State Politics

Fracking ban in Florida gets early Senate support

Sen. Dana Young, R-Tampa, shows off a piece of Florida limestone during a Senate Committee on Environmental Preservation and Conservation meeting considering her fracking ban bill, Tuesday, March 7, 2017, at the Capitol. The committee passed the bill.
Sen. Dana Young, R-Tampa, shows off a piece of Florida limestone during a Senate Committee on Environmental Preservation and Conservation meeting considering her fracking ban bill, Tuesday, March 7, 2017, at the Capitol. The committee passed the bill. TAMPA BAY TIMES

The Florida Senate reversed years of opposition to a statewide ban on oil and gas fracking and advanced a bill Tuesday that will prohibit the controversial practice in Florida.

Just hours after opening the annual legislative session, the Senate Committee on Environmental Preservation and Conservation voted unanimously to prohibit “advanced well stimulation treatment,” specifically hydraulic fracturing, acid fracturing and matrix acidizing. The high-pressure process involves injecting large volumes of water, sand and chemicals into rock formations to release oil and natural gas from rock caverns deep underground. Environmentalists says it is too risky a process to allow near Florida’s fragile aquifer.

The bill, SB 442, is sponsored by Sen. Dana Young, R-Tampa, who reversed her opposition to a fracking ban last year, promising voters in her newly drawn Senate district that she would make approval of the ban a top priority.

“This has been a wonderful journey,” Young said, acknowledging the shift in position since she voted for a House bill last year that would have regulated and authorized fracking beginning in 2017, after a state study.

She held up a chunk of Florida karst limestone: “It is fragile. It is porous,” she said. “Florida is unique. Florida is special, and we do not have to be like every other state in the nation.”

Opposing the bill were ExxonMobil, the Florida Chamber, the James Madison Institute, the Heartland Institute of Washington, D.C., the Hispanic Chamber of Commerce and the Florida Petroleum Council, which argued that Florida’s ban would be the strictest in the nation, that hydraulic fracturing has been proven safe in other states and that it must remain an option if Florida is to meet its energy needs.

Dave Mica, president of the Florida Petroleum Council, said the state consumes 27 million gallons of gasoline every day, the third largest amount in the country, and most of the natural gas used in the state comes from the process of hydraulic fracking. “We have a shared interest in our industry to protect energy resources,” he said.

Jake Kramer, an attorney at Stearns Weaver Miller Weissler Alhadeff & Sitterson, which represents Collier Resources, the company that has shown an interest in drilling for natural gas in Florida, warned that the measure “will be a lightning rod for litigation in this state.”

Kramer said that the measure will open the door to lawsuits that claim the measure qualifies as an economic taking, meaning landowners could seek compensation. Large landowners could claim that the law will deprive them of access to subsurface materials.

But Young disagreed. She said the bill does not foreclose mineral rights and does not prohibit traditional oil and gas exploration.

“There may be some uncertainty but the question is are you willing to roll the dice with the future of our state?” she said. “Are you willing to roll the dice with the future of our environment?” However, she acknowledged that with a room full of “business lobbyists” opposing her bill, her attempt to ban fracking in Florida “won’t be easy.”

Meanwhile, as one committee attempted to ban fracking, two lawmakers filed legislation this week that would change state law and allow Florida Power & Light to charge customers, and profit from, speculative natural gas fracking.

The bill, HB 1043 by Rep. Jason Brodeur, R-Sanford, is titled “Prudent Utility Investments in Natural Gas Reserves,” and the Senate companion is SB 1238 by Sen. Aaron Bean, R-Fernandina Beach.

The measures would overturn a Florida Supreme Court ruling last year that said that Florida regulators exceeded their authority when they allowed FPL to charge its customers, not its shareholders, for its speculative investment in fracking operations.

In June 2015, the Florida Public Service Commission went against its staff recommendation and unanimously gave final approval to a request by FPL that it be allowed to pass along costs of investment in natural gas fracking to its customers. FPL’s original request to charge customers up to $750 million annually was reduced by the PSC to $500 million for the speculative natural gas fracking activities. FPL, a regulated monopoly and Florida’s largest utility, entered into a $191 million joint venture with PetroQuest Energy of Louisiana to explore for natural gas in Oklahoma.

The proposal, called the Woodford Gas Reserves Project, allowed FPL to earn profits of more than 11 percent from the investment. Although FPL claimed the investment would provide a long-term hedge against volatile fuel costs and save customers money, FPL revealed that the Woodford project had cost customers about $5.8 million and did not save fuel costs.

The Office of Public Counsel, which represents ratepayers in utility cases, filed a lawsuit arguing that the PSC exceeded its authority in allowing the company to charge customers for the speculative investment. The Florida Supreme Court agreed and, in a 6-1 ruling ordered FPL to refund nearly $24.5 million to customers.

“Treating these activities as a hedge requires FPL’s end-user consumers to guarantee the capital investment and operations of a speculative oil and gas venture without the Florida Legislature’s authority,” wrote Justice Ricky Polston. Justice Charles Canady dissented, saying regulators did have the authority to use the fuel clause to allow the company to make risk-based investments.

After losing in court last year, Florida Power & Light is now turning to the Florida Legislature to revamp the law.

“Natural gas is a proven commodity that brings rates down and so we are going to allow FPL to go forward with a proven technology to have these reserves so that we pay down the road,” Bean said in an interview. He said his bill is intended to help FPL “do what’s best for their ratepayers in Florida.”

“I am looking to save the taxpayers and ratepayers money and there is proven technology that can lower consumers’ energy bills,” he said. “Do we have things to iron out? We do. And will not everybody agree? maybe.”

This story has been updated to correct when the Public Service Commission gave final to how much FPL was allowed to charge its customers for an investment in the Woodford Gas Reserves Project.