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A Message from AIF President Barney Bishop

February 23, 2006

Recently Florida's two U. S. Senators proposed a bill titled, Permanent Protection for Florida Act of 2006. As a political statement, this is a public relations dream come true, but as a realistic solution to Florida and the country's future energy needs it is woefully inadequate. And as a result if it is to be considered seriously, it must offer more hope to the rest of the country that we are willing to help solve our energy problems and this proposed bill does not do that equitably.

First, Florida is not going to be able to establish unilaterally the parameters for drilling/exploration for every other state in the country. Yet, this bill not only says there will be a permanent moratoria for Florida, but it also says that Bristol Bay, Alaska, the Atlantic and Pacific Outer Continental Shelf (OCS) leases will be withdrawn only until 2020. So, how do you think the other state Congressional delegations will feel about this un-level playing field? I can tell you that it has been predicted for some time now that Florida's Congressional delegations insistence on allowing Artic National Wildlife Refuge (ANWR) drilling in Alaska, but to not allow any drilling in the eastern Gulf of Mexico (GOM) has already unnecessarily aggravated other members Congress, many of whom have historically supported Florida's position but are now feeling that Florida is expecting and demanding too much. In fact, because of the way this bill has been drafted even states like Alabama, Louisiana and Texas, to name a few, will lose their ability to exercise a choice for future drilling. Now, how much sense does that make and what right does Florida have to determine their future?

Second, the truth about drilling is simple and self-evident. The bane of drilling for some Floridians is based on a misperception that to allow it to occur is going to defile our beaches and ruin our tourism. I say some Floridians, because a recent poll conducted on December 15, 2005 by Florida Insider, documented that when asked if Floridians would be favor or oppose oil and natural gas drilling closer to Florida's shores than is currently allowed, 44% of likely voters said they supported it, 46% said they opposed it and 10% had no opinion. Therefore, to suggest that there is solid unanimity by Florida voters in opposition to drilling is misleading, in fact, just the opposite would be true. Now, what about the beaches? Well, exploration and drilling with modern advanced technology yields no danger to our beaches. Primarily, because the rigs and platforms are so far out that even if there was seepage, the currents would never deliver the oil to a beach. In almost all instances of tar balls on the beach it is either due to natural seepage by Mother Nature or to the transportation of oil by ships or barges, neither of which are solved by this proposed bill. As for the potential impact on tourism if you can't see the rig (and you won't be able to see anything beyond 15 miles from the shore) and if there are no tar balls on the beach there can be no adverse impact on tourism! But, there is a huge impact from the continuing high cost of fuel and despite tourism officials decrying Associates Industries of Florida's (AIF) support for drilling in the GOM this past December, right after the first of the year Visit Florida™ announced that tourism would be down from the previously announced 7% to only 3% growth for 2006 due to - you guessed it, high fuel prices! Clearly, we Floridians will pay a heavier toll by not drilling than by drilling.

Third, the argument of providing sanctuary for our military training in the eastern GOM is a valid one. But, the answer is not the bill submitted by our Florida Senators, but rather the Bush-Pombo Compromise proposed late last fall. Why? Because it allowed the Secretary of Interior Gayle Norton and Secretary of Defense Donald Rumsfeld to negotiate on where the exact line of demarcation for military training would start and end. And if they could not come to an agreement, then the President would be the final arbiter. I don't believe anyone could argue with a straight face that our President wouldn't do everything he could to protect our military interests, yet at the same time he could balance those interests against our need for recoverable energy.

Fourth, our second (and sometimes our first) largest industry in Florida is agriculture. Unfortunately for farmers, fertilizer's primary ingredient is natural gas, and with the soaring cost of natural gas, it has raised the cost of farming to all-time highs. This means that not only will our food products will be more expensive, it also means that with our current supplies, farmers must compete with utility companies for this important energy resource as natural gas fuels the majority of our Florida power plants as well. Without stability in our fuel supplies we are going to continue to fall prey to the lords of the futures market and their ability to make money whether they sell natural gas long or short.

Fifth, this proposed bill does nothing to address the future concern of Cuba drilling for oil off of the Florida Keys. To be sure, neither does any of the other legislation that is currently on the table from Conggessman Richard Pombo (R-CA) or Senator Peter Dominici (R-AZ), but this is an issue that should be of great importance to Floridians. Because while no one in the US is advocating drilling in such sensitive waters, Cuba, which advocates a 200 nautical mile Exclusive Economic Zone, has authorized a joint venture between Cuba's oil company and a Chinese oil company that, when it occurs, is within 45 miles of Key West!

Sixth, is hurricanes. The truth of the matter is that despite two major hurricanes plowing through the western and central GOM this past hurricane season, there have been no reports of environmental degradation from the rigs or platforms. That is because well head shut-off valves have been required for many years now. When a storm approaches, the oil or natural gas is forced back down the shaft to the seabed, where it is automatically sealed. Thus, if the rig is dislodged, there is no oil to damage the environment. Of course, some say having more rigs in the GOM would exacerbate the problem, but if there is no environmental damage now, there will be none in the future as the same technology must be utilized.

Finally, we must realize that our future energy needs are not going to be addressed or even solved simply by drilling in the GOM. We must support more nuclear power plants, which with new technology can provide the energy we need at the best cost. Furthermore, we must advocate for more alternative and renewable forms of energy such as hydrogen, ethanol, biomass, solar, wind, and current among others, that could help reduce our reliance on more fossil fuels. But, in the meantime we must realize that if we do not allow for more exploration and drilling in the eastern GOM, then we are purposely denying our country the ability to recover oil and natural gas in our own backyard. In conclusion, drilling in the eastern GOM will not be a negative because the rigs will not be seen and the beaches will not be fouled. If Florida is to control our destiny, then we must be willing to compromise. Perhaps that is the best thing that can be said of this new proposed bill, it could lead us to realize that if we aren't willing to at least be a part of the solution, then we will certainly be perceived to be a part of the problem. And that could lead to disastrous results for all Floridians.