THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Wednesday, November 30, 1994 TAG: 9411300439
SECTION: LOCAL PAGE: B01 EDITION: NORTH CAROLINA
SOURCE: BY PAUL SOUTH, STAFF WRITER
LENGTH: Long : 115 lines
A federal agency has ``restarted the clock'' on some 21 oil and gas leases off the North Carolina coast.
The change means that most of the leases will expire in two years unless Mobil Oil files revised permit applications.
The clock was stopped two years ago. The suspension was to remain in effect until the Commerce Department ruled on whether Mobil's proposed exploration plan and water-quality permit complied with the federal Coastal Zone Management Act.
Mobil's environmental studies, required under the Outer Banks Protection Act, were ruled unacceptable by the Interior Department's Mineral Management Service.
However, Mobil's revised studies have been accepted by the MMS, which restarted the clock on the leases earlier this month.
Nineteen of the 21 leases have two years remaining, while two others will expire in about three years.
MMS officials say the action will have no immediate effect on offshore drilling, which is still prohibited under a September ruling by the Commerce Department.
However, some environmentalists say that while exploration is prohibited under the current plan, the MMS ruling does not prohibit Mobil from submitting a revised drilling plan which could be approved.
In September, the Commerce Department sided with the State of North Carolina, saying that Mobil's proposed exploration plan and its proposed water-quality permit were not consistent with the federal Coastal Zone Management Act.
As a result, the MMS and the Environmental Protection Agency are prohibited from issuing permits for drilling on the 21 oil and gas leases.
Under the CZMA, coastal states have the authority to veto any permit applications found not to be in compliance with state regulations. North Carolina's veto was upheld in the Commerce Department ruling.
The 10-year leases were issued between 1981 and 1983.
In the late 1980s, Mobil sought to drill an exploratory well on one of the leased areas in the so called ``Manteo'' Unit. However, congressional action and appeals before the Commerce Department prohibited exploration.
Edmund Welch, administrative assistant to U.S. Rep. Martin Lancaster, said the MMS action should have little impact on the current state of offshore activity.
``The likeliest possibility is that it will have no impact or have any real change,'' said Welch.
``These leases last for 10 years. The oil companies are supposed to take action within that period. If they don't, the leases expire.''
Welch said it is possible that Mobil could make a new application before its leases expire to explore the 21 tracts.
``You can't rule that out,'' he said from Lancaster's Washington office.
``But a lot of people are feeling that Mobil won't submit a new application, which would be good news for people opposed to offshore activity.''
Welch said the MMS is in the early stages of developing its new 5-year plan of offshore lease sales.
``It's my strong suspicion that the MMS will not push for offshore sales of the coast of North Carolina,'' he said. ``There's not going to be much interest if Mobil doesn't see much return on its investment.''
In the wake of the MMS decision, Mobil officials would say little.
``We are reviewing our options,'' spokesperson Susie McMichael said from the company's Dallas headquarters. ``We are working with our attorneys to determine what our next step will be.''
McMichael said no timetable has been set for Mobil's next action. Mobil, along with other oil firms, is in litigation in U.S. Claims Court, seeking the return of more than $300 million they paid for offshore leases off the coasts of North Carolina, Florida and Alaska.
Michael McOwen of Manteo, vice president of LegaSea, a coastal grassroots organization aimed at stopping offshore drilling, is unsure of the impact of the MMS decision.
``It could be good, it could be bad,'' he said. ``It all depends on how things work out. It's not as if anything has changed. It could work out well if Mobil fails to make a strong, good faith effort toward submitting a plan.
``If they fail to take action before the permits expire, we would do everything we could legally to stop any kind of extension on the length of the leases.''
Brant Wise, a member of the board of directors of the National Surfrider Foundation, said that while his organization and the MMS have a ``good working relationship,'' Surfrider is not in favor of ``restarting the clock'' on the 21 leases.
``MMS did what it felt it had to do,'' he said. ``But we do not feel the goals of the Outer Banks Protection Act have been met.
``As a result of MMS action, Mobil is again able to pursue the necessary permits to drill off the coast.''
Wise said that recent environmental study revealed a wide diversity of undersea life not found in other ocean areas.
``In Mobil's original data, they said that the area was `a lifeless moonscape,' '' he said. ``Now they've found that the area is a mecca for ocean life. Hopefully, Mobil will have to take that into consideration before they decide to drill.''
He added, ``The thing that's important to remember is that this is not a dead issue. We're going to have to pull together to see that offshore drilling does not take place off the coast of North Carolina.''
McOwen said the next step in the fight against offshore drilling will be at the state level.
``We're working hard to develop a strong, cohesive message from state government that it opposes offshore drilling, as well as the inclusion of North Carolina in the future five-year exploration plans.''
The MMS is seeking public comment on its five-year Outer Continental Shelf leasing program for 1997-2002.
The shakeup on Capitol Hill as a result of the November election is also a concern.
``We're all worried that the moratorium on offshore drilling will be lost in the next Congress,'' said McOwen.
``Hopefully, the oil industry will see that it's not a good plan. The coastal environment is fragile. We hope that the oil companies and the Congress will consider economic feasibility and environmental safety.'' by CNB