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Coastal Alert

Ecosystems, Energy, and Offshore Oil Drilling

ISLAND PRESS

DOI, BIG OIL, AND YOU

How the Government Is Selling Our Coast to Big Oil

North America does not end at the beach. Beyond where waves lap at sand and rock, the continent ducks beneath the ocean and slopes gently toward the horizon for miles and miles. Scientists call this watery edge of the mainland the outer continental shelf, or OCS. It is one of nature's true treasure troves, replete with a bounty of biological resources and resplendent in natural beauty and wonder. The OCS also contains scattered deposits of oil and gas trapped beneath the sea bottom. Their presence has triggered a tremendous conflict between developing them and protecting the coast's natural resources.

Since 1953, the government has been auctioning huge tracts of the publicly owned OCS to oil companies. The government agency in charge of scheduling and overseeing these sales is the Department of the Interior (DOI). Under the Outer Continental Shelf Lands Act of 1953 as amended (OCSLA), the Secretary of the Interior is charged with preparing and implementing so-called five-year programs. The secretary judges what the nation's energy requirements will be for a five-year period, then selects undersea areas and develops a schedule to lease them to oil companies in order to help fulfill those needs. At the same time, he must balance these plans with environmental protection measures and take into consideration the concerns of local governments.

The actual leasing is managed by the Minerals Management Service (MMS), an agency within the Interior Department. The MMS invites oil companies to bid against each other for the rights to specified nine-mile-square tracts in a process called a lease sale. The highest bidder wins. The government has held 100 sales between 1954 and 1988 and leased 53.27 million acres, an area as large as the entire state of Florida. Nearly 28,000 wells have been drilled on the OCS so far.

Huge areas of the nation's coast can be included in a five-year program. The "Mid-1987 to Mid-1992 Five-Year Program," for instance, proposed thirty-eight lease sales covering more than 700 million acres, over half of the entire OCS. That's an area nearly twice the size of Alaska. The program was engineered by former Secretary of the Interior Donald Hodel, who modeled it after a plan designed by his predecessor, James Watt. During his tenure, Watt proposed leasing virtually all of the nation's coastal waters. The areas originally targeted by the 1987-92 plan include the waters and the wildlife, marine resources, and scenic splendor that go with them off Alaska, Washington, Oregon, California, Texas, Louisiana, Mississippi, Alabama, Florida, Georgia, South Carolina, North Carolina, Virginia, Maryland, Delaware, Pennsylvania, New Jersey, New York, Connecticut, Rhode Island, Massachusetts, New Hampshire, and Maine.

What Is at Stake

The nation's OCS is divided into twenty-six planning areas: four along the East Coast (North, Mid-, and South Atlantic, and Straits of Florida), three in the Gulf of Mexico (Eastern, Central, and Western), four along the West Coast (Southern, Central, and Northern California, and Washington-Oregon), and fifteen in Alaska (Cook Inlet, Shumagin, North Aleutian Basin, St. George Basin, Navarin Basin, Norton Basin, Hope Basin, Chukchi Sea, Beaufort Sea, Gulf of Alaska, Kodiak, Aleutian Arc, Bowers Basin, Aleutian Basin, and St. Matthew Hall).

These planning areas support a number of non-energy-related coastal and marine industries, including tourism and commercial fishing. The myriad environmental consequences that accompany offshore development jeopardize the resources these activities depend upon.

The North Atlantic planning area, for instance, is home to Georges Bank, a remarkable fishery that has been a mainstay of the New England fishing industry for over three hundred years. It supports over forty thousand jobs and sustains a fishing industry worth approximately $1.5 billion annually. Georges Bank's unique circular current, shallow depth, and unusual turbulence combine to make it one of the most productive fisheries anywhere in the world. The area's submarine canyons and other undersea lands provide vital habitats for a variety of commercial seafood species, including tilefish, swordfish, tuna, red hake, and lobster.

The Mid-Atlantic planning area to the south also supports a robust commercial fishery, one worth more than $200 million annually. It is rich in biological resources, including a diverse array of fish, birds, and marine mammals, several of which are considered endangered. The coastal area here lies within the Atlantic Flyway. Over three million migratory waterfowl travel this flyway annually, with more than two-thirds of these birds wintering in the coastal wetlands of the mid-Atlantic states. Cape May County, New Jersey, is one of the most important regions in the Western Hemisphere for migratory shorebirds. At least three seabirds that breed here are listed as endangered or threatened: the least tern, roseate tern, and black skimmer. Some thirty species of whales swim offshore. Six are endangered, including the northern right whale. No more than three hundred such whales are thought to exist. The thousand-mile shoreline from Cape Cod to Cape Hatteras is composed predominantly of sandy beaches and barrier islands. It attracts millions of tourists annually.

The South Atlantic region off the Carolinas, Georgia, and northern Florida supports a vital tourist economy as well. Visitors are drawn by the area's abundance of national and state parks, wildlife refuges, and national seashores that line the coasts in all four states. Shorebirds, wading birds, and waterfowl depend on its coastal and nearshore areas. The waters off Cape Hatteras and along the western edge of the Gulf Stream are important feeding areas for several unusual bird species, including the Bermuda petrel and brown pelican, both of which are on the federal list of endangered species. The region supports several other threatened or endangered species, including bald eagles, wood storks, American alligators, Atlantic marsh snakes, short-nosed sturgeons, and three endangered and two threatened species of sea turtles.

The Straits of Florida planning area is one of the nation's coastal crown jewels. It encompasses extraordinarily sensitive and highly productive areas of seagrass beds, mangrove swamps, forested wetlands, coastal marshes, estuarine areas, and barrier islands, as well as the largest coral reef system on the North American continent. In addition, the region supports many endangered species, including five species of whales, four species of sea turtles, and the manatee. The southwest Florida shelf lies adjacent to Everglades National Park, the Florida Keys, two national marine sanctuaries, two national wildlife sanctuaries, a national natural landmark, two national wilderness areas, and an aquatic preserve. Over one million out-of-state tourists travel to the Keys each year. They spend millions of dollars on hotels, food, rental of diving equipment, and other services.

Tourism also plays a key role in all three California planning areas. In 1988, tourists spent $27 billion in California's coastal counties, accounting for 86 percent of the state's total tourism revenue.

Southern California's sandy, sun-kissed beaches attract visitors from all over the world. Both recreational and commercial fishing industries thrive here. The region boasts a plethora of wildlife, including several endangered species.

The Central California region contains the world's greatest diversity of seals and sea lions and seven endangered species of whales. The endangered California sea otter depends on this vital habitat for survival. Ano Nuevo Island, a refuge for the endangered northern elephant seal, is at the center of this region. The Farallon Islands, just offshore of San Francisco's fabled Golden Gate, are considered a premier seabird rookery.

The planning area along California's north coast abuts forty-one major wetland systems and a national wildlife refuge. The area supports no less than fifteen separate marine mammal breeding areas. The rugged nature of the pristine coastline makes Northern California's coast one of the most scenic on earth. Many of the small towns that dot the coast depend largely on tourism for survival.

The Washington-Oregon planning area is also rich in marine resources. More than one million seabirds rely on its sandy beaches, offshore rocks, inlets, and islands. Thirty-three types of marine mammals swim in the waters offshore, while the estuaries and wetlands onshore are home to critical nurseries for the Northwest's biggest fisheries. Six national wildlife refuges and a national park adjoin the coastal waters.

All the planning areas in Alaska boast incredible biological resources. Bristol Bay, for instance, supports one of the largest commercial fisheries in the world. The salmon fishery alone is valued in excess of $250 million annually and employs an estimated ten thousand people. The Bay is a vital stopover on one of the world's greatest bird migration routes. Nearly two million seabirds occupy sixty-four colonies here. Bristol Bay is also home to at least twenty species of marine mammals, including eight endangered whale species. The population includes 870,000 fur seals, 100,000 sea lions, 50,000 Pacific walrus, and 20,000 sea otters.

Flaws in the OCS Lands Act

Originally the public had little say in protecting these areas from government leasing plans. The headlong rush to develop energy took precedence over state coastal management policies and environmental concerns. But that changed in January 1969 after a Union Oil Company drilling platform operating off the coast of Santa Barbara suffered a blowout. The catastrophic accident caused 50,000 to 70,000 barrels of oil to gush out of the well unchecked, fouling miles of beaches with black ooze and seriously harming the coastal ecology of the region. Public reaction to the spill was visceral and vocal. Virtually overnight citizen groups organized and began calling for the government to place stricter regulations on offshore drilling. People living up and down the California coast demanded a say in how the Department of the Interior managed the coastal waters next to where they lived. Residents in other coastal states soon echoed the same demands.

The government responded by amending the OCS Lands Act in 1978. Key among the changes were provisions that gave citizens and local and state governments somewhat more opportunity to participate in OCS policy and planning decisions. As a result, the lease sale process was expanded to include public hearings in which citizens could nominate areas that should or should not be leased, review and comment on environmental impact statements, and make specific recommendations concerning the government's entire five-year program. The amendments to OCSLA also gave the state more input. The DOI and MMS were required to consult with state agencies regarding leasing plans, and the affected state's governor was given the opportunity to make an official recommendation.

Despite these changes, the lease sale system—the bureaucratic process that governs OCS development activities—remains flawed. A 1989 study conducted by the National Academy of Sciences, which was commissioned by the White House to review the Outer Continental Shelf Environmental Studies Program, concluded that the DOI has been proceeding with oil drilling leases despite sufficient scientific information regarding environmental and socioeconomic impacts. The report found the DOI's information so imperfect as to provide an inadequate basis for a decision to proceed with leasing, the first step in the oil exploration process.

Of underlying concern to the report's authors is the fact that there is no separation of leasing from development and production during the lease sale process. Studies sponsored by the government under the Environmental Studies Program, like the assessments found in the DOI's environmental impact statements, have focused almost entirely on the lease sale stage. Two fundamental problems result from this practice. First, the exact location of oil is unknown at the prelease stage. Consequently, it is impossible to identify the exact location of future facilities and to accurately predict specific environmental impacts of development. This also makes it difficult to balance the national benefits of production against the environmental risks. Second, by the time producing reservoirs are identified, the oil companies typically have committed enormous amounts of money to the lease. The DOI has never canceled a lease, although it has authority to do so. So a decision to lease is tantamount to a decision to develop and produce, provided that the oil company wants to drill.

In spite of provisions for further analysis and review at later stages in lease sale planning, many local, state, and federal government officials doubt that adequate analysis will be performed and that decision alternatives will be preserved through the process. Members of the NAS committee conducting the study say they were told by MMS officials that out of the hundreds of actual OCS development plans submitted by oil companies since 1978, none has ever been denied by the DOI.

Throughout the history of OCS development, the Department of the Interior has rarely deferred sensitive ecological areas from lease sales except for areas of minimal oil industry interest. When deferrals are made or buffer zones around important habitats are created, they are usually inadequate to provide real protection from oil spills and toxic discharges.

As was so tragically demonstrated by the Exxon Valdez accident, response, containment, and cleanup are slow and technologically inadequate when oil spills do occur. Nevertheless, lease sale stipulations generally fail to require measures that will reduce the potential of oil spills and increase spill response.

Adequate air pollution controls are not required by Interior officials, either. Offshore standards are frequently less rigorous than onshore standards. This is most vividly illustrated in areas such as Southern California, which is already suffering under the veil of the most polluted air in the nation. Usually, no meaningful effort is made to protect vital fisheries, either by deferring specific tracts or by imposing lease stipulations that will effectively minimize conflicts.

The single most important failure of current offshore development policies is the absence of a comprehensive, well-rationalized "least cost" national energy plan that would require Interior to compare the costs and benefits of drilling with alternative energy programs. Valuable resources are being placed at significant risk by virtue of a lack of long-term planning and little, if any, consideration of alternatives.

The Interior Department expects the public to accept the risks of such damaging consequences despite overwhelming evidence that the oil reserves off the nation's coasts are dwarfed by potential "energy reserves" from efficiency policies ignored by the federal government. Our current reliance on unfettered fossil fuel consumption has created environmental consequences of immense proportion—acid rain and global warming. Finally, fears regarding the implications of importing foreign oil have traditionally been overstated by the government. The past and current administrations have done little to reduce imports. Nor has enough been done to increase energy efficiency. As a result, the nation's current national energy policy, which calls for increasing the rate of depleting America's oil reserves through offshore drilling, does not help secure our national energy security.

Participating in the Process

The lease sale process has enormous political and ecological implications. It is a complex and lengthy bureaucratic undertaking that takes, on average, two years to complete. Leasing involves a series of labyrinthine steps, but citizens can pressure the DOI to negotiate and compromise. Intense and ongoing dialogue between private citizens, public interest groups, state and local government, the DOI, the MMS, and the oil industry can surround virtually every stage of the process.

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Excerpted from Coastal Alert by Dwight Holing. Copyright © 1990 Natural Resources Defense Council. Excerpted by permission of ISLAND PRESS.
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