Offshore Rigs Could Cut Property Values, Tourism, Study Says

Intensive offshore oil and gas drilling along Orange County’s coast could send ocean-view property values tumbling and reduce the county’s lucrative tourist trade by as much as $223 million a year, according to a study released Monday by a coalition of anti-drilling forces.

The $235,000 report, commissioned by the county and five local coastal communities, also predicted that the presence of extensive oil and gas drilling rigs in county waters would damage local sport and commercial fishing grounds and severely aggravate the region’s air pollution problems.

The study also noted that three sizable and active earthquake faults, including the Newport-Inglewood Fault, are located off the Orange County coast, posing a threat to drilling platforms should a major temblor strike.

Its release Monday was intended, in part, to send a message to state and federal officials, Laguna Beach Mayor Robert F. Gentry said during a news conference at the county Hall of Administration in Santa Ana.

“In Alaska, just a few months ago, we had a major catastrophe,” Gentry said, referring to the recent massive oil spill from an Exxon tanker near the Port of Valdez. “We need to do a lot to make sure the oil business is not expanded here.”

But others disagreed that oil exploration and drilling alone would harm tourism in Orange County coastal cities.

One oil industry official said tourism is strong and growing in places such as Santa Barbara, site of a major drilling accident that caused a spill of more than 235,000 gallons of oil, creating an 800-square-mile slick, blackening beaches and causing millions of dollars in damage in 1969.

“The biggest threat to tourism is not offshore rigs, but a shortage of petroleum,” said Robert Getts, an executive with Western States Petroleum Assn., an oil and gas lobbying group, who had not seen the report released Monday. “It becomes a question of whether the sight of a rig is more offensive (than) running out of gas. We are becoming more dependent on foreign oil all the time.”

Opponents of offshore drilling said the report, prepared by a Virginia-based environmental consulting firm, is the first attempt to quantify the potential impact and hazards of energy exploration and development along the county’s 42-mile shoreline.

Its release comes a week before a pair of meetings in Los Angeles that may affect whether the federal government ultimately approves further drilling off Orange County.

A special presidential task force, headed by Secretary of the Interior Manuel Lujan Jr., will hear testimony on May 23 at a daylong hearing from local elected officials, fishermen, oil company representatives and private citizens about the risks and benefits of opening Southern California coastal waters to further oil drilling. The task force, created by President Bush shortly after he took office in January, is expected to issue a recommendation early next year on whether to permit more oil drilling off California, including Orange County.

In a separate private meeting on May 24, Gov. George Deukmejian is scheduled to meet with about three dozen Southern California elected officials, including several from Orange County, to discuss future offshore oil drilling in California.

Tourism in the county’s coastal towns would be hardest hit by an expanded offshore oil-drilling program, the report said. Coastal recreation and tourism currently generates $637 million a year in revenues for beach cities. But the mere presence of more drilling platforms and tankers off the coast could cost those same cities an estimated $108 million to $223 million a year in lost tourism, the report said.

Those figures, Gentry said, were based on interviews with hundreds of tourists, who expressed concern about the “aesthetic damage” caused by the sight of oil rigs offshore.

“When you go to the beach and you see an uncluttered horizon, it’s restful and it’s relaxing,” Gentry said. “But when they establish those platforms out there, you not only see them but you smell them. And you know some oil is seeping out.”

But Martha Kleine, interim director of the Newport Beach conference and visitors bureau, said she doubts that the presence of offshore platforms would have a significant impact on tourism.

“Nobody has ever called me asking whether we have oil rigs off our beaches,” Kleine said. “It could have some impact, but I think it’s more in the event of a spill. Look at what is happening in Alaska. That has been devastating. But that’s a spill.”

The report also said coastal property values would suffer from expanded offshore oil activity because of the blight on the view. For example, a $300,000 home could lose as much as $51,000 in value if more rigs are erected off the coast, the report said.

The trade-off, according to the report, is for a supply of oil that is equivalent to what the nation consumes in 3 days. There are about 52.8 million barrels of oil off the Orange County coast, the report estimated. Gentry argued that California already is the third largest domestic oil producer behind Alaska and Texas.

“We are doing our fair share,” he said. “Why should we have to do more?” Gentry asked.

The report, Gentry said, also was designed to draw public attention to federal Lease Sale 95, a 10,000-square-mile area of coastal waters along central and Southern California that federal officials plan to open to oil and gas exploration by April, 1991. A draft environmental impact report on the lease sale, which covers an area from Monterey County to the Mexican border and includes large tracts of Orange County waters, is expected to be completed next February.

Its findings may not matter if Bush’s task force recommends against further offshore drilling in California.

However, Gentry, a Democrat, is skeptical of the task force’s independence. Based on the makeup of the task force, Gentry suggested that it does not represent much change “in thinking” from the Reagan Administration, which pushed for more drilling off the California coast.

“That task force is not necessarily viewed in my opinion as something that will help Southern California,” he said. “It is a very political gesture. I frankly buy the argument that it is a way to continue the Reagan Administration’s policies.”