More coastal areas soon to feel oil drill bits?

The Reagan administration appears ready to throw down the gauntlet to opponents of expanded and accelerated US offshore oil exploration and production.

In the next few weeks Secretary of the Interior James G. Watt will give the green light to proceed with the controversial sale of leases of four areas off northern California, highly placed Interior Department sources say.

The Interior Department, it has been learned, already has reserved an Anaheim , Calif., auditorium for the new lease sales.

At the same time, on the East Coast, the Environmental Protection Agency is expected to rule by June 26 that major oil companies may begin exploratory drilling in the equally controversial Georges Bank, according to agency officials.

"IT's possible we'll begin drilling in Georges Bank in August," says Norman Alstedter, a spokesman for Shell Oil Company in New York. Shell and its partners paid $34.7 million to lease a tract 200 miles southeast of Cape Cod.

The US Geological Survey recently estimated that 34 percent of the 83 billion barrels of potential -- but as yet undiscovered -- US oil resources and 28 percent of the 594 trillion cubic feet of undiscovered natural gas lies offshore in varying depths.

While some in the oil industry are pleased that the drill bits may be turning soon in Georges Bank, they are even more pleased with the general direction of Reagan administration policy on offshore oil.

"In looking at the leasing plans of the new administration, we are much encouraged that the tide had turned," said Shell executive vice-president C.L. Blackburn recently. However, he cautioned that "the delays in federal lease offerings in the period between 1975 and the end of 1980 mean that much of the production we were expecting to come onstream during the 1980s will be delayed until 1990 or even beyong."

At a press conference May 15, Secretary Watt said that, starting next year, the Interior Department would make about 200 million acres available for offshore oil and gas exploration and development every year. In the face of skepticism in the industry that this forecast was overly optimistic, he clarified his remarks two weeks later, saying that over a five-year period 200 million would be the average number of acres.

However, the substance of both press briefings appears to be to send a signal to the oil and gas industry that Mr. Watt's attitude on offshore energy development is -- as one of his aides described it recently -- "bullish."

Still, Watt's intentions and the scenario of further lease sales may well be two different things, depending on both the results of exploratory drilling as well as the firmness of environmental opposition.

Late last month, US oil companies spent near-record amounts bidding on 81 of 111 tracts for sale in the Santa Maria basin off Santa Barbara and San Luis Obispo, Calif. But drilling could be delayed indefinitely depending on the outcome of a federal district court hearing set for next month on whether environmental impact statements for 21 of the tracts were adequate.

Should the court decide that the impact statements need further work, some oil industry analysts say Watt might not go ahead and open the four northern California basin sales. But Interior Department sources told the Monitor that the secretary "will opt to offer the four basins" in the next few weeks.

(Meanwhile, a subcommittee of the Democratic-controlled House Appropriations Committee warned Watt last week not to use any funds from the fiscal 1982 interior appropriations bill in connection with leases off the northern California coast.)

US offshore oil exploration has had a history of delays. According to a report last month by the American Petroleum Institute, federal leasing "has been a stop-and-go affair. Many leases believed to have great potential have not been offered for leasing. The program has been plagued by cancellations and postponements of scheduled sales."

You've read  of  free articles. Subscribe to continue.
QR Code to More coastal areas soon to feel oil drill bits?
Read this article in
QR Code to Subscription page
Start your subscription today