No Harm in Extending Offshore Oil Leases, Federal Agency Says

The federal Minerals Management Service on Friday announced that it sees “no significant impact” on the environment by extending the life of offshore oil leases along California’s coastline, leaving open the possibility of future oil drilling in 36 locations from Oxnard to San Luis Obispo.

The findings would not alter the existing moratorium that prohibits new drilling leases anywhere else in federal waters on the California coast.

Agency officials cautioned that they have not made a final decision on whether more than a dozen oil companies can proceed to drill for oil on the tracts clustered in patches in federal waters off Ventura, Santa Barbara and San Luis Obispo counties.

“Let me stress: We are not authorizing any [oil] exploration or development,” said John Romero, a Minerals Management Service spokesman.

Nor has the agency formally extended the leases, an action that could open the way for a consortium of oil companies to renew long-stalled drilling plans on the 36 tracts, which were leased prior to the moratorium but never developed.

Nothing will happen, he said, until the California Coastal Commission reviews all federal documents that defend the lease extensions and ensures that they are consistent with the state’s coastal protection laws.

A showdown is expected at the commission’s meeting in June.

“We will want to make sure they’ve done the correct analysis and included everything we think is relevant,” said Mark Delaplaine, who scrutinizes federal projects for the Coastal Commission to ensure that they do not violate the state Coastal Act. “We will be taking a very close look.”

The conclusions announced Friday were contained in environmental assessments ordered by a federal judge in a lengthy court battle between state and federal officials over the fate of the 36 tracts.

The tracts, located at least three miles off the coast, were leased to companies between 1968 and the early 1980s, prior to the moratorium, but never developed because of regulatory hurdles and declining oil prices. The leases were supposed to expire within five to 10 years if oil companies did not make diligent progress in developing them.

Yet the Minerals Management Service has repeatedly extended them, sometimes at the behest of oil companies waiting for a surge in oil prices.

In 1999, the California Coastal Commission asserted its right to review lease extension requests for compliance with state laws. When federal officials balked at this, the commission, then-Gov. Gray Davis and environmental groups sued twice and won.

The Bush administration declined to take the matter to the U.S. Supreme Court and hinted that it would try to “buy back” the leases.

But negotiations have stalled because oil companies are holding out for hundreds of millions of dollars more than federal officials are willing to pay.

In addition to the undeveloped leases, California has 43 active federal tracts, many of which can be located by their offshore oil platforms. All these were leased or developed before Congress and President Bush’s father imposed moratoriums on oil leasing.

The Minerals Management Service recently objected to a proposed boundary expansion of the Monterey Bay National Marine Sanctuary, saying it could affect “future potential oil and gas resource recovery” around an undersea mountain called the Davidson seamount.

Some environmental activists were worried this was a signal that President Bush was interested in new drilling off Big Sur and was preparing to reverse his pledge to honor his father’s moratorium.

Responding to a critical editorial in the Monterey (Calif.) Herald, Minerals Management Director Johnnie Burton wrote, “The administration supports all existing moratoriums on offshore leasing in California. Therefore, there are no plans for activities within the Davidson seamount area, as your editorial suggested.”