Offshore oil-drilling delays seen as contributing to future crisis

When a projected sale of oil-tract leases on the continental shelf off southern New England fell through recently, area environmentalists, commercial fishing interests, and Massachusetts state officials cheered.

But, in Washington, US Department of Interior officials charge that those who are determined to delay or prohibit exploration for domestic oil off portions of the East and West Coasts are increasing the likelihood of an oil-supply crisis in the not-too-distant future.

They are concerned about Americans being lulled into a false sense of security by the current world oil glut.

In this context, Interior sees itself as a department in a position to head off a potential national crisis. The problem, officials say, is that no one seems to be listening.

One Interior official goes so far as to say: ''We are hurtling toward disaster. This country is desperately in need of oil.''

Interior officials say they feel they are in the center of what a frustrating situation. They are mandated, on one hand, to enhance US national security by encouraging energy companies to explore for new, domestic sources of oil and gas. On the other hand, they are mandated to safeguard and preserve the environment.

The sense of frustration at Interior was compounded recently after a US District Court judge in Boston blocked the auction of some 6.3 million acres of offshore oil and gas exploration tracts.

The frustration was compounded when it became clear that despite considerable legal maneuvering and advanced preparations by Interior officials, not a single oil company had entered a bid for even one offshore exploration tract.

Some industry representatives later suggested that oil firms might have bid on the exploration of New England tracts had the Interior Department and Congress not bent over backward to accommodate Massachusetts officials and the environmentalists by removing many desirable tracts from the lease sale.

''There just weren't enough promising acres left,'' said Frank Rogers of the American Petroleum Institute.

''It was going to happen one of these days. Between Congress and the environmentalists and Interior trying to accommodate everyone's objections, you were going to come up with a big zero - and it finally happened.''

Earlier, Massachusetts officials argued in court that the Interior Department had been particularly accommodating to oil industry concerns and had disregarded state arguments about the potential environmental impacts of oil exploration on the New England fishing industry.

Interior insists oil exploration and fishing are compatible.

''All the evidence we have shows that the fishing and oil industries can coexist,'' says William Bettenberg, director of Interior's Minerals Management Service.

Government estimates on the potential petroleum resource in the Georges Bank region illustrate the uncertainties of oil exploration. The estimate there may be as much as 140 million barrels of oil and 3.1 trillion cubic feet of gas off New England.

At the same time, the government projects a 74 percent probability that no oil or gas in commercially significant amounts will be found.

In his decision to block the lease sale Judge David Mazzone agreed with Massachusetts that Interior officials had not struck a ''reasonable balance'' in the oil vs. environment issue.

Specifically, the issue came down to whether the sale would include 161 tracts in water depths of 400 meters or less. (Each tract equals approximately 5 ,700 acres.)

Massachussetts Gov. Michael S. Dukakis requested that all tracts situated in waters of 400 meters or less be withheld from the lease sale as a means to protect the fishery around Georges Bank.

The Interior Department accepted the governor's recommendation for 12 tracts, but decided to leave 149 tracts in the auction. The 149 tracts had been identified as being of high interest to oil companies for prospective exploration work.

But Judge Mazzone said Interior's ''balancing should have begun with the 149 high industry tracts slated for lease within the governor's suggested deletion zone rather than ending with them.''

He also found that Interior's environmental impact statement and subsequent updates did not contain enough detail to make an ''informed decision'' about the possible impacts of oil exploration in the fishery area.

The environmental statement was based on an area extending across 25 million acres of ocean - the total area originally under consideration for exploration work. The auction size was subsequently cut down to 6.3 million acres which still would have been the largest such auction ever held in the North Atlantic.

Interior officials are studying the judge's decision and are considering whether to appeal.

According to Massachusetts officials, if Interior doesn't appeal, the department will be bound, before proceeding with a planned second part of the lease sale (tracts north and east of Georges Bank), to satisfy deficiencies identified by the judge.

That sale is not expected to be scheduled until after the resolution of a Canadian-US border dispute in the offshore area.