Representatives of the oil and natural gas industries yesterday criticized President Bush's moratorium on offshore oil exploration as environmentally misguided and economically unsound, but his action will apparently have little short-term effect on the energy industry or on the nation's fuel supply.
For the next few years at least, energy analysts expect crude oil to remain cheap and plentiful and natural gas supplies to be adequate, even though consumption is increasing rapidly.
More oil and gas will probably have to be imported -- oil from the Middle East, gas from Canada -- but the amount of reserves that might be found off the Atlantic and Pacific coasts would not be enough to alter that long-term trend, according to energy analysts.
Not even the most optimistic projections of the amount of oil that might be found on the Outer Continental Shelf show enough reserves there to halt the long-term growth in imports.
In the month that ended June 15, domestic crude oil production averaged 7.1 million barrels a day, down 7.9 percent from a year ago, while imports averaged 6.7 million barrels, up 15.7 percent. Natural gas imports will increase 3.5 percent to 4.6 percent a year through 2010, according to the Energy Department.
No drilling underway will have to be halted as a result of Bush's decision, according to oil industry officials.
Offshore exploration is concentrated in the Gulf of Mexico, which is not affected by the presidential directive.
Exploration off the Pacific and Atlantic coasts had been curtailed by state regulators and by reluctance of oil and gas companies to take risk of offshore exploration when the price they could get for their product is so low.
Mobil Oil Co.'s plan to explore for oil and gas off the Outer Banks of North Carolina also is not affected because Mobil holds leases on several tracts there that were not covered by Bush's decision.
Mobil is expected to submit its final drilling plan to North Carolina officials and to the Interior Department's Minerals Management Service by the end of August.
The biggest question is the fate of 73 leases held by major oil companies such as Mobil and Unocal Corp. off the southern coast of Florida. Interior Secretary Manuel Lujan Jr. said the Bush administration will "work with the state of Florida to buy back existing leases," a move that Sen. Connie Mack (R-Fla.) said would cost $110 million to $219 million.
Mobil owns 11 of those leases outright and has shares in 26 others, company spokesman John Lord said.
Mobil and Unocal said they had submitted exploration plans to Florida, which rejected them, and were planning to appeal the state's decision to the Commerce Department, which has jurisdiction under current law.
"All that won't happen now," Lord said. "We would be interested in how one would get the money back."
Lujan said Bush's directive would leave "99 percent of the federal area off California off-limits to consideration for leasing for the remainder of this century." But it would not bar exploration on 87 tracts leased near Santa Barbara, where exploratory wells have been sunk, according to Robert Almy, deputy director of the Santa Barbara County Resource Management Department.
Most major American oil companies are spending more money on exploration abroad than in the United States, for reasons that involve taxation as much as geology. American Petroleum Institute President Charles DiBona said Bush's order would exacerbate that trend, causing "an accelerated decline in domestic production. It means the export of capital and talent overseas. And it's an environmental mistake," he said, because tanker transport of oil is more environmentally dangerous than offshore drilling.
The National Ocean Industries Association, which represents the drillers, accused Bush of "surrendering to a very vocal minority in a few coastal states."
But Arco Corp. broke with the industry, saying it supports the president's decision and would not drill offshore even if allowed to do so.
OFF SHORE DRILLING
During the Reagan administration, then-Interior Secretary James G. Watt caused an uproar with plans to open virtually the entire Outer Continental Shelf to offshore development. Congress responded with a series of annual bans that have shut down offshore drilling outside the Gulf of Mexico for most of the last decade.
The plan announced yesterday is an attempt to break the congressional deadlock. Essentially, it calls for more study before new undersea tracts are leased off Southern California, Northern California, Oregon, Washington, southwestern Florida and George's Bank off New England.
But with one exception -- California's Monterey Bay -- Bush's plan does not call for the permanent offshore bandesired by environmentalists. Bush's plan still would allow considerable offshore activity in Alaska,the Mid Atlantic states and other locations, if Congress lifts its moratorium.
THE NORTHERN SPOTTED OWL
Last week, the Interior Department formally listed the northern spotted owl a threatened species.
The administration yesterday rejected a proposal by a panel of federal scientists to save the bird by preserving large chunks of the ancient forests that are the owl's natural habitat, a plan the Forest Service estimates would cost 20,000 jobs in the timber industry over the next decade.
Instead, it will create an interagency task force to draft an alternative to the scientific panel for Forest Service land. The aim is to come up with a plan that preserves more jobs.
On those forests managed by the Department of Interior's Bureau of Land Management, which constitute a relatively small portion of the remaining ancient forest, the administration wants to maintain high timber cuts by relying on alternative strategies such as feeding the birds and building "artificial nest structures."
But the plan also recognizes that it may not be possible to comply with the Endangered Species Act if jobs are to be protected. The administration therefore said it might seek an exemption to the Act by convening a cabinet-level committee to consider economic factors in its rulings.
The administration also wants Congress to consider broadening the committee's powers so that it can consider the entire ancient forest issue, rather than just individual timber sales. In addition, it wants Congress to insulate both the BLM and the Forest Service from legal challenges by environmental groups suing to enforce the Endangered Species Act.