Editorial Comment

July 2002 Vol. 223 No. 7  Editorial Comment

Thomas R. Wright, Jr.,  Publisher

Helping Jeb II. Just eleven months ago, we opined in this space that President George W. Bush sacrificed principles for politics when he reduced the area included in OCS Sale 181 offshore Florida from 5.9 million acres to only 1.5 million acres. Now, less than a year later, he’s done it again.

In case you have forgotten the details about OCS Sale 181, Dubya apparently decided to help his brother Jeb Bush remain Florida’s governor by placating the environmental interests there. The Bush administration deleted a large section relatively close to shore (half of which is no closer than blocks already open to exploration), and also cut a huge area that’s at least 115 mi from Panama City and 213 mi from Tampa Bay.

In its latest actions, the Bush administration pushed through a settlement, which will compensate oil companies that have been prevented from developing their leases off Florida. Again, in case you’ve forgotten, the drilling moratorium that halted development was extended by George The Elder just before his unsuccessful presidential reelection bid.

The area in question is the Destin Dome Unit, a large natural gas discovery in the Eastern Gulf of Mexico. The lease holders – Chevron, Conoco and Murphy Oil – will relinquish seven of nine leases in the unit in exchange for $115 million. The remaining two leases, to be held by Murphy, will be suspended until at least 2012 under terms of the settlement.

The Destin Dome Unit is about 30 mi south of Pensacola, Florida (see map). Though not yet fully explored, the unit is believed to contain at least 700 Bcf of natural gas. Two other leases in the unit, held by ExxonMobil and Samedan Oil Corp., were not subject to the original litigation. However, under the settlement agreement, Chevron, Conoco and Murphy have agreed to seek to compensate ExxonMobil and Samedan in exchange for relinquishing these two leases.

But that’s not all. The Interior Department agreed to acquire the onshore mineral rights under Big Cypress National Preserve, Florida Panther National Wildlife Refuge and Ten Thousand Islands National Wildlife Refuge from Collier Resources Co. This will virtually ensure no new oil and gas development in the three areas.

Under the agreement covering mineral rights under 765,000 acres of the Everglades, the Interior Department will pay Collier $120 million in either cash or bidding credits that can be used for bids or royalties on future OCS sales. Congress must pass legislation to finalize the deal. The three areas hold estimated reserves of 40 million bbl of oil equivalent.

Interior Secretary Gale Norton said, "For the citizens of Florida, the deal will ensure long-term conservation of the Everglades . . . For Collier Resources, it ensures the company receives fair value for its mineral rights . . ."

We assume all of the oil companies involved with these settlements are happy to finally receive some compensation for not being allowed to develop their leases. However, it’s also likely that they would rather be drilling.

How the Bush Administration reconciles this decision with its vastly different position on developing the Alaskan National Wildlife Refuge escapes us. One can only suppose that the Florida deals were meant to help Jeb, and the President himself carry Florida in the next presidential election. Disgusting, isn’t it?

Kyoto flip-flop. Although President Bush has repeatedly opposed the Kyoto treaty, one of his administrators seems to be taking a different position. In fact, Christie Whitman, head of the Environmental Protection Agency, sent a report on climate change to the United Nations, which the media widely hyped as a reversal of the President’s position. Whitman’s report warned that global warming (GW) was in fact occurring, and admitted that recent temperature changes were "likely due mostly to human activities." As expected, the greenies were seen dancing in the street.

However, their joy was short-lived. Just a day after being blind-sided by Ms. Whitman, President Bush said, "The Kyoto Treaty would severely damage the U.S. economy, and I don’t accept that." It will be interesting to see if Dubya holds his ground. We worry that Jeb may tell him that GW is important to Florida voters, which could produce yet another flip-flop.

Security check. Monitoring X-ray machines while scanning passengers’ baggage is a routine job for security personnel – most everywhere that is, except for Dubai. According to a newspaper report sent to us via e-mail, and thus not verifiable or attributable, a policeman was horrified to see a skull and skeleton appear on the baggage-inspection-unit screen. The security staff immediately shut down the X-ray machine and rushed to determine what was wrong. What they found was quite a surprise – a man was stuck in the machine between a row of suitcases.

Not surprisingly, the man was rushed to the airport clinic where he was examined, but found to be unharmed. A later investigation revealed that the Somali national, who was transiting Dubai on the way to Qatar, thought he was supposed to go through a security check with his luggage before boarding his plane. He said he didn’t know that the machine was for baggage only, nor that he was supposed to pass through a metal-detecting gate after placing his bags on the X-ray machine’s belt.

Now this will boost your confidence while traveling through Dubai – the policeman on duty at the security gate was busy with another passenger and did not notice the Somali passenger lying on the X-ray machine belt.

Comments? Write: editorial@worldoil.com