Watt Announces Expansion of Energy Leasing on the Outer Continental Shelf

Date February, 1981

Secretary of the Interior James G. Watt proposed opening nearly one billion acres of U.S. Outer Continental Shelf land to oil and gas leasing. Watt’s brief tenure was marked by constant public conflict that stemmed largely from his antipathy toward environmental groups.

Locale United States

Key Figures

• James G. Watt (b. 1938), U.S. secretary of the interior, 1981-1983
• Ronald Reagan (1911-2004), president of the United States, 1981-1989
• Gifford Pinchot (1865-1946), first director of the U.S. Forest Service
• John Muir (1838-1914), founder of the Sierra Club

Summary of Event

In February, 1981, Secretary of the Interior James G. Watt announced that he intended to reduce U.S. dependence on imported petroleum by opening the entire Outer Continental Shelf (OCS) to oil and gas leasing. The announcement began one of the conflicts that made the outspoken Watt the most controversial figure in Ronald Reagan’s early presidency. Watt, an ardent supporter of the conservative Reagan program, told a reporter that he intended to be the administration’s “high-risk player” in an uncompromising drive to implement the president’s agenda.

James Watt was born on January 31, 1938, in Lusk, Wyoming, the descendant of several generations of western homesteaders. His father, a lawyer, was, according to Watt, a “rabid” Republican who believed that leftists had seized control of the country. After James Watt received his law degree in 1962, he went to Washington as a staff member to a Republican senator. In 1966, he became a lobbyist on environmental matters for the chamber of commerce, and Presidents Richard M. Nixon and Gerald R. Ford later appointed him to important posts in the Department of the Interior and the Federal Trade Commission.

Watt moved back to the West in 1977 to direct the newly established Mountain States Legal Foundation, a conservative organization that fought environmental regulations. He believed that the conservation movement had fallen into the hands of environmental extremists who placed preservation of resources above economic development.

After the 1980 election, several powerful senators from western states urged the president-elect, Ronald Reagan, to name Watt to head the Department of the Interior. When Reagan offered Watt the position, the two men agreed on the need to speed the development of federally owned natural resources, especially new energy sources, to reduce American dependence on foreign oil. Watt warned Reagan that programs to increase development of public resources would arouse a storm of opposition: “You’re going to have to back me, and back me, and back me.” Reagan smiled and promised that he would.

The Sagebrush Rebellion foreshadowed and shaped the attempted Reagan-Watt revolution in conservation policy. In the late 1970’s, the Nevada legislature passed a resolution demanding the transfer of millions of acres of federal land to state control. The “rebellion” spread to other western states and attracted the support of conservative leaders outside the West. Watt became a prominent member of the movement, and in 1980 Ronald Reagan publicly proclaimed himself a Sagebrush Rebel.

Western mining, ranching, and lumbering interests that used public lands were infuriated at what they perceived as growing federal arrogance in managing resources. Beneath their anger at specific decisions was their dismay at changes in thinking about conservation. During the nineteenth century, the federal government had tried to dispose of its land holdings as quickly as possible by selling or giving millions of acres to states and individuals. A new direction in natural resource strategy began early in the twentieth century with the emergence of the modern conservation movement. Gifford Pinchot, first director of the U.S. Forest Service, was a central figure in developing new ways of thinking about public resources. Pinchot defined conservation as the planned, orderly use of natural resources to benefit the people then living, while reducing wastefulness that would unnecessarily deprive future generations of needed resources. He advocated economic development based on rational use of public resources under the scientific management of a strong federal government. Grazing, lumbering, and other corporate interests flourished as they used public resources at low lease prices.

While Watt portrayed his policy as being in the Pinchot tradition, his opponents tended to follow another path in conservation thought. John Muir, often called the father of modern environmentalism, rejected Pinchot’s utilitarian approach, which placed human wants above the rest of nature. Preservation of vast tracts of land, forests, and waterways in an undisturbed state was important, Muir believed, both for his generation and for future generations.

During the first half of the twentieth century, Pinchot’s view dominated, and the federal government regulated timber, grazing, mining, and other commodity interests that used public lands and water. During the long period of prosperity after World War II, however, millions of Americans began to travel and experience the natural wonders of American parks, waterways, and preserves. Environmentalist groups grew in membership and became major players in the formation of resource policy. During the 1960’s and 1970’s, the preservationist thrust in conservation thinking began to predominate, and commodity interests believed they were excluded from the decision-making structure.

The Sagebrush Rebels attacked the new environmental consensus that had emerged in the 1960’s and 1970’s with preservation as its theme. Watt merged the concerns of the Sagebrush Rebellion with the broader New Right attack on big government and government regulation of the private sector. Under his leadership, Watt said, the nation would dig more mines, pump more oil, and cut more timber. Preservationists had the right to exist, he said on his first day in office, but not in the Department of the Interior. He told all Jimmy Carter administration holdovers that he wanted their resignations by the end of the day.

Pumping more oil became one of Watt’s major goals. At the time of the first Arab oil embargo in 1973 and 1974, the United States imported about 39 percent of its oil, and American dependence on foreign oil became a major national security concern. Presidents Ford and Carter made conservation of energy use a major national priority.

Reagan and Watt rejected the idea of limits of any kind and looked instead for new sources of energy production. Shortly after taking office, Watt announced that he intended to use the billion-acre Outer Continental Shelf to break American dependence on foreign oil. The U.S. Geological Survey estimated that the OCS, the area that begins generally three miles off the mainland, contained as much as 44 billion barrels of oil and 231 trillion cubic feet of natural gas.

In May, 1981, Watt announced that he intended to open the OCS to leasing at a rate of about 200 million acres a year for five years. The U.S. government had leased only forty-two million acres of OCS land in the preceding twenty-two years. The scope of Watt’s plan shocked even oil company executives, who feared that they did not have the resources to respond to the opportunity.

Significance

James Watt developed his OCS policy in the larger framework of the Reagan revolution. Reagan set clear policy guidelines based on his conservative ideology and relied on loyal subordinates to implement his program. No one was more loyal than Watt. When White House moderates pushed for compromise, he proclaimed what became the conservative war cry: Let Reagan Be Reagan. Watt had “a bias for private enterprise,” he proudly admitted, and when he made a mistake he would err on the side of resource use rather than preservation.

His war with environmentalists began at once. Watt said that he intended to use budget decisions as an “excuse” to change policy. For example, he regarded the Office of Surface Mining as an overzealous and restrictive office that disrupted the mining industry. He cut its staff by 40 percent and rewrote most Carter administration surface-mining regulations. In July, 1981, he fired fifty-one Solicitor’s Office employees. By that time, he had announced his intention to lease the OCS, pushed plans to increase livestock grazing and mining on public land, and placed a moratorium on further federal land purchases for parks and preserves. In 1982, he announced plans to sell thirty-five million acres of federally owned wilderness and to open wilderness areas to mineral exploration.

Meanwhile, Watt continued to refine his OCS plan, and it took effect on July 21, 1982. Watt promised to open to leasing the entire billion acres of OCS land at a rate of 200 million acres a year. Governors Jay Hammond of Alaska and Jerry Brown of California went to court to block the action. Watt was an “environmental outlaw,” Brown said. Eight environmental groups also went to court to stop the plan.

Watt’s tenure was marked by constant public conflict. He was personally belligerent and brash, and he enjoyed ridiculing environmental groups that in recent decades had assumed sacrosanct status. He contemptuously portrayed environmental groups as special interest groups composed of elite extremists who wanted to deny the benefits of American resources to average people. His belligerent posture was partly a deliberate strategy to erode the moral authority of the powerful environmental lobby, which had identified its agenda with the public interest.

Watt’s policy was in line with Reagan’s conservative agenda, and he became the Republican Party’s biggest fund-raiser other than Reagan himself. If Watt’s opponents portrayed him as an environmental outlaw, his supporters claimed that he was in the mainstream of conservation thought, pursuing orderly development of natural resources to stimulate economic growth without waste. Watt pitted the American people’s support for improving the environment against their demand for economic growth.

Watt’s major vulnerability came from his penchant for making controversial statements, often unrelated to environmental issues. An accumulation of these controversial comments led eventually to his resignation.

The historical importance of Watt’s tenure continued to be debated long after he returned to Wyoming. His OCS plan proved disappointing to those who expected an economic and energy bonanza. Opponents fought the plan in the courts, and when it cleared those obstacles, state officials and environmental groups mounted a massive political challenge. Congress forbade leasing on some offshore lands and refused to appropriate money to initiate leasing in other OCS tracts. Perhaps the major problem the initiative faced was an international oil glut and falling prices that reduced petroleum company interest in the OCS. In two major lease offerings in 1983, for example, the Department of the Interior expected $8.4 billion in bids but received only $5.6 billion. While the administration’s intention was to reduce U.S. dependence on foreign oil, when Reagan left office in 1989, the United States was importing about 46 percent of its daily petroleum consumption, compared to 39 percent when he became president.

William P. Clark and then Donald Hodel replaced Watt as secretary of the interior. They refrained from using Watt’s fiery rhetoric but retained his policy. Most scholars concluded that Reagan and Watt fought their environmental opponents to a standstill. Environmentalists blocked or reversed most administration attempts to undo the gains of the 1960’s and 1970’s, but the Reaganites also stymied new environmental initiatives. Some scholars believed that the most important long-range effects of Watt’s tenure was to erode the sacrosanct aura surrounding environmentalism and to reduce environmental organizations to the status of other interest groups contending for success in a pluralistic political system.

Bibliography

Arnold, Ron. At the Eye of the Storm: James Watt and the Environmentalists. Chicago: Regnery Gateway, 1982. Defends James Watt and his policies. Arnold intersperses biographical chapters with chapters analyzing Watt’s environment policy based on his conservative thought. Arnold’s basic argument is that Watt was a staunch conservationist, but not a preservationist.

Cawley, R. McGreggor. Federal Land, Western Anger: The Sagebrush Rebellion and Environmental Politics. Lawrence: University Press of Kansas, 1993. Offers an interpretation of events in federal land policy from the 1960’s to the 1990’s.

Durant, Robert F. The Administrative Presidency Revisited: Public Lands, the BLM, and the Reagan Revolution. Albany: State University of New York Press, 1992. An important study of the modern presidency using the Department of the Interior as a case study. Durant shows how Reagan and his subordinates conducted the most zealous attempt in history to use all the powers of the chief executive to implement policy; Reagan’s extension of the administrative presidency was so complete that it provoked intense opposition from Congress, local governments, and interest groups.

Shanley, Robert A. Presidential Influence and Environmental Policy. Westport, Conn.: Greenwood Press, 1992. Like Robert Durant, Shanley uses Watt and environmental policy to study Reagan’s administrative presidency.

Short, C. Brant. Ronald Reagan and the Public Lands: America’s Conservation Debate, 1979-1984. College Station: Texas A&M University Press, 1989. Develops historically the split in the conservative movement between preservationists and developmentalists.

Watt, James G., with Doug Wead. The Courage of a Conservative. New York: Simon & Schuster, 1985. This is Watt’s conservative manifesto. It gives insight into Watt’s thinking, but falls short as a deep and coherent study of political philosophy.

Watt, Leilani, with Alan Janssen. Caught in the Conflict: My Life with James Watt. Eugene, Oreg.: Harvest House, 1984. James Watt’s wife describes from a personal perspective the controversies that surrounded her husband and defends and explains his decisions.