Three Miles Out . . . And Beyond

Mallard duck wrapped in blanket

John H. Sheally II

a coast under clouds

This article originally appeared in Southern Exposure Vol. 10 No. 3, "Coastal Affair." Find more from that issue here.

Most coastal visitors and residents know the sense of outrage and loss when a long-time favorite bathing, surfing or surf-casting beach is cut off by “No Parking” and “Guests Only” signs. But few feel as strongly about the possible loss of a larger commonly held resource, one that lies beyond the breakers and beneath the oceans and Gulf — the continental shelf.

Extending in a smooth apron far out to sea, composed of the same sheets of sediment that were swept by wind, rain and rivers from the mountains to the coastal plain, is the submerged extension of our continent. The continental shelf stretches some 50 to 100 or more miles out, sloping gently to a depth of about 600 feet before dropping steeply several thousand feet to the dark ocean floor. Thus far the continental shelf is largely unclaimed and undeveloped; less than 10 percent of our nation’s shelf is now leased, compared to an average 34 percent worldwide. But if comprehensive planning does not begin soon, vested interests — especially the oil companies — will get what amounts to high-class squatters’ rights for resources that we all own.

Public ownership of the shelf is firmly engraved in law. Our title is based on 2,000 years of Roman and English law, the foundation of our Western judicial system. Early Roman law proclaimed the sea and seashore res communes, common to all. When King John of England signed the Magna Carta in 1215, he conceded any right to sell or give away the tidelands — the open seas being considered international — and the accumulated weight of many courts’ decisions thereafter reaffirmed what became known as the public trust doctrine, adopted by our nation’s lawmakers in 1789. The essence of that doctrine was summed up by Dutch jurist Hugo Grotius in his seventeenth-century work, Mare Liberum: “that which cannot be occupied, or which has never been occupied, cannot be the property of any one, because all property has arisen from occupation. . . . all that which has been so constituted by nature, that although serving some one person, it still suffices for the common use of all other persons.”

Today some 220 million of us heirs hold in common the title to the U.S. continental shelf. We are so many, in fact, that a trustee manages our inheritance. That trustee is the government. Unfortunately, our trustee is spending away the irreplaceable capital of our inheritance, an endowment that should sustain our heirs for centuries to come.



The fact that no people live out on the shelf makes it a tempting place to put things no one wants on shore. The military has for years used coastal waters not only as mock battlegrounds but as a dumping place for old weapons. In 1970, the public and Congress realized that the government had been disposing of radioactive material on the continental shelf in a number of undisclosed sites. This realization led to a moratorium on ocean dumping that was reaffirmed by the 1972 Ocean Dumping Act.

In January, 1982, however, the Navy proposed dumping worn-out, radioactive nuclear submarines 200 miles off the North Carolina coast. With suspicious coincidence, the plan was announced at the same time that the Environmental Protection Agency decided to consider removing the dumping ban. The Navy admits that the ships and their reactors will not stay safely sealed; they will eventually corrode and release their radioactivity into the ocean.

A similar on-and-off approach to protecting the shelf applies to federal regulation of the dumping of industrial and residential waste. When the federal government ordered American Cyanamid to stop pouring sulfuric acid into the Savannah River, for example, the company and government developed plans to unload 59,000 tons a month further out, near the Gulf Stream. The dumping moratorium and 1972 act, designed to phase out all “harmful dumping” by 1981, did cut such dumping drastically. Industrial waste dumping in the Gulf of Mexico fell from 1,408,000 tons in 1973 to 173 tons in 1978. Since then, though, corporate interests have received federal support for alternative methods of solving their disposal problems on the beleaguered continental shelf: during Christmas week of 1981, the converted 334-foot tanker Vulcanus cruised out of Mobile loaded with oil saturated with toxic PCBs (polychlorinated biphenyls). Three hundred and fifty miles out in the Gulf it steamed for 10 days in a 150-mile oval course while its double furnaces burned the toxic oil at the rate of 3,000 gallons an hour. This was a test cruise. Chemical Waste Management, the ship’s operator, plans to follow up by burning 3.6 million gallons of PCB-laden oil in the first half of 1982, with EPA watching over the experiment. Though the environmental impact of such incineration over the shelf is yet unknown, it is clearly another case of a pollution dilution solution: doing it “out there” instead of adding to air pollution problems and incurring public wrath on land.

Theoretically, the dumping of municipal garbage and sewage sludge was to end by 1981, because of concern about damage to marine life and because some Northern beaches were blighted by “black mayonnaise” washing in during tourist season. Yet major metropolises like New York City have yet to find alternative ways to dispose of their tons of sludge, and the pressures for new dumping grow daily. In fact, the 1982 federal government’s search for new revenues initiated an unsuccessful effort to put a “user’s fee” on ocean sewage dumping. Though the fee concept was defeated, its being proposed at all raises questions about how permanent the dumping ban might be.



The continental shelf is rich in resources, including renewable ones like marine life, and schemes for harvesting its wealth abound. These plans include sand and mineral extraction, offshore superports, floating thermal conversion and nuclear power generation systems. But none will have as large an impact in the next two decades as the projected rapid expansion of deep sea oil and gas exploration.

Natural oil seeps on the Pacific Ocean floor attracted fortune-seekers as early as 1894, when crews reached for it from crude onshore rigs and long wharves. The first modern offshore platform began operating in 1947, pumping some 600 barrels a day off the coast of Louisiana. Since then some 20,000 offshore wells have been drilled, currently producing about 20 percent of our crude oil and 22 percent of our natural gas.

The American Petroleum Institute, the industry’s lobbying group, claims these wells have produced only four major oil spills and no permanent damage. But even normal drilling operations involve much more than a spinning bit poking a hole in the ground. A typical rig dumps an average of 4,000 barrels of mud and cuttings for each well, and a single platform may be the origin of as many as 40 wells. The rigs also discharge “produced waters” — waters geologically trapped with the oil — in volumes typically 200 times that of the oil and gas produced. Finally, most of the 1,500 different industrial chemical compounds used in various stages of drilling are disposed of at sea. The ocean, of course, dilutes all of these wastes but nevertheless has to bear sustained low-level pollution with unknown cumulative effects.

Independent scientists dispute oil company claims that their drilling activities have had no real effect on the shelf’s environment. Scientists say they have been hard-pressed to assess the damage because, on the Gulf Coast, even the supposedly “clean” control sites, with no oil rigs nearby, are blanketed with a low level of petroleum hydrocarbons.

The risk of oil spills is always present from both wells and associated pipelines and tankers. From 1972 to 1977 the Coast Guard recorded 62,239 oil spills, releasing 110 million gallons into U.S. coastal waters, with most of the volume occurring from many small spills (such as tankers anonymously flushing their bilges after unloading at a harbor) and from the occasional devastating major ones. In just two years (1975 to 1977) the Coast Guard reported almost 12 million gallons spilled in the Atlantic and 15 million gallons in the Gulf.*

With energy companies exploring for new sources of oil and gas in the Atlantic, another point must be factored into the risk equation: a study by the Council on Environmental Quality surprised its own authors when they found that Southern coastal waters are subject to more severe storms than either the North Sea or the Gulf of Alaska. There is a one-in-25 chance of sustained winds of 100 knots and seas with 50-foot waves in any year along the Southern coast. The odds for the North Sea are one in 90 and for the Gulf of Alaska one in 50.



Given the enormous risks of oil and gas development and the enormous wealth associated with it, it is no wonder that the states and the federal government are locked in complex legal and political battles over who pays for the problems and who gets the revenues.

This tug of war began in the late 1800s when Californians started collecting offshore oil and the federal government sued to protect its role as guardian of the public trust, winning decisively in the Supreme Court. The Mineral Leasing Act of 1920 utilized the decision to grant the federal government the right to lease offshore oil and gas territory.

At the end of World War II, when it looked as if offshore drilling might become a big industry, Texas and Louisiana proposed a 27-mile territorial sea under state jurisdiction. President Truman responded in 1945 by declaring that all shelf resources belong to the federal government. Drilling started during the ensuing debate and another court case followed. In 1950 the Supreme Court ruled that the national interest outweighed states’ rights.

The states countered by pressing for new legislation. By 1953 they had pushed the Submerged Lands Act through Congress. The best they could do, however, was to reverse the court’s ruling and give the states jurisdiction over the water within three miles of their coasts. Texas got three leagues (10.35 miles) based on its boundaries when annexed in 1845. Florida also got three leagues because Congress had approved its 1868 constitution claiming that much territory.

Only after 1953 did the real extent of offshore resources become known, and the technology to exploit them developed rapidly. With the space-age technology, engineers perfected deepsea breathing and diving gear and invented huge seafloor habitats. They designed motor vehicles for the new underwater activity, and oil companies stationed whole villages of workers on towers in the midst of the most powerful seas on earth.

Lured by the ever-expanding catalog of resources, the states attempted again to exert wider claims to the continental shelf. Texas tried to extend its territorial sea by measuring from the tips of new artificial jetties. Louisiana fought at least 10 different battles before the U.S. Supreme Court. In 1965 it lost a key decision when the court declared that the state’s jurisdiction moves as the shoreline moves. This was particularly important near the Mississippi Delta, which can grow or shrink several hundred feet a year.

As of December, 1981, some 63 oil and gas leases averaging about 5,000 acres each lay across the state-federal boundary, illustrating that the movement of the eroding shoreline could be a big erosion of the state treasury.



The federal hold on the continental shelf has been cinched just when higher prices and accelerated leasing are about to bring in the real riches. Industry and government geologists estimate that 60 percent of the nation’s undiscovered oil and gas is buried in the continental shelf. As of 1979, only 2.5 percent of the fuel-rich shelf had been leased. President Carter upped the ante by planning to more than double the leased offshore lands by 1985. Then President Reagan and his Interior Secretary, James Watt, accelerated the acceleration by proposing an increase from Carter’s 26 million acres of leases to almost a billion acres, auctioning off the land in tracts up to 50 million acres each. Public environmental planners immediately began expressing concern that they would not have sufficient time or resources to cushion the local impact of booming developments if oil and gas interests hit the jackpot so quickly in so many places. Even the corporations worried that they would not have the wherewithal to explore such a vast area in the rush of competition to get there first.

In the first flush of power, Reagan and Watt also ignored the gathering storm in coastal states, where, once again, impetus to gain control of shelf resources was growing. The states had seen the estimates of oil and gas reserves. They had seen energy corporations bidding as high as $36,000 per acre for leases. They knew that in August, 1981, 200 oil company representatives meeting in New Orleans bid some $561 million for drilling rights on some 50 tracts in federal waters off the coast of North Carolina. The states could only conclude that, despite talk of a “New Federalism” and partnership between state and federal government, Washington was about to take all the offshore royalties and leave the states with all the onshore problems — refineries, boom-town growth, public services expansion, pollution. So they fought back.

California had already successfully challenged a Watt-initiated federal lease in court. The U.S. Coastal Zone Management Act allows a state with an approved plan to determine if federal actions, including the leasing of oil and gas, are consistent with the state’s own planning and development goals.** In an unprecedented move, California used this clause in the spring of 1981 to claim the proposed lease was invalid because it contradicted the state’s own federally approved coastal management plan. In response, Watt demanded that the Department of Commerce direct its Office of Coastal Zone Management to rewrite leasing rules to exclude state participation. In his letter to Commerce Secretary Malcolm Baldridge, Watt called the coastal management act “an excellent example of unnecessary and burdensome regulations.” Meanwhile, California sued and won postponement of the leases, and Watt withdrew plans for that particular sale, thus delaying a decisive showdown.

North Carolina Governor Jim Hunt also protested that his state had not had sufficient time to determine if the leases slated for the August auction — especially tracts a mere 13 miles off pristine and popular Cape Lookout — would conflict with his state’s goals. His protest was riding the crest of public fury stirred by an early summer oil spill from an anonymous tanker that had closed long stretches of Outer Banks beaches to swimmers and dented the area’s tourism revenues. Alerted, the oil companies avoided a possible court challenge to the entire sale by not bidding on the Cape Lookout tracts.

Despite small victories, the coastal states still feel individually threatened, like 97-pound weaklings on a beach with Secretary Watt and the energy corporations kicking sand in their faces and running off with the offshore beauty and booty. Out in Watt’s spacious West, states receive 25 percent of the revenues from national timber leases, 50 percent from federal lands grazing receipts and, in accordance with the Mineral Leasing Act of 1920, 50 percent (90 percent in Alaska) of all mineral leasing revenues on federal lands within the state. The budget office estimated that revenues from the private mining of public lands would pay states $700 million in 1982 and over a billion dollars by 1985. But the continental shelf is treated differently.

When Congress did set aside some offshore lease money, it required that coastal states share the revenues with inland ones. From its inception in 1965, the Land and Water Conservation Fund received $2.8 billion from offshore leasing, and doled the money out to all states that put up matching funds for purchase of new park and recreation lands. As of January, 1980, the Southern states, Puerto Rico and the Virgin Islands had received altogether only $500 million over the last 15 years. Yet in the spring of 1981, Secretary Watt declared a moratorium on purchasing lands for national parks, saying the states should come up with their own money if they want more parks.

Furthermore, even as the nation’s budget office estimates the federal government will receive some $18 billion from offshore leases in fiscal year 1982, President Reagan has threatened to kill the only shield the states have for protecting themselves against chaotic onshore development related to continental shelf exploitation. In his February, 1981, budget, Reagan proposed zero funding for the federal Coastal Zone Management program, including special energy impact aid to states that must house and school and police temporary oil and gas boom towns. In March, 1981, of the 25 coastal and Great Lakes states with federally approved (and 80 percent federal matching grant funded) coastal management programs, only five predicted they would be able to continue their programs without federal aid. Others indicated they would continue to enforce basic coastal protection laws but at a greatly reduced level and without a systematic program.

By July, 1981, Congress had appropriated $40 million to coastal management for fiscal year 1982, but authorized only $7 million for the energy-impact program. (A “payoff’ amendment to the Coastal Management Act, the Coastal Energy Impact Program required states to plan for energy development and provided aid for social, economic and environmental consequences. It was originally authorized in 1976 for an average $120 million per year.) Observers predict that without broad public support to back up state lobbying, the administration will likely succeed in “zeroing out” coastal management by the end of President Reagan’s term.

Already, Secretary Watt has received the new regulation he wanted from the Commerce Department, knocking the states out of “pre-leasing” planning which considers size and location of drilling rigs and environmental precautions. Pre-leasing activities, the new regulations say, do not directly affect state coastal zones. Once again, California challenged the regulations in federal district court and won. Watt has appealed. A decision is expected in the summer of 1982.

According to Senator Ernest Hollings, Democrat of South Carolina, and nine colleagues, the new pre-leasing regulation “would seriously impair the states’ rights and violate the very spirit of ‘New Federalism’ espoused by the new administration.”

In short, President Reagan and Secretary Watt have betrayed their own supposed states’ rights philosophy by trying to lock up offshore revenues for corporate interests and the federal government, while pursuing every avenue possible to shut out state participation in planning for the consequences.

The only significant alliance opposing this federal strategy is the Coastal States Organization, formed during the Carter years by governors of coastal states who banded together in part because of these leasing battles. The organization intervened on the side of California in its suits against Watt, and their victory has thus far kept some life in the provisions of the Coastal Zone Management Act that require federal consistency with state goals. Unless the act is gutted by budget cuts in the next few years, it remains the best hope for state power over continental shelf exploitation.

Most recently, the Coastal States Organization, along with citizen groups and state lobbyists, has launched a strong effort to garner some offshore lease revenues to continue funding state-level coastal zone planning. The center of their work has been HR 4597, a bill introduced by North Carolina Democratic Representative Walter Jones. It would establish an Ocean and Coastal Resources Management Fund that would receive five percent of all rents, royalties and other money from leases on the continental shelf — but not more than $300 million per year. The money would be distributed as block grants to the coastal states in proportion to their shoreline mileage, oil and gas activity, coal handling facilities and population. At least 30 percent of the money would be earmarked for coastal zone planning and for handling the consequences of offshore leasing. As of February, 1982, staffers of the House Merchant Marine and Fisheries Committee were predicting mark-up by the full committee in April. The bill was facing strong opposition by the administration and oil companies, though.

While some observers call this approach “the bad impact payoff,” and a meager payoff at that, HR 4597 marks the beginning of a new effort by coastal states to claim some of the shelf’s wealth. Most states would like more than planning money from these federal revenues. Once again, many are thinking of nothing less than attempting to extend their present three-mile jurisdiction to 12 miles through new legislation. Such an extension would enrich the states, but would not do much to mediate between conflicting interests or assure the orderly and wise use of resources on the shelf. In this regard, states have proven no more virtuous in the past than the federal government.



If we do not want the oil and gas rush to overrun all other public interests on the coast, only one solution offers a constructive path through potential conflicts. We are far behind the best time for extending serious land-use planning from the shoreline to the continental shelf. Already, most coastal states, with the encouragement and cooperation of the federal government under past administrations, have sanctioned planning for an area where public and private interests clash bitterly — the shoreline. By comparison, extending planning seaward should be relatively painless for all but corporate interests and the Reagan/Watt administration. From the high water line seaward is nothing but public domain, yet we still govern its fate with a hodge-podge of laws and political deals.

Our leaders tell us not to worry, that we are over-planning and over-regulating and being too detailed in our consideration of every minnow and microbe. Yet the experts who analyze what is happening to our coastal resources are not encouraged. Their graphs and charts and tables tell a story as clear as any banker’s profit and loss statement. It is increasingly clear that — despite the billions of tax dollars spent studying, planning and regulating, despite great annual convocations of scientists, engineers and politicians, despite several dozen federal agencies, departments and committees overseeing one or another aspect of ocean management — our heritage is being sold off too cheaply and quickly.

While the coastal states and the federal government slug it out over who gets the offshore leases, the ringside seats are too often empty. Unless our trustee knows there is a strong and educated public looking on, the real public-access questions — of who shares in the new wealth and who inherits all the problems — will never be considered.

Protection of continental shelf resources, control over development, and access to the wealth that will flow is vital to the South’s coastland as it tries to accommodate increasing growth pressures. But most Southerners do not come to the shore to worry about such questions. They look seaward to watch the boats and the waves. Few realize that riding on those waves only three miles out is a new blockade of corporate profit-seekers and government subservience. And, unlike the Civil War’s Union blockades, the purpose of this one is not to promote union but to divide the public from its own vital resources.


*The major spill of late was the 1979 Ixtoc blowout in Mexico’s Bay of Campeche, which spewed 140 million gallons of “chocolate mousse” into the Gulf and fouled Texas beaches. Incidentally, though news coverage generally cast blame on the Mexican government for that one, it was an American rig – leased to the Pemex Company by SEDCO, Inc – that blew out. SEDCO is the family business of Bill Clements, the governor of Texas.


** The 1972 Coastal Zone Management Act (CZMA) gave coastal states the opportunity to receive federal grants and increased authority to plan for new growth. In return, it required participating states to establish organizational structures to coordinate local/state coastal growth management. Federal consistency meant that states gained power of review over federal actions in coastal areas; state programs, in turn, had to meet minimum federal standards.

A 1976 amendment to CZMA created the Coastal Energy Impact Program (CEIP), which then received most of the full program’s appropriation – $1.2 billion of $1.6 billion. Designed to mitigate local growth pressures caused by energy industries, CEIP also required states to plan for energy developments “in the national interest.”

President Reagan recommended that CZMA be “zeroed out” in 1981, but Congress appropriated $40 million for fiscal year ’82, staving off CZMA’s demise. North Carolina’s coastal program is often cited nationally as a model. For a brief explanation of its problems and promise, see NC coastal profile, page 93.