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Feinstein Urges Exploration Shutdown Offshore

Feinstein Urges Exploration Shutdown Offshore

In a letter to U.S. Interior Secretary Bruce Babbitt this week Sen. Dianne Feinstein (D-CA) urged Interior's Minerals Management Service to shutdown exploration on 40 offshore California leases, for which producers paid $1.25 billion initially.

The MMS will decide by June 30 whether to extend a suspension on the leases, which are held by Aera Energy, a partnership of Mobil and Shell; Conoco Inc.; Nuevo Energy and Noble Affiliates subsidiary Samedan Oil Corp. The leases are located mainly off the coast of Santa Barbara and hold estimated probable reserves of 1 billion bbl of oil and 500 Bcf of gas. They currently are under a suspension while the state conducts a study that will determine the impact of continued oil and gas development offshore.

"No matter the size, shape, or number of offshore oil platforms, Californians strongly oppose oil drilling off our coast," Feinstein told Babbitt. She estimated that "ocean-dependent industry" contributes $17 billion/year to the state's economy and 70% of Californians participate in beach activities each year. "One oil spill could dramatically endanger this national treasure," she said, noting that one almost did just that in 1969, when a 200,000 bbl crude oil spill spread from the Channel Islands near Santa Barbara south to the Mexican border.

President Clinton extended a moratorium on additional offshore California leases last year. Currently California has 43 producing leases, which have produced 900 million bbl of oil since the late 1960s. Only five new offshore platforms have been built in the 1990s. If the suspension on the 40 leases in question is extended, the companies could proceed with exploration wells later this year and begin development in the next few years. The moratorium on additional leasing will last until 2012.

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