JAMES G. WATT, SECRETARY OF THE INTERIOR, ET AL., PETITIONERS V.
STATE OF CALIFORNIA, ET AL.

   No. 82-1326

   In the Supreme Court of the United States

   October Term, 1982

   On Writ of Certiorari to the United States Court of Appeals for the
Ninth Circuit

   Brief for Petitioners

                      PARTIES TO THE PROCEEDINGS

   This litigation was commenced by the filing of separate but
virtually identical complaints by the State of California and various
environmental action groups.  Parties plaintiff include the State of
California, the California Coastal Commission, the California Air
Resources Board, the California Resources Agency, the California
Department of Fish and Game, the California Department of
Conservation, the Natural Resources Defense Council, Inc., the Sierra
Club, Friends of the Earth, Friends of the Sea Otter, and the
Environmental Coalition on Lease Sale No. 53.  Several California
political subdivisions intervened as parties plaintiff in the
litigation brought by the State:  the Counties of Humboldt, Marin,
Mendocino, Monterey, San Diego, San Luis Obispo, San Mateo, Santa
Barbara, Santa Clara, Santa Cruz, and Sonoma;  the Cities of Brisbane,
Capitola, Carmel-by-the-Sea, Los Angeles, Morro Bay, Pismo Beach, San
Francisco, San Luis Obispo, Santa Barbara, Santa Cruz, Santa Monica,
and Seaside, as well as the Association of the Monterey Bay Area
Governments.  Named as defendants, in addition to the Secretary of the
Interior, were the United States Department of the Interior;  the
United States Bureau of Land Management;  Edward Hastey, then Acting
Director of the United States Bureau of Land Management;  and Robert
Burford, then Director Designate and now Director, United States
Bureau of Land Management.  The Western Oil and Gas Association
intervened as a party defendant in the litigation, as did Amoco
Production Co., Atlantic Richfield Co., Champlin Refining Co., Chevron
U.S.A., Inc., Cities Service Co., Conoco, Inc., Exxon Corp., Elf
Aquitaine Oil & Gas, Getty Oil Co., Gulf Oil Corp., Phillips Petroleum
Co., and Shell Oil Co.

            TABLE OF CONTENTS
   Opinion below
   Jurisdiction
   Statutes involved
   Statement
   Summary of argument
   Argument
      I. Section 307(c)(1) limits consistency obligations to
          those federal activities that have a direct, identifiable
          impact on the coastal zone
      II. The decision below runs contrary to a carefully
          crafted legislative scheme that fully integrates the CZMA
          into the OCS oil and gas process
      III. Limiting Section 307(c)(1) to activities that
          directly affect the coastal zone fully implements the
          congressional policies behind the CZMA and the OCSLA
   Conclusion

                             OPINION BELOW

   The opinion of the court of appeals (Pet. App. 1a-33a) is reported
at 683 F.2d 1253.  The opinion of the district court (Pet. App.
34a-78a) is reported at 520 F. Supp. 1359.

                             JURISDICTION

   The judgment of the court of appeals was entered on August 12, 1982
(Pet. App. 82a).  A timely petition for rehearing was denied on
November 10, 1982 (Pet. App. 83a).  The petition for a writ of
certiorari was filed on February 8, 1983, and granted on May 16, 1983
(J.A. 156).  /1/ The jurisdiction of this Court rests on 28 U.S.C.
1254(1).

                           STATUTES INVOLVED

   Section 307(c)(1) of the Coastal Zone Management Act of 1972, 16
U.S.C. 1456(c)(1), provides (Pet. App. 84a):

      Each Federal agency conducting or supporting activities directly
      affecting the coastal zone shall conduct or support those
      activities in a manner which is, to the maximum extent
      practicable, consistent with approved state management programs.

   Pertinent provisions of the Outer Continental Shelf Lands Act, 43
U.S.C. (& Supp. V) 1331 et seq., are reprinted at Pet. App. 87a-99a.

                          QUESTION PRESENTED

   Whether an outer continental shelf lease sale that does not
authorize any conduct having a physical impact upon the coast is a
federal activity "directly affecting the coastal zone" within the
meaning of Section 307(c)(1) of the Coastal Zone Management Act of
1972, 16 U.S.C. 1456(c)(1).

                               STATEMENT

   Pursuant to Section 307(c)(1) of the Coastal Zone Management Act of
1972, 16 U.S.C. 1456(c)(1) ("CZMA"), federal "activities directly
affecting the coastal zone" are subject to the substantive requirement
that they be conducted in a manner that is consistent "to the maximum
extent practicable" with an approved state coastal zone management
program.  This litigation raises the question whether the substantive
consistency requirement of Section 307(c)(1) properly applies to an
outer continental shelf ("OCS") oil and gas lease sale conducted
pursuant to the Outer Continental Shelf Lands Act, 43 U.S.C. (& Supp.
V) 1331 et seq. ("OCSLA"), when that sale has no physical impact upon
the coastal zone but merely sets in motion a chain of events that may
eventually result in such an impact.

   1. a. The Coastal Zone Management Act of 1972, 16 U.S.C. (& Supp.
V) 1451 et seq., was enacted to encourage the wise use of the land and
water resources of the coastal zone through the development and
implementation of state management programs (Section 303, 16 U.S.C.
(Supp. V) 1452).  /2/ Before a state management program becomes
effective, it must be approved by the Secretary of Commerce (Sections
305(h), 306(c), 16 U.S.C. 1454(h), 1455(c)), who must insure that the
views of the federal agencies principally affected by the state's
program have been adequately considered (Section 307(b), 16 U.S.C.
1456(b)).  Following approval of a state management program, the
activities of the federal government, as well as the actions of its
licensees and permittees, must meet the various consistency
requirements of the Act (Section 307(c), 16 U.S.C. (& Supp. V)
1456(c)).

   Section 307(c)(1) of the CZMA sets forth the consistency
requirements imposed upon the activities of the federal government.
The section mandates that each federal agency "conducting or
supporting activities affecting the coastal zone" conduct or support
those activities "in a manner which is, to the maximum extent
practicable, consistent with approved state management programs" (16
U.S.C. 1456(c)(1)).  Pursuant to Commerce Department regulations
implementing this provision, federal agencies are required to prepare
a document termed a "consistency determination" for any activity that
will have a direct effect upon the coastal zone of a state with an
approved management program (15 C.F.R. 930.34).  /3/ The consistency
determination identifies the direct effects of the federal activity
and provides the state with an explanation of how the federal agency
has tailored its proposed activity to achieve consistency with the
state program (15 C.F.R. 930.39).

   Section 307(c)(3)(A) of the Act, 16 U.S.C. 1456(c)(3)(A), addresses
the consistency obligations of most federal licensees or permittees.
Applicants for federal licenses or permits are required to supply
consistency certifications for any "activity affecting land or water
uses in the coastal zone." 16 U.S.C. 1456(c)(3)(A).  The state is then
given an opportunity to concur with the certification.  If the
appropriate state authorities decline to concur, the federal agency
from whom the license or permit is sought must reject the application.
 The state's veto of an applicant's consistency certification can be
overridden by the Secretary of Commerce, however, if the Secretary
finds that the applicant's proposed activity is consistent with the
CZMA or is otherwise necessary in the interest of national security
(ibid.).

   In 1976, Congress added Section 307(c)(3)(B), 16 U.S.C. (& Supp. V)
1456(c)(3)(B), to the consistency provisions of the Act for the
express purpose of integrating petroleum development activities on the
outer continental shelf into the CZMA's statutory scheme.  H.R. Conf.
Rep. No. 94-1298, 94th Cong., 2d Sess. 30-31 (1976).  Under Section
307(c)(3)(B), any lessee seeking approval of exploration, development
or production plans for areas leased under the OCSLA must "attach to
such plan a certification that each activity * * * described in detail
in such plan" will be carried out in a manner consistent with an
approved program if it "affect(s) any land use or water use in the
coastal zone." This consistency certification, like the certification
required by Section 307(c)(3)(A), is subject to state concurrence or
override by the Secretary of Commerce prior to the issuance of any
federal permit or license for the activities described in the plan.
Thus, the states have significant substantive control over all
exploration, development and production activities on the OCS that
affect the coastal zone.  Moreover, as detailed below, this CZMA
consistency certification requirement has been specifically
incorporated into the Outer Continental Shelf Lands Act.  43 U.S.C.
(Supp. V) 1340(c)(2), 1351(d).

   b. The Outer Continental Shelf Lands Act, ch. 345, 67 Stat. 462 et
seq., was enacted in 1953 to authorize federal leasing of the outer
continental shelf for oil and gas development beyond the state
territorial sea belt.  See note 2, supra.  In 1978, Congress amended
the OCSLA (Pub. L. No. 95-372, 92 Stat. 632 et seq.) to provide for,
inter alia, the "expeditious and orderly development, subject to
environmental safeguards," of resources on the OCS.  43 U.S.C. (Supp.
V) 1332(3).  H.R. Rep. No. 95-590, 95th Cong., 1st Sess. 53 (1977).
The Act, as amended, establishes distinct stages for federal
decisionmaking regarding oil and gas development activities on the
OCS, and specifically provides for input by affected states as well as
a balancing of environmental concerns at each stage of the OCS oil and
gas process.  The stages in that process can be described as (1)
development of a leasing program, 43 U.S.C. (Supp. V) 1344;  (2)
preparation and leasing, 43 U.S.C. (Supp. V) 1337(b);  (3)
exploration, 43 U.S.C. (Supp. V) 1340;  and (4) development and
production, 43 U.S.C. (Supp. V) 1351.  /4/

   Section 18 of the OCSLA, 43 U.S.C. (Supp. V) 1344, requires the
preparation of a five-year leasing program to provide an overall
framework and schedule for OCS lease sales.  During the preparation of
a five-year leasing program, the Secretary is required to solicit
comments from "any interested Federal agency" and the "Governor of any
State which may become an affected State under such proposed program"
(43 U.S.C. (Supp. V) 1344(c)(1)).  The Secretary is required to
respond in writing to all comments or requests received from a state
governor, "stating his reasons" for "granting or denying such request
in whole or in part" (43 U.S.C. (Supp. V) 1344(c)(2)).  The proposed
program is then published in the Federal Register for a 90-day comment
period, and is thereafter submitted to the President and Congress,
together with all comments received and all correspondence between the
Secretary and the governor of an affected state (43 U.S.C. (Supp. V)
1344(c)(2), (3) and (d)(1), (2)).  After a Section 18 program is
approved, OCS lease sales proceed in conformity with its
month-by-month schedule.  43 U.S.C. (Supp. V) 1344(d)(3).

   The solicitation of bids and issuance of offshore leases constitute
the next stage of the OCS oil and gas process.  43 U.S.C. (Supp. V)
1337(a).  Prior to the actual lease sale, however, the Secretary is
required to undertake a variety of discrete actions.  See 43 C.F.R.
3310 et seq. (to be recodified at 30 C.F.R. 256).  An environmental
impact statement ("EIS") is normally prepared pursuant to the National
Environmental Policy Act of 1969, 42 U.S.C. 4321 et seq. ("NEPA"), and
consultation among various government agencies may be initiated under
Section 7(a) of the Endangered Species Act of 1973, 16 U.S.C. (Supp.
V) 1536(a) ("ESA"), if any listed species may be affected by the
proposed lease sale.  More important, under Section 19(a) of the
OCSLA, the governor of any affected state, as well as the executives
of any affected local governments, are given a formal opportunity to
submit recommendations regarding "the size, timing and location" of a
proposed lease sale.  43 U.S.C. (Supp. V) 1345(a).  The Secretary is
directed to accept these recommendations if he determines that they
provide a reasonable balance between the national interest and the
wellbeing of the citizens of the affected state.  43 U.S.C. (Supp. V)
1345(c).  The Secretary's resolution of any conflicts at this stage is
final and may be set aside only if found to be arbitrary or
capricious.  43 U.S.C. (Supp. V) 1345(d).

   Following these preparatory steps, which include the publication of
a proposed and final notice of the lease sale (30 C.F.R. 256, Subpt.
F), the Secretary may proceed with the actual lease sale.  The OCSLA
authorizes the Secretary to grant leases to the highest responsible
qualified bidders at the sale.  43 U.S.C. (Supp. V) 1337(a).  The
lease awarded at the sale, however, entitles its holder to undertake
only extremely limited activities without further federal approval.
See 43 U.S.C. (Supp. V) 1340(c) (approval required prior to
exploration);  43 U.S.C. (Supp. V) 1351 (approval required prior to
development and production).  Regulations promulgated by the
Department of the Interior provide that a lease only entitles its
holder to conduct "preliminary activities" on the OCS.  30 C.F.R.
250.34-1.  These "preliminary activities" are defined as "geophysical,
and other surveys necessary to develop a comprehensive exploration
plan" so long as such activities "do not result in any physical
penetration of the seabed of greater than 300 feet of unconsolidated
formations" and "do not result in any significant adverse impact on
the natural resources of the (OCS)" (ibid.).  More extensive activity
is permitted only upon a lessee's compliance with the procedures and
substantive requirements of the next stage:  exploration.

   Prior to commencing exploration activities, a lessee must submit a
detailed exploration plan to the Secretary for approval.  43 U.S.C.
(Supp. V) 1340(c).  The Secretary must disapprove a plan if the
activity would likely cause serious harm or damage to life or property
or to the marine, coastal or human environment.  Ibid.  A lessee
submitting a plan that affects any land or water use in the coastal
zone of a state with an approved management program must also attach
to the plan a certification that the activities described in the plan
comply with the state's coastal zone management program.  Ibid.; 16
U.S.C. (& Supp. V) 1456(c)(3)(B).  The Secretary may not grant any
license or permit for any activity described in an exploration plan
until the state concurs with the certification of compliance, or a
determination of consistency or necessity is made by the Secretary of
Commerce.  Ibid.  Only after an exploration plan is approved will
drilling permits and other necessary licenses be issued to authorize
exploration activities.

   The final stage under the OCSLA, development and production, is
reached only if commercial quantities of oil and gas are discovered.
As with the exploration stage, the lessee must submit a detailed
development and production plan to the Secretary for approval prior to
commencing any production activities on the OCS.  43 U.S.C. (Supp. V)
1351(a)(1).  /5/ The plan, together with all supporting documents, is
submitted by the Secretary to the governor of any affected state for
comment and review (43 U.S.C. (Supp. V) 1351(a)(3) and (g)).  To
obtain approval, the plan must be in compliance with the OCSLA and its
implementing regulations (43 U.S.C. (Supp. V) 1351(h)(1)(A)), and must
include a certification of consistency with the coastal zone
management program of any affected state.  43 U.S.C. (Supp. V)
1351(d);  16 U.S.C. (& Supp. V) 1453(c)(3)(B).  /6/ Approval of the
development and production plan is contingent upon an affected state's
concurrence with or the Secretary of Commerce's override of the
state's objections to this consistency certification.  43 U.S.C.
(Supp. V) 1351(h)(1)(B).  Finally, Section 19 of the OCSLA, 43 U.S.C.
(Supp. V) 1345, grants the governor of an affected state as well as
appropriate representatives of local governments a formal opportunity
to submit recommendations with respect to a proposed development and
production plan.  As with the comments received concerning the lease
sale itself (page 6, supra), the Secretary is to accept the state's
recommendations if they provide for a reasonable balance between the
national interest and the well-being of the citizens of the affected
state.  43 U.S.C. (Supp. V) 1345(c).  Again, the Secretary's decision
is final unless found to be arbitrary and capricious.  Ibid.

   2. This litigation arises out of the Department of the Interior's
decision to offer 111 OCS tracts off central California for leasing
under the OCSLA (46 Fed. Reg. 23678-23680 (1981)).  As contemplated by
the statutory scheme outlined above, the State of California has been
intimately involved in the administrative procedures leading up to
that decision.

   Preparation for OCS Lease Sale No. 53, Santa Maria Basin, began in
the early fall of 1977, when Interior requested the Geological Survey
and other federal and state agencies to provide reports on potential
oil and gas resources located in the Pacific OCS from Point
Conception, Santa Barbara County, California, north to the
California-Oregon border (C.R. 85;  A.R. 1w-15w).  /7/ In November
1977, the Department published a "(c)all for (n)ominations" that
requested potential bidders, as well as federal, state and local
governmental agencies, environmental orgainzations and the public, to
identify which of some 2,036 blocks in the area should be offered for
lease and which should be restricted or specifically excluded.  42
Fed. Reg. 60794 (1977).  After reviewing this information, on October
10, 1978, Interior selected 243 blocks for further environmental
analysis and consideration (C.R. 85;  A.R. 91w).  See 43 C.F.R.
3314.1(a).  Of these 243 blocks, 115 were located in the Santa Maria
Basin located off western Santa Barbara and San Luis Obispo Counties,
California.  The remaining 128 blocks were located in four basins
farther north.

   After the tentative selection of these blocks, the Department's
Bureau of Land Management began to evaluate the potential
environmental impact of oil and gas operations in the identified
areas.  The Bureau conducted a series of meetings in California, in
which several state agencies participated, to identify the issues that
should be discussed in the forthcoming draft environmental impact
statement (44 Fed. Reg. 26215 (1979)).  In April 1980, Interior issued
the draft EIS and scheduled six more public hearings in California to
discuss it (45 Fed. Reg. 30703).  /8/ The Bureau of Land Management
also initiated consultations with the United States Fish and Wildlife
Service and the National Marine Fisheries Service concerning the
impact of OCS Lease Sale No. 53 on the species protected by the
Endangered Species Act of 1973, 16 U.S.C. (& Supp. V) 1531 et seq.
/9/

   In September 1980, Interior issued a final EIS addressing the
potential environmental impacts from leasing all 243 tracts in the
five OCS basins.  One month later, on the basis of the EIS, the
biological opinions of the Fish and Wildlife Service and the National
Marine Fisheries Service, and the other data in the administrative
record, the former Secretary of the Interior, Cecil D. Andrus, decided
to exclude the four northern basins from Lease Sale No. 53.  /10/ On
October 17, 1980, a proposed notice of sale was issued, limiting
bidding to 115 tracts in the Santa Maria Basin (45 Fed. Reg. 71140).
On October 24, 1980, Interior sought the recommendation of former
Governor Edmund G. Brown of California as to the "size, timing or
location" of the lease sale pursuant to Section 19(a) of the OCSLA, 43
U.S.C. (Supp. V) 1345(a).

   In the course of these proceedings, the California Coastal
Commission, on July 8, 1980, informed the Secretary of its conclusion
that Lease Sale No. 53 was a federal activity directly affecting the
California coastal zone within the meaning of Section 307(c)(1) of the
CZMA, 16 U.S.C. 1456(c)(1).  The coastal commission demanded a
"consistency determination" from Interior that the lease sale would be
"consistent" to the "maximum extent practicable" with its coastal zone
management program (J.A. 63).  The Department of the Interior reviewed
the "possible effects of the department's pre-lease activities" and
determined that the lease sale and the award of leases would not
directly affect the California coastal zone (id. at 66).  Interior
thereafter notified the coastal commission of its negative
determination and explained the reasoning underlying that conclusion
(id. at 66-68).  15 C.F.R. 930.35(d).  /11/

   In response to Interior's finding that Lease Sale No. 53 did not
satisfy the threshold test of Section 307(c)(1) of the CZMA, the
California Coastal Commission adopted a resolution on December 16,
1980, reiterating its view that the sale directly affected the coastal
zone.  The resolution acknowledged that, by removing the four northern
basins from the sale, the Secretary had fully responded to the state's
initial objections raised in its comments on the draft EIS (J.A. 76).
The commission nevertheless concluded that 31 more tracts would have
to be removed from the sale because "leasing within 12 miles of the
Sea Otter Range in Santa Maria Basin would not be consistent" with the
California Coastal Management Program (id. at 79).  Although the
commission made no findings justifying its selection of a 12-mile
buffer zone, it asserted that the "national interest in protecting the
small population of the threatened southern sea otter" outweighed the
"petroleum resource potential of the 31 tracts * * *" (id. at 76-77).
On December 24, 1980, Governor Brown similarly recommended the
deletion of 34 tracts in the Santa Maria Basin that "are directly
seaward of the habitat, breeding and food supply area of the Southern
Sea Otter" (C.R. 85;  A.R. 224w).

   The new Secretary of the Interior, James G. Watt, issued a revised
proposed notice of sale for Lease No. 53 on February 10, 1981.  The
Secretary reaffirmed his predecessor's intention to offer the 115
Santa Maria Basin tracts, and also proposed to offer the four northern
basins previously deleted from the sale (46 Fed. Reg. 12436 (1981)).
Interior again sought Governor Brown's recommendations pursuant to
Section 19 of the OCSLA, 43 U.S.C. (Supp. V) 1345 (Pet. App. 10a).

   Reaction from the state was swift.  On March 31, 1981, the
California Coastal Commission resolved that leasing in the four
northern basins would be inconsistent with the state's management
program (J.A. 113).  The commission declared that leasing the 31
northern tracts in the Santa Maria Basin was inconsistent with state
law:  "even if Interior issues a determination of consistency as the
law requires, the proposed decision is not consistent with the
(California Coastal Management Program) to the maximum extent
practicable" (ibid.).  The commission also asserted that leasing the
disputed tracts in the Santa Maria Basin was contrary to the "national
interest" (id. at 130).  /12/ By letter dated April 7, 1981, Governor
Brown submitted his recommendations concerning revised Lease Sale No.
53.  The governor renewed his objections to leasing of the four
northern tracts, and reiterated his position that the northern 34
tracts in the Santa Maria Basin should be excluded from the sale.

   On April 10, 1981, the Secretary announced that Lease Sale No. 53
would go forward as to the 115 Santa Maria Basin tracts.  The
governor's recommendation that the northern 34 tracts be deleted from
the sale was rejected because it did not provide a reasonable balance
between the national interest and the well-being of the citizens of
California (J.A. 136).  43 U.S.C. (Supp. V) 1345(d).  /13/ The
Secretary, however, delayed the offering of tracts in the four
northern basins to permit a full examination of the governor's
recommendation.  /14/ Accordingly, on April 27, 1981, Interior issued
a final notice of sale, soliciting bids on all Santa Maria Basin
tracts and establishing May 28, 1981, as the date of the lease sale
(46 Fed. Reg. 23674).  /15/

   3. On April 29, 1981, the State of California filed suit seeking to
enjoin the sale of 29 tracts in the northern portion of the Santa
Maria Basin.  A group of environmental organizations, led by the
Natural Resources Defense Council, inc., filed a substantially
identical suit.  The complaints alleged that the Department of the
Interior had violated Section 307(c)(1) of the CZMA by failing to
prepare a consistency determination for Lease Sale No. 53.  Plaintiffs
also asserted that the sale of the northern 29 tracts would be
inconsistent with the state's coastal zone management program because
of the possible effects of oil development activities on the sea
otter.  /16/

   The federal government contended that it was not in violation of
its obligations under Section 307(c)(1) of the CZMA because Lease Sale
No. 53 did not come within the terms of the statute.  The government
relied upon former Secretary Andrus' administrative determination,
reaffirmed by Secretary Watt, that the lease sale had no "direct
effects" on California's coastal zone (Pet. App. 10a).  The potential
effects of exploration, development and production activities on the
OCS are not "direct" effects of the decision to conduct an OCS lease
sale, the government argued, because those effects are the result of
activities subsequent to the lease sale that are themselves subject to
the consistency certification procedures of Section 307(c)(3)(B) of
the CZMA.

   On August 18, 1981, the district court entered summary judgment
(Pet. App. 79a-81a) for California and the intervening local
governments on their CZMA claim.  The court ruled (id. at 62a-65a)
that OCS Lease Sale No. 53 directly affected the coastal zone and the
Secretary erred in not providing California with a consistency
determination.  /17/ The court found that leasing directly affects the
coastal zone because "leasing sets in motion the entire chain of
events which culminates in oil and gas development" (id. at 46a).  In
the district court's view, the "direct effects" of a lease sale
include all the potential activities that might take place during the
later stages of the OCS oil and gas process.  The court concluded that
all the possible effects on the coastal zone listed in the
environmental impact statement and the Secretarial Issue Document
("SID") prepared in conjunction with the lease sale were direct
effects of the decision to lease (id. at 63a-65a).  The district court
therefore held that the tracts disputed by the state could not be
leased until the Secretary prepared a consistency determination
addressing the steps taken by him to insure that the sale would be
consistent with the state's coastal management program.  /18/

   The Ninth Circuit affirmed (Pet. App. 82a).  It ruled that an OCS
lease sale directly affects the coastal zone within the meaning of
Section 307(c)(1) of the CZMA because it establishes "the basic scope
and charter for subsequent development and production" (Pet. App.
13a).  To support this conclusion, the court of appeals adopted the
district court's entire list of effects extracted from the EIS and SID
prepared for Lease Sale No. 53 (id. at 12a-13a).  The court of appeals
reasoned that California's expansive interpretation of Section
307(c)(1)'s "directly affecting" threshold standard served the
purposes of the Act better than the government's "narrow definition"
because an OCS lease sale is "the first link in a chain of events
which could lead to production and development of oil and gas on the
individual tracts leased" (Pet. App. 13a).  Accordingly, it held that
the Secretary of the Interior is required to prepare a consistency
determination addressing all potential exploration, development and
production activities prior to conducting an OCS lease sale.

                          SUMMARY OF ARGUMENT

   1. Section 307(c)(1) imposes a consistency obligation only on
federal activities "directly affecting" the coastal zone.  The lower
courts' conclusion that consistency review at the lease sale stage
must encompass all potential impacts that might be hypothesized during
the life of the entire OCS oil and gas process effectively amends the
statute by deleting the "directly affecting" limitation.  The possible
future effects on the coastal zone of OCS exploration, development and
production activities are not direct effects of the leasing decision
because they are preceded by separate federal approvals that include
CZMA consistency reviews.

   An expansive construction of Section 307(c)(1) not only disregards
the plain terms of the statute, it also conflicts with the legislative
history of the section and upsets the proper federal-state
coordination of the CZMA.  The "directly affecting" threshold of
Section 307(c)(1) was not drafted, as the court of appeals concluded
(Pet. App. 14a), to expand the federal government's consistency
obligations, but rather was the result of a congressional compromise
designed to restrict the federal government's consistency obligations
on federally owned lands within the physical confines of a state's
coastal zone.  The lower court's decision, therefore, takes a
limitation that was designed to restrict federal consistency
obligations within the coastal zone and recasts it as a broad
expansion of federal consistency obligations for activities outside
the coastal zone.  Such an unforeseen result renders past federal
input into approved state management programs superfluous, in clear
disregard of the preapproval comment scheme designed by Congress to
balance state and federal interests during the development of state
management programs.  The decision, moreover, unduly expands the
states' substantive control over energy development activities on the
OCS.  Congress did not intend Section 307(c)(1) to grant the states a
veto over the issuance of an OCS lease.

   2. The lower courts' deletion of the term "directly" from Section
307(c)(1) disregards the decisionmaking regime painstakingly
constructed by Congress for the development of resources on the outer
continental shelf.  In the 1976 amendments to the CZMA and the 1978
amendments to the OCSLA, Congress recognized that there was
insufficient information available at the outset of the OCS oil and
gas process to properly balance environmental concerns against the
nation's need for additional domestic energy resources.  Congress
therefore adopted a phased decisionmaking scheme whereby the decision
to issue an OCS lease was separated from the later decisions to permit
exploration, development and production activities.  To avoid the
making of any irretrievable commitment during the OCS oil and gas
process, the Secretary was invested with broad powers to modify,
suspend or even cancel leases at each stage of the process.  By means
of this regime, decisions regarding the risks and benefits of each
stage in the OCS process are made at a time when there is optimal
information available to assess adequately all available alternatives.

   The task of integrating the consistency obligations of the CZMA
into this decisionmaking regime is not difficult, inasmuch as Congress
has addressed the question explicitly.  In 1976, Congress rejected
attempts to subject the issuance of an OCS least to CZMA consistency
requirements precisely because there was insufficient information
available at that stage to assess whether possible future activities
on the outer continental shelf would indeed be consistent with state
management plans.  Instead, Congress subjected the specific later
exploration and production stages of the OCS development process to
CZMA consistency review, thereby assuring that substantive consistency
determinations will be made at a time when the actual impact of OCS
development on the coastal zone can be accurately determined.

   3. Limiting Section 307(c)(1) to federal activities that directly
affect the coastal zone fully implements the congressional objectives
behind the CZMA.  Contrary to the assumption of the court of appeals
(Pet. App. 14a), the CZMA is not procedural in nature, nor is it
designed primarily to facilitate yet another review of environmental
factors, such as the one provided for by the National Environmental
Policy Act.  Rather, the CZMA is aimed at achieving substantive
compliance, to the maximum extent practicable, with state coastal
management programs.  By requiring the government to make a
substantive consistency determination at the very outset of the OCS
oil and gas process, the decision below actually undermines this basic
goal of the CZMA because there is simply insufficient information
available at that stage to guarantee that all subsequent activities on
the OCS will, in fact, be consistent with the state program.

   Delaying CZMA consistency review to the later stages of the OCS
development process, as Congress expressly provided in the 1976
amendments to the CZMA, assures the states that substantive
consistency review will be made at a time when there is sufficient
information to predict intelligently the impact that proposed
activities might have on the coastal zone.  Should a conflict with a
state management program arise at these later stages, the state
possesses adequate authority to prevent those activities from
occurring.  On the other hand, if CZMA consistency review is imposed
on the issuance of an OCS lease, the national interest in full
development of energy resources on the outer continental shelf may be
thwarted, because the Secretary of the Interior may be precluded from
issuing OCS leases on the basis of erroneous assumptions regarding the
impact of hypothetical future activities on the OCS.  Thus, restoring
the statutory term "directly" to Section 307(c)(1) furthers the
national interest in the expedited development of vital resources on
the outer continental shelf without impinging upon the states'
interest in the preservation, protection and development of the
coastal zone.

                               ARGUMENT

   In this statutory interpretation controversy, the parties have
employed widely divergent approaches to ascertain the meaning of the
threshold standard for federal consistency contained in Section
307(c)(1) of the Coastal Zone Management Act of 1972.  The United
States' position is grounded firmly on the plain meaning of the
statute and gives effect to every word contained in that provision.
Our interpretation of Section 307(c)(1), moreover, is supported by its
legislative history and a functional analysis of how Congress intended
the CZMA to operate.  Equally important, our position harmonizes with
the action of Congress in amending the Coastal Zone Management Act in
1976 and the Outer Continental Shelf Lands Act in 1978.  By according
Section 307(c)(1) its plain meaning, it is possible to integrate the
Coastal Zone Management Act of 1972 into the unique decisionmaking
process Congress created for oil and gas activities on the outer
continental shelf, without derogating from the legislative policies
underlying either the CZMA or the OCSLA.

 I. SECTION 307(c)(1) LIMITS CONSISTENCY OBLIGATIONS TO THOSE FEDERAL
ACTIVITIES THAT HAVE A DIRECT, IDENTIFIABLE IMPACT ON THE COASTAL ZONE

   Section 307(c)(1) of the CZMA imposes consistency obligations only
upon those federal actions "directly affecting the coastal zone." The
decision of the court of appeals, however, subjects all OCS lease
sales to the consistency provisions of Section 307(c)(1)
notwithstanding the fact that the potential impacts of lease sales on
a state's coastal zone are speculative, remote, and subject to further
consistency review under Section 307(c)(3) of the Act.  The court, in
short, has accorded no meaning to the statutory term "directly." The
court of appeals' construction of Section 307(c)(1) does not comport
with the plain terms of the statute or its legislative history, and
improperly alters the federal-state administration of the CZMA.

   A. By its terms, the consistency requirement of Section 307(c)(1)
comes into play only when federal activities directly affect a coastal
zone.  An OCS lease sale does not directly affect the coastal zone
because it does not authorize any activities that, prior to further
federal approval and review, will have a physical impact upon that
zone.  An OCS lease, moreover, specifically imposes a duty on the
lessee to obtain state approval of any significant future activity
that might impact the coastal zone.  43 U.S.C. (Supp. V) 1340(c),
1351(d).  Thus, contrary to the decision below, the potential impacts
upon a coastal zone attributable to the exploration, development or
production stages of the OCS oil and gas process are not direct
effects of a decision to conduct a lease sale.  These potential
impacts are, rather, the direct result of later federal approvals that
can only be given following CZMA consistency review.  43 U.S.C. (Supp.
V) 1340(c), 1351(d).

   This Court recently rejected the contention that the statutory term
"directly" has no "substantive effect" on the interpretation of a
federal statute.  Bowsher v. Merck & Co., No. 81-1273 (Apr. 19, 1983),
slip op. 8.  To accept the contention that the term "directly" has no
impact on the construction of a statute, the Court wrote, "would
contradict the settled principle of statutory construction that we
must give effect, if possible, to every word of the statute" (ibid.).
In contravention of this "settled principle," however, the courts
below simply ignored the term "directly" in Section 307(c)(1) of the
CZMA.

   Rather than address the plain import of the language of Section
307(c)(1), the district court dismissed the government's appeal to
plain meaning as a "subterfuge" (Pet. App. 59a), and the court of
appeals maligned the possible validity of a "narrow definition" (id.
at 13a).  But, despite the lower courts' attempts to avoid the issue,
the fact remains that any conventional construction of the term
"directly" is at odds with the conclusion of both courts.  "The word
'direct' implies that the activity or condition invoked or blamed
shall operate proximately -- not mediately, remotely, or collaterally
-- to produce the effect." Carter v. Carter Coal Co., 298 U.S. 238,
307 (1936).  See also Webster's Third New International Dictionary
Unabridged 640 (3d ed. 1971) (without any "intervening agency,
instrumentality, or influence").

   Far from having a proximate impact on the coastal zone, an OCS
lease sale is "only a preliminary and relatively self-contained stage
within an overall oil and gas development program which requires
substantive approval and review prior to * * * each (successive
stage)." North Slope Borough v. Andrus, 642 F.2d 589, 593 (D.C. Cir.
1980) (emphasis omitted).  While the possible impacts of exploration
and production may be hypothesized at the lease sale stage, these
potential effects are remote in time from the OCS lease sale and
depend upon the discovery of oil or gas on the lease site.  Equally
important, these effects do not stem from the issuance of a lease, but
from subsequent federal approval of exploration, development and
production plans.  Such approval, moreover, is expressly conditioned
upon a state's concurrence with the consistency certification
submitted by the lessee.  16 U.S.C. (& Supp. V) 1456(c)(3)(B);  43
U.S.C. (Supp. V) 1340(c), 1351(d).  Therefore, the effects of an OCS
lease sale on the coastal zone, including the ones noted by the courts
below (Pet. App. 12a-13a, 62a-65a), are rather clearly "indirect," and
the plain import of Section 307(c)(1) requires reversal of the court
of appeals.  /19/

   B. The legislative history of Section 307(c)(1) also contradicts
the court of appeals' conclusion that the statute generally applies to
OCS lease sales.  Indeed, the legislative history demonstrates that
Congress drafted Section 307(c)(1) in an effort to restrict the
federal government's consistency obligations for activities conducted
within the physical confines of the coastal zone.  It would be ironic
to conclude that these efforts resulted in a marked expansion of the
government's consistency obligations for activities undertaken outside
the boundaries of the coastal zone.

   When the CZMA was originally drafted in 1972, Congress focused
primarily upon whether federal property physically located in the
coastal zone -- such as parks and military installations -- should be
subject to state coastal zone management programs.  The bill passed by
the Senate excluded federal property from the definition of the
"coastal zone." S. Rep. No. 92-753, 92d Cong., 2d Sess. 8-9, 45
(1972).  The House bill, by contrast, included federal property within
the "coastal zone" definition.  H.R. Rep. No. 92-1049, 92d Cong., 2d
Sess. 2 (1972).  Both bills, however, imposed consistency requirements
only on federal activities "in" the coastal zone.  H.R. Rep. No.
92-1049, supra, at 5;  S. Rep. No. 92-753, supra, at 54.  Thus, the
House bill would have required consistency for all federal activities
on federal lands located in the coastal zone;  the Senate bill would
have exempted government activities on federal lands from such a
requirement.  The conference committee created a compromise provision:
 it excluded federal lands from inclusion in the actual coastal zone,
but provided that consistency would be required for those activities
conducted on federal lands that "directly affect()" the coastal zone.
See H.R. Conf. Rep. No. 92-1544, 92d Cong., 2d Sess. 12 (1972)
reprinted in Congressional Research Service, Library of Congress, 94th
Cong., 2d Sess., Legislative History of the Coastal Zone Management
Act of 1972, as Amended in 1974 and 1976, at 454 (Comm. Print 1976)
(hereinafter "CZMA Legis. Hist.").

   Although there is no explicit legislative history to explain the
congressional intent behind this compromise, it is evident that
Section 307(c)(1) was drafted to serve a limiting function:  to
identify those activities on federal lands within the confines of a
state's coastal zone that would be subject to the consistency
requirements of the Act while at the same time excluding other
activities from such requirements.  Thus, contrary to the court of
appeals' conclusion that Section 307(c)(1) was drafted to expand the
consistency obligations of the federal government (Pet. App. 14a), the
"directly affecting" threshold of the legislation was plainly designed
to narrow the federal government's consistency obligations for
activities conducted on federal lands within the boundaries of a
state's coastal zone.  And, a fortiori, that standard also limits the
consistency obligations of the government for actions -- such as OCS
oil and gas leasing -- that take place outside the coastal zone.  The
holding below that Section 307(c)(1) broadly expands the government's
obligations outside the coastal zone, therefore, takes a limitation
that was designed to restrict the government's obligations within the
coastal zone and turns it inside out.  /20/

   C. The court of appeals' decision not only conflicts with the plain
meaning and legislative history of Section 307(c)(1), it also
jeopardizes the federal-state administration of the CZMA.  The court's
deletion of "directly affecting" from Section 307(c)(1) negates, in
large measure, the congressionally mandated preapproval procedure for
state management programs and erroneously shifts the responsibility
for controlling the development of resources on the outer continental
shelf from the federal government to the states.

   Because the federal government must comply with the substantive
provisions of an approved state management program once the Section
307(c)(1) threshold has been crossed, federal agencies closely review
and comment upon proposed state coastal zone management programs prior
to their approval by the Secretary of Commerce.  16 U.S.C. 1456(a) and
(b).  Through this process, Congress anticipated that any aspect of a
state's coastal zone program that was deemed to be impracticable by
federal agencies would be "iron(ed) out" prior to approval.  H.R. Rep.
No. 92-1049, supra, at 20.  A federal agency, however, cannot
intelligently assess a proposed state management plan unless it knows
which of its activities will be implicated by the state program, and
the decision below effectively eliminates this guidance.  The plain
language of Section 307(c)(1) permits a federal agency to determine
which of its activities will fall within the sweeping normative
statements of a proposed plan:  a state management program will affect
only those federal activities that have a clear, immediate and
identifiable impact on the coastal zone.  But, under the approach of
the court of appeals, federal activities come within a state coastal
management plan so long as any possible impact on the coastal zone can
be hypothesized.  The result is that the congressionally ordained
balancing of federal and state interests prior to approval of a state
plan is thrown seriously out of kilter.  /21/

   Another troubling aspect of the decision below is that it gives
coastal states undue authority over federal oil and gas activities on
the outer continental shelf long before sufficient information is
available to determine whether any particular OCS activity actually
may be inconsistent with a state's coastal zone management program.
Although California has consistently argued that application of
Section 307(c)(1) to OCS lease sales merely furthers
"intergovernmental coordination" (Resp. Br. in Opp. 17), the fact
remains that the consistency requirements of that section are
substantive, not procedural, in nature.  Thus, far from simply
"encourag(ing) cooperation between the federal and state governments
in developing a comprehensive plan for long-term management of the
resources in the coastal zone" (Pet. App. 14a), Section 307(c)(1), as
construed by the court below gives California a potential veto over a
broad range of federal activities on the OCS not previously considered
to be within the reach of state control.

   Congress has "emphatically implemented its view that the United
States has paramount rights to the seabed beyond" the limits of the
territorial sea.  United States v. Maine, 420 U.S. 515, 526 (1975).
Both the Submerged Lands Act, 43 U.S.C. 1302, and the OCSLA, 43 U.S.C.
(Supp. V) 1332(1), declare that the natural resources of the outer
continental shelf "appertain" to the United States and are subject to
its "jurisdiction and control." See also United States v. California,
332 U.S. 19 (1947);  United States v. Louisiana, 339 U.S. 699 (1950);
United States v. Texas, 339 U.S. 707 (1950).  Section 307(e) of the
CZMA, 16 U.S.C. 1456(e), explicitly states that the Act does not
diminish federal jurisdiction over submerged lands, and Congress has
recently emphasized that the states do not possess "a veto power over
OCS oil and gas activities" (S. Rep. No. 95-284, 95th Cong., 1st Sess.
78 (1977)).  It is pellucidly clear, therefore, that the CZMA has not,
sub silentio, altered or diminished the federal government's dominant
role in determining which areas of the OCS should be offered for lease
and when.  As noted above (page 24, supra), the "directly affecting"
standard of Section 307(c)(1) was designed to limit the federal
government's consistency obligations on federal lands physically
located within a state's coastal zone -- it was not drafted to grant
the states substantive control over federal actions on the outer
continental shelf.

 II. THE DECISION BELOW RUNS CONTRARY TO A CAREFULLY CRAFTED
LEGISLATIVE SCHEME THAT FULLY INTEGRATES THE CZMA INTO THE OCS OIL AND
GAS PROCESS

   Following the enactment of the CZMA in 1972, the Arab oil embargo
of 1973 precipitated renewed congressional action concerning the CZMA
and the OCSLA.  As the Court has previously recognized, "(d)uring the
mid-1970's, the Nation's increasing dependence on imported oil focused
public attention on the OCS as a potential source of domestic
petroleum and natural gas." Watt v. Energy Action Educational
Foundation, 454 U.S. 151, 154 (1981).  The 94th Congress therefore
considered proposals to amend both the CZMA and the OCSLA to respond
to the demands of an expedited oil and gas leasing program on the OCS.
 These proposals were considered to be so interrelated that the
concerned Senate committees held joint hearings on the proposed
amendments to both statutes.  Joint Hearings on S. Res. 45 and S. Res.
222 Before the Senate Comms. on Interior and Insular Affairs, and
Commerce, 94th Cong., 1st Sess. (1975).  See CZMA Legis. Hist., supra,
at 579.  Only the amendments to the CZMA reached enactment in the 94th
Congress, but, by 1976, the basic features of the OCSLA amendments as
they were eventually enacted in 1978 had also been formulated.
Accordingly, the 1976 amendments to the CZMA were designed to mesh
with the decisionmaking structure being created for the oil and gas
program on the OCS, and the amendments to the OCSLA, in turn,
contained coordinating provisions to ensure the effectiveness of the
CZMA consistency regime.  The court of appeals' decision, however,
ignores this congressional prescription for application of the CZMA to
the OCS oil and gas process.

   A. In 1978, the Outer Continental Shelf Lands Act was substantially
rewritten by Congress to promote "'the swift, orderly and efficient
exploitation of our almost untapped domestic oil and gas resources in
the Outer Continental Shelf.'" Watt v. Energy Action Educational
Foundation, supra, 454 U.S. at 154 n.2, quoting H.R. Rep. No. 95-590,
supra, at 53.  In that measure, Congress recognized that the OCS oil
and gas program is a unique federal undertaking because neither the
government, the industry, nor the states can determine, at the outset,
what actual oil and gas production activities (such as the placement
of platforms and pipelines or the utilization of tankers) will
eventually take place on the OCS.  Unlike the case of a dam, road, or
waterway project, the final contours of the completed activity cannot
be predicted until the leasing and exploration processes are well
under way.  See North Slope Borough v. Andrus, 642 F.2d 589 (D.C. Cir.
1980).  Plainly put, the ultimate effects of issuing an OCS oil and
gas lease depend not upon the contours of the lease sale but on the
type, quantity and location of commercially valuable hydrocarbon
resources discovered through exploration.  Accordingly, Congress
created a specially tailored federal decisionmaking regime by dividing
the OCS process into separate and discrete stages.  Under this system
of phased decisionmaking, the initial determination to authorize oil
and gas activity on a tract in the OCS, by offering it at a lease
sale, can be modified or reversed at the later exploration or
development and production stages.

   Under the amended OCSLA, a lease does not directly authorize the
lessee to explore for, develop or produce oil or gas.  To engage in
these activities, the lessee must seek separate federal approvals,
first to explore for oil and gas and later to develop and produce the
resource.  43 U.S.C. (Supp. V) 1340, 1351.  As restricted by the
OCSLA, a lease is a property interest that entitles the holder only to
conduct certain preliminary surveys prior to submitting an exploration
plan for approval (43 U.S.C. (Supp. V) 1340(c)(1);  30 C.F.R.
250.34-1).  The "direct" effects of a lease sale, therefore, are
extremely limited, and, by the express scheme of the statute, do not
include the effects of potential exploration, development and
production activities for which the lessee may eventually obtain
approval.  /22/

   The final House report on the 1978 amendments explained the purpose
behind prescribing this staged method of federal decisionmaking (H.R.
Rep. No. 95-590, supra, at 164 (footnote omitted)):

         Section 25 is intended to provide the mechanism for review
      and evaluation of, and decision on, development and production
      in a leased area, after consultation and coordination with all
      affected parties.

         The committee considers this one of the most important
      provisions of the 1977 amendments.  It provides a means to
      separate the Federal decision to allow private industry to
      explore for oil and gas from the Federal decision to allow
      development and production to proceed if the lessee finds oil
      and gas.  The failure to have such a mechanism in the past has
      led to extensive litigation prior to lease sales, when onshore
      and environmental impacts of production activity are not yet
      known.  In fact, the failure to have this procedure has led, in
      part, at least one court to invalidate an entire lease sale.

   See also S. Rep. No. 95-284, 95th Cong., 1st Sess. 45 (1977).
Thus, Congress dealt with the problem of incomplete information
regarding OCS resources and the "onshore and environmental impacts of
production activity" by altering the structure of federal
decisionmaking.  Rather than confronting every possible question
regarding production at the lease sale stage, decisions would be made
at later, specifically identified stages, when the maximum amount of
information would be available.

   Congress, moreover, added provisions to the OCSLA to insure that
the Secretary could make meaningful decisions at the post-lease sale
stages of the OCS process.  The amendments authorized the Secretary to
suspend operations or deny approval of exploration or development and
production plans if sensitive environmental or coastal resources are
endangered, see 43 U.S.C. (Supp. V) 1334(a)(1), 1340(c)(1),
1351(h)(1)(D);  to extend the term of lease if these dangers may be
mitigated over time, 43 U.S.C. (Supp. V) 1334(a)(2)(B), 1340(c)(1),
1351(h)(2)(B);  and to cancel leases if the dangers may not be
resolved, 43 U.S.C. (Supp. V) 1344(a)(2).  These provisions of the
OCSLA specifically apply to a lessee's failure to satisfy the
consistency requirements imposed by the 1976 amendments to the CZMA.
43 U.S.C. (Supp. V) 1351(h)(1)(B), (2)(A) and (B).  It is to those
amendments that we now turn.

   B. As stated above, Congress initiated efforts to amend the CZMA in
conjunction with proposals to amend the OCSLA.  The 1976 amendments to
the CZMA were designed to "address() a need not foreseen in the 1972
legislation -- that of energy development on the Outer Continental
Shelf * * *" (122 Cong. Rec. 6109 (1976) (remarks of Rep. Lent)).
And, while Congress initially proposed consistency review at the lease
sale stage of the OCS process, it ultimately rejected that approach in
favor of a phased system compatible with the structure of
decisionmaking under the OCSLA itself.

   Bills introduced in both the House and the Senate in 1975 proposed
modifying Section 307(c)(3) of the CZMA by inserting the word "lease"
into the statutory term "license or permit," and adding Section
307(c)(4), which would have required an applicant for an OCS lease to
certify consistency with a state management program if its activities
"directly or indirectly affect(ed) the coastal zone." H.R. 3981, 94th
Cong., 1st Sess. 3 (1975), reprinted in CZMA Legis. Hist., supra, at
801;  S. 586, 94th Cong., 1st Sess. 3 (1975), reprinted in CZMA Legis.
Hist., supra, at 605.  The bills that were reported out of committees
in both Houses eliminated Section 307(c)(4), but retained the proposal
to insert the term "lease" into Section 307(c)(3).  S. Rep. No.
94-277, 94th Cong., 1st Sess. 59 (1975);  H.R. Rep. No. 94-878, 94th
Cong., 2d Sess. 4 (1976).  The Senate report stated that the addition
of the term "lease" to Section 307(c)(3) would mean:

      (i)n practical terms * * * that the Secretary of the Interior
      would need to seek the certification of consistency from
      adjacent state governors before entering into a binding lease
      agreement with private oil companies.

   S. Rep. No. 94-277, supra, at 19-20.  The amendment of Section
307(c)(3), as proposed, was adopted by the Senate.  121 Cong. Rec.
23085-23086 (1975).

   The Executive Branch, however, opposed the proposed amendment of
Section 307(c)(3) on the same ground that eventually persuaded
Congress to adopt a phased decisionmaking procedure in the 1978
amendments to the OCSLA:  lack of information at the lease sale stage
of the OCS development process.  As an official of the Department of
the Interior testified before the House committee that was considering
the amendment (Coastal Zone Management:  Hearings Before the Subcomm.
on Oceanography of the House Comm. on Merchant Marine and Fisheries,
94th Cong., 1st Sess., Pt. 1, at 204 (1975) (statement of Royston C.
Hughes, Assistant Secretary of the Interior)):

         Our concern is that people may construe this as a requirement
      that the lease applicant prove Federal consistency before his is
      physically able to do it.  If he does not know what he is going
      to find out there and has no way of quantifying what he intends
      to bring ashore, there may be, if this requirement is placed in
      amendment to the Coastal Zone Management Act, a legal bar to us
      issuing a lease.  It is like a chicken-and-egg situation, from
      ou(r) point of view.

   While the committee reported the amendment favorably (see H.R. Rep.
No. 94-878, supra, at 52-53), it was deleted on the floor of the
House.  122 Cong. Rec. 6128 (1976).  The sponsor of the floor action,
Representative Dupont, explained that "existing law" (i.e., Section
307(c)(3)) required consistency compliance whenever "a permit or
license is granted by the Federal Government to perform offshore
drilling." 122 Cong. Rec. 6128 (1976).  The committee bill would
"bring the leasing of offshore oil sections within the same
framework." Ibid.  But, because it was not "quite clear as to what
effect that would really have on offshore oil tract leasing
procedures," he urged the House to delete the amendment to allow the
conference committee to study the matter further.  Ibid.  /23/ As is
evident, the focus of this discussion rested solely on whether the
consistency requirements of Section 307(c)(3) should be applied to the
leasing stage.  No one suggested that the consistency provisions of
Section 307(c)(1) applied to lease sales or that insertion of the term
"lease" into Section 307(c)(3) might be redundant or duplicative of
the Section 307(c)(1) requirement.  /24/

   The conference committee, after further study, did not restore the
proposed language to Section 307(c)(3).  Instead, it created a new
subsection to that provision that required lessees seeking federal
approval of exploration, development and production plans to first
comply with CZMA consistency certification requirements.  Section
307(c)(3)(B), 16 U.S.C. (& Supp. V) 1456(c)(3)(B).  The conference
report explained the legislative intent behind this action (S. Conf.
Rep. No. 94-987, 94th Cong., 2d Sess. 30 (1976);  H.R. Rep. No.
94-1298, 94th Cong., 2d Sess. 30 (1976)):

         The conference substitute * * * specifically applies the
      consistency requirement to the basic steps in the OCS leasing
      process -- namely, the exploration, development and production
      plans submitted to the Secretary of the Interior.  The provision
      will satisfy state needs for complete information, on a timely
      basis, about the details of the oil industry's offshore plans.

   The conference substitute was enacted by Congress as a special
consistency provision for oil and gas leases on the OCS.  16 U.S.C. (&
Supp. V) 1456(c)(3)(B).  This special provision, moreover, was
subsequently integrated into the 1978 amendments to the OCSLA, 43
U.S.C. (Supp. V) 1340(c)(2), 1351(d), 1351(h)(1)(B), and the
legislative history of the 1978 OCSLA amendments reveals the care and
attention with which Congress developed OCSLA provisions to fully
integrate the two statutes.  /25/ Congress, therefore, spelled out in
detail how the consistency procedures of the CZMA would be applied to
the OCS process.  Instead of explicitly subjecting potential
exploration, development and production activities to consistency
requirements at the lease sale stage, Congress conditioned those
future activities on satisfaction of consistency requirements applied
at the specific stages of the ongoing OCS oil and gas process.  /26/

   The 1976 amendments to the CZMA and the 1978 amendments to the
OCSLA thus represent a congressional repudiation of the court of
appeals' conclusion that all the potential effects of OCS lease sales
are subject to CZMA consistency review at the lease sale stage.  At
first blush, the congressional committees in 1976 thought that
consistency review at the OCS leasing stage was desirable.  But, when
acquainted with the practical consequences of such a requirement and
the impossibility of satisfying it in a meaningful manner, Congress
ultimately rejected that approach.  Instead, it substituted special
consistency requirements specifically designed to mesh with the
structure of the forthcoming amendments to the OCSLA.  16 U.S.C. (&
Supp. V) 1456(c)(3)(B);  43 U.S.C. (Supp. V) 1340(c)(2), 1351(d).  By
expansively defining "directly affecting the coastal zone" and
requiring a consistency determination at the leasing stage for
potential OCS exploration, development and production activities, the
court of appeals has adopted an approach that Congress expressly
considered and rejected.  The lower court's construction of Section
307(c)(1) is clearly a "creature of judicial cloth, not legislative
cloth." Weinberger v. Catholic Action, 454 U.S. 139, 141 (1981).

   C. In the face of the clear legislative scheme outlined above, the
State of California has been forced to rely upon a discarded
administrative interpretation of Section 307(c)(1) and recent,
post-enactment legislative reports to support its expansive reading of
the term "directly affecting" (Resp. Br. in Opp. 22-23).  But, in
spite of the lower court's reliance on these sources (Pet. App.
15a-17a), they offer little support for California's construction of
Section 307(c)(1).

   1. The National Oceanic and Atmospheric Administration ("NOAA")
within the Department of Commerce is the federal agency charged with
the responsibility of promulgating regulations implementing the CZMA.
See 16 U.S.C. 1463.  In 1978, NOAA issued final regulations containing
the agency's administrative interpretation of Section 307(c)(1).  /27/
43 Fed. Reg. 10510 (1978).  The regulations substituted the word
"significantly" for the statutory term "directly," and in turn defined
"significantly" in terms of "primary, secondary and cumulative effects
on the coastal zone." Id. at 10511, 10519.  The regulations, however,
did not expressly extend Section 307(c)(1) to OCS lease sales.
Although the agency had been requested during the rulemaking
proceeding to declare that the issuance of a federal lease was subject
to CZMA consistency requirements, /28/ the preamble to the regulations
noted the existence of some uncertainty as to whether an OCS lease
sale was a federal "activity" subject to the requirements of Section
307(c)(1).  /29/

   The Department of the Interior objected to NOAA's dilution of
Section 307(c)(1)'s "directly affecting" threshold, and asserted that
its pre-leasing activities were not subject to the consistency
provisions of the CZMA.  The Department of Justice's Office of Legal
Counsel ("OLC") was ultimately engaged to resolve the inter-agency
dispute between NOAA and Interior.  OLC determined that, although
Interior's pre-leasing activities could, under appropriate
circumstances, fall within the terms of Section 307(c)(1), NOAA had
impermissibly lowered the section's threshold (J.A. 45-46).  OLC
rejected NOAA's assertion that the legislative history of the CZMA was
"'replete' with statements that Congress intended to cover all Federal
activities capable of significantly affecting the Coastal Zone" (id.
at 46).  The opinion noted that Congress had provided discrete
standards to trigger the Act's consistency obligations, and concluded
that, in light of this fact, "we are unable to concur in an
interpretation that would dilute 'directly,' first to 'significantly'
and then to 'primarily, secondarily, and cumulatively'" (id. at 46).
The opinion unequivocally declared that "the conformity requirement of
Section 307(c)(1) applies only to the preleasing activities of the
Department of the Interior directly affecting the Coastal Zone" (id.
at 47;  emphasis added).  As a result of the OLC opinion, the portions
of the 1978 regulations that substituted "significantly" for
"directly" in Section 307(c)(1) were withdrawn (44 Fed. Reg. 37142
(1979)).  /30/

   This administrative history establishes two important, interrelated
propositions.  First, the suggestion that an OCS lease sale,
regardless of its actual impact on the coastal zone, falls within the
terms of Section 307(c)(1) was first raised administratively after
Congress, in 1976, had determined not to subject the issuance of an
OCS lease to CZMA consistency requirements.  See pages 32-36 & note
28, supra.  Second, the regulations relied upon by California and the
court below (Pet. App. 16a) do not in fact address whether an OCS
lease sale is an activity "directly affecting the coastal zone" (16
U.S.C. 1456(c)(1) because those regulations diluted the Section
307(c)(1) inquiry into the materially different question of whether an
OCS lease sale had any "significance" for the coastal zone.  Thus,
there is no basis for according NOAA's discarded interpretation of
Section 307(c)(1) any substantial weight because, as the court below
noted, there is no reason to assume "that the regulation 'implement(s)
the congressional mandate in some reasonable manner'" (Pet. App. 17a,
quoting United States v. Correll, 389 U.S. 299, 307 (1967)).

   2. California also relies on language from House and Senate reports
on the 1980 amendments to the CZMA, and on a 1981 resolution of
disapproval directed at NOAA's most recent attempt to interpret
Section 307(c)(1), to support its contention that Lease Sale No. 53
directly affects its coastal zone (Resp. Br. in Opp. 22-23).  These
legislative materials, however, have little relevance to the proper
interpretation of Section 307(c)(1).

   Following the OLC opinion and the subsequent withdrawal of its
original regulations, NOAA, pursuant to an interagency agreement,
again commenced a rulemaking proceeding to define the "directly
affecting" threshold of Section 307(c)(1).  See 46 Fed. Reg. 26656,
26659 (1981).  Because of this ongoing administrative procedure,
Congress did not attempt to refine Section 307(c)(1) in the 1980
amendments to the CZMA.  /31/ Indeed, both the House and Senate
reports on that legislation acknowledged that congressional action
would be premature inasmuch as the forthcoming regulations would
clarify the meaning of "directly affecting the coastal zone." H.R.
Rep. No. 96-1012, 96th Cong., 2d Sess. 34 (1980);  S. Rep. No. 96-783,
96th Cong., 2d Sess. 11 (1980).  But, despite the fact that the 1980
legislation did not amend Section 307(c)(1), the House report
contained language which suggested that the consistency obligation
imposed by the section attached "whenever a Federal activity has a
functional interrelationship from an economic, geographic or social
standpoint with a State coastal program's land or water use policies"
or "when a Federal agency initiates a series of events of coastal
management consequences" (H.R. Rep. No. 96-1012, supra, at 34).

   Two weeks after this suit was filed, the long-awaited regulation
defining Section 307(c)(1)'s "directly affecting" threshold was
published for comment in the Federal Register.  46 Fed. Reg. 26658
(1981).  In spite of the suggestions contained in the 1980 legislative
reports, the regulation relied on the plain terms of Section
307(c)(1), as well as the 1976 and 1978 amendments to the CZMA and
OCSLA, and provided that a federal activity directly affects the
coastal zone if it "produces a measurable physical alteration in the
coastal zone" or "initiates a chain of events reasonably certain to
result in such alteration, without further required agency approval"
(46 Fed. Reg. 26659-26660 (1981)).  The proposed regulation was
published in final form a few months thereafter (id. at 35253), but
its existence was short lived.  The 1980 amendments to the CZMA had
added a "legislative veto" provision to the Act (16 U.S.C. (Supp. V)
1463a), and following the passage of a resolution of disapproval on a
sharply divided 20-15 vote by the House Committee on Merchant Marine
and Fisheries (H.R. Rep. No. 97-269, 97th Cong., 1st Sess. 8-9
(1981)), the regulation was withdrawn.  47 Fed. Reg. 4231 (1982).

   The court of appeals accorded the legislative materials set out
above "substantial weight because they appear to us to serve better
the purposes of the CZMA than would the narrower interpretation urged
by the federal appellants" (Pet. App. 16a).  The course of events in
1980 and 1981, however, suggests just the opposite conclusion.  To
pretend that the 1980 committee reports or the 1981 majority report on
the resolution of disapproval contain any reliable expression of the
1972 congressional intent regarding the proper construction of Section
307(c)(1) is to blink at reality.  Because the 1980 amendments to the
CZMA did not alter or re-enact the consistency provisions of Section
307, the language inserted in the 1980 committee reports was unrelated
to the legislation then before Congress.  The membership of the
relevant congressional committees, moreover, had significantly changed
between 1972, 1980, and 1981, and the later committees cannot be
presumed to have any special knowledge of the intent behind the
original legislation.  /32/ The views expressed in the reports,
furthermore, are only those of the majority of the members sitting on
the committees themselves;  those views were never directly voted upon
by either House of Congress.  Indeed, when the chairman of the House
subcommittee was queried about the language of the 1980 report on the
floor of the House, he replied that it was not intended to "modify the
term directly affecting" (126 Cong. Rec. H10111-H10112 (daily ed.
Sept. 30, 1980)).

   This Court has often stated that "the views of a subsequent
Congress form a hazardous basis for inferring the intent of an earlier
one." United States v. Price, 361 U.S. 304, 313 (1960);  see also
United States v. Clark, 445 U.S. 23, 33 n.9 (1980);  Oscar Mayer &
Co., v. Evans, 441 U.S. 750, 758 (1979).  This observation is
especially apt here, where it is quite clear that the language of the
1980 and 1981 reports relied upon by the court below (Pet. App. 15a,
17a) represents "'only the personal views of * * * legislators'"
sitting on committees eight and nine years after Section 307(c)(1) was
enacted.  Regional Rail Reorganization Act Cases, 419 U.S. 102, 132
(1974), quoting National Woodwork Manufacturers Ass'n v. NLRB, 386
U.S. 612, 639 n.34 (1967);  TVA v. Hill, 437 U.S. 153, 193 (1978).  As
the dissenting members of the 1981 disapproval resolution stated, the
legislative materials relied upon by the court below are "inconsistent
with the previous action of Congress" and "should be dismissed as the
dicta they represent" (H.R. Rep. No. 97-269, supra, at 16, 17).  /33/

 III. LIMITING SECTION 307(c)(1) TO ACTIVITIES THAT DIRECTLY AFFECT
THE COASTAL ZONE FULLY IMPLEMENTS THE CONGRESSIONAL POLICIES BEHIND
THE CZMA AND THE OCSLA

   The court of appeals rejected the government's contention that
Section 307(c)(1) "limits the scope of direct effects from a lease
sale to those effects that 'are part of, or immediately authorized by,
a lease sale'" (Pet. App. 12a) because, in the court's view, that
"narrow definition" thwarts "a major purpose of the CZMA," i.e., the
involvement of the state "at an early stage of a significant and
comprehensive activity * * * that will eventually have an appreciable
impact on the coastal zone" (id. at 14a).  The State of California has
vigorously pursued this theme, suggesting that a prime goal of the
CZMA is to encourage "intergovernmental coordination" (Resp. Br. in
Opp. 17).

   Despite its possible appeal on first glance, the lower court's
construction of Section 307(c)(1) suffers from a fundamental -- and
fatal -- defect:  the immediate purpose of Section 307(c)(1)'s
consistency requirement is not to provide coastal states with an
opportunity to participate in the initial decisionmaking or planning
stages of federal activities on the outer continental shelf.  The
states are provided ample involvement in these stages of the OCS oil
and gas process by the express terms of the OCSLA, as the course of
events in this case so vividly demonstrates.  See pages 9-14, supra.
/34/ The CZMA is not, as California suggests (Resp. Br. in Opp. 15),
simply another "environmental review statute()." Far from merely
facilitating consideration of environmental factors, the consistency
provisions of the CZMA are designed to assure compliance, to the
maximum extent practicable, with approved state coastal management
programs.  Thus, Section 307(c)(1) is concerned not with procedure, as
the court of appeals assumed (Pet. App. 14a), but with substantive
results.

   Contrary to the conclusion of the court of appeals, limiting
Section 307(c)(1) to activities that directly affect the coastal zone
assures rather than defeats the congressional goal behind the
consistency provisions of the CZMA.  As noted above (page 7, supra),
the issuance of an OCS lease authorizes only limited activities that,
in general, will have no physical effect on the coastal zone.  See 43
U.S.C. (Supp. V) 1340(b);  30 C.F.R. 250.34-1.  In the usual OCS lease
context, therefore, where the lease itself does not authorize
activities with impacts reaching beyond the outer continental shelf,
the CZMA consistency determination is deferred to a stage in the OCS
oil and gas process when the actual effects of any exploratory or
production activities on the coastal zone can be accurately assessed.
16 U.S.C. (& Supp. V) 1456(c)(3)(B);  43 U.S.C. (Supp. V) 1340(c)(2),
1351(d);  S. Conf. Rep. No. 94-987, supra, at 30;  H.R. Rep. No.
94-1298, supra, at 30.  In this manner, the state is guaranteed that
all activities on the OCS will, in fact, be consistent with the
state's approved management program.  Moreover, the national interest
in the full development of energy resources on the outer continental
shelf is also furthered because the OCS development process is not
stalled on the basis of premature and erroneous speculation regarding
possible on-shore impacts of, as yet, uncertain future activities.

   The lower court's deletion of the term "directly" from Section
307(c)(1) upsets this careful balance between state and national
interests, and does so without furthering the primary goal of the
CZMA:  assuring consistency with approved state management programs.
A consistency determination made at the very outset of the OCS oil and
gas process cannot guarantee that all subsequent activities will
indeed be consistent with a state management program because, as
Congress specifically recognized in the 1976 amendments to the CZMA
and the 1978 amendments to the OCSLA (see pages 29-33, supra), it is
impossible to fully evaluate the potential effects of exploration,
development and production activities on the OCS prior to the lease
sale.  Among other uncertainties, the government does not know before
a lease sale (1) if specific tracts will actually attract bids;  /35/
(2) if bids are tendered, whether they will be accepted as
representing the tracts' fair market value;  /36/ (3) if leases are
issued, whether exploration plans will be presented for approval;
/37/ (4) if exploration plans are presented, what the content of those
plans will be;  (5) if exploration is approved, whether the lessees
will invest in actual exploration activities;  /38/ (6) if exploration
activities do take place, whether commercially recoverable
accumulations of hydrocarbons will be discovered;  /39/ (7) if
commercially valuable accumulations of hydrocarbons are discovered,
what the type and quantity of these resources will be;  /40/ and (8)
if development and production plans are in fact submitted for
approval, what the content of those plans will be.  Faced with this
series of sequential unknowns, the federal government simply cannot
make a meaningful substantive determination at the lease sale stage
that the coastal zone effects of all possible activities following the
issuance of the lease will be consistent, to the maximum extent
practicable, with a state's coastal zone management program.

   In spite of the evident futility of making a substantive
consistency determination at the outset of the OCS development
process, California asserts (Resp. Br. in Opp. 16) that Section
307(c)(1) must apply to the issuance of a lease to assure "proper()
evaluat(ion)" of the "cumulative impacts of the oil and gas
development which may occur under (an OCS lease)." This argument,
however, again assumes that the CZMA plays a primarily procedural
rather than substantive role.  In the context of a procedural statute,
such as the National Environmental Policy Act of 1969, 42 U.S.C. 4321
et seq., an informed estimation of the possible impacts or effects of
later occurring activities is altogether appropriate for the purpose
of informing the decisionmaker of the potential consequences of his
decision.  /41/ But, any attempt to satisfy a substantive consistency
limitation on future activities on the basis of speculation, like that
contained in an EIS, will almost inevitably result in an erroneous
decision.  /42/

   The present dispute between the State of California and the federal
government illustrates this principle well.  The California Coastal
Commission objects to Interior's decision to lease 29 tracts in the
Santa Maria Basin because, in its view, there is an unacceptably high
risk that an oil spill on these tracts will adversely affect the
nearby sea otter habitat.  This conclusion, of course, ultimately
depends upon two assumptions:  (1) that there is oil in commercial
quantities underlying those 29 tracts and (2) that the activities
necessary to develop those tracts will result in an oil spill
adversely affecting the sea otter.  If, however, either of these
assumptions is wrong, the state's consistency decision will also be
erroneous.  For example, if commercially valuable natural gas, but not
oil, is discovered on those tracts, the perceived difficulty of an oil
spill will not arise.  Furthermore, even if a commercially valuable
quantity of oil is discovered, it may be possible, based on the
amount, type and location of the oil pool and the technology then
available, to design a development plan that will reduce the risk of
an oil spill to a level acceptable to the state.  If such a plan is
not possible, development may be deferred until conditions change, or,
in the worst case, the lease may simply be cancelled.  See 43 U.S.C.
(Supp. V) 1351(h).  /43/

   Thus, California's determination that the offering of 29 tracts in
the Santa Maria Basin is inconsistent with its coastal management
program (J.A. 113) could well be erroneous.  If so, the national
interest in OCS development will be thwarted without reason, since the
Secretary will be precluded from offering these tracts for lease.
/44/ On the other hand, deferring the CZMA consistency determination
to the later stages of the OCS oil and gas process, when the direct
impact of any development activities can be accurately assessed, fully
protects the state's asserted interests in the coastal zone.  If a
genuine concern for the sea otter habitat, or any other coastal
resource, materializes following the issuance of an OCS lease, both
the federal government and the state retain ample power under Section
307(c)(3)(B) of the CZMA, 16 U.S.C. (& Supp. V) 1456(c)(3)(B), as
incorporated by the relevant provisions of the OCSLA, 43 U.S.C. (Supp.
V) 1340(c)(2), 1351(d), to prevent the objectional activity from even
occurring and thereby assure full protection of the coastal zone.

   At bottom, California does not trust the congressional
determination contained in the 1976 amendments to the CZMA and the
1978 amendments to the OCSLA that intelligent, responsible
decisionmaking in the OCS context can be achieved only by deferring
significant determinations until the necessary information for those
decisions becomes available.  See, H.R. Rep. No. 95-590, supra, at
164.  But, as the District of Columbia Circuit has stated, the
"congressional mandate establishes a clear program for thoughtful,
graduated, and tightly controlled development of oil lands on the
outer continental shelf of the United States." North Slope Borough v.
Andrus, supra, 642 F.2d at 594.  California's premature application of
the consistency provisions of Section 307(c)(1) to an OCS lease sale
runs contrary to this phased decisionmaking process so painstakingly
constructed by Congress in 1976 and 1978, and does not, in the end,
serve the underlying purpose of Section 307(c)(1);  there is simply
inadequate information at the lease sale stage to determine whether
all future activities on the OCS will in fact be consistent with
California's management program.

   The United States' interpretation of Section 307(c)(1) assures full
compliance with the consistency provisions of the CZMA, preserves the
phased decisional structure developed by Congress for OCS development,
and maintains a proper balance between the national interest in OCS
resource development and California's interest in the preservation of
its coastal zone.  Any action with an identifiable impact on
California's coastal zone will be subjected to CMA consistency review
at a stage when there is sufficient information to permit a meaningful
consistency determination, and, at the same time, the issuance of OCS
leases will not be precluded on the basis of speculative assumptions
regarding the possible on-shore impacts of hypothetical future
activities.  Restoration of the term "directly" to Section 307(c)(1)
of the CZMA, therefore, leaves California fully able "to preserve,
protect, develop and whenever possible restore the resources of the
coastal zone" (S. Rep. No. 92-753, 92d Cong., 2d Sess. 1 (1972))
without unduly fettering the congressionally mandated "expedited
exploration and development of the Outer Continental Shelf" (43 U.S.C.
(Supp. V) 1802(1)).  See Watt v. Energy Action Educational Foundation,
supra, 454 U.S. at 154 n.2.

                              CONCLUSION

   The judgment of the court of appeals should be reversed.

   Respectfully submitted.

   REX E. LEE

      Solicitor General

   CAROL E. DINKINS

      Assistant Attorney General

   LAWRENCE G. WALLACE

      Deputy Solicitor General

   RICHARD G. WILKINS

      Assistant to the Solicitor General

   PETER R. STEENLAND, JR.

   ANNE S. ALMY

      Attorneys

   JULY 1983

   /1/ The petition for a writ of certiorari in Western Oil & Gas
Association v. California, No. 82-1327, and the conditional
cross-petition in California v. Watt, No. 82-1511, were also granted
on May 16, 1983.

   /2/ Under the Act, the coastal zone includes coastal waters and
adjacent shorelands with the exception of federal property.  The zone
extends seaward to the outer limit of United States territorial
waters, three geographical miles from the coastline (Section 304(1),
16 U.S.C. 1453(1)).  The outer continental shelf, by definition, lies
beyond the belt ceded to the states in 1953 by the Submerged Lands
Act, 43 U.S.C. 1301(a), (b);  43 U.S.C. 1331(a).  In the case of
California, like all other states bordering on the Pacific or Atlantic
Oceans, the "coastal zone," like the Submerged Lands Act grant,
extends three geographical miles seaward from the coastline.  43
U.S.C. 1301(b).  See United States v. California, 381 U.S. 139 (1965).

   /3/ If the federal agency determines that an activity will not
directly affect a coastal zone, the agency, in certain circumstances,
must provide the state with notification of its "negative
determination" (15 C.F.R. 930.35(d)).

   /4/ Some provisions of the OCSLA apply throughout all stages of the
OCS oil and gas process.  Regulations promulgated pursuant to 43
U.S.C. (Supp. V) 1334(a)(1)(B), for example, provide for suspension or
temporary prohibition of all OCS operations if "there is a threat of
serious, irreparable or immediate harm" to life or the environment.
30 C.F.R. 250.12(a)(1)(ii).  The regulations also provide for
cancellation of leases if such dangers cannot be resolved.  30 C.F.R.
250.12(d)(4).

   /5/ The plan must describe all facilities, on or off the OCS, that
will be utilized in the development and production of oil and set
forth all environmental safeguards and other safety standards that
will be implemented during production (43 U.S.C. (Supp. V) 1351(a)(2)
and (c)).

   /6/ At least one development and production plan in any area or
region of the OCS (other than the Gulf of Mexico) must be declared a
"major Federal action" for purposes of NEPA (43 U.S.C. (Supp. V)
1351(e)), and the ensuing draft environmental impact statement on the
development plan must be sent to the governor of any affected state
for review and comment (43 U.S.C. (Supp. V) 1351(f)) prior to the
public hearing on the EIS (43 U.S.C. (Supp. V) 1351(h)).  The
Secretary is directed to disapprove a development and production plan
if exceptional geological conditions, marine or coastal resource
values, or other exceptional circumstances dictate disapproval despite
compliance with the Act and its regulations.  43 U.S.C. (Supp. V)
1351(h)(1)(D).  If these circumstances cannot be cured or mitigated in
a five-year period, the lease will be cancelled and the lessee will be
entitled to compensation.  43 U.S.C. (Supp. V) 1351(h)(2)(C).  If the
Secretary disapproves a development and production plan for other
reasons, including failure to obtain state concurrence on CZMA
consistency, no compensation is afforded the lessee.  43 U.S.C.
1351(h)(2)(A).

   /7/ "C.R." refers to the Clerk's Record;  "A.R." refers to the
Administrative Record.

   /8/ During the course of those hearings 745 persons commented
orally and extensive written comments were received from the state,
its coastal commission and numerous local governments (C.R. 85;  A.R.
165w, 172w).  The state's comments on the draft EIS primarily
addressed potential operations in the four northern basins included in
proposed OCS Lease Sale No. 53.  The California Coastal Commission
recommended removing three of the four northern basins from the sale
and delaying the sale in the Santa Maria Basin and the one remaining
northern basin (J.A. 76).

   /9/ The Fish and Wildlife Service subsequently issued a biological
opinion "that your action, as proposed, is not likely to jeopardize
the continued existence of the (southern) sea otter" (C.R. 85;  A.R.
183w).  The National Marine Fisheries Service also issued a "no
jeopardy" biological opinion for the gray whale, which migrates
through the proposed sale area (C.R. 85;  A.R. 182w).  Both agencies
limited their "no jeopardy" opinions to the lease sale and exploration
stages of the OCS process, and recommended further consultation if
development and production stages were ever reached (A.R. 182w, at
14).

   /10/ The data upon which this decision was based were compiled into
a Secretarial Issue Document ("SID"), "an internal document intended
to aid the Secretary in making decisions concerning lease sales" (Pet.
App. 9a).

   /11/ Interior's submission to the state addressed California's
contention that the possible impact of exploration, development and
production activities on the coastal zone were "direct effects" of an
OCS lease sale.  Interior explained that the possible effects of
exploration, development and production activities were not "direct
effects" of the lease sale, but rather of subsequent licensing
procedures that were themselves subject to the consistency
requirements of Section 307(c)(3) of the CZMA, 16 U.S.C. (& Supp. V)
1456(c)(3).  This statutory framework, Interior reasoned, assures the
state "that, by exercise of its own authority, only consistent
activities will occur after the lease award" (J.A. 67).  The state
"does not have to reach out through Federal pre-lease consistency
responsibilities, to limit sale proposals and thereby preclude energy
development opportunities before specific activities are proposed or
their specific coastal effects evaluated" (ibid.).

   /12/ In response to the commission's resolution, Interior again
explained that Lease Sale No. 53 did not "directly affect" the coastal
zone within the meaning of Section 307(c)(1) of the CZMA (J.A.
133-134).  The department, however, assured the coastal commission
that its views would be considered by the Secretary (id. at 134).

   /13/ The Secretary's decision to reject the governor's
recommendations made under Section 19 of the OCSLA, 43 U.S.C. (Supp.
V) 1345, was upheld by the district court (Pet. App. 69a-70a) and the
court of appeals (id. at 28a-29a).

   /14/ On August 17, 1981, the Secretary announced that the four
northern basins would be officially removed from Lease Sale No. 53.

   /15/ Interior consolidated several of the tracts before issuing the
final notice of sale.  Thus, although the area offered remained the
same, the number of tracts declined from 115 to 111.  The number of
tracts objected to by the coastal commission changed from 31 to 29,
and the tracts that were the subject of the governor's recommendation
declined from 34 to 32.  See generally Pet. App. 10a.

   /16/ California's suit also claimed violations fo the National
Environmental Policy Act of 1969, 42 U.S.C. 4321 et seq., Section 19
of the OCSLA, 43 U.S.C. (Supp. V) 1345;  the Endangered Species Act of
1973, 16 U.S.C. (& Supp. V) 1531 et seq.; and the Marine Mammal
Protection Act of 1972, 16 U.S.C. (& Supp. V) 1361 et seq.  The
environmental groups' complaint also contained these allegations.  The
district court resolved these issues in the government's favor (Pet.
App. 65a-78a).  The court of appeals affirmed (id. at 25a-30a).

   /17/ The district court ruled that the environmental organizations
"had no implied right of action to bring claims under the CZMA" (Pet.
App. 30a).  On appeal, the court of appeals reversed, holding that
such organizations had standing under Section 10(a) of the
Administrative Procedure Act, now 5 U.S.C. 702 (Pet. App. 31a).  We
did not raise standing as a separate issue in our petition because, as
to this lease sale, the claims of the state and the environmental
groups coincide.  Because the state clearly has standing to pursue
these issues, no live standing issue is presented.  See Watt v. Energy
Action Educational Foundation, 454 U.S. 151, 160 (1981).  We reserve
the right to challenge the standing of nongovernmental entities,
including environmental organizaitons, in future CZMA cases.

   /18/ The district court's injunction also declared that the bids
received on the disputed tracts were "null and void" (Pet. App. 80a).
The injunction was stayed pending appeal, and was ultimately modified
by the court of appeals.  As modified, the portion of the district
court's order that voids the bids on the disputed tracts is stayed
pending the preparation of a consistency determination by the
Secretary of the Interior (id. at 24a).

   /19/ This conclusion comports with regulatory language developed
under the National Environmental Policy Act of 1969.  NEPA regulations
define "direct effects" as those "which are caused by the action and
occur at the same place and time," while "indirect effects" are those
"reasonably foreseeable" effects that are "caused by the action" but
"are later in time or farther removed in distance." 40 C.F.R. 1508.8.

   /20/ In enacting the Coastal Zone Management Act in 1972, Congress
did not devote any detailed attention to the interrelationship between
activities on the OCS and the proposed creation of state coastal zone
management programs.  However, attempts in both the Senate, see 118
Cong. Rec. 14183 (1972), and the House, see H.R. 14146, 94th Cong., 2d
Sess. Section 313 (1972), reprinted in CZMA Legis. Hist., supra, at
398, to extend the legislation beyond the territorial sea on the outer
continental shelf were repulsed.  The reason stated by the conference
committee for declining to adopt an extension of the CZMA to the OCS
was that it "would create potential conflicts with legislation already
in existence concerning Continental Shelf Resources." H.R. Conf. Rep.
No. 92-1544, supra at 12.  It is quite clear, therefore, that Congress
in 1972 did not anticipate that the CZMA and its consistency
requirements would have a substantial impact on federal activities on
the OCS.

   /21/ The court of appeals' elevation of hypothetical impacts to the
status of "direct effects" renders such a broad range of federal
activities subject to the consistency requirements of Section
307(c)(1) that any "ironing out" of federal-state disagreements on
future state management programs may well be impossible.  The
decision, moreover, renders past federal agency input into approved
management programs largely superfluous:  the examining agencies
plainly did not assume that a proposed state plan would control any
federal activity possessing a foreseeable, albeit tenuous, link to the
coastal zone.

   /22/ Other courts have recognized the limited nature of the lease
sale decision, and have accordingly molded the obligations of other
generally applicable procedural and substantive federal laws to the
OCS process.  County of Suffolk v. Secretary of the Interior, 562 F.2d
1368 (2d Cir. 1977), cert. denied, 434 U.S. 1064 (1978) (NEPA does not
require speculation regarding pipeline routes at the leasing stage of
the OCS development process);  North Slope Borough v. Andrus, 642 F.2d
589 (D.C. Cir. 1980) (Endangered Species Act of 1973);  Conservation
Law Foundation v. Andrus, 623 F.2d 712 (1st Cir. 1979) (NEPA).  As the
District of Columbia Circuit noted, "(m)andatory stage-by-stage review
prevents the telescoping of any and every projected hazard to * * *
the environment into one overwhelming statutory obstacle.  The OCSLA
standards are not less strict, they simply rely more on achieving
compliance than on exacting proscription." North Slope Borough v.
Andrus, supra, 642 F.2d at 609.

   /23/ In Representative Dupont's words, deletion would provide "a
little bit of flexibility in the conference to either adopt the
language as the Senate put it in or adopt some other language we feel
would be more beneficial and at the same time protect the rights of
the States" (122 Cong. Rec. 6128 (1976)).

   /24/ Indeed, the prevailing view prior to the 1976 amendments was
that Section 307(c)(3) alone applied to the issuance of OCS leases.
See 122 Cong. Rec. 6128 (1976) (remarks of Rep. Murphy).  See also
Breeden, Federalism and the Development of Outer Continental Shelf
Mineral Resources, 28 Stan. L. Rev. 1107, 1142 (1976).

   /25/ See, e.g., H.R. Rep. No. 95-590, supra, at 168 ("(i)f a plan
is disapproved because lessee cannot demonstrate compliance with * * *
Federal 'consistency' requirements * * * the Secretary may cancel the
lease").  See also S. Rep. No. 95-284, supra, at 83-84;  H.R. Conf.
Rep. No. 95-1474, 95th Cong., 2d Sess. 101, 118-119, 156 (1978).  The
conference report also rejected a consistency standard applicable to
the five-year leasing program.  Id. at 156.  Instead, it required the
Secretary to "consider" state coastal zone plans in creating the
five-year program.  Id. at 105.

   /26/ Indeed, the only hint that Congress contemplated that any
consistency requirement would apply at the lease sale stage of the OCS
oil and gas process appears in a footnote to the House report on the
1978 amendments to the OCSLA.  There, without analysis, the report
states that "under the (CZMA) * * * certain OCS activities including
lease sales and approval of development and production plans must
comply with 'consistency' requirements * * *." H.R. Rep. No. 95-590,
supra, at 153 n.52.

   /27/ In 1976, NOAA issued proposed regulations that did not address
Section 307(c)(1)'s threshold test, on the premise that the term
"directly affecting the coastal zone" could "speak for itself." 41
Fed. Reg. 42878, 42880.  In 1977, the agency reversed itself and
issued a second set of proposed regulations that defined "directly
affecting" in terms of "primary, secondary, and cumulative impacts,"
as those terms were defined by the Council of Environmental Quality's
NEPA guidelines.  42 Fed. Reg. 43586, 43590, 43598.

   /28/ Following the issuance of the 1976 proposed regulations, NOAA
was asked to declare that the issuance of an OCS lease fell within the
"license or permit" provisions of Section 307(c)(3)(A) of the CZMA,
despite the fact that Congress had refused to mandate that result in
the 1976 amendments to the CZMA.  42 Fed. Reg. 43591 (1977).  The
agency responded that it was "considering a position" which treats
pre-leasing activities on the OCS as "federal activities" subject to
Section 307(c)(1) of the Act.  42 Fed. Reg. 43591 (1977).

   /29/ Although the preamble to the 1978 regulations is not specific
regarding the source of NOAA's uncertainty, other federal actions,
such as the issuance of licenses, permits, and non-OCS leases, were
deemed subject to Section 307(c)(3) and not Section 307(c)(1) by the
regulations.  43 Fed. Reg. 10523 (1978).

   /30/ The OLC opinion did not attempt to specify those circumstances
in which pre-leasing activities would fall within the terms of Section
307(c)(1).  The opinion concluded that the "question whether (these)
activities or any of them directly affect the Coastal Zone is
essentially one of fact" (J.A. 47;  emphasis added), which OLC was not
authorized to address.  Since the issuance of the OLC opinion, the
Department of the Interior has reviewed each OCS lease sale to
determine whether it authorizes any activities that, without further
federal approval, will affect the coastal zone.  No such direct
effects have been found for Lease Sale No. 53, and Interior's
"negative determination" has already been delivered to the State of
California.  See pages 11-12, supra.

   /31/ The 1980 amendments to the CZMA dealt primarily with
reauthorization of the funding provisions of the CZMA.  S. Rep. No.
96-783, 96th Cong., 2d Sess. 1 (1980).

   /32/ Of the members voting on the 1981 resolution of disapproval
passed by the House Committee of Merchant Marine and Fisheries, for
example, only six (of 35) sat on the committee in 1972, and five of
these six original members voted against the resolution.  Compare H.R.
Rep. No. 97-269, 97th Cong., 1st Sess. 8 (1981) with 1971-1972 Cong.
Index (CCH) 3417.

   /33/ The dissenting members wrote that "the inclusion of all
Federal OCS pre-leasing and leasing decisions in the consistency
provisions of the CZMA is a reversal of Congress' earlier decisions
during the 1976 amendments to that Act and the 1978 amendments to the
Outer Continental Shelf Lands Act" (H.R. Rep. No. 97-269, supra, at
17).  The dissenters noted that Congress, in considering the 1976
amendments to the CZMA, had deleted an amendment to Section 307(c)(3)
of the Act "that would have specifically included all federal leasing
activities in the consistency provisions of the Act," thereby
"rejecting the notion that absolute consistency should apply in all
cases during the planning for, and holding of, lease sales" (H.R. Rep.
No. 97-269, supra, at 17).  The dissenters concluded that the
committee's disapproval of NOAA's attempt to confine Section 307(c)(1)
to activities "directly affecting" the coastal zone "is completely
contrary to these facts" (H.R. Rep. No. 97-269, supra, at 17).

   /34/ California's contention (Resp. Br. in Opp. 17 n.27) that the
lower court's construction of Section 307(c)(1) is necessary in order
to give the state an opportunity to address its "broad( ) concerns"
regarding OCS oil and gas development is belied by the factual
background of this case.  As outlined in the statement (pages 9-14,
supra), California has been provided with ample opportunity to express
its concerns throughout the administrative preparation for Lease Sale
No. 53.  From the call for nominations through the drafting of the
environmental impact statement and the requests for comments under
Section 19 of the OCSLA, 43 U.S.C. (Supp. V) 1345, the state has
repeatedly addressed "which areas should be protected from the risk of
oil spills, which modes of oil transportation should be employed and
where on-shore construction should sensibly be located" (Resp. Br. in
Opp. 17 n.27).  It is plainly unnecessary to construe Section
307(c)(1) broadly simply to afford the state yet another opportunity
to ventilate issues that have already been aired under the OCSLA and
NEPA.

   /35/ In the 1954-1979 period, for example, only 46% of the tracts
offered for sale actually received bids.  Cabot Consulting Group, DOE
Contract No. DE-AC01-79RA35011, Competition on the Outer Continental
Shelf and its Implications for Competition in Downstream Markets 222
(July 14, 1980).  In OCS Lease Sale No. 53, 81 of the 111 tracts
offered received bids.

   /36/ Historically, only 41% of the tracts offered for lease
actually result in leases.  Cabot Consulting Group, supra.

   /37/ Depending upon a number of factors, including the bidding
system used and the lessee's interest in other tracts in the area, a
lessee may defer a decision on exploration pending the completion of
preliminary testing on adjacent tracts.  As a result of Lease Sale No.
42 in the North Atlantic, for example, 63 tracts were leased but only
26 exploration plans have been prepared.  See Conservation Law
Foundation v. Watt, 560 F. Supp. 561, 565 (D. Mass. 1983), appeal
pending, No. 83-1258 (1st Cir.).

   /38/ While 26 exploration plans have been approved for the Sale 42
area, only eight exploration wells have been drilled.  Conservation
Law Foundation v. Watt, supra, 560 F. Supp. at 566.

   /39/ On the "frontier" areas of the OCS, exploration has to date
been disappointing.  The eight wells drilled in the Lease Sale No. 42
area were dry holes.  Conservation Law Foundation v. Watt, supra, 560
F. Supp. at 566.  No commercial quantities of oil or gas were found as
a result of the MAFLA (Mississippi, Alabama, Florida) sale in the
eastern Gulf of Mexico in 1972.  See Sierra Club v. Morton, 510 F.2d
813 (5th Cir. 1975).  Similar results were obtained from the
Mid-Atlantic Baltimore Canyon sale considered in County of Suffolk v.
Secretary of the Interior, 562 F.2d 1368 (2d Cir. 1977), cert. denied,
434 U.S. 1064 (1978).

   /40/ The impacts of developing natural gas resources differ
considerably from those associated with oil production.  The quantity
of the resources, furthermore, whether oil or gas, will dictate what
transportation or processing facilities will be necessary.

   /41/ Indeed, the Environmental Impact Statements that are prepared
in connection with all OCS lease sales perform the sort of analysis
California asserts (Resp. Br. in Opp. 16) is necessary under the CZMA.
 A lease sale EIS projects a range of discoverable resource values,
constructs hypothetical scenarios of the possible activities necessary
to recover those resources (e.g., the number and placement of
pipelines, platforms, and tanker routes), and describes a variety of
environmental impacts that might be associated with these hypothetical
scenarios.  See, e.g., Strycker's Bay Neighborhood Council, Inc. v.
Karlen, 444 U.S. 223, 227 (1980) (NEPA requires a "hard look" at the
environmental consequence of federal action but does not impose
substantive limitations on that action);  Vermont Yankee Nuclear Power
Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519, 538
(1978) (same).

   /42/ For example, pre-sale resource estimates are "inherently
speculative" (Pet. App. 27a).  Prior to actual exploration, any
estimate of the actual on-shore impact of developing those resources
will, more likely than not, prove to be faulty, and any substantive
decision based on that estimate will suffer from the same defect.

   /43/ The lower court's decision inexplicably requires the federal
government to evaluate the impact of OCS development on the sea otter
under the CZMA, even though other courts have recognized that such an
evaluation is impossible under the Endangered Species Act of 1973.  In
conformity with the phased decisionmaking procedure applicable to the
OCS development process, biological opinions prepared for OCS lease
under the ESA generally reach conclusions regarding the likelihood of
jeopardy only as to the lease sale and exploration stages.  Decisions
concerning the development and production stage are deferred until
information gathered through exploration is available.  The biological
opinion prepared for Lease Sale No. 53, for example, addressed only
lease sale and exploration activities, and called for further
consultation prior to the development stage.  C.R. 85;  A.R. 182w, at
4.  This manner of satisfying the obligations of the Endangered
Species Act of 1973 has been approved by the lower federal courts.
North Slope Borough v. Andrus, 642 F.2d 589 (D.C. Cir. 1980).  See
also Conservation Law Foundation v. Andrus, 623 F.2d 712 (1st Cir.
1979).  Indeed, the district court below found that such phased
compliance did not violate the ESA (Pet. App. 74a-75a), and the court
recognized that it was requiring the United States to perform a task
under the CZMA that was impossible or inappropriate under the ESA
(Pet. App. 77a).

   /44/ In fiscal year 1982, the Secretary of the Interior accepted
high bids totalling $3.171 billion from all OCS lease sales.  Mineral
Management Service, U.S. Dep't of Interior, Outer Continental Shelf
Oil and Gas Leasing and Production Program Annual Report:  Fiscal Year
1982, at 42.  So far, the Secretary has accepted high bids totalling
$6.882 billion from all offerings in fiscal year 1983.  Mineral
Management Service, U.S. Dep't of Interior, OCS Lease Sale Statistics
(Draft July 1983).  In Lease Sale No. 53 high bids totalling $2.038
billion were tendered.  Ibid.