Shattered Trust

Even Jim Watt would have had a difficult time bungling the California offshore oil agreement as grandly as did Interior Secretary Donald P. Hodel. And after telling California members of Congress Tuesday that the July 16 deal was off, Hodel had the amazing naivete to declare that chances appeared good for a new agreement.

More accurate was the assessment of Rep. Leon E. Panetta (D-Carmel Valley), who said after a meeting with Hodel, “We are essentially back at war.” The only recourse for the Californians now appears to be reinstatement of the year-to-year congressional moratorium on offshore exploration and drilling until a satisfactory leasing program can be developed. An option would be to incorporate the July 16 agreement in law.

The July proposal would have allowed the leasing of 150 tracts of 5,760 acres each to the oil companies. Most of the rest of California’s outer continental shelf would be off limits until the year 2000, except in the event of a national emergency.

With a solid record as a resources manager up until now, how could Hodel have offered the 150-tract compromise after six weeks of negotiation without knowing that those areas had only limited promise? Didn’t he sense that the oil industry would be outraged? After all, the quest for offshore oil, particularly in California, has been the major element of what passes as a Reagan Administration energy program. And the oil industry’s major effort in the past five years has been to lease as much of the offshore region as possible.

The Administration’s stated goal has been national energy security. And the oil industry’s line has been that only the environmental quirks of Californians stand in the way of that goal while the Californians consume billions of gallons of others’ gasoline on the way to the beach. The Oil and Gas Journal, the major industry publication, put the choice to Hodel this way in its current issue: “He would have to point out that for the sake of secure energy supplies benefiting the entire nation, Californians might have to endure the not-so-horrible sight of a few jack-ups and production platforms for a few years--which, in environmental terms, is nothing.” A jack-up is a form of offshore drilling rig.


The industry will have to settle for something less than everything. And while California is contributing its share of oil production, including the offshore region, the state will have to live with some more offshore rigs at some point. Sadly, however, the trust needed to reach such an accommodation has been shattered for now.