US Sec. of the Interior Bruce Babbitt has ordered that 36 leases off California continue under suspension.
The move came just 3 days before a Nov. 15 deadline on the future of the leases and in deference to requests by California Gov. Gray Davis and the California Coastal Commission (CCC).
But the action fell short of what the state wanted, and it promptly filed suit on Nov. 16 on grounds that Interior did not allow the state to review lease renewals and "suspensions" (extensions). "We believe the federal government violated federal laws when they did not allow the states to participate," said California Attorney General Bill Lockyer, who filed the suit in US District Court in Oakland.
"The state will have a chance to review this process and will have a veto," said Tim Ahern of Babbitt's office.
But that's not good enough for California, Davis said in a press release: "California is entitled to be the engine, not the caboose, on this train."
A similar suit is playing out in Florida over a Chevron Corp. offshore lease.
In issuing the suspension, Babbitt ordered an environmental analysis of the impact of drilling off the central California coast and said that the leases will continue to be suspended until that review is finished and that California state agencies can file comments on it with the Department of the Interior. Babbitt, who announced the action in a letter to CCC Chairperson Sara J. Wan, said lease suspensions will be for at least 18 months to allow time for the actions.
On Aug. 13, Babbitt granted a 90-day extension of the suspensions on the 36 leases to allow leaseholders to give the US Minerals Management Service data on the environmental impact of proposed activities. His latest action was short of a definitive answer on developing those leases, awaited by both the industry and environmentalists (OGJ, Nov. 1, 1999, p. 36).
The new delay puts the onus of a decision on the next presidential administration. Vice-Pres. Al Gore has already announced intentions to ban any new drilling in the leases off California and Florida, should he be elected president (OGJ, Nov. 1, 1999, p. 37).
The California leaseholders have sought to proceed with delineation wells and plans to develop the offshore reserves by drilling extended-reach wells from existing platforms, while environmentalists pressed for a total ban on developing any of the leases.
Environmental analysis
Babbitt wrote Wan, "Because the lessees indicate that they will submit new or revised exploration or development and production plans for review, no drilling activity requested in such plans can be undertaken on the remaining leases" pending three steps.
He said an environmental analysis must study the potential effects associated with the proposed activity, including a cumulative analysis that takes into account changes that have occurred since the original plan was approved.
The lessees must also disclose detailed plans regarding additional exploration and development activities they hope to pursue. And the proposed actions must be reviewed under all applicable laws and regulations, including by the CCC, to determine whether they are consistent with state requirements under the Coastal Zone Management Act.
The undeveloped leases-estimated by MMS to hold 1 billion bbl of oil and 500 bcf of gas-have so far escaped expanding moratoriums and marine sanctuaries. The 40 tracts were leased during 1968-84, and CCC has insisted that new analyses be conducted to take into account "changed circumstances."
In response to the Nov. 15 deadline, companies holding some of the remaining 36 leases asked for permission to relocate the target sites for planned delineation wells. Two others asked to prepare new plans allowing them to explore or develop reserves in the Cavern Point and Rocky Point Units from two existing offshore platforms.