FOR RELEASE:  May 4, 1995                   CONTACT:  Tom DeRocco
                                                   (202) 208-3983

  OCS POLICY COMMITTEE PASSES RECOMMENDATIONS ON OIL
POLLUTION ACT FINANCIAL RESPONSIBILITY REQUIREMENTS (#50033)

     The Outer Continental Shelf (OCS) Policy Committee yesterday
voted to accept the report of a Subcommittee established to
recommend ways to implement the financial responsibility
requirement of the Oil Pollution Act of 1990 and pass the
recommendations on to the Secretary of the Interior.        

     Minerals Management Service (MMS) Director Cynthia
Quarterman said MMS was grateful to the Subcommittee for the time
and efforts spent on this very difficult issue.  "MMS is pleased
with the diverse interests represented.  We wanted to ensure that
all affected parties were represented in developing rules and
regulations that affect them," she said.

     OCS Policy Committee Chairman Paul Kelly said the majority
of the Subcommittee agreed that it would be unreasonable for MMS
to adopt regulations that would be needed to comply with the
legal opinion issued by the Interior Department's Solicitor last
November.  "To do so," he said,  "would apply the $150 million
Oil Spill Financial Responsibility (OSFR) requirement over an
unnecessarily large universe of facilities and impose potentially
severe financial burdens on parties responsible for thousands of
facilities that pose little oil spill risk."

     The Subcommittee found that the geographic scope of
jurisdiction implied in OPA is too broad, and noted that, unlike
the current law, facilities located seaward of the coastline have
been traditionally considered "offshore facilities."  They also
found that the amount of OSFR should not exceed $150 million and
should be proportional to the oil spill risk posed by the
facility.  In addition, they found that offshore facilities that
do not represent an oil spill risk should be exempted, and that
additional mechanisms for qualifying as a self-insurer are needed
to ensure that the costs of demonstrating OSFR do not cause
serious economic harm to responsible parties.

     Kelly noted that the Subcommittee initially focused on the
ability of MMS to incorporate the Subcommittee findings into OSFR
regulations.  It subsequently decided that new legislation would
be required to implement two of the recommendations as follows: 

     --Jurisdiction.  The Subcommittee recommends that the
Secretary of the Interior resolve the issue of the OSFR
jurisdiction by seeking legislation limiting the application of
OSFR to offshore facilities located seaward of the coastline as
defined in the Submerged Lands Act.


     --Amount.  The Subcommittee recommends that the Secretary of
Interior resolve the issue of amount by seeking legislation which
permits the Secretary to establish the amount of OSFR using an
assessment of a facility's oil pollution risk.

     The Subcommittee made two additional recommendations that
would not require new legislation but would require new
regulations as follows:

     --Exemption.  The Subcommittee recommends that the Secretary
of the Interior seek to administratively resolve the issue of
exemptions to OSFR for offshore facilities.

     --Insurance.  The Subcommittee recommends that the Secretary
of the Interior explore a range of options for demonstrating OSFR
through self-insurance.

     The 13-member Subcommittee was established in response to a
request in November by Bob Armstrong, Assistant Secretary for
Land and Minerals Management.  Chairman Paul Kelly, Vice
President of Rowan Companies, Inc., appointed members
representing a broad spectrum of interests, which would be
potentially affected by the requirements of OPA '90.  Robert
Jordan, Director of the Delaware Geological Survey, agreed to
serve as Chair of the Subcommittee.  A majority of the
subcommittee voted to make the recommendations outlined above.  

     MMS is the federal agency responsible for implementing OSFR
requirements for offshore facilities.  MMS manages the nation's
natural gas, oil and other mineral resources on the OCS, and
collects and disburses about $4 billion yearly in revenues from
offshore federal mineral leases and from onshore mineral leases
on federal and Indian lands.

                              -MMS-

Subject: PR-5/4/95 OCS Policy Committee/OCS Policy Committee
Passes Recommendations on Oil Pollution Act Financial
Responsibility Requirement (#50033)