Florida lawmakers might reconsider offshore drilling

Oil & Gas Journal editors for decades have monitored discussions about possible drilling in the Gulf of Mexico off Florida. There is interest in a band of leases 7-10 miles off the coast south of Naples.

It’s believed the area has geology similar to the giant Jay oil field in the Florida Panhandle. Jay field, discovered in 1970, was the largest US discovery since the supergiant Prudhoe Bay oil field on Alaska’s North Slope (OGJ, Sept. 29, 1997, p. 101).

The Florida legislative session starts Mar. 2, and lawmakers again are expected to discuss whether the state should allow oil and gas exploration in state water off the Gulf Coast, where a ban has been effective since 1990. Tourism, especially visitors frequenting the beaches, is the often-cited reason for the ban.

Last year, the Florida House passed a bill that would have moved to allow drilling, but the idea stalled in the Senate. Senate President Jeff Atwater, R-North Palm Beach, ordered an analysis before the Senate can take any action.

Atwater is running for state chief financial officer. If lawmakers were to lift the ban, then a final decision on whether to offer drilling leases likely would fall to the state Cabinet, which involves the governor, attorney general, chief financial officer, and agriculture commissioner.

BP, ConocoPhillips leave climate coalition

A lobby group focused on climate-change legislation is seeing its corporate membership numbers drop, which some analysts are calling another indication that Congress appears increasing unlikely to pass a climate change bill this year.

BP PLC and ConocoPhillips decided against renewing membership in the US Climate Action Partnership, a coalition of environmental groups and corporations targeted on building support for a national cap-and-trade program. BP and ConocoPhillips were among USCAP’s founding members in 2007.

Other large companies, including Royal Dutch Shell, remain in the coalition.

USCAP spokesman Tad Segar says there’s still momentum to get a climate change bill done. Some energy analysts are not so sure of that.

Raymond James & Associates Inc. said in a Feb. 17 industry brief that there is no realistic prospect of passing cap-and-trade in 2010, adding that attitudes in Washington are shifting “in the wake of the Climategate scandal and news that the UN climate panel made bogus claims about glacier melting, and perhaps also out of recognition that cap-and-trade is DOA in the US Senate.”

ESAI: Future climate change policy likely regional, national

“Scatter Shot Reform: Fuel Engine Pathways for Automotive Transportation: 2010-2025” is a recent report by Energy Security Analysis Inc. that analyzes how transportation fuels will develop in coming decades.

The report’s executive summary says competing—sometimes conflicting—reform will result in “a vastly different fuels landscape than the comparatively simple gasoline and diesel market in place today.” ESAI believes the emergence of vehicle fuel technologies will develop slowly and haphazardly.

“The overarching conclusion of this study is that environmental reform will result from a mosaic of provincial, national, and regional initiatives,” the report said. “ESAI believes that the scatter shot approach described in this study illustrates the likely evolution of future developments in climate change policy.

“While international negotiations such as those in Kyoto or Copenhagen will serve a purpose in aligning benchmarks, the future of climate policy will unfold not on the global stage, but on the national and regional stage.”

ESAI , a Boston-area energy research and consulting firm, notes that the changing transportation fuels business presents opportunities for oil companies, some of whom already are partnering with new energy companies developing breakthrough technologies.

Ballot initiative targets California climate-change law

Independent producers are watching California Republican Assemblyman Dan Logue’s efforts toward a ballot initiative to suspend California's “Global Warming Solutions Act.” Logue hopes to get the initiative on the November ballot.

Gov. Arnold Schwarzenegger signed Assembly Bill 32 in 2006 amid fanfare about what Schwarzenegger calls California’s leadership role in fighting climate change. AB 32 requires that, starting in 2012, the state of California must reduce its carbon emissions to 1990 levels by 2020.

The California Independent Petroleum Association says Logue currently has a bill, AB 118, to repeat AB 32 through the state legislative process, but AB 118 is not expected to get approval by lawmakers.

“Debate of the merits of the science used to attribute climate change to carbon sources, delay in congressional action in DC, and continued poor economic conditions in California have brought uncertainty to the future of a California only stand-alone program,” CIPA said in its Feb. 1 Monday Morning Report email.

A ballot initiative, once approved by the Secretary of State, has 85 days to collect 433,000 valid signatures of registered voters to reach the November ballot. The proposed initiative calls for suspension of AB 32 until the unemployment rate falls below 5.5%. California’s unemployment rate was about 12% in early February.

This issue of state vs. federal government issuing climate-change law goes beyond California, and it’s one that much of the US oil and gas industry will be watching closely.