    [From the U.S. Government Printing Office, www.gpo.gov]

    Coastal Zone   M
    Information
     Center

                                       COASTAL ZONE
                                    INFORMATION CENTER
                Seaward

                 Development

                 CASE STUDIES
                 OF CITIZEN
                 PARTICI PATION

       * 1020   ofi
         .N28
         1980

                 Property of CmC Librazy

                    Seaward

                    Development

                    CASE STUDIES
                    OF CITIZEN
                    PARTICIPATION

                    National Academy of Sciences
                    Academy Forum

                 U. S -DEPARTMENT OF COMMERCE NOAA
                 COASTAL SERVICES CENTER
                 2234 SOUTH HOBSON AVENUE
                 CHARLESTON, SC 29405-2413

                    Washington, D.C.  1980
     'N
    CD

    Available from:

    The Academy Forum
    National Academy of Sciences
    2101 Constitution Avenue, N.W.
    Washington, D.C. 20418

    Printed in the United States of America

                                       FOREWORD

                                       Robert R. White
                                       Director, Academy Forum

    Nowhere in the range of topics undertaken by the Academy Forum over the
    past eight years do the stresses and intricacies of national needs ver-
    sus regional interests stand out so clearly as in "Seaward Development:
    Case Studies of Citizen Participation." Meeting over a period of two
    and a half days in January 1979, the discussions reported here and re-
    corded from workshops and plenary sessions cover a wide array of fact
    and opinion.
         The four actual cases analyzed in the Forum are the basis on which
    its theories rest and from which its conclusions are taken. They were
    chosen to illustrate the complexity of issues related to seaward devel-
    opment, with particular emphasis in each given to the role of citizen
    participation.
         To further explore and understand some of the regional interests and
    differences that appeared during the Forum, conferences were held in the
    summer and autumn of 1979 at the following locations: University of
    California, Los Angeles; the Center for Wetland Resources, Louisiana
    State University; and the Center for Ocean Management, University of
    Rhode Island. Summaries are available from the Forum office.
         Every effort is made toward seeking sources of funding for each
    Academy Forum that are as diversified as its participants, audience, and
    viewpoints. We wish to acknowledge the following support for the devel-
    opment and publication of the Academy Forum on seaward development as
    well as the regional conferences emanating from it:

    Ashland Oil Inc.
    Atlantic Richfield Company
    Chevron, U.S.A., Inc.
    Department of Commerce
    Department of the Interior: U.S. Geological Survey
    Department of Transportation: U.S. Coast Guard
    Environmental Protection Agency
    EXXON Corporation
    Global Marine, Inc.
    Shell Oil Company
    Sun Company, Inc.
    Union Oil Company of California
    Zapata Corporation

                                     CONTENTS

    PERSPECTIVES I

    WELCOME        Robert R. White                                          3
                  Director, Academy Forum

    INTRODUCTION   H. William Menard, Co-Chairman                           5
                  Director, U.S. Geological Survey

    NATIONAL NEEDS, OPPORTUNITIES, AND CONSTRAINTS                          6
                  John P. Craven
                  Dean of Marine Programs
                  University of Hawaii

    THE INDUSTRIAL ROLE                                                    16
                  Michael R. Naess
                  President
                  Westminster Ventures, Inc.

    PUBLIC INTEREST AND PARTICIPATION: THEORY AND PRACTICE                 28
                  Oliver Brooks
                  Consultant and Chairman of the
                  Maritime Transportation Research Board's
                  Ad Hoc Committee on the Impact of Maritime
                  Services on Local Populations

    PUBLIC PARTICIPATION AND THE COURTS                                    34
                  E. Edward Bruce
                  Attorney at Law
                  Covington & Burling

    GENERAL DISCUSSION                                                     39

                                     v

    THE CASES                                                              43

    INTRODUCTION   Alfred A. H. Keil, Co-Chairman                          45
                   Ford Professor of Engineering
                   Massachusetts Institute of Technology

    CASE I:        OIL AND GAS FROM GEORGES BANK                           49

    CASE II:       SOHIO AT LONG BEACH                                     83

    CASE III:      LOUISIANA OFFSHORE OIL PORT                            119

    CASE IV:       A MANGANESE NODULE PROCESSING PLANT                    157

    THE LESSONS OF THE CASES                                              193

    GENERAL DISCUSSION                                                    206

    POLICY ALTERNATIVES                                                   227

    INTRODUCTION   Alfred A. H. Keil                                      229

    E. C. Broun, Jr.                                                      231
    President
    Petroleum Services Group
    Dresser Industries, Inc.

    James W. Curlin                                                       234
    Deputy Assistant Secretary for Policy
    Office of Ocean, Resource and Scientific
    Policy Coordination
    Department of Commerce

    Leonard C. Meeker                                                     237
    Attorney at Law
    Center for Law and Social Policy

    Eric E. Van Loon                                                      240
    Assistant Secretary of Environmental Affairs
    Director of Coastal Zone Management Program
    Commonwealth of Massachusetts

    James P. Walsh                                                        243
    Deputy Administrator
    National oceanic and Atmospheric Administration

    GENERAL DISCUSSION                                                    247

    COMMENTARY     Alfred A. H. Keil                                      261

                                        vi

    I

    I

    !I                                 PERSPECTIVES

                             l                                   I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

                               l~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~'

                                      3

                                      WELCOME

                                      Robert R. White
                                      Director
                                      Academy Forum

    The Academy Forums seek to identify and to illuminate important national
    issues that involve science and technology. Our concept is to seek this
    illumination basically through dialogue between the audience and the
    experts we bring together as part of the resources of the Forum.
    Consistent with this spirit, the structure of the program seeks take-off
    points for discussion. It does not offer comprehensive lectures. We
    have even avoided asking our principals to prepare written material in
    advance, because we seek spontaneity.
       Finally, we have tried to bring together people currently involved in
    problems of the real world, rather than those who might summarize all
    this complicated field in terms of analyses ex post facto to events.
    Also, consistent with the nature of the Forum, we have had the help of
    many people over many months in developing this subject. From the
    various staffs of the working groups of the National Research Council, I
    mention particularly Mary Hope Katsouros of the Ocean Policy Committee,
    William Robertson of the Commission on Natural Resources, and Richard
    Vetter of the Ocean Sciences Board.
       I also would like to underline the large contribution we have had
    from Randolph King and Leonard Bassil of the Maritime Transportation
    Research Board. I might mention that a report of this group has just
    been published, Public Involvement in Maritime Facility Development.
    One of your speakers, Oliver Brooks, was the chairman of this effort.
    We were lucky enough to see the progressive drafts of this report as it
    was being developed, and it was a great help to us.
       Finally, I want to pay a maximum tribute to the Marine Board of the
    Assembly of Engineering. They suggested this Forum. The staff officer,
    Jack Boller, has spent innumerable hours with us. His ways are
    sometimes redoubtable, frequently inspiring, and always helpful. He has
    steered us through many shoals with an unfailing touch, and we are very
    grateful to him.

      One of the keys to a good Forum is to have imaginative, knowledgeable
    and sensible directors of traffic, and we have two of them. One of them
    is Alfred Keil, a staunch member of the National Academy of Engineering.
    The other is H. William Menard, who is a member of the National Academy
    of Sciences. So I can't resist saying that this good ship called an
    Academy Forum is just casting off the mooring lines of port. It is
    heading seaward on a collective voyage of what I hope will be
    development, and it is a great personal privilege for me to turn the
    helm over now to the first master of traffic, the steersman, Dr. H.
    William Menard.

                                      5

                                      INTRODUCT ION

                                      H. William Menard, Co-Chairman
                                      Director
                                      U. S. Geological Survey

    All that nautical talk takes me back to my days as an apprentice ensign,
    just getting my bachelor's degree, and going off in 1942 to Harvard for
    the Navy's indoctrination school. There we were taught that when
    heading out to sea, the main thing to remember is Red Right Returning.
    So I hope we will all get back safely from this meeting.
      My responsibilities are small. The first of these is to introduce
    myself. I am Bill Menard. I have been involved with matters of seaward
    development since about 1950. Before that I was involved with sea
    aggression.
      Dr. White referred to people who are addressing problems of the real
    world. I was with the Navy Electronics Laboratory in the early fifties,
    and all during the years I spent as a marine geologist at the Scripps
    Institution of Oceanography,. in the deep sea, the shallow sea, under the
    sea, on the sea, I think I can honestly say that I was involved with the
    problems of the teal world.
       In April of this last year I came to Washington and became Director
    of the Geological Survey, and I accept no responsibility for the real
    world after that.
       I have a few other responsibilities in this Forum. One is to say
    that I am charged with keeping us to a fairly rigid schedule.

                                      6

                                      NATIONAL NEEDS, OPPORTUNITIES,
                                      AND CONSTRAINTS

                                      John P. Graven
                                      Dean of Marine Programs
                                      University of Hawaii

    I would like to begin by asking you to imagine New York City in the
    nineteenth century. Here was a society that was truly maritime and
    truly oceanic. It existed at a time in which we had cities with large
    populations that lived in a fairly high-density situation, but they were
    cities that were low-energy cities. They achieved this desirable state
    of affairs primarily because they used the ocean and the ocean
    environment.
       Both mass transportation and the transportation of goods and services
    were by sea. Also, they were basically operated by solar energy,
    because the major transportation was with sail as the mode of power,
    which we all know is the future solar energy propulsion mechanism that
    we will be forced to go to at the time that our energy resources are
    gone. We should note also that the society utilized the water not only
    for mass transport of its people, but also for the disposal of its
    wastes.
       In those days the East River, far from being empty of traffic as it
    is today, was filled with traffic of all sorts: sailboards carrying
    commerce and trade; paddlewheel steamers carrying tourists to enjoy the
    scenery of the city; and ferryboats, the most effective mass transit
    system we have ever seen for carrying people from one place to the
    other. Moreover, the area of Brooklyn that became a slum was then a
    promenade in which the people of Brooklyn lived in a park-like
    environment close to the shore and enjoyed the ocean scenery. The
    Hudson River was not only an artery for commerce and trade for New York
    City, but it connected with the Erie Canal and all the way to the GreatI
    Lakes. Therefore, it provided commerce and trade to the very center of
    the nation and for the whole of the continent.
       If we examined the recreation of that period, we would discover that
    at that time Coney Island was an uncrowded, open, unpolluted beach where

                                       7

    many recreational activities took place; that Sheepshead Bay was an
    ideal spot to which people went to fish; and that basically the
    recreational activities of the people of New York City were either
    oceanic, riverine, or involved with Long Island Sound. All this allowed
    a society that was both low-energy-consuming and at the same time
    densely populated.
       Then came the turn of the century, the invention of the motor car and
    the motor vehicle. With it came the notion that energy was free and the
    development of oil and gasoline, which were viewed as so low cost as to
    be essentially trivial.
       So New York City, as well as the rest of our cities, moved into the
    automotive society. I refer to this locality because it is reminiscent
    of my own youth in Brooklyn and the problem that we had when the
    automobile came and displaced the street baseball game. No longer could
    one play on the streets of the city, because the new mode of
    transportation occupied every square foot of the city. The automobile
    that came in first as a freedom from logistics became a constraint on
    logistics. So today it is far more time-consuming to cross the East
    River or the Hudson River than it was in the nineteenth century. The
    volume of goods that could be moved across these areas is less now than
    it was then because of the impaction of the automotive vehicle with the
    bridge.
       We have come to a time when the energy dollar is no longer free;
    indeed, the cost of energy is now becoming a substantial, if not the
    major, element in our economy. So we look to the future when we must
    return to low-energy societies if we are to be successful in solving our
    economic as well as our environmental problems. Can we replicate the
    good aspects of the past century in a modern, low-energy society with
    the help of modern technology and the utilization of the ocean
    community? Can we as a nation turn to the ocean and to the rivers again
    as a solution for our major economic and environmental problems?
       We at the University of Hawaii, where life is still oceanic and still
    uncluttered, examined this question by looking at New York City, where
    life is, we feel, most impacted and most cluttered, and the first
    question we asked ourselves was: Is it possible for the marine
    environment to provide a conduit for mass transportation that will move
    the people in volume and numbers -- and yet move them without impacting
    the society -- at low cost and in the environment? Figure I will show
    how we plotted quarter-mile and half-mile walking distances to the water
    environment which can be used for mass transit systems. We discovered
    that a large part of the city of New York can be covered by these kinds
    of transportation systems.
       Indeed, we looked at many cities. In addition to New York, we
    considered Seattle, Honolulu, Boston, Philadelphia, Chicago, San
    Fancisco, Cleveland, and Washington. We found that in all these cities
    a very substantial portion of the population lives within one-half-mile
    ,walking distance of a marine conduit which could be used for mass
    transportation systems. As Figure 2 shows, in the case of New Orleans,
    this is almost 50 percent of the population; almost 40 percent of the

                                      8

    FIGURE 1. Accessibility of New York to waterways useable for marine
    mass transit (1/4 and 1/2-mile swaths).

    population of New York; almost 35 percent of the population of Boston,
    and so on. Even in Washington, D. C., which we do not regard as a
    maritime society, more than 10 percent of the population lives within a
    half-mile of a conduit that could be used for marine mass
    transportation. And if you look at the fixed guideway population
    densities, you will discover that only New York City has a population
    density which is great enough so that the fixed guideways, the subway
    systems, have a higher accessibility in terms of people than do the
    water courses that naturally exist.

                                          9

    THCP                                P    A       S      BY
    0I0URE 2 Comparaive p uion s b y m a rin m s ta s oaion

                  to   this   question  again  is in the affirmative. The most exciting new~~~~~~i~     ~  i~

    FIGUR is Cmaratvehil populatialconsistervedtosbymarine hulls transowtto
    tesuraeoyh aetikstrcues (t/4and p/-iere thewaters).

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                                                    FIGURE 3.  Semisubmers-
                                                    ible passenger ferry,
                                                    Mitsui Engineering &
                                                    Shipbuilding Co., Ltd.

       Another craft, the Boeing hydrofoil, has been developed here in the
    United States. Paradoxically, it has been an economic failure here even
    though it has been a financial bonanza overseas.  It is a highly
    stable craft that can operate in very heavy seas. It is a so-called
    incidence-controlled hydrofoil, meaning that it compensates for the
    waves as they come ahead. The Soviet Union has a hydrofoil called the
    Raketa (Rocket); more than 700 such hydrofoils operate in marine mass
    transit on Russian rivers and waterways, as contrasted to the zero
    hydrofoil craft that operate here in the United States.
       If we go to marine mass transit systems in the society, will they
    travel only in the areas of cities or will they find new places and new
    uses? Overseas we discover they will find new ways to go. The first of
    these are the artificial peninsulas that are being created. One is the
    Kuree Seaberth in Japan; there are other Japanese seaberths in which
    artificial peninsulas have been built in the bays and harbors to service
    the sea-based society.
       Beyond that is the artificial island. A major artificial island will
    soon be built off the coast of Rotterdam. It will serve the European
    community as an extension of that developing maritime society.
       In addition to artificial islands and peninsulas, these crafts will
    service floating platforms. One such structure is the semisubmersible
    platform.  Although it has been developed by and primarily used in the
    oil industry, its stability and cost would enable many of the functions
    of society to be located on it in a convenient way, and it can be
    serviced by these marine transportation systems.
       Indeed, this semisubmersible concept has been carried beyond steel
    structures into the prestress reinforced structures that are being used
    in the North Sea, the so-called Condeep structures, which consist
    basically of structures well below the surface of the water, with thin
    columns going through the water and platforms on the top.  Figure 4

    FIGURE 4. Condeep, prestressed concrete floating structure being
    towed to sea.

    shows one of these structures being towed out in the North Sea. This
    demonstrates the technological capability of large-volume structures
    built at low cost being located in the ocean environment. The
    significance of this picture is that the major part of this structure
    is below the water. It is aestheticily beautiful because you cannot see
    it. The minor part of the structure is the columns that pierce the
    ocean surface. The rather unattractive platform that exists on top can
    in the future be replaced by architecturally aesthetic platforms on the
    free surface which house many of the functions of a modern society.
       Given the existence of low-cost platforms that are so stable that
    nobody gets seasick and that things aren't expensive to put aboard, what
    kinds of functions can we place at sea in our modern oceanic society?
    The first thing that we think about is industrial plants and processing
    plants. A barge has been built in Japan that contains a paper mill,
    shown in Figure 5. It was constructed in a Japanese shipyard and towed
    all the way to the Amazon in Brazil. It even has its own power plant.
       The technological capability is now available for building industrial
    facilities -- power plants, paper mills, steel mills., and other things
     --in an oceanic configuration, so that they can be located at sea, in
    close proximity to the land society but far enough away so that they do

                                       12

    FIGURE 5. Floating paper mill, Mitsui Engineering & Shipbuilding Co.,
    Ltd.

    not pollute. People who live in the land society can go out and on a
    daily basis work in these factories and then return to the shoreline.
       We ask how far this concept can go. It is important to point out
    that all such United States programs are still only artists'
    conceptions. Figure 6 is a U. S. artist's conception of a floating coal
    power plant, an approach to the provision of power for the Eastern
    Seaboard and the Western Seaboard that will allow us to build new power
    plants without polluting the land environment.
       Unfortunately, we don't have the Westinghouse nuclear power plant as
    one of our examples. Westinghouse came up with the idea of placing
    nuclear power plants in a floating environment offshore and built a
    shipyard in Jacksonville to construct them, investing a large amount of
    money.  Because of regulatory and economic factors in the U. S., New
    Jersey Power and Light defaulted on its contract and the plant has not
    been built.
       There also is the possibility of ocean thermal energy plants,
    extracting energy from the oceans by utilizing the warm water of the
    surface and the cold water of the depths.
       If we can locate the industrial functions of society at sea, in close
    proximity to the land, can we not also locate the urban, commercial, and

                                       13

    living functions of society on land, close to the sea? The answer to
    that, of course, is we can. This was demonstrated in the Hawaii
    Floating City Project, in which we laid out both the structural and the
    sociological aspects of floating platforms that place the high density
    core of the city just offshore, connected to the shore by marine mass
    transit systems, so that the land can be reserved for environmental
    purposes and for low density functions of the society.
       This concept stirred a great deal of interest and amusement in the
    United States, and a great deal of interest and action in Japan. This
    action in Japan was represented at the Okinawa Fair by a platform called
    Aquapolis, or city of the sea. It was installed as a symbolic
    demonstration -- and symbolic only because they used an offshore oil
    platform instead of the appropriate design. The platform demonstrates
    how one would locate a high density core of a city in close proximity to
    the land, so that all of our highrises, instead of utilizing the land,
    could be located just offshore and out at sea, leaving the land reserved
    for museums and other public facilities.
       The concept is developing that we can rebuild our cities with a high
    density core located at sea. But we must remember that there is more to
    that than living on the ocean; there are also recreational aspects. The

                                                 TURBINE                12
                                    PRECIPITATOR -   391

                                   OCEAN SURFACE  COLUMN     40

                                   COAL   PLANT   CONTROL
                                   STORAGE                                1

                                   BALLAST
                                                 HORIZONTAL CONNECTOR
        ISOMETRIC  PERSPECTIVE                         3so.

                                    C> CROSS  SECTION

    FIGURE 6. Floating coal-fired power plant, University of Hawaii design.

                                       14

    Japanese also are moving ahead in this direction. They have created an
    artificial beach in Okinawa that is remarkable for several reasons.
    First, it is a beautiful, white-sand beach. Second, it is still there
    despite a number of hurricanes and typhoons. Third, the coral reef, a
    beautiful one, has been left undisturbed. It would be virtually
    impossible to build this beach in the United States at the present time
    because of the environmental permits that would be required and the fact
    that there is no way of demonstrating that the installation of such a
    beach would not destroy the coral reef. Although this is a
    demonstration that that would not happen, it cannot be reduced to paper
    and is therefore nonprovable.
       In addition, from the recreational standpoint, the Japanese have
    developed such structures as an underwater observatory so that the
    people of Japan may walk in safety and comfort down below and observe
    the reef and the fish life.
      Finally, the University of Hawaii study has come up with a full
    demonstration of the movement of the city to the sea concept in the
    architect's model seen in Figure 7. This is our floating city model in
    which we locate the basic high density functions of the city at sea in a
    structure which is floating and which rotates, so that the people who
    live there will sometimes see sunrise and sometimes sunset; will
    sometimes see the land and sometimes the sea.  And the people onshore at
    the same time will see a changing landscape.
       The ultimate of this particular concept was demonstrated in a
    student's study of the west coast of Japan in which the valley
    configuration in which most societies live is reserved for golf courses,

    FIGURE 7. Floating city model, University of Hawaii.

                                       1 5

    for urban housing, for farm and agricultural land, for civic centers,
    and for football stadiums and other low density functions. The rivers
    that traverse these valleys are utilized for a marine mass transit,
    which extends out past the local coastline area to floating city
    complexes and industrial complexes, separated in such a way that they
    are mutually supportive but not environmentally interfering. Airports
    are located on islands offshore, so that the noise pollution from the
    aircraft is dissipated and so that the extensive land use that the
    airplanes require takes place where land is relatively free and
    available.
      Why is it that we are neither prepared nor willing to restructure our
    coastal cities and coastal environment in terms of the ocean?
       There are basically two attitudes in our society about the ocean.
    One is that the ocean is an environment that is fragile and needs to be
    protected. That attitude presents itself in a large section of our
    community which is resistant to any utilization of the ocean for any
    purpose whatsoever.
      There is a second portion of our society that recognizes that the
    ocean is a place to be exploited, that it has mineral resources and
    industrial resources, and that it is a place in which the industrial
    processes of the society can take place at low cost with the economies
    of scale. That sector of our society is pushing very hard for ocean
    development.
      There has resulted a polarization, which will prevent the effective
    utilization of the ocean until a new development takes place in our
    society. That development will occur with the recognition that the
    ocean is not only a place just as the land is a place, but that it is
    easier for man to blend with the ocean than the land. We must begin to
    think about all of our activities as being oceanic.  We must thin  about
    oceanic poetry, we must think about oceanic art, we must think about
    oceanic music., we must think about oceanic law, we must think about
    oceanic architecture, we must think about all of the functions of
    society in an oceanic context as we thought about them in oceanic
    contexts in the nineteenth century. We must start to learn to live with
    the sea again. Very few of our people know what it means to live with,
    to live on, and to live around the ocean. It seems to me that we as a
    society are going to go down the primrose path of high-energy use until
    we can no longer afford it. At that point we are going to have to turn
    to low-energy solutions, such as living in harmony with the sea.

                                      1 6

                                      THE INDUSTRIAL ROLE

                                      Michael R. Naess
                                      President
                                      Westminister Ventures, Inc.

    I think it might be interesting for you to hear about two encounters I
    had on New Year's Eve at a private party in Munich, West Germany. Both
    of these stories, I believe, have a bearing on the business of this
    Forum.
       First, there was the Bavarian chemist who had recently returned from
    his first long trip to the United States. He told me about how, on his
    first evening in the U.S., in his hotel room in New York, he was
    watching T.V. and happened to witness a beer commercial. This prompted
    him to try it out, and he called room service and ordered a bottle of
    American beer. Being a good Bavarian, he was, of course, somewhat
    surprised by the taste and consistency of this beer, and being a
    chemist, he was extremely curious, so he took a sample. He sent the
    sample back to his favorite testing laboratory in Germany. A few weeks
    later he had the result. The report read: "Dear Sir: We regret to
    ad vise you that your horse has diabetes."
       The second encounter, somewhat later in the evening, occurred when I
    made the mistake of lamenting that in just one short week in Germany my
    living expense budget had virtually evaporated as a result of the
    continuing erosion of the dollar against the deutschmark. At this point
    a German of considerable arrogance -- mind you, that is not an
    anti-German comment, as my wife is German -- volunteered to tell me
    exactly what the problem was. By his unsolicited definition, the real
    reason for the strength of the mark against the dollar is that the West
    Germans have no redundant natural resources to speak of, a-ad are
    therefore not conservationi-oriented. "What little we have," he said,
    11we put to work as quickly as possible and get the most out of it. You
    Americans," he went on, and this is where he really got offensive,
     ~think you have so much that you can afford to let your resources lie
    fallow while you engage in endless debate. Your -mistake is that you

                                       1 7

    expect the international community to give you credit for your
    unrealized potential, whereas, in fact," he said, "what we pay for is
    current performance. Your only fully utilized resource is the capacity
    of your law schools, and we in Germany don't think that is worth very
    much."
       What almost ruined my New Year's Eve was not the man's outrageous
    arrogance so much as the fact that he was at least partially right. In
    terms of the development of our ocean resources, we Americans seem
    somehow to be debating more than we are performing. If we could carve
    out a representative core sample of our total ocean effort and send it
    to a lab, we might in fact receive back a report something to the effect
    that the Ladies' Garden Club needs a change of venue.
       Now, why am I selected to deal with the industrial role in seaward
    development? I must confess, I am not sure. Since September first I
    have been engaged primarily as a consultant to numerous energy-oriented
    and marine-oriented businesses. Prior to that time I spent the majority
    of my working career in various capacities with Zapata Corporation. My
    most recent function with Zapata was as Senior Executive Vice President
    and a member of the board of directors. As chief operating officer of
    its service group of companies, I oversaw a fleet of offshore drilling
    rigs, supply vessels, petroleum products tankers, dredges, and various
    units engaged in offshore construction. In addition, since 1977 I have
    had the honor of being a member of NACOA.
       The complexity of this topic of mine depends on how I pronounce it.
    The industrial role, or the industrial role. Clearly, there is no one
    definitive role for industry in the oceans area. Equally clearly, there
    is no majority view among people in industry as to what the role or
    those roles should be. Like all the other participants in the oceans
    area, industry has a number of different roles it could and should play,
    so my approach to the problem is to discuss the industrial role in
    contrast to the roles of other elements.
       The role of industry in the ocean area is mainly carried out by large
    public companies, or by smaller service companies necessarily
    functioning under contract to the big ones because of the amount of
    capital involved. This is, of course, not strictly true in certain
    segments of ocean activity such as the fishing business, which
    encompasses numerous privately owned small companies and partnerships.
    But with this exception and a few others, the business of ocean use can
    largely be characterized as one requiring unusually large chunks of
    capital and complex technology, with long lead times. For these
    reasons, it is the -playground, if you will, of large companies.
       An idealized view of what industry ought to be doing offshore, and I
    stress "idealized," is simply this: We should be free to go after the
    resources, we should be allowed to develop and market them at our pace
    and in our way, thus simultaneously providing a fair return to our
    shareholders and achieving a very necessary national objective. With
    that said, now to the real world.
       As you all know, about ten years ago the conflict generally in
    resource development changed from being a relatively simple

    industry-versus-government proceeding and turned, instead, into a sort
    of three-cornered battle. An oversimplified sketch of the situation
    today is a triangle, where industry is the protagonist; the public,
    whatever that means, is the antagonist; and the government sits
    somewhere in between. The function of the industry is to get the job
    done. The objective of the public is to block it in some cases, but
    more often to modify it in accordance with some sociAl goals; and the
    function of government is to achieve compromise, presumably in the
    national interest.
       The problem with this model, obviously, is that it seldom works that
    way. Government doesn't always demonstrate complete confidence in
    industry's ability to get the job done, and neither the public nor
    industry appear always to trust government's ability to act effectively
    as the architect and negotiator of compromise. The result is that there
    is a constant switching and commingling of roles. The triangle, if you
    will, constantly reorients itself. Government and industry insist on
    trying to do each other's jobs, which of course is what each of them is
    least equipped to do, or at least to do well. Industry fumbles around
    trying to act political, and -- just as bad -- government finds itself
    *taking on technical, and even worse, commercial feasibility decisions.
       But whoever happens to be the protagonist at any particular point in
    the proceedings is by definition the bad guy, since to have a
    developmental bias today, whether you are industry or government, is to
    be tainted and vulnerable. Increasingly, the burden of proof is more on
    the doer to show why than on the non-doer to show why not.
       Now, what is wrong with that? Let me drop back to some fundamentals.
    As I understand it, the theory behind public participation is that the
    creation of the third 'element in the triangle improves, vastly, the
    probability of a balanced, fair result. This is simple bargaining
    theory, which holds that the best possible deal for everyone concerned,
    and the one most likely to endure, is achieved as a result of arm's
    length negotiations between unrelated, independent parties, each of
    which speaks with one voice and is of roughly equal strength.
       The problem is that the entities in the seaward development process
    are, first, not unrelated to each other; second, not unified within and
    of themselves; and third, not of equal strength. The public elects most
    of the government and owns most of the industry. Government regulates
    industry in a myriad of different direct and indirect ways. Industry
    employs a good proportion of the public. With all these mutual
    interdependencies, how can the bargaining process ever be arm's length?
       On the second point, only on rare occasions is any one of the three
    parties in a position to speak with a single, authoritative voice. Each
    accuses the other of creating delay and confusion through fragmentation
    and inconsistency of position, when in fact all three are highly
    fragmented.
       Both industry and the public constantly bemoan the problems created
    by overlapping laws and conflicting jurisdictions. Given the role of
    the doer, industry would appear most likely to benefit from any
    reorganization of the federal government designed to reduce the problem

                                       19

    of multi-stop permitting but, paradoxically, industry is not at all
    unanimous that centralization of licensing authority is necessarily a
    desirable reform.  With the power to say "yes" in one locus would come
    the power to say "no," perhaps with no right of appeal.
       The problem of fragmentation within industry itself is one that
    deserves special attention here. Contrary to what Senator Kennedy and
    the Justice Department would have you believe, there is competition
    between and among large American corporations, and there are certain
    industries, in particular the marine transportation industry, within
    which one of the many problems is the proliferation of conflicting trade
    associations.
       Finally -- as I believe the public so often fails to recognize --
    there is the fact that every major corporate decision usually represents
    a trade-off between competing and conflicting internal considerations.
    The popular myth is that large industrial entities are action-oriented
    to the exclusion of any attention whatsoever to process. Generally,
    this is not true.
       Let me list just a few of the internal conflicts that the process of
    corporate decision-making must attempt to accommodate. First, as I have
    already pointed out, investments offshore generally require large chunks
    of capital, and for most growth companies, capital is a scarce resource.
    Hence, each investment project must compete in terms of rate of return
    and strategic importance to the company with numerous other investment
    projects. The more unpredictable a given project's future may be, the
    higher the perceived risk, and therefore the higher must be the
    projected rate of return. The longer the lead time involved in a given
    project, the lower the present value of the income stream generated by
    that project at a constant discount factor. This does not mean that
    corporate management will necessarily confine its investments to short
    pay-out proposals, since profit maximization must be viewed as a
    long-term process. But it does mean that projects having long time
    horizons are subject to particularly careful scrutiny.
       Quite apart from the process of allocating capital within a given
    budget, the process of defining the total funds available for internal
    investment also involves a number of delicate trade-offs for management.
    Competing for those same funds are the shareholders, many of whom want
    higher dividends; the lenders, who want to minimize their risk;
    customers, who want expanded services; employees, who want both-growth
    and security; and vendors, who want payment in the shortest possible
    time. For most large corporations, furthermore, the shareholder group
    itself is far from homogeneous. There are the widows and orphans who
    want to maximize both the security of and the yield on their investment.
    There are the high bracket folks who want minimum yield and maximum
    capital appreciation. There may be political activists among the
    shareholder group who are less interested in the company's economic
    performance than they are in whether we are meeting certain social or
    political responsibilities. And although this is not often articulated,
    it is a fact that for any corporation an essential ingredient to
    long-run profit maximization is the perception by the public that its

                                       20

    behavior is socially responsible.
       Finally, there is the conflict between what may be in the best
    interests of today's shareholder versus what may benefit the shareholder
    of tomorrow. The man who bought the stock five years ago at half of
    todayTs price clearly has different desires and different interests than
    the man who is in there buying it right now.
      All of the above considerations have been part of the corporate
    decision-making process since long before the recent interest in public
    participation. Now, as you all well know, given recent initiatives from
    the SEC, all U.S. public companies today are under intense pressure to
    grant the public more participation in their internal affairs, all the
    way up to their respective board rooms. Audit committees composed of
    outside directors are now becoming as important as executive committees.
    The SEC has proposed new regulations that would require a majority of
    bona fide, outside directors on the full public company boards. The
    point is that for a long time, various segments of the public have
    already been participating in an important way in the corporate
    decision-making process.
       I think I have dealt adequately with fragmentation within both
    government and industry, and with the resulting internal checks and
    balances within each. It is probably self-evident that the public is
    also highly fragmented, so fragmented, in fact, as to defy anything but
    a very broad definition.
       Finally, in addition to being interrelated and fragmented, the
    parties to seaward development are clearly not of equal strength in what
    is essentially a political process. Industry is supposed to be the
    doer, but by nature and by law, industry enters the political process
    ill-equipped. Corporations are citizens but cannot vote and cannot make
    political contributions. They can make only limited use of their
    hire/fire and buy/sell power. They have the resources to finance PR
    programs designed to educate or persuade, but such expenditures may not
    be tax deductible. Their only weapons, in fact, are the personal
    financial resources of the officers and employees of the corporation,
    acting either directly or, more recently, through political action
    committees as well as the power of personal persuasion and reason.
      We in industry must become more skilled in the use of these few
    devices. Top management can no longer afford to be introverted. Active
    and personal participation by chief executive officers in external
    political affairs is becoming an increasingly important determinant of
    corporate success. But for now, it is very definitely an uphill fight,
    and one that is very frustrating.
       The single biggest problem is that for industry to comfortably commit
    massive amounts of capital, a key requirement is predictability. We
    must be able to plan with some reasonable degree of confidence. By
    definition, that which is primarily political is also largely
    unpredictable. For example, who would have predicted that by now, early
    in 1979, the total amount of money spent drilling for hydrocarbons in
    the Baltimore Canyon has yet to match even the interest cost to date on
    the signature bonuses paid at the original Lease Sale 40?

                                       21

       Every company in the ocean development industry has been burned,
    directly or indirectly, by the unpredictability of political conflict in
    the ocean program. At Zapata, unfortunately, we were no exception to
    this rule. For example, guided by the rhetoric of Project Independence
    and by the proposed leasing schedule which ensued therefrom, we
    committed $150 million to the construction of four new semisubmersible
    drilling rigs specifically designed for the East Coast. As it turned
    out, those rigs were delivered to us long before they could be utilized
    in the environment for which they were intended.
      Additionally, on the strength of the program mandated by Congress in
    the Merchant Marine Act of 1970 and with the promise of further
    legislative initiatives, we sold a fleet of foreign flat tankers and
    built a U.S. flag fleet. Cargo equity passed the Congress with wide
    margins in 1974, only to be vetoed by the Administration. Three years
    later it reemerged, this time supported by the Administration, but it
    was defeated in the House by a wide margin. At some point in the
    process of an escalating political controversy, industry tells itself
    there has got to be a better way to make a buck. The energy area is a
    case in point. The major oil companies 'have long been a significant
    presence in the coal industry. More recently, they have diversified
    into copper as well as other hard minerals and, in one case, all the way
    to general merchandising. Despite the hedging, all of them continue to
    budget significant amounts of capital to their traditional lines of
    business. But one wonders for how long.
       One major independent company, Ashland, recently announced its
    decision for strategic reasons to sell all of its production and
    exploration activities and to concentrate solely in the marketing and
    refining areas. Another much smaller independent testified in recent
    oversight hearings that offshore activity had become such a hassle that
    it was seriously considering getting out -- an ironic twist, given that
    the OCS Lands Act Amendment was intended in part to promote wider
    participation by smaller companies offshore.
       Given the proliferation of checks and balances already built into
    both its internal and its external life, industry necessarily questions
    the need for expanded public participation in resource management,
    whether onshore or offshore. But to be realistic, once the process has
    expanded, how do you cut it back?
     ewhat other alternatives may be available to us? We can of course
    live with what we have and lose ground internationally; but ultimately,
    to lose ground internationally is also to lose it domestically. If we
    must continue to operate within the triangle, it is obvious that new
    legislation or legislative amendments designed to make the rules clearer
    and facilitate the process of planning would be helpful to all three
    entities. And in contemplating new legislation, environmental interests
    might be well advised to consider the possibility of a Proposition
    13-type backlash. At some point in the cost spiral, the public and its
    lawmakers may well decide that the cost of environmental protection has
    begun to exceed the benefits, at which point, if history repeats itself,
    they overreact. Believe it or not, industry would be as unhappy as

                                       22

    anyone else to see that happen.
      The final alternative, the unmentionable one which must be mentioned
    is, of course, to eliminate the triangle, but to do so in the manner
    already adopted by so many countries in both the fully developed and the
    emerging world. You simply eliminate the distinction between government
    and industry through full or at least partial nationalization of
    industry. The conflict goes back to being a one-on-one situation, that
    is, government versus the public.
       Quite apart from being a terrifying concept philosophically, at least
    to me, hard experience internationally shows that it might not
    necessarily produce any economic or technological efficiencies. Some
    would argue, however, that it would simplify the process of political
    management. Whether this is necessarily in the public interest is
    obviously a matter for public debate.
       As a matter of fact, we may soon be the only country in the world of
    any consequence which does not have a wholly owned or partially owned
    national oil company, in an era where government-to-government dealing
    in the oil business is becoming increasingly the rule. I only hope that
    we can continue to live with and perhaps be proud of such a distinction.
       In conclusion, I would like to share with you the nightmare that I
    had last night. The scene is the Super Bowl. There are 55 seconds left
    on the clock, and the team that I have money on is down by three points
    and has the ball, first and ten at the fifty-yard line, no time-outs
    remaining. My guys are in a huddle where the next three plays have just
    been called, and about that time this huge lineman says, "Hey, wait a
    minute. Let's have a little public participation in this deal. I don't
    agree with the play selection; I think we ought to talk about it." From
    there on, the rest of the dream consists of yellow flags and a ticking
    clock.

    GENERAL DISCUSSION

       H. W4ILLIAM MENARD, Co-Chairman: I look around this audience, and I
    see faces like Brackett Hlersey, Russ Wayland, and Ned Broun. They have
    been involved in this business for a long time. It is kind of
    disturbing to think of the opportunities lost, or how things have
    changed, or how the world changes. Just 25 years ago, when these
    concerns began to crystalize, the problem was for the few people who
    were enthusiasts to try to get the rest of the people to realize that
    there were opportunities out there. There wasn't anybody against it, it
    was just that most people didn't care. From the two speakers presenting
    different viewpoints on national needs and industrial problems, we find
    that the real concern now is the complexity of our society. Moreover,
    the same people who have been trying to push now see that the things
    that they might have accomplished 25 years ago, if there had been
    support for what they were trying to do, are being accomplished in other
    countries and that the principal problem now is that we have very

                                      23

    divergent views. They are all legitimate views, nobody is questioning
    that. But it is because of this diversity of views that we now are in
    our present state. I am reminded of Pogo: we have seen the enemy and
    they are us. This is what the Forum is for -- for various viewpoints to
    surface, for people to raise questions, for people to discuss what can
    be done and present their viewpoints.
       We now come to a time when we ask you to go to the microphones,
    identify yourselves, and state your questions. In this context, there
    was a lecture delivered by the Nobel Prize winning British physicist,
    P.A.M. Dirac, who was famous for many things, including inventing a new
    way to do knitting when he was told there was only one way. He invented
    purling when he was walking home. He was a man of remarkable genius,
    but a very simple mind in many ways. He concluded his lecture, and
    somebody got up to say, "Professor Dirac, I do not understand what you
    mean by the equation you have written on the left side of the board,"
    and sat down. There was a long silence, and Dirac looked at the
    audience. There was a longer silence, and people began to get a little
    nervous. The Chairman said, "Professor Dirac, would you care to address
    that question?" And Dirac said calmly, "That was not a question; that
    was a statement."
       Now, could we ask you to focus on questions and discussion, please?

       EDWARD CANNON, United States Coast Guard: This is more in the nature
    of a footnote to John Craven's very erudite interview. Constantin
    Doxiadis, the modern Greek city planner, once coined the term
    "1ecestics," or the science of human settlements, and he foresaw man, or
    population concentrations, as advancing from a metropolis, to a
    megalopolis, to a final point, the ecumenopolos. I don't think we are
    ready for that, just as we have not been ready in our various public
    policy deliberations to define composite terms such as ocean policy or
    perhaps coastal zone management. But I think what we are ready for is
    closer functional descriptions.
       John, your vision -- which you may call aquapolis and we might call
    transopolis or oceanopolis -- has brought us a little closer to reality
    in terms of functional application. Transportation has been a vitally
    overlooked element in all of our various deliberations of economic
    policy.
       The other philosophical side of this is, I think, that too often as
    we go about the process of identifying and programming our resources, we
    do it for political visibility and immediacy. Rarely do we program our
    resources, money, and people with socioeconomic vision and imagination.
    I think that your perceptions have brought us a little bit closer to
    that vision. Thank you.

       NENARD: That was in fact a statement and not a question, but it is
    within the context of the Forum. Is there another brief statement, or a
    lengthy question?

       S.B. GOSWAMI,1 M.D.: Is this program supported by and representing

                                      24

    the big corporations or the public?

      MENARD: Well, John, I think you should address that.

      JOHN P. CRAVEN: I was fired from Standard Oil of California in 1947,
    and I have not been associated with it since that time. I served on the
    Nixon committee to look at the Santa Barbara oil spill, and I was almost
    ruled off the committee because of my prior association with the oil
    companies. To that extent, all of us have at one time or another in our
    lives been associated with a corporation. Indeed, it is the very nature
    of our society that we have depended upon the corporation for social
    innovations. And indeed, this is the debate which has been raised. It
    is the debate with which we are very much concerned on a national level.
       As we look at other nations like Japan, which operates as a corporate
    state, many of us are disturbed by the fact that this corporate state is
    incompatible with our own notions of what a society ought to be. We are
    disturbed by the fact that this corporate state is doing the things that
    we think that our society ought to be doing. This is our dilemma. We
    are not, any of us, representing the notion that what is good for the
    corporation is good for America, but we are looking for solutions that
    are good for America in terms of the kind of society that we have
    postulated for ourselves.  We are frustrated because we don't seem to be
    able to accomplish this.
       The best way I can respond to your question is: No, we don't
    represent the corporations, but we are frustrated when we see that the
    corporation in the U.S. is less able to carry out its limited, albeit
    important, role in society.

       GOSWAMI:  But why do we have to look toward Japan?  Why don't you
    double up our own programs or models?

       CRAVEN: Oh, I don't look at Japan. I do look to the U.S. But let
    me give one brief, frustrating example that appeared on the screen.
    This was the development of the SSP ferry, the semisubmersible platform
    ferry. This concept was a development of civilian scientists in the
    United States Navy, who saw that this was a new breakthrough in
    transportation by sea. This development was published in the public
    record, and the State of Hawaii, where I live, thought it was a
    wonderful concept to implement in terms of a ferry system between our
    Hawaiian Islands. So the Department of Transportation of the State of
    Hawaii went to American private industry and asked them to bid on the
    construction of a semisubmersible platform ferry between the islands.
       No private industry in the United States responded, and the reason is
    that many of them felt that the total set of regulations that we have
    imposed in this society were such that the SSP would never pass Coast
    Guard standards or specifications, or get through the environmental and
    regulatory hurdle that is required for innovation in our society. At
    the same time, there were some visitors from Japan who came to Hawaii
    and who sat down with us and looked at the SSP. They asked for and

                                          25

       received the master's thesis that was done at the University of Hawaii;
       they received the public information that was published by the Defense
       Department with respect to this; they did a free study for the State of
       Hawaii on what kind of an interisland ferry system we could have if we
       could get anybody in the United States to build it. And they carried
       this back to Japan, where they instituted their own interisland ferry
       system.
          Now, it is both fortunate and unfortunate that we can't buy the
       Japanese ferry system, because the Jones Act forbids us to do so. It is
       fortunate because we don't want to look to Japan; we would like to have
       our own semisubmersible platform ferry. But the frustration to me and
       many others is that we won't get the American ferry either, because
       something about our total process is such that it has stopped,
       absolutely stopped cold, innovation in the ocean. There is always a
       good excuse why they can't do it. The net result is that we have no
       semisubmersible platform ferries in the United States, we have no
       hydrofoils in the United States, we have, effectively, no surface effect
       craft in the United States. Almost all of the innovations in ocean
       technology which are environmentally sound and of benefit to the public
       do not appear on our shores. I don't want to rectify this by changing
       our form of government or our society; I want to rectify it by getting
       the public to be angry. I want you to be angry over the fact that we
       don't have the benefit of modern ocean technology for the people of the
       United States.

          GOSWAMI: But then you haven't really educated the public or informed
       the public.

          MICHAEL R. NAESS: As I understood your initial comment, it was based
       on the list of supporters of this program, and in fact roughly 50
       percent of the entities on that list are corporations. I would also
       point out the other 50 percent of the supporters on the list are
       agencies of the government. But I will speak to the corporation side of
       it.
          Corporations have different ways of expressing their point of view in
       trying to communicate with the public. I think I made it clear in my
       talk that I believe we have got to do more of this, to find better ways
       of communicating with the public, however handicapped industry may be in
       that respect. Some people take out full-page ads in the Wall Street
        Journal. My particular problem with that approach is tha~t-most of the
    Fpublic doesn't read that stuff, and that it doesn't provide a mechanism
       for feedback. I particularly think this kind of program is valuable
       because -- at least for a short period of time -- you have no choice but
       to listen to me. You may not agree with me, but you have to listen.
       And second, once I have said what I am going to say, you can speak back.
       That to me is a lot better than the Wall Street Journal. Industrial
       corporations are all trying to find a  etrway of communicating and
       understanding the public's position, as well as the government's
       position.

                                       26

       MENARD: Let me speak for a moment on the position of the National
    Academy of Sciences on this. If the National Academy of Sciences cannot
    maintain a reputation for neutrality and credibility and the highest
    quality of individual participation in its activities, then it has lost.
    Therefore the Academy really devotes an enormous amount of time and
    effort in trying to ensure that people who come before you are
    presenting a range of views. That is one thing we have learned the hard
    way, that you can get a group of scientists with impeccable reputations
    to talk about an issue, and in fact they all have exactly the same
    background and viewpoints. So over the years it has been established
    that we have to seek a range of viewpoints in order to be presenting a
    fair range of national opinion. We must have different people talking,
    and you are all here to talk.
       So to the extent that it is humanly possible for an organization that
    values its reputation above all things to produce a program in which
    that reputation will emerge unscathed, that is what the Academy is up
    to.

       P.V. TAWARI, Mitre Corporation: Mr. Craven talked about high-density
    city core offshore sites that might solve environmental problems. If
    you have these concentrations, are you actually alleviating
    environmental problems?

       CRAVEN:  It is difficult to answer that question without saying, in a
    sense, "Trust us."  But the answer is that in studying this concept we
    placed a very, very high priority on environmental effects, and the
    conclusion that we came to is that wherever man is, he must blend with
    his environment. And therefore he must blend either with the land, the
    atmosphere, or the sea.
       We asked ourselves: Which environment is it easiest to blend with?
    Our conclusion -- which I think is subject to challenge, but I would
    like to see it debated because it is a conclusion which is generally at
    variance with the public perception -- is that it is easier to blend
    with the sea environment than it is with the land environment.
       There are several aspects of this. Just imagine, for example, the
    effect on the landscape if a 200,000 ton truck were to drive down
    Constitution Avenue. First, it probably wouldn't make it more than 10
    or 15 yards before it would plow up the road irretrievably. At the same
    time, a 200,000 ton ship which moves through the ocean environment
    creates a wake which persists for perhaps half an hour. There are many
    such comparisons.
       This is not to say, as people often impute to us, that we are
    proposing that the ocean can be treated as an environment which is
    nonpollutable. That is not the case. But if one examines what one has
    to do to blend with the ocean environment in such a way that the effects
    on the ocean are localized, as contrasted to what one would have to do
    on the land or in the atmosphere to make the effects localized, one
    discovers that the ocean effects are much easier to handle.
       Let me give you one example of the frustration that we feel. There

                                       27

    has been a great deal of discussion about ocean disposal of sewage.
    There are many of us who have studied the problem with a great deal of
    care and understanding, and believe that the most acceptable way to
    dispose of sewage in an ocean environment is to discharge it into the
    ocean essentially with only modest primary treatment. There is good
    argument why this is environmentally superior to treating sewage and
    putting it in the ocean, mainly because the ecosystem likes raw
    fertilizer and not treated fertilizer. However, our society has decided
    that we should put fresh water into the ocean, and substitutes thereby
    land based plants, secondary and tertiary sewage plants. Anyone who has
    driven by a sewage treatment plant can smell it two or three miles away.
    No consideration has been given to the amount of real estate which has
    been filled up by a treatment plant whose primary purpose is to treat
    sewage. We perceive that the ocean can take nearly primary sewage in a
    beneficial way, and that therefore as we move high density societies
    onto the ocean, we can discharge that sewage effluent, properly treated
    in a concentrated way, into the ocean in an environmentally sound way,
    the net effect of which is to improve the primary productivity of the
    ocean, as contrasted to handling the same problem on land, where we now
    spend a great deal of energy in order to treat sewage to produce an
    effluent which is really unacceptable.

                                       28

                                       PUBLIC INTEREST AND PARTICIPATION:
                                       THEORY AND PRACTICE

                                       Oliver Brooks
                                       Consultant and Chairman
                                       Maritime Transportation Research
                                       Board Ad Hoc Committee on the Impact
                                       of Maritime Services on Local
                                       Populations

    Despite the legitimate questions that have been raised here -- both
    explicitly and implicitly -- I remain frankly and unabashedly a
    protagonist of public participation. I will confess that I am fully
    aware of its potential vagaries and of the problems that can arise from
    it. But on balance, I would argue that it has a great deal to offer.
       Let me very quickly give you a sense of where I come from, because
    obviously it is important here to establish some framework for one's
    point of view. I come, first of all, as chairman of a panel of the
    Maritime Transportation Research Board, which is a piece of the National
    Research Council and the National Academy of Sciences. The panel's
    charge was to analyze the local impacts stemming from maritime-related
    facilities and services. In the course of our enterprise we took a look
    at two of the four illustrative cases that are to be studied in this
    Forum. Our final report makes a strong case for public participation -
    early, energetic, and eclectic.
       Second, I have served as the lead person on a number of substantial
    urban real estate developments that were accompanied by all of the
    complex preliminaries that are a way of life today: environmental
    impact statements, zoning hearings, citizens' advisory committees,
    uncounted neighborhood meetings, interest subsidy arrangements and
    mortgage guarantees from the Department of Housing and Urban
    Development, and almost inevitably, a harrowing time schedule.
       Third, several years ago I served as the chairman of the key citizens
    group in what in its time was the most widely publicized environmental
    battle in my home state.
       In short, I have been on all sides of the table, and in the process I
    have been deeply involved in development efforts that have had a large
    measure of public participation.
       I am always troubled by the use of the term "public participation,"

                                       29

    because often people attempt to equate public participation with public
    interest. There are many organizations in this country which call
    themselves "public interest organizations." I am troubled with the fact
    that it is a term which is used relatively loosely and sometimes with
    precarious justification. There is an important distinction to be made:
    public participation is not, with any certainty, synonymous with the
    public interest.
       Some observers have suggested that public participation should be
    argued for as orderly, equitable, and invigorated democratic process. I
    tend to shy away from that sort of rationale on at least two counts.
    First, it may be premised too much on the town meeting principle. While
    that imagery may still be attractive, its broad applicability in a
    nation of more than 200 million people is certainly arguable. Secondly,
    public participation is vulnerable to the same distortions of democratic
    equity as almost anything else we attempt to manage in our enormously
    complex society. We should not attempt to claim for it a measure of
    infallibility that it does not deserve.
       I would argue, to the contrary, that public participation must be
    justified primarily on the basis of what it can potentially contribute
    to the planning and development process -- to its substance, its timing,
    the level of public understanding that is associated with it, and its
    impacts, both real and imagined. Further, I would argue that public
    participation must be evaluated on its ability to contribute
    constructively to the process of mitigation and compensation,
    particularly in instances where physical development for economic gains
    conflicts with other uses such as recreation, open space, or residential
    amenities or when it imposes a negative environment on parties not
    formally associated with the development process.
       It is my belief -- and it is a belief that I think was shared by most
    of the members of my panel -- that public participation can in fact be
    justified on these grounds in a great many instances. Most often, the
    problems that do emerge are problems of balancing legitimate objectives
    that conflict because of finite resources rather than because of
    anyone's malevolent purpose.
       There are certainly countless instances in which the lack of this
    generalized effort called public participation has created a backwash of
    suspicion, rancor, and obstructive legal actions. To the extent that
    there is a legitimate debate about public participation -- and based on
    the review comments that I received in advance of the release of our
    report, I can assure you there is one -- it should focus, it seems to
    me, on the process of decision-making rather than on the specific
    decisions that result.
       We have to recognize the fact that many maritime-related developments
    are certain to be intrinsically damaging to one group or another of
    neighbors or other interested parties. Public forums or candid dialogue
    cannot alone be expected to liquidate these damages. What they can do,
    it seems to me, is to place compensation or side payment or special
    adjustments at the core of the discussion, thus looking toward an
    improved decision process.

                                       30

      Yet having made this point, one must recognize the self-evident
    problems that are associated with the public participatory process.
    Tersh Boasberg, a Washington attorney, in a recent paper done for the
    National Scieince Foundation put it in these terms: "GAs a concept,
    participation is necessary to invigorate democratic government, but as a
    procedure it may encumber the decision-making process of the state.
    Granting government's right to rule, it may also limit its ability to
    rule efficiently. The importance of an enlightened public and a clearer
    articulation of diverse social values that emerge from participation
    must be weighed against the real necessity of efficiency in the
    decision-making process. Thus, there remains a persistent tension
    between the ideal of democracy and the pragmatic reality of it."
       This thinking process is not a new one in the context of 1979. For
    two decades or more -- and Mr. Naess certainly referred to this -- at
    both the legislative and the executive level we have been grappling with
    difficult issues that have become more and more apparent. One of these
    is interminable deadlocks or unreasonable delays. One of the basic
    approaches in some of our public participation efforts has been an
    effort to avoid some of these problems.
       I suppose I ought to review very briefly some of the recent past
    history of public participation. In the sixties, it was a factor in the
    Model Cities Program and in the Economic Opportunity Program, which
    carried bumper stickers with slogans like "Maximum Feasible
    Participation" or "Neighborhood Self-Determination." The results, at
    best, were mixed.
       In the early seventies we saw the Corps of Engineers launching a
    major effort to upgrade the opportunities for public input in its
    programs. A pamphlet called "Citizen Involvement in the Corps of
    Engineers Planning Process" emerged, as well as a fishbowl planning
    ef fort in Seattle that received considerable attention. Manifestly, two
    of the functions were public relations and information in the sense of
    establishing the validity of the Corps of Engineers' role. But perhaps
    the most important thing that the Corps attempted to emphasize with this
    effort was public participation as a device for conflict resolution.
       By the seventies, most of the major planning-related legislation that
    emerged from the Congress -- the Federal Water Pollution Control Act,
    the Coastal Zone Management Act, the National Environmental Policy Act,
    and many others -- included solid language on the necessity of public
    participation in the planning and development process.
       The Community Development Block Grant Program, representing as it did
    an effort to downplay the federal categorical programs and to give some
    sense of self-determination back to the local communities, contributed
    further to this trend.
       More recently, we have seen the emergence of the Science for Citizens
    Programs of the National Science Foundation, an effort on a modest scale
    to provide public funding to assist nonprofit organizations to develop
    their own technical skills and understanding in dealing with complex
    public policy issues.
       In the past two sessions of the United States Senate, we have seen

                                       31

    Senators Kennedy and Mathias pushing a bill to provide modest funding
    for nonprofit corporations as a direct encouragement to their
    participation in the federal governmental decision-making process at the
    agency level. The lesson of this brief history is clear: Public
    participation in this country has been put to serious test for the last
    two decades at least.
       It is against this background and within a framework of illustrative
    cases, some of which are summarized in our final report, that the
    Maritime Transportation Research Board panel considered the present
    state of the art of public participation and its relation to onshore
    development requirements of the maritime community.
       At the outset we concluded, with some chagrin, that the issues
    involved are much softer and lumpier than the issues with which the
    National Academy of Sciences is normally confronted. They are not ones
    which lend themselves to a neat compilation of empirical data and an
    equally neat conversion of that data into a set of widely applicable
    recommendations. We were struck by the fact that sectional differences
    of a political and cultural nature in many instances had a profound
    effect upon the type of public participation that evolved or was
    possible. Nevertheless, we felt that public participation, even if not
    precisely defined, should be part of the development process.
       One of our key recommendations argued for what we call a
    "participation audit." The participation audit, as we see it, should be
    a quid pro quo prior to the time that an application for a permit or
    license is accepted by the appropriate governmental agency. The basic
    thrust of the audit is to determine whether an applicant has reasonably
    attempted to involve impacted and affected citizens and constituencies,
    and also relevant local, state, and federal agencies, in the
    predevelopment planning process. It attempts to make the participatory
    process a forethought rather than an afterthought, which it often has
    been.
       This recommendation presupposes the strengthening of the so-called
    lead agency concept, which is already well-tested at the federal level.
    It is thus contingent upon avoidance of interagency squabbles and
    ambiguities that have sometimes unnecessarily retarded the designation
    of a specific lead agency, and it is dependent upon a high level of
    creativity and flexibility on the part of the reviewing personnel of the
    lead agency.
       To those who would protest that a participation audit would be just
    another large shoal in an already reef-strewn development ocean, we
    would argue to the contrary. There are simply too many instances in
    which public participation has been too little and too late, and the
    result has been long delays and even aborting of worthwhile projects.
    Our emphasis is on the pre-permitting stage, hopefully a time for
    identifying and resolving potential conflicts and developing mutually
    acceptable alternatives before the key actors are entrenched into
    positions from which they cannot retreat.
       We went on in our panel report to argue for special attention to the
    problem of maritime facilties that are specifically charged with the

                                       32

    handling of hazardous materials, urging that there should be an absolute
    requirement that a broadly based citizens' committee be involved at
    every step of the way as a precondition to the permit application.
       Parenthetically, I am struck by the fact that in my own adopted town
    of Boston in the late 1960s, the first LNG handling facility in the
    country was built in the core of the most densely populated 10-mile
    square in the entire New England region. The job was done remarkably
    quietly, with little civic flak accompanying it. I doubt whether that
    could or should happen today.
       Now, quickly, let me suggest that having attempted to make any case
    for public participation, there are a number of questions which need to
    be asked. Time will force me to leave these issues in the form of
    questions rather than hazarding some correlative answers.
       First of all, if we don't have public participation, how do we deal
    with the multiplicity of citizen groups that now exist in this country
    who are seeking a rationale for their own individual participations in
    governmental decisions? Just to give you some sense of what is out
    there -- and this is drawn from a recent book that was edited by
    Professor Stuart Langton of Tufts University -- there are 8,000
    neighborhood organizations in the country; there are 10,000 block
    associations in New York City alone; there are more than 100 national
    public interest organizations with Washington offices; there are 400
    consumer groups nationwide; there are 350 environmental action
    organizations. The Office of Neighborhood Voluntary Associations and
    Consumer Affairs at the Department of Housing and Urban Development
    recently issued a report which indicated that there are 15,000
    organizations which qualify under its particular rating system. This is
    a source of political and civic energy looking for constructive
    contributions to make. We cannot turn our backs on a resource with this
    enormous potential. If we do so, we do it at our own peril -- a peril
    that is not easy to gainsay.
       The second question is: How can we build into the public
    participatory process a form of political management that makes some
    sense? When I use the term "political management," I do not use it in a
    way that is intended to suggest omniscient manipulation, but rather to
    point toward efficient use of significant human resources.
       Third, how can we find creative ways to build in the sense of
    technical competence and understanding that is often necessary with
    respect *to these specific development issues?
       Fourth, how do we really deal with the problem of what I would refer
    to as the transaction costs of public participation? How much of this
    is a cost that is legitimately chargeable to the development and
    chargeable, therefore, to the initiating agency that is carrying forward
    the development?
       Finally, what can we do about the special problem of maritime-related
    facilities for the handling of hazardous substances? In this case the
    perils that are imagined are perhaps potentially almost as threatening
    as the perils that are real. How do we deal with this problem with some
    sense of equity that still recognizes the profound national needs that

                                        33

    underlie the proposal of such facilities?
       That, in essence, is the problem that we have before us, and
    hopefully we may have a chance during this Forum to discuss it more
    thoughtfully.

                    -- .

                            "*-I N             .-       :
                  T, ~ ~    ,~,  , ,  ,

                                       34

                                       PUBLIC PARTICIPATION AND THE COURTS

                                       E. Edward Bruce
                                      Attorney at Law
                                       Covington & Burling

    In accordance with the full disclosure rules that we have been enjoined
    to follow, I should tell you that my practice in large part over the
    last several years has been on behalf of what can be called the offshore
    oil industry, in connection with a number of cases involving offshore
    oil and gas development in such areas as the Gulf of Alaska, the Tanner
    Banks off Southern California, the Baltimore Canyon, and most recently,
    the Georges Bank.
       In one sense I will disagree with some of the general points that Mr.
    Brooks made, but in another sense I agree with him. Specifically, I
    want to advocate that there be the most limited form of citizen
    participation in policy-making after the policy has been decided within
    the appropriate branch of the government, executive or administrative,
    where jurisdiction is committed by statute. I am very skeptical about
    the role that the courts play in the evolution of policy in suits
    normally prompted by the complaints of so-called citizen or public
    interest groups.
       I would like to begin by quoting a passage from a recent opinion
    which might be typical of the views of a court that has to speak to the
    complex issues that are put before it in such a case, but is unusually
    candid. The judge said the following:

          The Court has before it questions of the highest importance, the
          greatest complexity and highest urgency. They arise as a result
          of high legislative purpose, low bureaucratic bungling, and
          present inherent difficulty in judicial determination. In other
         words, for the high purpose of improving and maintaining
          felicitous conditions in the coastal areas of the United States,
          the Congress has undertaken a legislative solution, the

                                      35

         application of which is so complex as to make the matter almost
         wholly unmanageable.  In the course of the legislative process
          there obviously came into conflict many competing interests which,
          in typical fashion, the Congress sought to accommodate, only to
          create thereby a morass of problems between the private sector,
          the public sector, the federal bureaucracy, the state legislature,
          the state bureaucracy, and all of the administrative agencies
          appurtenant thereto. In whatever technical form the questions and
          issues are here presented, they resolve themselves into the
          familiar situation in which a court must sit in some form of
          judicial review of administrative action -- and it isn't easy.

       Given the focus of this Academy Forum, it is of more than casual
    interest that these words were uttered by Judge Kelleher in passing upon
    the first judicial attack on NOAA's approval of a coastal zone
    management program.
       Not every judge has been as reluctant as Judge Kelleher was to embark
    upon a policy-making function in the offshore or coastal area cases.
    For example, in the Baltimore Canyon case, Judge Weinstein, the trial
    judge, not prompted by the invitation of any of the parties, decided
    that it would be a good idea for the government to lay out hypothetical
    pipeline routes to bring offshore oil to shore, even before there had
    been any exploration to give us data to tell us where the oil was, if it
    was there at all. Judge Weinstein's initiative in this regard was
    soundly and decisively rejected by the Second Circuit, who declared that
    he had allowed "his views regarding the substance of the Secretary's
    proposal to becloud his understanding of his reviewing function, leading
    to his unfortunate characterization of the Secretary's motives, his
    substitution of testimony received for that considered by the Secretary,
    and his adoption, sua sponte, of grounds for inadequacy that were not
    suggested by the parties."
       These portions of Judge Kelleher's opinion, and of the Second
    Circuit's opinion in the Baltimore Canyon case, suggest that coastal and
    ocean policy issues raise extraordinary problems for the court. In
    seeking explanation for this phenomenon, I resort to a premise that I
    think the case studies of the Forum will document -- that these coastal
    and ocean policy cases raise complex issues, involving competing values
    that are very difficult for the courts or anyone else to sort out.
       I will also posit that Congress has been, and congenitally may be,
    unable to provide significant guidance as to how these conflicting
    values are to be resolved. Take the case of the recently enacted OCS
    Lands Act Amendments. In the initial sections to that act, the Congress
    articulated its purpose of making oil and natural gas resources in the
    OCS available to meet the nation's energy needs as rapidly as possible
    and, among further goals, balancing orderly energy resource development
    with the protection of human marine and coastal environments. Now, that
    is a very worthy goal, but how is it to be accomplished? The clients
    that I represent hold the view, supported by evidence, that there really
    isn't much of a conflict between offshore development and other possibly

                                       36

    impacted interests. People who bring litigation to test the Secretary'is
    leasing program hold a contrary view. They think that the Gulf of
    Mexico experience simply isn't applicable to their part of the country.
       Now, I am not going to try to debate the merits of that question.
    But let's assume -- just arguendo, as lawyers say -- that there may be a
    conflict at least of some order. There are ways that conflict can be
    "minimized or eliminated," another direction Congress has given us in
    the OCS Lands Act. On the other hand, you could say no offshore oil
    development. That will eliminate a conflict. At the other extreme, you
    could say development full speed ahead, never mind anything else. That
    is another way to eliminate a conflict. And in between these extremes
    there is almost an infinite variety of measures that can be decided upon
    to mitigate or minimize conflicts between offshore oil development and
    other interests.
       The question is: Where should the balance be struck? Should it be
    struck on the basis of the need for more oil, because of our growing
    dependence on increasingly insecure sources? Or should it be struck on
    the basis of weight attributed to other interests? Initially, this
    balance will be struck by the Secretary of the Interior and his staff,
    as affected by the views of the Secretary of Commerce with respect to
    her fishery jurisdiction and coastal zone management jurisdiction and
    the views of the Secretary of Energy in connection with his responsi-
    bilities.
       Now, that executive balancing process -- I not only concede, but I
    stress -- is very properly the subject of the most intense citizen
    participation. State officials, industry representatives, consumer
    advocates, environmentalists, fishermen, and what have you, should and
    do play a very important role in apprising those decision-makers of the
    relevant facts and advancing arguments as to their interest in how this
    balance should be struck.
       The views of these people are heard, but there is no one who is going
    to say that every one of those interests will be satisfied after that
    balance is struck by the Secretary of the Interior. And given the very
    liberalized rules of what lawyers call standing -- that is, the
    allowance to bring a lawsuit these days -- it is almost inevitable that
    one or more segments of the public, whatever that is, will resort to a
    court to obtain a rebalancing of the interests that is more in keeping
    with their own point of view and their own interests.
       it is at that point that the issue I am addressing arises. It is
    then that the courts are asked to come in and speak to the substance of
    the policy questions that have already been decided in the executive or
    administrative branch.
       Now,, let me put to one side at the outset the easy cases, the cases
    where an administrative or executive officer has simply ignored, refused
    to follow, the commands of a statute. If an agency proceeds to develop
    a major federal program without the environmental analysis required by
    NEPA, then the courts do no policy-making in enforcing NEPA to the
    extent of requiring an environmental impact statement.
       It is rare, however, that the issues are this clear cut. Except for

                                       37

    relatively unusual situations, the issues of agency compliance in the
    regulatory cases that I am speaking of normally involve the issue of
    whether the decision-maker has gone far enough or has moved fast enough
    to respond to the congressional purpose in the statute that the
    plaintiff is relying upon.
       It is here where I think the courts ought to be most reluctant to
    move in the area of adjudicating claims. I hold these views for a
    variety of reasons.
       In the first place, the judicial system seems to operate at its worst
    when it asks itself the question: How much is enough? We have had
    Section 2 of the Sherman Act, which condemns monopolies, for about 100
    years. In that 100 years the courts still haven't really given a very
    good answer to the question of how much market power constitutes a
    monopoly, short of the obvious case of 100 percent. In the
    constitutional area, the general evolution of the one-man one-vote
    principle for reapportioning state legislatures towards almost an
    absolute requirement of perfect apportionment illustrates the point in a
    different context.
       N~ow, the reason I think the courts have such difficulty with these
    balancing or quantitative cases is that they are obliged both by
    tradition and, in this country, by the role that the Constitution gives
    them, to explain their decisions in accordance with a generally
    applicable principle, what Professor Wechsler, a noted constitutional
    scholar, has referred to as a "neutral principle." Judges can do this
    with varying degrees of success in normal judicial cases by deciding
    which of several competing principles decides a particular case.
       In the First Amendment area, for example, once a court decides that
    the utterance is "speech" within the meaning of the First Amendment, it
    will not thereafter normally weigh the substance of the government's
    interest in suppressing that speech or abridging that speech to decide
    the case. Having decided the matter is speech, the primacy of the First
    Amendment controls; the case is decided.
       I submit it is impossible for a judge to address the kind of policy
    issue that I am talking about here in those terms. Congress, for
    example, has identified both accelerated OCS oil and gas production and
    the protection of fisheries and other interests as being important, but
    it hasn't told us in any clear language which of those, if any, are of
    primary or supervening importance. Certainly nothing like the primacy
    of the First Amendment can be attributed to either one of them.
       Thus, ultimate decisions in these areas must rest upon a compromising
    and a balancing between principles. It is there that the judges, I
    think., have the most difficulty articulating what they are doing and
    making a principled decision.
       A second reason for my concern with the court's entry into these
    areas arises out of the circumstances under which these cases are
    decided. In a great many cases, the basic decision in these matters is

    made on a hastily filed motion for preliminary relief. In the Georges
       lglarguments, their evidence, and their exhibits six days before this

                                       38

    major financial transaction was to take place. Now, the judge devoted
    himself to the case to the extent he could, clearing his docket of other
    matters. But he was still forced to make the decision on what was
    really a few hours' reflection. Referring to the Secretary of the
    interior's decisional process, here is the way he put it just before he
    issued his preliminary injunction:
       "To what extent is this process permissible and indeed mandated by
    the applicable statutes? That is what I am going to be trying to figure
    out over a tuna fish sandwich between now and 1:30 or 2 o'clock."
       It does not reflect adversely on the trial judge to suggest that in
    these circumstances he was not in the position to address himself to the
    issues in the same depth as the Secretary of Interior and his staff, who
    had spent literally man-years of analysis and preparation before the
    decision.
       A third point is that even if the judge had all the time in the world
    to address himself to-this or similar cases, he would have to do it
    without any technical staff or any education or expertise that would
    allow him to intelligently choose between the conflicting expert
    testimony that is inevitably given in a case of this sort.
       A. fourth point I make in this regard is the unique bias or
    one-sidedness of the judicial process. The courts have ample authority
    to issue injunctions so as to stop or delay projects. They have little,
    if any, authority to order projects to go forward which they think are
    beneficial. In OCS leasing, for example, the Secretary's decision not
    to hold a lease sale, or to delete a number of tracts from a particular
    sale, has never been subjected to any form of judicial review. So the
    impact of the judicial process has to be one of stopping, rather than a
    balanced impact of stopping and starting.
       A fifth point I make is that it is very difficult to obtain prompt
    appellate review of individual trial judge's decisions. It is even more
    difficult to get Supreme Court review of intermediate appellate court
    decisions that will give you a consistent, uniform pattern of national
    policy across the courts in this country. Therefore, those who would
    urge an active role for the judiciary in the evolution of policy must
    anticipate an almost crazy-quilt pattern of decisions, in which more
    objectionable projects are not halted because they happen to be filed in
    a court with a pro-development judge and safer projects may be held up
    interminably in the hands of an environmentalist court.
       Let me close by anticipating a comment or two that some of the
    audience might make. I will concede that the judiciary in this country
    today has a very great impact upon our day-to-day activities and the
    long-term direction of this country, through its role in the fashioning
    of what I would call constitutional policy. It was, after all, the
    judiciary that gave birth to, and in some instances interred, such
    concepts as freedom of contract, separate but equal, and one-man
    one-vote. Thus, it may well be contended that given the huge role the
    judiciary plays in enforcing the Constitution, I am dealing with a
    relatively trivial matter here in addressing these regulatory issues.
       My answer to this is that our constitutional system really seems to

                                      39

    leave us no choice but to place in the hands of a life-tenured,
    independent, nonpolitical judiciary the final decision on constitutional
    matters. One can easily argue that the very existence of constitutional
    commands implies an independent judiciary to enforce those commands upon
    a political legislature and a political executive. That same
    justification of necessity does not apply to the situations that I
    described.
      MoreoverI while there is an occasional quantitative or balancing
    issue in constitutional cases, such issues are relatively rare. Most
    cases are decided on the basis of the identification of a principle,
    what I would refer to as a qualitative analysis. Beyond that, while
    there are exceptions, such as the Pentagon Papers case that was decided
    in a few days in the Supreme Court, for the most part constitutional
    cases don't get decided in the haste of a motion for preliminary relief,
    but are tried after the full development of a record, after judges have
    had time to stop and reflect about what they are doing.
       Finally, most of the case law in the constitutional area is made in
    the Supreme Court, not in the lower courts. And that, as I said, really
    can't be done in the regulatory cases, given their number and complexity
    and the difficulty of getting such Supreme Court review over all these
    matters.
       I thank the Forum for allowing me to set forth my views, and I await
    with interest other views, comments, and questions.

    GENERAL DISCUSSION

       JAMES CURLIN, Deputy Assistant Secretary for Policy, Office of Ocean
    Resource and Scientific Policy Coordination, Department of Commerce: We
    have had a variety of viewpoints. Mr. Craven started out by posing an
    ethical question, one of an evolutionary philosophical base -- that of
    accommodating society with the ocean. Mr. Naess followed with a very
    straightforward statement of industry's role, particularly industry's
    perspective of its role in the entire process. Mr. Brooks --
    unabashedly, as he said -- supported the public participation concept as
    an important component of the process. Mr. Bruce did an excellent job
    of explaining how the courts interact in this entire process, and more
    importantly, what their limitations are.
       I believe what everyone suggested indirectly is the evolution of an
    abstract term in the equation of national interest. It was brought out,
    implicitly at least, by Mr. Bruce that the Congress, to whom we often
    turn for a statement of policy, often falls short. I can assure you,
    having worked with the Congress in the development of legislation, that
    the provision that gets the least attention is the preamble and
    statement of policy that the legislation is supposed to implement.
       Given that, I think what we have described here is what might be
    considered an ad hoc evolution of the national interest through an
    interactive process involving many public and private factors. The

                                       40

    questions of those in the audience must be: Where are we? Where do we
    go from here? Perhaps we will see some answers in the case studies as
    they evolve.
      My questions to the panel in general are: Is this the best way we
    have to seek a definition of national interest, given the pluralistic
    society in which we exist? Is this the way we have to go about each and
    every decision? Are there inefficiencies? Are there inadequacies in
    the process toward which we can turn some creative energy? Can we, for
    instance, identify a national interest in a more certain way so that
    when we do develop resources offshore in a specific region, citizens in
    the interior of the country -- who also have these decisions -- will
    have an opportunity to involve themselves in a public participation
    process along with those in the coastal reaches?
       So when we talk in terms of public participation, we should ask:
    What public?  If you do befoul the beaches off someone's home, that is
    Important. But it is also important that somehow or other the people
    who cannot speak for themselves are spoken on behalf of, and that the
    concerns of those in the center of the country are also reflected.
       How does this problem fit into the entire scheme and range of
    attitudes that have been expressed?

       OLIVER BROOKS: That is a pretty large question. I will take a whack
    at a very small piece of it.
       This whole problem of defining the public interest or the national
    Interest is a very difficult one. We have found this particularly true
    within the framework of our study, which was essentially directing
    itself toward the local implications of maritime facilities. The local
    impacts may be very different from the national ones.
       I don't have any ready answers on how one sorts this out. A good
    case in point is the tried-and-true housekeeping function of port and
    harbor dredging. It is very easy to make a case for the fact that the
    dredging permitting process should be simplified a great deal. It is
    incredibly cumbersome and complicated now. There is one case of a
    $16,000 routine annual dredging job on the West Coast in which the
    passage of time from permit application to permit approval was 327 days.

       E. EDWARD BRUCE; Let me certainly concur with that statement, but let
    me offer a slightly different approach to it.
       There are a lot of courts, a lot of judges today, who welcome the
    policy role that is left to them by the vacuum that Congress often
    creates. Now, I submit that if there is a problem in having courts do
    what they are often asked to do, and I think there is, the only way it
    can begin to be solved is for the courts to say, "We won't do it any
    more. That statute is too vague. You, Congress, have to bite the
    bullet."
       I have -never really participated in the legislative process; I have
    never been on a congressional staff, but it seems to me it is very easy
    for Congress to vote for statutes that proclaim all kinds of wonderful
    values for everything, on both sides of every issue. And it is going to

                                       41

    continue to do that so long as the courts are willing to take that
    legislation and put their own stamp on it. That is one approach I would
    suggest: Force the Congress to be more specific.

       IRA DYER,, Professor and Read, Department of Ocean Engineering,
    Massachusetts Institute of Technology: I think this question can be
    addressed to the entire panel. I ask you to consider what implications,
    if any, the responsibility for public participation places on the
    educational system in this country. I would include especially primary
    and secondary education, but I would not exclude advanced education in
    colleges.

       JOHN P. CRAVEN: I would like to respond to that question because
    that is what I was about to say in response to the first question. It
    seems to me that the basic problem is not the machinery of government,
    cumbersome though it may be, but it is educational and motivational.
    The thing which we are complaining about in the judicial process is not
    so much the decisions of the judges, but the motivations behind their
    decisions. If there were basically a motivational aspect on the parts
    of the courts which had a -- I am not saying this is a correct
    motivation, but a primary motivation which was moving toward the
    development and productivity in the society, vis-a-vis the environmental
    aspects of the society, they would be less inclined to put an injunction
    on an activity before they make a resolution of the decision, but to
    allow the activity to proceed ahead.
       It seems to me our society is extremely responsive to the general
    notion that the ocean is a place to be protected, a fragile ecosystem.
    That has been encouraged by such books as The Frail Ocean, and by other
    better-written, well-meaning books, which have led the public to
    believe, understandably, that the ocean is such a frail ecosystem that
    if one dips one's toes, one is liable to destroy all of the life
    therein.
       It seems to me the solution lies in the educational system at the
    elementary school level, and particularly in the television and public
    information media. For example, one can trace the whole protection of
    the whale and dolphin to the "Flipper" program, and a large number of
    people have made conclusions about the intelligence of dolphins as a
    result of their childhood exposure to their favorite program. It is to
    these areas of public education that I think we should be devoting most
    of our efforts, not to infer our own biases,, but to demand more
    objectivity, more of a professional attempt to present to the public
    information which is closer to the scientific truth.
      My own general feeling is that there will come a swing on the part of
    the American public -- it is already taking place -- toward recognizing
    the importance of productivity and of living an affluent life at a lower
    energy level, of the trade-off between the environment and the economy.
    And when that movement has matured, we will see our institutions
    responding.

                                                   42

                MICHAEL R. NAESS: I would like to add in further response to the
             question of what responsibility the educational community has, not only
             that the marine ecosystem may not be quite as frail as is generally
             thought, but also that there is obviously an economic benefit to be
             gained by the nation as a whole from moving into ocean use. Further, it
             may be more than merely a national option to do so; it may be a national
             requirement in the face of international competition.

                                                                                             .

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    THE CASES

                                       45

                                       INTRODUCTION

                                       Alf red A.H. Keil, Co-Chairman
                                       Ford Professor of Engineering
                                       Massachusetts Institute of Technology

    On behalf of the National Academy of Sciences, I welcome you to this
    session of the Forum on Seaward Development, which I co-chair with H.
    William Nenard, Director of the Geological Survey.
       As a brief introduction of myself, I worked for nearly twenty years
    for the Navy in research and development related to improvement of naval
    ships. During that period I began to appreciate more and more as time
    went on the importance of many of the technological developments for
    nonmilitary uses of the oceans. After I left the Navy, where I worked
    as a civilian, I became a professor at MIT and head of the Department of
    Naval Architecture and Marine Engineering. There I began to broaden the
    department to include not only naval architecture and marine engineering
    of ships, but also engineering in the ocean environment. It is now the
    Department of Ocean Engineering, although it retains its naval
    architecture aspects.
       I also served for six years at MIT as Dean of Engineering, and during
    that period I tried to create an environment that, first of all,
    emphasized -- in addition to engineering sciences -- a strong element of
    practical engineering and of viewing engineering in the context of the
    social functions which it serves. In addition, particularly with
    respect to the marine environment, I tried to create an academic
    atmosphere where faculty and students could work not only on engineering
    -- that is, the technological and engineering science aspects -- but
    also on the related dimensions of the social sciences, coastal zone
    development, environmental protection, and governmental influences.
       I learned a tremendous amount through my participation in the Marine
    Board of the National Academy of Sciences, which grew out of an ocean
    engineering committee that increased its scope to include the uses of
    the ocean as they relate to engineering.

                                       46

      With that brief introduction, let me give you a quick status report.
    We have completed the first phase of the Forum, which provided an
    overview of four broad aspects of seaward development. There was a
    speech by John Craven on national needs and opportunities, a lucid
    summary of the industrial role by Michael Naess, a very exciting
    discussion by Oliver Brooks on public interest and participation, and an
    excellent review on public participation in the courts by Edward Bruce.
    A lively discussion followed those presentations.
       We now move into the main thrust of the Forum, the sessions that
    cover the four cases. These cases will be operated in parallel, with
    two in the morning today and two in the afternoon.
       We chose the cases to illustrate the complexity of the issues related
    to seaward development, taking actual cases in progress to bring the
    realities and the experience to this Forum. Particularly, we want to
    point out the various competing interests and the resulting conflicts.
    Each case will also show to what extent citizen participation occurred
    and what role it played.
       These cases should give us practical experience to build on in order
    to put together some general thoughts and lessons. That summing-up
    session will take place tomorrow. It will be followed by a debate on
    Policy Alternatives, in which we will take our conclusions from the
    cases and present them as a basis for interaction with policy makers.
       Each case will start with a brief overview by the case leader,
    followed by the statements of the panel members. Each speaker will
    mention his background so that you are aware of the resources you have
    with respect to later questions. But the audience is also a resource,
    and the real impact of the Forum comes from the debate between the
    audience, the case leaders, and the panel.
       The first case is entitled "Oil and Gas from Georges Bank." We hope
    it will address the relationship between possible oil and gas findings
    on the New England Continental Shelf and the energy picture of New
    England, the national energy picture, New England fisheries and coastal
    recreation., and coastal zone developments, along with the legal and
    regulatory issues and the experience gained in public participation over
    the last few years.
       The second case will be the SOHIO project at Long Beach, which is
    related to the transportation of North Slope oil to the U.S. market
    after it arrives in Valdez via the Alyeska pipeline, as is required by
    the U.S. legislation. The case specifically concerns the proposed oil
    terminal at the Port of Long Beach and the associated distribution
    system for shipping the Alaskan oil to refineries in Texas.
       The 501HI0 case must address a number of issues. The first is
    obviously the impact on the community of Long Beach. Closely related is
    the impact on the whole Los Angeles Basin if the 50OH10 terminal is
    built. The discussion must also include the consequences if SOHIO is
    not built. What are the pros and cons of the other options, for
    instance transporting the oil through the Panama Canal and the Mexican
    Gulf to the Gulf Coast, which would result in higher transportation
    costs? Since the price of the oil is fixed by legislation, one result

                                       47

    would be that returns to the State of Alaska would be lower. Here is a
    topic that illustrates the complexity of the issues in seaward
    development and also the need for public participation. The key
    question here may be how far that public participation should extend.
       Case 111, the Louisiana Offshore Oil Port, draws on the experience of
    planning the first U.S. offshore terminal for importing oil by means of
    supertankers. About 100 such offshore terminals are in operation
    throughout the world, but it took an act of Congress, the Deepwater
    Ports Act, to make it possible to start planning the first one in the
    United States. The Deepwater Ports Act gives the U.S. Coast Guard
    responsibility for coordinating the federal role for this development.
    The process of actually pulling all the strings together in a coherent
    way took the Coast Guard about a year and a half, but we are now at the
    point where a deepsea port is being planned, and things are moving
    along. It will be interesting to look at the various phases of the
    development and learn from it, and again, to learn what role public
    participation played in the decision.
       The last case, concerning manganese nodule mining and processing, is
    also a very interesting one with respect to seaward development. It
    addresses a crucial aspect of manganese nodule mining, that is, where do
    we process the nodules? We haven't yet mined manganese nodules,
    although there have been demonstrations that this can be done. Once the
    actual mining starts, the question of the processing plant becomes a
    very critical one. First, we must understand what it requires in terms
    of power, space, resources, water, and so forth. How will we handle the
    waste products? How does one go about planning such a plant? It will
    have substantial local impact, which is one dimension of the planning.
       Another consideration is, if we don't put the processing plant in the
    United States, what are we going to do do about the mined nodul~es? You
    can phrase it a little differently: How important is the supply of the
    critical metals in the nodules to our economy, because without this
    source we may have to depend, with ever increasing frequency, on foreign
    imports.,
       These, then, are the basic issues -- though there will undoubtedly be
    others as the discussion proceeds -- that will be raised in the four
    cases that we have chosen for this forum on seaward development and
    citizen participation.

    49

    CASE I: OIL AND GAS FROM GEORGES BANK

    CASE TEAM

    Ira Dyer, Co-Leader
    Professor and Head, Department of
    Ocean Engineering
    Massachusetts Institute of Technology

    Don E. Kash, Co-Leader
    Chief, Conservation Division
    U.S. Geological Survey

    Paul L. Kelly
    Senior Vice President, Corporate
    Af fairs
    Zapata Corporation

    Thomas A. Grigalunas
    Associate Professor Of Resource
    Economics
    University of Rhode Island

    Gene V. Soccolich
    Assistant Director, Resource
    Development
    Massachusetts Energy Office

    Christopher Weld
    Executive Director
    National Coalition for Marine
    Con serva tion

    Richard H. Burroughs
    Senior Fellow
    Marine Biological Laboratory, Woods
    Hole

                                       50

    IRA DYER

    Professor and Head, Department of Ocean Engineering
    Massachusetts Institute of Technology

    INTRODUCTION

    I have the privilege of co-leading the case on Georges Bank. I have had
    approximately twenty years' experience in a private research,
    consulting, and development firm, and about ten years in the so-called
    Ivory Tower of the academic world. In many ways, the academic world
    seems somewhat -more grubby than the world of private industry, but that
    is another story for another Forum.
       We have met to discuss Georges Bank, a potential oil and gas
    development on the Atlantic Outer Continental Shelf. The map in Figure
    I shows the area in relation to the northeastern coast of the United
    States. It is a case which many people with competing interests can
    discuss with deep emotion, and we are here to try to understand that., at
    least to some extent.
       More importantly, I think we are here to try to deal with the basic
    issues underlying this case, not only because this may help us reach
    some decisions with respect to Georges Bank, although some of us might
    be in decision-making roles, but perhaps even more to gain an
    extrapolative understanding of the issues surrounding resource
    developments in which there are such competing interests.
       Now, what are the bare facts of the Georges Bank case? First, there
    is a potential store of oil and gas on Georges Bank. But there is also
    a known resource, fisheries, of high economic value. That immediately
    puts us in a conflict position. By "us,"~ I mean those of who deal with
    and look at the case.
       Second, I would state that taking oil and gas from Georges Bank,
    assuming that we someday do,,will cause the environment to change. I
    don't think there is any chance of controverting that. But the issue is

       maschst

                                                      FIGURE 1. Georges Bank
                                              ~~ ~area in relation to the
                                                      coast of New England.

                                       51

    not so much whether we change the environment as whether we have
    agreement on what the benefits or the disadvantages of that change might
    be.
       The third point seems to be that the entity in charge of Georges Bank
     --if we could decide what that entity is, either singly or corporately
     --seems to lack a good set of communication links with the various
    parties that have an interest in Georges Bank, not perhaps through any
    lack of trying to establish such links, but because the situation is
    complicated. The number of people with competing interests is very
    large and the spectrum of issues is wide.
       But somehow our expectations are that this entity -- if we could
    define it -- should act decisively in the face of all these
    uncertainties. So it seems to me these are the three bare facts of the
    Georges Bank case, and I have given them in the broad terms so that we
    might see that there are other cases that have the same underlying
    difficulties and issues.
       The purpose of the Forum, then, is to get at the Georges Bank case,
    and to make use of the wisdom and criticism of the entire group
    assembled. We will begin by calling the members of the case team to
    speak briefly about their interests and their viewpoints.
       Paul, I wonder if you could put in context for us, from your industry
    perspective, the potential of oil and gas on Georges Bank and the energy
    posture of the U.S.

    PAUL L. KELLY

    Vice President Corporate Affairs
    Zapata Corporation

    I am Senior Vice President of Zapata Corporation, a diversified natural
    resource company based in Houston. Zapata operates a fleet of 18 mobile
    offshore drilling rigs and some 50 offshore tug supply vessels. We are
    also active in offshore construction. We are probably unique in that we
    are the only entity in the world that not only operates in offshore
    petroleum development, but that has invested heavily in fishing --
    approximately $100 million -- and we own and operate some 60 vessels
    that fish for menhaden, anchovy, and tuna. We have four fish processing
    plants in the United States, one in Mexico, and one in Costa Rica. At
    present we are investigating the Georges Bank fishery as a logical area
    of expansion for our fishing business.
       It might be helpful If we could begin by discussing the overall U.S.

                                       52

    energy outlook and try to put Atlantic offshore development in that
    context. Today we are dependent on foreign imports for some 48 percent
    of our energy. For this reason, it is industry's view that the U.S.
    should be examining all the potential new sources of energy that it can
    find. We need to reduce our dependence on foreign imports because, as
    we all know, this has had a drastic effect on our balance of payments.
    During 1977 we spent something like $45 billion on imported oil, and
    this was really the principal factor in our $27 billion balance of
    payments deficit that year.
       I have a few figures that will put the Atlantic Continental Shelf in
    context, and maybe Mr. Grigalunas or one of the others would like to
    narrow in on Georges Bank itself. Today, we have proven reserves of
    U.S. crude oil of about 30.9 billion barrels. Our domestic gas reserves
    stand at about 216 trillion cubic feet. Some 22 percent of our total
    domestic natural gas and about 16 percent of our domestic oil come from
    offshore operations. That figure should be put in the context of the
    fact that leases have been sold on only about 5 percent of the total
    available offshore acreage by the federal government.
       Offshore exploration is, to a great extent, a guessing game. Both
    the U.S. Geological Survey and industry do their best to estimate what
    reserves may exist, based upon geological and geophysical information.
    But although our society tends to be scientifically oriented and feels
    that such matters should be determinable, you never know whether you
    have any oil or gas reserves until you actually engage in exploratory
    drilling.
       There was a lot of money spent in the eastern Gulf of Mexico, in the
    Mississippi/Alabama/Florida area. I believe some 10 to 12 dry holes
    were drilled in that area on the basis of prospects that looked
    exceedingly optimistic. The jury is still out on Baltimore Canyon,
    where nine exploratory wells have now been drilled. Eight of those have
    been dry holes, and one has been a rather modest commercial gas
    producer. The industry hasn't given up yet, but it obviously is going
    to take a significant amount of additional drilling in order to define
    what the prospects there may be.
       The estimates of how much of our total oil and gas reserves may be
    located under the OCS range from 10 to 49 billion barrels. For gas,
    they range from 42 to 181 trillion cubic feet. Narrowing that to the
    Atlantic area alone, there are estimates of 2 to 4 billion barrels of
    oil and 5 to 14 trillion cubic feet of gas. I think those figures
    probably included Georges Bank and the Baltimore Canyon.
       To put that in further perspective, let's say that in those two areas
    we are looking at a combined figure of 2 to 4 billion barrels of oil.
    For comparison, the North Slope of Alaska, I believe, has proven
    reserves of about 10 billion barrels.
       If you assume the maximum estimate of 4 billion barrels of oil and
    project that it would be produced over a fifteen-year period, that could
    mean about a million barrels of oil a day for the United States. To put
    that in the context of our daily consumption, I think vie are using about
    18 to 19 million barrels a day.

                                      53

       1 know there are those who feel that those figures don't make the
    Atlantic OCS potentially significant in terms of our total energy
    outlook. In response to that, I always make the point that you never
    know when you may find a really large oil field, and I think it is in
    our best interest to go ahead and drill the exploration wells and find
    out what may be there.

    THOMAS A. GRIGALUNAS

    Associate Professor of Resource Economics
    University of Rhode Island

    I have been with the University of Rhode Island in the Department of
    Resource Economics since 1971. During that time, I have studied a
    variety of marine issues, particularly offshore oil and gas development.
    A major study that I worked on, through our Sea Grant program, involved
    looking at the potential onshore impacts of offshore oil and gas. I
    also was part of a University of Rhode Island team that, through the New
    England Regional Commission, looked at potential fishing and oil
    interactions on Georges Bank. I have done a variety of other things in
    the OCS area.
       First, let me further orient you toward Georges Bank. In Figure 2,
    Cape Cod, Massachusetts, is on the left side of the chart, with the
    Georges Bank area in the lower righthand corner. It covers
    approximately 11,000 square miles. When oil companies were asked to
    submit nominations for sections of Georges Bank, roughly 10 to 11
    million acres of Georges Bank, probably two-thirds to three-quarters of
    the area, were indicated to be of some interest. But it is the very
    dark areas that indicate the pockets of high petroleum interest. You
    can see that the area is a considerable distance offshore. If we were
    to construct a hypothetical circle around the very dark areas, its
    center point would be approximately 155 miles from the Rhode
    island/Massachusetts border and about 85 miles from Cape Cod. However,
    part of the area is as close as 55 miles to shore.
       The Bureau of Land Management has undertaken an environmental impact
    statement for the areas of high interest. Originally, these included
    206 tracks. Some 28 of those tracks were later withdrawn because of an
    ongoing border conflict with Canada. Roughly one-third of the northeast
    section of Georges Banks is in dispute, and the fate of the development
    in the area will certainly be influenced by the outcome.
       The resource estimates for Georges Bank, as indicated earlier, are

                                        54

    highly uncertain -- anywhere from 900 million barrels to 2.5 billion
    barrels of oil -- with something on the order of 4 to 13 trillion cubic
    feet of natural gas. The higher estimates are given extremely low
    probabilities, underscoring the uncertainty associated with estimates of
    oil and gas from any new area like Georges Bank.
       Figure 3 shows Cape Cod in the upper lefthand column, with Georges
    Bank represented by the configuration at the lower right. The various
    fishing grounds for scallops and the longline grounds and pot grounds
    are identified in the darkened areas. You can see that there is some
    overlap with the areas of high oil and gas interest, particularly for
    scallops and some of the pot grounds.
       From interviews with the fishermen in the area, we also know that the
    yellowtail flounder fishery extends throughout the area of oil and gas
    interest, as do some other fisheries. Some information on the fishing
    industry would be useful here. With the passage of the Fisheries
    Management and Conservation Act of 1976, the industry has been
    undergoing a major transition. There has also been a substantial
    increase in the number of vessels and landings. Based on the latest
    1977 statistics, reported landings by U.S. vessels from Georges Bank

              DEPARTMENT OF THE INTERIOR
                Bluzu.. I Land MI..q.me Q l
       FRONTIER OUTER CONTINENTAL SHELF AREAS  Y                1O
                NORITH ATlAll C OCS REGION

              GEORGES BANK TROUGH
                Areas Under Conslderaton
            by the Petroleum Industry

              E   Areas of Low Interest

                    Scale

                                  ~;    m

     FIGURE 2.  Georges Bank, with areas of high petroleum interest.

                                       55

    were on the order of $64 million, involving some 253 million pounds.
    As the effects of the Fisheries and Management Conservation Act are
    realized, it is possible that this figure could expand considerably. In
    fact, there have been some estimates that landings from Georges Bank
    could annually exceed $100 million if catches by U.S. vessels approach
    the maximum sustainable yield. There are about 900 commercial fishing
    vessels in New England. Not all of those fish on Georges Bank, but a
    good many do, and the number has been increasing sharply because of the
    conditions set by the new 200-mile limit.

       RUSSELL WAYLAND, U.S. Geological Survey, Retired: I have a minor
    correction. Mr. Kelly said that 48 percent of our energy was imported.
    I think what he is talking about is oil, not energy.
       Another point that needs comment, I think, is that he said maybe 4 or
    5 percent of the OCS was leased. I would say that a good deal more than
    that has been offered from time to time and not leased, simply because
    it wasn't bid on or didn't receive a high enough bid.

          .Gore.,..                                           Prime Scallop Grounds

          ;>M'.'...:: -:....*..
                                                             [i me Longline Ground for

          .0..~. :.:!... 0   10   20   30  40   50] Pot Grounds
                                                     Miles

    FIGURE 3. Fishing ground on Georges Bank.

                                       56

       B.H. BRITTIN, Ocean Affairs Consultant: Among the primary areas of
    concern about Georges Bank and its potential development, I think
    perhaps one of the most significant is our very long-standing dispute
    with Canada about jurisdiction over the area. It strikes me that as far
    as public participation is concerned, that issue alone is going to
    become very heady until it is resolved. Right now, we don't know when
    that is going to happen. I suspect, though, that it would be a major
    concern to the oil companies, the oil exploration companies, the
    environmentalists, and indeed, to the fish folk, too.

    GENE V. SOCCOLICH

    Assistant Director, Resource Development
    Massachusetts Energy Office

    I come from a seafaring family, tali ships and all, and have a few
    degrees in ocean affairs. I came to Massachusetts about four and a half
    years ago, and am now working for my third governor as advisor on oil
    issues. Coincidentally, we 'met just yesterday with the Secretary of
    Interior because, as most of you know, Massachusetts is involved in a
    court suit on Georges Bank.
       Offshore oil development is a controversial issue, mainly because
    initially it was a very novel one. Four years ago when Massachusetts
    literally popped up on the leasing schedule, we joined with California
    in asking for a delay in the review of the programmatic environmental
    Impact statement because we had only a few weeks and nobody had ever
    heard of offshore oil.
       The state was consistent, for the most part, in supporting the 00S
    Bill, which passed last September. I also was in favor of that bill,
    specifically the Fishermen's Compensation Fund, which finally made its
    way into national legislation. However, I differed with the state after
    passage of the OCS Bill, because it was my strong opinion that Lease
    Sale 42 should proceed with the enactment of that bill.
       That was also the opinion of former Governor Dukakis, and our -new
    governor, Edward King, is also advocating development. However, the
    issue has been in court, and we were down here yesterday to talk with
    the Department of Interior and various federal agencies and people on
    the Hill to see if we can come to an expedited agreement.
       The state is seeking economic development, compatible with the
    fishing and tourism industries. We believe that this development can be
    achieved. But there are rules and regulations that the state has said

                                       57

    must first be enforced. The Department of Interior has replied that
    those regulations are not needed at this juncture in order to have a
    lease sale and that they will follow the mandates of the law.
       Personally, I believe that. I think that you do not necessarily have
    to have rules and regulations in place, because the law is the law, and
    rules and regulations cannot be contrary to that law.

    CHRISTOPHER W4ELD

    Executive Director
    National Coalition for Marine Conservation

    The National Coalition for Marine Conservation is a plaintiff in the
    litigation on Georges Bank, and I disagree with practically everything
    that Gene Soccolich said. So maybe we have a case of controversy here.
       I also disagree with a number of other things I have heard today. We
    have heard many estimates on what kinds of oil and gas underlie Georges
    Bank. All the numbers that have come from the Forum panel greatly
    exceed the estimates printed in the best case in the environmental
    impact statement, which I think spoke of 513 million barrels of oil to
    be extracted over twenty years.
       With regard to fishing, the latest University of Rhode Island study
    on the value of the marine fishery resource on Georges Bank estimated a
    landing value not of $64 million a year -- the 1977 statistics -- but of
    $1 billion a year, with economic impacts amounting to $4.5 billion a
    year. This is in spite of a decade of terrific stresses on the
    resources as a result of overfishing.
       Georges Bank is a focal point of the entire North Atlantic ecosystem,
    and according to some estimates, it produces as much as 15 percent of
    the world's fish protein. It is a huge year-round spawning ground,
    involving a great range of commercially valuable species. So we are not
    talking about snail darters or that kind of thing.
       The actual controversy between the fishing industry and the petroleum
    industry, as I see it, boils down not to whether petroleum development
    should take place, but whether it should take place before or after the
    regulations growing out of the Outer Continental Shelf Lands Act
    Amendments are in place. Obviously, we would like to know now what
    those regulations are. Without regulations, the act itself is
    meaningless, and we won't be able to go back after the fact and put a
    lot of regulations in place without running into rights that have
    already been vested in the industry.
       In any event, these various provisions under the act are central, we

                                       58

    think, to carrying out its philosophy. The provisions particularly
    requiring implementation through the promulgation of regulations are, we
    feel, the suspension and cancellation of leases, which is central to the
    whole power of policing the environmental behavior of the operators on
    Georges Banks.
      We also feel that some kind of regulations have to be promulgated
    under Section 18, which is the five-year drilling program providing the
    mechanism by which environmental risk and potential rewards are
    balanced. We need to get at the very difficult and conflicting purposes
    of the act: on the one hand, to develop the resources as quickly as
    possible, and on the other, to protect the interests of the other
    industries and the national interest.
       We take the position, obviously, that the living resources on Georges
    Bank are every bit as much a strategic asset for the nation as whatever
    petroleum resources may underlie them.
       There are no regulations, I understand, nor is there any funding
    under the Oil Spill Liability Fund. This is important, because it is
    the only incentive other than public relations pressure that we can see
    for the oil companies to increase their oil spill cleanup and
    containment capability. The wreck of the Argo Merchant demonstrated
    rather dramatically that there is no open-sea cleanup capability.
       We also believe that the regulations under the requirement for the
    use of the Best Available and Safest Technology should be spelled out
    before anybody gets out on the Bank. Finally, we believe that the
    affected states should be consulted about the regulations.
       I think Mr. Soccolich said that he had absolute confidence that now
    that the law was in place, Interior would in fact do what the law
    requires. Well, in the first place, I am told that in the litigation
    Interior has taken the position that they don't believe the OCSL Act
    applies to Georges Bank. You can't have it both ways. In addition, the
    fact that they have gone ahead with Lease Sale 42 and the last
    environmental impact statement on the new Baltimore Canyon sale
    indicates that it is business as usual at Interior. I have found
    Interior, of all the federal agencies, perhaps the most difficult to
    deal with because of its fragmentation. There should be a clearly
    articulated standard that the department can be held to.

       STEVEN FRISHMAN, Publisher, The South Jetty: I am a New England
    expatriot, having been involved-w-ith coastal affairs in Texas for about
    ten years. Mr. Weld, you have given an interesting and intense view of
    the fishing conflict as you see it. My experience is that it is
    necessary to look very carefully at the perception of the fisherman in
    the conflict between oil and gas development and fishing.

       WELD: The concerns I hear expressed in the New England Fisheries
    Steering Committee, which is a broadly representative industry
    association,, involve loss of gear and loss of fishing time because of
    what they have heard happened in the North Sea as a result of fishing
    gear snagging stumpage and debris left on the bottom. I think this has

                                      59

    been to some extent addressed by the regulations, and also will be
    ameliorated by the Fishermen's Gear Fund.
      The other concern frequently voiced by New England fishermen is
    preemption of the fishing ground by platforms and the surrounding safety
    areas. As I understand it, there will be about a quarter-mile safety
    area around each platform. Now, there are tremendous currents around
    Georges Bank, which is another physical factor that distinguishes it
    from the Gulf of Mexico. The environmental impact statement didn't
    cover this very thoroughly, but anybody who has fished out in Georges
    Bank will tell you that there actually is white water out there; there
    are rips. In full-moon and dark-of-the-moontides, you can get out
    there and think you are in the middle of the Bay of Fundy.
       This means that if you are towing a net behind a not-very-powerful
    fishing boat, you have limited maneuverability, so that in order to stay
    away from these oil rigs, you are going to give up a lot of bottom.
    This is a primary concern. It may be an exaggerated one, but you won't
    convince the fishermen of it for a while.

       GRIGALUNAS: I want to discuss the figures given for fisheries
    landings from Georges Bank. The $64 million is a National Marine
    Fisheries Service statistic for 1977. In the University of Rhode Island
    report, there was a somewhat higher estimate because an attempt was made
    to look at what would happen if fisheries stocks were restored under the
    200-mile limit, assuming all of the landings were caught by U.S.
    fishermen. But that figure was nowhere near $1 billion. It was closer
    to $100 million.
       If you look at the activity in terms of even modest resource
    estimates, however, well within the Bureau of Land Management's
    published estimates, returns to the nation could be in the billions of
    dollars net.
       There are some conflicts. Some of them have been identified; others
    will come up and we need to discuss them. I think, though, that it is
    important to have what facts we do have straight and to look at ways in
    which we can deal with those conflicts if we want to capture the gains
    from development.
       As far as the Fisheries Fund is concerned, we have worked with the
    people in the North Sea -- visited them, corresponded with them. There
    have been fewer than 200 claims over a two-year period, amounting to
    less than $300,000. This isn't to dismiss that issue as unimportant; it
    clearly is important to the fishermen affected, and it is important that
    the legislation has been passed. But it is a matter of perspective.
       As far as area preemption is concerned, in our University of Rhode
    Island study we did a worst-case analysis, assuming an Ekofisk type of
    development, which is a series of platforms that preclude fishing
    between them because of the dense development. We assumed all the
    platforms were of that kind and were placed in the area of the most
    intense fishing. The reduction in fishing under this worst-case
    assumption, assuming the fish weren't caught somewhere else -- and fish
    are mobile -- is that there would be a reduction of less than 5 percent

                                       60

    in landings.
       A case can be made for compensation, which is not in the OCS Lands
    Act. In the North Sea there have been studies on how big the lost catch
    might be. This figure is elusive, but there is some attempt to seek
    compensation. However, preemption of fishing areas is not a major
    factor, not in the MIT study, the study that we did, or any other study
    that I am aware of.

       KELLY: None of us wants to depreciate the national significance of
    the Georges Bank fishery. But we grew up reading in American history
    that fishing for many years was the economic mainstay of New England,
    and it has a tremendous tradition. Because of that, and because it
    happens to be politically one of the strongest organized fishing groups
    in the nation, its significance vis-a-vis the other fisheries in the
    United States tends to be exaggerated.
       Georges Bank will not be the first area in which oil and gas
    operations have been conducted in the middle of significant fishing
    grounds. Granted, the Georges Bank fishery stands to gain from extended
    jurisdiction. But the record to date has shown that the landings from
    that fishery have been behind fisheries in other areas in this country,
    like the Gulf of Alaska, the California coast, and the Gulf of Mexico,
    all of which have extensive oil and gas operations.
       In the Gulf of Mexico, the fishing industry is much newer. It began
    in the last quarter century, about the same time as offshore drilling
    did, and the two industries have grown in parallel. Landings in the
    Gulf of Mexico are now at the rate of about 404 million tons a year.
       There are some differences in terms of currents. I would think,
    though, that the Gulf of Alaska would have navigation conditions
    comparable to those in New England. But basically, in other fishing
    areas it has been shown that offshore oil drilling and fishing can exist
    compatibly.
       The main concern of New England fishermen seems to be gear problems.
    I think Woods Hole did a study not long ago that showed that the areas
    actually removed from fishing were quite insignificant. The gear
    problem ought to be one that the two parties and the federal government
    can get together and resolve to everybody's satisfaction.
       I think, too, that the petroleum industry is certainly sensitive to
    the special problems relating to the trawls used in the New England
    fishery, and that everything will be done to minimize damage to gear.
    The Fishermen's Gear Compensation Fund is helpful in that regard too,
    under the OCS Lands Act Amendments.
      Regarding the OCS Lands Act Amendments, I agree with Gene Soccolich
    that their adoption has gone a long way toward solving the problems that
    New England saw with Georges Bank exploration.
      One very important point that I think has been overlooked since the
    adoption of the amendments is that for the first time we have, by
    statute, a separation of the exploration and development phases of
    offshore exploration. Prior to the amendments, a single environmental
    impact statement was generally called for, to be prepared by the Bureau

                                       61

    of Land Management prior to the holding of the lease sale. The new
    statute provides that in a frontier area prior to the commencement of
    development there shall be a second environmental impact statement, with
    opportunity for the public to participate in hearings leading up to the
    preparation of that statement.
       The statistics in offshore exploration show that the exploratory
    stage is the least risky part of the business. I think that USGS did a
    very careful study of risk from pollution in the Gulf of Mexico from
    1971 to 1975, and they found that over that period during exploratory
    drilling, there was no spill exceeding 50 barrels in any offshore area.
    During the same period, there were five blowouts reported in the Gulf,
    but no oil was lost in any of them. When you consider that there is
    minimal risk from exploratory drilling and that if production is
    contemplated we will have a second look, I don't see any reason to hold
    up the offshore lease sales.
       If you look at other situations involving public participation in
    OCS-leased areas, three that stand out are the Gulf of Alaska Lease
    Sale, the Tanner Banks Lease Sale in California, and the MAFLA sale in
    the Eastern Gulf of Mexico. All three lease sales were opposed by
    environmental and coastal state lawsuits. The oil company bidders spent
    some $2.4 billion on their bonuses for those sales, and the industry,
    the environmental groups, and the states spent millions of dollars in
    litigation costs. The sales were upheld by the courts, and exploratory
    drilling began. To date, there has not been one commercial producer
    found in any of those three areas. We have had nothing but a series of
    dry holes.
       I think something we ought to consider is: How much in the way of
    human and financial resources has been wasted in those cases, when we
    didn't even know if a drop of oil was to be found in the area?
       On Georges Bank, why should we hold up the lease sale, why should we
    hold up exploratory drilling when the risk is minimal and we will have a
    chance to look at the risk if we find oil and gas? Why not just go
    ahead and find out whether anything is there?

       E. EDWARD BRUCE, Attorney: I would like to set the record straight,
    because I have been involved in this litigation on a day-to-day basis.
       Sometimes assertions with very uncertain parentage take on a life of
    their own. One of those is this figure of 15 percent of the world' s
    fish protein that has been referred to as coming from Georges Bank. The
    fact is that is just an assertion, not attributable to any source.
       Judge Garrity, in the opinion he wrote to justify his preliminary
    injunction, credited that assertion. In the Court of Appeals, we had
    the time to examine it. Through world fishery data from government
    sources, we demonstrated that the catches from Georges Bank probably
    supply well below I percent of the world's fish protein.
       In terms of asserted legal positions, I would just like to make one
    point. I think it has been suggested that the oil industry will assert
    the position that it always has vested rights to do anything that it
    wants to do, and that the only way you can rein it in is to have in

                                       62

    place a detailed set of regulations prior to the time leases are issued.
    That is my sense of your point about the need to have the regulations
    now.
       in fact, the industry has always said in these kinds of cases that
    the government has very, very broad regulatory authority that it can
    exercise. It has never questioned that. Indeed, it would be silly to
    question it, because the law is so clear, not just in these cases, but
    in a whole range of cases involving modern regulatory principles. There
    aren't any decent constitutional arguments to the contrary.

       BRITTIN: I would like to put into broader perspective some of the
    comments concerning the problems of having oil rigs in a fishing area.
    It is true that the waters In Georges Bank are rough. In this regardI
    it might be well to look at the North Sea, where very intensive fishing
    is carried on by a number of countries right in the same area where
    there are oil rigs.
       I also think it is pertinent that in an area like the Persian Gulf,
    which has, indeed, a high concentration of oil rigs -- I do not work for
    an oil company, and I never did -- the second largest industry of Kuwait
    is fisheries. The productivity of shrimp for the whole Persian Gulf is
    very high indeed, and the countries that participate in that in the
    Persian Gulf feel pretty much the same way as the Louisiana Shrimp
    Association and the Texas Shrimp Association. We have found, through
    experience, that we live together pretty well. Indeed, in many cases
    productivity has increased.

    RICHARD H. BURROUGHS

    Senior Fellow
    Marine Biological Laboratory, Woods Hole

    My particular interest in our subject is the use of science in making
    resource management decisions. And with respect to oil development on
    the Outer Continental Shelf, there is a long history of trying to
    understand where the oil and gas resources are and how to exploit them
    economically. In that area, science -- in particular, petroleum geology
    -- has been involved for a number of years.
       Passage of the National Environmental Policy Act has created a new
    set of concerns, including the use of science in the management of the
    other resources on the Outer Continental Shelf. There the record is
    somewhat mixed. I have been involved in looking at how one might

                                       63

    conduct a study program, and in particular how information might be used
    in decision-making.
       The use of science in these kinds of questions is limited to
    occasionally producing facts and, more frequently, probabilities; its
    role is never one of resolving values. Ultimately, I think the Georges
    Bank case is bound up in values, in which of our natural resources there
    we value the most.
       I would first like to produce my set of facts and figures, every
    panelist having a set. I did the calculations somewhat differently.
    That is, I assumed that we are in a finite world in which there is only
    so much oil and so many fish. Fortunately, in the case of fisheries we
    have a renewable resource which, if properly managed, will produce
    indefinitely.
       I didn't try to convert these values into dollars. What I tried to
    do is assess how many fish we have today and what kind of undiscovered
    but recoverable reserves we might expect on Georges Bank.
       My calculation was that the Northwest Atlantic fishery was 7 to 10
    percent of the world's marine fishery. If you look at the ICNAF data
    for Georges Bank and the Gulf of Maine, you get that area providing
    about 1 percent of the world's supply.
       By estimating a one-billion--barrel oil find on Georges Bank and
    comparing that with the National Academy of Sciences 1975 estimate for
    total world supplies (noting that there are many estimates and that that
    particular estimate varied by a factor of three), one can determine the
    importance of the oil resource. If the world's supply is at the low end
    of the reported variation, Georges Bank oil may account for about
    one-tenth of one percent of total world supply. So we are off by a
    factor of 10 in this calculation in terms of the importance of fish
    versus the importance of oil.  But the oil benefits may be realized only
    once, whereas the fish benefits occur each year. This can be calculated
    a lot of different ways, using different data sets than the ones I used.
    Nonetheless, that is one way to think about the problem.
       To specifically address the interaction between oil and fish and the
    extent to which science can provide advice or guidance there, a variety
    of studies have been done on Georges Bank, but none that I am aware of
    has looked at the interactions with the biota in quantitative detail.
    The early MIT work looked primarily at trajectories. The Council on
    Environmental Quality, in its report of 1974, specifically flagged the
    fishery and oil interaction, but indicated that it had not addressed it.
    So the level of information getting into the decision process now with
    respect to the effect of oil development on fisheries is very low.
       People recognize that as a problem, and there are a series of
    investigations that could be undertaken in that regard, but I would
    expect quite a bit of time to elapse before unequivocable results would
    be available.

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    DON E. KASH

    Chief, Conservation Division
    U.S. Geological Survey

    As an employee of the Conservation Division, I represent one part of
    this triangle of government, industry, and the public that keeps being
    referred to. I grew up in a small town in Iowa where no one really
    thought there was much utility in being a political scientist. When I
    arrived in town on the way to Washington and it became clear that I was
    going to be a regulator, the reputation just dropped out completely. So
    I came to Washington with a certain amount of nervousness about this
    regulatory function.
       I haven't had firsthand involvement in the Georges Bank case, but I
    think it represents in microcosm the general issues that we as a nation
    have had to wrestle with concerning OCS oil and gas development.
       One issue is that there is an overlay of environmental concern. How
    much that motivates the differences in this case is a little difficult
    to sort out. However, since the Santa Barbara oil spill, there has been
    a widespread perception that oil and gas development negatively impacts
    the environment. Dr. Burroughs has suggested that factually we don't
    know much about that impact. The hard data are limited. But that seems
    to make little difference to public perception.
       Second, there are ideological concerns that run through this whole
    controversy. For instance, if you read the literature and the
    newspapers, there are some people who participate in this who have
    ideological concerns about large industry.
       Third, there are obviously economic concerns. If I recall correctly,
    this whole thing first surfaced when the State of Maine proposed selling
    some leases back in 1969 because they claimed they owned the OCS out to
    25 miles off Great Britain through a grant from the King of England, or
    something of the kind.
       If the State of Massachusetts owned Georges Bank, you probably would
    have a somewhat different mix of issues and players. The issues we are
    talking about -- whether or not there is a $60 million fishery and how
    you trade that off against oil and gas development -- depend on the side
    you stand on with regard to the economics. Economic issues pervade this
    whole controversy, and they are not just ones between fishermen and the
    oil industry. They also have to do with federal-state relations.
       Finally, there are a whole set of political concerns. If you read
    the New England press, I get the impression that candidates have
    sometimes used this issue as an appeal for election purposes, and that
    in this process state officials come down on opposite sides and it
    becomes a sort of surrogate for other kinds of struggles.
       Georges Bank isn't any different than any other political issue. But
    there is an element that it points up: It demonstrates some of the
    problems in making judgments in this society in a condition we can
    probably characterize as progressively more serious levels of ignorance.
       I choose "ignorance" as a loaded word, but I don't mean to make it

                                       65

    pejorative here. What I have been told, first of all., is that we have
    estimates of certain amounts of oil and gas on Georges Bank. And then I
    am told that we periodically sell leases, sometimes chunks of leases,
    for billions of dollars and then can't find anything. Now, it may be
    that Mobil or Exxon or someone really does that primarily to support
    their argument about the great capital risk and that they are willing to
    spend $100 million on a lease to build their case. But that really
    isn't quite credible to me. The point is that we don't really have any
    way of identifying oil and gas in advance of drilling out there. If we
    did, it would change the argument pretty drastically. That is one level
    of ignorance.
       Another level of ignorance is tied up with New England. Here I tread
    on terribly delicate ground. But though I am told by my colleagues at
    MIT that one of the great industries in New England is education, there
    is no petroleum engineering department at MIT, and there is really a
    good deal of ignorance about the oil industry in New England. It is the
    same sort of ignorance we had in Iowa, I would say. We didn't know much
    about oil, except that sometimes people drilled holes and got rich, and
    they made movies called "Giant" and so on. Part of this is a problem of
    being comfortable with an activity. I must say that I have always found
    fish ports very offensive; they smell bad. The oil industry is a sort
    of foreign commodity in this area.
       Finally, there is substantial ignorance about the impacts of oil
    drilling on fish ecology. Lyle St. Amant of the Louisiana Department of
    Wildlife and Fisheries has told me over the years that the only hard
    data he has with regard to the state fishery is that they are bringing
    more onshore now than they used to.
       You are faced with making a decision in the context of tremendously
    complex issues that are of central importance, with players who are all
    very sincere. In truth, I share the values of almost every panelist up
    here. I do a wonderful job as long as I don't have to trade them off,
    one against the other. And that is precisely what we have to do in this
    society. How do we do it?
       I propose that what this panel is about is trying to figure out how
    it is that in this society we substitute public participation for what
    would be much more satisfactorily done with understanding and shared
    values. We divide responsibility when we have to make decisions about
    consequences we don't understand in complex systems. To legitimize
    decisions made in ignorance, we use a process where we bring everybody
    into the decision, trying to insure that if something goes wrong, most
    of the players have to be careful about standing up-and pointing their
    finger, and saying, "Damn it, it is your fault."
       So public participation, as I see it, is a way to collect and to
    represent values. But in a sense it is a substitute for what would be
    better done if we understood the consequences of our actions and had a
    complete grasp of the data, which I do not believe we have.

                                       66

    GENERAL DISCUSSION

       LYLE ST. AMANT, Assistant Secretary, Louisiana Department of Wildlife
    and Fisheries: I have lived with the oil and fishing industries for too
    long to count. And I think the most interesting thing I have heard here
    this morning is that all of you speak the truth. The thing is, you need
    to put it together. There are several things I may be able to call your
    attention to, particularly If you bear with me a minute and look at the
    thing historically.
       First, we talked a great deal yesterday about the triangle, with the
    public and the environment in one corner, the government in another, and
    industry in the third. But in the early days, you 'nave to realize that
    the third partner was another industry, a real interest and not a vague,
    amorphous thing like the environmental movement may be today. The
    environmental movement may have been a force since 1969 or so., but since
    1945 we in Louisiana have been caught between real industries, the
    fishing industry and the oil industry.
       The problems here are much more people and industrial relations
    problems than they are ecosystem problems. On this point I must agree
    with Mr. Weld. Regulations should come first, and they should be clear.
    I don't believe in letting the fox guard the henhouse. I think that the
    regulations should be laid out and that the people running them should
    be aware of what the regulations affect and what they are supposed to
    do.
       On the other hand, I agree with the oil companies that the risk from
    drilling and exploration and even production is minimal.  It is really
    much lower than most people realize.  But I submit to the industry, if
    you don't plan to break the speed limit, you ought not to worry about it
    being there.  All I am saying is, the regulations are not going to keep
    you from operating, they are going to keep you from operating
    improperly. I have learned from experience that congressional intents
    and the regulations that come out of some of the agencies don't always
    match up. I think that what you have to do is to clearly explain them.
       What we are talking about is how to make people operate together.
    There is a problem with fisheries and oil industries. We have 2,700 to
    3,000 platforms off the coast of Louisiana, at least 1,000 of them what
    you might call large platforms. I agree with the gentleman who said
    that this is of no significance in a big area, even though it wipes out
    about one square mile around each platform for a big fishing vessel.
    Conversely, recreational fishing tends to congregate around these areas,
    and small boats can get into the system. Fish seem to like the
    platforms; fishermen don't. The problem is that the fishing industry is
    an historical industry, concerned about its welfare.
       The bottom and gear-snagging problem associated with fishing is a
    real problem. With all the regulations, if you don't have the proper
    surveillance and enforcement, people throw things overboard. Even with
    the best of regulations, it is difficult to keep the sea floor clean.
    The recent act which allows for some mitigation of this is a good thing,
    but it is going to be difficult to administer, let's not kid ourselves,

                                       67

    because you have to verify what is on the sea floor before you begin to
    pay people off. There are a lot of things there that have no
    relationship whatsoever to the oil companies: ships that were sunk,
    reef s, things that went overboard accidentally.
       It is true that our fish production in Louisiana has shown no
    variation over the last 35 years. I can conservatively say that if oil,
    as a toxic substance, could wipe out a fishery or ruin an ecosystem,
    Louisiana would have been gone before we could spell "environment."
    There were absolutely no regulations from 1927, when the first oil wells
    went into operation, until 1950. This was after World War II, when
    there was a big demand for oil, when they sank 17 tankers off the
    southwest pass in Louisiana in one week. All this oil accumulated on
    the beaches. I have seen the times when you were afraid to strike a
    match in Barataria Bay. Nobody is proud of this. It was a fact of life
    that came up in a really hostile environment where people weren't
    present most of the time.
       The other thing in favor of the oil companies is that in the early
    days they took land equipment, which at best was unsophisticated, and
    tried to move into a hostile marine environment. Some of the rigs and
    systems were not too reliable. The present system is so sophisticated
    and well-managed that I have no real concern about accident problems.
    The occasional accident should be well-contained. I think the evidence
    shows that where these accidents have occurred, the damage is temporary.
       I think that there is a subject we are unfamiliar with: changes in
    the in-shore areas where there has been a considerable amount of
    dredging. But here we have to point out that dredging is associated
    with oil as an industry, not oil as a substance. We have had as much
    dredging from other sources, navigation and what have you, as from the
    oil companies. When we began to separate the off-shore from the
    in-shore problems, the off-shore problems became really minimal.
       The question of the effect of minute traces of low levels of oil on
    marine larvae and eggs has been debated. All I can say is that the fish
    are still there, and even last year, with some 30,000 oil wells off the
    coast of Louisiana -- some of them mismanaged, let's be honest about it
    -- we had the highest production of the years of our fishery that we
    have records for. We produced over 104 million pounds of shrimp, and I
    think the gentleman from Zapata will recognize that the menhaden were so
    plentiful that some fishermen wanted to quit fishing because they
    couldn't handle them all. I think that to just make assumptions that
    the fishing and oil can't live together would be incorrect.

       KELLY: I believe that Cameron, Louisiana, was the number one fishing
    port in 1978 in terms of tonnage landed. I don't think the NMFS has the
    official figures out, but the preliminary figures indicate that.

       DYER: Dr. Burroughs, how does the nature of the fishery in the Gulf
    of Mexico compare to that of the fishery in Georges Bank? More
    particularly, in the Georges Bank case, what can you say about the
    statements that we really don't know enough about the nature of the

                                       68

    fishery to make good decisions about it?

      BURROUGHS: I thought that one of the bare facts that we agreed on at
    the outset was that the taking of oil will cause the environment of
    Georges Bank to change. There is a history of studies that indicate
    there are certain biological impacts of oil, and I don't think that is
    disputed any longer. I think what Dr. St. Amant and others have focused
    on is whether this disruption is significant enough so that the two
    cannot coexist. Under what circumstances might they coexist?
      Regarding Georges Bank, in citing the MIT study and the CEQ study and
    others, I pointed out that this interaction was not quantified -- nor
    could it be, I am sorry to say. That means that the public debate goes
    forward with a signficant missing link. That is where we probably tend
    to pour in a lot of value judgment about what levels of uncertainty or
    risk we are willing to accept.
       I think right now the public debate is reaching a decision point
    where these risks will have to be accommodated one way or another,
    depending on what happens in the courts.  The science of it is very
    unclear.  The record demonstrates that oil does cause problems in the
    environment.  It does not demonstrate that one can be 100 percent sure
    that if you develop oil on Georges Bank you are going to lose the fish
    there.  What we just heard from Louisiana is that the opposite seems to
    be the case.  Whether the Louisiana experience can be extrapolated to
    Georges Bank is uncertain.  My guess is that it would be difficult to do
    that.

      DAVID ALLEN, Oceanographer, Bureau of Land Management: I would like
    to bring up an issue that I think a Forum such as this -- and the
    public -- should be considering, and also to pose a question.
       The issue is misdirection of public pressure in many cases toward
    issues of personal prejudice rather than those germane issues that
    should be faced at the time. The Bureau of Land Management conducts
    environmental studies in all the development areas. I am speaking as
    the person responsible for the Georges Bank environmental studies on the
    effects of oil and gas development on Georges Bank. The issues that
    these studies address are largely determined by public participation.
    And despite the optimistic -- I feel -- prognostication of hydrocarbon
    presence on Georges Bank, the fact remains that they have been drilling
    on the Scotian shelf since 1961, and they have found nothing
    commercially exploitable.
       At last year's American Association of Petroleum Geologists' meeting
    in Washington, we listened to paper after paper discussing the fact that
    there is not the necessary juxtaposition of petroleum source beds with
    reservoir beds on Georges Bank, and for this reason the geologists
    doubted there was very much oil. Further, the oil is a very long way
    offshore, if there is any.
      With that background, my question basically is: Since with Georges
    Bank the public worry is directed primarily at the polluting effects of
    development rather than exploratory activities, would it not be

                                       69

    economically as well as environmentally sensible to consider deferring
    onshore and nearshore studies, which we are being pressured into now --
    especially socioeconomic studies -- until we know that there is a proved
    reserve in Georges Bank? And to use our money, which is limited and
    which has been cut back substantially, for more important studies?
       I feel this is a question that a public forum such as this should
    seriously be thinking about.

       COMMANDER PETER CRONK, United States Coast Guard: I have some
    comments and observations. One is a clarification of the safety zone
    mentioned previously. The quarter-mile safety zone around oil drilling
    platforms is not an automatic feature. It is designed to provide a
    buffer zone in cases where it is needed'. where passing vessel traffic
    might disturb the operation, or in case there may be an emergency aboard
    the installation making it desirable to keep other vessels away.
       I am wondering how much the public really knows about a mobile
    drilling rig. In drilling activity on the OCS, "rigs" are used to mean
    almost anything. Yet a mobile drilling unit is really a ship.
    Internationally it is recognized as a ship, a special-purpose ship. If
    a marine community realizes that this is a highly sophisticated
    organization, very much like any seagoing vessel, maybe the prospect of
    a drilling rig off the shoreline would be a little easier to accept.
       If there were a plastic model of the mobile drilling unit, I think it
    would be a very popular toy, and if there were a TV episode about oil
    exploration at sea, the public would be more inclined to consider the
    possibility that maybe this isn't such a bad idea. A mobile drilling
    unit in itself does -not provide any threat to the other activities on
    the OCS.
      Mr. Kelly mentioned that mobile drilling units have been responsible
    for only a minimum of oil pollution. A mobile rig is a very
    pollution-free operation. In the Coast Guard, where we investigate oil
    pollution and other types of casualties, we find that mobile drilling
    units are a very minor source of pollution, like many other types of
    ocean vessels.
       To put it in perspective, many passing tankers beyond the 50-mile
    limit are ballast tanks and clean tanks that continuously pump residues
    of oil into the same waters that you are talking about. I don't know
    what kind of analysis has been made on this source of pollution, but
    probably it is the most significant one.
       It takes about five years to determine whether you have an oil field
    worth developing, during which time there is much opportunity for
    continued public discussion on the issues. I think exploration of the
    Outer Continental Shelf to find out what our oil resources are, so that
    that can be equated with the known fish resources, would be highly
    desirable in resolving future development activities on the OCS,
    especially since the exploration phase does not significantly contribute
    to pollution. Further, sufficient regulations now exist to cover these
    vessels' operations.
       A couple of facts might change the perspective a little, if we knew

                                      70

    them here: What is the percentage of the Georges Bank fishing resource
    in respect to other fishing resources in the United States, instead of
    the world? What percentage does the estimated oil in Georges Bank
    represent of that yet to be recovered in the United States? Finally,
    what effect would a national energy policy have on public awareness and
    participation?

       PRISCILLA WHIL, National Wildlife Federation: My concerns are more
    the onshore impacts. I would like to see some consideration of how the
    local economy in New England affects the potential of oil and gas
    development on Georges Bank. We have talked about concerns related to
    fisheries, but there are other pressures in New England, I am sure, that
    will affect this decision.
       I would like to know what the institutional mechanisms are through
    which the various interests are expressed, and whether the panel feels
    that there is adequate representation of these interests.
       I would like to ask Mr. Soccolich whether he feels that there is a
    level of confidence in the state governments that they adequately
    represent local concerns. The possible problems here might be
    exemplified by the autonomy of some of the county and local
    jurisdictions and the result that this would have in lawsuits.
       I would like to know whether he feels that the developmental HIS will
    provide information that is adequate to the states' needs. Mr. Kelly
    said that he felt this does answer the states' needs. I would like to
    have some comment from the state representation as to what they think
    the developmental HIS will do for them.

       SOCCOLICH: Figures on the onshore impact in terms of employment go
    from a few hundred jobs all the way up to 19,000. First, it depends
    mostly on the size of the resource. I think that some people here have
    put it in perspective, in that this is not the North Sea or the Gulf of
    Mexico.
       The geologic structures that exist offshore cannot hold 10 to 20
    billion barrels of oil. The indication so far is that there might be a
    better potential for natural gas. What would that do for us? We would
    have gas processing plants in southeastern New England, which would also
    be a price break for the New England consumer. If there is oil, I would
    think it would be transported, in the absence of a refinery in the
    region, down to the mid-Atlantic states.
       The Argo Merchant case was brought up, illustrating how people attach
    oil spills to offshore drilling. However, most of the hydrocarbons in
    the ocean come from automobile exhausts and the oil spills from tankers.
    Only a small percentage can be attributed to offshore development.
       On the question of risk, it seems there is less than a fifty-fifty
    chance that commercial quantities of anything will be found off Georges
    Bank, if you look historically at the oil industry's rate of success in
    oil exploration. You multiply that times the risk of a spill. Then you
    multiply that figure times the risk of a spill during a certain time of
    year. Multiply that times the risk of the spill affecting a biological

                                       71

    quantity. You can see how your risk factor starts to diminish
    substantially.
      Back to the onshore impact of developing Georges Bank, I don't
    believe there will be 19,000 jobs. Certainly this is not going to
    change the economic posture of New England. It will be, possibly
    significantly, an economic boon to certain coastal localities. There
    are townships who welcome the development of onshore industries for
    offshore oil development.
       To get to another of your questions, whether the state has a
    competency in addressing local concerns, I will use the New Bedford
    example by saying that that town was in disagreement with the state with
    regard to the state's initiating a lawsuit, or even asking for a delay
    in the lease sale. The state's position was that it also had to look
    after the interests of the Cape and the fishing industry itself. But
    New Bedford's position was indeed considered.
      We must understand that there is no reason why fisherman should want
    offshore oil. Yet I believe the fishermen must also understand that
    they do not own the ocean. There are multiple uses of the ocean.
       If one looks at the workings of the federal government, it has been
    very slow in coming up with the necessary regulations as mandated by the
    law. But I do not believe that the regulations will deviate from the
    mandates of the law., or else they will be plainly illegal, and broached
    as such.
       I believe that there is an unjustified distrust with regard to the
    so-called new federalism, meaning, does the federal government
    necessarily look out after the interests of specific regions? This
    brings me to the overall topic of the day, which is public
    participation.
       Public participation, I believe, wherever it occurs in the
    decision-making process without an adequate understanding of the issues,
    is going to create the kind of controversy that we are discussing here
    today. So I believe with Don Kash that you must have the understanding.
    But public participation is generally at the local level. The locals
    then work with the state government. The state then works with the
    federal government, and everybody works with the Congress. To involve
    everybody in every single step, I believe, is largely a waste of time.

       KELLY: I have some figures here that I noted in a report of the
    National A~cademy of Sciences, published in 1975, which examined and
    broke down all the causes of oil spills in the ocean. They are as
    follows: offshore petroleum production is responsible for 1.3 percent
    of all the oil that is spilled into the ocean; natural seeps are
    responsible for 9.8 percent; tankers and tanker operations are
    responsible for 34.9 percent; atmospheric precipitation -- and this
    relates to the automobile pollution that Mr. Soccolich talked about --
    9.8 percent; urban and river runoff is responsible for 31.1 percent; and
    municipal and industrial activities are responsible for 13.1 percent.
    So when you look at the total ocean pollution from offshore production,
    it is 1.13 percent, which is pretty minuscule compared to all these

                                       72

    other sources. And yet it is very interesting that we have -- as in the
    Georges Bank case -- this great public concern over the risk. And if
    you look at these other activities, we do not seem to have the same
    degree of public concern. The question of risk may be less related to
    total spillage and more to the amount per incident.
       I think this is an excellent example of where -- at least from my
    perception of what we know and don't know about the environmental
    effects -- we haven't sorted out whether or not it is the total
    integrated spill per annum, say, versus the amount of the individual
    spill that is more crucial.

       WELD: So far, we seem to be talking about oil spill risks limited to
    exploration and development, and only in terms of what the platforms
    themselves produce. But there is another tremendous element of risk
    created by the fact that what the platforms produce must be brought
    ashore.
       Now, if you don't have enormous quantities of oil on Georges Bank,
    you are not going to have pipelines. That means that you are going to
    have some form of barge or tanker transport. I think there are
    estimates that even in the case of a relatively modest find you are
    going to double the amount of traffic in the Georges Bank area. The
    Ambrose Light-Nantucket shipping channel is one of the most traveled
    ocean traffic lanes in the world. If you put across these existing
    traffic patterns the traffic required to transport the oil from the
    platforms to New Jersey or wherever it is going, you will double that
    traffic.
       Among all this traffic there is a very substantial fishing fleet,
    composed of both foreign and domestic vessels. And the position of this
    fleet at any given time of year is not altogether predictable. You
    overlay this mess of vessels swarming out there with some of the worst
    weather in the world -- fog, storms, blizzards -- and the current that I
    have already alluded to. And then you add some gypsy vessels,
    underequipped, badly-manned vessels that may be going out to commit some
    kind of an insurance fraud, like the Argo Merchant, the Crown Zenith,
    and other disasters that have occurred out there in the last couple of
    years, and you get kind of a nightmare.
       It is in part created by the difficulty in getting the federal
    government to deal with the situation. There are so many agencies
    involved, and their responsibilities are so diverse, that it is hard to
    get a decision as to how you are even going to address this problem.
    Can you route the major traffic out around Georges Bank? That seems
    like a simple solution to a civilian like me, but once you raise it with
    the Coast Guard, the Association of Master Mariners, the Corps of
    Engineers, and all the other agencies Involved in this kind of decision,
    it is no longer simple.
       In addition to the problem of transporting the oil from the rig to
    land, there is a further problem which creates excellent opportunities
    for chronic and even major spills: Getting the oil up from the bottom
    into some kind of a holding barge, from the barge to the tanker, and

                                      73

    then off loading it. This is where your incidence of spills is going to
    go way, way up.

      DYER: It is very difficult to decide what that really means to our
    society. You characterize it as a nightmare; others would characterize
    it as a problem that can be resolved.

       GRIGALUNAS: I would like to comment on two points Mr. Weld made.
    One is that there will be some navigational problems because of the
    increased traffic, both with the additional fishing vessels as a result
    of extended jurisdiction-and because of oil-related traffic. There have
    been some very unfortunate incidents in New England recently, and there
    could be a higher occurrence of these with additional traffic. I think
    that has to be recognized.
       On the other hand, it is important to point out that if we don't have
    development of oil and natural gas resources in Georges Bank, the
    alternative will be more imports, and more tankers from other countries,
    and you will have spillage there. We have to consider the difference
    between what would happen if we develop Georges Bank and what will
    happen if we have imports instead.

       KELLY: Add to that that the tankers used to transport any oil found
    in Georges Bank would be U.S. flag equipment, subject to higher
    standards and much closer scrutiny by the Coast Guard. I would venture
    to say that they would probably replace, in supplanting imports, a much
    higher number of unsafe foreign flag tankers of the Argo Merchant type.

       WELD: Doesn't that presuppose a level of demand? Isn't your demand
    going to go up all the time, so that you would really be adding Georges
    Bank traffic to the same or greater import traffic?

       KELLY: Well, it assumes imports will continue to go up, and that is
    what we are trying to keep in check. But I am not sure that that is
    necessarily the case.

       BRUCE: I would like to generalize on the discussion. No one in this
    room would deny that we have less than complete information or
    scientific knowledge about what is going to happen in a complex region
    of the world, be it Georges Bank, the Gulf of Alaska, or anyplace else.
    I have enough faith in the scientific method to assume that in 10 years
    or so we will have more information. It may not be meaningfully more,
    it may be mainly incremental, but we will know something more. And
    there is a natural tendency, I think, to look at a situation like that
    and say, "Well, let's wait and learn a little more. Let's get a little
    more information about the fishery impact and about what is really out
    there."
       The fallacy in that point of view is that it assumes a static world
    and that it focuses too narrowly upon one particular problem -- oil in
    Georges Bank -- and doesn't begin to look beyond to the ramifications

                                      74

    that nonaction in Georges Bank 'has. If we don't produce oil in Georges
    Bank -- if there is any there -- then we have got to do other things:
    import more oil; liquefy natural gas in Algeria and try to bring that in
    in LNG tankers, which isn't easy; produce more coal; or cut down our
    consumption of hydrocarbons.
       It seems to me that those who argue for no-action in the limited
    context of Georges Bank have a certain burden of proof, too. It seems
    to me they must begin to focus on what is happening in the rest of the
    world and really decide whether nonaction in Georges Bank is worth the
    impact it is creating elsewhere. Coal is a terribly disruptive process
    on land, as everyone knows, with the slurry pipeline and the things that
    that involves. And we have talked about the impact of oil imports.
       But it is also disruptive not to have energy in a society that is
    geared to high energy consumption. The point I am making is that you
    can't simply say "Let's just wait until we know more," because the world
    doesn't wait. The more intensively you try to focus on these concerns,
    the less I am afraid you are going to be able to get any definitive
    answers over time.

       BURROUGHS: I hope I indicated that I thought the decision was going
    to be made by the courts in the face of a lot of outstanding
    uncertainty. I did not mean that one should wait to resolve all the
    outstanding scientific issues. That is a dilemma that I am very much
    aware of.
       I would say that the scientific method, if there is one, can lead us
    to greater levels of knowledge through increasingly sophisticated
    questions as we try to learn about the environment. We answer one
    question and become aware of three or four more.
       The government-industry-public triangle we have been talking about
    has a series of management decisions forced upon it that are clearly in
    a different time frame from the academic or research time frame. I hope
    what I communicated was that we have to recognize that there are very
    large uncertainties, and I think the decision process, whatever it may
    be, should speak forthrightly about what those uncertainties are.

       KASH: I have a sense that far too much of the discussion this
    morning has focused on oil spills, which seem to me to represent a
    characteristic of this society, so we are arguing about facts. You will
    spill more oil if you use foreign flag ships, offshore oil produces one
    percent of the spills, tankers produce 30 percent, and cars put 9
    percent in the air. Those are convenient things to argue about.
       Obviously, this controversy is tied up with a lot of other issues,
    and oil spills, I think, are really a surrogate for all the conflicting
    values.
       I think we are making some progress on Georges Bank, and the
    positions of the different parties seem to be changing. The fishermen
    find it more palatable now because there is something called the
    Fishermen Contingency Fund. And there is a Shoreline Contingency Fund.
       I have a sense that those funds are to compensate potentially

                                      75

    interested parties, and that some of that compensation may take place
    without the most compelling evidence of hard damage. I think it
    probably has some characteristics of distributing resources to interests
    to get them on board.
       Other issues play a role in this. A lady here asked about local
    interests. Sitting in the Conservation Division, I sometimes get the
    notion that people don't have as much faith in my good judgment,
    motives, and ability to do good works as I wish they had. That reflects
    their view that the federal government doesn't represent their
    interests.
       The interesting thing is that I am also told by local governments
    that they don't like their states representing them. As a matter of
    fact, the states do have their own axes to grind. One of the issues
    that runs through this whole process is that we in the U.S. Geological
    Survey are trying to deliver information to the states in substantial
    quantities. We are legislatively mandated to do it. And the Secretary
    and the OCS Lands Act both tell us that we have got to bring the states
    and the local communities into the loop. I think there is a power
    argument about who gets to participate and who gets to decide. All
    those issues play a role.
       Someone made some comments about the urgency or lack of urgency in
    getting our regulations out, and this is particularly sensitive to me
    because I have felt some heat on this issue. The OCS Lands Act
    Amendments are really quite a complex piece of legislation. They are
    another one of these lawyers' contingency funds, as nearly as I can
    tell; they offer multiple opportunities for getting legal counsel.
    Every engineer has to get involved and at every meeting I go to, the Act
    is pulled out.
       It has been pointed out here that sometimes regulations don't
    represent the legislative intent. I agree with that. But I think in
    this case we are going to come pretty close. We have had an awful lot
    of people watching, and a congressional committee is going to be set up
    for the sole purpose of monitoring it.
       Years ago, one of your colleagues at MIT published a paper in Science
    Magazine that made, I thought, a pretty persuasive case. It said that
    when people and interests exist who believe that new developments will
    impact them, and they don't know whether they will be impacted
    positively or negatively, they tend to do nothing. Only those people
    who can identify a positive benefit tend to be in favor of it when
    conditions are uncertain. I think that is exactly what has happened
    with Georges Bank. But we are working out the procedures and getting
    the data together, and one of these days we are probably going to get
    that sale pulled off, if we are lucky enough to find some oil and gas
    out there. But it is a time-consuming process in a condition of
    uncertainty, with lots of conflicting interests.

       KELLY: A recurrent theme of this Forum is the number of issues and
    complexities and differing interest groups. How do we handle this from
    a procedural standpoint? I think Mr. Bruce made a very good argument

                                       76

    earlier that policy should not be made in the courts, but should be
    delegated, as it is by Congress in this case, largely to the Secretary
    of Interior.
       in this whole process, there are lots of opportunities for public
    participation. I don't see any real changes that are necessary from a
    procedural standpoint. In a frontier area like the Georges Bank, there
    is first a lease sale. There is an environmental impact statement
    hearing held prior to the holding of the lease sale, and it is
    absolutely open to every citizen who wants to participate.
       in the development of frontier areas, there will be another
    environmental impact statement on the production phase if oil or gas is
    found. Here again, there will be an opportunity for the public to
    participate to whatever extent they wish as individuals.
      Now, in between those two events there are also the exploration and
    -- if oil or gas is found -- production plans that will be submitted to
    the Bureau of Land Management by the oil company operators. Under the
    new OCS Lands Act Amendments, these are going to be passed along to the
    state governors for coastal zone management impact review and comment,
    and also to the Federal Coastal Zone Management Office. Here we have
    another indirect opportunity for the public to participate, this time
    through their states. Congress, in its wisdom, thought that 'Was one
    area where communication from localities had to be funneled through the
    state in order to have one unified response.
       So I think there are adequate opportunities at the present time for
    the public to participate, but that what we need to see more of is
    various interest groups living with the decision that is made -- in this
    case by the Secretary of Interior, who, by necessity, has to balance all
    these conflicting interests.
       I hope in the future there will be less second-guessing of the
    Secretary after the balancing act is accomplished. In a lot of this
    litigation, we have parties who have an axe to grind because they didn't
    like the way that their interest was balanced. So they come back later
    in the courts to try to get a little more than they were able to get
    through the administrative procedure.   Hopefully, better education of
    the public on these issues will result in less of that and in more
    willingness to live with some pretty decent procedures that already
    provide for participation by the public.

       BURROUGHS: Could I make one brief comment? In trying to assess
    public participation with respect to Georges Bank, I looked at the final
    environmental impact statement, and in the back of it there is
    information that enables you to determine the participation categories.
    If you define the public as private citizens, he or she was represented
    through that process, in terms of the aggregate number of responses,
    only 5 percent of the time. In other words, 95 percent of the
    respondents to that process could be identified with some group, be it
    county government, industry, fisheries, scientists, or whatever.

       KELLY: I neglected to mention that as many of the individual

                                       77

    regulations are issued, there will also be opportunity for public
    hearings. For example, the Coast Guard has just held two public
    hearings on Title III, the Offshore Oil Pollution Liability and
    Compensation Fund provisions. One was held in New Orleans and one in
    Washington.

      DYER: It seems to me that the best way for the oil and gas industry
    to decrease the probability of judicial remedy after the fact is to have
    the industry police itself, to do just a first-class job, even more so
    than it has in the past. What about the best and safest technology that
    may be available to the oil and gas industry?

       KELLY: The technology in the exploratory phase of offshore
    exploration is already pretty advanced. I could include many
    illustrations, but a few will make the point.
       Figure 4 shows a semisubmersible mobile offshore drilli~ng platform of
    the type that will be used in the Georges Bank and that is presently
    being used in the Baltimore Canyon area. Dr. Craven talked about the
    American contribution to marine technology through the developmaent of
    semisubmersible platforms, but he was really emphasizing these platforms
    as a means of transporting people. To date, the semisubmersible design
    concept has been developed largely for mobile offshore drilling
    operations.
       Basically, you have a fixed platform that is riding on two submersed
    pontoons. In effect, they are sitting on two sponsons that are riding
    on two submarines. Through very sophisticated ballast control systems,
    the depth of the pontoons can be adjusted to various sea conditions.
    Because of the spaces between the sponsons, ocean waves are able, in
    effect, to flow through the platform to minimize motion during drilling
    operations. This creates a fairly stable platform for drilling, as well
    as one on which people can live without getting seasick and lead a
    pretty normal life.
       These semisubmersible units also contain sophisticated motion
    compensation equipment.
       The unit in Figure 4 has eight anchors and can remain moored in waves
    of up to 75 feet. It can continue drilling with ocean waves of up to 40
    feet flowing through it.
       Figure 5 pictures a jackup type of mobile offshore drilling unit
    which, instead of floating like the previous unit, actually stands on
    its legs on the ocean floor. This particular unit is standing in the
    North Sea in about 350 feet of water, and from the bottom of the legs to
    the top of the drilling tower, that is the equivalent of about a
    40-story office building.
       The third major type of offshore drilling unit, shown in Figure 6, is
    the ship-shaped drilling unit, which isn't used to a great extent in the
    United States, although one has been drilling the Exxon wells in the
    Baltimore Canyon. It is particularly useful in extremely deep water
    conditions and in areas of the world where the drill sites are far from
    land. Being a ship, it has a great deal of cargo capacity and can carry

                                       78

    FIGURE 4. Semisubmersible rigs like the Zapata Yorktown are capable
    of drilling 25,000-foot wells in water depths to 2,000 feet. The
    rigs have been designed to operate in moderate-environment areas along
    the Outer Continental Shelf.

    a lot of supplies used in the drilling process.
       The real purpose of these illustrations is to discuss the concept of
    best available and safest technology, which has become quite a buzz word
    of the environmental interest groups. One theme of the Forum has been
    the tremendously large amounts of capital required for offshore
    development. The semisubmersible drilling rig in Figure 4 now costs
    anywhere from $35 to $60 million to construct. For investors to be able
    to justify an investment like this, they have to be able to see enough
    income being generated by the unit to make the investment a viable
    alternative to putting the money in a time deposit account.
       One of the paradoxes here is that whereas environmental interests
    want to see best available and safest technology, the delays caused by
    litigation in the courts and the time required for the issuance of

                                       79

    regulations, and the various delays provided in the 00S Lands Act
    Amendments, discourage the development of such technology. Companies
    just won't be willing to allocate money for this type of investment in
    the context of other safer investments that they might make.

       GRIGALUNAS: I would like to answer that. I am not sure that within
    the concept of the best and safest technology it makes much sense.
       First, with regard to the best technology, you could invest millions
    more dollars and always develop something better. So what do you mean
    by "best?"
       Second, I don't think the regulators should be involved in the
    details of what technology companies should adopt as a general rule. If
    the society has certain goals, such as that so many parts per million
    should be discharged, then the government should establish general rules
    (which presumably are justified on economic grounds) and let the

    FIGURE 5. The Zapata Nordic, a jackup drilling rig, rests on three
    440-foot legs which reach to the ocean floor. The rig can drill in
    300-foot water depths in areas with severe environments.

                                      80

    FIGURE 6. Driliships like the 430-foot Zapata Trader can drill in
    water depths to 600 feet and can travel unassisted between drillsites
    at a speed of 11 knots.

    companies decide the best way to do it. As long as the company meets
    the regulation and you can have periodic inspections, then why should we
    care whether it is technology X, Y, or Z?

       WTILLIAM HYMES, Congressional Research Service: That language is, of
    course, in the legislation, and it is tied to the pollution question,
    the safety question. If you read the legislation, you will find some
    clues as to why the language "best available technology" is used. So it
    is not a matter of choice.

       DYER: Is there any difference between regulating the technology or
    stating the objectives of what that technology ought to accomplish? Do
    you think that the law will be blind to that differentiation?

       GRIGALUNAS: You are going to have to have someone decide what the
    best technology is. There is going to have to be a committee to decide
    that. It is going to be a very costly, cumbersome thing to enforce, and
    I don't see the need for it. If you can set the standard, why do you
    care what the technology is?

                                       81

       HYMES: I think that is what they are trying to do, to get at some
    way of saying what the standard should be.

       SOCCOLICH: I believe the most controversial issue on this point is
    the decision on how oil or gas should come ashore, either via pipeline
    or tanker. If it is determined to be economically and technically
    feasible for the oil to be brought ashore by pipeline, what is
    economically feasible, what is technically feasible? Those terms have
    not been defined specifically with regard to the national interest.

       WAYLAND: Regarding the technical aspects of actual drilling in
    oilfield operations, whether they are onshore or offshore, the Outer
    Continental Shelf Lands Act Amendments did provide for this best
    available technology. The resulting regulations probably will not
    greatly change the oilfield technical operation. The old regulations --
    and I think the new ones -- provide that the oil and gas supervisors of
    the Conservation Division of the Geological Survey will have the
    authority to make that decision, but they will be subject to challenge.
    As to the extent that they may be challenged, it will be a technological
    case which, if it winds up in the courts, will be subjected to the
    problems we have been discussing in this Forum.
       But the flexibility of the supervisors to issue orders which are
    publicly reviewed, I feel, is the safeguard that the best available
    technology will be used in oilfield operations offshore in the future,
    as they have been in the past.

       WELD: I would like to restate my position, which I take to be the
    position of the fishing industry as well as the conservation community,
    because I think it is being demonstrated by this discussion of what best
    available technology should or should not mean. This is one of the
    reasons why we feel these regulations should be in place before you go
    ahead with exploration and development.
       Not only do we feel that these disagreements have to be settled and
    the decision made as to what these regulations mean, what shape they
    should take, how you apply for compensation, or how you decide what kind
    of equipment belongs on the rig, but we believe that ought to be decided
    up front.
       More basically, I don't understand the willingness of a number of
    people here to assure me that we really shouldn't be worrying about
    these things, because Interior in its all-knowing benevolence is going
    to take care of it sooner-or later, when Interior is arguing with us
    that they may not even be subject to the 005 Amendments as far as the
    activities on Georges Bank are concerned.

    83

    CASE II:  SOHIO AT LONG BEACH

    CASE TEAM

    Russell R. O'Neill, Leader
    Dean of the School of Engineering
    and Applied Science
    University of California,
    Los Angeles

    Donald B. Bright
    Environmental and coastal management
    consultant
    Former Director of Commerce
    Port of Long Beach

    William Ahern
    Energy Coordinator
    California Coastal Commission

    Frank E. Mosier
    Senior Vice President
    Supply and Transportation
    Standard Oil Company (Ohio)

    Jan Smutny-Jones
    Chairman
    Citizens' Task Force on SOHIO

                                       84

    RUSSELL R. O'NEILL

    Dean, School of Engineering and Applied Science
    University of California, Los Angeles

    INTRODUCTION

    Good morning. I am Russ O'Neill, leader of this panel and chairman of
    the Maritime Transportation Research Board, a unit of the National
    Research Council.
       When Congress passed the Trans-Alaskan Oil Pipeline Act on November
    16, 1973, it opened the way for Alyeska, a consortium of oil companies,
    to build an 800--mile pipeline from the North Slope oil fields at Prudhoe
    Bay to Valdez. It was first thought that the West Coast refineries
    could consume all of the 1.2 billion barrels per day of oil that would
    flow through this pipeline, but it soon became obvious that they could
    not handle this much oil. Further, Standard Oil of Ohio (501H10), which
    has the major interest in the Alaskan Prudhoe Bay oil field, has its
    market in the Midwest. Currently, the West Coast has an oversupply of
    approximately half a million barrels of oil per day, and it's expected
    that this might be over three-quarters of a million barrels by 1982.
       5011I0 has proposed a distribution system that includes the
    construction of a new oil terminal at the entrance to the Port of Long
    Beach, California, the construction of 120 miles of new pipeline, the
    takeover of 910 miles of existing gas pipeline', and the construction of
    some temporary storage tanks, in order to transfer half-a- million
    barrels per day to Midland, Texas, 1000 miles away. The map in Figure 1
    shows this proposed system, including the tanker route from Valdez to
    Long Beach.
       This proposal was selected as one of the cases for this Academy Forum
    because it has created considerable controversy among the citizens.
    Their objections include the hazard to the environment, both the coastal
    region and the air, and the possible curtailment of future natural gas
    deliveries to California. The permitting process for a project of this
    magnitude is quite extensive; it involves many different agencies at the
    local, state, and federal level and provides for considerable citizen
    participation. The proposal is for a fairly large, complex system to
    supply energy to the United States.
      Long Beach is one of the twenty busiest ports in the world today.
    The aerial photograph in Figure 2 shows its extensive facilities.
       It serves about 500 ships a month, including 120 tankers. To put the
    SOHIO Project into perspective, about 12 to 16 tankers per month would
    be involved. To handle these ships, SOHIO proposes to build a terminal
    in the outer harbor near the harbor entrance at Pier J. This facility
    would have two tanker berths, a breakwater, and some temporary storage
    tanks. The artist's rendering in Figure 3 shows it as it would appear
    from an aerial view.

                                         85

                    of

           I

         little over 1000 miles long. Part of this pipeline would be new
                    .    ,

      thFIGURE 1. Route of Alaska pipeliver naturaoil gas from sourcexas to Calrefinerynia.
        SOHIO has alreadywing proposed twdiso tribuade-offs to offset the hydrocarbon
     emissions thate oil would then be capipused by to Midlhe tand, Texas through a ping operations and by

    the storage tanks: the installation of a sulfur dioxide scrubber at the
    Southern California Edison Power Plant at Seal Beach, which is nearby,
    and the installation of some hydrocarbon vapor control equipment at
    three large drycleaning plants in Long Beach.

                                       86

                  FIGURE 2. Aerial View of Long Beach Harbor.

       At present, the oil is being shipped by tanker through the Panama
    Canal, at an additional cost of about $2.70 per barrel.
       The SOHIO Project is a very complicated case study, involving a large
    amount of money and the kinds of tensions that arise when resources that
    are owned by the public are regulated by the government and developed by
    private enterprise.
       To lead this discussion, a panel of very knowledgeable individuals
    will expand somewhat on my introduction and then engage in a dialogue
    with each other and with you. Each panelist will make a few
    introductory remarks. But first, let me tell you about each of them.
    Bill Ahern is Chief of the Energy and Ocean Resources Division for the
    California Coastal Commission. Don Bright is an environmental and
    coastal zone management specialist; when the SOHIO project was
    initiated, he was Director of Environmental Affairs and Director of
    Commerce for the Port of Long Beach. Frank Mosier is the Senior Vice

                                        87

                              ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. ..... .1  ....  ~?

    FIGURE 3. Artist's rendering of proposed SOHIO facility with two
    tankers at discharge pier.

    President for Supply and Transportation of the Standard Oil Company of
    Ohio; and Jan Smutny-Jones is Chairman of the Citizens' Task Force
    Against the SOHIO Project.
       Our first speaker will be Don Bright. Looking at him, you would
    think he was a sea captain from New Bedford, but he's a Ph.D. in marine
    biology from USC, and he has been Professor and Chairman of the
    Department of Biological Sciences at Cal State University, Fullerton, as
    well as Chairman of the South Coast Regional Coastal Commission.

    DONALD B. BRIGHT

    Environmental and coastal management consultant
    Former Director of Commerce, Port of Long Beach

    The SOHIO Project, from an ehgineering point of view, is relatively
    simple: It consists basically of marine tankers and a lot of pipeline,
    most of which is already in place as part of a natural gas system.

                                       88

    Therefore, you might wonder why there has been such lengthy debate and
    concern over the project. The major problem is the number of
    jurisdictions and the permits that are required. Table I indicates
    where SOHIO is in this process. I've listed the permits as general, or
    relatively easy to obtain, and critical, or those that have required a
    great deal of effort. There are 59 environmental and 30 construction
    permits that are very critical. Of the critical permits submitted so
    far, only about 30 percent have been approved.
       Of all the permits, the most difficult are those associated with air
    quality. When SOUTO began this project, they and many others, including
    myself, believed that the critical path for approval involved dredging
    and dredge disposal. We were simply not aware of the political
    gamesmanship that would push air quality permits to the top of the list.
       Table 2 lists the jurisdictions associated with permit approvals. It
    illustrates why the S01110 management team flew to -many parts of the West
    almost daily. The agencies involved in the approval process include: 10
    federal agencies and 22 from four states (California, Arizona, New
    Mexico, and Texas); 22 more agencies in 12 counties; and 52 agencies or
    separate units in 19 cities. There were also six special districts,
    four railroads, and four companies or individuals involved. This is
    what S0OH10 has confronted in striving to obtain the necessary approvals.
       To further illustrate the complexity of the process, the air quality
    evaluations associated with the project are shown in Figure 4. It's
    important to recognize that neither the EPA nor the California Air
    Resources Board completely understood the air quality problems, that is,
    emissions associated with the movement of oil. For example, the
    Chairman of the California Air Resources Board indicated that this
    project would produce hydrocarbon emissions equivalent to those from six

    TABLE I   SOHIO Project Permit Status in March of 1979

                        In
                        Preparation   Submitted   Total   Approved   (%
    Critical Permits
        Environmental    10             49          59   is            31
        Construction      4             26          30        9        30
    General Permits
        Environmental    13             29          42       25        60
        Construction    140            432         572      202        35

    Total Project Permits    703
        Submitted            536 (76%)
        Approved              254 (36%)

                                        89

       TABLE 2  Jurisdictions Associated with SOHIO Project Permits

       Federal                         10 Agencies
       States                          4 States, 22 Agencies
       Counties                        12 Counties, 22 Agencies
       Local                           19 Cities, 52 Agencies/Units
       Special Districts               6
       Railroads                       4
       Companies/Individuals           4

    million cars. Yet once they understood the mechanics of moving crude
    oil and the related problems, that estimate was reduced to several
    hundred thousand cars. Ultimately, it was not hydrocarbons that were
    the key issue, but NOX (nitrous oxides) and sulfur dioxide.  So there
    has been an elusive character to these emissions both technically and
    politically.

                                  MODIFICATION

                                 PROJECT DESIGN

                                    I
                                 EVALUATION

                                  PROJECT  |E           V     AIR IMPACTS
                                 CONSTRAINTS  A  ESTABLISH  A
                                            A  PROJECT EMISSIONS A L    1  TYPE  _
                                BACT FOR TANKERS  u     u L   2. TRADE-OFF RATIOS
                                    AND A                A  3. BACT
                                 STORAGE TANKS  T  No   T
                                            I    SO)     I
                                               0 HC  ~   o
                                              N   TSP     N

                                   E               E
                                   VA    SPECIFIC MITIGATIONS  A
                                   L               L   FINAL PROJECT
                                 S   1 TRADE-OFFS  _U   APPROVED
                                    42  LEASE CONDITIONS  A  AND CONSTRUCTED
                                   oTA3. PERMIT CONDITIONS  T
                                   0               0
                                   N   P           N

    FIGURE 4.  SOHIO Proj-       BEFORE PROJECT  AFTER PROJECT
    ect Air Quality Eval-       AIR QUALITY MONITORIING  AIR QUALITY MONITORING  S
    uation.

       As Figure 4 shows, the air quality review began with design
    evaluation. This resulted in a series of constraints, both mechanical

                                       90

    and operational, for the tankers and the storage tanks. Then the
    baseline emissions were calculated for the our major categories of
    nitrous oxides, sulfur dioxides, hydrocarbons, and particulate matter.
    The next step was to determine what trade-off s (offsets) were required.
    In the midst of this process a new rule, the New Source Review, was
    adopted. It dictated that any project planned for a non-attainment area
    (one that did not meet the ambient air quality standards) would have to
    provide trade-off s for all the project emissions in excess of the
    allowable levels.  SOHIO was immediately thrown into this because the
    baseline emissions determined for the project exceeded that minimum
    level.
       Further, it was determined that the trade-off s would be accomplished
    at a premium, that is, for each pound of actual emissions, the project
    would be charged for 1.2 or 1.3, etc., pounds. These trade-off values
    (ratios) were established after lengthy public debate -- some 14 days of
    hearings before the South Coast Air Quality Management District and
    extensive discussions involving EPA, the California Air Resources Board.,
    the Governor, the President, Mr. Schlesinger, and others.
       Once those ratios and the BACT (Best Available Control Technology)
    were established, the specific (individual facilities) trade-off s were
    determined, that is, the kinds of equipment that SOHIO would provide and
    how this equipment would result in the reduction of emissions at an
    existing operation. Resolution of these problems will yield final air
    quality approvals. SOHIO is now trying to resolve differences of
    opinion between the local air quality management board and the
    California Air Resources Board about the specifics of trade-off s.
       As this air quality process evolved, it also led to a series of
    analytical reviews (depicted in the three lower boxes in Figure 4) of
    air quality before and after the project implementation. The EIR
    indicated that the project, with the trade-off s, would not greatly
    affect the air quality. There should, in fact, be less impact after the
    project than if the project were not implemented.
       Throughout the permit process, there has been a great deal of public
    participation, as is evident from Table 3. There were eleven hearings
    on the EIS and four on the EIR,, not just in the city of Long Beach but
    in many parts of the country -- in the case of the EIS, in several
    states. There have been, 31 formal hearings, with one before the South
    Coast Air Quality Management District lasting 14 days. There are still
    more to come, since the specific trade-off s have not been approved. The
    City of Long Beach held a referendum, as the table shows, on whether or
    not there should be a SOHITO Project. It was supported by 62 percent of
    the voters. Finally, there have been a number of formal presentations,
    at least 25.
      Within that mix of agency and public participation, a number of
    problems have emerged as part of what you might call a decision process
    through confusion and disagreement.
      To begin with, one of the key problems which 50OH10 and others did not
    envision at the outset was the lack of energy policies. The absence of
    these at the federal level was problematic, but more problems were

                                       91

    TABLE 3   Public/Government Participation in SOHIO Project

    Public Hearings on Environmental Documents:
        EIS - 11 Hearings
        EIR - 4 Hearings

    Formal Evidentiary Hearings:
        Senate                                               4 Hearings
        House                                                6 Hearings
        FPC/Federal Energy Regulatory Commission             3 Hearings
        California Public Utilities Commission        I         Hearing
        South Coast Air Quality Management District    I       Hearing last-
                                                             ing 14 days
                                                             and still
                                                             more to come
    Formal Hearings:
        National Transportation Policy Study Commission  I  Hearing
        California Air Resources Board                       2 Hearings
        California Coastal Commission                        7 Hearings
        Long Beach Board Harbor Commissioners                4 Hearings
        Regional Water Quality Control Board                 2 Hearings

    Referendum:
        City of Long Beach - Municipal Election, Novemiber 8, 1978 -
                             62% Voter Approval

    Formal Presentations:
        25 individual Discussions at Technical/Civic Meetings

    generated at the state level. In the absence of an "energy policy," the
    political games between the key actors in California made it very
    difficult for anyone, not just S0OHI0, to determine what was required.
       The second point that became clear is that the public does not
    understand oil operations, particularly a system that transfers only a
    large volume of crude oil, which made it difficult to gain public
    understanding of the role of California as an "energy window" for the
    rest of the nation.
       A further problem was uncertainty about tanker operations, that is,
    actual procedures for unloading oil and whether these produced large
    volumes of "fugitive emissions."
       Another key issue was regulatory agency boundaries, with overlapping
    and narrow jurisdictions, and one agency saying, "Our jurisdiction only
    deals with coastal dependency," and another one saying, "Ours only deals
    with air quality."
       Federal and state political gamesmanship also became a problem, for
    instance, the desire to maintain California's indigenous crude oil
    production at a high level, with concern over introducing North Slope
    oil. The largest producer of California oil, is, in fact, state and
    local government.
       The role of the public in the decision process has been particularly

                                       92

    disturbing to SOHIO. California is on the "cutting edge" of the
    multi-faceted approach to public participation. This process of
    decision by consensus has been quite evident, and SOHIO representatives,
    steeped in corporate management, have shown intolerance in many
    instances.
       Finally, a nd perhaps the most significant problem, is what I think of
    as confused eco-ethics. Two examples will illustrate this. Initially,
    the Chairman of the California Air Resources Board tried diligently to
    ensure that the SOHIO Project did not go forward. Whether his intention
    was to see that it never went forward or to develop a better bargaining
    posture for California is not relevant. The point is that at the
    beginning he used every available means to stop the project.
    Ultimately, when it became appropriate to approve the project, he and
    others discovered that to get public acceptance was well-nigh impossible
    and that you can't change from a total conservation ethic to a
    development ethic without losing some of your credibility.
       A second illustration of misunderstanding the prevailing eco-ethics
    occurred because SOHIO, as a small midwestern marketing and refining
    company, was ill-equipped to deal with California's regulatory process.
    Further, they attempted to manage the project from Cleveland, rather
    than having on-the-scene managers who could recognize the peculiarities
    of California's public participation process and the multi-faceted
    commissions and boards that review projects like this one.
       Recently, for example, the Coastal Commission was to vote on a
    critical amendment to add storage tanks to the already-approved marine
    terminal. Approval hinged upon whether locating those tanks at the
    terminal would lead to fewer air emissions than locating them somewhere
    out of the coastal zone. Before the Coastal Commission, you must have
    approval by a majority of those appointed, and the magic number is
    seven. After about three-and-a-half months of cajoling, discussion, and
    recalculating numbers over and over again, we had obtained a straw vote
    of six, with three members absent. At the next meeting, a newspaper
    article that quoted a local SOHIO management individual as being in
    disagreement with the League of Women Voters over air monitoring was
    passed up and down the Coastal Commission head table. One of the
    commissioners who had promised to vote Yes voted No, and the vote was
    six in favor, five against. This delay in the approval of the tanks
    occurred because someone in SOHIO was not aware of all of the various
    eco-ethical forces associated with regulatory review in California.
       In conclusion, public participation has been heavy in the review of
    this project. It will continue to be so until the final permits are
    received by SOHIO. Public participation has not been a bad influence;
    rather, it has indicated that until we understand the whole
    11perspective" of public participation as a goal, not just a process,
    we' re not going to be able to approve projects in any more of a timely
    manner than has been associated with 5011I0.

       O'NEILL: Thank you, Don. Don mentioned that there were over 100
    agencies involved in this. One of the agencies is the California

                                       93

    Coastal Commission. Bill Ahern will further explain its role. Bill has
    a Ph.D. in public policy from the Kennedy School of Government. He's
    had experience with other agencies such as the California Energy
    Commission and with California's legislature, and has been on the staff
    of RAND Corporation.

    WILLIAM AHERN

    Energy Coordinator
    California Coastal Commission

    Thank you, Russ. Those of you who were here last evening remember Mr.
    Bruce, of the law firm of Covington and Burling. He quoted from a
    federal judge's decision on the suit by the American Petroleum Institute
    and other oil companies against the Secretary of Commerce for having
    approved the California Coastal Management Program. Judge Kelleher, in
    his very candid decision, I must admit, described the whole process that
    he was dealing with as something of "high congressional purpose and low
    bureaucratic bumbling, confusion, and complexity." What he was
    describing, I realized, was my job at the California Coastal Commission,
    which is to deal with all energy projects proposed for the California
    coast. And each one is an incredible laboratory exercise in complexity,
    symbolism, and confusion, the interaction between federal and state
    legislation.
       But we at the California Coastal Commission are just one of those
    permit-givers on Don Bright's list. And I would claim that the
    California Coastal Commission is an institutionalization of public
    participation, because it was created by the people of California in
    1972. The legislature continued to refuse to pass legislation to
    protect the California coast and the people had to take the initiative.
    The commission passed by one vote in the Senate. We have 12 lay
    commissioners, who meet twice a month and are extremely regular people,
    except that most of them tilt towards protecting the California coast
    against development.
       The trouble with the SOHIO Project is not so much the 10 or 12
    tankers it will bring in each month, but the fact that a number of
    people in California worry about any more oil tankers going along the
    California coast. So there's a heavy, symbolic, value-laden level to
    this kind of project. This is an extraordinarily timely forum, because
    it's the tenth anniversary of the Santa Barbara oil spill. The SOHIO
    tankers, of course, were to go through the Santa Barbara Channel. Oil

                                       94

    spills, both because of media attention and their nature, grab the
    public's consciousness. When I walked into the commission meeting last
    week one of the commissioners immediately told everybody in the
    audience, not to miss the Nova show on the Amoco Cadiz. That was an
    incredible oil spill with effects that will probably last ten years,
    much longer than those of the Santa Barbara spill, which actually are
    very hard to detect now. But SOHIO ran into this great fear of oil
    spills and what they might do to the Coast.
       The Port of Long Beach is already an industrial area. It has oil
    production islands that pump from an oil field under the ocean. They
    have waterfalls and palm trees and colored lights, and many people think
    they're quite nice and other people think they're the most hideous
    things they've ever seen. The port is definitely an industrial area.
       You may be a little shocked to bear that the Coastal Commission
    almost unanimously approved the S0OHI0 Project more than a year ago, with
    a vote of 11 to nothing with one abstention. The reason was that the
    ports have very outmoded tanker facilities. We saw the SOHIO Project as
    providing some new tanker facilities for the Port of Long Beach. And
    the legislation we operate under, the California Coastal Act of 1976,
    says that, if you're going to have to have an oil terminal, put it in an
    industrial area so you're not messing up the beautiful, remote,
    relatively underdeveloped parts of the California coast. It's a very
    clear policy, and it's why the commission was able to approve the
    project.
       However, even in an industrial area you have use conflicts. Those
    big oil storage tanks 60 feet high and 140 feet in diameter make some of
    our commissioners feel that we're just dumping one thing after another
    on the City of Long Beach. You've got this inherent land use planning
    conflict: you're either adding to other industrial facilities or you're
    ruining a remote part of the coast. It caused a terrific amount of
    tension when these tanks came up for consideration in front of our
    Commission.
       As Don Bright mentioned, a major problem was the air emissions
    permits. The emissions from the tankers are the major problem, and the
    things in the media about tankers causing the emissions of six million
    cars -- even though our commissioners, 12 lay people, aren't supposed to
    deal with that -- are in their heads when they consider this project.I
    was out there on the channel when an Arco tanker was blowing its tubes,
    which they do for a few minutes when they put the engines in reverse.
    The impressive outpouring of smoke that you see in the photograph in
    Figure 5 had soon come and covered us in soot, a very graphic
    demonstration of what tankers can do. Of course, this would be totally
    illegal for the SOHIO tankers to do. But nevertheless, this kind of
    thing gets into people's minds when they are dealing with the project.
       The air emissions factor means it's going to be very difficult to get
    your permit in an industrial area like Los Angeles because it's a
    non-attainment area for standards. So the air quality policies make it
    easier to go to remote parts of the coast where you can put out more
    emissions and not have the serious requirements; however, our coastal

                      FIGURE 5. Tanker blowing tubes.

    legislation, approved by the Secretary of Commerce, operates on just the
    opposite policy and says, put industrial facilities in industrial areas.
    It got to be so crazy that the governor's office studied the possibility
    of putting the SOHIO Project in San Luis Obispo Bay, about 150 miles
    north, to try to solve the air emissions problem. Of course we in the
    California Coastal Commission probably would have gone beserk if SOHIO
    had ever made a proposal to do that, but since it came out of the
    governor's office we kept quiet and the proposal sort of died.
       Well, my theme is that some of the fears we have in California when
    we see each major energy project create sort of a mess in the approval
    process. At the Coastal Commission, we generally give a decision within
    42 days, and even when it's a denial -- and there are a decent number of
    denials -- at least the commission acts and people who come before us
    say at least you made a decision.
       Out in California we do have strong values about protecting the
    coast, but they may be in jeopardy because of what is happening with
    seaward coastal energy facilities such as the SOHIO Project, the
    Seabrook Nuclear Power Plant, and the LNG terminal in California. When
    Exxon wanted a couple of acres for an oil and gas processing facility in

                                      9 6

    Santa Barbara County, they got all the way through a referendum and
    then, in effect, got denied by the Coastal Commission. The coastal
    permitting process is extremely complicated, and it's not clear whether
    it benefits the public. I think things could now go two ways. One is
    the soft energy path, because of the process that hard energy projects
    have to go through, and many people in California would say that's the
    way it ought to be. And many people on the 50OHI0 Project would say the
    best place to send that oil is to Japan, both for economics and
    environmental protection, and why are we dealing with California at all?
       On the other hand, I see a trend that these decisions are being
    pushed up to the higher levels of government. Already in California,
    the Coastal Commission and the local government are preempted when it
    comes to dealing with electric power plants and liquefied natural gas
    terminals. The legislature said that the processes were such a mess
    that they created special agencies or gave special one-stop shopping
    authority to an existing agency. I have no doubt someone's going to
    propose this year in Washington that there be some kind of congressional
    decision on the 50OH10 Project, just as they did on the Alyeska pipeline.
    And what I see in the future, to the detriment of public participation,
    local government roles, and regional differences and values, is that 20
    years from now when some company wants to build an oil terminal, they
    will go to the Department of Energy and present an application showing
    the cost of the energy and how much energy the terminal will provide.
    The Department of Energy will put it into a national input/output model
    connected to an energy supply substitution model and an energy demand
    model, as well as to the Wharton or the Chase econometrics or some
    national total equilibrium model. And in about five minutes, out comes
    this printout that says whether there's a net national-interest economic
    benefit in the project or not. And if it shows a plus in front of your
    project, then you go over to the National Industrial Facility Site Bank.
    What this site bank has done for every region of the country is to rank
    all the potential sites for industrial or energy facilities. If you
    apply for an oil terminal of such-and-such a size, the site bank pops
    out a map, let's say, of Southern California, and it shows the site that
    you get. And then you go over to the Environmental Protection Agency,
    and because of the demand for specific standards, you take all your
    manuals on the Best Available Control Technology -- which will probably
    fill this room, but nevertheless, they'll be very specific on what
    your' re supposed to do -- and you have your project. The whole process
    takes about a day of walking around Washington. We in California --
    local governments, the public, the League of Women Voters, the Sierra
    Club regional offices -- will get to participate in the site bank and in
    the equations in the model, but that will be the level of public
    participation. And that's the way I see things turning out, given the
    way they're going now. Thank you.

       O'NEILL: Frank Mosier, the next speaker, is a chemical engineer who
    has done his postgraduate work with SOHIO; he's been there for 25 years
    and has had a wide range of responsibilities, from process design to

                                       97

    corporate planning. At present, he is responsible for supply and
    distribution and transportation, and his specific assignment would
    include the sale of this Alaskan North Slope crude oil and the
    acquisition of crude oil for all of SO-ITO's refineries on a worldwide
    basis.

    FRANK E. MOSIER

    Senior Vice President
    Supply and Transportation
    Standard Oil Company (Ohio)

    I 'i going to try to hit on a few points that haven't been emphasized
    today and to give you some perspective on SOHIO's point of view on this
    project.
       First, I'd like to say that it was suggested that we limit ourselves
    to 10 minutes. That's all right. We've put 50 million dollars into
    this project, and it is rare that we have equal time.
       To paraphrase the old comment about domestic wine, this is a rather
    humble little project and even we are amazed by its presumption at
    times. Four years ago when we got into this thing, if someone had
    indicated it would become a subject for discussion before the National
    Academy of Sciences, we would have scoffed; we wouldn't have believed
    it. It's a very simple project, as Don Bright has pointed out, and in
    fact it's even simpler than he suggested. It's a classic example of
    making a mountain out of a molehill. It's also a'classic example of
    what happens when you get into the ultimate in public participation, and
    I'll cover that a little later.
       The current concept of the project involves~a couple of tanks on Pier
    J, a couple of jetties, and a few miles of 48-inch line tying into a
    1000-mile system of existing gas pipeline. This pipeline was deemed to
    be surplus by the gas company and subsequently, after several years of
    study here in Washington by the FPC, found to be surplus.
       What are we going to do with the line? Well, we had planned to move
    about 500,000 barrels a day of Alaskan oil which, by the way, is not
    suited to West Coast needs. It happens not to fit into the current
    refining configuration on the West Coast, which needs a somewhat
    different kind of crude oil at this time -- specifically, Indonesian
    sweet crude oil, which is imported at the level of some 400,000 to
    500,000 barrels a day.
       We started thinking about the need for a pipeline to move this

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    residual of Alaskan crude oil from the West Coast to the Midwest back in
    1973, just about the time the TAPS enabling Act was passed. Why was
    there this indicated need? Because the OPEC countries got together and
    decided to increase the price of crude oil from $3.00 a barrel to $12.00
    a barrel, and as is normally the case with this kind of situation, the
    demand for crude oil went down. Also, the price of a lot of other
    things went up. As a net result, refinery modifications and new
    refinery capacity contemplated for the West Coast were not built. The
    demand for products went down and existing refining utilization did not
    result. Therefore, we had to move the oil. Refineries could have been
    modified to accommodate Alaskan oil, but certainly not at a cost of
    about three times as much as had been contemplated six months earlier.
       Two years later, after studying alternatives from the Panama Canal to
    northern Canada, we decided, not so casually, to go to Long Beach for
    some of the reasons that were pointed out here this morning. It was
    already a highly industrial area; we did not visualize this as an
    environmental problem of any magnitude. After all, if we're going to
    continue to move the excess oil to Panama, we're going to be moving a
    rather substantially larger fleet of tankers past the same West Coast
    ports, stopping for bunker fuel and then going on to Panama.
       In fact -- a point which is rarely ever mentioned -- the incidence of
    tanker-caused air emissions and potential pollution to the waters in
    that area would be reduced by our terminal if we traded nothing off.
    The project in itself would reduce the emission situation in the area
    because California can't really legislate Alaskan oil off this planet.
    Some people probably would have liked to, but they are unable to. The
    fact is that a shuttle fleet running to Panama on a continuous basis
    would be considered by almost anybody looking from a broader point of
    view to be a much more significant environmental problem than stopping
    off somewhere along the way and unloading the tankers, putting the oil
    into a pipeline, and moving it to market by that mode.
       Certainly this project had a great deal of economic merit to the
    Standard Oil Company of Ohio. We would have saved somewhere in the
    vicinity of fifty cents to a dollar, depending on how one viewed it, on
    every barrel moved through the pipeline. Therein lies the reason why,
    after four years, we're still in the picture. I submit to you that very
    few industrial or commercial projects that I have ever been aware of
    would have been able to get through the morass and labyrinth pointed out
    by Dr. Bright: they would have given up a long time ago, as did Dow
    Chemical.
       In order to facilitate this kind of a procedure, one has to have an
    overwhelming incentive to stay in the ball game. Most industrial
    projects of any kind would never make it. We're still in the game, and
    we probably will continue for some period of time to be in the game.
    However, obviously with each passing year the picture changes.
      Now, I've talked a little about the characteristics of the project,
    and I might add that we expect about one ship every three days on the
    average. We're talking about ships that haul 1,200,000 or 1,500,000
    barrels, and thus about an amount of oil ranging from 450,000 to 500,000

                                      99

    barrels a day. The average emissions from one of these tankers
    discharging would be something like 600 pounds an hour -- or 600 pounds
    a day, I believe, is the number -- of sulfur oxides and about the same
    amount of nitrogen oxide and 10 percent that amount of particulates.
       The project apparently is considered to be in the national interest.
    I won't argue that point. The President of the United States has made
    that comment. All the major policymakers in the energy field have
    acknowledged that this project is in the national interest. It
    certainly is in S0OHI0's interest, or we wouldn't have been pursuing it.
       The project has widespread support; it has considerable support by --
    as I said -- the administration, by many members of Congress, by many
    agencies in Washington, and as far as we know, by the administration in
    California, by many of the agencies and legislators in California, and
    by an overwhelming mandate from the people in the City of Long Beach, as
    well as many other miscellaneous officials. But the facts are that the
    project hasn't been aproved. We do not have a permit, even though the
    project meets tests such as being economically sound and we're ready to
    finance it. Technically it's a piece of cake. Why hasn't it been
    approved?
       I won't take you again through the labyrinth that Don Bright has
    covered on this thing. In very simple terms, the problems have included
    legislation well-intended but not very clear, proliferation of agencies
    with various viewpoints, rules and regulations promulgated at the drop
    of a hat, and the year and a half it took to prove that, in fact, we had
    emissions. If we had emissions) one would have thought it would have
    been a fairly simple process to prove it. In fact, it took almost a
    year and a half to demonstrate that there are emissions attributable to
    the project, and one had to eliminate Alaskan crude as a part of the
    base case in order to arrive at that conclusion. Regardless of all
    that, SOHIO decided to expedite the project. We agreed to accommodate
    those who believe emissions should be attributable to this project, and
    we will trade them off. We agreed to take the trade-off package that
    you insist we use, even though we don't believe it's necessarily either
    the best or the most cost effective. We agreed that we will not vent
    vapor all over the atmosphere. We agreed to bring in the latest new
    tankers specifically designed for this project and meet the rules and
    regulations far beyond anything that the Coast Guard or the United
    States has ever imposed on any port. We agreed to do all those good
    things. In fact, we said, we'll do whatever you want to do. Just tell
    us what you want us to do and let us go ahead.
       We are still tied up in the rules and regulations and the endless
    sequence of hearings, a situation where we go from agency to agency and
    hearing to hearing. Why? Because under public participation as
    practiced in the State of California, unanimous consent is required to
    do anything. If there is one guy, one group, anybody with a will to
    stop you, he can and will.
       Now, is that good or bad? I don't know. I'll leave that question up
    to you. But if anybody accepts the fact that doing nothing is an
    acceptable alternative in most instances, then you'll feel that that's

                                       100

    probably a good idea. I question whether in fact that' s good for the
    country as a whole or for California specifically. I certainly would
    emphasize that it has not been good for us.

       O'NEILL: We'll conclude with one of the voices listed as not in
    unanimous agreement. Jan Smutny-Jones is Chairman of the Citizens' Task
    Force on SOHIIO and has worked with the Coalition of Neighborhood and
    Community Associations in Long Beach. He is still going to school; he's
    at Cal State University at Long Beach studying political science. He
    paints houses to support himself.

    JAN SMUTNY-JONES

    Chairman, Citizens' Task Force on S01110

    I'm probably the first house painter ever to address the Academy. Thank
    you for the opportunity to speak here today. After Mr. Mosier's very
    eloquent talk on SOHIO and the supports SOHIO has, I sort of feel like
    David being forced to apologize to Goliath, but I'm not prepared to do
    that. Time is too short, unfortunately, to make a strong case on any of
    the specific issues which the Task Force and a number of other hometown
    and community groups in Long Beach are concerned with. I will
    therefore, for the sake of both argument and clarity, make a number of
    assertions on this project from a citizen participant point of view.
    These aren't meant to be inflammatory, but hopefully to initiate an
    animated dialogue.
       One of the key issues you'vye been aware of all along is air quality
    and how it relates to seaward development, specifically to Long Beach
    a-ad the SOHIO Project. People may imagine beautiful blue skies over the
    Port of Long Beach. In fact, most of the time over Long Beach we have a
    different kind of blue; it's called industrial blue. It's sort of a
    brown haze that hangs over the city, and it's a living reminder to the
    people of Long Beach and the people in the Los Angeles Basin that we
    have very serious air quality problems.
       The SOHIO British Petroleum Project has direct impacts on the air
    quality within the Los Angeles Basin, and specifically on some very
    different kinds of air quality problems within the city of Long Beach.
    I'm referring primarily to sulfur dioxide from their tanker operations
    and the trade-off propoals, and the issue there is who benefits from the
    trade-off s.
       Second, the SOHIO Project, in our opinion, will further aggravate the

                                       101

    already problematic West Coast gas situation by tying up two of the six
    natural gas pipelines that currently run from the Midwest into
    California. As they have signed an agreement with El Paso to use two of
    the gas lines, we're assuming that within a relatively short time it
    will make economic sense for SOHIlO to expand their project.
       We also believe that while SOH1IO experienced some initial problems
    with the complexities of California politics, it has, in fact, recently
    acquired some rather preferential treatment both on the part of the
    Governor and the various state agencies.
       An issue that will become increasingly important is the tanks on Pier
    J. You'll hear two different sides. One will say they're important to
    keep air emissions down. You will hear from us that that is a totally
    inappropriate place for those storage tanks, for seismic and planning
    reasons, with which the Coastal Commission 'has concurred. As Mr. Ahern
    said, well over a year ago the Coastal Commission granted SOHIO the
    permit, and yet no other agency or S011I0 has so far acted upon the new
    port configuration which they were given by the commission. We also
    believe that those tanks are not necessary for a 500,000 barrel project,
    but are designed for a millionr-barrel-a-day project.
       We are obviously concerned with a rather parochial question, but we
    believe the SOHIO facility is in conflict with the city's attempts to
    develop a more labor-intensive recreational and tourist-oriented
    economy. The SOHIO Project virtually guarantees that Long Beach will be
    increasingly used as a West Coast entry point for petroleum, further
    complicating atmospheric and oceanic impacts of handling petroleum
    products as offshore oil development begins to develop in Alaska, the
    Yellow Sea, South China Sea, and offshore California.
       We've been asked to address the national interest issue. We fail to
    see how the self-induced private marketing problem of a foreign-owned
    oil company constitutes a national interest issue. Regardless of all
    the saber-rattling, it has never been clearly pointed out to us how we
    are, in fact, standing in the way of the national interest. We believe
    that, as a matter of fact, this problem was created on the national
    level. In short, the Alyeska pipeline was built to the wrong place, and
    that is why we have a West Coast surplus of crude oil, and we feel a
    little shaky when suddenly we hear we're holding up the national
    interest.
       Finally, if 50OH10 has been as cooperative as Mr. Mosier has just
    stated, I submit that they would be pumping oil through their pipeline
    at this very moment.  The facts are that they haven't.  As I said
    before, the Coastal Commission over a year ago issued a permit telling
    them what the project should look like.  They asked for that permit at
    that time so they could act accordingly.  They have yet to act on that.
    Well over a year ago, Tom Quinn of the Air Resources Board basically
    said that he would cut the deal with sulfur dioxide scrubbers. It took
    an extremely long time; as a matter of fact, at this very moment, there
    is no solid agreement between all the parties involved that that
    scrubber technology is going to go into Long Beach and be used as a
    mitigation measure. There is a serious problem there. What I am saying

                                      102

    is it hasn't been as clear-cut as it has been put forward here.
       These are a number of our concerns and,, hopefully, we can address
    them later. But the public involvement process is just that: a
    process. It's not an end in itself. I don't believe that if S01110
    comes to Long Beach or if they don't came to Long Beach this country is
    going to fall apart, nor do I believe that citizen involvement is going
    to be wounded beyond hope. I think what we have to view citizen
    participation as is a process which all these projects are going to have
    to go through. And if tomorrow they start dredging the harbor and
    pumping oil through the pipelines, the S0OH10 Project is a better project
    environmentally because of citizen participation.

    GENERAL DISCUSSION

       ONEILL: Before we get into the discussion period, I would like to
    call one of the publications out on the table to your attention, "Public
    Involvement in Maritime Facilty Development,"~ which includes as one of
    the cases the S01110 Project.
       The chairman of this committee of the National Research Council is
    with us today, Oliver Brooks. I would also like to introduce Admiral
    King, the executive director of the Maritime Transportation Research
    Board.
       A~s you may or may not know, the four panelists have been together in
    many hearings, but they still might want to exchange a few questions
    back and forth during the discussion. In particular, though, I'd like
    to get the audience involved.

       OLIVER BROOKS, Consultant and Chairman, Maritime Transportation
    Research Board's Ad Hoc Committee on the Impact of Maritime Services on
    Local Populations:   I'd like to ask a three-part question, but I will
    try to make it brief. First, what are the long-term tax realizations in
    the City of Long Beach, assuming the construction of this oil discharge
    facility? Second, what role, if any, did S0OH10 or its direct or
    indirect agents play in the Long Beach -- or in the period prior to it
    -- referendum vote? Finally, did any of the other communities in the
    Los Angeles Basin have a piece of the electoral action beyond the one
    inherent in the activities of Mr. Ahern's Coastal Commission and Tom
    Quinn's Air Resources Board, et cetera?

       BRIGHT: The long-term tax realization for the City of Long Beach is
    quite minimal. Prior to the enactment of Proposition 13, there would

                                      103

    have been approximately 14 million dollars' worth of revenue generated
    each year from the project. Of the total, a portion would have gone to
    the Port of Long Beach, a little over a million, with about one million
    to the general fund of the city; half a milion to the junior college
    district; 1.9 million to the local elementary school districts; and the
    remainder to other jurisdictions along the pipeline right-of-way. But
    Proposition 13 reduced the City of Long Beach's share to about $110,000
    a year. There is a comparable reduction in the revenues for the other
    jurisdictions. Therefore, the long-term tax realizations for the
    political entities involved really are small for this project.
       Let me leave the referendum and S0OHI0's role to Mr. Mosier and jump
    to your third question: whether other communities had a piece of the
    electoral action. Only Long Beach citizens voted on the project. Many
    cities chose not to react other than through the ministerial processes.
    Yet public hearings occurred along the entire pipeline route, which
    provided opportunities for almost everybody to participate in the
    process, either in a broad sense, such as analyzing the EIS and the EIR,
    or in concern over details, such as the alignment of the pipeline along
    their particular street. So the community action has been extensive,
    and SOHIO has had at least 40 people participating in these efforts.

       O'NEILL: Frank, do you want to answer the second question?

       MOSIER: Well, we played a very significant role prior to the
    referendum vote in Long Beach. As I indicated earlier, we'd already
    Invested 50 million dollars in this project, and that in itself would
    suggest that we had a very keen interest in the outcome of the
    referendum. We spent a great deal of money, time, and effort on the
    campaign program in that referendum vote.

       SMtUTNY-JONES: I'd like to address Mr. Brooks' questions, too. The
    long-term tax generated from the project we don't see as significant.
    There are people in the city who do. The Citizens' Task Force and the
    nine homeowner community groups who put the referendum on the ballot
    obvously did not see it as a tremendous economic boon to Long Beach.
       With regard to the referendum, it's an issue I'm sensitive about
    since we were responsible for putting it on the ballot. I think there's
    a graduate student floating around who will base a Ph.D. on it, because
    it probably set a precedent in terms of the amount of money spent in a
    local campaign. We ourselves spent a little over $15,000. in a city
    like Long Beach, that's a fair amount of money for a referendum.
    Opposed to that, though I haven't seen the figures, the papers said that
    SORTIO was going to spend in the neighborhood of $750,000. I'm not
    whining about that. There was a tremendous output of computer letters,
    a well-orchestrated media campaign. They did a very good job of that,
    and I give them credit for it.
       But I don't believe that puts the overwhelming majority of Long Beach
    citizens in their camp, because I think a key issue -- and a rallying
    cry behind the Yes-on-Y forces -- was more jobs and cleaner air. In

                                      104

    other words, we believe that 60 percent of the people voted for cleaner
    air., and we have every intention of holding SORTO to that mandate.

      JOSEPH GUSTAFERRO, U. S. Department of Commerce: One of the things
    that kept coming up here was the national interest, and my question --
    which I will follow with a comment -- is, what model are you using to
    determine the national needs? In other words, what kind of a
    supply-demand balance or monetary balance? The reason I ask this
    question is that we in Commerce, which is the repository for a
    tremendous amount of data, have not been able to find a satisfactory
    model to determine the national needs. We went out and generated our
    own, which is in a preliminary state. Some of you might have gotten
    copies for comment. It is a preliminary forecast -- I don't remember the
    title, I only wrote it- of likely U. S. energy consumption and
    production balances for 1985'and 2000 assessed by states. We were very
    presumptious in doing this; we took each state and indicted to the last
    windmill where energy sources would be located and how many would be in
    the state, how much oil would be generated, how many nuclear power
    plants would be required and how much electricity per capita, and so
    forth.
       So I'll go back to my question: What did you use to determine the
    national needs?

       MOSIER: We didn't make that initial determination. It was made by
    the Department of Energy. And I think it's based pretty much on this
    reasoning: that our proposed pipeline, if it were related to the
    transportation of half a million barrels of oil to Texas versus shipping
    them through the Canal, is absolutely not an issue of national need.
    The point is that the expansion of frontier oil production in Alaska and
    of other oil from the West Coast is contingent on a pipeline of this
    kind. And the Department of Energy and Dr. Schlesinger and others are
    very keenly interested in the development of a West-East pipeline to
    permit the expansion of the Trans-Alaskan pipeline and the development
    of other sources on the North Slope. Obviously, oil companies that have
    interests there are not in a position to expand that production if there
    is no place they can go with the oil. We're fully utilizing the Jones
    Act fleet at this time to move the available excess of Alaskan oil
    through the Canal, and we're concerned that increases in throughput
    capabilities of the Trans-Alaskan pipeline, to the extent of maybe a
    modest 150,000 barrels a day, really could not be practically
    accommodated by the Panama Canal even if we had the Jones Act tankers.
    Therein lies the dilemma. I'm not as well equipped or prepared to
    comment on this as DOE, since they've made those studies. But that is
    the main thrust of the issue; it is not the current level of production,
    it is providing the opportunity to move additional oil out of Alaska,
    whether it comes from the North Slope through the pipeline, or over the
    Bering Sea. If we're lucky, maybe somebody will find some oil in the
    Gulf of Alaska. But that is the issue, and it translates into
    fundamentally a balance of payments and imports.

                                      105

       AHERN: It sounds like my prediction is coming true. The Department
    of Energy has a model, the California Energy Commission also has a
    model, and the Federal Energy Regulatory Commission probably has a
    model,, too. And the Coastal Commission, of course, is supposed to take
    into account the national interest when it deals with a permit for any
    coastal development in California, but particularly for something like
    the SOHIO Project. That's a requirement of the federal Coastal Zone
    Management Act, and that's just about how specific Congress was. They
    said consider the national interest. They didn't say accommodate the
    national interest,, all they said was, Consider it. So when we got the
    S01H10 Project permit, the Coastal Commission said, how in the world do
    we do that? And it occurred to us that the national interest has become
    a buzz word for energy supply. But it is not just energy supply; it's
    also Redwood National Park and Point Reyes Seashore and Big Sur, and the
    reason that California has a federally-approved coastal management
    program is because there is a national interest in protecting the
    California coast. So that phrase should not be a buzz word for
    economics or energy suply, but that's what it has become. To take care
    of that part of the national interest, the Coastal Commission said,
    we'll write the Department of Energy and ask them if the SOHIO Project
    is in the national interest, and then we'll consider their reply. So we
    wrote Jack O'Leary, the Deputy Director. He wrote back something I
    would have to call a bit waffle-worded: "We do not have the authority
    to judge whether projects are in the national interest or not. However,
    the S0O110 Project does have national energy benefits." So we copied the
    letter and sent it to all our commissioners so they could consider the
    national interest.
       We also, of course, referred to the President's National Energy Plan,
    but then we found out there were all sorts of people who disagree with
    what it says, including committees of Congress. And as you know, much
    of the national energy legislation that came out had nothing to do with
    the National Energy Plan, so we had a hard time using it as a guide to
    the national interest.
      We anticipate there will be more models that will come up with more
    results on what the national interest is in energy projects. Part of
    our problem was that the California Energy Commission -- with all their
    models and analyses -- came up with the conclusion that the national
    interest was to export the oil to Japan. You could make more money on
    that and help save the dollar, and you'd avoid all this capital
    investment and this business of cross-continental pipelines and marine
    terminals. To some of our commissioners, that made perfect sense. So
    it's a very confused picture, and I guess it's part of the dynamic
    interplay among agencies with different interests. I~n our case., it was
    left up to our 12 commissioners to determine whether the 50OH10 Project
    was in the national interest. They decided it was.

       SHUTNY-JONES: Obviously, that's an issue we've had to deal with from
    the other end quite a bit, and as I said earlier, we aren't convinced
    that this project is in the national interest. I think if we've learned

                                       106

    anything over the past fifteen years, some of them very bleak years,
    it's to be very cautious when someone starts talking about the national
    interest because it could, in fact, mean anything. The SOHIO pipeline
    was not a part of the original Alyeska plan; it was sort of an
    afterthought. I think that's revealing of the phrase "national
    interest." I think it also telling of the national interest -- and I
    think Mr. Mosier quite candidly said this -- that what we're really
    concerned with here is future development of oil resources. It seems
    that DOE is still dealing with the oil situation as a problem of
    production. Obviously, the real issue is not one of production, but of
    consumption. After so many years of the energy crisis, we are still
    consuming a record amount of petroleum. If this was, in fact, such an
    overwhelming national interest issue, we would probably hear quite a bit
    of talk about building a new pipeline, 42-inch or whatever, designed to
    accommodate all of this future oil. Yet that never gets discussed,
    either by the federal government or by the other agencies involved. And
    finally, there are a number of alternatives -- some of them very
    feasible, some of them less so -- which could also serve the national
    interest.
       Mr. Ahern raised the alternative of Japan. About two years ago we
    had the fortune of testifying before a Senate committee -- ironically,
    on Pearl Harbor Day, 1976 -- and in an unusual display of solidarity,
    the oil companies, the state agencies, and the environmentalist groups
    who were represented all agreed on one thing: that an oil exchange with
    Japan made perfect sense. Well, there's a problem with that, because
    not long ago we heard that we were supposed to approach the energy
    crisis as the moral equivalent to war. Less than a few months after
    that statement was made, the Department of Energy came out with a very
    candid statement saying that exchanging oil with Japan was politically
    inexpedient. Now, what that means is, first, that a lot of people
    believe that there is such a thing as Project Independence -- that ghost
    is still wandering through the halls of the Capitol -- and second, that
    a lot of us evidently still haven't forgotten World War II.
       So one of the alternat~ives which would clearly serve the immediate
    national interest was cut: off. And I think that's a serious problem
    that needs addressing.

       BRIGHT: There is one other key issue here: the absence of crude oil
    transportation links from West to East. Traditionally, oil has moved
    from the Gulf Coast area into the Midwest. California utilized its own
    indigenous production until environmental constraints established the
    need for very low sulfur crude that was not available in other parts of
    the United States. Also~, in the Northern Tier area sweet crude from
    Canada is used. To summarize the issue, the increased environmental
    problems, particularly air quality, the declining supply of natural
    gas, the inability to rely exclusively on California crude because of
    its sulfur content, and the dwindling supply of sweet Canadian crude in
    Northern Tier refineries, all indicate the absence of Adequate
    transportation links for getting energy into the right areas.

                                       107

       It now is clear to many people that a barrel of oil isn't always a
    barrel of oil, because you can't necessarily use it in any given place.
    Just getting it there doesn't make as much sense as it has in the past.
    When you consider the need to be able to ship California crude where
    it can be refined or to be able to deliver Alaskan crude to refineries
    in the Northern Tier for blending with sweet crude, you can see that
    the SOHIO Project is not the answer to the distribution problem of
    excess oil on the West Coast, but one of the answers. It will increase
    national capability for mixing and matching batches of oil to meet both
    energy and environmental requirements. In that context, the SOHIO
    Project is distinctly in the national interest.

       DAVID MARTIN, Attorney and Public Affairs Consultant, Washington, D.
    C.: Until recently, I was Research Director of a small federal agency
    entitled the Administrative Conference of the United States, whose
    mission is to study the administrative legal procedures of federal
    agencies. And one of the things that I've spent a lot of time doing in
    the last year or so is designing a project which the Conference has just
    commissioned to study the efficacy of citizen participation on federal
    agency behavior.
       I guess the discussion last night made clear that the function of
    citizen participation is to leaven the decision-making behavior of
    agencies of government, which tend to be somewhat specialized and
    parochial in their point of view, with an input from the citizenry that
    will lead to a wiser decision than the agency would have otherwise
    undertaken. In short, we think of citizen participation as a process
    that will tend to leaven, educate, elucidate, and improve the quality of
    understanding of matters about which decisions have to be made.
       Perhaps others shared my shock, therefore, at Mr. Mosier's statement
    -- I think he said, this project is a piece of cake.

       MOSIER: Physically.

       MARTIN: I don't' know what it means to consider this as a physical
    project, Mr. Mosier, in view of the discussion. That's one rather
    narrow aspect of the project, and the purpose of all the permitting
    requirements and the citizen participation opportunities is to assure
    that the decision will not be handled as though it were purely a
    technical project. But to come to my question, has the attitude of any
    of you been altered by the experience of citizen participation?

       MOSIER: Maybe I ought to make the first comment on that. First, as
    far as I know,, nothing has developed in the hearings from so-called
    public participation that has changed any aspect of the project one
    iota. Second, if the taxpayers are going to pay for the expertise
    assembled in agencies and develop regulations and spend millions of
    dollars studying all of the implications of projects like this, how on
    earth can a public hearing with little or no available information to
    the public in terms of the depths and implications of these projects

                                       108

    contribute anything other than the narrow viewpoint of individuals who
    may personally be affected by something in their back yard?
       In fact, that's exactly what we've learned from this. There's always
    going to be somebody affected. No project conceived by man will have
    unanimous support. Mr. Jones has every basis to have personal reasons
    for not particularly liking this project. But the fact is that the
    inputs have done nothing to alter -- that I'm aware of -- the physical
    makeup of this project in any way, but have accomplished one thing and
    one thing only: to delay it interminably, in effect, to ultimately
    escalate it from the administrative and/or executive branch of the
    government to the legislature, either of California or the nation, into
    the courts in the final anaysis. And that's probably the ultimate
    conclusion. That's what we've learned from it.

       AHERN: Many of our 12 commissioners were appointed because they had
    been public participants in front of the Coastal Commission, and now
    they very much want public participation when they make decisions.
       There are two different roles of public participation that make it a
    very difficult thing to get a handle on. One is people coming in and
    saying what they want the agency to do, regardless of what the agency's
    legislation is. These are the ones who don't want a house built that's
    going to affect their view of the ocean.
       Then there are other people -- and they're the most effective -- who
    come in and say, your legislation has this policy against developments
    in hazardous areas in the coastal zone. And the way that you should
    interpret that with respect to this project is not to let those tanks be
    put on Pier J. That's very effective public participation; it's the
    kind that holds Congress or the state legislature over the
    administrative decision-makers' heads. And there's no doubt that if the
    vocal public in the Long Beach area represented by Jan Smutny-Jones here
    had not appeared in front of our commission, the tanks would not have
    been as -much an issue as they were, and the decision probably would not
    have gone the way it went.
       Now, much to my shock and discomfort, the commission voted against
    the staff recommendation to approve these tanks on Pier J. And I don't
    think they would have done that had there not been people in there from
    the local area saying, Commissioners, the thing you should do under your
    legislation, despite what your staff is telling you to do, is not to
    approve those tanks on Pier J. So that kind of public participation
    overwhelmingly lends support to administrative decision makers where
    they have to make a judgment that could go one way or the other under
    their legislation. But an awful lot of public participation is not
    effective because they don't understand the legislation and regulations.
       So we definitely had what I would call effective public
    participation, but it was more a matter of pushing things in a direction
    on which our commission had judgment than adding information and
    analysis because, as Jan said, they're all part-time while we're
    full-time staff doing analyses. They did bring up a number of points,
    such as the failure of oil tanks in Japan, that got our commissioners'

                                       109

    attention, and then they told the staff to go look into this some more.
    But it's definitely effective in front of our agency because it's 12 lay
    people, and people are frequently comfortable talking in front of them
    because they know that our commissioners want to hear from "the
    public." Much depends on the agency and what it's supposed to be doing.

       SMUTNY-JONES: I guess the question is what have we learned from the
    S0OH10 project in the process. It's unfortunate that SOHIO doesn't issue
    Ph.D's because I think a number of us would be getting a degree there.
    Granted, the agencies are responsible for producing technical data. In
    our organization we have a couple of retired naval captains, a naval
    admiral, an old tanker master, a couple of lawyers, and a -number of
    people who are homemakers, et cetera. We have a very divergent group of
    people. None of them are meteorologists or seismologists -- their
    expertise or involvement is on a very different level.
       We're not an hysterical group of people who have been able to hold
    off S0HITO by just appearing and screaming. What we've been able to do
    is took at reports prepared by agencies and by the Coastal Commission,
    some for Air Resources Board and various federal agencies, and try to
    analyze -what's relevant and ask the significant questions.
    Environmental impact reports are supposed to be written so that the
    public can get some understanding of how particular projects are going
    to impact them and can respond accordingly. And that is exactly what
    we've done. We've been able to say, this is what the Coastal Commission
    says, this is what various agencies have said. The tanks on Pier J are
    a classic example. Dr. Bright and I probably can run off both sides of
    the argument because we've done it quite a bit before the Coastal
    Commission and elsewhere. But there you have two expert opinions. One
    says Pier J can undergo a process to make it perfectly acceptable for a
    storage tank farm, and the other says no, it's not acceptable at all.
    And both of those theories have been developed by geologists who appear
    to be competent, so there's a real problem there.
       We've obviously raised the issue of those tanks because we think it
    will adversely affect us. But that's the point -- the the public relies
    on that technical data in order to respond in the public participation
    process and that is, in fact,, the purpose of the data in the first
    place.

       BRIGHT: I think that review of the SOHIO Project has had the
    greatest degree of public participation to date in California. Citizens
    in California are aware that there are many means for them to
    participate in the regulatory processes, to make their opinions known.
    This means, as Mr. Mosier noted, that one person can throw a
    monkeywrench into the process.
       The California process is stil immature, and politicians in
    California capitalized on this immaturity as a means of trying to kill
    the project. To their chagrin, they discovered that having used the
    process that way, it was almost impossible to reverse it when, for
    political expediency, they were ready to support the project.

                                      110

      Also, there has been a discovery that the territorial imperative of
    certain state agencies Is very strong and rigid, and trying to get them
    to consider a matrix of distinct but interrelated issues is an amost
    impossible task.
      The SOHIO experience has been profitable as a consequence of the
    processing problems. For example, the state agency task force approach,
    first used for SOHIO, is being used on other projects. This involves a
    process where experts on project-related matters meet and develop mutual
    understanding. It is a joint exchange of concepts and ideas. This
    process has now been employed with considerable success on a large
    offshore oil project and a fossil fuel electrical generating plant.
       In retrospect, if the "factors" in the SOHIO Project had recognized
    the significance of developing a clear understanding of key issues at
    the onset of project review, many of the roadblocks in the processing of
    the S0O1I0 Project would never have occurred. You may think it would
    have required somebody clairvoyant to have anticipated the key issues at
    the outset. Not really. It only requires somebody who can be
    responsive in an administrative, procedural way -- a good executive
    secretary -- so that understanding of issues develops prior to an
    impasse.
       One other lesson from the S0OH10 experience is that key people in the
    upper bureaucratic and political levels cannot remain aloof from
    projects until the final decisions are at hand. They must get involved
    early to understand the vagaries of what's going on and to be able to
    guide -- whatever that word may mean -- the final decision. For
    example, early in the SOHIO Project, many of the agency staffs
    understood the issues, and they made recommendations that were not
    accepted by the next level. So new recommendations were developed
    there, and referred to still higher levels, and so on. In fact, SOHIO
    has not only had to deal with a horizontal but also an extensive
    vertical decision matrix. Specifically, the S0OH10 experience should
    serve as the "lesson" for developing an effective but simpler public
    participation process for decisions in California.

       MOSIER: The observation I made was that the kind of public
    participation we encountered in California during this particular
    project is such that I question whether significant projects of any kind
    could proceed. That's not to say that I and SOHIIO are completely
    negative about public participation. I'm talking about the degree of
    it, the process that we encountered, and the result. I don't fully
    agree that it could have been resolved with good foresight, because it
    was used principally as a vehicle for politicians to obtain their own
    objectives. The point is that public participation, if it is not
    carefully administered and utilized, can become a vehicle for political
    expendiency at all levels of government.

       NATALIE LOBE, Department of Energy. My group is interested in
    gathering information on mitigation, and therefore, I'm very interested
    in the discussion here. I'd like to ask two short questions, one

                                      III

    primarily directed to Mr. Jones and the other to Mr. Ahern. it's not
    quite clear to me, Mr. Jones, whether your group's stand is against the
    project altogether or for a modified plan.

       SMUTNY-JONES: That's actually a very good question because there
    seems to be a real break in the group, with one side saying that we
    should cut the best deal and the other saying we should hold out. So
    that hasn't been decided, but I think it will become clear in the
    mitigation proceedings on the sulfur dioxide scrubbers. There's real
    concern among people in Long Beach because we don't receive any
    significant benefit from those scrubbers but are, in fact, the primary
    impact zone for them. There's a critical issue there. But for the sake
    of argument, let me say that we continue to oppose the project In its
    entirety.

       LOBE: Mr. Ahern, having come recently from the Department of Energy,
    where models abound, and having also spent many more years with state
    and local government, where things are done a little differently, I'd
    like to ask how you would suggest we avoid letting decisionr-making on
    energy facilities become part of a modeling procedure. You're very
    articulate about what you don't want, but I'm not quite sure what the
    alternative is.

       AHiERN: Well,, as you probably know, within the Department of Energy
    there are disagreements about these policy matters, and the modelers at
    one level will push what the model says the decision should be up to a
    higher level and get reversed for various reasons. In fact, I remember
    Secretary Schlesinger's judgment that the model wasn't worth a damn -- I
    believe that is what he said. I can't remember what magazine it was in,
    but it was very interesting. I don't think models can quite do it.
    What I think would solve this problem is for the agency that's charged
    by Congress with taking care of -national energy supply and demand to
    actively participate in these project decisions. For example, Secretary
    Schlesinger appointed Doug Robinson as a coordinator to follow the S01110
    project. This is a part of public participation, too -- the involvement
    of other agencies that have things to say about your decision. Robinson
    would not testify as to the national interest implications of this
    project in front of our commissioners, who had to weigh the energy needs
    against the coastal impacts. So although I would not want a printout of
    a model when we had to deal with national energy, we certainly would
    like a representative of the Department of Energy, which we naturally
    look to for national energy implications of this project, to develop an
    internal position about it. And we would like to know what that
    position is and the rationale for it. But that means a federal agency
    -- having thrashed through its own internal bureaucratic processes and
    figured out what Congress wants -- coming down and telling us not what
    to do, but what they think we ought to do and why. That face-to-face
    contact would be much more helpful than a model.

                                      112

       STEPHEN THOMAS, Political Scientist, Harvard School of Public Health:
    I am one of a group of people who have been looking at this project for
    a year or so in connection with a case study that we've been doing for
    an annual executive education program at the Kennedy School that we
    jointly sponsor.
      What strikes me about the "what are the lessons of all of this stuff"
    discussion is that in different ways, Mr. Ahern and Dr. Bright are
    raising issues that seem to imply, at least to my ear, stronger
    government. Perhaps more centralized government, or at least simpler
    jurisdictional relations. If that's so, then I wonder whether
    Mr. Mosier and Mr. Smutny-Jones like the prospect of a stronger
    government coordinating a project of this kind.
      Let me rephrase the question, perhaps in a more complicated way.
    Public participation as we know it seems to be one response to
    governmental incapacity, either because agencies are suspect or Congress
    is regarded as incomeptent or states are regarded as too narrow in their
    views. Public participation isn't new to democratic govenment; it's
    just a response to the way in which traditional democratic institutions
    have been operated.
       Then if large-scale, complex, multi-jurisdictional projects of this
    kind find that the new modes of public participation are getting in the
    way -- we could disagree about how they've been getting in the way, but
    they're making it much more difficult to find the person or agency that
    can deliver the goods -- does that imply that we ought to look again at
    more traditional ways of involving the public, namely, legislatures,
    executives, and more centralized modes of government? It's not clear to
    me that either Mr. Mosier or Mr. Smutny-Jones would entirely approve of
    that conclusion. But I'm not sure what alternatives there are between,
    on the one hand, more centralized, effective government to match
    stronger corporate entities and more capital-intensive, long-term
    projects and, on the other hand, continuing with fractured jurisdictions
    and irresponsible division of agency power.

       MOSIER:  That's difficult.  I guess I'm trying to sort out whether
    obtaining clearer, much clearer, legislation and better-defined roles of
    various agencies and greater clarity in the regulations -- which I feel
    are necessary -- imply stronger government. I'm not certian that the
    weakness of government, in the sense of diffusion of responsibilities in
    the state, was as big a problem as the lack of clarity in basic federal
    legislation, followed by interpretations by state and local regulatory
    agencies and the proliferation of convenient rules all during our
    process. We didn't go into a situation where the rules were
    established; they were being developed in mid-project. And if we
    pursued a course of action within the framework of existing rules, a new
    set of rules was applied.
      What we feel would be important in this thing is to have more
    clarification, more precise legislation, rules which are not ambiguous.
    Because when public participation comes into play, they've got a wide
    open field. The regulations are so unclear that they could take on any

                                       11 3

    issue, and frequently do. And we're completely vulnerable.
       I don't think all of that means stronger government. I'm not
    particularly advocating a centralization of the responsibility for the
    decision7-making process as a way of life, but I do feel unless we have
    much more clarification of the rules and regulations, what in effect
    will happen is that those things which are genuinely determined to be in
    the national interest will, in fact, be designated on a centralized
    government basis. Public participation will, in the end, destroy
    itself. It won't exist.

       SNIJTNY-JONES: I hope I'm not alone at this conference in believing
    that public participation isn't facing an immediate crisis of such
    intensity that we're going to see a stronger central govenrment; I just
    don't believe that is the case. I do agree with Mr. Mosier that federal
    legislation and state legislation is generally vague, and it's probably
    vague for a reason. The only way you can get anything through Congress
    and the state legislature is to keep it vague. That may be one of the
    key problems we're facing here. I don't believe that a central
    government authority, whether that be federal or state, is the best
    solution, because I think it's difficult to see what some of the key
    local or regional issues are from far way. There is a very difficult
    problem there of weighing regional problems against national problems.
    I understand that, but I don't believe many of these decisions can be
    made in Washington or Sacramento without getting actively involved in
    some sort of political dynamic about where this particular project is
    going to go.
       What I'm saying is that the public participants are, for lack of a
    better word, legitimate actors in this sort of process. I use that word
    reluctantly because I hate that kind of catch word. But that' s exactly
    what we are; we're part of a process, we're not the end product of a
    process. We have our concerns and the Secretary of Energy has his
    concerns, Mr. Mosier' s company has its concerns, and somehow this is all
    battled out and we end up with something which will either be the SOHIO
    Project or won't be the SOHIO Project or it will be the SOHIO Project in
    some equally unpalatable fashion. Neither Mr. Mosier nor I nor
    Mr. Ahern and Mr. Bright wil be totally happy, but we'll end up with
    something that gets us somewhat closer to a solution.
       I'm concerned about the idea that's been expressed that we elect the
    legislature for a reason, and that is to make these decisions. I think
    if we've seen any lack of leadership in this country, particularly in
    the energy end of things, it is with the legislature. When you're
    talking about public policy, I don't think there's any one right answer.
    There are a number of answers, and I think it's very important to
    remember that we do live in a democracy and not a technocracy, and that
    those decisions need to be made in the open and to go through a process
    of public participation so everybody gets their say.

       AHERN: In no way, shape or form did I advocate stronger government
    with respect to projects like this. In fact, that was my fear when I

                                       114

    went through that future scenario of the Department of Energy putting
    everything into their model. However, it's the trend that I see, and
    I'm frequently conflicted on it. Usually I'm afraid of it, as when, for
    example, our legislature finally had to make a one-stop shopping
    decision on a liquefied natural gas terminal in California. It was
    clear that was going to be hung up in local governments and state
    agencies for years, and the legislature gave the whole jurisdiction to
    the California Public Utilities Commission. The Coastal Commission was
    left to handle a few complicated things, like ranking sites and sending
    the results over to the Public Utilities Commission, and they ran right
    over us in the rush to get Indonesian LNG to California. The California
    Energy Commission is another one-stop centralized place where you're
    supposed to go for power plants, and there's a lot of agonizing going on
    right now as to whether that commission should be done away with because
    its procedures got so complicated, and also because it's so difficult
    for the public to participate in Energy Commission proceedings because
    they're quasi-judicial and highly legalistic and wind up being very
    complicated.
       It's a trend I definitely see in California when projects get
    "delayed" -- I'm not sure what the word "delayed" means; we could
    discuss that for a couple of hours. But the legislatures sense
    frustration and say, we've got to cut through all this red tape and give
    this ball to one agency and let them decide it. I raised this issue
    from fear, because I see the Coastal Commission and, let's say,
    California's values that protecting the coast is more important than
    other things, getting run over by this pushing of decisions up to
    stronger, higher levels of government. So sometimes I don't like it;
    sometimes when I'm sitting there in my office dealing with one of these
    projects I just wish Schlesinger would decide the whole thing.

       BRIGHT: I don't think the answer is really stronger government, but
    rather, it's a squeezing of the process vertically. In so many
    instances the process itself is the god, and the goal of getting
    something done isn't even considered.
       The key point is that we must "squeeze" the process into something
    that allows for reasonable progress that adequately considers major
    problems on a priority basis, and that still allows for effective and
    reasonable public participation.

       JOHN BANTA, Conservation Foundation: I would like to pursue the
    consensus point further. It seems to me that you all agree that we're
    in -- at least for SOHIO -- a decision-making process that will require
    consensus for final approval, if that comes about. It's a multiple veto
    process. Don Bright started to describe some initiatives that have come
    out in response to the SOHIO situation for generating consensus on a
    position. Where are those initiatives coming from? The supporters of
     the project should have been trying to address that positive fact,
     rather than emphasizing the media and the divisive decision-making
     techniques in institutions.

                                      115

       BRIGHT: As I pointed out earlier, California is still on the cutting
    edge of effectively using public participation. Using it as an
    efficient tool will take more experience.
       The SOHIO state Agency Task Force also illustrates a consensus
    process. The concept was precipitated by the Port of Long Beach and the
    Public Utilities Commission, together with strong efforts from the
    Governor' s Office for Planning and Research. It was a new venture. It
    has proven to be effective, and it's being used on other projects.
       Finally, many legislators and directors of State agencies are using
    the task force concept to develop legislation, revise administrative
    processes, and define agency jurisdictional poles on various projects
    and plans.

       GUSTAFERRO: We've spent some time worrying about whether or not we
    could build a stronger federal government, but I would submit to you
    that we really don't know how to build one. A larger federal government
    and a stronger federal government are certainly not synonymous. I
    commend to your reading Opinion Four, which recently came out from the
    ERA on El Paso's request for LNG, in which the gas would ultimately come
    out to the State of California. If one had followed the proceedings
    there and had some of the staff people testify before Mr. &hemn and his
    Coastal Commission, one would agree with the administrative law judge
    that the project would go through and that the subsequent FERC analysis
    would go through. We in the Department of Commerce were under the
    impression that yes, this is a good project and it meets the national
    energy needs. Yet, by the time the opinion finally came out in December
    of last year, it was completely reversed -- the whole concept was
    changed.
       So I submit that this is not necessarily a stronger, but only a
    larger federal government.

       MARTIN: I wonder if I could ask Messrs. Ahern, Bright., and Mosier
    whether from each of their perspectives they consider a decision on one
    or more of the permitting processes that the project may not go forward
    an acceptable outcome in principle. Much of what you've each said seems
    to assume that it is preordained that a project should be approved, and
    your comments about public participation seem to depend on whether it's
    efficient, satisfactory, or esthetically pleasing to you.

       AHERN: Briefly, no. Our commission denies projects all the time, in
    fact, at every meeting, frequently with the assistance of public
    participation. The commission has definite policies to protect the
    California coast, and if a project violates those policies it gets
    denied. That happens all the time. There's no preconceived notion in
    our agency that a project should go forward.

       BRIGHT: The final approvals of the project will be based upon
    whether appropriate mitigations and conditions can be evolved that
    satisfy the concerned agencies. There is no way at this point you can

                                       116

    be sure of project approval. Each of the critical environmental reviews
    that remain have "thorns." For example, the S02 scrubber that has been
    proposed as an air quality trade-off has been accepted by many
    politicians, but it has not been reviewed under required environmental
    laws. It's a politically expedient answer at this point. And until the
    environmental evaluation is completed, I think it's really difficult to
    say that the project will or will not go forward. That uncertainty must
    be very disturbing for S0OHI0.

       MOSIER: For the record, the scrubber wasn't proposed by SOHIO, but
    by the CARB. It was reluctantly accepted by SO-ITO as the trade-off
    package. Now, I'd like to ask, what should finally determine whether a
    project is approved? If it complies with all the regulations, is
    technically sound, and is shown not to be an environmental threat in the
    judgment of all those who've studied it, if it's adequately financed and
    makes a contribution, what should the basis be to determine whether it
    should proceed? If a small minority attacks the project with nothing
    more than their attitudes about the process -- which they're perfectly'
    entitled to do -- does that mean the project should not proceed? It
    isn't a question of whether every project should be approved or not.
    What should be the basis for the decision process? That's what we've
    been trying to determine for four years.

       GEORGE PETERS, State Department: I'd like to ask Mr. Bright and Mr.
    Ahern how the interagency process in California might be related to the
    permitting process. Couldn't they be put together, and wouldn't this
    achieve some of that compression that you're talking about? I'm a
    little confused by Mr. Nosier, who says that SOHIO will do anything that
    it can to meet any requirement laid on it, and yet I'm told that the
    storage tanks are an issue. Why not just move them? I'm very
    interested in seeing how the process can be approved -- in the Coastal
    Zone Management Office, that's part of our business. It does strike me
    that the federal government could learn, as the California officials
    apparently have, that they should get involved in large projects on a
    high level at an early stage. And the state Interagency Task Force
    might also involve the federal government and might also be more
    directly related to the decision-making process. Then you might have
    the compression that obviously we all need.

       BRIGHT: I think two things have happened recently that answer your
    question. First, in January 1977, the California Environmental Quality
    Act was amended so that all the concerned agencies receive early notice
    about a project. In turn, they must reply as to what they require to be
    included in the environmental review. This amendment also limits the
    time for review to one year. This should compress the process and
    increase interagency involvement.
       Second,- on very complex projects that require federal action,
    memoranda of understanding are being executed so that the lead agencies,
    in preparing the document to meet California requirements, participated

                                       11 7

    on a quid pro quo basis with somebody from the key federal agency. In
    SOHIiO's case, they paid about four million dollars for an EIS and about
    three for an EIR. Those two documents could have been compressed into
    one to save an awful lot of time and money. This process of memoranda
    of understanding where an EIR/EA is being prepared is resolving part of
    that.
       So those things are beginning to occur and I think ultimately they
    will be the stepstones for further refinement of the process.

       MARTIN: I'd like to try to answer Mr. Mosier's question. First, I'm
    enormously sympathetic to what you and others have said about the lack
    of clarity in the laws and regulations that constitute the governmental
    decision-making environment within which a company seeks to get
    decisions on all these various permits. But if you start with the
    premise of much of the discussion here that the legislative process has
    often by design refrained from giving clear answers to what the policies
    should be, I'm not sure you should be shocked that small splinter
    elements can stymie the decision and result in a no-go decision. The
    other side of that coin is the amount of law on the books that's quite
    clear and specific, but which I think no one would argue reflects a
    political consensus of the society. The notion that our democratic
    political institutions produce decisions that are always reflective of
    broad consensus I think is patently not the case. So in a badly
    designed buck-passing by legislative bodies, splinter elements that are
    not reflective of a broad democratic consensus are capable of stymying
    the decision process. But that's just the other side of the coin of
    what happens affirmatively in legislative bodies all the time: that
    special interest groups succeed in creating an impression that a
    decision exists that reflects broad democratic consensus.

       SMUTNY-JONES: I think the real issue, from our point of view, is
    that the law exists now and that environmental groups, whatever that
    means, are strong enough now that energy companies, here specifically
    SOHIO, are being asked to be accountable for some of their external
    costs that historically they haven't been made accountable for, whether
    on a specific Long Beach area or regional issue. I don't believe us to
    be a small minority that should be sort of steamrolled over, and by the
    same token I don't believe a small minority group of people in Long
    Beach exercise an overwhelming amount of power over this project. I
    think we are simply holding the governmental agencies and the
    corporation accountable for what the law dictates.

       MOSIER: I feel I must respond to the implication that SOHIO has been
    reluctant or unwilling to carry out this responsibility. People
    constantly create a dichotomy with environmentalists on one side and
    business on the other; that is absolutely false. There are as many
    environmentalists in our company as there are in Long Beach, or about on
    a proportionate basis to the population.
       Second, I mentioned earlier that the emission levels for our project

                                       118

    were determined to be almost immaterial, but nevertheless, we accepted
    an accommodation with the agencies on an emission level ten times
    greater than those that could, by any modeling process, be attributed to
    the project and agreed, against a case which didn't even recognize the
    fact that the tankers we're talking about are already there. They
    aren't coming in new. In fact, there are two there now for every one
    that will be there when this project is put in place.
       The facts are that if the scrubber didn't work at all it would be
    immaterial, in light of what the issues are. But the scrubber will work
    and the people at Long Beach will benefit materially as a result of this
    project taken against the base case which currently exists. So we are
    not, in any sense of the word, reluctant to carry out a responsibility
    for cleaning up the environment, regardless of what we as a company
    thought about the extent to which we affect that environment. We've
    agreed to do that and are prepared to do it, and that is not the issue.
    It's the excuse, but it isn't the issue.

                                                                                4i�

    119

    CASE III: LOUISIANA OFFSHORE OIL
                PORT

    CASE TEAM

    Stephen J. Hasse, Leader
    Chief, Engineering Staff
    Deepwater Ports Projects
    United States Coast Guard

    William B. Read
    President, LOOP, Inc.

    Lonell Johnson
    Antitrust Regulations Specialist
    office of the Secretary of
    Transportation
    Office of Deepwater Ports
    Department of Transportation

    Shepard F. Perrin, Jr.
    Executive Director
    State of Louisiana Offshore Terminal
    Authority

    Sharron Stewart
    First Vice President
    Texas Environmental Coalition

    Jack R. Van Lopik
    Dean, Center for Wetland Resources
    Louisiana State University

                                       120

    STEPHEN J. MASSE

    Chief, Engineering Staff
    Deepwater Ports Project
    U.S. Coast Guard

    INTRODUCTION

    I would like to begin the story of the Louisiana Offshore Oil Port,
    hereinafter to be called LOOP, with a little historical data. In the
    years since World War II, the size of tank ships has increased
    dramatically, and in the course of their development, they began to
    outgrow conventional terminal facilities. Alternative transfer
    facilities that were developed to serve these so-called supertankers or
    very large crude carriers are deep draft ports, lightering,
    transshipment, offshore sea islands, and deepwater ports.
       By the early 1970's, there were a number of deepwater ports in
    Europe, Asia, and Africa, but the U.S. was just beginning to show an
    interest in such facilities. Among the studies done during this time
    was one by the Corps of Engineers that pointed out the potential for
    deepwater ports on the East Coast, the Gulf of Mexico, and to a lesser
    extent, the West Coast. Planning for deepwater ports was begun in
    Massachusetts, Delaware, Alabama, Mississippi, Texas, and Louisiana.
    However, only LOOP and Seadock, which was the project in Texas, got to
    the stage of actually submitting applications for federal licenses.
       The Superport Task Force, which was set up in Louisiana in February
    1972, led to the establishment of the Deep Draft Harbor and Terminal
    Authority, later changed to the Louisiana Offshore Terminal Authority.
    The Authority set out to build a public port, but by 1975 changed its
    focus to the licensing of LOOP and the protection of the environment.
       Congress began hearings in 1973. There was a great deal of interest
    in the legislation; there were six bills in the Senate, the
    Administration floated a bill, and there were bills in the House. The
    Deepwater Port Act was finally enacted in January 1975. The act gave
    the authority for granting of deepwater port licenses to the Secretary
    of Transportation and charged him with coordinating all federal
    licensing actions.
       LOOP, Inc., was formed in 1972 by ten oil or pipeline companies.
    Their original hope was to begin operation in 1976. Progress, however,
    had to await the passage of federal legislation and the development of
    regulations. Coast Guard regulations became effective in November 1975.
       LOOP, Inc., then consisting of six companies, and Seadock submitted
    applications in December 1975. During 1976 the Coast Guard and the
    Secretary of Transportation processed the applications, prepared the
    EIS, held hearings, and coordinated the inputs from all federal
    agencies. The Secretary published his decision and a 25-page license
    document in December. LOOP and Seadock then had to decide whether or

                                       121

    not to accept the licenses. By July of 1977, Mobil, Exxon, and Gulf had
    withdrawn from Seadock. The remaining Seadock members eventually
    deferred to the Texas Deepwater Port Authority, which now has an amended
    Seadock license before the Secretary.
       LOOP, consisting at this time of Marathon, Ashland, Murphy, Shell,
    and Texaco, accepted the federal and state licenses in August 1977.
    Since then, LOOP has been hard at work in the design and construction of
    its port. At present, offsite fabrication of components and drilling
    for salt caverns are underway. The first oil movement is scheduled for
    late 1980.
       In brief, LOOP, Inc. is a crude oil importation project consisting of
    an offshore terminal 18 miles south of Grand Isle, Louisiana, with
    pipelines to an onshore terminal 30 miles ashore in an area southwest of
    New Orleans. The temporary storage of the onshore terminals consists of
    caverns that have been leached from naturally occurring salt domes. The
    onshore terminal will connect to local refineries and to a pipeline
    system that serves much of Central United States. The distribution
    system from the offshore terminal in the Gulf of Mexico to the Great
    Lakes is shown in Figure 1.
       The offshore terminal will consist of a pumping platform and a
    control platform, encircled by single point moorings. The pumping
    platform will look something like the one shown in Figure 2.
       The initial phase of the project will consist of three single point
    moorings, like the one shown in Figure 3.
       The heart of the system is a ship tied to the buoy. Hoses are
    attached to the manifold, and they come down to a swivel at the base of
    the single point mooring depicted in Figure 4. So as the ship rotates,
    the hose follows.
       In the completed project, there will be six single point moorings for
    oil tankers and three crude oil pipelines. There is a 16-mile pipeline
    system across the Louisiana Wetlands to the onshore terminal.
       To construct the salt caverns that will be used for temporary storage
    at the onshore terminal, water is forced in to dissolve the salt and a
    brine is discharged as is shown in Figure 5. In the operational stage,
    there will be a continual fluctuation of crude oil floating on the
    brine, and a big reservoir will hold the brine.
       The onshore terminal will connect through a 53-mile pipeline to
    Capline, on the Mississippi River. Figure 6 shows an aerial view of the
    Capline Terminal, from which the crude oil will be shipped to refineries
    in Louisiana and throughout the midsection of the country.
       The capacity of LOOP will be 1.4 million barrels a day in the initial
    phase and 3.4 million barrels at the completion of all phases,
    contingent on the requirement for and initiation of the future phases.
       So that is LOOP in a nutshell. William Read, who is the President of
    LOOP, will talk about the project.

                               122

          |~~~~~~~~ :|ni

                                             Legend

                                           ---  Existing Pipeline
                                           For 0 Proposed Pipeline

       LCapin

    FIGURE 1. Louisiana Offshore Oil Port System, from offshore
    terminal to Central United States distribution points.

                           123

    FIGURE 2. Typical offshore platform complex.

                            124

    FIGURE 3. Tanker moored to a single point mooring.

                                                    125

                                                  Fnoring Lines

                                                                                    Floating Hose String

                                                             Buoyancy Tanks
    Anchor Leg Chain

    Submarine Pipeline
                                                     Fluid Swivel Assembly

                                                    Semi-Gravity Base

                         FIGURE 4. Single Anchor Leg Mooring.

                               126

                 Bre In and Out    :     --- ..

             Crude Oil   In an dOu t

               .(J fl |     > +;;>           g- .E~e; ,=Taprock s4 eet

    (P | Crn 190 Feet
           Crude Oil

         FIGURE 6.   Cap ine                                  ereial view.
    FIGURE 5. Salt storage cavern, cross-section view.

         FIGURE 6. Capline Terminal, aerial view.

                                       127

    WILLIAM B. READ

    President
    Loop, Incorporated

    I am a civil engineer, and I have worked for Marathon Oil Company, one
    of the major shareholders in the project, for almost 30 years. My
    experience has been in building pipelines and in crude oil trading and
    transportation. In October 1972,, when the decision was made by the
    shareholder oil companies to proceed with the project, I was loaned by
    Marathon to LOOP and served as the president of the corporation, which
    is a joint venture corporation owned by five oil company shareholders.
    I have been working on the project continuously since October 1972,
    through the legislative effort, through the environmental planning,
    through the licensing process, and now in the construction phase of the
    project.
       We are in the process of spending money building the port. We have
    four drilling rigs operating right now on the salt dome, drilling the
    access wells. We intend to start leaching out the salt sometime this
    summer. The offshore platform is being fabricated. We should be ready
    to start construction activities on the onshore pipeline next month.
    Our offshore pipelines will be laid this summer. If everything goes
    right, we will be unloading the first tanker in September or October of
    1980.

    LONELL JOHNSON

    Antitrust Regulations Specialist
    Office of the Secretary of Transportation
    Office of Deepwater Ports
    Department of Transportation

    I have been associated with the Office of Deepwater Ports since late
    1975. I served for a year as the Acting Director and have been involved
    in the processing of both the LOOP and Seadock license applications.I
    am currently associated with the regulatory phase of the LOOP project.
       The Secretary of Transportation organized the functions of deepwater
    ports so that the technical functions are the responsibility of the
    United States Coast Guard, but he reserved certain functions for his

                                      128

    staff. The Office of Deepwater Ports, with a small staff working
    together with the Office of the General Counsel, dealt directly with the
    Coast Guard and with the applicants, their affiliates, and the other
    federal agencies to expedite the processing of the license application
    and make sure it would be consistent with the goals and objectives of
    the department and would not exceed the time frame set forth in the law.
    The 356 days stated in the Deepwater Port Act is the period within which
    a license must be accepted or denied.
      We had originally expected the problems in the processing of the
    deepwater port applications to revolve around environmental questions
    and the question of citizen participation. However, the antitrust
    review and the antitrust concerns proved to be the most difficult part
    of the licensing process. The deepwater port legislation provided for
    the Attorney General of the United States and the Federal Trade
    Commission to give the Secretary advice on the anti-competitive aspects
    of deepwater ports. An invitation was extended to the antitrust
    agencies to participate in a joint investigation and fact-finding
    effort. The resulting information was used as the basis for a report
    from each agency to the Secretary.
       The Justice Department and the FTC recommended a set of competitive
    rules which any license issued in the case should follow, and the
    Secretary incorporated most of these recommendations into the LOOP
    license. In the course of our dialogue today, perhaps we can get into
    some of those specific issues. We have with us in the audience
    representatives from the antitrust community, and together we might
    review the manner in which the successful investigation and licensing
    that will put LOOP into operation by 1980 has been accomplished.

    SHEPARD F. PERRIN, JR.

    Executive Director
    State of Louisiana Offshore Terminal Authority

    I am a chemical engineer. At one point, I had four years at sea with
    the United States Navy on a heavy cruiser. At that time we refueled
    from 8,000-ton tankers while we were underway, which was my first
    experience with tankers.
       After that, I went into the oil business, and I have had experience
    in refining, supply, transport, and marketing of petroleum products,
    both in the U.S. and internationally. My last assignment with an oil
    company was in Singapore, where we had a single point mooring buoy

                                      129

    system that was capable of receiving up to 225,000 ton tankers. Those
    do not really qualify as supertankers, but they are pretty big.
       The role of the Louisiana Offshore Terminal Authority has changed
    quite a bit since its inception. In the beginning, the law that the
    legislature passed in 1972 and modified in 1974 called for a great deal
    of emphasis on protecting the environment, and an environmental
    protection plan was called for in the legislation. This was developed
    with the assistance of a lot of public input. The Board of
    Commissioners' meetings were all held in public. Louisiana has a
    sunshine law. There were many people who came and commented on the
    various aspects, and consequently we feel that the environmental
    protection program is a good one.
       Since my background has been in the oil industry to some extent, you
    may feel that the state is a little biased toward industry. But on our
    environmental committee, we have two experts in the environmental field:
    Dr. Lyle St. Amant, Assistant Secretary of the Department of Wildlife
    and Fisheries, and Dr. Jack Van Lopik of the Louisiana State University
    Center for Wetland Resources. So you can see that two environmentally
    concerned people can outvote me any time I get out of line.
       One of the things that the state took a look at was the risks versus
    the rewards. The risk has pretty well been taken care of by the
    environmental protection plan and an environmental monitoring program.
    The monitoring program is being conducted by the Department of Wildlife
    and Fisheries in the field, and certain studies relative to wildlife, in
    particular to the fur-bearing animals, the alligators, and the water
    fowl, are being carried out under Dr. Van Lopik's direction.
       With regard to the rewards, we had Kaiser engineers do a rather
    detailed study in 1976. It showed substantial industrial benefits to
    the State of Louisiana if the state took full advantage of the economies
    offered by the superport, as well as the benefits of removing some of
    the tanker traffic from the Mississippi River and allowing more room for
    general cargo traffic.
       Consequently, the state has made the decision that the rewards are
    well worth the risks, as long as the risks are completely covered and
    monitored, as we believe that they are. So we issued a license to LOOP
    at virtually the same time as the federal license was offered, and it is
    primarily oriented toward environmental protection.
       The role of the Authority at the present time is looking at the
    engineering design and reviewing the construction of the project,
    primarily on state lands up to the shoreline. We do have an interest in
    that portion of the project from the shoreline seaward.

                                      130

    SHARRON STEWART

    First Vice President
    Texas Environmental Coalition

    I am on the boards of a half-a-dozen different environmental groups on
    the Gulf Coast. I was fortunate enough to be appointed by the President
    to the National Advisory Committee on Oceans and Atmosphere, and when
    Seadock, due to the antitrust regulations, withdrew and left the state
    to build the port instead of private industry, the governor appointed me
    to the Texas Deepwater Port Authority. Ports both onshore and off in
    the Gulf have been a main concern of mine since 1971.
       I think that what has happened in public participation in LOOP
    parallels what happened with Seadock. That is, in Louisiana, one out of
    every ten jobs is associated with the oil and gas industry. Oil and gas
    reserves in both states are declining. People perceived that LOOP would
    help that situation, and I think in that respect they were very correct.
    All in all, public participation worked well with LOOP.
       On any issue as big as a deepwater port, there is a great deal of
    newspaper, TV, and magazine publicity. Publicity of that kind reveals
    the issues that were identified and discussed. The first issue was
    jobs. The second was, what kind of secondary development is going to
    occur? Mr. Perrin talked about the Kaiser Report that weighed benefits
    and disadvantages of the port. That was perhaps a very controversial
    report, and I would expect some people in the audience to ask questions
    about that later.
       The third issue that was discussed a lot is how good the port would
    be for the balance of payments. What may not have been discussed in
    detail in the early days were things like the risk of the ships coming
    in either offshore or to an onshore port. What is the spill potential?
    What about cavern integrity for the storage of oil? How is brine
    discharge going to affect the fisheries? What is the ability of the
    fishermen to use the safety zone?
       Now, some of these questions were attacked by the Port Authority and
    by LOOP. There was a great deal of base built up both with the
    organized and the unorganized public. The ability of the officials
    involved in dealing with the public, because they appeared to be
    concerned about what they were talking about and to be trying to work
    out solutions, was considerable.
       The one thing that ought to be understood for both LOOP and Seadock
     is that there was never really any question about whether a deepwater
     port would be built. In 1974 or 1975, that was not an issue in either
     state. The issue was when, where, and how, and that is where public
     participation was involved.
        Initially, there was the possibility of an onshore competing port in
     Plaquemines Parish. It was decided after a great deal of environmental

                                      131

    investigation that this was not the proper way to handle this
    particular problem. That project was dropped in favor of LOOP.

    JACK R. VAN LOPIK

    Dean, Center for Wetland Resources
    Louisiana State University

    I am a geologist by training and I guess that qualifies me to deal with
    issues such as ecology and environmental problems. I have also worked
    for the Corps of Engineers for about seven years at the Waterways
    Experiment Station in Vicksburg, Mississippi, and I spent about seven
    years with Texas Instruments in Dallas before coming to LSU. So from
    the standpoint of the three corners of the government-industry-
    environment triangle, I have run out of corners. Recently, however, I
    have been involved in a nonprofit research organization in Louisiana on
    its board of directors. And I can certainly tell you that none of these
    three sectors has a corner on objectivity or wisdom.
       My involvement with LOOP goes back to about 1972 in various
    capacities. First of all, my group at the Center for Wetland Resources
    at LSU contracted to conduct the environmental assessment for the LOOP
    program. The assessment involved the collection of about a year's worth
    of field data and other material to be used in the EIS, which we did not
    prepare.
       I was also involved with the development of the environmental
    protection plan that was an integral part of the Deepwater Port Act
    passed by the state. Since that time, we have contracted to do some
    work related to the monitoring program for vegetation, water fowl,
    alligators, and fur-bearing animals. This is in cooperation with the
    Louisiana Department of Wildlife and Fisheries.
       I also function as one of the three Environmental Directors for the
    Louisiana Offshore Terminal Authority, along with Lyle St. Amant and
    Shep Perrin, and I have overview responsibility for the environmental
    aspects of the development of LOOP.
       Regarding involvement of universities or scientists, the
    environmental groups and the oil companies perceive scientists as very
    objective and unbiased individuals, and therefore they came to the
    university to get the input they wanted. I really don't believe that,
    however. The best we can hope for is that within an institution or a
    group, we may have a balanced mix of people, and that the final product
    will at least reflect each of these various special interest groups. We
    employ people who are very active in environmental activities. We have

                                       132

    other people that are more conservation-oriented, as they prefer to call
    it. And we have some people who are in favor of economic development at
    all costs. So what I get involved with, even on an internal basis, is
    balancing these views and trying to come up with an objective product.
    When studies go beyond fact, as they often do in cases like this, this
    becomes very difficult.
       There is the question of the university role in all of this, and I am
    especially interested in how the university might work through the Sea
    Grant programs or other means to develop better public awareness. The
    university, because of its diverse faculty, does provide for public
    participation activity within a project such as LOOP.

       MASSE: I want to recognize Dr. Lyle St. Amant, who is a member of
    the program committee and who has been a part of getting the LOOP
    project before you.

    LYLE ST. AMANT

    Assistant Secretary
    Louisiana Department of Wildlife and Fisheries

    Well, before the audience thinks it was all that easy, let me point out
    a few things about the LOOP situation. I was in it from the beginning,
    and it worked out well because a great many people spent a lot of time,
    and in many instances did a lot of head-knocking, to get the thing done.
       The background of the system might help you understand it a little
    better. In 1969 or 1970, the environmental movement became active in the
    country. There was environmental work before that, but it was between
    competing interests, and I had been under the gun for years between the
    fishermen and the oil interests. They had been miles apart on the
    development of Louisiana, and there had been lots of oil wells. By some
    kind of machination, we managed to get some of both, and most people
    were satisfied.
       So when early representatives from LOOP camne to me and said, "Can
    this be done?" I said, "Well, from a practical standpoint, yes. There
    are many pipelines across Louisiana. Yours is no different, and if you
    want to follow the systems that we use, there should be no problem and
    no real environmental damages associated with it."
       About this time the environmental issue was surfacing, and there was
    a great deal of public interest. It became apparent that from a
    national standpoint this was going to be one of the first sea docks and

                                       133

    offshore ports, and that it was going to be scrutinized.
       This led to the legislation that set up the Deepwater Port
    Commission, and I think people who are interested in this should take a
    hard look at this legislation and perhaps at the resulting environmental
    plan and environmental monitoring system. I can't tell you the number
    of hours we sat down and worked on this plan. Finally we would get it
    knocked out. Then it would have to go to the Commission for public
    participation, and anybody else who wanted could have a shot at it.
       There were two keys to success. The first was legislation.
    Objectively, I wasn't going to get anything out of the oil companies.I
    was much more uinder the gun from the fishing industry, because if I
    didn't protect their interests, I could be considered off base.
       The other thing that nobody has mentioned on this platform is that
    somebody footed the bill for this thing. You can get all kinds of
    environmental suggestions from people in the public, but when you go out
    to get the baseline data, and then monitor it from day to day, it costs
    money. It takes nearly $400,000 a year to do this work, or one-fourth
    of what I spend in my total marine budget in the State of Louisiana.
    LOOP is footing the bill for about $500,OOO---that is our ceiling, and we
    argue about this from time to time. But it was in the law that somebody
    was going to pay for this.
       The Department of Wildlife and Fisheries is doing the day to day
    monitoring. There are two parallel sections, the ecosystem problems and
    the construction problems. Right now we are doing construction
    monitoring, trying to see that the actual digging, dredging, and
    placement, the way the pipelines are laid out and so forth, are going to
    cause a minimum amount of damage. lie have done this for 30 years.
      We had to go in and talk to the oyster fishermen, we had to examine
    the oyster leases in advance, to examine them after the fact, we have to
    determine whether we have any silting. If you do it right, you can
    mitigate the problems and you can certainly stop most of the litigation
    that would come from this type of thing.
       Sometimes rather curious things come up. The LOOP engineers, for
    example, planned to float their pipelines offshore. First, they were
    going to put them together in three- or four-mile sections in the canal.
    The problem here was not environmental. The problem is that these
    waterways are used, day and night, by fishermen, hunters, high-speed
    boats, and oyster boats, and we could have had four or five miles of
    pipeline stretched across the marsh, blocking passage until somebody
    decided to haul them out to sea.
       It means we have to be on it day to day, and I think LOOP is unique.
    I would like to think that all environmental disturbances could be
    handled this way. I don't know whether they could be, because it did
    take a lot of time and an exceptional amount of money.
       The monitoring team, which is, I guess, me and whoever is working
    with me and Jack Van Lopik, really has a pretty good bit of muscle. if
    we walk out there and see something going on that is going to affect the
    environment drastically, we have the right to shut this operation down
    until we get it straightened out. Now, this is an awful lot of power

                                       134

    and an awful lot of responsibility. But I have shut down oil wells, and
    it gets a lot more action than fining somebody.
      They were willing to give us this responsibility provided we were
    able to handle it in a proper way, and I expect to do it that way. But
    I have assured them, and I have assured the public, that if something
    goes wrong, we are going to have to take a look at it, because that is
    what the public demands.
       I think the reason we had so little problem with public objection to
    this project in Louisiana is because we made this promise and they have
    us in a position where we have to keep it. Anybody in the public or the
    professional areas knows that they can come to us with any data they
    think they have about a problem developing in the ecosystem from this
    operation, and that we are in a position to take a hard look at it and
    make the necessary adjustments.
       After working with this for years, looking at the pipelines and the
    way they are set up, I don't anticipate any real problem. The only
    thing we don't really know is what is going to happen with salt water
    out there. We do have some experience with the salt water from old
    stripper wells in shallow water areas. From what I know about this and
    from the calculations, I don't expect any problem from the salt water
    brine going into the system, because the dissipation of it is rather
    rapid. We have not been able to detect anything in some of the small
    units.
       We are prepared to monitor this with constant recording equipment and
    with frequent field examinations around the site. Once we start pumping
    salt water in this system, if the shrimp crop drops off or the speckled
    trout quit biting within a mile or two, somebody had better have an
    answer, because this is the kind of thing that we are going to be blamed
    for. I feel that now we will have enough data and enough control that
    if a question comes up, I can stand up in public and make a statement I
    can back up. This is the kind of position you almost have to be in with
    this kind of thing.

       STEWART: Dr. St. Amant, you need to be commended for the fact that
    all of this fantastic amount of data that is being accumulated is in a
    usable form, that the data base for the State of Louisiana is going to
    increase immeasurably and will be useful for people who are interested
    in the environment.

                                      135

    GENERAL DISCUSSION

       B.H. BRITTIN, Ocean Affairs Consultant: My work has been with the
    oceans for a long time. I first knew Lyle St. Amant about ten or
    fifteen years ago. What I was doing then, up until I retired, was
    involved with the law of the sea and negotiations over the use of the
    oceans, primarily fishing interests and scientific research communities.
       This morning I sat through a panel which had to do with the use of
    Georges Bank. What brings it to mind is that after hearing all of you
    speak, it strikes me that with all the disparate interests at play in
    LOOP, there were accommodations made in order to produce a package that
    is soon going to be operational. That is quite in contrast to Georges
    Bank issues. There still appear to be a lot of intractable positions,
    of people saying, "This is the way it is going to be, or else." In
    other words, they have not yet reached the conclusion that you who are
    involved in LOOP arrived at, that accommodation has to be made by the
    various facets and groups in order to reach a satisfactory conclusion.
       So my suggestion is this:   This group of people on the platform now
    should all move up to New England and take on that problem up there.

       MASSE: Can Lyle come with us?

       ST. AMANT: Let's be honest. The only reason Louisiana is operating
    is because we have thirty years, if you want to call it, of maturity.
    We went through every ache and agony that is going on in Georges Bank.
    I have been in situations where I had 'to keep people in one office or
    another to keep somebody from getting shot. I am serious; there were
    people shooting at each other. But we were dealing then with just two
    interests, oil and fishing. At least we could put the two of them in a
    room and get in the middle and arbitrate this thing.
       The credit goes to experience. I am sure many of the fishermen in the
    early days would like to have gotten rid of some of us. Then they found
    out that even though they objected and the oil companies went ahead, it
    didn't really tear up all the fish. And a lot of them got jobs with the
    oil companies, because every year the fish weren't produced and they
    were pretty well starving back in the Depression days and right after
    the war. In the early days, the oil people used fishing vessels to haul
    the gear out, and they hired these people.
       So there was accommodation throughout the system, but it came slowly,
    over a long, long period of time. I do think the East Coast can profit
    from this thing. I think if they really want to, they can come down and
    see our mistakes and try to avoid them. We made an awful lot of
    mistakes. And if I knew then what I know now, and I had anything like
    the muscle we have now with respect to environmental protection, I
    suspect the Louisiana coast would be a much different place. But you
    can't go back and pull up 30,000 oil wells, a-ad you can't go back in
    some of these oil fields that have been there for a long time and

                                       136

    completely reorganize them. But there is a way to do it, and there are
    several things that have been mentioned here today that are the real
    crux of this matter.
      First, oil offshore is a lot simpler than it is onshore. When you
    get into wetlands and crossing marshlands, you almost have to disrupt
    the ecosystem in some manner or other. Offshore, you are really looking
    at a physical structure that is, as has been pointed out, no different
    from a ship or a buoy or lighthouse or something, as long as it is
    operated properly.
      The second thing is the sophistication of the equipment now and the
    care that goes into developing offshore structures. The offshore group
    that has worked out the regulations on structures has got them to the
    point where you can have an accident, but it is going to be a rare
    instance. Nobody wants this accident.
       So the pipeline system, in my opinion, is the safest way to transport
    oil and probably the cheapest in the long run if you are going to haul a
    lot of oil.
       I would suggest that the Georges Bank people send a team down to go
    over all the scientific data and go back through the whole system and
    see if they can find any long-range effect on it. There may be a
    difference in temperature, there may be a difference in current. It was
    always my understanding, though, that high temperatures and high
    metabolic rates would probably show more rapid effects of a toxin than
    colder temperatures.
       There is some evidence that even in chronic spills the biodegradation
    of oil is rapid enough so that you can't find any cumulative effect.
    Some of the work that has been done by the Gulf University Group
    indicates that there was no long-term increase in oil pollution. That
    is not to say that you don't have chronic problems with it.

       PETER HOLMES, Atlantic Coast Project, Natural Resources Defense
    Council: I hate to cast a sour note on the cordial proceedings, but I
    represent a group that held one of the intractable positions with the
    Georges Bank drilling. We were some of the principal litigants against
    the Bureau of Land Management.
       Our position is that we cannot sacrifice infinitely renewable
    resources such as the fish that we can get from the Georges Bank for the
    sake of a finite supply of petroleum. After we have exhausted the
    petroleum and destroyed the renewable resources by not proceeding in an
    environmentally sound manner, then we are really in the hole for the
    future.
       I remember a supplement to the Washington Post, done with the
    National Ocean Industries Association, called "America Offshore." It
    expressed the opinion that drilling could continue in the Baltimore
    Canyon and Georges Bank with assurances that we had all the Gulf
    drilling experiences with no adverse impacts.
       I am just now starting to study some of Louisiana's problems, and
    they are pretty formidable, whether you talk about the standard of
    living in Morgan City or the fact that the Louisiana shoreline is losing

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    16.5 square miles of land a year, whereas before they were prograding at
    the rate of about I square mile a year, before 1940 or 1930 -- I can't
    remember the exact year.
       I am not familiar with some of the proceedings that went into the
    environmental impact studies for the Louisiana Offshore Oil Port.
    However, I have been reviewing some impact statements for projects that
    are being induced by LOOP, such as the Port Fourchon development plan
    that has applied for funds under the Coastal Energy Impact Program.
      My question is whether in the environmental impact statement for LOOP
    a lot of these induced impacts were considered, such as the Port
    Fourchon development. It seems that Louisiana is far from reversing the
    trend toward coastal degradation, but in fact may be actually on the
    road to much larger environmental degradation through the Corps of
    Engineers' -navigation projects, increased dredging, and the generally
    increased traffic load.

       ST. AMANT: Nobody ever said that this coastal area of Louisiana was
    stable or that it would maintain itself forever. What I object to is
    blaming it on the oil companies, or one specific unit.
       The coast of Louisiana has been being degraded since about 1720, when
    the first levee was built in the state. The entire deltic system and
    coast of Louisiana and all of the Mississippi River Valley system is
    based on an annual flood cycle. If we could tear down the levees and
    allow the river to operate, I am sure we wouldn't have this problem, but
    we wouldn't have 1.5 million people living in wetlands. I 'would remind
    you that 30 percent of the total area of Louisiana is subjected to the
    404 regulations of the Corps of Engineers. About 2 million people live
    in this area. Moreover,, they have been living in it for over 200 years.
       Several things should be recognized. It is true we haven't had a
    high river in Louisiana since 1950. This is when the coast began to
    subside. It can be directly attributed to things that had little to do
    with the oil companies. It has to do with man, with control of floods,
    with the stacking up of water in Missouri and Oklahoma for irrigation,
    with controlling the peak flow to the Mississippi River. It has to do
    with deepwater ports. When they couldn't got into New Orleans without
    assistance, they dug some, and every city wants them. I don't agree
    with this, but this is past history; they are there.
       These are the things that break down a wetlands system. I think any
    geologist would tell you that if man had never moved into this system
    except to set the levees, the Louisiana coast would go. The Mississippi
    coast is an example of what happens when a deltic system moves. You
    would end up with nothing but barrier islands out there over a period of
    time.
       it is true that when you put a pipeline in a wetlands system, the
    ground begins to degrade and erode away. We have some pipeline canals
    that were dug on Rockefeller Refuge at 50 feet wide; they are now 300
    feet wide.
       We try to adjust to this, though I am sure we don't do anything
    perfectly and never will. But we make them build roads now, plank

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    roads. We don't let them dig unless they have to. lie go in and try to
    maintain the integrity of the drainage patterns. We try to get water
    control structures into the system, and these are the kinds of things we
    are having LOOP do.
       I think it is true that it wouldn't look like it does now if we had
    known all of this. It took 50 years to see what was going on. All I am
    saying is that if you don't like the mistakes we have made, don't make
    them in some other area. But I do think that you can profit by them,
    and I don't think that you have to shut down the whole world in order to
    handle this.
       I would also point out that I don't believe that there is another
    coast in the United States that is as fragile or unstable as the
    Louisiana deltic system, with the possible exception of the Everglades
    in Florida. To try to equate the problems of some of these very
    delicate equilibriums with those of the rock-bound coasts just won't
    work.

       J. ROSS VINCENT, Ecology Center of Louisiana:   I presume one of the
    things we are trying to do here is learn from the LOOP experience how to
    handle things like this in the future. I think there are some things
    about LOOP that are unique and may make it atypical. It would be useful
    to understand those as we try to apply the LOOP experience to other
    places.
       For instance, whether or not there would be an offshore superport for
    Louisiana was never a serious political issue. In my experience, a lot
    of the really deeply felt, controversial environmental issues stem from
    groups of people who have significantly different visions of the future
    for an area. That may be the problem on the East Coast.
       In Louisiana, in building a superport, we weren't talking about
    radically changing the economic base of the community; we were talking
    about sustaining it. The issue of whether to build the port was never a
    serious political question. There were people who disagreed, but it was
    never seriously entertained as a viable issue for the public arena,
    because it simply wouldn't have gotten anywhere.
       That brought the issues related to 'LOOP down to questions of where
    and when and how you would go about building this port. It made the
    issues initially a good deal more technical in nature, and at that time
    the public interest community in Louisiana lacked the technical
    capability to deal with a lot of those issues. So the citizens' groups
    were put at a significant disadvantage by the political climate within
    which LOOP was considered. I think that is going to be less true in the
    future, because citizens' groups are beginning to develop technical
    capabilities they didn't have before.
       A second point is that, especially in the public works project
    issues, environmental groups were in the position of trying to relate
    the environmental risks involved in a project to the benefits to the
    communities affected. And in this case we were looking not only at
    economic benefits -- I think some of those were exaggerated in the
    process of trying to sell the project -- but also at substantial

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    environmental benefits, which isn't the case in a lot of these public
    works projects.
       I am inclined to believe that the greatest of those benefits is the
    increase in the data base about wetlands in Louisiana that resulted
    primarily from the impetus of the LOOP project -- the research that was
    done in preparing the environmental impact statement, the substantial
    increase in resident technical capability, the brain trust that has been
    built up in Dr. Van Lopik's organization and in state government. It
    became obvious early in the LOOP project that that was going to help the
    environmental community in Louisiana to deal with a whole host of
    wetlands-related issues.
       Another thing that I think is critically important is the fact that
    people like Bill Read and Shep Perrin and P.J. Mills were incredibly
    accessible to the public. In cases of this nature, the executives in
    government agencies and private corporations are rarely directly
    accessible. In the LOOP case, citizens' groups didn't have to deal
    through PR or technical people. The top-level people met directly with
    the public and established personal credibility with citizens' groups,
    and that went a long way toward reducing the level of suspicion. In
    doing that, some might argue they have unduly modified or suppressed
    potential opposition in some areas of the project. But the people who
    are making the decisions have to understand what the public is thinking
    about, and that doesn't happen often enough in these projects.
       The final thing is that the accessibility of these officials to the
    public, the sincerity that they portrayed, and the top quality work that
    was done in the process of conducting the environmental studies,
    preparing the legislation, and drafting the regulations, was so atypical
    in Louisiana that it stood out like the star on Christmas morn. We
    don't have a strong tradition of public involvement in government. That
    may be an understatement. The fact that a government agency, a state
    agency, the superport authority, and a private corporation involved in a
    major public works project really made themselves available and appeared
    to be doing top-quality work made a substantial difference.

       STEWART: I would like to point out that the environmental community
    in the State of Louisiana did not just roll over and play dead. The
    very first decision in this ballgame was based on the fact that if you
    put the port 18 miles offshore with the pipeline connecting to onshore
    storage facilities, you have a minimum lead time of 18 hours before a
    spill at that platform is going to get into the estuary. And if you
    build a port off Plaquemines Parish or at the mouth of the Mississippi
    River, you have no lead time.
       I recently went through the National Oil Spill Response School, and
    it was a very enlightening experience to find out how little we know
    about cleaning up oil. The thing that we must do is to prevent oil
    spills. The whole purpose of LOOP -- and this is what the environmental
    community, the ecology center, the Sierra Club, the Audubon Society, and
    other groups in Louisiana recognized -- was that this was the best way
    to prevent what we know can occur.

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       HOLMES: To get back to the Louisiana coastline erosion, which has
    resulted in the loss of about 500 square miles since 1940, I didn't
    intend to say that that was entirely attributable to oil and gas
    activity. What I mentioned was activity such as the Port Fourchon
    development plant, which includes extensive dredging, canal works, and
    so forth. The cumulative impact of projects like this has been to
    accelerate erosion on the Louisiana coastline, with the subsequent
    degradation of the wetlands.
       In their project proposal for the Coastal Energy Impact Program, the
    Port Fourchon Port Authority cited the LOOP terminal as the major user
    of their development, and I wanted to know whether you anticipated that
    in the impact statement for LOOP or not.

       READ: Yes, secondary industrial development was addressed in the
    impact statement. The facilities that LOOP will install were included
    in the application for the license and were also included in the impact
    statement.

       NANCY IKEDA, Office of Technology Assessment: Since the panel seems
    to have concluded that public participation was successful in LOOP, I
    would like to know a few more of the details, such as whether there was
    technical information prepared to assist the public when they considered
    and gave their opinion about the LOOP study. If so, who prepared it?
       I would like to know more about the number of hearings, the
    publicity, and the surveys and polls if those were taken. A public
    participation committee was mentioned, and I would like to know a little
    more about that.

       PERRIN: By the time I arrived at the Louisiana Offshore Terminal
    Authority in 1975, it had a very active program of inviting public
    participation. At that time the Authority had a Board of Commissioners
    that met four to five times a year. Under the Sunshine Law of the State
    of Louisiana, the meetings were open to the public. Announcements were
    placed in the paper and sent to interested parties. We had an
    environmental/conservationist mailing list of about 200 people to whom
    we sent notices of meetings, workshops, changes in regulations, and
    proposed environmental protection plans.
       The present environmental protection plan is the third edition.
    There has been continual public input as it evolved.
       Drafts of the environmental monitoring program were sent out to
    interested people and comments were requested, so that they were able to
    participate in this.
       In addition, we ourselves had a speaking program. P.J. Mills we-at to
    Washington several times to talk before the U.S. Congress when they
    considered the Deepwater Port Act. When I arrived on the scene, the
    Deepwater Port Act in Congress had been completed and the state act
    completed and revised. But in my three-and-a-half years, I guess I have
    made about 100 presentations to Rotary Clubs, Kiwanis Clubs, and other
    types of organizations within the state, and to a few outside the state.

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       Mention was made that we had pretty good press relations with the
    project because everybody was in favor of it. Consequently, we have
    gotten a lot of exposure outside the state that has brought inquiries
    from publications like the New York Times and Popular Mechanics, and I
    think that the publicity on- -the poec   a  be'engiv~en widespread
    dissemination to the public. Many of you may remember that about two
    years ago an oil ship -- not a tanker -- came down the river in the fog
    and hit the Luling Ferry. The ferry turned over and 75 people were
    drowned. Keeping these bigger tankers out of the river by having them
    remain offshore 18 miles to discharge reduces the traffic on the river.
    This is another reason for the widespread support of the project.
       And as has been mentioned, we have leaned over backward to make
    ourselves available to any interested group, and I know that LOOP has
    done the same thing,.

       JOHNSON: There were two formal hearings held by the federal
    government, one in each of the adjacent coastal states, and a final
    hearing in Washington. It is interesting to note that nobody showed up
    in Washington.

       MASSE: We had prepared the draft environmental impact statement and
    had allowed the time, which I believe was 30 days, for the draft
    statement to be circulated, and then we held the hearings in New Orleans
    and Freeport. After the draft impact statement was finalized, there was
    a hearing in Washington.

       PREAD:  We have tried to explain the project whenever anybody would
    listen to us. We started out in October 1972 when LOOP was formed, and
    members of my staff are continually giving talks. We make ourselves
    available to interested groups, technical societies, Kiwanis Clubs,
    Rotary luncheons -- to anybody that wants to hear about our project.
    They continually call and ask for an update, and we try to be accessible
    and tell people what is going on. It apparently has been working.

       PERRIN: Let me address a little further the question about technical
    assistance to public groups.
      We have offered it in keeping with our capability and what was
    available. We have told people about Louisiana State University and the
    State Department of Wildlife and Fisheries' capabilities. About the
    only request that we have had for technical data was on the disposal of
    brine from the leaching of the salt dome caverns into the Gulf of
    Mexico, about two-and-a-half miles offshore.

       OLIVER BROOKS, Maritime Transportation Research Board: I should
    confess, I am a New Englander. I was struck during the National Academy
    of Science's study, in which I was involved, by the fact that there are
    distinct political and cultural differences around the country which
    seem to have a profound effect on the way public participation is viewed
    and carried on.

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       When our report was nearly complete, a Mr. Reed who is Executive
    Director of the New Orleans Port had some comments to make about the
    relatively optimistic views expressed on citizen participation. lie
    said, "We simply don't do things that way down in Louisiana." I am
    heartened by the fact that the LOOP project seems to say otherwise.
       I would like to know more about the significance of the lead agency
    concept, as implicit in the Deepwater Ports Act, in the achievement of
    the LOOP project. It is pretty clear that its impact was profound in
    terms of this very complex permitting process. But I am more interested
    in the psychological effect that it may have had on the accommodations
    that took place among a variety of disparate interests who were involved
    in this discussion over a good many years.
       Clearly, everybody was conscious of the fact that at some point the
    clock would start ticking for 356 days in a high-profile way, and that
    the Secretary of Transportation on December 23, 1976 -- .or whatever the
    date was -- would say, "All right, it is go or no-go."
       Did this certainty about lead agencies -- absolutely no equivocation
    about where governmental responsiblities lay -- in fact have a
    psychological impact that tended to lubricate the process of
    accommodation?

       JOHNSON: In my opinion, it did. I think there is no doubt, with all
    due respect to my friends in the antitrust community, that that
    psychological time frame required most of us to work at a pace to which
    we were not accustomed.
       I think it provided us with a degree of cooperation that made our
    jobs far easier to accomplish. For example, in the legislation there is
    a provision that if the FTC and the attorney general don't come through
    with a report, the Secretary shall proceed as if he has received it. So
    we were prepared to issue a license to accommodate the time frame with
    or without that report.

       BROOKS: I was perhaps as much interested in the psychological
    advantages that seemed apparent on the local scene.

       STEWART: As to the one-stop lead agency concept, I don't think that
    made much difference, but there was something that did make a great deal
    of difference in Lafourche Parish, which is a very Cajun area.   The
    people down there were losing population. They were able to afford an
    education for their children,, who then could not find jobs in the home
    area and were leaving. The perception was that the jobs being brought
    in through secondary development from LOOP would enable their children
    to return home. This maintenance of their way of life, this ability for
    their families to be united again, was very important in the
    psychological perceptions of the people in the affected area. Nobody
    knows whether it is really going to happen or not, but this is the way
    they perceived it.

       READ: I think the single window approach worked almost the way it

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    was supposed to. When we got the license, we got most of the other
    permits that we needed to proceed with the project. The Corps of
    Engineers came through about three months after we got the license with
    the permits that we would need to construct the project. I think the
    time frame set up in the law was very important. The agencies that had
    to issue the permits within this time worked very diligently to do so.
    I personally was one of the people who thought it was a good idea to
    have a single window approach.

       MASSE: I think there was a one-two punch there, with the timetable
    and the lead agency to beat on the door and point at the timetable.
    This helped in a lot of mechanical things like the application. We got
    it in, we distribut'ed it, comments came back.

       PERRIN: The federal license was done with a one window approach, but
    the state license was done through the regular state procedures. The
    Superport Authority acted as a coordinating agency. We sent copies of
    the application to some 21 state agencies and made sure that they
    reviewed it, that they got their comments back on time, and so forth.
    But in the state, as Dr. St. Amant mentioned, they have been doing
    pipelines for years. So all of the different state agencies wanted to
    continue to hold on to their own area. The application was reviewed,
    the license was issued on time, but I think the one window approach
    would be more effective from the state's standpoint.

       VAN LOPIK: One thing that may be of interest i s the studies that
    were done in connection with the coastal zone management program in
    Louisiana, to gauge the awareness of citizens in the coastal parishes
    and understand their perception of the marine environment.
       You would think that in Louisiana the marine heritage would just be
    something you would take for granted. Well, apparently they not only
    take being in the coastal zone for granted, but they don't even think
    about it. There seems to be a greater appreciation for oil and gas
    operations and having grown up with them than for the marine and coastal
    environment per se.
       I think coastal zone management in Louisiana has been helped by the
    fact that Deepwater Ports Act of 1974 indicates that there has to be a
    coastal zone management program,, or progress toward development of such
    a program. And of course the coastal energy impact funds are very
    important to Louisiana, too.

       BROOKS: Up north, we call the Coastal Energy Impact Program the
    Louisiana Repurchase Act.
       I have a question on technology. There was an article in the Wall
    Street Journal about two weeks ago on the editorial page describing the
    federal government's emergency oil storage program, with an eventual
    target of a billion gallons and a total price tag within the DOE budget
    of $25 billion. The impression was conveyed by the Journal that this
    was perhaps one of the outstanding boondoggles in which the federal

                                       144

    government has participated within the last ten years.
       I am struck by the fact that this oil was to be stored in salt domes
    and that one of the problems appeared to be the federal government's
    difficulty in solving the problems of this kind of storage. Yet here we
    are at LOOP with apparent assurances that the owning consortium has the
    technology fully under control and is quite confident about it. I would
    be interested in any comments which might clarify that.

       STEWART: I am an antagonist to the Strategic Petroleum Reserve of
    the Department of Energy. As of last Friday, two of the groups in which
    I serve on the board finished developing the monitoring plan for Bryan
    Mound site. One of the things we are concerned about is the disposal of
    brine, and the other is the integrity of the caverns. This issue did
    not surface with LOOP until the groups in Texas began questioning Bryan
    Mound. And we agree with John Dingle's congressional committee that
    this is a boondoggle. The amount of oil stored in Bryan Mound, which is
    one-fifth of the total capacity to keep this nation going for two weeks,
    would keep the local chemical company that is located within a mile of
    that salt dome open for four days, and the cost of this project is
    absolutely fantastic. The environmental consequences are unknown. The
    only good thing coming out of it is some research, and to get a handle
    on that research we have been fighting since July of 1977. It has taken
    us that long to deal with the Department of Energy.
       So it is not always industry that is a problem with the environment.
    Sometimes it is those people who are supposed to be helping us, the
    federal agencies. The Strategic Petroleum Reserve is a boondoggle, and
    apparently LOOP has done a much better job because of contractors. At
    Bryan Mound, the federal government has to take the lowest bidder, and
    they have people working there who know very little about drilling
    injection wells. Yet five companies in Houston who are considered the
    most expert in that particular field couldn't get hold of the contract
    because they were not low bidder. This is a problem.
      When private industry was doing it they could go after the best
    available people. I don't know that their solution is going to be any
    better; you will have to ask them about that. But I do know that the
    problem with the Strategic Petroleum Reserve system is poor contracting.

       MASSE: In approving the LOOP design both from the state and the
    federal point of view, we have seen engineering studies that show the
    stability of the dome and that prove to our satisfaction that the actual
    leaching is feasible and sound.

      READ~: We investigated the feasibility of storing oil underground in
    salt domes for a long time, mostly the economics. Industry has been
    storing petroleum products underground in salt domes for 30 years.
    There are probably over 100 wells in which they store LPG, ethylene,
    propane, and butane in this way, without any major problems. It is just
    that storing crude oil has never been economically feasible until now,
    when we want to store very large reserves underground or need to store

                                      145

    quantities that come off of a supertanker. A 500,000 tonner carries 3.5
    million barrels. You are going to unload it in a day and a half, and
    you have to have at least that much storage to go into. That was the
    reason for the economic feasibility as far as the LOOP project is
    concerned.
       Technically, there isn't any problem with storing crude oil or any
    liquefied gas product underground in salt domes. They have been doing4:
    it in Europe and the United States for many years.

       VAN LOPIK: That is interesting, because one of the early looks at
    LOOP from an environmental standpoint resulted in the recommendation
    that they look at storing the oil in salt domes. The decision at that
    time was that they couldn't do it; it was uneconomic. So it went to a
    tank storage facility that would be located within two miles of the
    shoreline.
       I am convinced that from an environmental standpoint it is much
    better, in the case of LOOP anyhow, to go the salt dome storage route
    than to build tanks within two miles of the shoreline -- on foundations
    that are not too stable and are subject to hurricane situations.

       PERRIN: From the state's standpoint, we got interested in the
    Strategic Reserve Program in the beginning and followed it fairly
    closely. The state was strongly supportive in the beginning, and then
    the Federal Energy Department started taking steps which somewhat
    alienated the state. They treated Louisiana and its citizens like
    stepchildren and just marched in and took over.
       So I got involved in it to some extent. It is my understanding from
    talking with several of the people in the SRP that one of the
    prerequisites for being hired was that they have no major oil company
    experience. Consequently, they were taking a group of people from all
    over and putting them in charge of the program and coordination. They
    had no real practical experience in what they were doing, and they were
    rushing ahead under a program deadline that gave them very little time
    to go back and look at it in retrospect to see what they were doing
    right or wrong.
       The state had a hearing on the Hackberry salt dome situation two
    weeks ago. Bill Parker of the SRIP was there, and he did make the
    statement that General DeLuca had told them to take a look at having
    private industry do parts of the SRP program, not to turn the whole
    program over to industry, but to turn over more and more of it to them.

      MASSE: I think the other point about the underground storage is the
    reduction in the air emissions problems. That is one thing that hasn't
    been mentioned.

       GEORGE TRESSEL, National Science Foundation: I wonder if I could ask
    you instead to talk again about the public information activities. I am
    not sure how thorough I felt the earlier discussion on that was. Almost
    every agency provides speakers when they are asked for. I don't think

                                      146

    you would find an agency that doesn't think it is open and above-board
    and candid and provides information when people want it, and so on. But
    they don't usually have such nice, benign audiences. And I wonder if an
    alternative explanation for the success of the LOOP discussions and the
    peaceful, quiet decision might not be that there wasn't an informed,
    well-armed opposition giving you a hard time. Let me pose that as a
    speculation. I am questioning whether you did anything special in the
    way of public information, or whether you did the usual thing of just
    being available.

       READ: During the legislative effort on deepwater ports, we had the
    support of the environmental community on the strength of its being a
    better way to import oil into the United States than the way it was then
    being imported. The big question at that time -- it was during the
    Project Independence days, and the public statements by the government
    were that we weren't going to import any oil by 1980 -- was: Why are
    you spending all thi~s money to build a port that wdon't be done until
    1978, if we aren't going to import oil by 1980? I don't know whether we
    answered that or not, but we just kept plodding along. Our views were
    that we were going to be importing oil, probably more oil than we were
    importing at that time. But the environmental community was not against
    the project, which was an environmentally preferable way to import crude
    oil.

       TRESSEL: Did you do anything special to bring that about? Did you
    contact them, or could it be interpreted as simply a benign situation
    where they felt comfortable with it and where the urgency of the
    situation persuaded them not to give you a hard time?

       READ: I believe the environmental community was asked to participate
    in the hearings before congressional committees, and they did
    participate actively in the writing of the legislation. Their concerns
    were building the environmental safeguards into the law, so that we were
    required to meet NEPA. We were required to have an oil spill cleanup
    fund that would take care of oil spills and of paying damages due to oil
    spills. We are required to put 2 cents a barrel into a fund until it
    builds up to $100 million. We have liability without fault up to $50
    million for paying damages and cleanup costs. So these concerns were
    met in the federal legislation, and apparently the environmental
    community was satisfied with this.

       PERRIN: The Offshore Terminal Authority was responsible for issuing
    the state license, so we felt that the community of Louisiana should
    know what was going on. As I mentioned earlier, we had a mailing list
    of some 200 people who were interested in environmental issues. We
    mailed out status reports about every two or three months during the
    most active period. We had a second list that included all of the state
    legislators. They got copies of the status report. Then there was a
    third list of the key television and newspaper people throughout the

                                       147

    State of Louisiana, and they also got copies. Consequently, they were
    informed as to what was taking place at the time, and they were invited
    to participate or to respond in some way. So that was the public
    information program, to let interested citizens know what the Authority
    and its Board of Commissioners was doing and to invite them to respond
    or participate. Dloes that answer your question about public
    information?

       TRESSEL: That answers it, but it doesn't settle my concern. It
    sounds as though what you were saying was: Who are the local opponents?
    We will ask them, "~Do you fellows feel as though this is okay?" All
    right, that takes care of the people who might fight over this. We will
    also let the legislators know about it because we want their support,
    and we will send out press releases. All these things are pretty
    standard operations.
       What about the public? Where are they in this? Do you think that
    the press releases satisfied them?

       PERRIN: These were status reports, reports on what had just taken
    place, what was taking place, and what would take place, and they
    invited participation.

       STEWART: The environmental community was interfacing with the top
    level of decision-making. They had totalI access. If an
    environmentalist in Baton Rouge wanted to pick up the phone and talk
    with Bill Read or Shep Perrin or womever., they could get the answer to
    their question right then.  The levy of interface is very important.
    They weren't dealing with the public  elations people who were handing
    out press releases; they were dealing with decision-makers effecting
    policy.

       TRESSEL: The question that is still on my mind is whether or not the
    success of this particular project and the peaceful environment has more
    to do with the openness that you talked about before or with the fact
    that the situation itself was comparatively benign, that there wasn't
    opposition there to satisfy.

       VINCENT: I think the political situation, the nature of the
    constituency that LOOP had to deal with, had a profound effect on the
    lack of opposition. Had a similar project, under similar conditions,
    been proposed in New England, I think things would have been much
    different. The fact that people in Louisiana were not only used to but
    dependent upon oil-and-gas-related activity made a big difference in the
    way they perceived the whole project in the beginning.
       In retrospect, trying to compare what LOOP and the Superport
    Authority did with things like, say, EPA's new proposed regulations on
    public involvement in water quality activities, I would say that what
    happened in the LOOP process, viewed from a national perspective in
    today's terms, would be considered decent -- nothing spectacular, but

                                       148

    decent.
       In Louisiana at that time it was absolutely unheard of for agencies
    to behave the way they did, and that is one of the reasons they got such
    a good response. Nobody had made those kinds of overtures to the public
    in the past, and that had a profound impact.
       There are a couple of things that were different then and that still
    don't happen in cases like this that I think were critical. One of them
    was the level of the interface between the public and the agencies
    involved that has been mentioned. The other was the fact that I can't
    recall any time during the whole period of development of the superport
    that we were ever surprised by anything either the state or LOOP decided
    to do. Whenever there was a major change of any kind coming up, we were
    always notified ahead, either by a telephone call or, in some cases, by
    actual meetings. We were called a day or two before the announcement
    was made to sit down and talk to people about what was planned. So we
    were never put in the position of having to guess at what the
    implications were.
       That is different from having been involved in the process of coming
    to the decision in the first place. As a rule, we weren't involved at
    that very early stage, but at least we were never confronted with calls
    from the newspapers saying, "Hey, LOOP has just announced that it is
    going to switch from tank storage to salt dome storage. What do you
    thin~k about it?"' That is an important difference between what happens
    now in many cases and what they did in this case.

       BRITTIN: At the coffee break, I was surprised to find out how many
    people were Erom New England. Earlier today, if I inferred that I
    thought LOOP involved peaceful and relatively easy negotiations, I
    certainly didn't mean that at all. Mrs. Stewart, I know that you are
    not an easy customer, and I am sure that is true of perhaps everybody up
    on the platform.
       I suspect what distinguishes this particular operation from, for
    example, the New England one or a lot of other places is that the
    general public was really very well represented. By that I mean that
    there was a kind of credibility -- and please don't start wearing halos
    -- to the spokesmen for the various groups. When you have that, then
    you don't have to have a very noisy operation. You can argue like
    crazy, but it is done in such a way that the emotional impact is quite
    different.
       I would also suspect that because of credibility it might well be
    that various interest groups will not pursue through the courts things
    that they lost out on in the negotiations, which I think happens
    frequently in other areas of interest in the U.S. today. This case
    doesn't appear to have that characteristic, so again, my
    congratulations.

       WILLIAM AHERN, Energy Coordinator, California Coastal Commission: I
    am still In a bit of culture shock. I feel like I have come to the Big
    Rock Candy Mountain.

                                      149

       To begin with, you had a tailored act of Congress, which it sounds
    like a number of you were even involved in writing, with the high level
    involvement of the Secretary of Transportation and with special staff
    who paid attention to a number of issues. It sounds like it will be
    eight years until the time the project gets going from when it was
    cooked up.
       I am not sure whether the same thing happened at the state level, and
    whether this Offshore Port Authority was a special operation or an
    ongoing operation. I would be very interested in that, too, because a
    mailing list of 200 --we mail out regularly to 8,000 in the California
    Coastal Commission --sounds like easy living.
       First, could you have done it if the Deepwater Port Act simply
    enabled LOOP to be built and had said you had to get through the permit
    process like everybody else, without that special attention? And
    second, could you do it if you were starting today, with the additional
    rules and regulations in force? Did this go through a New Source review
    by EPA? Did it have to get trade-off s like the SOHIO project? Did the
    Corps of Engineers have the 404 guidelines all the way along, with
    bioassays of all the sediments?

      MASSE: Seadock is now coming again, but we are still using this
    special tool. Of course, the Coast Guard is now mobilized. I am on a
    special staff that was put together to do this. But that is a very good
    question, and I think we will all take a shot at it.

      READ: When we first decided we wanted to build a deepwater port, one
    of the first things we did, right after October 1972, was to make a tour
    of the federal agencies to find out what kinds of permits we needed.
    They all kind of scratched their heads and said, "Yes, you are going to
    need a permit from the Corps, from EPA, the FCC, the FAA, and the Coast
    Guard. You are going to need a lot of these permits. But there really
    isn't any mechanism for permitting outside of the continental limits of
    the United States."   They suggested that we needed some international
    agreements to do that and that this was something that might better be
    handled through the Law of the Sea Conference. We could see a very long
    lead time to get something through the Law of the Sea Conference on
    deepwater ports.
       Actually, one of the people in the Interior Department, a deputy
    undersecretary, said, "Why-don't you just go out and build it., and see
    who tries to stop you?" We thought better of that.
       But while we were talking about building this, there was a committee
    set up under the President to look at the licensing or legal aspects of
    permitting deepwater ports. This led to congressional hearings and
    recommendations and to each of the agencies in the federal government
    trying to decide whether they ought to be the lead agency, or whether
    there ought to be a lead agency. It was a very complicated process in
    the initial stages.
       To boil it all down, we felt that we ought to have authority from
    someone to build a deepwater port, and that that authority would have to

                                       150

    be from Congress. It could 'have been done by presidential initiative,
    but they decided to do it through congressional action.

      MASSE: This is one that bubbled up to the top, and a law was passed.
    If you put that kind of muscle on it, something eventually gets built.
    The other things that were put on top of it, the one window and the
    timetable, are the kinds of things where people take the bull by the
    horns and distort the existing system to make things happen. Is that
    the kind of thing you are talking about?

       AHiERN: Right. And the question is: Could it have been done without
    that?

       JOHNSON: In my opinion, it could not. If you begin to look at the
    time frame, for example, from the day on which an application is
    received, the Secretary was required to determine in 21 days as to
    whether or not the application was complete. Those very rigid time
    frames that necessitated a processing scheme were the result of
    requiring a decision in 356 days. I think clearly it could not have
    been done without these things.

       STEWART: I would like to answer the second part of your question
    about whether it could still be done today. Seadock -- or the Texas
    Deepwater Port Authority, whichever you want to call it -- is continuing
    on.  We 'have applied for an amended license under        toays conditions,
    not the 1976 conditions under which Seadock applied for their license.
    We are having to come into compliance with all the new air regulations,
    and there has even been some discussion with EPA about applying the
    Hondo Platform decision to a platform 26 miles out in the Gulf. So we
    are proceeding in the light of all the current things.

       AHERN: How do you think that is going to do?

       STEWART: I don't think it is going to hold water, but we will just
    have to wait and see. Whatever EPA decides, we will do.

       ST. AMANT: I think the unit would have been built without federal
    participation if they had decided not to do it that way. We built
    pipelines before LOOP, and we have built them since then without this
    particular bit of legislation. I don't think you should confuse the
    state legislation and the federal legislation.
       If any federal agency had assumed that this offshore structure was
    just like any other platform, it would have been simply a matter of
    getting a Corps permit for the pipeline and the offshore platform, and
    it would have been built. The problem would have started when they hit
    the shoreline, which is a state problem, and this is the area that the
    environmentalists and all of us got involved in, trying to get a state
    legislative procedure whereby we could monitor the system.
       From a practical standpoint, unless you make the assumption that one

                                      151

    of these big tankers might have an accident out there, this structure is
    no different than the other 2,700 platforms that we have built on the
    coast of Louisiana and are continuing to build. These pipelines are no
    larger than the perhaps 1,000 miles of pipeline that now exist out
    there. -The thing that happened here was that the federal government
    took some responsibility beyond its legal jurisdiction, so to speak, of
    three miles. They wanted to get some kind of handle on it. Otherwise,
    there was no way to go about it.

      MASSE: What do you think the Department of Justice or the Federal
    Trade Commission role would have been if the law was a one-liner that
    said go and do it?

       JOHNSON: I think it is important to note that the legislation is
    pretty clean. You don't find many compromises. You don't find various
    interest groups who struck a deal, except the oil industry. And the one
    area of the legislation in which the petroleum industry did not have
    great control was in fact the area where problems arose, and that is in
    the antitrust subcommittees. Here is a -nice piece of legislation with
    no great differences of opinion with respect to the various interests on
    the Hill.
       David Brown, will you talk to us about the antitrust groundwork?

       DAVID BROWN, Attorney, Energy Section, Antitrust Division, Department
    of Justice: I have been with the Department of Justice since the fall
    of 1975, two or three months before LOOP filed their application.
       Late in 1975, my boss called me into his office and asked me if I
    knew anything about deepwater ports. I said no. He said, "Well, you
    are the perfect candidate for the job." I took over, basically, the
    responsibility for starting the Department's antitrust review.
       Both of the antitrust agencies, Justice and the FTC, are obliged by
    statute to provide the Secretary of Transportation with antitrust advice
    in the form of a report for every deepwater port application that is
    filed. The statute also makes clear that there is no waiver of our
    traditional remedies under the regular antitrust statutes to challenge
    any anti-competitive activity growing out of the construction,
    ownership, or operation of a deepwater port.
       The idea of the antitrust review is to provide prophylactic rules and
    advice to prevent situations where the federal government is
    substantially involved in the creation and licensing of a new facility,
    to try to get important matters of competition policy straight
    beforehand and before substantial capital investments are made.
       Without this kind of framework within which we could provide advice
    to the one window agency, It would not have been possible for the
    Antitrust Division, except on the request of LOOP or Seadock, to
    structure in any way the ownership or operation of the deepwater port
    facilities. We would have been obliged to look at them after the fact
    and decide whether there was any violation of the antitrust laws
    associated with the way the port was going to be owned or operated,

                                       152

    after all the investments had been made.
       It was the congressional determination to inject us into the process
    in a formal advisory role that made our participation possible. While
    we still can sit back and rest upon our ability to later sue, the
    Antitrust Division has a long history of keeping its bargains with
    industry in terms of its participation or advice beforehand, of sticking
    with the recommendations and advice that it makes and not suing industry
    at a later time.
       I believe that the process has built up a certain amount of -mutual
    trust between the antitrust agencies and those who are going to be
    building and operating the port that would not be there without this
    antitrust review and the one window approach.

       ALEX MORIN, National Science Foundation: I was struck by something
    that Ms. Stewart said a few minutes ago. She said, "we," speaking
    presumably both for the environmental groups she represents and as an
    advocate of the development in Texas of the offshore facility. She
    said, "We will do whatever EPA tells us to do." And if you take the
    Georges Bank situation, the posture of the environmental groups there
    is, first, don't do anything to the coastline, and second, we will took
    at whatever EPA does and if we don't like it, we will take them to court
    tomorrow. It is a very different view of the appropriate relationship
    between the public interest group and the issue at hand.

       STEWART: I used "w" to mean that the Texas Deepwater Port Authority
    "will do whatever EPA tells us to do." That was not my response as an
    environmentalist and advocate of offshore ports vs. onshore ports.

       MORIN: My question really has to do with the role that scientific
    and technical information played in the LOOP situation. There is a wide
    divergence of experience as to whether there is such a thing as
    objective, scientific, and technical data on controversial environmental
    issues, and on the need for it and what role it can play in helping to
    resolve debates over controversial issues. My question of the group
    here is: What role did it play in LOOP? Was there substantial debate
    at any point of the need for certain kinds of information, or the
    validity of information that was provided and presented? Was there
    critical attack on presentations of data by, say, the oil company group,
    the state, or the Center, or was there general acceptance that the data
    that was being provided was, on the whole, accurate and useful?

       READ: The environmental data was gathered by the Center for Wetland
    Resources, which is the state-sponsored environmental agency, along with
    input from other state agencies. The economic impact was addressed in a
    Kaiser study prepared and sponsored both by LOOP and by the state
    Deepdraft Harbor and Terminal Authority. It was an attempt to get
    objective information, gathered by people that hopefully were beyond
    criticisin.

                                       1 53

      MORIN: Were they?

       READ: I think so. I think both groups had credibility.

       PERRIN: If there was a problem, the problem was that there was too
    much information. The application that came to the state -- and exactly
    the same application went to the federal government, with a different
    first part -- totalled some 25 volumes and was about 25 inches high. So
    if anyone wants any data on the proposed offshore port, all they have to
    do is come to any one of ten locations in Louisiana where we have copies
    of the application made to the state. The data are fairly complete with
    respect to environmental baseline data, environmental impact studies,
    economic studies, what LOOP plans to do in the way of general design and
    so forth, sufficient for us in the state to issue a license and for the
    Secretary of Transportation to issue a federal license.

       MASSE: It is my impression that most of the information in the
    application was used by the people who wrote the environmental impact
    statement for the Coast Guard, and accepted after study.

       VINCENT: I think if the LOOP proposal were made today and the whole
    process were to begin now, there would probably be a good deal more
    debate over -- if not the data itself -- the conclusions drawn on the
    basis of the data, than there was in the initial process. In the past
    the public interest community in Louisiana has not had the broad access
    to independent scientific and technical advice that it is beginning to
    get now. To some extent, the access we have now is due to the LOOP
    project, because it involves people in the universities who weren't
    there until the expansion generated by the LOOP project began to show up
    in the capabilities of the universities to deal with wetlands questions.
       The only time that we in the Ecology Center of Louisiana were able to
    get an "expert"1 to examine seriously some of the materials that were
    produced was when a Ph.D. resource economist reviewed the first Kaiser
    economic study for us and concluded, in a nutshell, that the economic
    benefits described for the project had been seriously overestimated.
    His report was published and received some distribution and publicity.
    But by and large, the public interest community, with that single
    exception, really didn't have access to technical expertise and
    personnel independent of state agencies.
       I think it is safe to say that the state agencies were perceived to
    be at least leaning toward advocacy for the project. I don't think they
    were perceived as totally objective and impartial in this whole process.
    Those of us who were involved in this were put in a position of sitting
    down with Bill Read and Shep Perrin and P.J. Mills and some of the
    others, listening to what they had to say, and trying to decide in the
    absence of a lot of solid technical knowledge whether or not what they
    had to say made sense. More often than not, it did. And in retrospect,
    I think we probably would have come to the same conclusion, even if we
    had had some of that technical expertise. But it wasn't there, and I

                                      154

    suspect that there would be more debate about technical and scientific
    considerations if the proposal were made today.

      MASSE: In the early seventies there was a lot of thrashing around
    about a number of different deepwater ports. lie are talking about the
    survivor. One of the things about the law is the virtual veto power of
    the states. I think that is central. We have Son of Seadock, and we
    have LOOP.

      AHERN: I heard the Hondo Platform mentioned earlier, which has been
    our classic platform in the Santa Barbara Channel for about five years.
    We in California have something of a fear in our regional and local
    agencies. We see these decisions being pushed up to higher and higher
    levels of government, until there will be the ultimate one-stop shop
    someday, perhaps in the Department of Energy. I would say that this
    exemplifies the trend very clearly.

       PERRIN: Congressman John Breaux, the author of the Deepwater Port
    Bill in the House, told me when I arrived late on the scene -- not
    having gone through the process that P.J.-Mills and Dr. St. Amant and
    others had -- that he had wanted to introduce a bill on his own just to
    permit Louisiana to have a superport outside the continental limits.
    The people in Texas said no, they wanted one, and the people at
    Ameriport, which was at the junction of Alabama and Mississippi, said
    no, they wanted one, and somebody around the Delaware area said they
    might want to have one someday. So it became a cooperative law that got
    a lot of people involved, whereas really all Louisiana wanted in the
    beginning was to be able to go beyond the three-mile limit.
       John Breaux said we made a big mistake by getting everybody into the
    act.

       SUZANNE POGELL, Smithsonian Institution: I am on EPA's workgroup on
    public participation. The institutional and technical evolution of LOOP
    is fascinating. I am just wondering if the problem that some of us are
    experiencing is that this was not a conflict resolution by equal,
    vociferous input by various groups. Maybe it just isn't a case study in
    public participation.

       MASSE: In a forum discussing seaward development, this is one facet
    of one big project, and we might ask why. I think it bears on the
    issue.

       PERRIN: I didn't understand that this was to be a public
    participation conflict resolution discussion.

       POGELL: I came to the Louisiana discussion because I expected a
    rather heightened interest in the environment of the State of Louisiana.
    And resolution of an issue by various parties involved I would think
    would be one of the criteria for calling it a citizen participation case

                                      155

    study.

       STEWART: It is a case study. It is far from the usual case study,
    and it should be looked at in that light. What has happened since
    public participation has become institutionalized is that public groups
    have a lag --and this is particularly true in the South and in the Gulf
    Coast areas --in developing the technical expertise to deal with the
    institutionalized arrangement of public participation, because it is
    becoming daily more sophisticated as the rules and regulations are
    developed by the agencies for public participation.
       For example, in the State of Texas, in trying to deal with an air
    board hearing on a new construction permit, it is like going to court.
    It is not like an initial public hearing. You have to be represented by
    legal counsel, it is very expensive, public participation is getting
    tighter, it is requiring more sophistication, and the people who could
    easily identify the problems in the sixties are now up against a wall
    saying, "I don't understand what is going on."
       Some people are going out and developing the expertise on their own
    -- we are developing experts in our colleges -- but mostly they go to
    work for industry or for universities, because public interest groups
    for sure can't hire them. They may join public interest groups and
    provide expertise in that manner. But the biggest problem with public
    participation today is the lack of the capability of the technical
    expertise. I think this is what we must learn from the LOOP case study.
    They didn't have it. They were fortunate in the way things worked out,
    but it was totally lacking.

       VAN LOPIK: With any special interest group, a little bit of
    knowledge is sometimes a dangerous thing. I think one of the problems
    is how to bring the various special interest groups' technical
    competency up to a level that gives them a breadth of understanding of
    what is going on. I know that Lyle goes through this kind of thing
    every year in opening the shrimp season. He has a public hearing, all
    the fishermen show up, he presents the data, and they make
    recommendations as to what to do.  But I don't know, Lyle, how you would
    feel about it if everybody in that room really understood all the inputs
    into the decision-making.  What is the level of competency that is,
    really necessary here?  Is there a segmented way to do it?  Maybe it is
    just by putting all the special interest points forward and pulling it
    together.

       ST. AMANT: This is far afield from where we started, but the shrimp
    season opening is an interesting exercise in public participation. If
    anyone wants to come down in April I will be glad to have them. To get
    back to some of these questions, it just happened over time that this
    thing came out like this, to be perfectly honest about it.
       If the oil companies had come to me in 1969 and said they wanted to
    put in three 50-inch pipelines across the coast of 'Louisiana, and if
    they didn't have to get an offshore permit for some curious reason,

                                      -156

    those pipelines would have gone in within six months or a year, as fast
    as they could put them in. They would have gotten the attention that I
    could give them, which would have been about certain restrictions on how
    to lay the pipes, but there would have been no way to block it. As a
    matter of fact, there is still no legislation in Louisiana that gives me
    the arbitrary power to stop any of these functions. And I don't think
    there are any in the federal government. This is one of the problems
    with the administrators. Nobody wants to stand up and set the
    priorities, which are whether or not you want to protect renewable
    against non-renewable resources. And you get into money problems here.
       if somebody told me to protect the fish in preference to oil and
    pipelines, it would be a lot simpler for me to say no, because then I
    never make a mistake. It is only when I agree to something that I am
    sticking my neck out on these things.
      When LOOP came in and asked about this thing, I said, "You can get
    the pipeline permit out of me, but you want to get it right with the
    rising environmental interests in the state." We had a number of
    permits up for consideration where the environmental interests for the
    first time were being heard, and they were willing to go to court. So
    as an advisor I told LOOP, I don't think you are going to get this thing
    through in the public light unless you get some legislation and proceed
    differently.
       Luckily, though maybe it took a long time, they took this advice.
    They went back to the environmental interests, and when this bill came
    up, everybody was happy. But there was some head knocking to see who
    was going to get some muscle into this system.
       For the first time in Louisiana, the environmentalists have got
    muscle. They can stop this project if it really damages the
    environment, or slow it down and make it change. If you could get this
    environmental muscle into all of your permitting systems, you might not
    have so much noise from the environmental groups.
       If you have 15 environmental interests that all want something
    different, though, you are not going to satisfy anybody. But this was a
    time in history that just made it work out right. Now that the
    environmentalists are better informed, now that they are more Interested
    in Lousiana, now that they know what they can do in the way of
    legislation, maybe the next one that comes up is going to be a little
    tougher. But don't you ever believe there was no public debate in
    Louisiana.  We may not have had a town meeting situation --in Louisiana
    it works kind of behind the closets and under the tables --but most of
    the people in the State of Louisiana are pretty well satisfied with it.

     157

     CASE IV: A MANGANESE NODULE
     PROCESSING PLANT

     CASE TEAM

     John E. Flipse, Leader
    Visiting Professor of Ocean
    Engineering
    Texas A&M University

    Steven A. Frishman
    Publisher, The South Jetty
    Port Aransas, Texas

    J. D. Nyhart
    Associate Professor
    Sloan School of Management and
    Department of Ocean Engineering,
    Massachusetts Institute of Technology

    Eugene M. Grabbe
    Manager
    Center for Science Policy
    and Technology Assessment
    Department of Planning and Economic
    Development
    State of Hawaii

    Conrad G. Welling
    Vice President
    Ocean Minerals Company

    Amor Lane
    Director
    Marine Minerals Division
    Office of Policy and Planning
    National Oceanic and Atmospheric
    Administration
    Department of Commerce

                                       158

    JOHN E. FLTPSE

    Visit~ng Professor of Ocean Engineering
    Texas A&M University

    INTRODUCTION

    I'm Jack Flipse. I am now a teacher, a researcher, and a consultant in
    ocean mining. About a year ago, I was the founder, president, and
    chairman of Deepsea Ventures, Inc., and I have been in ocean mining
    activities, in one form or another, for about fourteen years. Prior to
    that time, I was shipbuilder, merchant seaman, ship designer, and world
    traveler. My interest in this Forum will become clear as I make a few
    introductory remarks and set the framework in which the discussion will
    be held. Our other speakers will then introduce themselves and make
    clear, if there is any question, their areas of interest.
       I will not go into what manganese nodules are, except to say that
    they're not attractive in the aesthetic sense, that they blend
    beautifully with their environment, and that unless you turn on the
    light and keep the sediment cloud down you will never see one in its
    natural habitat.
       The interesting thing is that the nodules contain, variously, about
    25 to 30 percent manganese, 8 to 10 percent iron, 1.5 percent nickel,
    1.25 percent copper, 0.25 percent cobalt, and appreciably smaller
    amounts of another 18 to 22 or 23 metals -- all in the oxide form. They
    are located widely throughout the world, but the important
    first-generation mineable deposits are included within the major
    circulatory currents of the Pacific ocean in low sedimentation areas.
    The area that has gotten most of the attention so far is between the
    Clipperton and Clarion fractures in the North Pacific.   I know, having
    been there, that there is a mirror image deposit in the South Pacific.
    There is no point, however, in going that far from home if you don't
    have to.
       There are three factors I think we should focus on. The first
    concerns the possible uses of the nodules. Let me point out here that
    the mining, the testing of equipment, has been progressing very well.
    We call it dredging. Ultimately, the mining requirements will depend on
    the purposes for which the nodules are mined. There are three main
    possibilities. If you sell or plan to market only the manganese,
    one-third of each nodule will become marketable product, another third
    is water trapped in the nodule, and the other third is junk -- gangue
    material., to use a more dignified term.
       If you plan to use all four of the predominant metals -- manganese,
    nickel, copper, and cobalt -- a million--ton-per-year operation is
    practical. That's a million dry tons, which means you would actually
    mine a million~-and-a-half-tons because of the water content.
       Finally, if you are going to focus only on nickel, copper, and

                                      159

    cobalt, you will need probably three million dry tons, or
    four-and-a-half million tons of wet nodules. A maximum of 5 percent of
    the dredged material will be taken as metal product. The balance is the
    gangue material.
      We have several people here who will talk in some depth about the
    processing. I would just like to say that in all likelihood, the early
    processing will be on land and will require the transport of nodules
    from the mine site where they're dredged from the seabed to a land
    processing site. That raises the central question of this case: Where
    are we going to put this processing plant?
       On the other hand, we are involved in several other real issues.
    First, there is the need for the metals. As you know, manganese,
    nickel, and cobalt are almost 100 percent imported in the United States,
    except for reprocessed scrap material. The United States is a very
    large copper producer, but the last mine that opened for copper in the
    U.S. had only 0.2 percent copper in the ore. We're looking at 1.25
    percent or more of copper in the nodules.  Further, the U.S. imports 20
    percent of its net copper supply.
       The second major issue in which we get involved in ocean mining
    concerns the new world economic order. The Law of the Sea debate is a
    marvelous employment opportunity for large numbers of people. The real
    issue, however, is whether we are going to redistribute the world's
    wealth or going to continue to control the metal sources essential to
    our economic welfare.
       The third issue is the business of actually winning the metals.
    Where will we put the plant? In the 15 years that I worked in the
    business, I was disappointed by the attitudes of the people and
    governments of the West Coast. The people in the State of Washington
    didn't really want more people, much less a raw materials industry.
    Oregon said No. California has an unbelievable permitting problem that
    led me to consider the West Coast as "closed," a premature judgment,
    perhaps, but that was my conclusion. The Panama Canal Treaty took care
    of the Gulf Coast. Can you imagine carrying the "heritage of mankind"
    through the Panama Canal over a long enough period to amortize the
    plant?
       We are blessed to have Gene Grabbe here, who will introduce himself
    soon and tell you why Hawaii is a unique situation. There are overseas
    locations, but these could compromise the alternate domestic source
    objective.
       There is an alternative that one of our panelists may discuss:
    processing at sea. Technically, it's probably possible with more
    development. In terms of costs, it now seems unlikely. Yet, I think
    ocean mining will happen, if for no other reason than that we're going
    to run out of an economically feasible supply of manganese in about
    thirty years. And if the Cubans trotting around Gabon decide to make an
    issue of it, the free world will lose 60 percent of its presently
    available managanese much sooner. Our last major source, except for the
    U.S.S.R., is Africa. Do we want to bet on South Africa? The basket
    mines of Morocco and India are closed as uneconomic.

                                      1 60

       Remember that the steel industry depends on having 14 pounds of
    manganese per ton. Our South American neighbors are conserving their
    manganese; if they're going to make steel, they're going to need it.
       Therefore, I'm convinced that there will be ocean mining. If we
    don't do it, others will. Now let's move on to the rest of the panel.

    STEVEN A. FRISHMAN

    Publisher, The South Jetty
    Port Aransas, Texas

    I'm from a small town in Texas, and I live in Port Aransas on Mustang
    Island, across the bay from Corpus Christi. My background is in marine
    geology and environmental engineering, which qualifies me superbly for
    publishing a weekly newspaper. I do that part of the time. I'm a
    member of the Texas Coastland Marine Council. The council is an agency
    whose charge is to advise the state legislature on coastal and marine
    affairs -- everything from fisheries to hazard awareness through port
    development and so on. I also am on the Texas Coastal Management
    Advisory Committee. I work as a consultant to the state land
    commissioner, and my most recent job for him was rewriting the
    substantive rules for that agency. The agency, among other things, is
    the keeper of all the state's lands. The wetlands in Texas are largely
    in public ownership, which gets us into the questions of oil and gas
    leasing and competition for resources. This leads me into one of the
    areas where I spend a fair amount of time, the question of public
    interaction with the process surrounding government policy and
    regulation relative to development in coastal areas. And when I'm not
    doing specific consulting jobs in that area, I'm also working with the
    Texas Environmental Coalition.

                                      161

    J.D. NYHART

    Associate Professor
    Sloan School of Management and
    Department of Ocean Engineering
    Massachusetts Institute of Technology

    I am a lawyer. Although we have no law school at MIT, we have lawyers
    concerned with the way new technologies and scientific advancements are
    implemented in our society. How do you build a new legal regime for
    ocean technologies? We've seen in the ocean area one of the most rapid
    fields of expansion and development of technology in the last two
    decades. Within 10 years after the Geneva conventions -- certainly
    within 20 years -- the legal regime of the oceans was entirely
    inadequate. We are in the process not only of trying to build a new
    global legal regime today, but also a domestic one. On the federal,
    state, and local levels, we are trying to build legal regimes that can
    allow ocean technologies to be implemented in harmony with all the
    conflicting interests.
       So the kinds of issues that I'm interested in are: What is the role
    of government? How much ought the federal government to anticipate what
    might happen? How much should the government leave to chance and how
    much to resolution in our courts? Those interests have brought me, in
    the last three years, to work on deep ocean mining. We have built a
    computer model at the Institute looking at the costs and economics of
    deep ocean mining, and I've been directing that project. I've also been
    involved in the question of how you build a legal regime for a surface
    technology such as ocean thermal energy conversion, as well as in the
    concern about a legal framework to ensure the adequacy of thick
    structures offshore.
       My bias is that government should anticipate the kinds of
    technologies, the needs for information that they as regulators are
    going to have. They should try to get that information early, to
    establish at least a basis for it. Some of the issues that we ought to
    be discussing today move away from the legal regimes, though, to the
    question of commercialization. Should the government be active in
    trying to alleviate legal and other barriers, economic barriers and so
    on, for deep ocean mining? Also, what is the role between the states
    and the federal government likely to be? What kinds of conflicts are
    going to come up over land processing?

                                      1 62

    EUGENE M. GRABBE

    Manager
    Center for Science Policy and Technology Assessment
    Department of Planning and Economic Development
    State of Hawaii

    I'm a physicist. After some 30 years of industrial experience in
    research, sales, and management, I had the good fortune in 1971 of being
    appointed to a new Center for Technology Assessment in the State of
    Hawaii Department of Planning and Economic Development. In looking for
    new horizons to assess, we also peered into the depths of the ocean. At
    that time, there was a great deal of activity that involved the
    University of Hawaii, local industry, and the state in exploration for
    deepsea nodules close to Hawaii.
       We seized this opportunity to start a state manganese nodule industry
    program, and over the last eight years we have been involved in
    conferences, assessment workshops, and information dissemination through
    public meetings, TV, radio, and a lot of publications. An early result
    of these efforts was that we obtained some state funding in 1977 for a
    more preliminary assessment, which was completed early last year. The
    resulting report, "The Feasibility and Potential Impact of Manganese
    Nodule Processing in Hawaii," was published about a year ago. During
    the past two years of this assessment, we have obtained the
    participation of people from the national level, state and county
    governments, environmental groups, and the technical community. We've
    looked at both the pros and cons of having a manganese nodule processing
    plant in Hawaii.
       We have also had the good fortune of discovering geothermal energy,
    and we have many good sites for ocean thermal energy. So we feel that
    there are many benefits that Hawaii could gain from this activity.
       As a result of our assessment, in September of last year the Ocean
    Minerals Company -- my colleague Conrad Welling is a member of that
    group -- announced their intention to build a 4-million-dollar pilot
    plant on the island of Oahu in Hawaii, far larger than any previous
    processing plant. It should provide waste materials and tailings of
    great value for research, as well as knowledge about how plants operate
    and how to dispose of wastes. So we look forward to working with them.
       At present, w're continuing the program; our ongoing state funding
    has been augmented by NOAA funding. We will produce a second report on
    our work, expanding it and generalizing it, and we expect also to have
    some technical workshops and public meetings to obtain further inputs.
       In summary, I represent a state that has taken a very active role in
    assessing the pros and cons of the manganese nodule industry. The
    result has been a public response favorable to the development of a

                                       163

    manganese nodule industry in Hawaii. Looking to the future, we are very
    interested in the potential onshore benefits of using the wastes from
    the manganese nodule processing. In our preliminary report, we assumed
    the wastes could be returned to the ocean, but it may be more beneficial
    to the environment to use them on land. Research is needed on this
    subject.

    CONRAD G. WELLING

    Vice-Pre sident
    Ocean Minerals Company

    I have been heading up our company' s Ocean Mine Development Program for
    the past 15 years. We are now the Ocean Minerals Company, which is made
    up of Royal Dutch Shell, Standard Oil Indiana, and Bos Kalis, a Dutch
    dredging firm. We have leased the Glomar Explorer and are in the
    process of testing our mining equipment. In conjunction with that, we
    are starting to scale up our processing development work.
      Why mine manganese? There are certain very promising characteristics
    of the deposit that need examination. In the first place, we feel the
    metals it represents have strategic importance, not only to the United
    States but also to the needs of a developing world. By any measurement
    you can make, the deposit is an outstanding one. We've studied it for
    years, and the amounts of the metals associated with it are orders of
    magnitude greater than those of any other deposit in the world, whether
    we're speaking of nickel, copper, cobalt, or manganese. So we can look
    forward to centuries of supplies.
       Second, because of the vast quantity and the grade, we can look
    forward as time goes on to this being the richest deposit. Even though
    there are deposits on land of, say, copper or nickel that are richer,
    those deposits are being mined at a rate such that the ore grade is
    decreasing rapidly. And as the ore grade decreases, it requires more
    and more energy to mine a given deposit. I subscribe to the thesis that
    there is no such thing as a mineral shortage per se, but there certainly
    is a shortage of economic grades. The same case can be made for energy.
    There is no such thing as an energy crisis or shortage; there's a
    shortage of low-cost energy. And energy is going to keep increasing in
    cost.
       it behooves us to be looking for ways that we can produce the
    ever-increasing amounts of metals or minerals required at a lower cost,
    or at least at a money cost not prohibitively higher, and certainly at a

                                       164

    lower energy cost if we can. All our studies indicate, as an example,
    that we can produce a pound of nickel from a manganese nodule at about
    half the energy required to produce a pound from land ores.
       Therefore, there are a number of compelling reasons why it would be
    beneficial to develop this resource. We have, as I indicated, spent a
    considerable amount of money, and we plan on spending a considerable
    amount more. I testified in Congress last year that our bill to date is
    in excess of 70 million dollars, and that we are planning to spend at
    least another 100 million in research and development before we start
    making a capital investment in the early 1980' s. And that, as other
    people have testified, it will probably require at least a half a
    billion dollars in total costs -- it could easily be more -- before one
    dollar comes in. After we get into operation, it will probably take six
    to seven years before we can get back in dollars what has been spent.
    This is a long-term, high-risk program. However, we feel that the risk
    may be worth it in the long run, provided we can operate under a stable
    legal regime. This is one of the main problems affecting the rate at
    which the ore can be developed. And I assure you that even though we
    have a surplus of nickel and copper today, this will be shortlived. The
    studies made by the Geological Survey and others indicate that if we are
    going to meet our ultimate energy sources in the year 2000 and beyond,
    without the development of the manganese nodules we will not have enough
    nickel, copper, cobalt, and manganese to develop the alternate sources
    of energy. So it may not be a question of economics any more; it may
    become a question of trying to provide for future energy needs -- in
    fact, of survival.

    AMOR LANE

    Director, Marine Minerals Division
    Office of Policy and Planning
    National Oceanic and Atmospheric Administration
    Department of Commerce

    Before coming to the government, I spent most of my career in industry
    as an engineer in oceanography, not in the mining or the oil industry.
    I also spent 1970 to 1971 working with the Governor of Delaware as
    Executive Secretary of his Task Force on Coastal Zone and Marine
    Affairs.
      With respect to the questions we' re going to discuss, I would like to
    mention several relevant points. First, I think most of us realize that

                                       1 65

    a Deep Seabed Mining Bill will probably be reintroduced this month in
    Congress. A~nd in discussing what the role of the federal government
    should be, we should note several of the purposes -mentioned in the bill.
    One of them is to encourage the development of deep-seabed hard mineral
    resources. A second one is to establish a regulatory framework to
    ensure that the development is orderly, efficient, protects the
    environment, and promotes safety of life and property. Another purpose
    is to accelerate environmental assessment research.
       It is of interest that the Council of Environmental Quality published
    new regulations just a couple of months ago that have to do with the
    implementation of the National Environmental Protection Act (NEPA), and
    this is a very sweeping modification, I might add.
       Finally, I wish to point out some of the preparations the federal
    government has been making, with programs that embrace environmental,
    economic, legal, and technological questions. We've sponsored the DOMES
    (Deep Ocean Mining Environmental Study) Program at Sea, which is
    directed toward the environmental impact of the mining itself. We've
    also sponsored research dealing with the environmental aspect of
    processing to determine, for example, some of the environmental
    parameters that will have to be taken into account when environmental
    impact statements are written. There have been follow-up projects
    involving meetings with state agencies on the West Coast and the Gulf
    Coast to elicit from them some of the practical problems of siting the
    processing plant. The purpose of these projects, however, was not to
    try to define where the plants should be located. Obviously, that is up
    to the industry.
       Another program we are planning is one that will analyze the various
    federal and state laws and regulations, including municipal ones where
    applicable, that would apply to the siting of a processing plant. The
    initial phase will start w ith the West Coast states. One goal will be
    to determine some of the timing requirements: How long would it really
    take to get the permits?
       The hope is that such programs will enable us to prepare adequately
    for environmental impact statements, to form the basis for future
    regulations, and to ensure that the tools necessary for making important
    decisions will be available when license applications are submitted.

       FLIPSE: You have now met the panel. By this time someone must be
    concerned, and if you would please give your name and ask your question,
    we'll do our best to answer.

                                      166

    GENERAL DISCUSSION

       THOMAS A. GRIGALUNAS, Associate Professor of Resource Economics,
    University of Rhode Island: Some of the earlier studies of the
    feasibility of manganese nodule mining -- I am thinking specifically of
    Walter Meade's and Phillip Sorenson's study -- indicated that the
    economics simply didn't look good. This was in the late 1960's and
    early 1970's. I know you've developed an economic model, and I'm
    curious about some of the base case results. What do the economics look
    like in terms of present value or possible rates of return? What are
    some of the key assumptions and problems that accompany your results?

       NYHART: Well, Tom, I think that also brings in others besides me,
    because Connie and Jack are here and they have probably two different
    views of what the economics look like. Before I say anything about our
    results, there's a qualification I want to make. If you look at the
    four consortia today, you're going to get at least four different
    answers as to what the economics look like, because nobody has yet run a
    deep ocean mining project commercially. There are, as has been
    indicated, not only political problems, but technological problems and
    -- in terms of the metals market -- economic problems.
       We did a base case study of a three-metal mining project that is not
    processing manganese but is processing the other three, with a
    throughput of 3 million tons of ore per year. We looked at the costs of
    the exploration and prospecting of the mining, of the transportation,
    and of the processing, taking off-the-shelf technology and analogous
    technologies. We had those cost estimates reviewed two or three times
    by members of the industry and then plugged the costs, both capital and
    operating, into an economic analysis part of our model. I will get out
    a copy of the study case in a minute if anybody is interested.
       We came out with a base case result, over a 25-year period, of an
    internal rate of return of somewhere around 18 percent. Now somewhere
    it changes very fast once you begin to talk to industry. For example,
    Connie mentioned probably 170 million in R&D before any decision could
    be made to invest. We used a much lower figure for R&D. In talking
    with the Lockheed people I think we would revise that, at least for
    situations in which a consortium is developing new technology and is
    likely to have new and heavy R&D costs, banking on advantages to be
    realized not in the first project at sea, but in the second, third, or
    fourth one.
       If you take our base model and triple the R&D figures and stretch out
    the R&D time, you quickly get a different internal rate of return,
    perhaps half of the 18 percent.
       Let me give you another example on the economics. If you move to a
    four-metal model in which you are also producing manganese, it's likely

                                       167

    that your capital costs go up, lowering your internal rate Of return.
    We had capital costs of around 600 million. Incidentally, our payback
    period was roughly in the neighborhood of the one that Connie mentioned,
    six or seven years.
       Our assumption, then, is a return of around 15 to 18 percent,
    although perhaps not for the pioneering project.  There is another thing
    I think we've learned:  That the uncertainties of the first project for
    any consortium are going to result in delays that drive costs up and
    return down.

       WELLING: I'd like to add to that. As I mentioned before, we have an
    R&D bill anywhere from 150 to 200 million dollars before an investment
    decision is made. The reason is that we continue to make what we call
    feasibility studies, as they do in the mineral industry. We feel that
    to make the system an economic one that investors will put money in --
    otherwise you don't have a program -- it does take an intensive research
    and development program, and that's what we have.
       Now, there's nothing yet to show that we can meet the requirements of
    a system efficient enough to give that kind of return on investment, and
    I know there's no way that we can do that on the first system. Even if
    we meet all of our technical goals of efficiency -- and I mean
    efficiency in the whole system, not only in the exploration phase, but
    through the mining phase, the transportation phase, the processing, and
    the proper marketing of the end product -- the first system will at best
    be marginal as a business investment. So there's no way I can sit here,
    after spending in excess of 70 million dollars over the past 15 years,
    and say that we're going to achieve the goal from the first phase of
    even a 7 percent return, which at today's market is not economic.
       I want to make that clear. Second, I want to emphasize that there's
    not just one way; it is -not unreasonable to have each consortium come up
    with different ways of doing this. We've already heard about whether
    you go four metals or three metals. Now, there's an economy scale in
    this operation, and we have to achieve a delicate balance between
    keeping the initial size of the plant down so the capital investment
    will not be too high, and still having enough efficiency in the plant
    that we'll get a return that will attract investors. If you go the
    manganese route, there's a definite market limitation on plant size; for
    the system we envision it will be about a million dry metric tons per
    year.
       The non-manganese or three-metals route allows more latitude, and
    probably requires around 3 million dry metric tons per year. But with
    greater tonnage, where do you locate the processing plant? As Jack
    indicated, one-third of the nodule is sea water, and it certainly isn't
    profitable to ship water around the world. If the processing plant is
    too far from the mining site, considerable profits will get eaten up in
    transportation costs. So a very efficient system of transport is
    needed. If you go the manganese route, you have more leeway simply
    because of the revenues from the manganese, but again, the capital
    investment goes up.

                                      1 68

       So there' s no simple answer today. We hope within a year or two that
    our research and development program will give us enough information so
    we can say at that point, the feasibility study indicates we should
    continue.

       GRABBE: May I comment briefly on what the impact on a state would
    be. Connie mentioned 3 million tons -- that's dry weight -- of
    manganese nodules, which is the figure that NOAA has used in their
    various studies. We have a good input/output econometric model in
    Hawaii, and analysis showed that a plant that size would require over
    500 million dollars investment. The revenues to the state would be such
    that the gross state product would be about 335 million dollars. That
    would make the manganese nodule plant the sixth largest industry in
    Hawaii. During construction, there would be about 6000 jobs -- this
    counts indirect as well as direct jobs -- for a three-year period.
    During plant operation, this would be reduced to about 2400 jobs. So
    we're interested in the revenues and the jobs that such a plant would
    provide, but we're also interested in keeping a clean environment in
    Hawaii.

       FLIPSE: Before we take the next questions, let me just add two
    considerations. First, no one will make an invest/no invest decision
    without taking his R&D as a sunk cost. This approach appreciably
    shortens the timespan and therefore gives you a much better chance for
    a positive return with realistic discount rates.
       Second, if you're arguing at the Law of the Sea Conference, there's
    going to be a very low return. If you are soliciting funds, there's
    going to be a very high return. Both numbers can be made accurately;
    it's just a matter of whether the glass is half empty or half full. If
    you want to go into detail, I would suggest that you buy Dan's book and
    study it, because he realistically handles all of these concerns.

       LARRY SILVERMAN, Clean Water Action Project: I was very impressed
    with your statement on the need for manganese; the fact that we're going
    to have a shortage is important to steelmaking and is important to the
    world in general. I have a hard time reconciling that argument with the
    statements made by the other panelists that maybe we want to not produce
    manganese at all, but to take this 25 to 30 percent of the nodule and
    waste it in some way or other.

       FLIPSE: A metal company such as a nickel or a copper company looks
    at ocean mining in terms of their conventional product line. It has to
    be a big enough operation to supply their needs to be interesting. It
    is true that if you produced manganese at a very high rate you would
    dislocate the present manganese market. I refer you to testimony in the
    House of Representatives before the Oceanography Subcommittee of the
    Merchant Marine and Fisheries Committee. U.S. Steel produced and
    entered in evidence a document which they swore they'd never reveal, an
    analysis of the locations of world manganese deposits. There hasn't

                                       .169

    been a new one discovered in 25 years that's of any significance, and as
    costs go up, the small deposits become less and less interesting. Which
    brings us to the conclusion that perhaps a good starting point would be
    an ocean mining plant that did use the manganese. There is deliberation
    going on right now in all of the consortia on whether to produce
    manganese or not.

       WELLING: I did not mean the manganese would not be mined and
    produced. At least one of the companies will go after it in addition to
    nickel, copper, and cobalt. But the other companies then would not
    produce manganese because the first company would be supplying the
    market -needs. Beyond that point, we have to make our profit in the
    nickel, copper, and cobalt in the nodules. It's of strategic importance
    that manganese be produced, but only at a certain level.

       SILVERMAN: Where would that 25 to 30 percent of the discarded nodule
    go?

       WELLING: It would have to go into the tailing ponds or back to sea.

       FRISHIMAN: It seems to me extremely wasteful to expend energy and
    discard the manganese when you know within a real time frame -- if we
    can believe your 30-year figure -- that you're going to need some more
    of it and that you'll have to expend additional energy at some future
    time. Of course, this also depends on what it costs to store it on
    land, whether you can store it in a safe way, and so on. And I fault
    the present thinkers in even looking at deep-sea disposal as a viable
    alternative. I think it's extremely shortsighted financial thinking.
    Aside from that, I fail to see any reason for the apparent optimism
    about getting permission to go into a deep ocean disposal system.

       WELLING: Over a period of 15 years we've conducted a number of
    extensive studies on all aspects of deep ocean mining. We certainly
    could not have spent the tremendous amount of money we've spent without
    having thoroughly researched this. And manganese is being produced in
    the nodules on the ocean floor -- even if it takes millions of years to
    produce a nodule -- at a much faster rate than any demands for it that I
    can foresee in the next century. If at any particular time the need for
    manganese grows faster than what we need now, it will still be available
    in larger quantities than we can use as a result of the production of
    nickel, copper, and cobalt.

       IRA DYER, Massachusetts Institute of Technology: I have yet to
    understand what is unique about manganese nodule processing on land.
    That is to say, other industries have wastes, other industries use
    resources like energy and water. What in particular stands in the way
    of gaining permits for processing -- just what are the issues with
    respect to the processing itself that make the manganese plant a unique
    plant?

                                      1 70

      WELLING: There's nothing about manganese nodule processing to make
    it unique from other mining processing known today. The methods that we
    typically use are no different, basically, from those used in a chemical
    plant. The only things unique about manganese from nodules are that it
    is new ore, different from other ores, and the location from which we
    obtain it. But it is an oxide, as many ores are; -we use high
    temperatures and high pressure acid leaching as the most likely
    approach. Some processors may even use a reduction prior to leaching.
    The possibility of a limited amount of smelting exists, probably in
    already established smelting plants that use other ores.

       FRISHMAN: There are some things important about manganese
    processing, but maybe not unique. It represents a new process that
    exerts additional pressure for use of the coastal zone, in terms of the
    landing of the ore. This is true whether you decide that the processing
    plant will actually be in the coastal zone or whether you can
    economically justify slurrying the material to an inland plant -- it's
    one more potential alteration in terms of just the physical system of
    the coastal zone, the air and water quality. The demand feeds back the
    other way, too. There's an electricity requirement, there's a fresh
    water requirement.

       ALFRED A. H. KEIL: For the United States, I think the situation with
    a manganese mining plant is different from the other ore processing
    plants because we don't have ore processing plants along the shore.

       FRISHMAN: We do, and they historically have been the worst polluters
    available.

       KEIL: Not where you want to land it, apparently.

       NYHART: Connie, did I hear the implication right, that you're
    considering -- or at least some of the consortia are considering --
    existing facilities for processing?

       WELLING: I said, certainly, that studies have indicated that in the
     case of smelting it's the only way it could be economically done. We
     are not, however, going that route. I'm saying it's a possibility.
     I've seen studies made by the Japanese and there is a possibility there.
     I think other people have also studied it. But probably 90 percent or
     more of the nodules will be processed in new plants -- at least for part
     of the processing -- that will be like existing, self-contained chemical
     plants. In other words, there will not be the kind of smoke emission
     that you have from a smelting operation.

        NYHART: Manganese nodule processing may be unique in that it may be
     typical of a new technology with uncertain economics, thrust into a
     legal concern for the coastal zone and carrying a vital national
     interest. It can be asserted that there is a national interest that we

                                      1 71

    establish deep ocean mining. So you combine three factors here, and it
    may be a unique combination; I'm not sure.

       FRISHMAN: You can add one more factor, too, and that's the high
    potential that a new plant will be sited in what the oil business calls
    a frontier area. You're going to be taking a large industrial facility
    and dropping, it on a relatively undeveloped area. Because of rapid oil
    and gas expansion, this has become a critical question in coastal areas.
    But I think the same problem is likely to hit the manganese processing
    plant almost anyplace Wts put.

       FLIPSE: The driving economics is to put the processing plant next to
    a petrochemical plant because the across-the-fence exchanges are very
    important. One waste product is the other man's raw material, and vice
    versa. This is especially important if you use a hydrochiorination
    technique or use a chlorine-based acid. All of the PVC monomers need
    chlorine. The old technique of getting the chlorine back to reuse in
    the process was to burn off the hydrogen with acetylene. The nodule
    processing plant needs hydrogen chloride and can easily return chloride
    back across the fence. For economic reasons, therefore, the chances of
    a nodule processing plant being placed anywhere but next to a refinery
    are very low, unless you've got something up your sleeve, and I think
    Gene feels that Hawaii does.

       GRABBE: Well, we take the view that anywhere a nodule processing
    plant is placed today it will have to meet a set of standards that
    didn't exist ten years ago. And it may turn out to be a model plant, a
    plant of the future, in which reagents are recycled, completely
    enclosed. Our view is that electric power will be needed and probably
    the power plant will create more air pollution than the nodule
    processing plant itself.
       What Hawaii has to offer, is first of all, our proximity to the rich
    beds of nodules. If transport is through the Panama Canal, mining
    companies will use the Panama ship, the biggest ship that will go
    through the canal. From Hawaii, either ships or barges could be used
    with no size restraint. Barges might turn out to be cheaper. You just
    tow one barge out and leave it there to be filled with nodules while
    towing another loaded barge to Hawaii. We do have the added cost of
    importing reagents. But if such a plant were built in an industrial
    park area, there could develop some associated industries. For example,
    at present we import chlorine into Hawaii., and we could have a chlorine
    plant which would also generate sodium hydroxide which could be shipped
    back to the mainland. So there are a number of possibilities. But I
    think our advantages are good sea transportation, a supply of industrial
    water, and the potential of geothermal energy, which could be used for
    both process steam in the plant and to generate electricity. And the
    spot we picked, for this reason., is 10 miles from the coast and about 15
    miles from the geothermal resource. That's a reasonable distance to
    pump steam, since we have the hottest geothermal well in the world.

                                      1 72

      Further, in Hawaii we are looking for diversification. We have a
    high unemployment rate, especially in the outer islands. We don't want
    to put all our eggs in the tourism basket, and we think this could be a
    new high-technology industry that would provide jobs for our people,
    both technicians and professionals.
       While one pilot plant is being built, other companies have also
    indicated an interest in Hawaii as a potential site. We are also
    attempting -- and the governor has instructed all departments about this
    -- to streamline our state permitting process so that it will take a
    minimum amount of time to provide all the safeguards needed for a new
    industry.

       FRISHMAN: You still haven't addressed the thing that Jack mentioned
    about secondary and spin-off development. Have you told your subjects
    there's a possibility of this?

       GRABBE: Oh yes, w've mentioned it.

       FRISHMAN: What do they say? Especially in the area of
    petrochemicals.

       GRABBE: The pilot plant mentioned earlier is being located right
    next to the Hawaiian Independent Refinery on the island of Oahu, and
    they will be transferring chemicals, as Jack Flipse noted. If a plant
    were built on the big island, it would not have that infrastructure
    initially, but it could form the basis for an industrial park.

       WELLING: One of the ways we hope that mining manganese nodules will
    be beneficial is in holding down what we call infrastructure costs. One
    of the real problems with land mines is that they must be very large to
    be economical today, and they must be located, of course, where the ore
    is, which is in very remote regions. So one finds that the cost of the
    plant is mostly bound up in the port, the township -- all the
    infrastructure you need to support it. As a rule of thumb, only 25
    percent of the cost is in the mining and processing plant; the rest is
    in the support facilities, which has driven up the cost of new mines on
    land at an alarming rate.
       So certainly you want to try to locate the plant where you have some
    supporting infrastructure to hold down the capital cost. This is one of
    the advantages of ocean mining, if you can hold shipment of the ore to a
    relatively short distance, and Hawaii and the West Coast of the U.S.
    represent the closest areas that have any sizeable infrastructure
    whatsoever to support a mine.

       DAVID MOULTON, Staff Attorney, Congress Watch: First, are any of the
    consortiums now seriously considering ocean-based processing, or do
    economics rule that out? Second, how do the economics change under the
    types of legal regimes being discussed at the Law of the Sea Conference,
    if you have any kind of comparison. And finally, I'm wondering if with

                                      1 73

    the R&D efforts, the environmental studies being conducted by
    government, there is any cost-sharing between government and industry.

      LANE: As for cost-sharing for R&D efforts, it depends upon how you
    define it. For example, in assessing the environmental impact of at-sea
    m~ining, obviously, you have to have an industry ship at sea to do the
    test mining while the government is out there monitoring the
    environmental impact. There were those who thought that industry ought
    to pay for the research. However, we were able to show that for the
    prototype tests, in order to ensure credibility the government should
    pay for its own ships and scientists.

       FRISHMAN: Where will that stop, though? That's one of the things
    that I came across in some of the reports. I get the feeling that the
    government is going to stay in the business of very expensive
    monitoring.

       LANE: That's a good question, too, and 0MB wanted to know the
    answer. The so-called DOMES program, which is the Deep Ocean Mining
    Environmental Study, is a time-limited project. And in fact, in its
    original conception it was to last only five or six years. Now if
    legislation is enacted, there is a provision which states that the
    government will monitor the commercial operations to ensure that the
    environmental safeguards are adhered to. This is necessary to provide
    data to determine long-term effects and assure compliance with the law.

       FLIPSE: How about the comparative economics In the various Law of
    the Sea regimes, Dan?

       NYHART: Let me discuss that under several headings. The first is
    the whole question of access at all. In the Law of the Sea
    negotiations, the industry, in North America and in Europe and Japan, is
    quite concerned that agreements will be made which will place the
    question of access under an international authority, and that eventually
    there may not be access to the minerals for private investments or
    private industry. That is a basic issue in which I think industry has a
    collective concern.
       The second LOS issue -- the question of financial arrangements, as
    it's called -- is the negotiation of a tax or payments to this
    international authority, based on one of four different measures.
    Basicially, this comprises a tax on private industry paid to the
    international authority, in addition to the national taxing systems
    under which the companies might be operating.
       Now, the financial arrangements basically break down into four
    different methods of payment that have been discussed at the Law of the
    Sea Conference. One is a fixed-time charge, and the economics of a
    front end fixed-time charge are devastating. India proposed at the Law
    of the Sea Conference a few sessions ago a 60-million--dollar flat fee
    paid at the front. If you look at our analyses of the economics of

                                      174

    that, that could wipe out an internal rate of return and bring it right
    down to zero, even within all the ranges that we've been talking about.
      A second kind of payment is an annual charge, arranged probably to
    underwrite the bureaucratic and operating costs of the international
    authority. A third method of payment to the international authority is
    a royalty, and the fourth is profit-sharing. Most of the negotiations
    on financial arrangements in the last year have dealt with some
    combination of the latter three. I think it's probably fair to say -
    although I am not in the position of speaking for industry -- that
    industry probably favors the profit-sharing and a heavy weighting of the
    profit-sharing formulas rather than the annual charge. But there has
    been some discussion recently that at least one of the consortia would
    favor a royalty-based method of payment, perhaps in addition to
    profit-sharing.
       The economics there differ, and that's one place that the model has
    been used, I think to the disgust of industry, because you're trying to
    negotiate a tax rate before you know what the experience is going to be.

       WELLING: It would be like the Congress deciding on how to regulate
    the airlines before the Wright brothers built their first airplane. The
    industry doesn't exist; everything so far has been supposition. I would
    say I've had as much experience in this as anyone after spending 15
    years of my time on this problem. And I cannot, until I get my mining
    ship out there and get some experience, say what the industry is like.
    So to try to set up all these regulations and so forth on a supposition
    -- many people are making suppositions about the industry who had six
    months to look at it, or even three months.

       NYHART: That certainly has been another much-argued point at the Law
    of the Sea conferences. On the other hand, if there is a lack of
    confidence in the future regulator, then there is a tendency to want to
    pin down the uncertainties. So industry, in a way, is caught in
    between. They'd like as much certainty as possible, I think, before they
    commit themselves to any kind of an international regime. On the other
    hand, when you don't know what the outcome is going to be, it's hard to
    make a commitment to numbers, particularly when those numbers involve
    another factor: the concept of splitting the profit three ways.
    Industry is used to sharing with governments and paying taxes; paying
    international taxes is another thing.
       There are two other items I want to get out on the table. One is the
    whole issue of technology transfer, and the other is production control.
    Both of them have definite bearing on economics at the LOS level.

       FLIPSE: I think the one point that Dan didn't make is that no one is
    offering to profit-and-loss share. That's a one-way street. It's
    totally unrealistic to expect an entrepreneur to have a return on a
    high-risk investment that's not even the prime rate today. Anyhow,
    that' s the nature of the LOS negotations.

                                       175

       WELLING: It is the nature of mining that operators try to
    concentrate the ore at the mine site, whether it's nickel, copper, or
    whatever. With the grades as low as they are, it is not economic to
    transport all that rock over land, and the same is true for carrying
    great tonnages of water around the ocean. So there is a strong bent to
    concentrate and enrich the ore, say, from a fraction of one percent up
    to maybe 10 or 20 percent. This is certainly a thrust in our research
    and development.
       Eventually, I am convinced it will be done. The question is whether
    it will be done the first, second, or third generation. But the
    economics indicate that even the energy required to transport seawater
    over the ocean should be saved if it possibly can be. So there's an
    energy equation as well as an economic one. Our research and
    development tells us that in the future this should be solvable.

       GRABBE: John Craven is a proponent of floating platforms, and I
    think in the long run a real possibility is use of ocean thermal energy
    power for an ocean-based plant. The metals industry is energy
    intensive, and the three-metal plant we talked about would take 25 to 50
    megawatts of electric power plus process steam and some other energy
    inputs. The sea-based plant would thus require a large energy supply
    on-site. If we can generate the power at sea by ocean thermal energy
    conversion (OTEC), then this would provide impetus to ocean processing.
    As Connie Welling pointed out, this may be the second or third
    generation plant. Hawaii is working with Lockheed on a pilot
    ocean-based mini-OTEC plant.

       FLIPSE: We had an inquiry from a Japanese firm that we used to work
    with commercially, and they're very strong on this. They've spent quite
    a bit of money on the OTEC/nodule processing combined plant, and when
    asked my opinion, I said that each of these technologies was difficult
    enough by itself. If you marry the two of them, you're creating a
    government project -- which in fact they are in Japan, where they think
    that R&D should be funded by the government. But as a technically
    attractive package, the combination is superb. There seems to be
    agreement that there will be at-sea processing; the big question is
    when.

      WELLING: That is right, because the driving force is too high not to
    go that direction. But it's a question of when the technology problems
    are solved.

       FLIPSE: Now we need to get back to the subject. How does the public
    get involved? Where are we going to put the plant? Why haven't we
    faced the opportunity of marine industrial parks on the waterfront?
    After all, look at Rotterdam's Europort. Is the United States that far
    behind or ahead? One real question that needs to be discussed is the
    amount and nature of the gangue material. Can you put it in your
    suitcase? Would it cover Washington, D.C.?

                                      176

       GRABBE: Well, the waste output of a 3-million-ton-per-
    year, three-metal plant would cover, when compacted, about one square
    mile -- 610 acres -- three feet deep. Depending on the fill, such an
    area might handle wastes for three or four years. That's the amount of
    material. We have not seen samples of the wastes.

       FLIPSE: No, no one knows what it looks like. All I think the
    industry is willing to say is that it won't be soluble, it will compact,
    it won't be an ooze for 40 years or something. It will be fill-grade
    material.
       Yesterday I asked our panel to give me the question that they felt
    was the most important single issue. And every one of them came up with
    the same question: What would it take to put a nodule processing plant
    in your area, not in the other person's area, but in yours? What are
    the real concerns now, regarding both the environmental and the social
    impacts?

       GRABBE: In Hawaii, we like to have our citizens informed and we take
    special care to inform the public agencies which are concerned, such as
    the County Departments of Planning and Economic Development, the State
    Health Department, etc. We involve them in the process of developing
    our assessment. They are interested because they have provided inputs
    and reviewed the report before publication.
       These government agencies have frequent contact with citizens who ask
    about new developments and their impacts. They are able to respond
    about manganese nodule processing because they understand the process,
    the outputs, and the environmental and other impacts.

       FRISHMAN: There are some problems inherent in the whole question of
    siting. In Hawaii you've probably taken the success-oriented path, and
    success apparently in your eyes is to site the plant there.

       LANE: I'd like to take a different tack on this. The Hawaii studies
    involve a state which is actively trying to attract the industry to its
    shores. Now, from the federal government point of view, we think in
    different terms -- if you want to prepare for a new legal regime, what
    can you do to get ahead of the "power curve?" One thing that you can do
    is start thinking about the environmental impact statement that would
    have to be written, whether for Law of the Sea, if that should ever get
    through, or legislation.
       One aspect of the environmental impact statement is the on-shore
    socioeconomic and environmental impact, which encompasses the processing
    plant. Now, as I've mentioned, the first step was to figure out what is
    in a processing plant and which of the many processing technologies will
    probably go commercial. Unlike the at-sea mining aspect, processing
    techniques have received very little attention in the literature. Of
    course, there are many processing patents one could study, but it would
    be hard for the uninformed public to predict which ones would probably
    go commercial.

                                      1 77

      Now, you cannot write a very good environmental impact statement if
    you have information only on the processing technology per se. .You
    must also know something about the location involved. So the next thing
    the federal government did was to sponsor workshops on the West Coast
    and the Gulf Coast (since we were told back in those days that they
    seemed like the most interesting areas from industry's point of view).
    This, of course, predates the Panama Canal Treaty ratification and a lot
    of other things. What we did was to meet in an open forum with members
    of the various state agencies. In hosting the West Coast workshop, we
    met with representatives from Alaska, Oregon, Washington, and
    California. In fact, Hawaii representatives sat in on that, too. These
    representatives came form a wide diversity of agencies. For example,
    not only did we have the economic development groups, but also those
    from the air,, water, and solid waste disposal agencies, plus the Coastal
    Zone Management groups. In addition, electric utilities and railroad
    representatives were involved.
       This was a fascinating experience, because we realized that we were
    facing the people who lived in the areas where a processing plant could
    be a reality. We anticipated numerous protests.
       One of the surprises was that the representatives were impressed that
    we had come to them years in advance of when such a plant would become a
    reality. This seemed to be something new for them, and I believe it
    encouraged the state participants to be open. I won' t say that they
    were more receptive, but at least they were pleasant as they pointed the
    problems as they saw them. I might also add that the Governor of
    California's office called us back about a year later, right after
    Proposition 13. We thought there wouldn't be anybody interested in
    talking about this subject so soon after that. So I wouldn't rule out
    anything as a possibility, because ultimately the approval of a
    processing site will depend on the political Atmosphere and economic
    climate.

       NYHART:  I don't know how many of you saw --I think it was in
    yesterday' s New York Times -- a squib about a group that looked like the
    beginning of a coalition in California of pro-industry technology
    development forces, formed to address the problems raised by policies
    such as the EPA non-degradation policy or the trade-off policies, which
    are thought by industry to present barriers to development of new heavy
    industry in so-called frontier areas. So I think that in some of these
    coastal states there are pro-development or pro-continuation or
    pro-technology forces coalescing.

       SILVERMAN: I have a question about that. One of my great concerns
    is whether or not the desire for this new industry will spearhead a
    general weakening of environmental laws -- whether the industry people
    see themselves as attacking the clean air acts, or, let's say, the
    Resource Recovery Act that deals with land fills and protecting ground
    water, or the Marine Sanctuary Act which deals with ocean dumping;
    whether you folks see it as your role in the interests of the industry

                                       178

    to attack those laws in the forefront, or whether you see yourselves as
    providing some new model for industry.

      WELLING: I certainly wouldn't want to be put in the position of
    having industry attack the going environmental direction. We are
    supporting, on our own company money, environmental research work that
    we feel will make us more intelligent about what our position should be,
    because weye got to be sure that our R&D work is in the direction of
    the best ecological/environmental approach. On the other hand, we've
    all witnessed instances where the enforcement of some of the regulatory
    procedures has had a negative instead of a positive environmental
    effect. We look at it in the same way as we do the possibility of
    taking the tailings back to the sea, where we are balancing the positive
    and negative aspects against land disposal. Our indication so far is
    that it might be a very desirable thing to do, but until we get more
    information, we can't say which direction we should go. But to take a
    stand that any so-called ocean dumping is bad is, I think, as
    irresponsible as industry approaches taken without complete knowledge of
    the environmental effects.

       SILVERMAN: Well, the law right now doesn't say you can't ocean dump;
    it says you've got to meet a certain number of criteria. The question I
    have is, do you see yourself politically as trying to weaken those
    criteria, change the law, alter the regulations?

       WELLING: So far, our studies indicate we can more than meet the
    present requirements. We want to get more information and more facts -
    we can see a possible trend in tightening them beyond reason.

       FRISHMAI\T: This brings us to an interesting question that's spread
    throughout our conversations here, the question of weighing the
    scientific end of what is being proposed against the public perception
    of what the impact will be. And from my knowledge, the people who Are
    looking into this industry are not undertaking almost futile efforts to
    change that. In any case, it's not cost effective. So I think their
    efforts are to understand what the effects of disposal will be under
    given conditions, and I really think the industry is looking at all the
    conditions. The issue I raised was the apparent optimism over ocean
    dumping, when I don't see any reason for that optimism. I'm not saying:
    that it's a good or bad process, because the data really isn't in.
    Regardless of what data you might collect and however you assert that
    you meet the performance standards, you're still going to gave a public
    that has already been trained that ocean dumping is bad, no matter what.

       WELLING: I understand that thoroughly.

       FRISHMAN: And they'l11 insist that a full-project EIS be developed,
    meaning mining through processing. If some people can take an EIS and
    find it faulty because it is not a full-project EIS, just because they

                                      1 79

    don't like ocean dumping and it includes that, they can essentially bomb
    your whole project for a couple of years, based just on the legal
    sufficiency of the EIS.

      WELLING: We recognize that and agree with what you're saying. For
    that reason, we feel that in addition to doing our own work, we must
    also work closely with NOAA. We know that a two, three, or four-year
    period of this kind of effort is necessary. It would be bad business
    for us, bad investment, to proceed in a direction in which we felt that
    the risks were so high that we would not be able to achieve our
    operational mode.

       LANE: I'd like to add also that NOAA has started to work with EPA
    and the Bureau of Mines on tailing research, with plans to examine the
    ocean dumping and land disposal alternatives. Of course, a permit for
    ocean dumping would certainly not be granted without also examining the
    various ways in which tailings could be disposed of on land. We have
    also entered into a dialogue with the industry on this subject.
       I'd like to bring up Another point which has not been mentioned this
    afternoon. Everybody knows that when you don't meet a need one way, you
    have to do it another. For example, if you don't get your metals from
    nodules, you're going to have to get them from land sources which, in
    turn, involves mining ever-diminishing grades of ore. So in questioning
    the environmental impact of this new industry, one must really ask, how
    does it compare with the alternative of not permitting this new industry
    to get underway and continuing to rely on land sources? The new
    regulations just published by CEQ emphasize that the EIS is supposed to
    be used as a tool for decision-making. But we must truly examine the
    .no-ac tion"' alternative.

       FLIPSE: Could I inject just one thought on this? If you heard Ed
    Bruce last night, you know how the court can be used to delay a permit
    decision for years. For the environmentalists present, I congratulate
    you; you've won. Regardless of the final decision, delay is the
    victory. For instance, Dow recently dropped expansion plans in the San
    Francisco Bay area; after 9 million dollars and seven years of permit
    haggling, they decided if they couldn't expand the plant they'd shrink
    what was there. That's when the emotion really started to generate.
    But the point is that these delays and the misuse of the court -- and I
    choose that term advisedly -- punish private enterprise. In Europe, two
    countries now say that if you start an environmental suit and it' s
    without merit, you then pay the damages. It could cause some budget
    adjustments for some of the environmental groups if it ever happens
    here.
       Another concern is that environmental requirements are a "~moving
    target." You can change the rules, but industry is not supposed to.
    We're not going to attack the standards; that's unrealistic and a losing
    fight, we know that. But are environmentalists going to change the
    standards? Yes, the minute they can. In fact, a lot of the

                                       180

    environmental standards are ratcheted on a time frame, so if you can
    make the distance between bases longer when w're running them, I can't
    understand why It concerns you if we try to shorten them up.

       NYHART: Wait a minute, Jack. You have to look at the court-shopping
    that the industry does. Both sides play that game, not only the
    environmentalists. All of the hazardous substances safety standards
    were just overturned by a Louisiana Judge in the Manufacturing Chemists
    Association, in which they found a court that -- I think it is probably
    fair to say -- was at least going to be receptive to overturning those
    EPA standards. That threw the whole hazardous substances movement into
    a turmoil. Congress did react very quickly and bailed the EPA out.

       FRISHMIANI: But the game isn't over because Louisiana, like Texas,
    will take its time deciding whether it wants to live by federal
    standards or not.

       MOULTON: I did want to comment on your remark about some foreign
    countries penalizing those who bring frivolous suits. There's plenty of
    American case law that permits courts to penalize those who bring
    frivolous suits, and I think the fact that you aren't seeing it as often
    as you'd like is an indication that the court ].ay feel that these cases
    are not as frivolous as you do.
       The second thing I'd like to say concerns the ratcheting. I think
    you're right that it causes tremendous problems for industry to have the
    rules changed in the middle of the game, but often the problem for
    industry is greater because they've been playing it as close to the line
    as they possibly can, without allowing for a margin of safety with
    respect, for example, to public health.
       What can citizens do to affect that? Maybe one way to get at this is
    to have Mr. Welling conjure up in his mind the worst case, from his
    point of view, for citizens. You've studied the subject much more than
    the layman who's in a town somewhere and suddenly hears that a new
    industry is going to be sited nearby. You've already gone through much
    of this tremendous education process that everyone has to go through.I
    wonder if you could tick off a few of the issues you have already
    identified that should be of major concern to citizens, including the
    benefits as well as the costs.

       WELLING: Well, I'll try. The problem with the siting of any
    commercial or public facility, whether it be an airport, a processing
    plant, or, for instance, a prison, is that people all want them but they
    want them somewhere else. The logical approach is to put them where
    people have already agreed to having an industrial facility. Usually
    the citizens will not object strenuously to an additional facility
    where, say, a refinery or a chemical plant already exists, particularly
    if the community is interested in the extra jobs. But even if one can
    put the plant at some remote location, there are other problems such as
    much higher costs because you lack the infrastructure to support it. As

                                       181

    It pointed out earlier, we have always felt that it may be difficult to
    put the plant in the coastal zone because of the many restrictions in
    that area.
       The only experience we've had is with the pilot plant itself. We
    looked into areas such as California, Oregon, Washington, Texas,
    Louisiana, and Hawaii, trying to get a feel for the process of getting
    permits and rating each state as to the degree of resistance or
    acceptance. And naturally it became apparent to us that because of the
    long transit distance the West Coast and Hawaii were the economically
    logical places. In terms of environmental acceptance, though, and the
    aid we were getting in obtaining the permits, we saw that Hawaii offered
    us an environment in which we could meet our time scale. In some states
    the permit process would be entirely too long, so we had to exclude them
    even though there might have been other reasons to consider them.
       It boils down to the practical problem of finding out what the
    environment is and how much time it takes to get the permits -- will
    they be sequential or parallel -- and whether you have general
    acceptance by the public.
      Maybe I've not answered your question, but I'm just trying to relate
    the experience I've had.

       FRISHMAN: There's another whole side where I know there has been
    some work done, and that's looking at the impacts your re going to have
    on the community itself in terms of numbers of people, the types of
    services that are going to be necessary, where the labor force will come
    from, where it will go after the construction phase, and so on. And the
    one area that is still a very tough one in your project and others, just
    on the siting question, is the necessity for a relatively short-term
    public service system, where the taxpayers are going to have to
    essentially front the money to take care of your short-term
    perturbation, and then a much longer-term increase in the system. And
    this is where you start building some of the resentment that you see for
    industry siting. An additional resentment in rural areas especially --
    and you've looked at it a little bit, I know -- is the whole question of
    changing social structures because of the people that you bring in. I
    think these are the kinds of questions that you were referring to,
    aren't they?

      MOULTON: That's right. But Mr. Welling did a good job of ticking
    off the problems for industry.
       From a citizen' s point of view, I would suggest that in a state that
    has grappled with a lot of these environmental issues already and which,
    therefore, may have a more sophisticated regulatory regime in place, the
    citizens may feel more confidence than in a place where you're imposing
    a whole new industry and they have to start from scratch, coming up with
    regulations that they don't yet have. Sometimes, from the citizen's
    point of view, it's better for industry to have to go through these
    regulatory hoops.

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      GRABBE: Could I respond on behalf of Hawaii? The reason the
    permitting time is shorter in Hawaii is, first of all, that we have two
    levels of government, the state and the county. In some areas, for
    example, the Department of Health handles the health problems for the
    state, so only one agency is involved.
       Second, we have made a definite effort to streamline the permitting
    process. In other words, documents prepared for one agency would meet
    the permitting needs of other agencies.
       in informing the public, our assessment team gave many talks and
    speeches before we published our manganese nodule report. Many of the
    early responses we received were on an emotional level. Citizens are
    naturally concerned with new developments about which they lack
    information. After we distributed our report -- a lot of the
    information in this came from NOAA documents which generally aren't
    available in quantities for individual citizens -- the questions were
    fewer on the emotional level and more on specifics.

       WELLING: I think I did not quite answer the question about citizen
    concerns, but in the case of the Hawaii situation, it was well debated;
    the citizen had a chance to bring in all his concerns before the permit
    process was started.

       LANE: I'd also like to comment about these permits. In other words,
    the more complicated it is, the more hoops you have to go through, the
    better. I realize you were oversimplifying it, but as one who works for
    the federal government, I am often on the receiving end of such comments
    about the "bureaucracy" and all the permits and paperwork that go with
    it. I'd like to point out that one good thing that has come out in the
    last few months is the new set of regulations from CEQ, which encourages
    the feds to work together with the state. They encourage joint
    hearings, joint reports, joint notices, and so forth; the trend is more
    and more towards the "one-stop" approach. We're not getting rid of the
    many permit requirements; we're just trying to handle them in a way that
    involves less time and duplication.

       FRISHKAN: We've run into a problem,, though. Logically the one-stop
    approach seems to be the most efficient, and if you have the right czar
    running the system, then everything should work out okay. But when you
    start designing one-stop shopping,, industry is afraid that it will have
    less predictability than the fancy system of hoops that they're jumping
    through right now. It's a conservative approach. They think they know
    the system they' re in now, and they're not particularly interested in
    getting into one where there's a possibility of one person saying no one
    time and meaning it. We've been through this in Texas, Louisiana, and a
    number of other states, and it's almost useless to try to consolidate
    permitting to any great extent because industry turns out to be the
    biggest resister in the end, even though that's what they said they
    wanted in the beginning.

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       LANE: This term "one-stop approach" means too many things to too
    many people, and I'm sorry I used it. All I meant was that we would try
    to have the requirements of two agencies combined where possible. And I
    was trying to say there is a beneficial "trend" towards one-stop -- I
    don't think you'll ever get the one-stop.

       KARL JUGEL, NOAA: I think I'd like to ask Jack and Connie a loaded
    question. In the case of siting, what is your approach to solving some
    of the so-called dilemmas that could be involved? That is, if you're
    going to use the tailings pond for onshore waste disposal, you have to
    have a climate which allows for evaporation. Have you looked at the
    West Coast? From northern California northward you really don't have
    areas like that near shore. If you get down to San Francisco Bay are
    and south, you start running into air quality problems, particularly in
    the L.A. Basin. Now, you look at Hawaii and they have the wet and the
    dry sides of the islands, and frequently the dry sides are where the
    tourist development is, as opposed to industrial development. So just
    what approach are you taking in looking at the physical characteristics
    of these areas?

       WELLING: We certainly were well aware of t he problems you cited.
    What we did with tailings was to list all these factors, such as net
    yearly evaporation rate, which in the Bay Area is 28 to 35 Inches. It's
    not easy to find a combination of factors that are positive enough to
    overcome some of the negatives. As you mentioned, Southern California
    does not present a good case from the point of view of the
    overpopulation and overindustrialization of many areas.
       We also have the economic problem. In Oregon, one of the ways of
    getting around it is to pump the tailings over the Cascades to the drier
    section. Economically, that is not attractive because of the
    transportation cost. In the case of Hawaii, the distances to the dry
    areas are relatively short, so that you can choose a favorable net
    evaporation area.
       So again, one of the factors in choosing the Hawaii location was
    opportunity for a test where we would experiment with various approaches
    to the tailings problem. One is land disposal, which might be
    beneficial because lava flows have carried off the manganese. How much
    material could be safely used on the lands to make them usable, even
    though this might take 100 years?
       Second, we want to look not only at disposal at sea, but also at all
    other possibilities for handling the tailings. The best way to do that
    Is in conjunction with studies already being made and by contracting
    with universities for further research. We've a contract with the
    University of Hawaii, and with other universities in the U.S., for
    studies and experimental work -- MIT, Cal Tech and so forth -- in order
    to give us various approaches, because we may end up with a mixed bag.
    We may end up doing -- in fact, we already do -- certain chemical
    conditioning of the tailings.
       We do not have the answers, but I feel that with this varied approach

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    and with the experimental plant, in several years we will come up with a
    satisfactory answer in terms not only of site location, but also of the
    environmental effects.

       MIRIAM LEVERING, Ocean Education Project: My question doesn't relate
    so much to that as to my own concern that we might have less siting
    problems if we had a greater amount of conservation in this country. I
    would love to see you people in industry making a tremendous amount of
    money out of reducing industrial debris -- more recycling, collecting
    junk metals from various places, or whatever. I suppose I was one of
    those that sort of laughed at Rachel Carson when she first came on the
    scene. But I have lived in one spot of land since 1939, and when I
    first came there, walking between my house and the mailbox, I heard
    three kinds of vireos -- there were the chimney swifts, there were the
    redstarts, there were all kinds of birds on the land. Well, they're not
    there now, and we ourselves may be partly to blame because we have been
    pouring chemicals on our land and one thing and another. It would have
    fascinated me this afternoon if there had been somebody from the
    National Academy of Sciences giving us ideas on how we could become less
    dependent on advancing industry. I certainly haven't been as good to
    the land as I should have been over these years. But I don't feel we
    can overemphasize that. So if any of you people have ideas on how less
    can be more in our society, that's what I'd love to hear.

       FRISHMAN: What you're expressing, I think, is one of the goals of
    those who are seen as the opposition to various types of projects, not
    necessarily just this type. And I tend to view the haggling over
    individual environmental standards as just being a ploy for industry to
    keep people -- and governments, too, sometimes -- from asking the real
    questions we need to ask, which are those related to growth in various
    areas. The opposition includes that group that says growth is not
    necessarily good, but at the same time, we're consuming at a rate even
    faster than we're growing. So this is an area that needs to be
    understood by both the proponents and the regulators of growth.
    Questioning the value of growth is legitimate now,, though it never used
    to be. And it's to the point where you can become geographic about it,
    saying some areas may be better suited for growth than others. Some
    types of resource utilization may be better than others, depending on
    conservation needs, real consumption needs, or whether there's the
    potential for recycling.
       One of the big problems with manganese is we're recycling too much of
    it, and I think that becomes a market problem. I certainly don't fault
    the industry for doing it.

      FLIPSE: I would like to point out again that the United States
    practice is to use 14 pounds of manganese per ton of steel. European
    practice is about 22 pounds, and the U.S.S.R., which holds the largest
    terrestrial deposits of manganese in the world, considers that 30 pounds
    of manganese is needed per ton of steel. So although it isn't obvious,

                                       185

    there has been some excellent research work done in an attempt to reduce
    manganese consumption. Back to the general topic, I don't think there
    is any fundamental desire within industry to fool the public. The
    public today is much too sophisticated. Certainly in the ocean mining
    business we've involved the public and the academic institutions to an
    unbelievable degree. I think Amor Lane would admit there wouldn't have
    been a DOMES program if we hadn't started it as part of our R&D program
    to bring the academic groups out to try to do some evaluation work and
    to develop understanding.

       GRABBE: Steve referred to conservation and recycling and the
    relation to markets. Small is Beautiful is a theme that Hawaii is
    promoting in the energy field. We're supporting small appropriate
    energy technology; that is, generating energy locally and using it
    there. And we're trying to develop a conservation ethic, but we think
    it takes a generation or so to instill this. General Motors has found
    out, for example, that the older people still buy the big cars. Younger
    people are buying the smaller cars.
       However, the point I want to make concerns markets. In Hawaii we're
    striving for complete energy self-sufficiency.. But all of the alternate
    energy devices like solar water heaters or windmills or almost anything
    you can think of, even though they're small and beautiful and replace a
    bigger system, still require copper and steel and other metals. So
    we're still going to need the metals.

       MAXWELL MCKNIGHT, Marine Technology Society: I'd like to get back to
    the legal regime for a moment. Professor Nyhart has told us about the
    LOS problems. The effort to reach a treaty has been. called the longest
    floating crap game on record, and it will probably still take some time.
     And following that, you have the advice and consent of the Senate,
    which will probably also take time. Meanwhile, as has been mentioned,
    there is some legislation pending from the last Congress, to be
    reintroduced in this Congress, to set up an interim legal regime to
    enable the American consortium, at least, to operate in the deep-sea
    area.
       In view of this, Connie, what's your time schedule., and do you
    anticipate getting sufficient legislation to proceed with your
    construction of this site in Hawaii?

      WELLING: We were very disappointed, of course, that legislation
    wasn't passed last year. As I pointed out, we would not be able to make
    an investment decision anyway until the early eighties. Once
    legislation is passed and the agency is set up to regulate the Industry,
    it's going to take several years to set forth the regulatory procedures
    and solve the environmental equation, which will delay us further. When
    we do make the investment decision, we must know what the business
    environment we're going to be working in will be.
       So at present, the best answer I can give is that if legislation is
    passed this year, we hope that the regulatory agencies and procedures

                                      186

    will be set up SO that they can issue us licenses and permits not later
    than 1981-1982. We won't make any investment decisions until then
    simply because it would be bad business to do so. After that, it will
    take at least four years to have the plant Operating. So 1986-87 is the
    soonest that we could get into operation, if everything is favorable.
    Even if we had all the technical problems solved today, we could not
    proceed.
       We tried to have government, state, and federal agencies, the
    environmental interest, the industrial interest, and the academic
    community adequately represented on our panel. But have we reached any
    conclusion? We haven't really answered Al Keil's question, Is the
    United States ready for a marine industrial park? In terms of
    legislation and the permitting procedure, the answer is that there's no
    thrust in the United States that I can see for that.
       The fundamental question that John Craven brought out last night was,
    why don't we turn to the sea and live there, work there, and adapt to
    it? Why don't we, as a country, utilize the assets of shorefront
    industrial development, intelligently done, protecting the environment,
    the aesthetics? Somebody said, the greatest thing about ocean mining is
    that you'll never see it. Not even the discharge from the ship. But
    are we as a society sophisticated enough to consider a marine industrial
    park?

       GRABBE: The answer is Yes, put it in New Mexico!

       FLIPSE: You touch, Gene, on a point that we raised yesterday. There
    must be benefits in this and there must be costs, and one of the things
    we've found out is that the fellow who gets the benefits isn't
    necessarily the one who pays the costs. There is an inequity that's
    very natural in these developments. Can that be prevented? Certainly
    not by legislation. The legislative assistant would then get the
    benefits.

       DYER: I think our society is moving towards recognition of the
    inequities through various compensation schemes. Until very recently we
    observed principles of ownership that we were brought up on. But it is
    possible, as has happened in the OCS Amendments Act, to build into the
    system some compensation that recognizes just those factors that you
    mentioned. For example, it is possible by modes of taxation and
    payment, environmental penalty funds, and so forth, to recognize those
    whose sense of aesthetic contentment may be violated by the appearance
    of a processing plant between a picture window and the sea. It may well
    be that our society is moving that way.

       SILVERMAN: I followed the legislation last year, and I think I spoke
    to most of the people who opposed it and some of the people who favored
    it. I'd like to report to you my impression of the reasons for the
    opposition and the problems.
       First of all, no one that I spoke with -- really no one, and I spoke

                                       187

    with many groups -- opposes exploiting the wealth of the sea. But some
    of the concerns were not answered adequately. For instance, the
    legislation extends diplomatic protection to the United States. I don't
    really know what that means. I don't know what it means in military
    requirements or to what extent it commits the nation's foreign policies.
    I think there are a lot of people, in the Senate particularly, who were
    concerned about that, and I don't think it was adequately addressed.
       A second area where the work was very poor was in the relationship
    between the legislation and the other pieces of legislation. I was
    involved in it because someone asked my opinion as an attorney about how
    it related to the Clean Air Act, particularly the permit requirements.
    I couldn't give an answer, and I don't think that was spelled out. Nor
    was it spelled out how the legislation relates to OSHA, and to a lot of
    other things. I think someone should address such questions very
    systematically as part of good legal work.
       Further, the metals that we talk about as resources and hard metals
    -- particularly the trace metals -- are thought of in certain circles as
    heavy metals or toxics, and they have a very bad name. I think we'd
    like to know the impact of breaking up the cadmium or the arsenic and
    putting it in a slurry or wherever. Nobody addressed that question
    during the hearings, but I know a lot of people asked it.
       As for our sessions here, I think what Ms. Levering mentioned about
    resource conservation is a key concern. I think the idea of wasting all
    this manganese, particularly if you waste it irretrievably, really
    troubles a lot of people.
       Then there's antitrust -- we didn't talk about that today, but
    Senator Kennedy and the Judiciary Committee were primary obstacles to
    the passing of this legislation; I think they had some questions about
    antitrust and I think that needs to be addressed outright.
       And finally, the effect of the manganese nodule industry on the
    oceans I think still needs very close scrutiny. There are a lot of
    people who worry about what's happening with the oceans, especially when
    they think that once we start mining, many others will start mining as
    well.
       If I were opposed to this legislation or opposed to the idea of
    mining I wouldn't tell you all this, because these were the strong
    points of the opposition. But I hope they can all be answered.

       CHARLES MATTHEWS, National Ocean Industries Association: You were
    talking about a marine industrial park. Are you thinking in terms of,
    say, Spillhouse's concept of artificial islands offshore? Is this the
    direction we should be going, seaward expansion, that kind of thing? Or
    are you talking about an onshore industrial park that would be devoted
    exclusively to a marine activity, perhaps deep-sea mining and offshore
    oil and gas development with support facilities?

       FLIPSE: I'll be glad to answer that. I think Al Keil's experience
    in Europe with Europort and the creation of offshore islands, the
    floating plants, and so on, is a tremendous technical stimulus for

                                      188

    cooperative development. Al couldn't believe that we had a group of
    people who were concerned with where you would put a nodule processing
    plant who wouldn't see the value of a marine industrial complex. And he
    was delighted to hear that a petrochemical plant would be a good tie-in
    plant. He saw an American 'Europort" developing somewhere, again, in
    New Mexico -- anywhere but in our own backyard. He thought that if we
    could get this idea into the discussion of the Forum, the next
    discussion would be more constructive and the problems would be faced
    and the trade-offs made. If it's so right for them, is it so wrong for
    us? But in the United States, the use of the waterfront for industrial
    development is almost impossible. Is this a pendulum that will swing
    back? Industry isn't going to intentionally try to make that happen,
    but it is almost a normal reaction in due time. There's a lot of
    interest 'now in the cost of the environmental improvements that we're
    getting. What are the costs for the next increment of environmental
    protection? That focus is perhaps a symptom of this reaction.

       LOIS SHARPE: I've been in this process so long that I think it's not
    useful to engage in this kind of debate. But the pendulum does swing --
    I've seen it swing a number of times since I began working on water
    questions in 1960. And as you say, many people are now questioning the
    cost of this environmental protection. Resources for the Future --
    which is a reputable organization, not even really an environmental one
    -- has reviewed recent opinion polls on the public's attitude toward the
    preservation of environmental controls versus a reduction in the
    standards. And the results they report are strongly in favor of
    continuing those high standards. The public does not really feel as
    confident as you gentlemen do about the good intentions of industry in
    this respect.

       NYHART: Ms. Sharpe, before you spoke I was thinking that I had heard
    a lot of things that could be reasonably optimistic. One is that the
    pro-development, pro-technology forces are stating their case. And
    there is time, I think, to hash these issues out. There are a lot of
    weaknesses, a lot that is fuzzy, I think, in the legislation. And
    certainly these things need to be discussed and resolved.
       But at least they're out on the table -- you listed them, other
    people are listing them in other forums. I think it is significant that
    Connie Welling has responded here by saying, 'Look, it's good business to
    direct my R&D in anticipation of these issues. I think that's cause for
    optimism, the fact that we have almost a decade in which to work these
    issues through. As Ira Dyer pointed out a moment ago, there are
    economic tools at hand to try to balance the external considerations
    with the industry ones. There is the work that Amor Lane is doing and
    that other parts of the Department of Commerce are doing, trying to
    identify and perhaps quantify the national interest in this endeavor.
    The fact that we have a forum today I think is a cause for optimism.

      WELLING: Regardless of whether one thinks we have good intentions or

                                       189

    not, the fact is we could not afford a four-year delay like the one
    experienced by the Alaska pipeline. We must be sure that we are going
    to be environmentally acceptable and meet the regulations.

       NYHART: It is certain -- and I think industry realizes this -- that
    if these issues are not thrashed out in advance they will be settled in
    the courts. We have enough experience now to know that even if you use
    an existing processing plant, the existing plant is going to require a
    Corps of Engineers permit. And once you call for a Corps of Engineers
    permit you're in the EIS, the whole review, creating ample opportunity
    for these issues to be litigated and to bring out the costly delay that
    IMr. Welling is talking about.

       GRABBE: A point that no one has mentioned is schedules -- when will
    the first operational mining system begin and when will the first
    processing plant be built? They have to go together. In Hawaii, we
    estimate this will be sometime after 1985, which gives us five more
    years to examine and look at the processes to inform our legislators and
    the public, the environmental groups, and so forth. Is
    this a reasonable assumption, Connie?

       WELLING: I'll say that we have to get it settled within three or
    four years, not five, because we may have to make an investment decision
    before then.

       FLIPSE: Five years ago I would have said the same thing. I regret
    to report that the Rennecott operation has been reduced by 95 percent;
    the INCO operation, although highly successful in its technical
    experimentation, has been reduced by over 80 percent; and the Deepsea
    operation is facing the very serious decision of whether to continue or
    go on the shelf now. It's just as wrong to be early as late, and we're
    all congratulating Connie on his early problems that may turn out to be
    later blessings.

       WELLING: But don't congratulate me too soon. Without legislation
    this year, I doubt whether I can keep up the present pace.

       FLIPSE: There is at least a four-year minimum from economic
    feasibility to production. The legislation will provide an estimating
    basis for use in the payout study to determine whether it's worth
    investing. Otherwise, it rolls over one more year. The result, at
    least in three out of the four American undertakings, are in doubt just
    on this time line problem.

      JOHN McNALLY, Clean Water Action Project: I've got one or two things
    I'd like to bring up. First, I'd like to hear the panel's feedback on
    the Department of Defense study that stated that they didn't feel
    there'd be any need to go for alternate sources of metals for quite some
    time -- they mentioned supplies of 62 years of copper, 220 years of

                                       190

    manganese, and 69 years of nickel. In sum, the Assistant Secretary
    said, "In the DOD point of view there seems no immediate need for a
    mineral resource in deep-seabed mining."
       Second, we mentioned sister projects where activities in one area
    might dovetail with those in another. I'm just curious if anybody on
    the panel or in the audience knows whether there's been any
    investigation into the possibilities of utilizing -- perhaps by some
    kind of deep-seabed farming -- the nutrient-rich ooze that would be
    brought up by mining techniques to stimulate production of plankton.
    This might be zooplankton such as krill, which is very nutrient-rich and
    could possibly be an alternate food source.

       LANE: I've got two answers for the nutrient one. First of all,
    there is a project down in St. Croix by Oswald Roels, who was an early
    deepsea mine investigator who was trying to demonstrate the feasibility
    of bringing up deep water with nutrients for aquaculture.

       FLIPSE: And air conditioning.

       LANE: Yes, and air conditioning. Now, as far as the deepsea mining
    itself, there were some initial thoughts that perhaps the level of
    nutrients that would be dumped overboard -- that is, brought up from the
    mining pipe -- would be sufficiently strong that you could have some
    kind of fish farming out there. But we haven't seen evidence of that
    high a level of nutrients in the discharge plume.

       GRABBE:  There's another experiment going on at Dana Point off
    California where they're bringing up deepsea water in an attempt to grow
    kelp. When you bring up the sludge from the bottom, you have a double
    effect: nutrients which can react with sunlight to form phytoplankton
    and other materials which make the water opaque so the sunlight may not
    penetrate as deeply. Although they may tend to counteract each other,
    we believe the overall effect may be beneficial.

       LANE: One of the purposes of DOMES is to find out the extent of the
    surface plume. But we must keep in mind that current tests are
    demonstration-scale. In attempting to extrapolate the results to
    commercial-scale operations, we must use caution. Nevertheless, from
    what we have found, the diminishing of light becomes slight to the
    vanishing point in the upper waters.  That is, we'll have a plume that
    may extend five kilometers in these scale-up experiments. The plume is
    relatively small and disappears in a couple of days.
       Now as far as the particulates in the plume, we're investigating
    these from two points of view. One is the level of metals that might be
    taken into the food chain through zooplankton. But the other is the
    "food" value of these particulates to the plankton. For example, if
    they're eating these particles instead of real nutrients, they may be
    gorged, but they're not nourished and may die prematurely.

                                       191

       WELLING: I have studied this problem for a number of years, and in
    fact wgas asked by the National Materials Policy Commission some years
    ago to do a study on ocean minerals and their strategic importance to
    the United States. In reporting my findings at that time, I experienced
    no disagreement, but they're certainly 180 degrees from the findings
    that I undertand DOD has come up with. If you look at the data, we are
    importing all our manganese, and All our cobalt, and practically all our
    nickel, and the trends in copper are such -- other studies have
    supported this -- that probably by the year 2000 we'l11 be importing half
    of our copper.
       Now, one can argue as to the total effect upon the economy -- I've
    indicated in my studies, for example, that the savings and the balance
    of payments in the United States between now and the end of the century,
    if we can get ocean mining started in the 1980's, would be on the order
    of 40 billion dollars. This would be a saving of several billion
    dollars a year. The more important factor-, though, is the fact that
    these are strategic materials -- as we mentioned, you cannot manufacture
    steel without manganese. And the demand upon cobalt is increasing all
    the time due to the need for it, for instance in jet engines; the U.S.
    is a major supplier of jet aircraft. The fact is that the energy
    requirements to mine lower-quality ores are considerable. The
    Department of Defense report did not cite the Geological Survey study
    that indicated that between the years 2020 and 2040, when most people
    agree petroleum production will be quite downhill -- it will peak
    somewhere early in the next century --- the requirements for these metals
    will exceed by an order of magnitude what we normally think we will
    need. Therefore, unless we have a timely development of strategic
    metals, we will not be able to meet our energy needs. In spite of the
    fact that we recycle at least half of our copper and 25 or 30 percent of
    our -nickel, and that we recycle more all the time, the need will still
    be there.

       NYHART: I would only add that it is my understanding that a recent
    government study within the Department of Commerce policy office, trying
    to define the national interest in deep ocean mining, has come up with a
    long-term (20-year) manganese supply as the critical element of national
    interest. I think the people doing that study took a fairly independent
    look at the thing. I don't know the DOD study to which you referred,
    but I 'know within the last six to eight months there has been another
    government study that has basically supported the position that you just
    heard from Mr. Welling.

       FRISHMAN: This means that we're going to have all the national
    interest arguments in developing the industry focused on a portion of it
    that the industry doesn't even plan to use right now.

       WELLING: Let me again point out that there is a certain level of
    manganese that you absolutely have to have. Above that level, you don't
    need it.

                                      192

       FLIPSE: And it's an inflexible market.

      WELLING: It's an inflexible market. But in order to meet the
    nickel, copper, and cobalt needs, you have to produce far more of those
    metals than the amount of manganese you need. So the manganese is
    accumulated on the bottom of the ocean at a much faster rate than you
    can conceivably use it in the next century. It isn't a question of
    wasting resources at all; in fact, they're even putting it back there.

       HAROLD HARTLEY, United Methodist Law of the Sea Project: Another
    citizen concern that has not been dealt with today is an international
    perspective and the common heritage principle. With a unilateral
    agreement prior to an international treaty, how will industry guarantee
    a significant revenue-sharing system to benefit the developing states?

       FLIPSE: That is an interesting question, but we are now out of time.

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                                       LESSONS OF THE CASES

    INTRODUCTION

    Alf red A. H. Keil
    Co-Chairmaan

    Now that we have discussed the four cases, in order to learn from those
    actual experiences about the interaction between seaward development
    and citizen participation, we should identify and summarize lessons
    learned from them. Each case leader will summarize key points for the
    review of his team and the comments of the audience. We then will see
    whether there are some common elements that we can identify and general
    conclusions that we can reach.

    REPORT ON GEORGES BANK CASE STUDY

    Ira Dyer
    Co-Leader

    I think that the Georges Bank case can be characterized as follows:
       While Georges Bank may have economically valuable stores of oil and
    gas, it is known to have an economically valuable supply of fish.

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       If we do go ahead and take oil and gas from Georges Bank there will
    be an environmental change; agreement does not now exist on the benefit
    or disbenefit of that environmental change.
       As the individual, individuals, or entities in charge of the Georges
    Bank situation are difficult to define, decision-making for the area is
    a very difficult process. Yet in some sense, perhaps in a large sense,
    most of us in our society have come to expect more generally a crisp
    decision-making process.
       Now, given that to be the bare bones of the Georges Bank case, what
    can I conclude from our discussions? Here are a few points that I
    would like to bring to you.
       With respect to the last issue that was raised, namely, the nature
    of the management process and the decision-making process, it does seem
    to me that it is a process of decision-making under a great deal of
    uncertainty, one in which it is largely impossible in sensible
    quantitative terms to play out a scenario that we can all agree on.
    Even if we can agree on a scenario and its outcome, we would not
    necessarily be good predictors of the future.
       With the recent enactment of legislation by Congress there appeared
    in the OCS Amendments Act terms of compensation for harm that may ensue
    to competing interests in Georges Bank, which I personally view
    optimistically. Along with that, there is the option to cease
    operations on Georges Bank, also viewed in an optimistic mode. That is
    to say, I believe our society is taking a step forward in its management
    and decison-making processes by recognizing that not all future events
    can be predicted with precision, and that we are going to recognize that
    whatever harm might ensue out of mistaken predictions will somehow be
    taken into account in the process of managing that resource and
    regulating that development.
       Another point that seems to be related to the process of
    decision-making with respect to the Georges Bank is the way in which
    competing interests might be taken into account. It does seem to me
    that as a society we are not well equipped to discuss in a public forum
    or to enter into public debates in as useful a way as we might like. We
    are as a public, as a society, not as well-informed as we might be
    about, on the one hand, the nature of the environment, and on the other
    hand, the opportunities in the environment. It may well be a
    responsibility of our society to do something about educating that
    larger public in ways that enable us to deal more effectively in the
    future with questions that concern the interaction of technology with
    society, economics and resource economics most particularly. I am,
    generally speaking, an optimistic soul, and I do believe that while it
    may take a long time to achieve that better sense of information, that
    better degree of knowledge, it is the direction we ought to take, even
    though it may well involve an enormous effort.
       As a final point with respect to Georges Bank, there will be created
    a series of regulations. Regulations that are written with respect to
    any development project can be of two types. They can be written in
    terms of objectives, that is to say, what do we wish to achieve; or they

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    can be written in terms of minimum standards. It seems to me that we
    ought to urge regulations that are of the former quality. Regulations
    that are of the latter quality, namely, minimum standards of technology,
    of ten have or seem to have the characteristic that they stifle
    technological innovation, whereas regulations written in the form of
    objectives can often motivate technological Innovation. I would
    suggest that is what we want to achieve, namely, we would like to see
    in each process a further evolution of technology that may be used in
    some subsequent development.

    REPORT ON GEORGES BANK CASE STUDY

    Don E. Kash
    Co-Leader

    The first thing that strikes me about the Georges Bank case is the
    confusion derived from the complexity of the issues involved. There is
    a mixture of competing values. Those values range across a spectrum
    from slower economic development and a preference toward maintaining
    things pretty much as they are to a preference for rapid development.
       There is equal confusion about the facts. That confusion is
    associated with uncertainty about the technologies and processes
    involved in finding and getting the oil and gas out, and perhaps the
    greatest uncertainty revolves around what the impacts would be of oil
    and gas development, independent of whether they are viewed as positive
    or negative.
       One reason for the confusion is that we are dealing with a very
    complex, interdependent set of choices and we live in a world whose
    complexity has passed beyond our intellectual equipment. We try to
    understand the Georges Bank Issue by breaking it into bits and pieces.
    We try to understand it in the way we generally understand in a
    scientific society, that is, by analysis. That means breaking it into
    components, each of which can be made understandable. And yet, Georges
    Bank is a case where what you are looking at is a whole, a lot of bits
    and pieces put together.
       We try to manage with organizations that are the derivatives of the
    way we understand the world. That is, we try to manage it with
    bureaucratic procedural arrangements which assume that you can break out
    pieces, and make choices with regard to those pieces. Yet, when you get
    all the pieces broken out, you somehow don't have the whole. In a
    sense, we are trying to understand and manage with an analytical system,
    and we have a synthetic problem.
       The upshot is a great deal of confusion, and the debate is not as
    informative as it might be. I made the comment in our case session that
    I thought we had devoted a disproportionate amount of time to talking
    about oil spills. I think we did that because although people disagreed
    about how much oil would be spilled and what the consequences would be,

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    it was at least something that you could try to get your head around,
    and there was some set of common, factual data. Dr. Keil suggested some
    work done by a colleague of his, Mr. Devanney, and he said that one of
    the useful things in connection with that work was to lay out the facts
    of the case. He indicated that lots of people had used those facts. I
    think that is generally correct, but in the Georges Bank case, if you
    look at it overall, it hasn't done a whole lot of good. We seem to be
    able to proceed with seaward develoment, particularly oil and gas
    development, without much difficulty if it takes place in the Gulf of
    Mexico or off the coast of Georgia. The key reason for a sale taking
    place relatively easily off Georgia and not on Georges Bank appears to
    be associated with the fact that there is a greater span of values at
    work in New England than there is in Georgia. My general perception
    would be that in the Gulf and off Georgia there is a broader community
    of interest committed to economic development.
       Generally it seems to me that public participation is something we
    are going for as a direct result of the increasing lack of confidence in
    our governmental system by a wide range of interests in this society.
    We are supposed to have a representative government. If government were
    seen as effectively representing, we wouldn't have to have all these
    procedures for letting every ad hoc special interest group participate
    in the system. I think Georges Bank reflects just another one of those
    instances of a declining confidence in government and in the processes
    of governmental decision-making.
       Public participation is being proposed as a substitute for
    governmental decision-making in part because of that lack of confidence.
    This results in part from the confusion, uncertainty and lack of
    understanding to which I referred. The view of interested parties is
    that the only way they can have any confidence that their interests will
    be protected is if they get to participate continually. That is almost
    a necessity where there is both uncertainty about what the consequences
    are going to be and a lack of confidence in the formal institutions and
    procedures of government.
       One of the things that public participation represents, then, is an
    effort to involve vested interests at every step in the process, so that
    those vested interests both have a chance to get their oar in and to
    maintain a kind of continuing assessment as to what the consequences
    will be of the decision-making process that is underway.
       The final impression that I have is that public participation seems
    to be necessary, and so we probably ought to focus on how it works best.
    Based upon what I have heard here, public participation works better the
    earlier it takes place. But it is important to emphasize that we never
    have public participation which involves masses of people. Rather, what
    we are involved in is a process that seeks to allow two categories to
    participate: those groups that have an interest, and alternatively,
    those groups that are likely to be impacted. Those groups that are
    likely to be impacted negatively need to be brought in at a very early
    stage. Frequently the groups that are impacted don't know it when the
    process begins.

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       So if public participation is to serve the function of developing a
    consensus and speeding decisionr-making, it is incumbent upon the
    protagonists of these developments and upon the government to make an
    increased effort to try to identify parties that will be impacted by
    the decisions to develop the Georges Bank, inform them of what is going
    on much earlier, and invite them into the system.

    REPORT ON SOIO511 AT LON1G BEACH CASE STUDY

    Russell -R. O'Neill
    Leader

    in our session, we laid out very well all of the elements of the SOHIO
    case. We had good presentations and lively discussion.
       The SOHIO project is still up in the air. Therefore, it may be a
    little premature to say exactly what the lessons are. We might be able
    to do a better job in two or three years, looking back at it.
       At this stage, I find that there is some difference of opinion.
    There are some actors who feel that nothing has been learned, and there
    are other actors who feel that it has been the equivalent of a doctoral
    degree.
       I think that one of the most significant lessons is that engineering
    is no longer simply a matter of designing something and then having it
    constructed. If that were all there were to engineering, the S011I0
    example would indeed be a "piece of cake," as one of our panel members
    said. Constructing a terminal, a pipeline, and moving half a million
    barrels of oil a day around involves many other things, including values
    of different people. There is a certain amount of symbolism in all of
    this. You become involved in national politics, you become involved in
    the very complicated process of getting permits, which really hasn't
    been all worked out, and so forth. Also, there is the matter of
    credibility. You have got to do something that people will really
    believe.
       one of the difficulties that might be considered a lesson is that it
    is difficult to define and ascertain exactly what is the national
    interest in this case. If you inquire, you just don't get a clearcut
    answer. And it makes everything that follows more difficult.
       Another thing that makes this a difficult case is that SOHIO is on
    the cutting edge. When they started this project, one of the things
    that had not yet been settled exactly was the acceptable limits; these
    were actually negotiated as the project proceeded. That makes it much
    more difficult and also stretches the whole process out.
       There is also this question of public participation. lie now 'nave a
    large number of entrances where the public can get into the permitting
    process. There may be too many, there may not be enough. But it seems
    to me that it is just a little too early to draw all the lessons from
    the SOHIO case.

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      KEIL: The question of -national interest is a rather key issue. In
    a way it is underlying the question on the significance of the oil
    resources on Georges Bank and, in essence also, the significance of the
    fishery resource. Is one more important than the other? Is one so
    important that you don't have the other?

    REPORT ON LOUISIANA OFFSHORE OIL PORT CASE STUDY

    Stephen J. Masse
    Leader

    The controversial thing about the LOOP case was a noticeable lack of
    controversy. Perhaps in the land of the blind the one-eyed man is
    king. But there are lessons to be learned.
       The first one is very obvious, but it has some depth to it, and that
    is that Louisiana is different from New England. Don mentioned regional
    differences, and just saying that they are different opens up more
    questions. Why are they different?
       We have the long history of oil development, onshore and offshore
    development, and many pipelines. There are political differences that
    came out in the discussion of the state politics of Louisiana. Here we
    are talking about a certain period of time in this twentieth century,
    and even now, things are different in Louisiana than they were while the
    permits and licenses were being processed.
       The attitude of the people is a factor, and it is a combination of
    all the other things I said about the differences between Louisiana and
    New England. The focus of the public participation group that spoke in
    the LOOP case study session was not how to stop the project, but getting
    the best for the state and for the region from this project.
       I think we can link the difference to education, which was mentioned
    previously also. Either the people of Louisiana are being conned, or
    the New Englanders are, or there are differences in the facts. But
    knowing more about the facts will, of course, be helpful in future
    development. From a historical point of view, in the years that follow
    we can look at the environs of Louisiana and see whether these things
    that were accepted by the people of Louisiana were for the better or the
    worse.
       What we found in the Louisiana case is that the accessibility and the
    openness of the owners and the state officials and everyone concerned
    did a very good job of bringing about a credibility and a rapport with
    all of the interests that were there. I say given the climate in
    Louisiana, plus the outlook that was almost universally accepted that
    deepwater ports are a better way to import oil than going up the rivers
    with the smaller ships, and the acceptance of some other benefits. I
    think that in Louisiana there was some trust. It is easier to argue
    with someone about what they are saying than to argue with them about
    what they are not really saying. I think there is a lesson there.

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       A third point is that if you get an act of Congress, and you focus
    massive attention on a project in terms of mandating a timetable and
    putting bite in it by having an operating agency to enforce and
    coordinate this timetable you can get things done. We had what we
    called the "single window concept." It was tried for the first time in
    a major federal legislation in the Deepwater Ports Act, where the
    Department of Transportation received the application and dispersed it
    to all the federal agencies involved and got their comments. Each
    agency had a deadline by which to declare all objectives to the project.
    That is the kind of law that was working for this project.
       The law also mandated decision by a cabinet-level official. The
    Department of Transportation received all the inputs and said yes or no.
    As it turns out, there was a 25-page license full of yes.
       The other point on the law is that it did cost. There was a big
    bill. We had over a dozen people in the Coast Guard working on it.
    There were people in the Office of the Secretary. At the state level
    the Louisiana Offshore Terminal Authority was set up to lubricate this
    process. Maybe this law that sets up a procedure for a specific project
    points toward the future when there may be a universal system that will
    provide this type of 'handling for all projects.
       The fourth point that I heard from the LOOP discussion was that there
    was a'good dialogue by all concerned on the writing of the law. Dr. St.
    Amant said, "We all got together and knocked heads." It was fortunate
    that they had informed people at an early stage and knocked heads early,
    because they got a relatively clean law that people weren't going to
    fight later.
       At the federal level there was a lot of discussion, and the law came
    out pretty clean. So struggles came on early. And that is something I
    would say is'a lesson from this case. If it can be worked that way, it
    is for the best to get nice, clean laws, and to have everyone have their
    say at that stage. I would say that is particularly true at the state
    level.

       KEIL: I should just say for the record that the legislation that you
    refer to was the Deepwater Ports Act, which actually is not confined to
    the State of Louisana. It is the Deepwater Ports Act for the United
    States to import oil'.

       MASSE: There is also a law in the State of Louisana that would not
    affect all deepwater ports. We do have this continual partnership and
    coordination with the state.

       KEIL: You mentioned something else that just for the record I think
    I would like to emphasize, and that is there was an agreement there that
    it was felt that the import of oil by unloading offshore at a deepwater
    port is environmentally safer than bringing it in in smaller ships up
    the river. But the other part is that it is also cheaper. The
    transportation costs become substantially less if you can go through a
    deepwater port, because you use large tankers, and the cost per barrel

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    is lower.

      HASSE: That is a very good point. We have a marriage of something
    that was attractive to the oil companies from a financial point of view
    and helped the environment.

      KEIL: I would hope it also benefits the consumer, because if oil
    arrives at a lower cost, then I think the consumer should also have the
    benefit.

    REPORT ON MANGANESE NODULE PROCESSING PLANT CASE STUDY

    John E. Flipse
    Leader

    The initial interest in manganese nodule commercial development was in
    about 1962. It was characterized by a very open exchange of
    information and attitudes between the industry, the academic community,
    and the government. In that sense, this was a unique opportunity for
    broad cooperation. There was an Interior Department Advisory Committee
    when only two companies were actively working the problem.
       There was also work with Scripps, Lamont, and Woods Role, and
    excellent cooperation with the Naval Electronics Lab who, in developing
    deep ocean cameras, needed a suitable subject. Fortunately, the only
    thing they could find at considerable depths to photograph was manganese
    nodules. It was an interesting coincidence and a very important
    development. So there was a very early broad interchange.
       There were two additional concurrent events that made public
    participation very real. One was the extended discussions of the United
    Nations Law of the Sea Committee and, later, Conference. There was an
    industry group that was supposed to provide advice but that was being
    advised regularly by the U.S. Government. The function of the advisory
    committee was to teach the government people what ocean mining is and
    how it works. The government people frequently changed. It was, and
    still is, an intense world debate on the subject involving the public,
    perhaps a particular sector, but much broader than many people realize.
       Then there was another educational effort leading to U.S. domestic
    legislation, resulting in a bookshelf of hearing records. it was the
    conviction of both the industry and academic people that if you could
    make the Congress understand the problem, you could legislate wisely.
    It sounds like a theoretical approach. But nevertheless, again we had
    the changing staffs. Every two years we had a new rack of faces,
    committee responsibilities, and so on. So there has been an extended
    educational effort or, if you will, public participation in this sector.
       Another unique situation developed when the State of Hawaii decided

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    not to join the West Coast of the United States in saying: "No nodule
    processing here." A several-year intensive study enjoyed extensive
    public participation focused on siting a manganese nodule processing
    plant.
       As someone said yesterday, press coverage is like the measles, so
    that each time they open the Law of the Sea debate, which is at least
    once a year and sometimes twice for the last seven years, somebody
    writes an article, whereupon all the other journals follow suit. In
    fact, the press coverage has been extensive. In our case there was an
    intense interest in the scientific and technical aspects of the subject.
    We had a hard time getting away from this in our case discussion. There
    are just too many interesting aspects to ocean mining.  Most of the
    discussants were either very well grounded or absolute neophytes, so
    that most of the exchange was between the well-grounded persons and the
    members of the panel. The other thing that characterized our session
    was its reasonableness and its conservatism. These observations are
    reflected in some of the findings.
       The first finding was that the industry-environmentalist relationship
    is improving. This was a surprising conclusion which reflects the
    maturity of the relationship. Supporting evidence includes the
    following:
       The rhetoric is diminishing. Nobody from the industry feels that if
    you don't mine the nodules next week the world is coming to an end.
    Similarly, we didn't hear one person say that if you stir up a small
    sector of the seabed, you have done incalculable damage to the world.
       The R&D programs of both the government and industry are focusing on
    the environmental concerns. The assurance that the industry R&D is so
    directed was well received by the many representatives of environmental
    interests. We are convinced that the distrust of the environmental
    community of ocean mining is decreasing because of understanding and
    that self-confidence is increasing -- a significant development. If
    there is enough factual exchange between the parties and the confidence
    of each party increases, they can become more reasonable. There was
    almost a tenor of this being a cooperative effort now -- let's see how
    we can do this with proper environmental protection -- rather than an
    adversary situation.
      A contributing factor is that industry is facing regulation and
    recognizes the strength of the environmentalists, their effectivness in
    the use of the court. Instead of playing the ostrich with their heads
    in the sand, they are facing the issues and trying to handle
    environmental problems realistically.
       The second finding was an awareness of the physical problems of
    having a manganese nodule plant in an area. Attention was focused on
    the plant "tailings." For a typical three-metal operation, tailings
    approximate a square mile three feet thick each year. That is not the
    way it will be configured, but that is the magnitude of the mass that
    must be handled.
       On the other hand, the tone of the discussion in this area was
    positive. Is this a future ore body? Should you save this material so

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    that later on you can come and take out some other contained values as
    the economics permit? Hawaii, having done its homework, wonders if
    these tailings could be put on barren lava flows and replace the
    manganese missing in the lava flow, thereby turning these barren slopes
    into productive fields? There is much work being done in this area.
       The question of at-sea disposal was discussed in a relatively calm
    and constructive fashion. Should these tailings be disposed of at sea?
    There is research and evaluation going on to see if this is possible.
    The problem of tailings disposal must be properly anticipated to prevent
    costly and devastating later problems.
       The third finding, supported by the government, the environmental,
    and the industry interests was the need to improve and expedite the
    permitting and approval procedure. Apparently nobody really believes in
    one-stop shopping or single-agency permitting, but better interagency
    coordination is essential.
       Our federal government panelist made the point that interagency
    agreements are practical a-ad will be effective. Most panelists agreed
    that it is great as long as the lead agency leads. This approach
    suggests there is a leader, and this unfortunately is not always the
    case.
       Another finding was that the timetable for ocean mining is more
    relaxed. Passage of reasonable U.S. legislation is near. No one knows
    whether this is next session or two more sessions, but all agree that
    it has to be nearer; it has been "working" for seven years!
       And Law of the Sea expectations are down. The threat of a Law of the
    Sea treaty that would deny access, although still very real, appears
    remote.  The people are getting inured to a treaty "next          yer.
       Another-reason for the feeling that this is not a doomsday problem is
    that the metal markets are weak, and that is a fact. Then there is the
    high-confidence level that there is not really a metal shortage.
    Certainly there is not a current metal shortage, except perhaps for
    cobalt.
       Let me depart from the euphoria of the Forum discussion to caveat
    these happy developments. I am worried! Two of the four major U.S.
    consortia in ocean mining are inactive. Their technical programs are
    essentially complete, and they have dismissed their engineering staffs
    and are not proceeding with the system development. One more is facing
    that decision very soon. The fourth American-led consortium, which was
    once considered to be "far behind," has enough testing work ahead to
    last a year or two.
       I am concerned, too, that if the pressure is removed that the work
    won' t get done. If there is a major political problem in Gabon with the
    usual military action, we could have a manganese crisis resulting in
    "emergency"~ ocean mining development, usually not the best way to do
    good engineering and protect the environment. Therefore, I don't share
    the joy that was expressed' in our case discussion because the pressures
    are off.
       The last conclusion that our group reached was the result of some
    severe prodding by Dr. Keil. John Craven spoke to "your movement toward

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    the sea" in his opening remarks. I encouraged the audience to express
    their opinions, without results. My conclusion is that the U.S. is not
    ready for a "marine industrial park." The major concern seemed to be
    that the new environmental legislation, the Clean Water Act, the Coastal
    Zone Management Act and so on, have not been shaken down to the point
    where this is a practical development.
      A fundamental problem is the combination of two frontier technologies
    where either one could be a disaster. In combination, there is sure to
    be a disaster. Not everybody agrees with that thesis, as there is a
    strong interest in Japan to combine ocean mining with ocean thermal
    energy conversion -- an opportunity, perhaps, as the two processes are
    technically complementary. The keystone of the Hawaiian interest in the
    nodule processing plant is the possibility of "free" geothermal energy.
    Again, this is combining two frontier technologies.
       The focus on public participation in our Forum case discussion came
    as close to zero as is possible. It was a good example of many cases of
    public participation. No one was concerned about it as a separate
    subject. The panelists and most of the people in the audience had been
    participating "publicly" to the extent that we couldn't understand why
    it was an issue.

       KEIL: If one doesn',,t worry about the individual constraints that
    exist at any time by regulation and so on, and asks what are technical
    opportunities with respect to manganese processing, you come to the
    conclusion which Jack described. If you combine a petrochemical plant,
    if you don't have other cheap energy, with a manganese nodule procesing
    plant, you get a fantastically efficient land use, you make substantial
    savings on energy and purchase of raw materials and transport, because
    you have a lot of things that are going back and forth between the two.
    And if you combine it with a port capability to bring the oil to the
    fossil fuel plant and hydrocarbon plant, you have an industrial complex.
      Now, we haven't thought about that very much in the United States,
    but if you look at the rest of the world, this is the way they are
    doing it, and it is very effective. When we look at the interface in
    seaward development between technical opportunities and policy-making
    and decision-making, one has to be aware of what the opportunities are,
    and what the benefits are from new ways of doing business.

    OBSERVATIONS ON CITIZEN PARTICIPATION

    Oliver Brooks

    I participated in George Tressel's informal discussion session on
    citizen participation. Although the panel plus audience comprised a
    small group, it was interesting that it represented a nice little
    vignette of the vagaries of public participation. If we can liken
    public particpation to a drama, it was very clear that some of the

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    people had come in during Act I; others had come in during Act III and
    missed Act I and II entirely; still others had been there for Act I,
    had gone out at the intermission and not returned until the midle of
    Act III. In short, like many public participatory efforts, the level
    of experience and the level of perceptions were very diverse and this
    made communication difficult.
       In addition, each person came in with his or her own particular
    agenda and tried to fit the discussion to the agenda rather than the
    reverse. This again is a problem which invariably arises in public
    participation.
       Now, let's turn to some more specific issues. We must concern
    ourselves with the question of whether public participation is a means
    to an end, or an end in itself. It was clear in the discussion that
    many of the people who were there were not there because of an interest
    in seaward development. For example, there was a very articulate
    consumer attorney whose interests seemed to be grocery store items and
    telecommunications schedules. To him public participation was an end in
    itself far more than it was a means to an end. It seems to me that in
    the relationship of citizen particiation to seaward development, we have
    to come to an understanding of its basic rationale. My instincts tell
    me that public participation must be looked on as a means to an end --
    that process, while important, should be viewed in a larger context:
    i.e., to encourage the development process while assuring an opportunity
    to impacted citizens to have their grievances aired.
       But if, as the Forum has purported to do, we intend to focus the
    debate on public participation, we should concentrate our attention on
    the character and the strategies of the process rather than upon the
    exact nature of the ultimate development decision. As one who listened
    with care to the SOHIO and LOOP discussions, I found myself listening to
    a great deal of data on hardware and project financing and relatively
    little about the nuances of public participation strategies and the
    identification of a widely diverse set of impacted citizens.
       It seems to me, as we use the term "public participation," its
    definition would appear to be much more in the eyes of the beholder than
    subject to a commonly accepted meaning. To the extent public
    participation was discussed in SOHIO and LOOP, it occurred to me that
    what we were talking about was not really public participation, but
    selective marketing. There is a vast difference between them.
       In the SOHIO discussion, the SOHIO vice president stated reflectively
    that, having been through myriad public hearings, having been involved
    in a process that is now four years old, SOHIO had not learned anything
    appreciable that it didn't know at the beginning of the pre-development
    stage. This was startling to me, because I am convinced that the
    process can contribute very markedly to the identification of new and
    unexpected impacts or other factors that might bear on a given decision.
    In the SOHIO case, I was asked to believe that the corporation's
    preliminary analysis was so omniscient as to have identified all the key
    factors in advance.
       Further -- and this was touched on very lightly -- one of the key

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    items of public participation in the SOHIIO case ---that is, a referendum
    vote in the City of Long Beach, the host community of the proposed oil
    discharge facility -- was accompanied by a vigorous campaign in which
    $15,000 was spent by the citizens group that was troubled by the
    environmental implications of the project, and 50 times 15, $750,000,
    was spent by SOHIO, the chief protagonist of the project. But we did
    not talk at all about the propriety of this kind of imbalance of
    resources on two sides of a legitimate issue. In the debate on citizen
    participation, we cannot overlook such problems.
      Mitigation and compensation, or to put it in more jargonese, side
    payments and trade-off s, have been discussed relatively little. And
    yet, these are items which address themselves to the impacts of a given
    project on citizens individually and collectively in a very sharp and
    very significant way. It seems to me they should be more central to a
    symposium of this kind.
       The transaction costs of public participation should be more central
    to the discussion. We know that both industry and government have a
    great deal more in the way of resources -- financial and technical -- in
    a development context than do affected citizens, either individually or
    collectively. How far is it reasonable to expect industry or government
    to make specific contributions -- technical or financial -- to help
    redress this imbalance in the interests of encouraging a more effective
    public participation process? Can this be looked upon as a legitimate
    cost of doing business on the one hand? Or is it just mindless
    financing of the opposition on the other? These issues are complex
    indeed, but I do feel they need far more attention.
       I have been struck repeatedly, and perhaps this is the nature of the
    cases with which we are dealing, that there has been relatively little
    reference to one of the key actors on the scene of seaward development
    -- the port authorities of the United States. I bring them up for one
    primary reason. By and large, port authorities are public agencies. By
    and large they are separate authorities. Authorities can be loosely
    described -- and someone may want to argue with me -- as a device to
    establish a public agency on a particular level that makes it as
    unresponsive to the democratic process as possible. While this may
    overstate the case, the comment is not without some relevance to the
    current conditions of life.
       Therefore, somehow we have to face up to the issue of bringing port
    authorities more directly into the mainstream of the democratic process,
    and, if public participation is going to be part of that democratic
    process, to find mechanisms under which port authorities (and this
    applies to some but not all) develop greater sensitivities to the public
    participatory process. Port authorities or port facilities are by and
    large located in urban communities. They are very Important elements in
    those urban communities, and when in fact, as has happened in many
    cities, those elements go to rack and ruin through disuse or declining
    economic usefulness, this has a ripple effect that adversely impacts the
    fabric of the entire urban community. The port cannot be looked upon as
    an autonomous and isolated segment of its urban environment.

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    GENERAL DISCUSSION

       ALFRED A. H. KEIL: I thought we should start with a request to raise
    questions, make comments, try to criticize or supplement some of the
    discussion or some of the summaries you have heard, not so much the
    individual cases, but the topics that were brought out.

       SHEPAR~D PERRIN, Panelist, Loop Case Study:  I am the Executive
    Director of the Louisiana Offshore Terminal Authority. My comment, Dr.
    Keil, came about because of the remark you made about "the act" being
    the Deepwater Port Act of 1974, passed by the U.S. Congress. There was
    such an act. The State of Louisiana had its own act, and there would
    have been no need for a federal act if we could have located the port
    within the 3-mile limit. There is a location within the 3 mile limit
    however, the base is mainly mud, and it would not sustain the
    facilities. So consequently,'it had to be located outside the 3-mile
    limit.
       We wanted an act just for the State of Louisiana. But as I mentioned
    in the panel yesterday, Texas wanted to get into the act, so to speak.
    So did Alabama and Mississippi, and there was a potential port on the
    east coast, so that created the need for a federal act, not conflict.

       ROSS VINCENT, Ecology Center of Louisiana: I would like to raise a
    couple of points. Both of them I guess are actually triggered by
    something Mr. Brooks said. He made the point that we need to decide
    whether public participation programs are to be viewed as a means to an
    end or as an end in themselves. I think it is important to understand
    that people in government agencies who 'have to try to design these
    programs almost have to view them in that way. The vast majority of the
    people who are going to be part of these programs, the people that I
    have to work with on a day-to-day basis, don't view these programs
    either as a means or an end. They view them as a right. They all took
    high school civics, and they were taught in those high school civics
    courses that they were the ultimate decision-rmakers in this country,
    that the institutions, the government and industrial institutions, were
    supposed to be responsive to their needs. When they see themselves
    confronted with a major institutional decision that affects their
    day-to-day existence, they see their direct participation in that
    decision as a right. That is an important thing for people trying to
    design these programs to understand.
       But it raises another question, too, and it is one that concerns me.
    I sense it as sort of an underlying tone here, and it is clearly a
    problem with a lot of people who work on a day-to-day basis in
    decision-making processes in administrative agencies. Because of the
    nature of the framework within which we operate and they operate, it is
    easy to begin to view the major decisions that are made as essentially
    technical decisions, and they are not; they are political decisions.

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    They involve all sorts of things that can't be quantified, that don't
    lend themselves to the kind of logic that tends to be applied in a lot
    of these decision-making processes. They involve people's aspirations
    for the future, they involve their perception of what the future in
    their communities ought to be like. In some cases, they have no bearing
    whatsoever on their perception of the national interest. People are
    going to continue to see their right to participate in decisions that
    affect their future in that light. It is critically important that the
    decision makers and the people involved in public participation programs
    understand that and accept it, because in the final analysis, what
    appears to be the best decision on the basis of the data may not be the
    proper decision.

      NORMAN LEAMS, Interior Department: I was very interested in Mr.
    Brooks' observation that many times there is a considerable discrepancy
    between the resources that are available to public interest groups and
    those that are available to the developer, and his further observation
    that it may be appropriate for the developer or the protagonist to
    rectify this imbalance.
       I would like some response from the panelists as to the advisabilty
    or the feasibility of dealing with this problem.

       BROOKS: In the case of hazardous substances which may be dealt with
    within the framework of seaward development -- for example, an existing
    or proposed LNG terminal -- I would personally argue for making it
    mandatory that the developer contribute a fund of X-amount of dollars
    which has to be used in a no-strings way to somehow create a competence
    among impacted residents nearby. This should be both a competence in
    articulation and in the understanding of technical problems. I am not
    sure I would be prepared to go so far as to say that this ought to apply
    to all types of development, but I think in the case of hazardous
    substances there are pressures, there are fears, both justified and
    unjustified, which somehow have to be ameliorated. I think this
    justifies some very special efforts to do so.

       KASH: I would make one comment on that. I share the general drive
    of your comments, but I think they are tied up with a point Jack Flipse
    made earlier. He said that the evolution of the manganese nodule
    development had resulted in a level of understanding and a substantive
    debate between environmentalists, the industry, and government.
       A key element in that process is having people representing different
    interests who can talk about the substance of the activity. I can think
    of two instances in which people who were tied up with the states or
    environmental interest groups over a period of time became at least
    fairly knowledgeable about the activities. As they became
    knowledgeable, the tenor of the debate changed to a debate over about
    how to do it, about making it safe, about adequate numbers of
    inspections.
       I just had a discussion in which some people were proposing that they

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    would oppose some activities the USGS was involved in. I was really
    amazed at the position that these people took, which was one of adamant
    opposition. After a period of time it became clear that there was very
    little understanding of the technical or substantive side of this; but
    the discussion got very intersting when they brought in an expert in
    whom they had confidence, and who was understandable to them. They were
    perfectly willing to change the debate to one on the details.
       Some colleagues and I wrote a book some years ago on OCS development.
    An attorney with one of the environmental interest groups came up to me
    one time and said, "Do you know that you are responsible for our not
    taking the Department of Interior to court to block a lease sale?" I
    said, "Why, no. I feel good about that. Was it the power of the
    argument, the insight of the analysis, the logic?" He said, "Oh, no,
    nothing of that kind. We read your description of a down-hole safety
    valve." I said, "My God, that is the industry's description." "But,"
    he said, "we believe you."
       That is a fairly important point, and it is one reason for having
    someone who is technically competent in every camp. That is a key
    element in this process, and if you are going to deal with it, probably
    some kind of support that allows you to pay for that competence is
    necessary.

       FLIPSE: May I add that that fund is available, and collected,
    painfully, from everyone regularly? The highlight is April 15th. That
    is where the money should come from.

       KASH: That is why I say I am not sure that I agree with his
    characterization of where it ought to come from.

       KEIL: I had mentioned yesterday the Georges Bank study which, by the
    way, had an impact at the time it was generated. It took us just as
    long to organize the funding for the study as it did to carry out the
    study. To get the money we were tempted to go to the protagonist for
    offshore oil development. We decided not to do that, because if we had,
    the study would not have been credible. We felt that it was better,
    therefore, to scrounge around and see where we could find it. Some came
    from the State of Massachusetts, some came from the New England Regional
    Council, and the Sea Grant program contributed the other third. It did,
    in essence, provide some information which then could be used by a broad
    spectrum to discuss the situation.

       MASSE: I would like to try to make two points at once. One is to
    illustrate what is written into the Deepwater Ports Act, and the other
    concerns what exists elsewhere today. The applicant for A deepwater
    port pays for the cost of the application. To show that he is in
    earnest with the application he presents a $100,000 check. The major
    item that it pays for is the environmental impact statement. And not
    only that, but the application itself 'has something called environmental
    assessment that is used to build the EIS. That is the Deepwater Ports

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    Act.
       But there is a requirement for an EIS -- and perhaps there are people
    from EPA who are more familiar with that than I am -- on any project
    that involves the federal government. It is my understanding that this
    is the technical focus of the project, explaining to everyone what is
    going on, the basis for the technical arguments. This is also the focal
    point, in the case of LOOP, of the public hearings. The draft
    environmental impact statement went down to Freeport and to New Orleans.
    We put it out, and then 30 days later we had a hearing. We said this is
    what we see as the impacts.
      Let me add that perhaps during the writing of the EIS is when we
    should make sure that all the inputs are aired.

       BROOKS: I disagree with that point, because often this public
    participation can be most valuable at the pre-application stage. The
    environmental impact statement assumes that an application has already
    been filed, that a project has been defined, And at this point you may
    have the hardening of positions, which will make life much more
    difficult. What I am looking at particularly is the pre-application
    stage, where a great deal of candid dialogue and trade-off s can take
    place.

       LEONARD MEEKER, Center For Law and Social Policy: I have just one
    further word on the financing of public participation. Not very much
    has been done about this yet. There are some opportunities which are
    highly available. One is in the form of regulations, which a few
    government agencies have adopted: NOAA is among them, the Department of
    Transportation on a trial basis, the Federal Power Commission, as it
    then was, and now the Federal Energy Regulatory Commission.
       Under those agency regulations, agencies have undertaken to provide
    financing specifically to public citizens groups for the purpose of
    enabling them to present their point of view, paying for their experts,
    and being a part of the agency deliberation process. I think this is a
    model which might be followed much more widely, and perhaps it will be
    in the future. If this Forum is to have some conclusions and some
    suggestions for the future, something in this area would certainly be
    appropriate.
       There has also been before the Congress some legislation sponsored by
    Senator Kennedy and Senator Mathias that would do exactly the same thing
    on a government-wide basis. It would provide for public financing of
    public participation in agency proceedings, and also in any court
    litigation that might come on afterward. That bill hasn't gotten very
    far in the Congress, and I think this points up the difficulty of making
    use of the public treasury for this purpose. But it is an idea that is
    there and needs further attention.
       I think I would agree with your implication, Mr. Chairman, that
    having the funding come from one of the interested parties such as an
    applicant for a license may be easier in some cases,, and yet it may not
    contribute to the result that we would want to see in the end, which is

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    a very wide and firm public confidence in the result.

       MIRIAM4 LEVERING, Ocean Education Project: Since 1972, 1 have had a
    little experience with public participation in regard to the Law of the
    Sea, a conference in which the manganese nodule problem is the major
    current stumbling block to an agreement that on other questions has
    really come a long way, considering all the difficulties there are in
    such a huge and complicated undertaking.
       As a public person, I guess we were viewed with great suspicion and
    maybe resentment by everybody. Certainly the secretariat, the officials
    of the conference, didn't want to be nagged at by little public interest
    know-nothings, from their standpoint.  Probably a great -many of the
    developing world people were suspicious of us because we were the United
    States, and maybe we were in the pockets of somebody or other.
       The companies certainly weren't interested in us because we were
    trying to make sure that the companies' interpretation of their own
    interest was not elided into the same thing as the interests of the
    global society, necessarily. But we finally found a technique of
    becoming more helpful, and that was to take some extremely technical and
    difficult, sticky issue in the conference, and to get together the best
    brains that we could find on the subject, with some of the delegates,
    many of whom feel somewhat inferior when confronted by enormous
    concentrations of brains and money. We simply would say this: "lie have
    a list of questions here that relate to this topic, and we are going to
    run down these questions. Just say what comes into your mind. The
    report that we are going to put out isn't going to mention anybody's
    name, and it is just going to say that one participant thought so-and-so
    might be helpful in solution to the problem, and another participant
    might think such-and-such."
       Well, the result of that is that we have relaxed everybody, and we
    have found that we have been able to come up with some good, helpful
    material. I suppose if it is true, as Jack Flipse has said, that
    expectations in the conference are down, which I hope is not true, maybe
    all of us have had some responsibility for that, certainly myself, and I
    think perhaps even the industry, for not taking a more problema.-solving
    approach.

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    REPORT ON CITIZEN PARTICIPATION WORKSHOP

    George W. Tressel, Leader
    Program Director, Public Understanding of Science.
    National Science Foundation

    The four case studies of this Forum vividly illustrate the problems of
    resource development in an increasingly confrontational environment.
    At the same time they display two sharply divergent views of the
    appropriate public role in this process.
      Most of the Forum participants are directly involved in ocean
    resource development as decision makers -- as developers, technologists,
    investors, regulators, et cetera. Because of this, they reflect a deep
    commitment to continuing development. They have long since resolved to
    their own satisfaction the questions of whether this development is
    important, necessary, urgent, and desirable. Generally, if subtly, they
    regard the potential intrusion of emotional and poorly informed citizens
    as a threat to an orderly, rational, and necessary decision process.
       In contrast to this view, many of the participants in the workshop on
    citizen participation view themselves as representatives of a
    fundamental public interest and right that is frequently ignored or
    treated in cavalier fashion. As such, they reflect a deep and growing
    division between the "two cultures" and a gnawing distrust of both the
    institutions and processes of decision-making. They do not tend to ask
    how resources can be developed or if the technology is adequate and
    economic. Rather, they tend to question the basic assumption that
    development is desirable at all, and with this to reject both
    authorities and the decision processes.
       During the Forum these two viewpoints appeared as separate and almost
    unrelated discussions,, addressing the same phenomenon from totally
    different value systems. Most of the case histories have presented the
    experience of developers who have faced the reality or potential of
    citizen participation as one of the problems of contemporary
    development. Very little was heard in these case histories from the
    citizen groups who are challenging and often obstructing such
    development. To this extent, the Forum is a subject of the same problem
    that it addressed, and it is appropriate to examine the views of the
    participants in the citizen workshop.
       Citizen participation (and obstruction) are symptoms of a growing
    public disaffection and skepticism regarding all forms of authority and
    government decision-making. Again and again, public opinion polls
    emphasize that most decision makers are held in low regard. And while
    science and technology continue to enjoy comparatively high esteem, it
    is inevitable that they are tarred with the same brush when the

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    activities are sufficiently large to become part of the political
    arena. Topics such as recombinant DNA, nuclear power safety, and ocean
    resource development have reached this level of popular attention and
    will increasingly be subject to the needs of political rather than
    technical developments.
       In earlier times such issues were treated as expert decisions, to be
    arrived at by knowledgeable elites within political parties and involved
    decision-making groups. Compromises, trade-off s and continuing
    disagreement on fundamental issues were accepted as part of the
    political process. But this is no longer true, and it is neither
    realistic nor effective to ignore the populist requirements of today's
    decision environment.
       As Alex Morin noted in our workshop, case histories tend to divorce
    the phenomenon of public participation from its political and social
    context as though it were an unfortunate obstacle to development.
    Instead, we must recognize that citizen participation is part of a
    populist trend that is now generally accepted, -not as a problem but as a
    right and an integral part of the decision process.
       Complicating this picture is the growing trend toward single-issue
    interest groups that form and lobby in a constantly changing pattern
    that responds to the fluctuating array of public issues. The form and
    number of such groups has grown enormously, and their views are a social
    and political fact of life that must be solicited, addressed, and
    weighed as an integral part of the decision process.
       They pose questions that are far deeper than the immediate issues of
    whether to build this platform or drill in this location. Instead, they
    tend to focus on more general questions: Shall we have nuclear power
    anywhere? Shall we harvest ocean oil at all? Such penetrating and
    categorical sentiments cannot simply be passed off as uninformed or
    obstructionist. The public is indeed uninformed and often does not
    understand either the reasons for development or the technical and
    economic ramifications. But like the shrewd old farmer who said "I
    ain't lost," the public is cautious, skeptical and not eager to be
    rushed. Increasingly, conflicting and confusing information, together
    with the ambiguities and consequences of technological development,
    force the public to rely on political judgments of whom they trust and
    whom they do not. It is not surprising that they are apprehensive.
       James Turner pointed to one statement by an industry spokesman who
    sees the ocean development issues in terms of "industry, which wants to
    produce . . . faced by the public which wants to stop production. . .and
    the government which is trying to arbitrate these two interests." While
    there is some truth to this description, it is a gross distortion and
    simplification of the fundamental questions and problems. Rather, most
    citizen groups believe that they are forcing all of us to pay attention
    to the basic questions: What kind of a society shall we have? How much
    development shall we have? What kinds of trade-of fs shall we make?
      Because these questions are so penetrating and so general, and
    because they are so often poorly articulated and distorted by the terms
    of the immediate issue, they are easily rejected or disparaged by

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    technologists and decision makers are too biased and preoccupied to
    consider such basic questions. And there is a growing public
    determination to be consulted and make the basic decisions for itself.
    The need and the reality of this determination constitute the
    fundamental consideration which we must satisfy. The real questions are
    not what to do about public input, but rather how to solicit, respond
    to, consider and weigh such input In a way that seriously and
    convincingly implies the public's control of its own destiny.
       Priscilla Newbury pointed to four factors that are necessary to such
    consideration and that citizen groups do not generally find adequately
    addressed.

       1. Public Understanding. The public is poorly informed and there is
    little more than token effort to change this. Public "education" is
    usually a poorly disguised euphemism for public persuasion. As long as
    this is true, it is difficult to address the popular concerns,, expect
    them to be well articulated, or to anticipate the instability that
    overnight turns a benign public to an attentive public and to a
    mobilized public.
       It is certainly possible to provide better, more reliable, more basic
    and balanced information at every level of understanding. And it should
    be possible to do this in an early and open manner that implies that the
    public is a partner in the use of its own environment. But too often.,
    government, industry, scientists, and developers feel that it is their
    right and privilege (if not moral duty) to enlighten and persuade the
    public to the "truth" rather than to provide balanced,- understandable
    information so that the public can reach its own conclusions. We need
    greater recognition of the need for public understanding and the
    societal responsibility for balanced, objective, and accurate
    information.
       2. Opportunity for participation. We have not yet developed
    adequate procedures for soliciting and airing public concerns and
    opinions. Furthermore, since public interest in such issues develops
    over a period of time, there is a need for both early and continuing
    participation as development plans mature. We have yet to develop
    adequate and consistent procedures to do this.
       3. Public confidence. We live in an atmosphere of public
    skepticism. Unless the public feels that its views are seriously
    desired, considered, and incorporated into the ultimate decisions, it
    will continue to regard hearings and public meetings with doubt and
    hostility. In an environment of single interest politics, some views
    are intransigent and the sincerity of decision makers is inevitably
    tried and tested at length. We must be prepared to accept the fact that
    processes and decisions that were once issues for private and technical
    resolution are now dedicated to the public and political arena.
       4. Appeal procedures. Both developers and citizens groups feel that
    the public "does not understand." Until we have established a more
    credible hierarchy of consideration and appeal, until both developers
    and citizen groups feel that their positions have been adequately

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    aired, understood, and weighed by the public, we will continue to face
    routine recourse to confrontation and the courts. This is an
    increasingly hostile and litigous society, but it is not clear that all
    such issues must be appealed in this manner.

       In sum, these four suggestions reflect a need for procedures that
    will more effectively incorporate public participation in the decision
    process, so that it can be more constructive than adversary. As Lois
    Sharpe emphasized, such a constructive environment cannot exist unless
    there is a background of agreement on a common body of knowledge and
    "facts," together with a mutual understanding of the value systems that
    underline competing views. And we are led again to the need for greater
    public "understanding."
       But it is not clear that this is enough. Paul Turner pointed to the
    costs of confrontation and noted that the real issues are not whether
    there should be citizen participation, but how there should be citizen
    participation, who should represent the public interest, and what is an
    acceptable response to diametrically opposite views. Is it possible to
    accommodate conflicting value systems in a manner that will ever be
    acceptable to both? Perhaps resolution of conflict with all of the
    attendant cost to society is an inevitable fact of our time.
       We have not yet resolved the conflicts and failings of elitist versus
    populist decision processes, and today the pendulum is still swinging
    toward the latter. It is so because there have been repeated
    demonstrations that spectacular technology is not always accompanied by
    spectacular judgment; the quest for profit is not always in the public
    interest; and major developments can generate major disasters. These
    are fundamental attributes of a technological society and not all of us
    are prepared to accept them until there has been a penetrating debate
    and a new consensus on who shall do what, and with which, and to whom.
    Until there is some such consensus and better procedures to reach it, we
    must expect to continue the costs of confrontation and litigation.
       It is unfortunate that this and similar meetings tend to focus on the
    intrusion of citizen groups rather than on how to overcome their
    weaknesses and incorporate their perspectives. Most activist groups are
    not simply uninformed intruders. More often than not they are generated
    by members of the science community who have exercised an informed and
    appropriate whistle blowing role when they felt that the system has
    ignored major issues. The more effective and persuasive of such
    advocates gather around themselves a group of disciples, perhaps less
    well-informed, and undertake an appeal to the public, which becomes a
    single interest lobby and results in the confrontations that have been
    described in so much of this Forum.
       The public, to which they appeal, is generally benign and poorly
    informed, but there is within it a portion that has been termed the
    "attentive public" and to some extent serves as the gatekeepers of
    public participation. If the particular issue is of sufficient personal
    appeal and consequence, there is a flow from the benign general public
    to the attentive public, and thence to the mobilized group, which may

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    ultimately wield enough power to frustrate a President or a utility.
       The process is unstable and costly to all involved, but it is
    necessary. Its dependence on appeal to the courts and a largely
    uninformed populace implies a rejection of representative government
    that is incongruous with the complexity of our society. But the
    failures of technology are sufficiently numerous to support the rituals
    that examine the needs and hazards and societal goals of major
    developments. Should they be so costly, cumbersome, and marginally
    effective?
       A significant number of government agencies are attempting to develop
    institutions that will consistently incorporate public views as part of
    the decision process. NEPA and the various consumer representation
    offices, the information transfer activities of the Office of Biological
    Services at the Fish and Wildlife Service, and the Science for Citizens
    Program of the National Science Foundation are all part of this effort.
    But the need for and adequacy of such mechanisms has yet to be widely
    accepted by either industry, government, or citizen advocates.
       We still face an imbalance where industry and federal agencies can
    devote millions of technical man-hours and millions of dollars to
    develop and marshal technical information in opposition to citizen
    groups that depend upon volunteer help and public domain statistics.
    Right or wrong, how reasonable is it to expect an individual, whether
    university professor, banker, or housewife, to make a significant
    penetrating case against such preponderant resources? In an environment
    where a major industry can simply buy most of the aerial surveys of
    Alaska, and thus remove them from the public domain, how democratic is
    the subsequent debate?
       Stuart Langton focused on this basic issue. The American electorate
    is increasingly disillusioned with the representative process and
    increasingly cynical about government decisions.  As the level of
    participation and representation erodes, so does the level of confidence
    in the results and the willingness to accept the consequences.
    Participation in elections has continued to decline. The number of
    people who participate in political parties is dropping. The power of
    political parties as consensus-building institutions is eroding. All
    are occurring in a period characterized by rapid social change and
    complex technological decisions. We face an overload of issues without
    mechanisms to meet the challenge.
       Bothdevelopers and activist groups have resorted to obstruction and
    the courts, with all of the costs and doubtful results that this
    implies. In such procedures there is no assurance that results will
    represent the public interest rather than some temporal and arbitrary
    balance of power. And whether the results are accepted by any
    particular group is simply a question of whether they have won the
    particular issue. Further complicating this issue we have not yet
    agreed on who is entitled to represent the "public interest." Industry
    would not relinquish this claim, government claims the role and
    constituency, and most special interest groups are self-appointed
    guardians of this holy grail.

                                      21 6

      Perhaps we must continue to see the waste of confrontation and the
    legal model before all of the participating institutions will come to
    agree that winning a single issue is less important than an orderly and
    consistent process of decision. Perhaps -we must experience both the
    problems of inadequate technology and the results of excessive technical
    zeal before the general public can appreciate and reconcile the issues
    of resource development.
       These are decisions that rightly belong to the public. The questions
    of whether we shall radically change parts of our environment, and
    whether we shall undertake risks of vast (if improbable) consequence are
    too important to be decided without public debate and assent. And the
    fact that the issues are technical., difficult to articulate, and posed
    in a series of local confrontations over seemingly local developments
    does not alter this.
       It is not easy to provide an enlightened public that is able to
    understand and weigh such far-reaching issues. So far the mechanisms
    for ensuring public participation in the decision processes have proven
    disruptive, delaying, and costly. The mechanisms that do not
    incorporate public views have produced Three Mile Island, a million
    dollar hole in the ground at Bodega Bay, and Torrey Canyon. So it is
    clear that we need a better process to provide public debate and assent,
    if not approval.
       But our efforts at developing such mechanisms are very preliminary,
    and our efforts at public education have been minimal at best. We need
    more such conferences, and they should be directed toward the questions
    of public education and of public influence on the decision process.
    How can we assure that the public has participated in and assented to
    the principal lines of future development?
       Most of these issues are not simply questions of sophistication.
    They are questions of value systems, which are not easily answered at
    any level of technical knowledge. In sum, this Forum, like the cases it
    dealt with, points to the need for continued debate addressed more
    directly to the political arena and to the decision process.

    GENERAL DISCUSSION

       KEIL: There is a strong national need for seaward development. It
    hasn't been stated that clearly and that concisely by the Executive
    Branch. This is one of the dilemmas which you have in looking at the
    various parts of the federal government, and dealing with individual
    pieces: there is no central thrust which says we should positively
    think about these developments. There also is a certain national
    posture which we envision for the United States, and for the United
    States versus the rest of the world, and in that context we must decide
    what we want to do. The cases studied in this Forum are illustrations
    of how cumbersome steps toward actual seaward development can be in the
    United States. I think there is no doubt about it.
       We now are in a competitive world. We are not in the era of 1948,
    where we were the technical leaders and the rest of the world was

                                       21 7

    struggling, whether they were the developing or the developed nations.
    We now are in a world where we are seeing intense developments in other
    countries and an upward, positive movement of industrial developments.
    All too often we see in our country a beginning stagnation in various
    areas for all kinds of reasons. The dollar is losing value, et cetera.
       In Norway, Great Britain, France, the Netherlands, Japan and a
    growing list of other countries we see a commitment by individuals and
    governments toward the development of ocean uses. A-ad not only a
    commitment, but also an intensity of pursuit which is of an unusually
    high degree. This is the framework in which we must look at U.S.
    developments, realizing that the capabilities we develop as we move
    toward seaward development are valuable on the international market.
    This is what the other countries have recognized, and they are doing it.
       With respect to industrial project developments and technology
    developments, there is another interesting dimension. I would like to
    refer you back to a comment which Russ O'Neill made about engineering,
    which I have translated into slightly different words. It is that the
    engineer used to deal with overcoming the technical constraints in
    developing a technical solution. He must continue to do that, because
    if he doesn't continue to do that, it won't work. But he also must now,
    in today's environment, make the solution work in the context of the
    societal constraints around him, and he has to learn to do that.
       This is in essence the whole topic of public participation which we
    are discussing. We must look at it not only from the standpoint of the
    local interest with respect to the benefits derived to the local
    community from a port, but we must also look at it from the standpoint
    of the national interest. That was a plea in several of the cases when
    they were discussed. Who is speaking up for the national interest? If
    we ask the federal government, no one speaks up on it. I think that is
    a very sad comment.

       CONRAD G. WELLING: I have been involved in oceans research and
    development for thirty years, ten in the military and twenty years in
    civilian industry. But I often look at the development and the
    tremendous amount of R&D going into ocean mining as just a step. Mining
    the manganese nodules offers an opportunity whereby we can develop the
    technology of economically mining the deep ocean floor, that is, 15,000
    feet deep. This would in fact open up new frontiers for this century
    and the next.
      We also know from work that has been done that there is a possibility
    of massive sulfide deposits in the deep ocean floor. Once we can
    develop the technology of economically bringing material up from the
    deep new frontiers would be opened. We would then say it is worthwhile
    to do further exploration, because once you have a technique for doing
    something, then you have an incentive to continue that work.
       I think this has been brought home to us by the space program. The
    real value of the space program Is not necessarily going to the moon.
    it was the path by which we have achieved advanced technology,
    particularly in communications, particularly in the microcircuits and so

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    forth. If the government is not going to open this frontier because of
    political reasons, we certainly need an environment by which industry
    can go ahead and develop a resource that will, again, have many unknown
    pay-off s in the future. The technology now is available to broaden our
    ability to exploit the deep ocean, which represents a tremendous surface
    area of the earth.

      B. H. BRITTIN: Let me make two observations. One has to do with the
    basic question of public participation and trying to find common grounds
    between different kinds of issues.
       I am inclined to think that it is almost impossible to arrive at
    common grounds. For fifteen years, in my personal experience, there has
    been a debate about Georges Bank. I think the fundamental reason for
    that debate is not because they ought to drill for oil there, or because
    there were foreign fishermen there at one time, but basically because
    the State of Massachsuetts is strongly inclined to try to get title of
    Georges Bank vis-a-vis the United States government. I haven't had the
    benefit of reading the research paper from MIT, but I suspect that it
    would be found that over these past fifteen years, the public, in open
    debate on Georges Bank and what should happen there and what should not
    happen there, has been very present indeed.
       It would seem to me that the question of where the Executive Branch
    of the government stands is simply this: There must be a point in time
    when a decision has to be made. We speak in terms of credibility or
    confidence in the Executive Branch, and I suspect part of the lack of
    confidence might well be in continuing to postpone decisions,
       Jack Flipse mentioned it in regard to deep seabed mining. He and his
    group took all the necessary steps and did everything just about right.
    But still, he is not, and the industry is not, mining at this time.
    Factors other than public participation come in here. I wonder also
    when we do have increased public participation -- and very obviously
    that is the trend -- what are we doing to ourselves competitively? If
    Country A has an idea to do something on the oceans, and we have the
    same idea at the same time, the odds are that Country A is going to get
    to it and do something about it before ourselves. So I wonder whether
    or not a function of time is not important here, as well as
    distinguishing between various issues, many of which are local in
    character. I don't think you can find too many common grounds.

       MILTON JOHNSON, National Oceanic and Atmospheric Administration: I
    am certainly impressed with the way the citizen interest is evolving,
    here, and how we are increasing the tempo of citizen participation. I
    wanted to emphasize, though, one element of this which I haven't heard
    much talk about. I believe that there are many ways that citizen
    participation can be increased through the work of professional
    societies. I happen to belong to the Narine Technology Society, and
    they not only encourage professionals to participate in their
    activities, but also citizens as well. Almost anybody could come in,
    depending on their interest.

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       I would also like to point out that one of these organizations, the
    American Oceanic Organization, just last spring here in Washington, with
    the cooperation of the Washington Waterfront Association, carried out a
    very successful citizen particiation activity known as Oceans Week.
    Many of you saw this wonderful outpouring of citizens during that week
    to learn more about ocean developments and what can be done out there in
    the great seas.

       TRESSEL: There is a real need if you are ever going to have peace
    and quiet in the pursuit of these things, if you are ever going to have
    a government that has a policy of seaward development, to have popular
    approval of or at least sanction of it. This requires popular
    education.
       Last year, for example, the National Sciences Foundation and NOAA had
    a project that had a lecture series on ocean resource development.  On
    the West Coast they had a direct audience of 55,000 people, mostly
    blue-collar workers coming to listen to the pros and cons, and a
    remarkably technical discussion of it. So there is a real interest
    there. But it does take money, and it takes'a substantial amount of
    commitment.

       JAN SMUTNY-JONES:  I would like to make a comment -- actually it is a
    note of caution -- regarding what is known as the national interest. We
    have gone through some very bleak historical situations in which
    decisions have been made in the national interest by some very talented,
    often brilliant and sometimes even well-meaning people. Some of these
    have been disasters.
       In looking at energy development -- and certainly I am getting this
    feeling sitting here today -- any development regarding energy somehow
    is viewed as in the national interest. I seriously question that. We
    have been under the gun in California now for two and a half years that
    the SOHIO project has some overwhelming national interest. It has never
    been explained to us what that national interest is, by anybody.
       So I would really caution against encouraging -- whether it is the
    Department of Transportation or the Department of Energy -- the
    establishment of a concept of national interest. It is very vague, and
    one that probably should only be used in times of war. It is actually
    that kind of issue.
                                                :
      DYER: I think that comment is a crucial one and that you will easily
    agree that the national government does not have a'patent or the sole
    rights to making stupid decisions. Sometimes that happens, too, with
    citizens groups. I think what we are really dealing with are complex
    issues that neither the federal government nor the citizens groups can
    fully appreciate entirely at the outset, at the planning stage of a
    project.
       Because we are not infallible on either side, or in any part of that
    triangle that was described a few days ago, we ought to be seeking
    mechanisms not so much for establishing positions that we will assert to

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    be right -- because I think we will fail in that process -- but rather
    to establish -mechanisms that allow us to-move forward, while at the same
    time allowing us to evaluate, or to accelerate, or to affirm, or stop,
    when in fact the evidence comes pouring in.
      My perspective of the situation is that this is in fact what the
    Forum ought to be talking about: the mechanisins for proceeding in spite
    of the uncertainties. With all the scientific talent, with all the
    managerial talent, with all the citizens groups, with all the
    well-meaning people in this country -- and I think we are all
    well-meaning -- I think we are bound to make some mistakes, because we
    just don't understand well enough to predict our complex world.

       JOSEPH GUSTAFERRO: I think it might be helpful to some of us in the
    government, since this Forum is being held in Washington, to have some
    discussion and perhaps evaluation of the mechanisms that the federal
    government has used in trying to get public participation. There are
    three or four that come to mind, I am sure, within the members of this
    audience and within the panel, and you could think of many more. When
    the President was first elected, as you recall, he enjoined citizens to
    write to the government and express their views on things. Although
    some of us were virtually innundated with entire schools that wrote
    letters to which we could not respond, this is a mechanism; whether or
    not it is a good one, I don't know.
       Later on the Department of Energy and FEA and the Department of
    Interior and other departments have had a tremendous number of hearings,
    all of which are announced, and which the public is invited to attend
    and to participate in whatever decision is of Importance. The
    Government Printing Office, the National Technological Service, and
    other publishing Institutions within the government endeavor to put out
    a tremendous number of books, reports, and so forth, to inform the
    public as to what is going on.

       EUGENE GRABBE: I would like to correct just one statement of our
    case leader, Jack Flipse, to the effect that Hawaii wants a manganese
    nodule plant. Headlines like that have appeared in our newsapers.
    However, I think we are in the position of Louisiana, of recognizing
    that the manganese nodule industry is an opportunity that may come to
    Hawaii once in a hundred years. So our approach has been to look at it
    and determine the benefits for Hawaii and the consequences. In the
    process of doing this over a number of years, I think we have created a
    climate in Hawaii that is receptive to the manganese nodule industry.I
    don't want anyone to go away with the impression that we are out selling
    ourselves.
       One thing that occurs to me is that in the case of Louisiana and
    Hawaii there seems to have been a focal point for information
    dissemination, and we use that rather than education, because people
    don't like to be told they are being educated.
       In our reports we always put in an executive summary which a
    thirteen-year-old can understand. 'By this mechanism we have succeeded

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    in obtaining state funding a-ad support for our studies. But when I hear
    such terms as "uncertainties," "complexities," "credibility," and so
    forth concerning SOHIO and Georges Bank, I wonder if it would help to
    have a focal point which could be the center for study or dissemination
    of information. Through the use of universities, consultants and so
    forth, would such a center not have credibility and be recognized as the
    overall authority that looks at all pros and cons?

      DYER: To some extent, and maybe to a large extent, we are observing
    a distrust in some of the institutions, particularly the established
    institutions in this country. One established institution is industry;
    another is government. Those who see in a proposed project the
    institutions at least describing it are somewhat distrustful.
       I think your suggestion is to establish an institution or recognize
    an institution to serve the needs of the other groups that have
    interests in this project, who may be impacted adversely. My concern
    for that, quite frankly, quite directly, is that the moment one
    institutionalizes that process is the moment it becomes suspect. And I
    don't have a way out.
      My own experience at MIT, for example, is that while we offered to do
    that, the moment we tried to institutionalize it is the moment that
    people begin to wonder about our motives in so doing. I tried to
    respond to your question by really putting another question before the
    group. It seems to me that the base issue is the mistrust in some of
    the institutions of the day, and that mistrust comes back to my point of
    a Few moments ago. Namely, there is a general inability to predict
    precisely the outcomes of some of the projects that we are dealing with
    today. This is not a new phenomenon really, but we haven't been called
    before the bar of evaluation as frequently as we have in recent times.
       I think we have to recognize that we do have that inability to
    predict, and if we do, perhaps there will again be some trust in our
    institutions. I am concerned with establishing institutions to serve
    the citizens groups.

       WILLIAM AHERN: The panel here today illustrates a number of the
    themes that Professor Keil used. You mentioned a cumbersome process.
    Well, the need for public participation and different interests being
    represented is also being pushed. I frequently see these things being
    pushed simultaneously. This is the tenth anniversary of the Santa
    Barbara oil spill. Right after that, of course, for any coastal
    development in California, people would come out from every community to
    oppose either ugly things or damaging things being built on the coast.
    The people created an agency, which did just what Professor Dyer just
    said happens. They institutionalized the Coastal Commission, created it
    themselves, and then when the legislature-made us a permanent state
    agency, the public participation has gone down precipitously with
    respect to coastal developments, because now there is an agency with a
    $10 million budget and a staff of 200 that has permanent authority, all
    of which is now part of Professor Keil's cumbersome process. However,

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    the successful public interest group is the dne that gets an agency
    created with staff and millions of dollars, and then once it is created,
    there are inevitably some who have to watchdog that agency and don't
    trust it, because naturally a bureaucracy with all its political
    pressures doesn't do what the public who supported it expected it to do.
    That is exactly what is going on now, and it sounded like it came out in
    a number of these cases.
      What I want to ask the case leaders is: A theme in all of these
    cases Is the incredibly cumbersome processes. LOOP involved 21
    Louisiana state agencies, and I don't know how many federal agencies.
    In the SOHIO project we saw the graphs of hundreds of permits required
    for these things from different agencies representing different special
    interests that used to be once-public interests, who managed to get an
    agency created to require a permit of anybody who wants to do anything.
    What I want to ask of the case team leaders is: In these cases, what
    public interests that you actually might call special interests were not
    represented in these proceedings by a government agency?

       FLIPSE: I was impressed with the intellect and thoroughness of a
    public interest person, the "~little old lady in tennis shoes," who
    lucidly made the point that small is beautiful and big is bad. When
    this subject came up today it was as poorly treated here as it was in
    our Forum session. Except for that intervention, all other discussion
    was institutionalized public opinion. The point was not pursued because
    of a strong acceptance of the national need for ocean mining.

       KEIL: Was that really an answer to the question you asked or didn't
    you really mean the participation in the whole process over the years?

       AHERN: I meant in the process. I understand there isn't a federal
    Deep Sea Mining Administration yet. I guess this hasn't been
    institutionalized all the way yet, but even now there seem to be a
    number of agencies involved. Yes, that was an answer.

       DYER: May I respond briefly for the Georges Bank case? It is my
    impression that the interests and needs of the citizens of the area were
    well-represented by the various state agencies that became interested in
    the Georges Bank question. However, I would say that up until just
    recently my gut feeling is that a vote would have yielded a mistrust for
    the way in which that representation was carried forward. At the same
    time, however, there seems to be a growing trust in the way things are
    going. I think all along there was adequate representation; early on
    mistrustful., and later on, I am guessing, more trustful.

       E. EDWARD BRUCE: Excuse me for making reference to some legal
    concepts, but I may be the only lawyer speaking here qua lawyer. There
    was a remark made by one of the members of the panel this morning that
    prompted some thoughts by me that might be of interest. It was observed
    that industry has from time to time gone to the courts to achieve its

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    ends. It would be naive to deny that. The present process of the
    so-called public interest law movement of using the courts for similiar
    purposes was compared to that.
      Really, that got me to thinking about what is, I would think, the
    most sustained and important era in our history, when industry did what
    was described. This was a time in the beginning, about the turn of the
    century -- it had its heyday, I would say, in the early thirties -- when
    repeatedly industry or industry groups went to the courts urging such
    concepts as "freedom of contract," "substantive due process," and other
    similarly vague terms, in order to obtain the court's assistance which,
    by and large, industry got, in rolling back governmental programs,
    stopping them in their tracks and invalidating governmental programs
    that industry didn't like, programs that we now think of as progressive
    social legislation -- minimum wage, maximum hours, regulation of various
    forms of commerce.
       Industry was able to do that because the dynamic of the judicial
    process is such that the people serving on the courts who respond to the
    arguments are ones whose education and background were shaped twenty or
    thirty years earlier than the issues that they finally adjudicate when
    they come to them. That is the nature of the federal and state
    judiciaries. They consisted in those days exclusively of men, and
    nowadays some women but not very many, who are in their fifties and
    sixties, reflecting their earlier training and outlooks.
       Contrast that with what we call the "public interest law movement."
    There, too, you have a very organized group of highly sophisticated
    people who can utilize the legal system to obtain relief from it, not
    under constitutional concepts, but under concepts of "where lies the
    public interest," and other such concepts that are as vague as the
    freedom of contract doctrine, or the substantive due process doctrine
    that was articulated under the Constitution. And there, too, what you
    have is a forum for somebody who has one system of values that seems to
    conflict with the system or the set of results that a government process
    is spinning out, and is intent on using the judicial process to stop the
    governmental process.
       I am reaching here for rather broad analogies, but I do it for a
    purpose, and that is to suggest the perhaps very fragile basis upon
    which this entire citizen participatory movement rests. The industrial
    effort that I have described was reversed in a few years when the
    Supreme Court' s personnel was changed through the appointing power of
    Franklin Roosevelt, and when modern philosophy caught up with the
    members of the judiciary. The whole doctrine was abandoned, and it was
    just a total land shift in terms of the relationship between the
    judiciary and the legislature.
       I am not predicting that that is going to happen tomorrow with
    respect to citizen participation, but I would suggest that if one gets
    to the bottom of the concepts that the judiciary is relying upon, and
    that in turn the citizen participatory effort has to rely upon, one will
    find that there are questions as to their doctrinal roots that are just
    as serious as those that underlay this earlier industrial effort.

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       RUSSELL WAYLAND: I will make a brief comment. I am coming up to a
    point that was made by Ira Dyer some time back when he was summarizing
    for his panel and pointed out that regulations are based two different
    ways: one is on the objectives to be achieved, and the other is on
    standards.
       My observation is that whereas I agree with him, or I think I do,
    that the achieving-objectives way of writing regulations is probably the
    better, that is not the trend. Twenty years of looking at regulating
    changes in trends applicable to industry operations, where they have
    federal or Indian leases, shows me that increasingly we are putting
    standards into the regulations at low levels, and they get written up to
    higher levels, and to some degree they even get into legislation, so
    that we have a tendency to freeze regulations. This is part of our
    problem with not only using our own innovative technology, but it is
    another reason why I think other countries are free to do some things
    that we are not.

       MEEKER: I would like to come back to Mr. Bruce's analogy for a
    moment because it is a provoking one. He was suggesting that when the
    nine old men in the twenties and thirties invalidated a good deal of
    state and sometimes federal legislation, they were essentially an
    anachronism, and that this anachronistic process is perhaps being
    repeated today in citizen participation and in the efforts of
    environmental organization.
       I don't believe the analogy really holds. If you look back to the
    earlier period when constitutional attacks were being made on state and
    sometimes congressional legislation, those attacks were based on
    relatively novel theories about certain parts of the Constitution. I
    think it is quite true, as Mr. Bruce has indicated, that the attacks
    were successful because they did indeed appeal to a majority of the
    justices who had experience in private practice and as the counsel for
    rather large business interests.
       Let's look for a moment, though, at what is involved in the
    environmental cases where public participation has been a feature. Here
    I think the situation is different, because what is happening is not
    that the public and citizen groups are asking the courts to overturn
    recent legislation which reflects the more modern perceptions about the
    way the society is best organized. That is not what is happening. I
    think what has really been happening is that the citizen groups have
    been coming to the courts and saying, "We and others persuaded Congress,
    and we persuaded some state legislatures, to enact some new legislation,
    giving effect to some ideas about the quality of living, which we and
    other people thought had some importance. The legislatures in question
    and the Congress did in fact enact those laws. Now what is happening is
    we are not satisfied with the way some of the governmental agencies are
    applying the laws in question. And we challenge this action not on the
    ground that some novel constitutional doctrine invalidates it, but
    because it is not faithful to the intent and the purpose of this very
    recent and up-to-date environmental legislation."

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       1 don't really think the analogy holds.

       FLIPSE: Not being a lawyer, I will try to do this very briefly.
    There are two or three other subtle points of law that were passed over,
    and I think it would be a mistake not to bring them out. Mr. Brittin
    put his thumb on the real Georges Bank issue, and since ocean mining of
    manganese nodules started before the Maine vs. U.S. decision, believe it
    or -not, we actually negotiated with states who had never given to the
    federal government their right to develop the offshore area beyond three
    miles. Our legal advice was that we should negotiate with the state
    because we would be mining under state laws, but there was no chance, in
    terms of constitutional law, that Maine would be defeated. On the other
    hand, anyone who was close to Washington realized that although "the
    law" was in Maine's favor, the government court would rule otherwise,
    which happened.
       I would like to respond to the unnamed lady who commented that the
    real issue of the Law of the Sea argument is the new economic order. It
    is not mining manganese nodules; it is the redistribution of wealth, the
    redressing of old injuries, so it is actually a superb analogy to the
    Georges Bank case and Maine vs. U.S. Anyone who thinks that the Law of
    the Sea debate on manganese nodule mining is a matter of the merit of
    the mining is as deceived as those who believe that the Georges Bank
    debate is oil versus fish.

    .. " .

    PANT

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                                       INTRODUCTION

                                       Alfred A. E. Keil
                                       Co-Chairman

    If we look at seaward development for the United States, the four cases
    chosen for the Forum have something in common. They especially show
    that the process toward actual development is long and slow. This is a
    common element that we must recognize and deal with as we talk about
    policy alternatives.
       Now, to broaden our perspective, let's look at seaward development in
    other countries. For example, the development in Norway is particularly
    interesting, because ten or twelve years ago Norwegians had just begun
    to think about how to get to their oil fields. Now they have
    established a strong and aggressive offshore industry. They are
    building oil drilling rigs and selling them all over the world. They
    sold some to the Soviet Union. They also sell oil exploration ships,
    and they are eager to get even deeper into the international market with
    the technology they have developed in a period of twelve years.
       If you look at Great Britain., there is similar development with
    respect to the North Sea oil. There is an emphasis on moving to the
    next step in offshore technology, going to deeper and deeper wells,
    deepsea completions, and corresponding support requirements. The U.K.
    Minister of Energy has indicated that by the late 1980's Britain clearly
    would have the tools the United States would need to go after its deep
    oil resources.
       In France there is a Center for the Exploitation of the Oceans, which
    is systematically pushing the development of offshore oil, manganese
    nodules, and other resources. It is a federal agency; I don't know
    whether it has industrial sponsorship or not, but its goal is to
    establish a technological base on which the country can build its future
    strength.
      As far as Japan is concerned, all of you are aware of how aggressive
    the Japanese developments are., not only with respect to the ocean, but

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    altogether.
       These recent accomplishments and ongoing developments in ocean
    technology and ocean uses by foreign industrialized nations., as well as
    statements by their government and industrial leaders, illustrate not
    only the scope of their commitment to expand ocean uses and develop
    ocean technology, but also the intensity with which they are pursuing
    these goals.
       Now, in discussing policy alternatives, we must look at the present
    pattern of United States development in the context of both the
    development in other countries and our own national aspirations and
    needs. Here, I think, we must include our desire for the kind of
    international role that we want to play in the long run. We can't play
    that role without having the necessary internal strength, industrially,
    economically, and otherwise. We must keep in mind the trade deficit,
    the shrinking dollar, and so forth.
       In discussing policy alternatives, we must also realize that the
    pursuit of new seaward developments and related technology does more
    than accomplish the specific pursuit. These efforts also develop the
    base for new opportunities in the long run.
       We must also keep in mind that we see a number of tendencies. I
    speak now not as the panel chairman, but as an individual. The branches
    of the executive part of the government tend more and more to act
    independently and with primary concern for their own prerogatives, while
    seaward developments cut across many departments and agencies. The
    states are also beginning to act more independently, and sometimes I
    personally have the feeling that together they act more like the United
    Nations than the United States. It is easy to say `Nyet, Nyet, Nyet,"
    but in the end, we are all in it together as a country.
       Last, but not least, I must say that I think that the Executive
    Branch has not really taken the leadership in the national issue of
    seaward development.
       In the discussion of policy alternatives we must face the
    decision-making process itself , because that is at the heart of the
    whole operation -- the decision-making process by the industrial
    developer, the states, the federal government, and the various groups or
    individuals that participate.

                                       231

                                       E. C. BROUN, JR.

                                       Pre sident
                                       Petroleum Services Group
                                       Dresser Industries, Incorporated

    I am from Houston, Texas, and am with Dresser Industries, which is a
    multinational energy service company. I am a petroleum engineer, and
    have worked in the oil and gas energy production and service industry
    for some thirty years. I would like to point out that neither I myself
    nor my company owns or produces a drop of oil or a cubic foot of gas.
       As we were instructed not to have a prepared statement, I don't have
    one, but I do have some observations from the last couple of days of the
    Forum. First, Mike Naess' triangle is really a quadrangle, with the
    three entities that he mentioned -- the federal government, the public,
    and industry -- now joined by state and local governments. We have
    certainly seen evidence of that In this Forum. There is LOOP, in which
    a project has come into being with all four members of the quadrangle
    participating; there is Seadock in Texas, which was not completed by
    industry, with the same four members of the quadrangle. There also is
    the SOHIO at Long Beach project. While I didn't attend the SOHIO
    discussion, I did pick up the project analysis, which involved a
    staggering number of state, county, and local agencies.
       Second, Don Kash said that we have progressive levels of ignorance,
    and I have to agree with him. But there is one part I'd like to
    straighten out: The oil and gas production and energy service industry
    are educated. We have been educated the hard way in the past ten years.
    Politically we have been educated by the depletion allowance
    legislation; by the energy bill of 1976 and the recent energy bill of
    1978, which extended price controls for gas production; by the OCS Lands
    Act Amendment, which furthered the regulations by which we are governed;
    and by the Corps of Engineers, the Coast Guard, the DOT and the EPA,
    OSHA, NOAA, and so forth.
      And we have been educated environmentally. Two outstanding examples
    are the Alyeska pipeline, to which environmentalists added five years

                                       232

    and $7 billion in costs, and the Santa Ynez oil field in the Santa
    Barbara Channel, to which citizens of Santa Barbara added some eight to
    ten years and $4 billion in development costs. When you get those kinds
    of impacts, you get educated.
      We know what can be done to industry by government and the
    environmental groups. But industry hasn't reciprocally educated the
    other entities. We haven't educated the government segments, the
    public, or the environmental groups. I have some examples of that.
       I have had two experiences in public participation groups. One was
    the Industry Advisory Group of the Texas Legislative Committee on
    Oceanography, on which I served in 1970 and 1971.   Most recently I
    served for two years on the Ocean Advisory Panel of the Office of
    Technology Assessment with Bill Menard and Don Kash, Director and
    Assistant Director of USGS, and David Bardine, Deputy Secretary of the
    Department of Energy in Charge of the Economic Regulatory
    Administration.
       An example of our failure to educate these entities is the lack of
    impact of an assessment published from the work of the Ocean Advisory
    Panel. This assessment was issued by the Office of Technology
    Assessment in November 1976 on offshore oil and gas systems. It says:
    "Oil and natural gas can be produced in the amounts presently projected
    off the mid-Atlantic coast without significant damage to the environment
    or disruption of patterns of life in New Jersey or Delaware if
    operations are carefully designed, planned, and monitored." Despite
    this assessment, we have had to fight continued environmental opposition
    to this vitally needed resource development.
       Another example of how we have not educated the public is the outcome
    of a survey of young adults across the country, ages 26 to 35. The
    survey was conducted by the National Center for Education Statistics of
    the U. S. Department of Health, Education and Welfare. Some of its
    findings astounded me. Only 20 to 39 percent of the young adults
    queried knew that the United States, with approximately 6 percent of the
    world's people, consumes 30 percent of the total energy consumed on
    earth in a year; that crude oil now provides the largest percentage of
    energy used in the United States; that from 30 to 60 percent of all the
    oil consumed in the United States is imported. Sixty percent of the
    young adults knew that during the decade 1960 to 1970, the rate of
    growth of oil use was greater than the rate of population growth.
       In the part of the survey that requested input as to their
    preferences for energy sources, 66.4 percent of the respondents
    preferred large windmills; 59.3 percent preferred large solar energy
    collectors; 33.8 percent preferred dams with hydroelectric plants; and
    21.1 percent preferred geothermal power plants. Oil and gas are not
    even on the list. Now, you would have to say that we have done a bad
    job of educating the younger segment of our society.
       I am going to read you some statistical facts, published in Ocean
    Industry Magazine in January, 1976:

         The energy produced by one 24-well platform with an average daily

                                       233

         production of 12,000 barrels is equal to each of these sources of
         energy: one 1,000 megawatt nuclear plant of largest optimum size;
         36 square miles of solar panels (that is, about two-thirds of the
         size of Washington, D. C.); 6,000 to 10,000 windmills (each about
         100 feet in diameter); and about 80 percent of the output of the
         Hoover Dam.

    That article goes on to say:

         If the United States hopes to achieve self-sufficiency in energy by
         the year 2000, we would need to find ten more Prudhoe Bays or four
         more states of Texas, and have them produce at full capacity. We
         would have to ban all new cars larger than 40 horsepower. We would
         have to force a 20 percent improvement in building heating systems;
         a 15 percent improvement in the energy efficiency by industry; a 15
         percent improvement in the efficiency of converting electrical
         power; and we would have to develop all offshore oil and gas
         reserves as far out as the Outer Continental Shelves of both the
         east and west coasts; increase coal production 270 percent; convert
         all of California, Montana and Idaho to geothermal steam electric
         power; double the present rate of hydroelectric power generation;
         produce 2 million barrels a day of shale oil; and add one
         conventional nuclear power plant every three weeks from now to
         1985. All1 that, just to meet the projected energy demands of this
         country by the year 2000.

       I think those facts give us some pretty clear mandates. We had
    better stop debating and do something. lie have heard a lot about the
    faults of our government, and it does have faults. I happen to think,
    though, that it is the best system and preferable to that of any other
    country in the world.
       I think that in this educational process the government is the
    logical entity to serve as a focal point. Dr. Lyle St. Amant pointed
    of the LOOP came into being principally because they had 30 years of
    experience in making mistakes. But the people in that part of the
    country were willing to benefit by learning, and they were willing to
    communicate with one another in the quadrangle. I hope it doesn't take
    us that long to develop the Georges Bank and whatever other resources we
    have.

                                      234

                                      JAMES W7. CURLIN

                                      Deputy Assistant Secretary for Policy
                                      Office of Ocean, Resource and
                                      Scientific Policy Coordination
                                      Department of Commerce

    Having listened to Ned's litany of where we are and where we must go in
    terms of energy production, the most frightening thing to me, having
    attended Louisiana State University for training, was the prospect of
    having to create four states of Texas and of multiplying the number of
    Texans by four. There is nothing more awesome.
      Let me share with you the experience that I have had for the last 18
    months in dealing with what is called ocean policy. I think that we are
    talking in general about the policy process. In Dr. Keil's
    introduction, he pointed to the inefficiency in the execution of policy
    by the Executive Branch. We have just heard a plea from industry that
    we must get our act together in the Executive Branch and do a better
    job.
       This ties in very well with the findings of a study that we have just
    completed at the Department of Commerce. We looked at the breadth and
    depth of "U.S. ocean policy," which is manifest in about 350 different
    provisions in the U.S. Code. Each of these provisions creates a
    function, requires a license, or provides an authority to impact the
    affairs of the public, industry, the economy, and the nation through
    governmental processes. This is the codification of our ocean policy.
    If one looks at ocean policy in terms of the laws that have evolved,
    which are the framework for governmental activities, you discover that
    most of the policy has been created within the past ten years. You also
    discover that the character of the laws that form this framework, which
    were largely the initiatives of the Congress, have been handed to the
    Executive Branch for implementation, with little enthusiasm from the
    Executive Branch itself. Furthermore, most of these statutes are
    essentially environmental and conservationist in nature, because they
    reflect that era in which we became very concerned about the things that
    were happening to the environment as a result of development.

                                      235

       To point that up, let's just tick through a few of these laws,
    beginning with the National Environmental Policy Act (NEPA) in 1969.
    This is the umbrella legislation with which we are all acquainted. The
    Coastal Zone Management Act is from the same era.  The Federal Water
    Pollution Control Act Amendments, the Marine Mammal Protection Act, the
    Ports and Waterways Safety Act, the Ocean Dumping Act, the Fishery
    Conservation and Management Act, the Water Quality Act of 1977, the OCS
    Land Act Amendments -- invariably, these have some kind of resource
    allocation, environmental protection, or conservation theme embodied in
    them.
       These laws were delivered to the Executive Branch for implementation.
    During that same period, there was either a reluctance because of
    budgetary limitations or a lack of will to structure the government to
    effectively implement these laws. So we find ourselves now substituting
    ad hoc measures, including public participation, to improve the decision
    process. There is little doubt that public participation must and will
    continue to play an important role in this entire area of public
    administration.
       Each of the laws I mentioned was essentially single-purpose. Each
    of them approached a specific problem. And each dealt with actions on a
    case-by-case basis, just as we broke out the cases in this Forum. Each
    individual action is still treated as a single case.
      Yet, what we are dealing with in this area of seaward development is
    a region that the United States has roped off, rightfully or wrongfully
    -- depending on where you are in terms of international perspectives --
    the margin of the ocean around the coast of the United States, out to
    200 miles with regard to fisheries. The OCS sometimes extends beyond
    that limit, and it sometimes falls short of it.   But by international
    accord, we have control over those minerals on and in the seabed.
       We of course still permit navigation rights on the surface under
    international law; but with regard to the management of resources, we
    have roped off and claimed for the United States through various means
    of essentially legal fictions an area equal to two-thirds of the entire
    50 states of the United States. Two-thirds! However, we have
    established neither a management concept, a structural concept for
    government, a commitment, a goal, nor an objective for the utilization
    of these resources in a responsible way.
       Why haven't we done this? The United States has established an
    integrated philosophy of management for other public resources. We have
    done it in the case of the national forestlands, the national resource
    lands administered by the Bureau of Land Management, and the national
    parks. But we have failed to establish a similar framework for the
    ocean area. I have chosen to focus on this discussion on the lack of
    capacity in the government to consider the ocean region as a whole in
    the context of seaward development.
       No single agency, indeed, no agency at all, has the responsibility
    for looking at the actions and activities in that total region in terms
    of alternatives or futures of the resources, the national interest in
    developing those resources, the goals for developing them, or concern

                                       236

    for protecting the marine environment as a whole.   We continue to do
    our business on a case-by-case basis, with little concern about how the
    SOHIO pipeline interacts with the development of Georges Bank on the
    other side of the United States.
       In my view, we lack an adequate national focus with regard to the
    public resources of the ocean. We lack a national planning capability.
    We can easily co-opt future opportunities by the decisions made today
    through a lack of understanding of the implications of those decisions
    for the future.
       Further, I have concluded, after going through the analysis of U.S.
    ocean policy, that although we have provided a framework for a national
    ocean protection and conservation program, until we match that with a
    national ocean developmental policy so that all of the players know the
    rules of the game -- so that industry knows how the game is being played
    and the public knows how it is being played vis-a-vis the objectives of
    government  -- we have only "half-a-horse."   Without a real policy, we
    will continue to have the confrontation that we see in the case-by-case,
    inch-by-inch, random-walk-through-life attitude with regard to the
    development and protection of ocean resources. Therefore, I suggest
    that we have to develop a national scheme to identify where we are
    going.
       Where does that bring us? What is the integrating theme? I think we
    talk in terms of a concept that is well bred in public land
    administration -- that of balanced "resource management." Management
    has bad connotations as well as good ones. It is not a subversive
    scheme to take over and control the destiny of mankind. What it imparts
    to me, given my background, is this: One must identify the management
    objectives; analyze the best information available, including
    scientific, political and social; provide a framework for decisions and
    administrative processes; and provide for public input in a reasonable,
    rational scheme. I was under the impression that this is the role of
    government, but I find this notion to be somewhat of an abstraction,
    based on my current experience in the Executive Branch.
       Thus, I think if there is a message that reads through, it is that we
    must begin treating our ocean resources like our public land resources.
    We have put the world on notice that we consider the ocean resources in
    the marginal ocean around the U.S. to be under our national stewardship.
    These resources being our responsibility, we have a significant stake in
    the ocean as a nation, and must not only protect these resources, but
    plan for their wisest possible use.
       After sitting here for the last couple of days dealing with the
    specific cases of ocean use, I find myself reinforcing my earlier
    conclusions, but I see the problems even more clearly as a result of
    this Forum.

                                       237

                                       LEONAR~D C. MEEKER

                                       Attorney at Law
                                       Center for Law and Social Policy

    I am a lawyer with a public interest law firm here in Washington, the
    Center for Law and Social Policy, which in fact was the group that
    represented the plaintiffs in the Alyeska pipeline case that Ned Broun
    has mentioned. We have also represented environmental organizations in
    various other matters.
       The questions and the choices about seaward development of course
    involve some technical issues, and those are important. But the more
    fundamental issues -- and I think the ones that need to concern us most
    -- are the political decisions implicated in seaward development. They
    are decisions about the way we want to use our resources and the
    standard of living, the quality of life we want to have, and the kind of
    society.
      We have seen from the cases discussed here yesterday that the answers
    to the political questions have differed a great deal. They have
    differed according to area. In the Gulf of Mexico, particularly in
    regard to the deepwater ports, resolving the political issues in oil and
    gas development has not been nearly so difficult as it was, for
    instance, in New England or California.
       One feature of the current situation which seems central is that for
    the first time in U.S. history we are at a point where the resources are
    not so plentiful that we need not think about them a great deal. We do
    have to manage the resources that we control.
      With respect to oil and gas there is a case of special urgency,
    simply because the supplies are not limitless and the prices of the
    imported commodities have gone up enormously. We have needs in the
    United States which are very substantial. What we do not have, and what
    I think contributes to the confusion and to the lack of rational
    comprehensive action, is a national energy plan, a plan which would tell
    us, after careful thought, how much energy the country is going to use

                                      238

    during a predictable period of time and where the sources of the energy
    are to be found. How much in the way of conservation is the country to
    undertake? How much in the way of new supply is to be opened up? Where
    is it coining from? I think the lack of such a plan, plus disagreement
    on the part of many different factions as to how to put one together, is
    a real problem for the country. Until a plan is elaborated, debated,
    and settled upon, subject of course to revision from time to time, we
    are going to have big problems.
    Any plan needs to include a process for its implementation. We have
    heard already about the distrust of government, both federal and state.
    This is a reality. And in part, public participation is designed to
    cope with it.
       I think public participation can also do some other things. It can
    contribute to an illumination of the impacts of particular decisions.
    An involved public can also insist on real scrutiny of what industry and
    the government are doing in a given area. Public participation can
    certainly serve groups who have views that they want to put forward.
       Finally -- and this may even be most important function of public
    participation -- the process can be highly educational to the public,
    educational in the sense of bringing people to better understand the
    problems, the choices, and the facts and to know what the rational
    solutions are, given a choice of values, which I think do have to be
    established in a national policy.
       Now, as I have said, I think oil and gas is a case of special
    urgency, which is not to say that we can relax in regard to other
    aspects of seaward development. Deepsea mining may seem less urgent
    today, but it ought not to be neglected. The deepwater port of f
    Louisiana proved to be a relatively easy undertaking in terms of
    agreement among all factions.   But that doesn't mean that problems
    concerning development of other deepwater ports are necessarily going to
    be disposed of so easily and with so much agreement.
       As to seaward development in general, I think there are a whole
    series of questions that need to be asked. John Craven spoke
    enthusiastically in support of such development. I think before the
    country can accept his fundamental thesis, some questions need to be
    answered. They include the following: Suppose you do have co-location
    of different industrial activities for the sake of efficiency. Does
    this mean that marine industrial parks are going to be more
    energy-efficient and economic than they would be on land? Does it mean
    that they are going to be environmentally more acceptable? I think
    those questions haven't really been addressed. In fact, there needs to
    be a national study to try to produce some answers.
       How do you undertake such a study? Well, some private studies 'have
    been done, very good ones, including the Ford Energy Policy Project. But
    good as it was, it hasn't given us a national energy policy. Congress
    conceivably could commission a study, take the results of it, and
    legislate a national policy. One wonders about the real likelihood of
    accomplishing that, simply because of the enormous difficulties and
    complexities of the legislative process.

                                       239

      My own belief is that the Executive Branch really has to take the
    initiative. It must appoint a commission and arrange for the Department
    of Energy to undertake a study. There are various mechanisms that could
    be employed. But we need to produce a study with some conclusions as to
    what seaward development is desirable, what its impacts would be, and
    then propose a course of action.
       Now, to say that we should have a national policy on seaward
    development or a national energy policy doesn't mean an unchanging
    policy; it means establishing a basis on which action can be taken until
    further research indicates a different or modified course of action. In
    the process of producing policy, not only are all sorts of expertise
    needed, but also a lot of public input.

                                      240

                                      ERIC E. VAN LOON

                                      Assistant Secretary of Environmental
                                      Affairs
                                      Director, Coastal Zone Management
                                      Program
                                      Commonwealth of Massachusetts

    In addition to my position with the State of Massachusetts, I also wear
    what is sometimes regarded as the ominous hat of a lawyer. I was in the
    middle of the Georges Bank litigation representing the Commonwealth, and
    therefore on the opposite side from Mr. Bruce, who spoke to you earlier.
       For the panel, I would like to briefly share three points of view:
    one on behalf of Massachusetts, to round out the record; another as a
    lawyer on legal history and the implications of it for citizen
    participation, because I do disagree with Ed Bruce's view; and finally,
    some overall thoughts on our primary issue of public participation.
       First, a word in regard to Massachusetts and the Georges Bank
    litigation. While I don't want to dwell on this at length, I did hear
    the statement several times this morning that it was a profound
    misunderstanding not to realize that that controversy essentially
    concerned an attempt by one state to own, control, and dominate Georges
    Bank. I wish to report from my point of view that that is a profound
    misunderstanding, or at very best, an out-of-date analysis of the
    conflict. At no time during the public involvement, and also not in any
    of the very lengthy internal discussions that I participated in, was
    anything of that nature ever even hinted at.
       Instead, the recent round of litigation activities has been focused
    primarily on the question that Jim Curlin posed a couple of moments ago.
    I share his feelings intensely. Looking toward ocean development, many
    in Massachusetts felt that a way was needed to bring together a coherent
    administration of the OCS Lands Act, the 200-mile fishing law, the
    Coastal Zone Management Law, and the Amendments to the OCS Lands Act
    which were then pending before Congress. This need, rather than any
    assertion of state ownership or control or takeover, was really the
    issue.
       If such a thing as our national interest or national consensus exists

                                       241

    with regard to ocean development, perhaps the easiest way to define it
    is in terms of what Congress at any given point formulates as national
    policy.  The situation in Massachusetts a year ago, when Lease Sale 42
    for Georges Bank was proposed, was that the first substantial amendments
    in twenty years to the OCS Lands Act were before Congress. Previously,
    similar amendments had passed Congress, and the newest version contained
    environmental safeguards which, if adopted by Congress, would have
    applied to all future lease sales everywhere in the United States.
    Legally, it was clear that if the Georges Bank sale took place before
    the amendments became law, those safeguards could not apply
    retroactively to Georges Bank. For this reason, the thrust of the
    litigation was a holding or postponement action.
       With those safeguards now passed by Congress, I think (at least from
    the viewpoint of the State of Massachusetts) that development will go
    forward. Presumably the new safeguards will be in place and spelled
    out. There are, of course, private environmentalist groups also
    involved in the litigation who have a different perspective; but from
    the state's point of view, orderly development was and is the objective.
       Next, let me venture as an attorney to offer two thoughts on the role
    of the courts as they relate to public participation and seaward
    development. The first is that it is important to acknowledge the many
    instances in which the judicial arena has provided a constructive forum
    for public policy resolutions. The courts have provided the check and
    balance on executive and legislative action which, under the
    Constitution, they were intended to provide.
       And I have often observed that courts have constituted a forum in
    which more dispassionate analysis and weighing of facts and issues has
    taken place than occurs in the sloganeering of the political process.
    In all too many political debates, representatives of different
    factions, trying to put their viewpoints -across, seek shortcuts with
    slogans that will win them adherents. These generalizations don't
    necessarily advance the citizenry's understanding of the specifics. I
    think that happened, to some extent, with regard to Georges Bank.
       I have a broader concern, however, about the suggestion made this
    morning that judicial involvement is something to be avoided if
    possible. I draw from the analogy of Roosevelt and the "nine old men" a
    different inference from the one suggested this morning. In my view the
    nine old men of Roosevelt's time can be characterized primarily as
    taking actions which rejected the national consensus that had been
    forged through the electoral system by Congress. Repeatedly, they ruled
    that the laws that the national consensus (as manifested by Congress)
    had adopted were improper, and in doing so they relied on old phrases
    like "freedom of contract."
       To my mind, the court's role in OCS activity to date is the opposite
    of that. The courts are essentially reasserting the national will as
    indicated by Congress. It is the courts that are reminding us that
    there are new levels of environmental sensitivity, embodied in
    congressional acts. They are now saying there are new layers of citizen
    participation mandated through various laws passed by Congress.

                                      242

      Criticisms based upon catchword phrases such as the "national
    interest" are, to me, analogous to shorthand phrases such as "freedom of
    contract." I think the involvement of the courts in forcing the
    decisionmakers to look beyond such phrases and look at, adopt, and
    accept the national consensus legislated by Congress is a permanent part
    of the government landscape.
      My third general thought is related more broadly to the idea of
    public participation and environmental sensitivity as we proceed with
    seaward development. It ties in with an idea expressed in the panels
    that one of our chief concerns has to be our international position and.
    our comparative advantage vis-a-vis other countries. Implicit in this
    consideration is the worry that other countries may develop their
    seaward areas without the kind of public participation and environmental
    procedures that have been mandated by law in our country, and that
    therefore we are at a competitive disadvantage. The implication is that
    we should seek to minimize these pesky procedures which slow us down in
    our competition with other countries.   In response to this concern, I
    wish to voice the reminder that our nation has repeatedly decided to
    impose such limitations, even if it put us at a competitive disadvantage
    with other societies, because we thought it was a more just and rational
    way in which to proceed.   Our minimum wage laws and child labor laws
    are examples. Yet it is a price we feel is warranted.
       I recall reading recently a quotation from a Brazilian government
    official who advocated the rapid development of the Amazon Basin and its
    wealth of minerals, even if that meant the destruction of several tribes
    which had long existed there. Development was to be given priority
    because the value of the minerals there was just too great for the
    government to take the time to consider what to do with those people.
       In the United States, in contrast, I believe we have reached a
    national consensus that our decision-making at many phases must involve
    a greater level of public participation than heretofore. This public
    participation may range from court actions, citizens' groups, to, very
    importantly, the states and state and local officials.
       Winston Churchill once remarked that democracy was the worst form of
    government ever conceived by man -- except for any other. By analogy,
    let me suggest that development of our seaward areas with
     time-consuming, sometimes frustrating public participation, with
    occasional intervention by the courts, and with equally time-consuming
    environmental procedures may be a most frustrating approach -- but
    nonetheless preferable to the alternatives. Our task should be to look
    not for ways to minimize these inconveniences, but instead to embrace
     them, to use them,, and to get on with the job.
       If we devoted the amount of resources to streamlining and making the
     process work that we sometimes do -- for example, in judicial actions
     -- in trying to justify the meager amounts of actual participation, I
     venture to suggest we might discover, in the long run, that we have
     shortened and enriched, rather than hampered, the progress of our
     efforts.

                                       243

                                       JAMES P. WAL~SH

                                      Deputy Administrator
                                       National Oceanic and Atmospheric
                                      Administration
                                      Department of Commerce

    My name is Bud Walsh. I am both a lawyer and a bureaucrat, and I don't
    know what that makes me on this panel. In my previous position, as some
    of you may know, I worked for about six years in the United States
    Senate. I was at least partially responsible for some of the
    legislation that has come down the pike, including the Coastal Zone
    Management Act, the Fishery Conservation and Management Act, the
    Deepwater Port Act, and a good number of the pieces of legislation which
    I now have the unenviable position of trying to understand and
    implement.
       In short, I find myself somewhat in the crucible of the debate over
    ocean policy, and unlike many people, have come into the ocean policy
    area trained in that area, previously at the University of Washington.
    All of my jobs have been in public service and they have all been
    related to the ocean. I have been in this area for about ten years now,
    and seem to have gotten somewhat stuck, as some of my friends who have
    gone elsewhere have said.
       In terms of the themes that we have before us today -- seaward
    development and public participation -- I would like to be a little more
    realistic about the future and try to stay away from the traditional
    conclusion that people reach when they go through the process that you
    have: that democracy is pluralistic and complex, but better than
    everything else.
       I think that the one main reality about seaward development, which
    will become even more evident in the future, is that the complexities of
    development activities in the ocean are simply not like those connected
    with land activity. The policy questions that come up are not like land
    questions.
       First of all, most land in the United States has an owner, one who
    more or less owns it, under legal theory, from the center of the earth

                                       244

    to the top of the sky, unless it has been given to someone else.  in the
    ocean the ownership is much different. The land under the water, of
    course, is owned, generally by a government. The water itself is not
    owned and not subject to control, except to the extent that access to it
    can be given according to regulations set by government. That is the
    tradition passed down to us from the King of England, and it makes the
    ocean very different in a legal sense from land itself.
       There is an unusual public involvement in water activities. For
    navigation purposes the resources are owned by the public until access
    is provided to others. Fisheries do not belong to the fishermen, they
    belong to the public, and access is provided upon a fair basis as
    determined by our governmental systems.
       Second, in the ocean we have unusual overlap of jurisdiction. Given
    that the United States has parceled itself up into a series of fairly
    complex government jurisdictions, on the land things have been fairly
    sorted out over several hundred years of activity. Over time we have
    developed a series of balances of political power between government
    institutions. For the-ocean, however, that kind of activity and
    practice has never been fully developed, and-this uncertainty breeds
    complexity.
       Because of the unusual nature of the ocean, we also run into more of
    a debate about the proper role of government versus private enterprise.
    Of course, the United States is well known for carrying on and
    continuing this debate in every sector. In the oceans, I think it
    becomes even more pronounced because the ownership of the resources, of
    the seabed land, have a very heavy public tinge to them. So the Outer
    Continental Shelf is owned by the public and leased.
       Now, there are some land analogies, but in one location in the ocean
    you can have far more kinds of conflicts than I think you will find in a
    similar area on land. In addition, because of the nature of water, the
    potential for one use affecting another use, even miles apart, is higher
    than on land. The closest analogy I can think of would be atmospheric
    and air pollution. But in the water there is an unusual
    interrelatedness between activities.                                              -
       I think overlying the complexity of ocean development is the
    increasingly complex problem of achieving a consensus on our national
    goals and needs.  We are a country that not too long ago talked about
    manifest destiny. We inherited resources that seemed without limit. We
    have now come to realize our limits and have gotten down to the much
    more complex and difficult questions of who gets what. And as our
    population increases, along with the rest of the population of the
    world, the demands on our resources are adding to the basic complexity
    of ocean activities.
       What this means, I think, for the future is continuing difficulty in
    dealing with all our ocean policy questions. We have begun to operate
    under a series of statutes that try to guide public behavior. This
    legislation is only partly successful.
       In approaching this complexity, I, for one, am quite skeptical about
    what is called planning. Planning, is useful, but I tend to believe

                                             2.45

          something that has been well stated by Governor Jerry Brown: that if
          you don't know where you are going, government planning will get you
          there.
             I think it is more important that we begin to analyze the basic
          process by which decisions are made. When I was in law school, one of
          the things that shocked me was a law professor who told us that the law
          cares more about fair process in many instances than a truly just
          decision.  That, perhaps, is an overstatement.  But it is important that
          the United States, unlike many countries, has been strongly concerned
          about the procedures by which decisions are made. If the process is
          fair, the outcome is likely to be more easily accepted.
             In the future, I think we must accept that there will be strong and
          active government involvement that is likely to become as complex as the
          problems and the issues. Because of the interrelatedness of activities
          in the ocean, there will be a lot more pressure to control activities
          along the seaboard.as we move seaward.
             I do not see that we will truly resolve the debate between
          government's role and the role of private enterprise. It will continue
          to sway back and forth over time, and that complexity will add to our
          woes.
             By and large, government does not anticipate problems; government
          reacts to a problem and tries to set forth a statute to change behavior.
          We didn't, for example, deal with fisheries very adequately in this
          country until we saw that they were being over-fished. We then created
          a mechanism to solve that problem, which in the eyes of many created
          more problems than existed before. One has to ask: If we had started
          conservation practices earlier, would we be without the complex
          management system we now have? Of course, now is too late.
             We hear a lot today about the need for energy. In this Forum, we
          have talked a great deal about it. We can look back and say: If we
          hadn't had an import quota some time ago and had been using cheap
    *     ~foreign oil, today we would be far better off.  Having experience,
          unlike many people, on both the congressional side and in the legal
          system and the government bureaucracy, I see substantial flaws in the
          way we reach decisions.
             one of the things that I am growing concerned about is that we are
          tending more and more to divide ourselves into camps, and each camp sees
          all the weaknesses of the others but spends little time looking at its
          own. Each camp grows more doctrinaire, more insistent, and less worried
          about what is fair overall.
             In my opinion if government -- because it must play a role -- is
          going to work, it is going to have to do a much better job of being an
          honest broker, of providing a system whereby decisions can be made among
          the many competing parties. We must not resort to influence to get into
          power and make these important public decisions. I think we have to be
          concerned about establishing a process to make sure that the best
          technical information, the most thorough analysis, and the best judgment
          are brought to bear upon our ocean and seaward development.
             The complexity of our system, I think, is making it difficult to

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    arrive at decisions that truly are supported by everyone. More and more
    groups of people are finding that political mobilization along a narrow
    interest line is a very effective way to get a victory. But a narrow
    victory in the long run is not good. In this town there are many people
    who are beginning to think we can't allow the system to become so
    narrow, so special-interest oriented and fragmented, as to create a
    morass of fighting fiefdoms. When that happens, there are no decisions
    that are timely or fair or balanced.
       I realize I am offering some high ideals without any practical
    recommendations. My feeling is that seaward development will take place
    and that there will be fights over it. I am very much concerned that
    there is not, presently, a process for getting people to sit down on a
    reasonable basis -- without shouting at each other or fighting in the
    courts -- and trying to work out a common approach. I find that
    particularly true in the bureaucracy, where people tend to owe their
    allegiance to their institutions rather than to a good decision.
       I think one of the benefits of public participation is to make us all
    aware of the faults we have, not only as bureaucrats, but as people.

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                                      GENERAL DISCUSSION

       IRA DYER: I would like to return to the nature of the
    decision-making process, and the uncertainty that, at least in my view,
    often surrounds it.
       One speaker characterized the encampments that occur during the
    decision-making period when the various groups retreat to their corners
    and invent slogans.   It seems to me the reason we tend to do that is
    that we are facing. in many instances complex environmental, market,
    technological, and political situations. And as individual decision
    makers, it is difficult for us to come forth with judgments, no matter
    how well-intentioned, that are perfect predictors of the future.
       So it does seem to me that the basic problem we face is
    decision-making with uncertain outcomes, and we retreat to very hard and
    defined negotiating positions.
       We might make some progress if we could be more creative and develop
    mechanisms for accommodating such uncertain outcomes, for making the
    respective parties feel somewhat comforted by the fact that the
    decisions are not ultimate and final ones and can be reviewed; that harm
    can be compensated; that projects can be accelerated or stabilized or
    terminated. And while this may sound too flexible to be comfortable, I
    think the uncertain nature demands a decisionv-making process that will
    accommodate to it and that that may in fact be a stabilizing feature.
       I would like to have our experts on policy alternatives, especially
    from the government side -- who often need to say things in very sure
    terms -- say how they feel about decisionr-making with uncertain
    outcomes.

       CURLIN: Do you include state government in there, Ira?

       VAN LOON: Speaking from a state government point of view, I would

                                       248

    hope so. I find myself in substantial agreement with the thought that
    you have just expressed. I believe we are proceeding toward that mode
    of decision-making with the fallback position and that one concrete
    embodiment of this newer approach is found in the amendments to the OCS
    Lands Act which were just passed by Congress. For the first time with
    regard to seaward development, the amendments now provide clear legal
    authorization, for example, for the suspension or cancellation of
    leases, with compensation to the oil companies, in the event that some
    environmental disaster takes place. The amendments also provide for a
    second environmental impact statement to be done at some point after the
    exploratory stage is completed and before the development and production
    phase commences. I view both of these as mechanisms or opportunities to
    stop and reevaluate directions even though the basic process has begun.
    That opportunity did not exist before, and I think the recent amendments
    represent a step toward institutionalizing what you have suggested.

       WALSH: How do I feel about decision-making with uncertain outcomes?
    Uncertain. Regulatory programs in this country have now been set with
    very tight constraints on the decision-maker. Not too long ago, you
    could get something like the original Outer Continental Shelf Lands Act,
    one with very broad authority. We were comfortable that the discretion
    that would be exercised would, in fact, be fair.
       Today, whether you talk about OCS development or tanker safety or a
    wide range of very technical areas that we are trying to regulate in the
    public interest, these broad discretionary provisions are absent. In
    fact, because of the activist nature of both sides of the issue,
    statutes are getting more and more rigid and complex. And there is
    distrust. The distrust everybody talks about, at least in regard to
    the Executive Branch, is exhibited in what the Legislative Branch puts
    in statutes. Part of that is because, I think, the Legislative Branch
    does an abysmal job of oversight. Too much concern and thoroughness
    just doesn't get any attention politically, and it is hard work. Some
    people are afraid of what it might do, for instance, to the friendships
    that you need to get political results.
       After a year or so, Congress will sit down and write very tight
    specifications in hopes that they will know exactly what the outcome
    will be. And I am concerned that may result in decisions that may be
    somewhat skewed, and that the fight to eliminate uncertainty may be as
    bad as anything else.
      What I am most concerned about is that the system honestly make an
    assessment of the points of view. From my experience in Congress, most
    people are result-oriented. They want to figure out a way to get their
    point of view across. With the Deepwater Port Bill, I think, there was
    a fairly good process leading to the legislation. It was a good model
    of setting deadlines on the process and decision points along the way.
      A key thing we did was to say, "Look, the state governments are going
    to play a role, like it or not." Everybody accepted that fact,
    including the oil industry, and they felt very comfortable with the
    state having a veto power.

                                       249

       I then got involved in liquefied natural gas, and we thought because
    of the siting complexity it would be a good idea to have a one-stop
    system of permits. We recognized one agency in the federal government,
    we would have a timeline for making decisions, and the governor would
    have a veto. At that point the liquefied natural gas industries got off
    the bandwagon because they were afraid of the outcome. We offered them
    certainty and a decision point, but they didn't want to deal with it.
       You see that kind of frustration occurring where people want more
    certainty out of the situation than there is. In many cases, it is best
    to just live with the uncertainty, to try to get a full evaluation of
    the technical, legal, and social aspects, get a decision made, and then
    get on with it.
      Unfortunately, everybody is trying to remove uncertainty in their
    favor, and it has led to a real slowdown, I think, of the regulatory and
    legislative system.

       CURLIN: Under the surface of the process that we have focused on is
    a parallel process, that is, the decisional process within and among the
    government agencies and departments themselves. This process involves
    every bit of the conflict, passion, and vehemence that is in the
    case-by-case public participation process. And to the extent that
    public interest vis-a-vis the various interests and concerns is
    reflected, the decisional process within the government itself is
    another dimension of the public process. Each of the agencies reflects
    the attitudes of its constituents. They are as real as the groups that
    express themselves in the public hearings.
       These debates are sometimes rather dramatic and sometimes low key.
    Harnessing the special concerns within the whole equation is a problem,
    and I think that process is what we must work to improve.
      With regard to managing the uncertainties, I hope I am interpreting
    you right that the ones to which you refer relate to dealing with the
    "project" rather than the "decision." I believe the thing that we owe
    to any entrepreneur who is putting the money out front is an orderly
    decision process that has an element of finality.
       Eric mentioned the new provisions in the OCS Lands Act as an example.
    I don't know how the National Ocean Industries Association would respond
    to this, but I see that as being a management process. At the least,
    they should know how the rules are to be played. Once the rules are
    known, the private sector can "discount" them and live with them. They
    may not like the outcome, but they can live with the result.
       The Deepwater Ports Act is another good example. It is progressive
    legislation to the extent that it provides a timeline and provides input
    at specific points. It seems to have worked in at least one instance,
    and we hope in the second instance, and maybe the third and fourth, as
    needed.
       In other cases, however, we must depend on the initiatives of
    industry to identify opportunities. They come forward with a proposal
    in the framework of the license, leasing, or permitting systems. It is
    at that point that the government decides that theirs is an

                                      250

    ill-conceived idea that is not in the public's best interest.
      Unfortunately, industry isn't able to operate as openly as the
    government. We had to forego some of the best case-candidates for this
    Forum. These include the two refinery proposals pending right now. In
    general, there is a consensus that we need more refinery capacity in the
    East. There are two locations: Pittston, Maine and the Hampton
    Roads/Portsmouth area, Chesapeake Bay.
      When you build a refinery -- and I am not speaking as an expert on
    this, but from hearsay -- you do it low-key and under the table. One
    doesn't go in and say, "Hey, city fathers, we are going to put in a
    refinery, and we want to buy this land." You do it through brokers, you
    do it through agents, you do it quietly, because the landowner will jack
    up the price on you. You have competitive factors to protect. So this
    automatically puts it under a cloak of secrecy. The investment must be
    virtually nailed down before you can go forward with any of your permits
    and other approvals. You must have your studies in place before the
    fact. That is the point when this all comes down on the industry's
    head.
       I believe that we must be sensitive to this as government officials
    when we are protecting the public interest, and I believe we can do this
    with a little inventiveness and creativity. But we also have to
    recognize the constraints that we place on the entrepreneur in putting
    the money out front. We are very sensitive, as Bud suggests, to the
    proper balance that must be struck between where the legitimate
    government role stops and the private sector begins. We have-placed
    this responsibility largely on the private sector. We don't have a
    national oil company.   We do dictate where these activities are not to
    be. We don't dictate where refineries are to be. We don't even dictate
    where oil and gas can be developed in the OCS, because those locations
    are nominated by the industry itself.
       If we are going to place that responsibility on the industry, then I
    think we also have a responsibility to see that the decision process is
    timely and orderly.
       I believe that out of this system of uncertain decisions must co-me a
    decision process, and one that has certainty, with explicit rules for
    the game which all the players understand.

       DYER:  I think you have discussed two issues.  I was thinking less of
    uncertain decision-making and more of decision-making for processes that
    had uncertain outcomes. I couldn't agree more that our society at large
    -- not only industry, but everybody -- needs to have an idea of how the
    decisions are to be made and needs timelines. We ought to be
    disciplined about it.
       But I was really addressing those physical, social, and environmental
    phenomena that by their very nature will turn out, under the best of
    efforts, to have unpredictable outcomes. And yet we have a need for the
    entire society, on one hand, to keep moving forward with industrial
    development, and on the other hand to do it so that individuals with
    other interests are not harmed. If we attempt to wait until we

                                      251

    understand everything before moving, my dire concern is that we will
    harm society by waiting too long.

       WALSH: That is a real dilemma. If you look at the history of
    regulatory activity, if you read some of the court decisions that were
    reached whenever there was a pollution case, you will see that at the
    time of the Industrial Revolution the custom was to not put any
    constraints on the activities of private corporations. The private
    corporations of this country were the principal social instruments
    through which we achieved national goals.
       But what happened is that there were some people who did overreach.
    There were those that learned that if you owned the tank car as well as
    the oil you got everything there was to get. If you look at the
    railroad system and at the oil system, it led to the regulatory
    activities that you see in this country. They didn't just start
    overnight, and they weren't started to harrass business.
       In the environmental area, you see a lot of regulatory activities.
    Take the toxic chemicals area, where we learned that when kepone has
    polluted a good part of the James River, it cannot be removed, that it
    is in fact dangerous to us as well as to animal life. Why didn't we
    have more controls before it got there? There is a series of cases that
    have come up where there have been no controls. There has been an
    abuse, a mistake, a risk taken and lost, and then the regulatory system
    has moved in.
       The regulatory system has usually been, in this country, a reaction
    to a mistake. It is getting so that we are less willing to take risks
    in all kinds of activities. I think the euphoric philosophy of the
    scientific revolution is beginning to draw back to a more careful,
    cautious kind of philosophy. That means that we are going to require a
    burden of proof from the doer before he does. That has become something
    of an ethic, as exemplified by NEPA and many of the regulatory
    activities.  But those changes were born of human mistakes.       What
    that may mean philosophically is that there are inhibitions that ought
    not to be there, that we ought to accept that there are risks and that
    the worst thing we can do is stand still. I suppose history tells us
    that.

       BROUN: Maybe I can reply to the comments about uncertainty from the
    standpoint of private industry.
       First, we don't have the luxury of making decisions without answers.
    We have to get to the bottom line and to get there with profits for our
    stockholders, or we had better look for another job. So we have to make
    decisions that are finite and take risks.
       If we are servicing or operating in an area in which we encounter
    constraints that prohibit us from operating profitably, then we shut
    that area down and go to another one. Dr. Keil mentioned the advances
    in the last ten years for seaward development in Norway, the U.K.,
    France, Japan, and so forth. I might point out that those advances were
    made with U.S. technology. In effect, we developed the North Sea

                                       252

    because we weren't able to develop the Atlantic Seaboard. And we
    developed Indonesia and the Persian Gulf and a lot of other offshore
    areas. When the situation is such that we can operate competitively in
    an atmosphere that will enable us to make a profit, we will be there,
    and hopefully it will be in the United States, because that is where our
    interest lies.
       On this matter of regulations and overreaching, I can assure you that
    those of us who have any sense at all and are patriotic are not going to
    be overreaching. I am also this year chairman of the National Ocean
    Industries Association. We have 380 companies, all associated with
    seaward development, all the way from two-boat outfits to great big
    shipyards and service companies. We are well aware of living within the
    constraints.
       If we have an orderly decision process, if we have legislation like
    the OCS Lands Act Amendment, even if we don't agree with a lot of the
    points, those are the rules of the ballgame and we will play by them.

       GEORGE TRESSEL, National Science Foundation: Mr. Broun made some
    comments about the government being the appropriate place for educating
    the public regarding such topics, and I would like to respond to that.
       What we are looking for essentially is the technical/political
    equivalent of informed consent, and that means enough understanding for
    the public to be able to listen to a diagnosis, with the potential to
    reject the treatment. That does not have to be a very high level of
    sophistication, and it certainly is true that the government is the
    obvious focal point for this kind of awareness.
       However, the government has a hard time dispensing information in a
    balanced, objective, and accurate manner, because in many cases
    government is also a participant, as it certainly is in seaward
    development. That Is why the polls say that the public gives such low
    credibility to the government, along with industry and so on. They may
    not understand the arguments or the information, but they do understand
    that you have some motive for telling them about it.
       Now, I believe that the government agency involved is the appropriate
    focal point for public education because it is the place most likely to
    understand what needs to be said. What is missing is a way for the
    agency to carry out this responsibility without an inherent conflict of
    interest. On the one hand, the agency can appropriately say, "Here,
    public, let us tell you about the prescription that we have for you and
    why we have it." What it cannot then do, on the other hand, is say,
    "Let me tell you, friend, how to evaluate this prescription."   I could
    recite, as I am sure you can, a long list of occasions where the
    government has abused that and where agencies have, for example, sent
    pamphlets to California to help settle the nuclear initiative thing.
       There is a solution, I think. That is for us to adopt a policy that
    each agency has a responsibility for both information, that is, for
     stating its own position, and education, that is, providing perspective
    in its own area. In giving information, it has the responsibility to go
    forth and inform the public about what it is doing. But education'

                                       253

    should be done indirectly, through a process of providing funds to
    independent organizations -- say, for example, the League of Women
    Voters, universities, public broadcasting, there are many organizations
    interested in doing this. The government can provide grants, with a
    peer review process that precludes government from controlling the
    content.
      We need ground rules --and we, have good precedents in my program, in
    NEA.9 NE H, and so on -- for providing this buffer between the federal
    role and the actual carrying out of information activities. First, we
    need to-establish a principle that agencies have this dual educational
    responsibility.

      MEEKER: I would like to suggest that the government agency should
    have a responsibility to provide for a very rational process of
    illumination of each case, and that it ought to get started on this at
    an early stage, with public participation from the beginning.
      Now, Jim Curlin has suggested why it may not be feasible for industry
    to invite public participation from Day One. But I think as soon as a
    government agency begin-s to think about a project, it ought to make sure
    that there is public participation so that there will be a perfectly
    open and rational process of deliberation, with no thought that the
    government is trying to do anything in secret.
       If the government does provide for an informed and rational
    deliberation, the uncertainties that Professor Dyer has talked about are
    likely to be reduced. To the extent that you bring to bear all the
    information., all the points of view, all the expertise available, you
    tend to reduce uncertainties. You also reduce another undesirable
    feature of some past cases: relatively desperate public participation
    that comes in at a late stage and tries, through appeals to statutory
    requirements and technicalities, to reverse a decision which ought to
    have been debated at the start.
       So I think that government agencies certainly should arrange for a
    careful illumination of the problem, and, then make their decisions in
    terms of what is brought out. It is also very helpful, as Professor
    Dyer suggested, to have not an irreversible decision, but one in which
    there is the possibility of some reconsideration. We should follow,
    perhaps, the deepwater port precedent -- which unhappily seems not to
    have been followed by liquefied -natural gas -- rather than the pattern
    of the SOHIO case in California.

       KEIL: Does anyone else want to respond to that question?

       O'NEILL: We have talked about uncertainty, but I wonder about
    diversity. In our case it is not a question of an uncertain outcome;
    rather, it is that certain groups don't want that outcome, even if they
    know exactly what it is going to be.

       KEIL: Are you referring to, the SOHIO case, your specific case?

                                      254

      O'NEILL: No, Professor Dyer was talking about uncertainty, and I am
    just saying there is this question of diversity, that no matter how
    serious you are, people don't want certain outcomes. How do you deal
    with that?

      MEEKER: I would like to come back to this question of basic policy
    decisions. It seems to me that there does need to be some national
    policy on energy that will at least suggest answers for a specific
    project.
       It was brought out in the discussion of your case that when the
    California Coastal Commission asked the federal government whether, from
    the national point of view, the answer would be positive or negative, no
    answer was forthcoming.
       The federal government, dealing with the national problem of energy
    availability, should be able to say to the state coastal commission, "We
    do not consider that this particular project is one which meets the
    series of goals that we have settled upon nationally," or, "It is one
    which in fact meets those goals". And if the federal government could
    honestly give its answer on that kind of issue, my guess is that the
    state authority would consider that along with other factors in order to
    produce its own decision and that it would not be parochial or
    irresponsible. But there does need to be some national energy
    policy-making, and I think we are suffering from the lack of it.

       CURLIN: I feel compelled to introduce another dimension, and I guess
    this gets into "pluralism." If we have an energy policy, where does
    that put our environmental policy, because those trade-off s are
    fundamentally what we are dealing with. And if we have an ocean policy,
    where do environmental and energy policy fit in? "Policy" is the most
    popular word around this town. The quickest way to pull a "~policyphile"
    up short is to ask that person what policy is, because it is impossible
    to define. We all know what policy is, but no one can define it.
       I am not convinced that a mere statement of energy policy -- we have
    had many such statements -- will solve the problem.

       MEEKER: It needs to include environmental factors.

       CURLIN:  Okay, so you are really talking about a comprehensive policy
    to treat a series of problems.

       MEEKER: That is right.

       CURLIN: Maybe we come closer to that in talking about ocean policy
    than anything else. But when you ask the government to make a decision,
    whom do you ask? It is not "Mr. President," obviously. He sits in a
     rarified atmosphere, and he has sixteen cordons of defense around him
    and can't speak to anyone unless they get past the keepers of the gate.
    Mr. Government? Congress? Five hundred and thirty-five Mr. Governments
    on the Hill? They have their own specific functions, so the focus on

                                       255

    administrative decisions is downtown.
       We have agencies whose names impart some kind of meaning to their
    life. We have the Department of Energy, and many subdepartments of
    energy. One of the interesting things that happened as a result of the
    reorganization activities of this Administration and the creation of the
    Department of Energy was the elimination of the Energy Resources Council
    within the White House.
       We have now created under the Department of Energy an Energy
    Coordinating Committee -- the ECC -- which has the same composition as
    the Energy Resources Council. Sitting on the ECC are about ten agencies
    and departments of the government. When a major decision is needed on
    .energy policy," one with the capacity to significantly affect many
    sectors of the public, it goes to the Energy Coordinating Council to
    resolve interagency differences. So in the case of an energy decision,
    you are addressing a multiplicity of interests. The anatomy of the
    decision process in the federal government reflects the divergent goals
    of society as a whole in dealing with these issues on a case-by-case
    basis.
       What is the result? Well, a clear government commitment that one
    factor is more important than another can influence the decision, but I
    don't think this kind of determinism is what we are after. As Len
    suggests, when we talk about energy policy, we are talking about a total
    management policy that combines the social, economic, and environmental
    factors into one decisional process.
       We are demanding a lot of the system, and I think implicit in some of
    Bud's opening statements was the suggestion that maybe we shouldn't
    expect as much as we are from this decision process. While we must
    continue to try to improve it, we should do so with an acknowledgement
    of the realities. When you ask the government for a decision, I fall
    back on my own understanding of what a government decision imparts. We
    have thus come full circuit. The decision reflects the same kinds of
    concerns that we talk about in terms of public participation, so we are
    back to "go."

       WALSH: You forgot political policy, Jim, and I suspect that in the
    case of SO-ITO and the silence of the federal government, that policy was
    predominant. If Jimmy Carter told the State of California what to do,
    the state would be unhappy and his chances of getting that electorate to
    vote for him in the next election would be much lower. I have found
    that to be true. Much as we say Let's have a national policy on energy,
    people in many of the states -- and this is the basis on which many
    state politicians, such as Dixy Lee Ray, are being elected -- don't care
    what the federal government says; they want to make their own decision,
    even if it is the wrong decision. There is a political risk to anybody
    going into the State of California and saying, "I am the President; we
    need the oil. build SOHIO." So we should never forget the politics.

       MEEKER: That is not quite what is involved. California in that case
    has a decision to make of whether to say yes or no. It is not a matter

                                       256

    of the federal government coming in to make the final decision, but of
    its being asked for a viewpoint, an evaluation, which the state will
    take into account.   I think it is helpful if the federal government has
    a notion of what the nation's energy needs are, how they can best be
    supplied, and how the environment can be protected, and communicates
    that to the state authority to use in making its own decision.

       KEIL: The Coastal Zone Management Act requires that the state
    consider national priority. It doesn't say it has to comply with it.
    This is exactly what Len is saying.

       WALSH: There is some debate on that point over whether the state
    must not only consider the national interest in energy facilities, but
    must actually site them within its boundaries. That is not a small
    argument.

       KEIL:  Let's go to another question.

       TOM SHOREBIRD, Student: I wonder if the panel could discuss the
    state of the art of image analysis and how it applies to the decision
    process, and also if this level of information would be available to the
    citizen in the decision process, including some examples of that
    technology -- satellite imagery and animation and engineering animation,
    aircraft type, or traffic flows and things like that -- as well as base
    maps that Census has that might be applied to ocean data.

       KEIL: Who wants to take that on?

       WALSH: Let me comment that NOAA has a sizable satellite operation
    which we use principally for weather forecasting, and we are getting
    more and more into experimental activities. The LandSat satellite,
    which is under development by NASA, is expected to play a large role in
    refining basic information gathering techniques.
       For example, we have used satellite imagery to identify the eddies of
    the Gulf Stream. That information is being used for all kinds of
    things, in particular for traffic routing and related activities. The
    government is also engaged in a fairly major analysis of space policy
    for the future. Particularly, how do we make better applications of
    satellites, which essentially began as a national security activity but
    have now begun to move more and more into providing data for day-to-day
    activities? Satellite data are being used in a variety of ways
    throughout both government and private enterprise. They will, of
    course, provide us better information about decision-making.

       CURLIN: More important, perhaps is the translation of that
    information into something usable by the general public. Within an
    area that is equivalent to about two-thirds of the continental span of
    the United States, there is essentially no capacity to look at the
    resources in total context, and I believe that the LandSat and the

                                       257

    Seagat satellites as they come into existence, can be used as a very
    important tool. But let's face it: The imagery from those instruments
    is not generally available, because of money or distribution problems,
    or, equally important, the inability of untrained citizens -- you
    represent yourself as a common citizen -- to use remote imagery for the
    kind of information I think you are looking for.
       But I think government has a responsibility here. What I would
    envision, particularly with this seaward expansion, is the development
    of a good set of comprehensive coastal charts. We already have a great
    deal of information which can be superimposed to make, essentially, an
    atlas of our ocean and coastal resources. The atlas should show the
    location of resources in terms of their potential, their spatial
    relationship to each other, and existing facilities, with provision for
    updating to identify where there are new licenses, permits, and leases
    pending so that Joe Citizen knows where these activities are. In other
    words, some kind of a reasonable bookkeeping system for the basic,
    fundamental government information that we have not converted to hard
    copy and that can be used for planning, public 'participation, or
    educational purposes. I think that would be more important than merely
    the imagery which these satellites provide us.

       UNIDENTIFIED SPEAKER: I would like to have the panel reconsider the
    subject of planning. Jim Curlin made a good plea for planning, and yet
    Bud Walsh is skeptical. I can understand that, because if you develop a
    plan that is too rigid, you are in a pattern which prevents progress.
    But if we lay out the goals and objectives for the plan, would you then,
    Bud, go along with that, if these could be clarified to the point where
    an overall plan might really be possible?

       WALSH: I am skeptical of the government putting together a
    relatively complex plan that then becomes what we all march to.
       I believe that over a period of time a lot of seemingly unrelated
    decisions, if they are well made, will develop into a pattern for a
    plan. At the same time I recognize the need to have goals. I suppose
    government goals are much more diffuse than they are in business, and
    that is because they are so different. You can't be quite as rigid in
    trying to achieve social goals that keep evolving and changing.
       If we had had a national energy plan back in 1970, I wonder what
    would have happened if it had been a rigid plan and the Arab embargo
    camne along.   The danger is in losing flexibility.  I guess you try to
    find a balance between setting goals and objectives that perhaps are
    vague, but generally agreed upon, with which we can head in the same
    direction.
      Unlike Jim, I am skeptical of setting forth clear and complete plans
    that we then follow.

      MEEKER: But any plan would have to be subject to continuing review
    and revision. Otherwise, what you say is quite true.

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      GIJRLIN: I don't think we are that far apart. The reason I got into
    the ocean business, by the way, is because I was involved earlier in an
    ill-fated program called "land use."   That was big on the Hill at one
    time, as you may recall. We ended up with a coastal zone management
    program instead of a comprehensive land use program, so I gravitated to
    coastal zone management and found myself getting wetter and wetter as
    the years passed.
       If anyone has a healthy skepticism about planning and planners, it is
    myself. I have had a series of unhappy experiences with them. I don't
    want to be misinterpreted -- I emphasized management in my response. I
    consider management to be a process in which planning is an integral
    component.
       I don't espouse a hard, fast plan where everything is defined on a
    chart or a map, specifying that this is where an activity is going to
    be. Our society doesn't function that way. I do believe we have to
    have a planning horizon, and we have to have the information, goals, and
    objectives to move in a direction. That is about the extent of the
    planning I want. I also want an information base, and it must be the
    kind of information base that planners require. But I don't think we
    are that far apart; I don't think I am in disagreement with you.

       AHERN: I am trying to do a plan for the State of California with
    maps on where people should go and not go, put power plants and not put
    power plants, and things like that. However, I share Jim Curlin's
    trepidations about the process.
       Perhaps the reason the discussion of policy alternatives is at this
    abstract level is that when we went through the cases, problems didn't
    jump out, except for some complaining about cumbersome processes. But
    what I learned, and what I want to ask the panel about, is: If the
    state and the industry and the environmental groups all want something,
    let's say, like LOOP or perhaps a manganese nodule processing plant in
    Hawaii, for that, by George, you can get yourself a nice piece of
    federal legislation and go do it. It takes a little while; all the
    different agencies are there, but the Coast Guard can deliver the permit
    application to the other agencies and tell them to bring it back in so
    many days.
       On the other hand, with Georges Bank and SOHIO, it is clear that if
    there are state/federal politics involved and there is -no agreement,
    particularly among high state and federal officials, about what ought to
    happen with that development, that thing is not probably going to
    proceed at any kind of pace, and can get stymied and perhaps -not even
    happen at all.
       So I haven't really seen problems leap out. I didn't sense any
    members of the public complaining that they weren't able to participate
    in the processes in these cases, because apparently they were.

       KEIL: I would like to make a few observations as a result of having
    sat through the discussions that we had on all the cases. The first
    relates to expediting the decision process, and I want to make sure that

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    you don't misinterpret that as railroading. One example that was
    mentioned was the interagency task groups on a state level. If you have
    too many people to go to and you don't know who they are, one task group
    that would pull it together would certainly help. On the federal level,
    it has become quite clear that it is helpful if you can assign a
    lead-agency responsibility.
       A~nother point that was mentioned, again with respect to expediting,
    and this might apply particularly to the state level: If there is a
    difficult case, it is extremely important that the higher echelons get
    involved and become aware as early as possible that this thing is
    happening. Just as we talk about citizens who -would like to get
    Involved early, we should also get the necessary people in the
    government involved early.
       Where is public participation particularly important in the
    decision-making process? I think every case came up with the conclusion
    the sooner the better, the earlier the better. If the public has a part
    in arguing the case before it is proposed -- and there are difficulties
    in doing that, as we heard -- they become part of trying to find a
    solution.   Early participation, I think, is really improving the
    efficiency of the process.
       With respect to the steps toward an informed public, we have had a
    number of discussions of mechanisms. it is important, though, that the
    public feels that they are participating, and it is not a matter of just
    putting ads in the paper or sending booklets out. You have to create the
    desire to become informed.
       There are some things which we have not covered very well in the
    Forum, and one that I think is'worth mentioning is that somehow I think
    we have to become aware of what it really costs us as a nation if the
    decision process gets awfully long. lie must be concerned about what the
    cost is, no matter what the various ways of looking at costs are. Long
    delays mean something; first of all, the cost of not doing it. The
    investment is made and the money sits there. The cost of nuclear power
    plants has escalated by a tremendous amount, and someone has to pay for
    it. It is the public who ends up paying It. I think there must be an
    awareness created of what that cost is. That is also part of public
    education.
       We also -must compare the cost of different options for achieving an
    objective. I think the cases were not designed to deal with that.
       This is my first Academy Forum. I find it exciting. This way of
    using a group of experts as a resource panel in discussions is much more
    effective than having a group of experts lecture to the group with no
    time left to ask questions and exchange ideas. The Forum, I think, has
    been extremely successful and productive as far as I personally am
    concerned. I learned not only a lot about the various projects that
    were discussed, but about the whole process of public participation,
    about the broader dimensions of decision-rmaking and government
    Interaction.
       It also verified something that I have been arguing for many years
    and that Russ O'Neill expressed here: That engineering in today's

                                       260

    environment means much more than just being concerned with making
    something that is technically correct and functioning.   Engineering
    means working toward solutions, and the solutions must certainly meet
    the technical constraints and be valid and operative. But they must
    also be workable within societal constraints, and we have to learn to do
    that. It is a somewhat painful enterprise. It is not just a matter of
    meeting regulations.
       I think there is a responsibility also to show the opportunities that
    technology could offer if certain regulations were changed. That is not
    generally being done. But I believe it is important -- if you really
    want to make progress -- to look at the technical options which may
    appear feasible. And if they are really worthwhile, I think we should
    put them forward, and see whether the regulations can't be changed to
    open up new opportunities.
       There were some comments made about port industrial complexes and the
    difficulty of getting tbem approved. They are the style of operation in
    quite a number of countries. They are actually an example of intense
    land use, freeing other land for other purposes. One shouldn't rule
    against those things out of hand without really doing studies and
    evaluating such alternatives.
       It is a challenge to the engineering community to find technical
    solutions that are more effective in every respect: energy use,
    environmental protection, technical efficiency, and meeting the societal
    constraints. It requires acceptance of the fact that we have to think
    in somewhat broader terms with our technical solutions. That I have
    been arguing, and I think I heard it, in essence, throughout the
    discussion of the cases.

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                                      C0OMMENTARY

                                      Alfred A. H. Keil
                                      Co-Chairman

    The objective of this Forum was to explore the role that the process
    of citizen participation plays in new seaward development in the United
    States.
       The term "seaward development" covers the development of ocean uses
    and related activities in the coastal zone. The major thrust for
    seaward development involves both the expansion of present ocean uses
    and the initiation of new uses in order to derive economic and social
    benefits. The resulting "ocean-use industries" carry out these
    developments and operations (including, for example, marine
    transportation, ocean mining, offshore oil and gas production, and
    dredging and the disposal of dredged material at sea). In addition,
    public utilities use the coastal waters as cooling water for shore-based
    power plants, and municipal sewage treatment plants discharge into
    coastal waters. Federal, state, and local governments regulate uses of
    the ocean in the public interest by controlling renewable and
    nonrenewable resources and the "pollution" generated by ocean and
    shore-based operations.
       Economic benefits from seaward development are usually interpreted
    too narrowly as meaning profits for individual industries. Important as
    such profits are (industry cannot survive without them), the economic
    benefits to be gained by the nation as a whole can be far greater.
    Opportunities for future seaward developments are therefore not only
    industrial options but national options, and they may even be national
    requirements in the face of international competition. The importance
    to the United States of ocean uses must be understood and taken into
    account.
      Much has been written about the dependence of the United States, its
    industries, and its economy on the uses of the oceans, both present and
    potential. Seaward development in the United States, however, continues
    to suffer from lack of public awareness of the importance of ocean

                                      262

    resources for the nation. The general public seems remarkably unaware
    that the era of independence enabled by U. S. land based mineral and oil
    resources has passed, and that many ores and much of the crude oil
    critical for U. S. industry and public use have to be imported. The
    public does not seem to realize the significance of
    marine-transportation-based exports and imports for the U. S. economy.
    Nor does it realize and appreciate the rapidly increasing rate and
    sophistication of ocean activities and technology in Japan, Norway,
    Great Britain, the Federal Republic of Germany, and France, which
    indicate not only the commitment by these countries to expand ocean
    uses, but their determination in pursuit of clearly defined national
    goals. In fact, many of our approaches to new ocean uses are based on
    or hampered by historical concepts going back to the eighteenth and
    nineteenth centuries.
       Up to ten years ago, the decision-making process for seaward
    development involved only industry and the government. Since then
    public participation has been mandated, and the process now involves
    three groups. The term "public participation" does not refer to
    government representation of the public interest or the indirect
    participation in corporate decision-making by stockholders. It refers
    to direct participation of citizen groups, each representing a set of
    special, common interests, or of their designated spokesmen. Citizen
    participation results from a concern that certain aspirations,
    particularly with respect to the quality of life, will be affected in a
    detrimental way by new seaward development plans. The major objectives
    of public participation, with respect to ongoing or projected ocean
    activities, have been the protection of the ocean environment and
    coastal zone from pollution, the protection of marine life, the
    preservation of wetlands, and the establishment of sanctuaries.
       Industrial decision-making is by necessity concerned with technical
    and economic dimensions and its commitments for massive amounts of
    capital require a reasonable degree of confidence. The decision-making
    by government, and particularly by citizen groups, is primarily
    political and inherently unpredictable. Herein lies a key dilemma for
    industry in its own decision-making process on the potential development
    of ocean uses. This process is further complicated by the fact that
    none of the three groups speaks with a single voice; each group in
    itself is fragmented.
       As a consequence, seaward developments in the United States have
    slowed down during the past decade, and concern is growing that the
    United States is losing ground both internationally and domestically in
    this area, as well as in related ocean technology developments.
       The four case studies discussed in the Forum have indicated that
    participation in the decision-making process on seaward developments has
    often started with polarizations, with each party looking at the other's
    weaknesses but not its own. Bud Walsh described the consequences in the
    lucid observation that this generates at the most "narrow victories
    which are not good in the long run," and that "a morass of fighting
    fiefdoms makes no decisions that are timely, fair, or balanced." On the

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    other hand, Leonard Meeker pointed out that public participation can not
    only be highly educational to the public, but can make significant
    contributions if the decision7-making process systematically addresses
    the problems, the facts, the choices, the consequences of actions (and
    inactions), and the "rational solutions" for accommodating a spectrum of
    sometimes contradictory values.
       The Forum, recognizing the value of the effective citizen
    participation mandated by the federal government, focused on steps to
    make the decision process in seaward development more effective and less
    time consuming.
       The discussions of the four cases and the Forum' s general proceedings
    have illustrated the complexity and intricacies of seaward development
    projects, the resulting complications in the process of public
    participation, and the need for developing ocean resources in the
    context of national and international interests. It is, therefore, no
    surprise that during the Forum the need for better education of the
    public was stressed to ensure effective public participation in an area
    so complex as ocean affairs. This call for a more informed public
    should apply not only to the public participation group, but to the
    U. S. citizenry in general and to industrial and governmental decision
    makers, the legal profession, and the courts.
     Teudevelopmntding ofsseveral bakgoun carbetter istredpbic.sBecauseathes
     Teudeverpetaning ofssential bakgoun caractter infredpbic.ease theseawr
    points were only touched on during the Forum, they are given fuller
    development here, as part of the broad perspective needed for more
    effective participation in the decisionr-making process.

    Important seaward developments since World War II

    In the last thirty years, ocean uses have been modernized in ways that,
    taken as a whole, seem almost revolutionary. Some examples follow:

       o    The transport of passengers between continents before World War
            II was solely by means of passenger ships. Since the 1960? s it
            has been, for practical purposes, overwhelmingly by aircraft.

       o    Most of the ocean transport of industrial products has been
            shifted from general freighters to specialized ships
            (containerships, barge-carrying ships, and the roll on/roll off
            ships). This change required substantial reorientation of port
            operations to assure rapid "throughflow" of the cargo at the
            ports.

       o    Since World War 11, exploration for and production of offshore
            oil and gas in large-scale industrial operations has evolved
            worldwide, coupled with developments of special drilling and
            production platforms that successfully operate in water depths
            of up to several thousand feet. About 19 percent of the world
            supply of oil now comes from offshore platforms.

                                       264

       o    The increasing demand for industrial raw materials, fuel, and
            food products has led to the development of special super ships,
            including oil tankers of 300,000 tons and more, and large bulk
            carriers, with associated special loading and unloading
            facilities.

       o    The rapid growth in worldwide fish catches during the post-World
            War II years is due only to a small extent to the improvement of       4
            existing fisheries; primarily it is the result of large-scale
            coordinated fishing operations (at-sea fish catching and
            processing systems), which are actually big industrial
            operations. Coupled with this development of fishing industries
            is the advancement of fish processing and preservation
            techniques.

       o    The increased automation of shipboard operations and the
            development of specialized port facilities in connection with
            specialized classes of ships has led to drastic changes in the
            required work force.

    The growth of ocean engineering capabilities in seaward development

    There have been meteoric advances in ocean engineering capabilities and
    technology, coupled to their use in seaward developments.
       Most of the dramatic seaward developments during the past three
    decades are the result of the expanding of existing branches of ocean
    technology to accommodate the development of larger and more specialized
    ships. This development was sparked by the need for greater economy in
    marine transportation. It required expansion of the underlying
    principles of ship design and operation as well as the evolution of the
    related technology, which could be developed only through operating
    experience.
       The offshore oil and gas developments during the past three decades
    required the development of new technology and engineering capabilities
    for offshore exploratory drilling and rel ated safety measures, drilling
    and production platforms, and the laying of pipelines. The rapid
    development of these capabilities during the past thirty-five years Is
    rich in creative, innovative engineering.
       Pioneering efforts of the emergent offshore mining industry required
    the development of a deepsea mining capability, which includes mining
    the nodules on the ocean floor; separating the tailings from the
    nodules, either on the sea floor or at the ocean surface; transporting
    the mined products to the surface; transferring the manganese nodules
    from the floating mining facility to ships; transporting them to a port;
    transshipping them to a special smelting facility; and extracting the
    critical metals. All these steps require adaptation of existing ocean
    technologies and coupling them with new developments (such as deepsea
    mining technology) in an economically viable manner. This necessitates
    an evolutionary process of designing, building, testing, and evaluating

                                             2 65

          in order to gain the experience and capability necessary for a
          successful future operation.
             in addition to providing the necessary operation and engineering
          capability, the design of these new techniques must assure reliable and
          safe operation and "acceptable" degrees of protection of the
          environment.
             Another important dimension of these ocean technologies is their
          economic value, which goes beyond their value to the specific operation
          for which they are developed; advanced engineering services have a high
          premium on the international market because they are sought by many
          countries who decide to develop ocean uses.
             The major impact of the advancing ocean technology and engineering
          capability has mranifest itself when there has been distinct effort to
          consider all facets of a specific ocean use or resource development in
          the framework of an integrated systems approach. Striking examples are
          the high sea fishing fleets of Japan and the Soviet Union, the U. S.
          offshore oil and gas industries, and the development of container
    p ~shipping.

          Foreseeable seaward developments

          Part of the public's edu cation about ocean development should be a broad
          knowledge of the probable areas in which this will take place. A few
          examples follow of the kinds of seaward developments projected over the
           next fifty years, to indicate the dramatic changes likely to occur.

              o     The increasing-uncertainty about public acceptance of nuclear
                    power, coupled with the certainty of a decline in the
                    availability of crude oil and natural gas, is causing world
                    attention to shift to coal as an energy supply by the turn of
      F            ~~~~the century.  Projections have been made that by the year 2000
                    transocean shipments of more than a billion tons of coal may be
                    needed. Major potential suppliers for this amount of coal are
                    the United States, the Soviet Union, India, Australia, and
                    South Africa. The establishment of the necessary mining
                    capability and of the transportation networks to move the coal,
                    both to ports for transshipment to other continents and to the
                    inland users, will require lead time of decades and an
                    integrated, worldwide approach.

              o     As we have seen in the Forum, a large-scale manganese nodule
                    mining industry is projected for taking advantage of the vast
                    fields of manganese nodules on the ocean bottom to obtain
                    copper, cobalt, manganese, and nickel, which are critical for
                    most industrial developments. This requires the development of
                    an ocean-mining industry and the transshipment to port
                    facilities where the nodules will be processed. it illustrates
                    how development of new offshore resources must be closely
                    coupled with coastal zone use and coastal zone development.

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      o     While many of the specific fish resources in high demand on the
            world market are overfished, there are other, underutilized
            fish resources of enormous magnitude available in the oceans
            and the polar regions. Innovative steps are required not only
            for harvesting and processing these resources, but also for
            marketing them.

      o     Offshore oil and gas resources in frontier areas of the
            continental shelf, the polar regions, and possibly the
            continental margins are likely targets for development and will
            require innovative approaches and advances in technology.

      o     The world's food problems will necessitate a new look at grain
             storage and transshipment capabilities to overcome the frequent
            breakdown in international grain shipments.

       The Forum on Seaward Development proved to be a valuable experience
    for all participants, as some of the intense exchanges have indicated.
    It brought out the fact that seaward developments have many dimensions
    that make them much more complex than land-based developments: state,
    national and international "ownership" and overlapping jurisdictions;
    the debate on government's vs. industry's role; interrelatedness of
    various activities as a result of the fluid nature of water; and the
    difficulty of achieving a consensus on national goals and needs. The
    decision-making process in seaward development, involving government,
    industry, and public participation, requires appreciation of the scope
    of the problems in order to be effective. It must also take into
    account the local nature and impact of technology and industrial
    developments in the context of national interest and international
    competition. Furthermore, this decision process must make allowance for
    those physical, social, and environmental phenomena that by nature turn
    out (even with the best efforts) to have unpredictable outcomes.
       To find a way for reaching decisions on seaward development, in spite
    of all these complications and risks and in a wise and considered
    manner, is the challenge facing the nation. To develop a better
    informed citizenry is the crucial first step in meeting this challenge.