Hint of compromise on fish vs. oil issue off New England shores

Massachusetts Gov. Michael S. Dukakis has fired the latest round in an ongoing battle with the Reagan administration over the planned federal leasing of tracts for offshore oil exploration near the rich Georges Bank fishing grounds.

In a recent letter to Interior Secretary William Clark, Governor Dukakis proposed that roughly half of the 2,469 offshore tracts slated to be put up for oil and gas exploration leases in September should be withheld from the lease sale to protect the environment.

The governor says the leasing of offshore tracts - approximately 14 million acres - should be scaled down ''to protect the ecosystem of this area which is critical to the Massachusetts environment, our tourism industry, and to the fishing industry that harvests and processes more fish, shellfish, and lobsters from Georges Bank than any other New England state.'' An Interior Department spokesperson said the proposal is being studied.

The Massachusetts Audubon Society, a longtime foe of mass leasing of offshore tracts near Georges Bank, praised the governor for seeking to limit the number of tracts available.

Representatives of major oil companies involved in offshore oil exploration off the Massachusetts coast declined to comment specifically on the Dukakis proposal.

But a spokesman for Shell Oil Company, one of five firms currently leasing tracts near the Georges Bank, said the company is concerned that America's offshore exploration and development program ''is being made ineffective.'' He said, ''Litigation and moratoria have prevented the oil industry from exploring on more than 53 million (offshore) acres . . . where there is a high potential for oil and gas. . . . The industry is confident it can explore safely in those areas as it has in the past.''

Governor Dukakis's letter specifically proposed that any tracts in waters shallower than 1,200 feet be excluded from the lease sale. State officials argue that such ''shallow'' waters near the Georges Bank are important for generation of fish and lobster stocks. The concern is that an oil spill during the sensitive spawning season might destroy an entire young population of fish for a given year.

''The preservation of this area is vital to the economy of Massachusetts, and it is in the best national interest that it be preserved and protected for us and for our children,'' Dukakis said.

Oil industry officials point out that fish catches in the Gulf of Mexico have risen over the years - despite the presence of 3,000 offshore oil rigs.

Ironically, the governor's proposal to limit offshore exploration to deeper waters fits in with a current oil industry trend toward drilling in deeper water in the Atlantic. But such decisions are coming more as a result of promising rock formations and dismal results in shallower waters than because of environmental concerns.

In 1979, when the Georges Bank area was first opened up for oil exploration, five companies purchased 63 tracts for $816 million. Eight wells were drilled, none of them resulted in commercial production of oil and gas.

To date 57 wells, including the eight at Georges Bank, have been drilled offshore in the Atlantic. None have produced commercial quantities of oil. The 1979 Georges Bank leases expire in January 1985, and the next round of oil and gas leases will be effective for 10 years.

Some industry observers feel there is more potential for a major oil or gas find in the deeper tracts than in the shallower waters nearer Georges Bank.

But drilling in deeper water also costs more. Shell is drilling its third deep-water well in the Wilmington Canyon, some 100 miles east of Atlantic City. In 6,952 feet of water (a world record), the well may cost the firm in excess of previous deep water rigs - neither of which produced commercial quantities of crude oil or gas. In comparison, it cost Shell $6.4 million in 1978 to drill a test well in 200 feet of water in the Baltimore Canyon.

After five years of exploration on the Georges Bank, with no significant quantities of oil or gas found, the oil companies' interest in the region may be waning. But company officials aren't talking. Any comment - or even an expression of interest or lack of interest - at this point might give a competitor an edge at the September lease sale.

The Interior Department hopes the interest is still there. ''One of the largest oil fields in the Gulf of Mexico had 12 dry holes before it was discovered,'' a department spokesperson notes. ''History has proved that just because you come up with dry holes one time that is not necessarily all you are going to find.''