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Coastal Oil Plans May Have to Change, Hodel Says

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Times Staff Writers

Interior Secretary Donald P. Hodel on Saturday held out the possibility of scrapping or switching oil lease tracts proposed off Orange County because of the potential for lawsuits and a record of previously unsuccessful exploratory drilling in the area.

Hodel revealed for the first time Saturday that some of the six Orange County tracts had been leased to oil companies in the early 1970s, then abandoned as unproductive.

“This raises the question whether we should contemplate substituting them,” Hodel said at a news conference following a jammed public hearing at Newport Beach City Hall. Hodel declined to say whether more acceptable substitute tracts exist off Orange County.

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Major Changes Suggested

Wrapping up two weeks of statewide public hearings in Oceanside later Saturday, Hodel questioned the credibility of a tentative accord reached with some members of Congress to open up offshore oil drilling on the California coast.

Noting that objections to the preliminary agreement have come from the oil industry, local officials and some environmentalists, Hodel suggested that major changes will be required to reach a viable compromise.

Hodel raised a new concern for the first time Saturday. He said the possibility of lawsuits posed a major threat to the present pact, which opens 150 tracts for drilling in return for lifting a general moratorium on coastal drilling. It also places off-limits 6,310 other tracts--nearly 98% of the state’s coastline--until the year 2000.

“That is a real threat to the preliminary agreement. It really is. It’s probably the biggest single threat that I’m aware of at this stage,” Hodel said of the potential for lawsuits.

Hodel’s remarks followed private discussions as well as public warnings from officials of local coastal cities and counties, including Los Angeles County Supervisor Deane Dana, that they would sue the federal government if drilling was allowed in some of the 150 outer continental shelf tracts set aside for exploration--including some off Malibu, Newport Beach and Oceanside.

(Newport Beach and Laguna Beach have taken legal action in past years to block previous sales of oil lease tracts in federal waters, without success.)

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Lawsuit Threat Noted

Hodel said that if oil companies or the government are threatened by lawsuits on those tracts, it was clear that he and members of the California congressional delegation would have to find other commercially attractive tracts.

“It seems to me I hardly have a credible preliminary agreement if the (congressional) members I negotiated with cannot deliver the 150 tracts,” Hodel said in Newport Beach. “It’s one thing for me to exclude 6,310 tracts to the year 2000--and I can deliver on that. But if they cannot tell me the 150 tracts will . . . go forward with a reasonable certainty, (that) would be very, very difficult to live with,” he said.

“I think local representatives have said pretty clearly they would not hesitate to file lawsuits if they thought it could stop the process,” Hodel told reporters before departing for Oceanside.

Rep. Robert Badham (R-Newport Beach), who breakfasted with Hodel Saturday, concluded from Hodel’s remarks that the six tracts ranging from 3 1/2 miles to 7 miles off Huntington Beach, Newport Beach and Laguna Beach would be exchanged for others, possibly outside of Orange County altogether.

“I will state that none of these six tracts will be leased . . . because of the need for preservation of our nationally recognized coastline, the threat of litigation and the lack of (oil industry) interest in those six tracts,” Badham said.

The anti-drilling coalition of four coastal cities and the county has not decided whether to seek legal action as a last resort, but Newport Beach Councilwoman Evelyn Hart said with a victorious smile, “I think Mr. Hodel heard our message loud and clear, and I think the Orange County tracts are going to be eliminated, transferred to another area.”

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While some read good news into Hodel’s comments, Lt. Gov. Leo McCarthy told reporters in Newport Beach that Hodel was virtually abrogating the agreement because of pressure from the White House and oil companies.

“For all practical purposes, Secretary Hodel has said today we have no basic agreement and we will start from scratch,” McCarthy said. “He is saying no area should be excluded and that he will not be held to the 150 tracts.”

“The last leg has been pulled out from under the agreement,” McCarthy said at a news conference following his testimony before Hodel. “Without it, Orange County and the rest of the coast is going to be in severe danger.”

Told of the San Francisco Bay Area Democrat’s remarks, Hodel replied, “It may be that there are partisan considerations in his view of today’s events that color his thinking.”

Critical of Tracts

Later at an Oceanside press conference, Hodel criticized the 150 tracts selected as having little commercial value to the oil companies. He said he was directed by law to work for the nation’s energy security.

“It’s hard to see I’ve accomplished anything,” Hodel said.

He said that while Southern California tracts agreed upon for drilling have stirred opposition from local officials and environmentalists, oil companies have dismissed all but 5% to 10% of the 150 tracts as commercially worthless.

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He also questioned waiting until the year 2000 to consider drilling in the remaining tracts.

From Eureka to Oceanside, Hodel has been praised, excoriated and even asked to eat seaweed by people ranging from environmentalists, commercial fishermen, oil industry officials, oil workers and representatives of minority groups demanding jobs.

In Eureka, a woman with a child in one hand reportedly proffered a strand of seaweed in the other, asking him to sample a part of the underwater ecology she contended was threatened by oil drilling.

Oil Industry Attack

In Bakersfield, Hodel’s compromise was assailed by oil industry representatives as offering little but “dogs” for oil and gas exploration. In Ventura on Thursday, he was greeted by 2,000 oil workers who urged more drilling to protect their jobs.

On Saturday, about 200 mostly Newport and Laguna Beach residents turned out with placards and balloons, exhorting him to prohibit drilling off their coast. Another 120--including two congressmen, two state legislators, three county supervisors, and mayors and council members from numerous cities--were packed inside the council chambers, awaiting their turn to be heard.

Most told Hodel they would support the compromise provided the 54 square miles of Orange County tracts were eliminated. He was given a 10-inch-high stack of petitions bearing more than 57,000 signatures supporting a moratorium on drilling in Orange County.

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State Sen. Marian Bergeson argued that “Orange County’s coastal resorts are as significant as those in other areas of the state. Equity demands our inclusion (in the moratorium).” She added that the apparent lack of industry interest in local tracts was an “unjustifiable risk for questionable gain.”

“Please do not jeopardize our resources for no appreciable return, as you have said. It just doesn’t make sense.”

Board of Supervisors Chairman Thomas F. Riley reminded Hodel that three state parks along the county coast, as well as the Upper Newport Bay Ecological Reserve, are areas of “unquestionable sensitivity.”

“I fail to understand why Orange County has not been given equal consideration with those tracts off Malibu and Big Sur. . . . As a retired brigadier general, I understand the need for energy. The world’s supply of oil is finite. But the supply off Orange County is debatable, so I don’t feel it is prudent to drill here.”

But Rep. William E. Dannemeyer (R-Fullerton) argued that energy independence was an overriding concern for the nation’s security and economic health. He said the U.S. foreign trade deficit is largely created by dependence on foreign oil and costs U.S. workers about 1 million jobs.

Representatives of the Orange County and Anaheim chambers of commerce also opposed any continuation of the moratorium.

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Many of the speakers who opposed offshore drilling said they would support tapping local offshore reserves in a national emergency.

Argument for Development

But Exxon representative G. Rogge Marsh said people failed to realize that oil supplies cannot “be turned on and off like a faucet.”

“A national crisis will likely have come and gone before you would ever get oil exploration started,” Marsh told Hodel and those assembled. “Exploration must necessarily (occur on) a continuum . . . for as you know, it can take many years to actually begin exploration.”

When Marsh added that he didn’t want to see his teen-age son have to pick up a gun to fight for precious world oil supplies elsewhere, there were audible boos and hisses from the crowd outside.

Irvine Mayor Dave Baker broke up the crowd by mentioning the free packets of “tar-off” toiletry wipes provided to guests at a Santa Barbara hotel. “I don’t think we want to have to supply our guests here with the same of thing,” Baker said.

Coffee for the Genteel

But Hodel quickly interjected that “we can demonstrably prove that the tar on the beaches (in Santa Barbara) most likely is coming from the natural seepage.”

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Outside, six silver-plated coffee urns provided by a local hotel and tennis club were set up on the Newport Beach City Hall lawn for the genteel protesters. One picket sign said: “Tar and feather Hodel. Not our beaches.”

As Hodel concluded his news conference, a frustrated Supervisor Harriett Wieder--who had been preempted from speaking before Hodel--finally managed to push a wheelbarrow full of about 20,000 postcards from constituents opposed to offshore oil exploration.

“Am I supposed to wheel this back to Washington?” a smiling Hodel asked.

He was greeted by a phalanx of chanting protesters bearing signs and singing an anti-drilling song to the tune of “Row, Row, Row Your Boat.”

Further Testimony

“Oh, you’ve changed signs,” Hodel said to Sonia Harrington of the Laguna Beach group Save Our Shores of her new sign, “People are ecologically sensitive too!!” Earlier, she had flashed the two-sided message: “Mr. President, Is this Orange County’s reward?” and “The sea is why people live here and why tourists come here.”

Once Hodel left, most of the crowd drifted away to enjoy the warm summer day, while about 50 remained inside to give their testimony to senior Interior Department officials.

“I’m disappointed that more younger people didn’t show up,” said Mitch Waggoner, a curly-haired 21-year-old drama student who listened intently to the testimony blaring from the loudspeakers. “They’re not getting the information. I told people in my oceanography classes last week, but no one showed up.”

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“I think it’s apathy,” said Craig Riley, 45, a longtime Newport Beach resident and businessman who supplies equipment to offshore oil rigs. “I have mixed emotions. If there’s going to be more drilling, I am convinced the almighty dollar will win out. But they’d better damn well have more assurances that they have minimized the hazards.”

Possibility of Suits

Still, there seemed to be rough waters ahead if Hodel was to reach a final accord with Congress on offshore oil drilling in California.

The possibility of lawsuits raised publicly Saturday was only the latest difficulty he has discussed.

Over the course of his two weeks in California, which began Aug. 19, Hodel has had one objection after another to the present plan, prompting some, including the Sierra Club’s Southern California representative, to warn that environmentalists would seek to reinstate the 4-year-old drilling moratorium if Hodel allowed the preliminary agreement to unravel.

Speaking to reporters at Mission San Luis Rey Saturday before addressing Oceanside residents, Hodel called for basic changes in the pact but said the tentative compromise could still provide a framework for negotiations when he returns to Washington his week.

Biblical Reference

“We may have to put different wine in those casks,” he said, employing a Biblical metaphor.

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Members of Congress who negotiated with Hodel have repeatedly said that the agreement was all but final and that only minor adjustments were contemplated.

However, Hodel on Saturday described his thinking since reaching the preliminary agreement as being in “transition.”

Following his public hearing here Saturday--the 11th and final of his two-week swing through the state, Hodel flew to San Diego and was scheduled today to return to Washington.

He said he hoped to have a good idea of what should be in the final accord he hopes to reach with Congress by the middle of the month. He said there would be considerable pressure to reach agreement before the end of September, when the moratorium expires.

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