News & Updates


Lawmakers try to restart state oil, gas production

Paul Flemming
News Journal capital bureau

TALLAHASSEE — A proposal to get oil and natural gas production going again in the Panhandle and Southwest Florida sailed through House and Senate committees Tuesday.

The bills would give tax breaks and exemptions to Florida’s six active onshore oil producers that is projected to cost the state $5.2 million in lost revenue. But its sponsor says it’s addition by subtraction, gaining some tax revenue where none will otherwise exist.

In the last five years the state has taken in $46.5 million from oil production in Florida. But increased costs to extract it and reduced prices have shut down many wells. To try to kick-start production, the bill changes the tax from a flat rate to a graduated levy based on oil prices. Also in the bill are five- and four-year exemptions for new and restarted production.

The bill’s House sponsor, Rep. Greg Evers, R-Baker, says it would put workers back on the job, contractors back in business and property owners cashing royalty checks again from new and rejuvenated production.

In the Jay Field of Santa Rosa County, which was the state’s biggest producer with 1.1 million barrels of oil in 2008, all 103 wells are now out of service. The entire state produced about 2 million barrels from 166 wells in 2008. Low oil prices and increased electricity costs led Quantum Resources, the Jay Field wells’ operator, to halt production in December. Evers said 68 people are out of jobs.

"It got so expensive to finish getting out all the oil that’s in the ground, it wasn’t worth it," Evers said.

The state’s Department of Environmental Protection estimates 51 wells would be eligible for tax exemptions under the bill’s provisions.

In the Senate, Sen. Ken Pruitt sponsors SB 978. It passed its first committee Tuesday.