier area where the seismic information is old and we would need to do imaging and stuff. And it is not an area where we.d have to go through a lease sale and the cumbersome process of exploration. It is an area where immediately – and I would suspect it in what you would term rather than long numbers of years, months. It might take more than a year or even two because, you know, those [well] walls are old now and might need to be retooled and redrilled and stuff. But I would say if you will in short order, those products could come online and get into the pipeline system that supplies the United States and the state of Florida, perhaps out of Mobile Bay where it is likely, and was then proposed to be brought ashore to a processing facility. That is a little longwinded, but I think that that area would be a significant area.
And I should also note – you were talking about Floridians not being in favor – or being in favor that the Panama City News Herald on Saturday editorialized in favor of looking for and drilling for oil and gas in the Arctic National Wildlife Refuge and right off their coast there in Panama City, where some of our most treasured beaches are. And that is coastal newspaper…
The call featured a lot more information in the same vein, discussing why the current meme claiming "the oil companies have plenty of leased land, they just aren’t using it" is way off base and simply the words of the uninformed. We also discussed the fact that there is much technology that has been developed in the years since most large scale exploration in this country was halted. There is a wide variety of new advances that can be put to use to aid in the discovery of energy reserves, facilitate extraction, and provide environmental protection that were unheard of twenty to thirty years ago.
Another bit of information I learned was the fact that, with domestic exploration and drilling, both the local and federal governments stand to gain significant revenues, thus helping taxpayers. In fact, until Thursday’s call, I had no idea that energy source leases account for the second largest source of monies to the Treasury, surpassed only by the income tax. To me, that’s a win-win situation: we get dependable DOMESTIC supplies, AND taxpayers get relief at the same time.
I would highly recommend you read the whole transcript of the call here, or listen to the audio recording here. We all need to be properly informed about this topic so that we can make reasonable and rational decisions about energy in our lives, and the politicians who seek to somehow control it…
The call was hosted by Jane Van Ryan of API and featured the following guests:
Doug Morris, group director, Upstream and Industry Operations, API
Andy Radford, policy advisor, API
Richard Ranger, senior policy advisor, API
Lisa Flavin, senior policy advisor, API
Erik Milito, managing counsel, API
Sara Banaszak, senior economist, API
Dave Mica, executive director, Florida Petroleum CouncilBloggers represented on the call included:
Doug Lambert from Granite Grok
Joy McCann from Little Miss Attila
Bruce “McQ” McQuain from The QandO Blog
Gail Tverberg from The Oil Drum
Brian Westenhaus from New Energy and Fuel
Pejman Yousefzadeh from RedState and A Chequer Board of Nights and Days
“The Bear” from The Absurd Report (submitted questions via email before call)
For more info, vist EnergyTomorrow.org. Thanks to Jane Van Ryan for the invite!
