SR-511-000 (4)
City Councll OffiC~ER:C1S
CounCll Meeting of August 13, 1985
.
S//~oco Santa Momca. Cal ifornia
/4-C)
AUG t 3 1985
TO:
FROM:
SUBJECT'
Council Members ~ yV'
Mayor Christine (~eed and Council Member James Conn
Request of Congressman Mel Levine
Congressman Levlne has asked that we support the recently announced
off-shore oil drilling compromlse. The attached materlal was provided
by SCAG.
Attachments
/4-0
AUG 1 3 I~~;
.
.
A Compromis3 on Oil Drimng
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O New areas where
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New areSs of potential 011 ~~
drilling have been added In
federa~ waters off Southern '"
Callfornra previously under a r':
moratonum order The ongl-
nal lease sale boundaries ~y
were reduced by twcHh"ds .~
and Congress had forbidden
drlllmg within 20 miles of ~
the coast Four Sltas under
the moratonum order now 'f.--
have been reopened for i:
lease ~ .
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001'1 CLEMEl-., I Loo Ange\a 'llmes
I. A T1mes JUt 1 71935 v ( -
Oil Drilling Compromise Reachcq_
. - 5
Plan Calls for Shifting New Offshore Exploration North-
By MICHAEL WINES, Tunes Staff Writer
WASHINGTON -Callforrua legislators and Intenor
Secretary Donald P. Hodel on Tuesday unveiled an
artful plan for ot! productIon off California, shiltlng
new exploration north-where public Opposltlon IS
most muted-and sparing explOIted southern waters
the brunt of future activity
But wlule the accord's pohtlcal hanmcraft left Hodel
and the legislators beanung, neIther the oll mdustry
nor some Southern Callforma envlronmentaltsts were
as pleased Wlth the south's share of all explorauon
A spokesman for the Los Angeles- based Western 011
and Gas Assn expressed cbsmay that IdenUfled OIl
reserves m the Santa Momca Bay area would remam
largely exempt from dnllmg, as they have smce 1975.
But a reglOnal offlClal of the Sierra Club, Bob Hattoy,
contended that the proposal gIves the Industry "a foot
In the door" for future exploratlOn In the ba:; and along
other close-to-shore Callforrua waters
The proposal, on wInch pubhc comment W11l-be
sought for a mOllth. would open for leasmg more than
1,000 square miles of ocean floor off Northern and
Central Callforma, but only about 300 square rrules off
Los Angeles, Orange and San Diego countles
Protected Until Year 2000
Another 57,000 square mlles of sea floor, now barred
from oll company exploratlon -by a congressional
moratonum, would remam protected untll the year
2000. should the proposal survIve statewide re'llew and
be enacted, as Hodel and the legislators hope.
Both Sides m the monthlong negotlatlOns that led to
the accord pr81sed It effUSively Tuesday. Callforma
I Rep VIC FazIO (D-Sacramento) called the agreement
\ "the epitome of statesmanship," and Rep. Barbara
Boxer (D-Greenbrae), whose mstrlct would be shield-
ed from offshore dnlhng, termed It "a dream come
dLue." :.
The accord derues the oll mdustry the right to explOIt
. known and potenl1ally large all fIelds along ~ .1 rIS of the
southern coastlme m exchange for the nght to explore
larger, less certam fIelds m the north .
"Near Los Angeles, roughlY 140 square nules would
be freed for exploratJon south of Santa Maruca Bay and
another 100 square mlles along the coast of Long
Beach, Newport Beach and Huntmgton Beach Farther
south, about 40 square nules would be opened offshore
from OCeaI1Slde
Please ssa nen PI!4a.
.
"JoIl~) j froo ;r~:~:rv:c't.l..3 '2b!3.
All of those lra'l:!.S are area.'3 of "heavy mdt;stry
mterest," Rep. Leon E Panetta (D-Carmel Valley). a
chief architect of the comproffilse, saId Tuesday The
acreage had been put up ior bids last year m an Intenor
Department lease sale, but the congresslOnal moratori-
um on exploratIon blocked the sale oi the tracts
Minimal Imput Expeeted
Panetta smd that most of the new southel"l" tracts are
either far offshore or near exlstlng oli oroduct:on areas
and that the unpact on coastai residents therejore
should be small
Hattoy agreed, but salci. "We're not happy With a."lY
of those near-shore tracts belI'g leased. Their prOXIl'I'.!-
ty to heavtly used beaches and recreauonal boanng-
and the fact that !...'le oll compa:'ues now have theIr foot
m the door m these areas-Is alatrmr.g."
Panetta sald the WlliL"l~ess of some northem tOWfl..5
to accept offshore ot! dnllu:g "attracted our attentIQn"
dunng negotlatlons. The CIty Counct! m one such
town. Eureka, voted earlier to support offshore dnll~"lg
m the area, and two-lhIrds oi the lands released for
exploration are near the town. m the Eel River BaSIn
off er.reme Nort.hern Callforma.
Rep Douglas H. Bosco (D-Occldeni.all. whose
congresSIOnal d1stnct. abuts;he basin, said he hopes the
Agtre<e[11lUetrtr~ te;(~~:
.
aC~lvl'.y WI!] beast the reg:on's
economy, now dommated by a
stagnant logglr g mdustry
Whl!e he e:cects unfavorable
pOl:tlCal fallout from the dec:slOn,
"I can sleep at mght." Bosco smd
Tuesday's compromise averted a
c:uc:al vote on cont.mumg the
d..,llmg moratom:rn that had been
scheduled by a House A?propna-
t.lOns subconumttee cons:denng the
Department of the lnter-or's budg-
et. The subcommIttee voted mstead
to put. off any vote on the drlllmg
ban and to adopt. the language of
the compromise as part of t.he
Intenor budget leglslatlOn
-actual t~xt of Callfornla OCS Agree~ent as entered 10 the Appropr13tlons Commlttee report.
kiter an extenslve perlod of negotlatlons, the Secretary of the Interlor and representatlV(
:~embers of the Callfornla delegation have reached prellffilnary agreement regardlng
protectlon and development on the Callfornla Outer Contloental Shelf.
"
It lS felt~~t1~ flnal agreement cannot be concluded unll1 there lS further
wlth State _~cal offlclals, as well as other lnterested partles.
The general outllnes of the prellmlnary agreement conslst of the followlng:
consultatlon
1. 150 of 6,460 tracts contalned wlthlO the present moratorla would be offered for leasl~g
10 accordance wlth eovlronmental safeguards requlred under eXlstlng law.
2. The deleted areas would be protected unLll the year 2000 subject to a natlonal energy
e~ergency condltlon.
3. One C.O.S.T. well would be authorlzed ln each of the followlng three baslns--Pt. Arena,
Bodega, and Santa Cruz--on the condltlOn that lt not be closer than 18 mlles from the
shorellne and these wells would be subject to standard envlroomental safeguards as requlrec
by eXlstlog law. A C.O.S.T. well lS a well drll1ed for the purpose of obtalnlng
stratlgraphlc lnformatlon.
Pursuant to the above prell~loary agreement, actlon on contlnulng the eXlstlng moratorla
would be deferred untll the cooslderatlon of the contlnulog resolutlon for flscal year 198c
approprlatlons. At that tlme, subJect to the advlce of State aod local government
o[flclals and concerned members of the publlC, the flnal agreement would be lncorporated
lnLO that leglslatlon.
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I IIII
California OCS Agree!11ent JULY 23, 1985
,
_ ACTION NEEDED: COMME~TS OM THE CALIFORNIA oes AGREEMENT FROM AFFECTED LOCAL GOVERNMENTS
AND INTERESTED PARTIES.
- DIRECTED TO: The Congress1onal Representat1ve for your D1str1ct, Washlngton, DC 20515.
Please also
bcc. R1c~ard Charter, Local Government Coord1nat10n Program. 6947 Cl1ff Avenue. Bodega
Bay, CA 94923. so that a comprehenSlve record of local responses can be kept. D1rect
meetlngs between local offlc1als and Representatives whlle they are In the Dlstrlct for
the August recess would be an effectlve means of consultatlon ln addltion to your
wrltten response. Secretary Hodel lS scheduled to be In Callfornla between August 26
and 29 and some dlrect meetlngs wlth hlm way also be appropr18te.
_CRITICAL DATE: August 3D, 1985
_THE CALIFORNIA DCS AGREEMENT:
On July 16, Inter10r Secretary Donald Hodel and most of the Callforn18 Congresslonal
Delegat10n held a jOlnt press conference on Capltol H1II to announce that they had
reached a prellmlnary agreement wlth respect to federal OCS leaslng offshore
Californla. The agreement came after a ser1es of meetlngs between Secretary Hodel and
the Delegatlon.
_WHAT IT CONTAINS:
The bas1c provlslons of the agreement are as follows:
1. 150 of 6,460 tracts conta1ned wlthln the present year-by-year oes morator1um would
be released for leas1ng 1n accordance w1th env1ronmental safeguards requlred under
eX1St:l.ng law.
2. The rema1n1ng 6,310 tracts not released for leaSlng under this agreement shall be
off-Ilmlts to oes leas1ng untll the year 2000 unless a speClflC nat10nal energy
emergency cond1t1ou occurs (see below for deta1ls of the Energy Emergency Over-r1de).
3. Although no leaSlng would be permltted untll the year 2000 1n the Pt. Arena, Bodega,
and Santa Cruz bas1ns, ONE deep-st.ratlgraphlc "C.O.S.T." well would be allowed U) each
of these baslns for the purpose of gatherlng geologlc data.
4. Pursuant. to the agreement, act.lon on contlnuatlon of the eXlstlng one-year
moratorlum by the House Appropr1atlons Commlttee has been deferred, as of the Comm1ttee
meetlng on July 16. untll conslderatlon of the "Contlnulng Resolutlon" for flscal year
1986 appropr1atlons. At that tlme, subject to the advlce of state and local government
offlclals and concerned members of the publ1c, the flnal agreement lS to be
incorporated lnto that leglslat10n.
- IMPLEMENTATION OF THIS AGREEMENT INTO LAW:
A thlrty-day comment perlod 1S presently belng conducted by the Congresslonal
delegatlon, but furth~T ref1nement of the "natlonal energy emergency over-rlde"
prOV1Slon and other detalls lS presently ongoing between the Secretary and the
Delegatlon. At the end of the August recess the f1nal verSlon of the agreement will be
1ncorporated lnto the cont1nuing resolut10n and enacted 1nto law by the Congress w1th
the concurrence of the Secretary of Inter10r and the Admln1strat1on.
- WHERE ARE THE 150 TRACTS DESIGNATED FOR LEASING?:
The 150 tracts to be opened for lease are located
Eel Rlver BaSln (Eel Rlver to Klamath Rlver)
Santa Marla Fasln (offshore San Slmeon, Morro Bay)
Santa Monlca Bay (near Palos Verdes Penln.)
Long Beach (vessel trafflc lanes)
Newport / Huntlngton Beach, Orange County
Oceans1de (flnal locatlon of tracts stl11 not fLxed)
as follows:
99 tracts
14
22
4
6
5
--notracts
(see maps enclosed for spec1flcs)
All unreleased tracts WhlCh &re presently part of the one-year Appropr1atlons
Moratorlum would be subject to a prov1s1on ~h1Ch prohlblts leaSlng unt11 the year
2000. A Natlon21 Energy Emergency Escape Clause would permlt leas1ng of these
protected tracts only 1n the event of a Pres1dent1al Proclamatlon of a Matlonal
Energy Emergency wh1ch resulted ln the drawdown of the U.S. Strateglc Petroleum
Reserve located 1n large salt domes 1n Louslana. Detalls of th1S Energy Emergency
Over-rlde provlSlon rema1n to be negot1ated.
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. WHERE THE AGREEMENT cuts THE DEEPEST:
Local reacc~on to the outcome of thlS agreement Yl1l obv~ously vary from locat~on to
locat~on along the coast. Areas w~th protect10n from leaslng unt~l the year 2000 w~ll
clearly be pleased. Oceans~de, Laguna Beach, Newport Beach, Hunt~ngton Beach and areas
on the Palos Verdes Pen~nsula are clearly threatened wlth early leas~ng
because of the hlgh degree of 011 lndustry lnterest ~n the nearshore tracts. 99 of the
150 exposed tracts are off of Humboldt County, start~ng three ffilles from shore off the
mouth of the Eel R1Ver and extend~ng northward to Just north of the Humboldt-Del Norte
County Ilne. It lS apparent that the major burden of thlS compromlse 11es on the Eel
Rlver basln, where exposed nearshore tracts wlll present confllcts w1th present
commerclal flsh1ng uses. partlcularly the crab flshery. In addltlon, there 15 not
presently eXlst1ng protect10n of state waters adjacent to the Eel Rlver tracts, so that
a state tldelands lease sale brlnglng petroleum actlvlt~es rlght to che surf zone lS a
very real prospect. To protect the state waters, Asse~blyman Hauser has, earller th~s
summer, moved hlS AB 755 through the Assembly and through Senate Natural Resources, but
further progress of thlS bl11 wlll requlTe careful support from local JUT1Sdlctlons ln
mld-Augusc as the blll approaches conslderatlon ln the state Senate Approprlatlons
Commlttee.
A total of fourteen tracts near San Simeon at the south end of Blg Sur wl11 brlng
leaslng wlthln close proXlmlty to a crltlca1 portlon of the range of the Callfornla Sea
Otter. It lS wlthln th1s ~mportant southern portlon of the sea otter range that most
breedlng palrs are located and vlrtually all recent range expanslon has taken place.
.\1I\AT ABOUT THE C.O.S.T. WELLS IN THE }lIDDLE THREE BASINS?:
In the Pt. Arena. Bodega. and Santa Cruz bas1ns. the agreement would permlt the
drl1ling of one C.O.S.T. well at least 18 mlles from shore. These wells, known as
"Colltlnental Off-Structure Stratlgraph1.c Test" wells, are drl11ed off of the geologlc
structure thought to contaln petroleum and are not des1.gned to h1.t 011 or gas. The
C.O.S.T. wells do penetrate to a full depth drllllng hor~zon and provlde a
comprehenSlve geologlc record wh1.ch 1.S much deeper and more complete than the shallower
"NcClelland Englneers" type of dnlhng. The C.O.S.T. wells are JOlnt1y funded by the
Interlor Department and a consortlum of 011 companles, who then share the resulting
ge01og1c data. Under the terms of thlS specif1.c agreement, the resu1tlng ge010glC data
would also have to be shared w1.th the relevant Commlttees 1.n Congress.
The concept of C.O.S.T. wells in the baslns where thlS conceSSlon has been made has
disturbed some local communltles. The only alternatlve to a C.O.S.T. well 1.n these
bas~ns, however, was the openlng of some tracts ~n these areas to actual leaslng.
Leas~ng in these baslns was not acceptable to the Delegatlon even though Inter1.or
pursued lt untll the end, flnally settllng for the test dr~lllng as a Substltute to
permlt inventory of the petroleum resource potentlal. The prlnary concern over
C.O.S.T. wells would appear to be the large volume of assoc~ated drlll1.ng d~scharges.
The discharge permlts for the C.O.S.T. wells would be subject to tne standard E.P.A.
NPDES Permlt process. Should tney be selected, spec~flc C.O.S.T. Sltes such as the
Cordell Bank off of Mar1.n-Sonoma would present ser~ous problens from a b~ologlcal
standpolnt and would need to be opposed on a slte-speClf~c basls. Once S1.tes were
selected and permlts obta~ned, drlllsh1.p actlvlty would take about three to four months
per slte, wlth local onshore support hlghly unl~kely except out of San Franclsco Bay.
After completlon of the three test holes. no leaslng could occur unt11 the year 2000.
. THE NEGOTIATI~G PROCESS LEADING TO TIIIS AGREE.~lE'IT:
As part of the "Conference Report" on the FY 1985 Interlor Appropr~atlons b11l last
year. the Conference CO~lttee lncludedlanguagewh~ch dlrected the Department of
Interlor to seek a negotlated settlement of the ~mpasse over new OCS leaslng offshore
Callfornla. These negotlat~ons were a precondltlon of adopt~on of the OCS Moratoc1.um
prOV1S1.0nS last year, and Interlor ~as dlrected to conduct d1SCUSS1.ons wlth the
Callfornla Delegation, wlth state offlc~als, and wlth local offlclals (wh~ch 1.t has not
yet done). Slnce thlS language was lncluded 1n the FY 1985 Inter1.or Bill last October,
the Callforn~a Delegat~on and local off~c~als have been wrltlng. f~rst to Inter~or
Secretary Clark and more recently to Secretary Hodel, asklng for the negotlatlons noted
1n the Conference ~languuge to get underway. Flnally, on June 4. ln antlclpat~on
of the successful approval of another one-year oes Moratorlum ln the House Subcomm~ttee
on Interior Approprlatlons, Secretary Hodel agreed to begln OlScusslons wlth the
Callfornla Delegatlon.
The dlScusslons took the form of closed seSSlons between Secretary Hodel and h~s staff
and varYlng numbers of ~embers of the Cal1.fornla Delegatlon. The central negot1atlng
team for the Delegatlon was led by Rep. Leon Panetta, and ~ncluded Reps. Mel Lev~ne and
Blll Lowery. Durlng a number of seSSlons Reps. Bosco, Boxer, Burton, Lantos. Packard
and Badham were also present. Senators Cranston and W~lson both took part 1n the
d1Scusslons dlrectly at t~mes. The bUS1C negotlatlng pr1nc1ple was that each coastal
Nember negotlated for thelr own Congresslonal Dlstrlct on a tract-by-tract bas~s. At
one p01.nt Rep. Dannemeyer entered the dlScuss10ns wlth a lot of pro-drll11og-everywhere
rhetor1c and the process nearly broke down. When talks resumed, lt was back to the
core team of Panetta, Lev1.ne, and Lowery. The flnal nlght, on July 12. when the actual
f1nal deal was cut, the part1clpants were Reps. Leon Panetta, Nel Levlne, Blll Lowery,
Senator Pete W~lson, and Secretary Hodel. All staff had been excluded from the meetlng
room. 1ncludlng B~ll Bettenberg, Dlrector of the M1nerals Management Servlce.
"
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3
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.OFFERS AND COU~TEROFFERS PRECEDI~G THE AG~ES~ENT:
At the start of negotlatlons. Interlor s baslc premlse was that they wanted the yearly
Ca11fornla OCS Moratorlum to go away at any cost. But Secretary Hodel stl11 lntroduced
an openlng posltlon whlch ln the north looked surpr1s1ngly 11ke the four northern
baslns of Lease Sale #53. Broad tract areas were lncluded ln each of the Santa Cruz,
Bodega, and Pt. Arena baslns, and the Eel Rlver baSln tract area had been extended
northward nearly to the Oregon Border. Santa Monlca Bay Protectlon would have been cut
back to a dlrect 11ne between Pt. Dume and Pt. Fermln, Orange County would have been
exposed and tract areas off of San Dlego were stl11 ln the plcture, In exchange for
1easlng In these areas, Hodel proposed to grant flve years of protectlon for
"everythlng else". Not surprls1ngly, thlS proposal was rejected by the Delegatlon.
After a number of maps had been sent to Interlor by the de1egatlon lndlcat1ng
envlronmental resource areas deservlng of protectlon, a counter-offer was submltted by
the Delegatlon whlch requlred nearly the full scope of Mora~rlum protectlon ln
southern Callfarnla but offered up an area of the Eel Rlver BaSln extendlng almost to
the Oregon border. Interlor came back wlth a demand that the'Delegatlon open a mlnlmum
of 210 tracts coastwlde and the requlrement that these 210 tracts be dlstrlbuted wlthln
"hlgh-lnterest" areas deslgnated by Interlor. At thlS pOlnt ln the dlScusslons,
Humboldt and Del Norte Countles would have rece~ved year-2000 protectlon for thelr
protected areas but a much larger Eel Rlver tract area would have been opened for
leaslng WhlCh also lncluded the Del Norte County coastllne. At that t~me, Sonoma,
Marln, San Mateo and Santa Cruz basln tracts would have only recelved protectlon for
flve years. The concept of protectlon of varYlng duratlon was based upon how much an
indlvldual Member was wllllng to sacrlflc~ In order to "buy" longer term protectlon for
the rest of hlS Dlstrlct. ThlS notlon qUlckly became very unpopular and almost
overturned the dlScuss~ons at one cr~tlcal pOlnt. In the end, the northern boundary of
the Eel Rlver BaSln was cut back from wlthln flve tracts of the Oregon border to a llne
one row of tracts north of the Humboldt / Del Morte County line. ~t the same tlme,
troublesome nearshore tracts rlght off the mouth of the Eel River were lncluded WhlCh
may trlgger a state tldelands lease sale ln that area and brlng leaslng rlght to the
surf zone. The prec1se locatlon of the 5 tracts tentatlvely ldentlfled off of
Oceanslde remalns to be determlned In d1SCUSSlons between Rep. Packard, the mll1tary,
Interlor, and local offlcials. The adjustment of one nearshore tract off of the Palos
Verdes PenLnsula rema1ns a possibL11ty, but lS not certaln. Nearshore problem tracts
of part~cular concern are marked on the attached maps wlth a * symbol.
. THE APPROPRIATIONS CO}mITTEE:
The f~nal resolutlon of thlS agreement came about nearly on the eve of the scheduled
July 16 meetlng of the House Approprlatlons Commlttee. An lntensLve lobbYLng campalgn
on behalf of SOllcltLng Comm1ttee support for the yearly oes Moratorlum was conducted
on behalf of local agencles by Santa Cruz Superv~sor Gary Patton, Mayor Shella LOQge of
Santa Barbara, MendocLno Supervlsor Norman deVall, Warner Chabot, and Rlchard Charter.
Envlronmental groups were represented 1n thlS lobbYLng effort by Llsa Speer of NRDC and
Bob Hattoy of the S1erra Club. As our lobbYlng effort progressed, the negotlatlons
between Interlor and the Delegatlon Lntenslfled. As we worked our way In teams through
more than forty offLces, held a well-covered press conference at the Natlonal Press
Club, and pooled the results of all of our afflce V1S1tS, we began to thlnk that we
Just mlght Wln In the Approprlatlons Comm~ttee. Varlous Delegatlon Members made
personal requests of thelr colleagues to support the Moratorlum for Just one more year.
On Frlday, July 12, we found out that the Amerlcan Petroleum Instltute's own vote count
lndlcated that we were gOlng to Wln the Commlttee vote on July 16. The vote count
complIed by the Department of Interlor also 1ndlcated that the yearly oes Moratorlum
would prevall in eommLttee. That same Frlday evenlng, July 12, was the nlght that
Secretary Hodel and the Delegat1.on made th!F flna1 "cut", apparently because Hodel was
convlnced that we would preval1 In_full Commlttee and re-enact the full Moratorlum.
The Secretary d~d not appear to be operatlng from a posltlon of strength when he closed
the deal.
On July 16, the same mornlng as the scheduled vote ln the full Approprlatlons
Commlttee, the Delegatlon met at 8 a.m. so that each Member could glve thelr flnal
approy?l to the agreement. The Delegatlon then held a J01nt press conference wlth
Secretary Hodel. Under the terms of the agreement, the full eommlttee on that day
"deferred" conslderat1on of the Callfornla OCS provlslons untll the Connnulng
Resolutlon lS taken up ln early September, when the actual terms of the agreement wlll
be passed lnto law. In the meanwhlle, the prellmlnary agreement language has been
1ncluded In the Commlttee Report language.
. THE 30-VA Y CO[>L~lENT PERIOD NOW RUNNING:
One of the reasons for the lntervenlng perlad of tlrne prlor to fLnal adoptlon 15 to
permlt tlme for the state, local agencles, and cltizen groups to comment on the oes
agreement. ThlS should be done by wrltlng dlrectly to the Member of Congress
representlng your Dlstrlct. A copy of your resolutlon or letter should also be sent to
the Local Government eoordlnatlon Program (address above) WhlCh wlll act as a
repOSltory of the co1lectlve response to the agreement.
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4
. \,HAT THE OIL INDUSTRY THINKS:
The Exxon Corporat~on, the ~estern O~l and Gas Assoc~at~on, and the Nat~onal Ocean
Industr~e5 ASSoc1at10n have all been burn1ng up the Wlre serV1ces condemnlng th~s
agreement as a d~saster for the energy future of Amerlca. On July 17, a contlngent
from the ~atlonal Ocean IndustrlesAsSO~latlon met w~th Interlor Secretary Hodel and he
emerged from the meetlng "vlslbly shaken". Hodel made a clear comml tment dun.ng hlS
July 16 press conference that he would stand by hlS slde of the OCS agreement. 011
Dally, as of July 22, quoted Hodel as saYlng that "perhaps some people d1dn't hear the
word ' prel1m1nary' as appl1ed to tIns agreement" and sald that based on 011 lndustry
l.nput he felt he ml.ght need to "renegot1ate" over certal.n tracts. There lS always the
chance that 011 1ndustry pressure could cause Hodel to try to back away from thls
agreement, 10 whlch case he would probably be a "former" Secretary of Interlor. The
Contlnulng Resolutlon would then be amended to lnclude the one-year full scope OCS
Moratorlum. ~ssumlng we d~d succeed In ult1mate Congresslonal approval thlS year for
the one-year moraton.um, the questlon would remaln "Hhat would we have done next year?"
. IMPLICATIO~S FOR ~cCLELLAND EXGIXEERS TEST DRILLING LITIGATIO~:.
The developments surround1ng the OCS agreement at th~s stage create a cl~mate of
uncertalnty for the shallow-core test drllllng project proposed by McClelland
Englneers. Attorneys for the Department of Justlce (actlng for Inter~or) and
McClelland have requested a "stay" of the prevlou31y-scheduled August hean_ng on the
N.E.P.A. SUlt. ThlS request for a stay 1S presently be~ng conSldered by attorneys for
plalntl.ffs. The stay would put off the scheduled August hearlng on the NEPA sUlt
aga1nst Inter10r and rqu1re a "status conference" on the case to be held 10 days after
Congress acts to flnallze the terms of the oes Agreement. No "at-sea" act1v1ties could
be conducted by McClelland pr10r to 10 days after th~s status conference, thus allowlng
tlme for obtalnlng a prellmlnary lnJunctlon lf one lS st11l needed. The fact 15 that
the OCS agreement may have made the McCelland proposal ~n the Santa Cruz, Bodega, and
Pt. Arena baslns irrelevant by removlng the market for McClelland's data. What company
wlll want to purchase.data for a lease sale whlCh lS 17 years or so ln the future? It
1S also P05s1ble, lf deep C.O.S.T. wells are to be dr1lled 1n the m1ddle three baslns
anyway, that the McClelland data may be lrrelevant because 1t would be so shallow by
comparlson. There rema~n five McClelland dr~lllng targets In the Eel R1ver basln Wh1Ch
mlght be stlll attractive as far as marketable data ~s concerned, but McClelland has
apparently not yet declded 1f that Ilmlted number of targets makes for a profltable
at-sea oper~t10n in one bas~n only.
On a parallel McClelland front, on July 22 the Envlronmental Protectlon Agency
announced that 1t had declded to grant the plalntlffs' request for an EV1dent1ary
Hearlng before an Admlnlstratlve Law Judge on the NPDES Permlt for the McClelland
Englneers proposal. Th1S EVl.dentlary Hear1ng could have ~nd1rect ~mpllcat1QnS fo~ the
terms and condl.t~ons applled to later dlscharge perml.ts for the C.O,S.T. wells, so lt
remalns of lmportance to local agencles. ThlS EPA EVldentlary Hear1ng may also be put
"on hold" pendlng flnal leglslat10n 1mplementlng the oes agreement. It appears that
contlnuat1on of the actlvltles of legal counsel presently represent1ng the numerous
local government pla1nt1ffs remalns a top prlorlty.
.CO:~IUNICATI~G WITH CONGRESS:
Because thlS agreement cuts so d1fferently 1n each area, lndlVl.dual communlcatlons
dlrectly between local offlCl.als and thel.r respect1ve Delegatlon members are very
cr1t1cal at thls tlme. Keep ~n m1nd that the general turf agreements have aleady been
made wl.th Inter10r and are pretty much set ln concrete. It lS posslble, but by no
means a certa1nty, that speclflc 1ndlvldual tract "Subst1tutlons" mlght be posslble lf
a strong enough case can be made for these changes. 150 tracts total remalUS the
absolute bottom l1ne. however, and-lt ],5 unclear as to how much "adJustment." luten_or
w~ll permlt, 1f any. On the other ~and, the 011 lndustry may present Interlor w1th
some "hot" tracts lt espec1ally wants and perhaps a tract-far-tract substltutlon could
be conducted. The Oceans1de tlact~ appear to be the most flexlble as of July 22. Any
local government comments on the agreement should conta1n support for three
"st.lpuletlons" whl.ch are stl.ll under dlscussl.on and rema1n to be negotated between
Hodel and the Delegatlon. The proposed stlpulat~ons are: (8) A requlrement that OCS
a1r ern1SS1ons on tracts subJect to th15 agreemen~ comply wlth the strlctest of the
onshore Alr Quallty Management Distrlcts adJacent to the leaslng act1V1tles. (b) A
requlrement that all produced petroleum be transported by plpell.nes, both to shore and
to ref1n~ng centers. (c) A requlre~ent that any necessary onshore racllltJeS be SIted
In strlct conpllance ~lth the local plannlng pr1orlt1es, ~ncludlng speclflcally the LCP
ami the Callfornla Coastal t-Ianagef'lent: Plan.
...DRAFT RESOLUTIO~S attached provlde baSle expamples of ap-proprlate statements of support
or concern over the terms and condltlons of the prel1mlnary Callfornl.3 OCS Agreement.
Whatever your agency poslt1on regardlng the agreement, the folIow1ng players deserve
your thanks for (a) Support for the one-year Moratorlum, and (b) Thelr good-falth
efforts toward a negotl.ated settlement to thl.s ~ssue: Rep. Leon Panetta, 339 CIlOB,
kep. Sldney Yates, 2234 RHOll, and Rep. V1C -Fano, 1421 L110B, all in \~ash1Dgton, DC
20515; ilnd Senator Pete Ihlson, 720 511013, nnd Senator Alan Cranston, 112 SIIOB, both /'
1/<Ishlngtol1, DC 20510. _,J-€;Y