Babbitt Cancels Four Out of 40 Proposed Offshore Oil Leases

Buffeted by intense political pressure and the threat of a lawsuit by the state, U.S. Interior Secretary Bruce Babbitt on Friday canceled four of the 40 oil leases proposed for development off California’s Central Coast and put up new obstacles to drilling.

Babbitt gave oil companies 90 days to address any effects drilling would have on a variety of environmental concerns, including the endangered California sea otter and the Monterey Bay National Marine Sanctuary.

Foes of offshore oil drilling generally applauded Babbitt’s actions. “This is a welcome decision by the Department of Interior,” said Gov. Gray Davis, who has pushed hard to block any new drilling off the coast. Susan Jordan of the League for Coastal Protection called the announcement by Babbitt “a good first step.”

Oil industry officials complained that Babbitt had caved in to political pressure and was unnecessarily delaying development of the leases, most of which are clustered at the northern edge of Santa Barbara County in an area previously free of offshore platforms.

“There’s clearly political pressure being exerted here,” said Frank E. Holmes, coastal coordinator for the Western States Petroleum Assn., an industry umbrella group.

Holmes said it is too early to say whether the two firms that had leases canceled--the Samedan Oil Corp. of Oklahoma and the Bakersfield-based Aera oil company--will challenge Babbitt’s action in court.

Babbitt announced his decision in a two-page letter to the state Coastal Commission, which earlier this week vowed to sue the federal government if the state was not allowed the right to fully review the oil leases.

Most of the leases date back two decades, and environmental regulations--along with ecological realities such as the decline of the sea otter population--have since changed dramatically. Given the changed circumstances, the coastal commission argued that it should have the opportunity to help determine whether drilling goes forward.

Oil companies hope to pump about 1 billion barrels of crude oil from the sites--an amount that exceeds all that has been taken from federal waters off California in this century.

Babbitt agreed in his letter that the passage of time may have altered the playing field enough to justify requiring that oil companies submit new plans for development of the leases, instead of merely updating existing proposals.

Coastal Commission officials said that is a significant concession because the submission of new development plans would give the state agency an opportunity for a full review--and a better chance to block any new drilling. If the plans were merely updated, the commission would likely be limited to addressing only those parts that were altered, hindering its ability to stop platforms from going up.

“I’m very encouraged by this,” said Sara Wan, commission chairwoman. “By canceling four of the leases, the federal government is indicating it wants to work with us.”

Although federal officials still have not committed to giving the state authority for a full review of the oil leases, Wan said she suspects “they’re leaning in that direction. We’ll see what the next 90 days brings.”