Crude Awakening

The site sits hidden just a stone's throw from a nearby elementary school, behind vacant lots filled with stands of thick trees. Surrounded by a rusty chainlink fence topped with barbed wire, a short, squat cement pad rises up in the middle of small, neatly mown field. A few pipes painted forest green rise out of the ground, and cables loop and coil around the unusual structure.

Listen closely and you can hear a low hum coming from the property. That's the hum of oil being pumped out of the ground right here in Lehigh Acres.

"I never knew what it was," says Dwayne Vega who lives just a couple of blocks from the Lehigh oil well. "I thought it was something from 50 years ago that nobody has anything to do with anymore."

The Lehigh Park oil field, as it's known in the industry, has actually been active since 1974 pulling up what one old television show theme song called "black gold" and "Texas tea." Thirteen more oil fields sit scattered around Southwest Florida, some dating back more than 60 years.

It's all part of a small industry that few Florida residents and even fewer visitors know exists.

With oil prices skyrocketing, some think it's time for Southwest Florida's quiet oil industry to go into high gear. With tens of millions of barrels still believed to be bubbling under the surface, why wait?

Others, concerned about the environmental impact of exploration and drilling, balk at the thought and argue the oil industry in the region is long past its prime.

According to Florida Department of Environmental Protection, oil production in the Sunshine State dates back to September 1943, when "black gold" was discovered in the Sunniland field in eastern Collier County near Immokalee. Soon, more oil fields began popping up in an arc that extends from the Lehigh Acres area of eastern Lee County down through Hendry and Collier counties and into Miami-Dade County.

Named after nearby landmarks or communities, some of the fields have colorful monikers such as Bear Island, Pepper Hammock and Raccoon Point. Other field names sound more familiar, like Corkscrew, Lake Trafford and Sunoco Felda. Over the years there have been 14 fields in Southwest Florida. Currently, about half of the fields are active with a total of 37 wells pumping up a thick crude. This whole oil-producing area is named the Sunniland trend, after the first field found.

Most of the Sunniland trend oil, pumped from a depth of 11,500 feet, is channeled through underground pipelines to a tank battery where it's held in huge containers. From these sites, trucks transport the oil to Port Everglades and ship it off on barges to anywhere from Louisiana to Trinidad and points beyond.

"It goes to whomever wants to buy it at that particular time and then they take it to a refinery," says Robert Caughey, the district coordinator with the DEP's Florida Geological Survey office.

Southwest Florida isn't the only oil-producing region of the state. In June 1970, an oil field was discovered near Jay, in the Panhandle, leading to eight more fields; seven are now active.

"That was a huge field," Caughey says. "That was four or five hundred million barrels of recoverable oil.more oil than [in] South Florida."

Oil production grew steadily in the state over the decades, attracting big name companies like Exxon, Sun Oil and Chevron. The industry reached a peak around 1978 when 47 million barrels were produced in the two oil regions. One barrel equals 42 gallons. In total, an estimated 592 million barrels of oil have been pumped from beneath Florida's sandy surface since 1943. In 2003, approximately 9,000 barrels were produced each day.

While that may sound like a lot to the uninitiated, Florida only ranked 17 among oil-producing states in 2003, far behind industry leaders Louisiana, Texas, Alaska and California. In Southwest Florida, state officials "guestimate" that only about 30 to 40 people are employed in oil produc-tion full-time. And experts say the quality of Florida oil leaves something to be desired.

"The standard is West Texas crude. That's the price that's quoted," Caughey says. "South Florida is a high-sulfur asphalt-based oil, and it gets about six or seven dollars less a barrel than West Texas Crude. Refineries don't like sulfur, so they're not going to pay as much for it, and it's a little

harder to find someone to sell it to."

ENVIRONMENTAL CONCERNS

While most Floridians aren't even aware of the industry, oil production in the state isn't without controversy.

Much of the drilling and pumping in Southwest Florida is taking place on lands that environmentalists consider sensitive. This includes 17 wells located in the Big Cypress National Preserve, home to nearly 100 protected species, including the Florida panther and the red-cockaded woodpecker. Test wells were also drilled in the Florida Panther National Wildlife Refuge, but state officials say they never produced any oil and were plugged and abandoned.

There are also concerns over the impact that wells, containment berms and access roads have on efforts to improve water flow throughout Southwest Florida as well as into

the Everglades.

"There's definitely a disruption," says Charles Lee, the director of advocacy for the Florida Audubon Society. "It would be better if [oil production] just didn't happen there."

You might ask, how do companies get away with exploring for, drilling for and pumping oil inside a national preserve? You need only look as far as the county name for the answer: Collier.

The Collier family today owns thousands of acres of land across Southwest Florida. They used to own even more, but in 1974, the descendants of early Florida settler Barron Collier sold much of their land to the federal government. What they didn't sell was the subsurface mineral rights to approximately 400,000 acres. That's more than half the preserve's total acreage. Today, the family's Collier Resources Company leases land to various oil companies. In 2003, these companies extracted about 628,000 barrels from two active fields within Big Cypress.

"Historically, they [the Collier fam-ily] would contract with third parties to do the extraction and retain royalty rights," says Bob Duncan, the general manager for Collier Resources.

In response to environmental questions, Duncan says Collier-and other producers for that matter-are care-fully monitored by the government.

The Department of the Interior under President Bush has expressed its determination to purchase those min-eral rights and end oil production in these sensitive lands. At one point, the government offered the Collier family $120 million, but politicians balked at the amount and the deal fell apart.

Collier Resources has kept the heat on over the years by applying for additional permits to search for new oil fields inside Big Cypress, in a process that includes the use of dynamite. In 2002, the National Park Service approved Collier's plans. Officials said they had no other option, because the Colliers own the minerals rights and that includes the right to search for new fields and exploit them.

"If they can be looked for and extracted and generate an acceptable return, then why shouldn't they?" Duncan asks. "That represents a fair business opportunity."

Estimates on the total value of the Collier mineral rights vary widely according to reports, from as low as $5 million to more than $400 million. "The deal that is on the table is $120 million payment," says Duncan, who adds the plan called for the Colliers to donate the excess value in return for certain tax benefits.

But he points out that price may be out of date. "Gas is worth a lot more than the $20 a barrel it was when the tentative agreement was hashed out," Duncan says. "Now it's up to $50 plus a barrel."

Oil speculators believe much more oil waits under the Florida surface. Not only are there possible new oil fields to discover, but more oil may lie deeper in existing fields.

"There's virtually six to eight thousand more feet of sediments that have been virtually unexplored today," Duncan says. The U.S. Geological Survey agency estimates there may be an additional 68 million barrels of oil buried deep beneath the Big Cypress Preserve. There are likely millions more under other areas of Southwest Florida; but whatever privately conducted studies exist haven't been made public.

FUTURE OF FLORIDA OIL

But Lee of the Audubon Society thinks it's unlikely Collier Resources or anyone else will go full steam ahead with more drilling.

"The time for oil in Big Cypress has come and gone," he says. "Big Cypress exploration and production has reached its peak and is on the decline."

That's why he thinks a multi-million dollar buy-out of the Collier holdings is not the right move. "I'd have to think long and hard before I'd think that's a good deal for taxpayers," Lee says. Like many others, he believes there will never be a major expansion of oil production in the area because, ultimately, there's just not enough money to be had. With moderate quality oil, comparatively small fields and major restrictions and regulations on the exploration and extraction process, the future of the region's oil industry is clouded.

"It's some of the most expensive per well cost to drill anywhere in the country," Lee says. "[New] wells out there will be few and far between."