Bush Dismisses Idea of Offshore Drilling Ban : Oil: President reaffirms need for environmental caution. But he says the Orange County tanker spill is not related to safety of exploration at sea.

President Bush said Monday the American Trader oil spill off the Orange County coast has reinforced his caution about offshore oil drilling in environmentally sensitive areas, but he brushed aside the idea of ending leasing on the outer continental shelf.

“I have said we’re not going to have drilling in highly environmentally sensitive places,” he told a White House press conference, “but I’ll be darned if I think we ought to shut down all offshore drilling everywhere.”

In discussing last Wednesday’s spill, the President was adamant in distinguishing between tanker accidents and drilling offshore.

“I don’t see that a spill from a tanker really has much to do with whether you can drill an offshore well safely,” he declared.

Bush has before him a decision on opening up to leasing much of the outer continental shelf off the California coast.

Shortly after entering office, he halted lease sale preparations begun by the Reagan Administration and ordered an interagency task force to assess the environmental and economic impact of developing three offshore areas rich in oil and gas: Lease Sale 95, off the Southern California coast, Lease Sale 91 off Northern California and Lease Sale 116 off the Florida Keys. The 6.7 million acres of Sale 95 extend from the Mexican border to the northern border of San Luis Obispo County. Lease Sale 91 covers 1.1 million acres off Mendocino and Humboldt counties.

Bush told reporters Monday he has read the task force report, submitted to him in January, and expects to announce his decision “fairly soon.”

Administration sources said some of the President’s advisers have been urging him to announce his decision when he returns to California on a four-day trip at the end of this month. That suggests that his course will be considered politically popular in the state, where anti-drilling sentiment is strong.

Rather than giving Bush specific recommendations, the task force, headed by Interior Secretary Manuel Lujan Jr., laid out a series of options for each of the lease sales affected by the embargo, ranging from beginning leasing to extending the ban for years.

Knowledgeable sources have said the area off Southern California is the most likely of the three to be opened to development since it is believed to have more than a billion barrels of recoverable oil, far more than the Northern California or Florida Keys sites.

The offshore development that already has taken place off Southern California also has created an infrastructure, such as pipelines and refineries.

About the same time the President was addressing the newest spill, Environmental Protection Agency Administrator William K. Reilly was making the same point, telling reporters that he does not see “a near-term alternative to continued offshore leasing in a lot of places.”

However, he added, “California is in some respects a very special place.”

“The sad reality of this country’s heavy dependence on petroleum,” Reilly said, “is that we have had to look for it everywhere. We are committed to energy use levels that will require us for some time to come to import a large amount of oil from other countries. That does, in fact, pose a large number of hazards, particularly as it comes in tankers.”

The EPA chief said he questions whether the accident would have been averted by a double hull or double bottom on the vessel. Bills to require double hulls were recently passed by the House and Senate, and a conference committee is working out differences between the two houses.

The oil industry and trade groups such as the National Ocean Industries Assn. have used the accident off the California coast to argue that tanker accidents make offshore drilling even more imperative in order to restrain tanker traffic.

“Additional offshore production,” the association said, “will actually decrease the amount of tanker traffic off America’s coasts. For every barrel of oil produced domestically, one less barrel of imported oil will be transported into the country, nearly all of which is transported by tankers.”

The industry assertion is flatly disputed by environmental groups opposing development of the outer continental shelf off California. Drilling offshore, particularly off Northern California, will produce more, rather than less, tanker traffic, said Lisa Speer of the Natural Resources Defense Council.

Reilly told reporters the question is moot. “Whether the leases go forward or not,” he said, “there is going to be a lot more tanker traffic coming into the country because our own rate of production is decreasing as our rate of usage is going up.”