1. Archive

Falloff bad timing for state's oil industry

Back in World War II, the federal government dangled cash rewards to encourage landowners to drill for oil to power America's military machine.

South Florida's Collier family responded and in 1943 tapped the state's first reservoir of smelly, molasses-like petroleum on the edge of Big Cypress National Preserve.

The South Florida oil fields, combined with larger discoveries of black gold in the Florida Panhandle, represent the state's little-heralded oil industry the past 63 years.

But if this year's production is any indication, the quantity of oil pumped from Florida has plunged about 20 percent. It's an industry fading at a most inopportune time.

Crude oil prices spiked this year at $78 per barrel, and experienced Florida oilmen can extract crude here at a profitable $15 per barrel. But there's simply not enough of it. As old wells run dry, there's been little new drilling, partly because of environmental fears.

In 2005, production at the state's 52 wells in 11 oil fields stood at about 2.6-million barrels. That's a fraction of Florida's peak of 48-million barrels in 1978. In comparison, Texas pumped 388-million barrels out of the ground last year.

"I'm still in the oil business - what's left of it," said Ricky Stechmann of Calumet Florida LLC, which drills most of the accessible crude in South Florida. "Most time when people ask me what I do I say used car sales. The oil business is not well received down here.''

For an industry that tries to tread as quietly as a Florida panther, a pair of elephants dominate Florida oil.

Exxon-Mobil runs the state's most prolific center, the Jay Field, about an hour north of Pensacola among cotton and peanut fields. Last year, Jay pumped 1.6-million barrels from deposits tucked among ancient ocean and river beds.

Calumet controls the No. 2 and 3 fields, both hidden in the swamps and forests east of Naples. Raccoon Point produced 427,000 barrels last year while West Felda produced 240,000 barrels.

The relatively poor grade oil, drawn from limestone two miles underground, is mostly gooey, asphalt-based and sulfurous. It's piped to the Miccosukee Indian Reservation and hauled via Port Everglades to Texas refineries.

Calumet's main owner is Microsoft co-founder Paul Allen through his Vulcan Inc. investing arm in Seattle. The billionaire's far-flung ventures include the National Football League's Seattle Seahawks.

Wells in both North and South Florida are "watering up" as petroleum pockets are depleted and flooded with brine. Both regions could cling to their diminishing returns a couple more decades, but the Jay Field's dropoff has been ominous. It produced 3.5-million barrels in 1999, more than twice last year's output.

If oil production is confined to only two regions of the state it's not for lacking of trying. "Dry holes" - the name for nonproducing exploratory wells - dot St. Petersburg, Clearwater and Pasco, Hillsborough and Hernando counties.

The last Florida oil discovery was the Panhandle's McDavid Field in 1988. It oozed just three years before petering out.

"The historical average for wildcat wells to succeed in Florida is between 2 and 3 percent," said Ed Garrett, head of the state's oil and gas section. "The odds of finding another field like the Jay Field are obviously pretty small."

The Collier family, one of Florida's richest, controls mineral rights on hundreds of thousands of acres in South Florida. Calumet pays them royalties.

The Colliers have been of two minds about further drilling. They applied for, and recently withdrew, a request to explore for more oil in Big Cypress swamp. They also tried to hawk mineral rights to the federal government in the name of the environment, but the price was too rich for the Bush Administration.

Industry insiders don't see much future for Florida crude - unless you're talking about the offshore variety. Saudi Arabian wells spurt tens of thousands of barrels a day. In Florida, 1,000 barrels is a gusher.

"Unless a new field is discovered it's going to continue with a long, slow decline," Garrett said. "They've found the easy fields.''

James Thorner can be reached at (813) 226-3313 or


Florida oil fields

The Jay Field, which ranked with Alaska's Prudhoe Bay in size when it opened in 1970, has supplied nearly three quarters of the oil found in Florida

Raccoon Point opened in 1978 in the swamps east of Naples and continues to be the state's No. 2 producer under the ownership of Microsoft's Paul Allen