Off-Limits Signs Go Up Offshore : Environment: The state bans new oil-drilling activity in all remaining unleased Southland coastal waters.

In a new blow to the petroleum industry, the State Lands Commission on Wednesday declared all remaining unleased or unprotected coastal waters in Southern California off limits to oil and gas development.

The decision followed a similar commission move last year covering waters off Humboldt and Mendocino counties, and now means that for the first time all new oil and gas drilling in state waters from Oregon to Mexico has been shut down. The action also provided evidence of the continuing repercussions from the disastrous Alaskan oil spill last March.

Wednesday’s move does not require approval by the governor, state Legislature or federal government. However, the Lands Commission could reverse itself in the future and the state Legislature could overturn the decision.

Earlier this year, President Bush and Congress in separate actions locked out new oil and gas leasing activity in federal waters off California until at least next June. Slightly more than half of the oil produced off the California coast occurs in federal waters beyond the three-mile limit. The State Lands Commission has jurisdiction over coastal waters between the high tide line and three miles seaward.

“The world has changed since the Valdez accident,” Controller Gray Davis, a member of the commission, said Wednesday. “We’ve learned we can’t afford to gamble with California’s coastline,” Davis said.

“It’s just sheer dumb luck we haven’t experienced the same catastrophic accident,” added Lt. Gov. Leo T. McCarthy, another commission member.

On a 2-0 vote, Davis and McCarthy set aside 310 square miles of ocean tracts located between the northern city limits of Newport Beach and Point Fermin in Los Angeles County, and all offshore lands in Ventura and Santa Barbara counties.

The sanctuary area established Wednesday is believed to hold between 100 million and 300 million barrels of crude oil valued at between $500 million and $1 billion at today’s prices.

Oil industry interest in drilling in the newly created sanctuary areas off Los Angeles and Orange counties was said by the commission staff to be “modest.”

But, there was little doubt that the drilling ban off Santa Barbara County was viewed as a major setback to industry hopes of exploiting untapped oil and gas reserves there. Oil companies have been especially interested in the area between Point Arguello and Point Conception.

“It is almost certain the area you propose to lock up contains valuable resources. These areas are adjacent to existing state and federal leases that are already developed or being developed,” Terry Covington, spokeswoman for the Western States Petroleum Assn. and the California Coastal Operators Group, told the commission.

Oil production in federal waters in the Santa Barbara Channel, now at about 80,000 barrels a day, is expected to peak to 500,000 barrels a day over the next decade. Production in state waters is expected to reach 70,000 barrels a day for the Santa Barbara Channel area, dropping to 45,000 barrels daily by the year 2003.

Wednesday’s vote came despite protests from the oil industry, which pleaded for a “balanced” view that took national security and economic issues into account as well as environmental factors.

Covington said California oil would minimize dependence on foreign oil. She also reminded the commission that since 1980 an estimated $3.5 billion in oil royalties have been paid into the state treasury, a good portion of it earmarked for education.

“At a time when the state must increase the sales tax to provide earthquake relief, it is not a time to cast aside this economic contribution to the state’s welfare,” Covington said.

She also urged the commission to delay the decision pending the outcome of a study due to be completed next June that will attempt to assess the state’s coastal environment and energy needs.

Since the Exxon Valdez accident last March, pressure has been growing to forestall additional oil and gas development, not only off California but off the coast of Florida and in the Alaska National Wildlife Refuge and Alaska’s Bristol Bay.

Last month, the National Research Council--an arm of the National Academy of Sciences--warned Bush’s offshore oil task force that scientific information about Southern California’s ocean floor was “inadequate” and “not sufficiently reliable” for making decisions on oil drilling off Southern California’s coast.

Last June, a high-ranking petroleum industry task force made up of the chief executive officers of 14 major oil companies concluded that the industry had neither the equipment nor the personnel to handle a catastrophic tanker spill. It called for a $250-million program to create five regional oil spill centers capable of quickly responding to a Valdez-type disaster anywhere in U.S. coastal waters.

A short time earlier, analyses by federal, state and local authorities concluded that California’s coast, including sensitive estuaries and marine sanctuaries, would be virtually defenseless against a major offshore oil spill, even if the accident were far smaller than the Alaskan spill.

Santa Barbara County Supervisor Gloria Ochoa urged the Lands Commission to go a step further and investigate the possibility of terminating and reacquiring existing idle leases that have low oil or gas production value.

The 310 square miles given sanctuary status Wednesday represent only 10% of the total square miles that have been declared off limits to oil and gas drilling. The state previously gave sanctuary status to 2,739 square miles--or about 1.75 million acres. About 250 square miles have been leased.

Gov. George Deukmejian’s representative on the three-member Lands Commission, state Finance Director Jesse Huff, did not attend the hearing. But the governor’s office said Wednesday that Deukmejian has consistently opposed blanket oil drilling bans.

BACKGROUND

In October, 1988, the State Lands Commission imposed a ban on oil and gas drilling in state waters off the coasts of Humboldt and Mendocino counties. Last Feb. 9, President Bush announced a postponement of leasing in all federal waters--those beyond three miles from shore--in Northern and Central California, and Congress later imposed a ban in federal waters off Central California. A presidential task force on offshore drilling is scheduled to report back to Bush next month.