July 8, 1975
Page 21543
OFFSHORE OIL
Mr. MUSKIE. Mr. President, one energy related issue of special importance to the State of Maine is the planned exploration and development of petroleum resources off the coast of New England. Accompanied by much controversy and uncertainty, these plans have been met both with enthusiasm by the hopeful residents of an energy poor region and the articulate resistance of concerned environmentalists. It seems that the only thing all sides can agree on at this point is that many questions about OCS drilling still remain to be answered.
Among these unanswered questions are several that have yet to be addressed. What, for example, will be the effects on New England coastal towns of the rapid influx of people that must accompany any successful drilling venture. And on the other hand, what will be the effects on these towns should OCS drilling be found to be unfeasible, causing those who have come to the region to leave unexpectedly. The answers to these questions and others must be found before any rational, comprehensive policy can be developed regarding OCS drilling off New England.
On Sunday, June 29, the New York Times magazine printed an article by Times editorial board member, Robert Bendiner, which defines several important policy considerations about OCS drilling off New England. So that my colleagues may read Mr. Bendiner's article, I ask unanimous consent that it be printed in its entirety in the RECORD.
There being no objection, the article was ordered to be printed in the RECORD, as follows:
TAKING OIL OFF THE SHELF
(By Robert Bendiner)
Landing on the helicopter pad of an Exxon oil rig 27 miles out in the Gulf of Mexico on a recent gusty morning, I could not escape the thought that the platform and its operations looked in truth like those depicted in the company's colorful television commercials. The production platform itself was spotless. Accommodations for the 30-man crew, who work alternate seven-day weeks in a complicated welter of pumps, pipes, compressors, separators and sensing devices, were maintained with military neatness. Personnel were forbidden to throw so much as a paper cup over the side. Even rainwater falling on the platform was filtered before it was allowed to reach the surface of the Gulf.
Looking down some five stories through the open grill of a catwalk, I could see scores of
bluefish darting about the structure's tubular steel legs, which extended downward 170 feet below the green surface. The fish are neither attracted nor repelled by oil for the simple reason that no oil is anywhere to be seen – either on the rig or in the adjacent water. It is the structure itself that is responsible for their presence. Like any topographical irregularity in the sea, it acts as a reef, attracting a food chain that starts with barnacles and works up through sea urchins and ever- larger marine creatures to the 400-pound shark that the crew had. pulled in a few days before.
At least as significant as what could be observed in this casual way were data I had previously been shown by an official of the Louisiana Wildlife and Fisheries Department with a long record of vigilance against the incursions of the oil industry. His facts and figures proved that, after a history of drilling on and off the Mississippi Delta going back to 1927, the state's shrimp, oyster and fin fish were in as healthy a condition as ever.
Under the circumstances it seemed at least reasonable to take another look at the Federal Government's plan to lease 10 million acres of the Outer Continental Shelf this year for the possible extraction of oil and natural gas – and at the determined opposition it has encountered.
One of the reasons the environmental movement remains vigorous, in spite of economic pressures and dire talk of energy shortages, is that people who care little about protecting the environment at a distance are vehement about protecting it close to home. Since seven of the 10 most populous states in the country are on the coasts, the Government's plan to lease immediately five times the offshore acreage ever leased before in a single year has aroused a volume of opposition surpassing the reaction to more localized threats of desecration, however serious.
What is more, it is an opposition that comes as much from Governors, legislators and hardheaded men of business as from nature lovers.
Is all the uproar warranted? At the very least it is understandable, but curiously not for the reason usually cited – the fear of oil spills like those that marred a long stretch of coast on the Santa Barbara Channel in 1969 and threatened the Louisiana shoreline in 1970. The imposition of drastic liabilities for damage, the financial loss incurred in the waste of the oil itself, at fabulous current prices, and the dawning sensitivity of the companies to a sharp decline in public esteem – all have combined to hasten the development of a greatly improved technology in the extraction of offshore petroleum.
Automatic storm chokes, installed in the well itself below the seabed, react instantly to sudden rises in heat, pressure and rates of flow. These together with thicker pipe casing, electronic monitoring and a complicated group of blowout preventers on top, known as "Christmas trees," are designed to cut off and contain the oil in cases of emergency and reduce to a minimum the chance of blowouts. Practically all the big spills of the past occurred when companies deliberately neglected to use even the crudest preventers they had in order to cut costs.
Should even the new safety systems fail, as all things will from time to time, improved booms and skimmers are at hand to contain spills before they are very likely to get to shore. The ideal boom has been described as a vertical curtain or barrier so constructed and placed in the water that it can follow the motion of the waves, with its top never going beneath the top of the slick and its bottom never rising above it. As a result of considerable research and experimenting, much of it by the United States Navy, the newest booms come much closer to this ideal than those used in the past. But it should be said that what is effective in the usually calm waters of the Gulf may not do at all in the stormy Atlantic, much less in the coastal waters of Alaska.
The visitor to one of these impressive production platforms in the Gulf cannot overlook the possibility that he is being shown a specially tidied-up exhibit, but the likelihood is small. Too many observers have visited too many similar rigs in these waters and off the California coast for such trickery to work. A delegation of Federal and New York State environmental officials returned from one such inspection on the Pacific coast last fall with the conviction that "no casual spill was likely and that the chance of any substantial spill was fairly remote."
As long as pipes are used to carry the oil ashore, as they are in the Gulf, environmental danger at the source appears to be a matter for constant watchfulness rather than a decisive obstacle.
Transfer to ships would be another matter, entailing a certain amount of chronic and unavoidable leakage. Among sources of oceanic pollution, spills from offshore drilling rank very far down on the list. Tankers and even normal shipping are far greater offenders, accounting, according to the Coast Guard, for 19 times as much oil on the waters as offshore production. River deposits and sewer drain-offs, including the discarded crankcase oil of thousands of gas stations, are much more significant sources. So, for that matter, is the natural seepage that is emitted from time to time from the oil seabeds of the world, that might indeed have been a sheen on the waters viewed by Columbus, Leif the Lucky or Ulysses.
Visual pollution by 2,700 rigs and wells is real enough in the Gulf, where the awkward-looking structures along with drilling ships, service boats and other attendant activity give the entire seascape a depressingly industrial look. But off the Atlantic coast the intention is to drill from 25 to 75 miles off the New Jersey, Delaware and Maryland shores. At 25 miles, the uppermost tip of the rig could just be seen from the shore on a clear day. Any distance beyond that would preclude all possibility of offending man's eye.
It is the shore itself where the great doubt lies. What happens on the Outer Continental Shelf is only the beginning of the threat. What drilling can do to the coast, unless it is carefully planned and controlled, is the real issue that has to be faced. This is the aspect of the question that received the least detailed attention in the Interior Department's environmental-impact statement on the great leasing program – not surprisingly in view of the position taken by Rogers C. B. Morton, who was Secretary of the Interior when it was promulgated. Responding to a flood of protests from Governors and Senators last year, Mr. Morton overrode their insistence on the need for preliminary coastal planning on the ground that both foreign policy and inflation forbade the country's continued dependence on foreign crude oil, leaving him no alternative. To let the state governments hold things up, he suggested, could "give an extremely important national decision to a very limited number of people."
Putting aside the question of how much of the Secretary's remarks were rhetorical, one may well consider at this point the possible consequences to the coast of what 20 United States Senators have jointly described as a,"hasty and ill-conceived" proposal. Growing out of former President Nixon's Project Independence, the plan is to lease as much of the shelf in 1975 as has been leased in all the years since the Federal Government started the practice in 1952. As with the sea, these consequences do not appear to include much of a threat from the oil itself. Pipe carrying the offshore fuel could be brought in even under a beach and invisibly carried any number of miles inland. Indeed, if that were all that was involved, the environmental risk would probably be worth taking. The states affected would have only to stipulate that facilities for handling the oil in most areas, except on such narrow strips as Long Island or Cape Cod, be located in some already industrialized region. Oil found off the New Jersey coast, for example, could be brought, partly underground, to storage tanks or refineries in the Wilmington area or in the vicinity of Newark Bay. Distance is hardly a technical problem, though it could be a cost factor in a country that is already traversed by more than 200,000 miles of oil and gas pipe. New lines especially are heavily protected against corrosion and present little danger of rupturing.
The real difficulty, social as well as environmental, comes before any oil is produced, as the current boom in the North Sea has been demonstrating. After the first serious look at what is happening in those waters, a team sent out by the Conservation Foundation concluded that "while the risk of oil spills warrants public attention, the Scottish situation suggests that the United States would be unwise to continue focusing disproportionate attention on spill hazards to the neglect of onshore development impacts."
If the companies are required to locate storage tanks, refineries and petrochemical works well inland, and if laying the pipe itself can involve at most a very narrow corridor, what onshore impact is left? In good part, the answer lies with the oil rigs themselves. Gigantic structures, they must be assembled at points as near to their intended operating sites as possible. At these shore points they are placed side down on great barges and towed to sea. The leg section of the largest platform is by itself some 23 stories tall. Once in place, a series of decks is built on top of it, rising seven stories above landing pad, derrick, pumps and machinery, the surface of the water to accommodate monitoring equipment, repair shops, offices and living quarters. Concrete platforms, sometimes preferred for deep and turbulent water, are even more massive and difficult to assemble and put in place.
The building and siting of these towering "islands" inevitably requires an onshore task force to operate the essential fleet of boats and barges, to supply the daily needs of the crews but, above all, to assemble the platforms in the first place. Along with their families, this working force, swooping by the thousands on a small coastal community, creates monumental problems – both social and environmental, both immediate and long-range. These problems are at least being given serious consideration in Scotland, though conclusions are not always allowed to determine the course of events. But if the Department of the Interior has its way, they will hardly be considered at all before the oil companies are given a green light here.
While the production of offshore oil does not in itself employ great numbers of people, this onshore activity does. Without the most deliberate planning, a small seaside resort can suddenly find itself host to a regiment of platform construction workers, supplemented by other builders needed to put up housing for them and their families. Next come additional schools, stores, restaurants, professional office and entertainment establishments, with roads and sewers to serve them – in short, all the bustling expansion of a boom town, complete with the labor shortages, inflated land prices, soaring wages and social strains between natives and outsiders that everywhere characterize boomtown development.
But there are in this case several major departures from normal boom conditions that promise greatly to aggravate the difficulty. A small shore community is likely to be scenic and geared to the kind of pleasure activities that are especially vulnerable to a sudden upsurge of industry and construction. Even more, the fragile nature of coastal terrain leaves it open to irreparable damage from the heavy equipment that the building and hauling of oil rigs and heavy supplies requires.
The Mississippi Delta below New Orleans has suffered visibly from this activity – to the extent of actual subsidence of the marshland in some areas. Oil executives concede the point and indicate that they would not do today, along the Atlantic Coast, what they did without objection on the Gulf coast before there was much consciousness of the environment and its vulnerability. But without detailed cooperation between states and companies in advance, they cannot avoid doing it.
Above all, the boom can end as abruptly as it began. The leased acreage may turn out to have nothing like as much oil as expected. A field's potential is revealed only by actual drilling, and the odds are only one in seven that a given well will yield any oil or gas at all. Even if most of the wells on a given tract have been productive, moreover, the time comes – say, in 20 years – when the oil is gone, an inevitability with a depleting resource. Then the offshore activities cease: No more platforms are built; no more pipe is laid; no more crews and supplies have to be ferried out day after day. Workers drift away, perhaps to move on to some other spot on the coast. Stores close their doors, schools disappear, houses are boarded up as boomtown gives way to ghost town – all the worse because its pre-boom resort quality can never be recovered.
It is fear of just such a future along the North Sea that caused a tough official of the Shetland Islands to take a firm line with representatives of Shell Oil. When their exasperation at the Shetlanders' strict planning regulations took the form of a threatened withdrawal from the proposed site, the official's instant response was, "That's the best news we've heard since you arrived." It is the same fear that motivates some coastal-state Governors to demand more time for planning and laying down conditions such as the Shetlanders successfully forced on Shell.
Maryland is even working out a plan to confine onshore oil facilities to certain designated tracts, which the state would then buy up for eventual sale to the companies.
At the same time, there is no doubt that many critics of outer-shelf development are motivated as much by a failure to share in the return as they are by fears for the environment. In the case of state and local officials, the attitude is not unreasonable, since the states and localities themselves, not the Federal Government or the oil companies, will sooner or later pay the price in whatever damage is done to resort business, fisheries, and tourist trade.
While the Supreme Court has decided that the states have no jurisdiction over waters beyond the three-mile limit, what happens to their coasts is another matter. No doubt the Federal Government has the right, for example, to lease drilling sites 50 miles from Long Island if it wishes, but it will fall to the state of New York to protect Montauk or the Hamptons or the Rockaways from the ravages of attendant onshore activities. It is on the basis of this wholly legitimate interest that the coastal states and their representatives in Congress are demanding not only a share of the income from what is, after all, a public resource but also a voice on where exploratory drilling is to be done – and even who is to do it.
The present arrangement for leasing the Outer Continental Shelf has a backward, almost Alice- in-Wonderland, character. The Interior Department's Bureau of Land Management leases the 5,760-acre tracts on the basis of sketchy estimates of their potential yield in oil and gas. The estimates are necessarily sketchy for the simple reason that the bureau is obliged to depend on information from the oil companies themselves in the form of seismic and geophysical data made prior to any exploratory drilling. This raw information is sold to the Government, but not the oil companies' interpretations of it. For competitive reasons these are claimed by the companies as "proprietary" and remain their secret.
On the basis of its own largely uneducated guesswork, the Interior Department is then free to consider financial bids from companies operating on at least somewhat educated guesswork. It is a kind of two-handed poker game in which only one of the players is permitted to see his own hand. Only after a lease has been awarded – and the Government has thereby lost substantial control of the tract – is the purchaser of its mineral rights given a permit to do exploratory drilling, the only real way to find out what the tract contains.
The result of this curious procedure is that the Government, eager for the revenue and inclined therefore to be modest in its evaluations, can innocently dole out a publicly owned treasure for a fraction of its worth. When competition among the companies for available tracts was high, the danger of this happening to any appreciable degree was not serious; even on the basis of their own fragmentary preliminary data, the companies would raise the prices they were prepared to offer the Government in the simple process of outbidding each other. But with the Interior Department now flooding the market with more than five times the normal annual acreage, competition is bound to be less.
It is this topsy-turvy system that is now the target of considerable legislative attention. Among others, Senators Ernest F. Hollings of South Carolina, Henry M. Jackson of Washington, Clifford P. Case of New Jersey and Alan Cranston of California want to separate exploration for oil and gas from their development and production, making the former either wholly or partly a function of the Federal Government.
Embodying recommendations of the Senate Commerce Committee's National Ocean Policy Study, proposed bills would have the Geological Survey conduct seismic, geomagnetic, geophysical, geochemical and exploratory deep-drilling activities in "frontier areas" of the shelf, where development has not yet occurred. In addition, the Interior Department would be required to prepare a 10-year leasing program based on the nation's projected energy needs and the coastal zone management plans of the individual states, none of which will have time to do an adequate planning job if the present program goes into effect this year. Without any idea of where oil is to be drilled, they could do no more than hypothetical planning in any case.
The department is considering better methods of bidding, including a decreased reliance on the initial bonus payment and more on royalties after production has started, as well as the elimination of joint bidding by the big companies. But so far it is as firmly opposed to Government explorations as the oil companies themselves. The argument is that private industry can do the job more efficiently than Government and that the public ought not to pay – and pay
dearly – for the risk taking involved in exploration. Though the efficiency argument is not overwhelming, because the Government would be hiring the same commercial survey experts who now serve the companies, there is some cogency in the contention that taxpayers would be forced to gamble. It can be just as convincingly argued, however, that the companies now pass their exploration costs along to the consumer anyway, so there would be nothing really new about what some company men criticize as "socialized" risk taking.
Overshadowing all such objections to the program, however, is the contention of Government and oilmen alike that the country needs the offshore oil now in order to avert dependence on foreign sources – needs it too desperately, in fact, to afford the luxury of delay. It is this contention which, in view of the damage that a hasty and poorly planned program can do, calls for serious consideration. The consideration given it so far – for example by the Federal Energy Administration, the National Ocean Policy Study and the General Accounting Office – has indicated such a lack of realism in the expansionist plans for the continental shelf that the Department of the Interior is already pulling in its horns and hinting, unofficially, of a somewhat scaled-down leasing program. The reasons for grave doubt are these.
Although nobody knows how sizable are the petroleum deposits to be found on the Atlantic Continental Shelf, the Geological Survey has drastically reduced its estimates from those it made in 1968. Instead of 48 billion barrels of oil and 220 trillion cubic feet of natural gas, it now figures 10 billion to 20 billion barrels and somewhere between 55 trillion and 110 trillion cubic feet. These figures are still significant, of course, but for a country that consumed 6.3 billion barrels of refined products in 1973 alone (2.2 billion of them imported), the hoped-for supply could not in any case offset present imports for more than four to nine years unless per capita use were, at the same time, quickly and drastically curtailed. To satisfy the assumptions of Project Independence, the General Accounting Office roughly estimates that 15 million to 28 million acres of the Outer Continental Shelf would have to be leased and drilled by 1985. For reasons to be considered next, that is clearly impossible.
Whatever reserves are discovered offshore, none of them will add significantly to the country's usable supply for something like a decade. Between the department's call for tract nominations by the companies, issued a few months ago, and the beginning of exploratory drilling, three years can be expected to be consumed in the bidding process, public hearings, impact statements and sale. After that four or five years are likely to pass under the most favorable conditions before such drilling is completed and production platforms are erected at the appropriate sites. Beyond that, it would be two years more before production could be brought to a peak.
What threatens to attenuate even this timetable considerably – aside from possible lawsuits – is acute shortages of mobile rigs for exploratory drilling, of equipment materials, highly skilled manpower and capital. According to the Government's Project Independence Report, drilling facilities will fall short of the requirements of an accelerated program by some 38 percent. Drill pipe, casing and tubing are all in short supply, and experts in both government and industry concede the serious shortage of engineers, geophysicists and other professionals – all needed in force for projects in the unfamiliar deep water and turbulent environment of the Atlantic shelf.
Not least among the factors to be considered in the current offshore plan is that the dumping of so vast a seabed area on the market at one time – with similar acreages planned successively in the years immediately to come – calls for a capital outlay that has even the oil companies staggered. Frank Ikard, president of the American Petroleum Institute, has been quoted to the point: "On one side, I say, 'Great; let's get on with offshore development.' On the other side, I say, 'Where are we going to get the money to bid?'"
Add to these formidable obstacles the fact that, under the terms of the leases, exploration must take place within five years after sale and you have some idea of why the Comptroller General's report to Congress found the program "hastily conceived by Interior under pressures exerted by the presence of the energy crisis and fears that the newly formed F.E.A. would assume responsibility for the shelf leasing program."
If that is the case – and the department's current hesitation is almost evidence enough that it is – the first order of business would seem to be a revision of the 1975 program before any tracts are parceled out. An interim schedule could then be worked out which could have several highly important advantages. The delay that will be caused by shortages in any case could be put to excellent use, to begin with, if the department were to take the advice of Russell E. Train, Administrator of the Environmental Protection Agency, and shift its focus to areas "where the resource potential is high and where the adverse environmental effects would be low."
While the reduced and selective program was being worked out – with the advice of the most skilled technicians the Geologic Survey could command – a broader kind of planning could be proceeding on both state and national levels. The states would have the time to complete their own coastal protection plans in accordance with the Coastal Zone Management Act of 1972.
Once these are drawn up and approved by the Commerce Department, any future offshore leasing programs will have to conform as far as their onshore impacts are concerned. Now in the process of development, these plans should begin coming in sometime next year. They should assure a genuine role for the coastal states down to monitoring and surveillance where the standards they have set up for their own shore areas are potentially affected.
The same time could be used by the Federal Government to evolve a sensible method for joint exploration of the Outer Continental Shelf – if Congress fails to impose one – and to do the one great and obvious thing it has so far signally failed to do – that is, to frame an over-all energy policy for the nation. It is impossible to know how immediately essential offshore drilling really is (it could be, instead, rash waste of a valuable resource we will desperately want at a later date) unless we know how much energy we will need in the next few decades, how much can be conserved and what other potential sources exist for supplying it.
All energy taken from the earth exacts a price in environmental damage. Until there is an imminent prospect of harnessing the sun or fusing the atom, the crying need is for a panel of the nation's wisest heads – a Presidential commission of its leading scientists, industrialists, economists, environmentalists, and, yes, philosophers – to decide, all things considered, which is the best course to follow, whether that course is nuclear energy, coal or the last drop of oil from the Outer Continental Shelf. Only then will full concentration on any given source make sense. Only then will Congress be likely to feel both the pressure and the confidence to move ahead. Only then will the nation, including even its most ardent environmentalists, feel free to accept proposals perhaps questionable in themselves as the price demanded by a coherent energy policy – a policy that becomes more urgent with every passing month.