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Texas company ends controversial oil drilling in Florida; keeps pumping from one well

Workers at the Dan A. Hughes drilling operation on Dec. 31, 2013, the day the company violated its permit by using a drilling technique not allowed under its state permit. The uproar that resulted led to a $25,000 fine, testing of the groundwater and now an announcement from Hughes that it’s ending its drilling work in Collier County.

Florida DEP

Workers at the Dan A. Hughes drilling operation on Dec. 31, 2013, the day the company violated its permit by using a drilling technique not allowed under its state permit. The uproar that resulted led to a $25,000 fine, testing of the groundwater and now an announcement from Hughes that it’s ending its drilling work in Collier County.

A Texas company that sparked controversy by drilling for oil in Florida panther habitat near the Everglades — and then violating its permit — announced Friday that except for its lone well that's producing oil, it is ending all its operations there.

Officials from the Dan A. Hughes Co. "assessed their capital budget and their prospects in other parts of the country and decided to allocate their resources to other project areas," spokesman David Blackmon said.

He dismissed speculation that the move was driven by a rift between Hughes and Collier Resources, the local landowner that had leased the company the mineral rights. Collier Resources officials could not be reached for comment.

Hughes' leading critic, Joe D. Mulé of Preserve Our Paradise — who helped lead an antidrilling protest at Gov. Rick Scott's waterfront mansion in nearby Naples — said he's not going to throw a big party just yet. "It's a small victory," he said, predicting Collier Resources will lease the mineral rights to another driller that will do a better job of staying out of the spotlight. "This fight is far from over. We need to pass legislation in Collier County that bans fracking."

Meanwhile, state Department of Environmental Protection officials, who in recent weeks had tried to placate angry local officials by mounting a belated crackdown on Hughes' activities, were caught off-guard by Hughes' announcement.

"They have not sent any correspondence to the DEP," agency spokeswoman Tiffany Cowie said. "We found out about it from the media."

A similar surprise is what first stirred opposition to Hughes' drilling operation among residents of Collier County's semi-rural Golden Gate Estates neighborhood, where Hughes had planned a new well just a mile from the Florida Panther National Wildlife Refuge.

No one realized what the company was up to until a Hughes subcontractor last year sent out letters asking Golden Gate residents for information needed to draw up an evacuation plan in case of an explosion. The alarmed residents formed Preserve Our Paradise, organized protests, wrote letters and packed a DEP public hearing to oppose granting the company a drilling permit.

This would not be the first oil drilling operation permitted in Florida, where wildcatters have been hunting black gold since the 1940s. There are more than 150 active wells, split between fields in the Panhandle and in southwest Florida, and the oil they pump out provided $700 million in tax revenue for the state.

In the past five years, the DEP has approved more than 40 oil drilling permits and denied zero. So despite strong public opposition, the DEP approved the new one from Hughes, too.

But then, in December, the DEP ordered a shutdown. Hughes' permit allowed it to inject acid deep underground to fracture the limestone. The process is similar to hydraulic fracking, which has been the subject of heated debate across the country, although the industry term for it is "acid stimulation."

However, Hughes then tried something never before allowed in Florida. After injecting the acid, Hughes workers injected a mix of sand and chemical gel under pressure to prop open the new fractures and let the oil flow out. That's known as using a "proppant," and it was not covered by the DEP permit.

The DEP shutdown was not made public until April, when the agency revealed that it had negotiated a fine of $25,000 with Hughes, which the company paid while insisting it had done nothing wrong. The DEP also required the company to test the groundwater for any pollution.

Collier County officials blasted the agency for what they viewed as lackadaisical regulation of a dangerous industry and filed their own lawsuit.

In the past month, DEP Secretary Herschel Vinyard Jr. has met with local officials and sent letters to Hughes setting stricter requirements for its activities, including attending a meeting with the county commissioners. But Hughes officials skipped it.

In a prepared statement, Hughes spokesman Blackmon said the company is ending its work in Collier "with the knowledge that our activities in the region have caused no harm to the environment and have been fully compliant with Florida law."

Craig Pittman can be reached at craig@tampabay.com. Follow @craigtimes.

Texas company ends controversial oil drilling in Florida; keeps pumping from one well 07/11/14 [Last modified: Friday, July 11, 2014 9:20pm]

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