Monday, February 20, 2012

Oil and Gas bill up in Senate committee tomorrow morning. Please call today!

SB 1158 Development of Oil and Gas Resources by Sen. Evers will be heard in Senate Environmental Protection and Conservation tomorrow, Tuesday, February 21, 2012 at 9:15 a.m.  This bill creates an alternate pathway to leasing state conservation lands by allowing state land management agencies to enter public-private partnerships with business entities to explore, develop, and produce oil and gas.  Please call today to urge Committee members to vote NO!  (contact information below)

The bill does not contemplate, or compensate for, any negative impacts from oil/gas activities - from the explosions used in seismic testing and the possible contamination of ground water, to the need for new roads, to the disposal of drilling fluid and production water, to the effects of a spill.

Currently, the only way these lands can be leased for oil/gas development is for the Governor and Cabinet sitting as the Board of Trustees of the Internal Improvement Trust Fund to put parcels up for bid, require a minimum return, provide public notice, and find that leasing the land is not contrary to the public interest.  SB 1158 skirts all of those requirements by starting the bill with the words “Notwithstanding the provisions in Chapter 253, Florida Statutes…”  

SB 1158 specifies conservation lands as its target by citing "land management plans" (non-conservation lands have “land use plans.” And it skirts the following provisions in Chapter 253:
  • It deprives the state of the operation of the market by eliminating the bids
  • It does not consider any possible downside of oil/gas exploration, development, or production or require any surety or property bond to pay for a disaster.
  • It does not set a minimum price for royalties and does not require rent
  • It does not guarantee the state use of seismic data
  • It eliminates notice requirements
  • It eliminates the need for municipalities to consent to oil/gas exploration, development, and production within three miles of their borders

    SB 1158 eliminates any consideration of the public interest until the very end of the process when the Board of Trustees has to approve the public-private partnership.  It is not clear that the Board is even required to consider the public interest when approving a public-private partnership contract as they would when approving the leasing of land for oil/gas development.  Legally, there  is a difference between approving a lease for oil/gas development and approving a public-private partnership contract – even if the partnership contract effectively approves leasing land for developing oil/gas resources.
    SB 1158 is not only a bad deal environmentally, it’s a bad deal financially too.  The state loses the operation of the market to get the best terms for the lease of the land and cities that could be adversely affected are deprived of any say in the matter.

    Please call members of the Environmental Preservation and Conservation committee today to urge them to vote NO on SB 1158. 

    Senate Environmental Protection and Conservation Committee 2012
    Sen. Charles S. Dean, Chair    (850) 487-5017
    Sen. Nancy Detert                   (850) 487-5081
    Sen. Dennis Jones                   (850) 487-5065
    Sen. Jack Latvala                    (850) 487-5075
    Sen. Steve Oelrich, V. Chair   (850) 487-5020
    Sen. Nan Rich                         (850) 487-5103
    Sen. Eleanor Sobel                  (850) 487-5097

    Chapter 253 protections that are lost in SB 1158
    The authority for a land management agency to enter a public-private partnership for oil/gas development is granted “Notwithstanding the provisions in chapter 253, Florida Statutes”.  In other words, this bill permits what is provided in it even if it conflicts with the provisions of Chapter 253 which includes – among others - the following provisions that could be abrogated:

    Normally, 253.51 would limit the authority to negotiate, sell, and convey leaseholds to lands vested in state boards, etc, to the Board of Trustees on the principle that what is expressed in law excludes everything else of the same class.  However, the language of HB 695 says “Notwithstanding the provisions of Chapter 253…”  Therefore, a “land management agency” would also be permitted to enter into lease arrangements.  And HB 695/SB 1158 thereby creates an alternative means to obtaining access to exploration, development, and production rights that is exempt from anything in Chapter 253 that conflicts with the provisions of the bill.

    The Board of Trustees  could not require the reports of number of holes drilled, depth of drilling, and results cited in 253.511 and thereby lose the availability of evidence for use in a court proceeding.

    253.52 As HB 695 provides an alternate method of leasing state lands it is in conflict with this section and therefore supersedes it by virtue of the “Notwithstanding the provisions of Chaptrer 253…”  And as none of the limitations in 253.52 are found in the specifications of HB 695, they would not be applicable under its operation.  The excluded limitations would include:
    • The Board of Trustees ’s discretion to designate blocks, tracts, or parcels
    • The requirement for bids
    • The requirement for an advertised public hearing before any leasing of a block, tract, or parcel within a radius of 3 miles of any incorporated city or town, or within a 3 mile radius of any bathing beach or beaches outside of an incorporated city or town
    • Requirement that the Board of Trustees  consider the comments made at the public hearing
    • Authority of Board of Trustees  to withdraw land from market and to refuse to execute a lease or leases if the Board of Trustees  considers it/them contrary to the public welfare.

    As HB 695/SB 1158 do not provide for notice, the provisions of 253.115 would not apply.  253.115 provides for:
    • Public notice of an application for a lease of state owned land sent to landowners within 500 feet of the proposed activity that includes
      • Name of applicant
      • Description of activity and any proposed mitigation
      • Location of proposed activity and whether it is in an Outstanding Florida Water or an aquatic preserve
      • A map identifying the location of the proposed activity
      • A diagram of the limits of the proposed activity
    • Consideration by the Board of Trustees  or agency of comments from the public
    • Requirement that the Board of Trustees  or agency find that the lease be in the public interest  or not contrary to the public interest before it may approve the proposed activity

    253.53 would be superseded by HB 695/SB 1158 as the consummation of the public-private partnership provides an alternate method of leasing state owned lands.  Provisions of 253.53 that would not apply under the language of HB 695/SB 1158 include:
    • Submission of sealed bids
    • The Board of Trustees ’s discretion to set a royalty (never less than one eighth) in kind or in value
    • A definite and, after the first two years, increasing rent on lands not developed for, or not yet worked to produce, oil or gas

    253.54 requiring competitive bidding is superseded by the language of HB 695/SB 1158.   Also superseded is the provision that the Board of Trustees has discretion to reject bids if they do not represent the fair value of the lease(s) or if the lease is contrary to the public welfare, or for any other reason.

    253.55 The limitations on the terms of the lease are  different in HB 695/SB 1158 and include a three year period for exploration by geophysical seismic methods before leasing and a minimum 5 year period for leasing after the three year exploration.  The provisions of HB 695/SB 1158 would supersede 253.55, and would eliminate the termination of a lease in the absence of drilling or reworking operations or production of oil or gas therefrom, or that the lease must be actively worked with no cessation of more than 30 days.

    253.571  The provisions of HB 695/SB 1158 do not include any requirement for a surety or property bond, and, as this condition is not included in the provisions of the bill, it conflicts with it.  Under the “notwithstanding the provisions of Chapter 253…” this provision is also excluded.

    253.60 This section requiring the development of oil and gas to be in accord with the Laws of Florida relating to conservation and control would still apply to the Board of Trustees  (which is required by the bill to approve the public-private partnership contract) but only to the extent that conflicts “herein” (in this chapter) with Laws of Florida relating to conservation and control are to be resolved in favor of the Laws of Florida relating to conservation and control.  HB 695 /SB 1158 are not included in the “herein” as they would be unnumbered Laws of Florida if they become law.  And the provisions relating to the public-private partnership contract do not have any provisions relating to “the development of the lands leased”.  Therefore, a conflict between HB 695/SB 1158 and this section would be resolved in favor of HB 695/SB 1158 under the “Notwithstanding the provisions of Chapter 253…” language. 

    Further, since HB 695/SB 1158 provide an alternative route to obtaining a lease, the Board of Trustees might not be the lessor – in which case the section would not apply.

    263.61 This section also conflicts with HB 695/ SB 1158 and would therefore, be superseded by it.  A protection that would thereby be lost includes the requirement that no lease be granted within a municipality without the municipality passing a resolution granting consent.

    David Cullen
    Sierra Club Florida lobbyist