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Since the Santa Ynez Unit involves a platform for water depth much greater than that of existing Channel production platforms, EPA recommends that if all approvals are granted, new deepwater technology employed in the installation and operation of this platform be closely monitored. We suggest all monitored information be made available to the public and the rest of the industry so that future leasing decisions might include consideration of experience with these techniques. In this manner, development might proceed in an orderly fashion into deeper waters with a minimization of risk to platform workers and to the marine environment. In this connection, we also recommend consideration be given to a

special provision for the implementation and testing of subsea production facilities in the Hondo Field to provide more experience with this type of technology as well.

Further, if this fifth developmental option were implemented in the Santa Barbara Channel, consideration might first be given to the proposed platform on Lease V-P0202. This action might then be followed by further exploration of the unnamed potential field in the Santa Clara Unit on Lease I-P-0215 and the unnamed potential field in the Pitas Point Unit. When information on new technology for the above areas had been analyzed and after new deepwater techniques had been demonstrated in the Hondo Offshore Field, the Sacate Offshore Field might be considered.

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In view of the potential risk of deepwater operations employing new technology in a seismically active area, EPA believes it is essential that OCS leases include language which informs bidders of investment risk. In the event that subsequent research or experience determines that development of certain leases or development with certain technologies is environmentally unsatisfactory, it is important that the Department of the Interior have appropriate language in the leases which would retain the maximum legal options that are available within the existing authority. This would permit the Department the utmost flexibility to modify (and perhaps to deny) operating permits, and to provide an opportunity for public involvement.

Potential Conflicts Associated with Proposed National Energy Reserve Approximately 85 percent of the total California State lands offshore, including the Santa Barbara Oil Sanctuary, are held in petroleum resource sanctuaries that are legislatively excluded from any petroleum drilling. Large areas of potential Federal offshore leases and the proposed National Energy Reserve are adjacent to either State leases or State petroleum resource sanctuaries. Production on the Federal leases could deplete State reservoirs and prompt the State to accelerate its own production. If Federal production threatens to deplete reservoirs within California's petroleum resource sanctuaries, the State is bound by the sanctuary legislation to begin drilling and production within the sanctuary. The final environmental impact statement (FEIS) should clearly identify the extent of this potential conflict, and assess the

environmental impact of any induced or accelerated State activity due to accelerated activities on the Federal leases.

EPA is especially concerned about the leasing of tracts within the proposed National Energy Reserve which lie adjacent to the three mile limit bordering the Santa Barbara Oil Sanctuary or the nearly pristine Channel Islands (including Anacapa Island which has been designated by the State of California as an Area of Special Biological Significance). EPA is also concerned about the leasing of tracts within the proposed National Energy Reserve which lie within the shipping lanes, require deep ocean drilling and/or may lie atop geologically hazardous areas. The complexity of assembling a new boundary for the National Energy Reserve is appreciated. However, EPA believes the final statement should provide a full discussion of the range of options and impacts of the proposed National Energy Reserve.

Onshore Impacts

The development of the Santa Barbara Channel OCS will result in secondary onshore impacts. Onshore activities and facilities which are required to service the construction of and production from OCS oil and gas facilities include oil platform fabrication sites, boat docks, storage yards, pipeline corridors, pumping stations, tank farms, intermodal transfer facilities and onshore

7 pipelines. Oil refineries, petrochemical processing facilities and electrical generating plants are among the activities and facilities which will seek locations in the coastal zone in order to take advantage of the availablity of OCS oil and gas produced either as a raw material or as a source of energy. In turn, these facilities and activities will induce incremental additions to community facilities such as roads, sewers, schools, housing and transit facilities and other public

services. The product of this complex matrix of change is of
particular concern to EPA because of serious potential conflicts
of coastal land use and resource management with the ability of
State and local governments to provide the necessary urban infra-
structure, and with the ability to control the generation of waste
residuals in the form of wastewater discharges, air pollutant
emissions, and toxic materials. It is clear that secondary effects
of OCS leasing and subsequent production, as they are manifest over
time, will be equally as important as the direct and primary effects.
While the DEIS generally does a commendable job of disclosing
the direct and primary effects of and mitigative actions for OCS
activity in the Santa Barbara Channel, the discussion of secondary
effects and mitigation measures could be improved in the following
instances:

Socio-Economic Impacts

a. The discussion of socio-economic impacts in Section III is predicated upon population and employment projections for the State of California prepared by the State Chamber of Commerce. No justification is provided for using the Chamber of Commerce projections versus the official projections of OBERS or those published by the State Department of Finance. The projections used in the DEIS not only exceed the current official D100 series baseline values, but they also exceed the upper limit planning estimate of the D150 series. In discussing the employment benefits of OCS development, the DEIS cites the Chamber of Commerce estimate of 170, 000 new jobs needed annually statewide through 1980. There is no explanation as to why these figures were preferred over those of the State Department of Finance.

b. The secondary pricing effects throughout the economy, public revenue impacts, and equilibrium effects of the proposed action are not adequately analyzed. The DEIS omits opportunity costs relating either to the four levels of OCS development in the Channel or alternative energy sources. Thus, for example, the discussion of energy requirement impacts on page III-186 states that OCS development will provide critically needed energy supplies but omits a discussion of the net or balance concept of energy production. There should be consideration of the net energy production from the Santa Barbara OCS, particularly in deep water, versus alternative energy sources, including for example, the alternative of increased conservation and "storage and shut-in capacity" discussed in U.S. Energy Policy: Alternatives for Security, Resources for the Future

Inc.

c. Ultimately, (in 20-30 years, but with peak production expected eight years after discovery) the economic activity associated with development of nonrenewable OCS resources may end. The social and economic costs of adjustment to this potential outcome must be considered in assessing regional economic and environmental impacts. In the post production period the sponsors of significant OCS employment and capital investment will have to discover new economic purposes, possibly in the face of smaller energy supplies. Irreversible commitments of land to urban uses induced by OCS related activities will make it difficult, if not impossible (see page III-3), to continue to rely upon the current agricultural and tourism economies of Santa