Rohrabacher Seeks to Give Cities a Cut of Offshore Oil Fees

A South Bay congressman thinks he has a way to interest coastal communities in offshore oil extraction: guarantee them a cut of the royalties.

U.S. Rep. Dana Rohrabacher (R-Lomita) is drafting a bill that would require the federal government to share its royalties from new offshore oil and gas production with coastal cities affected by the drilling.

Such a plan, he argues, is the only way Washington can interest local communities in aggressive oil and gas exploration in the federal waters off Northern and Southern California and off Florida--a priority project of the Reagan Administration now being reviewed by President Bush.

“If the federal government is going to have any chance, it is going to have to enlist the support of local communities,” Rohrabacher said last week. “. . . We cannot steamroll local people. We have to provide incentives for them.”

Rohrabacher’s staff cautions that the congressman plans to get reaction to his bill before deciding whether to file it. Interviews with congressmen and local officials indicate the proposal could face rough sledding.

Rohrabacher’s House colleagues expressed skepticism last week that Congress would relinquish future oil and gas royalties in a time of gaping federal budget deficits. And a bipartisan majority of California’s congressional delegation urged President Bush on Thursday to extend the permanent ban on oil drilling into federal waters along the state’s coastline, a step that would effectively end new drilling in the Pacific Ocean off California.

Leaders of several coastal cities said in interviews that they doubt oil and gas money would soften them to offshore oil drilling, with its air and water pollution, and the potential for large oil spills.

After two members of the Palos Verdes Estates City Council heard Rohrabacher pitch his proposal at an appearance in Long Beach Jan. 9, Mayor Ruth Gralow wrote him that the council opposes offshore oil development “under any circumstances.”

Redondo Beach Mayor Brad Parton said on Friday, “I think Dana Rohrabacher is a good man, and I probably support him on 90% of the things he does, but I totally oppose offshore oil drilling.”

Said Chuck Sheldon, mayor pro-tem of Hermosa Beach: “It wouldn’t be worth it, at least for Hermosa Beach residents. . . . There is substantial danger in platform drilling, and oil rigs are terribly unsightly.”

Rohrabacher argues that such views might change if voters learn that in return for tolerating “a blip on their view” from offshore oil platforms, their cities could get more money for police, schools and other services.

“Citizens may see it differently,” he said.

Currently, the federal government receives nearly all royalties from oil and gas production in its waters, which in California begin three miles offshore. In California, those royalties totaled $68.8 million in 1988, according to Robert Walker of the U.S. Department of the Interior.

Washington does give states a 27% share of royalties from federal oil and gas leasing areas that abut state waters, Walker said. In 1988, such lease holdings accounted for $8.3 million of the federal royalties from production off California, and $2.2 million of it went to the state, he said.

Rohrabacher’s proposal would apply to royalties from new oil and gas production from all of the federal government’s offshore leasing areas, members of his staff said. It would also apply to income from the sale of federal offshore lease holdings, a potentially huge source of income.

The royalties would be divided in thirds among the federal government, the states where the drilling takes place and the coastal communities opposite the platforms.

These proportions and other details of the proposal would likely change if the bill goes through the legislative process, Rohrabacher’s staff said.

Whether Congress would agree to share any more oil and gas royalty money at all, however, is an open question.

“I doubt that any kind of program that smacks of revenue sharing is going to have much chance,” said U.S. Rep. Leon E. Panetta (D-Monterey) chairman of the House Budget Committee. “. . . We’re struggling for resources.”

An official with the Department of the Interior said it is likely that Bush Administration budget officials would have similar concerns. His agency has not taken a position on the proposal, the official said.

Rohrabacher would also have to contend with opposition from anti-offshore oil drilling lawmakers from coastal states who regard his proposal as a threat.

“It sounds to me suspiciously like a bribe,” said U.S. Rep. Barbara Boxer, (D-Greenbrae) who has filed a bill that would permanently ban oil drilling in a coastal band around the United States ranging from 50 miles to 175 miles wide. “I just think it sounds like he’s trying to throw a monkey wrench into our efforts.”

Said Rohrabacher, “I’m just trying to be the stimulus for new ideas here.”