States face off with Interior in new bout over oil leases

Driftwood and sea shells aren't the only things washing ashore in the chilly late-winter surf along the East and West coasts. So is more controversy over oil lease sales.

And once again, the US Interior Department is at the center of the controversy. Despite a worldwide oversupply of oil - so much so that OPEC has just announced its first official cut in the price of crude - Interior is vigorously pushing the sale of offshore leases.

The affected states have just as vigorously been trying to push them away - at least until Interior Secretary James Watt makes concessions to help safeguard the environment.

For the third time in five years, Massachusetts is suing the Interior Department to block exploration for oil and natural gas in environmentally sensitive sections of Georges Bank, one of the world's richest commercial fishing grounds.

Alaska recently sought a two-year delay in the sale of 429 tracts in Norton Sound, south of Nome. The delay tactic failed, and the sale was scheduled to be held Tuesday in Anchorage. But Gov. Bill Sheffield (D) did win the deletion of 11 tracts from it.

Alaska also is a party to a continuing suit by California against Secretary Watt's five-year offshore leasing schedule, which its attorneys call ''environmentally blind'' and based on industry interest and administrative convenience. Watt's plan calls for 16 sales off Alaska.

Meanwhile, a double-barreled offensive against oil and gas development in sensitive areas off the California and Massachusetts coasts has been launched in Congress.

US Reps. Leon Panetta (D) of California and Gerry Studds (D) of Massachusetts have introduced a bill to remove certain areas from leasing until 1990 and others until the year 2000. Similar legislation has been offered in the Senate, cosponsored by Alan Cranston (D) of California and Edward Kennedy (D) and Paul Tsongas (D) of Massachusetts.

''It is abundantly clear that we in Congress cannot afford to stand by while Secretary Watt continues to manage oil and gas development on the OCS (outer continental shelf) like a national fire sale,'' Representative Studds told constituents.

Interior has scheduled lease sale OCS-52, covering 488 tracts off the Massachusetts coast, for March 29 in New York. Each lease would be good for at least five years.

Since the Reagan administration took office, California (twice) and New Jersey have sued successfully to stop lease sales in environmentally sensitive waters off their coasts.

In filing the latest suit, Massachusetts Attorney General Francis Bellotti noted Georges Bank is ''the source of an infinitely renewable supply of fish.'' Risking it for possibly small amounts of oil and gas ''is extremely shortsighted ,'' he said.

State officials here cite recent rollbacks in the federal estimate of the amount of ''recoverable'' oil and gas in the OCS-52 area. Both estimates were lowered by more than 90 percent - from 1.7 billion barrels of oil to 56 million and from 5 trillion cubic feet of gas to 280 billion.

That, however, is a sore subject with Interior.

David Russell, deputy director of the department's minerals management section, says the state's reference to the lowered estimates is ''a red herring.''

''We're quite disappointed that the Commonwealth has chosen to balance its interests heavily on the side of the environmental groups,'' he says. ''It's my opinion that the suit barely passes the red-face test for credibility. We're confident of the strength of the environmental protections we've incorporated in the lease offering.''

Interior seeks to communicate to the states ''generically'' that it wants to balance environmental and industrial interests in developing mineral resources, Mr. Russell says.

The original estimates in Georges Bank were probably too optimistic in view of the eight reportedly dry holes already drilled there under an earlier lease sale, he concedes.

Even so, he adds: ''It's not our job to say definitively what's out there. It is the private sector that bears the risk. We're not requiring industry to buy up the leases.''

Massachusetts wants 57 of the 488 tracts deleted from OCS-52 because of their value to the fishing industry and because some of them are in deeper water than offshore drilling technology has been proven effective in.

Originally, 98 tracts were contested by the state. The Interior Department agreed to drop 41 of them. Another 11 - not among those the state wanted to protect - were withdrawn at the request of the US Navy, which is believed to use them for submarine testing.

According to various environmental officials here, Massachusetts is not opposed to development of the outer continental shelf per se.

Indeed, the state is basically happy with the way exploration under the first lease was conducted, according to Richard Delaney, director of the Massachusetts Coastal Zone Management program. He says the six oil firms that have explored here so far ''carried out their operations in a responsible manner. They knew they were under the microscope.''

But Mr. Delaney says the deepest canyons below Georges Bank - which also seem to be the area of greatest potential interest by oil companies - have unstable sandy sides that could be threatened by drilling. They also are rich breeding grounds for lobsters.

Interior and the state have ''very little left to talk about,'' Russell says. But he maintains: ''I would think there would be interest by several companies (in Georges Bank). They're not finished up there.''