Impacts of OCS oil and gas activity The subject of OCS-related coastal impacts has always been controversial and difficult to quantify in formulae. Some of the problems include the difficulty in separating impacts from Federal versus State (within 3 miles) OCS activity: inconclusive research results on environmental impacts of drilling muds and even of oil spills; and the difficulty in quantifying or predicting risk of a catastrophy. Although the OCS drilling program has an excellent safety record, there is great potential for temporary coastal damage and local adverse economic impacts (e.g., tourist industry losses) if there should be a blow-out. And although some effects of offshore activity cannot be easily documented, there are certainly some negative impacts. Valuable coastline acreage has been used for offshore staging operations, refineries, tank farms, and pipelines. Public access to the coast has been incrementally decreased; wetlands acreage, and thus the fishery habitat area, has been decreased; and population stresses on local community facilities have increased. There can even be impacts on local economies from offshore energy activities interfering with, or displacing, commercial fishing activities. It is clear that, although OCS oil and gas do not fall within coastal State boundaries, the Federal Government cannot recover its OCS resources without some staging operations and other impacts within the States' coastal zones. National interest in coastal and marine programs Coastal management programs have been involved with far more than just OCS energy-impact issues. During the last decade there have been enormous growing stresses on the Nation's coastal zone. Coastal populations are growing far faster than the Nation's average. Increased leisure time, money, and mobility have caused a boom in pleasure boating and other coastal recreation activities, causing more demand for public access to the coast. The declining U.S. balance of payments has focused new attention on the value of our commercial fishery resources, and the value of their wetland habitats. U.S. coal export opportunities are forcing plans for rapid port development and channel dredging, requiring the disposal of massive amounts of dredge spoil. Coal transhipment activities have occupied many sites on the Great Lakes shoreline. The need for coastal facilities in support of OCS energy development is only one of the many conflicting-use problems in the Nation's coastal zone. These problems all have a local impact, of course, but many-energy needs, recreation and public access needs, fishery resources, and marine pollution-cross State boundaries. Such conflicting-use decisions also can create great political and economic pressure at the local and State government levels. These problems collectively become a national concern. For example streamlined local and State coastal area permitting helps industry nationally; reduced coastal hazard-area development_reduces national disaster and income-loss payments from the Federal treasury. The Federal Government has invested effort and funds for structural frameworks necessary within States to handle coastal management problems, while still keeping general Federal oversight for protection of the national interest. Without continued Federal funding, the Coastal States Organization asserts that many of the State programs will be weakened or dismantled. The Federal Government also has invested, through Sea Grant, in marine education, training, and research. The Federal/State partnership in this program has provided marine technology transfer among the States, while providing Federal coordination of local and State programs to ensure that national problems are addressed efficiently. Without continued Federal support for Sea Grant, we will slow marine education at a time when there is growing public and private industry demand for well-trained staff to solve marine policy, research, and development problems. It is in the long-term economic interest of the Nation to invest in a continued Federal role in planning for wise and efficient use of the Nation's coastal and marine resources, and in the training of future generations of coastal managers, marine scientists, and ocean resource development specialists. OCS revenue sharing The question of Federal versus State jurisdiction over OCS lands (beyond 3 miles), and their resource revenues, is still a matter of some controversy. As recently as 1975, in the Supreme Court case United States v. Maine, the Atlantic margin States challenged the ability of the Submerged Lands Act to supercede their colonial charter boundaries. The Supreme Court ruled in 1954 that Federal/ State jurisdiction boundaries are a domestic matter governed by Congress, and set by Congress in the Submerged Lands Act; the Court upheld this opinion in the U.S. v. Maine case. This also apparently means that Congress can change the boundary, by amending the Submerged Lands Act and the OCS Lands Act. Although the coastal States and Congress have not reopened the OCS jurisdiction dispute, they are-in response to the proposed termination of Federal funding for the CZM, CEIP, and Sea Grant programs-raising OCS revenue sharing arguments again. OCS revenue sharing schemes proposed in the past either extended the States' offshore boundaries, or shared revenues largely with coastal States adjacent to the OCS activity. Both of these approaches might cause inequities. The States affected by Georges Bank development would receive little benefit from a 12-mile offshore boundary. Adjacent-State sharing formulae do not address the fact that coastal staging operations and population stress are not always concentrated in the State adjacent to the most OCS activity. Because of prevailing winds or currents, the environmental risks also may not be greatest in the adjacent State. Adjacent-State sharing of OCS revenues also does not address impacts of other national interest coastal energy-related activities, such as coal transshipment and port development. A more reasonable scheme would allow the sharing of a small percentage of Federal OCS revenues among all coastal States. Unlike onshore revenue sharing programs, some of the funds should be earmarked for mitigation of impacts from Federal coastal and offshore energy activities, and for broader marine and coastal programs that are in the national interest. Thus, the receipts generated by extraction of a non-renewable offshore Federal resource would be invested in planning for the wise use of renewable coastal resources and for training of future generations of personnel to deal with the wide range of coastal and marine problems that will remain after OCS oil and gas activities are gone. In the meantime, this also would allow a more equitable sharing of Federal-lands leasing receipts; inland States would continue to receive by far the bulk of onshore leasing receipts, but all coastal States would begin to receive a share of receipts from OCS leasing activities. TABLE I.-REVIEW OF ONSHORE REVENUE-Sharing PROGRAMS. 1908: National Forest Revenue Act (16 U.S.C. 500) Twenty five percent of Federal receipts from national forest lands for timber harvesting, mineral leases, and other uses are shared with counties in which the forest lands lie. Receipts are to be used to build roads and schools. DOI estimates $275 million in fiscal year 1982. 1920: Mineral Leasing Act (30 U.S.C. 181 et seq.) Thirty seven and one-half percent of Federal receipts from mineral extraction leases on Federal lands will be shared with States in which these lands lie. In 1976, the Act was amended to allow a 50-percent share (90 percent for Alaska) to the States, and to suggest that funds also be used for planning and constructing public facilities to mitigate impacts from activities on Federal lands. Receipts are to be used for building roads and schools, but are to be disbursed at the discretion of the State legislatures. No monitoring or guidance on use of funds is exercised by the Federal government. DOI estimates $700 million in fiscal year 1982. 1934: Taylor Grazing Act (43 U.S.C. 315 et seq.) Fifty percent of Federal receipts from grazing and stock-raising leases on Federal lands will be shared with States in which the lands lie. Receipts have no limitations on use, but should benefit affected counties. 1964: Land and Water Conservation Fund Act (16 U.S.C. 460L) The Fund is to comprise $900 million per annum drawn from Federal property sales, motorboat fuel tax, and OCS oil and gas revenues (over 80 percent has come from OCS revenues in recent years). Funds will be used by Federal and State governments for acquisition and maintenance of park lands. Sixty percent of the Fund will be used for matching grants to States. Of the States' share, 40 percent is distributed equally among 50 States and the remainder is allocated according to a formula based on population distribution. State grants and Federal expenditures under this fund are currently frozen by the Reagan administration. 1976: Payments in Lieu of Taxes Act (Public Law 94-565) Ten cents per acre of federally owned land in addition to other receipt sharing programs or 75 cents per acre instead of shared revenues-whichever is greater, will go to States in which Federal lands lie. The funds are intended to reimburse States for property taxes lost due to Federal land ownership. DOI estimates $45 million in fiscal year 1982. TABLE 2.-REVENUE SHARING PAYMENTS TO STATES, FISCAL YEAR 1981 TABLE 2.-REVENUE SHARING PAYMENTS TO STATES, FISCAL YEAR 1981-Continued 1 Totals do not include matching grants through land and water conservation fund, or revenue sharing from the National Forest Revenue Act (figures from the National Park Service not yet available). 2 Miscellaneous disbursements include: Proceeds of land sales (31 U.S.C. 711), Oklahoma royalties (65 Stat. 252), Oregon and California grant lands (43 U.S.C. 1181f), National grasslands (7 U.S.C. 1012), Coos Bay Wagon Road grant lands (53 Stat. 753). Source: All figures provided by DOI/Bureau of Land Management, 1981. TABLE 3.-OCS REVENUE SHARING PROPOSALS INTRODUCED IN CONGRESS, 1967-1980 Description Amend Land and Water Conservation Fund Act— dedicate 100 percent OCS revenues to fund for 5 years. Amend OCS Lands Act-62.5 percent OCS revenue to a marine resource conservation and development fund; 37.5 percent OCS revenues to adjacent State for public schools and roads. Amend OCS Lands Act, 40 percent OCS revenues to a marine resources conservation and development fund; 60 percent OCS revenues to adjacent State up to $50 million per year, with reduced percent above that amount on sliding scale; applies only to leases beyond 12 miles offshore. Amend OCS Lands Act-100 percent OCS revenues from leases out to 12 miles offshore to adjacent State; coastal States have full mineral rights and leasing authority out to 12 miles. Amend OCS Lands Act-40 percent OCS revenues Amends OCS Lands Act-50 percent OCS revenues to TABLE 3.-OCS REVENUE SHARING PROPOSALS INTRODUCED IN CONGRESS, 1967-1980—Continued Description Amendment No. 36-37.5 percent OCS revenues to coastal States; formula based on oil and gas produced and landed; OCS acres leased; new employment in adjacent State. Amendment 37-20 percent OCS revenues to coastal States; formula same as No. 36 above; maximum 30 percent, minimum 1 percent for any adjacent State. Amendment No. 38-First 1.5 million barrels of oil and gas landed, to adjacent State; $0.20 per barrel first year, down to $0.08 per barrel first year, down to $0.08 per barrel fourth year, with $100 million per year maximum. Amendment No. 39-15 percent OCS revenues to coastal States; formula same as No. 36 above. Amendment No. 40-10 percent OCS revenues to coastal States; formula same as No. 36 above. Alabama American Samoa Arizona Arkansas California. Colorado. Connecticut Delaware...... District of Columbia Florida.. Georgia. Guam Hawaii Idaho. Illinois Indiana lowa. Kansas Kentucky Louisiana Maine. Maryland. Massachusetts. Michigan Minnesota. Mississippi. Missouri Montana Nebraska Nevada New Hampshire.. New Jersey TABLE 4.-COASTAL ENERGY IMPACT PROGRAM (CEIP) GRANTS 1 New Mexico New York North Carolina. 225 1,538 North Dakota Footnotes at end of table. |