916 

 30 



Once the program commences, provisions should be made for 

 federal assistance such as the application of federal royalty 

 revenues to affected coastal and adjacent states in compensa- 

 tion for any net adverse budgetary impacts and for the costs 

 of fulfilling state responsibilities in the regulation of off and 

 onshore development. 



Confirmation of the Governors' statement that they will face net 

 revenue losses as a consequence of offshore energy activity has come 

 from a variety of sources, including the Office of Management and 

 Budget. While its estimates are markedly lower than other surveys, it 

 conceded that state and local governments will have to invest $100 to 

 $300 million in Alaska and along the Atlantic Coast due to OCS opera- 

 tions. A private consulting firm, Energy and Environmental Analysis, 

 Inc., put the total public investment costs at $5.2 billion by 1985 for 

 all types of energy developments. The maintenance costs were esti- 

 mated at an additional $4.2 billion for the same period. 



Testimony from both industry spokesmen and environmental orga- 

 nizations agreed with the basic aim of H.R. 3981 in providing assist- 

 ance to affected state and local governments. 



Robert Bybee, operations manager of the Exploration Department 

 of Exxon, Inc., told the Oceanography Subcommittee : 



Exxon believes that adjacent coastal states and areas will 

 be impacted by OCS activities but that the impact is not 

 necessarily adverse. Nevertheless, these areas should right- 

 fully share in the revenues resulting from OCS activities. 

 The concept of "OCS impact" is difficult to translate into 

 practical terms. Exxon believes it is more appropriate that 

 citizens in adjoining states participate in the benefits of OCS 

 development through revenue-sharing on the basis of dividing 

 with the coastal states a part of that income derived from the 

 OCS opposite that state. 



Although not revenue-sharing, essentially this is what the Commit- 

 tee has provided in the automatic grant portion of the Coastal Energy 

 Impact Program (section 308(a) ). 



Testimony from the Environmental Policy Center of Washington, 

 D.C., stated in part : 



We support the approach taken in H.R. 3981 which pro- 

 vides for grants through the existing coastal zone manage- 

 ment program. The money is needed for both planning for 

 the impacts of OCS development and for direct compensation 

 for the impacts which state and local communities must suffer, 

 as a result of the development. 



The Center gave basic support to a tailored impact program where 

 the compensation would be related to the actual impacts felt. This is 

 the approach contained in the second part of the impact program con- 

 tained in H.R. 3981 in section 308 ( b) . 



H.R. 3981 contains a third type of assistance for states and coastal 

 areas directly affected by OCS operations. Under section 319, local and 

 state bonds issued to provide public services and public facilities made 

 necessary by OCS activity will be backed by the federal government. 



The provisions of this portion of the bill were strengthened meas- 



