Critics Vow to Defeat Offshore Oil Bill Giving States Part of Revenue

House critics of legislation to give California and six other coastal states $2 billion in disputed offshore oil revenues vowed Friday to defeat the plan. They called the proposed payments a “mockery” of efforts to trim the federal deficit.

The legislation, narrowly approved last month by the House Interior Committee, would give California $375 million in oil revenues already collected, plus $225 million over the next three years and several hundred million dollars more in later years.

Rep. Morris K. Udall (D-Ariz.), a leading opponent of the bill, said at a news conference Friday that coastal states were offered an “extremely generous” share of revenues, totaling $1.4 billion under an alternative plan backed by the Reagan Administration.

Full Vote Sought

Udall, chairman of the Interior Committee and a supporter of the Reagan proposal, said he will ask the House Rules Committee next week to detach the rival bill by Rep. Jerry Huckaby (D-La.) from an omnibus budget package and put it to a vote by the full House.

“I think (the Reagan plan) was a fair proposal, but the newest measure is a raid on the Treasury,” Rep. Philip R. Sharp (D-Ind.) declared. He explained that Huckaby’s bill could cost the government $6 billion in future oil revenues, according to its distribution formula.

Udall’s remarks drew strong opposition from California congressional officials.

“It’s ridiculous to say this legislation is a raid on the Treasury. . . . It’s the settlement of an old debt,” said one congressional aide, noting that Congress agreed in 1978 to award coastal states a fair share of offshore oil revenues.

‘It Makes No Sense’

“It makes no sense for the government to take resources that belong to California,” noted James T. Burroughs, an aide to Sen. Pete Wilson (R-Calif.), who supports a proposal similar to Huckaby’s legislation in the Senate.

At stake are billions of dollars in offshore oil revenues that the federal government and officials from California, Louisiana, Texas, Mississippi, Alaska, Alabama and Florida have been battling over for seven years.

Currently, states control oil revenues within three miles of their shores, while jurisdiction farther out belongs to the federal government. The states have long contended that they should also get revenues from oil wells that are drilled in federal waters but that draw resources from gas and oil pools within the states’ three-mile zones.

Money From Leases

The revenues come from oil and gas companies that pay the government for the right to lease drilling areas in federal waters. These firms also pay royalties to the government on profits from oil and gas production.

Federal officials set aside $5.8 billion in contested revenues while both sides tried to settle the dispute. Earlier this year, the Administration endorsed a formula that would give states 27% of the bonuses and rents paid by companies for oil leases in a three-mile stretch of federal waters next to the three-mile state zone.

The Reagan plan would have distributed the $5.8 billion as well as future offshore revenues according to this formula. However, states would only get royalties from wells that actually drew oil and gas from state waters.

Members of the Interior Committee approved a similar measure but, in a key difference, awarded states 27% of the royalties from all oil wells in nearby federal waters.

Udall said that last provision amounted to a “blank check” on future federal revenues for oil-rich states, adding: “We are interested in compromise on this very tangled issue, but not at the expense of the integrity of the Treasury.”