A major front in the energy-environment wars disappeared yesterday when the Department of the Interior designated 36 areas in the outer continental shelf where oil and gas rights will be leased over the next five years.
The plan, announced by Secretary Cecil D. Andrus, was preceded by a struggle over which patches of the mineral-rich shelf should be leased and when. The debate involved questions of urgent domestic energy production possibilities versus equally urgent worries over what such production might do to fishing grounds, migrating whales and other wildlife as well as to nearby coastal zones.
But this time the fight was over procedure and timing, not over whether the leases should occur at all. "I think that's major progress," said Interior's deputy assistant secretary for planning, Heather Ross.
The oil industry expects to invest billions of dollars in the 36 areas to produce oil and gas conservatively estimated to be worth $275 billion, Ross said. And every barrel of oil that costs $10 to produce in the Gulf of Mexico, for example, will replace an imported barrel now costing $28 to $32, she added.
"It translates directly into the import reduction we need, available without waiting past the year 2000 and without many of the environmental risks associated with other energy sources," she said. Those considerations were among the ones cited by President Carter and Congress in calling in 1978 for an accelerated program of offshore leasing.
But some environmental groups counter that the dollar value of their concerns has not been figured in. "This program is far too aggressive," said Frances Beinecke, a senior research associate at the Natural Resources Defense Council. "In many of these areas the sales are going ahead before they've done the necessary research . . . environmental interests go by the board in the great push for more energy."
An example, she said, was the recent one-two punch by which a federal and then a state court halted leasing and drilling preparations in a half-million acres of the Beaufort Sea off the coast of northeastern Alaska. hSold Dec. 11 for $1.1 billion over the strenuous objection of environmental groups, the mineral rights leases had involved 78 state and federally owned tracts in what some oilmen have called America's Kuwait.
But U.S. District Court Judge Aubrey Robinson ruled in January that the Interior Department had ignored a requirement that it get further information on effects of the leasing on bowhead whales that migrate through the area yearly. And Alaska Superior Court Judge Jay Hodges ruled last week that the state had ignored the effect oil and gas exploration would have on the Inupiat Eskimos. Both rulings are being appealed.
"We're not opposed to OCS [outer continental shelf] leasing in general," said Beinecke. "We recognize Interior's interest in going ahead. But [Andrus] should put the most sensitive areas at the end of the schedule . . . they're up front instead."
The schedule includes 11 sales in the Gulf of Mexico, six in the Atlantic, four off California and 10 off Alaska, plus five sales in which areas not bid or sold previously will be reoffered. Early Alaska sales will occur in October, September 1981 and in September and December 1982, with three more in 1983.
The NRDC had argued that impact on salmon fisheries has not been fully assessed, while oil spill technology for frigid waters won't be adequate to allow Alaska sales before 1985. Court action may be taken to block some sales on the new schedule, Beinecke said.
By contrast, the oil industry had argued that leasing in Alaska ought to be speeded up even more in comments on the schedule proposed last year, which did not differ significantly from the one announced yesterday, Shell Oil experts cited 10-year lead times and 39-month lease preparation periods as reasons for accelerated leasing now.
Production vice president Jack Threet wrote that 4 million barrels of oil per day by 1995 were at stake, as was "the ultimate benefit of the entire nation." All the oil companies were enthusiastic about including additional Alaska areas.
Another conflict arose over the areas off central and northern California. The state argued that the territory was too large to allow any meaningful environmental assessment, and proposed breaking the lease area into five parts. Three of five sedimentary basins included in the area were particularly sensitive.
But Sohio, among others, argued that such a move would require separate environmental statements and hearings and would further delay the energy production process. "Perhaps the delay aspect is the true intention of those presenting the state of California viewpoint," wrote Sohio vice president C. C. S. Davies in a letter to Andrus.
Given so much conflicting pressure, Interior's Ross said, the schedule issued yesterday was "very judicious." There will never be agreement over how much enviornmental impact information is enough she said. "I don't think we could have done less and justified it."
Andrus commented yesterday that he joined California in questioning the value of leasing the basins at issue, which is now scheduled for next May. A decision on whether to include those areas will be made when the final environment statement is drawn up, he said.
The final schedule may be challenged only through the courts. Attention in the energy-environment wars will now shift to the next step in the process, the "nomination" of tracts within each area for mineral rights sale.
Each oil company will tell the Interior Department which of the hundreds of 5,760-acre tracts it is likely to bid on in a particular area. "The companies will nominate a lot of dummy tracts, naming many they have no interest in, so as not to tip off the other companies where their real interests lie," said Stephen P. Chamberlain, coordinator of OCS and coastal zone issues for the American Petroleum Institute.
"Some tracts will have 100 nominations and others will have zero." The U.S. Geological Survey will then estimate the mineral potential for the most popular tracts, and Interior will choose representative ones in each area for preparation of an environmental impact statement.
There will be hearings and public comment before the final statement is made and the final sale date set. At least one sale, in Alaska's Chukchi Sea, is contingent upon a finding that technology will be available for the deep water sites involved. Further debate will concern the mechanics of leasing and bidding for the mineral rights.
The entire time-consuming process has turned out to be an unexpectedly big moneymaker for the federal government. Last year's six sales brought in $4.8 billion, with leases providing another $1.4 billion.
The record bid was $43,801 per acre by ARCO/Exxon for Tract 37 in the Beaufort Sea which is now on court-ordered hold. Interior has leased 52 offshore areas since 1954 and they are now producing 23.5 percent of the nation's domestic gas and 9 percent of domestic oil, the department said.