Scientific, Environmental and Economic Considerations in Oil and Gas Policy for Florida Dr. Frank Alcock Director, Marine Policy Institute Mote Marine Laboratory Associate Professor of Political Science New College of Florida

MISSION To strengthen the scientific basis of public policy and societal decision making for economic development and sustainability of our oceans and coastal ecosystems

Honest Brokers Proactive engagement Proactive engagement Getting the questions right Getting the questions right Expanding the menu of policy options Expanding the menu of policy options Credible assessments of risks and opportunities Credible assessments of risks and opportunities

Considerations… Ecological risks associated with exploration and development of oil and gas resources Ecological risks associated with exploration and development of oil and gas resources Specific vulnerabilities on the West Florida Shelf and associated coastal communities Specific vulnerabilities on the West Florida Shelf and associated coastal communities Economic risks associated with the above Economic risks associated with the above

Considerations continued… Economic benefits: Jobs and Infrastructure Investments Economic benefits: Jobs and Infrastructure Investments Economic benefits: state budget revenues Economic benefits: state budget revenues Economic benefits: consumer prices Economic benefits: consumer prices Security benefits: energy independence Security benefits: energy independence

Final Consideration Distribution of risks and rewards Distribution of risks and rewards

Ecological Concerns Accident risk (technology, human error, nat hazards) Accident risk (technology, human error, nat hazards) Leakage associated with transfer and transport Leakage associated with transfer and transport Ballast discharge Ballast discharge Drilling fluids (carbonate hardbottom vs. sand/mud) Drilling fluids (carbonate hardbottom vs. sand/mud) Sand for beach renourishment Sand for beach renourishment Habitat (patch reef mapping) Habitat (patch reef mapping) Visual pollution (line of sight) Visual pollution (line of sight) Noise pollution (acoustic/marine mammals) Noise pollution (acoustic/marine mammals) Landside infrastructure development Landside infrastructure development

Economic Opportunities: Jobs and $$ Investments, Jobs, Lease rights, Excise Taxes, etc. Investments, Jobs, Lease rights, Excise Taxes, etc. Potential to be substantial but preliminary claims are heavily dependent upon assumptions Potential to be substantial but preliminary claims are heavily dependent upon assumptions Destin Dome & broader EGOM vs. nearshore Florida state waters Destin Dome & broader EGOM vs. nearshore Florida state waters

Fishkind Analysis Tens of thousands of jobs and $2.3 billion to $12 billion in additional state budget revenue Tens of thousands of jobs and $2.3 billion to $12 billion in additional state budget revenue Projections based upon 3 to 16 BBO in Florida state waters Projections based upon 3 to 16 BBO in Florida state waters Production timeline and its relationship to economic projections unclear Production timeline and its relationship to economic projections unclear

Hank Fishkind projections: “ The economic outlook for 2007 through 2009 is quite good.” – –December 26, 2006 “Continuing strong population gains and job growth, especially in central Florida, will shrink the home inventory fairly quickly over the next 18 months. The more over built markets will take longer to recover. But, fears that prices will drop significantly are unfounded. And so is the pervasive panic. The economy is stronger than the reports about it.” – –August 21, 2007 In response to question about the 2008 employment outlook for Florida: “Well, I think were about at the bottom of this cycle David, and thank god for that.” – –April 1, 2008

Economic & Security Implications: Consumer Prices & Energy Independence Impact of oil reserves on energy independence and consumer prices likely to be modest if not negligible Impact of oil reserves on energy independence and consumer prices likely to be modest if not negligible Less certainty regarding impact of gas reserves in Destin Dome. Less certainty regarding impact of gas reserves in Destin Dome.

Channeling Shakespeare… To drill or not to drill…Is that the question? To drill or not to drill…Is that the question? How, where and when to grant access How, where and when to grant access Minimizing risk and maximizing rewards to Florida... Minimizing risk and maximizing rewards to Florida... Fair allocation of risk and reward to coastal communities and county governments Fair allocation of risk and reward to coastal communities and county governments

Options to consider… Value of a peer review/assessment panel Value of a peer review/assessment panel Value of marine-based comprehensive management plan Value of marine-based comprehensive management plan Assurance Bonds Assurance Bonds Royalty rates & dedicated funding for at-risk coastal communities Royalty rates & dedicated funding for at-risk coastal communities

Thank You