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Old Tactic Revived in Bid to Block Oil Drilling

Politics: California's congressional delegation hopes to follow the lead of other states and deny federal funding, forcing the buyback of leases.


California's congressional delegation hopes this week to choke off federal money needed to permit new oil drilling off Southern California's coast, adopting a ploy used by their colleagues from other states to force the buyback of offshore oil leases.

"It worked for other states," Rep. Lois Capps (D-Santa Barbara) said Saturday as she unveiled the strategy. "We don't want these leases to continue in California. We want to encourage the Bush administration to sit down with oil companies and negotiate a settlement."

The delegation's effort was born of frustration with Bush officials, who have agreed to buy back offshore leases off Florida, but declined to do the same off California.

On Tuesday, Capps and other Democrats on the House floor will try to amend the spending bill for the Interior Department, cutting off any funding to approve drilling on 36 offshore oil tracts off the coast of Ventura and Santa Barbara counties.

Without federal permits in hand, oil companies cannot sink exploratory wells or begin pumping crude.

If successful, the ban on spending would act as an "insurance policy" against new drilling, Capps said, should California lose its ongoing court battle with the Bush administration over the state's rights to review drilling plans in federal waters.

A federal judge sided with California last year, suspending all activity on these 36 tracts. The case is now on appeal to the U.S. 9th Circuit Court of Appeals.

It isn't new for Congress to dictate policy by clamping down on dollars. Congress has used such a chokehold on the Interior Department's annual budget for 21 years to safeguard the rest of the West Coast, and most of the East Coast, from leasing new undersea areas to oil companies.

But this annual moratorium has not covered offshore leases already in the hands of oil companies--with a couple of exceptions.

In the mid-1980s, Congress extended the moratorium to areas already leased to oil firms in the salmon-rich waters of Bristol Bay, and in the early 1990s it did the same for leases off North Carolina's Outer Banks.

In both cases, the de facto ban on drilling helped nudge the Interior Department to reimburse oil companies for leases they were not allowed to develop.

Last year, the Florida congressional delegation used a similar ploy to eclipse Interior Secretary Gale A. Norton's proposal for more leasing off the Florida panhandle.

Capps and others draw a connection between this congressional action and the Bush administration's decision in May to spent $115 million to retire leases off the Florida coast. Other Democrats have interpreted the Florida deal as a political gift designed to help the president's brother, Republican Florida Gov. Jeb Bush, win reelection in November.

In a briefing paper circulating on Capitol Hill, Capps, Rep. George Miller (D-Martinez) and Nick J. Rahall II of West Virginia, the highest-ranking Democrat on the House Resources Committee, point to last year's Florida action as an example of a similar vote that won bipartisan support.

The Florida vote passed 247 to 184, with 70 Republicans joining Democrats to instruct the Interior Department on offshore oil matters. Backers of the same idea for California hope to gather bipartisan support Tuesday.

But Florida's delegation is dominated by Republicans. It's unclear if California's largely Democratic delegation can win the same kind of support in the Republican-controlled House of Representatives.

Rep. Nancy Pelosi of San Francisco, who as the Democratic whip lines up votes, through a spokesman called Tuesday's amendment a "high priority for California Democrats and environmental groups."

If successful, Capps' measure "would force the hand of the White House to get something cooked up for California in the way it has to protect the coast Florida," said Richard Charter, a longtime oil-drilling opponent with Environmental Defense.

Nuevo Energy Co. of Houston, which owns an interest in most of the 36 tracts, has sought a buyout. It wants to recoup the dollars tied up in California leases and reinvest them in more promising offshore areas such as the Gulf of Mexico.

Nuevo and other energy firms earlier this year filed a breach-of-contract suit against the federal government, complaining of delays and ever-changing rules that have thwarted their ability to produce oil from the 36 tracts.

Capps' proposal to cut off funding targets only those sites, which were leased to oil companies between 1968 and 1984 but have never gone into production.

It would have no effect on the other 43 leases in federal waters which are pumping oil and gas, or those active wells in state waters within three miles of shore. These active tracts can be spotted by the oil platforms that dot the coast off Huntington Beach, Long Beach, and Ventura and Santa Barbara counties.

Norton last month rejected Gov. Gray Davis' request that her department buy back offshore drilling rights on the 36 tracts as it did in Florida. In her letter, she cited California's history of offshore oil production to conclude, "Florida opposes coastal drilling and California does not."

About 10 days later, on June 19, she wrote to Davis' gubernatorial opponent, Republican Bill Simon, and sounded interested in negotiations.

"We continue to extend our hand to join the state of California and all other leaseholders and stakeholders in crafting a solution that will protect your truly magnificent coastal areas," she wrote.

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