Casino concerns about offshore drilling

Posted on February 11, 2012 

By GEOFF PENDER

glpender@sunherald.com

GULFPORT — Coast casinos say they’re not opposed to oil and gas drilling in Mississippi waters, but they still have concerns they want addressed to protect the tourism industry as the state moves forward.

They’re trusting state leaders that exploration and drilling would be low-key for natural gas and out of sight of most of the mainland, but they don’t want tourist areas overrun by industrial equipment, boats and workers.

Lawyers for Beau Rivage, Island View and IP casinos have sent a letter to the Mississippi Development Authority outlining their concerns and recommendations. They want to know where ports to support exploration and drilling would be located and what routes would be used to move equipment to and from drilling and exploration sites.

The letter said: “While it appears the vast majority of the Mississippi Sound will be off limits to seismic activities and exploration and production facilities, we can find no information that demonstrates the state has considered, assessed or evaluated any potential environmental or aesthetic impacts of any land-side ports necessary to service offshore development and production activities.”

They also recommend the MDA include in its leasing -and seismic-testing rules language from the Legislature’s 2004 offshore oil and gas law that prohibits activity in most of the near-shore waters of the Mississippi Sound. The casino industry back then joined with community leaders and environmentalists and lobbied for the nearshore prohibition as lawmakers, energy lobbyists and then-Gov. Haley Barbour were pushing to open state waters to drilling.

Many environmentalists and some local business leaders still oppose any offshore exploration or drilling and have said even after most of the Sound was put off limits, the barrier islands and other areas could still be harmed. But casino and other powerful business leaders reigned in their protest and lobbying after Coast lawmakers successfully secured protection for most near-shore water. Only two areas, on the Alabama and Louisiana lines, would allow exploration and drilling nearshore.

But opponents say the Legislature could easily come back later and open water inside the Sound to drilling, and the Alabama-line area is near fragile habitat.

The casino letter was one of many comments MDA received during a recently ended 43-day comment period and in public hearings on its draft of offshore leasing and seismic surveying rules.

In a meeting at the Sun Herald on Thursday, MDA officials said the agency will consider the casinos’ concerns and meet with tourism leaders. They said they were uncertain where landside operations will be based or exactly who might regulate their operations, but they don’t believe drilling will harm tourism or the environment.

“From MDA’s standpoint, tourism is vital,” said MDA spokesman Dan Turner. “Between (oil and gas) and tourism, tourism is a bigger deal — at least it is now. It’s here. It’s happening now and we want it to continue to grow.”

Jack Moody, MDA’s program director for mineral leasing, said, “We don’t want to turn a tourist area into an industrial one.” He said the Coast already has three industrial ports, and likely any oil and gas operations would be based in those. But, he said, “we want to maintain flexibility” with rules, because some area boaters and fishermen might want to work with oil and gas.

“We want to allow Mississippians to get those jobs,” Moody said.

Cathy Beeding, attorney for Island View, said casinos just want to see “a balanced approach,” to exploration and drilling that protects tourism.

“We certainly understand the state’s interest in economic development, and we don’t want to stymie that,” Beeding said. “... As they move to the next steps, we want to make sure they balance those concerns.”

Mary Cracchiolo-Spain, spokeswoman for Beau Rivage, said state leaders were careful and deliberate when they created regulations for casinos, and they want the same considerations when regulations are adopted for offshore drilling.

“We want to protect existing businesses and tourism,” Cracchiolo-Spain said.

After the Legislature passed laws in 2004 and 2005 aimed at promoting exploration and drilling in state waters and moving much of its oversight from state environmental agencies to MDA, Hurricane Katrina hit and the efforts were shelved. But shortly before he left office, Barbour directed MDA to move forward with creating regulations for leasing and seismic testing.

MDA has pitched local leaders and residents that it estimates there is around 350 billion cubic feet of natural gas offshore and that the state could receive $250 million to $500 million over however many years it takes to pump it out. Legislation would direct 97.5 percent of the state’s collections would go into the Education Trust Fund, although some question whether the money, if it materializes, would end up providing extra funds for education.

Local governments would also receive severance payments, with the legislation directing half of this money to reduce property taxes.

On Thursday, Moody noted that natural gas prices are extremely low right now and historically volatile, making it uncertain whether companies would want to drill in Mississippi waters any time soon.

He said that as only “an educated guess,” he would suspect seismic testing to begin in one to three years. When asked whether people would be able to hear or feel seismic testing, which uses underwater explosions of compressed air, Moody said, “from the mainland, probably not. It’ll scare some fish.”

“We’re looking for responsible development,” Moody said, “that balance between responsible economic development and protection of environmental resources. It can be done.”

Staff writer Mary Perez contributed to this report.

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