The Offshore-Oil Debate

Not since the giant Alaska-pipeline debate of 1970 has the U.S. Interior Department run into such resistance. The issue this time is whether potential oil reserves on the continental shelf off three "frontier" areas--Alaska, the West Coast and the Atlantic seaboard --should be developed as those in the Gulf of Mexico have been. Last week, after a series of public hearings with Governors, Congressmen and other interested citizens from the states that would be affected, Interior officials were still smarting from the criticism.

They had called the hearings ostensibly to discuss the department's "preliminary impact statement"--a 1,200-page document that reports on the probable environmental effects of offshore drilling. But the real purpose was to test public opinion, and if the hearings are any guide, the public clearly does not want the drilling--at least not on Interior's timetable.

To increase domestic-oil supplies, the Ford Administration wants to accelerate the leasing of offshore oil-bearing tracts to oil companies. Interior now auctions off 3 million underwater acres a year, but has talked of leasing as much as 10 million acres annually. Though the continental shelf is still largely unexplored, estimates of the oil to be found there range from 40 billion to 140 billion bbl. That is a lot of new fuel for a nation that consumes 6 billion bbl. a year, onethird of which is now being imported at extortionate prices.

However, the support of the coastal states is crucial: they could obstruct the leasing program, for example, by refusing to allow new storage tanks or refineries to be built onshore. Conceivably, the states, not the U.S., might even own the offshore oil. In a case that goes before the Supreme Court this week. Maine argues that coastal states control waters not only out to the three-mile limit, but beyond it as well. This is just one of many points of dispute; the major problems created by a massive leasing program fall into three main categories.

ENVIRONMENT. Of the 19,000 wells that have been drilled to date in U.S. waters, only four have caused major oil spills. But as the industry explores in rougher, deeper waters, the likelihood of more spills increases--with possibly disastrous effects on such recreational areas as the beaches of Long Island and Southern California. For this reason, several officials requested new federal insurance coverage against oil spills. Then there are disruptions onshore, which New Jersey Governor Brendan Byrne described as the "helter-skelter development" of pipelines, refineries and storage tanks. Interior's impact statement, critics charge, deals with such problems inadequately. Indeed. California Senator John Tunney called the Government proposals "a nightmarish blueprint for disaster."

MONEY. In the past, the Federal Government has kept all revenues from offshore lease sales and from royalties on offshore-oil production. Now the states want a cut even if Maine loses its lawsuit. One plan, proposed by Senator Ernest Hollings of South Carolina, is to set up a "coastal impact fund" of up to $200 million annually. The money, which would come from general tax revenues, would go to help coastal states plan for an offshore-oil boom and provide the roads, schools, sewers and other needed public services.

PROCEDURE. Many critics pointed out that the Interior Department depends too much on the oil industry for information. Senators Hollings and Tunney suggest that the Federal Government take responsibility for exploring before offering offshore leases for auction. Alternatively, New York State officials suggest that there be much tighter federal controls on all offshore-oil development.

"I just don't think that the Government can do the job as well as private industry," argues Assistant Secretary Royston Hughes, chief of Interior's offshore program. His staff must now try to answer formally all the complaints. The first step is to rewrite the environmental-impact statement, which will then be open to challenge in court.

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