Offshore Oil Pact Rejected by Hodel : California Lawmakers Vow to Extend Moratorium as Compromise Collapses

A compromise plan that would have limited oil and gas drilling to a small part of the California coast collapsed Tuesday after Interior Secretary Donald P. Hodel told the state’s congressmen and senators that he can no longer accept the negotiated agreement.

The California lawmakers, including Sens. Alan Cranston and Pete Wilson, immediately announced that they will seek another yearlong moratorium on drilling off California’s coast or will attempt to push through a modified version of the July 16 preliminary agreement without Hodel’s backing.

“We are essentially back at war” on the issue of outer continental shelf development off California, Rep. Leon E. Panetta (D-Carmel Valley) declared after a tense two-hour meeting between the lawmakers and Hodel.

Several members of the state’s delegation accused Hodel of reneging on a deal and expressed skepticism about their ability to trust him in the future.

‘Let’s Break a Deal’

“To us,” Rep. Barbara Boxer (D-Greenbrae) said, “this is really a new show called ‘Let’s Break a Deal.’ ”

The original agreement between Hodel and the state’s congressional delegation would have opened 150 nine-square-mile tracts of ocean floor, mostly off Northern California, in exchange for declaring 6,310 other tracts off limits for leasing for 15 years. The oil industry strongly opposed the pact, which was announced after weeks of negotiation.

During the closed meeting Tuesday, Hodel told the congressmen and senators that he had decided that he could not support the preliminary agreement because it would release only 5% to 7% of California’s offshore oil and gas potential. He said he prefers a plan that would tap more of the state’s offshore energy resources--possibly as much as 30%--but made no specific counteroffer.

Moreover, he said, it became apparent during public hearings last month that the preliminary plan was unacceptable to Southern Californians because of environmental concerns and would be the target of numerous lawsuits once it was passed by Congress.

Hodel said he reached the preliminary agreement without truly understanding the viability of the tracts. He said he accepted it only because he feared that Congress would vote to renew a moratorium on drilling off the California coast a few days later. In addition, he said, he believed that it was the best deal he could achieve at the time because congressional negotiators would not yield further.

He said, however, that he now believes that he erred in allowing the pact to be called an “agreement.” Instead, he said, the “preliminary agreement” should have been labeled a “proposal, a suggestion or an offer.” Over time, he contended, “the word preliminary has gone stale.”

150 Proposed Tracts

Hodel has prepared a tentative new list of 150 proposed tracts for leasing off California that contain only 14 of the sites included in the original compromise. He said he will make the list public when it is completed, possibly next week. Department officials said the sites on the new list would release 30% of the state’s offshore energy potential.

Hodel told reporters that he is not attempting a “massive assault on the coast of California” and noted that he regrets “the heat with which some people react.”

“I will continue to try to seek a program which provides protection of the environment and an orderly exploration” of the outer continental shelf, he said.

Rep. Tom Lantos (D-Woodside) said, however, that Hodel’s action raises doubts about whether members of Congress could trust the Administration in future negotiations.

“I think the Administration’s credibility has suffered a very serious blow,” he said.

Environmentalists said their confidence is also shaken. “The secretary has long claimed that he seeks to operate by consensus wherever possible,” said Lisa Speer, a spokeswoman for the Natural Resources Defense Council, a national environmental lobbying group.

“The fact that he has walked away from his own agreement and has refused to even offer a counterproposal raises very serious questions about his credibility and his commitment to negotiate in good faith,” Speer said.

Wilson, however, said he believes that Hodel entered into the agreement in good faith, although perhaps “naively.”

Assesses Chances

Panetta said he believes that the delegation could win passage of a moratorium or the compromise plan without Hodel, a move that several members said would have to be made within a few days to have a chance to succeed in this session. The current moratorium ends at midnight Sept. 30.

Meanwhile, Cranston said that if the lawmakers decide to push through the preliminary agreement, several changes will be sought. Tracts proposed for development off Newport Beach and Laguna Beach would be deleted and replaced with sites elsewhere, he said, and tracts adjacent to populated areas in northern San Diego would be swapped for others off Camp Pendleton.

Bob Hattoy, the Sierra Club’s Southern California representative, said, however, “I think they’ll have real trouble getting the compromise through or a moratorium through, because Congress is paying attention to a lot of other issues right now.”

Other observers were more optimistic, however.

“I think people feel so betrayed by the secretary’s action that we have a very good shot,” Speer said. “I feel very confident.”

Glad Deal Fell Through

Phillip Clark, vice president of the National Ocean Industries Assn., which represents offshore development interests, said he is glad the deal fell through. He said, however, that he is concerned about the prospect of Congress renewing a four-year congressional ban on oil exploration off Northern and Central California and a three-year ban off most of Southern California.

“The preliminary agreement was a terrible deal,” Clark said. “It was imperative that it fall through. The problem is, where do you go from here? If they keep getting moratoriums every year, it could start turning into a permanent way of doing business.”