FEDERALISM AND OFFSHORE OIL LEASING RESOURCES FOR THE FUTURE

This paper explores the relationship between federalism and the oil an d gas resources of the Outer Continental Shelf(OCS). Under the current system, the federal government his jurisdiction and control over leas ing and the coastal states share in almost none of the lease revenues. State involvement in the OCS process takes place primarily through th e consistency provisions of the Coastal Zone Management Act (CZMA). Th ese provisions state that all activities that affect a state's coastal zone must be consistent with the state's coastal zone management plan . The paper argues that the current system leads to an inefficient amo unt of OCS development and that efficiency would be enhanced if coasta l states had control over the OCS. The paper finds that the two argume nts for retaining federal control-(1) national energy security benefit s from OCS development, or (2) national environmental benefits from OC S preservation-are flawed.The paper also considers three other proposa ls: (1) retaining federal control with revenues shared with coastal st ates, (2) giving coastal states control with revenues shared with inla nd states, and (3) modifying the leasing system such that states and o thers could bid in competition with oil companies for the right to del ay leasing. Each of these alternatives, with the possible exception of (2), is found to be inferior to state control.