Lawmakers Assail Export Proposal for Onshore Oil

Seventeen congressmen from California urged Interior Secretary Manuel Lujan Jr. on Monday to disavow a federal task force report that calls for the export of oil produced by onshore wells in California, calling the recommendation “startling confirmation” that no need exists for further development in coastal waters.

The little-noticed study, led by the Commerce Department and submitted to Congress early this year, calls for lifting restrictions on exports. It would allow producers to begin exporting 15,000 barrels of heavy crude per day, increasing to 25,000 barrels after two years. The basis for the proposal was the task force’s conclusion that California has supplies of heavy crude far exceeding state refineries’ ability to turn it into gasoline.

Charging that the report misrepresents the capacity of California refineries, 16 Democrats and Republican Tom Campbell of Stanford told Lujan that adoption of the recommendations would “exacerbate our dependency on foreign crude and fabricate a new market for California offshore crude.”

Robert Sulnick, executive director of the American Oceans campaign, echoed the objections of the House members. “To say there is a need for more oil development and recommending exporting at the same time shows an Administration that is very out of touch,” he said. In a letter, the California lawmakers told Lujan that, “If, in fact, there were an excess of crude in the California market, we would be obligated to ensure that excess was refined domestically. In this way, every barrel which was in excess of California’s refining capacity would become part of the nation’s solution to foreign crude imports.”

The congressmen suggest that if California oil is exported, the resulting decrease in supplies will be used to bolster arguments for offshore drilling. “The report itself validates our concern that California’s offshore crude will become one of the sources that will replace the onshore oil we export,” they wrote.

The letter was drafted by Rep. Mel Levine (D-Santa Monica), who called the report’s recommendations “outrageous.”

“The Commerce Department has just baked dessert for what the major (oil companies) have long planned to be an offshore drilling feast,” he said.

But at the same time, he added, a reading between the lines of the report shows that “We don’t need California’s offshore oil . . . case closed. We’ve said all along that it’s insane to ruin California’s coast for what amounts to 1% to 2% of the nation’s total recoverable” oil.

The massive study was carried out under a mandate of the 1988 Omnibus Trade and Competitiveness Act to determine whether export restrictions enacted after oil crises in the 1970s continue to serve the nation’s energy and national security interests.

While the United States imports about 40% of the 17 million barrels of oil it uses daily, the lower 48 states export about 160,000 barrels of heavy crude, most of it to Canada, Puerto Rico and the Virgin Islands.

If independent producers are restricted from exporting, the study advised Congress, they may be forced to sell their properties to large companies with integrated production and refining operations. As a consequence, it said, independent refineries would be jeopardized.

Objections to the report came as the Bush Administration moved toward long-awaited policy decisions on offshore oil development, beginning with a presidential announcement of plans for large areas of the outer continental shelf off Northern and Southern California. Shortly after taking office, Bush suspended the Ronald Reagan Administration’s plans for lease sales in a 6.5-million-acre area of the shelf off Southern California and 1.1-million-acre area off Northern California while a presidential task force, chaired by Lujan, studied the potential economic and environmental impacts.

The still-secret report of the Lujan task force went to Bush at the beginning of the year, and government sources say that after months of delay, the President is nearing an announcement of his plans for the two areas.

Administration sources expect the President to propose going ahead with development of restricted areas of the shelf off Southern California, and the congressmen’s letter was designed to rally opposition.