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natural gas deposits. A Congressional Research Service report issued in April 1976 for the committee declared that offshore production “can be the largest domestic source of oil and gas between now and the 1990's. The chances of finding large new fields on U.S. land are slim, except in Alaska.”
Similar conclusions have been reached in recent reports to this committee this year. Most energy industry representatives and most Government specialists from the Federal Energy Administration, USGS, and the special energy office in the White House (now the Department of Energy) indicated that the only substantial new source of domestic oil and gas will be found in the OCS.
It is today's reliance, and tomorrow's dependence on OCS resources that demonstrates the need to reform OCS procedures and to provide new protections.
The committee found that the present law's grant of total discretion to the Secretary led to a situation where the petroleum industry had until recently, as will be discussed later, a too dominant voice in the setting of policy.
As found, among others, by the study entitled "Energy Under the Oceans: A Technology Assessment of OCS Oil and Gas Operations”, prepared by a group at the University of Oklahoma, headed by Professor Don E. Kash:
In the case of making and administering OCS policy, direct, continuous participation has been largely limited to the petroleum industry and government. Since government and industry have had almost identical policy objectives, policy has been made and administered with extraordinary ease * * *. Within the Department itself, many of the Secretary's advisors are either recruited from industry or are persons who have spent a part of their careers in industry. At the operational level, detailed OCS orders regulating OCS development have been and are the product of a process of industry-Government cooperation *** *.
It is clear that the pattern of Government-industry relationships which have been developed, produced a very closed system for making and administering OCS policies. It is the closed character of this system which is being challenged at
the present time. Witnesses this year confirmed this conclusion and further stressed that this dominant voice was, in fact, limited to the larger oil companies. Under the present law's bid system, representatives of the American Gas Association testified the larger energy companies were able to totally dominate leasing.
Exploration techniques, such as on-structure dwelling, a representative of a smaller oil company said, were not allowed, despite requests, as the larger companies were not in favor of it.
Other witnesses confirmed that regulatory machinery was established often to suit the convenience of the industry. Provisions for hazardous working conditions were not, until recently, being promulgated because in part they were opposed by contractors. OCS orders for specific areas were often prepared, in draft form, by those who were to act in accordance with those orders. This close industry/
Federal Government cooperation has often disregarded the interests of state and local governments and the taxpayer.
State and local officials repeatedly testified that their dealings with the Department of the Interior were unsatisfactory. While many acknowledged improvements in the recent past, and expressed great confidence in the new Secretary of Interior, there was almost total unanimity that much more remained to be done to equip State and local officials with sufficient information to give them adequate time for assessment and to provide them with the opportunity they sought for a real role in offshore leasing policy decisions. The need for formal legislative change became evident.33 "This attitude was strongly expressed recently, on June 29, 1977, when the OCS Advisory Board, an organization established by the Department of Interior and consisting of state and local representatives, among others, called for passage of H.R. 1614. The resolution of the Board declared:
Whereas, the coastal States and local jurisdictions adjacent to areas that are, or will be, subject to OCS development have routinely and continually supported the need for improvements in the OCS leasing and development process; and
Whereas, such improvements include the need for greater consultation with, and participation by, State and local governments, a more meaningful and definitive role for the OCS Advisory Board, and greater protection for environmental values and resources; and
Whereas, this support has been expressed in a variety of forms; and
Whereas, OCS leasing and development are proceeding at a rapid pace without the needed legislative improvements being made; therefore, be it
Resolved, That the OCS Advisory Board urges the Secretary to urge the United States Congress to take earliest possible action on legislation to amend the Outer Continental Shelf Lands Act to strengthen the role of State and local governments and the OCS Advisory Board in OCS leasing and development decision, and provide increased protection for environmental values and resources; and be it further
Resolved, That the OCS Advisory Board recommends that the Department of the Interior support and work to achieve
early passage of such amendments to the OCS Lands Act. The efforts on the part of the Interior Department to meet the demands of the States to be included in the OCS leasing process were clearly inadequate until very recently. It was not until March 1974 that an advisory board, with designated State representatives, was established, and even then its function was restricted to overseeing offshore environmental monitoring programs.
83 Testimony from an impartial source on the inadequate role provided state and local governments was provided during the 94th Congress by the National Advisory Committee on Oceans and Atmosphere ("NĂCOA") a Presidentially-appointed body composed of experts in marine and atmospheric science, business and research. The Chairman of the body, Dr. William J. Hargis, the head of a State-supported marine research laboratory, told the Committee: “State and local governments have had almost no role in the decisions leading to the accelerated leasing program for the Outer Continental Shelf with regard to both the timing and the location of the proposed development. NACOA supports the intent of H.R. 6218 to assure that coastal states are given the opportunity to participate in policy and planning decisions relating to management of the resources in the OCS. (Despite recent Department of the Interior attention to states). NACOA has clearly stated it feels that legislation is needed to clarify this point and, therefore, supports the general concept of legislation such as that you are considering.”
Under continued pressure from States, and in response to the hearings of the Ad Hoc Committee, Interior finally, in October 1975, set up an OCS Advisory Board with a limited policy role. The earlier body became the OCS Environmental Studies Advisory Committee and continues to work with the Department to obtain better and more comprehensive baseline studies and offshore environmental monitoring programs. Both of these steps, while welcomed, were long overdue and still fall short of giving States and local communities the involvement they should have.
As will be described later, the committee is confident that the new Secretary of Interior will establish new mechanisms for FederalState-local coordination. Nevertheless, it is the committee's view, based on a review of the testimony of most witnesses, that the subject of OCS leasing is too important and the need for change too compelling to rely on piecemeal and tardy decisions of the current or some future administrator of the OCS leasing program in the Department of the Interior. It is essential that Congress set out, in law, public objectives and provide guidance to the Secretary of the Interior, based on the accumulated knowledge gathered since 1954, for implementation of such a vital component of the Nation's total energy program.
During the 94th Congress, the committee heard opposition to the current legislation from two sources, the Department of the Interior and the large petroleum companies. The present law was adequate, they argued, providing sufficient leeway for changes, and that most of the objectives of such legislation could be (or already was) accomplished by administrative action. As described later, the Department of the Interior now recognizes that the 1953 Act is too vague and too broad.
The present law, with its grant of almost total discretion to the Secretary of the Interior, has led to criticism by States, environmentalists, fishermen, tourists, smaller industry representatives, and others. This criticism led to fears and opposition, often expressed in repeated law suits. It is the committee's intent, through new legislation, to alleviate these suspicions and allow prompt, yet conscientious, exploitation.
The petroleum industry itself is aware of these suspicions. The chairman of the board of Humble Oil (Exxon) told a conference on offshore technology in 1969 that the industry's freedom of operations in the future "may well depend on our ability to convince the American public that we are capable of carrying out difficult, sophisticated technical operations deep in the ocean while maintaining the ability to conserve and protect the marine environment.”
The committee endorses this sentiment. The motivation behind, and the intent of, H.R. 1614 is to provide the public with this type of assurance, require a more open process in the leasing of the public's OCS lands to industry, and thus help dispel the doubts and suspicions, and avoid undirected and misdirected opposition and, often, legal challenge.
It is the conviction of the committee, after its extensive examination of the OCS issue, that we can and should proceed with early exploration and development in an expanded offshore oil and gas program and that this can be done, provided adequate safeguards are provided in an environmentally and socially responsible manner.
As one witness, James W. Brooks, Commissioner of the Alaska Department of Fish and Game, stated:
I firmly believe we can have our petroleum and our healthy ecosystems too. But I just as firmly believe that we are a long way from achieving the safeguards we must to insure that the Alaska OCS experience is not a disastrous gamble. Yet, the safeguards are well within our reach if we can but shake off the hoary traditions of antique management decision, if we can but create a biological surveillance system
with authority, integrity, and expertise. This statement is an apt summary of the purposes of this bill.
B. RECENT EVENTS
The first OCS bill was the result of 17 months of diligence and perseverence on the part of the Select Committee. At the time, it was the feeling of the majority of the members of the committee that the 1976 amendments, titled S. 521, dealt thoroughly and realistically with OCS problems. The fact that S. 521 was a balanced bill is documented by the firm support for it by most coastal States, environmental and citizen groups, unions, gas distributors, independent service station operators, small refiners and smaller energy companies. That support has remained steadfast and public demand has continued to lend impetus to the OCS legislation of this Congress. The OTA report
After adjournment of the 94th Congress, the need for OCS reform was demonstrated by a series of events and reports. In November of 1976, the Office of Technology Assessment issued a report which identified the problems associated with OCS developmentproblems which this legislation will ameliorate. The recommendations of this OTA Report, “Coastal Effects of Offshore Energy Systems,
, 34 parallel the provisions in H.R. 1614.35 The findings, purposes, and policies of the OCS bill reflect the need for detailed planning on the part of the Federal Government and the concerned States to minimize the potential conflicts and adverse impacts of OCS activities as recommended by the OTA report. The bill specifically requires that the Secretary prepare a 5-year leasing program after consulting all interested parties and balancing all impacts.
The fragmentation of the Federal management of the oil and gas program was assailed in the OTA Report. This problem has been satisfied in H.R. 1614 by strengthening the responsibilities of the
34 U.S. Congress, "Coastal Effects of Offshore Energy Systems", Office of Technology Assessment, OTA-0-37, November 1976, 288 pp.
35 For a comparison, recommendation by recommendation, see statement of John M. Murphy, in the Congressional Record of Feb. 2, 1977, at E-516.
Interior Department as lead agency, and mandating coordination and the elimination of duplicative requirements.
The OTA report also attacks the “inadequate regulation and enforcement of offshore oil and gas technology," a problem which this bill remedies by requiring a review of safety regulations, and the use of the best available and safest technology. In addition, the Department of Labor and the Coast Guard are both given regulation and enforcement authority.
Answering the OTA critique concerning environmental studies, the bill requires baseline studies for every lease area prior to any lease sale. Studies are ordinarily to be completed before the approval of a development plan, and the responsibility for conducting baseline and monitoring studies is incumbent upon the Secretary of Interior, with direction to utilize the expertise of NOAA.
On the role of the state in the OCS program, the OTA Report stated forcefully:
The limited role of State governments in the decisionmaking process for OCS development under existing laws and practices may lead to unnecessary delays and improper
planning for such development.” In order to make the OCS program effective and credible, H.R. 1614 provides for the solicitation of comments from the states on the leasing program, lease sales, exploration plans and development plans. The Secretary is to respond to such recommendations in writing, and incorporate them if he determines they are in the national interest, and within the balanced interest of the citizens of such State.
On oil spill liability, compensation, containment, and cleanup, recommended for legislative action by OTA, the bill has a detailed title establishing strict liability for spills; providing for responsibility for spills; establishing procedures for removal; providing compensation for spills by lessees and a fund; and authorizing judicial remedies, including class actions. In addition, the Coast Guard is given authority to enforce preventive measures to counter oil spills, to promptly remove discharges and to report on such activities. Spills, shortages, and law suits
In the severe winter months of December and January, a series of events demonstrated the need to amend the outmoded OCS Lands Act of 1953—the gas shortages; the freezing weather; well-publicized tanker disasters; reports of withholding of gas; varying estimates of the extent of our oil and gas resources; and the acceleration of proposed lease sales by the outgoing administration.
The hazards of tanker conveyance of oil and gas, and the threat of oil spill pollution, were vividly engraved in the public consciousness in the 4-month period, ending in March of 1977. Some 45 men died and over 22 million gallons of oil spilled in our coastal waters and oceans. On December 15, 1976, on the shoals off Nantucket Island, Massachusetts, the Argo Merchant ran aground and split in two, pouring 7.6 million gallons of heavy industrial oil near the North Atlantic coast. Although the U.S. Coast Guard quickly took control of the rescue and cleanup operations, the strong 50-knot winds and 15-foot