STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
RICHARD D. RADFORD, )
)
Petitioner, )
)
vs. ) CASE NO. 80-1388
) DEPARTMENT OF NATURAL RESOURCES, )
)
Respondent. )
) FLORIDA AUDUBON SOCIETY, )
)
Petitioner, )
)
vs. ) CASE NO. 80-1389
) DEPARTMENT OF NATURAL RESOURCES ) and GETTY OIL COMPANY, )
)
Respondent. )
) GETTY OIL COMPANY, )
)
Petitioner, )
)
vs. ) CASE NO. 80-1390
) STATE OF FLORIDA DEPARTMENT OF ) NATURAL RESOURCES, )
)
Respondent. )
) THOMAS N. WALLIN, )
)
Petitioner, )
)
vs. ) CASE NO. 80-1468
) STATE OF FLORIDA DEPARTMENT OF ) NATURAL RESOURCES and GETTY OIL ) COMPANY, )
)
Respondent. )
) UNITED CITIZENS AGAINST )
POLLUTION, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 80-1602
) DEPARTMENT OF NATURAL RESOURCES )
and GETTY OIL COMPANY, )
)
Respondent. )
)
RECOMMENDED ORDER
The above captioned cases involving preliminary actions taken by the Department of Natural Resources (DNR) upon a permit application filed by Getty Oil Company were consolidated, together with ten additional cases involving preliminary decisions issued by the Department of Environmental Regulation (DER) as to applications for a dredge and fill permit, natural gas flare construction permit, and a request for variance (DOAH Cases Nos. 80-785, 80-855-59, 80-866- 68, 80-1245) . A joint hearing on the consolidated cases was held at Pensacola, Florida on November 12 and 13, 1980, and at Tallahassee, Florida on November 24 and 25, 1980.
APPEARANCES
For DER: William W. Deane, Esquire Assistant General Counsel 2600 Blair Stone Road Tallahassee, Florida 32301
For DNR and Board of Henry Dean, Esquire Trustees of the Internal 3900 Commonwealth Boulevard Improvement Trust Fund: Tallahassee, Florida 32303
For Getty Oil William H. Green and
Company: Gary Sams, Esquires Post Office Box 6526
Tallahassee, Florida 32301
For United Citizens
Against Pollution, James R. Brindell, Esquire Inc., and Northwest Post Office Box 3103 Florida Sierra Club: Tallahassee, Florida 32303
For Florida Audubon Charles Lee, Vice President Society and Francis M. Post Office Drawer 7 Weston Audubon Society: Maitland, Florida 32751
For Thomas N. Wallin: Appeared in own behalf For Richard D. Radford: Appeared in own behalf
ISSUES PRESENTED
Whether the application of Getty Oil Company for a permit to conduct dredge and fill activities by the construction of an oyster shell platform and by dredging (drilling) in East Bay, Santa Rosa County, should be approved, pursuant to Chapters 253 and 403, F.S.
Whether the application of Getty Oil Company for a variance from Rule 17-4.28(8)(a), F.A.C., to construct a shell foundation pad and to drill one
natural gas exploratory well in East Bay, Santa Rosa County, should be approved, pursuant to Chapter 403, F.S.
Whether the application of Getty Oil Company for a permit for natural gas flare construction should be approved, pursuant to Chapter 403, F.S.
Whether the application of Getty Oil Company for a drilling permit should be approved, pursuant to Chapter 377, F.S.
These proceedings stem from Getty Oil Company's intent to erect a structure and drill a test well in East Bay, Santa Rosa County, for the purpose of natural gas exploration. The waters of East Bay are Class II, approved for shellfish harvesting. Getty holds leasehold rights for drilling at the proposed site under an assignment of a lease granted by the Trustees of the Internal Improvement Trust Fund in 1968.
DER issued Notices of Intent to grant Getty's three applications, subject to specific conditions, as follows:
Request for Variance
By letter of April 3, 1980, the DER Director of Division of Environmental Permitting issued its Notice of Intent to grant a variance from Section 17- 4.28(8)(a), Florida Administrative Code, pursuant to Section 403.201(1)(a)(c) Florida Statutes, to permit the requested dredge and fill activities in an area approved for shellfish harvesting by the Department of Health and Rehabilitative Services.
Dredge and Fill permit
By letter of April 3, 1980, the DER manager of the Northwest District issued Notice of Intent to issue a dredge and fill permit for the construction of the exploratory gas drilling platform provided that the applicant obtained a variance from the requirements of Sections 17-4.28(8)(a), Florida Administrative Code.
Natural Gas Flare Construction Permit
By letter of June 16, 1980, the DER manager of the Northwest District issued Notice of Intent to issue a permit for natural gas flare construction at the East Bay test site in Santa Rosa County.
DNR issued the following Notices of Intent regarding the Chapter 377 drilling permit:
By letter of June 18, 1980, as amended by letter of June 23, 1980, the Executive Director of the Department of Natural Resources issued Notice of Intent to recommend denial of Getty's application for a permit to drill in East Bay for the reason that Section 377.242, Florida Statutes, prohibits the construction of structures for the production of oil, gas and other petroleum products on submerged lands within the lease area. However, by further order of the Executive Director, dated duly 28, 1980, Notice of Intent was issued to recommend approval of the drilling permit application, subject to specified conditions in the event that the legal opinion expressed in his prior letters concerning the prohibition against drilling as set forth in Section 377.242, Florida Statutes, was found to be incorrect.
Although the DER cases were originally scheduled for hearing in August, 1980, the consolidation of the DNR cases resulted in the granting of a motion for a continuance of the hearing until November, 1980.
At the commencement of the hearing, the parties announced that they had arrived at a stipulated settlement and that all issues raised in the consolidated cases were, with two exceptions, withdrawn by the parties with respect to the three permit applications and the variance application. The two issues reserved by the Stipulation involved the application of Section 377.242(1), Florida Statutes, with respect to the requested drilling permit from the Department of Natural Resources. The Stipulation was accepted by the Hearing Officer as sufficiently comprehensive to meet the requirements of pertinent statutes and regulations with regard to the permits under consideration. Paragraph VI of the Stipulation provides that paragraphs II and IV of the Stipulation shall be specifically incorporated into the agency permits or variance to which those paragraphs refer.
In view of the agreed resolution of the two DER permit applications, a hearing on those matters became unnecessary. However, as to the application for variance, subsection 403.201(2), Florida Statutes, mandates that the Department hold a hearing on each application for variance. Inasmuch as the parties to the proceedings had resolved all factual and legal questions in their Stipulation, the only remaining purpose for a hearing was to permit public participation. Accordingly, twelve public witnesses testified at the hearing (Hearing Officer's Exhibit 1), four of whom submitted documentary materials (Exhibits 1-4). These included a petition signed by local area citizens in support of the project, a favorable recommendation by the Pensacola Area Chamber of Commerce, a statement from the League of Women Voters from the Pensacola Bay Area expressing concern for preservation and protection of estuaries and wetlands, and various publications submitted by one witness.
After the receipt of public testimony, the hearing was continued until November 24, 1980 for presentation of evidence concerning the two remaining issues reserved by the parties in their Stipulation. Due to the fact that the DER was not a party to the matters remaining for consideration, its representative did not participate in the further proceedings.
During the hearing sessions on November 12- 13, 1980, twenty eight exhibits were provisionally received in evidence. (Hearing Officer's Exhibit 2)
. Eight additional exhibits were received in evidence during the session on November 24-25, 1980. (Hearing Officer's Exhibit 2)
By Recommended Order, dated December 15, 1980, the Hearing Officer recommended to DER that the Stipulation of the parties be accepted, and that the requested DER permits and variance be issued in accordance with the terms thereof.
The two issues reserved by the Stipulation involving the application of Section 377.242(1), Florida Statutes, are as follows:
Whether Section 377.242(1), Florida Statutes, prohibits the proposed drilling on submerged lands located in East Bay.
Whether Section 377.242(1), Florida Statutes, can be constitutionally applied to prohibit
Getty from conducting the proposed drilling on submerged lands located in East Bay.
Evidence was received at the hearing as to whether Getty Oil Company is authorized by the statutory provision in question to drill at the proposed site. As to the constitutional issue, Getty was permitted to proffer testimony to preserve such issue for any future judicial determination. The following findings of fact are restricted accordingly.
FINDINGS OF FACT
Getty Oil Company proposes to drill a hydrocarbon exploration well pursuant to State Drilling Lease No. 2338. The lease was issued by the Trustees of the Internal Improvement Trust Fund of the State of Florida on July 9, 1968, to J. Melvin Young, Arden A. Anderson, and Philip D. Beall. Getty purchased the lease from the original lessees on March 10, 1970. The lease grants the right to explore for and produce oil and gas from the state-owned submerged water bottoms of East Bay, Blackwater Bay, and that portion of Escambia Bay lying in Santa Rosa County, a combined total of 47,932 acres. The proposed well would be drilled from submerged lands located in approximately the center of East Bay to a depth of approximately 17,800 feet. (Testimony of Anderson, Exhibits 6, 27)
The well site will be located some 2.7 miles from the nearest shore and about six miles from the Gulf of Mexico. The site is not within one mile from the seaward boundary of the Yellow River Marsh Aquatic Preserve, the Fort Pickens State Park Aquatic Preserve, or the Gulf Islands National Seashore.
East Bay is an estuary which is part of an estuarine "system" in the immediately surrounding area of Pensacola. An estuary is an area that is a buffer zone between the open ocean where the salinity is equal to 35 parts per thousand, and the fresh water river areas which drain into the system. The fresh water runoff carries nutrients into the system which in turn result in productivity of plants and organisms, including fish, shrimp, oysters, and other shellfish of various types. Estuarine systems are therefore one of the most productive types of ecosystems. East Bay is one of the best parts of the estuarine system from the standpoint of both water quality and general health of the system. Although during the major periods of river drainage in the winter and spring months, low water salinity exists on the surface of East Bay, the bay is not considered to be a fresh water lake, river or stream from an ecological standpoint.
(Testimony of Herbert, Livingston, Exhibits 6, 15, 26, 29-32)
The coastline of Florida in the vicinity of East Bay coincides with the seaward boundary of Santa Rosa Island, a barrier island, and extends across the mouth of the entrance to Escambia Bay. East Bay is connected to Escambia Bay, but does not connect directly to the Gulf of Mexico. (Stipulation, Exhibits 29,
31 and 32)
Based on seismic data obtained from a 1970 survey of the Getty Oil Company's leased area, including East Bay, the only possible structure where hydrocarbons could be located beneath submerged lands is one covering 2,860 acres or approximately 4 1/2 square miles. The proposed well site is at the top center of the structure, which extends some 17,800 feet below the surface of the submerged land. There is no evidence that there are commercially recoverable deposits of salt, brines, or sulphur under the lands of the leasehold area. Hydrocarbon accumulations tend to occur along the crest of regional arches. The crest of the Santa Rosa Arch has been projected to be underneath the East Bay area. (Testimony of McCarthy, Greenwell, Exhibits 34-35)
Studies conducted by Getty Oil Company to determine the advisability of drilling at the proposed site led it to the conclusion that there is one chance in twelve that hydrocarbons would be present in the target structure in commercially productive amounts. These studies also produced an estimate that Getty would accrue about $537,000,000 before state and federal income taxes if it vertically drilled four producing and one non-producing wells in the area. (Testimony of Greenwell)
Directional well drilling is performed by the oil industry to maximum lateral deviations of 10,000 to 12,000 feet, depending upon varying conditions at the site. In such instances, an angle is formed at periodic intervals which eventually deviates sufficiently to reach the target structure. Straight-line slant drilling is only feasible in cases of shallow wells.
Directional drilling creates varying problems based on the depth and lateral deviation required in a particular place. The "doglegs" required in creating the necessary angles pose extreme difficulties in removing cuttings from the drill hole. The angles created in the process produce tremendous torque and cause pipe "fatigue." Drill collars are subject to sticking and, at extreme depths, it is doubtful if turning of the pipe can be achieved. Such a method of drilling makes it difficult to control direction, particularly at great depths. Additionally, at extreme depths where the temperature is some 325 degrees, the rubber material of "down-hole" motors is melted. (Testimony of Porterfield, Moore)
In order for Getty Oil Company to directionally drill from land to the target structure under East Bay, it would be necessary to commence drilling on land approximately 3.3 miles from the bay site at a point about 1 1/4 miles due north of White Point. Drilling at that location would require a 50 percent lateral deviation of some 17,500 feet and a total drilling distance of some 25,000 feet. Such a distance has never been attempted in the history of directional drilling and is considered by experts in the field to be virtually impossible from a technological standpoint. Such a well would require that 2 1/2 degree angles be formed every 100 feet. These bends in the well hole through which the pipe must be extended and bent would create extremely severe pipe failure problems and exacerbate the other traditional difficulties encountered in directional drilling. Further, the cost of directional drilling at the Getty site would make such an undertaking economically undesirable even if it were technically possible. In view of all the considerations, Getty Oil Company does not consider directional drilling a viable alternative to vertical drilling, and therefore would not undertake drilling by such a method. Getty does not own or hold property interests in any dry-land areas near the shore of East Bay. (Porterfield, Moore, Englert)
Prior to 1972, the Department of Natural Resources issued permits to drill in submerged lands of the state. Subsequent to the 1972 enactment of Section 377.242(1), Florida Statutes, no such permits have been issued and the pending application of Getty Oil Company is the only one which has been received by the Department since that time. Based on prior policy, the Chief of the Department's Bureau of Geology recommended to the Executive Director that Getty's application be approved. His reason for such recommendation was that he had not been aware that there was a variation in the 1972 statute and the Department's prior policy. Dr. Elton J. Gissendanner, Executive Director, however, determined that the statutory provision prohibited the placement of structures for the purpose of producing oil or gas anywhere in submerged lands in the state within a mile seaward from the coastline, which he considered to be located at the seaward border of Santa Rosa Island. He interpreted additional
language in the statutory provision (which prohibited the issuance of a drilling permit within one mile inland from the coastline unless estuaries, beaches and shore area were adequately protected in the event of accident) to refer to uplands, and that therefore unrestricted drilling on land could only occur more than a mile from the coastline. In this manner, he concluded that the legislature intended to protect all estuaries of the state. He views his decision to constitute a proposed departmental policy which would require ratification by the Governor and Cabinet as head of the Department. However, no rules have been issued in implementation of the statutory provision. Based on his interpretation of the statute, the initial letter of intent to deny the requested permit was issued on June 18, 1980, as amended by his letter of June 23, 1980. By his further letter of July 28, 1980, the Executive Director informed Getty Oil Company that he had been directed by the Governor and Cabinet to issue a Notice of Intent to recommend final agency action concerning the merits of the application in the event that his legal position was overruled.
The letter stated that pursuant to that mandate, and after review of the application, he intended to recommend approval of a permit to drill the requested test well in East Bay for the reason that the application complied with all criteria set forth in Chapter 16C-2, Florida Administrative Code.
Certain conditions were stated in the letter to which any permit would be subject. These conditions were the subject of tide later stipulation between the parties at the commencement of the final hearing in these proceedings. The statutory interpretation of the Executive Director was confirmed in a later departmental legal opinion. (Testimony of Henry, Gissendanner, Exhibits 15, 20, 36)
Various legislative materials, including bills, committee reports, and transcripts of committee meetings which primarily were preliminary to or contemporaneous with the passage of the legislation that became Section 377.242(1), F.S., were admitted in evidence (Exhibit 33a-p). A post-hearing Motion of Getty Oil Company to supplement the record with additional legislative materials was granted in part by the official recognition of a Report of the House Committee on Environmental pollution Control (Exhibit 33q). A further post-hearing Motion of United Citizens Against pollution, Inc. to supplement the record with further pertinent legislative materials was similarly granted (Exhibit 33r, s).
CONCLUSIONS OF LAW
Section 377.22, Florida Statutes, provides that the Department of Natural Resources shall issue appropriate orders governing all phases of the exploration, drilling, and production of oil, gas, or other petroleum products in the state. Section 377.24 provides that a person desiring to drill a well in search of oil or gas shall give notice of such intent and make application to the department. Subsection (4) provides that applications may be denied for only "just and lawful cause." Section 377.241 prescribes criteria for issuance of drilling permits pertinently as follow:
Criteria for issuance of permits.-- The division, in the exercise of its authority to issue permits as hereinafter provided, shall give consideration to and be guided by the following criteria:
The nature, character and location of the lands involved;. . .
The nature, type and extent of ownership of the applicant, including such matters as
the length of time the applicant has owned the rights claimed without having performed any of the exploratory operations so granted or authorized.
The proven or indicated likelihood of the presence of oil, gas or related minerals in such quantities as to warrant the exploration and extraction of such products on a commercially profitable basis.
Section 377.242(1) provides as follows:
Permits for drilling or exploring and extracting through well holes or surface extractions.-- The Division of Resource Management shall be vested with the power and authority: (1) To issue permits for the drilling, exploring for, or production of oil, gas, or other petroleum products which are to be extracted from below the surface of the land, including submerged lands, only through the well hole drilled for oil, gas, and other petroleum products. No permit shall be required for preliminary geophysical tests and other exploratory operations prior to actual drilling which are now permitted by the division for oil, gas and other petroleum products. No structure intended for the drilling for, or production of, oil, gas, or other petroleum products may be constructed on submerged lands within 1 mile seaward of the coastline of the state or as otherwise provided in s. 377.24(7). No such structures shall be constructed within 1 mile of the seaward boundary of any state, local, or federal park or aquatic or wildlife preserve or on the surface of freshwater lakes, rivers, and streams. No permit shall be granted within 1 mile inland from the coastline unless the division is satisfied that the estuaries, beaches, and shore areas of the state will be adequately protected in the event of accident. Each permit shall contain an agreement by the permitholder that said permitholder will not prevent inspection by division personnel at any time.
Section 377.243 sets out ownership requirements for granting permits for extraction through well holes and requires satisfactory evidence that the applicant has implemented or is in the process of implementing programs for control of pollution and abatement thereof when a discharge occurs.
The parties to this proceeding have by stipulation limited the issue in these proceedings to the question of whether Section 377.242(1), Florida Statutes, prohibits the proposed drilling on submerged lands located in East Bay. The additional constitutional issue preserved by the parties is outside the scope of administrative determination.
The precise portion of subsection 377.242(1) which must be applied is the prohibition against construction of a structure intended for oil or gas drilling or production on submerged lands within 1 mile seaward of the coastline of the state. The evidence presented at the hearing established that Getty's proposed drilling structure would not be constructed within 1 mile of the seaward boundary of any state, local or federal park or aquatic or wildlife preserve, or on the surface of a freshwater lake, river or stream. Further, the proposed site is located more than one mile inland from the coastline, and thus the statutory restriction against the granting of a permit within the one mile inland area is not applicable.
The parties profess agreement that the pertinent statutory provision regarding the construction of structures on submerged land is clear and unambiguous as to the legislative intent, and that therefore the application of the rules of statutory construction, and use of extrinsic aids such as the legislative history of the provision, are unnecessary. However, the applicant's and the opposing parties' versions of the meaning of the statute are in direct conflict. The disputed portion of section 377.242(1) is as follows:
No structure intended for the drilling for, or production of, oil, gas, or other petroleum products may be constructed on submerged lands within 1 mile seaward of the coastline of the state. . .
Getty maintains that the prohibition applies only to structures located in a one-mile zone lying on the seaward side of the coastline. The opposing parties contend generally that the prohibition extends to other submerged lands that lie inland from the coastline.
It is fundamental that the primary guide to statutory interpretation is to determine the intent of the legislature. To achieve this end, it is a general proposition that:
Where the language of a statute is plain and unambiguous and conveys a clear and definite meaning, there is no occasion for resort to the rules of statutory interpretation. The plain and obvious provisions must control. In other words, if the language of the statute is clear and admits of only one meaning, the legislature should be held to have intended what it has plainly expressed. There is no room for construction, and no necessity for interpretation. . . 30 Fla Jur, Statutes, 79
In applying the above concept to the statutory language in question, the disputed sentence appears at first blush to be straightforward and unambiguous. There is no argument among the parties as to the meaning of such words as "structure," "drilling," or "seaward." Although the word "coastline" is not defined in Chapter 377, the parties generally agree that the seaward boundary of Santa Rosa Island constitutes the coastline at the area in question which extends westward across the opening of the bay. This consensus is reflected in the posthearing briefs of all parties which adopted the federal definition that "coastline" means the line of ordinary low water along the coast which is in direct contact with the open sea and the line marking the seaward limit of inland waters as determined under the Convention on the Territorial Sea and the
Contiguous Zone. United States v. Florida, 425 U.S. 791, 48 L.Ed. 2d 388, 96 S.Ct. 1840. One party sought to differentiate the meaning of the term "coastline of the state" with the word "coastline" which appeared in the "1 mile inland" provision of subsection 377.242(1), but it is determined that such a conjectural distinction is without merit. Although the term "submerged lands" is subject to varying interpretations by the parties as to whether the term embraces both public and private areas, the basic meaning of the words is not in dispute and they are uniformly acknowledged to include the submerged land at the proposed well site.
The key word in controversy is "within" as used in the statute. Getty interprets the word to mean "between, i.e., between the coastline and a point 1 mile seaward of the same, whereas the other parties construe the word to mean "inward of", i.e., inward of a point located 1 mile seaward of the coastline. When used as a preposition as here, the word has several varying common meanings and therefore requires construction of the statute to determine the meaning intended by the legislature. The word "within" can be used variously to indicate "enclosure or containment" or a "specified difference or margin", or "to the inside of." Webster's New Collegiate Dictionary (1979 Ed)
Section 253.47, F.S., authorizes the Board of Trustees of the Internal Improvement Trust Fund to lease for royalties or other agreed compensation the right to drill wells for the discovery and production of petroleum and natural gas in the bottoms owned by the state in its sovereign capacity of the "bays, lagoons, straits, sounds, gulf, streams and lakes within the state." Section
253.60 requires that development of any such lands for the production of oil and gas shall be in accord with state conservation and control laws which prevail in the event of conflict.
Chapter 377, Part I, deals with the regulation of oil and gas resources and, in Section 377.06 the legislative intent is spelled out pertinently as follows:
377.06 Public policy of state concerning natural resources of oil and gas.--
It is hereby declared to be the public policy of the state to conserve and control the natural resources of oil and gas in said state, and the products made therefrom; to prevent waste of said natural resources; to provide
for the protection and adjustment of the correlative rights of the owners of the land wherein said natural resources lie and the owners and producers of oil and gas resources and the products made therefrom and of others interested therein; to encourage and cause the development in said state of said natural resources of oil and gas and the products made therefrom, to encourage the continuous and economic supply of the demand therefor; to safeguard the health, property and public welfare of the citizens of said state and other interested persons and for all purposes indicated by the provisions herein. . . (Emphasis added)
It thus can be seen that the intent of the legislature in general is to encourage the development of oil and gas resources of the state while concurrently ensuring that the public welfare is protected. Subsection 377.242(1) is the statutory provision designed to provide such protection and must be construed in its entirety. In keeping with the legislative intent to encourage the development of petroleum products, DNR is vested with the authority to issue drilling permits for petroleum products which are to be extracted from below the surface of the land, including submerged lands. It is therefore apparent that submerged lands are not necessarily excluded as a drilling location.
The various restrictions set forth in subsection 377.242(1) show a statutory scheme to limit the issuance of permits or the construction of structures for drilling only in specified areas.
The law includes a prohibition against structures within one mile of the seaward boundary of public parks and aquatic or wildlife preserves, and on the surface of fresh water lakes, rivers and streams. The statutory provision does not allow permits to be granted at locations within one mile inland from the coastline unless DNR determines that the estuaries, beaches and shore areas will be adequately protected in the event of accident. Although certain of the parties in these proceedings would construe the word "inland" to mean only "uplands", the common and plain meaning of the word is "into or toward the interior" and is therefore directional in sense. Webster's New Collegiate Dictionary (1979 Ed) The above restrictions therefore must be deemed to cover both uplands and submerged lands located within the first mile landward of the coastline. When these restrictions are viewed in conjunction with the one in dispute, it becomes inescapable, as urged by Getty, that the legislature intended to, inter alia, restrict drilling in a two-mile wide band centered over the coastline of Florida. Drilling structures are totally prohibited on submerged lands in the seaward half of the zone, and permits may be denied in the inland half, regardless of whether located in uplands or submerged lands, if the estuaries, beaches, and shore areas are not adequately protected in the event of accidents. Getty's proposed drill site does not lie within the two- mile zone. It is concluded that the restrictions of subsection 377.242(1) are not applicable to the proposed project.
The above determination is buttressed to some extent by consideration of the legislative history of Section 377.242. The disputed language of the statute was enacted in 1972 as Chapter 72-394, Laws of Florida, House Bill 3519. The statutory language in question originated in House Bill 2598 which was sponsored by the House Standing Committee on Environmental Pollution Control which was amended on to 3519 in its entirety. A number of bills relating to gas and oil wells had been filed in the 1972 Legislature, but were not enacted. These bills reflected a variety of approaches to the question of location of oil and gas wells, and generally indicate an attempt to balance the need for well drilling with the need to protect particular environmental areas. It would serve no useful purpose, however, to discuss their various limitations and restrictions to provide enlightenment as to the meaning of the legislation here under consideration. Cogent arguments can be made by both sides as shown in the posthearing briefs, but it is impossible to determine the reasons for rejection of one or another of the different bills.
As pointed out by one of the parties, legislative history of statutory enactments in Florida ordinarily is scant and usually is insufficient upon which to provide assistance in statutory construction. Certainly, some of the materials submitted in evidence, such as press releases, incomplete transcripts
of committee meetings, newspaper articles, and correspondence are seldom considered authoritative in ascertaining legislative intent. Committee reports normally are useful, but here are limited to summaries of certain bills and of committee activities. An excerpt from the April 11, 1972, Report of Activities of the Committee on Environmental Pollution Control, 1972 Session, does shed some light on the purpose of the legislation, as follows:
A summary of the new environmental laws follows:
HB2958 (Committee on Environmental Pollution Control and Rep. Spicola and Rep. Robinson) provides for environmental regulation of the oil and gas industry. . .prohibits drilling activities within a mile wide band seaward of the Florida coastline and in addition within a mile of the seaward boundary of any aquatic preserve or conservation area. Drilling is prohibited in fresh water areas. Extreme caution must be taken before drilling will be
permitted up to one mile inland from the coast. . .
The above quoted language lends credence to the view that the Committee considered the seaward prohibition to encompass only a one-mile wide area.
The Department of Natural Resources and several of the other parties opposing issuance of the drilling permit urge that the interpretation of subsection 377.242(1) by the Department's Executive Director should be entitled to great weight and be sustained unless it is clearly in conflict with the constitution, the plain intent of the act, or if not clearly erroneous. (Citing Gay v. Canada Dry Bottling Company of Florida, 59 So.2d 788 (Fla. 1952), Green
v. Stuckey's of Fannin Springs, 99 So.2d 867 (Fla. 1958), State ex rel Bennett
v. Lee, 166 So. 565 (Fla. 1936), Daniel v. Florida State Turnpike Authority, 213 So.2d 585 (Fla. 1966).) This proposition is certainly true, particularly in cases where the construction placed on a statute by the responsible state administrative officer or body has been established by long usage. L.B. Price Mercantile Company v. Gay, 44 So.2d 87 (Fla. 1950). However, this case is one of first impression. The 1972 statute in question has never been interpreted before by the agency or by a court. The agency interpretation therefore is in the nature of "incipient policy" which may be tested and challenged in an adversary setting. McDonald v. Dept. of Banking and Finance, 346 So.2d 569 (Fla. 1st DCA 1977) Indeed, the Executive Director of the DNR agreed with Getty's counsel that the agency's construction of the statute could be characterized as a "proposed department policy" until ratified by the collegial head of the agency. It is concluded from the evidence that the Department's proposed policy is not in accord with the intent of the legislature.
The posthearing briefs and other submissions by the parties have been fully considered and those portions not adopted herein are considered to be either unnecessary, irrelevant, or unsupported in law or fact, and are specifically rejected.
It having been determined that subsection 377.242(1), Florida Statutes, does not preclude the issuance of the requested permit, and the parties having stipulated to the issuance of the permit in such event, it is therefore RECOMMENDED:
That the Stipulation, dated November 12, 1980, be accepted, and that the application of Getty Oil Company be approved, subject to the provisions of the Stipulation, pursuant to Chapter 377, Florida Statutes.
DONE and ENTERED this 7th day of January, 1981, in Tallahassee, Florida.
THOMAS C. OLDHAM
Hearing Officer
Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301
(904) 488-9675
COPIES FURNISHED:
Henry Dean, Esquire
Department of Natural Resources 2900 Commonwealth Boulevard
Suite 402
Tallahassee, Florida 32303
James R. Brindell, Esquire Post Office Box 3103 Tallahassee, Florida 32303
William H. Green, William Boyd and Gary Sams, Esquires
Post Office Box 6526 Tallahassee, Florida 32301
Charles Lee, Vice president Florida Audubon Society Post Office Drawer 7 Maitland, Florida 32751
Thomas N. Wallin
4000 Bay Pointe Drive
Gulf Breeze, Florida 32561
Richard D. Radford Route 2, Box 30A
Gulf Breeze, Florida 32561
Robert Shealy
Northwest Florida Sierra Club Department of Biology Pensacola Junior College Pensacola, Florida 32504
Info copy to:
William W. Deane, Esquire Assistant General Counsel Department of Environmental
Regulation
2600 Blair Stone Road Tallahassee, Florida 32301
================================================================= AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA DEPARTMENT OF NATURAL RESOURCES
RICHARD D. RADFORD,
Petitioner,
vs. DOAH Case No. 80-1388
DEPARTMENT OF NATURAL RESOURCES,
Respondent.
/ FLORIDA AUDUBON SOCIETY,
Petitioner,
vs. DOAH Case No. 80-1389
DEPARTMENT OF NATURAL RESOURCES and GETTY OIL COMPANY,
Respondents.
/ GETTY OIL COMPANY,
Petitioner,
vs. DOAH Case No. 80-1390
STATE OF FLORIDA DEPARTMENT OF NATURAL RESOURCES,
Respondent.
/ THOMAS N. WALLIN,
Petitioner,
vs. DOAH Case No. 80-1468
STATE OF FLORIDA DEPARTMENT OF NATURAL RESOURCES and GETTY OIL COMPANY,
Respondents.
/ UNITED CITIZENS AGAINST
POLLUTION, INC.,
Petitioners,
vs. DOAH Case No. 80-1602
DEPARTMENT OF NATURAL RESOURCES and GETTY OIL COMPANY,
Respondents.
/
FINAL ORDER I
Introduction
On January 7, 1981, the duly appointed hearing officer in the above-styled matter submitted to the Department and all parties a Recommended Order, consisting of Findings of Fact, Conclusions of Law, and a Recommendation. A copy of said Order is attached hereto as Exhibit "A."
Pursuant to Section 120.57(1)(b)(8), parties are allowed at least (10) days to submit written exceptions to the Recommended Order. Petitioners, Florida Audubon Society, Getty Oil Company, Thomas N. Wallin, and United Citizens Against Pollution, Inc., filed written exceptions to the hearing officer's Recommended Order. The Department did not file exceptions to the hearing officer's Recommended Order. The Recommended Order and exceptions filed thereafter came before the Governor and Cabinet, as head of the Department, for final agency action in this matter.
II
DISCUSSION OF THE DIVISION OF ADMINISTRATIVE HEARINGS' HEARING OFFICER'S FINDINGS OF FACT
Section 120.57(1)(b)(9), prohibits an agency from rejecting or modifying a hearing officer's Findings of Fact unless it can be determined, after a review of the complete record, that the findings were not based upon competent substantial evidence or that the proceedings on which the findings were based did not comply with essential requirements of law.
In determining that the hearing officer's Findings of Fact are supported by competent substantial evidence, and cannot be lawfully disturbed, the Department recognizes that the hearing officer's findings should be afforded considerable weight. The hearing officer is the trier of fact who is best able to evaluate the credibility of witnesses and resolve conflicting testimony. Indeed, courts
have cautioned agencies against making a new judgment upon the evidence. See Koltay v. Department of Business Regulation, 374 So.2d 1386 (Fla. 2d DCA 1979); Borovina v. Florida Construction Industry Licensing Board, 369 So.2d 1038 (Fla. 4th DCA 1979).
The hearing officer's Findings of Fact, in this instance, reflect evidence received at the hearing concerning two issues involving the legal interpretation and application of Section 377.242(1), F.S., with respect to the requested drilling permit of Getty Oil Company. All other factual issues were withdrawn by all parties pursuant to a stipulated settlement a copy of which is attached hereto as Exhibit "B." The Department concludes that the "Findings of Fact are supported by competent substantial evidence, and, as a result, are accepted by the Department.
III
DISCUSSION OF HEARING OFFICER'S CONCLUSIONS OF LAW
The two issues reserved by the aforementioned stipulated settlement involving the interpretation and application of Section 377.242(1), F.S., are as follows:
Whether Section 377.242(1), F.S., prohibits the proposed drilling on submerged lands located in East Bay?
Whether Section 377.242(1), F.S., can be constitutionally applied to prohibit
Getty from conducting the proposed drilling on submerged lands located in East Bay?
The hearing officer has set forth in his Recommended Order a discussion of the first issue only. As to the second issue, the hearing officer rightfully rejected any attempt to address and, therefore, did not base his recommended order on any constitutional questions involving the application of Section 377.242(1), F.S. See e.g., Rice v. Department of Health and Rehabilitative Services, 386 So.2d 844 (Fl. 1st DCA 1980).
The Conclusions of Law reached by the hearing officer concerning his interpretation of Section 377.242(1), F.S., are the sole legal basis for the Recommended Order. (See Paragraphs 1 through 11 of the Conclusions of Law in Exhibit "A"). It is the position of the staff of the Department of Natural Resources that Section 377.242(1), F.S., by its express language, prohibits the construction of strictures to drill for oil and gas on those submerged lands of the state which are within one mile seaward of the coastline and on the surface of freshwater lakes, rivers and streams. In addition, Section 377.242(1), F.S., provides that no permit (to drill for oil and gas) shall be granted within one mile inland from the coastline unless the division is satisfied that estuaries, beaches and shore areas of the state will be adequately protected in the event of accident. Further, the staff concludes that when Section 377.242(1), F.S., is read in toto, submerged lands protected from structures used to drill for oil and gas extends to all submerged lands, including bays and estuaries, which are within an area one mile of a line seaward of the coastline. The basis for this determination arose from a reading of the aforementioned prohibitory provisions of Section 377.242(1), F.S., which expressly prohibit structures on freshwater lakes, rivers and streams, and therefore all submerged lands which are inland
from a point one mile seaward of the coastline. The hearing officer, in his Conclusions of Law, limited the prohibitory language of Section 377.242(1), F.S., to those submerged lands (excluding freshwater lakes, rivers and streams) which were located in a belt within one mile seaward of the coastline of the State. In other words, according to the hearing officer structures may be constructed to drill for oil and gas on portions of bays and estuaries or any other submerged lands which may not necessarily be considered as freshwater lakes, rivers or streams because the placement of said structure may not be within the one mile zone arguably protected by Section 377.242(1), F.S. The determination as stated by the hearing officer was based on the legislative history of Section 377.242(1), F.S., and other documents received into evidence relating to the legislative history.
The Department rejects the limited interpretation of Section 377.242(1), F.S., expounded by the hearing officer because such interpretation would circumvent the overall legislative intent and render an absurd result. The interpretation of the hearing officer promotes the idea that the Legislature intended to exclude prime ecologically significant areas from the protection of Section 377.242(1), F.S. The Staff's interpretation of Section 377.242(1), F.S., would protect the state's bays and estuaries from oil drilling activities and would be in accord with the overall legislative intent. Accordingly, the Department adopts Conclusions of Law 1-6, as recited by the hearing officer insofar as they are consistent with the staff's position and rejects Conclusions of Law 7-11, as recited by the hearing officer. See Exhibit "A."
IV
RULINGS ON EXCEPTIONS TO RECOMMENDED ORDER
All of the Petitioners' exceptions to the hearing officer's Recommended Order have been considered and are disposed of in the following fashion. For ease of reference, the exceptions will be listed in the following order of parties:
Florida Audubon Society
Getty Oil Company
Thomas N. Wallin
United Citizens Against Pollution, Inc.
Florida Audubon Society
Florida Audubon Society's exceptions to Findings of Fact.
The Florida Audubon Society filed exceptions to the hearing officer's Findings of Fact, paragraph two, which determined that East Bay was an estuary and not a freshwater body. The gist of the Florida Audubon Society's exception to this finding is that the greater weight of the evidence produced at the hearing demonstrated that East Bay is a "ground river valley" and a "river type estuarine system." A review of all of the testimony at hearing reveals that although East Bay is not a completely saltwater body it, nevertheless, is a mixing zone of fresh and saltwater, particularly at the point where the well site is proposed and therefore the hearing officer ruled correctly that it is not a freshwater body. Florida Audubon Society has not shown that the hearing officer's findings and conclusions on this issue are unsupported by competent substantial evidence so the hearing officer's determination must not be disturbed. The exception is hereby rejected.
Florida Audubon Society's Exceptions to the Conclusions of Law.
Florida Audubon Society's exceptions to the Conclusions of Law, Numbers 1 through 6 are rejected as being immaterial and irrelevant pursuant to the applicable law. Florida Audubon Society's exceptions, Numbers 1 through 8 to the Conclusions of Law are accepted as they apply to the hearing officer's Conclusions of Law, Numbers 7 through 11, in that the Department of Natural Resources' legal interpretation of Section 377.242(1), F.S., is in fact in accordance with the intent of the Legislature and should be the correct interpretation of the statutory construction.
Getty Oil Company
I. Exceptions to Conclusions of Law filed by Getty Oil Company.
Getty Oil Company filed two exceptions to the hearing officer's Recommended Order, Conclusions of Law Number 10 which states that:
The post hearing briefs and other submissions by the parties have been fully considered and those portions not adopted herein, are con- sidered to be unnecessary, irrelevant, or unsupported in law or fact, and are specifi- cally rejected. (Recommended Order, page 21)
The gist of Getty Oil Company's Exceptions to Conclusion of Law Number 10 is that all of the Findings of Fact and Conclusions of Law rejected by the hearing officer are, in fact, relevant, and that the Findings of Fact and Conclusions of Law filed by Getty Oil Company are not unsupported in fact and law. From a review of the evidence it is shown that the hearing officer's Recommended Conclusion of Law Number 10 was correct in rejecting those portions of the proposed Findings of Fact and Conclusions of Law filed by Getty Oil Company.
Thomas N. Wallin
Thomas N. Wallin filed two exceptions to Findings of Fact contained in the hearing officer's Recommended Order. The first exception is to the hearing officer's Finding of Fact Number 6 wherein the hearing officer found that it would be extremely difficult to directionally drill to a maximum lateral deviation of greater than 10,000 to 12,000 feet depending upon varying conditions of the site. A review of the testimony reveals that this is probably the most advanced state of the art of directional drilling and therefore, the hearing officer's findings and conclusions on this issue are supported by competent substantial evidence and must not be disturbed. The exception is hereby rejected.
The second exception Thomas N. Wallin filed was an exception to the hearing officer's Finding of Fact Number 7. The gist of which is that Getty would find it economically undesirable to directionally drill at the proposed well site from a land based operation. This exception does not take issue with the fact that Getty would not drill at a 16 percent rate of return but rather suggests that a 16 percent rate of return would yield a profit attractive to most reasonable men. This does not conflict with or overcome the finding of the hearing officer which was based on competent substantial evidence and therefore is rejected.
Thomas N. Wallin's Exceptions to Conclusions of Law.
Thomas N. Wallin filed exceptions to the hearing officer's Conclusions of Law, Numbers 7 through 11. The exceptions to the Conclusions of Law are in accordance with the applicable law and therefore are accepted by the Department.
United Citizens Against Pollution, Inc.
1. United Citizens Against Pollution, Inc., (UCAP) filed two exceptions to the Recommended Order.
The first exception states that the hearing officer erred in his Conclusions of Law for the reasons set forth in UCAP's brief, dated December 22, 1980. This exception which conforms to the correct interpretation of the applicable statutory law is hereby accepted.
The second exception filed by UCAP, adopts and incorporates by reference, the exceptions filed by Thomas N. Wallin and by Florida Audubon Society. For the reasons previously stated the agency rejects those exceptions which were likewise rejected in the rulings on the exceptions filed by Thomas N. Wallin and Florida Audubon Society above.
V CONCLUSION AND ORDER
Based on the foregoing Findings of Fact and Conclusions of Law and the rulings on the exceptions contained herein, it is:
ORDERED, that the permit to drill in East Bay, Santa Rosa County, Florida, is hereby DENIED, pursuant to Section 377.242(1), Florida Statutes
DONE AND ENTERED, this 20th day of March, 1981, in Tallahassee, Florida.
BOB GRAHAM GOVERNOR
GEORGE FIRESTONE SECRETARY OF STATE
JIM SMITH ATTORNEY GENERAL
GERALD A. LEWIS COMPTROLLER
BILL GUNTER TREASURER
RALPH D. TURLINGTON COMMISSIONER OF EDUCATION
DOYLE CONNER
COMMISSIONER OF AGRICULTURE
| Issue Date | Proceedings |
|---|---|
| Jun. 05, 1981 | Final Order filed. |
| Jan. 07, 1981 | Recommended Order sent out. CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Mar. 20, 1981 | Agency Final Order | |
| Jan. 07, 1981 | Recommended Order | Grant application for drilling permit and natural gas/petroleum wells. Case of first impression with Section 377, Florida Statutes. |
