Chevron's Destin Dome Development Plan

Interior Reaches Agreement to Acquire Mineral Rights in Everglades, Settles Litigation on Offshore Oil and Gas Leases in Destin Dome

On May 29, 2002, Secretary Gale Norton announced that the Department has agreed in principle to settle litigation with oil companies that own interests in the Destin Dome Unit.  The companies--Chevron, Conoco and Murphy Oil--will relinquish seven of nine leases in the unit that were the subject of the litigation, in exchange for $115 million.  The remaining two leases, Destin Dome Blocks 56 and 57, are to be held by Murphy and will be suspended until at least 2012, under the terms of the agreement.  Murphy has agreed not to submit a development plan on the two remaining leases before 2012, the year when the current moratoria will expire.  Under the terms of the agreement, the leases can not be developed unless approved by both the Federal Government and State of Florida.

Previously, on August 15, 1997, MMS had begun its formal review process for Chevron U.S.A. Inc.'s plan to develop natural gas resources located 40 kilometers (25 miles) offshore Florida's northwest coast (see Map). Previously, Chevron had drilled three exploration wells (in 1987, 1989, and 1995) in this area, each of which resulted in significant natural gas discoveries (see Table). Chevron submitted its development plan in November 1996 on behalf of itself and its two partners--Murphy Exploration & Producing Company and Conoco, Inc. The development plan covered 11 contiguous lease blocks in the Destin Dome 56 Unit and called for an estimated natural gas production ranging from 300 to 450 million cubic feet per day.  A draft EIS was made available to the public on August 19, 1999. 

The State of Florida objected to Chevron's coastal zone consistency findings in February 1998.   Chevron appealed the State's objection to the U.S. Department of Commerce in April 1998.  On July 24, 2000, Chevron U.S.A., Conoco Inc., and Murphy Exploration & Production Company filed a lawsuit against the U.S. Government for denying the companies "timely and fair review" of plans, permits, and an appeal concerned with the Destin Dome 56 Unit Development Plan.  They alleged this action constituted a "taking" and that the Government delayed and ultimately blocked the partners from developing the field.  The lawsuit sought compensation for lease bonuses and rentals paid, exploration costs, expenses incurred on environmental studies, and opportunity costs associated with the project.  The agreement that was announced mooted this litigation.

AES Ocean Express and Tractebel Calypso Pipelines (Florida East Coast)

AES Ocean Express LLC (Ocean Express) and Tractebel Calypso LLC (Calypso) have proposed to transport natural gas from the Bahamas to South Florida.  Each company would construct a plant in the Bahamas to regasify LNG transported in by tankers and deliver it to Florida by their proposed pipelines.  Ocean Express has submitted an application (February 2002) to lay a 92.8-mile, 24-inch pipeline from Ocean Cay in the Bahamas to Broward County, Florida; 46.1 miles of this pipeline will be laid in the Federal OCS off Florida’s east coast.  An application was originally filed by Enron to lay the Calypso pipeline, and was assumed by Tractebel.  This 24-inch pipeline would begin at a proposed regasification plant near Freeport, Bahamas, and be laid 89.9 miles to Broward County Florida; 31.6 miles of this pipeline would be in the Federal OCS off Florida.

Both of the proposed pipelines have had an EIS prepared.  Construction will commence soon after all permits are granted.