U.S. Appeals Ruling on Offshore Drilling

The Bush administration Wednesday appealed a federal court ruling that effectively halted new oil drilling off the California coast by requiring state officials to review any new exploration plans.

Lawyers for the administration filed lengthy legal arguments after Gov. Gray Davis rejected a proposed compromise that would have permitted some new drilling and required the state to help buy out the claims of other oil companies.

“The Minerals Management Service believes this is the appropriate action to take,” spokeswoman S. Dian Lawhon said. “We want to clarify that all this is in federal waters. People don’t understand that we are not talking about something smack dab up against the coastline.”

At issue is how oil companies might resume long-stalled plans to drill for oil and natural gas on 36 tracts at least three miles off the coast of Ventura, Santa Barbara and San Luis Obispo counties.

California’s waters are generally off-limits to new oil drilling by federal and state moratoriums. But the bans on offshore oil leasing do not apply to the 36 tracts--each three square miles--that were leased to oil companies from 1968 to 1984.

An additional 43 federal tracts are producing oil and gas in coastal waters that stretch from Oxnard to San Luis Obispo.

California officials maintain that federal law gives them the right to review new oil-drilling plans in federal waters off the state’s coastline to make sure they conform with state regulations protecting air and water quality, sea life and scenic views.

A U.S. District Court judge agreed in June, effectively blocking new oil-drilling plans until they pass muster with the California Coastal Commission and the environmental safeguards outlined in the state’s Coastal Act.

Lawyers for Interior Secretary Gale A. Norton and the Minerals Management Service asked the U.S. 9th Circuit Court of Appeals to overturn the decision and do it in an expedited matter.

“Bush administration folks are marching off a gangplank on this one,” said Mary Nichols, California’s secretary of resources. “They are going to lose in the court of appeals, waste a lot of time and end up with a political loss.”

Nichols said there is no support in California for offshore oil drilling. Even the major oil companies do not rally to the cause anymore, she said.

“We are left with a number of smaller companies that bought these [oil tract] leases when the major companies pulled out,” she said.

Some of those companies have asked the Bush administration to consider buying back their oil leases so they can buy tracts in the Gulf of Mexico, a region where oil drilling is less likely to get bogged down in environmental red tape.

That idea surfaced in one settlement proposal, officials said, in which the Bush administration suggested that California use offshore oil revenues to buy out these long-dormant leases.

“The federal government approached us with a possibility for settlement that wasn’t acceptable,” said Jamee Jordan Patterson, a state deputy attorney general. “There really wasn’t anything to talk about.”

Linda Krop, chief counsel of the nonprofit Environmental Defense Center, argues against any kind of “bailout” to retire leases that she believes should have expired years ago.

“A buyout avoids the real issue,” she said. “If the state believes any of the leases don’t comply with the state’s coastal management plan, then they expire anyway.”