The Interior Department yesterday proposed to slow the pace of offshore oil and gas leasing, citing a "downward trend in oil prices" and continued political opposition that has forced the administration to shelve its most ambitious energy-development plans.
"We are better off to have a moderately paced program that can proceed on schedule than to have an aggressively paced program that is tied up by lawsuits" and congressional delays, Interior Secretary Donald Hodel said in unveiling a five-year leasing proposal that would govern offshore development starting in 1987.
But the proposal was quickly criticized by conservationists, who said it includes virtually all areas placed off-limits by Congress in the last few years. Congressional bans covering coastal areas off California and Massachusetts are to expire later this year, and Hodel's plan would offer them for leasing in 1987 and 1989.
Moreover, the new plan would keep intact the controversial "area-wide" concept under which former interior secretary James G. Watt had hoped to open nearly the entire U.S. coastline to energy development. It also would open the Pacific Northwest coastline to oil drilling for the first time in 27 years.
"The fact of the matter is that he's unveiling a five-year program that looks like a Watt program," said Geoffrey Webb of Friends of the Earth.
Industry officials also expressed displeasure with the plan, however. The American Petroleum Institute said it is "disappointed about the announced cutback in the pace of offshore leasing in the revised five-year schedule, which we see as a first step toward abandonment of the area-wide leasing concept."
Most criticism of yesterday's proposal centered on the area-wide concept, under which the department offers vast tracts of the ocean floor for lease at one time. Under previous administrations, oil-lease sales centered on a limited number of well-defined tracts thought to have the biggest potential for energy development.
Conservation groups have complained that it is impossible to assess environmental impacts of a lease sale involving millions of acres of ocean at one time. Some coastal state officials also contend that the practice discourages competitive bids and results in lower prices for leases.
Industry has been strongly supportive of area-wide leasing, arguing that it encourages competition by giving oil developers more choices and putting more land under lease.
In recent years, however, Interior officials have been embarrassed by the industry's lack of interest in some lease sales. Watt put nearly one billion offshore acres on the auction block, but only about 20 million acres were leased. An offering off the Atlantic Coast last year was abruptly canceled when the only bids were made by an environmental group trying to protect a lobster-breeding ground.
Hodel said yesterday that the department attempted to resolve that problem in its new plan by focusing on "promising acreage," as defined in consultations with industry and state officials before a sale.
Nevertheless, the department has proposed scheduling another sale in the Atlantic area that drew no bids last year, as well as a 1991 sale off the Washington-Oregon coast, where a $35 million lease sale in 1964 turned up a dozen dry holes.
Hodel offered no estimate of the number of acres that might eventually be involved in sales but said the consultations would result in "much reduced acreage" and would "take the heat off" state officials.
"Our goals have not changed," he said. "I am trying to change the way we approach it."
The new plan calls for 33 general lease sales, including one every year in the Gulf of Mexico, where industry interest has remained high. Outside the western and central Gulf, leases would be offered every three years instead of every two years as envisioned in Watt's plan. Five of those areas involve unexplored tracts off Alaska where "industry interest appears low," according to the department.
Watt's plan had called for 41 sales. Because of congressional moratoriums and court orders, however, only 29 of those sales have been held.
Hodel's plan also calls for five "catch-up" sales to reoffer tracts rejected in earlier sales and provides for five "emergency" sales in the event of a major oil discovery or a change in world oil markets that would make marginal areas economically attractive.