The Interior Department has found that oil companies were producing all the natural gas they could from five of six large offshore fields in the Gulf of Mexico examined in a year-long study.
Interior Secretary Cecil Andrus released the results of the study yesterday. It was undertaken following charges during the 1976-77 natural gas shortage that major oil companies may have been withholding offshore gas to force up prices.
"We found no evident in this study that there was any withholding of gas," Andrus said at a news conference yesterday.
Completed by theNational Research Council at Andrus' concluded that therewas potential to increase gas deliveries from Texaco Inc.'s Tiger Shoal Field. Andrus said that field offered "a significant opportunity to increase production over the next five years."
Andrus and Assistant Interior SecretaryJoan Davenport told reporters that Interior's U.S. Geological Survey is working with Texaco to ensure that the oil company moves to increase gas production from the federally leased field.
Davenport said, however, that Interiorand Texaco had yet to agree on how much new gas production the company would deliver from the field in the years ahead.
The six fields selected by the NRC for the interior study contain an estimated 17 percent of natural gas reserves on federal lands on the outer continental shelf, and accounted for 16 per cent of 1976 gas production from the OCS.
Andrus told reporters that the study "cleared the air," stressing the question of withholding "is not an accusation the department is making."
The former Idaho governor, who has become the administration's chief enviromental spokesman, said, "We shall continue to monitor (oil company) operations closely on all federal leases."
Interior has primary reponsibility under a 1953 act to ensure that companies exercise so-called "due diligence" to develop oil and natural gas resources that are economically recoverable from federal lands on the outer continental shelf they leases.
Accusations from oil industry critics such as Rep. John E. Moss (D-Calif) have alleged in the past that oil companies have witheld oil and natural gas production in anticipation of higher prices. Natural gas from federal offshore lands is sold under price controls in the federally regulated market where prices have nearly tripled in the last five years.
The Interior studyfound that a Union Oil Co. field, the Vermillion Block 14Unit, had potential for increased production, but would be uneconomical.
Results also indicated that another field, the South Marsh Island Block 48, had potential for increased production as well, but it would be too costly to undertake. One of the oil companies operating on the field, Amoco Production Company, issued a written statement heralding the interior report for putting "to rest the myth that Amoco . . . is or ever has been deliberately withholding natural gas," at that field.
Andrus said he would press on in enforcing the "due diligence" provisions of the leasing law, but knew of no instances in the more than two decades since it was passed when enforcement action had been taken.