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118564876
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Issues - Tidelands Oil
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118564876
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Issues - Tidelands Oil
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Ronald Reagan's Governor's Papers of the Press Unit
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1975-12-31
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1967-01-01
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Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual collections.
Collection: Reagan, Ronald: Gubernatorial Papers,
1966-74: Press Unit
Folder Title: Issues - Tidelands Oil
Box: P32
To see more digitized collections visit:
https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories visit:
https://reaganlibrary.gov/document-collection
Contact a reference archivist at: [email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
National Archives Catalogue: https://catalog.archives.gov/
fidelands Oil
STATE LANDS COMMISSION
July 30, 1974
1020 - 12th Street, 2nd Floor
Sacramento, CA 95814
(916) 445-5303
STATEMENT OF CHAIRMAN HOUSTON I. FLOURNOY
At the close of business today, the people of the
State of California will have lost $181,350,000 in public tidelands oil
revenue due to the Temporary Emergency Court of Appeals July 26th
reversal decision.
The decision declared that the Federal Energy Office had the
right to remove State and local government exemptions from crude oil
price ceilings, and to make that right retroactive to October 25, 1973,
without prior notice or public hearing.
As each 24 hours rolls by, that $181 million loss is increased
at the rate of $650,000 a day. By the end of this calendar year, the
loss to the people of this State will be an additional $100 million.
That's more than a quarter of a billion dollars of their own
money that the people of California could lose in 14 months and 7 days
unless we get judicial relief from a federal administrative regulation
that forces us to sell our state-owned oil to independent oil producers
at less than half the fair market value.
At today's prices, major oil companies and independent producers
are allowed to sell crude oil at the posted price of more than $10 a
barrel. The Federal Energy Office, supported by last Friday's court
decision, is retroactively forcing the State of California to sell its
royalty oil at the artificial price ceiling of $4.21 a barrel. If the
posted price should go higher, the price ceiling on California oil
would not budge one cent.
Tidelands oil is a public resource in California, and belongs only
to the people of this State. The revenue from that resource also belongs
to the people of this State. By statute, that revenue is applied, in
its greatest majority, to water projects; to recreation, fish and
wildlife preservation; and, to higher education.
MORE
-2-
At a time when major oil companies are reporting profits which
have been called everything from "obscene" to "phenomenal", it is
unconscionable that a temporary administrative energy office should
countenance and perpetuate increasing private gains while slapping a
lid on public revenues.
It is amazing to me that some oil companies seem to be perfectly
willing to pay whatever price a foreign country charges for oil, but
are unwilling to pay their own posted prices for oil from a sovereign
state within their own country.
Their attitude is totally irresponsible and completely contrary
to the best interests of the people of California. It is, in effect,
an insulting demand that the people of California provide them with a
subsidy even beyond the gas pump.
The State Lands Commission has an obligation to the people of
this State to get a fair market price for their oil and if we have to
go to the United States Supreme Court in order to operate on the open
market, then that's where we'll go.
At the emergency meeting this afternoon, I will introduce a motion
that the State Attorney-General be authorized to petition the U.S.
Supreme Court to hear the State of California on appeal from the recent
decision of the federal Temporary Emergency Court of Appeals.
##
de
STATE LANDS COMMISSION
NEWS RELEASE
1020 - 12th Street, 2nd Floor
Sacramento, CA 95814
July 8, 1974
CONTACT: Candy Johnson
(916) 445-5303
-- FOR IMMEDIATE RELEASE -
SACRAMENTO -- State Controller Houston I. Flournoy said
today he will oppose U. S. plans for massive offshore oil operations
along the Southern California coast unless the Federal Government
guarantees to meet California's stringent standards for drilling
operations.
"I am not against oil drilling or exploration for new
energy sources," said Flournoy, who also is chairman of the State
Lands Commission, "but I do demand optimum safety measures.
"I intend to see to it that the Federal Government applies
to all of its off-shore oil operations the same strict controls the
State has adopted in order to give the best possible protection to
the people of California."
Flournoy said he had a particular problem with the federal
interest in granting exploratory oil leases off Santa Monica Bay.
"Santa Monica Bay," he said, "has been termed a sanctuary
by both local and state government. We have long-established policies
preserving this area and we intend to maintain them. The Federal
Government must take into consideration the particular concerns of
Californians in this area."
Flournoy pointed out that the Federal Government has
operated its offshore oil leases under more relaxed requirements than
those of the State.
"When the State Lands Commission lifted the five-year
drilling moratorium on State leases last December," he said, "we
-2-
adopted even stricter regulations than were in force when the Santa
Barbara blow-out occurred on a federal offshore lease in 1969. The
requirements we have today are probably the toughest in the world."
The Commission's request for stricter safety assurances,
he said, has already been forwarded to U.S. Secretary of the Interior
Rogers C. B. Morton and to the Outer Continental Shelf Research
Management Advisory Board.
Flournoy said any federal action without considering
California's major concerns would meet certain opposition from him,
personally, and possibly additional opposition from the State Lands
Commission, which has jurisdiction over all development crossing the
three-mile width of offshore state waters along the entire California
coastline.
"The Lands Commission," he explained, "as well as the
Coastal Commission, will have jurisdiction over federal lessees
wanting to transport oil across state tidelands and into coastal
refineries for processing. So there are definite commitments that
must be made by the Federal Government to abide by our safety
standards and regulations, as far as I am personally concerned.
"If the lessees were to try offshore loading," he
continued, "then I would want to see an environmental impact report
on that possibility, with all alternatives explored. California
definitely is entitled to that consideration."
Flournoy also called for establishment of formal, meaningful
coordination mechanisms for meeting California's concerns before
any final action is taken by the Federal Government.
#####