--The focus by states and localities on the environmental and socioeconomic implications of major energy facilities, particularly new offshore oil and gas installations, brought increased attention to, and support for, the coastal zone effort.

--The Administration requested and Congress passed a $3 million supplemental appropriation to enable states to speed preparation for onshore impacts from offshore oil and gas operations.

--The first state coastal zone program to be processed, from the
State of Washington, received preliminary approval.

--All 30 states have voluntarily applied for and received matching grants to prepare their comprehensive coastal programs, as have three of the four eligible territories.

--Twenty-two states received second-year program development funding, most with revisions in their objectives based on the first year's experiences.

--The Nation's first marine sanctuary was designated under a program administered by the Office of Coastal Zone Management (OCZM).

--The first formal interagency agreement between OCZM and another Federal entity, the Department of Housing and Urban Development (HUD), regarding related management planning assistance programs was executed.

--Enactment of the first amendments to the Coastal Zone Management Act of 1972 was accomplished.

--Approval of funding for the Nation's second estuarine sanctuary was given.

--The Third Annual Coastal Zone Management Conference was conducted. --Three meetings of the Coastal Zone Management Advisory Committee were held.

II. SUMMARY OF THE YEAR'S ACTIVITIES

It became increasingly clear during Fiscal Year 1975 that the Nation's energy requirements demanded that the country develop new domestic sources of oil and gas. It likewise was clear that the best prospects for new fields lie off our coasts in previously unexplored areas.

Recognition by state and local governments in areas along the Atlantic, Pacific, and Alaskan coasts that they very soon might be faced with the presence of the offshore oil industry caused concern among some of the citizenry. Some reacted favorably, looking to the new development to provide a needed economic shot in the arm. Others registered a negative reaction, fearing oil spills, unplanned development, or destruction of rural or small community lifestyles.

During the year, concern, first at the local and state levels and then at the national level, centered on the shoreside implications of the introduction of the offshore industry into areas without previous experience with such a major undertaking.

Whereas in the past concern has centered by and large on the danger to the marine environment and recreation areas from oil spills from offshore activities, the focus of discussion by state and local authorities was now on the landside or onshore impacts. There is general agreement that a temporary phenomenon, such as the offshore petroleum industry, may present real problems for some areas of the country.

While concern was triggered by the prospect of introducing the offshore industry into new areas, the broader question of the impacts of all major energy facilities on the coastal zone received increased attention. There is general agreement that the balanced approach of the coastal zone effort provides a good way to conduct the careful planning required to minimize impacts from major energy facilities in the coastal zone.

From the standpoint of industry, for instance, the coastal zone program offers some degree of certainty about what type of facilities can be located where on the coasts and thus permit its planning to proceed.

For the state and local governments affected, the coastal zone program promises to give them a means of affecting Federal decisions in the energy area. Once a state has an approved coastal zone management program, Federal actions affecting the coastal zone must be consistent with the state program. This "Federal consistency" clause is a strong incentive for states to participate voluntarily in the coastal zone management effort. For the Federal Government, having the state and local governments work out decisions together with Federal cooperation on the future of their coastal areas will facilitate national decisionmaking as it affects the coastal zones.

The Nation's Governors, meeting on February 20, 1975, adopted a resolution about offshore development that laid heavy stress on the need for coastal zone planning. The National Governor's Conference statement neither opposed Outer Continental Shelf (OCS) operations nor early exploration to determine the extent of the resources. The statement, approved by a 30-to-1 vote, said:

"Development, production, transportation and onshore facility
plans should be submitted for approval to the Department of
the Interior, but only after the potentially impacted coastal
States have reviewed such plans in order to ensure consistency
with state coastal zone management plans and other applicable
state statutes and regulations. Since the plans should be
reviewed for consistency with state coastal zone management
programs, the Governors believe that adequate time, as deter-
mined by Congress, should be afforded states to develop such
coastal zone programs before any OCS production commences."

The current schedule calls for most states to have completed development of their coastal zone programs by the fall of 1977, well in advance of any OCS production even if no delays are encountered in the current leasing schedules. The best estimates are that it will be several years before the first production begins offshore in the new frontier OCS areas, such as the Atlantic and Alaskan Coasts.

During Fiscal Year 1975, four programs were submitted for examination by OCZM. Of the four, one from the State of Washington received preliminary approval from the Secretary of Commerce in May. The purpose of the preliminary approval is to provide formal recognition to a state that it has developed a management program that is in substantial compliance with the Coastal Zone Management Act and its implementing regulations. Once the state remedies the deficiencies identified pursuant to the secretarial review under the preliminary approval, the state is eligible for final approval pursuant to Section 306 of the Act. With an additional several months' work, it is anticipated that the State of Washington program will be ready for final approval by the Secretary, the first such program in the Nation.

The other three programs submitted for examination by OCZM-- from Oregon, the San Francisco Bay area, and the midcoast region of Maine--are all continuing program development work. It is expected that several state programs, or major geographic segments thereof, will be submitted during the current fiscal year for final program approval.

Final program approval makes a state eligible for Federal matching funds with which to operate the program (Section 306 of the Act) and means that the Federal consistency provision (Section 307) takes effect.

During Fiscal Year 1975, a total of 22 states received second-year funding to continue work on preparation of their programs. This matching funding (two-thirds Federal, one-third state) is authorized by Section 305 of the Act. All but a few dollars of the $9 million available in regular appropriations was obligated for this purpose during the year (see Appendix A).

First-year program development grants were made to the States of Indiana, New York, and Virginia, as well as to Guam and the Virgin Islands. Their entry into the program brought total participation as of June 30, 1975, to 33 of the 34 eligible states and territories. Only American Samoa is not taking part, due to its inability to provide the required matching funds.

States that did not receive second-year continuation grants during Fiscal Year 1975 will do so during the current year. By and large, these six states and territories were late in starting program development. It is expected that these states will receive their second-year funding early in Fiscal Year 1976.

Second-year programs for the most part represented a refinement and an advance from the programs outlined in the first year (see Fiscal Year 1974 annual report for summary of state programs). State coastal zone program offices have developed a capability for dealing with coastal zone issues as they have successfully gone about the task of assembling basic information about the coastal areas. These issues, whether they be erosion control, industry-recreation conflicts, or the need for control of coastal water uses, have come into sharper focus as a result of the first year's effort.

Just as the national concerns about energy issues led to a greater recognition of the coastal zone program, many state program efforts have become better known. This was particularly true among various interest groups.

For the most part, states were able to achieve the objectives they had established for themselves in their first year. Where delays were encountered, they were attributable to the difficulty of finding suitable personnel or to uncertainty about where the coastal program effort should fit within a state's executive apparatus. Some states found certain of their objectives more complex than they had anticipated and some tasks easier than expected, and have adjusted accordingly.

It is expected that increased attention will be given during second-year program development to the legal authorities available and to possible legislative requirements in order to achieve an approvable program. Also, attention will, naturally, come to focus on the state-local government relationship, which will be the key to successful coastal management programs.