Mr. LIGON. I think there is no intent to avoid compliance with that law. I think it is clear in what it says and Interior will comply with it. Senator TUNNEY. We are not going to have completed our State Coastal Commission report until 1975. The legislature will then act in 1976. The Department of Interior, as I understand it, is hoping to start the leasing program in May of 1975. You are suggesting that the Department of Interior will delay the leasing program until such time as the Coastal Commission study completes the coastal zone management program. Mr. LIGON. I am suggesting there may be a possibility a delay, yes, sir. Senator TUNNEY. Do you believe the FEA might agree on the need to delay until the plans are completed? Mr. LIGON. The FEA agrees that we should receive public input before major decisions are made, and we hope the Department of Interior follows that procedure. Senator TUNNEY. Meaning we wait until the Management Plan has been approved by the Coastal Commission? Mr. LIGON. If that is necessary, yes, sir. Senator TUNNEY. I don't mean to be a prosecuting attorney but I think a greater degree of precision is needed for me to understand it. Mr. LIGON. My hesitancy is that I can't speak for the Department of the Interior. Senator TUNNEY. Can you speak for FEA? Mr. LIGON. Yes, sir, I can. Senator TUNNEY. Does FEA feel there should be delay until after the Coastal Plan is completed? Mr. LIGNON. That is the feeling at the present time, yes, sir. Senator TUNNEY. Thank you. I am very pleased to hear that. I think that this is really an extremely fine statement that you have made and one which, I might say, knowing the kind of problems that you haveeveryone attempts to take positions which are matters of conscience but knowing the perils that lie sometimes in taking those positions of conscience that yourself as well as Mr. Sawhill and others in the FEO are to be highly commended for taking the position you have just taken here today. Obviously this position was taken with the approval of Mr. Sawhill, because it does represent a significant change in what we have heard in the past, and shows a much greater sensitivityto the needs of local governments and citizens at the grass roots level to have an opportunity for maximum input before the Federal Government, by fiat, makes decisions which will dramatically affect their liven, Mr. Lagon. It is clear that the Congressional authority for this kind of final action rests with the Secretary of Interior. But obviously, in the energy circle in Washington, we have a significant input in the final decisionmaking and that is what we are talking about here today. Senator TUNNEY. It is, and the Congress has repeatedly made it clear that it feels there should be maximum amount of State and local government input as to the timing and location of drilling offshore. It has made it clear it wants coastal zone management to be considered by the Department of Interior as part of leasing decisions and also it has made it clear it feels it is important that the onshore de velopment of an infrastructure be taken into consideration before a leasing decision is made offshore. As you have just heard from local government officials, many feel there would be serious adverse impact on off- and onshore environment should you go forward with offshore drilling off the Santa Monica-Newport Beach areas. Senator STEVENS. I don't want to disagree with you, my good friend, but I am sure Mr. Ligon understands the concept of the coastal zone. I worked on that bill, and it only applies to the territorial sea. You are not talking about that anyway, are you? Mr. LIGON. That is correct. Senator STEVENS The Coastal Zone Management Act of 1972 applies more to onshore development in relation to refineries than it does to OCS leasing activities. ÓCS is more at issue here. Mr. LIGON. That is correct. Senator STEVENS. I know you have problems with regard to the concept of leasing in the Gulf of Alaska, is that right? Mr. LIGON. That is right. Senator STEVENS. Is there any place in the country you propose to lease the Outer Continental Shelf that you don't have problems with? Mr. LIGON. No, Senator Stevens. It was announced that a program to put 10 million acres into lease would be the goal for 1975, and it was estimated that 16 to 20 million might be put up to be looked at during the process as far as tract selection is concerned. Whether or not it is attainable in that period of time is not clear. As you pointed out, there isn't a single place that we haven't had some problems. The Gulf of Mexico, because of past development, has been the area that is most accessible to further development, but generally speaking, we've had problems with every area. Senator STEVENS. The Louisiana sale was enjoined and, the people of Delaware and the east coast objected strenuously to exploratory seismic work. Mr. LIGON. It is true in Maine and offshore Texas as well as every other area we have looked at. Senator STEVENS. In reality, a proposal to lease offshore OCS lands anywhere faces a hearing similar to this one, doesn't it? Mr. LIGON. Yes, sir. That is correct. Senator STEVENS. Thank you very much. You have got a tough problem. Senator TUNNEY. We have-I have a substantial number of questions I wanted to ask you. On the other hand, I don't want you to miss your plane because you have to participate in the Economic Summit Conference. Mr. LIGON. If you would allow me to take the questions, I will submit the answers for the record for you. Senator TUNNEY. That is what I thought. On Monday, I would send them over to you and then you could answer them in writing so we could have them as part of our record. Mr. LIGON. We will get the answers back to you as soon as possible. Senator TUNNEY. I want to thank you very much for coming all the way from Washington to be here today. I particularly appreciate the fact you have indicated that the FEA has a position of flexibility as it relates to timetables for offshore drilling in southern California. I think it relates a significant change, at least as I understood the FEA's position, and I think it is perfectly consistent with the attitude of Congress that there should be local and State government and coastal management input prior to the time the leasing takes place. I think it demonstrates the FEA, at least, has had its ear to the ground and recognizes there is a substantial body of opinion in California that feels that it would be wrong to go ahead with such a leasing program without adequate local input. Thank you for the statement and for being here. Mr. JOHN HUSSEY, Director, National Ocean Policy Study, FEDERAL ENERGY ADMINISTRATION, DEAR MR. HUSSEY: Senator John V. Tunney has requested that the Federal Energy Administration (FEA) supply the answers to five questions posed in his letter to me on October 2, 1974. Listed below are the five questions with the corresponding answers. 1. Question. Based on information available to FEA, to what extent may materials shortages, particularly tubular steel products, affect the implementation of the lease schedules proposed off the coast of southern California? Answer. With this time lag, it is the belief of FEA that materials shortages, particularly tubular steel products, will not delay exploration and production of the leases involved. The shortage of these materials is already beginning to abate and should not be a serious problem next summer. At the Senate Commerce Committee National Ocean Policy Study Group Hearing in California on September 27, 1974, Mr. David E. Lindgren, Deputy Solicitor, Department of the Interior, made the statement that no decision will be made on the holding of a lease sale for California offshore Federal lands prior to next summer. 2. Question. In the development of the "blueprint" for Project Independence, to what extent has FEA consulted with the coastal states which may be affected by the accelerated leasing program? Answer. In the development of the "blueprint" for Project Independence, FEA has had considerable input from state representatives and interested citizens at the various Project Independence Hearings around the country. In addition, FEA has relied on various task forces to deal with specific energy sources. The task force assigned to oil is chaired by Dr. V. E. McKelvey, of the United States Geological Survey. This task force was charged with predicting production of crude oil given certain parameters such as price, governmental regulations, land availability, etc. FEA does not say that a certain amount of offshore land should be leased, only that if it is leased that a certain productivity can be expected. The leasing schedules are determined by the Department of the Interior (DOI) and more specifically the Bureau of Land Management (BLM). The BLM and DOI have been in constant consultation with both the State and local governments of the State of California. 3. Question. What rationale compelled FEA to hold hearings on development of OCS oil and gas in Atlanta, Georgia, rather than Los Angeles, California, when the announced leasing schedules would affect the southern California coastal communities first? Answer. FEA regional hearings were held at widely spaced locations in the United States so that interested parties would have a minimum distance to travel to participate. Although different items of special interest were emphasized at each regional meeting, the meetings were open to the discussion of any item desired by the participants. There was no rationale that deliberately located the hearing where Outer Continental Shelf (OCS) lands were featured away from Los Angeles. The coastal states bordering the Gulf of Mexico and the Atlantic Ocean are also interested in the treatment of OCS lands. At the time of the hearings, Folrida had a wildcat well drilling in the OCS adjacent to its jurisdictional waters. 4. Question. From the perspective of FEA, do the Federal agencies responsible for administering the OCS lands and for planning future energy development strategies have access to sufficient geophysical and other relevant data to adequately plan and administer the programs on OCS lands? Answer. The Federal agencies have, at this time, more technical information regarding operations on the OCS than at any other period. For several years the Department of the Interior has been acquiring larger quantities of reliable geophysical data. Measures are being taken to improve the rules regarding the disclosure of proprietary geological and geophysical data to the DOI. In this regard, new rules were proposed in the Federal Register on May 16, 1974, and public hearings concerning the proposals were held on July 15, 1974. The revisions are expected to be published soon. The DOI receives all downhole-well information desired from operators as it is developed, thereby maintaining up-to-date operational information in all areas. FEA believes that the responsible Federal agencies have preliminary information sufficient to properly plan for and administer the OCS lease scheduling programs. Before actual lease sales take place, a considerable amount of additional information will be accumulated in preparation of the environmental impact statement required in each sale lease. 5. Question. Is FEA, or some other lead agency, attempting to evaluate the cumulative and interactive impact of locating oil and gas production facilities, terminals offshore, while at the same time siting conventional generating stations, refineries and transfer terminals onshore in the coastal zone? Answer. A Federal agency is required by the National Environmental Policy Act (NEPA) to prepare an Environmental Impact Statement (EIS) prior to taking any action (such as issuing license or permit) significantly affecting the human environment. In those cases where several Federal agencies are involved in a proposed project and there is uncertainty as to which is the lead Federal agency, the President's Council on Environmental Quality (CEQ) can designate a lead agency. Our Office of Siting and Regulation is preparing a series of energy assessments of major proposed energy projects. These assesments will examine the need to be satisfied by a project, alternative ways of satisfying that need, and alternative use of the resources to be consumed by that project. Such energy assessments will satisfy certain portions of the NEPA requirement. At present, this office is preparing an energy assessment of the Kaiparowits Project, a 3,000 megawatt electric generating station in southern Utah. This assessment is being conducted in consultation with the Bureau of Land Management. The Office of Siting and Regulation is also starting work on an energy assessment of two refineries proposed for construction in the State of Maine. A deepwater port may be proposed in conjunction with one of those refineries. This office would also conduct an energy analysis for a complex of facilities such as that described in Senator Tunney's letter. We hope the answers to these questions will be of use to the National Ocean Policy Study. Sincerely, DUKE R. LIGON, Assistant Administrator Energy Resource Development. Senator TUNNEY. Assemblyman Cory, it is a real pleasure having vou before the committee as Chairman of the Joint Committee on Public Domain of the State Legislature. You have been a leader in studying the problems of offshore drilling and I know your statement will be most meaningful to our committee. STATEMENT OF KENNETH CORY, CHAIRMAN, JOINT COMMITTEE ON PUBLIC DOMAIN, CALIFORNIA STATE LEGISLATURE Mr. CORY. Thank you, Senator. It is a pleasure to be here. I would like to give some indication of the context from which the comments come. I share the knowledge of the environmental concerns 46-037-75—3 that have been expressed by others, although I do not classify myself as a person that believes offshore drilling should never take place. I come to this conclusion having been involved in the State of California leasing activities in the last 7 years. I am very pleased to be here and I think the existence of this committee marks a Federal legislative concern in matters too long left to and abused by the executive branch. The fact the committee sits today in California signals important recognition that California offshore problems are unique. We have been made acutely aware that the Federal Government intends to lease the shelf lands quickly and on its customary terms under the cover of meeting an energy emergency program. The tenor of Project Independence and of the recent environmental impact hearings in this area have made it all perfectly clear. The question is not whether the shelf oil resources would be leased or on what term, but only how soon. Until the testimony prior to this statement, I was totally convinced that was the only question before us and I see some small glimmer of light. The thing that disturbs me about the statement is it is from a man who has no ultimate authority, and our term in Sacramento is "Leave room from the double cross." In the tradition of Judge Roy Bean, the Law West of the Pecos, they have already reached their verdict but will give us a fair trial before the hanging. This approach is nothing new in national energy policy. As it was described by Secretary Morton to the oil industry leaders just over a year ago; "Our mission is to serve you, not regulate you." And the hasty leasing of the OCS lands, before we have a chance to balance the real State and national interests, will indeed serve those companies well. We can no longer afford to set national energy policy to meet the wishes of that small group of large private companies who already control our energy supplies. We do have an energy inflation that is a real emergency. Yet the specter of that emergency is being used to stampede us into continuing policies which created it-disposing of the vast energy resources of our Continental Shelf on the ill-considered terms which will leave future supplies in the hands of the same self-interested and highly cooperative group of major oil companies; which will permit environmental degradation that is wholly unnecessary and that we can no longer afford, and which will mean an almost complete abandonment of free enterprise competition in energy. Let me emphasize that last point because I think there are others in a better position to deal with the environmental question. I deeply believe that the principle of free enterprise competition is most important, that the best economic system is one in which anyone with the courage and know how can go into a business and make a fair profit by providing society with the goods it needs under the conditions it demands. Yet now, as over the past, the current Federal big bonus leasing. policies effectively eliminate any possibility that any small company or group of comp es can compete. The Government policy, in effect, does for the major companies, what they dare not do openly for themselves. And unless there is an effective and immediate congressional intervention in the leasing process, to give full scope to all of the factors 1 |