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Destin Dome Unit, Florida

STATUS:  Killed

TYPE: Natural Gas

OPPOSITION:  Florida state government, environmental groups


BACKGROUND:  The Destin Dome Unit is a block of federal outer continental shelf leases acquired by Chevron, ConocoPhillips, and Murphy Oil to drill for natural gas about 25 miles south of Pensacola, Florida, in the Eastern Gulf of Mexico.  The Destin Dome is thought to hold large reserves of natural gas, anywhere from 1.6 to 3 trillion cubic feet.

Chevron U.S.A. drilled three exploratory wells in the area between 1987 and 1995.  Each of these showed significant amounts of dry gas.  In 1996, Chevron and its partners (ConocoPhillips and Murphy Oil) filed with the Minerals Management Service (now the Bureau of Ocean Energy Management, Regulation and Enforcement) a development and production plan for several leases in the Destin Dome, which the companies held under a five-year lease.  Under the filed plan, Chevron would drill 12-21 wells to establish production, estimated at 300-450 million cubic feet of natural gas per day.  The gas would be transported by a pipeline to a processing facility in Mobile, Alabama.

The State of Florida opposed Chevron’s Destin Dome exploration plan, and its clashes with federal authorities and the lease holders delayed the project significantly.  On July 24, 2000, Chevron and its partners filed a lawsuit against the U.S. government for denying the companies “timely and fair review” of plans and permits, and an appeal concerned with its Destin Dome 56 Unit.  On May 29, 2002, Secretary of the Interior Gale Norton announced a settlement of the litigation, which effectively killed the project.  Under the terms of the settlement, the U.S. government bought back seven of the nine leases for $115 million.  The remaining two leases would be held by Murphy Oil and suspended until at least 2012.  On December 20, 2006, President Bush signed into law a compromise with Florida senators that provides their state with at least a 125-mile buffer in most areas until mid-2022.

S. 1462, the “American Clean Energy Leadership Act of 2009,” sought to open the Destin Dome to natural gas drilling.  Many environmental groups, including Sierra Club, opposed the bill.  S. 1462 was passed by a bipartisan majority of the Senate Energy and Natural Resources Committee in July 2009, but never received a full vote in the Senate.

As recently as April 2010, the Obama administration sought to study and possibly open to drilling several deepwater areas in the Gulf of Mexico.  However, none of these areas included the Destin Dome, and in the wake of the Deepwater Horizon oil spill in the summer of 2010, the administration has officially taken those study and exploration areas off the table.

SOURCES:  Bureau of Ocean Energy Management, Regulation and Enforcement: http://www.gomr.boemre.gov/homepg/offshore/egom/offflor.html; http://www.gomr.boemre.gov/homepg/offshore/egom/eastern.html;
Mobile Press-Register: http://blog.al.com/press-register-business/2010/04/alabama_businesses_could_benef.html;
Offshore Magazine: http://www.offshore-mag.com/index/article-display/24375/articles/offshore/volume-58/issue-6/departments/drilling-production/florida-dispute-delays-destin-dome-project.html;
Sierra Club: http://action.sierraclub.org/site/MessageViewer?em_id=114481.0       

Last Updated:  November 19, 2010