Drilling Ahead in the Atlantic

Long frustrated by the legal appeals of environmentalists, fishermen, beach-front homeowners and hoteliers, the nation's energy companies at last will begin drilling for oil and gas off the Northeast Coast by early summer. The oilmen won a hard-fought victory last week when the U.S. Supreme Court, by refusing to hear an appeal of a lower-court decision, signaled a go-ahead to exploit acreage near the Baltimore Canyon, which lies 50 to 90 miles off Atlantic City, N.J. The most optimistic geologists estimate that this tract contains up to 1.4 billion bbl. of oil and 9 trillion cu. ft. of natural gas. That would be equal to all the oil and gas now drilled in the U.S. in six months.

Executives of oil companies, which paid $1.13 billion to the Government for leases 18 months ago, were exhilarated. Reason: while they do not expect to strike another Spindletop or North Slope, the industry has known for years that substantial reserves were available off the East Coast. With the price of new oil virtually deregulated, those finds have become all the more desirable. Though the Supreme Court decision set no precedent, the oilmen hope it may move other courts to rule in their favor in a case involving those lease tracts in the Georges Bank area, 100 miles southeast of Nantucket Island, Mass., that are still blocked.

Exxon expects to have a rig at the Baltimore Canyon in less than three weeks; within an additional 90 days, the company should drill the first well. Shell's Pacesetter II rig, now drilling in the Gulf of Mexico, will move to the Baltimore Canyon by mid-April. Texaco, Continental, Mobil, Gulf and Houston Oil & Minerals are also moving rigs to the area.

The drilling will give a hypodermic to some ailing economic areas. Pipe, drilling mud and other necessities are being shipped to Davisville, R.I., which will serve as a supply station. The oil companies plan to quarter their drilling crews in Atlantic City. There will be about 50 men to a rig, each earning $700 to $800 a week, and their spending power will create new jobs in hotels, restaurants and stores. "It will be a tremendous advantage for the Atlantic City area," says Louis Dalberth, head of the Southern New Jersey Development Council. "Super," echoes Delaware Governor Pierre du Pont IV, who hopes to get support facilities set up in his state.

Some thorny problems lie ahead. The oil companies stress that even if they were to hit oil on the first drilling, it would still take five years to get a well into production. Moreover, the U.S. Geological Survey is wrestling with the problem of approving pipelines to move the oil and gas safely to shore. Oil from the Atlantic is a long way off, but at least a start has been made.

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