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OUTER CONTINENTAL ShELF POLICY ISSUES
HEARINGS
BEFORE THE
COMMITTEE ON
INTERIOR AND INSULAR AFFAIRS
UNITED STATES SENATE
Pursuant to S. Res. 45
A National Fuels and Energy Policy Study
NINETY-SECOND CONGRESS
SECOND SESSION
ON
OVERSIGHT ON OUTER CONTINENTAL
SHELF LANDS ACT
MARCh 23, 24, AND APRIL 11, 18, 1972
Serial No. 92-27
PART 1
H
Printed for the use of the
Committee on Interior and Insular Affairs
U.S. GOVERNMENT PRINTING OFFICE
77-463 0 WASHINGTON : 1972
For sale by the Superintendc~t of Documents, U. S. Government Printing Office
Washington, D.C. 20402 - Price $2.~0
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COMMITTEE ON INTERIOR AND INSULAR AFFAIRS
HENRY M. JACKSON, Washington, Chairman
CLINTON P. ANDERSON, New Mexico
ALAS BIBLE, Nevada
FRANK CHURCH, Idaho
FRANK E. MOSS, Utah
QUENTIN N. BURDICK, North Dakota
GEORGE McGOVERN, South Dakota
LE13~ METCALF, Montana
MIKE GRAVEL, Alaska
GORDON ALLOTT, Colorado
LEN B. JORDAN, Idaho
PAUL J. FANNIN, Arizona
CLIFFORD P. HANSEN, Wyoming
MARK 0. HATFIELD, Oregon
HENRY BELLMON, Oklahoma
JAMES L. BUCKLEY, New York
JERRY T. VERKLER, staff Director
WILLIAM J. VA~ Nzss, Chief Counsel
DANIEL A. DREYFUS, Professional Staff Member
MARY JANE DUE, Staff Counsel
CHARLEs CooK, Minority Counsel
(II)
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SENATE RES()LTJTTON 45
~NATIONAL FUELS AND ENERGY POLICY STUDY
This publication is a background document for the National Fuels and Energy
Policy Study authorized by Senate Resolution 45, introduced by Senators Jen-
nings Randolph and Henry M. Jackson on February 4, 1971, and considered,
amended, and agreed to by the Senate on May 3, 1971.
The resolution authorizes the Senate Interior and Insular Affairs Committee,
and ex-officio members of the Committees on Commerce and Public Works and
the JOint Committee on Atomic Energy, to make a full and complete investigation
and study of National Fuels and Energy Policies.
This document is published to assist members of the Committee and other
interested parties In their understanding of the Issues inherent In the formula
tion of a long-term National Energy Policy which assures the continued welfare
of the Nation, including balanced growth, safeguarding and enhancing the
quality of the environment, and national security.
COMMITTEE ON INTERIOR AND INSULAR AFFAIRS
HENRY M~ JACKSON, Washington, Chairman
~LINTON P. ANDERSON, New Mexico GORDON ALLOTT, Colorado
ALAN BIBLE, Nevada LEN B. JORDAN, Idaho
FRANK CHURCH, Idaho PAUL J. FANNIN, Arizona
FRANK B. MOSS, Utah CLIFFORD P. HANSEN, Wyoming
QUENTIN N. BURDICK, North Dakota MARK 0. HATFIELD, Oregon
GEORGE McGOVERN, South Dakota HENRY BELLMON, Oklahoma
LEE METCALF, Montana JAMES L. BUCKLEY, New York
MIKE GRAVEL, Alaska -
Eo, Officio Members Pursuant to section 3 of ~S~enate ResoZution 45
COMMITTEE ON COMMERCE
WARREN G. MAGNUSON, Washington, Chairman
NORRIS COTTON, New Hampshire
COMMITTEE ON PUBLIC WORKS
JENNINGS RANDOLPH, West Virginia, Chairman
JOHN SHERMAN COOPER, Kentucky
JERRY T. VERELER, Staff Director
WrLLIAM J. VAN NEss, Study Director and Chief Counsel
DANmL A. DREYFIJS, Professional Staff and Engineering Consultant
RICHARD D. GRUNDY, Ecvecutivq3 Secretary and Professional Staff
ARLON TOSSING, Staff Economist
MART JANE DUE, Staff Counsel
DAVID STANG, Deputy Director for Minority
JEFF COOPER, Research Assistant
HARRY Pza~y, Senior Specialist, Congressional Research Service, Library of Congiress'
ALAN BIBLE, Nevada
JoINT COMMITTEE ON ATOMIC ENERGY
HOWARD H. BAKEIt~~Jn~, Tennessee
(~)
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CON PEN TS
STATEMENTS
Page.
Allott, Hon. Gordon, a U.S. Senator from the State of Colorado_~ 3
Beilmon, lion. Henry, a U.S. Senator from the State of Oklahoma 2
Buckley, Hon. James L., a U.S. Senator from the State of New York 31
Dole, Hollis M., Assistant Secretary for Mineral Resources, Department
of the Interior, accompanied by Vincent McKelvey, director of Geo-
logical Survey, Russell Wayland, Chief, Conservation Division, and
Eugene Standley, staff engineer, Office of Assistant Secretary 5
COMMUNICATIONS
Dole, Hollis M., Assistant Secretary of the Interior; letter to Senator
BellmQn, dated March 17, 1972 24
ADDITIONAL INFORMATION
"Oil Contamination and the Living Resources of the Sea," by Max Blumer,
senior scientist, Woods Hole Oceanographic Institution, Woods Hole,
Mass. - - 38
"Price Gap Between U.S. and Foreign Oil Shrinking," by Lester F. Van
Dyke, management editor, Oil and Gas Journal, March 20, 1972 49
Quantity and value of Louisiana landings, 1966-71 14
U.S. imports of crude oil and products, 1971, W. J. Darby, Office of
Oil and Gas, memorandum to Director - 22
APPENDIX
Dole, Hollis M., Assistant Secretary, Mineral Resources, Department of
the Interior, letters to Senator Jack~on, dated:
May 17, 1972 307
June 28, 1972 - 318
Draft Environmental Statement, prepared by the B~ireau of Land Man-
ap'ement, Department of the Interior 829
Jackson, Hon. Henry M., letters to Secretary Dole, dated:
April 18, 1972 803
May 18, 1972 - 312
Questions submitted to the Department of the Interior, by the committee
and their answers
Appendix 1 166
Appendix 2 - - 282
Worldwide crude oil prices, Office of Oil and Gas quarterly report,
fall 1971 315
(V)
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OUTER CONTINENTAL SHELF POLICY ISSUES
THURSDAY, MARCH 23, 1972
U.S. SENATE,
COMMITTEE ON INTERIOR AND INSULAR AFFAIRS,
Washington, D.C.
The committee met, pursuant to notice, at 10:00 a.m., in Room 3110,
New Senate Office Building, Senator Frank E. Moss, presiding.
Present: Senators Moss, Buckley, Bellmen, and Metcalf.
Also pres~nt: Jerry Verkier, Staff Director, and Mary Jane Due,
staff counsel.
Senator Moss. The committee will now come to order.
Today we begin our deliberations, pursuant to S. Res. 45, into the
administration of the Outer Continental Shelf Lands Act and the
Nation's ocean resource policies.
The Outer Continental Shelf has proved to be a major source of
energy supply and has satisfied a substantial part of this Nations gro*-
ing demand for oil, natural gas and other minerals. Yet, at the same
time, unfortunate accidents have occurred on the Outer Continental
Shelf as a result of drilling and production operations.
At a- time when the Nation's energy demands are mounting and
concern for the environment weighs on the national conscience, it is
timely for us to examine the role that Outer Continental Shelf re-
sources have played in our total energy picture.
Hearings were held before my subcommittee in November in con-
nection with the establishment of marine sanctuaries over the Outer
Continental Shelf adjacent to California and these hearings served
to focus attention on the need to resolve the many ~onfiicts over the
use of the coastal zone, On the one hand, we are beset by an energy
crisis. On the other hand, we are faced with an intolerable degradation
- - of environmental values.
Priorities for each of the many applications and exploitable features
of these coastal resources need identification. The many sides of this
issue provide a classic example of the dilemma of natural resource
management facing the Nation today: the need to differentiate and
s~lect the best of many potential uses of a resource without ~oreclos- -
ing other benefits inherent in the resource. The choice is not sitnply
* one of good and wise options over bad and foolish ones, but ~`ather -
- a sensitive and complicated selection between several resource alloca-
tions each of which is extremely valuable or actually essential to the
Nation's continued welfare. -
These hearings point up the necessity for renewed examination of~
the Federal policies impinging on the coastal zone. -
- (1)
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2.
We have a public trust in these resources not only to satisfy our
immediate needs but to meet our obligations to future generations
of Americans.
In addition to these next 2 days for hearing Government wit-
nesses, the committee `~il1 hear invited industry representatives ~n
April 11 and Congressional representatives and selected environmental
organizations on April 18.
We hope that within these 4 days we can make a record which
will give the committee the material it needs in trying to adjust to the
problems that I have tried to state broadly in this brief opening state-
ment.
I am pleased that several of my colleagues are here to sit with us
this morning on this committee and if any of them have any opening
remarks-the Senator from Montana.
Senator METCALF. No, thank you, Mr. Chairman.
Senator Moss. The Senator from Oklahoma.
Senator BELLMON. I have a statement that I have been asked to place
in the record by Senator Allott, also I have a brief statement that I
would like put in the record.
Senator Moss. They may be printed iii the record at this point.
STATEMENT 0]? HON. HENRY BELLMON, A U.S. SENATOR PROM
THE STATE OP OKLAHOMA
Senator BELLMON. In view of this Nation's present energy crisis,
which is becoming more critical day by day, I welcome these Outer
Continental Shelf oversight hearings and congratulate our chair-
man for making them possible.
There is no question that vast amounts of domestic petroleum re-
serves do, in fact, exist both on and off shore. These can provide the
only dependable, secure source of energy for the citizens of this Nation
through 1990.
The development of the OCS has been the subject of great controver-
sies and has been retarded as a result of uncertainties brought about
by moratoriums on offshore drilling, stoppage of lease sales and the
prospect of the establishment of marine sanctuaries.
This great uncertainty has undoubtedly contributed greatly to the
transfer of the petroleum industry development efforts and funds
abroad at an ever-increasing rate. It is plainly in the national interest
that this exploration and producing effort be attracted back into areas
which are not subject to the control of foreign governments.
The issues that these proceedings are attempting to clarify are
numerous and complex and they cannot be resolved to the total satis-
faction of every interest group.
When this vast range of issues has been identified and the facts de-
termined, the necessary and difficult decisions can be made. However,
there remains the most important and paramount question which must
first be answered: namely, whether or not this Nation deems it essentia]
to maintain a basic, self-sufficiency in energy and how high a priority
such development must have.
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3
These and stibsequent proceedings will l~ielp provide the necessary
insight into this key question, so~that when the hearings are concluded,
the committee will he able to develop an effective course of action that
will truly be in the national interest.
STATEMENT.OP HON. GORDON ALLOTT,A U.S. SENATOR PROM THE
STATE OP COLORADO
Senator ALLorr. Mr. Chairman, I appreciate thi~ opportunity to
make a brief opening statement. I would like simply to focus on the
context of this hearing.
Nearly 20 years ago this committee reported out a bill which
was enacted into law as the Outer Continental Shelf Lands Act. It was
a legislative achievement of which the Congress should be proud. I
think it would be useful to include a copy of that act. in the hearing
record at this point and request that it I?e so included.
The reason for including it in the record is that it expressei the will
of the Congress as of 1953 and, as a matter of law, the present will of
the Congress-until amended.
That act declares at section 8(a):
In order to meet the urgept need for further exploration and development
of the oil and gas deposits * * * of the Outer Continental Shelf, the Secretary
(of the Interior) is authorized to grant * * * oil and gas leases on ~ * * the
Outer Continental Shelf. * * *
In that section there was-and still is-a declaration of the Congress
that there is an urgent need to develop the oil and gas deposits of the,
Outer Continental Shelf. I anticipate that Secretary Dole in his
testimony this morning will confirm that the need to rely on develop-
ment of OCS oil and gas deposits is as urgent, if not more urgent than
it was when the Outer Continental Shelf Lands Act was enacted. The
shaky, politically unstable, expropriation-prone Middle East seems to
be the only alternative to the OCS to meet this Nation's rising demands
for oil and gas.
Under the authority of the Outer Continental Shelf Lands Act
21/2 billion barrels of oil, 141/2 trillion cubic feet of natural gas
and nearly 3 billion gallons of natural gas liquids have been produced
with bonuses, rentals and royalty payments accruing to the United
States Treasury from 1953 through 1971 in the amount of $~,456~-.
688,788. This oil, gas and natural gas liquids production represents a
value of over $11 billion.
That represents the positive side of the ledger. Regrettably, how-
ever,. -three major mishaps have occurred on the OOS off Santa Bar-
bara and in the Gulf of Mexico. Much oilwasspilled and people and
wildlife were hurt-. These incidents have given rise to a reaction which,
while well intended, would have the Congress either declare- a mora-
torium on future OCS development or transform the Continental Shelf
into a gigantic marine sanctuary from which would be excluded any
drilling for, or production of, oil and gas
The reaction to the Santa Barbara and Louisiana offshore spills
has not limited itself to seeking legislative action in the Congress. The
reaction has also taken the form of lawsuits in the Federal courts. I - -
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4
refer to the December 1971 Federal district court decision involving
the proposed OCS lease sale off Louisiana. Notwithstanding the
declaration of Congressional policy to which I made reference regard-
ing the urgency of the need to develop OCS oil and gas, the court held
that under the National Environmental Policy Act the Secretary of the
Interior was required to consider alternatives to OCS lease sales which
went beyond the scope of his authority to implement. The result was a
cancellation of the sale.
The litigants have suggested that they will be back in court with
another law suit at the next sale.
Thus, as a significant part of our National Fuels and Energy Study
the committee is examining in explicit detail the effectiveness of the
management system of the executive department in the administra-
tion of the Outer Continental Shelf Lands Act.
The major issues we will be considering, as I see them, are:
(1) How environmentally safe and economically necessary is it to
continue to rely on the OCS as a major source of oil and gas? Are
there viable alternatives to the OCS?
(2) What is the price to be paid, in terms of domestic supplies of
oil and gas, for declaring a moratorium on further OCS drilling?
What are the social, economic and national security dosts to the U.S.
if such an option is taken?
(3) Should marine sanctuaries be established on the OCS and if so
by the Congress or the executive department and subject to what
criteria?
(4) How well has the Interior Department (and other Federal
agencies) been administering the Outer Continental Shelf Lands Act,
in particular its selection of lease tracts, conduct of lease sales, super-
vision of operations following lease sales, and protection of the marine
environment in general? What recommendations for improvement
in the Federal OCS management system should the committee be
considering?
The committee is having 4 days of extens~ive hearings on these
and related issues. It is my. hope and expectation that the witnesses
will be as objective and thoughtful in their presentation on the issues
we have asked them to respond to, as we intend to be in our follow-up
analysis of their responses.
I loçk forward to these hearings and hope that as a result of them
the air will be cleared regarding what course of action the Nation
should be following with respect to its use of the Outer Continental
Shelf.
Senator Moss. The Senator from New York.
Senator BUCKLEY. No, Mr. Chairman.
Senator Moss. Thank you. We are pleased that you are here and we
are going to hear today from the Assistant Secretary of the Depart-
ment of Interior, the Secretary for Mineral Resources, the Honorable
Hollis M. Dole, who is a very well known man before this committee
and we depend on him for a great deal of the information that comes
to us that we are able to utilize in trying to work out some of the prob-
lems that face the Nation.
We are very glad you are here, Secretary, and look forward to
hearing from you today.
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`5
STATEMENT OF ~IOLLIS M. DOLE, ASSISTANT SECRETARY POE
MINERAL RESOURCES, DEPARTMENT OP THE INTERIOR, A000M
PANIE]) BY VINCENT MoKELVEY, DIRECTOR OP GEOLOGICAL
SURVEY, RUSSELL WAYLAND, CHIEF, CONSERVATION DIVISION,
AND EUGENE STAND'LEY, STAFF ENGINEER, OFFICE OP ASSIST-
ANT SECRETARY
Mr. DOLE. Thank yo~i, Mr. Chairman, with your permission I would
like to have accompany me at the table, Mr. Eugene Standley, en-
~ineer on my staff, Dr. Vincent McKelvey, Director of the U.S. Geolog-
ical Survey, and Dr. Russell Wayland, who is Chief of the Conserva-
tion District of the Geological Survey.
Senator Moss. Very good, we welcome all of you and are very pleased
to have you before the committee.
Mr. DOLE. I would like to call your attention, Mr. Chairman, that
since submitting my prepared statement `to you we have made very
few an~d minor technical changes in my statement at the very last min-
ute, and I hope you will bear with me in making these changes.
Senator Moss. That is very appropriate, I am glad you were working
on it up to the last minute. Now it is completely up to date.
Mr. DOLE. I too am glad to see so many of your committee present
this morning and I am glad to meet with you today to discuss some of
the problems facing the Country today in satisfying a portion of its
energy demands from the Outer Continental `Shelf.
I have previously stated that the United States has within its bound-
aries all the energy resources it needs for any degree of self-sufficiency
it chooses to maintain, but their development will be more costly than
purchasing energy from abroad. Because of `this cost we can predict
with almost actuarial certainty the acceleration of the trends that are
now evident; the forfeiture to'oil of markets formerly held by coal
and gas concurrent with the `decline in domestic petroleum supply,
which must, in turn, be made good by rising imports of oil, increasingly
from the Eastern Hemisphere. We can slow this rate `of foreign de-
pendency with full development of our energy resources from the
Outer Continental Shelf.
The Outer Continental Sheif-OCS_-has been assuthing an increas-
ingly larger,role in supplying the Nation's oil and gas requirements. In
1970, the Outer Continental Shelf provided over 10 percent of the oil
and gas production of the United States, compared to about 5 percent
in 1965. We estimate that by 1980 25 percent of the U.S. oil pro-
duction and 19 percent of its gas production could be produced from
the Outer Continental Shelf. To accomplish this, more Outer Con-
tinental Shelf areas would have to be opened for leasing, more wells
would have to be drilled and many additional miles of pipelines laid
to bring this vital resource to market.
Historical data available on Outer Continental Shelf oil and gas
exploration and develonment help to give us the insight necessary for
planning for future OCS development. Only about 1.4 percent of the
area of the United States Outer Continental Shelf to the 200 meter,
water depth has been leased for oil and gas exploration and develop-
r~ient. Less than 3 percent is adequately mapped for assessment of its
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6
total energy resource potential and for evaluation of the environmental
impact of mineral resource development.
The wise use of Outer Continental Shelf fuel resources developed
through good mineral conservation practices is a prudent means of
enlarging the Nation's energy base. Equally important is the develop-
ment of technologies which increase efficiency and safety in finding,
developing, producing, transporting petroleum so as to continue to
make energy available at as reasonable a price as possible. An appropri-
ate national objective is to provide a favorable climate for private
invention and innovation, and it is appropriate for Government to
initiate and encourage research in technologies which are in the broad
national interest. New and safer equipment, better procedures, more
efficient operations and increased recovery are some areas where sig-
nificant advances have been made in Outer Continental Shelf oil and
gas development in the past few years.
The legal regime with respect to the continental shelves of the United
States involves the Geneva Convention on the Continental Shelf of
OCS Lands Act, P.L. 212 for Federal operations and the Submerged
Lands Act, P.L. 31, for State waters. The proposed Oceans Policy now
before the United Nations for consideration will have significant
effect on deeper ocean operations. The litigation `involving various
States as to ownership boundaries will eventually solve some of our
near shore marine land problems.
In Outer Continental Shelf leasing, drilling, and production
operations the Department of the Interior's prime responsibility is to
see that industry provides adequate safety and environmental protec-
tion, and conforms to sound conservation practices.
We described the minerals on the Outer Continental Shelf lands
thought to have, some actual or potential commercial value in 1968
for the Public Land Law Review Commission. These included crude
oil, natural gas, natural gas liquids, sulfur, and salt which are known
well enough by the existing marine technology and economics of re-
covery to be classed as potentially recoverable resources. These esti-
mates were published as an appendix to the report of the Commission.
Other estimates of oil and gas resources have been published by the
National Petroleum Council-19~TO--and the Potential Gas Commit-
tee-1971.
The public's desire for an increasing supply of fuel for transporta-
tion, home heating, and electric power is being tempered by its concern
for the environment and the need to protect its quality. Alarmed by
accounts of the spill off the southern coast of California, the more
recent platform fires in the Gulf of Mexico, and the tanker accidents
of the past few years, some have overreacted to the negative aspects
of petroleum exploration in the oceans. This reaction has manifested
itself in a variety of actions designed to restrain further development
in the Santa Barbara Channel off California and on the Atlantic Con-
tinental Shelf. Additionally, last December an injunction was issued
against the proposed lease sale off Louisiana in response to a suit filed
by three environmental groups. This eventually made it necessary
for the Secretary to cancel the sale. We are now trying to reestablish
our Outer Continental Shelf lease sales program.
Natural gas siipnlies one-third of our total energy recuirement.
It is a clean fuel whose demand has greatly exceeded that of other
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fuels, averaging an annual krowth rate of 6 percent dtiring the past
20 years. The problem now is that we have a developing shortage in
natural gas. It is already evident in some markets, and no doubt
will hit .with full force in the next few years. We simply have been
consuming more gas than we have been able to replace with new
reserves.
In 1970, gas demand was 22 trillion cubic feet and reserves were esti-
mated at 265 trillion cubic feet in the contiguous United States. The
reserve-to-production ratio is currently 11.7 to 1, compared with
20. to 1 in 1960. By 1980, gaseous fuel consumption would reach 33
trillion cubic feet-if the gas were available. Between 1971 and 1980,
cumulative gas demand would amount to 275 trillion cubic feet, an
average of 27.5 trillion cubic feet per year. However, annual additions
to proved gas reserves have averaged only 15.2 trillion cubic feet
in the past 5 years. The best 5-year annual rate of additions to new
reserves ever attained was about 22 trillion cubic feet.
Alternate sources to augment our domestic supply of natural gas
such as imports from Canada, liquefied natural gas or LNG, and
synthetic gas from coal or other sources are not considered adequate
to meet fuel demands in the next 5 to 10 years. Petroleum geologists
~believe, however, that there are large natural gas resources remaining
to be discovered and developed in the Outer Continental Shelf, partk~-
ularly in the Gulf of Mexico.
Petroleum products supplied 43 percent of total energy consumed
~n the United States in 1970, averaging 14.1 million barrels daily.
Of this total, 23 percent was imported under oil import controls. For
th~ past several years, the Nation's excess petroleum producing capac-
ity has declined and since 1967 the United States has not been self-
sufficient in oil.
As in the case of gas, domestic petroleum resources are not being
developed at adequate rates to meet anticipated demands. In the last
20 years, geophysical exploration in the United States has decreased
72 percent, exploratory well's drilled have decreased 44 percent, and
overall drilling activity has decreased 63 percent. The National Petro-
leuin Council estimates that 436 billion barrels of potential oil
resources remain to be discovered in the United States. A substantial
portion of these potential resources will most likely come from the
Outer Continental Shelf since the most promising undrillecj areas are
offshore.
Estimates of the source of the annual worldwide oil pollution in
the oceans indicate that tankers contribute 29 percent of the total,
while offshore production activities contribute only about ~ percent.
Reducing the `supply of domestic production by curtailing oil pro-
duction offshore could require additional imports of oil and conse-
quent increase in tanker travel. This in itself could increase `the po-
,tentiai for oil pollution of the oceans by increasing the load on a
large àontributi'on to world ocean pollution.
Until alternatives `are developed which can renilace oil and gas as
primary contributors to o'ur `energy supply, it will be necessary to con-
tinue to find and develop hydrocarbon resources in order to maintain
our current level of living. This obviously will require expanding
Outer Shelf oil and gas operations. However, there is,no need to sacri-
fice enyironmental quality to accomplish this. We have increased fund~
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8
ing fivefold for our Outer Continental Shelf leas emanagement pro-
grain in the last 3 years, enabling us to increase our technical staff, re-
vise our operating regulations, conduct studies related to the safety of
operations, and institute a stringent inspection and enforcement pro-
gram in order to increase safety and decrease pollution in Outer Con-
tinental Shelf operations.
These actions have already produced significant results. There has
been a great reduction of incidents of noncompliance with regulations
an4 small leaks and spills offshore have been cut in half. The new
safety systems installed have already prevented several platform fires
from becoming maj or disasters.
It is significant that these actions have also motivated a greater con-
sciousness for safety and pollution prevention. Tens of millions of
dollars have been spent by industry in response to this endeavor and
much resarch is being directed toward further improvement of safety
devices and systems.
The work connected with oil and gas development on the Outer
Continental Shelf has a relatively good safety record. In fact, it is
among the best of the various domestic industries. However, we intend
to see that offshore operations are conducted in such a way that dam-
aging accidents are avoided altogether or at least reduced to a lower
level.
One last comment before I invite your questions. Accompanying the
chairman's invitation of March 8 was an extensive list of questions on
the administration of the Outer Continental Shelf Lands Act. I have
had the answers to these questions prepared. in detailed form and am
submitting them for the record. I respectfully request that they be
made a part of my testimony. And, Mr. Chairman, I might say that
these 300 pages in answer to your questions, I think, will make
a very fine record for your committee.
Senator Moss. Thank you. Obviously it has been an extensive job
answering those questions, and we do appreciate the work you have
done. The responses will be included as part of the record.
(The questions and answers referred to are in the appendix.)
Senator Moss. I appreciate your statement very much. In it you say
the amount of funding for OCS mangement has increased fivefold in
the last 3 years. This indicates to me that our national policy at this
time is to accelerate development of our oil and gas resources recoveries
on the Outer Continental Shelf; is that correct?
Mr. DOLE. Yes, Mr. Chairman, not only to accelerate the recovery
of oil and gas from offshore but it is also a reflection of both the Con-
gress and the administration's view that more caret has to be taken in
the management of these operations aild in the safety of these opera~
tions so that the enviromental impact will be reduced to the smallest
minimum possible.
Senator Moss. So the funding is in part environmental preservation
and management to protect the environment as well as to increase the
production; i~ that correct?
Mr. DOLE. Yes, sir; in very large part.
Senator Moss. The Land Law Review Commission calls for State
involvement during the course of oil leasing. Do you have any State
involvement in such leasing?
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9 V S
Mr. DOLE. Yes, sir, Mr. Chairman. The Geological Surv~y and the
Department of Interior work very clo~ely with the State in the devel-
opment- of the ~nvironm~ntal impacts that are prepared prior to the
leasing of any area. As a matter of fact, when there was intimation
that there was going to be activity off the Atlantic coast, Secretary
Morton has not only met with members of Congress to discuss where
we stand on this and w'hat we are doing, and I should add it' is strictly
in the matter of investigation to see what our resources are, but he
has also met with Governors of the States in this area. We do have con-
tacts through our various field offices and through our offices here in
Washington of the Geological Survey and the Bureau of Land Man-
agement in the Department of Interior, we have contact with the State
officials and officers and work with the State officials in this respect.
Senator Moss. Is this working out?
Mr. DOLE. I think it is working out very well. Certainly we have
areas that we do not always see eye to eye on but the fact that we have
a dialog contin.uing b~tween the co~stal States and our resources S
managers in the Department of Interior I think is very helpful. They
are kept well informed of what we are doing, what we are finding out,
and, in most instances, we are able to resolve any problems that might
come up.
Senator Moss. Your testimony indiëates an alternative to increasing
OCS leasing and production has to be additional imports, is that
correct? V
Mr. DOLE. Mr. Chairman, we are going to have to rely more on our
off-shore imports for our energy supply as re~'ards oil* and gas. The
extent which we have to rely u}?on off-shore imports is going to be,
directly in relation and proportion to the amount of discovery and
developmexit of oil found within the boundaries of the United States.
Now, here we run into a very difficult and sensitive national policy
and that is, what is the point of reliance that we want to give to off-
shore resources. Certainly the off-shore areas have the best chance `
for ready development and have the best chance for large discoveries
of both oil and gas, so it follows that the early develQpment and the'
active development of the off-shore is going to be a measure of our
independence and security. . S
Senator Moss. What is your current estimate of reserves, oil and gas
reserves, that are contained in the Outer Continental Shelf? S
Mr. POLE. I would like to refer that to Dr. McKelvey, if I may,
please. S S
Senator Moss. Doctor.
Dr. MOKELVEY. Mr. Chairman, the proved reserves on the Oute~r
Shelf amount to approximately 5 billion. barrels. These
reserves are explored, are producible under present economic condi-
tions and fit the definition of proved reserves as customarily used In
addition to proved reserves, however, are deposits as yet undiscovered
but almost certainly present-identifiable only in a ,very broad way
from the nature of the rocks that occur on the Shelf, but nevertheless
almost certainly present in' the sedimentary basins that have not yet
been explored. Of course, in addition to the undiscovered deposits, `
there is more petroleum, even in known deposits, that will almost cer-
tainly be recovered as the technology for secondary recovery improves.
PAGENO="0016"
10
So the estimate of proved reserves is oniy a very minimal indication
of the amount of oil and gas that may be present.
Now, no one knows, of course, how much actually is present. But
as we in the Geological Survey have appraised the situation, we have
made the analogy that very likely there is as much oil and gas present
and perhaps eventually producible off-shore of the United States as is
present on shore.
Senator Moss. Well, when you say 5 billion barrels in what is known
as proved reserves and your other estimates are projections for which
you don't have proof as to the way you project it, how many would
that be in number of barrels?
Dr. MOKELVEY. Estimates of this vary considerably. There are no
well established and agreed upon methods for estimating undiscovered
resources and it is very difficult to predict as to how much will actually
become recoverable in the future. But, let's say, Geological Survey's
estimates of the total oil in the ground indicate the potential of about
1500 billion barrels. How much of that can actually be found, how
much of it can be recovered, of course, is entirely conjectural. But that,
we think, is the target.
Senator Moss. Are you confined in determining your reserves off-
shore to actual drilling? Is there something akin to seismographic
exploration?
Dr. MCKELVEY. Petroleum can only be found by drilling, but indi-
cations of its presence come from other kinds of geological studies and
geophysical surveys off-shore are extremely important in indicating
the areas in which there are thick sediments, areas in which there are
favorable structures where petroleum might occur. It is from those
kinds of indications that we build our estimates of the potential.
Mr. DOLE. May I add to what Dr. McKelvey has said? He noted
right at the very beginning that oil and gas are found only by the
drill. That the estimates that we make here are those based upon
volume of sediment and experience in the past in developing these
sediments in other areas. We make these estimates because it is es-
sential for the Nation to know what its resource potential is. But the
important thing is that oil and gas are not found unless a drill finds it.
Senator Moss. I realize that and I knew asking for a projection took
in a lot of these other indefinite factors, but the geologic inference
gives us some very broad guideposts and I would be glad to have a ball
park figure of what you estimate might be there. I realize you have to
put a drill down before you know it is there.
Mr. DOLE. Mr. Chairman, the search for oil and gas is a very risky
business and I wish to refer to the sad experience on the OCS off of
Oregon-Washington, an area that I followed very closely around 10
years ago. Although about 600,000 acres were leased for a little more
than $35,000,000 in bonuses, and after 5 years of drilling, an ex-
penditure of perhaps on the order of $60 to $65 million more, not
one bit of oil or gas was found. In other `words, after looking at about
600,000 acres of what appeared to be, from seismic records and geolog-
ical inference, what appeared to be a nice oil province, did not work
out at all. So this is the risk that is involved.
PAGENO="0017"
11
Senator Moss. Have you fixed the date for the offering of the lands
offshore, the ones that were canceled by reason of the lawsuit down
in Louisiana?
Mr. DOLE. No, sir, Mr. Chairman. We have not and the reason we
have been unable to fix a d~ite is because of the requirements of the
National Environment Protection Act that upon filing of an En-
vironmental Impact Statement certain periods of time have to remain
for public comment, for comment of other agencies in the Govern-
merit, for other departments and a review time. We are hoping that
we can bring on a sale in the Louisiana Gulf sometime later this
year. My guess, and this is as close as I can put it, would be sometime
in September or October. But Secretary Morton will make the an-
nouncement as soon as he can see daylight to do this. But that is not so
much the result of work within the Department of Interior, but it is
living up to the requirements of the Environmental Protection Act.
Senator Moss. Is it the present intention to offer esesntially the same
acreage that was to be offered before?
Mr. DOLE. This is being discussed and reviewed in the Department
at the present time, Mr. Chairman. I am not at liberty right now
to say exactly ~what it will be. I would imagine that it will be in the
same area and it very well may be the same amount of acreage.
Senator Moss. You indicated in your testimony that there has been
a considerable change, a tightening up of procedures that reduced the
amount of spill and the number of fires and things of that sort. Per-
centagewise, can you put that into any kind of figure for me?
Mr. DOLE. Mr. Chairman, I am very pleased that you asked that
question. I am going to refer it to Dr. McKelvey for complete answer-
ing but since January of 1969 to date, the `effort on the part of the
Geological Survey and the Bureau of Land Management, principally
the Geological Survey as it is the manager of the resources, we have
revised our GUS orders, our rules and regulations, we have had many
studies made and with your permission I would like to ask Dr. Mc-
Kelvey ta go into the extreme work we have done and are doing be-
cause I do not believe that it is generally realized that today we are in a
completely new baligame as far as management and control of off-
shore applications as compared with pre-1969.
Dr. MCKELVEY. Mr. Chairman, first may I say that the overall safety
record of off-shore operations has, on the whole, been an excellent one.
There have been some 10,000 wells drilled on the Outer Continental
Shelf, some additional 6,000 wells in State waters, a total of about
16,000. Of that total amount of drilling and off-shore operations, only
three major spills have occurred. This is too much, but still I think it
is worth noting that the total spillage and the number of major spills
is very small in that total.
The Santa Barbara incident, of course, was bad and did cause much
damage from the oil that was spilled. Many birds were killed and oil
came on to the beaches. It was a mess to say the least. Since that time
much has been done to strengthen regulations to make them muci~
more stringent and inspection programs have been developed to see
that these regulations are adhered to. We are in the process of de-
veloping improved safety procedures, to improve the. inspection pro-
77-463 0 - 72 - pt. 1 - 2
PAGENO="0018"
12
gram and in other ways to see that accidents as a result of off-shore
operatiops is reduced to the very minimum possible.
Senator Moss. So the figure you supply me with, three major spills
and about 16,000 drilling operations.
Dr. MCKELVEY. Yes. There have beei~i other accidents but actually
not large in number, and without serious environmental consequences.
Senator Moss. One of the major spills, would that be that great fire
we had off the coast down there in Louisiana where they allowed it to
burn, really, in order to keep the oil from spilling on the water to any
major degree? Now, do you count that as a major spill?
Dr. MCKELvEY. The two other spills besides the Santa Barbara spill
that resulted in the release of oil in the amount of more than 5,000
barrels were the Chevron and Shell spills, both of which were accom-
panied by fires.
Senator Moss. Well, thank you, it is encouraging to have you say
the techniques have been tightened up and inspection and procedures
have been tightened up greatly to guard against spills. This is one of
our great problems which causes an'awful lot of concern, of course.
Mr. DOLE. Mr. Chairman, in the Santa Barbara spill of January
1969, less than 1 percent of the spill was contained and reëovered.
During the Chevron fire in early 1970 approximately 10 percent of
the total oil spill was retained and recovered. In the Shell fire in late
1970 approximately 40 percent of the total oil spill was retained and
recovered. In the Amoco fire in late 1971, which spilled 450 barrels of
oil over a 40-day period, and this was because this was allowed to burn
and be consumed, because there was such a small amount of oil spilled~
only about 20 percent was recovered. So I think the industry's ability
to respond to accidents such as this have shown marked improvement
very marked improvement and the research that is continuing by both
the Federal Government and by industry will make that record even
better.
Senator Moss. Thank you. My colleague from Montana is a genuine
expert on the Continental Shelf and has held many hearings on the
matter, and I am sure he will have some questions.
Senator METCALF. I am far from an expe~rt, Mr. Chairman, I know
just about as much about the Continental Shelf as a Senator from a
landlocked State such as Montana would be expected to know.
However, in the course of our hearings before the special subcom-
mittee, we did develop a good deal of information, Mr. Secretary, on
the matter. Some of our hearings have been in some demand by the
academic community as a text book on some of this material because of
what is contained. Therefore, I want to congratulate you on supplying
the answers to a rather formidable list of questions, and I know that
will be volume II of a very interesting and widely used text book on
the very subject matter. Certainly I know Senator Bellmon and I, who
have conducted many days and hours of hearings on this matter, will
welcome that additional material. We will especially welcome it as will
our staff and the full committee.
I want to go a. little further into this oil spill business. What per-
manent environmental impact and temporary environmental impact
did these oil spills have on the various areas of our country?
PAGENO="0019"
13
Mr. DOLE. Senator Metcalf, I have had a little paper, a short two
paragraphs, prepared hoping that you would ask some question like
this or anticipating that you would and I would like to quote from
that.
In the four major fires since 1970 in the Gulf of Mexico a total of
~,300 barrels of crude were spilled. There was an exposure to pollution
for a total of 314 days. Minor amounts of oil hit the shore only 31
times. Oil that did reach shore was either cleaned up immediately or
was removed by waves, before it could be cleaned up. In the Gulf of
Mexico there have been no significant bird kills, no apparent loss of
ash or other wildlife and no visible short-term environmental damage.
Although the long range effects are unknown, no adverse effects have
been reported to date.
In the Santa Barbara incident of 1969 there was considerable en-
vironmental impact from the 10,000 barrels plus spilled. There were
3,686 reported bird deaths, as well as the loss of certain kinds of bottom
dwelling fauna. Oil was also washed upon the beaches in the many
places in the channel and massive efforts were required to clean up the
oil. The long-term effect of the spill has been much more promising.
Dr. Dale Straughan has determined in her studies from the oil spill
that the area has recovered rapidly from the effects of the spill.
Senator METCALF. How long will it take before we know some of the
long range effects of oil on the water and the damage to the algae to
the bottom-feeding fish and things of that sort?
Mr. DOLE. I can't specifically answer that, Senator Metcalf, but I
would call to your attention that during World War II there were,
I believe-_it is estimated that over 95 U.S. flag tankers were sunk
off the Gulf coast and off the Atlantic. That has been a period now of
almost 35 years.
Senator METCALF. For us veterans of World War II, that is too long.
Senator Moss. Make it 30.
Mr. DOLE. Around 30 years. As you know, the fishing has never been
any better than off the Coast of Florida and the recreational aspects are.
still very good. I am not sure there has been any real definitive study
m~ide of that area and there probably should be. Perhaps Dr. McKelvey
could elaborate on this for me, please.
Dr. MCKELVEY. Senator, as far as I know there has not been any
definitive or exhaustive studies on those effects in the Gulf.
Senator BELLMON. Mr. Chairman, could I interrupt at this point?
Senator Moss. Yes.
Senator BELLMON. I have some information received from Dr. Whet-
land, Chief of the Statistic and Marketing Division of the U.S.
Department of Commerce, in which he reports on the harvest of
several species of fish from the Louisiana area. I believe this might be
enlightening to be a part of the record at this point.
Senator Moss. It will be inserted at this point as part of the response
about the fishing.
(The information follows:)
PAGENO="0020"
14
QUANTITY AND VALUE OF LOUISIANA LANDINGS, 1966-71
[Inthousandsi -
1966 1967 1968
Item, Pounds Dollars Pounds Dollars Pounds Dollars
Menhaden 555, 852 9, 558 510,414 6, 134 622, 291 7, 740
Shrimp 62,276 24,390 75,325 24,575 67,768 25,623
Oysters 4, 764 2, 156 7, 743 3,414 13, 122 5, 305
Hard blue crabs 7, 986 537 7, 559 520 9, 551 807
Catfish and bullheads 4, 205 1, 169 3,730 1, 040 3, 397 978
Total 635, 083 37, 810 604, 771 35, 683 716, 129 40, 453
~
Marine waters and coastal rivers 656, 834 38, 979 639, 675 37, 280 754, 502 42, 125
Mississippi River area 6, 008 902 6, 898 1, 062 9,467 1,498
Total 662, 842 39,881 646, 573 38, 342 763, 969 43,623
1969 1970 1971
Pounds Dollars Pounds Dollars Pounds Dollars
Menhaden 856,251 12,764 959,810 18,931 1,237,093 20,050
Shrimp 82, 888 33, 358 90, 948 34, 614 92,635 43, 000
Oysters 9, 178 3,969 8,639 3,631 9,937 4, 235
Hard blue crabs 11,602 1,072 10,254 928 10,394 1,060
Catfish and bullheads 4, 313 1, 215 4, 226 1, 214 3, 804 1, 089
Total 964, 232 52, 378 1,073,877 59, 318 1,353, 863 69,434
~
Matine waters and coastal rivers 1, 003, 160 54, 426 1, 007, 251 61, 068 1, 396,470 72, 430
Mississippi River area 10, 341 1, 768 6,876 1,308 6,900 1, 300
Total 1,013, 501 56, 194 1,014, 127 62, 376 1,403, 370 73,730
Senator BELLMON. It shows in 1966 the total catch-menhaden,
shrimp, oysters, hard blue crabs, catfish, bullheads-was 662,000
pounds and in 1971, after a great deal of offshore activity has taken
place, the catch was 1,403,000 pounds. More than doubled.
Senator Moss. Thank you. You may continue, Dr. McKelvey.
Dr. MOKELvEY. Thank you, Mr. Chairman. When I said an ex-
haustive study, I was referring to the more subtle effects of oil spills
Or petroleum pollution effects that might not be observable immedi-
ately, even over a considerable period of time. I think the question of
what the effects may be, what happens to oil in the sea, what the effects
of oil of different kinds in different kinds of environments, with
such questions we are dealing certainly with a very complex situation
and one that perhaps is not easy to judge from evidence that may
appear immediately. We know, for example, that among the tanker
spills that have occurred, the damage to the aquatic life has varied
considerably from place to place.
Whether this is due to the character of the oil, or the nature of the
environment, is unknown and I t~iink most people agree that this is an
area where research ought to be done.
Senator Moss. Isn't it true that there is some natural spillage going
on all the time? I recall going off of Coal Oil Point and being able
to see the slick that had been there for some time, like 100 years, is
that true?
Dr. MCKELvEY. Yes we estimate somethinp like 50 to 75 barrels a
day is being spilled from the natural seep. Historically there have
been many oilfields of all dimensions that have become exposed to the
PAGENO="0021"
15
surface as a result of erosiOn and dissipated. There is in the geological
record tar and asphaltite deposits, many of which may have originated
in that fashio~i. So one can say that over historical times much oil
has been released to the natural environment and to the oceans with-
out a long-term effect that we are able to observe. One possibility that
has been offered to explain some of the differences in the effects of
tanker spills is that synthetics of various kinds are less biodegradable
than natural crude oil and may have, therefore, more serious effects.
But, as I say not enough is really known to define the effects of vari-
ous kinds of hydrocarbons in various kinds of environments.
Senator METCALF. What kind of research are you doing about this
complicated problem? You all remember in World War II we thought
DDT was the greatest boom that came along and we sprayed it around
and killed the flies and insects and so forth, then after a generation
it lost a good deal of its glamour and now it is prohibited. That was a
result of further additional research. No one is particularly blamed
for that, but are we going forward with research as to the bottom
effects of these tanker spills and ordinary geological formations, seep-
ages, and spills as a result of such things and Santa Barbara.
Mr. DOLE. Senator Metcalf, the principal area that the Geological
Survey has been concentrating their research, has been in the manage-
ment of production from offshore, in the safety applications of the
producing of the wells. I am not sure whether they are doing any basic
research in the biological side of this or not. Perhaps Dr. McKelvey
can respond better to that.
Dr. MCKELVEY. We are beginning research in this area, Senator.
Other Federal agencies are also becoming concerned with the problem.
NOOA, I believe, is undertaking some studies in this area, and the
academic institutions are becoming active, and, I believe, some of the
petroleum companies are becoming concerned also and.have started in-
vestigations ~n this area.
Senator METCALF. Are you satisfied with the kind of research being
developed and the progress and rate of its development?
Dr. MCKELVEY. With respect to my knowledge of it, Senator, I
would say it is really just getting underway, and in all of the institu-
tions I have been speaking about, this has really only been recognized
to be a problem within the last few years. So. it needs to be expanded
considerably.
Senator METCALF. What are you doing with regard to interagency
agreements, Mr. Secretary, working with such oFganizations as EPA
and the Coast Guard in the containment of these spills and prevention
and so forth?
Mr. DOLE. We have had, Senator Metcalf, areas of jurisdictional
disputes in the past few years. We worked out a contingency plan for
oil spills that involves the Coast Guard, the Environmental Protection
Agency and the Department of Interior. We have arrangements and
agreements with the Coast Guard on cleaning up oil spills. As you
know, the Corps of Engineers has the responsibility for the oversight
of obstruction to navigation. We work closely with them in this regard.
The Coast Guard has certain lighting and buoying regulations~ We
aid them whenever we can in making inspections.
There is some overinu in the inspection requirements as to safety
regulations of the Coast Guard and our inspections of offshore wells,
PAGENO="0022"
16
bttt by and large we are resolving the jurisdictional disputes and are
working with the various agencies and I think we have now a much
better working relationship than we have had in the past.
Senator METCALF. You are satisfied with the progress you are mak-
ing on this interagency cooperation?
Mr. DOLE. Yes; I think the progress we have made over the past
few years has been very large. There is still some way to go but we are
working on this and I am sure we will come to a good agreement with
all the various agencies and there will be a concerted Federal effort
that will be efficient and not as harassing as it has been in the past.
Senator METCALF. I hope you will continue to keep the committee
informed as to the progress of your activities there in this particular
area. -
Section 12-A of the Outer Continental Shelf Land Act provides
that the President of the United States may from time to time with-
draw from disposition any of the unleased land to the Outer Con-
tinental Shelf. President Eisenhower used this authority to create
a marine coral reef preserve off of one of the Florida Keys. Is this
authority sufficient for the creation of a future marine reserve or is
new or further legislation necessary?
Mr. DOLE. I ~think that authority, Senator Metcalf, is sufficiently
defined and broad enough that it will allow the protection of any
highly scenic area that would have a higher use than the'production of
energy. As you know, in 1969, Secretary Hickel established a reserve
off of Santa Barbara Channel called the Santa Barbara Channel
Ecological Preserve and that was established under Public Land Order
3478 on March 25. This order withdrew approximately 20,000 acres
from all forms of disposition, including mineral leasing and reserved
this designated area for use of scientific, recreational and other similar
uses as an ecological preserve. In addition, about 30,000 acres of con-
tiguous OCS lands were designated as a buffer zone and will be with-
held from mineral leasing. I feel that the law and the rules and regu-
lations developed from that law are sufficiently strong that these other
resources of the ocean can have due recognition and that they will
receive the recognition that they deserve.
Senator METCALF. I am glad to hear you say that you feel you have
adequate legislative authority for the protection and setti~ig aside of
these very important marine reserves and I am also glad to hear you
say that they will be set aside under that authority if need be.
I have one more question which was handed to me by a member of
the staff. He points out that the Bureau of Land Management survey
shows that offshore Louisiana petroleum costs only $1.78 a barrel to
discover and produce on the average. Even with royalty payments
the cost is only $2.34 a barrel. These costs probably have gone up but
they are less than the domestic price of oil during the time covered
by the survey. These costs are, in fact, less than the price of foreign
oil laid down in the United States.
Now, the offshore operations look as if they should be very, very
profitable. How do you explain the drastic decline in the offshore ex-
plorations, attempts for discovery and general operations of the
present leases?
Mr. DOLE. Senator Metcalf, I guess the old story about figures. Peo-
ple who use figures, they can use them any way they want pertains
here.
PAGENO="0023"
.17
Senator METCALF. Well, I am just trying to get an explanation.
Mr. DOLE. Yes. The fallacy here is that it might cost to produce this
amount of oil from a particular reservoir, but what is not figured in
here, and something that I spoke to a little bit earlier, is the high risk
involved in the search for oil and gas. Not figured into those totals is
the tremendous sum spent looking for oil and gas and not finding it.
So I would imagine if you would work in all the costs that should be
really brought into this, that the amount of money there would be
more per barrel than those figures would indicate.
Now, as to why there has not been more activity offshore, and we
are becoming more and more reliant upon overseas sources, I think it
comes down to the fact that the marketplace is strictly responsive to
price and if you don't pay enough you just plain don't get enough.
Inasmuch as gas, and I think it is pretty well acknowledged now
that gas has been underpriced, when you compare it with B.t.u. value
of 1,000 cubic feet of gas with the B.t.u. value of oil or coal or other
energy sources, gas has been underpriced, with the net result that there
has not been the economic return for the. search for oil and gas in the
United States that could be obtained elsewhere. Money does not know
any real controls. If you cannot get the return for an investment in
one area than you can in another area, the money is going to go to that
other area. The size of the fields found overseas would certainly be
more attractive than the size of the fields that have been found to date
here, with the exception of the large discovery up at Prudhoe Bay.
Senator METCALF. Mr. Secretary, this information was taken from
Technical Bulletin No. 5, U.S. Department of Interior, Bureau of
Land Management. I am reading from table 1 on page 205 of that
bulletin. "The summary of estimated revenues and cost of finding
and producing hydrocarbons." The finding cost enumerated here con-
sisted of some of the items that you suggested. Subject to well drilling
costs, dry holes, lease facilities, lease acquisition, geophysical and geo-
logical lease rentals, land scouting, and other exploratory expenses. So
all of the material that you were talking about as to the finding of the
dry holes and so forth was included in the figure that I cited, $1.19
for finding costs and other costs amounted to 59 cents, made it $1.~78,
plus royalties which would be $2.34 on the Gulf of Mexico.
The only point I was making is that this was less than the cost of
finding and producing wells in many parts of the United States and
even importing oil from the Arabian countries, for instance.
Mr. DoLE. Yes; you are absolutely right, Senator Metcalf. The off-
shore areas certainly appear to be the areas here in the United States
that offer the lowest cost rate and the lowest cost production.
In my introductory statement I noted the amount of oil and gas
anticipated to be produced from the off-shore areas in the future is
going to increase much more rapidly than it has in the past years.
Certainly those figures that you quoted would indicate that the finding
of oil and gas offshore is the best bet that the United States has of
increasing its reserve's. The only inhibiting thing in this~to date has
been the number of lease sales that have been offered offshore and
hopefully we can find the key to the statement that we must file for
this and that we can make more land available offshore.
Senator METCALF. This is exactly what I was leading up to. In exam-
ination of the cost of finding and producing offshore oil, there still is
PAGENO="0024"
18
room for environmental protection and these various conditions that
we find we must put around the safety precautions, around these
leases, and still make that offshore competitive in the world market,
and, especially in the United States; isn't that true?
Mr. DOLE. That is absolutely right, Senator.
Senator METCALF. Mr. Chairman, on November 2, after hearings
of the special subcommittee that Senator Jackson, the chairman of
our committee, appointed, Senator Beilmon and I joined along with
our colleagues Senator Allott and Senator Jackson and Senator
Stevens in introducing 5. 2801 which is the Deep Sea Bed Hard
Mineral Resources Act, I am going to ask, I know Senator Bell-
mon is going to join me in asking you to set this bill for hearing and
while Secretary Dole is here I want to urge him to get the information
and report in so that about May, when, if you and Chairman Jackson
agree, we can have this bill heard, which is a matter of concern to
us and I know to you and to the people who are using it for hard min-
eral resources.
Senator Moss. We will be glad to do that.
Mr. DOLE. I think this is an area that certainly needs to be looked
into and I hope we can develop some hard mineral legislation that will
allow us to not only look to the offshore for oil, gas, and sulfur. but
will encompass these other resources of the country and we will cer-
tainly be ready.
Senator Moss. Senator Bellmon comes from a great oil-producing
State but also has done a great deal of work in the hearings on off-
shore production and other minerals besides oil.
Senator BELLMON. Thank you, Mr. Chairman, I might say our
State has exactly the same amount of Outer Continental Shelf as
Montana.
- Mr. DOLE. But you do have a deen seanort now.
Senator BEI~LMoN. Yes. I would like to compliment the Senator
from Montana for the excellent job he did in chairing the hearings
on the Special Committee on the Outer Continental Shelf and also
say the events since that time have shown the wisdom of the posi-
tion our committee took in the report we issued. I think this may be
some time when we had some influence on the activities of the execu~
tive branch.
Before we get into the questions, I would like to get into some ques-
tions that Senator Allott asked me to bring up.
Senator Moss. Yes; you may proceed with those. /
Senator BELLMON. Mr. Secretary, questions 1. 2, and 3 of the list
that the committee sent to you appear to require some consideration
in the department. I would like to read these two questions to you and
ask you if you would like to comment on them in addition to what you
said in your formal reply.
The first question is, in light of existing and projected demands for
energy and simultaneous requirement to protect the marine environ-
ment, what alternative source of energy other than the OCS petro.
leum from future leases are readily available and what would he the
economic cost and environmental risk of energy from these sources
In other words, what can we do if we don't go ahead and develop
the OCS?
PAGENO="0025"
19
Mr. DOLE. I think the key word there is readily available, Senator.
As you know, we have some research programs on the obtaining of
gas from coal and liquids from coal. We have a lease program on oil
shale and Senator Bible's bill for the development of geothermal re-
sources has passed and we are in the process of letting leases for
geothermal resources very soon. But this will not give us any quantity
of energy resources before 1980. So, therefore, your term, readily avail-
able, becomes that important. We have, really, no major source of en-
ergy, oil and gas, which makes up about `75 percent of the energy used
here in the United States, other than coal, readily available. Coal is
being chased out of `the market because of environmental requirements,
so therefore the OCS becomes that much more important because it
is in this area where the best chances of bringing oil and gas ashore to
the economy of the United States the fastest exists. This means, theh,
that we have to rely upon overseas imports to supply the gap that is
widening between our ability to supply' energy and the demand on
energy. This means then, in this very important segment of our
economy, the very basic segment of our economy, where energy is
needed for all of our industry, that we must become more reliant upon
overseas sources which we have very little if any control upon.
Senator BELLMON. Thank you, Mr. Secretary.
Another question Senator Allott asked me to bring up, it says, what
would be the economic security of supply and environmental con-
sequences of alternate strategies for the scheduling of OCS resource
development, that is to say, the postponing of development and con-
sumption of these resources until the need is greater through the in-
creased cost or unavailability of imported oil? In other words, if we
cut off developing OCS now, what are the economic and environmental
consequences?
Mr. DoLE. Well, Senator, this would mean, as I mentioned earlier,
that we would have to rely upon off-shore sources for our oil and gas
and, as you know, worldwide, in the ocean, only about 2 percent of the
oil that is found a pollutant in the ocean comes from drilling, whereas
a very large percentage, I believe it is 28 percent, comes from tankers.
This would mean you would be increasing the number of tankers com-
ing into our ports, with the net result that they are the much larger con-
tributor tQ oil pollution than is the development of our off-shore re-
sources. So the most secure, the less pollutant source of oil and gas
would be from our own field on our own Continental Shelves.
Senator BELLM0N. When you mention the large amount of pollution
that comes from tankers, does this come because of disasters or is it
a fact that tankers flush their tanks? Why do we get pollution from
tankers?
Mr. Dor~E. It comes from many reasons, Senator Beilmon. It comes
from off loadrng and then a bad practice that is being corrected now
of numping bilges. Some comes from the occasional catastrophe in the
sinking of a ship or in collisions, but by and large it is the incidental
spills connected largely with the off loading and on loading of the ships
themselves.
Senator BELLMON. Would you care to state what is being done to
correct those problems?
Mr. DOLE. Yes, I think the Department of Transportation and th~
Department of Commerce are largely concerned in this area and I can-
PAGENO="0026"
20
not give you a real definitive discussion on this, but I know that the
companies have gone to what they call top loadings. That is, putting
the bilge and other oils on top of their tanks and then discharging
that, not into the ocean but on facilities located on land. The review
of the types of materials, the types of connections made for moving oil
from a tanker on shore is being done. I know of some organizations
that are actually putting booms around the offshore dock unloading
facilities in order to contain that. I know they are at this time tighten-
ing the rules and regulations and marine laws so that a minimum
amount of oil will result from this off-shore unloading or this off-
tanker unloading. Nevertheless, as the quantity of oil increases coming
from overseas, the; number of tankers increase and that increases the
ni~mber of chances for spills of minimal proportions to take place.
Senator BELLMON. Another question raised by Senator Allott sup~
posing the OPEC countries refuse to sell us oil or sell it at prices ex-
ceeding the United States market price, what are the sources available
with respect to OCS?
Mr. MCKELVEY. If you would like I could elaborate briefly on that.
As I mentioned, the estimate of proven reserves on the Outer Conti-
nental Shelf is about 5 million barrels.
Senator BELLMON. Could you bring that down to supply in terms
of years for the country at present rates of consumption?
Mr. MCKELVI~Y. At present rates of consumption, that would only
be about a year and a half's supply, a little bit less, perhaps, but there
is a great potential to be developed. Everyone agrees to that, it is a
question of just how large it is and, of course, nobody knows precisely
how much oil is present, how much can be discovered and how much
of that can be recovered economically. But we think that the total in
the way of potential resources in the ground is very large. As I men-
tioned earlier, perhaps as many as 1,500 billion barrels of total oil in
the ground. Certainly not all of that could be discovered and not all of
it could be produced economically. But a substantial part, perhaps as
much as 200 billion barrels is a reasonable target for eventual discovery
and production.
Senator BI~LLMON. That would be perhaps a 40 years supply?
Mr. MCKELvEY. At the present rate of consumption, that would be
about 15 to 18 years, I believe.
Senator BELLM0N. It also has been reported that several U.S.
platforms have been hauled to foreign offshore areas due to the
decline in U.S. offshore operations.
If this is so, what accounts for the decline in the U.S. offshore
operations?
Mr. DOL1~. Senator Bellmon~ we responded to that question in the
compendium that we have here. I would like to elaborate on it by say-
`ing this. On the West Coast area, which I am most familiar with, they
have only two rigs remaining that can do any exploration offshore.
There are some rigs in the Louisian~t Coast where the activity has
been, but the reason for it i~ that we just haven't been putting up the
quantity of offshore lands necessary to keep them busy here and they
had to find someplace else to send them.
PAGENO="0027"
21
For instance, the Blue Water 2, which was the large platform off of
Oregon, and was kept busy in the Santa Barbara Channel for many
years, has just now been moved down o~ the coast of Chile. It is
unlikely that it will ever return.
So we not only have lost the capability of having equipment to drill
areas, but we also have lost the ancillary manpower and expenditure
of moneys within the community. We have lost the trade personnel
and we are in bad shape for crews here.
I think that indicates that we must embark upon an accelerated
leasing program, as President Nixon has directed be done in his
June 4, 1971 Clean Energy Message to Congress.
Senator BELLMON. Do you feel the economics are satisfactory with
respect to the availability of drilling locations needed?
Mr. DOLE. There is a combination of both, Senator Belimon. Cer-
tainly the economic presence of offshore oil makes that more attractiye.
However, I think that the events of the last few months, certainly the
last couple of years, indicates that economics of offshore oil is no
longer as great a spread as it was.
Furthermore, I think with the developments of the last couple
of years, that the OPEC countries coming together as they have and it
is strictly a seller's market now, it could very well be that these com-
panies are formulating an idea that maybe it is-a matter of not furnish-
ing us with all the oil we need, but using oil as a bargaining spot in the
world markets today.
I think this would be a good time to now refer to a memorandum
I got just this morning from our Office of Oil and Gas on the U.S. im-
ports of crude oil and products in 1971.
It shows thal~ when compared with 1970, 1971 imports increased by
almost 13 percent. Crude oil imports increased substantially by almost
28 percent while petroleum products indicated a modest increase of 4
per~ent.
There are some tables attached here and I would hope after the.
staff has looked at it, you can include it in your record.
The examination of the tables points out that 78 percent of the total
U.S. imports originated in the Western Hemisphere, crude 62 per-
cent and products 91 percent. Canadian products amounted to 43 per-
cent. On an overall basis Canadian imports amounted to 858,000 bar-
rels a day. that was from Canada.
Substantial increases of refined product imports from other West-
ern Hemisphere sources, especially residuals from the Virgin Islands
and the new refinery in the Bahamas averaged 530,000 barrels daily.
The Caribbean exporting areas supplied two-thirds of residtial fuel
oil imports and 22 percent of the total crude products imports.
Total Eastern Hemisphere sources supplied about 22 percent of the
total imports. There is no major geographical area that supplied more
than 10 percent of the total imports.
Senator Moss. Thank you. We are glad to have those figures. We
will include them in the record.
(The information follows:)
PAGENO="0028"
22
U.S. DEPARTMENT OF THE INTERIOR,
OFFICE OF OIL AND GAS,
March 16, 1972.
Memorandum:
To :` Director.
From: W. 1. Darby.
Subject: U.S. imports of crude oil and products, 1971.
The attached table lists U.S. imports of crude oil, residual fuel oil, all other
products and total imports for 1971. Imports are broken down by country of
origin and major exporting area.
When compared with 1970, 1971 imports increased by almost 13 percent. Crude
oil imports increased substantially by almost 28 percent while petroleum pro-
ducts indicated only a modest increase of about 4 percent.
1971 1970 Difference
Thousand Thousand Thousand
barrels daily barrels daily barrels daily Percent total
Crude oiL..... 1, 680.6 1, 316. 6 364.0 27.6
products 2,191.8 2,117.9 72.9 3.7
Total 3,876.4 3,434.5 441.9 12.9
An examination of the attached table points up several pertinent and interesting
factors:
1. Over 78 percent of total U.S. imports originated in the Western Hemi-
sphere-crude 62 percent and products 91 percent.
2. Canadian crude imports amounted to almost 43 percent of total crude
imports. On an overall basis Canadian imports registered about 21 percent
or 858,000 barrels daily.
3. Substantial increases in refined product imports from other Western
Hemisphere sources especially residuals from the Virgin Islands and the new
refinery in the Bahamas averaged almost 530,000 barrels daily.
4. The Caribbean exporting area supplied almost two-thirds of residual
fuel imports and supplied just about 42 percent of total crude and product
imports.
5. Total Eastern Hemisphere sources supplied about 22 percent of total
imports. No major geographical area supplied more than 10 percent of total
imports.
W. 3. DARBY.
UNITED STATES IMPORTS OF CRUDE OIL AND PRODUCTS, 1971
Crude oil Residual fuel oil Al other products _____________
Thousand Thousand Thousand
barrels Percent barrels Percent barrels Percent
Country daily total daily total daily total
T3taI
Thousand
barrels Percent
daily total
858.0 22.1
27.8 .7
1.9
107.4
15.9
.3
~
23.5
3.5
.7
16.6 1.1
302. 9 19. 9
125. 4 8. 3
562. 2 37. 0
.5
113. 8
50. 4
133. 1
.1
16. 8
7. 4
19. 7
25.8
416.7
175. 8
998. 2
5
10.7
4. 5
25. 8
41. 7
1, 007. 1 66. 3
297. 8
44. 0
1, 616.
Canada 721.4 42.9 29.2
Mexico ____________________________________
Caribbean:
Colombia 8.7 .5
N.W.I
Trinidad and Tobago
Venezuela 302.9 18.0
Subtotal 311. 6 18. 5 _________
- -=~==--~==~--
Other Western Hemisphere:
Argentina . 3 . 3
Bahama Islands 125. 2 8. 2 24. 3 3. 6 149. 5 3. 9
Bolivia 2.2 .2 .2 2.4 .1
Brazil 3.1 .2 3.1 .1
Chile . 7 . 7
Leeward and Windward
Islands 1. 8 . I . 4 2. 2
Panama 1. 4 . 1 4. 8 . 7 6. 2 . 2
Puerto Rico 95. 3 14. 1 95. 3 2. 4
Virgin Islands 210.7 13.9 59.3 8.8 270.07.0
Subtotal 2.9 . 2 342. 5 22. 5 184. 3 27. 2 529. 7 13. 70
-~
Total Western Hemisphere - 1, 035. 9 61. 6 1, 383. 1 91. 0 613. 0 90. 6 3, 032. 0 78. 2
PAGENO="0029"
23
UNITED STATES IMPORTS OF CRUDE OIL AND PRODUCTS, 1971-Continued
Crude oil Residual fuel oil All other products Total
Thousand Thousand Thousand Thousand
barrels Percent barrels Percent barrels Percent barrels Percent
Country daily total daily total daily total daily total
Non-Communist Europe:*
Belgium-Luxembourg 5. 8 . 4 . 9 . 1 6. 7 . 2
France 5. 5 . 4 . 1 5. 6 . 1
Germany, West . 2 . 2
Italy 61. 4 4. 1 14. 0 2. 2 75.4 2. 0
Netherlands 19. 7 1. 3 . 6 . 1 20. 3 . 5
Norway 1.0 1.0
Spain 10. 5 . 7 1. 5 . 2 12. 0 . 3
United Kingdom 8. 4 . 5 . 8 . 1 9. 2 .3
Subtotal 112.3 7. 4 18. 1 2.7 130. 4 3.4
North Africa:
Algeria 12.8 .8 .9 .1 13.7 .4
Egypt 19. 0 1. 1 19.0 - 5
Libya 53.2 3.2 .4 .4 .1 54.0 1.4
Tunisia 3.3 .2 .2 3.5
Subtotal 88.3 5.3 1.3 . 1 .6 . 1 90.2 2.3
West Africa:
Angola 3,6 .2 3.6
Gabon .3 .3
Ivory Coast . 4 . 4
Nigeria 95.4 5.7 3.8 .3 .2 99.4 2.7
Subtotal 99. 0 5.9 4. 5 - .3 . 2 103. 7 2. 7
Middle East: -
Abu Dhabi 79.5 4.7 79.5 2.0
Bahrain 2.2 .2 8.2 1.2 10.4 .3
Iran 105.7 6.3 3.0 .2 6.1 .9 114.8 3.0
Iraq 10.8 .7 10.8 .3
Kuwait 29.2 1.7 .5 6.9 1.0 36.6 1.0
Saudi Arabia 115.0 6.8 10.5 .7 5.0 .8 130.5 3.4
South Yemen 1.6 .2 1.6
Subtotal 340. 2 20. 2 16. 2 1. 1 27.8 4. 1 384. 2 10.0
Japan 2.8 .4 2.8
Far East:
Australia 7.0 .4 7.0 .2
Indonesia 110.2 6.6 110.2 2.8
Malaysia 8.9 1.3 8.9 - 2
Pakistan . 2 . 2
Subtotal 117.2 7.0 .2 8.9 1.3 126.3 3.2
Communist:
Romania .8 .1 5.4 .8 6.2 .2
US.S.R, .6 6
Subtotal 1.4 .1 5.4 .8 6.8 .2
Total Eastern Hemisphere 644 7 38 4 135 9 9 0 63 8 9 4 844 4 21 8
Grand total 1,680.6 100.0 1, 519.0 100.0 676.8 100.0 3,876.4 100. 0
Senator BELLMON. What impact will the September 20 Supreme
Court decree regarding the Outer Continental Shelf of Louisiana have
on helping the Nation meet the energy requirements?
Mr. DOLE. As I mentioned earlier, Senator, your question was on
the September 20 Supreme Court supplemental decree?
Senator BELLMON. Yes~
Mr. DOLE. Actually, this will not have a very great impact. We
estimate it will only increase production from those wells by five to
10 thousand barrels a day, and on those last statistics that I quoted
of 858,000 barrels a day from Canada, you can see that is a very
miniscule amount.
PAGENO="0030"
24
Senator B1~LLMON. Mr. Chairman, I have from Secretary Dole a
letter written in response to the question I raised at a recent hearing
about the amount of natural gas that is being flared from wells on
the Outer Continental Shelf, and I would like to have that made a
part of the record at this time.
Senator Moss. The letter may be inserted in the record.
(The letter follows:)
U.S. DEPARTMENT OF THE INTERIOR,
OFFICE OF THE SECRETARY,
Washington, D.C., March 17, 1972.
Hon. HENRY BELLMON,
U.S. Senate,
Washington, D.C.
DEAR SENATOR BELLMON: During my appearance on February 25 before the
Senate Committee on Interior and Insular Affairs, pertaining to production and
use of natural gas, you requested information on our policy with respect to the
flaring of gas from wells on Federal leases in the Gulf of Mexico. The following
outlines our policy and gives some insight to the problems involved in the
conservation of natural gas:
`1. Our policy is generally expressed in the OCS operating regulations, 30 CFR
Part 250, which are administered by the Geological Survey. Section 250.30 re-
quires that a lessee shall take all necessary precautions to prevent damage to
or waste of any natural resource. Waste is defined in Section 250.2 (h) as:
"Waste means and includes (1) physical waste as that term is generally
understood In the oil and gas industry (2) the inefficient, excessive, or improper
use of, or the unnecessary dissipation of reservoir energy; (3) the locating,
spacing, drilling, equipping, ( operating, or producing of any oil or gas well or
wells in a manner which causes or tends to cause reduction in the quantity of
oil or gas ultimately recoverable from a pool under prudent and proper opera-
tions or which causes or tends to cause unnecessary or excessive surface loss
or destruction of oil or gas; (4) the inefficient storage of oil; and (5) the pro-
duction of oil or gas in excess of transportation or marketing facilities or in
excess of reasonable market demand."
2. No gas well gas is being flared except for brief initial periods in the testing
and cleaning of newly completed wells. The gas being vented or flared in the
Gulf of Mexico is gas that accompanies oil produced from oil wells. This gas
is In a liquid phase in the oil reservoir but changes to a gaseous phase as the
pressure is reduced when the oil rises to the surface. This type of gas is variously
referred to as oil well gas. casinghead gas, solution gas, or associated gas. The
volume of gas well gas being produced and sold from the 005 Is about 6.815,725
MOP (1000 en. ft.) per day. The volume of oil well gas being produced is
about 1185,600 MOP per day; of this amount, approximately 601,550 MOP per
day is being marketed, 312,100 MOP per day is being reinjected for improved oil
recovery or used for lease operations, and 272,000 MCF per day is being vented
or flared. Thus. about 3.4 per cent of all OCS gas produced is being vented or
flared. It is estimated that 20 per cent of the gas now being vented or flared
will be recovered upon installation later In 1972 of additional facilities which
are required to market the gas. The percentage of casinghead gas being flared
in the Gulf of Mexico has been reduced by more than one-third in the last
five years.
8. Monthly reports are submitted by each operator showing the disposition
of all produced gas, including the volumes of gas being vented or flared. These
reports are reviewed by Geological Survey engineers and technicians. When-
ever it is indicated, from a review of the reports or by inspection of the plat-
forms, that significant volumes of oil well gas are being vented or flared, our
policy is to determine the lessee's plans for conservation of this gas. Our In-
quiries and evaluation of the specific situation result either in additional compres-
sor capacity being installed, additional pipelines being laid, high gas-oil ratio
wells being shut-in, or a determination that the small volumes involved are
not economically feasible to recover. In some cases the public's interest is best
served by permitting the continued production of the oil until such time as it
becomes feasible to market the gas.
4. We have under review and consideration more specific reqttirements on
lessees whereby any flaring of gas other than for short routine well tests or
PAGENO="0031"
25
in emergencies, must be justified in writing to the Geological Survey and formally
approved. These requirements are contained in a draft of a new OCS Order,
under development since the fall of 1971, which will cover all aspects of pro-
duction rate control, prevention of waste, and protection of correlative rights
This Order is presently being reviewed informally by industry.
5. There will always be a small amount of oil well gas flared or vented in
offshore oil well operations unless a large amount of oil production is to be
shut-in and kept from the market. Some of the reasons for this gas flaring are:
(a) Temporary compressor breakdown or other mechanical difficulties; (b) Delay
in deliveries of additional equipment to compress and market the low pressure
gas; (c) Delays for FPC certification of gas sales and pipeline construction;
(d) Negotiating sales contracts for casinghead gas; (e) Volumes of gas too
small to be economically gathered, compres~ed, and transported to market.
Your concern over flaring of gas in this period of energy needs is understand-
able. Please be assured that we are doing and will continue to do everything pos-
sible to prevent the waste of this energy source from offshore wells.
Sincerely yours,
HOLLIS M. Dour,
Assistant ~5ecretary of the Interior.
Senator BELLMON. The letter shows 278 million cubic feet per day of
natural gas is being flared from the Outer Continental Shelf and it
explains in detail why this is being done.
The question I would like to raise with you~, Mr. Secretary, is does
the State and Federal Government get any royalty return from the
flaring of this gas?
Mr. DOLE. Senator Beilmon and Mr. Chairman, I want to congratu-
late the Senator for bringing this question up at one of our last hear-
ings before your committee.
As I promised the Senator, I personally looked into this matter and
I did not realize that it was as large as it was. The letter states that a
lot of this material that is being flared comes from gaseous material
associated with oil and it is not considered economic to try to pipeline
it.
But I can tell you, Senator, that I have asked the Geological Survey
to look into charging for this gas and other energy material that is
being wasted, with the idea that I am hopeful that it will cause the
companies to think twice about flaring this and put it back into the
mainstream of commerce.
At the present time, correct me if I am wrong on this, the T5.S. Gov-
ernment is not receiving any funds from the flaring of this material;
is this correct?
Mr. WAYLAND. That is right.
Senator BELLMON. If a charge was made to a company that felt it
was more economic to flare gas than to compress it and market it,
this would seem to me to have the effect of causing or increasing the
attractiveness of making whatever arrangements are necessary to put
this gas into the Nation's energy supply.
Would this be your conclusion?
Mr. DOLE. This is what we hope will happen, Senator. And once
again, I thank you for calling this to our attention because we certainly
are responding to your inquiry.
Senator BELLMON. It also seems to me that with the Federal Power
Commission decision to allow liquifled natural gas, which cost this
country a price of-what will it be?
Mr. DOLE. At least a dollar. I have seen some prices up to $1.45.
PAGENO="0032"
26
Senator BELLMON. With natural gas being worth that much be-
cause the companies aren't bringing it in at a loss, we might put a fairly
high value on this gas being flared because it is oniy a matter of time
before it is going to be desperately needed.
I feel frankly rather ill to discover that we are wasting this much of
our resources and it would seem that the Department would be jus-
tified in taking some rather extreme measures to bring the practice to
a halt.
Mr. Dor~E. Congress can also aid us in this respect. As I mentioned
earlier, on a BTTJ basis the price of natural gas is much lower than
the price of any of the other energy sources.
In other words, it has an economic advantage. Yesterday I had the
pleasure of testifying before Senator Hollings in the Commerce Com-
mittee on the Hollings bill and the Hansen bill on the pricing of nat-
ural gas, and it is my hope that Congress will soon pass the sanctity
of contract bill and allow the price of natural gas to seek a free
market price rather than a controlled price by the Federal Power
Commission.
This, too, this increase in the price of natural gas would not only
benefit the oil and gas industry and our energy situation, but it would
tend to bring our energy mix in better balance.
Senator BELLMON. It occurs to me that perhaps the Federal Power
Commission could give some special dispensation that might be re-
quired by the regulation from the Department of Interior to save this
gas at a financial loss by allowing it to be marketed at a price equal
to what they are allowing LNG to come in here as.
If the company has to build a compressor station to compress this
gas and lose its money, it would seem to me it would be in the national
interest to allow the FPC to market this gas rather than see it flared,
because once it is flared it is gone forever.
Mr. DOLE. As you know, the Federal Power Commission is taking
a very hard look at what they can do. But the Federal Power Com-
mission is a regulatory agency that is pretty well bound in by several
court rulings.
Their attitude toward the pricing on natural gas is certainly an
improvement over that the Federal Power Commission established
during the early 1960's and mid-1960's.
I feel they are moving as rapidly toward the solution of pricing
of natural gas in order to assure the U.S. customer, the individual, that
they will have a supply of these fuels.
Senator BELLMON. The point I was trying to make, if it cost more
than the present wellhead price to save this gas, the FPC might be
approached on the theory that if it let's the companies sell the gas for
what it would cost them to save it, that we would stop wasting the
resources.
I would like to put in the record the figures we received from the
Interstate Oil Compact Commission showing the amount of gas being
flared and I want to set the record straight.
When I brought this up earlier, I said my State was not flaring
gas. I found that not only was I wrong, but my State was flaring
more gas than any other State in the Union.
PAGENO="0033"
27
The figures' for Oklahoma are 370 cubic feet `a `day `and' the Nation
is ~ billion cubic feet a day.' I intend `to pursu~ a course of action to
get this stopped. /
Senator Moss. I am very shocked to find we are flaring gas at all.
I l~tiow economics is the answer, but the fact that we are so desperately
short of gas' as a source of energy, makes it reprehensible to know
some of it is being flared.
Senator BELLMON. I think the responsibility rests with the Federal
Power Commission because it sets the price at such a low level it
`makes it uneconomical to save this resource.
I would like to pursue another line of questioning. You mentioned
earlier that procedures are being tightened up to prevent future oil
spills I was impressed, frankly, with what we were able to observe
in the fieldtrip the committee made to the Outer Continental Shelf.
I wonder if' you would like to be a little more specific about what
some of the procedures are that you `recently put into effect to con-
trol oil spills.
Mr. DOLE. Dr. McKelvey.
Dr. MCKELVEY. Senator Belimon, they come into two main areas.
One is a change in regulations, and the other is a change in inspec-
tion procedures, particularly the increase `in the amount of inspection
activity.
With respect to the changes in the OCS regulations, they have been
strengthened to require add~tiona1 safety features on platforms and
pipelines, to require the testing of safety devices prior to, during,
and in production use; more careful control of drilling and casing
operations; prior approval of plans and equipment for exploration
and development drilling; and suspension of any operation threaten-
ing life, property or damage to other resources or the environment.
,,We, require the reporting of all leaks and spills and to control the'
remOval of any spills at the Jeasee's expense.
With respect ~to `the inspection capability, we have more than
doubled our staff. We are making use of helicopter support and a radio
communication system that allows us to get more for our inspection
hour than we were able to do before.
We standardized our inspection procedures. We have provided a
basis for inspection strategy. We have increased the number of un-
announced inspections, which in turn, has to do with increasing our
visibility in the area which is in itself a deteri~ent, and we have al~o
participated in the development of interagency plans, particularly
with the Coast guard, for contingency plans for oil spill clean up
I mentioned also' that we had other studies in progress. We asl~ed
NASA several months ago to undertake a study for us on haza~'d
analysis procedures and that study has been completed and released.
We also have another study under wa~ in-house and still' another
one is being conducted for us by the National Academy of Engineering.
Senator BELLMON. Let's assume a company has a permit to drill a
*eH..Will your inspector always be on the scene during the time the
~el1 is being drilled?
Mr. MCKELVEY. No, Senator Belimon, it would be an extremely heavy
urden, a very great requirement in personnel to have an inspector
nil time on each rig.
77-463 0 - 72 - pt. 1 - 3
PAGENO="0034"
28
One of the problems that we are investigating `is what is the most
efficient and effective way of conducting inspections. We have done a
lot in the development of and improving of inspections systems, hi
systematizing it, putting in many elements of the inspeection on a
statistical basis so that we are sampling the total operation and keep-
ing the operators on their toes, being aware that at any given time
their operation may be inspected for all critical elements.
Mr. DOLE. Senator, I might add to that by saying in the Santa
Barbara area we do have an inspector there on those rigs everyday.
At least once a day an inspector visits those rigs.
During the critical period in the Santa Barbara Channel area we
had an inspector on the rig 24 hours a day, but there are several thou-
sand rigs down in the Gulf Coast and as Dr. McKelvey mentioned, that
would be a very large burden on the Federal Government to keep a
man on the rig every day there.
Senator BELLMON. Do you happen to know how many drilling rigs
are currently operating on the Outer Continental Shelf?
Dr. MCKELVEY. There are about 1,845 platforms, I believe.
Senator BELLMON. I am talking about a drilling rig.
Dr. MCKELVEY. About 90 drilling rigs, some of which would be on
platforms.
Senator BELLMON. How many inspectors does the Department have
to service these rigs?
Dr. MCKELvEY. About 30, sir.
Senator BELLMON. Thirty?
Dr. MCKELvEY. Yes.
Senator BELLMON. Would this be the only responsibility these 30 in-
spectors have or do they have to inspect all of the platforms as well?
Dr. MCKELVEY. They would have to inspect the platforms as well.
Senator BELLMON.~ So you have 30 inspectors available to inspect
90 drilling rigs and 1,800 platforms?
Dr. MCKELVEY. Correct.
Senator BELLMON. How often would an inspector be able to visit
a platform or drilling rig?
Dr. MCKELVEY. As Secretary Dole mentioned, iii the Santa Barbara
area they are visited daily, but in the Gulf of Mexico much less fre-
quently.
Senator BELLMON. What I am leading up to, has the Congress give
the Department an adeQuate budget to do the proper job of super
vision and inspection of the Outer Continental Shelf for oil producin
activities?
Dr. MOKELvEY. Well, Senator, our budget for this general leas
management activity has been increased about fivefold since 1963.
Senator BELLMON. Well, is this from zero?
Dr. MOKELVEY. From a level of about $1 million a year to about $
million currently. Presently we believe we are adequately staffed t
insure that the operations are conducted safely. But, as I mentione~
we are also studying the question of the inspection procedure with thi
very specific question in mind.
How much inspection, how frequents done in what way~ just what i
needed for adequate surveillance on the Outer Continental Shelf op
erations. We don't consider that we have a static situation or that w
have at the present time a firm answer by any means.
PAGENO="0035"
29
In other *ords, `we are, not saying'thatotfr ,inspectioi~ procedure is
thø most adequate possible by any means We expect it to be changed
with' the results of our research, and we expect it to be changed, also,
with the future development of technology in the area particularly
of development of safety devices and so on.
So it is a changing situation. We think we are on' top of it at the
present time, but we are not by any means saying we know the pro-
cedure that we follow is the most desirable possible and that we don't
have to create any changes in the future.
Mr. DOLE. Senator Bellmon, to bring these numbers into the record,
in January of ~this year there were 88 active drilling wells in the Gulf
of Mexico and on the offshore there are 650 producing leases on 2.8
million acres.
So, we have two things. One, those that are drilling and those that
are producing.
Senator BELLM0N. How many inspectors oversee this?
Mr. DOLE. Thirty inspectors.
Senator j3ELLMON I have never tried to cover 24 million acres but
it sounds like a large area.
Can `the Department demonstrate any results from' the increased
inspection activities?
Dr. MCKELVIEY. Yes, sir. Part of our inspection procedure consists
of a very detailed list of items that each inspector checks. We call these,
potential incidents of noncompliance. These include some things that
might seem to be trivial. If something went wrong with a particular
`item, possibly a major accident would not develop, but nevertheless
they represent the things that presently we consider to add up to a
safe operation.
We have found a marked decrease in the number of violations that
have been reported in our inspection over `the period that this proced..
ure has been in operation.
In other ways it is evident that the inspection procedure is having
a salutory effect iu tightening up operations on the part of the
companies.
They have helped to develop a safety `consciousness, if you like,
through the entire industry.
With respect to specific examples, we think the sum total of our
actii~iti~s has already eerved to avoid some serious disasters.
If you would permit, I might read one or two specific examples of
reports.
Mr. DOLE. While he is looking at that, Senator Beilmon, I have a
note that has just been handed to me that says
"Specs conducted on the production platforms have found a great
many reductions in missing or inoperable safety equipment between
December of 1970 and January of 1972
~` "In December of 1970, 2 months after the revision of OCS orders
prescribing safety equipment procedures, 5.8 percent of the equip-'
"ment, records and procedures were found to be not in compliance.
- "In the January of 1972 special inspection, this number was re-
duced to 0.38 percent. In other words, a reduction from 5.8 percent to
0.38 percent."
Senator BELLMON. Have there `been fewer spills or accidents as a
result of your inspection activities? Have you had a spill this last 12
months?, `
:4:"
`I
PAGENO="0036"
30
Mr. DOLE. The number of small oil leaks and spills we estimate have
been cut in half and there has not been a major fire or spill on the OCS
in the past 6 months. I believe it was October of last year, so it is 6
months.
Senator BELLMON. Do you feel that the present regulations pertain-
ing to oil and gas production on the OCS are sufficiently strict to ade-
quately protect the marine environment and the safety of the person-
nel involved?
Dr. MCKELVEY. Senator, to say absolu+ely protect, I don't think
anyone could say, dealing with any kind of operation in which human
beings are involved, that it would be possible to reduce the likelihood
of an accident to zero probability. One can't even cross the street
with that kind of certainty. You can look up and down the street, no
cars are coming, but still one can shoot you from a window, or some-
thing of that sort, something totally unanticipated.
But, Senator, I do feel that regulations as now developed, the in-
spection procedures that have been developed and the improvement
in safety devices and so on, all have served to reduce greatly the prob-
ability of serious accidents on the OCS.
I may say also we feel there is still room for improvement. As I said
earlier, we are dealing with an accident record that in toto is already
pretty good, and we feel that we have reduced the chances of mishaps
in the ways that I have mentioned considerably, but we are still work-
ing on it. We believe that further improvement is possible.
I think that Secretary Dole a while ago referred to the improve-
ments that have been made in the containment of spills, for example.
Very little of the oil in the Santa Barbara spill was recovered, about
10 percent was recovered in the first Gulf accident, about 40 percent
in the one after that.
The conditions under which those spills took place are not exactly the
same. Maybe it is not fair to make that comparison or to say that that
amount of improvement is due solely to the improvement in the pro-
cedures. But they show a learning curve, I think, no matter how you
interpret them.
We think this learning curve is applicable or applies throughout
rnother operations as well. We think we are doing better, but we think
we can still do better.
Senator BELLMON. I will ask this one additional question.
Which agency has final authority so far as environmental questions
are concerned on the OCS? Do you make your own rules?
Dr. MC~ELVEY. With respect to the enforcement or the definition
of operations that are to take place in connection with operations on
offshore leasing, the Geological Survey has the full responsibility.
Senator BELLMON. You don't have any procedure for clearing with
the Environmental Protection Agency?
Dr. MCKELVEY. We are working closely with the Environmental
ProtectiQn Agency, but their jurisdiction does not extend to the OCS,
sir.
Mr. DOLE. They set sewerage treatment standards. We see that
the operations meet those standards.
Senator BELLMON. So there is, then, a clear line of authority as to
who has the responsibility on OCS?
Mr. DOLE. We think there is, Senator Beilmon, but I am not so sure
this is exactly so.
PAGENO="0037"
31
Senator BEti~to~. That 1s~li,'Mr. Chairman.
Senator Moss. Thank you.
The Senator from New York.
Senator Bvcia~y. Thank you, Mr. Chairman.
At the outset of this hearing you asked me if I had a statement
to introduce. Because of traffic difficulties, I did not at that moment,
but, if I may, I would appreciate being able to insert this statement
and have it printed.
Senator Moss. That will be printed in the record.
STATEMENT OP HON. JAMES L. BUCKLEY, A U.S. SENATOR PROM
TEE STATE `OP NEW YORK
Senator BU&LEY~ I would like to take a moment to express my
sense of good fortune to have become a member of this committee and
for the opportunity ~cthich this hearing provides me for the examina-
tion of an issue which is of particular concern to the people of the
State of New York, particularly those living on Long Island. The
possibility that the Atlantic Outer Continental Shelf contains com-
mercially valuable oil or gas reserves has stirred deep apprehension,
an~ `often' alarm, among those citizens who live and work near ooastal
areas in my State; I am sure they share these fears with their neighbors
to the north and south on `the Atlantic seaboard.
At a time when the public's awareness of potential environmental
dangers is acute, memories of the Santa Barbara blowout in January
1969, the Gulf Coast fire in early 1970, the West Falmouth tanker
spill in September 1969 do not fade quickly. Long Islanders are con-
stantly reminded of the dangers of oil spillage with each report of
`a tanker going aground near Port Jefferson and with each mysterious
appearance of a slick that is clnimed by no one.
The dense concentrations of population along the east coast are an
important factor in placing coastal areas at a premium, and with good
reason. Long Islanders jealously guard their values: those of shell-
fishing, sport and commercial fishing, recreation, and the value of
ooastal wetlands to seabirds and those minute marine organisms which
provide food for larger species and which play a vital role in the'
marine ecosystem.
I appreciate the `fact that these hearings are being conducted not
t& determine whether it is wise or necessary to drill for oil in the
Atlantic, but rather to oversee `the broad policy issues as ociated with
the administration of the Outer Continental Shelf nationwide, par-
ticularly as OCS reserves contribute to our national fuel and energy
supplies.
Nevertheless, I believe `that the situation now presented by possible
,00S leasing in the Atlantic Ocean serves `to focus the attention of
the Federal Government on~ the environmental issues probably `more
than ever befOre. ` ` ` -
I am particularly interested in examining how the Department of
`the Interior intends to safeguard environmental `values,, both `in its.
guidelines and inspection of offshore facilities and in its ability to
require and assist ,in the immediate removal of any oil whi~h is spilled.
MOst important, I hope that at some point during these hearings, we
might receive information on the state of our knowledge of the short
1'
/ `/` f,
PAGENO="0038"
32
and long-term effects of oil spillage on the marine environment. This
is an issue fraught with controversy and one which is of particular
significance in determining whether it is in fact wise public policy
to increase any activity which adds to the threat of irreversible
damage by oil.
I thank my colleagues for their indulgence in allowing me to ex-
press my special concerns and those of my constituents.
Mr. Secretary, in listening to the questions that have been asked
you, I find that many of the questions that I did have have been
anticipated. But I would like to concentrate on one area of con-
cern which is geographically localized, namely, the northeast coast
of the United States.
We have, first of all, one of the largest populations in the United
States. Over the years we have managed to destroy more than our
share of beaches, marine areas, coastal wetlands and so on, so what
we have left is rather precious.
There is a tremendous concern at the present time at the prospect
of drilling off the Atlantic Coast. So my questions are more or less
directed to this area, and I would appreciate if you could answer in
this light, considering this particular series of problems.
Now, I was interested in a statistic which you gave us to the sources
of our overall global oil pollution, ocean pollution.
You mentioned 2 percent of it is derived from drilling and
something like 29 percent from tankers. Now taking into considera-
tion the concern for the protection of beaches and wetland areas, do
you have any comparable figures that would give us a breakdown of
pollution, say, within 10 miles of the shoreline or within the Con-
tinental Shelf area?
Mr. DOLE. Not within that areas but I would like to add another
bit of statistics that I think is highly applicable to your areas Sena-
tor Buckley. That is, let's see, 28 percent from tankers and about 30
percent from automobile crankcase oil, 19 percent from other marine
vessels, industrial waste, 21 percent.
Now, let's look at this automobile crankcase oil and this-although
this report is `only current to 1968, it is the only thing I can find this
morning. It says about 6 million metric tons of lubricating oil was
sold during 1968. The total amount drained for refill was about 3
million metric tons. These include automotive use as well as industrial
machinery. The 3 million ~tons were disposed of in the following
manner: Rerefined in which the oil is reused again, 0.441 metric tons.
Disposed of as fuel oil, that is to be generally burned in diesel trains,
0.97. Used as road oil, 0.441. Dumped on land or in sewers, 0.61. Not
accounted for 0.52.
In other words, better than 1.2 was dumped on the land and not
accounted for.
Now, the Coast Guard has estimated that 1.4 million metric tons
from highway vehicles and 0.75 million tons from industrial machines
finds its way into the sea. This totals 21 million metric tons. They ar-
rive at these figures by means of a roundhouse estimate that 75 per-
cent of all drainage finds its way to the sea.
I do not have any figures on the localization of oil around the
beaches, but we had a study made by an interim student 2 years ago
PAGENO="0039"
33
in which he' found out that the. greatest oil pollution is' found near the
Industrial centers.
In other words, New York Harbor has a greater amount of oil pollu-
tion than do the areas where oil and gas are produepd.
Now speaking specifically to the subject that you have introduced,
that is the concern that you and your people areexpressing on the work
that is being done at the present time in trying to find out what the
resources might be in the Atlantic Coast, especially the mineral re~
sources off the Atlantic Coast, and this is all we are doing, I want to
make this perfectly clear here.
There has been no decision made to even make an environmental
impact statement, let alone go through any leasing route.
I want to make this perfectly cle.ar. All we are doing is trying to find
out what the resources are. But one of your biggest problems, Senator
Buckley, as you well know, as you get it from constituents, is the high
price of fuel oil and of gas and oil in the New England area.
You are actually, literally at an end of the pipeline. The pipeline
coming from the Gulf Coast up into that area. It is in the New Eng-
land and New York area that all these projects for the making of
methane from imported naphtha, the manufacture of gas from lique-
fled natprai gas, or the manufacturer of gas petroleum, it is within
the east coast area where most of these are concentrated.
Now, as Senator Bellmon pointed out, natural gas at the New York
gate sells around 45 cents per millIon B.t.u. Fuel oil sells for consid-
erably more than that.
Number 2 oil, residual, sells for considerably more than that,
two to three times as much.
/ On the other hand, gas from LNG or SNG will be in the order of
$1.50 to $2. Now, if there could be found and developed substan-
tial oil and gas deposits off the Atlantic Coast, you would find that you
would have less pollution because you would have less tanker traffic
bringing it in there. You would have a greater security of supply and
certainly the cost is not going to be comparable to the cost of importa-
tion of LNG or SNG.
I think a lot of rethinking has to be done `by the people along the
Atlantic Coast and the priorities put in their proper perspective before
any decision is made whether to or whether not `to look at the mineral
resources of the. Atlantic Coast in trying to develop it.
Senator BUCKL1~Y. I would agree, Mr. Secretary.
Of course, one of the problems is to get the information on the basis
of which we make these relative judgments. I think, first of all, I per-
sonally feel you ought to free up all sources of energy for the maximum
competitive-expose them to the maximum competitive mechanisms
qf the marketplace.
I I think that we want to preserve some of our environmemital assets,
and we have to be prepared to pay the cost. But we have to know whit
`the costs are and the dangeFs.
Now, in terms of some of the figures that you have given where we~
have pollution, but in a very diffnsed way, I think, concerning people
~pecifica1lv on Long Island, for example, what is concerning them is
he possible effect of a local catastrophe which might appear in the
world and global statistics of .0001 of the total ~pillage but might
```1
PAGENO="0040"
34
nevertheless do serious, lasting damage to a particular wetland to the
oysters and clams of that area. This is the kind of thitig that I hope
we can focus on and get hard information about.
Given the problem that we now have and the new techniques for
safety which was described by you and Dr. McKelvey, is there a dis-
tance from shore at which one could state that spillage would not effect
onshore facilities and land?
Mr. DOLE. I think, Senator Buckley, that distance very definitely is
a factor. The farther from shore the less effect it will have on them and
their probably is a distance where the effects would be very minimal.
From our knowledge to date of the geology off the Atlantic seacoast,
it appears that those structures that may have interest would be from
50 to 80 miles out. They would not be adjacent to the shore or visible
from the shorelines as they are out in Santa Barbara Channel. But
Alaska has had a very minimum of pollution.
On the Cook Inlet where there was one drilling here several years
ago, I believe it was in the mid-60's, where there was a well that blew
out and actually burned for a year before it was brought under control,
and as you know in the Cook Inlet the tides are very high and the winds
are high, and to the best of my knowledge there was no discernible
effect on the beach.
On the other hand, we know of oil accumulations that have come
ashore from an unannounced source, but undoubtedly it was from the
pumping of bilges that did destroy birdlife and animal life onshore.
The inference I am trying to make is that in high seas and at some
distance away, any problems that you might expect from drilling-
the effect would probably be very low. But a tanker has to come to
shore and the tanker poses a much greater problem than does the
drilling.
Senator BTTCKLEY. In terms of developing a national strategy to,
number one, supply us with the energy which our population wants
and by the same token minimize the risk to the environment, do you
feel there is adequate coordination?
You, for example, as the Department of the Interior, have jurisdic-
tion over Continental Shelf drilling. By the same token you point out
the greater hazard of tankers. Is there any mechanism which would,
for example, determine rules and regulations as to how close in tankers
should come or determine what ports of entry might be best suited for
this operation or might pose the least possible danger?
Mr. DOLE. I am not quite sure I understand your question, Senator
Buckley, but let me take a stab at it.
Number one, the determination of an energy policy is going to be
very difficult because of the responsibility of many agencies within the
Government, such as the Atomic Energy Commission, such as the
Department of Commerce or Marine Division on tankers. It has been
the Office of Oil and Gas and the Geological Survey and the Depart-
ment of the Interior, the Federal Power Commission.
It is difficult to get the coordination that will be required for the
establishment of a national energy policy. This is one of the reasons
why I feel that the Department of Natural Re~ources as proposed by
President Nixon in his Reorganization Messai~e to the Congress is why
I am hopeful that the Congress will take this up at a very early time
PAGENO="0041"
because I ~hink the D~partrne.nt of Natural ResOurces is absolutely
necessary for the development of a good, c1o~ energy policy.
Now, as I understood another one of your questions or another
part of your question; is there a mechanism for theestablishment of the.'
size of ship that can come inshore and the like and the amount of
traffic?
I think the factor here that must be considered is that we `are going-
that the shipping industry is going to get larger and larger tankers
and, to the best of my knowledge, there are only two ports in the
United States that can take the so-called supertanker and those are,
both on the west coast. I believe it is Long Beach Harbor and in Puget
Sound.
This then indicates that if you are going to make the savings in the
movement of bil that are effected by utilization of the supertanker, we
have to `look to offshore loading facilities.
My guess is that studies such as these are underway here in Govern-
ment because now the only plans I know of are to establish large scale
supertanker unloading facilities in the Bahamas and Nova Scotia.
Senator BUCKLEY. You mentioned earlier, Mr. Secretary, that the
Department has negotiations with the States in terms of developing
mutually agreeable rules. Let us assume a case such as New York or
any other coastal State feels it desirable in terms of its own priorities
to make an absolutely fail-safe prOtection of one specific area Or
another, let's sa~ a particular evironment that is essential to the sur-
vival of a particular species.
Would you believe' it is desirable that the States should be given a
veto Power over the development of Outer Continental Shelf where
exploratory activities or production activities could in the case of an
accident, jeopardize that particular area?
Mr. DoLE. Senator Buckley, I had the pleasure of testifying before
Chairman Moss' committee here not too long ago on a bill that would
give the States a veto power on this.
In this testimony I brought out that the-no I felt the Secretary of
Interior should have the final authority on this
However, this does not preclude a close cooperative agreement with
the States As a matter of fact, I think you would be pleased to know
that the head of the New York Environmental Agency and I were in
conversation just the day before yesterday.
He was concerned about mined land reclamation in the New
England States. I have sent hi~ a bunch of material that he and his
fellow environmentalists in the New England area will find useful,
am sure. I think you will be pleased to know that next month the,
`UnderSecretary and myself and other, members of the Department of
Interior will be meeting with a delegation of Atlantic' Coast and New ` `1'
England people who will be down here and we will discuss again many
of the problems we have di~cucsed today
We are trying to show them all the information we have available,
but in answer to your question, no, I think th'Lt the Secretary has to
have final authority on `this because I think it is important'to realize
that although one area may have the problems where they have large
Ources of a particular material, copper, for instance, or oil in Wyo-
fling, for instance, but that isn't only for the benefit of the people
PAGENO="0042"
36
in that lodal area. It is for the benefit of the economy and the people
of the whole United States and these are Federal concerns.
Senator BUCKLEY. Thank you, Mr. Secretary.
A little earlier you read from a paragraph which you had in anticipa-
tion of questions about the evironmental impact on spillages. You
quoted ~from a Dr. Dale Straughan who examined the damages at
Santa Barbara. Have you been aware of study recently in progress
by which scientists, specifically Dr. Max Blumer-well, if I may, let
me quote from a summary of some of their findings thus far.
This is based on the study of a tanker spill of fuel oil off of Woods
Hole, in September of 1969.
This particular study concludes:
All crude oils are poisons for all marine organisms; many crude oil distillates
are more severly poisonous because they contain higher proportions of the
immediately toxic compounds.
Long-term toxicity may harm marine life that is not immediately killed by
spills, and oil can be incorporated into the meat of marine animals, making it
unfit for human consumption. Crude oil and oil products may cause cancer In
marine organisms and in man; even at very low concentrations oil may interfere
with processes which are vital for the propagation of marine species.
The most immediately toxic fractions of oil are water soluble; therefore, recov-
ery of oil slicks is often futile, except for the aesthetic improvement.
Treatment with detergents, even the "nontoxic" ones, is dangerous because it
exposes marine organisms to higher concentrations of soluble and toxic hydro-
carbons and because it disperses oil into droplets that can be ingested and re-
tained by many organisms.
Are you aware of this line of investigation?
Mr. DOLE. I am, and I think this refers to the statement Dr. McKel-
vey made earlier about synthetics, or if you wish, refined oils that we
do not know as much about those as is desirable.
I think it is also referring back to discussions we had earlier here
today in which we pointed out that oil seepages have been occurring
here in this world of ours since the beginning of time and there has
been an awful lot of crude oil brought to the ocean surfaces and with-
out any, at that time, visible damage, but, of course, that could be due
to the lack of research.
Now, I understand, Senator Buckley, that one of Dr. Blumer'
cohorts at Woods Hole has also been studying the material which Dr.
Blumer refers to, that particular oil spill, the tanker spill. I have no
gotten this firsthand, but I understand that the findings of Dr.
Blumer's fellow scientists are practically opposite conclusions to wha
Dr Blumer did.
Perhaps Dr. McKelvey is more acquainted with this study than
and would like to add something to this.
Dr. MCKELVEY. I am sorry, I heard the same thing, but I can'
elaborate on it. We haven't gotten any specifics on it. But if I may refe
to the work of Dr. Blumer, I think perhaps that he has over general
ized, in assuming that the observation in a particular area that h
studied, particularly the effects of a particular spill, to say that this i
true in all cases, I think is perhaps going too far.
It is in contradiction with the results, for example, of the work o
the scientists at the University of Southern California on Santa Bar
bara. It would seem not to be supported by other observations else
where. It goes back to the questions I mentioned earlier.
PAGENO="0043"
~87
The effects of differences in oils and different kinds of environments
involve a good many variables. it is quite possible that a certain oil in
a specific environment will have a deleterious effect, whereas another
oil in another environment may not.
* Senator Moss. Haven't we identified a bacteria that actually breaks
down the molecule and in fact this is one of the areas of research to be
applied inareaS where we do have an oil slick.
Dr. MCKELVEY. Yes, sir. This is true, Mr. Chairman.
Certain bacteria do break down and degrade petroleum. As a matter
of fact, this is one of the things that may have to do with the accumu-
lation of petroleum in the first place.
It has been recognized for some time that petroleum or the com-
pounds from which it is derived are destroyed in oxidizing environ-
ments on the sea bottom. Petrolçum is organic in origin. It originates
through organic activity, produced by marine organisms of various
kinds,
If organic fats and oils are not destroyed by oxidation they can end
up as petroleum As it becomes buried by the accumulation of sedi
ments-it has been recognized for some tipae that these kinds of mate-
rials are destroyed by oxidizing environments and in considerable part
through the activities of various kinds of bacteria and perhaps other
organisms. -
Senator Moss. Well, I have understood that this is the reason these
analyses and exposures that have occurred previously have all gradu-
ally been dissipated because the oil molecules have been broken down
into the component parts and disappeared into the general
environment.
Dr. MCKELVEY. Right. But, and Dr. Elmer referred to this in the
statement Senator Buckley quoted, it is possible that the bioclegrade
ability of the various hydrocarbon compounds may vary considerably.
Some may be more resistant than others to the bacterial attack. This
may be true even with natural oils.
There is a great variation of crude oil. It is not a chemical compound.
It consists of many chemical compounds. One crude oil is likely to be
very different in composition than another. So it is quite possible that
variability exists among natural crude oil to say nothing of the
synthetics.
* Mr. DOLE. May I add to that also by saying th~at in, 1969 there were
34,002 tanker arrivals at the Atlantic Coast Ports of which 11,736
were into New York Harbor and 7,094 were into Boston Harbor.
So in 1969 we had 34,000. As your dependency on offshore oil in~
creases, you see the type of traffic we will be looking to at that time.
* Senator BUCKLEY. Mr. Chairman, I wonder if I éould make a part
of the record at this time the paper by D~. Blumer.
`Senator Moss. Yes, it may be placed in the record.
Senator BUCKLEY. I would also like to observe, and apparently Dr.
Blumer is not the only scientist whose conclusions are under attack,
`I note the studies made by Dr. Straughan are attached by Dr~ Nushel-
of the University of California who also investigated the spill wider
contract with the Oil Pollution Administration, -
In this report Nushel made the statement, "There was no extensive
ecological damage." I am a layman, of course, and I have no expertise
but it does appear to me there is a great deal of uncertainty as to what
the facts are.
I
PAGENO="0044"
38
I note Dr. McKelvey stated earlier he thought this was an area of
research which must be pursued. May I assume any environmenlal
impact statement in connection with the offshore leases off the Atlantic
will make a detailed investigation of all these areas?
Mr. DOLE. Well, Senator, you can certainly be assured of that. Sec-
retary Morton, who is a Marylander, as you know, has absolutely in-
sisted we have close contact with the States in any work we do out
here. And when your bossman instructs it, I can tell you, you do it.
Senator BUCKLEY. Given the fact that the NEPA legislation now
mandates that those departments broaden their sights to take into it
environmental consequences, does the Departmont of Interior intend
to initiate the kind of study that Dr. McKelvey feels is desirable?
Mr. DOLE. You mean basic research, Senator Buckley, on oil?
Senator BUCKLEY. Yes.
Mr. DOLE. I am not so certain that this is the precise area where we
should be doing research. I would prefer to have Dr. McKelvey answer
this and porhaps I can get together at some future time to discuss it.
Dr. MCKELVEY. As I mentioned we have already in the Geological
Survey done some work on this. I might say that one of the things that
stimulated us was a sort of curious event and that was that we found
that much of the oil from one of the spills in the San Francisco Bay
had sunk. As you know, oil is lighter than water and this phenomenon
made us think that actually in many other areas where spills may have
sometimes occurred, they dissipated quickly and they also sunk. So it
underscored to us that we do not really know all we need to know about
what happens when oil is released in sea water.
But yes, the Geological Survey is beginning some work in this area.
The question is also of interest to the Bureau of Sport Fisheries and
Wildlife within the Interior, and as I mentioned, it is of interest to
other Government agencies as well, and a number of them are under-
taking the studies in this field.
Mr. DOLE. I think Dr. McKelvey would tell you that it was from an
inquiry from me that they started their research on what happened
from this oil.
So I can assure you we are concerned.
(Paper by Max Blumer follows:)
PAPER PUBLISHED BY MAX BLUMER, SENIOR SCIENTIST, WOODS HOLE OCEANOGRAPHIC
INSTITUTION, WOODS HOLE, MASS.
OIL CONTAMINATION AND THE LIVING RESOURCES OF THE SEA
(By Max Blumer)
ABSTRACT
Pollution introduces an estimated 5-40 million tons of crude oil and oil
products into the ocean per year. The threat to the living resources of the sea
is most severe in the coastal environment. There, oil pollution adds to the
growing stresses from sewage, insecticides, chemicals, overfishing, and the
filling of wetlands.
All crude oils are poisons for all marine organisms; many crude oil distillates
are more severely poisonous because they contain higher proportions of the
immediately toxic compounds. Long-term toxicity may harm marine life that is
not immediately killed by spills, and oil can be incorporated into the meat of
marine animals, making it unfit for human consumption. Crude oil and oil prod-
ucts may cause cancer in marine organisms and in man; even at very low con-
centrations oil may interfere with processes which are vital for the prepagation
of marine Species.
PAGENO="0045"
39 ~ ~ `~
The most 1mmediat4~r toxic fraetion~ of oil are water soluble therefore
recovery of oil slicks is often fntile~ except foi~ the aesthetic ieiprovement Treat
meat with detergeilta even the nontoxic o~nes is dangerous because it exposes
marine organisms to higher concentrations of soluble and toxic hydrocarbons
and because it disperses oil Into droplets that can be Ingested and retained by
many organisms.,
Natural bacterial action eventually decomposes spilled oil; however, the
most toxic fractions disappear much more slowly than the more harmless ones.
Within the lipids of marine animals and In sediments petroleum hydrocarbons
are stable for long time periods.
MARINE RESOURCES-MTJLTIPLE USES
Throughout history man has used the ocean and especially the coastal waters
,as a source of food and of minerals, for shipping and for disposal of his wastes.
Today, more than ever, the ocean has a very large tangible and intangible value
and an even greater potential. The present annual world income from marine
fishing in now roughly $8 billion. The world ocean freight bill is nearly `twlee
that. In contrast, the mineral recovery has a relatively small value; the world
oil and gas production from the seabed is worth approximately half that of the
fish catch, and all other mineral production adds only $250 million.' The value
of the ocean for recreation and for waste disposal is not easily put into similar
figures; through its interaction with the terrestrial ecosystems a healthy ocean
may well have critical importance for the survival of the human species.
The economic and aesthetic potential of the coastal regions is far greater than
what we realize now; it has been estimated that with presently available tech-
nology Puget Sound (in western North America) alone could produce annually
6 mIllion pounds of oyster meat, equal in value to the entire present U.S. fish
catch.2 Most of the potential. marine productivity Is concentrated ~n coastal
waters. flyther3 states that the open sea-90 percent of the ocean-is essentially
a biological desert, that proçluces a negligible fraction of the present fish catch
- and has little potential for yielding more in the future. The coastal waters
produce almost the entire shellfish crop and nearly half of the total fish crop;
the remainder comes from regions of u.pwelling waters that occupy one-tenth
of 1 percent of the ocean surface and that are located near the margins of some
continents. Similarly, recreational values, oil and mineral resources and marine
waste disposal areas are concentrated almost entirely in the coastal regions
of the ocean.
MARINE RESOURCES-MULTIpLE STRESSES
Our growing population and our expanding technology lead to an Increasing
dependence on marine values Different uses of the marine resources are often
in conflict and are being made and planned with little regard for the marine
environment as a large interrelated ecosystem. Mafly unrelated causes contribute
to the deterioration of the environment; oil pollution, the subject of this review,
is only one of them. Additional stresses come from the loss of marshland, from
overflshing from pollution with percustent chemicals and with domestic and
ipdiistrial-wastes, The marine environment is tolerant of changes-up to a point.
Many individual actions and even single large stresses can be tolerated whether
this is still true for the sum of the stresses imposed on the env.ironme\nt now,
should be a matter of great common concern We have polluted many of our rivers
and lakes including some large bodies of water like Lake Erie The wastes that
now enter the ocean are similar to those that have damaged the Great Lakes in
fact they are probably more toxic and more persistent Given the saiçrie damaging
input, the ocean differs from the lakes principally only in its size and time con-
stant changes may take a much longer time to become evident but as a direct
consequence restoration of a polluted ocean will also require an entirely dif
fereilt time scale. A polluted small lake can be reclaimed within a few years.
Lake Erie may or may not be restored within fifty years but a polluted ocean
will remain irreversibly damaged for many generations.
`1 Holt, S. J., "The Food Resources of the Ocean," Scientific American, Vol. 22~, pp. 178-
194 1969.
2 kVestley R Conference on Pollution of the Navigable Waters of Puget Sound the
Strait of San Juan de Fuca and their Tributaries and Estuaries Seattle Vol 1 pp 174
f-rn, 1967.
Rytber J H Photosynthesis and Fish Production in the Sea Science Vol 166 pp
72-70, 1969,
PAGENO="0046"
40
Ketchnm4 has pointed out "that nature has a tremendous capacity to recover
from the abuses of pollution, so long as the rate `of addition does not exceed the
rate of recover~v of the environment. When this limit is exceeded, however, the
deterioration of the environment is rapid and sometimes irreversible."
It is not within the scope of this paper to consider the entire field of marine
pollution; the further discussion is restricted to the problem of marine oil pol-
lution because of the increasing extent of oil spillage and because of its severe,
but largely unrecognized, biological effects.
OIL POLLUTION-ExTENT
Oil pollution is the almost inevitable consequence of our dependence on an oil-
based technology. The use of a natural resource without losses is nearly im-
possible and environmental pollution occurs through intentional disposal or
through inadvertent losses in production, transportation, refining and use. Large
catastrophes like that of the "Torrey Canyon", the blowouts at Santa Bar-
bara and in the Gulf of Mexico get the attention of the public because of the
obvious aesthetic damage and the harm to birds. Small and continuing spills
and their far greater impact on less visible resources are less apparent to the
public. It is estimated that 10,000 pollution incidents occur annually in U.S.
waters alone and that oil pollution accounts for 7,500 of these. We have esti-
mated that the present practices in tanker ballasting introduce about 3 million
tons of petroleum into the ocean. The pumping of bilges by vessels other than
tankers contributes another 500,000 tons. In addition, in-port losses from
collisions and during loading and unloading contribute an estimated 1 million
tons.5
Oil enters the ocean from many other sources whose magnitude is much less
readily assessed; among these are accidents on the high seas (Torrey Canyon)
or near shore, outside of harbors (West Falmouth, Mass.), losses during ex-
ploration (`oil based drilling mud) and production (Santa Barbara, Gulf of
Mexico), in storage (submarine storage tanks) and in pipeline breaks, also,
spent marine lubricants and incompletely burned fuels. A major contribution may
come from untreated domestic and industrial wastes; it is estimated that
nearly 2 million tons of used lubricating oil is unaccounted for each year in
the United States alone, a significant portion of this reaches our coastal
waters.°7
Thus, the total annual oil influx to the ocean lies probably between 5 and 10
million tons. There is an urgent need for a more accurate assessment of the
pollution of individual oceanic regions and of the relative contribution of
different oils.
OIL-COMPOSITION AND PERSISTENCE
Petroleum is one of the most complex natural materials and contains many
thousand different compounds. Different crude oils differ markedly in their
physical properties, such as gravity, viscosity and boiling point distribution.
It is beyond the scope of this paper to describe the crude oil composition more
than superficially (see reviews in: Eglinton and Murphy) ,8 However, for our
discussion, considerable simplification is possible since every crude oil contains
the same homologous series of closely related compounds. Different crudes differ
mainly in the relative contribution of the individual number of these series.
However, within these homologous series, chemical properties and toxicity vary
little. Thus, low and high boiling saturated and aromatic hydrocarbons occur
in every crude oil and though their numbers may go into thousands, individual
members of these series have very similar chemical and biological properties.
It follows that in their chemical, biological and toxicological properties crude
oils are very similar, in spite of marked differences in individual composition
and overall physical properties.
Ketchum. B. H., "Testimony before the Subcommittee on Air and Water Pollution,"
Senate Committee on Public Works, March 5, 1970. Unpublished Manuscript.
6 Blumer, M. "Scientific Aspects of the Oil Spill Problem," Presented at the NATO/CCMS
Conference on Ocean Oil Spills. Brussels. Nov. 2-6. 1970.
6 Anon., "Final Report of the Task Force on Used Oil Disposal," American Petroleum
Institute, New York. N.Y.. 1970.
~ Murphy, T. A.. "Environmental Effects of Oil Pollution," Paper presented to the Session
on Oil Pollution Control, American Society of Civil Engineers, Boston. Mass., July 13, 1970.
8Eglinton, G. and Murphy, M. T. J., Ed., "Organic Geochemistry," Springer, Berlin, 1969.
PAGENO="0047"
41
Petroleum and petroleum hydrocarbons in the marine envfronment are re-
markably stable Hydrocarbons that are thssolv~d in the water column are
eventually destroyed by bacterial attack, though `it should be pointed out that
the most toxic compounds are also the most refractory ones.
We have demonstrated that hydrocarbons that are ingested by marine or-
ganisms can pass through the wall of the digestive tract and can be i~etained
for long time periods 91011 Thus, oysters that ha,d been polluted by a fuel oil
spill were removed to a clean aquarium. After six months the analyses showed
that the amount and chemical composition of the fuel oil hydrocarbons in the
fat of the animals remained nearly unchanged.12 Hydrocarbons can be transferred
from prey to predator; they spread through the marine food web in a manuer
similar to that of other persistent chemicals, e.g. DDT.'°'3
Within marine sediments, hydrocarbons are also well protected from bacterial
degradation, especially if the sediments are anaerobic or become anaerobie as
a result of pollution. Thus in a spill Of fuel oil in 1969 at West Falmouth, Massa-
chusetts, U.S.A., oil was incorporated into the sediments of coastal waters, rivers,
harbors and marshes. The oil is still present in the sediments, now, one year
after the accident, and transport of oil laden sediment has contaminated more
distance areas that had remained unpolluted immediately after the spill.~
OIL-IMMEDIATELY TOXICITY
All crude oils and all oil fractions except highly purified and pure materials
are poisonous to all marine organisms. This is not a new finding. The wreck of
the "Tampico" in Baja Oalifornia, Mexico "created a situation where a completely
natural area was almost totally destroyed suddenly on a large scale . . . Among
the deed species were lobsters, abalone, sea urchins, starfish, mussels, clams and
hosts of smaller forms" ~ Similarly, the spill of fuel oil in West Falmouth, Mas-
sachusetts, U.S.A., has virtually extinguished life in a productive coastal and
intertidal area, with a complete kill extending over all phyla represented in that
habitat.15 Toxicity is immediate and leads to deith within minutes or hours.10
Responsible for this immediate toidcity are principally three complex fractions.
The low boiling saturated hydrocarbons have, until quite recently been considered
harmless to the marine environment. It has now been founa that this fraction.
which is rather readily soluble in sea water produces at low cqncentration an-
aesthesia and narcosis and at great concentration cell damage and death in a
wide variety of 1ow~r animals; they muy b' esbecially damaging to the young
forms of marine life 17~ The low bOiling aromatic hydrocarbons are its most im-
mediately toxic fraction. Benzene, toluene and xylene are acute poisons for m~n
as well as for other organisims; naphthalene and phenanthrene are even more
toxic to fishes than benzene, toluene and xylene. These hydrocarbons and sub-
stituted one two and three ring hydrocarbons of similar toxicity are abundant
in all oils and most, especially the lower boiling, oil products. Low boiling aro~
mati~s are even more water soluble than the saturates and ~an kill marine or-
ganisms either by direct contact or through contact with dilute solutions. Olefinic
hydrocarbons, intermediate in structure and properties and probably in toxicity
between saturated and aromatic hydrocarbons are absent in crude oil but occur
in many refining products, e.g. gasoline and cracked products, and they are
in part responsible for their immediate toxicity.
9 Blamer, M., "Hydrocarbons in Digestive Trace and Liver of a Basking Shark," Science.
Vol. 156, pp. 390-391, 1967.
10 Blumer, M., Mullin, M. M. and Guillard, B. R. L., "A Polyunsaturated Hydrocarbon (3,
6 9 12 15 18 henelcosahexaene) in the Marine Food Web Marine Biology s 226-36 1970
ii Blamer ~E Sousa 0 and Sass J 0Hydrocarbon Pollution of Edible Shellfish by an
Oil Spill," Marine Biology. ~, 195-202, 1970.
12 Blumer M Sass J Sousa 0 Sanders H L Gras~ie J F alid Hampson 0 B The
West Falmouth Oil Spill," Woods Hole Oceanographic Institution, flef. No. 70-44, Unpub-
tisbed Manuscript, 1970.
`2I3lumer, M., Sass. J., Souza, G., Sanders, B. and Sass, J., "Phytol-Derived Cop Di- alid
Triolefinic Hydrocarbons In Marine Zooplankton and Fishes," Biochemistry, Vol. 8
p. 4067', 1909.
14 North, W. J., "Tampico, a Study of Destruction and~ Restoration," Sea Frontiers,
Vol. 13, pp. 212-217, 1967.
~ Hampson C B and Sanders H L Local Oil Spill Oceanus Vol 15 pp 8-10 1969
16 Wilber, Ch. 0., "The Biological Aspects of Water Pollution," Ch. C, Thomas, Publisher,
Springfield, Ill., 1969.
17 Goldacre, R. J., "The Effects of Detergents and Oils on the Cell Membrane," pp. 131-
37. Suppl. to Vol. 2 of Field Studies, Field Studies Council, London, 1968.
I
PAGENO="0048"
42
Numerous other components of crude oils are toxic, among those named by
Speers and Whltehead'8 cresols, xylenols, naphthols, qtiinoline and substituted
quinolines and pyridines and hydroxybenzoquinOlines are of special concern here
because of their great toxicity and their solubility in water.
It is unfortunate that statements which disclaim this established toxicity are
still being circulated. Simpson `~ claimed that "there is no evidence that oil spilt
round the British Isles has ever killed any of these (mussels, cockles, winkles,
oysters, shrimps, lobster, crabs) shellfish." It was obvious when this statement
was made that such animals were indeed killed by the accident of the Torrey
Canyon as well as by earlier accidents; work since then has confirmed the
earlier investigation. In addition, by its emphasizing only the effect on adult
life forms such a statement implies wrongly that juvenile forms were also
unaffected.
OIL AND CANCER
The higher boiling crude oil fractions are rich in multiring aromatic com-
pounds. It was at one time thought that only a few of these compounds, mainly
3, 4-benzopyrene, were capable of inducing cancer. As R. A. Dean 20 of British
Petroleum Company stated "as far as I know, no 3,4-benzpyrene has been detected
in any crude oil . . . It therefore seems that the risk to the health of a member
of the public by spillage of oil at sea is probably far less than that which he nor-
mally encounters by eating the foods he enjoys." However, before that time car-
cinogenic fractions containing 1,2-benzanthracene and alkylbenzanthracenes bad
already been isolated2' from crude oil and it was known that "biological tests
have shown that the extracts obtained from high-boiling fractions of the Kuwait
oil . . . (method) . . . are carcinogenic." Further "Benzanthracene derivatives,
however, are evidently not the only type of carcinogen in the oil. . . ."
In 1968, the year when Dean claimed the absence of the powerful carcinogen
3,4-benzopyrene in crude oil, this hydrocarbon was isolated in crude oil from
Libya, Venezuela and the Persian Gulf.22 The amounts measured were between
450 and 1800 milligrams per ton of the crude oil.
Thus, we know that chemicals responsible fOr cancer in animals and man occur
in petroleum. The causation of cancer in man by crude oil and oil products has
been observed some years ago, when a high incidence of skin cancer in some
refinery personnel was observed. The cause was traced to prolonged skin contact
by these persons with petroleum and with refinery products.
According to Wilber'° "there is evidence that even a highly refined, diesel
engine lubricating oil obtained from a napbthenic base crude oil, and lacking in
substances ordinarily known to be carcinogenic, can induce tumors of the diges-
tive tract of animals." Also, "Cutting oil is known to have carcinogenic potency."
These references and a general knowledge of the composition of crude oils
suggest that all crude oils and all oil pro~ucts containing hydrocarbons boiling
betweOn 300 and 500° C should be viewed as potential cancer inducers.
This has severe implications for fisheries and human health. In our study of
the West Falmouth oil spill 1112 we showed that oil from that spill was taken up
by shellfish and built into their body fat without fractionation of the hydrocar-
bons. In that specific accident an oil boiling between 170 and 370° C was in-
volved; this boiling range overlaps with that within which carcinogens have to
be expected. Human consumption of such contaminated shellfish and other fish-
eries resources should therefore he viewed with great suspicion.
Carcinogenic hydrocarbons can enter the chain leading to human food at an
even lower level of the food chain; thus, it was shown by Doerr23 that intact
plant roots can take up carcinogens like 3,4-benzopyrene from their growth
medium.
The level of oil pollution encountered in many oceanic regions suggests that
fisheries resources may often be contaminated with toxic petroleum derived
hydrocarbons at levels that may constitute a public health hazard. Laboratories
18 Speers, G. C. and Whithead, E. V., "Crude Petroleum." In "Organic Geochemistry,"
Eglinton, 0. and Murphy. M. T. J.. Ed., Springer, Berlin, pp. 638-675, 1969.
19 Simpson. A. C., "Oil, Emulsifiers and Commercial Shell Fish," pp. 91-98, Suppl. to
Vol. 2 of Field Studies. Field Studies Council, London. 1968.
20 Den, R. A., "The Chemistry of Crude Oils in Relation to their Spillage on the Sea," pp.
1-6, Supnl. to Vol. 2 of Field Studies, Field Studies Council, London, 1968.
21 Carruthers, W., Stewart, H. N. M. and Watkins, D. A. M., "i,2-Benzanthracene
Derivatives in a Kuwait Mineral Oil." Nature, Vol. 213, pp. 691-692. 1967.
22 Graef, W. and Winter. C.. "3,4 Benzpyren in Erdoel," Arch. Hyg. 152/4', 289-293. 1968.
23 Doerr, R., "Alkaloid and Benzopyrene Uptake by Intact Plant Roots," Naturwissen-
schaften, Vol. 52, p. 166, 1965.
PAGENO="0049"
43
to assay fisheries products for such contamination do not ~x1st. Public health
authorities should be urged to establish such laborittories for continuous surveys
of the pollution level encountered in commercial sea food.
Other questions suggest themselves: Floating masses of crude oil now cover
all oceans and are being washed up on shores. We have shown that such lumps,
even after considerable weathering still contain nearly the full range of hydro-
carbons of the original crude oil, extending in boiling point as low as 1000 C.
Thus, such lumps still contain some of the immediately toxic lower boiling hydro-
carbons. In addition, the oil lumps contain all of the potentially carcinogenic ma-
terial in the 300-500° boiling fraction, The presence of oil lumps ("tar") or
finely dispersed oil on recreational beaches may well constitute a severe public
health hazard, through continued skin contact.
OIL-DESTRUCTION OF FISHERIES RESOURCES
It has been said that "a review of the literature indicates that in deep water,
whether in the open ocean or a mile or so offshore; no significant damage to
marine life is encountered from even large oil spills because pelagic fish avoid
the spill and few other marine species are present".2° We wonder whether any-
one could take such a statement seriously, who knows the established toxicity
of crude oil, the richness of coastal life and the complexity of marine life cycles.
The dead fish washed ashore after the West Falmouth oil spill ~ clearly were
unable to avoid the spill1 nor will the fish fry in estuaries and marshes or the
planktonic food organisms in the open ocean be able to avoid a large spill or the
plume of toxic dissolved hydrocarbons descending from it. Unfortunately, in-
Vestigation of the effects of major accidents (e.g. Torrey Canyon, Santa Bar-
bara) have very largely concentrated on the study of damage to adult fish or of
any immediate reduction in fish catches. This is not sufficient; we must also
consider the damage to the often more delicate juvenile forms and to the food
organisms on which commercial fishes feed. Damage to these will not show up
immediately nor will it he evident necessarily at the location of the accident.
A large spill may lead to a gradual -reduction of productivity over a large but
diffusely defined area. The combined effect of many such spills and of other
stresses, e.g. from overfishing and from the filling of marshlands may lead to a
reduction in fishing income which is difficult to trace to any single cause.
The so called "tainting" of fish and shellfish by oil spills has been recognized
for many years, however, it was not realized until now that oil passes through
the intestinal barrier and is incorporated into and stabilized in the lipid pool
of the ~
It has been widely assumed that fish and shellfish "tainted" by oil will again
be fit for human consumption after a period from 2 ~ to several months.2°
Our experience referred to above makes this highly improbable. If the oil were
contained solely in the gut of the animals it might be readily displaced, however
oil is resorbed and incorporated into the lipids where it may not be `readily
mobilized as long as the animal lives.
The disappearance of an* "oily small" is no clue whether fish or shellfish has
cleansed itself of the oil pollution. Only a small fraction of the petroleum has
a pronounced odor and loss of these compounds may occur while the more harm-
ful high boiling, taste and odorless carcinogens are retained. It has been reported
that boiling or frying will remove the odor; however, it will not affect the
presence of polycyclic aromatic hydrocarbons.
OIL-LOW LEVEL EFFECTS S
We are concerned that oil pollution, even at very low levels. may be respon-
sible for long term damage to the marine ecology. Many biological processes
which are important for the survival of marine organisms and which occupy
key positions in their life processes are mediated by extremely low concentra- S
tion of chemical messengers in the sea water. We have demonstrated that marine ` S
predators are attracted to their prey by organic compounds at concentrations
below the pare per billion level.25 Such chemical atteraction-and in a similar
25 Little, A. D.. Inc.. "Combating Pollution Created by Oil Spills," Report to the Dept. of
Transportation, U.S. Coast Guard, Vol. 1: Methods, p. 71386 (R), ~1une 30, 1969.
24 Contln~ency Plan for Spills of Oil and Other Hazardous Materials in New England
Federal Water Pollution Control Administration. Draft. 1970.
26 WhIttle, K. I. and Blumer, M., "A Predator-Prey Relationship. Sea Stars-Bivalves. The
Chemical Basis of the Response of Asterias eulgaris to Crassostrea vir.qinica," Woods Hole
Oceanographic Institution, Ref. No. 70-20, Unpublished Manuscript, 1970.
77-4~3 0 - 72 - pt. 1 - 4
PAGENO="0050"
44
way repulsion-plays a role In the finding of food, the escape from predators, in
homing of many commercially important species of fishes, in the selection of
habitats and in sex attraction. There is good reason to believe that pollution
interferes with these processes in two ways: by blocking the taste receptors
and by mimicking for natural stimuli; the latter leads to false responses.
Those crude oil fractions likely to interfere with such processes are the high
boiling saturated and aromatic hydrocarbons and the full range of the olefinic
hydrocarbons.
It has long been known that lobsters are attracted to crude oil distillate frac-
tions, e~pecia11y kerosene,27 28 this has now been confirmed in the laboratory
and with purified hydrocarbon fractions derived from kerosene.29 Thus it is
likely that an oil spill will attract lobsters away from their normal food and
guide them into the direction of the spill, where they are more likely to be
severely contaminated or killed. Again, this is in direct contradiction to the
opinion quoted above ~ that marine animals will actively avoid oil spills. It
may be relevant that after the West Falmouth oil spill numerous dead lobsters
were washed ashore.
Interference with normal taste reception at very low and seemingly innocuous
pollution levels may have disastrous effects on the survival of many marine
species through their links in marine food web.
COUNTERMEASURES
Compared to the number and size of accidents and disasters the present counter-
measures are inadequate. However, a rapidly advancing technology is hopeful
of developing techniques that will be effective iii dealing even with very large
spills under severe sea conditions. Yet, while we may hope that the gross
aesthetic damage from oil spills may be avoided sometime in the future, there
is no reason to believe that existing or planned countermeasures will eliminate
the biological impact of oil pollution.
The most immediately to~xic fractions of oil and oil products are soluble
in sea water, therefore, biological dam8lge will occur at the very moment of the
acident. Water currents will immediately spread the toxic plume of dissolved
oil components and, if the accidents occurs in inshore waters, the whole water
column will be poisoned even if the bulk of the oil floats on the surface. The
speed with which the oil dissolves is increased by agitation, and in storm con-
ditions the oil will partly emulsify and will present a much larger surface
area to the water; consequently, the toxic fraction will dissolve more rapidly
and reach higher concentrations.
From the point of view of avoiding the immediate biological effects of oil
spills, countermeasures can be completely effective only if all of the oil is re-
covered immediately after the spill. The technology to achieve this goal does
not exist, Some comments on existing countermeasures and their biological ef
fect~ appear appropriate:
Detergents and dispersants
The toxic, solvent-based detergents which did so much damage in the clean-up
after the Torrey Canyon accident are presently only in limited use. However so-
called "non-toxic dispersants" have been developed. The term "non-toxic" is mis-
leading, these chemicals may be nontoxic to a limited number of often quite
resistant test organisms but they are rarely tested in their effects upon a very
wide spectrum of marine organisms including their juvenile forms, preferably
in their normal habitat. Further, in actual use the dispersant-oil mixtures are
severely toxic, because the oil is toxic and bacterial degradation of "non-toxic"
detergents may lead to toxic breakdown products.
A dispersant lowers the surface tension of the oil to a point where it will
disperse in the form of small droplets. It is recommended that the breakup of the
oil slick be aided by agitation, natural or mechanical. Thus, the purpose of the
detergent is essentially a cosmetic one, and it appears attractive to `those who
wish to alleviate only the aesthetic damage. However the recommendation to
apply dispersants is often made in disregard of their ecological effects. Instead
of removing the oil, dispersants push the oil actively itito the marine environ-
ment; because of the finer degree of dispersion, the immediately toxic fraction
~ Prudden, T. M.. "About Lobsters," The Bond Wheelwrirht Co., Freeport, MaIne, 1967.
~ Anon. (Editorial), "Sea Secrets," Vol. 13, No. 11, p. 7, 1969.
20Boylan, D. B., unpublished results, 1970.
PAGENO="0051"
45
dissolves rapidly and reaches a higher concentration in the sea water than it
would if natural dispersal were allowed. The long term poisons (e.g. the carcino-
gens) are made available to and are ingested by marine filter feeders, and, they
can eventually return to man incorporated into the food he recovers from the
ocean.
For these reasons I feel that the use of dispersants is unacceptable, inshore or
offshore, except under special circumstances, e.g. extreme fire hazard from spil-
lage of gasoline, as outlined in the contingency plan of the Federal Water Quality
Administration.24
Physica~ sinking
Sinking has been recommended: "the long-term effects on marine life will not
be as disastrous as previously envisaged. Sinking of oil may result in the mobile
bottom dwellers moving to new locations for several years; however, conditions
may return to normal as the oil decays." 25 Again, these conclusions disregard our
present knowledge of the effect of oil spills.
Sunken oil will kill the bottom faunas rapidly, before most mobile bottom
dwellers have time to move away. The sessile forms of commercial importance
(oysters, scallops, etc.) will be kil1ed and other mobile organisms (lobsters) may
be attracted into the direction of the spill where the exposure will contaminate
or kill them. The persistent fraction of the oil which is not readly attacked by
bacteria contains the long term poisons, e.g. t~ie carcinogens, and it will remain
on the sea bottom for very long time periods. Exposure to these compounds may
damage bottom organisms or render them unfit for human nutrition even after
the area has been repopulated.
Combustion
Burning the oil through the addition of wicks or oxidants appears more attrac-
tive from the point of view of avoiding biological damage than dispersion and
sinking. However, it will be effective only if burning can start immediately after
a spill. For complete combustion, the entire spill must be covered by the com-
bustion promoters, since burning will not extend to the untreated areas; in prac-
tice, in stormy conditions, this may be impossible to achieve.
Mechanical containment and removal
Containment and removal appear ideal from the point of avoiding biologic~U
damage. However, they can be fully effective only if applied immediately after
the accident. Under severe weather conditions floating booms and barriers are
ineffective. Booms were applied during the West Falmouth oil spill; however, the
biological damage in the sealed-off harbors was severe and was caused prob-
ably by the oil which bypassed the booms in solution in sea water and in the
form of wind-dispersed droplets.
Biological degradation
Hydrocarbons in the sea are naturally degraded by marine microorganisms. It
is hoped to make this the basis of an oil removal technology through bacterial
seeding and fertilization of oil slicks. However, great obstacles and many un-
knowns stand in the way of the application of this principally attractive idea.
No single microbial species will degrade any whole crude oil; bacteria are
highly selective and complete degradation requires mnny different bacterial
species.5° Bacterial oxidation of hydrocarbons produces many intermediates
which may be more toxic than the hydrocarbons; therefore organisms are also
required that will further attack the hydrocarbon decomposition products.5°
Hydrocarbons and other compounds in crude oil may be bacterlostatic or bac-
teriocidal: 50 this may reduce the rate of degradation, where it is most urgently
needed. The fraction of crude oil that is most readily attacked by bacteria is the
least toxic one, the normal paraffins; the toxic aromatic hydrocarbons, especially
the carcinogenic polynuclear aromatics, are not rapidly attacked.~°155°
The oxygen requirement in bacterial oil degradation is severe; the complete
oxidation of 1 gallon of crude oil requires all the dissolved oxygen in 320,000 gal-
lons of air saturated sea water.5° Therefore, oxidation may be slow in areas
where the oxygen content has been lowered by previous pollution and the bacterial
degradation may cause additional ecological damage through oxygen depletion.
3°ZoBell. C. E.. "Microhi°1 Modification of Crnde Oil In the Sea," .Tolnt API-FWPCA Con-
ference on Prevention and Control of Oil Spills, Press Release, Dec. 17, 1969.
PAGENO="0052"
46
Cost effectiveness
The high value of fisheries resources, wh1~h exceeds that of the oil recovery from
the sea, and the importance of marine proteins for human nutrition demand that
cost effectiveness analysis of oil spill counter-measures consider the cost of direct
and indirect ecological damage. It is disappointing that existing studies com-
p'etely neglect to consider these real va1ues. A similarly one-sided approach
would be, for instance, a demand by fisheries concerns that all marine oil produc-
tion and shipping be terminated, since it clearly interferes with fisheries Interests.
We have to start to realize that we are paying for the damage to the environ-
ment, especially if the damage is as tangible as that of oil pollution to fisheries
resources and to recreation. Experience has shown that cleaning up a polluted
aquatic environment is much more expensive than it wou1d have been to keep the
environment clean from the beginning.31 In terms of minimizing the environmental
damage spill prevention will produce far greater returns than clean-up-and we
believe that this relationship will hold in a realistic analysis of the overall cost
effectiveness of prevention or cleanup costs.
SELF CONTROL AND LAW ENFORCEMENT
The oil industry has an outstanding personnel and plant safety record. Oil re-
fineries probably operate more safely than any other plants of equal production
capacity. The industry has achieved this record through internal control because
of the realization of the cost effectiveness of personnel safety.
We believe that in the past the oil industry has not been fully aware of the
substantiated toxicity of oil in the marine environment. We hope that the in-
creasing recognition of the threat of oil pollution to marine resources will lead
industry to aim for a ecological safety record similar to the plant safety record.
It would be unrealistic to expect that intentional and negligent oil poPution
can be stopped through education or appeals to man's responsibility. In this re-
spect law enforcement will have to speak more strong1 y. Methods for the identi-
fication of oil spills by day and night through spectroscopic surveys from air-
planes are becoming available.32 Active tagging of oil in marine transit ~ should
provide for simple and conclusive identification of spills. Even without active tag-
ging, which depends on the willing cooperation of the ship owners and operators,
each oil and oil product has its unique fingerprint. Fast and simple analytical
techniques are available (e.g. capillary gas chromatography combined with mass
spectrometry) that can qualitatively and quantitatively determine hundreds of
different compounds in a spilled oil within a very short tjme. These techniques
should be a great aid to more effective law enforcement.
In their effectiveness for law enforcement these techniques cou1d be greatly
supported if the oil industry would make available samples or analyses of those
crude oils and products which are being transported across the sea.
CONCLUSIONS
The to~vicity of crude oil and oil products to marine life and the danger of oil
pollution to the marine ecology has been established in several independent ways:
(1) Studies of crude oil composition and isolation of compounds known
to be toxic, e.g. low boiling aromatic hydrocarbons and the carcinogenic, high
boiling polycyclic aromatics.
(2) Laboratory studies of the effect of oil and oil fractions on marine
organisms.
(3) Field studies of the effect of oil spills on marine organisms in their
normal habitat.
Pollution with crude oil and oil fractions damages the marine ecology through
different effects:
(1) Direct kill of organisms through costing and asphyxiation.34
(2) Direct kill through contact poisoning of organisms.
~ Ketchum, B. H., "Biological Effects on Pollution of Estuaries and Coastal Waters,"
Boston Univ. Press, In Press, 1970.
~ Swaby, L. G., "Remote Sensing of Oil Slicks," Joint API-FWPCA Conference on Pre-
vention and Control of Oil Spills Press Release, Dec. 17, 1969.
~ Horowitz, J., "Oil Spills: Comparison of Several Methods of Identification." Joint
API-FWPCA Conference on Prevention and Control of Oil Spills, Press Release, Dec. 17,
1969.
~ Arthur, D. R., "The Biological Problems of Littoral Pollution by Oil and Emulsifiers-
a Summing up," pp. 159 -164, Suppl. to Vol. 2 of Field Studies, Field Studies Council,
London, 1968.
PAGENO="0053"
47
(3) Direct kill through expoSure to the water soluble toxik~ components
of oil at some distance in space and time from the accident,
(4) Destruction of the generally more sensitive juvenile forms of
organisms.
(5) Destruction of the food sources of higher species.
(6) Incorporation of sublethal amounts of oil and oil products into or-
ganisms resulting in reduced resistance to infection and other stresses (the
principal causes of death in birds surviving the immediate exposure to oil ~).
(7) Destruction of food values through the incorporation of oil and oil
products, into fisheries resources.
(8) Incorporation of carcinogens into the marine food chain and human
food sources.
(9) Low level effects that may interrupt any of the numerous events nec-
essary for the propagation of marine species and for the survival of those
species which stand higher in the marine food web.
Some oil products may be more poisonous than whole crude oils-thus, kerosene
and #2 fuel oil are particularly rich in the low boiling water soluble poisons and
higher boiling distillates are rich in carcinogenic hydrocarbons. However, the
toxicity of oil is spread over such a wide boiling range, and the composition of
different crudes in terms of their chemical type distribution is so similar, that
all crude oils and distillates must be considered severe environmental poisons.
Crude oil and most products are persistent poisons; they enter the marine food
chain, they are stabilized in the lipids of marine organisms and they are trans-
ferred from prey to predator. The persistence is especially severe for the most
poisonous compounds of oil; most of these do not normally occur in organisms
and natural pathways ~or their biodegradation are missing.
The presence of toxic and potentially carcinogenic hydrocarbons in fisheries
products may constitute a public health hazard. Laboratories to measure routine-
ly the contamination level and to assess the public health hazard do not now
exist; such laboratories should be organized to carry out continuous surveys of
the safety of fisheries resources to public health.
Because of their low density, relative to sea water, crude oil and distillates
should float; however, both the experiences of the "Torrey Canyon" and the West
Falmouth oil spill have shown oil on the sea floor. Oil in inshore and offshore sedi-
ments is not readily biodegraded; it can move with the sediments and can con-
taminate unpolluted areas long after an accident.
None of the presently used containment and recovery techniques prevents the
ecological damage and the damage to fisheries products from oil spills. Toxicity
is evident immediately and the poisonous fraction will be carried in water solu-
tion away from the accident, even if the surface spill is contained and recovered
rapidly. The sinking method and the use of detergents and dispersants, while
cosmetically effective, are especially harmful since they introduce afl the oil into
the environment. There are no dispersants that are not toxic in the presence of
oil. The use of sinking agents and of dispersants should be most strongly.
discouraged.
Natural mechanisms for the degradation of oil in the sea exist; unfortunately,
these are least effective for the most severely toxic components of oil. As a result,
the most toxic fractions are also the most persistent ones. `1~he breakdown prod-
ucts of oil and dispersants may also be toxic, Further, oil that has been incor-
porated into the lipids of marine organisms and into the sediments at the sea
bottom and in estuaries and marshes is largely unavailable to the natural de-
gradation; poisoning of the bottom habitats and of the marine food web will
therefore be more severe and more persistent than the posioning of the water
column itself.
The tolerance of the marine ecology to oil spills is unknown. The great persist-
ence of oil and the existence of low level effects suggest a lower tolerance than
we would expect by considering only the immediate toxicity of oil at high con-
centration levels.
The effects of oil pollution, especially in the coastal environment cannot be
considered without also considering the other stresses on these most productive
regions of the ocean.
The combined impact of oil and oil products, chemicals, domestic sewage and
municipal wastes, of the filling of wetlands, of dredging and of overfishing might
Beer. J. V., Poet-Mortem Findinre In Oiled Auks during Attempted Rehabilitation,"
pp. 123-129, Suppi. to Vol. 2 of Field Studies, Field Studies Council, London, 1968.
PAGENO="0054"
48
lead to a deterioration of the coastal regions similar to that which we have
brought about in the Great Lakes. Because of the much longer time scale of the
oceans such a catastrophic deterioration would not likely be reversed within
many generations; it would have a deep and lasting impact on the future of
mankind.
ACKNOWLEDGMENTS
We are grateful for continued support of our work on origin and fate of hydro-
carbons in the sea by ONR, NSF and FWPCA (current grants and contracts,
NOO 14-66-CO-241, GA 1625, EBN 18050).
The concern and suggestions of many colleagues has contributed. Special grati-
tude goes to Drs. R. H. Backus, V. T. Bowen, J. M. Hunt, B. H. Ketchum, J. fly-
ther, H. L. Sanders and 0. C. Zafiriou.
This is Contribution No. 2474 of the Woods Hole Oceanographic Institution.
Senator BUCKLEY. Thank you very much.
Mr. Chairman, I have no further questions.
Senator Moss. Thank you very much.
We appreciate your testimony. We have kept you a long time.
I think the import of the questions of the Senator from New York
and the answers indicate there is probably a lot of research yet to be
done. Perhaps we ean give attention as to how that can be coordinated
someway between industry and government to make sure we are at-
tacking all possible areas of research and know what oil does, and
where it goes, and whether indeed it does persist in marine life or else-
where if it is ingeste I while it is on the surface or elsewhere.
So I think this hearing will help us to point up to that and see that
we can get that done.
This has been most profitable and interesting, and I appreciate the
very detailed answers you have prepared for our rather long list Of
questions.
I want to thank all of you gentlemen for appearing.
Senator BELLMON. Mr. Chairman, I would like to ask permission
that an article entitled "Price Gap Between U.S. and Foreign Oil
Shrinking" be i~ch~ded in the record.
Senator Moss. That will be included in the record without objection.
(The article follows:)
PAGENO="0055"
49
[From The Oil and Gas Journal, March 20, 1972]
NLWS
Price gap between U.S.
and foreign oil shrinking
LESTER F. VAN Dvxca
Management Editor
"CHEAP" foreign crude oil is becoming
more expensive all the time. And the
chances that the trend established dur-
ing the past 3 years will stop or even
slow down are remote.
Price upheavals in the main produc.
ing countries of the Mideast and North
Africa have steadily narrowed the gap
between the landed cost of imported
crudes on both the U.S. East and West
coasts and the price of domestic crude.
A Journal study of fonr representa.
tive foreign c~udes shows that the aver-
age landed cost of these oils in New York
compared to the landed cost of a South
Louisiana crude moved in large volume
to the New York area has climbed 420/
bbl since early 1969.
These figures are supported by the
value of import tickets. Tickets brought
about $1.45/bbl in 1969. The value today
is around $1.
A similar shrinkage of the gap be-
tween foreign and domestic prices is
taking place on the West Coast.
Despite the foreign price increases,
there is still a substantial price spread-
with a couple of exceptions-in favor of
offshore oil. But industry economists and
crude-supply executives point out dan-
gers in taking the figures at face value.
How landed cOsts o~ crude compare on U.S. East Coast
PAGENO="0056"
Surplus domestic crude supplies are
drying up fast. Without domestic re-
serves to fall back on, the U.S. is
much more vulnerable to price escala-
tions abroad.
Also anything which would boost the
now relatively low tanker rates could
erase the price gap. Supply disrup-
tions in the producing countries, of
courso, could serve as such a trigger-
just as they have in recent years.
Finally, there is little chance that
the price of domestic crude oil will
Increase this gear.
What's happened. Throughout moat
of the 1960's, there was little change
in world crude-oil prices. Early in
1969, ~he U.S got its first real crude-
price increase in almost a decade. In
Septemb~r 1970, posted prices, for
Mediterranean crudes began to move,
followed in a couple of months by
other Mideast crudes.
With the February 1971 Tehran
agreement, world crude-oil prices took
an even larger leap upward. Tax-paid
costa of crudea jumped, along with
postings and selling prices. At the
aame time, tanker rates soared to rec-
ord levels. And import4icket ex-
change values vanished.
To see how these moves have af-
fected the price differential between
foreign and U.S. oil, the Joumal picked
four representative crudes and traced
their price movements since 1969.
Iranian light (34~ gravity) was
selected from the Persian Gulf. Be-
fore price escalations began It had a
relatively stable posting of $l.79/bbl
and a tax-paid coat delivered to the
terminal of about $1.01/bbl. A gen-
eral rule of thumb called for between
35 and 40f/bbl profit margin to the
company. And the crude waS selling
at about $1.38/bbl fob. Based on the
AFRA rate for a medium-range tanker
to the U.S. East Coast, oil could be
brought to New York then for about
88c1/bbl plus 10.5f/bbl duty and landed
for roughly $2.361bb1.
Domestic Ostrica-type 32~-gravity
crude, moving under fairly high
rates-even using time charters as the
Journal did for this study-was coming
into `the East Coast from Louisiana
at about $3.45/bbl. This figure includes
about a 25f/bbl sulfur discount.
Libyan 40~ crude oil was about lO~/
bbl more costly than the Iranian in
1969, figuring a 45f/bbl freight rate.
The lower-gravity, ~sigher-sulfur Ven-
ezuelan Leona crude enjoyed about
a $1.30/bbl advantage over the domes-
tic crude and at least 20f/bbl over
other offshore oils. Freight rates on
the Caribbean/USNH run were about
25f/bbl in 1969.
By February 1971, prices were up on
moot oils following the Tehran agree-
ment. But the erratic freight market
played tricks with the landed cost
figures. Rates on almost all runs were
up 25 to 50f/bbl on the AFRA basis.
The spot market had soared to record
levels, erasing import-ticket values on
marginal crude movements.
Prices today. AFRA rates are set-
tling back to near normal but still are
higher than in 1969. Even so, the effect
price hikes on foreign crudes has had
on their relative competitive position
in the U.S. market is apparent. Libyan
crude, moving under a 5ç1/bbl higher
freight rate than in 1969, now is only
40f/bbl cheaper than Ostrica crude,
compared with a $1/bbl spread in
1969. It does enjoy a certain premium
due to its low sulfur contenL
Iranian light crude was only 10ff
bbl cheaper in 1969 than the Libyan
oil. But today it can be landed on the
U.S. East Coast for 35f/bbl less. Only
1Sf of that can be attributed to in-
creased freight costs.
The 35.5~ Oficina Venezuelan crude
was on a par with the Libyan oil in
1969 but now is about 12f/bbl cheaper.
Roughly 7f of that, however, must be
subtracted due'to higher transporta-
tion costs. Again, the Iranian light oil
holds a much larger price advantage
over Venezuelan crude landed on the
East Coast than it did 3 years ago.
Heavier Venezuelan crude also has
lost ground. The $1.30 difference be-
50
How aetna! selling prices have increased*
PAGENO="0057"
tween it and ~strica 32~-gravity ip
1969 has melted to 95!=. There's 7~
added freight that has to be con-
sidered, though. In 1969 the 25.5~-
gravity Venezuelan crude was about
30~/bbl cheaper than the Libyan and
higher gravity Venezuelan oil. Today
the range is 50~/bbl.
West Coast. The price gap between
foreign and domestic crude on the
W~st Coast also has narrowed sharply
in recent years and likely will con-
tinue to do so.
Because of the drop in tanker rates
the past year, the laid-down price of
offshore crude on the West Coast is
actually smaller today than a year
ago. But compared with prices 2 years
ago, the difference is apparent.
The West Coast is heavily dependent
on imported and tankered crude. Late
last year, California production was
around 950,000 b/d. Added to this
was Alaska's 220,000 b/d, which went
to West Coast refineries. Canadian
imports added another 203,000 b/d.
Overseas imports, which provide the
supply flexibility, accounted for 272,000
b/d. Of this amount, 135,000 b/d came
from the Mideast, 91,200 b/d from
Indonesia, 37,700 b/d from South
America, and 7,600 bId from Australia.
Comparing prices of foreign and
domestic crude on the West Coast, as
in the East, ia complicated by chang-
ing tanker ratea and continuing price
negotiations with exporting countries.
Crude of 35'.gravity from Hunting-
ton Beach field in the Los Angeles
area sells for $3.67/bbl. Adding 5ç1/
bbl tranaportation charge for move-
ment to refineries puts the coat at
$3.72.
Today's price of Indoneaian crude
from Sumatra-the moat coatly Qf the
overseas crudes-is approaching this
figure. The low-sulfur oil sells for $2.60.
Transportation adds 72ç1/bbl, And the
import duty of 10.5~ brings the figure
to $3.43. When current negotiationa on
repricing Indonesian crude-based on
revaluation of the American dollar-
are completed, an added increase of
about 22ç1 will nearly wipe out the
gap. It would bring the coat of Suma-
Iran crude to $3.65 compared to $3.72
for Huntington Beach crude at Los
Angelee.
- Cheaper and less-valuable Saudi
Arabian crude is not as competitive,
but it will be moving closer as annual
increases take effect.
With the latest increaee Saudi crude
is coming in at about $2.94/bbl in Los
Angeles. This will increase by another
200 under contract terms by 1975.
Continuing price rise. The cost in-
creasea of the Tehran pact that apply
to the West Coast, of course apply in
the East. Tax-paid coat increases
totaling roughly 32f/bbl are plugged
into the Tehran and Geneva accords
by 1975.
Libya and Algeria are expected to
apply the geneva agreement terms-
or better-to their crude prices. And
the Journal assumed auch an increase
in calculating the price of Libyan
crude for its charts.
If the Geneva accord is applied in
Libya, it would raise the government's
take by 16 to 18ç1/bbl, compared to
11-12Ø/bbl in the Persian Gulf.
In Libya, the 8.49% increaae would
apply not only to postings, but also to
the 9ç1/bbl retroactivity "buy-out."
This is an extra payment, on top of
the tax, that was included in last
year's 5-year Tripoli agreement. As
the proposal stood it would not apply
retroactively. But the way Algeria acts
in applying the Geneva terms to its
own oil could have a bearing on this.
So far, major international crude-
oil suppliers appear able generally to
pass along to their customers the price
increases they have had to bear. Price
hikes to customers have come On an
across-the-board basis following each
round of price increases by the pro-
ducing countries.
While the tax-paid cost is scheduled
to increase some 320/bbl by 1975, in-
dications are that the selling price
will climb by roughly 21-23f/bbl. How-
ever, that'a assuming rather static
conditions in supply/demand patterns
and some stabilizing of price negotia-
tions in the Mideast and North Africa.
And with such isaues as participation
still to be resolved, such stable con-
ditions seem unlikely.
Profit margino on crudes have held
up so far. But one economist notes
that the rule of thumb for figuring
the selling price after calculating the
tax-paid cost in the Mideast is now
to add 30-35ç1/bbl. It used to be 35-40f,
By the mid-to-late 1970's it could be
closer to 20-250, he says.
World crude-oil prices are moving
rapidly toward some sort of "parity"
-all things such as freight and qual-
ity differences considered-moot in-
dustry sources seem to agree. And
that might not be as bad as it might
seem at ftr~t glance. Overall effect
probably would be to dampen the con-
tinuing struggle among the producing
countries and the producers, sources
acid.
The U.S. is certain to become more
and more dependent on offshore crude.
And whether it's secure or not, it
won't be cheap by the end of this
decade, industry economists say.
51
PAGENO="0058"
52
Mr. DOLE. May I leave one more thought with you, Mr. Chairman.
I feel this hearing that you have called today on the OCS and what
it means to the United States is very impOrtant, and I want to thank
you for having us put this together so it will be in the public record.
I would like to leave the thought with you at the present time, be-
sides the OCS, and besides furnishing about 12 percent of our oil
production and 10 percent of our gas production as of last year, that
it has brought into the U.S. Treasury-in other words, this is mate-
rial that did not have to be collected through the tax route. It has
been brought into the U.S. Treasury over $7 billion.
So we not only get an economic advantage from the oil and gas that
is brought in to meet our energy needs, but a very substantial sum of
money into the Treasury.
Senator Moss. Thank you very much.
We will be in recess until tomorrow when we will hear from Russell
Train and David Wallace.
(Whereupon, at 12:40 p.m., the hearing was recessed, to reconvene
Friday, March 24, 1972, at 10 a.m.)
PAGENO="0059"
53
APPENDIX
(Under authority previously granted, the following statements and
communications were ordered printed:)*
QUESTIONS AND POUCY ISSUES RELATED TO OVERSIGHT HEARINGS
ON. THE. ADMIN~TRATI N OF THE OUTER CONTINENTAL SHELF
LANDS ACT TO BE HELD BY THE SENATE COMMITTEE ON INTERIOR
AND INSULAR AFFAIRS,~ PURSUANT TO S. RES. 45, MARCH 23, 1972.
The fol1owii~g questions are directed towards
developing historical andbackground information
on the legal and management regime for the
Outer Contine~ital Shelf (OCS) ~s well as signifi-
cant policy issues concerning the OCS. Issues
which are riot covered in this paper are those
relating to OCS Lease Bidding Policy alternatives
and possibilities for revenue sharing with the
States. These issues will be.exarnined in later
hearings.
U. S. DEPARTMENT OF THE INTERIOR
PAGENO="0060"
54
A. THE PRESENT LEGAL REGIME FOR THE OUTER CONTINENTAL
SHELF
Question A.l.
What Federal statutes directly contribute to or constitute the existing
legal regime for the management of the resources of the OCS (including
relevant Executive Orders or other executive branch policy statements
and relevant court decisions)?
Answer:
The rights of the United States in the Outer Continental Shelf are set
in the Geneva Convention on the Continental Shelf (1958). The basic
authority for the management of resources of the Outer Continental
Shelf is the Outer Continental Shelf Lands Act (43 U. S. C. ~ 1331-1343).
In conjunction with this statute, the Submerged Lands Act (43 U. S. C.
li 1301-1315) must be read to determine the extent of the Feder~.l area
of the Continental Shelf. The National Environmental Policy Act of
1969 (42 U. S. C. §~ 4321-4347) also affects the Departments manage-
ment of OCS lands, and section 102(1) requires the Department to
administer and interpret the OCS Act "to the fullest extent possible
in accordance with the policies and provisions of NEPA.
The discharge of oil into the waters of the contiguous zone, which
includes portions of the OCS, is governed by the Water Quality Improve-
ment Act of 1970 (33 U. S. C. ~ 1161-1164).
31 U. S. C. ~ 483a requires the receipt o~ fair market value for the
grant of rights under the OCS Act.
The President's Clean Energy Message of June 4, 1971, is the most
recent Executive branch statement affecting the management of the
OCS. Prior to that is the President's U. S. Oceans' Policy Statement
of May 23, 1970.
Question A.2.
What, in summary form, is the major goal or purpose of each of these
statutes, orders or policy statements (e. g. resource development,
oceanographic research, fish and wildlife protection, pollution control,
etc.)?
Answer:
The basic purpose of the OCS Act is to assure that the natural resource
of the seabed and the subsoil of the Outer Continental Shelf will be su)-
ject to Federal jurisdiction, control, and power of disposition. Pursua
PAGENO="0061"
55
to this general purpose, the OCS Act provides for the disposition of the
mineral resources of the OCS. Particular emphasis is laid on the dis-
position of oil, gas, and sulphur, but provision is made for the dispo-
sition of other minerals.
The purpose of NEPA is to provide a national policy which will encour-
age productive and enjoyable harmony between man and his environ-
ment. Pursuant to NEPA the Department has prepared environmental
impact statements in connection with major Federal actions on the OCS
significantly affecting the quality of the human environment.
The purpose of the Water Quality Improvement Act is to prevent the
* discharge of oil upon or into the navigable waters of the United States,
onto adjoining shorelines, or upon or into the waters of the contiguous
zone.
The purpose of 31 U. S. C. § 483a is to obtain for the United States a fair
return for rights granted.
The President's Clean Ene~gy Message directed the Department to
accelerate the offering of tracts for OCS lease and to prepare a five-
year schedule for lease sales.
Question A. 3.
Which entities within which Federal agencies have been assigned OCS
responsibilities and what formal and informal coordinating relation.'
ships (inter-agency committees, memoranda of understanding, etc.)
exist. among these agencies regarding OCS administration? (Provide
organization chart showing agencies and their links.)
Answer:
The Secretary of the Interior is authorized by section 5 of the OCS
Act (43 U. S. C. § 1334) to administer the provisions of that statute
relating to leasing of the OCS. Within the Department of the Interior
the Bureau of Land Management administers the OCS leasing provi-
sions (43 CFR Part 3300) and the Geological Survey administers the
OCS operating regulations (30 CFR Part 250). The Geological Survey
is also responsible for geological and geophysical exp1oration~ under
section 11 of the OC$ Act (43 U. S. C. § 1340). The Secretary of the
Army has certain responsibilities, exercised through the Corps of
Engineers, for preventing certain obstructions to navigation under
section 4(f) (43 U. S. C. § 1333(f)). The Coast Guard has other respon-
sibilities with respect to navigation under section 4(e). Section 5(e)
authorizes the Secretary of the Interior to grant rights of way for
PAGENO="0062"
56
minerals oz~ the dCS, but provides that determinations as to propor-
tionate amounts to be transported by such pipelines shall be made, with
respect to natural gas, by the Federal Power Commission and, with
respect to oil, by the Interstate Commerce Commission.
Under section ll(c)(2) of the Federal Water Pollution Control Act,
33 U. S. C. ~ 1161, the National Oil and Hazardous Materials Pollution
Contingency Plan has been established to provide coordinated and inte-
grated responses by departments and agencies of the Federal Govern-
ment to pollution spills affecting the contiguous zone and the continental
shelf bottom.
Question A. 4.
What changes in the existing legal regime or Federal organizational
structure for management of the OCS have been proposed or recom-
mended by Federal advisory committees or by the Administration and
what, in summary form, is the purpose of these, recommended changes?
Answer:
The Department has made no recommendations for amendment of the
OCS Act, nor has there been any major organizational change recom-
mended. The Public Land Law Review. Commission Recommendations
No. 72 through 77, inclusively, apply to the OCS. . Three were of par-
ticular importance in respect to this question. Recommendation No. 72
called for consolidation of OCS functions within the Government to the
greatest possible degree. The Commission also recommended coordi-
nation of activities with the States. Recommendation No. 75 called for
amendment of the OCS Act to give the Secretary authority for more
flexibility in the methods of holding competitive sales.
Question A. 5.
What additional changes in the existing legal regime or Federal organi-
zational structure nerit Congressional consideration and review?
Answer:
The Department has no changes in the OCS Act. The Administration
has proposed establishment of a Department of Natural Resources as a
Federal organizational structure.
PAGENO="0063"
57
B. HISTORICAL 1~ATA.
Question:
What is the available s~atistlca1 Information, related to OCS oil, gaé,
sulfur, and salt leasing, drilling production, income and related
information for the period 19534971?
Answer:
Enclosed are 55 tables of statistics related to OCS oil, gas, sulfur,.
and salt leasing, drilling production, income and related information -
for the period 19534971.
1. Geological and Geophysical Exploration
a) Permits Granted by Number, Years, and Areas Covered -
table 1
2. Leasing
a) Lease Sales by Years, States and Products - - tables 2-4
b) Producing and Non-producing Leases by Years and States - -
tables 5-9
3. Development
a) Well Status
i) By Years - - table 10
ii) By. Years, and States - - tables 11-15
b) Well Activity
i) By Years - - table 16
ii) By Year's, and States - - tables 17-20
c) Unit Plans, Number of, by Year's - - table 21
PAGENO="0064"
58
4. Production and Revenue
a) Statistics by Years
i) Oil and Condensate, and Gas Production - - tables 24-27
ii) Revenue and Production Values - - table 22
iii) All Leasable Minerals - Value and Royalty - - table 23
b) Production, Value, and Royalty by Products
i) Oil and Condensate - - table 24
ii) Gas -- table 27
iii) Natural Gasoline and L. P. G. - - table 28
iv) Salt - table 29 S
v) Sulfur - - tabte 30
c) Production, Value and Royalty, by Years, States, and
Produ~~t s
i) California
Oil and Condensate - - tables 31, 33
`Gas -- tables 31, 33
Gasoline and L.P.G. --tables 31, 34.
ii) Louisiana S
Oil and Condensate - - tables 31, 35, 36
Gas - - tables 31, 36
Gasoline and L. P. G. - - tables 31, 37
Salt - - tables 32, 38
Sulfur - tables 31, 37
iii) Texas
Oil and Condensate - - tables 31, 39, 40
Gas - - tables 31, 40
Gasoline and L. P. G. - - tables 31, 41
d) Summary of Bonuses, Minimum Royalties, Rentals, Shut- In
Gas Payments, Royalties, and Total by Years, States and
Products
California - - table 42
Florida - - table 43
Louisiana - - tables 44-47
Oregon - - table 48
Texas - - ta~b1Cs 49, 50
Washington - - table 51
`Total by States - - table 52
PAGENO="0065"
~59
5. Total Offshore and United States Production of Oil and
Condensate, and Gas
a) Total Offshore `State and "Federal OCS" Production
by Years, and States
Oil and Condensate - - table 53
Gas - - table 54
b) Total United States and Outer Continental Shelf Production
of Crude Oil and Condensate, and Gas - table 55
6. What has been the average excess, shut-in or reserve pro-
ducing capacity for oil and gas on the OCS in each year? What
portion of this capacity has resulted from
a) Market demand prorationing?
b) MER prorationing?
c) Lack of pipeline connectIons?
d) Economic factors?
Answer:
The estimated excess productive capacity of OCS oil wells has decreased
as follows:
1/1/69 357, 000 BOPD
1/1/70 348, 000 BOPD
1/1/71 103, 000 BOPD
1/1/72 0
The drop in excess capcity was due to a squeeze between increasing
allowable schedules caused by increased demand and the relatively
static (in the absence of further leasing) potential capacity of the area.
Demand was increasing faster than hydrocarbons were being discovered.
There is essentially no excess capacity in gas pipelines which is the
major limiting factor curtailing gas production.
Whatever excess capacity cushion we enjoyed in the past was due to
market demand prorationing which is closely allied with economic
factorS. Lack of pipeline connections is more important to gas pro-
duction than t~ oil production. Economic factors and lack of pipeline
cOnnections are closely related. Reserves must be large enough to
amortize the cost of a pipeline. The an~ount of uncommitted gas in
the Gulf OCS is insignificant.
77-463 O-72-pt.1-5
PAGENO="0066"
60
7. How much natural gas has been vented or flared on OCS lea~w
in each year? How much (if any) royalty is collecte~1 on this ga
Answer:
No gas well gas is being flared except for brief initial periods in the
testing and cleaning of newly completed wells. The volume of gas well
gas being produced and sold from the OCS is about 6, 815, 725 MCF
(1000 Cu. ft.) per day. The volume of oil well gas being produced is
about 1, 185, 600 MCF per day; of this amount, approximately 601, 550 M
per day is being marketed, 312, 100 MCF per~day is being reinjected for
improved oil recovery or used for lease operations, and 272, 000 MCF
per day is being vented or flared. Thus, about 3.4 percent of all OCS
gas produced is being vented or flared. It is estimated that 20 percent
of the gas now being vented or flared will be recovered upon installation
in 1972 of additional facilities which are required to market the gas.
The percentage of oil well gas being flared in the Gulf of Mexico has
been reduced by more than one-third in the last five years.
The annual amount of gas flared during the years in which these statis -
tics are available is as follows:
1968 95, 873, 748 MCF
1969 81, 649, 932 MCF
1970 75, 846, 960 MCF
1971 79,255, 518 MCF
No royalty is collected on the flared gas. The lessee is required to pa
royalty on the production saved, removed, or sold from the leased area.
Gas used for purposes of production from and operations upon the
leased area or unavoidable lost is not considered to be subject to roy-
alty under the terms of the lease.
8. What volume of petroleum resources have been lost in oil
spills or consumed by accidental fire in connection with OCS
developmental activities? How much, if any, royalty is
collected on these resources?
Answer:
About 300, 000 barrels of oil and 4, 000, 000 MCF (1000 Cu. ft.) have
been spilled in major OCS accidents since 1953. During this period
about 2. 45 billion barrels of oil and condensate and 14. 4 billion MCF
of gas have been produced and sold. Minor nuisance type spills were
contributing an additional estimated 4, 000 barrels per year. This
figure is steadily dropping as better safety equipment is installed and
PAGENO="0067"
61
more stringent anti-pollution measures are enforced. An additional
2, 000, 000 barrels of oil and 3, 000, 000 MCF of gas are estimated to
`have been consumed in accidental fires.
Royalty has been collected on about 200, 000 barrels of the oil spilled
due to part of it being recovered, covered by insurance payments, and
by direct billing for oil lost due to negligent operations.
9. What proportion of OCS lease acreage and petroleum production
has been accounted for by oil "majors", "minors", "independ-
ents", and nan-oil companies (or by another appropriate classi-
fication of enterprises)?
Answer:
A. Groups of majors ` S
35% of acreage 34% of production
B. Individual majors
46% of acreage 63% of production S
C. Groups of independents
17% of acreage 2% of production
D. Individual independent
2% of acreage 1% of production
For comparison with our figures, a list prepared by Merrill, Lynch,
Pierce, Fenner and Smith of the 21 top companies in terms of cash
Income shows that since the start of the OCS leasing program, 88. 6%
of the leased acreage has been acquired by "Majors", 10. 8% by
"Independents" and . 6% by "Others." Investment companies were
classified in the "other" category. The historical participation of
certain companies in the offshore was also taken into account.
PAGENO="0068"
62
10. How many offshore drilling rigs have been
a) Present on or adjacent to the OCS, or
b) Working on the OCS in each past year?
Answer:
Active Drilling Wells - Gulf of Mexico, OCS
January 1972 June 1971 June 1970 June 1969 June 1968
88 83 100 86 108
In addition to the Gulf of Mexico there have been 2 to 5 rigs active on
the OCS in the Santa Barbara Channel over the last few years.
PAGENO="0069"
OUTER CONTINENTAL SHELF
NUMBER OF PERMITS GRANTED FOR
GEOLOGICAL AND/OR GEOPHYSICAL EXPLORATION
YEAR: AlASKA: ATLANTIC:
GULF COAST :PACIFIC:yEARLy:
- : Florida: Louisiana : Mississip~j : Texas: : TOTAL
1963
9
1
2
1
1)43
1
6
181
196k
5
6
2
7
110
1
85
1~4
230
1965
12
2
3
7
155
1
1~4O
21
3)41
1966
11
10
11
*
30
360
6
136
1967
17
5
7
26
301
3
138
27
~9l
1968
27
9
13
26
188
12
95
28
398
1969
1970
30
ko
k
jo
10
13
i6o
13)4
9
5
61
18
5
305
1971
27
*
*
253
178 4~
GRAND TOTAL 1963~~7~
59 139
-
LABLE 1.
PAGENO="0070"
- ~ ~ - - -
$ oss ~ru s
I-' P-3$ I'P~ 1 14U?U P4~4O $ ~
-~ O~,0O$j4 !~ o$-0\ ~ 01L.,!~. 0W1
&. ~ ~ ~ ~ ~
r'~) I\) (~. ~J1 O~ i- 000 I-"-O ¼0 I-~~JP~J1
~.o r~, ¼0 ¼0 ~-ø
`.15 `fl ~J1
ru 0 `.0 ~
~ ~ bb
- a-~ c ~ ~c ~cc ~
- - (5~ ~ *~ - ID
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- U ri
ID ~ID
0.
o ooo 00 00 00 OuO
- - - - ~ - - `~ ~ - ~
- - - I_a I_a I_a I_a ~_a ~~a ~_a l.a I-. ,~ ~
ID ri
R~ R'R~R~ ~ R~R~ ~ R~R. R~
~ ~
ID IDIDID (DID (DID (DID ID ID
k~ I~~L-~ ~ H I
i-ar-., " IDOi it
0 0~ ~ CD - CD~ ~ ~ I~ ~ ~ * ID ~
~ ~ i ri
(D(15
ID~
CD ro i-a i-a I-ar~ `.,4 ~
~j4 0 .1~ `.JJ 0 .I~%J1 0% rU'.0 ~
~ ~ rr-~ 0 C~ U~D ~k_0-4 ~
6 kL~'.o b0 ~ ~ru C
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ii- 101-4 0 ~ 1-1~E' I~) 0 CD 0 l\) CD 0 ro ID ID
$J1 I.flIOD 0-S .0 `-` IO~I0 0 ~ 00 0-S 0 0~
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l~ ~ ~ I hi ~ LI~ `-` - -
0 -
- I~*I~0 1.1. I0\
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10 ICD.o~'~.m~~1 ~ru ru -`I-4'-'~ 0 i~-~ - 1ru1_4 `.0 -j C
1-.I ii-~$--J--J0D jiuru ~.~ru'.o ~ - `.a4OD
i_ar~ ro~ i~f~4 I.o'I_'~ ~ ~
lCD ~ ~ _ - LiS ~ ~qlr~~ ru1c~ o~ 0-i
1-~J .I-aI.0 0 ru 0 ~.a 0 I-a ~ ,,-a ru ru¼j4 0 0.
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CD ~- ~ LI -~ ru `-a ~
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PAGENO="0071"
GUTER CONTINENTAL SHELF LEASE SALES
By Years, States, Products
i~: Adjacent Product 1a~s Acreage First Y~ar
4~2S_64 Louisiana
104-64 Oregon
104-64 Washington
Total 1964
Oil & Gas
Oil & Gas
Oil & Gas
23
74
124
32,673
425,433
155,420
~6l3,526
$ 60,340,626
27,766,772
7,764,928
95,674,326
$ 326,780
1,276,302
466,260
2,069,34~
1244-65 Texas
Sulfur
72,00&
3~,740.~309
216,000
3_29_66 Louisiang
io-is-66 Louisiana
12-15.-66 California
Total 1966
Oil & Gas
Oil & Gas
Oil & Gas
17
24
1
~
3~,056
104,717
1,995
i4i,~6~
ss,s4~,963
99,164,930
2l,l89~p~
209,199,693
350,570
523;600
9,960
s04,i~o
6-13-67 Louisiana
9-5-67 Louisiana
Tqtal 1967
Oil & Gas
Salt
156
1
744,456
2,495
~7~46,951
510,079,176
30,564
510,109,7I~»=
2,233,458
7,465
2.240,943
2-6-66 California
5_21_68. Texas
11-19-68 Louisiana
Total 1968
Oil & Gas
Oil & Gas
Oil & Gas
.
71
110
16
J9j
363,161
541,304
29,662
602,719,262
593,699,046
149,666,769
1,346,467,097
1,089,543
1,623,915
296,820
~,010,276
1_114_69 Louisiana
5-13.69 Louisiana
1246-69 Louisiana
Total 1969
Oil & Gas
Sulfur
ail & Gas
20
4
iG
~
46,5o5
5,625
60,153
114~263
44,037,339
715,150
66,gos i~6
Ill ~
465,o50
16,675
6oi,~~o
1,103,475
7-21-70 LouIsiana
12-15-70 Louisiana
Total 1970
Oil & Gas
Oil & Gas
~
.19
116
._j3~
44,642
566,540
97,769,013
g45,g32,7S5
943,601.796
446,420
~
2,076,114
11-4-'7l Louisiana
Oil & Gas
11
37~,222
96,30k~52
372,230
TABLE 3
PAGENO="0072"
SUI+JARY OF OUTER CONTINENTAL SHELF LEASE SALES
October 13, 195~4 through No~einber 4, 1971
By State By Product
:
:
:
Lease
l0_13_5l~
By State
Sales from
to 11-4-71
: BY Product
: No
: T~eas~ Acreage BOnUS
: ,
First Year
Rental
:
California 129 678,121 $ 636,715,849 $ 2,038,361
Florida 23 132,480 1,711,872 397,440
Louisiana 1,143 4,762,723 3,101,543,840 16,873,459
Oregon 74 425,433 27,768,772 1,276,302
Texas 264 1,099,493 695,723,597 3,298,485
Washington 27 155,420 7,764,928 466~, 260
GRA}ID TOTAL L~.Q 7,25~.670 $h.L7L228~858 g2,&.~350.307
Oil & Gas 1,599 7,146,050 $4,435,434,085 $24,052,447
Salt 2 4,995 105,814 14,985
Sulfur 102,625 35,688,959 282,$75
GRAND TOTAL ~ 7.253,670 $4.471.?28.858 ________
TABLE 4
PAGENO="0073"
OCS LEASE SALE
TYPE OFFERED LEASED TOTAL FIRST AVERAGE HIGHEST
DATE SALE STATE TRACTS ACRES TRACT~KCRES TOTAL B0N1J~ YEAR RENTAL BID PER AC. BID PER AC.
10/13/54 O&G La. 199 748,000 90 394,721 $116,378,476.00 $1,184,175 $ 294.84 $ 1,220.00
10/13/54 Sul. La. 108 523,000 5 25,000 1,233,500.00 50,000 49.34 130.20
11/09/54 0&G Texas 38 111,788 19 67,148 23,357,029.78 201,450 347.84 2,209.00
07/12/55 0&G Texas 39 216,000 27 149,760 8,437,481.60 449,280 56.34 177.00
07/12/55 0&G La. 171 ~58,095 94 252,806 100,091,263.81 758,442 395.92 2,076.80
02/26/59 O&G Fla. 80 458,000 23 132,480 1,711,872.00 397,440 12.92 16.17
08/11/59 O&G La. 38 81,813 19 38,820 88,035,120.37 388,200 2,267.78~ 10,442.08
02/26/60 O&G Texas 97 437,760 48 240,480 35,732,031.20 721,440 148.59 1,026.25
La. 288 1,173,223. 99 464,047 246,909,783.59 1,392,159 532.07 2,501.51
05/19/60 Salt La. 10 22,085 1 2,500 75,250.00 7,500 30.10 30.10
03/13/62 O&G La. 401 1,808,276 206 951,811 177,260,304.75 2,855,433 186.23 3,201.10
03/16/62 O&G Texas 30 90,720 10 28,800 577,719.50 86,400 19.37 26.25
La. 380 1,780,265 195 927,746 267,775,677.06 2,783,238 288.63 3,081.00
10/09/62 O&G La. 19 33,855 9 16,178 43,887,358.72 161,780 2,712.79 8,480.00
05/14/63 O&G Calif. 129 669,777 57 312,976 12,807,586.68 938,838 40.93 454.80
04/28/64 O&G La. 28 34,028 23 32,675 60,340,626.00 326,780 1,846.69 10,490.40
10/01/64 O&G Ore. 149 836,134 74 425,433 27,768,772.24 1,276,302 65.27 376.00
Wash. 47 253,940 27 155,420 7,764,928.40 466,260 49.96 310.05
12/14/65 Sul. Texas 658 947,520 50 72,000 33,740,308.80 216,000 468.61 2,013.00
03/29/66 O&G La. 18 35,993 17 35,056 88,845,963.42 350,570 2,534,43 6,112.20
10/18/66 O&G La. 52 227,898 24 104,717 99,164,930.42 523,600 946.98 3,128.00
12/15/66 O&G Calif. 1 1,995 1 1,995 21,189,000.00 9,980 10,618.49 10,618.49
06/13/67 0&G La. 206 971,489 158 744,456 510,079,177.76 2,233,458 685.17 6,500.00
09/05/67 Salt La. 8 16,995 1 2,495 30,563.75 7,485 12.25 12.25
02/06/68 O&G Calif. 110 540,609 71 363,181 602,719,261.60 1,089,543 1,659.56 11,373.70
05/21/68 O&G Texas 169 728,551 110 541,304 593,899,046.38 1,623,915 1,097.16 7,602.00
11/19/68 0&G La. 26 46,824 16 .29,679 149,868,789.27 296,820 5,049.58 27,400.73
01/14/69 O&G La. 38 96,389 20 48,505 44,037,339.65 485,050 907.90 2,161.00
05/13/69 Sul. La. 120 163,105 4 5,625 715,150.00 16,875 127.14 214.93
12/16/69 O&G La. 27 93,764 16 60,153 66,908,195.60 601,550 1,112.29 6,600.00
07/21/70 O&G La. 34 73,360 19 44,642 97,769,013.00 446,420 2,190.06 8,:. 1.OC
12/15/70 O&G La. 127 593,485 116 543,898 845,832,785.00 1,631,694 1,555.13 12,875.00
11/04/71 0&G La. 18 55,872 IL 37,222 96,304,522.50 372,230 2,587.29 18,00~..76
TOTALS 3,863 14,330,607 1,660 7,253,729 4,471,248,808.85 24,350,307
TABLE 4a
PAGENO="0074"
OUTER CONTINENTAL SHELF - - -
PRODUCING AND NON-PRODUCING LEASES (OIL, GAS, SALT AND SULFUR)
UNDER SUP~VISION AS OF DECEMBER 31, (195)4-1970)
:YEAR PRODUCING NON-PRODUCING - : TOTAL
: ADJACENT STATE : NUMBER ACREAGE : NUMBER ACREAGE NUMBER ACREAGE~I
i~
Louisiana
Louisiana-Sulfur
Texas
1~
Louisiana
58
-
2)40,028
-
295
5
120
~420
1,066,739
25,000
196,926
1,288,665
353
5
120
)47~~~
1,306,767
25,000
196,926
1,528,93
58
2~40,028
102
)432,316
356
1,567,1)47
25,000
~458
5
1,999,)463
25,000
Louisiana-Sulfur
Texas
.
i~5~
Louisiana
-
)4
io6
-
5.760
~438,076
1~44
505
3)46,~o9
1,938,656
~
i~48
6ii
352,269
2,376,73?
167
668,1416
265
5
8)42,1143
25,000
1432
5
1,510,559
25,000
Louisiana-Sulfur
Texas
i~
Louisiana
Louisiana-Sulfur
Texas
I9~
Louisiana
Louisiana-Sulfur
Texas
-
14_
jjj~~
210
-
213
226
-
11
-
5,760
67)4,176
121
39'
31)4,019
1,181,162
125
562
3l947~9
1,855,338
771,2)46
-
)4,320
775,566
176
5
27
208
587,552
25,000
97.389
709,9)41
386
5
30
1421
1,358,798
25,000
101,709
l,1485~~5Q7
.
959,1195
-
10,080
136
5
21
162
1453,593
21,995
75,789~_
362
5
25
392
1,1413,088
21,995
89.$69
1,520,952
TABLE 5
PAGENO="0075"
OUTER CONTINENTAL SHELF
PRODUCING AND NON-PRODUCING tEASES (OIL, GAS, SALT AND SULFUR)
UNDER SUPERVISION AS OF DECEMBER 31, (19511_ 1970)
:
:
PRODUCING -
NON-PRODUCING
:
TOTAL
:
ADJACENT STATE : NUMBER
ACREAGE
: NUMBER : ACREAGE
: NUMRER : ACREAGE.
259 1,079,620
23 132,1480
85 209,983
5 22,000
U I B
117 38.14
3)2 132,1480
1,289,~603
5 22,000
-U-
7,8q
Florida
Louisiana
Louisiana-Sulfur
Texas
Florida
Louisiana
Louisiana-Salt
Loutsiana~Sulfur
Texas
Florida
Louisiana
Lout siana-Sa It
Louisiana-Sulfur
Texas
13~
California-Phosphate
Florida
Louisiana
Lout siana-Salt
Louisiana-Sulfur
Texas
2?
1,102,660
-
285
1.
-
1,1)41,959
2,500
-
23,0140
,
23
9)4
-
5
~4S
132,1LSO
1428,361
-
22,000
23
379
1
5
132,1480
1,570,320
2,500
22,000
299
1,167,1499
170
2140,1480
823,321
61
146g
263,520
l,990,~?p
29)4
1
5
-
1,189, l~46
2,500
6,953
30,2~40
23
85
-
-
140
.
132,1480
366,967
-
-
23
379
1
5
132,1480
1,556,113
2,500
6,9~3
315
1,228,839
l~48
205,920
705,367
55~
1463
236,160
-
311
1
5
-
-
1,261,262
2,500
6,953
30,2)40
6
11
1475
-
-
30,2140
63,360
2,177,985
-
-
6
11
786
1
5
1,9314,206
30,21&0
63,360
3,1439,2147
2,500
~
l~
332
1,300,955
526
152,6140
2,142II,22~
149
858
182,880
3,725,180
TABLE 6
PAGENO="0076"
OUTER CONTINENTAL SHELF
PRODUCING AND NON-PRODUCING LEASES (oIL, GAS, SALT AND SULFUR)
UNDER SUPERVISION AS OF DECEMBER 31, (19514_1970)
PRODUCING
ADJACENT STATE : NUMBER : ACREAGE
: NON-PRODUCING
: NUMBER ACREAGE
: TOTAL
: NUMBER : ACREAGE
-
3142
-
1,381,8714
57
)4141
2,O30,0~43
57
783
1
3,1411,917
2,500
1
5
j~
~
2,500
6,953
)4o,~oo
1j4ug27
-
-
.~j.
~2~4
-
-
115.201L
2,1458,188
5
jj1.
887
6,953
15~~700
Cal if ornia
Louisiana
Louisiana-Salt
Louisiana-Sulfur
Texas
California
Louisiana
Louisiana-Salt
Louisiana-Sulfur
Oregon
Texas
Washington
i~6s
California
Louisiana
Louisiana-Salt
Louisiana-Sulfur
Oregon
Texas
Washington
357
1,1463,1149
5)4
1422
295,665
1,870,55~#
514
779
1
295,665
3,333,703
2,500
1
5
-
12
~
2,500
6,953
~
31,860
-
-
-
7)4
29
27
-
-
1425,1433
123,8)40
155,1420
5
7)4
141
27
6,953
1425,1433
155,700
155,1420
14,375,3714
375~ ~
1,5014,1462
6o6
~~,~7p~j12
981
-
14o6
-
1,632,5)4~4
50
335
272,625
1,1487,335
50
7)41
1
272,625
3,119,879
2,500
1
5
-
13
-
)4»=~
2,500
6,953
-
37,620
-
1,679,617
-
-
7)4
26
27
512
-
-
1425,1433
109,14)40
155.1420
2,1450,253
5
714
39
27
937
.
6,953
1425,1433
1)47,060
155,1420
)4,l2q,8JQ
TABLE 7
PAGENO="0077"
OUTER CONTINENTAL SHELF
PRODUCING AND NON-PRODUCING LEASES (OIL, GAS~ SALT AND SULFUR)
UNDER SUPERVISION AS OF DECEMBER 31, (195)4-1970)
:YEAR
Afl1A~ENT STATE
PRODUCING
2 NUMBER 2 ACREAGE
NON-PRODUCING
2 NUMBER : ACREAGE
TOTAL
NUMBER : ACREAGE
California
Louisiana
Louisiana-Salt
Louisiana-Sulfur
Oregon
Texas
Texas-Sulfur
Washington
California'
Louisiana
Louisiana-Salt
Louisiana-Sulfur
Oregon
Texas
Texas-Sulfur
Washington
California
Louisiana
Louisiana-Salt
Louisiana-Sulfur
Oregon,
Texas
Texas-Sulfur
Washington
- - 35 186,225 35 186,225
1469 1,917,276 303 1,307,869 772 3,225,1)45
2,500 - - 1 2,500
5 ` 6,953 . - . - 5 , 6,95~
- Go 3)4)4,793 6o . 3)414,793
13 37,800 26 109,260 39 1)47,060
- - 141 59,0)40 141 59,0140
- - 21 120,960 21 120,960
1488 1,96)4,529 1486 2,128,1)47 9714 14,092,676
- - 3 13,515 3 13,515
506 2,038,821 293 1,303,928 799 3,3)42,7)49
1 2,500 1 2,1495 .2 14,995
6,953 - - 5 6,953
- - 8 145,825 8 145,825
13 37,800 16 87,660 29 125,1460
- - 314 148,960 314 148,960
- - . 3 17,280 3 17,280
525 2,086,07)4 358 1,519,663 883 3,605,737
3 13,156 69 ` 352,021 ` 72 365,177
518 2,119,651 276 1,182,081 7914 3,301,732
2 14,995 - - 2' 14,995
5 6,9~ ` - - 5 6,953
- - 2 11,520 2 11,520
10 11,1430 125 622,3014 135 633,7314
- - 10 i14,ltoo 10 i14,14oo
- - 3 17.278 3
538 2,156,185 14s~ 2,199,6014 1,023 14,355,789
TABLE 8
PAGENO="0078"
OUTER CONTINENTAL SHELF
PRODUCING AND NON-PRODUCING LEASES (oIL, GAS, SALT AND SULFUR)
UNDER SUPERVISION AS OF DECEMBER 31, (195)4-1971)
;
:
YEAR
ADJACENT STATE
: PRODUCING
NUMBER : ACREAGE
: NON-PRODUCING
: NUMBER : ACREAGE
TOTAL
: NUMBER ACREAGE
7
531
2
30,300
2,152,560
14,995
6~
265
~
33)4,576
1,106)437
-
72
796
2
365,176
3,259,297
14,995
.
5
23
-
6,953
53)430
-
14
113
.6
*5,625
5)49,1311
s,611o
9
136
6
12,575
632,56)4
s ,614o
California
Louisiana
Loui sian.a-Salt
Louisiana-Sulfur
Texas
Texas-Sulfur
California
Louisiana
Louisiana-Salt
Louisiana-Sulfur
Texas
Texas-Sulfur
1971
California
Louisiana
Louisiana-Salt
Louisiana-Sulfur.
Texas
10
557
2
5
3)4
-
142,256
2,329,365
14,995
6,953
1)46,3)40
-
6o
25)4
-
14
90
1
312,9S3
999,393
-
5,625
1431,32)4
1,11.140
70
511
?
9
12)4
1
.
355,239
3,325,755
14,995
12,57S
577,66)4
1,1l~-10
6og
2,5?9.,329
)4og
1,750,765 1,017
12
53,776
58
301,463
70
355,239
596
2,497,933
303
1,248,742
899
3,746,675
2
4,995
-
-
2
4,995.
5
6,953
4
5,625 .
9
12,578
~34
146,340
69
336,464
103
482,~04
6h9
2.709.997 .
I~3L
1.892.29b
1.083
h.602.291
TABLE 9
PAGENO="0079"
73
- U) ~ - tt\~(- 4)0.4)0 `.4 0 z(- `0 0t ~\4)i) (~ tO
CU `-4 4)0 Lc\0\¼0 4-~tO (~ ~LPtS LC\t0 0 4)0 N- 0'~cy\
(ft I I I (`~l t `-0 0 P'~t `-4 N-~t C'J 0 0 N- N- ft LC\~ C~
E43
`-4
~ -~ C's ~(- trs - (ft 0-'4)O .~* (`.4'.0 c\i Lr~ - ~~`s ((1
- t~-1 $ I 0 N-tO 04)04)04)0 -40 Cu N-N N- ~ O~ . N-
`-`4 `-4 `-4 `-4 `.4 Cu (`.4 4)4~\ C".
(`1 Cu0~t.,-i
`-`4~"4 I I I I I I I I I I I-I I 10 IO'.Q'.p~'.,c~
.~ 1-I U) 1-1 - - ,~ ~- ~- ~ ~ ~`.
1. 0 ~`. 0 `-4 I-d C'- `-.0 -
140(l) $IIII$$I$III$$NIr~)'.,.,t.~~'-4' `-0
(1)4-40- p-i
(0CC
-. `4 0 - 0 0'.N-4)0 (ft.-' 14'.r-,-4 - `\C'.4)0 O'.r4-~tO ~I (1)
0) CI * I - Nt (ft 4)0 O'.4)0 Cu 4)0 0'. 4)". 4)". r~sg'. `-4 0 C'j `.0 C". N-
*~~* I I I `-4 Cu P'strs N.-.~ 0'.~t 0 t~0 cu N-,:j- Cu o N~'O `-4
~4 "4~ ~` N~ -~ (ft'0 N- N-4)0 0'
N' - -~
~ 4)0 LC'sCu 0\~t~ C'.O'.U's(\i N'.4)O C'J~ N-b0 toLrs('~ "4
Cu I I ~
:~ ~..
.0 ~ L('.~ -4 r".O LC's'.0 C'. frt~ Cu N- N- 0'tN 0 Cu (~\
- ~ -4 I I IN~b0JCu0~~4)0~ 00
N
- N-
00'. Cu "4 ~ Ce'. 0 0 N\,N- N-~.0 0 0 0 O~- ~ (1)
o `~ I I I I Cu Al C". P'tN- N- `-4 -~ C". 0'.'-i "4~-0 N-~ 4)0 N- N-
Ct~ - Cu Cu Ce'. r".~1- (f\t0 4)0 0 Cu ~`.
~ ~.. ~`.~-`--
~ `4 .4 0 N- (ft 0 N-~ 4)0 N'. C". N- 004)0000 C". Wtj~- ~
N- LC\-4 0'. C".b0 4)0 t'\4)0 4)0 C". 04)00000 00 ~O4)o 0
0 -N'. I I I `.4 `.4 F".~f 4)0 `.4 ~ N Cu N- 0 1)'. 0 -~f 0'.(ft C'- (I
- - `-4 `.4 -4 Cu Cu -rf'.C'\~ .4C ~j- ~ .
0
U) ~ . - 1W_p-I
`4 $ ~ 0 0 0'. N- 00 (1'. `-4- r".N- `-4 -4 4)". N\LCtClJ 4)0 Cu 0'. (0 "4 0
`-~ E ~ `.1 ~sU'. 00 C'.t~0 Cu 4)0 0'. C". .4 F". 04)0 L(\L(\~-~,.4
*:I- I I $CuN-~0'.~fO4)0N-r~'.N-Cur~-,'.N
`-4 `-4 Cu C". F't~ ~- `.C"..~ ~`.
~ I,- N- -4 `-4 F".Q'. N- 0 C". `-4 C't4)c'. Cu ~) ~
-"4 °~1 I I I I I I I `-4 Cu C".Lr\ 0-s 0 C". CVtO I I I CsJ ,-l 44'. I-i .~
`-4'-4'.ICJ `.`.-~.i
U) 14 ~ ~ -C-- ,-44)0 `-4 (C's 0-4)0 ~ `0 Cu C".0sCu (ft $-CtC'-$~~ 0'
Z 0 `Cu I I 1 Cu ~,-r-.-¼O C".~t (C'. L(-t ((`.4)0 N- N -000'. ~ (0 `0 8
.-4('i C'\~-- Lrs4)0 N-tO C'. 0 `-4 cu C'\~C ((`.4)0 N-N o'..0 -
tC\LCtL(t1ftLCt4t'.Ut4ftlftt(\t0¼0tO4)O4)Q4)0t.~t~tj~>'0 N- C'- ---,. ..
C-s0't0'.0-s0't0-s0~s 0-tO's O\0-tCtO O'.0'.0'sO-~g-~ at Ufl
-4'.s - p'4'.$ `. - `.4 - -. - ~4 - - `.4 `.4 - - - p-I `.4
PAGENO="0080"
WELL STATUS
OUTER (X)NTINENTAL SHELF
Produ
cible Z
or~es
: All :
:
Year, :
State :
:
: :
New Wells Wells : : : Total : Serv.
Drilli~g~ : Coin- : Active : Shut-tn : Act.& : Inp.-
Act. :Susp~ : pletedt~Oil : Gas : Oil : Gas : Shut-In: Disp.
: Other :
: Wells :
: not P&A:
Wells
P & A
;
Total
:)4ells. L
~9_~
Louisiana
Texas
26 -
1 -
-
130 50 20
- - -
130 50 20
15 )45
- -
15 )45
130
-
130
-
-
-
..
~~_-
-
103
1
lO~
259
2
~
i~
Louisiana
Texas
35 -
-
-
235 117 29
- -
239 117 29
30 59
1 3
31 62
235
~4
239
-
-
-
-
~
-
170
5
175
111~3
12
~~55
i~
LouIsiana
Texas
75 -
1 -
76 -
353 19~4 32
)4 1 -
357 195 32
)41$~ 56
- 3
)4~ 59
353
~
357
-
-
-
-
-
-
2I~2
19
261
670
2~4
6g~
i~5I
Louisiana
Texas
6i U'
- -
6f 17
555 330 31
3 - -
555 330 31
53 1~4l
- 3
53 I~4~
555
~
555
-
-
-
-
-
-
.
351
21
)402
1,01l~4
2~4
i,o6s
1,310
26
1,3~
i~
Louisiana
Texas
31~ 21
I -
~~21
~40 31
- -
T~F~
791 ~57 7~4
- -
795 ~ 71~
50 150
-
50 15~4
791
1~
795
-
-
-
-
46)~
21
)455
i~
Louisiana
Texas
1,)455 S6~4 173
6 - -
~6i s6'~ 173
2~414 I71~
1 5
2)45 179
1,~55
6
- i,)46i
-
-
~
- 514~ 2,071
- 2~
- 56C~?~1Oi
PAGENO="0081"
0
WELL STATUS
OUTER CONTINENTAL SHELF
Florida 1 - - - -
Louisiana 55 53 1,916 1,138 210
Texas 2 - 7
Florida - - - - -
Louisiana 51~ 99 2,)456 l,)463 2~40
Texas - - 11 - -
Florida - - - - -
Louisiana ~6 107 3,079 1,863 333
Texas - 12 - -
56 107 3,091 1,863 333
.i9~
California 1 - - - -
Florida - - - - -
Louisiana 6o 130 3,617 2,235 397
Texas 1 - 1~4 2 -
62 130 3,631 2.237 397
511 372 3,079 -
_2 10 12 -
513 382 3,091 -
583 ~402 3,617 :
1 11 1~4 -
58)4 4l~ ~ -
- 3 3
- 955 )4,197
-
- 1,002 ~,2~jG
- 1 2
- 3 3
- 1,175 )4,982
- 1)7 62
- 1.226 ~
Producible Zones : All
Year, : New Wells : Wells : : : Total : Serv. : Other
State : Drilling : Corn- : Active : Shut-tn : Act.& : Inp. - : Wells : Wells : Total
Act. :Susp'd : pleted: Oil : Gas : Oil : Gas : Shut-In: Di~p. : not PM: P & A Wells
32)4 2L~L 1,916 :
2 ~ 7
5~. 53 1,9~23 1,138 210 326 2)49 1,923 - - 686 2,720
- 1 2
- 657 2,631
2~
)427 326 2)456
_________________________________ 2 9 - 11
54 99 2,Ub7 ~9~b~3 240 1)29 335 2)467
- - 3 3
- - 771 3,330
- - 1)o 51
- - 811) 3,)43L)
TABLE 12
PAGENO="0082"
WELL STATUS
OUTER WNTINENTAL SHELF
Producible Zones : All
Year, New Wells : Wells : : : Total : Serv. : Other
State Drilling : Corn- Active : Shut-In : Act.& : Inp.- : Wells .Wells : Total
Ac~.:Susp'd pleted: Oil : Gas : Oil : Gas : Shut-In: Dlsp. : notP&A: P & A : Wells
California 2 - - - -
Florida - - - - -
Louisiana 70 193 4,281 2,708 ~417
Texas 1 - 32 -
7~ 1Q~ JLI~ 2708 )417
- - - - - 8 10
615 )46i )4,201 80 102 1,302 5,9)48
_1 25 32 - - 92
622 )486 LL2~ 80 102 1.~72 6.o~
California - - - - -
Florida - - - - -
Louisiana 87 2~4l )4,69]4 3,067 5i6
Oregon 1 1. - - -
Texas' 1 19 39 1 -
89 261 1~,733 3,068 516
6~i 430 )4,69)4 :
6 32
687 )462 )4,733 -
- 15 15 .~
- 3 3
- 1,597 6,619
- 3 5
- 6i 126
- 1,685 6,768
California I - - - -
Florida - - - - -
Louisiana 80 - 3,25)4 3,580 630
Oregon - - - - -
Texas 1 - 51 8 30
Washington - - - - -
82 - 3.30~ 3.588 66o
- - - - - 16 17
- - - - - 3 3
7)4)4 )4~)4 5,)428 35 )427 1,773 5,53~
- - - - - 7 7
3 30 71 - 17 70 139
- - - - - 2 2
7)47 ~o)4 5,)499 35 )4)4)4 1,871 5,702
TABLE 13
PAGENO="0083"
WELL STATUS
OUThR ~NTINENTAL SHELF
-~ : Producible Zones All
Year, : New Wells : Wells : : : Total : Serv. : Other
State : Dr111i~g_ Corn-. : lye : Shut-In : Act.& : Inp.-. : Wells : Wells : Total
Act.:Susp~~d : pleted: Oil : Cas : 011 :Gas : Shut-In: Djs~. : not P&A: P &k: Wells:
California - - - - - - - - - 26 26
Florida - - - - - - - - - - 3 3
Louisiana 93 - 3,681 1~,053 789 756 499 6,097 6o ~493 2,111 6,378
Oregon - - - - - - - - - - 8 8
Texas 2 - 81 27 81 3 8 119 - 3 81 167
Washington - - - - - - - - - )4
-. 3,7~2 ~4,080 $70 759 507 6~2l6 6o 1~g6 2,233 6~6
19~
California 9 - 26 2~4 - 2 - 26 - ~4 51 90
Florida - - - - - - - - - - 3 3
Louisiana 117 - )4,11~7 ~4,1~28 956 903 569 6,856 91 576 2)425 7,265
Oregon - - - - - - - - - - 8 8
Texas 7 - 85 31 814 3 9 127 - 12 101 205
Washington - - - .- - - - - -
131. - 14,258 14,1483 1,0140 908 578 7,009 91 `592 2,592
~a1ifornla 6 7 914 77 *- 17 -. 914 - 14 71 182
Florida - - - - - - - - -
Louisiana 92 120 14,567 14,875 1,189 86o 569 7,1493 117 570 2,68~ 8,O2~
Oregon - - - - - - - - - - 8 8
Texas 5 2 91 33 91 3 9 136 - 16 1~ 26
Wathington - - - - - - - - - -
1Q3~ 129 14,752 ~ 1,280 880 578 7.723 117 590 2,91C ~~i~~:93
TABLE 14
PAGENO="0084"
WELL STATUS
OUTER CONTINENTAL SHELF
Producible Zones : All
Year, New Wells : Wells : : Total : Serv. : Otha- Wells Total
State : Drilling : Corn-. : Active : Shut-In Act.& : Inp.- : Wells
:~ & A Wells
Act. Susp'd : pleted : Oil Gas : Oil Gas : Shut-In : Disp, : not P&A
~91~
California 5 9 * 162, 11~9 - 1k - 163 - 5 77 255
Florida - - - - - - - - 3
3
Louisiana 100 102 5,099 5,3&4 l,~4S3 S61 629 5,357 I6~4 510 3,006 S,817
Oregon - - - - - - - - - -
Texas 1 95 32 91 7 16 l~-~6 - 19 150 302
Washington - - - - - - - - - -
106 115 ~ ~ l,57~ 552 61~~ s,666 l6~4 531~ 3,273 9,3~2
California 1 13 188 182 - 11 - 193 1 5 88 295
Florida - - - - - - - - - - 3 3
Louisiana 81 131 5,429 5,495 1,771 935 588 8,789 216 526 3,429 9,596
Oregon - - - - - - - - - - 8 8
Texas 7 8 101 27 101 7 14 149 - 20 192 328
Washington - - - - - - - - - - 4 4
89 152 5,718 5.7OL 1.872 953 602 9.131 217 551 3.72I~ lO.23L
TABLE 15
PAGENO="0085"
79
W ~) 0) OJ LC\N- 0~¼0 C\J `~0 :j~ u-~ 0 NI 0 ~- 0~ O~ `.0
0) ~ .J bO 0 Cd N- 0 `-4 ~ .-4 ~- 0~W Lrs~f .:)-
.rl
0140 ~
0 `0
14 5,0
0)00
NI
* COO
0~'4O lIllIllIll ,F~'~N 0)0)
NI,0
NI
C `041
CO.-)
0
~I
C1 C'.) `-I NI 00 C'.) W~ 0 LC\C'.i .~ 14\C'J `.0 LC~&0 0 `.0 0
0 t4\CoJ 1S\.~ 0' Cd F'\0~ 0 0'..~)- 00.0 C~J0.0 ~ o~ 0
N1 `~`-` ~ ~ ~ C'.J ~
l0)
-I `-I
to C)
I-4~ ,j~
01 NI F~".0~.00 F44V# C') N\ N- NI N-to 00 L(\ 0 0 ,-4 `i. a'
NI tCt 0t F'~ N-'.0 F~'. Ps". C') 0 1"SC'.J Ift L1-. csj to 0)
P.. 0 NINI.-4F4~N~~_ WU)\LD~0.0 (4\ U)
* NIb)
0) C
to `50
41
0 0~
LC'. 0 P~\ N- L(\ 0 tACt) 0~.0.O Ct) N-LAO `.0 LA LA C
(7tC'J N-CL) ,~ ~ ~ C') ~4 tr~, p'~ p(\ 00 NI
LALr~..o))-.t)- r4-~,~-.~'0.0 ~ NI
NI NI C') CL)
(I),')
0 NI5)
tO
`0
`55) NI
U `-~ 4) lftbO 0 C'.) .4) 00 N\.-4 P4tN-b0 a" F4~b0 LA p"O ,-.
(U - 1. 4) PAt'.) 0 F- 00.0 LA PAbO 00)0.0 0. ~t) 0 -~ 1.
NI
Z (U (5 `-4 C'.) PA FACt) .t .~ .~J tt').0 00 00 00 0'. O'tO'. 0) 4) .~ ~
U) >
NI00
4-IC 14
~il
.-INI 5)
NI tONI
14
(5
(U .4)' LA'.0 N-to 0'. 0 NI Cs) FA4) LC\'.0 N-to 0'. 0 ~
1~ LA LA LA LALALC\'.00.0 `.0 `.00.0 `.00.00.0 ~ ~
0'. 0'. 0'. 0'.0\0'. 0's 0'. 0'. 0'. 0'. C's 0'.
.-4 NI .-* NI NI NI.-) NI NI NI NI NI NI NI NI NI NI ,-4
PAGENO="0086"
Louisiana
Lousiana
Texas
Louisiana
Texas
Louisiana
Texas
Loul siana
Texas
Louisiana
Texas
WELL ACTIVITY
OUTER (DNTINENTAL SHELF
,~,
ear,
-
:
:
:
New : Well : ~~4ucible
Wells Comple- : :
Started:tiois : 1 :
Zorj~
Completion~ Dry Holes,
: Service Failures,
~
Gas
5 3 2 -
2
1)45 89 58 31 -
)4)4
3 -- 1 L~~- --
~~~~_____ 9!)_ 59 31
220 120 98 22 -
80
l0 3~ - 3.~_ -
J
i?L___9__1~._.......
313 176 133 -
87
99
9 1 1 -
10
303 225 174 51 -
109
125
1 - - - -
1
22-5 17)4 51 -
126
71
276 208 162 )46 -
2 2 2
1
278~_____ -
72
TABLE 17
PAGENO="0087"
WELL ACTIVITY
OUTER CONTINENTAL SHELF
:
:
.
r New
ea : Wells
State
:
:
:
Well
Comple-
Ti~t~__:
~pduc
ible Zone Com~l~ions : Dry Holes,
Service Failures,
: Gas np. -Disp. Abdoned
:
:
OIL
398
~423 331 92
2 2 -
~42s g2
103
2
Florida
Loui siana
Texas
Florida
Louisiana
Texas
12~
Florida
Louisiana
Texas
1963
Louisiana
Texas
California
Louisiana
Texas
I
-
-
- - I
41~l~
16
I~6i
1
337
L
337
l2~ - 102
1 -_~ ii
125 - lll~
1~i
1~6~
.1
-
-
- - 1
)4]4)4
8 -
~3.
535
1~
539
~409
~409
126 - 126
l~ -
130 135
536
516
~42l
95 - 208
I
-_ -
2
537
516 : I~21
-
-
8
-
-
- - 6
653
59)4
50~4
87 3 221
~21
~18
15
686
-
612
-
~O7
102 ~3 2)41
TABLE 18
PAGENO="0088"
California
Louisiana
Oregon
Texas
Washington
California
Louisiana
Oregon
Texas
Washington
Cal if ornia
Louisiana
Texas
WELL ACTIVITY
OUTER CONTINENTAL SHELF
:
:
L~
Year
State
:
:
New
Wells
Started
:
:
:
Well
Couple-
~iqns
:
:
:
Producible Zone CgTnpletiQ~ls_
: : Service
:
Failures,
Abandonei
:
Q11_L__cas
:
Lop. ~
i9~
Cal if ornia
Louisiana
Oregon
Texas
7S5
soq
10
~
5~7
~l
538
~7
2
800
2
17
2
7
273
3
2Qfl
1~00 521~ 118 _2
15 25 -
)4ji~
13
2
S23
1U5
528
2
9
828
1
-
339
-
-
1i~4~
-
-
96
-
9
-
10
335
1
28
2_
11
.
11
-
6
-
-
-
11
2
-
350
)455
102
9
35_~
6~
26
~406
26
520
-
162
-
7
2~
301~
893
38
)4
iv~6
~4
~o
1~
166
7
20
3k9
TABLE 19
PAGENO="0089"
WELL ACTIVITY
OUTER CONTINENTAL SHELF
Year New : Well : Producible zone Completions : Dry Holes,
Wells : Comple-. : : : Service Failures
State
Started : tions : Oil : Gas : Inp.-DiSD. Abandnn~d
97
76~4
62
q2~
72.
35~
`S
California
Louisiana
Texas
i9J-Q
California
Louisiana
Texas
California
Louisiana
Texas
72
uS
7
-~ ~~35 520 125 5
5.
25
362
77
7SS
~15
70
525
70
607
-
260
-
13
32
900
605
6~i
6
266
-
i~
21~
35
780
26
28
375
4
.
36
357
-
236
1
6
15
522
~.
L07
-
393
4
2h0
-
7
15
TABLE 20
PAGENO="0090"
84
to 0\ 0' 00 ~(\ F~~\ ~ ~c, v trvto tr~ -t ~
N-C~0'00LC)LC)C'J 0~Ob0 ~
- I~\t0 `40 N7\C\~ to LC\Z~ `4 C) 0) s-I I~)LC\ - `-4
-~ s-I F'\LC\t0 `40 `40 0 N\C~J 0~to `-4 ~.0 0 to to
`~Is-I ~Oz1~ r-'-b'-O N-to 0C~JC\J I() `4)
F~) F') N~ ~0 0)0000 0' 0'
s-I s-I .-I s-I
~4 `-4 to F~\4~O w~U)LC\t.Q s-I `40 r')N-0b0 N)to U)
-~r--o-~G' a'
In
1J
U)
0 O)s-4 N- 0 F') 00 (\j~z)- ~O ~
Z Lr) 0) 0~ `-i) N-to 0 `40 ~t) C) tO
I to I -~ LI) 0 I I to I to `40 `40 0 ~) ~ N:
`40 to to LI) `-I N- `-4 ~* s-I C)) N
F') to LI)F') to LI)to 0 N- to `40
.~I v-4 II) CO
N- 111
-~ *a-~ s-I
i~a `-4 05
~ NI s-I ,~` s- F'"-I F') to -f
C_0 I-I I -s-I
-4~za-s ~Z 0
144
0
1~1~ `s's (0
~ CLI N- 0 0 s-I 0 0 zt F')'-0 to f~)O) F') ~0 `0
C) Z N- N- 0000 N-~ IC) N- 00 F-'4O ~O C~ -s-s
0~D~ w LC)~t00 lC~J4N-s-4N-'40to0s-4 0\ 4-)
`~ tf L()to ~ 11)1)) to ~f `40 N-s-I 0) 0)'4O -~f 0'
0) `-4 F")C)J 0 s-4 to 0)0)s-I N-to ~j 0) N 1
s-~ - -~
* `-I to s-I~ s-I s-I LI)N-'~0 N- `)0'sU) N- to
(1) `-4 I I s-I torI s-I (0
0 `s-I
`40N-'4O0)0P-4toF').~FLC)'.ON-b0~'0s-I ~ C)
~ N-N oN
0)0)0)0)0)0)0)0)0)0)0)0)0)0)0)0' `410'
,s-4s-4s-s-4s-4s-Is-4s-4s-4s-Is-Is-Is-I ~s-4
(-4
(01
PAGENO="0091"
85
*-~ ~O t7 0 ( N- (~ Nt 0 7; (7' 7 ~
~ : :~
-
0.
~ ~=~!J ;
~
4, 0)
g;o
(0 0).~_
~ ~ o~cc
4, ~ ill
~ E ~
~ 00
~ :
- (`\0~ t\C(J C)) ~C~((0 00 O~00~Q (0 0000 0) C- ~
i.i. ~ : I ~
~
4,
C'
4, ~
(C)
$0 (C
.~$
PAGENO="0092"
OIL AND GAS OPERATIONS
ALL PRODUCTS OUTER CONTINENTAL SHELF
1953
1954
1955
1 956
1957
~958
1959
1960
1961
1962
1963
1964
1°65
1966
1967
1 968
1969
1970
1971
THROUGH
1971
* 5,036,861
14,37" ,!~98
27,060,679
39,497,871
61,072,588
96,471,136
150,472, 527
2"t' ,969,615
273,636,456
376 ,675 ,90~
450,866,484
506 ,783,51~
594,222,732
801,721L,611
947, 214, 6Q1
1,1 79,912,209
1,443, 870,472
1,7~'7 ,593
2,135,677,078
11, 013 , 128, 968
967,B~2
2,748,977
5,140,006
7,629,383
ii ,391 ,245
17,423,878
26,539,977
37,~95, 301
47,920,332
66,096,334
76,999,225
88,400,230
102,862 ,540
136,987,537
1 57,607,609
201,136, 931
240 ,0$~) ,666
283,494,568
350,042,488
1,860,575,119
: YEAR
:
PRODUCTION
:
ROYALTY
:
:
:
VALUE(S)
:
VALUE(S)
:
TABLE 23
PAGENO="0093"
87
`.4bQ.~ It~N-U) 0%'.4 ~O-~ `.4t('.C~J--,t U\
.~ c~~o ao ~o N- u~u~ LC\ - U) o~ N-Ø~ Lc~OC'J~ c~l
UbO~OC%J'~OLC\~O N
~\N~LC\Lt\O .4 `-4 ON~a~ .-i
- ,~ (SJ. OJ C\J - C~J N- L(\ 0 I'\~ 00 ()~ P'~\N-~J ~\
N- 00 L(\ C\J `4 (\j `.4 C~J L~ CSJ ~D N- F'\ QC'J Q C~l to
C'xi -~ `~O 0 LC~ . O~N-'-' O~ U) 0 l'~'.4 U)U) t-C'\ N
- `.4 C~J C'J ~\LC\L(~O bOO C~j.~N-QIA a'
`4
o o U) `-4 Lf~i t4\ `.4 l\~..O LC\~t _~J- U\bO U) i(v-.O N
xi r'\.t `-4 LC~ O~'.0 N-~.0 0 LC. a' r~'C%J 1r\~~Q~f (\j r4 ~0
~ 0 LC\ `-4 `.0 bO `-4 `-4 P'\ F'~bO U) N-.xi bO 0 U) 0 tO LC'~O' `-4
U 0 `.0 to to .~ N- O\j- CU N- 1c\ a' LC\bO a'O 0 `.-iO C)
lxi 0 - a' N-~i- 0 `.0 N\'.0 r~ N- CU `.0 `-` 0 t,() ~-bO N~a'
) e3 a' a' Lr\ LC\ N-C) xi `.0 a' O~t.0 bO'.4) ,~ C~J'-x LC\ -
f~\ 0" a' CU ~ 0 ~`4~~44) .- to to ir~ r"~ o~ tr~o-~r'~.-t .4-
.0 $4 `.4 N~Lt\bO `.4~ 0 N-r-'~N-.Z1 N-U) F~.-4 0'~tO 00
8 - L(\L.CU) 0'. 00,
`.~`4'.4 N
N-0 ,~ CU N- N- `-4 a' U) CU 0 `.0 iC'. 0 ,xi ON-U) `0 C~\
~ a' l~ U) P~ U) N~(\J tO N- U) ~4- (`U `.4 N- `.x C~U)'.C) -4- 0'
0 U) `-.0 (`U .t Lr~'-4 0 Lr\ a' 0 LrtCU `.4 `.0 0 `-.0 tO 0w4 C' a'
U W 0 C~J L(".~ 0 a' N- tC\ 0 `.0 a' 0 U) ~- `-I (f-.0.~.0 to `0
C) $4 tt\~7 0 `.4 N-¼0 O'U.O lx\ lx\N- 0 `.0 `-4'-.0 0\L(\~ ~t IA
0 $4 -~ N-C) 0 `-`.0 `.0 r~ N- Lrt LA a' N-to O'-.tO~.O `A `.4
o `~ ~ - P~',¼O `-4 `.0 ~f LA O".~ 0".~ ("4 z$- U) r-4to (`.4 C) CO `0
0
$4 PA.xi LC\¼0 N-tO a'0 ` C'.) ~ L~~¼1) N-U) 0'0'4 ~`4
CU LALALALALALA p'.0'.0'.0-.0~-0 N-N ON
4) 0'-. a' 0' a' CAO~ a' 0'-. a' a' 0'-. 0" a' 0' a'0s0\a' 0' $ 0'
~4 .-4r-4 `.4.4 ,-l.-4 `.I'.4 `.-4'.4 ~ `~4~~4 4 `.4'.4'.4 ,0r
PAGENO="0094"
OIL - CUTER CONTIWFNTAL SHELF
* : YEAR
:
PRODUCTION
:
PRODUCTION
:
:
ROYALTY
VAIUE($)
:
PARRELS
1953
1954
1955
1956
1*357
1958
1959
1963
1961
1962
1.63
1964
1965
1c66
1967
1968
1969
1570
1971
940, 634
2,723,113
5,871 ,e53
10,136,355
15,373,071
`3,709,108
34,177,529
47, 359, 144
61,265,710
94~9ij ,909
311, 298
114,977,253
136,236,062
115, 187, 390
205 ,950,535
252,316,345
295, 429, 477
337, 122,385
39",18~,C91
2,710, 866
8,028,326
17,318,314
29,764,624
51,166,849
77,266,710
103,197,518
139,113,972
192,144,960
264,C5' ,899
313,797,445
352,677,995
417,141,510
537,917,192
633,989,826
780,1 13,838
958,388, 119
1,112,1 83,855
1,378,656,054
584,088
1,681,702
3,539,946
6,019,747
9,793,597
14, 48' , 598
20,331,723
27,843,125
35,462,210
48,737,457
55,61 8,246
64, 36C, 892
15,419,562
96 ,C29, 10'
112,770, 550
138,248,3C5
167,701,123
193, 102,272
235 , 78 , 785
1 971
2,291,829,882
7,374,691,474
1 ,3~'7,476,03'~
TABLE 25
PAGENO="0095"
CCNOENSATE - CUTER CONTINENTAL SHELF
YEAR
PRODUCTION
PRODUCTION
:
RCYALTY
:
:
BARRELS
:
VALUE(~)
:
VALUE($)
:
1 953
1954
1955
1956
195?
1958
1959
1963
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
210,063
619,057
833,631
878, 177
~697, 116
1 ,C.59,929
1,519,992
2,306,845
3,~64,3O8
4,R04,673
6,247,942
7,522,873
8,732,553
13,526,680
16,001,079
16,979, 545
17, 43~, 510
23,523,283
28,368,855
719,664
I ,947,804
2,624,334
2,738,187
2,~91,306
3,47~,484
4,371,845
7,320,399
9, 527, 9'~3
14,874,9C7
19,168,31 `~
22,941,499
26,664, 321
41, 75-),232
48,190,009
55,166,230
6~~,742, 729
81,407,670
* 103,024,860
135,453
361,496
483,418
505,938
432,270
627,78~
889, 736
1 ,328,526
I ,783, 043
2,799,353
3,61 8,838
4,286,902
4,989,612
7,679,495
8,627,708
9,189,356
10,590,402
13,974,190
17,448,239
THROUOH
1971
154,327,111
5 `9,548,693
90,355,755
TABLE 26
PAGENO="0096"
GAS - (~L.JTER CONTINENTAL SHELF
YEAR
PRODUCTION
:
PRODUCTION
:
ROYALTY
VALUE(S)
:
:
:
MCF
:
VALUE(S)
:
1953
19,881,C55
1,546,331
248,351
705,179
1954
56,325,083
4,393,968
1,116,642
1955
*
81,279,042
7,118,031
6,995,~6'~
1,1'~3,698
1956
82,892,538
1,165,378
2,313,5O~
~957
82,573,604
7,508,433
1958
127,692,848
15,733,942
5,318,518
1959
r7,156,296
37,403,164
7,636,074
1960
*
273,034,451
52,761,614
64,615,52!~
9,483,489
1961
.
318,2R",~95
13,748,40C
1962
451,952,659
92,209,196
16,136,781
1963
564,35?,6C6
106,783,758
17,887,512
3964
621,731,438
1l8,37?,'~8~
19,248,IIC
1965
645,589,469
126,977,562
29,142,325
1966
1,007,447,235
189,381,492
1967
1,187,215,750
227,694,353
32,C~4,125
48,453,728
1968
.
1,524,17R,C78
291,257,157
57,39',3)6
1969
1,954,486,975
365,77C,489
69,445,227
1910
2,418,676,591
438,136,408
549,648,012
87,405,869
1971
2,777,C43,418
*
T~OUGH
1971
14,401,789,231
2,704,311,570
419,933,812
TABLE 27
PAGENO="0097"
GASOLINE AND LPG - CUTER CONTINENTAL SHELF
0
YEAR :
PRODUCTION
PRODUCTION
:
ROYALTY
:
:
GALLONS
:
VALUE(S)
:
VALUE(S)
:
1969
222,430,~16
9,777,811
197~
1,075,386,730
51,18~,237
714,111
3,728,914
1971
1,550,667,787
80,563,166
5,944,366
THROUGH
.
-
1971
2,848,484,833
141,521,214
TABLE 28
PAGENO="0098"
SALT - OLTER C0NTIN~NTAL SHELF
196~
1961
1962
1963
1964
~965
1966
1967
1968
1969
1970
1971
TI- P OIJGH
1 971
59, 794
528, 581
176, 924
262, 951
212 ,978
290,834
297,475
274,422
54~',651
343,060
269, 691
370,406
1~,764
95,142
31,848
47,334
38,334
52,334
53,544
49,396
97,317
61,751
48,544
66,673
1,792
iS~ ~57
5,308
7,889
6,385
8, 724
8,924
7,422
17 ~ 1
10,292
8,091
11,112
.109,83C
`YEAR
PRODUCTION
:
PRCDUCTION
:
ROYALTY
:
:
:
TONS
:
VALUE(S)
VALUE(S)
3,627,737
652,981
TABLE 29
PAGENO="0099"
SULFUR - CUTER CONTINENTAL SHELF
1 96C
1961
1962
1963
1964
1 ~65
1966
1967
1968
1969
1970
1971
THROUGH
1 971
98,025
401,521
285, 975
552, 573
634, 875
1,~9C, 950
I ,400, 848
1,409,276
1,553,621
1,232,939
1,099, 584
1,178,400
1,762, 866
7,252,931
5 ,5'J7,C50
11,069,637
12,748,602
23,387,0C5
32,621,551
37,291,107
51,277,667
49,129,573
24,636, 136
23,718,311
285,784
1, 170,733
835,816
1,617,471
1,858,535
3,197,532
4,128,691
4, 167, 8~)4
4,628,512
3, 684,432
3,235,874
3,452,117
32,263,301
: YEAR :
PRODUCTION
:
PRODUCTION
:
ROYALTY
:
:
TONS
:
VALUE($)
:
VALUE(S)
:
10,938,587
282,403,036
TABLE 30
PAGENO="0100"
OUTER CONTINENTAL SHELF
CALENDAR YEAR icit
STATE : PRODUCTION
PRODUCTION
ROYALTY
:
:
:
VALUE(S)
VALUE(S)
CALIFORNIA
LOUISIANA
TEXAS
(BARRELS)
31,103,548
358,366,080
710,463
Ott.
98,407,829
1,277,637,359
2,610,868
16,401,306
218,947,766
431,713
TOTAL
390,180,091
1,378,656,056
235,780,785
LOUISIANA
TEXAS
(BARRELS)
27,394,271
974,584
CONDENSATE
99,350,253
3,674,607
16,835,804
612,435
TOTAL
28,368,855
103,024,860
17,448,239
CALIFORNIA
LOUISIANA
TEXAS
(BARRELS)
31,103,548
385,760,351
1,685,047
.
OIL E CONDENSATE
98,607,829
1,376,987,612
6,285,475
16,401,306
235,783,570
1,044,148
TOTAL
418,548,946
1,481,680,916
253,229,024
CALIFORNIA
LOUISIANA
TEXAS
*
(MCF)
15,671,479
2,634,014,031
127,357,908
GAS
4,231,299
525,451,277
19,965,436
705,217
83,373,079
3,327,573
TOTAL
2,777,043,418
549,~4R,012
87,405,869
CALIFORNIA
LOUISIANA
TEXAS
(GALLONS)
2,115,628
1,462,879,363
85,672,796
GASOLINE AND IPG
131,712
76,751,561
3,679,893
8,781
5,659,170
276,415
TOTAL
1,550,667,787
80,563,166
5,944,366
LOUISIANA
(TONS)
1,178,400
SULFUR~
23,718,311
3,452,11?'
TABLE 31
PAGENO="0101"
OUTER CONTINENTAL SHELF
CALENDAR YEAR 1971
STATE PRODUCTION PRODUCTION : ROYALTY
VALUE(S) VALUE(S)
LOUISIANA
TOTAL O.C.S
(TONS)
370,406
66,673 11,112
2,135,677,078 350,042,488
TOTAL ALL LANDS
2,135,677,078
350, 042,488
TABLE 32
SALT
OIL AND GAS OPERATIONS
OUTER CONTINENTAL SHELF
CALIFORNIA
CALENOAR
YEAR
QUANTITY
BARRELS
PROCUCT ION
VALUE(S)
ROYALTY
VALUE(S)
QUANTITY
MCF
PRODUCTION
VALUE(S)
ROYALTY
VALUE(S)
1968
~969
1970
1971
2,C'5~,889
q,94fl, 844
24,987,628
31,103,548
5,222,660
28,042,929
72,294,311
98,407,829
*
870,444
4,673,822
12,049,052
16,401,306
799,685
4,845,851
12,229,147
15,671,479
215,915
1,308,38fl
3,301,87"
4,23!,299
35,986
218,063
550,312
705,217
TOTALS
68,091,909
203,967,729
33,994,624
33,546,162
*
9,057,464
1,509,578
TABLE 33
PAGENO="0102"
<~ TOTAL ALL PRO
PRODUCT! CN
VAL U'~( 5)
5,438,575
29,351 ,3~9
75,604,368
102,770,840
213,165,092
CALIF ORNI A
CALENDAR
YEAR
1968
1969
1970
1971
TOTALS
OIL AND GAS OPERATIONS
OUTER CONTINENTAL SHELF
<~- GASOLINE AND LPG ~-~>
QUANTITY PROQJCT ION ROYALTY
GALLONS VALUE(S) VALUE(S)
132, 639
2,115,628
2,246,267
8,187
131,712
139,899
546
8,781
9,327
DUCTS ~>
ROYALTY
VALUE(S)
906,430
4,891 ,885
12,599,910
, 7,1t5,3~4
35,513,529
TABLE 34
PAGENO="0103"
OIL AND GAS OPERATIONS
OUTER CONTINENTAL SHELF
LOU! SIANA
OIL
CONDENSATE
CALENDAR
~UANTtTY
PROCIJCTION
ROYALTY
QUANTITY
PRODUCTICN
YEAR
BARRELS
VALUE(S)
VALUE(S)
BARRELS
V4LU~(S)
VALUE(S)
1953
`956
1955
1056
.
940,634
2,723,~73
5,869,897
10,123,071
2,770,866
8,028,336
17,312,409
29,724,365
584,C88
~,68~,7f'2
3,538,967
6,013,072
210,063
619,057
833,631
878,177
719,664
1,947,804
2,624,334
2,738,187
*
135,453
361,496
4~3,413
~957
19~8
~5,367,279
23,709,1fl8
51,146,960
77,266,710
9,79fl,38j
14,482,599
6~7,:16
1,059,929
2,397,306
3,470,494
~32,27~
627,7~0
1959
34.177,272
1~R,~.96,671.
20,331,582.
!,51.9,992
4,87'~,R45
1960
47,359,fl44
139,.113,688
27,843,078
2,3~6,.B45
7,320,399
899,736
1,328,526
1961
61,265,770
l~2,144,960
3~,462,2jA
3,06.4,308
~,527,9~3
1785,043
1°62
84,928,426
264,04~,875
48,705,620
4,804,673
14,874,°07
1963
98,278,494
313,637,681
55,591,619
6,247,942
19,168,310
3,618,838
1944
~965
114,972,300
`.36,232,315
352,663,296
437,131,468
64,358,443
75,417,896
7,522,873
8,732,553
22,941,499
26,664,32!
4,2P6,9~
4,998,612
1966
i~67
~968
174,304,792
204,6°8,114
248.223,799
535,253,645
63fl,364,403
769,355,722
~5,584,085
112,366,314
136,455,284
13,526,680
14,297,694
15,601,560
41,750,232
42,884,947
.50,711,986
7,679,495
7,743,53'
1.969.
1970
1971
283,974,318
313,035,150
358,366,O8~
925,153,657
1,036,032,944
1,277,637,359
162,162,256
180,410,505
218,947,766
*
l&,1$4,974
22,376,342
27,394,211
56,381,108
77,309,200
99,350,253
9,863,476
13,291,113
16,835,80k
TOTALS
2,216,549,058
7,146,977,005
1,269,527,386
147,878,680
TABLE 35
PAGENO="0104"
OIL AND GAS OPERATIONS
OUTER CONTINENTAL SHELF
LOUIS lANA
<- OIL
AND CONDENSATE
-
<---------- GAS --------->
CALENDAR
YEAR
QUANTITY
BARRELS
PRODUCTION
VALUE(S)
ROYALTY
VALUE(S)
QUANTTTY
P~CF
PRODUCTION
VALUE(S)
ROYALTY
VALUE(S)
1953
1954
1955
1956
1957
1°58
1q59
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1,i.50,697
3,342,23~
6,703,528
11,001,248
16,5&4,395
24,769,037
35,697,264
49,665,891
64,330,078
89,733,0~9
104,526,436
122,495,173
144,964,868
187,831,472
213,995,828
263,825,359
300,159,292
333,411,492
385,760,351
3,490,530
9,976, 13f~
19,936,7'3
32,462,552
53,544,266
80,737,194
113,068,516
146,434,087
201,672,863
278,916,782
332,835,991
375,604,795
443,795,789
571,003,877
673,249,350
820,067,708
981,534,765
1,113,342,153
1,376,987,612
719,541
2,043,198
4,q~22,385
6,519,fl1'~
10,222,571
15,l1.~,378
21,221,318
29,171,604
37,250,253
51,504,973
59,210,457
68,645,345
90,406,508
103,263,580
119,909,845
145,502,268
172,025,732
193,701,618
235,783,570
19,881,055
56,325,083
81,279,042
82,892,538
82,568,807
127,692,848
2"7,156,296
273,034,451
315,280,095
451,952,659
566,352,606
621,731,438
645,589,469
965,387,849
1,087,262,804
1,413,467,606
1,822,544,142
2,273,147,040
2,634,014,031
1,546,331
4,393,968
7,718,03'
6,995,"60
7,507,053
15,733,942
37,4f~3,j~4
52,761,614
64,615,520
92,209,196
106,783,758
118,377,08~'
126,977,562
182,465,9~8
210,606,727
272, 969,~79
344,015,027
414,018,458
525,451,277
248,351
705,779
1,1'6,6'2
1,103,698
1,165,296
2,313,5~
5,318,518
1,636,074
Q,483,48~
13,748,4."~
`6,136,78'
17,887,512
19,248,11C
27,989,727
2,786,187
45,405,714
53,764,39c
65,425,563
83,373,074
TOTALS
2,364,427,738
7,634,631,703
1,356,234,154
13,728,559,859
2,591,949,655
*
401,256,818
TABLE 36
PAGENO="0105"
OIL AND GAS OPERATiONS
OUTER CONTINENTAL SHELF
LOUISIANA
<-~
GASOLINE
AND
LPG -~->
<~-~-~
SULFUR
-~~~--~->
CALENDAR
Y~AR
QUANTITY
GALLONS
PRODUCTION
VALUE(S)
ROYALTY
VALUE(S)
*
QUANTITY
TONS
PRODUCTION
VALUE(S)
ROYALTY
VALUE(S)
1960
1961
1962
1963
1964
1965
`.966
.1967
1969
1969
1970
1971
~-
~
~
~
~
222,430,316
1,027,998,797
1,462,879,363
S
~
~,
~
--
--~
~
-~.
9,777,811
49,247,030
76,751,561
5
~-
-
~
;
714,111
3,582,647
5,659,170
.
98,025
401,521.
285.975
552,573
634.875
1,000,050
1,400,848
1,409,276
1,553,621
1,232,939
1,099,584
1,178,400
1,762,866
7,252,~31
5,5~7,fl5O
~
12,748,60-2
23,387,O"5
32,621,551
37,291,1"?
53,277,667
49,129,573
24,636,736
23,718,31'
295,784
l,17fl,7~3
835,816
1,617,471
1,858,535
3,~97,532
4,128,691
4,167,8"4
4,6?8,5~2
3,694,432
3,235,87k
3,452,1'7
TOTALS
2,713,308,476
135,776,402
TABLE 37
- S L
PAGENO="0106"
OIL AND GAS OPERATIONS
LOUISIANA
OUTER CONTINENTAL SHELF
SALT ~~--~~->
CALENDAR
YEAR
QUANTITY
TONS
PRODUCTION
VALUE(S)
ROYALTY
VALUE(S)
PRODUCTION
VALUE(S)
ROYALTY
VALUE(S)
1953
1954
1955
19%
`957
.
`~"
)°60
1961
1962
1963
1964
i965
1966
1967
i968
1969
1970
1971
~-
~
~
~
~
~
-~
59,794
528,581
176,924
262,951
212,978
290,804
297,475
274,422
540,651
343,060
269,691
370,406
-~
~-
~
~
.
-~
10,764
95,142
31,848
47,334
38,334
52,334
53,544
49,396
97,317
61,751
48,544
66,673
-~
~-
~-
1,792
15,857
5,308
7,889
6,389
8,724
8,924
7,422
17,030
10,292
8.091
11,112
*
*
~
.
~
.
5,036,861
14,370,098
27,054,774
39,457,6'2
61,052,219
96,471,136
~5o,47~.,6sn.
200,969,331
273,636,4%
376,664,876
450,706,720
506,768,811
594,212,690
792,144,880
921,196,58~
1,146,411,771
1,384,518,927
1,601,292,921
2,002,975,434
*
967,892
2,748,9~7
5,139,02w
7,6~2,7fl8
11,387,865
17,423,878
26,539,836
37,0Q5,254
47,920,332
66,~94,4Q7
76,972,598
88,3°7,78J
1~2,86~',874
135,390,922
~53,271,258
195,553,524
230,108,962
265,953,798
328,279,fl48
TOTALS
3,627,737
652,981
108,830
10,645,413,777
1,79°,819,031
TABLE 38
PAGENO="0107"
OIL AND GAS OPERATIONS
OUTER CONTINENTAL SHELF
TEXAS
OIL ~----~-~>
QUANTITY
BARRELS
<~-`~-~CONDENSATE ~-`-~>
YEAR
BARRELS
VALUE(S)
VALUE(S)
PRODUCTION
VALUE(S)
ROYALTY
VALUE(S)
1955
1,956
5,905
1q56
13,284
40,259
6,675
-~
1957
5,7Q2
19,889
3,296
~-
~-
!958
~-
.
-~
t9'~
257
847
*
141
196~
~8
284
.
.
.
196~.
-~
-~
47
~-
-~
1962
3,483
11,024
1,837
~-
--
1°63
52,8'~4
159,764
26,627
~-
1964
4,953
14,699
--
~-
1965
3,747
10,047
2,449
1,666
~.
1966
882,598
2,664,147
444,017
-~
-~
-~
1967
1,162,401
3,625,423
6'~4,236
-~
~968
1,732,657
5,535,456
.
922,577
1,703,385
5,305,062
884,177
1969
1,514,315
5,191,533
865,045
1,377,985
4,454,244
742,372
1970
1,10(~,107
3,856,600
1,245,536
4,361,621
726,926
197!
710,463
2,610,868
431,713
1,146,941
~74,584
4,098,461
3,674,607
6~3,O77
612,435
TOTALS
7,188,915
23,746,740
I.
C
TABLE 39
PAGENO="0108"
OIL AND GAS OPERATIONS
TEXAS
OUTER CONTINENTAL SHELF
<~ OIL AND CONDENSATE ~>
QUANTITY
MCF
<-~~-~-~ GAS --.~--~->
PRODUCTION
VALUE(S)
CALENDAR
QUANTITY
*
PRODUCTION
ROYALTY
ROYALTY
YEAR
BARRELS
VALUE(S)
VALUE(S)
VALUE(S)
1955
1,956
5,9~)5
979
~-
1955
13,284
4'~,259
6,675
-~
1957
5,792
19,889
3,296
4,797
480
84
1.58
--
-~
-~
`959
*
257
847
141
.
196~
9.
284.
47
1961
1962
3,483
11,024
1,837
1963
52,B~4
15°,764
26,627
1Q64
4,953
14,699
2,449
1Q65
3,747
1~,~42
1,666
--
.
-~
--
1066
882,598
2,664,147
446,Q17
*
42,~9,386
6,915,584
1,152,598
1.67
2,865,786
8,93~,485
1,488,413
99,952,946
17,087,626
2,867,9~8
~968
3,110,642
9,989,700
1,664,949
1'~9,91D,787
18,072,163
3,(~12,t~2°
1969
2,759,851
9,553,154
1,591,971
127,096,982
20,447,0P2
3,4~7,8'8
1970
2,247,048
7,955,061
1,325,792
133,300,404
20,816,080
3,469,347
`~971
1,685,047
6,285,475
1,044,148
127,357,908
19,965,436
3,327,573
TOTALS
13,637,346
45,640,735
7,603,007
639,683,210
103,304,451
17,217,416
TABLE 40
PAGENO="0109"
OIL AND GAS OPERATIONS
TEXAS
OUTER CONTINENTAL SHELF
<--- GASOLINE AND LPG --->
<-TOTAL ALL PRODUCTS ->
CALENDAR
YEAR
QUANTITY
GALLONS
PRODUCTION
VALUE(S)
ROYALTY
VALUE(S)
*
PRODUCTICN
VALUE(S)
*
R')VALTY
VALUE(S)
1955
1q56
.1957
.
.
5,9~'5
4'~,25°
Zfl,369
~79
6,67~
3,38~
IqEs
1959
.
0
.
--
847
284
*
. --
14!
67
1961
19t'Z
~
1964
1965
~966
--
--
--
~-
-~
--
--
--
--
--
.
-
-
-
-
-
.
.
-~
13,"24
159,Th~
14,699
IE',042
~,579,73j
--
1,837
2&,627
2,44°
,666
1,5°6,615
1967
--
--
~-
26,(~18,11l
4,336,351
1969
1q69
1970
19w!
~-
47,255,294
85,672,796
--
1,925,020
3,679,893
-
145,721
276,415
28,~6',863
3(',('t'~,236
30,696,161
29,93~,8fl4
*
4,676,977
4,9°9,81~
L,94C.,86'~
4,648,136
TOTALS
132,928,090
5,6(~4,913
422,136
154,SSfl,099
25,242,559
TABLE 41
PAGENO="0110"
SUMMARY OF BONUSES, MINIMUM ROYALTIES, RENTALS, SHUT.4N
OUTER CONTINENTAL SHELF
GAS PAYMENTS, AND ROYALTIES
:State
.
Year
Product
:
Bonuses
.
:
.
Minimuni
Royalties
:
Rent
.
:
:
als
:
Shut-In
Gas
Payments
:
: Roya
:
.
lties : To
:
tal
:
CALIFORNIA
-. $ 938,838
- 933,333
-
- 563,658
- 314,560
- l,O39,5~43
- 1,056,063
97)4,817
953,913
68,715 7,373,108
- $ 13,7146)425
- 933,533
- 817,573
21 ,757 ,6~s
3)4,560
60)4,715,233
* 13,592,007
18,120,652
$
$
1963 Oil & Gas
19614 Oil & Gas
$
12,807,587
1965 Oil & Gas
-
1966 Oil & Gas
1967 Oil & Gas
1963 011 & Gas
1969 Oil & Gas
21,189,000
-
602,719,262
-
1970 011 & Gas
-
197J. Oil & Gas
-
Through
1971 Oil
& Gas
*
636,715,849
17,280
51,435
- $
906 ,)430
- 14,891,885
12,599,910
- 17,115,304
- 35,513,529 679,671,201
C
TABLE 42
PAGENO="0111"
SUMMARY OF
BONUSES, MINIMUM ROYALTIES, RENTALS, SHUT-IN
- OUTER CONTINENTAL SHELF
GAS PAYMENTS, AND ROYALTIES
:
*:-
State
Year
Product
:
Bon
:
:
uses
:
.
Minimum
.
Royalties
:
:
:
:
Rentals
:
Shut-In
Gas
Payments
:
:
.
Royalties
.
:
:
Total
.
:
:
FLORIDA
1959
1960
1961
1962
1963~71
Oil & Gas
Oil & Gas
Oil & Gas
Oil & Gas
.
$l,7ll,S72
-
-
-
$ -
-
-
-
$ 397,~4~O
397,~#O
397,)4)40
l90,0~0
$ -
-
-
-
$ -
-
-
-
$2,109,312
397,L~)4~
397,~#0
190,080
through
1971
ljl1,~72
l,3g2,L~oo
-
1*
TABLE 43
PAGENO="0112"
SUMMARY OF BONUSES, MINIMUM ROYALTIES, RENTALS, SHUT-IN GAS PAYMENTS, AND ROYALTIES
OUTER O)NTINENTAL SHELF
:State : : : :Shut-In
Minimum
Year Bonuses : : Rentals Gas : Royalties : Total
Product : Royalties
Payments
LQ~AN~
8/7/53-
12/31/53 Oil & Gas $ -
195L Oil 4 Gas ll6,378,~476
Sulfur 1,233,500
Total ll7,6lL97~
1955 Oil & Gas 100,091,263
Sulfur -
Total 100,091,263
1956 Oil & Gas -
Sulfur -
Total -
1957 Oil & Gas -
Sulfur -
Total -
1958 Oil & Gas -
Sulfur -
1959 Oil & Gas 88,035,121
Sulfur -
Total 88,035,121
$ - $1,271,790 $3o,65o $ 967,8g2 $ 2,270~32
- 3,5l6,0~43 86,950 2,7)48,977 l22,730,)4~+6
- 50~000 - - l,283~5OO
- 3,566%ol~3 S6,95~ 2.7)48,977 l2~4,ol3,9)46
- 2,819,231 122,000 5,139,027 108,171,521
- 50,000 - - 50.000
- 2,869,231 l22~000 5,139,027 108,221,521
- 3,259,7th 79,950 7,622,708 10,962,362
- 50,000 -~ - 50,000
- 3,309~~7th 79,950 7,622,jQ~ 11,012,362
67,201 2,930,301 110,268 11,387,865 1)4,'495,635
- 5Q~000 - - 50,000
67,201 2,980,301 110,268 11,387,865 114,5)41,635
1814,396 2,l140,58~4 121,218 17,)#23,878 l9,87O,0~6
- 143,990 - - 143,99C
1814,396 2,l8L~,57)4 121,218 l7~1423,878 l9,9l~+,O66
171,036 1,780,026 814,9814 26,539,836 ii6,6ii,co~
- 143.990 - - 143.9~O
171~03~6 ~82~4,0l6 8)4,54~4 26,539,$36 ~
TABLE 44
PAGENO="0113"
0
SUMMARY OF BONUSES, MINIMUM ROYALTIES, RENTALS, SHUT-IN GAS PAYMENTS, AND ROYALTIES
OUTER CONTINENTAL SHELF
:
:
:
State
Year
Product
: :
: Bonuses :
: :
.
Minimum
Royalties
:
: Rent
:
:
als
:
Shut-In
Gas
Paymertts
:
: Roya
:
:
ities To
:
:
tal
LOUISIANA
1960 Oil & Gas $2)46,909,7&4 $299,695 $2,~422,790 $149,350 $36,S07,67~ $2S6,14E9,297
Sulfur - - 12,660 - 2E5,7&4 29E,U414
Salt 75~25O - 7,500 - 1,792 &4,5142
Total 2)46,9SS,0314 299,695 ~,!4~42,95O ~9~35O 37,O95,?5~ 2S6,872,2E3
1961 Oil & Gas - 291,790 1,9E)4,1l~4l 37,100 46,733,7)42. 149,0147,073
Sulfur - - 12,660 - 1,170,733 l,1B3,393
Salt - 3,2O~ - - 15,857 19,065
Total - 29)4,998 1,997,101 37,100 147,920,332 50,2)49,531 __
1962 Oil & Gas 1488,923,391 )497,202 7,707,267 62,200 65,253,373 562,11)43,1433
Sulfur - - 12,660 - 835,816 848,1476
Salt - - - - 5,308' _________
Total 1188,923,391 497,202 7,719,927 62,200 66,09)4,)497 563,297,217
1963 Oil & Gas - 632,376 7,059,2)46 52,950 75,3~47,238 83,091,810
Sulfur - - 12,660 - 1,617,1471 1,630,131
Salt - - - - _7~$$9 7,8~9
Total - 632,376 7,071,906 52,950 j~972,598 8I29~~
l9f~14 Oil & Gas 60,3)40,626 7814,993 6,735,693 )45,soo 86,532,857 15)4,1439,969
Sulfur - - 12,660 - 1,858,535 1,871,195
Salt - - - - 6,389 6,3~
Total 60,3~40,626 7811,993 6~,7148,353 ~ 88,397,781 ~56,3F,5~3
TABLE 45
PAGENO="0114"
SUMMARY OF BONUSES, MINIMUM BOYALTIES, RENTALS, SHUT-IN GAS PAYMENTS, AND ROYALTIES
OUTER (DNTINENTAL SHELF
State
Year : Bonuses
Product
LOUISIANA
Minimum : Shut-In
Royalties : Rentals : Gas : Royalties : Total
- Payments
1965 Oil & Gas $ -
Sulfur -
Salt -
Total -
1966 Oil & Gas 188,010,893
Sulfur -
Salt -
Total l88,OlO,~93
1967 Oil & Gas 510,079,175
Sulfur -
Salt 30,56)4
Total 510,109,7142
1965 Oil & Gas 1149,565,759
Sulfur -
Salt -
Total 1l~,s6~jsg
1969 Oil & Gas ll0,9~45,535
Sulfur 715,150
Salt -
Total 111 ,66o,68s
$ 983,059 $5,604,824
- 12,660
g~)5g 5,617,484
1,327,530 14,736,29)4
- 12,660
________ 4,745
1,585,755 5,500,516
- 12,660
- 7,48~
l,8~75~ 5,520,661
2,l~40,858 5,275,979
- 12,660
________ 5,288,639
1,922,3140 5,584,162
- 25,787
1,292 -
l,923,6~2 ~,6og,g49
$38,450 $ 99,6514,618 $106,250,951
- 3,197,532 3,210,192
- 8,724 8,724
35,4~0 102,860,87~4 109)499,867
)41,700 131,253,307 325,370,024
- 4,125,691 )4,l4l,35l
- 5,924 5,924
41,700 135,390,922 329,520,299
41,400 1)49,096,032 666,605,884
- 4,167,804 4,iso,4614
- 7,422 45,471
51,1400 153,271,258 670,831,819
52,300 190,907,982 348,245,908
- 4,628,512 4,641,172
- l7,0~0 17,030
52~3QQ 195,553,524 352,9014,110
41,650 226,504,238 3)4)4,997,925
- 3,684,432 4,425,369
- 10,292 11,584
Ift,65jj 230,198,962 ~I~9,434,575
C
TABLE 46
PAGENO="0115"
SUMMARY OF BONUSES, MINIMUM ROYALTIES, RENTALS, SHUT-IN GAS PAYMENTS, AND ROYALTIES
OUTER CONTINENTAL SHElF
State
Year
Product
-:
: Bonuses
:
Minimum
Royalties
Rent
als : Gas
: Payments
;
: Royal
ties : Tot
al
LOUISIAN
1970 Oil & Gas $ 9)~3,6o1,798 $ 1,692,271k $ 6,220,862 $ 1V7,700 $ 262,709,833 $l,214,272,)467
Salt - 5,000 - - 8,091 13,091
Sulfur - - 1,880 27,661 - ~,235,S'~ __3~~j1~
Total $ 91~3,60l,7~ l~699,l5L~ 6,21i.s,523 ~7~700 ~5~953,79~ L7~550~Y~3
1971 Oil ~` Gas $ 96,304,522 $ 1,564,845 $ 5,687,848 $ 32,300 $ 324,815,819 $ 428,405,334
Salt - 5,000 - - 11,112 16,112
Sulfur _____________ 1,880 27,661 - 3,L52,117 ~ i~
Total $ 96,304,522 $~571,725 $ 5,715,509 $__32,300 $ 328,279,048 $ 431,903,104
Through
1971 $iJ0l.5L3~4~ $14~,L66,913 $82,735,615 $1j28,920 $1,799,819,031 $j~9997/+h.31g
TABLE 47
PAGENO="0116"
SUMMARY OF BONUSES, MIN IMUM ROYALTIES, RENTALS, SHUT-IN GAS PAYMENTS, AND ROYALTIES
OUTER CONTINENTAL SHELF
:State
Year
Product
:
: Boo
:
:
uses
:
.
Minimum
Royalties
:
Rent
:
ala
:
.
Gas
Payments
Royal
:
.
ties : Tots
*
:
1.
:
OREGON
196)4 Oil & Gas $27,768,772 $ -
1965 Oil & Gas - -
1966 Oil & Gas - -
1967 Oil & Gas -
1968 Oil & Gas - -
1969-71 Oil & Gas __________ -
Through
197]. $27,768,772 $~
$1,276,302
1,276,302
1,03)4,382
l37,)475
3)4,560
- $29,O)45,0714
- 1,276,302
- 1,03)4,382
- 137)475
- 3)4,560
$~9,a~ $~ $~ $3~27.793
TABLE 48
PAGENO="0117"
SUMMARY OF BO~U SES, `uN IMU~ ROYALTIE$, RENTALS, SHUT- IN GAS PAYMENTS, ANt) ROYALT IES
OUTER CONTINENTAL SHELF
:
:
:
State
Year
Product
:
Bonuses
: :
.
Minimum
Royalties
:
Rentals :
Shut-In :
Gas : Royalties
Payments
:
: Total
* TEXAS
g/-753-
12/ 31/53
j95L
1355
1956
1957
195E
1959
ipEi
1 9E2
1 ~E3
I ~E
Oil&Gas $
-
$ -
$ E7,&40
$.~_. $.
-
Oil & Gas
2~,357,029
-
- 2E9.2~0
-
-
23,6L6,3j9
Oil & Gas
E)437,l~62
-
537,120
-
979
E,975,561
Oil & Gas
-
-
~9~,1tS9
-
6,675
703,i6~~
Oil Gas
-
l~3EO
289 ,321
-
3,380
29il~5~
Oil & Gas
-
-
236,010
-
-
236,010
Oil & Gas
-
-
6i~,26g
-
1t41
Oil & Gas
35~32,O3l
J7~30
762,750
-
i~7
Oil E~ Gas
- - *
19,123
679,320
-
-
6~g,lJ~
Oil Gas
~7J~ç~
20,320
-
1,337
h032~~
Oil & Gas
-
3i,963
~2LL,~+Q
26,62~
Oil Gas
-
35~35C
363,320
-
2,L~L9
~o6,6r
Oil Gas
Sulfur
Total
-
33,7~40,309
33~40,309
39,6~O
-
39,61,0
33',~~5L
216,000
553,L514
-
-
-
i,666
-
1,666
~2E,'6
~
~
TABLE 49
PAGENO="0118"
SUMMARY OF BONUSES, MINIMUM R0"ALTIES., RENTALS, SHUT-IN GAS PAYMENTS, AND ROYALTIES
OUTER ~ONT~NENTAL SHELF
:State
Year
Produ
: .
Minimum
Bonuses Ro alties
Ct : :
: Rentals. :
:
Shut-In
Gas
Payments
.
: Royalties : Total
:
TEXAS
1967 Oil & Gas
Sulfur
Total
196S Oil & Gas
Sulfur
Total
1969 Oil & Gas
Sulfur
Total
- - 1,6142,275
- - 14,320
- - i,6146,~g5
$ 1,599,514S
l90,EQO
l,79O,~
220,320
14,503,505
600, 307 ,66S
6oo,3~6,s14S
6,6142 ,09~
14,320
6,6146,14114
6,327,955
5,9'~,551
Through
1971
$695,723 ,597 $563,023 $1L9%~0l6 $ -
$25,242,559 $733 ,487,195
1966 Oil & Gas $ - $ - $ 2,933
Sulfur -- _39,)420 151,1470
Total - 39,1420 . 1514,1403
593,599,0)46
2,757 2)414,050
- 220,320
2,757 ________
14,320
1,727,325
35,550
$ - $ 1,596,615
_____ 1,596,615
- 14,336,351
- 14,336,351
- 14,676,977
______ 14,676,977
- 14,999,519
- 14,9)40,560
-: _________
- 4~64~j36
1970 Oi1& Gas
Sulfur
Total
1971 Oil & Gas
29,1430
29,~3~
267 ,~40
1,357,695
14,320
1,3&2,01~
1,072~,57~
TABLE 50
PAGENO="0119"
SU*IARY OF BONUSES, MINIMUM ROYALTIES, RENTALS, SHUT-IN GAS PAYMENTS, AND ROYALTIES
OUTER CONTINENTAL SHELF
:State
Year
Product
:
: Bonu
:
:
ses :
:
..
Minimum
Royal ties
:
: Rent
:
:
als :
:
Shut-In
Gas
Payments
:
Roya
:
:
.
ities : Tota
:
:
1
:
WASHINGTON
Through
1971
- $ l~66,26o
- L~66,26o
- 362,850
- 51,8110
- 51,5)40
$8,231, 185
)466,26c~
362,850
51,8)40
51,8)40
196)~
1965
1966
1967
1965
1969
1970
19fl
$
Oil & Gas
Oil & Gas
Oil & Gas
Oil & Gas
Oil & Gas
Oil & Gas
011 & Gas
Oil & Gas
$7,76)4,925
7q~761lj9?~ _____ ________
- g,16~4,oos
I.
TABLE 51
PAGENO="0120"
l9~1
SUMMATION OF BONUSES, MINIMUM ROYALTIES,
RENTALS, SHUT-IN GAS PAYMENTS, AND ROYALTIES
OUTER CONTINENTAL SHELF
TOTAL ALL STATES $~_9~3OI~,522 ~ 1,891,000
8/7/53-
12/31/71
TOTAL BY STATES
California $ 636,715,849 $ 68,715
Florida 1,711,872 -
Louisiana 3,101,543,840 14,466,913
Oregon 27,768,772 -
Texas 695,723,597 563,023
Washington 7,764,928 -
GRAND TOTAL $4,471,228,858 $15,098,651
:
:
.
Years
States
:
:
.
Bonuses
Minimum
Royalties
:
: :
: Rentals :
: :
Shut-In
Gas
Payments:
:
Royalties : Total
$ 7~74l,997 $ 32,300 $ 350,042,488 $ 456,012,307
$ 7,373,108
1,382,400
82,735,615
3,759,021
11,958,016
1399,O80
$108,607,240
- $ 35,513,529 $ 679,671,201
- - 3,094,272
1,178,920 1,799,819,031 4,999,744,319
- - 31,527,793
- 25,242,559 733,487,195
- - 9,1E4~~08
$1,178,920 $1,860,575,119 $6,45(~,i'8,"$8
TABLE 52
PAGENO="0121"
115
`-4
N-.-4 Lt'\C~0~t.0 N~b0 LC\t0 N'0 f-'-\ 0 N- 0'~ t-4'~ tO -4 4) N
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`-4
~ 0 ~ o~ L(\'-4 `-4 N- C') u'~4- r~ 0 N- 0 r~ .-i N-
~ ~ ~i 2 0~~t0 0)0) N- L(-~ Lr~j- i- 4- -4~'.z)- ..? i~-~ ç.-~
(4 4)
to .-i ~ N ~- o- ~ N- c'~i o-~ c'.s a r-'.. ~ ~. ~ ~ .4
E-41 I ~ ~ ~sOt1(\ `-4 N-'.0 N-.-4 0 `-1 LC\ N- N- 0~ ~ , ~ ~ 4)
toN `.~ .44 ~
I~-~ N-C) 0bO4.~~ ~ k
-*Z N- N-bOto0~4NO 040N-C'JN-'.4 ..f
4-4 ~4 ,-4 `.4 `.4 Ct.) N (Cf4~ I~\~J ut tr-~ ~ij
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N-to0ttoN-~ ~ 0.
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Ct.) `-4 `.0 N- C) ~) C)t.0 N H 0 `-4 t') N-N-C) N ~ N ~`-~ 0 Ii)
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C 41
414) 0(4 ,o
to O~)- P') 0 N- H to 0)0 0)N- N~f~\ 0 to (4) N 4.1 ~)
C
0) N- N- N- N-LL\ L(\~ N\ Ct) (Ct) N Ct) N N Ct.) ,-4 H ~4 ()) (4 ~) ~j
0
~) ,~ C-'~4-.0 H'.)) Ii-~ `-4 tt)N N- ~-4 N-C) ~t) 0 It)N `-4 to 0 CX) (0 (4 14
0 N (C') 0 -t(CO 0) N 0)0 tO 0 0) tO (Ct)N 0) N- 0 0) (4 0 0 (4)
(CO 0) N- 0)tO N) N- H H CC 0 N-Ct.) 0 0 0)4.)) (Ct)Q tO 0 -.-4 (H (C)
04.1
~ONN-c\C~-0~to ii-~ ~
U) H N -~ IC) IC) N-tO 0 Ct) -t N- cry-.)- (CO N (C.)) 0-' -4 N `4> 4)
.-4 `-4 H `-4 H N N N) I~~t N) 4 C)) C) 14 i.~
C')
i~ -~
I ~I~2 IIItIIlIIlII4II(t_J()~j.(4) iC-S OC_) (I)
`-(NC') CC) 4)
000
000000000000000000'.OQ I)) (4 (4
OQQQOOOOQOOQ00OO-~0-\N-N Q' `4. 14
d1 - ~` 4~14-1 U
(1)
U)U)NtoHN)N-.Z)N-N)ON~N-C)I)\N)Q N 8~S ~
~_i,_4 to&QI(~-'.O'.OtoN-tO'.4.)-CtJN-0\Qrt).~J-toQ 4 (f~ 14 .4
H
N Ct) N)N 0CC)'.)) 40 0);)- (OX) N )~~`~~:f tC)(C.0 .i-J- C~ C).
.4 C\)N\NC.)C'JNr JLC)'.0(O0-~O0 (`2 (0.'~(4 (40'
cO -~ ,4'.~ (4) C)) (OH (4H
~--441-4 (4
.4.'..- H ~O'C4 .,4H
,~j ~
I I I 4.4 I I I I I I I I I $ I I I (4
(C) ~) 0-4)
(.441 (4'O'.1 ,_)
0000000~ C) ,~o4U) ,-,4
~ IIIIIII4IIIooooooo~ ~ o~ ,~
0) 4- H H p-I H H `.4 H `.4 1(4 cO .,~ 4)
0 (4
(.000N-0N-N-N Q~ H-,i I4.~
~1(4 o~
N) I)) N) ctto C) ~` ,.~ ~ ~ (4) 44 `.4
I I I I I II I `.))0t)(\(O `444
(CC~-. ,-4~
NR\C\) C.) D\0 Cr! II >
H1I,4Q N-C) ~ C'1-)-I o~
~ I~; .4 I~i
1- (Ct'.)) N-tO 0)0 H N .~-~z) LC)4.X) N-to 0) ~H OH ~ 4-'
-~ ri~ (CtOS04O)O)0\0\0\U)O~0)0)0\O\0iO-O)cj-.
q) -liC))(itC\U))C)))\4.04.C)4.04.O4.C)'.04o4.0t4)tO N 1~N ~
N H H H H H H H H `.4 H H H H H H H H H
PAGENO="0122"
116
~ (_) C'J'.0 N\b3 N-0CNc\J N-'.4 t\C\N~LC-&0 0'ic\ -:C (3
CU `.0 `-.0 Lr'-.~- ~- iC-'.~ `.0 N-F~- r-'.o r-'.o -.0 `-.0 i--.. N
040
(.0 `.~- N- CU ~e-~.--i `.4 ~O ~ 0~'.O N- `-4 N- tC\~ `-4 tC\ ~ r)
N-r-'44-e\...., LC\Lf\.0- r"\N\(\J CU (`.i C(\C'J NThP N\(~J (.~ (-.-~ 0
"4
U)
LC\0'N-N-N-O,--I.~- CU.~ N-~f N-CU .`-4'.0~) -..() .4.4
L~-\Q U 4-LD'.0.(3- `-4 N-0\CU 0~L~\N4N-,-~ ~- ~
~ 0
`.3 0
~ CU N- (.0 V\ CU N N 0 0
o *
10X - No BASIS FOR QUANTITATIVE
ESTIMATES BUT PROBABLY LARGER
THAN THE ORDER OF MAGNITUDE SHOWN
NPV PROBABLY PRESENT IN VERY LARGE
AMOUNTS BUT OF NO PROSPECTIVE VALUE
- POSSIBLY PRESENT BUT NO BASIS
AVAILABLE FOR AN ESTIMATE
SULFUR
14 SALT DOMES
IN CRUDE OIL
N OTHER SCORCES
SALT
POTASH
GEOTHERMAL EIVERGY
PUITSPHDR lIE
P:.A'',oz .~.ICZ
METOL-AIC' SEDIMENT
BAR IlL
GLAUCCVITC
DIATOMAECUS CODE
CARBONACEOUS MUD
OUSTER SHELL, CORAL,
LIME MDI'
SANA AND ~RAVEL
GALA
PLAT 114DM
TIN
MAGNET lIE
~HROMITE
ILMEN lIE
ROT ILL
MONAD ITE AND XLNOTIME
Z IIICON
KYAAITE
SILL IMANITE
5TAUROLITE
KNOWN UNDISCOVERED
RECOVERABLE RECOVERABLE
PROMISING AREAS RESERVES RESOURCES
G 37 x. io6 ~ xio6
P 40x10
AL,P,G, AT
G
AL, P, G
P, AT
AT
P, AC -
P, AC
P, ~L
P, AL
AL, P, G, Ri-
H, P, C, Ai
AL, F', C, Ar
AL, P
AL, P
AL
AL, F', G, Ar
P. 1;. \~
Ci, Vi
P. 1, Xi
PRESENTLY UNRECOVERABLE RESOURCES
KNOws UNDISCOVERED
~AINAL SUBMARGINAL MARGINAL SUBMARGINAL
~`U10~
1.5x1&
P1'V
NPV
.NPV >iOV NPV
NPV >109 ~v
NPV NPV
? 6 >108
>40x10 >10~
>200,106 >i~9
>~ , io6 >io7
c ,io6 >~~6
;S~) olOG >~ij8
S~OLS
H - HAWAIIAN SHELF
AL - ALASKAN SHELVES
P - WASHINGTON, OREGON AND
CALIFORNIA SHELF
C - GULF SHELF
AT - ATLANTIC SHELF
tfV NPV
NP',
>106 Az.
>i~~ 02.
>i~3
`A `A
V
CJ~
(,, Ri
C, Al
106 >io~
y~ ,~6 >108
PAGENO="0222"
¶~ab1e 8
FOTENT1AL RESOURCES OF MINLVUL~, EXCEPT PETROLEUM, 44 VII ~LDIMENTS OF THE UNITED STATES OUTER CONTINENTAL SHELVES ACCESSIBLE TO DREDGING OR DRILL-HOLE EXTRACTION
(SHORT TONS EXCEPT AS Nolti').
SALT
POTASH , G
GEOTHERMAL ENERGY AL, P, G
PIIOSPHOPITE P, AT
~~4"~X: ~.4CE AT
k3Z~LES
METAL-RIC- SEC1METVT P, ALA'
BARITE P. AL?
GLAUCONITC P, AL
DIATOMACEOUS OOZE
CARBONACEOUS MUD
OYSTER SHELL, CORAL,
LIME MUD
SAND AND SPAVEL
GIJLD
PLATINUM
TIN
MAGNET ITE
..HROMITE
ILMENITE
~UTI LE
MONAZITE AND XEIJOTIME
ZIRCON
KYANITE ANL
SI LLIMANITE
>iO~ - No BASIS FOR QUANTITATIVE
ESTIMATES BUT PROBABLY LARGER
THAN THE ORDER OF MAGNITUDE SHOWN
NPV - PROBASLY PRESENT IN VERY LARGE
AMOUNTS BUT OF NO PROSPECTIVE VALUE
- POSSIBLY PRESENT BUT NO BASIS
AVAILABLE FOR AN ESTIMATE
PRESENTLY UNRECOVERABLE RESOURCES
KNOWN UNDISCOVERED
RESOURCES /~,~A~I14~ ~UBMARGINAL 7~(!~L SUBMARGINAL
>40-50 x6106 >1O~.~'~ ?
40 x 10 ~ 10 ~
DFV NPI~
NRA'
NPV
>1o9 NPV
>io~ NPV NPV
? NPV ? NPV
>~8
>io~
>io9
>io7
>106
>iø8
S~WLS
-
4L - ALASKAN SHELVES
P - WASHINGTON, OREGON AND
CALIFORNIA SHELF
G - GULF SHELF
AT - ATLANTIC SHELF
KNOWN
RECOVERABLE
PR0,1IS1NG AREAS RESERVES
SULFUR
IN SALT DOMES
6
G 37 x 10
IN CRUDE OIL
P
IN OTHER SOURCES
AL. F, G,
>i~9
NPV
ico x io6 >~ >:~~
1.5 ~
P, AL
AL, P, G, AT
H, P, G, AT
AL, F, C, Ui
AL, P
AL, P
AL
>10 oz.
>i~~ oz.
>i~3
AL, F. 4,
r. G. Al
C, Ai
>405106) -
- >200x 106
>15 ~io6
4x~
>50 x 100
C AT
40 ~io6 >i~~
30x106 >~8
PAGENO="0223"
217
3. 0r~anic sulfur in crude oil.--Among all the crude
oils produced in the U.S., those in southern California
contain the most sulfur, generally `between 2 to 3 percent..
Sulfur in crude oil is recovered by some modern refineries,
mostly as hydrogen sulfide, which is then converted to
elemental sulfur. The recovery of.sulfur or sulfuric acid
as a by-product of oil refining seems' to be possible at
competitive'prices in many parts of the world, and the
developing pollution-abatement measures assure future
recovery of sulfur from high.~sulfur crudes.
Using the Hendricks favorability method previously
described in Table 6, the southern California potential
offshore resources of oil are estimated to be about 60
billion barrels "in place; ~.inder the, same assumptions
about discovery and recovery, about 15 billion barrels
would be recoverable. Assuming this contains 2 percent
recoverable sulfur, the potential by-product production
from this source would be about ~40 million tons.
The numerous salt domes in the Gulf coastal plain and
shelf contain enormous tonnages of salt, which is mined on
land by both underground and solution methods. The. domes are
the. result of diapiric injection of salt from deeply buried
salt beds of ,Permian-Jurassic age, and still larger amounts
are present in beds at depth. Estimates of their magnitude
are not at hand but they are probably in the order of hun-
dredS of billions of tons; national inferred reserves and
resources) excluding sea water sources from which salt is
produced on the west coast, are of the `order of 60 trillion
tons. Salt is being ~roduoéd by solution methods from one
offshore dome for local use by a sulfur producer and un-
questionably salt from offshore domes can be. produced cheap.
ly. The proximity of the' huge deposits on. land makes it un-
likely that offshore resources will be developed for on-
shore use in the `foreseeable future. At present, therefore,
the offshore salt resources of the Gu.Lf shelf have little
prospective value.' ` `
Proepects'for the occurrence ot saltelsewhere on the
other U.S. `shelves are poor.
E, Potash `
Bedded potash deposits are asSociated with some of
PAGENO="0224"
218
the world's great salt basins, and .potash.~rich brines
* are recovered also from continental salt basins such
as that at `Searles Lake., California. In the past, bedded
* deposits have beenmined mainly by underground.methods
* but one company in Canada I.e now using solution methods
and submarine deposits ~are': therefore accessible to drill-
hole . extraction. .
The prospectà for the discovery of potash beneath the
Gulf continental shelf appear to be reasonably good (0.B.
Raup, personal communication, 1968). The Permian-Jurassic
salt basin of the Gulf coastal plain and shelf, however,
is extremely large and sylvite (KCL), presumably brought
up from the Louanne salt of Jurassic age, has been found
in a few salt domeS (DeQolyer,. 1925; Erich Hoftrichter,
1968, in press). . There is no basis on which to estimate
the potential, but it could be of the order of billionS
of tons.. . .
F. Geothermal ener~gy.
The Pacific margin of North America is a region in
which volcanic and plutonic igneous activity has been
widespread since Mesozoic time. Possibly reflecting
proximity to magma chambers or cooling igneOU8 intrusives,
the heat flow in parts of the region is abnormally high,
thermal springs are widely distributed, and steam reservoirs
are known in several areas. An installation to make electric
power at the Geysers, California now has an installed ca-
pacity of 55 MW and the field is capable of supporting more
than 200 MW of generating capacity. A wholly concealed and
unsuspected geothermal field discovered accidentally only
a few years ago near the Salton Sea attests to the unknown
character of the geothermal energy potential, and is part
of a growing body of evidence' that suggests the potential
may be extremely large.
It may be safely assumed that geothermal reservoirs
are present beneath the outer continental shelf orf the
Pacific Ccoast, but at this date there is no basis for
estimating their magnitude, nor is it possible to meaning-
fully appraise the *diffi(~ultie8 and, costs of finding,
appraising, and recovering them.
Abnormally high heat flow has also been observed in
parts of the Gulf coastal plain and shelf, and hot brines
have been encountered in some of the deeper drilling. This
potential source of geothermal energy also cannot be eval-
PAGENO="0225"
219
uated now. For both the Pacific and Gulf shelves, and
perhaps to a lesser extent for Hawaii (which though
volcanically still active, has little hot spring activity),
it suffices to say that there i~ some unknown potential
for geothermal energy.
VII. Minerals in surficlal sediments accessible to dredging
A. Phos~horite
Phosphate in the form of crusts, nodules, pellets,
and skeletal remains is widespread on the sea bottom off
the coast of California and on the Atlantic shelf south
of New Jersey. The phosphate mineral is carbonate-
fluorapatite (Ca10(P)~ ,C03)6(F,Cl ,OH)2) , which although
variable in composition generally contains 36-~40 percent
The nodules and pellets, h.owever, contain admixed
impurities of other minerals, and in addition. they occur
in a matrix of other mineral particles. Phosphorit~ for
use In the electric furnace manufacture of elemental
phosphorus need only contaIn~ about 2~i percent P~05, provided
its overall composition is suitable, but raw rna~erial of
this quality has an extremely low value and will not stand
a high mining or transportation cost. Phosphorite for
fertilizer manufacture must contain a minimum of about
31 percent P20~, and its value, in fact, increases from
$6-$7 a ton for 31 percent P205 rock to $l0-$ll a ton for
35 percent rock--about $1.00 a ton with each percentage
point increase in grade--reflecting not only the savings
in transport cost per unit of P205, but also and more
especially, the savings in the cost of sulfuric or other
acid required to put It in soluble form. Phosphorite
that contains 29-30 percent can be used to make phosphoric
acid, provided its extra impurities are not acid consumers.
Lower grade deposits must therefore be beneficiated and
under favorable circumstances a rather pure pellet or
nodule concentrate can be profitably produced from
phosphorite containing as little as 5-10 percent P205 in
place. The phosphate content of Ihe concentrate can be no
greater than that of the nodules or pellets, and although
it can be raised 2 or 3 percent by calcining--an effect
achieved naturally by weathering--such a step adds signifi-
cantly to the cost and is not ordinarily undertaken. Un-
weathered marine phosphorite particles generally contain
29-30 percent P205 as a maximum--Just enough below the
commercial cut-of!~ grade to make them noncompetitive with
weathered deposits exposed on land in most markets.
77-463 0 - 72 - pt. 1 - 15
PAGENO="0226"
220
The phosphorité off the coast of California is known
from numerous dredge sample8 to extend discontinuously
from Pt. Reyes to the eouthern tip of Baja, California.
It occurs in depths ranging from about 190 to 8L100 feet,
but most of it is in waters less that 1800 feet deep.
The California and Mexican shelf area over which most
of the phosphorite is found is about 36,000 square miles,
about 6,000 square miles of which has been estimated to
contain nodules at the surface (Emery, 1960, p. 69).
Assuming only 10 percent of the total area or 3,600 square
miles contains nodules at the surface, Mere (1965, p. 71)
estimates the tonnage of nodules at the bottom surface as
about 1 billion tons, of which he thinks about 100 million
tons might be minable. These calculations take account
only of nodules lying at the surface, the concentration of
which is judged to range from 1 to 30 pounds per square foot
and in one area to average about 22 pounds per square foot.
Very likely phosphorite in many areas does occur only at
the surface, but it is also likely that in places phosphatic
accumulations have a thickness of several feet or more. A
phosphatic sand has been found recently off the coast of
Baja, California (D'Anglejan, 1967), for example, and from
seismic observations and coring one deposit containing
about as high as 15 percent P205 in place is inferred to
be more than a few meters thick and to contain 2 billion
tons of phosphorite (Mero, 1967).
Assuming a phosphorite content of 50 lbs. per cubic
foot, the tonnage of phosphorite per foot of thickness
per square mile w2uld be 0.7 xl0° tons per square mile
or about 2.5 x l0~ tons in the top foot of the 3,600 mile
area estimated by Mero to contain phosphorite at the
surface. Something of the uncertainties involved in
estimating tonnage may be seen from the range in the
variables that would be reasonable in the light of knowl-
edge of these and other marine phosphorites--a factor of
0.5-2 for the phosphorite concentration, 0.5-2 for the
area, and perhaps 0.3-20 for the thickness. For a prob-
able minimum the above would be multiplied to 0.5 x 0.5
x 0.3 x 2.5 x 109 0.1875 x l0~ tons; and for a probable
maximum ~he calculation would be 2 x 2 x 20 x 2.5 x 10' =
200 x l0~ tons. Doubtless these uncertainties do not con-
catenate in either the most favorable or unfavorable way,
and it would be reasonable to expect that the potential re-
sources of surficial phosphorite deposits .off the California
and adjacent Mexican coasts are in the range of billions or
tens of billions of tons, including materials too lean and
lying at too great a depth to be of conceivable interest for
the foreseeable future, as well as some rich and accessible
enough to be recoverable within a decade or so. Some of
the California offshore deposits were leased temporarily a
PAGENO="0227"
221
few years ago and they continue to.attract considerable
interest because the large and growing California market
is supplied wholly by imports that bear freight costs äf
$~4.50.-7.00 or more per ton, added to an f.o.b. mine price
of $7.00 or more, depending on the grade, and there are
in addition paper economics that suggest that west coast
offshore phosphorites could compete favorably with Florida
and other world sources for the growing Japanese and
other Far Eastern markets (Overall, 1968). Mining has
not yet been started, however, and among the known areas
the Baja offshore deposits seem more attractive than
those off California. The best of the California deposits
must therefore be regarded as marginal now. Mero's
guest imate of 100 million tons of minable material is
probably a reasonable order of magnitude for inferred
marginal resources and the remainder is best considered
submarginal.
Most of the California offshore surficial deposits
are thought to be derived from older Miocene deposits,
which also have a large potential beneath the shelves.
The surficial deposits on the Atlantic shelf and slope
also seem to be large3~y derived from the weathering and
erosion of older phosphatic rocks, principally Miocene
strata. No primary deposition is known to be taking
place at the present time. The. surficial distribution
of phosphate, therefore, is closely related to that of
the Miocene phosphatic bedrock.
Phosphate has been found in surficial sediments on
the Atlantic Coast from Cape Cod, Mass. to Miami, Florida.
The richest concentrations, however, are found from
Virginia southward to Florida, in parallel with the dis-
tribution of the phosphorite on land. North of Virginia,
the phosphate is found mainly in the area from Long
Island eastward on to Georges Bank. It is essentially
restricted to depths of less than 200 m in this area, and
phosphorite grains form only or:~ or two percent of the
sediment.
Off Virginia and to the south the. Miocene phosphatic
strata generally crop out on the continental slope, in
the range of 200-2,500 m, (Gibson, 1968), and most of the
major surficial deposits are in this range. As the
phosphatic material probably is derived from primary
rather than weathered deposits, the P205 content is very
likely in the range of the North Carolina deposits--5 to
/
PAGENO="0228"
222
20 percent. The area is approximately 30,000 square miles
in the 200-2,500 m range, of which a c~nsiderable part
should be covered with phosphate (T.W. Gibson, personal
communication, 1968; see also Bunce et al, 1965).
The major sources of phosphate on the shelf above a
depth of 200 meters are the areas of structural uplifts,
where Miocene phosphate i8 present as a result of primary
deposition on structures or has been brought to the sur-
face by subsequent structural movements. One such area
has been described by Pilkey and Luternauer (1967) on the
Frying Pan snoals off Cape Fear, North Carolina. The
phosphatic sands are a weathering concentrate from
phosphatic limestorle, and have a thickness of several feet.
All the phosphatic sands are found In the three mile to
200 m bracket, having an area of 140 square miles, with
a range of phosphate particles In the sand of 2 to 110
percent. The range in P205 content is 1 to 7.78 percent,
and most samples are in the 14 to 7 percent range. Several
other such areas probably exist in the shelf area between
North Carolina and Florida.
With regard to phosphate in the bedrock, the Miocene
strata north of Virginia contain several percent ~2Q5
where cored near the coast, but there are no IndIcaUons
of richer deposits offshore. Paleocene strata with some
phosphatic material are also known on the coastal plain,
but shoreline drilling has not shown any concentrations
of P2OS in strata of this age. Subsurface information
near the coast from Norfolk to Miami, Florida, indicates
about 10 to 30 feet of phosphatic strata in the Miocene.
The P205 content appears to be in the 15 to 20 percent
range, similar to that of the Pungo River deposits in
North Carolina. Drilling along the coastline through
Virginia, North and South Carolina, Georgia, and Florida
shows that the Miocene phosphatic deposits are not uniform
and continuous. It appears likely, however, that the
continental shelf and part of the slope in this area are
generally underlain by phosphatic strata 10 to 30 feet
In thickness and containing 10-25 percent P205, over
an area of approximately 140,000 square miles. As is the
case off Florida (Bunce, et al, 1965), most of the phos-
phatic strata appear to be truncated on the slope to the
north. The facies present in the slope area appear to be
very high in silica, and is likely tp contain only 1-10 per-
cent P205, although it may be similar in thickness to that
further west. It probably underlies an area of about 5-
10,000 miles, in the 200-2500 m depth range.
PAGENO="0229"
223
Although phosphorite similar in quality to that found
* in surficial sediments and bedrock of the Atlantic shelf
and slope is being mined in North Carolina, it must be
beneficiated and calcined before use. Onshore reserves in
North Carolina are of the order of 2 billion tons and those
in Florida are more than 3.5 billion. Large marginal and
submarginal phosphorite resources plainly are present on
the shelf--roughly 2 billion tons of phosphatic sand con-
taining 10-25 percent P205 per 10 feet of thickness--but
because they would be more expensive to mine and beneficiate
than the land deposits, which are large enough to meet all
needs for the foreseeable future, estimates of them would
* have no economic meaning now.
B. Man&araese oxide.
Nodules and crusts of manganese oxide are extensive
over marty parts of the deep ocean floor, but, they are
much less common on the shelves. In U.S. waters they are
known only on the Blake Plateau, `off the southeastern
coast, where they occur at depths of tIOO_800 meters (Pratt
and McFarlin, 1966). Overmuch of the area manganese oxide
forms a solid pavement an inch or more thick, but elsewhere
it occurs as concretions and replacements of pre-existing
phosphorite nodules. The deposits are impure and contain
only 11-15 percent manganese--much below the cutoff grade
of 35_LW percent that is the minimum acceptable for com-
mercial production--and nearly equal amounts.of iron.
Although some of the Pacific nodules contain 0.3-2.0 per-
cent each of copper, nickel, and, cobalt--high enough to
have led some to consider mining the nodules for those
metals'alone--the Blake Plateau deposits contain only
0.03-0.2 percent copper, 0.25-0.~t8 percent cobalt, and'
0.31-0.59 percent nickel (Manheim and others, 1968; Mero,
1965, p.238). Efforts to find a suitable process for
recovering the manganese and/or associated metals have
thus far been unsuccessful.
Manheim and others (1968) estimate the tonnage of the
manganese oxide deposits on the Blake Plateau as follows:
Estimated 2 3
Type thickness, (cm) Area (km ) Volume (m.) Tonnage
Manganese oxide-
phosphorite pave- ` 8
meritandnodules 5 9.14xl0 4.6xlO l.2xlO
Manganese and° . 9 8
iron oxide nodules 2 5.1 x 10 1 x 10 0.25 x 108
PAGENO="0230"
224
Even though these deposits are thin, they probabl~P
could be dredged and concentrated and they are large enough
to merit research on methods to utilize them. For the
present, however, they must be classed as submarginal re-
sources.
C. Metals deposited from submarine hydrothermal waters
In 1965, hot brine and metal-rich sediments were dis-
covered in one of the deeps in the Red Sea (Miller and
others, 1966), and subsequent studies have shown similar
deposits in two other deeps (Degens and Ross, 1967). Cores
have been taken of 10 meters of sediment, but seismic ob-
servations suggest the thickness could be 100 meters. In
one of these basins, the Atlantic Deep, F. T. Manheim
(personal communication, April 28, 1967) estimates the fol-
lowing concentrations and tonnages in the upper 10 meters
of sediment as:
Percent by Cu Zn _~g Pb Sn Au
weight 0.90 ~ 0.008 0.10 0.002 0.0001
Tonnage a! l.OxlO6 3.2x106 lxl0~ l2xl0~ 2.5x103 lxl02
a! Allows for probable recovery, based on extraction exper.-
lence of the Hecla Mining Company in treatment of ores from
the Coeur d'Alene district.
The total value of these tonnages of metals at present prices
is about $1.5 billion. Iron and manganese are also present
in large quantities but were not taken into account in the
calculations; along with barium (in barite) and mercury (in
cinnabar) they are among the metals that in some deposits
are thought to have a hot springs origin (Hewett, 1966).
Whether or not such metalliferous sedlments-.-which
evidently form by precipitation from the anox~ic brine as it
rises and mixes with cooler, oxidizing, weakly alkaline,
less saline Red Sea water (Miller and others, l966)--occur
on the U. S. shelves is wholly speculative, but the super-
heated metal-rich Salton Seabrine (White et al, 1963) ap-
pears to be of the same origin, and the Pacific margin, as
previously indicated, is one of the tectontic belts in which
comparable hydrothermal activity is taking place now or
took place in the recent past. The origin of the Red Sea
deposits is evidently complex, and the concentration of the
metals apparently is related not only to the local emission
of the brine but to the morphology of the bottom. Whether
PAGENO="0231"
225
or not the complete ore-~forming environment prevails any.~
where along the Pacific or Alaskan shelves is impossible
to say at this point, but the potential for this type of
deposit plainly deserves investigation.
D. Barite
Barite (BaSO,4) concretions have been dredged off the
coast of California and elsewhere in depths ranging from
300 to 1200 meters or more (Mero, 1965, p. 75), and barium
sulfate is a common constituent of manganese oxide nodules
and of some ocean bottom sediments. The implication that
large quantities of high-~quality deposits may be found on
the sea bottom, however, comes not from the present sea
floor, but from the recently discovered sedimentary barite
deposits in Nevada, where three principal beds have been
found that aggregate 5.0 feet in thickness and have been
traced 2 miles along the strike (Shawe and others, 1968).
These beds, which resemble dolomite in appearance, were
previously unrecognized and Shawe has advanced the hypothesis
that barite is a normal marine chemical sediment that will
be found to be far more common than previously suspected.
Even if the Névadabarite has a local hydrothermal sourøe,
as Suggested for some of the sea bottom deposits (Emery,
1960, p. 217), it could have counterparts on the present
sea bottom. There is no way of estimating their magnitude,
however, and even if they are present, the abundance. of
land resources may preclude their exploitation.
E. Glauconlte
Olauconite, a hydrous iron potassium alumino.~silicate
containing 2~.9 percent K20 and locally a few percent P205 in
the form of admixed phosphorite, has been used at times as
a fertilizer but is used now only as a water softener
and soil conditloner--.uses that together take only about
L1300 tons a year in the United States. Efforts to develop
economic processes to recover potash from glauconite have
been unsuccessful, and because of the abundance of potash
in lower cost, sources there is no incentive n~w for further
research. Resources, on land are .~ tb large and widely dis..
tributed; Mansfield (1922), for examp1~, estimated that the
gi.auoonite deposits of New Jersey minable by open pit `methods
contain more than 500 million tone of 1q20.
Ueposits of glauconitic sediments are widespread on~
both the Atlantic and Pacific shelves, particularly in
PAGENO="0232"
226
areas of slow accumulation at depths of 600-1800 feet, and
are in some places associated with phosphorite. The ~n-
dent glauconites exposed on land are similar to phosphorites
in area, thickness, and concentration and the ~tlantic and
Pacific shelves each probably contain of the order of bil-
lions to tens of billions of tons of glauconite in surficial
sediments and much more in bedrock beneath.the shelves. Be-
cause glauconite has such limited use and is so abundant
on land, however, the shelf deposits have no prospective
value.
F. Diatomaceous ooze
Siliceous oozes composed mainly of either diatom or
radiolarian tests are widespread on. the deep ocean floor.
They are less well known on the shelves, but diatom blooms
are common in upwellin.g waters (in which the phosphorites
also are formed) and diatomites are abundant in older shelf
sediments that formed in the upwelling environment. It is
safe to assume that diatomaceous ooze is abundant on parts
of the Alaskan, Pacific, and Atlantic shelves.
Diatomite has many important uses in filtration, in-
sulation, abrasives, and fillers and prices for it in these
uses range from $30.-$l37 a ton. Most of its cost, however,
is in processing after mining. Drying is .one of the cost-
ly processing steps, for diatomite in the ground commonly
contains 50 percent water.
Resources of diatomite on land are abundant, particular-
ly in the western states, and potential minable resources
are probably in the range of tens or hundreds of billions
of tons. Diatomite deposits are also known in most of the
Atlantic coastal states but are not of competitive qua]it;y.
Considering the added costs of dryirw and perhaps eth'.~r
types of processing that d~atomaceous 0050 would require,
as well as the abundance of land deposits, shelf depos1t~
have no prospective value even though they are potentially
large. Conceivably deposits of high purity on the Atlantic
shelf might have some value in eastern markets, but judgi~pg
from the deposits known in the exposed shelf sediments in
the coastal plain, the prospects for discovering such de-
posits are not promising; conversely, the prospects for
finding minable deposits are equally good on the coastal
plain, where the costs of producing them would certainly
be lower.
PAGENO="0233"
227
CL Carbonaceous mud
Marine black shales, particularly those deposited in
the upwelling environment, commonly coriiain 5-20 gallons of
oil equivalent a ton (Duncan and Swanson, 1965). Some of
them also contain minor amounts of several metals--parti-
cularly vanadium, chromium, and zinc in the vicinity of 1
percent, nickel and molybdenum in the rang~ of 0.1-0.3
percent,and uranium in the range of 0.005-0.01 -percent--
along with several percent of sulfur. Oil has been recover-
ed by destructive distillation from some of these shales in
the past; vanadium, uranium and sulfur have been produced
from such a shale in Sweden, and serious consideration has
been given to recovery of various metals from such deposits
in the United States in recent years.
Muds that are the progenitors of such black shales are
known in some of the basins off the coast of southern Calif..
ornia (Emery, 1960) and are probably forming elsewhere.
Their composition has not been studied in detail, but it is
reasonable to assume that in places th~y contain comparable
amounts of the materials that have some prospective future
value on land. But because the land deposits are large
and are of submarginal or at best marginal value now, no
prospective value at present can be assigned to the shelf
accumulations, even though their magnitude is probably
large.
H. Shell, coral, and lime mud
Oyster shell is presently dredged from San Franciso
Bay, from lagoons and estuaries at many localities along
the Gulf Coast, and from a few estuaries of New Jersey,
Maryland, and Virginia. Current total production is about
21 million tons; about 1~wo-thirds of this is used for con-
crete aggregate and road metal and most of the remainder
is used for cement and lime. Coral limestone, mainly from
old reefs now exposed on land, is mined for cement and lime
on Hawaii and lime mud, composed of ~`agonite pellets and
ool1~tes, is dreged oft the coast of Ber~da for similar
purposes.
Land sources of calcium carh~n~te are enormous in the
aggregate. They are not adequate for local needs in many
coastal areas, however, and in such localities offshore
PAGENO="0234"
228
sources may be economic, as the existing operations demon-
strate. Generally speaking, the areas in which land sources
are sparse enough to offer some present or future market for
vaPious forms of offshore calcium carbonate deposits include
Hawaii; Washington, Oregon, and Northern California; most
of the Gulf coast; and New England. Potential resources
of calcium carbonate on the outer continental shelves are
large in some of these regions but their magnitude and
prospective value are difficult to evaluate from available
information. General observations on each of .the regions
may help to indicate some of the possibilities and problems.
Inasmuch as the Hawaiian Islands are composed of
volcanic rocks, the only source of lime for cement and
chemical purposes is coral reef rock and lagoonal lime mud
and sand. Remnants of older reefs on land are now the
principal source of lime, and resources within the 3 mile
limit are probably measurable in billions of tons. In some
areas the reefs extend beyond the 3 mile limit, however,
and for reasons of local convenience they may be drawn on
in places as a source of lime in the future.
Known shell deposits along the coasts of Washington,
Oregon, and California are mainly confined to inshore bays
and lagoons. Relict deposits formed at times of lower sea
level may be present on the outer shelf, and those in shallow
water near coastal cities might have prospective value if
they could be located cheaply. Judging from the size of
known accumulations elsewhere, such undiscovered deposits
are probably in the range of hundreds of millions or billions
of tons. Some of the order of millions or tens of millions
of tons might be suitable for mining in the near future and
thus merit classification as marginal resources.
The shell deposits now being dredged in the Gulf of
Mexico are also located in inshore and nearshore waters.
* Because better sources'of aggregate and lime on land are
sparse near the coast in many areas, there is considerable
demand for the oyster shell deposits, and dredging opera-
tions are moving further away from the local market centers
as deposits close at hand are depleted. Because the waters
of the Gulf are generally more favorable for either chemical
or biochemical precipitation of calcium carbonate than those
of the Pacific coast there is an even greater likelihood
PAGENO="0235"
229
that relict shell banks, forme~d during periods of luwer sea
level, exist on the outer-shelf of the Gulf, and those in
shallow water near coastal cities probably have some pro-
spective value. The magnitude of these undiscovered re-
sources is probably at least in the billions or tens of
billions of tons range, and it is reasonable to suppose
that those of marginal quality and accessiblity are of the
order of tens or hundreds of millions of tons.
Relict oyster shell deposits are common on the cont~-
nental shelf south of Boston (Emery, 1965). Not enough
sampling has been done to determine the extent of individual
deposits, but it seems likely that deposits similar in order
of magnitude to those mentioned for the Gulf are present.
Land sources of lime are abundant, however, and nearshore
estuarine and lagoonal deposits are available also. There
seems no justification, therefore, for assigning any pro-
spective value to the Atlantic shelf shell deposits or for
considering any of them to be in the marginal category.
Because good deposits of limestone are sparsely distrib-
uted in the coastal region of New England, good offshore
deposits there might have some prospective value. Available
information on the composition of sediments offshore, how-
ever, suggests that large shell deposits are not as abundant
on the outer New England shelf as they are further south
(Emery, 1965), and the chance of finding suitable deposits
In areas in whi~ch they could be worked profitably seems too
small to justify an estimate of either minable or marginal
resources.
Sand and gravel
Sand and gravel for concrete aggregate and many other
uses are consumed in larger amounts in the United States than
any other mineral commodity except water, but their
average unit value of a little more than $1.00 a ton is
among the lowest. The cost of transportation is a large
element in their cost at the ~oint of consumption, and local
sources are therefore utilized ~.:`rever possible. Sand and
gravel, or crushed stone, which is a cuitable substitute in
some uses, are abundant and widespread in most parts of the
* country. They are in short supply locally in some coastal
areas, hOwever, and the growth of some coastal cities, and
the accompanying increase in land .value and the institution
of zoning ordinances that prohibit mining, are driving sand
and gravel producers to suburbia, with a consequent sub-
PAGENO="0236"
230
stantial increase in cost of downtown construction. Off-
shore sources, where suitable ones are available, provide a
good solution to this problem, and the benefits of shifting
to them may be multiple. At Oyster Bay near the west end of
Long Island Sound, for example, offshore dredging has not
only produced a needed and salable product, but has deepen-
ed and widened navigation channels, reduced tidal current
speeds, increased mooring areas, and provided royalty re-
venue to the village of Huntington (U.S. Dept. of Commerce,
Development potential of the U.S. Continental Shelves, 1966,
p. 29). Offshore sources of sand and gravel are also drawn
on to replenish beaches and for other types of construction
along the edge of the sea. Offshore production of sand and
gravel for these and other types of uses is likely to in-
crease, but the increase probably will be localized to the
vicinity of major coastal cities. The amount and value of
U.S. production are not known but Cruickshank et al (1968)
estimatC the 1966 total for the United States and Britain to
be 100 million, cubic yards valued at $100 million, of which
about half was produced from coastal areas of the United
States (John Padan, U.S. Bureau of Mines, personal communica-
tion, 1968). Activities were mainly concentrated along the
northeast coast from Maine to Virginia, the Gulf Coast from
Mobile Bay to Galve8ton Bay, the west coast (San Diego and
San Francisco Bay) and Alaska (Cook Inlet near Anchorage)
(William Barton, U.S. Bureau of Mines, personal communication,
1968).
Although coarse sand and gravel are not abundant in the
Gulf of Mexico, potential resources of sand and gravel on
most of the outer continental shelves are almost incalculably
large, and an estimate of the total magnitude would have no
meaning. On the Atlantic shelf, sand is widespread from
Maine to Florida north of Miami (Emery~ 1965 a, b). It
ranges in depth from an average of 20 met~rs to as much as 80
to l~40 meters near the shelf edge, and it~ thickness is as
much as 60 meters..
Gravel, on the other hand, is restricted primarily to
two areas off the north Atlantic shelf. One deposit that
lies off the New Jersey shore near Barnegat Bay and south
of the Hudson Channel (Shepard, 1932; Shepard and Cohee, 1936)
has been described by Sohlee (l96L~) as a fan shaped deposit
covering 560 square miles and lying between the 66 and 132
feet bottom contours. Gravel-size.material comprises as
much as ~Il percent of the sediment; the rest is composed
largely of sand. It is 10-30 feet thick, as are gravels
PAGENO="0237"
231
or similar origin exposed on the coastal plain, it may con-
tam 10-30 billion tons. A second, less well known gravel
deposit is located in the Georges Bank area southeast of
Cape Cod, where residual gravels derived from glacial till,
glacial outwash and Tertiary strata have been concentrated
by the winnowing action of tidal currents (Emery, 1965, p.
Cl59).
In the Gulf of Mexico, fmne-grained silt to sand-sized
materials extend along the shore line from Brownsville,
Texas to Apalachee Bay, northwestern Florida, but sand
fractions extend only 2 to 5 miles from the shore (Shepard
and Moore, 1955, p. l9L~8). In general, these materials be-
come finer grained seaward and, therefore, probably. will not
be exploited on the outer shelf. Because the Pacific shelf
has a relatively youthful shore line, there has been less
erosion and sorting by current-winnowing of sand and
gravel than along the shores discussed above. Because of
these topographic irregularities, sand and gravel deposits
offshore California occur as pockets or "bolsons" in small
embayments ar.d depressions in the shelf floor. For this
reason, deposits are more difficult to locate and exploit.
The proportion of gravel to sand is much higher than on
the Atlantic shelf but total exploitable reserves are prob-
ably considerably less. Glass sand has been mined from
beach deposits near Monterey, California, where ocean cur-
rents and weathering of granitic rocks have combined to form
relatively pure silica sand deposits. Sand is abundant off
the Oregon coast and both sand and gravel are abundarft off
the coast of Washington.
Shelf areas of southern Alaska contain large quantities
of sand and gravel, and near population centers of southern
Alaska, such as Anchorage, Cordova, Kodiak and Juneau, where
ease of accesa and sea transportation is relatively cheap,
mining of sand and gravel from the ocean floor may. . compete
locally with exploitation of land based deposits for land
fill, road building and aggregate for construction.
In Hawaii, sand for concrr~-e aggregate is obtained from
beaches, and partly lithified ~ar dunes (C. 0. Johnson,
personal communication, 1968). All of the material is
composed of calcj~um carbonate fragmen;s of marine shells,
algae, and coral. Supplies on Oahu are essentially deplet-
ed and the chief source is now a large beach on Molokal.
There are no commercial sources of gravel in Hawaii. Crush-
ed bassalt is used for coarse aggregate in concrete. S~mnd-
PAGENO="0238"
232
and gravel-.size material is obtained from cinder coneo for
use as light-weight aggregate. Gravel-size material for
use as road metal is obtained from cinder cones and clinker
zones of lava flows. Sand deposits probably exist off the
larger beaches and these may eventually come into use.
Although sand and gravel are widespread, they are by
no means ubiquitous. Deposits of suitable quality for a
given market are rare in many areas, and the selection and
delineation of usable deposits will require considerable
prospecting and exploration. Generally speaking, coarse
materials are most abundant in glaciated areas, as on the
northern Atlantic shelf and Alaska; near the mouths of
rivers with steep gradients; in relict stream channels in
shallower waters where the shelves were once exposed to sub-
aerial erosion; and on coasts exposed to heavy seas. Some
of the latter, however, present severe operating problems
because of the frequency of heavy storms.
J. Placer minerals
World beach and offshore production of placer minerals
--chiefly diamonds, tin (cassiterite, Sn02), iron (magnetite,
Fe3O~ rutile (TiO2), ilmenite (FeTi0~), monazite (Ce, La)
PO~, and zircon (ZiSi0~j)~-is now worth about $50 million a
year (Cruickshank and others, 1968), approximately equivalent
to 7 percent of the world's annual production of placers
from land, which includes gold ($150 million) and platinum
($20 million) (Emery and Noakes, 1968). Among all the
placers produced in the world, tin placer production
($3~45 million) has by far the greatest value, and diamond
placers ($256' million) are in second place, although they
are exceeded by the annual value of the world's lode mining
of gold ($1,160 million) (Emery and Noakes, 1968).
Geological kn~w1edge of placer deposits on land iridi-
cates that the rich placers of tin, gold, and platinum are
nearly always in.stream~type deposits, including related
eluvial deposits, because the high specific gravity of
these minerals allows the coarser grains to be relatively
easily trapped and held in river beds, generally not very far
from their primary source (Emery and Noakes, 1968). With a
few notable exceptions beach deposits even in mineralized
coastal areas are rarely as prolific. While most of the
rich coarse placers of tin, gold, and platinum are thus ex-
pected to be in river channels, the accumulations of the
lighter heavy minerals (ranging in specific gravity from
PAGENO="0239"
233 /
1L2 to 5.3), principally ilmenite, rutile, zircon, rnorazite,
and magnetite, are virtually confined to beaches (L.nery and
Noakes, 1968). Being slightly denser than quartz and feld-
spar with which they are associated, these minerals can be
transported for hundreds of miles from their sources and
still form economic deposits in favorable high-energy beach
environment of wide extent (Emery and Noaks, 1968). The
long-distance transporta~iori and frequent reworking into
younger deposits that characterize these minerals permits
accumulation of equally valuable placers in ancient beaches
(both raised and submerged) and modern ones. Because of the
slow rise of sea level during the past 5,000 years, the
opportunity to receive minerals reworked from the ancient
beaches is certainly greater for modern beaches than for
any other post-glacial ones. Thus, the modern beaches as
a group are expected to be the richest in light heavy min-
erals, the raised beaches next, and the submerged ones
somewhat poorer (Emery and Noaks, 1968). The Pleistocene
sea level was as much as 137-160 meters lower (Donn, Farrand,
and Ewing, 1962). and because of the cyclic nature of the
sea level changes during the glacial and interglacial periods,
a series of beaches and extensions of stream channels likely
developed. Offshore placers may thus include relict, or
reworked alluvial deposits and, in glaciated areas, reworked
till. Compared to land and present beach placers, offshore
deposits are not likely to be as abundant or rich, but the
exceptions may be important in local areas or regions.
Although there are several good prospeôts for the de-
vel~pment of placers in both east and west coast waters,
none are in production now and all of them must be classed
as marginal or submarginal for the time being, but they have
more than enough prospective value to warrant further pro-
specting and improvement in mining and recovery technology.
The common east and West coast placer assemblages con-
tain some of the same minerals but in general they are
different, as indicated in the following lists of the po-
tentially valuable minerals:
West coast
placer minerals
Gold
Platinum
Cassiterite
Magnet ite
Ilmenite
Chromite
Zircon
East coast
~lacer minerals
Ilmenite
Rut ile
Monazite
Xenot ~me
Zircon
Kyanite
Sil limariite
Staurolite
PAGENO="0240"
234
Not all of the west coast placer minerals are likely
to be found in individual deposits, and only gold, platinum,
and minor amounts of tin have been recovered in commercial
operations on land. Ilmenite is the only product recovered
from some east coast placers, but others contain as potential
products all those listed above. Regional prospects may be
reviewed briefly as follows:
1. Alaska.--About 30 million ounces of gold have been pro-
duced in Alaska, largely from deposits near or in the coastal
regions. About 70 percent of the total has come from placer
deposits, and some 29 placer districts near the coast have
contributed the bulk of this. Of the lode mines, 13 are in
coastal regions and the major ones are in southeastern
Alaska. One of the most productive of the placer districts
was that at Nome, which yielded some 5 million ounces, mainly
from ancient and modern beaches. Platinum has been produced
for many years from a placer on the Salmon River, which drains
into Goodnews Bay, and formerly from two other placers near
the coast, one on the Seward Peninsula near Norton Bay, and
the other at Lituya Bay in southeastern Alaska; the magnitude
of past production is not known but has been estimated to be
well over a half million ounces (Merti, open file report,
1968). About 2,000 tons of placer tin has been mined from
several valleys on the western Seward Peninsula. Magnetite
and/or ilmenite beach sands are present at Yakutat and
Lituya Bays and other localities in southeastern Alaska
but they have never been mined.
In recent years offshore sampling, drilling, and/or
geophysical studies have been undertaken in search for gold,
platinum, and tin in the, vicinity of some of the onshore de-
posits. The results of the prospecting undertaken by private
companies has not been announced. The Geological Survey's
investigations, however,. have shown the presence of five major
submerged shoreline and submerged stream channels at depths
of 30 to 1W0 feet beneath the Bering Sea (Hopkins, 1968)
and a cooperative Bureau of Mines-Geological Survey recon-
naissance drilling program in the Nome offshore has shown
low concentrations of gold over a wide area and at a depth
in the surficial sediment.
The sampling undertaken thus far suggests that the
surf.icial sediments over the shelves of the Bering Sea and
Chuchi Sea contain a background concentration of gold of
the order of 0.02-O-.08 ppm, or $0.02-$O.08 per ton, mainly
in particles 10-20 microns in size -- too small to be
PAGENO="0241"
235
recoverable by available technology (Hopkins, in preparation
1968). The fine-.grained size of the gold encountered is in
consonance with what might be expected from the geology of
the area, for coarse alluvial gold is seldom found more than
a few thousand feet from its source, and workable deposits are
generally within 5 miles or so of the source. Except for
gold borne to the Bering Sea in glacial till, the best pros-
pects for richer and coarser marine deposits are in near
shore waters. Seismic profiles show buried fault scarps,
and at least one of these faults shows evidence of mineral-
ization (Hopkins, 1968). Placer concentrations of coarse
gold may have formed where these source materials are crOssed
by submerged alluvial channels and beaches.
The U.S. part of the Bering and Chuchi Seas is an area
of about 300,000 square miles, and of the surficial sediment
averages 20 feet in thickness and has the concentrations of
gold indicated above. It would contain some 5-20 billion
ounces. Even though gold dredges can operate profitably
under favorable conditions with heads that contain only ten
~ents a ton (one at Hammonton, California is working material
that contains only about 0.07 a ton), the "background" gold
is too fine-grained to have prospective value, especially
in this area. Recoverable deposits almost Oertainly occur
on the inner shelf and some may occur on the outer shelf
also, but the magnitude of such undiscovered recoverable re-
sources is probably in the range of millions or at best tens
of millions of ounces; and of course much geologic study,
prospecting, and exploration is needed to define them.
The Gulf of Alaska also has some placer gold potential,
particularly along southeastern Alaska where the largest
known Alaskan lode deposits are located. Although there
is no basis for a quantitative estimate, the magnitudes
may be of the same order as those for the Bering sea--pos-
sibly millions or tens of millions of ounces in undiscovered
recoverable resources, with far larger amounts in deposits
too lean and too. fine.-grained ~o have prospective value.
Platinum and cassiterite are more resistant to abrasion
than gold, but cassiterite has a greater tendency to fracture
during transportation. Both may stand travel from the source
of distances up to 10 miles or so, but tin placers accumulat-
ing at greater distances are expected to be finer-grained
and lower grade.. The magnitude of past production and re-
serves on land in Alaska suggests that potential offshore
resources of these minerals are not large--perhaps of the
order of tens or hundreds of thousands of ounces of platinum
77-463 0 - 72 - pt. 1 - 16
PAGENO="0242"
236
and thousands or tens of thousands of tons of tin.
Magnetite and ilmenite placers almost certainly exist off
southeastern Alaska, and judged from the magnitude of known
deposits on land they are probably large. One alluvial de-
posit at Klukwan, for example, is estimated to contain sev-
eral hundred million tons of rock with a magnetite content
of about 10 percent (Berg, Eberlein, and McKevett, l96~I, p.
109). None of the large lode deposits on land have yet been
developed, however, and the hundreds of millions or even bil-
lions of tons of ilmenite and magnetite that may be present
in the offshore must be regarded as submarginal now because
of the added costs stemming from their location and the lack
of local or regional demand. Local economic development or
continued growth of Japanese demands could, of course,
speed the development of these resources.
2. Washington, Oregon, and California. --Several elongate
areas containing a high proportion (up to 30 percent) of
heavy minerals in bottom sediment have been recently dis-
covered northwest. of Grays Harbor, approximately 5 miles
west of the Washington Coast, at a water depth of about 60
feet. The economic potential of these heavy mineral con-
centrations, which may represent old beach deposits, is
not yet known but preliminary analyses indicate less than
0.1 ppm gold. Further investigations designed to more
closely delineate these areas of heavy mineral concentra-
tions and to determine their economic potential are in pro~
gress under a joint U.S. Geological Survey and University of
Washington program.
Black sands composed essentially of magnetite and il-
menite are present in moderate concentration (up to 10 per-
cent) near the surface in Recent spits and beaôhes north and
south of the mouth of the Columbia River. Exploration pro-
grams by several groups suggest that the total amount of
heavy mineral in these sands decreases with depth. System-
atic test drilling with reliable sampling techniques and
regional geologic studies are needed, however, to evaluate
the potential of these deposits.
Modern and ancient beaches in southern Oregon and
northern California contain black sand placers derived from
crystalline rocks in the adjacent Coast Range and the Klamath
mountains. These deposits yielded an unknown amount of gold
and platinum in the two decades following their discovery
in 1852, and a small production has continued intermittent-
ly into recent years from "sniping" on the modern beaches,
particularly after heavy storms. During World War II efforts
PAGENO="0243"
237
also were made under government support to recover chromite
from the Oregbn sands, and about 1450,000 long tons of crude
sand.between 19113 and 1955 yielded about 51,000 tons of con-
centrate containing 37-39.3 percent Cr203 with a Cr:Fe ratio
of 1.6:1. Both the Cr203 content and Cr:Fe ratio are lower
than industry ordinarily considers acceptable.
Studies of the exposed placer deposits on land indicate
that some of them were formed offshore (Griggs, 19145) and
recent cooperative studies by the Geological Survey and
Oregon State University have led to the identification of
seven deposits on the shelf off southern Oregon at depths
ranging from 60 to 1180 feet. The best defined of these
deposits are approximately 8 miles long and 2 miles wide.
All but one of them are within 3 miles from shore. Their
thicknesses are unknown, but assuming they average 15 feet--as
do many of the adjacent exposed deposits--and assuming a
mineral concentration similar to that in the nearest onshore
black sand, H. E. Clifton (personal communication, 1968) has
estimated the tonnage of some of the heavy minerals in these
deposits as shown in Table 9.
The gold in these placer deposits ranges from 0.1 to 0.5
ppm (10-50 cents a ton) and is generally in particles that
weigh less than 0.005 mg (Clifton and others, 1967), again
too fine-grained for easy recovery.
Ilmenite, rutile, and zircon also occur in the onshore
deposits in variable amounts, but the average in several
samples reported by Griggs (19145) is about 14 percent, 0.3
perceilt, and 1 percent, respectively. Presumably about
l8xl0°, lxl0°, and 14.5xlO° tons of ilmenite, rutile, and
zircon should therefore be added to the above potential in
the offshore deposits.
Other recent cooperative investigations by the Geological
Survey and Scripps Institute of Oceanography along the coast
of northern California indicate that an area of about 1400
square kilometers on the shelf bt~tween Crescent City, Calif-~
ornia and the Oregon border, mostly in state waters, contains
low grade concentrations of gold, platinum and chromium in
surficial sands that may average 5 meters in thickness over
the area. G. W. Moore (personal communication, 1968) esti-
mates that the gold and chromite contents are 0.01 ppm and
5 percent, respectively, or about 5 million ounces of gold
and 7.5 million tons of chromite. The platinum content is
PAGENO="0244"
Estimated tonnage
_.~of !an~i__~___
50 x 106
100
100
70
50
50
-35
1~55
* Platinum
_~rn.tals(oz.L
.07 x io6
.07
.07
.05
.035
.035
O.34~5 x io6
Chromite I~gn.tite
5x106 2.5x]06
10 10
10 10
2.8 10.5
2.0 7.5
2.0 7.5
.7 _________
32.5 x io6 51.5 x io6
Table 9 Heavy mineral content of black sand deposi~q on the continental shelf
of southern Oregon (estimated by H. E. Clifton)-J
Gold (oz.)
Water depth
~
1. 15...W
2. 15-20
3.. 15-25.
4. 80..85
5. 10-10
6. 10-20
7. 10
TOTAL
0.7 ~
1.4
1.4
1.0
0.7
0.7
0.3
6.2 x io6
1J
About half of deposit 5 and all of 14' are on the OCS; the others are within the
three nautical mile limit.
PAGENO="0245"
239
about 110 grams per 100,000 cutic meters. About 3 times as
much sand, but of still lower grade, is present between
Crescent City and Trinidad Head to the south.
Inasmuch as it has not been possible to produce a
chromite concentrate from the onshore deposits of a grade
and Cr:Fe ratio acceptable to industry, and because the gold
content is low and its grain size is very small,. the Oregon
and California deposits must be judged to be submarginal at
the present time if mined for those minerals alone. No
analyses are available of the ilmenite, but if it is suf-
.ficiently rich in titanium it might be a salable product.
If so, co-product recovery of gold, platinum, ilmenite,
rutile, and zircon might make mining profitable.. Such an
operation apparently has not proved attractive onshore, and
the deposits in the aggregate must be classed now as marginal.
It is not unreasonable to suppose, however, that within the
southern Oregon-northern California offshore province some
concentrations exist that are rich and large enough to mine
under present economic conditions, and therefore to project
undiscovered recoverable resources of gold of the order of
hundreds of thousands of ounces, ilmenite and rutile in the
range of a few millions of tons, and several hundreds of
thousands of tons of zircon.
3. Atlantic shelf ..-Placer minerals, mainly ilmenite and
rutilè but also zircon and monazite, are mined from early
Pleistocene raised spits, late Pleistocene raised terraces
and dunes, and Recent beaches in Florida (Overstreet, 1967, p.
126-132). Ilmenite and rutile are mined from Miocene and
`Younger fossil placers in the New Jersey Coastal Plain (Peter-
son, 1966, p. 30).. The high-alumina refractory minerals
kyanite and sillimanite (A12SiO5) could also be recovered
from the Florida tailings. .
Marginal and submarginal concentrations of these ~n1nerals
have been identified in the Atlantic beaches and in well
cuttings from buried fossil placei~s in the older sedimentary
formations of the Atlantic Coastal i~~in at least as far
north as Delaware and New Jersey. Monazite, zircon, ilmenite,
rutile, and stáurolite were dredged from a stream placer
at the inner edge of the Coastal Plain near Aiken, South
Carolina, in the 1950's (Lenhart, 1956). Farther inland,
small fluviatile placers in North and South Carolina were
the source of nearly 5,500 sh~rt tons of moriazite from 1880
to 1917 (Overstreet, 1967, p. 11).
Local concentrations of ilmenite, rutile, and other
PAGENO="0246"
240
placer minerals have been reported on the south shore of Long
Island in beach sands derived from glacial outwash and mor-
ainic deposits (Martens, 1935, p. l59~-l595). Along the
Atlantic Coast north of Long Island, Pleistocene glaciation
eroded any pre-existing placer deposits. Variations in re-
lative abundance of individual mineral species in typical
placer deposits along the Atlantic seaboard are shown in
Table 10.
The most sought placer mineralalong the Atlantic coast
of the United States has been ilmenite. Weathering leaches
iron from ilmenite, thus increasing its titanium content above
the theoretical 52.7 percent Ti02 of normal ilmenite and en-
hancing its industrial value. Ilmenite enriched in T102 is
found in the older fossil pladers of the Atlantic Coastal
Plain and in the most southerly of the Upper Pleistocene
and the Younger placers of the Atlantic beaches. The largest
known placers on the Atlantic seaboard of the United States
are in Florida and New Jersey. Over 50 percent of the known
recoverable ilmenite in the United States is said to be in
Florida, Georgia, North and South Carolina, and Tennessee
(Giese and others, 19611, p. 3). Data are unavailable on the
extensively prospected ilmenite placers in the Coastal Plain
of North Carolina near Albemarle Sound (Stuckey, 1965, p.
3111~3142; Williams, 196'I, p. 113..116).
Production of titanium minerals in the southeastern
States was reported by Giese and associates (19611, Table 5)
to range from 180,0.00 short tons (including 7,000 short tons
of rutile) in 1952, to 267,000 short tons (including an
unstated output of rutile) in 1962. Production in New Jersey
has not been reported, but the placers are conservatively
estimated to contain about 19 million tons of ilmenite with
58 percent Tb2 In two deposits (Lynd, 1960, p. 8611). Florida
resources of ilmenite recoverable under technological con-
ditions of 1962 appear to be about 17 million tons contain-
ing 9.9 million tons of Ti02 (Peterson, 1966, p. 29). Five
placer deposits in South Carolina (Peterson, 1966, p. 29) are
estimated to contain about 5 million tons of ilmenite, with
2.7 million tons of Ti02. These estimates obviously.rep-
resent only a very small part of the potential ilmenite
resources in the placers of the Atlantic Coastal Plain.
The sum of past production through 1962 and known recoverable
reserves of ilmenite.along the Atlantic~ Coast from NewJersey
to Florida is about 511 million short tons.
PAGENO="0247"
.CATI?.
TIrANIT-
TINCRALS
IL~E:.I~L EJCLC.E
~TILEI~CON
STAuRol~rE KYANITC
SILLI,4ANITE MONAZITE TOURTIALINE
OThER MINERALS
REFERENCE
:~
TRAiL RIA;L E~AVLY PlEISTocENE
45
15
20
4
5
5
6 (*)
CARPEPntR AND OTHERS, 1953
p* 7~; CALVER, 1957~ p,
~ACK53NILE ~ UPPER
FLElSTOCE~E
42>
7
11
0.5
37.5 (e)
CALvER, 1957, p, 18.
TLANTIC CCAST, TA> JY-L BEAC
SAT> oF 5E:E AC.
e_;TIES. APEPAZ 0.5
INES
.
k
>-:
1>>
2-1
3.20
1-2
.
2.11
1-8
2-~1
1-8 (c)
MARTENS, 1935, p* 1584
~.~;i-
SA1~AI_ `C- ~4I?.CRAL
D~EVATR.TE. TYBEL. ~
~ :E~rr
:
14
4
TRACE
TRACE
1
TRACE
(D)
MARTENS, 1928, P. 144.
CONCENTPAT IONS I?. roVE:>>.tS,
JEVYLL !SLATA. GLYNT Ccsrv
~2.0
2.;
5.5
1~.3
.
~3.8
1.3
6.0
1.2
1.3
21.54 (E)
NEIHE1SEL, 1962, TABLE 1.
L~
LV~ A?. ORE: YES, `ILTOl,
IEAf sLAt:. S~.FoRr OU?~T
~J
*~
~1.
tA
M~AULEY, 1960, p* 35; SEE ALSC
WILLIAMS, 1967, ~. 23.
c. :~~*
,L'~S1 `VOVET;, (V.4
OA?T~. * C~E\L T. PLEISIACL:.L
F)~SIL VLA~EAS
51.
.
tJ
5.9
i.0
1.1
6.3 (F)
.
QUIRK AND EIi.ERrsEN, 1963, ~. 10
EPISCTE, A0NL1, *ORNRLEIADE, COLLOPHANE, SPIIEPiE, SPINEL AND CORUNDAM.
(E~ PILCTE, SARNET, VORNRLENDE, ETC.
~F) UNISE,.TIFIEA.
:stle 10. HEAVY MINERAL COMPOSITICA OF TYPICAL PLACERS ALONG tVE ATLASTAC SEABO&R~ OF THE UNITED STATES (IN PERCENT).
I?[. ;` AtM. SPINEL ?_OAJtL~M.
~ FYA..IL, ILI-tI;c, ST._t L:ETC.
PAGENO="0248"
242
Rutile is more valuable than ilmenite because it is es-
sentially pureTi02. Most of the known placers of the
Atlantic Coast contain only 2 to 8 percent of rutile in
the total heavy-mineral suite. Rutile however, is more
abundant in beach sands on the Atlantic coast of Florida, -
Georgia, and South Carolina than it is on the northern
beaches. This increase in abundance southward probably is
because a) the weathered sililmanite schists and gneisses
in the western Piedmont from the vicinity of Mt. Airy near
the border between Virginia and North Carolina southwestward
to at,least to Athens, Georgia, are a better source of rutile
than. crystalline rocks further north, and b) rutile resists
weathering; and*hence is relatively enriched with1 respect to
minerals that disappear during alongshore transport.
Some beach placers outside the United States are re-
markably rich in rutile and zircon and comparatively poor
in ilmenite. For example, concentrates çrom placers along
the coast of Queensland and New South Wales, Australia, are
reported (Gardner, 1955, Tables 17, 29, 31-33) to have 17 to
~2 percent rutile and 20 to 63 percent zircon. * The great
abundance of rutile and zircon relative to ilmenite probably
cannot be attributed to a unique original source rich in
those two minerals, because both are found along 1000 miles
of Oo.astline. Either the detrital minerals have passed
through many cycles of weathering, transport, and deposition
during which the. ilinenite was selectively eliminated, or
certain appropriate energy conditions, as yet not understood,
separated ruti].e and zircon from ilmenite during deposition
on the present beach. Either condition might apply along
the southern seaboard of the United States, and rutile- and
zircon-rich deposits may exist landward or oceanward from
presently known ilmenite-rich placers. The possiblity that
such rutile- and zircon-rich placers may lie offshore deserves
investigation.
Rutile production in the southeastern States, dominately
Florida, was reported to average 8,ooo short tons per year
from 19~7-51, and to range between 6,8oo tons and 12,000
tons from 1952-58 (Giese and others, l96~, Table 5). Output
after 1958 was recorded with ilmenite*. Resources of rutile
in Florida were estimated to be about 700,000 short tons, and
in South Carolina 1.1 million short tons (Peterson, 1966, Table
3). Total output and associated resources ofplacer rutile
to 1958 is about 1.9. million short tons.
PAGENO="0249"
243
Annual production figures of zircon are not published,
but measured reserves of ziréon in deposits on the Atlantic.
Coast, expressed as concentrate containing 66 percent Zr02
(+Hf02), equal to 98 percent zircon, have been given recent-
ly by F. W. Wessel (1960, p. 999) as over 10 million short
tons, distributed as follows: Florida, 6,8011,000 short tons;
North and South Carolina 1,526,000 short tons; Maryland,
162,000 short tons.; and New Jersey, 1,520,000 short tons.
This measured reserve would be sufficient for several hundred
years at the l965.-l966 consumption rate of 314,000~35,000
short tons (U. S. Bureau Mines, 1967, p. 1111).
Monazite is the main commercial source for thorium and
the cerium earths, arid also yields small percentages of the
~yttrium earths, which are presently more valuable than the
cerium earths. Monazite makes up about 0.5 to 5 percent of
the heavy-mineral concentrate from beaches south of Georg-.
town, South Carolina, and less from beaches farther north.
This distribution appears to relate to the mouths of through--
going streams that reach the main belt of monazite.-bearing
rocks in the Carolinas and Georgia (Mertie, 1953, p1.1).
Resources of monazite in fluviattle placers between the
Savannah River, South Carolina and the Catawba River, N. C.,
not exploitable under present economic conditions, were
estimated to be 7811,000 short tons (Overstreét, Theobald,
and Whitlow, 1959,p. 713). If half the ilmenite resources
of Florida are accompanied by monazite in the ratio of 110
percent ilmenite to 0.5 percent monazite shown by available
data, then about 106,000 tons of monasite are associated with
the Florida ilmenite. Estimates for the other states are
lacking, and figures on production, except in the early years
when 5,500 short tons came from the Carolinas, are withheld.
Thus, total reported output plus recoverable and currently
non-recoverable associated resources are 895,000 short tons.
Xenotir~e (YPO11) occurs as a minor mineral with monazite
in detrital deposits along the Atlantic. coast of the south--
eastern states where it is known as far north as Assateague
Island, Worchester County, Maryland, and Accomack County,
Virginia (Peterson, 1966, p. 211). No placers rich enough
to mine for xenot~me alone are known. In ordinary practice
xenotime is recovered with monazite, and is not separated
from it in commercial concentrates. About 0.1 to 5 percent
of commercial monazite concentrates may be xenotime. Inasmuch
as xenotime is somewhat more magnetic than monazite, the two
iirierals could be separated in processing. Recently several
small lots of xenotime were ~sold for about $1000 a ton, or
PAGENO="0250"
244
between three and four times the price of monazite (R. F.
Griffith, oral comm., 1967). Because xenotime iè some-
what lower in specific gravity than monazite, its main
depositional environment may be slightly displaced from
the major concentrations of detrital monazite, and xeno-
time may tend to be somewhat more dispersed in sediments
than is moriazite. Resource estimates of xenotime are
lumped with those for monazite.
The high~~a1umina minerals kyanite and sillimanite
(Al2SiOç) are commonly present in Pleistocene and Recent
placer deposits on the Atlantic coast from New Jersey
south to the tip of Florida. There is some indication
that kyanite is more common than sillimanite on the beaches
from Virginia northward (Alford, Kane, and Marthison, 1956;
McMaster, l95k,.p. 62-.170), and that sillimanite may be
slightly more common than kyanite on the beaches from South
Carolina to Florida. This order may be reversed in the
older Coastal Plain sediments. Tailings from the separation
oftitanium minerals and zircon from placer concentrates
are enriched in kyanite and sillimanite where these minerals
are present in the raw sand. Procedures have oeen developed
for the px'eparation.of a 90 to. 95 percent kyanite.-sil~imanite
product from tailings at the Florida placers, but the mixture
was not completely evaluated as of l960.as a refractory
(Cooper, 1960.,. p. ~I25). Resources of kyanite and sillimanite
in the areas of placer mining in Florida may be about one-
fourth as great as the resources of ilnienite, or about LI
million tons.
Staurolite (H2FeA1IISi2O12) has been separated from
placer concentrates in Flox~ida and South Carolina for use as
a blending agent in the manufacture of portland cement and as
a premium-grade product for sand blasting. Staurolite is a
common component in early Pleistocene to Recent placers in
Florida, Georgia, and the Carolinas. It makes up as much as
8-13 percent of.the heavy-minerals fraction from coactal
sediments in New Jersey (MoMaster, l95LI,p. 62-170), but de-
creases in abundance to about 1 percent in the Miocene placers
(Markewicz and Parrillo, 1957). Condentrate~ from all placers
along the east coast of the United States probably will have
some staurolite, which must be removed when the titanium min-
erals, zircon, and monazite are separated. Resources of
staurolite in placers mined for ilmenite appear to be about
J40 percent of the Florida ilmenite reserves and 1 percent of
the New Jersey ilmenite reserves. Thus, about 6.8 million
tons of staurolite are available in Florida and about 200,000
tons are available In New Jersey.
PAGENO="0251"
245
Almandine garnet from monazite-bearing rocks .n North
Carolina was found by K. J. Murata (written commun., 195k) to
contain small amounts of lanthanum and yttrium. The relative
abundance of yttrium in the garnet was greater than lanthanum,
the reverse of their association in monazite. Inasmuch as
garnet is present. in Late Pleistocene and Recent beach sand3
along the Atlantic coast, and some of the garnet on beaches
south of Georgetown, South Carolina is from the same source
as the yttrium.-tearing garnet analyzed by Murata, detrital
garnets in marine deposits south of Georgetown should be
analyzed to learn the quantity and distribution of yttrium
in the garnet for in some areas it might provide `a source
for yttrium earths. No data on reserves or resources are
available.
Magnetite is essentially absent in all Atlantic coastal
placers from Florida northward to about the mouth of the
Chesapeake Bay where it becomes a common component of the
Recent heavy-mineral suite (Alford, Kane, and Marthison,
1956). Early Pleistocene and older deposits of the Coastal
Plain lack magnetite, mainly because it has been destroyed
during weathering.' Glacial outwash materials from about
New York northward, and unweathered rocks in the formerly
glaciated coastal areas contribute magnetite to the suite
of heavy minerals in beach sands, but exploitable placers
are unknown.
The value of placer concentrates depends on their mineral
composition, and other factors such as thickness, size, and
land costs determined the minability of individual deposits.
As a rule of thumb, however, placers in eastern United States
.must contain at least ~ percent of heavy minerals to be
workable, but in mining of beach sands in Australia the
common cut-off grade is about 0.3 percent for rutile and
zircon and averages 1 to 1.5 percent in total heavy mineral,
although elsewhere' in the world it is about 2 percent of'
heavy mineral (Emery and Noakes, 1968).
Turning now to the potential heavy mineral resources of'
the continental, shelf most of them ~re likely to consist of
submerged beach and drowned river va'ley types formed during
the Pleistocene ice ages. In some shallow water areas, how-
ever; offshore placers appear to be related~to various kinds
of offshore currents rather than to beach and alluvial pro-
cesses. It seems possible also that some of the ocean cur-
rents, such as the Gulf stream, which are strong enOugh to
sweep the bottom'clean of sediments over much of the shelf,
have also concentrated placers on a favorable bottom topo-
PAGENO="0252"
246
graphy,. Nevertheless, the placers in the marine environment
are expected to be largely confined to shelf areas less than
160 m depth.
Available data on shelf sediments indicate that some are
simiJ.ar to those along the coast and probably have the same
placer minerals. Between the latitude of Cape Hatteras,
North Carolina, and Jupiter Inlet, Florida, the heavy minerals
found by 0. H. Pilkey (1963, p. 643) are essentially the same
as those in sediments on the Recent beaches. The shelf sedi-
ment generally consists of slightly less than 0.5 percent of
heavy minerals. The suite includes ilmenite, rutile, zircon,
monazite, kyanite, sillimanite, staurolite, garnet, tourmaline,
apatite, epidote, amphiboles, and pyroxene.s. Pilkey defined
two heavy-mineral provinces in this part of the shelf. A pro-
vince north of the Cape Fear area yields concentrates that
contain less than 10 percent, and generally less than 5 per-
cent, of epidote with abundant garnet, zircon and kyanite.
* A province south of the Cape Fear area has concentrates that
contain more than 10 percent epidote, but relatively little
garnet, zircon, and kyanite. Monazite and sillimanite tend to
increase slightly to the south, the distribution of opaque
minerals (including ilmenite) is random, and rutile has a
* nearly random distribution. Stau~olite, garnet, kyanite, and
zircon, however, form distinctive regional highs (Pilkey,
963, p. 61111).
`Staurolite forms two broad highs, one on the shelf be-
tween Cape Lookout and Cape Romain, and the other to the
south off southern Georgia and Florida * The southern boundary~
of a well-defined regional high for garnet is in the Cape Fear
area, and three smaller highs are off the coast of Georgia
and Florida. Kyanite forms a regional high subparallel to
the coast in the northern half of the area. High concentrations
of zircon coincide with the northern anomaly for garnet (Pilkey,
1963, fig. 2), and the southern part of the zircon anomaly re-
lates closely to Cape Fear. The clearest factor seen by Pilkey
in the distribution of the heavy minerals in sediments on this
part of the shelf is a spatial relation to the major capes
and their extensions as underseas shoals (Pilkey, 1963.
p. 61e5-61i6).
Equivalent data are not at hand for the shelf north of
Cape Hatteras. However, the general distribution of the
placer minerals in time and space there probably resembles
their distribution on the coast.
PAGENO="0253"
247
Table 11
Favorable areas fox' heavy~ minerals on the Atlantic shelf to the 200
meter depth.
Mineral
A~e of der-~~it
Reàint az~ late Pre..late
Favorable areas
,,ç~Lswuune
r~.swuene
Ilmenite
x
x
Georgia southward for younger
sediments; throughout for
plder sed~nts
Rutile
X
x
South of latitude of Georgetown,
S. C. for younger sediments;
~hrouEboutfoi~ older s~ediments
Zircon
x
x
Richer north of Cape Fear in
younaer* sediments
Monazite
-~
x~
South of latitude of 0eori~etown.S.C.
Xenotime~
x
x
Ditto
Kyanite
x
x
-
Virginia northward in younger
sediments; southward from
j(~g~nia in o]4er se4tments
Sillimanite
x
x
J~y~erse. o~ k~4~
Staurolite
x
x
General with sharp highs in
younger sediments; possibly
~ for older sediments
Garnet
x
.
Absent
North of Cape Fear, but
yttrium-bearing garnets may
be off Georgia and Florida
Magnetite
x
Absent
~,
Nc. ~ward from latitude of
nth~c~' Chesapeake Bay
PAGENO="0254"
248
Table 12 -~ Estimates of undiscovered marginal resources of heavy minerals
on the Atlantic shelf to the 200 meter depth (millions of short tons).
~~!ineral P~ei~to~ ~..~ecent lz'e,j'letsto*en, Total
Ilmenite
17
17
75
109
Rutile
0.7
0.7
1.L~
Zircon
6.8
6.8
*
13.6
~4onazite and
xenotime
0.1
.
0.1
Icyanite and
sillimanite
*
Z~
.
~
k
Staurolite
6.8
6.8
13.6
uape icennecy
Cape Romain
gape itomain Cape Kennedy
Cape Nay Long Island
PAGENO="0255"
249
The effect of ocean currents as the 200 meter depth is
approached may be to increase northward the favorable areas.
for all placer minerals except magnetite in Recent and late
Pleistocene. sediments, and to extend northward the favorable
areas for monazite and xénotime in the Pre-late Pleistocene
sediments. The study by Pilkey (1963, p. 6~t4) showed that
unstable minerals like pyroxenes and amphiboles generally
increase in abundance in the direction of deepening water.
Favorable areas for individual minerals on the shelf
to the 200 meter contour are summarized in Table 11.
Resource estimates of the placer minerals on the shelf
to the 200 meter depth are based on the real possibility
that they are at least as common as they are on the beaches
and in the older sedimentary rocks. The most attractive
possibilities are ilmerdte-zircon placers resembling those
on Trail Ridge, Florida, but possibly associated with the
undersea shoals and extensions of Cape Kennedy, Cape Romain,
Cape Fear, Cape Lookout, Cape Hatteras, Cape Charles, Cape
May, Long Island, and Cape Cod. Monazite, rutile, kyanite,
sillimanite, and staurolite may be expected in the area
from Cape Kennedy to Cape Romain, but monazite and silH-
manite are not likely to be present iz~ significant amounts
farther north. It is possible that the Cape Kennedy-Cape
Romain offshore area has undiscovered resources in Pleisto-
cene and Recent material at least equal in magnitude and
quality to those known in Florida. Between Cape Romain and
Cape May underwater Pleistocene placers probably at least
equal resources of ilmenite, rutile, zircon, and.staurolite
known in Florida. Pre-Pleistocene deposits of ilmenite at
least four times as large as the New Jersey deposits, are
probable between Cape Kennedy and Long Island. These esti-
mates are summarized in Table 12.
Although these undiscovered re eurnes are expected to
be of equivalent quality, thickn~, nd magnitude to those
being mined now, the offshore dred~1ng costs/ are likely to
be somewhat higher than those onshore, and the deposits must
be classed as marginal now.
Undiscovered lower grade resources on the shelf to the
200 meter contour must be very large. Known total abundances
of the placer minerals, including species with no commercial
use, amount to only about 0.5 percent of the sediment (Pilkey,
PAGENO="0256"
250
Table 13
Estimate of undiscovered au~narginal resources of heavy minerals on
the Atlantic shelf to the 200 meter depth (millions of s1~rt tons)
Ilmeriite 1000
Eutile
Zircon l1~0
Monazite and xenotime 1
Kyanite and sillimanite 40
Staurolite 140
PAGENO="0257"
251
1963, p. 6143), compared to the 14 percent cutoff that is the
general rule for workable placers onshore. Undiscovered
placers in this area of better than average quality may con-
tain resources of about one order of magnitude more than
those in the marginal class, as shown in Table 13.
Resources in sands of average composition are enormous,
of course, and resources of placer minerals in the older
sediments may even be greater, but neither are of prospective
value.
Data on the distribution of placer minerals in the sedi-
ments beyond a depth of 200 meters are essentially lacking.
Minerals derived from typical continental felsic plutonic
rocks and high-grade metamorphosed sediments-*~species such
as rutile, zircon, monazite, xenotime, kyanite, sillimanite,
staurolite, and garnet--may decline in abundance with in-
creasing depth and distance from the continent. Ilmenite,
pyroxenes, and amphiboles may increase in abundance, but the
ilmenite may tend to be leaner in titanium and have more
chromium than is wanted for titanium metal or pigments.
Indirect indication of late Cretaceous and Tertiary
felsic volcanic activity associated with the Coastal Plain
sediments has been found in North and South Carolina and
Georgia (Rooney and Kerr, 1967, p. 7140: Heron and Johnson,
1966, p. 61; Sandy and others, 1966, p. 17, 23.-25; Crawford
and others, 1966, p. 1, 314~140). Oligocene and Eocene sedi-
ments on the continental shelf also show evidence of. volcanic
material as a component (Hathaway and McFarlin, 1966). It
is possible, therefore, that the sediments near and beyond
the 200 meter contour contain heavy minerals from a felsic
volcanic provenance that are lacking or unknown on: shore.
A test of this possibility would be in the appearance of per-
rierite, a thorium-bearing titano-silicate mineral resembling
zircon that is associated with rhyolite tu~fs and flows,
and that may be asource for thorium (Ippolito, 1956, p. 169).
Also, a large increase in zircon in the deep-water .sediment~,
particularly if it tended to be dot.~1y termina~ed without
evident overgrowth, might be attributable to rhyolitic sources.
Tertiary felsic volcanic activity may 1~ave formed systems
of auriferous hydrothermal deposits possibly associated with
copper, molybdenum, tin, and beryllium. If gold from such
deposits was subjected to submarine erosion it may have been
concentrated in placers or residually enriched deposits.
77-463 0-72 - pt.1 - 17
PAGENO="0258"
252
Data are not sufficient to evaluate the undiscovered
resources of the deeper shelf. The possible presence of
placer minerals like perrierite and gold perhaps offsets the
low potential for such minerals as rutile, zircon, monazite,
xenotime, kyanite, sillimanite, and staurolite, but none of
these possibilities can be evaulated in even semiquantitative
terms.
14~ Gulf shelf.--The distribution of titanium deposits in
the coastal plain and beaches of the Gulf of Mexico from
Florida to the Mexican border is shown by Rogers and Jaster
(1962) and that of monazite is described by Olson and Adams
(1962) and Overstreet (1967, p1. 2). None of these deposits
has been mined for placer minerals, but some have been ex-
plored (Giese and others, l96~I, p. 5-6).
The distribution of placer minerals along the Gulf
Coast appears to be closely related to differences in the
distributive provinces of the major rivers entering the Gulf
(Van Andel and Poole, 1960). Minerals such as kyanite,
sillimanite, staurolite, garnet, rutile, zircon, monazite,
and ilmenite, typically derived from plutonic granitic rocks
and high-grade metamorphic rocks are most common on the
beaches and in the near-shore sediments around the mouth of
the Apalachicola River on the Gulf Coast of Alabama and
Florida; however, no resources suitable for ilmenite mining
have been found in Alabama or western Florida (Peterson, 1966,
p. 10, p. 19-22).
Sand from the beaches of northwestern Florida has a
smaller variety of heavy minerals than any part of the
Atlantic Coast (Martins, 1935, p. 159L1); however, kyarzite
is much more common and sillimanite is much less common in
Gulf Coast sands than on the Atlantic Coast (Overstreet,
1967, p. 130-131).
Mississippi Rtver sediments, Recent beach sands, and
Pleistocene deposits of Louisana contain many varieties of
heavy minerals reworked from older sedimentary rocks and
glacial deposits of the continental interior. Ilinenite
and zircon are among the most common heavy minerals, but
rutile, monazite, kyanite, sillimanite, and staurolite tend
to be rare (Dohm, 1936, p. 378-379). Sediments carried to
the Gulf by the Rio Grande are characteristically rich im
green hornblende and pyroxenes but lack monazite (Bullard,
19142, p. 1022). Bullard found that heavy minerals are
common in the beach sands of Texas, and that the suite under-
PAGENO="0259"
253
Table 11~ -~ !~eavy minerals in the middle shoal off Cape St. 3eorge,
Florida (after Tanner and others, 1961).
Mineral Estimated percentage Estimated short tons
Umenit. and magnetite 33 60
iCyanite 12 17
Staurolite 6.5 10
Sillimanite 6.L~ 8
Rutile 5.7 8.~
Ziroon ~.9 9.~
Garnet 1.3 2
Monazite 1.3 2.5
PAGENO="0260"
254
goes a change in mineral composition northeastward along the
coast, from hornblende and pyroxene-rich suites near the Rio
Grande to suites richer in more resistant minerals such as
monazite, rutile, zircon, and staurolite (Bullard, 19112,
Table 2). Minable deposits of heavy minerals are unknown on
the Texas coast.
With regard to the offshore, the largest deposit of
heavy minerals known off the beaches in the United States
segment of the Gulf of Mexico is one of the shoals off Cape
St. George, Franklin County, Florida, near the mouth of the
Apalachicola River (Tanner and others, 1961, p. 1086),
and within the 10.5 mile limit of State of Florida waters..
From 12 to 15 feet below the tops of the shoals the sand
may contain LI percent or more of heavy minerals, but above
that depth the sand has only 0.1 to 0.5 percent of heavy
minerals. Tanner and as~ociates estimate that the middle
shoal may contain ~ of heavy minerals, shown in Table
111.
The western shoal is also thought by Tanner and assoc-
iates likely to contain large quantities of heavy minerals,
but they have given no estimates.
These resources as estimated by Tanner and associates
must be classed as known, marginal resources owing to tl)eir
statement that the total heavy mineral content may be about
14 percent, because this value is.t~ie lower limit of placers
mined for ilmenite on shore. As this shoal has not been
fully tested by drilling, further evaluation is needed, not
only to establish the magnitude and character of the deposit
itself but also to understand its possibly important regional
implications both for the Gulf shelf and the Atlantic shelf.
If these estimates are valid, for example, they imply a dif-
ferent order of magnitude of extent of placer deposits in the
coastal plain and shelf than has been assumed here and they
may require that the estimates for both the Atlantic and
Gulf Coasts be revised upward by at least an order of magni-
tude.
Few data are available to support an estimate of un-
discovered marginal and submarginal placers on the Gulf
shelf. If the western shoal at Cape St. George, Florida has
only half the volume of heavy minerals Tanner and associates
estimated for the central shoal, and the overall abundance of
PAGENO="0261"
255.
heavy minerals in the sediment averages 11 percent, then this
one deposit would be an impres~ive resource, although it is
within the 10.5 mile limit. The estimates summarized in
Table 15 are based on the probably conservative assumption
that the tonnages of undiscovered marginal placer minerals
on the Gulf shelf are 1-1/2 times as great as the known mar-
ginal resources on the central shoal at Cape. St. George.
Undiscovered submarginal resources must be very large but are
not estimated. No estimates are attempted either for the
shelf beyond the 200 meter contour.
The presence of volcanic materials in the Tertiary sed-
imentary rocks of the Mississippi embayment and Gulf coast
is interpreted to mean that possibly perrierite, zircon, and
gold of felsic volcanic or hydrothermal origin may be present
in sediments of the Gulf shelf, although these minerals have
not been found. Magnetite may be a potential resource off
the coast of Texas.
5. Hawaii.-.-No placer minerals have been produced from
Hawaii, arid it is unlikely that significant deposits of the
more valuable heavy minerals occur there. Olivine, a magnesium
silicate sometimes used as a basic refractory, is abundant on
many Hawaiian beaches and conceivably might fill some future
local need. It has no prospective value in Hawaii now, how-
ever, and no attempt has been made to estimate its magnitude.
VIII. Minerals accessible only to urider~round mining methods
As previously indicated, subsurface mining on the shelves,
either from a tunnel or an inclined shaft entry from land,
or from a vertical shaft through. an artificial island or
constructed by caisson or by a combination of lock-tube and
big-hole drilling techniques, is within the range of modern
technology. At present, t~e depth limit for the caisson
technique probably is 100 feet; for an artifici~l island
It might be 200 feet; and for the lock-tube the present
limit might be 300 feet or more, depending on the nature of
the sea floor, the size and value of the orebody, and other
factors (T. E. Howard, U. S. Bure~ ~f Mines, personal
communication, 1968). If necessary thr~ vertical entry tech-
nique likely could be extended to several hUndred feet, as
suggested by Austin (1966 and 1967).
Even though the technology for these procedures is
available, the vertical island technique has not been used
indeep water and the others have not yet been tried in the
marine environment.. The cost of a vertical shaft and of the
PAGENO="0262"
Table 15 Potential resources of heavy minerals on the Atlantic and Gulf shelves
(between state limits and the 200 meter contour; millions of short tons.)
Past production and known
reserves from related
Q in~n+~ on land
Undiscovered marginal
resources
Undiscovered submarginal
resources
- Gulf
Atlantic
Gulf
Atlantic
Gulf
)bnazite
Umenite
i~utile
Zircon
Kyanite and
siflimanite
Staurolite
0.9
54
1.9
10
4
7
No data
No data
ft
0
ft
ft
I,
0.1
109
1.4
13.6
4
13.6
No data
3.7
90
12
lii
35
15
3
1
1000
14
1110
110
140
not estimated
I,
N
ft
ft
Garnet
I
Nodata ft
PAGENO="0263"
257
other installatio~is required therefore cannot be judged from
experience. Austin (1966, p. 28) thinks that the shaft would
host no more than twice that o~ a comparable one on land.
Even if it cost much more, however, it probably would be
economic for a large rich ore body. For the purpose of the
discussion here,.-then, it is assumed that large subsurface
ore bodies would be exploitable on the shelves to a water
depth of 200 meters.
Sedimentary mineral deposits In shelf sediments
The minerals of sedimentary origin that might be present
in sedimentary rocks include all of those previously discuss-
ed as well as oil shale, gypsum, coal, bauxite, clay, and
bedded iron ore. With the possible exception of iron ore,
which is not known to occur in U. S. coastal plain sediments
but Is present in rocks of comparable age elsewhere, there Is
reason to expect every one of these sedImentary minerals to
be present In shelf sedimentary rocks in amounts generally
larger than those already mentioned. Those minerals, however,
that are ordinarily mined by open pit on land or that could
be mined successfully from the shelf by dredging--sand and
gravel, the placer minerals, calcium carbonate minerals, oil
shale, clay and perhaps others--could not be mined competi-
tively from the subsurface, and even though their potential
resources in rocks beneath the shelf are very large they are
of no prospective value. Most of the minerals of this group
are low value commodities and even underground resources on
land, if more favorably ~ituated with respect to markets,
would probably have enough of an edge in cost to make similar
subsea deposits unattractive. Only where minerals are lack-
ing In the adjacent land region is there likely to be suf-
ficient demand to support subsurface mining of these low
cost commodities, and considering the specifics of the geo-
logy of the United States and that of the shelves even those
opportunities are likely to be sparse in U. S. waters. Bit-
uminous coal off New England might have some prospective
value, for example, but the best prospects for It are not
there but off northern and western Alaska. In short, the
prospects for the development of subshelf sedimentary bed-
rock resources, either on the basis ~ need or opportunity,
seem so remote as not to Justify estima~cs of their potential.
Even though most of the potential resources in subsur-
face sedimentary deposits off the United States are of no
prospective value now, it is worth noting that many of them
are large and that they much extend the nation's resource
base for the more distant future.
PAGENO="0264"
258
B. Minerals in older rocks or in deposits of hydrothermal or~g1n
The deposits that might occur in older sedimentary or
crystalline, rocks beneath.the shelf sediments or that might
have been deposited within them from hydrothermal solutions-~-
including buried syngenetic or epigenetic analogues of the
Red Sea metalliferous deposits--include most of the metals
and some of the more valuable nonmetallic minerals such as
fluorite. As a group these commodities are much more valua-.
ble than the sedimentary minerals, some of their deposits are
large and rich, and the demand for them is assured, for most
are now imported in the United States, and a few, such as
gold and mercury, are in short supply in world markets.
Except for a few types of deposits, the science of
ore-finding is not far enough advanced now to make it pos-
sible to discover deposits that lie, like dollar bills be-
neath a mattress, under a cover of rocks that conceal the
geology and structure of the host rocks.' One of the ex-
ceptions is magnetite, large bodies of which can be detected
by magnetometer surYeys. It was an airborne magnetometer
survey, for example that led to the discovery a few years
ago of the magnetite body beneath 1300 feet of post-ore
sediments at Pea Ridge, Missouri. Magnetite deposits of the
Cornwall, Pennsylvania type--associated with diabase intrusives
in Triassic `sediments--are an example of a type of ore body
that might occur beneath.the northern *U. S. Atlantic shelf
and that might be found by magnetometry. Other geo-physical
prospecting methods are developing that make it possible to
find concealed sulfide deposits in some environments, and
there is reason to expect prospecting techniques to be de-
veloped that will permit discovery of some of the deposits in
the subshelf environment. Offshore evaluation techniques--
so `expensive now as to constitute a real drawback to the
development of subsurface ores (Howard and Padan, 1966)---
can also be expected to improve if there is sufficient in-
centive to support research on them.
Is the size of'the target, then, large enough to warrant
such efforts? In terms of regional geology, the large metal-
liferous districts in older rocks along the east coast from
Alabama to Newfoundland, and along the Pacific coast from
California to Alaska are numerous enough to suggest that.
deposits of sufficient size to warrant subsurface mining
do odcur beneath the adjacent shelves. In terms of base-
ment deposits, much of the Gulf shelf is less promising, for
the basement in much of it appears to be deeply buried, and
PAGENO="0265"
259
as shown by the estimates of thickness of shelf sediments
used in estimating potential oil ~nd gas resources, base-
ment rocks on parts of the other shelves are also deeply
/ buried. Even so, it is possible that metalliferous deposits,
derived from hypogerie sources `or from regeneration from
dispersed sources within the sediments themselves, are. pre-
sent within the sediments. Recently, for example, Taylor
and others, (1968, in preparation) have identified a large
buried felsic intrusive along the Atlantic margin; countless
metalliterous deposits are present on land as fracture fill-
ings and replacements in association with such igneous in-.
trusives, and there is no reason to doubt that similar de-.
posits are present beneath the shelves.
Two general methods have been used to estimate the
magnitude of such resources in unexplored areas--one extra-
polating known reserves in explored areas to unexplored areas
solely on the proportionality of the areas (Nolan, 1950), and
the other taking account also of the observed relation between
the crustal abundance of the elements and the magnitude of
their reserves.(MoKelvey, 1960). In the United States, for
example, the tonnage of minable reserves in short tons for
many elem~~ts is equal to crustal abundance in percent times
10~ to 10 ; for Japan,an area 1/21:2 the size of the United
States and perhaps even better explored, Sekirie (1963) found
that reserves of the principal netals generally fall within
l0°-10~ times their crustal abundance. Comparison of these
methods as applied to world reserves, using the United States
as a base, shows good agreement for both with available
world estimates for those metals, such as copper and gold,
that are relatively easily recognized and that have been pro-
spected for at the surface even in remote parts of the world.
The extrapolation on the basis of area also fits reasonably
well the world estimates of several other elements that
are not so. easy to find and 1~ave not been long sought, such
as thorium and tungsten. Extrapolation based on the crustal
abundance of these metals, however, yields estimates generally
much higher than those already r~ported, suggesting that
world resources of these elements r~ther new to commerce
have been poorly explored.
Estimates of resources in large unexplored land areas
based on either method should extrapolate from the ~um of
past production and known reserves in explored areas, but
even so they are likely to yield minimal estimates, for they
assume that the extent of minable ores in the explored areas
is fully established and they make no allowance for tech-
PAGENO="0266"
260
nologic advances that will permit mining of lower grade or
more inaccessible deposits than those now mined (for Japan,
Sekine extended the reserve-~abundance analysis to known
po~e~tial resources and found that they were equal to 10 -
10 ~ times crustal abundance--still a minimum because, the
method cannot allow for potential resources of types not
now recognized as having prospective value.
The valid1~ty of such methods as applied to the U. S.
shelves, however, is less certain than it is for large land
areas, because a) the area accessible to mining probably
includes a `greater proportion of relatively undeformed sedi-
mentary rocks and a lower proportion of basement rocks and
folded and Intruded sedimentary rocks than do the lands;
b) enrichment by solarial weathering, which plays an
important part' in the formation of some ores, has surely
been less extensive on the submerged areas, even though parts
of them have been exposed at various times during their
history; and c) the geology of the continental margins--the
character of the igneous, sedimentary, and tectonic activity--
differs in many basic aspects from the geology of the con-
tinents, and these differences may reflect importantly .on
the character of ores formed in the two provinces. Until
much more is known about the geology of the continental
margins, not much confidence could be plaCed in estimates
of their potential resources of bedrock minerals based on
projections from the lapd.
Nevertheless the geology of several metals in many of
their occurrences on land is similar enough to what might
be expected in bedrock deposits along the continental margins
to support such a land-sea extrapolation and to illustrate
the order of magnitude of the target for exploration. Extra-
polating the sum of past production and known recoverable
reserves in the United States to the shelves beneath waters
less than 200 meters in depth, on the basis of proportionaL~.
ity of the respective areas, suggests undiscovered recoverable
shelf resources. of the order of 2.6 billion tons or iron ore,
78 million ounces of gold, 64 billion ounces of silver, 800
thousand flasks of mercury, and 14 million tons of zinc.
Data on the size-frequency distribution of deposits of
various kinds, show that although there are many small and in-
consequential deposits for every large one, the bulk of' the
minable reserves are in large deposits (Nolan, l936)--some of
which might be large enough to f~orm images that would be visi-
ble to sensing techniques through the rather dense screen of
PAGENO="0267"
261
younger shelf sediments. Doubtless thany of the subshelf de~-
posits will never be found, and certainly there is not the
prospecting capability to find many of them now. But, many
metalliferous mining districts in the conterminous United
States have produced or will produce $100 million worth of
ore, and 20 or so have produced or will produce more than
$1 billion worth. The size cf the targets, then,, and the
probable ease with which rich ore bodies could be mined from
at least the shallower part of the shelf,justifies strong
efforts in developing prospecting and evaluation science and
technology and in acquiring knowledge of the subsurface geo-
logy of the shelves.
IX. Continental U.S. and world mineral resources
For comparison with the foregoing estimates of the po-
tential resources of shelf minerals, estimates of U.S. and
World land resources of petroleum and many other minerals are
summarized in Tables 16 and 17.
As may be seen from Table 17, known minable reserves of
several minerals--tin, manganese, mercury, beryllium, nickel,
platinum, and a few others--are small or lacking altogether
in the United States. Comparison of U.S. land' reserves with
projections of cumulative future demand through 1985, more-
over, shows that known minable deposits of many minerals are
not sufficient to meet anticipated requirements. For a few
minerals, the imminence of a shortage in domestic supply as
judged from such comparisons is more apparent than real, for
some industries customarily rnain~tain proved reserves as a raw
material inventory adequate for a 10-20 year supply and they
replenish this inventory by exploration at about the rate
required to maintain it at that level. Even a decrease in the
reserve/production ratio does not necessarily bet'oken approach-
ing exhaustion of resources. The domestic oil industry, for
example, for many years maintained a proved reserve/annual
production ratio of about 12-13:1, but. ~n recent years It has
dropped gradually to slightly less than 10:1. Since 1955,
however, advances In production techrlL logy have much Improved
secondary recovery and Increased productIve capacity and the
opportunities for developing low-cost foreign sources In giant-
sized fields have become attractive. Although the percentage
of domestic new field wild cat wells that become producers is
still about the same as It has been over the last 20 years, as
exploration has advanced the chances for discovery of very
large fields have diminIshed-except in virgin territories such
PAGENO="0268"
Table 16 . - POTENT i AL UNITED STATES AND WORLD. PETROLEUM RESOURCES (CALCULATED FROM DATA TO JANUARY 1, 1966)
(CONTINENTAL SHELVES INCLUDE STATE LAND OR 0 TO 2500 METERS ISOBATH).
REMAINING PROVED
AREA RESERVES
.
TOTAL POTENTIAL
RESOURCES I N
THE GROUND
.
RECOVERABLE RESOURCES
UNDER CURRENT EcoNoMics
AND TECHNOLOGY (i NCLUDI NG
CUMULATIVE PRODUCTI~N AND
PROVED RESERVES)
CRUDE NATURAL NGL
OIL GAS
547 2,737 82
MARGINAL AND
SUBMARG I NAL RESOURCES
.
CRUDE NATURAL
NGL
CRUDE NATURAL
NGL
CRUDE . NATURAL
OIL GAS
NGL
OIL GAS
TOTAL U.S. 31(1) 286w
8(1)
OIL GAS
2,828 7,070
212
2,281. 4,333
130
CON~yN~NTAL 27 255
7(2)
1,470 3,675
110 -
367 1,838 55
1,103 1,837
55
U. S.
CONTINENTAL 4~~~'1 31
~HELVE~
(TOTAL)
1
1,35~ 3,39~ ~
/ r3~~4)i ri~4~4)
`~7c&'i ~1 ,(~~ui
102,
,` ~4)
e'~i
(4) (4)
180'~' 900 27
1,178 2,496
27
TOTA~JW~RLDt5) 357 786
NA
8,400 26,500
710
1,575 13,250 355
6,825 13,250
355
TOTAL WORLD 3~(3)g~72(7)
NA
11,228 33,570
922
2,122 15,987 437
9,106 17,583
485
* (i) A1i -AGA, 1966, V. 20., BREAKDOWN FOR LAND AND SHELVES BASED ON DATA ~OM API, APG, AND UNITED STATES
GEOLOGICAL SURVEY. .
2 ACTUAL AMOUNT LARGER THAN SHOWN, soiiE NGL FOR SHELF IN WITH CRUDE OIL.
3 CONTAINS SOME NGL
4 AMOUNT FROM 0 TO 200 MT. ISOBATH, INCLUDING AMOUNT SHOWN IN TABLE 5 PLUS THAT UNDER STATE JURISDICTION.
5 HENDRICKS, 1966, r. 17 (FOR RESOURCES ONLY~ NOT PROVED RESERVES).
(6) WORLD OIL, AUG. 15, 1967, p* 41
(7) OIL AND GAS JOURNAL, JUNE 19, 1967, r'. 97
CRUDE OIL AND NATURAL GAS L1SUIDS (NGL) IN BILLIONS OF BARRELS OF 42 U.S. GALLONS.
NATURAL GAS IN TRILLIONS OF CUBIC FEET.
~LANAT~ON.
PAGENO="0269"
DV SDMV METALS AND NONMETALS THAT MAY OCCUR IN THE
SHELVES
Tab] e 1 7 DI AiLS iDL* WOMLI CHILL LCJL&VL~ AND REV
~~1LLL ~v Ur*LITCL' STATES 0EOLOL~AL SURVEY
1/
MINABLE RESERVE
2~
RESOURCES ~I
PROJECTED CUMULATIVE DEMAND, 1966 TO 2000
(ROUNDED FROM UNITED STATES BUREAU OF
MINES ESTIMATES)
UNITCD SlATES
~
WORLD
(IN~t0~TNG
UNITED STATES)
UNITED STATES WORLD
- ( fzr~rNG
UNITED STATES)
UNITED STATES WORLD
( N~EU~TNG
UNITED STATES)
ALUMINUM (BAUXITL, MILLIONS, LOUD TONS)
45
5,800
300 9,600
440~/ 840
BARITE (MILLIONS, SHORT TONS)
60
130
100
80 190
BERYLLIUM (SHORT T~TS, EQUL H. BERYL)
~/
~/
1,000,000 1,650,000
360,000 540,000
BROMINE (MILLION POU;.S)
VAST
VAST
VAST VAST
22,000 30,000
BORATES (MILLIONS, SHORT TONS, B203~
95
110
~/ ~/
4 14
CHROMIUM (MILLIONS, ~OO TOLS, CLIROMITE)
0
2,000
SEVERAL
8 BILLION
74
COPPER (MILLIC1. S-5T TONS)
86
210
65
140~" 400
COBALT (TROOSAE~S. S.~VT TOTs)
50
2,200
~/
600 1,300
~ILLIONS, TT CLLLCES)
50
1,000
400 ~/
670 2,370
EIJ' BILL 0.0. ~V1C FEET)
1~
42 ~/
60
OLUSTRIAL DIUPIOlOS (1IILLIOK CHALLIS)
0
~/
0 ~/
1,700 3,600
IRON ORE (MILLIONS, LONG TONS)
8,000
250,000
100,000 250,000
6,400 35,00Q
*
LEAD (M1LLIONS. SHORT TONS)
35
83
. 15 ,~/
57 180
MANGANESE ORE (MI~LIONS, LONG TONS)
0
3,800
1,000 15,000
50 450
MERCURY (THOUSANDS OF FLASKS)
200
7,000
500 10,000
3,600 11 ,iiCO
NICKEL (THOUSANCS, SHORT TONS)
250
60,000
1,400 ~/
14,5004/ 31,700
NIOBIUM (THOUSANDS, S~DRT TONS, NU(15)
125
9,800
165 11,500
190 570
PrOSPHATE (MILL IONS. LOIS ND)
12,000
48,000
48,000 ~/
530 2,300
PAGENO="0270"
Table 17. ?~o_ 2 Ut!IED STATES AND WORLD LAND RESERVES AND RESOURCES OF SOME METALS AND PIONMETALS THAT MAY OCCUR IN TUE CONTINENTAl. SHELVES
(0S~PILED BY UNITED STATES GEOLOGICAL SURVEY COMMODITY GEOLOGIsTS; SEE EXPLANATIONS BELOW).
-
1 /
Mt NOBLE RESERVES
2/
RESOURCES
PROJECTED CUMULATIVE DEMAND, *~966 TO
(ROUNDED FROM Ut4ITED STATES BUREAU OF
MINES ESTIMATES)
2000
U
COMMODITY
NITED STATES
WORLD
(IN~Z~TNG
UNITED STATES)
UN1TE
D STATES
WORLD
(I~i~tU~TNG
UNITED STATES)
UNITED SrArEs WORLD
(srã~tU~TNG
UNITED STATES)
POTASH, (MILLIONS, SHORT TONS, K20)
1,400
72,000
.
5,000
VERY LARGE
300 1,100
PLATINUM GROUP (MILLIONS, TROY OUNCES)
5
280
~/
~/
144 250
*
COXE :00-5 ~MtVIT~S, soe~- TOLS, REST)
S
J~/
~/
5
~5 I
SALT (TRILLIONS, SHORT TONS)
60
VAST
~/
~/
.003 .009
SILVER (MILLIoNS, TROY OUNCES)
1,400
5,500
500
~J
14,000~' 31,000
SULFLP (MILLIONS, SHORT TONS)
~/
~/
500
2,000
690 2,600
TANTALUM (S:HORr TONS. T~.-~5)
2,100
170,000
~j
95,000
54,000 104,000
TIN (THOLSAVDS. LONG TONS)
9
5,600
43
11,400
3,200.~/ 9,200
TITANIUM (MIL~IONS, SHORT TONS. TiC9)
100
500
~/
VAST
50 100
T-:~,..': ~ SHOR~ TDLS. T~G2)
0
82
200
1,000
5 15
TUNOSTEL HCLSNNOS. SHORT TONS)
70
1,500
200
2/
620 2,040
URANUJM (THOUSANDS, SHORT TONS, U30~
210
742
675
2,700
1,500 3,750
VANADIUM (IHAULANDS, SHQRT TONS)
200
5,500
1,300
20,000
650 1,000
ZiNC (MILLINs, SHORT TONS)
29
100
60
~/
90 280
:IRCON ~ ILLIUNS. SHORT TONS)
6
30
.2/
2/
3.0 * 10
1 I1.~VLC RESERVES ARE MATERIALS THAT MAY OR MAY NOT BE COMPLETELY EXPLORED BUT THAT MAY BE QUANTITATIVELY ESTIMATEL 4100 ARE CONSIDERED
TC HE ECONOMICALLY EXPLOITABLE AT THE TIME AR THE ESTIMATE.
EVCUVCES AR~ MATERIALS OTHER THUS RESERVES THXT ARE PROSPECTIVELY USABLE AND INCLUDE UNDISCOVERED RECOVERABLE ~ESVQRCES AS WELL AS
- T4'SE WOVE EXPLCITUTIOS REQUIRES MORE FAVORABLE ECOMONIC OR TECHNOLOCIC CONDITIONS.
USA NO WI.
lUVE UL~JuV. A I:AIFICAN1 ..AIATITY OD RECYCLED METAL.
PAGENO="0271"
265
Explanation of individual estimates in Table 17
Barite: Estimates of barite (BaSO~) usually given in terms
of barite ore. For this table, World reserve and
United States resource barite estimates are calcu-
lated from average grades of ores.
Beryllium: Includes deposits containing at least 1 percent
* equivalent beryl (0.l%BeO).
Chromium: Resources of chron~ite include deposits contaifling
from 33 to 50 percent Cr203, and available as shipping
ore or concentrates at 3 to 6 times present price.
Copper: Bureau of Mines, Information Circular 8325.
Gold: United States resource data from Bureau of Mines
Information Circular 8331.
Iron ore: Calculated as iron ore comparable to that mined in
recent years.
Lead: Bureau of Mines Information Circular 8325, and from
unpublished sources.
Manganese ore: Reserves range from 30 to 50 percent Mn, and
resources from 5' to 50 percent. Mn.
Mercury: A flask of' mercury contains 76 pounds. Reserves
calculat~d at 2 pounds mercury per ton of ore at
price, of $500 per flask. Resources calculated at
1 or more pounds mercury per ton of ore, at price
of $750 per flask.
Nickel: United States reserves calculated from laterite de-
posits'~averaging 1.5 percent nickel,'whereas U.S.
resources consist of lateritic material averaging
0.25 percent'nickel and sulfide material averaging
0.75 percent nickel.' ` *
Niobium: Cut-off grade for'rescrves at 0.20 percent Nb205.
World figures exclude ~
Phosphate: Reserves of the Western United States calculated
as material averaging 211 percent or better P~Oç and
being" above mine entry level or within 100 feet be-
low entry level. Some of this material would not
be minable at present day prices.
Platinum group: Includes platinum, palla4ium,' iridiUm,
rhodium, ruthenium, and osmium. United States
PAGENO="0272"
266
res.erves fplatinum group metals are almost en-
tirely in copper ores.
Rare Earths: Large but unknown resources in USSR. Almost
half of Free World reserves are in single deposit
in California, worked chiefly for cerium content.
The balance is in placer depostts of monazite.
Increased.thoriun production could increase rare
earth output. By-product rare earths (chiefly
yttrium) from Canadian deposits are dependent on
uranium production.
Salt: Includes different classes of reserves. Many deposits
are commercial only when near industrial centers.
From U.S. Senate Committee Print, 80th Congress, 1st
session, Investigation of National Resources, Com-
mittee o~i Public Lands, 19148.
Silver: Output tied chiefly to copper, lead and zinc pro-
duction. United States resource estimates from
Bureau of Mines Information Circular 8325. Data
covers non-Communist countries only.
Sulfur: Present sources are elemental sulfur deposits,
natural gas.and petroleum, and smelter by-product.
Sulfur contained in coal, oil shales, anhydrite-
gypsum, etc., is not included in the estimates.
Tantalum: World figures exclude USSR. World .re~erve esti-
mate may be optimistic, formuch of the tantalum is
in pyrochiore and may not be recoverable.
Tin: Reserves of tin include material minable at $1.37 per
pound. Resources include materials that cOuld not
be mined now at a price of less than $3.00 per pound
of tin.
Titanium: From unpublished Bureau of Mines source. Of World
reserves, 9 million tons consist of rutile in placer
deposits averaging 0.5-3.0 percent rutile. The re-
mainder is inilmenite, in beach deposits containing
Ti02, and anorthosite deposits containing 20 percent
Ti02.
Thorium: All present production comes from by-product sources.
Tungsten: Given in short tons of tungsten metal. United
States reserves contain more than 0.3 percent W03, and
are base4 on a price of $145 per unit.
Uranium: Reserves calculated at price of $5.00 to $10.00 per
pound U308. Resources based on price of $5.00 to
$15.00 per pound U308.
Vanadium: Produced chiefly as by-product.
Zinc: United States reserve and resource estimates from
Bureau of Mines Information Circular 8325.
PAGENO="0273"
267
as the shelves and Alaska, an~ except in these areas domestic
exploratory drilling has declined. Among the investment
choices available, then, it appears that many companies ~iave
chosen investment in improving productive capacity and second-.
ary recovery or in foreign exploration as more economical
and rewarding means for maintaining their production capabil-
ity than domestic' land, exploration in the conterminous United
States, even though much oil remains to be discovered.
The United States now depends on foreign sources for part
or all of its supplies not only of oil but also of all of the
metals except molybdenum, vanadium, magnesium, and sodium,
and for a few nonmetals such as fluorspar and diamond as
well. The shift to foreign sources has been a rather steady
one in recent decades, but except for minerals such as tin
and diamond that have never been found in large quantities
in the United States, the shift has been more the result of
the discovery and. development of lower cost deposits else-.
where thar~ of physical exhaustion of domestic resources. The
decisions by American producers to seek foreign sources and
for American consumers to import raw materials have been
guided by the least-cost principle that has traditionally'
been the essence of the American free Enterprise system.
The trade with raw material exporting. countries has been
mutually beneficial and for the foreseeable future' it should
continue so. Just as raw material exports were the chief
source of foreign exchange for the United States during its
early history, `and contributed importantly to capital for-
mation, they are `the chief sources of income now for many of
the developing countries, and without the revenue from min-
eral exports they would have no funds. with which to purchase
U.S. exports. As time goes on, developing countries will
want to use more of their raw materials themselves as the
base for manufacturing and developed countries including the
United States will have to produce, more of their own raw
materials than they do now. Moreover, in spite of the bene-
fits of trade there are benefits also from domestic produc-
tion of minerals and it is desirable to maintain `enough pro-
duction capacity to provide for the national security in
time of emergency and to maintain an influence on world prices.
Nevertheless, for the next couple of decades or So foreign
sources can be counted on to augment domestic supplies.
As may be seen from Tables 16 and 17, known and poten-
77-463 0 - 72 - pt. 1 - 18
PAGENO="0274"
268
tial world resources of nearly all minerals are adequate to
support projected demands for the next several decades, and
the history of the mineral industry gives every reason to
expect that continued research, exploration, and technologic
development will continue to provide mineral supplies far into
the distant future. The only minerals that are in short world
supply now are gold, silver, platinum, mercury, and sulfur,
and for all of these more effort on exploration or on means
to develop lower grade sources would almost certainly
extend usable supplies.
How does this supply outlook reflect on the need to
develop marine mineral resources? Obviously, their develop-.
ment cannot be justified on need, for even for the minerals
that are in short world supply the lands still offer oppor-
tunities for developing new supplies and some of them are
easier to pursue than those offshore. The recent discoveries
of lode gold at Carlin and Cortez, Nevada are examples of
important land deposits that probably could not be found or
developed offshore with available technology.
But whereas subsea exploration and development cannot
be justified by present day need, it can be fully justified
on the basis of opportunity for efficient and profitable
utilization of available resources. It has been the oppor-
tunities for lower costs that have led to the offshore pro-
duction now underway for oil, gas, sulfur, and other minerals,
and similar opportunities are certain to exist and continue
to develop. And as competitive demands for land for recrea-
tion and urban use continue to grow in coastal areas, the
offshore may offer opportunities for supplemental sources of
raw materials that will contribute to overall efficiency in
the use of land resources.
The capability for subsea mineral exploration and pro-
duction has already grown subetantially as operations have
crept out from land. For oil an~i gas this growing capability
has extended the accessible domailA to water depths of three
hundred feet, and the remainder of the shelves are plainly
coming within reach. This growing capability may be also
expected to bring within economic reach not only new area2
but also other minerals as operations continue and thus
gradually add future opportunities for the beneficial utili-
zation of the mineral resources of the subsea domain.
PAGENO="0275"
269
X. Conclusions
The potential mineral resources of the U.S. continental
shelves include a wide variety of minerals. Among' them, oil,
gas, and natural gas liquids have by far the greatest prospec-
tive value for the immediate future, and they have the poten-
tial for increasing U.S. petroleum reSources by approximately
50 percent. Other minerals now being mined offshore in U.S.
waters include sulfur, oyster shell, sand, gravel, and salt,
and except for the last of these~ there appear to be good op-
portunities for expanded future production. . Also of pros-
pective value in the near term are phosphorite deposits on the
west coast, lime mud in the Gulf, gold in Alaskan waters, and
a variety of other heayy minerals on Alaskan, Pacific, Gulf,
and Atlantic shelves. Within the reach of present extractive
technology but difficult to find are large metalliferous ore
bodies that are almost certainly `present beneath the shelves.
Other minerals are present also--glaucon~te', barite, diato-
maceous ooze, manganese oxide and associated metals,, potash,
geothermal energy, and perhaps others--but prospects for their
development are further removed or are less certain than for
the others.
Compared tç the 130 or so commodities that comprise' the
spectrum of minerals currently used in the United States, the
list of shelf minerals that have immediate or even near term
prospective value is short indeed. Even if usable shelf re-
sources were to consist onl3: of the petroleum fluids, however,
their potential coj~tribution to the Nation's future security
and prosperity woUld be enormous and would more than justify
the efforts to bring about their efficient development.
The full potential of the shelves, however, must be rec-
ognized to be far greater than can be foreseen at this stage
of their investigation from an analysis, such as that reported
here, of occurrences of specific minerals, for our under-
standing of shelf geology now is simply too scant to reveal
its full possibilIties. To gain some perspective about the
effect on the development, of mineral resources of the inter-
action between growing geologic knowledge and exploration and
extraction technology, it is well to recall the forecasts
made concerning the U.S. resource potential at the time of the
famous Governor's Conference in 1908, when the authorities of
the day were convinced that usable resources of oil, gas,
iron ore, phosphorite, and anthracite coal would be exhausted
within one to three decades (se~ Nolan, 1958). Obviously
neither the geology of the land nor man's ability to find
PAGENO="0276"
270
and utilize its resources were well understood then, and with
important discoveries and advances still being'made It is
equally obvious that limits to the land potential still can-
not be set within any confidence. On the time scale of ex-
ploration of the U.S. lands, that of the shelves Is in the
early 17th Century stage, and an appraisal of their potential
at such stage Is bound to be minimal.
Considering that the rocks beneath the, shelves are per-
haps roughly comparable In their mineral content to those
beneath the lands, their `full potential Is perhaps better
understood from a comparison with what has already been found
on the land. The total value of mineral production from the
United States from 1880 to 1967 Is roughly $550 billion cur-
rent dollars (A.E. Schreck, U.S. Bureau o.f Mines, personal
communication, 1968), or perhaps $800-$900 billion in 1968
constant dollars--an average of $220,000-$250,000 per square
mile. Mineral production Is still growing in the United States,
and It Is not possible to begin to predict wha't will be the
value of the minerals that this piece of real estate will
eventually yield. But assuredly it will be,far greater than
that already obtained.
* The potential mineral wealth of continental lands, then,
Is enormous,' and the shelves are sufficiently large and similar
enough in their geology to say that they too have an enormous
potential mineral wealth, even though it Is not possible now
to say where and what much of it is or to visualize how to
find and extract it. This is not to say' that a square mile
of shelf land has a present value of $X million dollars--on
the contrary all but a fraction of shelf lands have no pre-
* `sent mineral value whatsoever, for with the present state of'
knowledge and technology nothing can be extracted from them
economically. But It is to say that shelves do contain large
quantities of minerals that will make a valuable contribu-
tion to the'U.S. economy--provided the Investment Is made In
acquiring the knowledge necessary to find and extract them
éftlciently. ` ` . `
PAGENO="0277"
271
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American Petroleum Institute and American Gas Institute, 1967,
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Austin, C. F., 1966, Manned undersea structures-. the rock-
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Austin, C. F., 1967, A logical approach for undersea mining
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Bounce, E. T., Emery, K. 0., Gerard, R. D., Knott, S. T., Lidz,
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Bush, A. L., and Stager, H. K., 1956, Accuracy of ore-reserve
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Calver, 3. L., 1957, Mining and mineral resources: Florida
Geol. Survey Bull. 39, 132 p.
PAGENO="0278"
272
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PAGENO="0288"
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APPENDU 2
comparison and discussion of some estimates of United States
resources of petroleum liquids and natural gas
General
The estimates included were selected on the basis of timeliness and
broadness of coverage. No one of them, however, is directly comparable
with any of the others because each was made by a different method, or
methods (although some are quite similar in method), and/or, for a
larger or smaller portion of the total ground favorable for petroleum.
The authors of the estimates chosen are listed here; their estimates
will be discussed in some detail later. The authors are: a) The National
Petroleum Council (NPC, 1970); b) The U.S. Geological Survey Survey (USGS),
Hendricks and Schweinfurth, 1966, unpublished data; McKelvey, et al.,
1969; Schweinfurth, l971,(unpublished data); c) H. K. Hubbert (1969);
d) L, G. Weeks (1959); e) C. L. Moore (1970); f) M. A. Elliott, and H. R.
Linden (1968); g) The Potential Gas Committee (PGC, 1971); and h) T. W.
Nelson and C. A. Burk (1966) (see attached list of references)..
This analysis fits, as well as possible and for the sake of comparison,
some estimates of petroleum resources into the framework of resource
terminology that was published by V. E. McKelvey in an article entitled
"Mineral resource estimates and public policy" inthe American Scientist,
v. 60, no. 1 (Jan..Feb.), 1972, p. 32-40; tables 1 through 6, attached,
summarize the results. For the detailed terminology, however, it was
deemed advisable to use the terminology of the U.S. petroleum industry which
describes categories of known reserves and potential future reserves because
industry groups (API, AGA, PGC, & NPC) have been the ones that have produced
the most detailed definitions and work on this subject. It was relatively
easy to relate, at least in a generality, all estimates of resources of
petroleum to the terminology of the industry.
PAGENO="0289"
283
Terminology (see tables 1 and 2 for examples),
In known deposits
Known resources, cumulative (past) production, proved reserves, and
j~icatcd additional reserves are terms defined and used by the American
Petroleum Institute in its annual report of reserves of crude oil in the
United States (see, for example, API-AGA, 1971). APi also reports on
discovered total orig~[nal oil-in-place. These terms refer to crude oil,
and crude oil only, that has been discovered as of a certain date (always
the end of December of the given year). Cumulative production, proved
reserves, and indicated additional reserves refer to quantities that either
have been or could be produced under current economic and technologic
conditions. The difference between these quantities and discovered ~
original oil-in-place gives McKelvey's known paramar~~ina1 and submarginal
resources (nonrecoverable under current conditions) of crude oil as of the
same reporting date.
The API also reports proved rcserves of nature) gas liquids but does
not report either cumulative production, or indicated additional reseryq~, or
totaloriginal NGL-in-place for the gas liquids. Apparently there is
yet no reliable statistical series on either total original NGL-in-piace
or cumulative production of NGL and the category indicated additional reserve!
is not applicable to gas liquids because they are not generally amenable to
secondary recovery methods, while crude oil is. Therefore, a quantity for
past production of NGL was estimated by the U.S.G.S. but no estimate of
known pars- and submarginal resources of NGL was calculated by the U.S.G.S.
77-463 0 - 72 - pt. 1 - 19
PAGENO="0290"
284
Known quantities of natural gas reserves are reported as p~~oved reserves
by the American Gas Association (see API-AGA, 1971) as of the end of a given
year. Cumulative (past) production is also reported, while discovered ~
original gas-in-place is not. In any case, the report of cumulative production
(gas) is at best an estimate because for many years gas produced with oil was
flared and no reliable production records were kept. iicated additional
reserves are not reported by the AGA fc'r gas both because it is not very
amenable to secondary recovery and because initial recovery is high (approximatel
807. of gas-in-place).
A quantity for known para- and submarginal resources of gas was
calculated by the U.S.G.S., however, because the amount is large and additional~
or secondary recovery might one day become feasible.
In undiscovered deposits
The terms probable-, pgssible-, and ftpeculative- potential reserves
are defined by the Potential Gas Committee (PGC, 1971, p. 11), to categorize
estimates of undiscovered but recoverable, if found, resources of natural
gas by degree of reliability of the estimate. Reliability decreases from
left to right- -probable being the most reliable and ~poculatjve the least.
The probable category includes, however, some known resources, in the sense
of having been discovered but not completely developed, and some unknown
resources so that it brackets the boundary between the known and the unknown.
This PGC terminology was adopted by the National Petroleum Council (1970)
for its report on future petroleum provinces of the U.S. but estimates were
reported as p~p]~ab1e-possible combined and spe~culatiye.
PAGENO="0291"
285
Estimates of potential reserves of NGL are not made by the PGC. The
NPC did estimate potential NGL reserves but reported them in a lump sum for
the U.S. and not by. the aforementioned categories.
The NPC did extend the reliability categories of probable-possible and
speculative to estimates of total undiscovered oil-in-p1a~e, or future
original oil-in-place, so that by subtracting the NPC values for ultimate
recovery (note that potential, ultimate production is used in tables 1-6)
from estimates of original oil-in-place the quantity of ~ and submarginal
resources in undiscovered deposits can be determined. -
The term potential ultimate production under the totals columns of
tables 1-6 is one used here for convenience by the U.S.G.S. and is self
explanatory. It is the sum of estimates of cumulative production, J~~L!~
recoverable and undiscovered recoverable resources of petroleum.
The term current conditions refers to the current well-head price
structure for oil and gas and current recovery factors, or, more succinctly,
to current economics and technology.
Total resources in place (bottom field tables 1-6)
The estimates of total petroleum liquids, or natural gas, originally
in place in the U.S. are estimates of total original quantities of petroleum
in discrete deposits in the earth and consist of the sum of the quantities for
a given estimate in each of the four categories of resources, i.e.,
known recoverable + known pare- and submarginal + undiscovered recoverai»=i~e
+ undiscovered pars- and submarginal. In most cases the quantities of
undiscovered para- and submarginal resources had to be calculated from the
.uthor's reported estimate of ultimate production by applying an appropriate
ecovery factor (807. for gas and NGL, 357. for oil).
PAGENO="0292"
286
Individual estimates
General
The American Petroleum Institute (API) and the American Gas Association
(AGA) are the accepted authorities respectively on reports of known resources
of oil and gas. Therefore, their data, alone, was used to fill in those
categories except for known para- and submarginal resources of natural gas,.
which were estimated by the USGS as discussed above under the section on
terminology.
In the cases of estimates of undiscovered resources of the NPC and PGC
for liquids and gas, respectively, these estimates were put at the tops of
their respective tables because these agencies were most responsible for the
development and use.of the terminology. The other estimates s.hown were
listed by order of the relative amount of detail reported for the areas
taken into account by the individual authors. For total U.S. and U.S. land
areas (tables 1, 2, 3, and 4) it was felt that the conterminous states and
Alaska should be reported separately insofar as possible because of the
distance and transportation difficulties associated with Alaska. For the
case of the U.S. offshore areas (tables 5 and 6) it was felt that the most
important aspect is water depth, and subdivision into shelf and slope has become
most customary(by convention, shelf is the area between 0-200 meters, 0~656 feet;
and slope is the area between 200-2500 meters, 656-8250 fe.et).
Methodology
In general two basic methods, 1) geologic and 2) mathematic, were
used by the authors reported here; in detail however, each author used a
method that was more or less different from all the others.
PAGENO="0293"
287
The geologic method was used by the NPC, PGC, USGS, and L. G. Weeks,
and apparently' T. W. Nelson and C. A. Burk, and the mathematic by
M.K. Hubbert, C.L. Moore, and M. A. Elliott and H. R. Linden. Both basic
methods employ more or less of the stdtistical record of past oil and gas.
exploration and production but the mathematic method is based entirely on
those statistics.
Comparison is difficult between the estimates within each basic method
but, roughly, the closest in terms of method are the estimates of the NPC, `the
PGC, and L. W. Weeks, and possibly Nelson's and Burk's work also belongs in
this group.
In terms of area and depth (rock volume) of favorable strata covered1the
estimates of the USGS were applied to the largest potential area. The PGC
comes next closest in area but since it includes potential rocks to drilling
depths of 30,000 feet whereas the USGS estimates include potential rocks only
to drilling depths of 20,000 in actuality the rock volume used by the PGC
might be as large as that used by the USGS.
Theoretically, at least, all the mathematic estimates cover the same
area (and volume) which should be the total of all the potential rocks in the
U.S. This is so `because the mathematical methods supposedly take into account all
volutionary trends in the exploration and production of oil and gas and one very
efinite trend is toward the deeper rocks and more remote areas believed to
ave potential. Consequently, the areas (volumes) taken into account should
nclude at least as much territory as the USGS estimates do. (Practically
peaking, they probably do not but this subject is too complicated for these
otes.)
PAGENO="0294"
288
Other authors included more or less of the potential areas for various
reasons to be discussed later.
Most estimates of resources of natural gas (and natural gas liquids)
are arrived at by applying a gas-oil ratio to estimated oil resources. This
method called the gas-oil ratio method, although less than satisfactory,
was used by the U.S.G.S. and M. K. Hubbert. Possibly L. G. Weeks and Nelson
and Burk also belong in this group but this isn't clear from their discussions.
Estimates of resources of NGL are then prepared by applying a ratio of
NGL to gas to the resultant estimate of gas resources. Estimates of potential
future reserves by other than the NPC and PGC are in tables 1-6 are centered
under the undiscovered deposits column below the pp~sible potential reserves
column only for convenience. The estimates actually range from the probable
to the ~peculative categories but cannot be broken down in that detail
because of lack of information.
(a) tional Petroleum Council.--The data used was taken from
table 22, p. 104, and several textual paragraphs of the report "Future
Petroleum Provinces of the United States." Table 22 was based on a
recovery factor for crude oil of 30%.
The original oil-in-place was estimated by NPC for each of 11 regions,
in the three categories of probable, possible, and speculative but the
estimates for the p~obable and ppssible categories were reported as one
figure. Ultimate recovery was made by the NPC using recovery factors of
42% and 60% but they were not included in tables 1-6.
Some estimated speculative oil-in-place was not included by the NPC
in the U.S. totals but no reason for this was given.
PAGENO="0295"
289
A flat estimate of 49 billion barrels of ultimately recoverable
NGL was reported on table 25, p. 108 of the NPC report without any details
as to how this quantity should be assigned to the various regions.
Therefore, it is reported as a single figure in table 1. The quantity
of original NGL in place reported under the NPC at the bottom of table I
was calculated by U.S.G.S. on the basis of an 80% recovery factor.
Future potential gas reserves were also reported in the NPC
publication but since these had been received from the PGC they are
reported in table 2 with PGC as the source.
A variety of geologic methods were used in preparing the NPC report.
The methods include extrapolation and interpolation along trends,
comparison of similar areas and strata, evaluation of structures
determined by geophysical prospecting,. evaluation of the undrilled
portions of known fields and poois, and assignment of average oil
incidence to rock volumes. The results, though conservative, are
probably the most reliable estimate of potential crude oil reserves
that has been made for the U.S. to date.
Some oil in the i,robable-possible categol7 can be considered to have
been already discovered but not booked as proved reserve at the time the
NPC report was prepared. This is oil in undeveloped parts of fields and
pools that have been "discovered" but not drilled out. There is no way
to tell, from the report, how much this might be but roughly it might
be assumed to be an amount nearly equal to the proved reserves reported
by the API at that time.
PAGENO="0296"
290
The NPC report does not cover all potentially favorable areas.
Those left out are the onshore and offshore of Washington and Oregon,
parts of North Dakota, South Dakota, Michigan, Montana, and the Great
Basin Area, the offshore of Alaska, except for parts of Cook Inlet and
Bristol Bay, and the offshore of California north of the Santa Barbara
Channel.
(b) The U.S. Geological Survey. --The crude oil estimates of the
USGS have been prepared by a method developed by A. D. Zapp and
T. A. Hendricks and reported by T. A. Hendricks (1965). The method is
basically geologic and involves applying the historical results of
past exploratory drilling to unexplored rocks on an equal basis for all
of the favorable strata of the U.S. including Alaska and the continental
margins to a water depth of 2,500 meters (8,250 feet). This is, therefore,
the only geology-based estimating method that is entirely consistent.
This method is not necesoarily good, however, in the estimating of
potential resources because not all regions are alike in their geology
and petroleum potential. On the other hand, if the method is applied
to large enough areas, it is felt that errors will average out and,
at least, a valuable first approximation will result.
The resulting estimate is of total original oil-in-place fmm which
the various other categories can be calculated by applying suitable
finding and recovery factors. The finding factor used in 5/8ths of oil-
in-place and the recovery factor is 40%-i-" of that found. Potential resources
of natural gas and NGL are determined by applying a gas-oil ratio to
estimated quantities of oil and a NGL-gas ratio to the resultant gas
11 Forty percent was used to take into account projected near term increases
in crude oil recovery.
PAGENO="0297"
291
estimate. The application of gas-oil and NGL-gas ratios differs
from the usual in that the ratios used are for gas-in-place to oil-
in-place, while the usual method is to use only ratios of proved reserves
of gas to oil or ratios of cumulative production of gas to oil. The
result is original gas- and NGL-in-place to which a finding factor of
5/8ths is applied, as for oil. In this case, however, a recovery
factor of 80% is used to reflect the average experience in gas and NGL
production.
Para- and submarginal resources are those either not recoverable,
or not found and not recoverable because of size and location, or
recovery technology and low price. Future advances in recovery technology
or increases in price could make some of these known and undiscovered para
and submarginal resources recoverable.
Resource estimates have been prepared by the USGS for the conterininous
U.S. and Alaska, and for two zones of the continental margins, from
0-200 meters (shelf) and 200 to 2,500 meters (slope). The resources
estimated for the continental slope are believed to be generally out of
reach both technologically and economically at this time and, therefore,
have been placed entirely in the undiscovered para- and submarginal
categories.
(c) M. K. Hubbert. --Hubbert prepared his estimate of ultimate
production of crude oil mathematically from historical data on reserve
additions for the conterminous U.S. and its contiguous shelves. Ultimate
gas production was calculated from a gas-oil ratio and NGL from a NGL-gas
ratio. For Alaska Hubbert used geological analogy to estimate ultimate
crude oil production and gas-oil, NGL-gas ratios for the ultimate
PAGENO="0298"
292
production of gas and NGL. The estimate of original resources in place
shown on tables 1 and 2 were calculated by the USGS. There was no way
to subdivide Hubbert's estimates for the land and continental margins.
(d) L. G. Weeks. --Weeks prepared his estimates of ultimate production
by geological methods but never fully described what they were nor
whetlar or not his estimate of ultimate gas production was based on a
gas-oil ratio.
Estimates of ultimate production were made for the conterminous
U.S. and Alaska combined land and offshore areas, but areas, such as
the Atiantic Coast and offshore, where there had been very little or no
petroleum experience were not included and the offshore areas were carried
only to a water depth of 1,000 feet.V
(e) C.L. Moore.--Moore based his resource estimates on mathematic
calculations of the historic patterns of discovery and recovery of each
commodity separately. Consequently, there is an independent estimate
for crude oil, natural gas, and NGL. For oil, Moore calculated total
original oil-in-place and applied a calculated ultimate recovery factor
to that to get ultimate oil producticin; this was not done for either
gas or NGL, however, so the USGS calculated original in place values
for them.
The quantity for ultimate crude oil production reported by Moore is
based on a much higher recovery factor than any of the other estimates
used. There was no way, however, to bach up an ultimate production at
either 30, 35, or 40 percent, so Moore's estimate was reported just as
2) £OOO feet is only slightly deeper than the seaward edge of the
contineOtal shelf.
PAGENO="0299"
293
given by him. By Moore's calculation much future'oil produclion will have to
come from both the known and unknown para- and submarginal resource categbry
so that the numbers reported cannOt be broken down into ~ and
undiscovered para- and submarginal categories with any meaning.
(f) H. A. Elliott and H. R. Linden. --Elliott and Linden used a
mathematic method based on the hiStorical statistics of cumulative
production and reserve additions to arrive at independent estimates of
ultimate production (called ultimately economically recoverable by them)
both of crude oil and natural gas. They did not separate these est~nates
into regional subdivisions nor did they estimate NGL resources. Estimates
of total original resources in place were calculated by the USGS.
(g) Potential. Gas Committee.--The estimates of potential supply of
natural gas in the United States reported by thePGC are made by a
variety of geologic methods (these were outlined above under the NPC).
These estimates are made for the largest possible Area of favorable ground
after those of the USGS and are made independently of a gas-oil ratio.
Gas resources are reported by three categories of reliability and
for 12 areas oi the U.S. Within the 12 areas, except for Alaska,
resources are reported by two drilling depths on land, and by two water
depth zones offshore. The drilling zones are 0-15,000 feet, and 15,000-
30,000 feet, and the offshore wAter depth zones are 0-600 feet, and 600-
1,500 feet. Estimates for Alaska are not further broken down by depths
or areas.
Part of the quantities estimated in the p~~ab1e potential re~erve
category can be considered as discovered for the reasons discussed above
under the NPC.
PAGENO="0300"
294
The PGC does not estimate total original gas-in-place so that the
estimate shown was prepared by the USGS.
(h) T. W. Nelson and C. A. Burk,--Nelson's and Burk's estimates
were only for "undeveloped and unfound" petroleum reserves of the U.S.
continental margins. Presumably these estimates were prepared by
geologic methods but this is not explained by the authors. The estimates
were made only for the U.S. shelves but do not include all of the
Alaska shelves.
The estimated quantitias were reported as prospective and speculative
and include petroleum liquids and natural gas. The prospective quantities
were equated in table 6 with the probable potential category but with a
question as to how much might actually fall under the Dossible potential
one. The speculative quantities are given as a range by the authors and
were placed herein in table 6 under the possible and ~peculative categories.
Potential ultimate production and original resources-in-place were
calculated by the U.S.G.S.
From the tone of Nelson's and Burk's report it is assumed that they
were dealing or.ly with the continental shelf, or the zone from 0-200 meters
water depth.
(i) The figures reported i-~ this table are not rounded but are simply
arithmatic calculations. The accuracy of the figures is largely unevaluated
and the number of significant figures is not indicated in the numbers.
PAGENO="0301"
Ref eronces
American Gas Association, American Petroleum Institute, and Canadian
Petrôleu~i Association, ~97l, Reserves ~f crude oil., natural gas
liquids, and natura~. gas in the United States and Canada as of
December 31, 1970: Am. Gas Assoc., Inc., Mi. Petroleum Inst.,
and Canadian Petroleum Assoc., v. 25.
EllIott, M.A., and Linden, H.R., 1968, A new analysis of U.S. natural
gas supplies: Jour. Petroleum Tech., v. 20 [Feb.. 1968), p. 135-141.
Hendricks, T.A., 1965, Resources of oil, gas, and natural-gas liquids
in the United States and the World: U.S. Geol. Survey Circ. 522.
Hubb6rt, M.K., 1969, Energy resources, in Resources and Man: Comm. on
Resources and 2~fan,Natl. Acad. Sci..Natl. Research Council, p. 157-242.
McKelvey, V.E., et al., 1969, Potential mineral resources of the United
States outer continental shelf, in Public Land Law Review Commissiot~
Study of outer continental shelf lands of the United States, Volume IV
(Appendices): Clearingh»=se, PB 188 717.
Moore, C.L., 1970, Analysis and projection of historic patterns of U.S.
crude oil and natural gas, in Future Petroleum Provinces of the
United States: Washington, D.C., National Petroleum Council.
National Petroleum Council, 1970, Future petroleum provinces of the United
States: Washington, D.C., Natl. Petroleum Council.
Nelson, T.W., and Burk, C.A., 1966, Petroleum resources of the continental
margins of the United States, ~Exploiting the Ocean: Marine Technology
Soc., Trans., 2d Ann. )1T~ Conf. & Exhibit, June 27-29, p. 116-133.
Petential Gas Committee, 1971, Potertial supply of natural gas in the
United States (as of De~enber 3'l, 1970): Golden, Cob., Potential
Gas A~bncy, Mineral Resources Inst., Colorado Sch.~ of Mines Found., 41 p.
PAGENO="0302"
296
Torrey, P.D., 1966, Evaluation of United States o~ii. resources as of
January 1, 1966: The Interstate Oil Compact Commission, Oi1~nd
Gas Compact Bull., v. 25, no. 2, p. 22-41.
Weeks, L.G., 1958, Fuel reserves of the future: Am. Assoc. Petroleum
Geologists Bull., v. 42, no. 2, p. 431-441.
Weeks, L.G., 1959, Whcrc will energy come from in 2059: The Petroleum
Engineez, v. 31, August, p. A-25.
PAGENO="0303"
Table 1.-Some Estimates of United States Original Resources o_ - e.r._......
(Crude oil and natural gas liquids in billions of barrels) Data to 12/31/702!
In known deposits In undiscovered deposits
Totals
Areas
~
- Indicated Probable Possible Speculative
Cumulative Proved additional potential potential potential
production reserves reserves reserves reserves reserves
Potential
ultimate
production
S
us
$40
no
0,4
5~4J
C$
so
544
SW
Conterminous U.S.
Alaska
Conterminous U.S.
Alaska
Conterminous U.S.
Alaska
Conterminoüs U.S.
and Alaska
Conterminous U.S.
and Alaska
Conterminous U.S.
and. Alaska
(American
105.6
.44
Petroleum Institute)
36.5 5.2.
10.5 .1
f
~
~
~
I .
I
,
1
~
*22
f
1"
(Plus
1
1
I
~
~
I
.
29.6
28.2 NGL to NPC)
~
106
~
19
~
307
(Pl~~s
a -
225.4 -
32.5 NPC)
49 NGL to NPC
500 W
117 (USGS)
201
30 (Hubbert)
~_/*
460 (seeks)
276
1/
317
436 (C.L.Moore
1/(Elliott
~
S
S
U
$4-.' $
5
o ~
$4
~1J,a S
.~4 0
S ~n a
`-4055
.00 01.
~
1. so~-e
GJ1J 1415
OW E.,4
o $4 *5 so
514 $~
14 5 `5 `5
o 05*5
Conterminous U.S.
Alaska
Conterminous U.S.
Alaska
268 (API)
248.4
30.1
1,663
465
516.4.8!
50.1 --
1,931 ,.~1
485
Estimates ot total petroleum liquids originally
NPC a/ USGS b/ Hubbert c/
Conterminous U.S. 741.8 2,431 575
Alaska 82.6 602 85
824.4 1/ 3,033 660
61.0 NGL
885.4
in place in tee u.s.
Weeks d/ }ioore .1
Elliott &
Linden LI
1,315 670 1,286 1/ . l/~rude oil
only
[See notes for explanation of lettered footnotes.]
/
PAGENO="0304"
Table 2.--Estimates of United States Original Resources of Natural Gas
(In trillions of cubic feet, S.T.P.) Data to 12/31/702!
In known deposits I In undiscovered deposits
Totals
Areas
Probable Possible Speculative
Cumulative Proved potential potential potential
production reserves reserves reserves reserves
Potential
ultimate
production
(Am. Gas Assoc.) 1 1
Conterminous U.s. 391.1 259.6 218 326 307 1,502 1
Alaska 0.3 31.1 ~ 67 227 358
Conterminous U.S. 1 1 1,579 2,230
n o (USGS)
o ~ Alaska
I 479 510
21
Conterminous U.S. 399 1,050 (Hubbert)
so
,-~ u Alaska I 119 150
.~u
a a Conterminous U.S. I
140
and Alaska I I 318 1,000 (Weeki)
so
Conterminous U.S.
and Alaska I 865 1,547 (C.L.Moore)
Conterminous U.S. I (Elliott &
and Alaska I I 1,058 1,740 Linden)!'
U)
4,
U,-.
145,
p 0.0 in
00041
a .,~ in u
14
p Conterminous U.S. (l63)~( 3497 3,460k'
a Alaska (8) (S~ 862 870
~04141
LU
410555
051 5.4
0 51 ., 55
4101414
14055
S _____________________
Estimates of total natural gas originally in place in the U.S.
Elliott &
PGC ~/ USGS b/ Hubbert c/ Weeks d/ Moore e/ Linden f/
Conterminous U.S. 1,877 5,690 1,312
Alaska 447 ~j~Q 637 -
Sum. ~ 7,070 1,949 1,250 1,934 2,175
PAGENO="0305"
m
a,
1403 I
0 .0 ~ Conterminous U.S.
00 ~W
03 ~4 0) 0 Alaska ~Incl.
COIl 14
- .,.~ .~ a Cook Inlet)
`~ ` Conterminous U.S.
`-1010W
.0 0 0 14 Alaska
CO .,4
.14 14 05.-C
0) 0 14 10
014 5'~
C) 14 15 Ø~
COO 1~ 14
-
saoLe ~.--some 1~stimates of United States Original Onshore Resources of Petroleum Liqu~s
(Crude oil and natural gas liquids in billions of barrels) Data to 12/31/70-
In known deposits
Indicated
In
Probable
undiscovered
Possible
4e~osits
Speculative
Totals
Potential
Areas
CumulatIve Proved additional
potential
potential
potential
ultimate
s
~
~
`~
~
~
~
~
~
~
Conterminous U.S.
Alaska
(Including
Cook Inlet &
Bristol Bay)
Conterminous U.S.
Alaska
(Including
Cook Inlet)
Conterminous U.S.
and Alaska
production reserves reserves
American Petroleum Institute
lOO~4 30.8 5.23
0.44 10.54 .1
.
.
.
.. .
.
.
. . .
I
I
~
1
f
1
I
I
reserves
I
~
I
~
.
~
I
~
I
*~
reserves
21
75.3
22.0 1/
~
226
40 .
..
243
reserves
~
productton_~
1/ aI
193.4 (NPC)~
32.5 1/
C
362
5~(USGS)
.
.
df
390 (Weeks)
NA
20 (~~)
(224) k"
I
-. . 30
797
121
Conterminoüs U~S.
Alaska
1/
456.4
50 ~
1,021 b
141 L .~)
Estimates of total petroleum Liquids orjginally in place in the land areas of .the U.S.
NPC a/
USGS b/
Weeks d/
649.8
a~
1,383
~
1,114
732.411
1,575
1,114 1/ crude oil only
NA -- Not available.
PAGENO="0306"
Table 4.--Some Estimates of United States Original Onshore Resources of Natura~ Gas.
(Natural gas in trillions of cubic feet, S.T.P~) Data to 12/31/70. -`
5
us
I~0
P0
o .4
54~
a..,
so
~ u
.0
SI.,
we
~
op
In known deposits In undiscovered deposits
Totals
Areas
Probable Possible Speculative
Cumulative Proved potential potential potential
production reserves reserves reserves reserves
Potential
ultimate
production
(Am. Gas Assoc.),
374.2 220.5
.3 31.1
Conterminous U.S.
Alaska
Conterminous U.S.
Alaska
Conterminous U.S.
and Alaska
179
207
227
NA
1,015
199
62
Conterminous U.S.
Alaska
S
a
1~ SOS
pa
0050
5.~.4 $~
`~ ,.4 5
Seam
~ 0 0
.0 Q..4
S
S., I~ S.~ 5
"sac
a
0S~ 500
a p as
$~ ~J5~ E
1208 £1
NA (PGC)
1610 b/
`231 (USGS)
688 (Weeks)
NA (AGA)
(149)
r;s ~
(8).k
1,491
191
1'640b/
199
* Estimates of total natural gas originally in place in the land areas of the U.S.
PGC tJ USGS b/ Weeks d/
Conterminous U.S. 1,510 3,250 860
Alaska 430
1,510 3,680 860
NA -- Not available.
PAGENO="0307"
Probable Possible
potential potential
reserves reserves
2 (American Petroleum Institute)
ContInental shelf 4.2 5.7 >0.03
(Gulf of Mexico
& Southern
California)
3
Continental shelf
a:~d slope (less
Alaska)
Continental shelf
Continental shelf
and slope (600-
1000 ft. water
depth)
Continental shelf
(less part of
Alaska shelf)~
``$5.
-.us
?4 `o s a U Continental
.0
~ shelf.~/
ca ass
5 3/
.~4u slope_
a u
u o ,-nae
a a one
o o u~4d...4
Areas
Table 5.-Some Estimates of Uni~cd States OrigInal Offshore ~esources of ~e~roleum Llqu~.~s
(Crude oil and natural gas liquids in billions of barrels) Data to 12/31/70 -
___ - In known d~o It~ fi~d1 coiercd dejo its - `lot ____
Intl icated
umulative Proved adttit tonal
reduction reserves reserves
5,.'
Cs
on
0t.~
Ut `.4
50
0
mu
`-4
`ow
en
us
mu
>u
os
uu
Specula'tive Potential
potential -ultimate
reserves product tots
*1
`I
F
23
1198
60'
1. *~.. ?
1/ a/
32 (NPC)
208 (Ust:S)
70 (Weeks)
.16 to 35 (Nelson
- Burk)b
NA (API)
(l7).~/
Q
560
690
567
690
Estimates of total petroleum liquids originally in place in U.S. continental margins
NPC a/ USGS b/ . Weeks d/ Nelson & Burk h/ 1/Crude oil only.
Shelf 92 200 46 to 100 2/Shelf, 0-200 meters or 0-656 ft. water de
Slope - 690 - _________ 3/Slope, 200-2500 meters or 656-8250 ft.
92 1/ 1,465 200 46 to 100 . water depth.
PAGENO="0308"
2/
U.S. Continental shelf
(Gulf of Mexico &
Southern California)
Conterminous U.S.
continental shelf V
& slope (part,
656-1500 ft. water
depth)
U.S. Continental shelf V
U.S. Continental shelf V
& slope (part, 656-
1000 ft. water depth)
U.S. Continental shelf _2/
(less part of the
Alaska shelfl
(Am. Gas Assoc.)
.16.9 39.1
844
27 ?
89 72
10 28
5 to 85
b/
900 (USGS)
dI
(Weeks)
(Nelsc
Burk
Estimates of total natural gas originally in place in U.S. continental margins
Table 6.--Some Estimates of United States Original Ogfshore Resources,of Natural Gas
(In trillions of cubic feet, S.T.P.) ~Yata to 12/31/70 1
.
Areas
In known deposits I In undiscovered deposits
Probable Possible Speculative
Cumulative Proved potential potential potential
Totals
Potential
ultimate
we
I~o
04J
0
wu
so
o~
uu
39
256 zi
38 (PGC)
256
(14) k~c~
312
88 to 168
886
1,590
1,590 (USGS)
Shelf
Slope
PGC ~
320
/iz.
367
USGS b/
1,800
3,390
Weeks d/
390
390
Nelson & Burk ru
110-210
110-210
2/Shelf, 0-200 meters or 0
ft. water depth.
a/Slope, 200-2500 meters o
656-8250 ft. water dep
PAGENO="0309"
303
~iCnffeb ~cz ~ena1c
COMMITTEg ON
INTERIOR AND INSULAR AFFAIRS
WASHINGTOPI. D.C. 20510
April 18, 1972
Honorable Hollis M. Dole
Assistant Secretary Mineral Resources
Department of the Interior
WashingtQn, D.. C. 2O2l~O
Dear Secretary Dole:
In connection with your testimony before this Committee on
March 23, 1972, the Department of the Interior submitted for the record
a supplemental statement, "Questions and Policy Issues Related to
Oversight Hearings on the Administration of the Outer Continental
Shelf Lands Act... ." The Committee wou.ld appreciate a clarification
or elaboration for the record, of the following points in the Depart-
ment' 5 statement..
Page 6 (Suestion B
There is an apparent conflict between the last sentences in the
second and third paragraphs of the Answer: "There is essentially no
excess capacity in gas pipelines which is the major limiting factor
curtailing gas production," and "The amount of uncommitted gas in the
Gulf OCS is insignificant." Is the import~of these two statements that
all OCS gas reserves are.indeed committed to sale, but that some committed
reserves are not being~produced for lack of pipeline capacity? If the
foregoing interpretation is correci~:
1. what volume of reserves and producing capacity are involved,
and
2. within that volume, what part, if any, is u.nprodüced pending
completion of pipelines under construction or planned,
3. what part, of any, is unproduced because it is not presently
economical to extend pipelines to them, and
* of this part, wI~at portion, if any, would be economical to
produce at a higher gas price (e.g. 10 cents higher, or 2
cents. higher per
PAGENO="0310"
304
Honorable Hollis M. Dole
April 18, 1972
Page Two
If, however, the interpretation above is not correct, please
clarify the two statements.
Page 7 (Question Bfl
1. Of the natural gas currently being flared on 005 leases,
what portion would be marketed at a higher gas price (e.g.
10 cents higher or 25 cents higher per MCF)?
2. What aôtion(s) would be expected from the operators on OCS
leases if flaring of natural gas were prohibited by law or
regulation? For example, what portion, if any, of the gas
currently flared would be reinjected, and what portion, if
any, would be marketed? Is it likely any oil wells would be
shut in because of the prohibition of gas flaring? What
would be the cost to producers (net of revenues from sale of
gas that would otherwise be flared) from such a provision?
Page 8 (Question C 2~
The definitions of proved reserves used by the American Petroleum
Institute and American Gas Association include recoverability under
current economic conditions (including wellhead prices) as explicit
parameters of proved rese~i~e estimates. The National Petroleum Council's
known reserve estimates also depend implicitly on economic conditions,
including price. Question C 2b was riot directed at the price responsive..
ness of exploration or production, but seeks some indication of the
sensitivity of reserve estimates to price changes, even absent additional
exploration.
Page 83 (Question G 2 Answer
"In June 1971, Louisiana officials denied a proposal for an off-
shore port in the Gulf of Mexico." Please furnish summarize the history
of this proposal. Was the port to be located wholly or in part on the
Outer Continental Shelf? Who made application to the state on this pro-
ject, and what was it that the state denied? Under what authority?
Page 86-88 (SuestionH 1-31
Please provide background and detail on the figures offered here.
Is there a technical paper or other Department of the Interior publica-
tion in which the research reported here is described and presented?
PAGENO="0311"
* 305
Honorable Hollis M. Dole
April 18, 1972
Page Three
Page 87 (Question H 26)
In the second paragraph, line 2 of the answer there is reference
to "the following table." The table, however, has apparefltly been-
omitted. Please furnish the information intended to be presented at
that point.
Page 91 (Question H
There is apparently an arithmetic error in the table. Should
not the figure for "oil" in 1975 be $1 .92 per barr&. rather than $1. 97?
Is there any reason why the following second column should not be added
to this table?
Dollars Per Barrel
1975 * -.20
..2.62
-1.92
- .70
+.30 *
- +*53 -
-1.99
198
- .)~o
-3.01
-2.31
- .70
* +.29
+2.59
Page 92-93 (Section Il
In view of * several references in the statement to the new' draft
environmental impact statement for the proposed Louisiana 008 sale,
please furnish a copy of this statement for inclusion in the record.
`~ge 96 (Question 3'l.~ * /
The answer to this question contains estimates of the frequency
of oil spills and of the proportion that is spilled of oil handled, in
tanker operations a Are there similar' stati~tics ot~ the average frequency.
PAGENO="0312"
306
Honorable Hollis M. Dole
April 18, 1972
Page Four
of spills (per well, per platform, etc), and on the proportion of
oil produced offshore that is spilled?
In your testimony, you cited estimates of the proportional con-
tributiori of tanker operations compared with that of offshore drilling
and production in the total influx of oil to the oceans. How do these
proportions compare, respectively, with the volume of oil carried in
tankers, and the volume of oil produced in offshore operations? That
is, how much oil is spilled per barrel in each of these activities?
These amendments and clarifications may be furnished either as
a separate memorandum, or in the form of substitute pages for the
original statement.
Sincerely yours,
Henry N. Jackson
Chairman
HNJ:atn
PAGENO="0313"
307
~ United States Department of the Interior.
OFFICE OF TIlE SECRETARY
WASHINGTON, D.C. 20240
May 17, 1972
*55 I
S. I
* Dear Senator Jackson:
In response to your inquiry requesting a clarification or an
elaboration for the record of several points in the Department's
supplemental statement entitled "Questions and Policy Issues
Related to Oversight Hearings on the Administration of the
Outer Continental Shelf Lands Act . , ." which was submitted
for the record during testimony before your committee on March 23,
1972, the following comments are offered and keyed to your
questions. S
!~! 6 (Question B.6.L
Answer: Yes, essentially all OCS gas reserves are committed to
a purchaser, but some committed gas reserves are not being
produced at the present time for lack of pipeline capacity.
Specific answers to your four questions on the volumes and
producing capacity involved and whether gas is not being
~~roduced because of economics or waiting on additional con~
struction are unavailable at this time. We have not attempted
tà evaluate what portion would be economical to produce at a
higher gas price. However, we understand these points were the
subject of testimony during the Federal Power Commission,
Southern Louisiana area rate proceedings. Docket No. AR-69~l
(FPC opinion No. 598, issued on July 16, 1971).
Page 7 (Ouest~on B.7.) *
Answer 1: We have no information on the effect that higher gas
prices would have on the amount of natural gas being flared.
Answer 2: The actions to be expected from the operators on
OCS leases if flaring of natural gas were prohibited by law or
regulation would depend on the provisions of any such law or
regulations. For example, would there be a time limit within
which to stop flaring or would it be an immediate shu't~~down?
In general, however, we would expect some .of the casinghead
PAGENO="0314"
308
gas to be re-injected, and some to be marketed by displacing
*gas-~c~l? gas in the pipelines. It is quite likely that some
oil i;olls would be shut~in as uneconomical to produce if gas
flaring was prohibi ted. The cost to producers of such a levi
or regulation is unknown. To obtain a reasonable estimate
of the economic parameters involved would require an under-'
* taldng of considerable magnitude.
~4~a
Answer: We regret the misinterpretation of the question but
the answer would ~still be in the same vein. Price changes
will prestmtably have some effect on the estin'ates of reserves,
even absent additional exploration, but their potential effects
on the ocs have rot been eval uatec2.
~ cl.l.)
Answer: Approximately one year ago, private interests requested
the Louisiana State land office to advertise certain offshore
acreage near South Pass for leasing for purposes of constructing
an offshore terminal. The land was off ereci and two bids were
* received, one from a concern called International Tank Terminals
* and one from a combine of private interests.
The Corps of Snginocrs objected to the proposal as not being
well planned and the State land office also had some reservations.
As a result the proposal was rejected and the Governor appointed
* ~. corrmittee to study the rratter further. The offsh~re terminal
* was to be located ~h~ll~i in State waters.
Paqe86-9O(~)uostion_fl~1-3~)
Answer: The background and detail on the figures mentioned in
pages BG-90 are contained in Pt'! Technical Eulletin No, ~
and in the Fall 1971 qzzartc-rly report of Worldwide Crude 012
Prices, prepared by the Deportme~t's Office of Oil and Gas.
~oples of these docuraents are enclosed.
~ga87_(()uestionff.2.b.)
* Answer: Enclosed is the requested table (Page 07a) which
* was inadvert~nt1y omitted in printing.
PAGENO="0315"
309
j~nswer: There .is an arithmetic error in the table. The figure
for "oil" in 1975 should be $2.92 per barrel insto~d of $1 * 97.
Your suggested second column has been added to the table and it
is enclosed as revised page 91.
P~pe 92-'93 (`~ection ~
Answer: Enclosed is a copy of the new draft environmental impact
statement, released March 31, 1972, for the proposed Eastern
Louisiana 00$ sale.
~~ge96(QuestionJ.i.d.)
Answer: During 1971 thorewe±ê 410,548,946 barrels of oil and
condensate removed and. sold from the 00$. At the end of 1971
there were 7,576 active well completions involving 1,861 separate
structures or platforms on the OCS. During 1972 there were 1,239
`reported spills involving an estimated 2,226 barrels of oil. Over
75 percent of the spills involved one barrel or less. The spill
frequency rate would be an average of 0.67 spills per structure
per year or an average of 0.16 spills, per active well completion
per year. The average quantity spilled would be 1.20 barrels per
structure per year or 0.29 barrels per active well completion per
year.
An estimated 1,300 million metric tons of oil were transported by
sea in 1970 and the estimated annual influx into the ocean from
tankers operations and tank barges was 1.457 million tons or
0.112 percent.
Total world offshore oil production was 315 million metric tons
during 1970 and the estimated spillage from producer operations
was 100 thousand metric tons or 0.032 percent.
This results in Ô. 00112 barrels lost per barrel transported by
tankers and tank barges or one barrel lost per 893 barrels trans'-
ported and 0.00032 barrels lost per barrel produced in offshore
operations or one barrel lost per 3,125 barrels produced offshore.
Sincerely yours,
(Sgd) John B. Rigg
MAY 1 7 1972
Deputy Assistant $eore~g of the Interior
honorable Meaty H.. Jackson, Chairman
Committee on Interior and Insular Affairs
Washington, P. C. 20510
Erzclosures
PAGENO="0316"
310
Answer
* Assume all incremental increases in imports must come from the
Middle East. Increased imports to 1975 are in the range of 4 MB/V
and by 1980 in the range of 7 MB/V, according to most estimates.
Middle East
Millions of Dollars Per
Dollars Barrel
1975 Net one time capital outflow 304
Annual proximate outflows -3,825
1980 Net "one time" outflow
Annual prxirnate outflows
Oil @ $2.31 /3
* Freight @ $ .70 /3.
* Annual purchases of U. S.
Goads
Oil @ $1.92 /3
Freight @ $.70 /3
-2,803
-1,022
-0.2
-2.6
-1.92
-0.70
Annual purchases of U. S. ÷ 432
Goods ..
Third Country return flow 4- 768
-2,929
4-0.3
4-0.5
-2.0
-5,902
.1,788
-1,029 -0.4
-7,690 -3.01
-2.31
-0.70
+ 756 - +0.30
- 4-0.53
-2.58
- Third Country
* +1,344 -
-6,619*
PAGENO="0317"
311
* U.S. East Coast Estimates of Landed Prices Selected Foreign Crudes.,
- Circa 4/1P2 . .
(Dollars per Barrel*) .
- T
Origin & Gravity If.o.b. Price
AFRA
Freight Charge
Duty
.
Total Pri
Persian Gulf 34°
Libyan 40° *
Nigerian ~ : * * -
:Venezuelan 350
Venezuelan 26° * *
. $l~9O
2.96
* 2.88
2.80
2.30
$1.05
- .41
. .51 *
.20
.22
$.11
.11
.11
.11
.11
$3.06
3.48
3.50
3.11
2.63
* All figures rounded for estimating. . -*
PAGENO="0318"
312
May 18, 1972
The Honorable Hollis M. Dole
Assistant Secretary Mineral ~oaOurcos
* Department of the Interior
* Washington, D. C. 20240
Dear Mr. Secretary:
This letter is a supplement to my inquiry of April 18,
1972, requesting clarification or elaboratiOn of points
in the report submitted with your March 23, 1972, appear~
ance before this Committee concerning administration of the
Outer ContiAental ~helf.
In response to question ~3, "...the anticipated
economic costs of petrole~am produced from future OCS leases
(ox bonw~es, etc.) ," the. Department offered an estimate of
$1.61 per barrel. (p. 88) * However, i~ its ?tha1y~ie of the
1~conomic and Secur y~~eots of the Trans ~
~ppendix B, "Analysis o(~Zrude Ofl Aiterives97~~e
Department's estimate of the resource cost of Outer Co.ntin~
ental Shelf crude oil is "$3.30 (+7)." (p. l3~l8) From
the context (p. 13~-16), it appears that the two cost concepts
are identical. The Committee would appreciate a reconoili~
ation of the seemingly conflIcting statements.
We would also appreciate an early reply to my letter
of April 18, as completion of the hearing record is awaiting
the clarification and elaboration requesto4 there.
* Sincerely yours,
* * * . Henry H. .~ackson
* * . * * Chairman
IiM.7/atp
PAGENO="0319"
313 ~~-1
United States Department of the Interior
,2JJ7 OFFICE OF THE SECRETARY
WASHINGTON, D.C. 20240
JUN 28 1972
Dear Senator Jackson:
Your letter of Hey 18 inquires about a reply to your earlier letter
of AprIl 18 requesting clarification and elaboration of points in
our March 23, 1972, testimony. This reply was sent to you on
Hey 17. A copy is enclosed for your convenience.
Your Hey 1$ letter also notes discrepancies between the estimated
economic resource cost of OCS oil production of $1.61 per barrel as
submitted in reply to your question 0-3 (p. 88) and the resource
cost of $3.30 (.t) reported on page B'18 of the Analysis of jtt~.
We direct your attention further to page Vi-46 of Voiwne iii of the
latter report where OCR resource costs en identified as follows;
Finding Coet..,,,,.,n..,,,,....,..,., $1.30- l.35/bbl.
Other Costs (excluding return royalties
and texes).,....,.,.,....,..,......, 0.63
1,93 1.98
Return,,..,.....,...,,..,,,........,., 0.16-0.33
Resource Cost,.......,......,......... 2.09 2.31
I em informed by the special staff who prepared the "Analysis" that
the Volwne iii figures represent a reevaluation of end supersede the
figures reported on page 5-18 of Voiums I.
We believe that the above resource cost should be further adjusted to
exclude lease acquisition costs as follows:
Estimated Resource Coat,.............. 2.09 - 2.31
Less: Lease Acquisition Coets........ O.25~O.28
Revised Estimated Resource Cost....,.. 1.84 a 2~03
PAGENO="0320"
314
The cost used in answer to question II~3 does not include a return
on investment. If estimates of returns are eliminated from the
above figures derIved from the An~lys1s the resource cost estimate
becomes $1.68 to $1.70, quite close to the $1.61 estimate reported
in answer to question 11-3.
The remaining differences arise because of the use of mere recent
cost estimates in answering question H~3.
* Sincerely yours,
*(Sgd) John B. RLgg
Deputy A~sfstant Secretary of the Interior
Honorable Henry 11. Jackson
Chairman, Committee on Interior
and Insular Affairi
United States Senate
Washington, D.C. 20510.
Enclosure
PAGENO="0321"
315
IHE INTERIOR UNITED STATES DEPARTMENT UNITED STArES DEPARTMENT OF- THE INTERIOR UNITED
GAS OFF1O~ OF OIL. AND GAS OFFICE OF OIL AND GAS OFFI
N N N r `ImP ST AT ES DEPARTMENT OF THE INTERIOR UNITED Si
I 0 A IL AND GAS OFFICE OF OIL AND
DEPART MENT OF ~E E IN TENETS ur~r~ I A is DEPART MEN OF `THE IN TENETS UNITED STATES DEPT.
FICE OF OIL AND GAS OFFICE OF OIL AND GAS OFFICE OF
IT OF THE INTERIOR UNITE P STAlL' DEPARTMLNI UNITED STATES DEPARTMENT OF THE INTERIOP UT'
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~ENT OF THE INT'ERIOP UNITE'; STATES DLPAR STATES DEPARTMENT OF THE INTERIOR UNITED STATEE
)F OIL AND GAS OFFICE OF OIL AND GAS OFFICE OF OIL AN!
S DEPARTMENT OF THE INTERIOR UNITED STArFSDEPARTMENT OF THE NTERIOR UNITED STATES DEE
OF OIL AND GAS OFFICE OF OIL AND GAS OFFICE OF OIL
THE INTERIOR UNITED STATES DEPARTMENT UNTED STATES DEPARTMENT OP tHE INTERIOR UNITED
GAS OFFICE OF OIL AND GAS OFFICE OF OIL AND GAS OFFI('
~PTMENT OF THE INTERIOR UNITED STATES DEPLP STArES DEPARTMENT OF THE INTERIOR UNITED ST;
`IT OF THE INT ERIOR UNITED STATEN DEF-APTMEN'T UNIT ED STATES DEPARTMENT OF THE INTERIOR UT
OFFICE O~ ~I: ` ~AS OFFICE OF OIL ANE GAS OFFICE I
`NT OF THI ID `1 IL `NIT -`AN F-'T'ATES PL'rAPTMP' OF THE ` ION UN fl STATES
)F OIL `\ID "~S OF JF OIL AND G~AS C .r~ OF OIL AN!
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Ui~ AS "-FICE OF O'L ~" JIL ~ND
AEPART `N; SUNITEDSTAII DES~P STAT DEP/
FICE GAS OF~ ICE OF
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MENT OF T NIT ED STATES DEPA ST~TES DO T STED STATE;
)F OIL A .~ OFFICE OF `JF OIL ANI
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THE INTEFIcH UNI IL UTATEN DEP~T1T~~ S T)EPARTI ENT ( :HE INTERIOR UNITED I
GAS OFFICE ~. NL AND ~,-. ~E OF OIL SAND GAS OFF
~ARTMENT OF THE INTE' LU STAT LU LIEPA .JEPARTMENT.OF ~F INTELIOR UNITED S
OIL AND GAS OF OIL GAS OFFICE OF U~ AND
DEPARTMENT OF THE IN' ~D STATES PEP ` OP THE INTERIOR UNIT S ATES DEP~
FICE OF OIL ANi 3 OFFICE J~ - AND GAS `E OF
T OF THE INTEPIETH UNITE DLF'ANTMENT I iS ATES DEPARTMENT ERIOR UN
S OFFICE OF 01' ND GAS OFF ~E OF OIL AND 1 . ~ :FICE
TENT OF THE INTERIOR UNI A T ATE'S DEFATT STATES DEPART MENT OP THE INTERIOR UN . D STAT
)F OIL AND GAS FFICE OF OIL AND GAS OFFICE OF OIL AN(
S DEPARTMENT OF THE IN RION UNITED SrATE;DEPARFMENT OF THE INTERIOR UNITED STATE. DEF -)
E OF OIL AND t AS OFFICE OF OIL AND GAS OFFICE OF OIL
THE INTERIOR UNITED SD "ED LTEPARTMENT UNITED STATES DEPARTMENT OF THE INTERIOR UNITED
GAS OFFICE OF OIL AND GAS OEFICE OF OIL AND GAS OFFI(
ARTMENT OF THE INTERIOR UNITED STATES DEPAI'EAlATES DEPARTMENT OF THL INTERIOR UNITED ST
OIL AND GAS OFFICE OF OIL AND GAS OFFICE OF OIL AND
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FICE OF OIL AND GAS OFFICE OF OIL AND GAS OFFICE OF
- iT OF THE INTERIcIR UNITE) STA I ES DEPAPTMENT UNITED STATES DEPARTMENT OF THE INTERIOR UN
- L~s OFFICE OF OIL AND GAS OFFICE OF OIL AND GAS OFFICE
~ F TI-I ~ E 0 NIT S S DEPARS TAT ES DEPARTMENT OF THE INTERIOR UNITED STATEF
FF 10F OIL AND GAS OFFICE OF OIL ANt
.5 DEPARTMENT OF THE INTERIOR UN1 rED STATE~DEPARTMENT OF THE INTERIOR UNITED STATES DEl
E OF OIL AND GAS `OFFICE OF OIL AND GAS OFFICE-OF OIL - . -`
THE INTERIOR UNITED STATES DEPARTMENT UNI TED STATES DEPAR ~MENT OF THE INTERIOR UNITED
GAS OFFICE OF OIL AND GAS OFFICE OF OIL AND GAS OFFI
AARTMENT OF THE INTERIOR UNITED STATES DEFAR STATES DEPARTMENT DF THE INTERIOR UNITED $1
OIL AND GAS OFFICE OF OIL AND GAS OFFICE OF OIL AND
DEPARTMENT OF THE INTERIOR UNITED STArESDEPARTMENT OF THE INTERIOR UNITED STATES DEPA - - -
FFICE OF OIL AND GAS OFFICE OF OIL AND GAS OFFICE OF
lENT OF THE INTERIOR UNITED STATES DEPART MENT UNITED STATES DEPARTMENT OF THE INTERIOR
OIO~ OIL ANQ GAS OFFICE L
77-463 0 - 72 - pt. 1 - 21
PAGENO="0322"
316
United States Department of the Interior
OFFICE OF OIL AND GAS
WASHINGTON, D. C. 20240
FOREWORD
This booklet contains a series of Tables that describe the derivation of
costs of selected foreign crudes. These costs are applied to current
tanker rates to provide a close, approximation of the landed costs of
foreign crudes to the East Coast of the United States. The data have
been taken from various sources and are current to the period circa
October 1, 1971
icca
I/Acting Director
`S" September 1971
~4
I'!
~b. ~
2~6~ £~ ~Z4~ ~
~4L ~
PAGENO="0323"
317
INTRODUCTION
The following series of tables have been developed to provide a ready reference to
foreign crude oil prices. It is important to know that posted prices or minimum
export prices are simply a "catalog" price in that they are used as a base for
calculating income taxes and royalty payments by the producing countries. The
actual market prices for the oil have been lower in a majority of cases.
In using the tables it is equally important to understand what each purports to
say. In Tables I and II there are line items titled Landed stCharter, Landed
£2~ Spot, Landed ~jj~e U.S. and Landed ~ ~ U.S.
The first two refer to foreign crude tax paid costs which include taxes, royalties,
production costs, tanker freight charges and duty. Another way of stating it would
be to call them "profitless" landed prices because no profit has been added nor any
provision made for a unit per barrel earning.
The last two are actual estimated landed prices. The ~ ~xj~e of Louisiana
and Texas crudes are a close approximation of what their actual price is. The
Landed ~ Prices are based on quoted foreign crude price sales wherever they are
available andcan be expected to be reasonably close approximations, also.
As a guide to what might be expected to be a profit value, one could look at data
supplied by the First National city Bank of New York. In 1970, seven International
Oil Companies show that their average earnings per barrel were approximately 32.7
cents and a return, on net worth of 11 .3 percent. (Note: By comparison the values
for the same items in 1963 were 56.3 cents per barrel and a return on net worth of
1L+ percent.) Also, these figures derive from the total integrated company operation
`including transportation, refining and marketing in addition to production operations
and not production operations alone.
A synthetic profit per barrel valuemay also be'derived by subtracting the tax
paid cost from the "quoted" fob spot cargo' price in each respective case.
PAGENO="0324"
318
Table I. - Estimations of Costs of Comparable 1/ Worldwide Crudes
Delivered to U.S. East Coast - September 1971
_____________ (Dollars. ocr Barrel)
Libya 1400 Algeria 1+L+o Nigeria 3L~O Louisiana 38
Total Posted Price 2/ $3.399 $3.576 $3.178 $3.71
Company's Tax Paid Cost 2/ 2.286 2.1+60 2.091+ -
Gathering Charge - -
Pipeline Charge - - -
Loading Charge -
Fob Price - - $3.7L+
Tanker Freight Charges 1/:
For Charter Rates .55 .51+ .69
For Spot Rates .30 .29 .37 -
USATRS - - - .28
Duty .105 .105 .105
Landed Cost Charter I~/ $2.91+ $3.11 $2.89
Landed Cost Spot ~/ $2.69 $2.86 $2.57
Landed Price U.S.
-
- -
-
$k.o2
~ot Cargo Prices "Quoted" ~
Spot Cargo Rate and Duty
Landed Spot Price U.S.
$2.80
.1+1
$3.21
$2.75
.1+0
$3.15
$2.70
.1+8
$3.18
-
-
$L#.02
1/ Crudes are high quality, low-sulphur. Gravities shown are export averages and vary
somewhat, ranging from 31+° to L14~, the true comparability difference would adjust to
no more than 10 cents per bbl. up or down.
~/ Total posted prices are for period beginning October 1, 1971. Temporary freight
premiums, taxes and royalties have been adjusted for this time period.(last quarter
1971).
~/ Two rates are shown - charter based on AFRA and spots averaged from Mullion - AFRA
rates are for September; spot rates are as of September 21+, 1971.
~/ Foreign crudes are tax paid landed costs to which a "profit per bbl." must be added.
For ease in comparison, all items have been rounded to nearest cent per bbl. to arrive
at "best estimate figure."
Last reported "lowest market price" fob producing area. Figures are obtained from
varidus sources. No.assessment is made, however, as to their reliability.
V
PAGENO="0325"
- :
*19
Table I. - Estimations of Costs of Comparable ~/ Worldwide Crudes H
Del ivered to U.S. East Coast September 1971
_________________________ (Dollars per Barrel) _____________ _________
H Iran 3k° Arabian 3l~O v 1 ~ West Texas
Persian Gulf Persian Gulf enezue a 35 ~ur 3k°
tal Posted Price or 11EV 2/ $2.27k $2.285 $2.78k $3.30
eipany's Tax Paid Cost ~/ 1 .k33 1 .k39 2.185
Gathering Charge - - .05
Pipeline Charge - .16
Loading Charge - .03
Fob Price - -, $3.5k
rnker Freight Charges 1/:
For Charter Rates 1.2k 1.2k .28 -
For Spot Rates .61 .61 .17 -
US ATRS - - .29
.105 .105 .105
$2.78 $2.78 $2.57
$2.15 $2.15 $2.46 -
-
$3.83
uty -
anded Cost Charter k/ -
anded Cost Spot ~/ _____________ ______________ __________
anded Price U.S. ______________ _____________ ______________ _________
pot Cargo Prices "Quoted" ~/ $1 .78 $1 .73 $2.78 ~/
pot Cargo Rate and Duty .72 .72 .28 -
anded Spot Price U.S. $2.50 $2.k5 $3.06 $3.83
/ Crudes are middle weight, medium sulphur. Gravities shown are export averages.
/ Total posted prices or MEV's are for period beginning October 1, 1971. Temporary
freight premiums, taxes and royalties have been adjusted for this time period (last
quarter 1971). In Venezuela prices were called "Tax Reference Values" under 1967
agreement. After March 18, 1971, they are called "Minimum Export Values." In both
cases actual realized values are used for tax purposes when they exceed either the
TRY or MEV.
1/ Two rates are shown - charter based on AFRA and spots averaged from Mullion - AFRA
rates are September; spot rates are as of September 2k, 1971.
I+/ Foreign crudes are tax paid landed cos~ to which a "profit per hbl." must be added.
for ease in comparison, all items have been rounded to nearest cent per bbl. to arrive
at "best estimate figure."
~/ Last reported "lowest market price" fob producing area. Figures are obtained from
various sources. No assessment is made, however, as to th.eir reliability.
6/ Use Minimum Export Price since realized prices are not likely to be higher than MEV's.
PAGENO="0326"
Table III. - Libyan Agreement on Posted Prices and Taxes, Mediterranean, 1970-1975
_____________ ___________ (Dollars per Bbl.)
Pre-Sept. Jan. 1 Mar. 20 Oct. 1 Jan. 1 Jan. 1 Jan. 1 Jan. 1
1970 1971 1971 1971 1972 1973 1971+ 1975
Base Posted Price (1+00 gravity) $2.23 $2,550 $3.197 $3.197 $3.217 1/ $3.368 $3.523 $3,682
Temporary - Suez Premium - - 0.120 0.120 0,120 (*) (*) (*)
Temporary - Freight Premium 21 - - -0.130 0.082 0.082 3/ (*) (*) (*)
Total Posted Price $2.23 $2.550 $3.447 $3.399 $3,419 $3.368 $3.523 $3.682
Royalty 12-1/2% of Posted Price 0.28 0.318 0.1+31 0.1+25 0.1+27 0.1+21 0.1+40 0.1+60
Average Producing Cost 4/ 0.30 0.300 0.300 0.300 0.300 0.300 0.300 0.300
Tax Reference Price $1.65 $1,927 $2.716 $2.671+ $2.692 $2.6'+7 $2.783 $2.922
Tax 5/ $0.83 $1 .060 $1 .491+ $1 .1+71 $1 .1+81 $1 .1+56 $1 .531 $1 .607
Gevernment Take:
Tax $0.83 $1,060 $1.491+ $1.1+71 $i.481 $1.1+56 $1,531 $1.607
Retroactive Buy-Out 5/ - - 0.090 0.090 0.090 0.090 0.090 0.090
Royalty 0.28 0.318 0.431 0.1+25 0.1+27 0.1+21 0.1440 0.460
Total Government Take $1.11 $1 .378 $2.015 $1,986 $1 .998 $1 .967 $2.061 $2.157
Company's Tax-Paid Cost:
Total Government Take $1.11 $1 .378 $2.015 $1 .986 $1 .998 $1.967 $2,061 $2.157
Average Producing Cost 0.30 0.300 0.300 0.300 0.300 0.300 0.300 0.300
Total Company Cost $1.41 $1 .678 $2,315 $2.286 $2.298 $2,267 $2,361 $2,457
Rise In Total Postings
Rise in Government Take per Bbl.
-
-
$O.320
$0.268
$1,217
$0.905
$1,169
$0.876
$1 .189
$0.888
$1 .138
$0.857
$1,293
$0.951
$1,452
$1,047
* Assuming temporary premiums remain in full effect 1971 and 1972 but not thereafter. !/ Includes 2~ sulfur-escalation
under Sept. 1970 deal. 2/ Temporary freight premium based on following world scale rates: First quarter index W 94.4;
2nd quarter, W 90.3; 3rd quarter,.W 86.1. 3/ Assumes temporary freight advantage in Jan. 1972 same as October 1971.
141 Producing costs reported at 25~ to 26~ by the large-volume producers, ranging up to 50~ for smaller volumes. A per
barrel industry average of 30~ assumed here. 5/ Tax Rates: 50% before Sept. 1970. Since Sept. variable tax rates of
51+%-58% applicable to different'companies, averaging about 55%, in lieu of lump sum payment of "retroactivity" settlement.
New base tax rate rises from former 50% to 55%, and each company will "buy out" its last September tax "retroactivity"
settlement with an additional per barrel payment, averaging about 9~.
PAGENO="0327"
Table IV. - Saudi Arabia Agreement on Posted Prices and Taxes at Eastern Mediterranean (Via Tapline) 1970-1975
(Dollars per Barrel)
Pre-Sept. Jan. 1 Mar. 20 Oct. 1 Jan. 1 Jan. 1 Jan. 1 Jan. 1
1970 1971 1971 1971 1972 1973 1971+ 1975
Base Posted Price (314° gravity) $2.170 $2.370 $2.91+1 $2.91+l $2.91+l $3.065 $3.192 $3.322
Temporary - Suez Premium - - .120 .120 .120 (*) (*) (*)
Temporary - Freight Premium 1/ - - .120 .075 .075 2/ (*) (*) (*)
Total Posted Price $2.170 $2.370 $3.181 $3.136 $3.136 $3.065 $3.192 $3.322
Royalty 12-1/2% .271 .296 .398 .392 .392 .383 .399 .1+15
Average Producing Cost .120 .120 .120 .120 .120 .120 .120 .120
Tax Reference Price $1 .779 $1 .951+ $2.663 $2.621+ $2.621+ $2.562 $2.673 $2.787
Tax 3/ .890 .977 1.1+65 1.'443 1.1443 1.1+09 1.1+70 1.533
Total Government Take $1 .161 $1.273 $1 .863 $1 .835 $1 .835 $1 .792 $1 .869 $1 .91+8
company's Tax Paid Cost $1 .281 $1 .393 $1 .983 $1 .955 $1 .955 $1 .911 $1 .989 $2.068
Rise in Total Postings - $0.200 $1 .011 $0.966 $0.966 $0.895 $1 .022 $1 .152
Rise in Government Take per Bbl. - $0.112 $O.590 $0.6714 $0.671+ $0.631 $0.708 $0.787
* Minimum - Assumes temporary elements fully eliminated. -
~/ Temporary freight premium based on following world scale rates: Fist quarter index W 91+.1+; 2nd quarter, W 90.3; 3rd
quarter, W 86.1.
2/ Assumes temporary freight advantage in January 1972 same as October 1971.
3/ Tax rate at 50% prior to March 20, 1971, and at 55% thereafter. -
PAGENO="0328"
.
Base Posted Price (36° gravity)
Pre-Sept.
1970
Jan. 1
1971
Mar. 20
1971
Oct. 1
1971
Jan. 1
1972
Jan. 1
1973
Jan. 1
1971+
Jan. 1
1975
$2,210
$2.I+1O
$2.971
$2.971
$2,971
$3.095
-
$3.222
$3.353
Temporary - Suez Premium
-
-
.120
.120
.120
(*)
(*)
(*)
Temporary - Freight Premium 1/
-
-
.120
.075
.075 2/
(*)
(~)
(*)
Total Posted Price
$2.210
$2.k1O
$3,211
$3.166
$3,166
$3.O95
$3,222
$3.353
Royalty I 2-1/2% 3/
Average Producing Cost 1+/
.276
.120
.301
.120
.1+01
.100
.396
.100
.396
.100
.387
.100
.1+03
.100
.1+19
.100
Tax Reference Price
Tax ~/
$1 .811+
.907
$1 .989
.991+
$2.711
1 .1+91
$2.670
1 .1+69
$2,670
1.1+69
$2.608
1 .1+31+
$2.719
1 .1+95
$2,831,
1 .559
Government Take (Est.)
$1.183
$1.295
$1.892
$1.865
$1.865
$1,821
$1.898
$1,978
Company's Tax Paid Cost
$1.3O3
$l.Z+15
$1.992
$1,965
$1,965
$1.921
$l.998
$2,078
Rise in Total Postings
-
$O.200
$1 .001
$O.956
$0.956
$O.885
$1 .012
$1 .11+3
Rise in Government Take per Bbl.
-
$O.112
$0.709
$0.682
$0.682
$0.638
$0.715
$0.795
Minimum - Assumes temporary elements fully elims.nated.
Temporary freight premium based on following world scale rates: First quarter index W 91+.k; 2nd quarter, W 90.3; 3rd
quarter, W 86.1.
Assume temporary freight premium same as for October 1971.
Royalty is hased on 12-1/2% of Posted Price - Negotiation for other considerations. For practical purposes same
method of calculations used as for other Mid-East producing countries since Iraq has a different method for calculating
taxes and uses different bases.
Approximately 12~ per bbl. but changes, in expensing and capitalization accounts, may reduce it to l0~ per bbl. after
1970.
Formerly 50% of profits. Profits were calculated at border price less producing costs. Royalty not expensed. For
practical purposes will estimate using 55% rate and expensing royalty ala OPEC. May be an acceptable estimation.
Table V. - Iraqi Agreement on Posted Prices and Taxes at Eastern Mediterranean (Via IPC-Line) 1970-1975 (Estimated)
(Dollars per Barrel)
*
1/
2/
1/
1+,'
5/
PAGENO="0329"
ase costed Price
(1+1+ gravity)
Short haul premium !l
otal Posted Price
Royalty 12-1/2%
Average Producihg Cost
`ax Reference Price
`ax
Government Take:
Tax
Royalty
Total Government Take
-Company's Tax Paid- Cost:
Government Take
Average Producing Cost
Total Tax Paid Cost
1971
-$2,700 $3.350 $3.350 $3.370
- .266 .266
6 $3.596
$0. 876
$0. 530.
$0. 896
$0 .51+3
~.,,,2
1.,,_~
$3.8L14
$3. 521+
$3. 521+
.1+1+1
$3.682
$ 3.682
$1 .280
$1 .280
.650
$1 .930
$1 .825 -
.650
$2 . 1+75
`$1 .810
.650
$2 .1+60
$1.82~3
.650
$2 .1+73
$1 .779
$1 . 779
.650
$2 .1+29
-
~-~---
-
Rise in P~sted Prices
$0.900
Rise in Government Take/Tax
Paid Cost
-
- --
$0.51+5
$1,875 $1,973
$1.875 $1.973
- .650 .650
$0. 821+
$0.1+99
Note: Old Algerian rates, under 1965 pact with France, provided for fully ore
royalty, based on well head price and 55% tax. Presently they are operating u --
System with 12-1/2% expensed royalty based on Posted Price and 55% tax. -
~/ Called "complementary element" in Algerian Legislation and not broken down Into Suez
and freight components; assumes this temporary premium remains in full effect at current
rate for the rest of 1971 and 1972 but not thereafter.
PAGENO="0330"
Table VII. - Nigerian Agreement on Posted Prices and Taxes, 1970-1975
____________________________________ (Dollars per Barrel)
Pre-Sept. Sept. Mar. 20 Oct. 1 Jan. 1 Jan. 1 Jan. 1 Jan. 1
1970 1970 1971 1971 1972 1973 1971+ 1975
Base Posted Price (340 gravity) $2.170 $2,420 $3.OO2 $3.002 $3.002 $3.l68 $3.317 $3,470
Less Harbor Dues 0.060 0.060 - - - -
Temporary - Suez - - 0.120 0.120 0.120 (*) (*) (*)
Temporary - Freight - - 0.090 0.056 0.056 (*) (*) (*)
Total Posted Price $2.11O $2.360 $3.212 $3.178 $3.198 $3.l68 $3.317 $3,470
OPEC Allowance 1/ 0.156 0.172 - -
Market Allowance 0.005 0.005 - - - -
Adjusted Price $1 .949 $2.183 $3.212 $3,178 $3.198 $3.168 $3.317 $3.47O
Royalty 12-1/2% 0.251 2/ 0.283 2/ 0.'+02 0.397 0.1+00 0.396 0.1+15 0.434
Average Producing Cost 0.350 0.350 0.350 0.350 0.350 0.350 0.350 0.350
Tax Reference Price $1 .348 $1 .550 $2.460 $2.431 $2.1448 $2.422 $2.552 $2,686
Tax 3/ 0.674 0.775 1.353 1.337 1.346 1.332 1.404 1.477
Government Take:
Tax $O.674 $0.775 $1,353 $1.337 $1.346 $l.332 $1.4O4 $1,477
Royalty 0.251 0.283 0.402 ~.397 0.400 0.396 0.415 0.434
Harbor Dues 0.060 0.060 0.020 0.020 0.020 0.020 0.020 0.020
Total $0.985 $1.118 $1,775 $l.744 $1,746 $1.748 $1,839 $1.931
Company's Tax Paid Cost $1 .335 $i.468 $2,125 $2.O94 $2.096 $2.098 $2.189 $2,281
Rise in Total Postings
Rise in Government Take per Bbl.
-
-
$0.25O
$1 .133
$1 .102
$O.790
$1,068
$O.759
$1.088
$O.761
$1.058
$0.763
$1 .207
$O.854
$1 .360
$O.946
* Assumes temporary premiums remain in full effect 1971 and 1972 but not thereafter.
!/ Average; actual figure varies by companies.
~/ A 1O~ per bbl. gathering cost deducted from posting to determine wellhead value for royalty calculation.
3/ Tax rate 50% before March 20, 1971, and 55% thereafter.
PAGENO="0331"
Table VIII. - Iranian Agreement on Posted Prices and Taxes, 1970-1975 - Persian Gulf Shipments
(Dollars per Barrel) _________ _______ ________ ________________
* Pre-Nov. 1k After Nov. 1k Feb. 15 June 1 Jan. 1 Jan. 1 Jan. 1
1970 1970 1971 1971 1973 197k 1975
Base Posted Price (3k° gravity) $1,790 $1 .790 $2,170 $2.27k $2,381 $2.k9l $2.603
OPEC Allowances and gravity
adjustments 0.099 0.099 - - - - -
Royalty 12-1/2% - * 0.22k 0.22k 0.271 0.28k 0.298 0.311 0.325
Average Producing Cost 0.120 0.120 0.120 0.120 0.120 0.120 0.120
Tax Ràference Price $1.3k7 $1.3k7 $1 .779 $1 .870 $1 .963 $2.060 $2.158
Tax ~/ 0.674 0.741 p.978 1.029 1 .080 1 .133 1 .187
Government Take:
Tax $0.67k $0.7k1 $0.978 $1 .029 $1 .080 $1 .133 $1.l87 CY'
* Royalty 0.224 0.22k 0.271 0.28k 0.298 0.311 0.325
Total $O.898 $0.965 $1.249 $1,313 $l.378 $1.kkk $1.5l2
Company's Tax Paid Cost $1 .018 $1 ~O85 $1 .369 $1 .k33 $1 .k98 $1 .56k $1 .632
Rise in Posted Price -. - $0.380 $0.48k $0.591 $0.70l $O.8l3
Rise in Government Take - $O.067 $0.351 $O.k15 $0.k80 $0.5k6 $o.6ik
1/ Tax rate at 50% until Nov. 1k, 1970, then increased to 55%. *
PAGENO="0332"
Table tX.1 - Saudi Arabian Agreement on Posted Prices and Taxes, 1970-1975 - Persian Gulf Shipments
_________________________ (Dollars per Barrel)
Pre-Nov. 1k After Nov. 1k Feb. 15 June 1 Jan. 1 Jan. 1 Jan. 1
1970 1970 - 1971 - 1971 1973 197k 1975
Base Posted Price (3k0 gravity) $1 .800 $1 .800 $2.180 $2.285 $2.392 $2.501 $2.614
OPEC Allowances and gravity
adjustments 0.099 0.099 - - - - -
Royalty 12-1/2% 0.255 0.255 0.273 0.286 0.299 0.313 0.327
Average Producing Cost 0.120 0.120 0.120 0.120 0.120 0.120 0.120
Tax Reference Price $1 .326 $1 .326 $1 .787 $1.879 $1 .973 $2.068 $2.167
Taxi! 0.663 0.729 0.983 1.033 1.085 1.137 1.192
Government Take:
Tax $0.663 $0.729 $O.983 $1.033 $1.085 $1.137 $1.192
Royalty 0.255 0.255 0.273 0.286 0.299 0.313 0.327
Total $O.918 $0.98k $1 .256 $1,319 $1 .38k $1.k50 $1 .519
Company's Tax Paid Cost $1 .038 $1 .10k $1.376 $1.k39 $1 .508 $1 .570 $1.639
Rise in Posted Price
Rise in Government Take
-
-
- $0.380
$0.066 j $O.338
*$0.k85
$0.k01
$O.592
$O.701
$0.81k
1/ Tax rate at 50% until Nov. 1k, 1970, then increased to 55%.
PAGENO="0333"
Crude
Gravity
Port
Pr~e-Mar. 18
1971
Mar. 18
1971 2/
June 1
197i~/
scan
chaquero
gunillas
a Juana Med.
a Juana Lt.
ficina
fl Joaquin
10°
14°
16°.
26°
31°
35~
41°,
Puerta Miranda
"
Is
La Sauna
"
Puerta l.a Cruz
"
$1 .43L~
/ i.~8o
1.652
2.016
2.198
2.341,
2.562
$2.427 ~/
2.4871/
2.5171/
2.667
2.742
2.802
2.892
$2.k09 ~/
2.4691/
2.4991/
2.649
2.72k
2.784
2.874
*
Export Values Applicable to Refined Products
(Dollars per Barrel)
Heavy 71-55 SSU NA $3.431 $3.4l3
Medium 54-40 SSU NA 3.681 3.663
Light 39-30 SSU NA 3.831 3.813
Heavy 7,000-3,050 SSU $1.73 2.387 2.369
Medium 3,000-825 SSU 1.73 2.487 2.1169
#4 190-72 SSU 1.73 2.895 2.877
Low Sulphur 1.9-1.7% 72-7,000 SSU 1.73 2.895 2.877
1.5% " 1.73 3.022 3.004
1.0% " 1.73 3.312 3~294
0.3% " 1.91 3.596 3.578
opped Crude Oils Formula: V=$2.325/bbl. + 0.0188 times original API gravity of oil topped.
Prices were called "Tax Reference Prices" under 1967 agreement. Now after Mar. 18,
1971 called "Minimum Export Prices." in both cases actual realized values are used for
tax purposes when they exceed either the TRV or MEV.
I Variable freight elements amounted to 7.7~ per bbl. added for period Mar. 18-31. For
April-June quarter it amounted to 5.9~ per bbl. added to basic ME.V.
includes premium "extra" of 15c for Boscan, 9~ for Bachaquero and 6~ for Lagunillas.
/ Distillate values show in each case had a diesel index range of 48-52. All SSU are at
122° F. Also where sulphur content lower than 0.3% a premium of 5~ per bbl. will be
added to values shown.
Type
Quality
Viscosity
Pro-Mar. 18
1971
Mar.
18
1971
.~/
June
1
1971
~/
`I
/ .
327 ~.
Table X. - Venezuela Tax ReferenCe Prices/Minimum Export Prices 1/
(Dollars per Barrel)
istillates: !±i
esidual Fuels: High
Sulphur (2% or more)
PAGENO="0334"
328
Table XI. - Venezuelan Agreement on Posted Prices and Taxes - 1971
(Dollars per Barrel)
Base Mm. Export Value (350 API) !/
Royalty (16-2/3% est.) ,~/
Average Producing Cost ,~i
Taxable Base
Tax (at effective 58% rate) k/
Government Take per Barrel
Company Tax Paid Cost
Rise in MEV
Rise in Government Take
Pre-Mar. 18
1971
Mar. 18
1971
June
1971
$2.34k
.600
.520
.22k
.612
~
$1 .732
-
-
- $2.802
.600
.520
$1,682
.976
$1,576
$2.096
.458
.36k
$2.78k
.600
.520
$1 .66k
.965
$1 .565
$2.185
.1,40
.353
Base Mm. Export Value (26° API) 1/
Royalty (16-2/3% est.) ~/
Average Producing Cost 3/
Taxable Base
Tax (at effective 58% rate) k/
Government Take per Barrel
Company Tax Paid Cost
Rise in MEV
Rise In Government Take
$2.016
.530
.520
$0.966
.483
$l.0l3
$l.533
-
$2.667
.530
.520
$1 .617
.937
$1 .467
$1 .987
.651
.454
$2.6k9
.530
.520
$1 .599
.927
$1 .457
$1 .977
.633
*11e4
j/ 35° API oi,l is Officina and 26° API oil is Tia Juana Medium.
2/ Royalty is at 16-2/3% base on prices of comparable Texas crudes. Officina is compared
to Sweden at $3.60/bbl~ and Tia Juana is compared to West Texas Sour at $3.17/bbl.
1/ Average production costs range from k0~ to 62~ per bbl. Average of 52~ Is from State
Department calculations of which 20~ Is applied to capital.
~j/ Tax rate is 60% but 2% discount prevails as before on most production, so 58% was used
as a practical rate. The effective tax rate pre-March 18, 1971, was 50%.
PAGENO="0335"
m
z~
0
~1 Z ~.
i-ri
-4
>
-4
~c1~FTt
>>r-
Zr-a -4
>m~ i-n
rn
z
-4
PAGENO="0336"
PAGENO="0337"
331
Summary
(X) Draft ( ) Final Environmental Statement
Department of the Interior, Bureau of Land Management
Division of Minerals
1. Proposed Oil and Gas Lease Sale, Outer Continental Shelf,
Gulf of Mexico.
(X) Adminstrative ( ) Legislative Action
2. Seventy-eight tracts (366,440 acres) of OCS lands are proposed
for leasing action. The tracts are located offshore Eastern
Louisiana. If implemented, this sale is tentatively scheduled
to. be held in late summer, 1972.
3. All tracts offered, pose some degree of pollution risk to the
marine environment and or adjacent shoreline. The risk potential
is related to adverse effects on the environment and other resource
use which may result from accidental or cthronic oil spillage. Since
the location of an OCS tract in relation to resources is an import-
ant consideration in assessing environmental risk potential, all
tracts have been ranked according to their distance from shore or
from high value/critically vulnerable resources.
4. Alternatives considered:
A. Hold the sale in modified form
B. Withdraw sale
* Augmenting Supply
1) increase imports
" increase onshore production
3) 4~icrease nuclear energy sources
4) increase use of coal .
5) increase hydro-generated power . -.
6) modify FPC rate policy
7) modify market-demand prorationlag
8) oil shale production .
* Reduction in Demand
C. Delay Sale .
5. Draft statement made available to Council on Environmental Quality
and the public on March 31, 1972.
i
77-463 0. 72 - Pt. 1 . 22
PAGENO="0338"
332
6. Comments have een requested from the following:
Environmental Protection Agency
Department of Commerce
National Oceanic and Atmospheric Administration
Department of Transportation
U.S. Coast Guard
Atomic Energy Commission
Federal Power Commission
Office of Emergency Preparedness
State of Florida
Department of Administration
State of Louisiana
Commission on Intergovernmental Relations
Department of Conservation
Louisiana Wildlife and Fisheries Commission
State of Alabama
Alabama Development Office
State of Mississippi
Coordinator for Federal-State Programs
State of Texas
Off ice of the Governor
Department of the Interior
Bureau of Sport Fisheries and Wildlife
But au of Outdoor Recreation
Bureat. of Mines
Geological Survey
National Park Service
Office of Oil and Gas
ii
PAGENO="0339"
E. Recreation Resources
1. Federal areas.
2. State areas.
F. Wildlife Resources
1. Waterfowl.
2. Other birds.
3. Fur animals.
4. Other wildlife
G. Fis.~iry Resources.
1. Resident species
2. Semi-catadromous
3. Seasonal migrant
A. Possible Impacts
1. Debris
2. Structures
3. Pipelines.
4. Oilpollution.
1
5
5
6
11
14
1.6
18
20
22
25
27
31
32
33
35
35
36
37
37
38
39
39
43
44
46
46
46
49
51
Page
333
CONTENTS
I. DESCRIPTION OF THE PROPOSAL
A. Background of the Proposal
1. Proposed sales
2. Development
3. Environment
4. Resource use and commercial activity
5. Possible environmental &mpacts from OCS
oil and gas development' under 5-year lease schedule
B. Purpose of the Proposed Sale
C. Location and Reserves
II. DESCRIPTION OF THE ENVIRONMENT
A. Coastal Zone .
B. Geologic Framework
C. Weather Patterns
D. Hydrography
species
H. Oil and Gas Resources
III. ENVIRONMENTAL IMPACT OF THE PROPOSED SALE
iii
PAGENO="0340"
Contents (cont')
334
B. Analysis of Environnental Risks to Resource Use.
C. Areas of Special Consideration
IV. MITIGATING MEASURES INCLUDED IN THE PROPOSED ACTION
B. Special Stipulations
C. Departures
D. Inspection
E. Enforcement
F. Contingency Action
G. Research on Advanced Technology.
H. Geophysical Information
I. Other Requirements.
Page
* . . 66
71
75
77
78
80
82
83
86
86
87
A. Regulations
V. UNAVOIDABLE ADVERSE ENVIRONMENTAL EFFECTS
A. Oil Pollution Effects on Marine Environment 88
B. Pipeline Construction Effects on Marshes and
Bottom Resources 90
C. Struc~res in Conflict With Commercial Fishing 94
D. Oil Pollution Effects on Recreation Resources 95
E. Structures in Relation to Shipping 96
VI. RELATIONSHIP BETWEEN LOCAL SHORT-TERM USE AND MAINTENANCE
AND ENHANCEMENT OF LONG-TERN PRODUCTIVITY. 97
VII. IRREVERSIBLE OR IRRETRIEVABLE COMMITMENT OF RESOURCES 99
iv
PAGENO="0341"
Contents (cont')
Page
VIII. ALTERNATIy1~5 TO THE PROPOSED ACTION
A. Hold the Sale in Modified Form . . . . . . . . . ìóø
B. Withdraw the Sale. . . . . . . . . . 101
1, Increased oil imports. . . . . . . . 103
2. Increased onshore oil and gas production * . . . . l~l
3. Increased nuclear power. . . . . . . 153
4. Increased use of coal. . . . . . . . . . 165
5. Increased hydroelectric power. . . . . . 200
-6. Modification of FI'C natural gas Pricing. . . 205
7. Modification of market demand
Prorationing Systems * * . . . . . . . . 208
8. Oil shale production . . . . . . . 215
-Reduction in demand . . . . . * . 241
C. Delay Sale * . * 249
IX. CONSULTATION AND COOPERATION WITH OTHERS
A. Consultation and Coordination in Preparation of
Draft Environmental Statement., * . * * . * * * * * * . . 250
1. Federal . . . . . . * . . * * * * . 250
2. State. * * * * . * * * . * . . . * . . * * * * * 250
3. Public * . * . . * * * * * * * * . 250
*X. ATTACj~jqg~5 . . . . * . . 252
V
PAGENO="0342"
336
Note:
This draft environmental statement has been prepared pursuant
to section 102(2)(c) of the National Environmental Policy Act of 1969.
It is presented for review. A final enviorrxmental impact statement
will be prepared after the appropriate review period.
The regulations to which reference. is made throughout this draft, unless
otherwise noted, are 30 ~FR Part 250 and !~3 ~FR 3300, and Geological
Survey OCS Order Nos. 1 through 12 - Gulf of Mexico. Although too
bulky to append here, these may be obtained from the United States
Department of the Interior.
The tracts which are being considered for leasing in this proposed sale
are the same as those previously scheduled for leasing at the cancelled
December, .1971 sale. In connection with the cancelled sale, a public
hearing was held in New Orleans on September 8 and 9, 1971.
vi
PAGENO="0343"
337'
I. Descriwt±on of the Proposal
A. Background of Proposal
Por most of our history, a plentiful supply of energy is something
the American people have taken very much for granted. In the last
twenty years alone, we have been able tO double our consumption of
energy without exhausting the supply. But the assumption that suffi-
cient energy will always be readily available has beex~ brought sharply
into question within the last year. The brownouts that have affected
some areas of our country, the possible shortages of fuel that were
threatened last fall, the sharp increases in certain fuel prices and . our
growing awareness of the environmental consequences of energy produc-
tion have all demonstrated that we cannot take our. energy supply for
granted any longer.
A sufficient supply of clean energy is essential if we are to sus-
tain healthy economic growth and improve the quality of our national
life. I am therefore announcing tod&y a broad range of actions to
assure an adequate supply of clean energy for years ahead...
President's Clean Energy
Message June k, 1971
The Pr~sident's Clean Energy Message alerted the nation to the possibility
of insufficient supplies of clean energy unless prompt action is taken.
A series `of measures were proposed which were intended to help meet the
challenge. These measures involved action on several fronts, including:
increased research and development on the more promising energy concepts
such as the fast breeder reactor, coal gasification and sulfur-oxide control;
the balancing of environmental and energy needs through long range power
plant siting and a sulfur-oxide emissions charge; increased emphasis on
energy conservation through public education; an expansion of our supplies
of nuclear fuels through increased plant capacity; (placing the responsi-
bility for energy management in one agency, a Department of Natural
~/ U. S., President, "The President's Message to the Congress, June k, 1971,"
Weel4yi Com~ilatiprj of.~esidentie!. Documents, Vol. 7, No. 23, June 7, 1971,
pp. 855-ff66.
1
PAGENO="0344"
338
Resources); and, by making available the energy resources of Federal lands.
In order to carry out one segment of this program the development of the
energy resources of the Federal lands, the Department was directed to
accelerate the offerings of OCS oil. and gas leases and to publish a five-
year schedule of lease offerings. This mandate was followed and on June 15,
1971, a tentative schedule was released which includes an acceleration of
lease sales tb be held in the Gulf of Mexico and proposes holding public
hearings on possible leasing in the Gulf of Alaska and the Atlantic sometime
prior to 1976 (Attachment A). This schedule is currently being updated and
revised by the Bureau of Land Management with considerable resource informa-
tion being supplied by the Geological Survey and with the assistance of other
Federal agencies. The Department, in its current revision of the supporting
analysis for the schedule, is further improving its data and applying more
sophisticated analytical tools, e.g., the use of a computer model, to allocate
projected gas supplies on a regional basis.
In establishing the tentative five-year leasing schedule the Department con-
siders three primary factors: orderly resource development, protection of
the environment, and receipt of fair market value. These three factors must
be balanced against each other in each situation and in the overall schedule,
and the consideration accorded to each factor may vary in each situation.
Orderly resource development is determined by an analysis in broad terms,
* of when, where, and how much oil and gas to offer for lease. This is
done through a review of the national energy situation and the
2
PAGENO="0345"
339
identification of future supply..dernand imbalances. Projections' were made
of future non-OCS supplies of oil and gas, including imports which it was
assumed would remain at a constant percentage of demand. Supplies from
the OCS were treated by initially projecting future production from
existing leases. Deficits were then identified by matching anticipated
supply with future demar~d. These demand forecasts were made on a regional
basis, using the regions of the Future Requirements Committee for gas and
the Petroleum for Administration of Defense (P.JLD.) districts for oil.
Once deficits are idefltified new OCS sales are proposed to help meet these
deficits. The impacts of alternative schedules on meeting demand are
tested and one schedule is selected which can best satisfy this objective.
The schedule is also evaluated in terms of fair market value. The size
and frequency of sales can induce or inhibit~a competitive market which
in turn affects the government's receipt of fair market value. Currently,
in order to promote competition and sufficient~ capital for bonus payments
and development o leases, two general sales of ~3OO,OOO~-6OO,OOO. acres each
are scheduled per year.
After the schedule has been developed to reasonably assure the receipt of
~fair market value while attempting to meet deficits where possible,' the
schedule ~ust be further evaluated and adjusted to assure maximum possible
protect~on of the environment.
The tentative five~year schedule proposes that 10 sales be held in the
Gulf of Mexico. The schedule indtcates that if~ flG sales are Jield in' these
areas by 1976, then sales of comparable potential reserves in other areas S
3 11,
PAGENO="0346"
340
will be ~ffex~ed.
Under the .tentativef'ft~é ar'sëhedule,an~environmentál impart statement
based `uponJdetáiled~andly~is~ôfriállappropriate data will be piepared for
each propoaed~.OCS oil'~and.'gas lease;sâle~ included in the five-~year schedule.
Detailed sttidies.~reqüired to~.analyze environmental impacts of proposed OCS
lease sales.Will1be~ i~±tiated~soon~for the' ~Pexas and Floi~ida - Alabama -
Mtssissippi~areas of'the'O~xltof Mexico. An~environmentál aimlysis of
the cumulative impact df~'OCS oil:;and gas operations is being initiated.
Prior to any.~decidion to lease:OCS~.lands~ in the(Thtlf of Alaska and
Mtd_Atlantic:.areas, broad planning studiesöf the environmental, natural
resource, minerá~., economtc..andother regional `factors must ~be undertaken.
Until the results oftthese~studtes, arld'ôthers r~hat may be necessary, are
fully evaluàte4, noudeëision to initiate 3.eastpgprogrsms ~in ~thesé areas
can be made. .ln~additton, ;the'~questton. ot~respeetive Federal and State
OCS jurisdiction in these Offshore areas is currently in litigation.
Resoiution of this litigation is~inecessary;before a decision on leasing
actions can be made.
The following general analysis of possible environmental impacts on the
tentative five-year lease schedule has. been developed for sales proposed
in the Gulf of Mexico.
4
PAGENO="0347"
341
`1. ~pOSed Sale~
Sales tentatively included in the five~year schedule (excluding possible
Gulf of Alaska and Atlantic areas) are:
1. (~tzlf of Mexico Drainage (held October 1971)
2. E. Louisiana General and Gulf of Mexioo~D~aiiage'.
3. Louisiana General and Gulf of Mexico .D1~ainsg~
k. Texas General and Gulf of Mexico Drainag~:
5. Alabama, Mississippi, arid Florida Generali and:
Gulf of Mexico Drainage
6. Louisiana and. ~st Texas General and Gulf.~ of.
Mexico Drainage
7. Gulf of Mexico~.D~ainage
8. Louisiana and. Texas,.General. and Gtilf of `Mexico.
Drainage
9. Gulf of Mexico Drainage
10. Gulf of Mexico General and Drainage
2. Deveio~pnient.
The following estimates. indicate' the intensity..'of~ devel&pment which will
be required in. order to develop the hy~rocarbon reserves incli.~dCd in
`the five-year schedule in the Gulf.."of".'Mexico. -
5.
PAGENO="0348"
a. Acres under lease (millions)
b. Reserves to be developed:
- oil (bil. bis.)
- gas (tril. Cu. ft.)
C. Remaining reserves:
- oil (bil. bls.)
- gas (tril. Cu. ft.)
d. Holes
é. Platforms
f. Miles of Pipeline
g. Terminals
h. Storage Facilities
* This assumes that some leases will have expired
** Includes approximately 3,100 miles of common carrier pipeline
3. Environment
The coastal zone of the Gulf of Mexico is richly endowed with estuaries and
coastal marshes. Over 200 estuarine systems e~xtend from Florida Bay and the
famous Ten Thousand Islands of the Everglades to the hypersaline Laguna
Madre of the Southwest Texas coast. It is estimated that there are about
12.7 million acres of estuary and coastal marsh habitat in the five states
bordering the Gulf of Mexico. This is about k5 percent of the total estuary
and coastal marsh area in the contiguous k& states, about two-thirds of the
coastal marshes and one-third of the estuarmne water area. It is this area
of shallow estuaries and marshes that makes the Gulf of Mexico so productive
of fish and wildlife resources
~/ AU figures are for developaent over the life of the leases issued /
during the give-year period.
2/ U. S. Congress, Senate, Report of the Secretary of the Interior tb the
U. S. Congress, the National Estu~rine ~i1ution Q~, 91st Congress,
Second session, )~.rch 1970. 6
342
Current
Status
k.6
2.0
37.0
9,92k
l,8k5
5,Okk**
72
82
Increment :.~/
5-year Schedule
2.6 - 3.6
2.5 - 5.0
20 - ko
3,500 - k,500
800 - l~+0O
1,020 - 3,000
1k - 28
16-32
~2J~ Status
5-6 *
2.75 - k.o
35 - ks
13,000-15,000
2,300-2,800
6,060-7,080
86-100
98 - Uk
PAGENO="0349"
343
From the shoreline of the barrier ialands of the Gulf, waters deepen
gradually at a rate of about six feet per mile out to depths of about
~300 feet, where the gradient increases more rapidly out to the shelf
break or continental slope. In some areas the shelf is more than 100
miles wide. The Gulf Coast area lies, generally, in a zone of
transition between tropical and temperate weather patterns. The
climate is mild (mean temperature 69 degrees F.) and the area receives
considerable precipitation (55 inches annually). Wind flows are
complicated, particularly in the cold months, when the normal track
of disturbance traveling west to east lie near the coast.
The Gulf of Mexico is defined ecologically as a high energy system in
which the naturally generated energy supply is sufficient to maintain
a large and diverse population of plant and animal life. The extensive
shallow water area of the Continental Shelf provides a broad expanse
of nutrient laden substrate which tends to concentrate commercial
species of fish where they can be caught readily.
a* Wildlife
The Gulf of Mexico offers ~iñtering and nesting areas for a large
proportion of the waterfowl population of the United States. It is
the southern terminal for much of t~ie aenteral Flyway and both the
Mississippi and Atlantic Flyways. Twenty.five National Wildlife
Refuges, including k86,780 acres are located in the area. These are
distributed as follows:
National Wildlife Acres
Refuges
Texas 5 131,333
Louisiana 5 232,k76
Florid~ 15 122,971
7
PAGENO="0350"
344
In addition, 66,250 acres of wildlife I~abitat in the area have, been
elosed to hunting by Presidential Proclamation.
Rach State, including Alabama and Mississippi, also operates several
wildlife reguges or management areas adjacent to the Gulf of
Mexico.
~ Resources
The rich nutrient laden estuaries of the Gulf of Mexico produce an
abundance of sport and commercial fish. Major species by type of
estuarine dependence `are: ~/
Sport Fish
Permanent Nui'sery
Residence
Crabs, spotted . strited bass croaker,
sea trout, oysters, black and reck drums, spot
* mullet, sand sea trout,
whiting shrimp, flounder
* salt water sheeps head,
salt water catfish, blue
fish
Commercial Fish
Oysters, blue crabs, * same as above
spotted seatrout, stone axd menhaden
crab
Recreation
The Gulf of Mexico offers a wide variety of outdoor recreation
opportunities. The resources of the area are summarized as follows ~3~/
j~/ The National Estuarine Pbllution 8t~d~, op. cit., pg. U6.
~/ All statistics pertaining to outdoor recreation were taken from,
Shoreline Recreation Resources of ~ United States, Outdoor Recreation
Resources Review Commission, Report No. ~ 1962.
8
PAGENO="0351"
* 345
Florida
Florida's total recreation shoreline on the Gulf of Mexico is 1755 miles
including 111 miles of public recreation areas and 771 miles of beach.
Approximately half of the entire shoreline (8'+o miles) consists of
mangrove swamps or marsh. All recreation activities are feasible in
the area, but swimming and fishing are the most popular.
Alabama
Total recreation shoreline in Alabama is 20k miles including 115 miles
of beach and 89 miles of marsh shore and only 3 miles of public recreation
areas. Swimming, fishing, sailing, a~id boating are suited to the area
and are the most popular recreation activities.
Mississippi
Missinsippi's total recreation shoreline is 203 miles including 69 miles
of marsh shore and 131+ miles of beach. The Mississippi shoreline lies
some miles behind a widely broken chain of offshore islands (Petit
Bois, Horn, Ship and Cat tslands), which protect the shore from the
open Gulf. The area is best suited for such recreation activities
as swimming, fishing, sailing, and boating.
Louisiana
Louisiana's total recreation shoreline (including Lake Pontchartrain)
is 1076 miles including 819 miles of marsh shore and 257 miles of beach.
Fishing, hunting, wildlife s~u4y, and z'elated activities are best suited
to the area. Swimming is feasible but the nature of the beaches and
offshore bottom make them le~s~ than attractive.~/
See also se~tion 1.~. ~
/ 9
PAGENO="0352"
346
Texas
Total recreation shoreline in Texas is 1081 miles including 359 miles
of marsh shore and 301 miles of beach. The shorelines are probably
as little developed as any beach areas in the TJnfted States. All types
of recreation activity are feasible on the Texas shore.
National Park Service Units j/
National Park Service units in the Gulf of Mexico area are:
Padre Island National Seashore
Gulf Islands National Seashore
DeSoto National Monument
Everglades National Park
Fort Jefferson National Monument
New areas which may be established by 1976 are:
Swannee Wild and Scenic River
Jean Lafitte National Cultural Park
Wakulla River National Monument or Wild
and Scenic River
In addition to Federal areas, the following National Landmarks are
located in the Gulf of Mexico area:
Fort Morgan National Historic Landmark
Fort Walton Mound National Historic Landmark
Fort San Marcos De Apalche National Historic Landmark
Safety Harbor Site National Historic Landmark
Lignumvitae Key Natural Landmark
~/ Curremt data, National Park Service
10
PAGENO="0353"
4. Resource Use and Qornte~oial ~4c~tiiri~y~ ~e1a~e4, tp the ~PC$ in, the
Gulf of $ex1~Q
The following c~mnerical activities and resource uses occur on the
OCS or are related to the OCS of the Gulf of.Mexico.
a. Mineral Industry
The petroleum refining industry and the related extraction industries of
Loisiana and Texas have a growth rate several times greater than the
national rate for industries of this type. In 1971, Gulf of Mexico
OCS operations produced 387 MM barrels of oil valtied at $1,463,704,540 and
2.8 tr. Cu. ft. of gas valued at $~k5,4l6,7l3. Total 1970 sulfur pro~
duction on the Outer Continental Shelf was 1,099,548 tons valued at
$24,636,736. In addition, 269,691 tons of salt' was produced in 1970
with a value of $48,544.
b. CQmm~cial ~ishir~ ` ` /
The Gulf of Mexicois one `of the most productive fishing areas in the
United States. In 1970, the commercial fishing catch was 1,688 million
pounds valued at $164.6 million (paid `to fishermen). In 1970, this catch
was 35 percent of the total quantity of the United States commercial
catch and 27 percent of the total value of the United States `catch.
c. ~p~t Fishing / - -
In 1970, an estimated 2.4 million fishermen, 12 years and older, spent
25.7 million man-days of fishing in the Gulf of Mexico. Approximately
53 percent of this sport fishing was in the ocean or beaches and 47 per-
cent was in estuaries. ~/ No projections are available for 1976, but the
1970 level is expected to increase.
~/ Projected from 1965 National Survey of Fishing and Hunting and 1965 Salt
Water Angling Survey; U.S. Fish and Wildlife Serviee, and preliminary 1970
Salt Water Angling Survey, National Marine Fisheries Service.
11
``/2
*2;
847~
2/
77-463 0 -`72 - pt. 1 - 23
PAGENO="0354"
348
d. Recreation
In 1970, recreationists participated in 215 million recreation activity
1/
occasions in the Gulf of Mexico area; by 1975 it is expected that
recreationists will participate in approximately 250 million recreation
activity occasions in this area. Recreation activities in the Gulf
area are, of course, largely water-oriented. Water-oriented recreation
is the most popular form of outdoor recreation in the United States.
The warm climate of the Gulf of Mexico makes this area very attractive
to recreationists both in, and beyond, the region.
Estimated visits to National Park Service Units in the Gulf of Mexico
are as follows:
Estimated VisIts
~2I~
Padre Island 904,L~00 1,165,900
Gulf Islands 0 2,052,600
De Sota N. Jkui. 135,500 161,600
Everglades 1,293,500 l,~28,200
Ft. Jefferson 10,500 20,900
1/ A recreation activity occasion is the participation in a single
activity by a single individual.
2/ The above estimates for recreation use are based on data arid procedures
contained in A New Perspective on ~ecreational Use of the Ocean, National
Planning Association, Winilaw and Bigler. The above estimates are in-
cluded for the purpose of presenting order of magnitude data and could
be subject to considerable adjustment.
12
PAGENO="0355"
ç
e. Shi~pin~g
The Gulf of Mexico is subjected to heavy shipping traffi~. The following
is an analysis of shipping traffic (daily distribution in the Gulf of
Mexico. il)
All ~S1esse1s Over lOQ GET*
Location 1972 1980
Straits of Florida 19 27 21
E~.stern Gulf of Mexico 17 19 17
Western Gulf of Mexico 9 6 10
1~bbile Area 62 77 73
Ent, to Miss. H. 18 16 19
*
Gross Tons
f. Defense Warning Areas
A possible restraint on the extent of future offshore oil and gas leasing
involves conflicts in some areas between mineral development and high
priorit7 uses of the Department o Defense. Some adjustments in befense
"Warning Areas" (these are principally testing and training areas) on the
OCS and/or development of adequate special oil and gas lease stipulations
where appropriate will need to be made before mineral leasing in such
areas can proceed.
1/ A of Maritime Mobile Satellites, Vol.1 - Merchant' Vessel
Population/~stributors Present and Forecast, Automated Marine
International, Newport Beach california. Also see Attachment E
of this statemert.
13
.1,
PAGENO="0356"
350
5. Possible Environmental Impacts from OCS Oil and Gas Deve~pment Resu1ti~g
from Implementation of the Five Year Lease Schedule
The environmental impact which could result from implementation of
the five-year lease schedule can be estimated with precision only after
specific factors related to each sale are known. For example, at least
the following information is needed but is not immediately available for
sales beyond the East Louisiana and, to a lesser degree, the Louisiana
General Sale area: (a) location of tracts in relation to resources, shipping
lanes, recreation areas, refuges, etc., (b) type of expected production, e.g.,
oil or gas, (c) geologic formations, (d) water depths, (e) expected terminal
points for pipelines, and (f) expected size and location of required new
storage facilities.
In general, it can be assumed that future impacts of OCS oil and gas lease
sales, both favorable and unfavorable, will be greater on the environment,
other industries and communities in areas where no previous OCS oil and
gas leasing has been undertaken. This is so because new pipelines and
storage facilities must be built, relationships must be developed between
existing industries, (e.g. fishing, and the oil and gas industry), and new
labor forces and new payrolls will be introduced to the areas. In short, incre-
mental impacts, both positive and negative, will be greater than for similar
lease sales offshore Louisiana.
The general impacts expected to result from the implementation of the five-
year schedule are expected to be similar to those described in this statement
for the proposed East Louisiana OCS lease sale. The following table summarizes
possible positive and negative impacts which could octur as a result of imple-
menting the five-year lease schedule. Nore specific relationships cannot be
PAGENO="0357"
identified until detailed ana1~sis has'beèn completed for each of the pro-
posed sale areas.
General Sununai~y O~ Euvi~o~neAt~l*
U, Irnpact~ ~ , ~ Re~ult
~~cm OCS Oil And~ Gas O,Derat1~ons ~/
Impacted
Debrià
Platfozi
Oil
Pipeline
storage
mipport.
Labor
.i~'roa..
Pactors
Still
Const.
Fac.
Service
1. Refuges U
()
(~)
~/ `
U
U
2.' Estuaries
(..)
*T~
t-)
-
.-
~. Marshland `
TT
M
~7
U
~. beaches `
~tT~
U
5. Nat. ~ark Units U
`
-rr
U~T
UU
6. Corn.' 1ishin~
TT
(-)
(-)
7~Sport~[~hirig
-r:r~
()
L Recreation
tT~
-
9. Shipping
c-y
*
U
U U
Tm~M~4 .,~
0. Regional-
Economy
U(~)
(+)
~/ The, principal type. of relationship between impacting and impacted facjors is i~
cated by (+) positive impact or (-) negative impact. In some relationships,
positive and negative relationships are Upomsible; in these cases, the type
- of relatiohship considered dominant `is shown. U U
~/ Impacts of oil pol'ution on deep water fisheries are not well understood.
~/ Impacts would be excluded by administrative action, e.g., pipelines or storage
facilities would not be permitted in refuges, National Park unite, or on
recreation beaches. ,U U
PAGENO="0358"
352
B. Purpose of the Proposed Lease Sale
The U.S. is the single largest energy-consuming nation in the
world, accounting for one-third of the world's total consumption. The
growth in domestic demand for electric power and industrial demand for
energy has caused a sustained high level of energy demand; from 1960
to 1970 demand increased at an average annual rate of 4.3 percent.
Overall Energy Requirements for the 15 Year Period 1970 to 1985 1/
1970 1985
Percent Percent
of energy of energy
Quantit~y supply Quantity suppl~y~
Coal (1,000 ihort tons) 526,650' 20.1 850,000 16.7
Crude petroleum (million bbls) 5,367 43.0 8,600 35.6
Natural gas (billion cu. ft.) 21,847 32.8 38,200 29.5
Hydropower (billion ku. hr.) 246 3.8 363 2.6
Nuclear power (bil. kil. hr.) 19 0.3 1,982 15.6
100.0 100.0
During the period 1970 to 1985, demand for total energy is expected to
increase at an average annual growth rate of 4.5 percent. The demand
for oil and natural gas during this period is expected to increase at
a 3.2 and a 3.8 percent average annual rate, respectively.
I" Secretary of the Interior, Statement before the,Committee on
Interior and Insular Affairs, United States Senate June 15, 1971.
16
PAGENO="0359"
J t 1
In ~ecember, 1971, the Envit'onmei~ta1 Protection Agency pronittigated,nationàl
air quality standards from statLonaty sources for carbon monoxide, particu-
late matter, sulphur oxides, hydrocarbons, nitrogen oxides, and photo-
chemical. oxidants. The standards for sulphur oxides are particularly
important to consideration of offshore oil and gas leasing in the Gulf of
Mexico since this is ~ major potential source of relatively low sulphur
fuels 1/ and `has a potential for greater expansion.
In order to overcome the deficiencies in low sulfur fuel supplies with-
out curtailing domestic energy consuipption, it maybe essential to develop
as many low sulfur fuel sources and ±~e~erves as possible. Additionally,
other actions are needed to develop methods of reducing the sulfur
content of fuels, to control sulfur emission of consumed fuels, and to
develop non-fossil fuel technologies. The President pointed out in his
Clean En,ergy Message to Congress that, "A major bottleneck in our clean
energy program is the fact that we cannot burn coal or oil without dis-
charging its sulfur conteiit into the air. We rieed new technology, which
will make. it possible to remove the sulfur before it is emitted to the
air". Therefore, the availability of low sulfur petroleum products does
not in itself assure that high air quality standards will be attained.
However, sulfur extraction costs, are lower if the sulfur content of the
raw material is lower. This provides economic incentives to seek and
u~e low sulfur fuels. S S
~/ "Data for Tracing Crude-Oil Sources - Table 1", The Oil and Gas
Jourr~a1, I~ecember 27, 1971.
55,5
S S
S.'
S `` ~
~`
-
S 5)
SS'*S/~?
S ~
S'~ ,*\~
5,' -~
`S
`S
17 -
S *.
* ,
S ~
`1
PAGENO="0360"
354
C, Location and Reserves
The sale area under consideration includes 78 tracts ~/ off the
eastern half of Louisiana (from the Ship Shoal area East through the Main*
Pass South and East area). These tracts, if leased, would add 366,'4~+0
acres, an increase of about 10%, to the total of 3,783,k23 acres presently
under Federal lease offshore Louisiana. The area is 230 miles long with
tracts ranging to 60 miles from shore. Three of the tracts are subject
to drainage &~; 39 tracts are in, or adjacent to, moderately developed
areas ~/; and 36 tracts are wildcat tracts ~/. The proposed lease sale
would be made under Section 8 of the Outer Continental Shelf Lands Act
(76 Stat. k62 U.S.C. sec. 1337) and regulations issued under that statute.
Other tracts in the immediate area could have been included in this
proposed sale but were deferred for consideration at this time because
of potential risk to wildlife refuges. In the overall tract selection
process potential conflicts with the shipping, commercial and sport
fishing, and boating industries, Federal and State parks and beaches are
all given consideration. In addition, an analysis is made of biological,
oceanographic and meteorological data to select the least environmentally
hazardous tracts for the proposed sale.
~/ The tracts are summarized by water depth, distance from shore, and
expected type of production in Attachment B. Also, see attached map..
~/ Tracts subject to depletion of their oil and gas deposits from wells
on adjacent tracts.
~/ Areas of current production.
~/ Tracts that are generally located five or more miles from tracts
with established production.
18
PAGENO="0361"
E~j~ima*ted Volu~t~ j/ Estirne4Narket Vapie 1/
($million)*
Recoverable
Oil Reserves
825
million
bbls.
2
,900
Recoverable
Gas Reserves
1.75
trillion cu. ft.
481
* 1971 doll
at vglues
~j See also Section VIfl.B.2, "Onshore Oil and Gas Production", of this
statement. Data for total 1971 U.S. oil and gas production were not
available at the tine this draft statement went to press. However',
1971 data should be available before the final statement is released.
Estj~nated .Recoverg~1~Rese~v~:
\~.
~
It is estimated that the proposed leases may produce 75,000-150,000 bbls.
of oil per day and 200 - 400. million Cu. ft. of gas pev day by the sixth
year after leasing and that the average producing life of the leases will
be about 20 years. ~
Production from OCS leases in the proposed sale area during 1971 amounted
to approximately 308 million barrels of oil and l,O~,O billion cutic feet
of gas. This production represented approximately 79 percent and 39 per-
cent, respectively, of all oil and gas produced during the year from OCS
lands in the Gulf of Mexico. In j.97O, 10.29% of domestic U.S. oil produc-
tion and 10.96% of domestic gas production cane from the Outer Càntinental
Shelf. ~/
This sale is tentatively scheduled to be held soi~ietime in late ~urnmer
1/ U.S. Geological Survey, Informal Preliminary Staff Estimates, Undated,
Unpublished.
~/ Ibid.
19
PAGENO="0362"
356
II. Description of the Environment
A. Coastal Zone
The coastal area of Louisiana and Mississippi, shoreward of
the proposed sale area, is one of the major estuarine/delta marsh
complexes in the world, and certainly the major one of the United States.
The fortunate combination of warm water temperatures, shallow depths,
and the rich nutrient systems of estuaries and coastal marshes makes
the Gulf of Mexico the most productive fishing region of the United
States. The extensive estuarine coastal marsh areas are vital to fish
and wildlife resources in providing a valuable source of food, nursery
habitat for many species of fish and shellfish, and spawning areas for
others. Similarly, food and shelter also are available in abundance
for migratory waterfowl and other wildlife.
The Mississippi River for thousands of years has deposited sediment
over the shallow waters of the Continental Shelf to build a large
expanse of coastal wetlands, waterways, and estuaries that now reach
almost to the edge of the Continental Shelf at the river's mouth,
where the entire area is dominated by the MississJ~ppi River Delta.
Elsewhere, the adjacent marshes and estuaries are separated from the
Gulf of Mexico by a system of barrier islands extending as an inter-
mittent chain across much of the coasts of Louisiana and Mississippi. The
combined estuarine areas of Louisiana and Mississippi include 3.9 million acre
20
PAGENO="0363"
I - -, - I'
I ~` ~ `1 1
357 i
I-"- `
of esti~aries and 4.0 milhi~n acres of coastal marsh or 62 percent of the
entire e~tuarinefcoastal acreage of' the Gulf of Mexico. This rep~'eaeuts
&bo~t 28 perc~rit of the total `combined estuaririe/coastalmarsli area of
the entire contiguous Unite4 States.
Comparison of Marsh and Estuarine Acreage in the
Coastal Zone Adjacent to the Sale Area (Louisiana and Mississippi)
with that of the Gulf of Mexico and the Contiguous k8 States ~/
(Millions of Acres)
Sale Area `Gulf of Mexico
Eabitat ,
` United~at
e~,
Coastal Marshes
k.o
,
5.7
8.2
Estuaz~ines & Lagoons
3.9
I
7.~
20.1
TOTAL
7.9
12.7
28~.3
Most of the estuaries are extremely shallow, being only a few feet deep,
have a tidal range of about two feet and, for the most part, are relatively
turbid because of the great volumes of sediment laden tributary freshwater
re9eived from the uplands. The transition of the e~tuaries and coastal
marshes into the adjacent waters of the Continental Shelf is without
clearly defined boundaries. This condition is essential to the survival
of many of the 1iv~ng aquatic resources of the coastal zone which must
occupy both the estuaries and the open waters of the Gulf of Mexico.
~/ Chapman, Charles IL, "The Texas Water Plan and Its Effect on Estuaries,"
In: A Symposium on the Biological Significance of Estuaries. Sport
Fishing Institute, Washington, D. C., March 1971.
21
PAGENO="0364"
358
B. Geologic ~ramework
The continental shelf in the northern Gulf of Mexico extends over
100 miles off the Texas and Florida coasts, but becomes very narrow or
absent off the Mississippi River where the delta has prograded 2/ across
the entire shelf. The continental slope seaward from the Mississippi
delta is smooth and continuous, and has the form of a cone (the Missis-
sippi cone") that flattens seaward, and extends southeastward to the
Straits of Florida.
Terrigenous ~j silt and clay mantle the area off the Mississippi delta.
A seismic profile down the slope of the Mississippi cone, south of Mobile
Bay, Alabama, shows that the prograded layers are truncated and a thin
series of horizontal beds overlie the erosional surface. Another pro-
file, down slope from the Main Pass area, shows irregularities interrupting
the general structure which may be caused by gravity sliding or slumping.
Both profiles show characteristic dome-shaped structures that are commonly
bounded by faults. 4/ These are diapiric 5/ structures which are probably
salt domes.
1/ Except where otherwise indicated, this section is largely from a
report by E. Uchupi, and K. 0. Emory, "Structure of Continental
Margin off Gulf Coast of United States", Am. Assoc. Petroleum
Geologists ~ Vol. 52, July 1968, pp. 1162-1193.
~/` Shoreline showing a regular seaward movement due to sedimentation.
3/ Sediments derived from the destruction of pre-existing rocks on the
earth's surface.
4/ A fracture, along which there has been relative dL~placement o~ the
two sides parallel to the fracture.
5/ A structural fold in which a mobile core, such as salt, has injected
or pierced the overlying rock.
22
PAGENO="0365"
359
The continental shelf west of the delta is blanketed by terrigenous
sediments that grade from sand near the shore to silt and clay offshore.
The sedimentary embankment which forms the continental margin off this
area was formed by prograding and upbuilding, but~ it has been altered
by the upward movement .f domal masses or diapirs of salt or mud. The
basin areas between these diapirs received sediment from the Mississippi
and ot1i~r rivers and from the growing diapiric structures that adjoin
the basins.
During an earlier period (lower Cretaceous ~/) `in geologic time, coral
reefs were built, forming an organic barrier which almost completely
surrounded the Gulf of Mexico. While the reefs were active, a thick
sequence of shallow water deposits probably accumulated within the reef
barrier. After the reefs died, sediment upbuildii~g and prograding formed
the Sedirnentax7 embankment of the present continental shelf and upper
slope.
The continental shelf in the northern Gulf of Mexico is one of the most
productive oil and gas bearing areas in the Western Ifemisphere.
The area of the proposed sale is on Federally owned submerged lands
offshore Louisiana. There is a wide variation in the type of geologic
structures which would be offered in this sale, Most of the obvious
~/ ¶r]~e third period of the Mesozoic era, approximately 135 million years
ago.
23
PAGENO="0366"
360
stz'uctures, such as shallow salt domes, ~/ have been leased in previous
sales. Geophysical data indicate 3k separate structures or areas of
possible hydrocarbon traps widely dispersed over the sale area. The
majority of the structures in the lease area are a variety of deep-seated
shale domes ~/ and fault closures ~J.
Although the northern Gulf of Mexico is not now a siesmically active area,
both shallow and deep faulting have occurred. Sediments in the lease area
overlying the potentially first productjve formation are relatively thick,
generally in excess of 2,000 feet. Further geological and geophysical
data indicate that abnormal pressure zones are below 5,000 ft. in depth. ~/
The strata in the proposed sale area are represented by sediments thought
to be favorable for the occurrence (and accumulation) of oil and gas.
Potential producing horizons may be expected at depths between 3,000 and
20,000 feet. Of the 78 tracts, 17% are expected to be gas productive,
477. are expected to be oil productive, and the remaining 367. are anticipated
to have both oil and gas potential.
~/ A structure resulting from the upward movement of a salt mass, and
with which oil and, gas fields are frequently associated.
~J A dome or anticline composed of shale.
~/ Dislocation and closure by displacement of a once continuous bed
of sediment through which oil may have migrated from a source bed.
~/ Based upon geological and geophysical data available to the
Geological Survey.
24
PAGENO="0367"
N
36:1.
C. ~
The northern Gulf of Mexico lies, generally4 in a zone of 4~j
transition between tropical and temperate weather patterns. The climate
is mild (mean temperature 69 degrees F.) and the area receives considerable
precipitation (55 inches annually).
During the summer and early autumn the Azores-Bermuda high pressure zone
is tb~ dominant atmospheric feature in the North Atlantic. This high
pressure none generats the prevailing tradewinds which drift westwa~d
~ver the Atlantic and Caribbean and into the Gulf of Mexico. Storm~
and tropical cyclones which are generated in the Gulf of Mexicc~, the
Caribbean, or the equatorial Atlantic are driven toward the U. S. coastal
areas by the trades during the warm season. Under certain co~tditions
these disturbances increase in size, speed, &nd intansity uzitil they
become hurricanes, with winds exceeding 7k miles per hour. Most hurricanes
occur in August, September, and October, but the six-month period from
June 1 to November 30 is considered the "hurricane season" in the Gulf
of Mexica.
During an average year, off the Gulf and Atlantic Coasts there are fewer
than ten tropical cyclones, of which about six develop into hurricanes.
These cause on the average, the death of 50 to 100 persons between Texas
and Maine and property damage exceeding- $100 million.
~/ See, U. S. Environmental Scieñc~ Services Administration (ESSA),
Some Devastat~g North Atla~tic/Hurricanes of the 20th Century,
Washington, D. C., 1970. ,Aiso~ ~hA, Hurricane, Washington, D. C.
U. S. Government Printing/Office, 1969. Also see, U. S. National
Oceanic and Atmospheric Administration, Hurricane Informatjçn and
Atlantic Trackii~g Chart, Washington, D. C., U. S. Government Printing
Office 1971. (N0AV~~70O23)
- 25 .
PAGENO="0368"
362
The prevailing winds in the northern Gulf of Mexico are easterly (NN:E-SSE)
during the spring (March-May) and fall (September-December). In
the summer (June and July) winds blow from the southwest and northwest.
During January, February, and August, winds from the east are only slightly
more predominant than winds from the south to northwest. Monthly averages
of wiiid velocities in the area over a four year period, range from a
maximum of 13.1 mph in March to a minimum of 7.6 mph in June. ~/
The wind speeds and directions shown above are derived from averaged or
resultant data ~( and do not necessarily convey dynamic conditions imposed
by local fronts, storms, or hurricanes.
~J Scruton, P. C., "Oceanography of Mississippi Delta Sedimentary
Environments", Am. Assoc. Petroleum Geologists Bull., Vol. ~+0,
December 1956, pp. 2S6~-2952.
~/ The single vector that is the suni of a given set of vectors.
26
PAGENO="0369"
363
D. Hydrography
Major water currents in the northern Gulf of Mexico are influenced
principally by the deep water -circulation which is dominated by the
Yucatan Current. Circulation over the continental margin is governed
by the loop current which turns clockwise after making the meridional
transverse from Yucatan Channel towards the Mississippi Delta. The
current may divide south of the delta and flow west and east or turn
towards the east in its entirety. In either event, eddies having
characteristic diameters of 62 miles, may be formed which migrate
along the shoreward flank of the loop current. These eddies may be
cyclonic (counter clockwise) or anticylonic (clockwise) and assert con-
siderable influence on the direction and velocity of nearshore waters.
The effects of the loop current on shelf and nearshore waters are more
pronounced during the warn season than in the winter months. 1/
A report by P. C. Scruton, more pertinent to the near sh9re waters
around the Mississippi Delta, desctibes a north directed, semi-permanent
current south of the delta. 2/ He `notes this semi-permanent current is
modified by local conditions and that a strong relationship exists
between wind speed and direction and surface current speed. He states
current patterns around the Mississippi Delta "are extremely complex
and are highly variable, both from place to place at any one t1in~ and
from time to time at any one place". This conclusion is substantiated
1/ Gaul, Roy, Circulation Over!~ Continental Margin of~j~ Northeast
Gulf of Mexico, college Station Texas, 1967, 172 pp. (Thesis, Ph.D.)
Texas A&M University, Department of Oceanography.
2/ Scruton, P. C., Op. hit., p. 2905.
27
77-463 0 - 72 - pt. 1 - 24
PAGENO="0370"
364
by a study prepared for the Environmental Protection Agency .by Texas
Ir1strum~nts Incorporated regarding the movement of the 1969 oil spill
from Shell Oil Company's Platform B, South Timbalier Block 26. This
data illustrates a striking dependency of localized water currents on
wiiid direction, velocity and duration. (See figs. 1 through 5, Attach-
ment C.)
The discharge of the Mississippi River creates a "fresh water barrier"
or rip tide around: the major passes in. the. Mississippi Delta. The -
barrier is created by the fre8h water from the river moving seaward and
over-riding. -the heavier seawater., The barrier can stop or retard the
movement of surface oil into the major .pass areas. The freshwater
barrier is subject to three major influences: quantity of Mississippi
water flowing, wind ~/ and tide~, Increased Mississippi flow promotes
a strong barrier, while wind and tide either inforce or hinder such a
barrier, depending on their direction and force.
It i.s possible that if - the surface layer were. destroyed (i.e., - if there
were sufficient onshore winds* and incoming tide), . oil could be carried
very close if not onto the delta in the areas, of the major passes.
~/ Wind can contribute from 2 to 3 percent of its velocity to surface
currents. It is also possible for wind to push an object or oil slick
faster-than- the wind generated current or -in. a different direction due
to slippage between laminar flow layers.
28
PAGENO="0371"
365
In extreme caseS,. it has been noted, with favorable witids and tides, andY
lower river discharge, surface currents would be directed upstream. ~/ On
the other hand, it has been observed by Scru.tón that with a large river
discharge of 880,000 CFS, with tides and river flow directed to the north-
east, and with moderate southwest winds, the river surface layer dominated
out a distance of about 20 miles off Pass-A-Loutre. ~/ While these two
cases are extreme they illustrate the variability of the freshwater sur-
face barrier. The normal conditions in the area support a continuous
barrier around the delta area that can be broken down with a shift of
wind, and/or tide but making it unlikely for oil to get into a major
pass.
Tinder conditions of strong onshore winds, a turbulance is created where
the onshore wind meets the offshore freshwater surfaç~e current. This
turbulance, and the sedimentary load carried by the freshwater, could
cause surface oil to be emulsified. In such a case, the subsurface
shoreward currents existing under the freshwater surface flow could
carry emulsified oil into the delta river system where it could be
depo~ited onsbor~ or washed back to sea by surface currents.
~/ Humphreys and Abbot, 1876 "Report Upon the Physics and Hydraulics of
the Mississippi River", U.S. Engi~ieers Prof. Paper 1~, p. 617, (From
Scruton, P.C. 1957, p. 2890).
~/ Scruton, P.C., "Oceanograph of Mississippi Delta Desimentary Environ-
ments", American Association Petroleum Geologist Bull., Vol. ~+0,
December 1956, p. 2897.
29
PAGENO="0372"
366
It was noted by Seruton that at low river inside North Pass bar there was
a current distribution, of 136 knots downstream on the surface and .2 knots
upstream close to the bottom. ~/ The extent of the salt water wedge and
two layer circulation ranges from negligible during high river discharge
to extensive during low river discharge.
The effects. of the freshwater barrier are. weak between ihe major passes.
In these areas, onshore winds could move surface oil to shore. Sub-
surface currents in. these areas flow seaward.
In conclusion, it `can be said that the delta region is extremely complex
and various conditions could exist which would either retard or assist
the movement of surface oil toward the delta area. It appears that,
on balance, conditions in this area provide a measure of protection of
the delta area as documented by surveillance photography taken during the
Chevron Fire - Platform "C" spill.
~/ Scruton, P. C., 1956, p. 2887.
30
PAGENO="0373"
367
E. Recreation Resources
Louisiana and Mississippi possess quality water-orientated natural
resources which make them highly attractive for vacation and other outdoor
recreation purposes. Louisiana has the longest shoreline of any Atlantic
or Gulf Coast state except Florida. Even with an abundance of fresh
and salt water, much of the shoreline is presently inaccessible or unsuitable
for recreational use. The inaccessibility is primarily due to lack of
boat ramps, fishing wharfs and pier facilities. At the present time,
available faCilities satisfy only about 7 percent of the demand on the
East coastal areas of Lottisiana.
The coastal regions of both States contain millions of acres suitable for
~outdoor recreation.~ In the coastal area of Jithsissi~pi, all except 12,000
1/
acres are in public ownership. About 90 percent of the available beach
areas of both states are along the Gulf of Mexico.
There are almost 2,500 islands of 10 acres or larger offshore Louisiana
2/
Mississippi has 128 islande of at least 10 acres. - The islands along
the Gulf of Mexico Coast are used for outdoor recreational purposes but
have remained undeveloped because of their isolation and because of
threats from periodic tropical storms.
~/ State of Loui sia~ia, "Comprehensive Outdoor Recreation Plan l970~l975,"
Baton Rouge, June 1969. Also, State of Mississippi, "Statewide Comprehensive
Outdoor Recreation Plan, "Jackson, 1969 and updated in 1970.
2/ U. S. Bureau of Outdoor Recreation, "Islands of America", Govermnrent
Printing Office, August 6, 1970, pg. 95.
31
PAGENO="0374"
368
In 1970, 2.k million people lived in the coastal area of Louisiana
(including the city of New Orleans and the counties or parishes adjacent
to the coastline) and over 300 thousand people lived in the coastal area
of Mississippi. This represents 61% of the total population of Louisiana
and 13% of the population of Mississippi. ~/
1. Federal Areas
The major Federally controlled outdoor recreation area in the Gulf of
/~(
Mexico is the Gulf Islands National Seashore ~/, a new national facility
extending over 150 miles along the coastline from Florida to Mississippi.
The National Seashore includes Santa Rosa Island and the Eastern half
of Perdido Key off west Florida. It also includes Petit Bois Island in
Alabama and Mississippi, and Horn, and Ship Islands in Mississippi as
well as the Davis Bayou area of the Mississippi mainland.
Historical sites of the Seashore consist of various coastal fortifications
dating from early Spanish occupation. The area offers almost unlimited
opportunities for camping, picnicking, fishing, swimming, skin-diving,
water-skiing, boating, bird-watching and beach-combing.
Current outdoor recreational use of the area is most concentrated in the
vicinity of Fort Pickens State Park, Florida, and Fort Massachusetts
on Ship Island, Mississippi.
~/ Louisiana and Mississippi Comprehensive Outdoor Recreation Plans,
Authorized January 1971, under P.L. 91-660 (8k Stat., 1967).
32
PAGENO="0375"
369
The Seashore is of prime outdoor recreational importance to the seven state
region of Florida, Louisiana, Arkansas, Tennessee, Mississippi, Alabama,
and Georgia, containing 23 million people. More than 10 million people
live within 250 miles of the National Seashore * It also is anticipated
that many visitors from other States in the East and Midwest wil~1. be
attracted to the area. Visitation is expected to exceed 3.5 million
within five years, eventually increasing to 10 million annually. ~/
Other major Federal holdings in the coastal area of Louisiana are the
Sabine, Lacassine, Delta, Shell Keys, and Breton Island National Wildlife
Refuges. While the major purpose of the refuges is to provide migratory
waterfowl habitat, they also provide habitat for many other wildlife
species as well as significant opportunities for recreation.
2. State Areas~(
State owned recreation land along the coast in both Louisiana and
Mississippi includes wildlife refuges and management areas, historic
monuments and State parks. Wildlife Refuges are Rockefeller Wildlife
Refuge and Game Preserve, Louisiana State Wildlife Refuge and Game
Preserve, Marsh Island Wildlife Refuge and Game Preserve, St. Tammany
Wildlife Refuge and Paul J. Rainy Wildlife Refuge and Game Preserve
~/ Estimates of recreation use are by the National Park Service.
~( Louisiana and Mississippi Comprehensive State Outdoor Recreation
Plan, ~. .2~.t.
33
PAGENO="0376"
370
(private). State waterfowl and game management areas include: Borne
Carre, Biloxi, Pass..A-Loutre, Wisner, Bohemia, Pointe Au Chien and
Salvador. The State of Mississippi manages Magnolia State Park, the
Mississippi Coast Sand Beach, Fort Massachusetts and Cat Island. State-
owned or private areas in Louisiana suitable for recreation include:
Grand Isle State Park, the Chandeleur Island (also part of the Breton
Island National Wildlife Refuge), Fontembleau State Park, Fort Pike
State Park, and Fort McComb State Park. State and private areas on
Dauphine Island, Alabama are also suitable for recreation. Federal,
State and private recreation and wildlife areas are summarized b~r
acreage in Attachment D.
3I~
PAGENO="0377"
371
F. Wildlife Resources
The barrier islands, sounds, deltas, bays, marshes, and other
wetlands of coastal Louisiana and Mississippi are important wildlife
habitat, as are the adjacent forest and a~ricultura]. lands and the
nearshore waters of the Gulf of Mexico. The coastal wetlands and
estuaries harbor some of the largest concentrations of waterfowl, wading
birds, colonial birds, and fur animals to be found in the Nation. The
shallow coastal waters of the Gulf of Mexico are used extensively by
diving ducks and colonial birds. ~/
The National Seashore provides nesting grounds for terns, herons, egrets
and other colonial birds. The islands support large winter concentrations
of blue and snow geese, many species of ducks and other water birds and
are a key part of the Mississippi Flyway. Terreat:~ial mammals consist
of a few mainland species that have been able to adjust to the barrier
island environments.
1. Waterfowl
The coastal region of the Mississippi Miver Is the southern end of the
Mississippi Flyway. Waterfowl exist there in great variety and abun-
dance, particularly between October and March when great concentrations
of wintering birds are present. In l97l,.the Winter Waterfowl Survey con-
ducted by the Bureau of Sport Fisheries and Wildlife and the Louisiana
~/ Louisiana Wildlife and Fisheries Commission, Biannual Reports, Baton
Rouge, 1970. Also, U. S. Department of the Interior, Assistant
Secretary for Fish, Wildlife and Parks, "Interim Evaluation of Environ-
mental Impact from the Chevron Company Fire mud Oil Spill Of f Coastal
Louisiana, February and March 1970," unpublished report 9/19/70.
35 -
PAGENO="0378"
372
Wildlife and Fisheried Commission estimated the population of wa~erfowl
to be about 6.3 million birds: 1L1 million ducks, 1.7 million coats,
and ,5 million geese. This population includes over 1 million diving
ducks which use the offshore waters of the Gulf of Mexico extensively.
Peak populations of more than 1/2 million ducks and 150 thousand geese
were~ observed on the National Wildlife Refuges of the area. Migratory
waterfowl support about 2 million man-days of local hunting annually. ,~/
The migratory birds are protected by treaties with Great Britain (on
behalf of Canada) and Mexico. The* Migratory Bird Treaty Act of 1918
obligates the United States to preserve and manage existing populations
of all migratory bird species. This responsibility is exercised by the
Department of the Interior through the Bureau of Sport Fisheries and
Wildlife in cooperation with the various States. The coastal area,
particularly that portion associated with the Mississippi River Delta,
is a key to the successful management of waterfowl under' the Treaty by
providing suitable wintering habitat at the end of the Mississippi Flyway.
The waterfowl and migratory bird population in this area appears to have
stabilized. Kowever, `the nesting habitat can accommodate additional water-
fowl.
2. Other Birds
Colonial birds, such as gulls and terns, use the offshore barrier'
islands extensively for nesting and feeding.
~/ Data based upon information made available by Bureau of Sport
Fisheries and Wildlife, Department of the Interior.
36
PAGENO="0379"
373
wading birds in a great variety of species are found throughput the
region. Many species winter in the area; some spepies are present
only during the summer and nesting period; and others are year-round
residents.
Shorebirds, e.g. willets, plovers, and sandpiper~, nest on the offshore
islands during the summer. Large populations of rails and gallinules
nest in the marshes during the summer. Snipe are present in large
numbers during the winter.
3. Fur Animals
The coastal marshes of the Mississippi Delta support large populations
of fur-bearing animals. Louisiana is the Nation's leading fur-producing
State. During the 1969 season, 3,600 trappers caught more than 1.8
million nutria, muskrat, mink, raccoon, and otter; the pelts yielded
about $6 million. An additional $1.1 million was received for the
carcasses of nutria and muskrat. ~/ These fur-producing statistics are
expeôted to remain approximately at current levels in the future.
k. Other Wildlife
Alligators, an officially recognized endangered species, song birds
of many varieties, rabbits, arid 4eer are found extensively throughout
the entire coastal region.
2/ Louisiana Wildlife and Fisheries Commission, ~. cit.
3T
PAGENO="0380"
374
0. ~tshery Resources
In 1970, Louisiana. eommercial~ fishermen harvested 1.1 billion
pounds o( commercial fish and shellfish. This was larger than the
catch of any other State. Commercial catches landed in Mississippi
totaled 0.3 billion pounds of commercial fish and shellfish. Much of
the Mississippi commercial fish and shellfish catch comes from Louisiana
waters or was nutured in the Mississippi River Delta estuaries as
juveniles. Louisiana and Mississippi fishermen received a record
$71 million for this harvest in 1970. The average annual Louisiana
and Mississippi commercial fish catch over the past 10 years has been
one billion pounds. 1/
Many of the sane resources that contribute to commercial fisheries
also support a very large coastal recreation fishery for finfish,
shrimp, and crabs. It is estimated that these provide 9.0 million
man-days of sport fishing annually. Average recreational catches
are estimated to be almost 6.0 pounds of finfish per man-day of
fishing. 2/ Sport crabbing and shrimping yield even greater catches.
The distribution and life history of the fish and shellfish of the
Louisiana/Mississippi coastal zone vary between species but general
groupings, with some overlap, can be identified. On the basis of these
1/ U.S. Department of Commerce, NOAA, Marine Fisheries Service,
Fisheries of the United States, 1970, Washington, D.C., Govt.
Printing Office, 1971 (current Fishery statistics CFS-5600).
2/ Louisiana Wildlife and Fisheries Commission, .2~ cit. Also, based
upon information provided by the Bureau oE Sport Fisheries and
Wildlife, Department of the Interior.
38
PAGENO="0381"
375
characteristics, fishery species are classed as resident, semi-catadro~
mous, or seasonal migrant. (These terms are defined in the following
sections.)
1. Resjdent Species
Resident species complete their life cycle in estuaries ax~d are
deiendent on this zone most of the time. Oysters, blue crabs and spotted
seatrout are classed as resident species aLthough blue crabs and spotted
seatrout may for a short time, venture into the shallow coastal waters.
All three species contribute significantly to the commercial fishery, and
spotted seatrout and blue crab are also sought by recreation fishermen.
Since the advent of offshore oil and gas activities, other resident
species have become concentrated around the drilling structures. Among
these are: red snapper, groupers, trigger fish, spade fish, giant sea
bass, pompano, and many smaller species. Speculation that these species
and other larger, seasonal game fish, such as sailfish and marlin, have -
appeared only since the offshore oil industry became active is erroneous.
However, the platforms do create artificial environments which attract
and concentrate many predatory species, providing favorable fishing
sites for sportsmen and commercial snapper fishermen. While this intense
concentration of species, in lieu of the more random distributional
patterns, is considered in a favorable light by fisiiermen,.the long-term
effect on ~predator-prey relationships is not known.
2. Semi-Catadrornous .
Semi-catadromous species spawn in. the Gulf of ~1exico; the young
39
PAGENO="0382"
I 376~
migrate to their estuarine nursery area, where they grow to sub-adults;
then, they return to the ocean where their life cycle is completed. Some
species nay return to the estuaries for short periods aé adults. ~jor
species include white shrimp, brown shrimp, menhaden, Atlantic croaker,
spot, black drum, red drum, sand seatrout, sourthern flounder, and saltwater
sheepshead. ltst of these species contribute significantly to the commercia
fishery and, except. for menhaden, are also caught in great numbers by
sport fishermen.
The Louisiana/M1~ssissippi commercial fishçry is, for the most part, a
shallow-water fishery, i.e., 60 feet or less. Virtually all of the
species caught are taken in coastal waters and in bordering esttiaries.
Though many species contribute to the sport and commercial fisheries, two
groups are of outstanding commercial importance: the shrimp and industrial
fish, such as menhaden.
According to President of the Louisiana Shrimp Association, total 1971
Louisiana shrimp production reached a high of 58.6 million pounds. This
was the highest recorded catch in over 25 years.
The shrimp spawn offshore, brown shrimp in waters as deep as 275 feet and
white shrimp generally in waters shallower than 120 feet. 1.t,st commercial
shrimping takes place in waters less than 60 feet deep. In 1970, of
the 168,000 fishing trips recorded, 90 percent occui~red in coastal
waters less than 30 feet deep and in estuaries. I~bre than 70
~/ The Times-Picayune, "large Catch Makes 1971 the Year of the Shrimp",
~uary 22, 1972. Official 1971 catch figures compiled by the National
Marine Fisheries Service were not awailable for inclusion in this draft
statement. It is expected, however, that 1971 data will be available
for inclusion in the final environmental statement.
/ ItO
PAGENO="0383"
377
percent of the almost 120 million pounds of shrimp caught were taken
from waters less than 60 feet deep, and 56 ~p~rcent were taken from
waters less than 30 feet deep. Table 1 describes shriurn fishing and
catches by water depths. 1/
The industrial fishery (producing fish for meal, oil and pet food) is
the largest volume fishery in the United States. Menhaden, accounted
for more than 1.1 billion pounds o~ the total Louisiana and Mississippi
catch in 1970, or about 79 percent of the total 1.4 billion pounds
landed. 2/ Virtually all menhaden are caught in waters shallower than
60 feet, and much of the fishing takes place within State waters. In
addition to menhaden, small croaker, spot, and sand seatrout, several
other species are caught and processed for industrial ~use, principally
pet food. Most of these fish are also caught in waters shallower than
60 feet, although, particularly in the winter months, the fishery does
extend into deeper water.
1/ U. S. Department of Commerce, NOAA, Marine Fisheries, Service,
2~* cit.
2/ Ibid.
41
PAGENO="0384"
Table
1 - Comparison
Between the
Proposed Area of Sale & Shrini~ FishiM and Catches, 1970
Item
0-30
Water Depth
31-60 61-90
in Feet for Coastal Louisiana and M~Lssissippi
9l-~120l21-l50 151-180 l81-2lô211-2k0
÷2k0 Totals
Proposed Sale
Number tracts
Miles from shore
Acres (thous.)
% of total
Shrimp fishing
Number trips(1,000)
Boat days (1,000)
Catch (in miflions
of pounds*)
Brown
White
Other
Total
Pounds (per day)
per boat
2
1
3
6
8
3
8
7
kO
78
11.5-12.6
23
9-10.5
8-36
1O-k3
3.5-2k
5-53
l0-k9
k5-69
10.2
5.0
9.0
25.3
ko.6
12.8
36.1
32.5
l9k.9
366.k
2.6
1.3
3.8
7.7
10.3
3.8
10.3
9.0
51.2
*
1k9.7
10.6
2.6
1.8
1.5
1.5
0.5
0.2
0.1
168
89.9
6.2
1.5
1.0
.8
.9
.3
.1
--
*
70.6
2k.3
8.9
7.0
5.9
6.9
2.5
0.6
0.2
126
55.7
19.2
6.8 5.5
k.6
5.k
1.9
.5
.1
3k.7
k.5
6.3
5.9
5.1
6.9
2.9
1.0
0.2
67.5
29.5
lk.7
3.7
O.k
0.2
0.0k
0.02
o
o
`+8.6
3.0
0.2
0.08
0.03
0.06
0
0
0
0.02
3.k
67.2
l9.k
10.1
6.3
~.k
6.9
2.9
1.0
0.2
119.5
56.2
16.2
8.k
5.3.
k.~
5.8
2.k
.8
.02
95k
799
1,168
930
896
1,010
1,177
1,660
1,23k
* Catch figures are in round or live weights.
PAGENO="0385"
379
All of the other fish caught for food are harvested jxl relstively
shallow waters, generally less than 30. feet deep:, comprising, the
shallow nearshore Gulf waters and estuaries. However, fishery scientists
of the National Marine Fisheries Service indicate that commercial fishing
offshore Louisiana, and in the Gulf of Mexico as a whcie, hem..peaked and
in order to increase production in the future,. it' may become necessary
to evolve substantial inshore aquaculture development, to initiate
development of offshore fisheries: and to increase production of species
inhabiting waters deeper than those presently being harvested.
3. Seasonal Migrant Species
The seasonal migrants generally reside in th~: neershore waters of the
Continental Shelf during the summer season, and some may forage briefly
in the estuaries. They appear in late spri~ig as the waters warm and
depart as the water temperature de'clii2es in the fall. They: either
winter in the warmer offshore waters of the Gulf. of Mexico or migrate
to warmer coastal waters off Mexico or southern Florida. Some spend
considerable time in the vicinity of the oil and gas platforms. Major
species are the Spanish and king mackerel, tarpon, ladyfiCh and several
species of jack, bluefish and cobia. Several of these, in other areas of
the Gulf, are seini-catadromous. Other speàies found in the offshore waters
include marlin, sailfish, wahoo, and a variety of tuna, sharks, skates an~
rays. At this time, no~ie are important as major commercial species in
Louisiana and Mississippi, but most are seught by recreation fishermen.
I~3
77463 0 - 12 - pt. 1 - 25
PAGENO="0386"
380
H. Oil and Gas Resources
The Gulf of Mexico is one of the most prolific oil producing areas
in the world. Development of this area began in the late 1930's when the
first offshore wells were drilled in State of Louisiana waters. Presently,
there are over 9300 completions producing oil and in Louisiana marshland
and State waters.
As of January 1972, there were 5,956 wells with 8,990 completions capable
of producing oil and gas in 005 areas of the Gulf of Mexico. Furthermore,
5,468 of these wells and 8,840 of the completions are offshore Louisiana.
Over 1,800 platforms including single and multi-well structure, have been
installed in 005. Gulf of Mexico waters.
Production in 1971 from 005 lease areas in the Gulf of Mexico accounted
for 387 million barrels of oil and 2.8 trillion cubic feet of gas with
a market value of $2.01 billion. Since the inception of the OCS leasing
program, the cumulative value of offshore production in the Gulf of Mexico
through 1971 has been $10.39 billion.
In the future, as economics and technology permit, oil and gas development
in the Gulf of Mexico can be conducted in deeper waters. In fact, deep
water drilling operations are no longer experimental. Ocean bottom formation
have been drilled by drillship Glomar ChallenKe~ in water depths of 20,000'
without mishap. Industry today has drilled exploratory oil and gas wells
safely in water depths to 1,497'. Through this experienQe industry spokes-
men have stated that oil and gas wells can be drilled safely in water depths
to 2,000'. Meanwhile, engineering and technical advances are continuing
44
PAGENO="0387"
381
at accelerated rates.
The tracts proposed for offering in this sale range in water depths up to
51O~ Technology has been developed, which will allow production of oil
and gas in water deeper than any tract offered in this proposed lease
sale while providing adequate environmental safeguards.
45
PAGENO="0388"
382
III. Environmental Impact of the Proposed Sale
A. Possible Impacts of the Proposed Leasing Action
The area-of production and transport is considered to be not
only the proposed sale tr.acts, but also the adjacent marine and coastal
areas of the Gulf of Mexico. Issuance of leases may have an impact
upon the environment in four principle ways: (1) debris from oil and
gas drilling operations, (2) construction of platforms, and other struc-
tures, (3) construction of pipelines and (4) pollution from potential oii spi
1. Debris
In the past, prior to the issuance of the present regulations, there
have been indications that debris (as well as submerged structures) has
damaged or interfered with fishing gear-and imposed expense and lost
time to fishermen. The present regulations governing oil and gas operations
on the OCS (see Section IV, Mitigating Measures Included in the Proposed
Action) strictly prohibit dumping of debris on the Shelf. Therefore,
little or no impact on the environment from debris would be expected from
the development of the proposed lease offerings.
2. Structures
At the present time, approximately 987 platforms and other struc-
tures, 4,341 holes with 5,942 oil and gas completions and approximately
2,700 miles of pipeline serving 29 receiving stations on shore are
located in the proposed lease sale area from Ship Shoal through Main Pass
South and East Additions.
1~6
PAGENO="0389"
383
It is estimated that approximately 70 to l20'additional man-made structures
may be necessary to develop the proposed tracts. This would increase the
present number of platforms in the area by 7 to 12 percent. The structures
would remain for the productive life of a lease which averages about 20
years. Under existing regulations, they would be removed when production
ceases.
Under some conditions, structures have an adverse effect on commercial
fishing activities. The traditional fishing grounds are becoming less
accessible to commercial fishermen because of the increasing number of
platforms. Depending on currents and underwater obstacles, an offshore
structure can remove substantial areas of trawling and purse seining
grounds. Heavy concentrations of platforms often make trawling and
purse seining difficult over large areas.
Of the 78 tracts proposed in this sale, 23 are located in water depths
less than 180 feet and 3 are within 60 feet. Since approximately 72 percent
of total shrimp are caught in water depths of 0 feet - 60 feet; and
menhaden, 90 percent of Louisiana's fish catch by weight1 is usually
caught within the 60 feet isobath, no conflicts with commercial fishing
would be expected from eventual development on most of the tracts proposed
in this offering.
If a ship strays from established fairways, oil and gas platforms can pose
a hazard to commercial shipping. This hazard, however, is minimized by
the fact that fairways are well marked and well desisnated on naviestion
PAGENO="0390"
384
charts. Directional drilling from outside shipping lanes is used to
develop tracts lying partially in shipping lanes. Pertinent portions
of the Federal Regulations (33 C.F.R., Sec. 209.135 (b), 1971), governing
shipping fairways and anchorage areas are as follows:
"The Department of the Army will grant no permits for the
erection of structures in the area designated as fairways,
since structures located therein would constitute obstruc-
tions to navigation. The Department of the Army will grant
permits for the erection of structures within an area
designated as an anchorage area, but the number of structures
will be limited by spacing as follows: The center of a struc-
ture to be erected shall be not less than two (2) nautical
miles from the center of any existing structure. In a drilling
or production complex, associated structures shall be as close
together as practicable having due consideration for the safety
factors involved. A complex of associated structures, when
connected by walkways, shall be considered one structure for
the purposes of spacing. A vessel fixed in place by moorings
and used in conjunction with the associated structures of a
drilling or production complex, shall be considered am attend-
ant vessel and its extent shall include its moorings. When a
drilling or production complex includes an attendant vessel
and the complex extends more than five hundred (500) yards
from the center of the complex, a structure to be erected shall
be not closer than two (2) nautical miles from the near outer
limit of the complex. An underwater completion installation
in an anchorage area shall be conéidered a structure and shall be
marked with a lighted buoy as approved by the United States
Coast Guard."
A survey of shipping traffic in the Gulf of Mexico shows that there is
heavy daily usage of both the Eastern and Western portions of the Gulf
by vessels of 100 gross tons or over. This information together with
projected data for the years 1972 and 1980 is presented in Attachment E.
PAGENO="0391"
385
3. ~peli~s~
It is estimated that approximately 36 new pipelines, totaling 230 miles,
may be required to develop the tracts in this proposed offering if leases
were to be issued. Seven of these pipelines would be major trunk lines to
shore (1 in the South Timbalier avea, 4 in the South Pass area .and 2 in the
Main Pass Area).
The only practical method for transporting gas from offshore areas to on-
shore processing facilities is by pipeline. Oil, however, can.be tratis-
ported to shore by either pipelines or barges. In 1966, over .20% of oil
produced in the Gulf of Mexico was transported to shore by barges. Since
that time, however, the more dependable and, environmentally safer method
of pipeline transportation has taken pt~eference over, barging oil to shove.
For instance, 1~n November, 1971, only 3 1/2% of oil produced In the . offshore
area was barged to shore, and the remainder was transported by pipelines.
One report states (in referring to commercial fishing) "offshore pipelines
usually do not create a hazard if the construction is regulated to prevent
exposed pipes on the seabed". 1/ In the area offshore Louisiana pipelines
are generally buried or allowed to sink into the soft bottom sediments.
When the dredging method is employed, pipeline installation would have a
local temporary impact on certain marine species, particularly organisms
attached to or living in the bottom' sediments and species that feed through
a filtering web which can become clogged by suspended sediments.
The Impact of the pipelines would be greater in the coastal marshes and
estuaries. As mentioned above, most, if not all, of the major pipelines
11 St. Amant, Lyle S., "Biological Affects of Petroleum Exploration .and
Production in Coastal Louisiana," Louisiana `Wildlife . and Fisheries
Commission, Dec., 1970, p. ~ . .
PAGENO="0392"
386
on the Onter Continental Shelf have been buried beneath the ocean floor.
Similarly, pipelines are usually buried in the estuaries, but in coastal
marshes it is only possible to bury pipelines and back-f ill the canals
when bottom soil conditions are suitable to make such a process feasible.
In many instances, especially involving larger diameter pipelines, it is
not possible, given the physical consistency of the substrate, to bury
them. In these instances canals are dredged for pipeline emplacement.
Recent studies 1/ indicate that 16.5 square miles of marsh are being
destroyed each year in coastal Louisiana by erosion, subsidence and
construction. Much of this destruction is attributable to natural forces
and to flood control measures on the Mississippi River which have inter-
rupted the process of sediment transport and deposition which formerly
built and stabilized the marsh lands. It has been estimated that approxi-
mately 13% (or 2.15 sq. miles per year) of annual marsh destruction can
be attributed directly to canal dredging operations associated with the
oil industry. By far the majority of land loss falling within this
category can be attributed to access canals to site drilling rigs and is
not related to offshore oil and gas development. No rig access canals
will be cut as a result of OCS operations. Probably less than 3% of the
16.5 sq. miles annual land loss can be attributed to the direct construction
of pipeline canals; some of which serve onshore production and others serve
OCS production. Indirectly, however, all canal construction contributes to
marsh land destruction caused by erosion by permitting accelerated drainage
of freshwater and fostering salt water intrusion.
1/ Louiáiana State University, Coastal Studies Institute and Department of
Marine Science, "Geologic and Geomorphic Aspects of Deltaic Processes,
Mississippi Delta Syètem", Bat~~n Rouge, La., 1970. (Hydrologic and
geologic studies of coastal Louisiana, Vol 1).
50
PAGENO="0393"
3~7
Dr. Gagliano and other authorities who have studied the area 1/ have
pointed ont that there are other possible adverse effects related to
pipeline construction which do not necessarily contribnte to a land
loss figure but which are nevertheless important to consider. For
example, the destruction of vegetation in pipeline right-of-ways can
alter the environment of the immediate area and contribute to an
acceleration of the natural drainage process; pipeline construction
can also cause destruction of waterfowl nesting areas within its path,
but the spoil banks left after pipeline canal construction, when the
back-fill method is not employed, often provide excellent habitat for
wildlife; disruption of sessile animal habitats and other bottom
resources will inevitably occur within the pipeline right-of-way.
4. Oil Pollution
The fourth possible type of impact upon the environment is pollution
from oil spillage. Oil Spillage can occur in seve~ral different forms.
It can take the form of a major oil spill of extreme proportions, such
as that af~~ Chevron spill in early 1970, or in' the form of
minor spills, oT)~er~aps in a series of such spii1s. Major efforts are
being made to improve technology and equipment which will prevent s~il1s
as well aS mimimize pollution damage should a spill oc~ur.
1/ See particularly, Lyle D. St. Amant, "Biological Effects of Petroleum...",
* op. cit. pp. 21-23.
51
PAGENO="0394"
388
Both short and long term effects on the environment can be expected,
either from a major spill or from a series of minor spills. The short-
term effects of oil pollution, both obvious and subtle, may seriously
damage the marine biological community in the area where the pollution
occurs, whether it is in an estuarine zone or in shallow or deep waters.
It is more conspicuous in estuarine and shallow waters, but the effect
is also felt in deep waters. 1/
Damage from oil spills is obvious, where adult organiêms are affected,
such as the destruction of waterfowl. and, marine birds through con-
tamination of feathers or elimination of food sources, but detection
of damage is often delayed when microscopic organisms and smaller
life stages of larger organisms are affected. In the latter case, the
loss of larvae of shrimp, oyster, fish, or other planktonic organisms, if
severe enough, might reduce or eliminate a generation of major organisms.
This is of particular concern if pollution occurs in shallow waters where
these organisms reproduce and/or pass through their early life stages. 2/
1/ Blumer, H., "Oil Pollution of the Sea", Oil on the Sea, David P.
Hoult (ed.), Plenum, New York, 1969, pp. 6-12.
2/ Goldacre, R. J., "Effects of Detergents and Oil on the Cell Membrane"
Field~~Couñcil, Supplement, Vol. 2, p. 131 (1968).
52,
PAGENO="0395"
- 389
In the deepest regions of the Gulf, owing to the comparative simplicity
of the biological system, any pollutant introduce4 could have a pro-
nounced impact although it. might be buffered by the large volumes of water
involved. Plant and animal life of the deeper regions are not as diverse
as those fgund in shallower regions due to a combination of factors
associated with the penetration of sunlight, nutrient supply, and temper-
ature conditions of the deeper waters.
Several major studies and reports have been done in recent years attempting
to assess the effect of an oil spill in a marine eflvironment. Findings
from such studies have varied from conclusions that no permanent damage
has occurred to conclusions that oil has done great harm both innnediately
and oyer the longer term. One report 1/, dealing with the 1969 oil spill
in the Santa Barbara Channel, presents the results of a 12 month field
study aimed at determining initial effects of the pollution and gaining
insight into the longer term effects of pollution and rates of recovery
and recolonization of the ecosystem. The study was complicated by three
factors. First, the area is noted for natural oil seepage which made. it
difficult to obtain comparative data in regard to "normal" conditions
in the area before or between. the platform spills. Secondly., the
1/ Straughan, Dale, Kolpack, Ronald L., ~ ~o~~ica1 .a~~cea~
~aphicaSuryeyo~~he Santa Barbara Oil 5~jfl 1969-1970, VoI~t
and II, Allan Hancock Foundation, University of Southern California,
(Sea Grant Publication No. 2: 1971).
PAGENO="0396"
390
largest recorded flood in Southern California history occurred almost
simultaneously with the spill resulting in large runoff of fresh water
and sediments into the Santa Barbara Channel, creating reduced salinities,
high sedimentation rates, and a probable increase in pesticide levels
which washed into the Channel from citrus groves. The final complicating
factor was the overall general lack of knowledge of the ecology of the
area.
The general conclusions of the study were that the damage to the biota
was not widespread but was limited to several species, and that the
area is recovering. The study hypothesizes that "the biota of the area
had a high tolerance to oil built up by almost continuous exposure to
small amounts of similar oil from natural seeps over long periods". 1/
Further, "the presence of oil in the area may have resulted in a nor-
mally high population of oil degrading bacteria." 2/
Other factors relate to the final disposition of the spilled oil. It
is stated that the slow solubility and surface floatation of the crude
oil allows for the rapid loss of volatile compounds which reduce the
potenti~l toxicity of the oil. In volume two of the report, geological
studies have revealed that "much of the oil deposited at the sediment-
water interfaces was removed from the area of initial deposition and
was retransported into deeper water." 3/
1/ Ibid., Vol. I, p. 411.
2/ Ibid., Vol. II, p. 343.
3/ Ibid., Vol. II, p. 343.
54
PAGENO="0397"
391
The report indicated that different types of oil will vary in this
effect and that "A crude oil such as that found in Santa Barbara
is far less toxic than a light refined oil." 1/
The hypotheses presented in the study, relating to oil tolerant
species and oil degrading bacteria, nay also be given consideration
in the oil production areas of the northern Gulf of Menico.
Another report directly relating to the area under consideration was
an "Interim Evaluation of Environmental Impact from the Chevron Company
Fire-and Oil Spill Of f Coastal Louisiana, February and March 1970". 2/
This report did not establish that the Chevron oil spill caused damage
to the surrounding area. "Efforts to evaluate the environmental
effects of the spill were generally limited to detecting immediate
impact on commercial fishery species. Ecrlogically significant damage
to the biota could ha~Pe occurred and not been detected."
In public hearings held by the Department of the Interior in New Orleans
on September 8 and 9, 1971, concerning a proposed oil and gas lease
sale offshore Louisiana, Dr. John G. Mackin, marine biologist at Texas A & M
testified that his study of the Chevron fire and oil spill of February and
March, 1970 revealed:
1/ Ibid., Vol. I, p. 414
2/ U.S. Department of the Interior, Assistant Secretary for Fish, Wildlife
and Parks, "Interim Evaluation of Environmental Impact from the Chevron
Company Fire and Oil Spill off Coastal Louisiana, February and March
1970", unpublished report 9/19/70.
55
PAGENO="0398"
392
"0n~, the Chevron platform 41-.C fire liberated crude petroleum in
the shelf and Bretton Sound areas to the northeast and east of the
Mississippi Delta. Two, so far as can be determined none of this
oil reached the shore or marsh)~Three, no effect of the spill
can now be detected so far as the biology communities are concerned.
Pour, no affect on the fisheries was found. Five, the spill did not
destroy birds or wildlife as have some other widely publicized spills.
As a peculiar fact, destruction of birds have not been a feature in
any spill in Luisiana waters that I have any knowledge of."
Another report which is based on over 20 years of investigation, observation
and experimentation in the coastal and offshore areas of Louisiana expresses
the following:
"While accidental pollution can be catastrophic, unsightly, costly and
result in a considerable public outcry . . . we must recognize that
very rarely will accidental oil pollution have a gross permanent effect on
the ecosystem." Moreover, "seldom is there significant fish or animal
mortalities associated with oil spills".2/ However, the report does express
a concern for the long range impact on the environment of sublethal pollutants
and identifies the need for further studies in this area.3_/
1/ C. S. authorities indicate that on 2 separate occasions small amounts of
oil did get on Breton Island, but it was immediately cleaned up.
2/ St. Amant, Lyle S., "Biological Effects of Petroleum Exploration and
Production in Coastal Louisiana", Louisiana Wildlife and Fisheries
Commission, December, 1970, p. 16.
3/ Ibid., pp. 29-30. See also Sec. VI of this environmental statement
regarding St * Amant' 5 concern for the effects of sublethal pollutants.
56
PAGENO="0399"
393
A more recent report 1/discussed the results of a chemical and
biological analysis of a relatively small o~l spill (650-700.tons of
number 2 fuel oil) which occurred in November 1969 off West Talmoutli,
Massachusetts, in Buzzard's Bay. Unlike earlier studies on oil pollu-
tion in the ocean which were largely based on reports of the visible
effects `of the spillage, the Blumer study extended beyond the period
of visible evidence.
The study reports that the contaminated region in Buzzard's Bay expanded.
steadily after the accident. Eight months after the spill, `the pollution
covered an area approximately `eleven times that first `affected. The oil
destroyed marine life (95% mortality of adult organisms)" in the immediate
area of the spill within the first few days. As the oil sDread out across
the bottom `of the bay it did not lose its toxicity. As of May 1970, eight
months after the spill, contamination had ruled out commercial shellfishing
in the nearby Wild Harbor River for at least two years, according to the
report. `
The study notes that, despite the low density of oil, it may mix with
water, especially in a turbulent sea. Thus, the hydrocarbons can be
dispersed through the'water column and reach the sea bottom, particularly
if weighted down by mineral particles. The hydrocarbon compounds are
adsorbed by the bottom sediments and persist for long periods, killing
larvae organisms which settle `on the, sea bottom and in the marshes.
1/ Blumer, M., et.al., "A Small Oil Spill",, Environment, Vol. 13,
No. 2, March 1971, pp. 2-12.
57
PAGENO="0400"
394
In addition, revitalization of bottom areas will probably be further
hampered by oxygen depletion caused by oxygen-requiring bacteria that
degrade oil.
One of the conclusions drawn from the study is' that the importance
attached' to the evaporation of toxic hydrocarbons has been overestimated.
"It has been thought that many of the immediately toxic low-boiling
aromatic hydrocarbons are volatile and evaporate rapidly from the oil
spilled at sea. This, has not been the case at West Falmouth (number 2
fuel oil), where the low-boiling hydrocarbons found their way into the
sediments and organisms." 1/
Samples of Louisiana crude oil collected from an oil spill showed, how-
ever, that as much as 16 percent of the volume of the spill evaporated
within 500 feet of the platform, all in the lighter ends. It seems
likely that at least 35 percent of the total oil discharged would
* have evaporated' within 48 hourà. 2/
1/ Ibid., p. 11.
2/ tT.S: Department of the Interior, Assistant Secretary for Fish, Wild-
life and Parks, "Interim Evaluation of Environmental Impact From
the Chevron Company Fire and Oil Spill Of f Coastal Louisiana,
February and March 1970", unpublished report 9/19/70.
58
PAGENO="0401"
395
Marine life may also be affected by efforts to remove surface oil.
Emulsifiers, as well as natural storm action, remove oil from the surface
by redistributing it as minute droplets throughout the water column.
In this condition, oil is more susceptible to biological and chemical
degradation, although in combination with such chemicals it also
usually is more toxic. Furthermore, the oil treating chemicals them-
selves have been found to be more toxic than crude oil in many instances. 1/
Regulations and enforcement of standards to prevent oil spills are
stronger today than ever, and are under constant review to identify
improvements that may be made. Since Federal prosecution àf regulation
violations, it has become apparent that non-compliance can be very
costly. The greater efforts today exerted by both Government and industry
to avoid pollution should decrease the instances of major oil spillage.
The possibility of such spills, however, cannot be ruled out. Spillage
has been categorized in three main ways: minor spills from operations
and unidentified sources; discharge of waste water contaminated with oil;
and major accidents.
a. Minor Spills
During 1971, approximately 1239 minor èpills 2/ involving 2226 b*trels
(42 gals./barrel) of oil were recorded from OCS oil and gas operations
1/ See - Annex 10, p. 2, National Oil and Hazardous Materials Pollutipn
Contingency Plan, August 1971, for a list of interim restrictions on
the use of dispersants for pollution control.
2/ For information concerning actions to be taken in the event of a
spill, see section IV, G.l, "Contingency Action".
59
77-463 0 - 72 - pt. 1 - 26
PAGENO="0402"
396
in the Gulf of Mexico. The majority of t~iese spills (913) involved one
barrel of oil or less. Three hundred and twenty-six of the recorded
spills involved 1 to 15 barrels totaling 917 barrels. Only 22 spills
exceeded 15 barrels of oil (1079) barrels). An additional 969 oil
slicks from unidentified sources were sighted and are not positively
related to offshore drilling. There is evidence of natural oil seepage
in the Gulf of Mexico, which dates back to 1906 1/, long before oil
development activities were initiated, and it is quite possible that
seepage still persists in oil prone areas.
b. Waste Water
Waste water-can be a source of oil pollution. Waste water is that forma-
tion water which is produced from a reservoir along with the oil and
separated therefrom by passing the production through separation and
treating facilities. Additional treating facilities remove the entrained
oil from the separated water but are not 100% efficient in removing
the oil from the effluent water. The efficiency in removing oil
depends on the physical characteristics of a particular oil, the
percentage of water in the crude stream, the volumetric thruput
and various other factors. After recognizing these characteristics,
evaluating the state of the technology and effects of oil on
11 U.S. Department of the Interior, Fish and Wildlife Service, "Gulf of
* Mexico: Its Origin, Waters and Marine Life." Fishery Bulletin 89.
Also see, Thomas C. Johnson, "Natural Oil Seeps In or Near the
Marine Environment: A Literature Survey, "National Technical Infor-
mation Service, (Dept. of Commerce: Washington, D. C.) March, 1971.
60
PAGENO="0403"
397
the environment, the OCS Orders have established a limit of the oil content
in produced waste water to an average of not more than 50 parts per million
or .005% (1/200 of 1%) prior to disposal into the Gulf.
There are about 1800 structures in Federal areas offshore Louisiana producing
approximately a total of 1 million barrels of oil per day but waste water is
discharged from only about 250 of these structures. Total waste water pro-
duction is about 300,000 barrels per day; 120,000 barrels per day is trans-
ported to shore and 180,000 barrels per day is discharged into the sea. The
largest volume of waste water discharged at a single location is about 20,00ó\
barrels per day. The decision to separate, treat, and discharge waste water
on the platform or pipe it to shore depends primarily on whether or not
space exists on the platform for separating facilities. The oil content of
waste water discharged in OCS operations in the Gulf of Mexico, under the
average 50 ppm restriction of OCS Order No. 8, can contribute as much as 9
barrels of oil per day.
DurIng 1971, approximately 16 barrels of oil may have been introduced into
the ocean daily, either from minor spills, unidentified sources, or waste
discharge. Based on these figures, the estimated production of 150,000
barrels per day from the proposed sale might contribute an additional 2 to.
4 barrels of oil per day from continuous pollution sources on the OCS.
61
PAGENO="0404"
398
c. $gjor Spills
During the last decade., three pipeline accidents have resulted in the
spillage of 174,000 1~bls (the smallest of these spills was 6,000 bbls) of
oil in the Gulf of Mexico. The largest of these occurred in October, 1967,
when a ship dragging its anchor in a storm, broke a pipeline which lost
160,000 bbls of oil into the water.
Over the paet 10 years, 1.9 billion barrels of oil and condensate were
produced from the OCS in the Gulf of Mexico. During this period, nine
accidents involving drilling or producing operations resulted ~in the
spillage of 96,300 barrels of oil (the smallest of these spills was
100 bbls). An additional 174,200 barrels of oil were spilled as a
result of three major pipeline accidents. A little more than 24,000
barrels is estimated to have been recovered.
An analysis by the Geological. Survey of four OCS fires which resulted in~
large oil spills shows the extent of shore-line contact by oil resulting
from those fires.
Fire Spill Days duration of Shoreline Pollution
.(Date) on Water. oil on water
Amoco
(Oct. 1971) 400 bbls. 56 None
Shell
(Dec. 1970) 53,000 bbls. 207 A. A sheen or heavier on 28
different places for a
short duration. (inclusiv
ofB.)
B. Slight accumulative of oil
on beach for a short dura-
tion 7 places.
C. Only on 21 days was any oil
reported on shore.
62
PAGENO="0405"
399
Fire Spill Days duration of
(Date) on Water oil on water Shoreline Pollution
Chevron
(Feb. 1970) 30,500 bbls 49 Oil accumulated on
Breton Island Beach
2 different times for
a short period of time
and was cleaned up.
Galveston
(May l9~7O) 1,400 bbls. 2 Approximately 50 bbls.
from oil storage of oil on beach at
tanks on platform Galveston for 1 day.
Mostly cleaned up by
end of that day. Totally
cleaned up by end ~of
third day.
Total exposure to PollutIon
from 4 spills 314 days
Oil on beach for short duration 31 times
Total number of days which any
oil was reported on shoreline 26 days
The volumes of oil in the mibnor and major spils and waste water discharges
listed above are limited to OCS operations and do not contain volumes for
spillages or discharges from tankers and other commercial vessels which is
estimated to contribute as much as 22.82 million barrels of petroleum to
the ocean each year ~/, ~or does it include oil spilled and lost in the
ocean each year.
1/ M. Blumer, et. al., "A' Small Oil Spill," ~p. cit., p. 3.
63
PAGENO="0406"
400
d. Pollution from Gas Condensates
The possibility of environmental damage, and the inherent risks
associated with offshore petroleum production is closely related to
the total volume of liquid pollutants which could be introduced into
the marine environment. The degree of damage is also related to other
factors such as seasonal variations in temperature, winds, currents,
and spawning activities, to mention only a few.
An oil well normally produces crude oil, and in many cases, varying
amounts of water or gas which may be associated with a particular
reservoir or field. The total volume of crude oil produced varies con-
siderably due to a wide assortment of physical characteristics related
to the reservoir conditions and field development such as pressure,
permeability of the strata and number of wells. In the OCS fields of f-
shore Louisiana, daily production varies from 100 to 2,000 barrels of
crude oil per well, with an average daily rate of 300 barrels per well.
The amount of petroleum liquids associated with gas produciton is also
variable due to the characteristics of the particular gas reservoir
or field. The total volume of petroleum liquids from a gas well, however,
is less than that from an oil well. The amount of liquids produced
from gas wells may be expressed as the ratio of gas to oil (condensates)
produced (GOR). A well having a GOR of 15,000/1 indicates a production
6I~
PAGENO="0407"
.401
ratio of 15,000 cubic feet of gas to 1 barrel of oil. Most wells with
this production ratio or a lower ratio are usually considered as oil
wells. Wells having a higher ratio are generally classified as gas
wells and may be divided into the following two categories. Por the
purpose of this discussion, a ratio between 15,000/1 attd 200,000/1
may be considered a "wet" gas well. Those wells with a ratio of 200,000/1
or higher may be considered "dry" gas wells. In this proposed action,
all tracts identified for gas drainage have estimated GOR ratios of less
than 15,000 to 1. Due to their high liquid condensate production, we
view them as if they will be oil productive.
In the proposed sale area, data on the average production of condensates
from gas wells is based on averages from producing fields. Daily con-
densate production from some of the larger "dry" fields (GOR - 200,000/1
and above) range from 1 to 17 barrels per well, with an average daily
rate of 5 barrels per well. Daily condensate production from "wet" gas
wells in the larger fields in the proposed sale area range from 40 to
160 barrels per well. Thus, the average liquid condensate production
from gas wells is significantly lower than the average crude oil production
from oil wells.
65
PAGENO="0408"
402
B. Analysis of Environmental Risks to Resource Use
The possibility of an accidental oil spill occurring on any one
of the potential oil producing tracts in this proposed lease offering
from natural hazards, equipment failure or operator error would not be
greater than that posed by any of the other potential oil producing
tracts. Any development activity on any of the tracts would be within
the framework of a known array of natural and operational hazards, any
one of which could result in an oil spill. The probability of such
incident, based on occurrence of previous large oil spills on OCS lands,
is low (12 spills of 100 barrels or more in 10 yrs.), but highly signifi-
cant in terms of environmental mandates. As far as has yet been determined,
the few previous large spills occurring in the Gulf of Mexico resulted in
minimal damage.
The purpose of this section is to rank each of the blocks in the proposed
sale on the basis of its proximity to high value/critically vulnei~able
resources. The distance from such resources constitutes a major factor
in assessing the risk of possible oil development from OCS tracts.
A numerical risk level index is assigned to each tract, based on the
distance of the possible production site to a high value/critically
vulnerable area, such as a heavy effort commercial fishing site, spawning
and nursery grounds, refuges, recreation sites, estuaries, marshes and
wetlands.
66
PAGENO="0409"
403
Close proximity of production tracts to such areas implies a low
response time to implement adequate contingency measures, and assumes
that, under normal hydrological and meteorological conditions, oil
could reach the areas. The index used in this analysis ranges from 7
to 1. A ranking of 7 indicates that a tract is within 9 miles of a
high value area; a ranking 5 indicates a distance of 10 to 19 miles
between the tract and the high value area; a ranking of 3 indicates a
distance of 20 to 30 miles between the tract and the high value area;
and, a ranking of 1 indicates a considerable distance (greater than
30 miles) between the tract and the high value area.
In this analysis, with shoreward ocean current velocities of 0.5 knots 1/,
oil spilled from tracts ranked 7 can be deposited on shore or on high
value resources within 18 hours, and oil spilled from a tract ranked 5
could be depositad on shore or on high value resources within 20 to 38
hours, Therefore, to prevent damage from a spill from a tract ranked 7,
oil containment and clean-up equipment would need to be brought into full
use in less than 18 hours to assure protection of the high value resources.
All tracts on the OCS, regardless of the levels of liquid pollutant produced
or distance from high value areas, will pose some level of risk to the
environnent if developed. In this proposed lease offering, tracts
1/ Ocean currents of 0.5 knots are common in the area of the proposed
lease sale.
67
PAGENO="0410"
404
producing "wet" gas are also expected to produce oil; therefore, these
tracts are analyzed as if they were oil producing tracts. All gas
producing tracts in this proposed offering are expected to produce "wet'
gas.
The following summary lists all of the tracts in the proposed offering.
68
PAGENO="0411"
405
Summar~T of Area and Block Analysis
Potential
Area and Block Resources Affected Risk Level
Ship Shoal
98 and 110 Commercial Fisheries 7
(Ship Shoal)
160 Commercial Fisheries 5
(Ship Shoal)
202, 320, 326, Commercial Fisheries 1
338, 343, 344, and adjacent coastal
345, 359 marshes and estuaries
South Timbalier
195, 202, 217, Mainland, marshes and 1
314, 315, 316 estuaries
Grand Isle
58 Commercial fishing, 5
spawning and nursery
grounds, estuaries and
marshes
65, 67, 69, Mainland, marshes and 3
76, 84 estuaries
94 and 95 Mainland, marshes and 1
estuaries
West Delta
35-36E 1/2 Commercial fishing, 7
spawning and nursery
grounds, estuaries and
marshlands
36W1/2, 68, 101, 113, Commercial fishing, spawn- 5
124, 143, 149 ing and nursery grounds,
estuaries and marshlands
154 Estuaries and marshlands 3
69
PAGENO="0412"
46, 47,. 48, 49, 51,
52, 53, 56-57, 75,
76, 77, 78
Resources Affected
Delta Migratory Waterfowl
refuge, nursery grounds
estuaries and marshlands
82, 83, 96
Nursery and spawning 5
grounds, estuaries and
marshlands
60, 61, 138, 139,
140, 141, 146, 149,
150, 302, 303, 310,
311
Wildlife refuges, estuaries
and marshlands of Breton
and Mississippi Sounds,
spawning and nursery grounds
Gulf Islands National Sea-
shore
221, 222,
246, 247,
263, 280,
Wildlife refuges, estuaries 3
and marshlands of Breton
and Mississippi Sounds,
Gulf Islands National Sea-
shore
Wildlife refuges, estuaries
and marshlands of Breton
and Mississippi Sounds,
Gulf Islands National Sea-
shore
406
Area and Blocks
South Pass
Potential
Rjsk Level
7
Main Pass
5
304, 309
219, 220,
223, 245,
261, 262,
281, 282
1
70
PAGENO="0413"
407
C. Areas of Special Consideration
One area, containing tracts included in tI~ie proposed of fering~,
has been identified. as a potentially hazardous area. Production plat-
forms which may be located in this area could be subject to damage from
sediment movement and appear to pose a greater potential for pollution
than the otherwise low probability associated with platforms on other
tracts..
The area in question extends from South Pass to an area off Main Pass.
A seismic pr6file off South Pass shows features which may have been
caused by gravity sliding or slumping. The area is immediately adjacent
to the main river passes where sediment deposition is most active. The
delta slope is quite steep and is covered by a mantle of soft uncon-
solidated sediments, portions of which are considered to be unstable.
Recent hurricanes have caused large volumes of sediment to be relocated
and during hurricane "Camille" in August 1969. Two of the thirteen
existing platforms off Main Pass were seriously damaged, evidently as
a result of sheer forces created by the movement of large areas of the
unconsolidated sediment.
Unstable zones may be present on portions of several of the proposed
tracts and a soil. boring program has recently been conducted to detet-
mine the presence and extent of the postulated instability. Data
resulting fron the boring program will identify the specific tracts
which have unstable conditions and will be used by the regional oil
Ti
PAGENO="0414"
408
and gas supervisor, Geological Survey, in his approval of the design
and location of platforms in tracts having unstable conditions (see
Plans, Section IV. A.l, Mitigating Measures Included in the Proposed
Action).
All blocks ranked 5 and 7 in the Ship Shoal area included in this
proposed offering are located in water under 42 feet in depth. Earlier
sections tn this report have shown that virtually all menhaden and other
commercial. fish and over 70 percent of the shrimp taken are caught in
waters under 60 feet in depth. Therefore, to insure protection of this
resource, the following stipulation is proposed for Ship Shoal,
Blocks 98, 110 and 160 in the event these tracts should be leased:
"No structure for drilling or production may be erected within
the leased area until the Regional Supervisor, Geological Survey, has
found that the structure is necessary, on the basis of existing geo-
logic and engineering data, for the proper exploration, development,
and production of the tract. The lessee's exploratory and development
plans, filed under 30 CPR 250.34, shall identify the anticipated place-
ment and grouping of necessary structures, showing how such placement
and grouping will have the minimum practicable effect on commercial
fishing operations. The Regional Supervisor may decline to approve
the installation of a structure at a site which he determines will
unreasonably interfere with other uses of the area."
72
PAGENO="0415"
409
The following stipulation is proposed for all blocks ranked 7 in the
West Delta and South Pass areas, if they are leased, as a basis for pro-
viding additional resource protection. (Specific blocks are: West Delta
blocks; 35-36 E 1/2, and South Pass blocks; 46, 47, 48, 49, 51, 52, 53,
56-57, 75, 76, 77 and 78.)
"During all drilling and production activities on the leasehold,
the lessee shall maintain, or have available under contract, adequate
oil containment and cleanup equipment approved by the Regional Super-
visor at a readily accessible site. Within twelve hours after the
occurrence of a significant oil spill, as determined by the Regional
Supervisor, the lessee shall have such equipment in use at the site
of the oil spill, unless, because of weather and attendant safety
of personnel, the Regional Supervisor shall modify this requirement.
The lessee shall monitor all drilling and production activities either
with personnel in the immediate field area or by remote surveillance
methods. The proposed method of monitoring and any proposed changes
thereof shall be approved by the Regional Supervisor."
The following twenty-two blocks proposed in this offering lie partially
within shipping fairways and/or anchorage areas and would be subject to
the Federal regulations as presented in Section III. A.2 ("Structures")
of this statement: West Delta blocks; 143, 149 and 154; South Pass
blocks; 47, 48, 49, 51, 52, 53 and 56-57; South Pass - South and East
Addition blocks; 75, 77, 78, 82 and 83; and Main Pass blocks; 60, 61,
139, 140, 146, 149 and 150.
73,.
PAGENO="0416"
410
IV. Mitigating Measures Included in' the Proposed Action
The Department has developed the following strategy for safe
development of the mineral resources of the OCS.
Management of the mineral resources of the OCS will be conducted in such
a manner as to cause these resources to make a significant contribution
toward supporting the present and future National economy at a rate con-
sistent with maximum possible protection of the environment, orderly and
timely development of the resource, and receipt of a fair market value
return to the Federal Government.
Reasonably safe development of oil and gas resources on the OCS can be
achieved through strict enfor~ement of lease stipulations and obligations,
(detailed in the OCS operating regulations and orders) and must be based
on sound operating practices backed by effective contingency actions in
the event that pollution occurs as a result of a natural disaster, human
error, or equipment failure.
Research and development programs in exploration, production, transpor-
tation, containment and clean-up technology, which will provide greater
safeguards for the environment, are being conducted by the Departinent'of
the Interior, other Feder~l agencies and private industry. As advances
are made, OCS operating reguJations and orders will be revised and the
new technology applied to existing leases as well as new leases. Revisions
of the regulations and formulation of lease stipulations may also result
from the review of environmental impact statements by the agencies and
the interested public.
71~
PAGENO="0417"
A. ~u1at~s -
Regulations governing OCS oil and gas lease operations in the G~.tlf of
Nexico are contained in Title 30, Code of Federal Regulations and OCS
Order Nos. 1-7, dated August 28, 1969, Nos. 8-9 dated October 30, 1970,
No. 11, dated December. 11, 1970, and No. 12, dated Aug. 13, 1971.
Leasing regulations are contained in Title 43, Code of Fedetal Regulations.
The regulations esta4lish procedures an4 requirements to be folloc,ied
in all stages of lease operations: exploratory and development
drilling, production, transportation (pipeline construction and operation)
and abandonment. Compliance with and enforcement of existing regulations
will permit exploration, development and production operations to be
conducted on the OCS within a low, order of ánvironmental risk; however,
research into techniquO to imprbve OCS operating efforts needs to be
continued and strengthened.
A general description of operating requirements under the existing regula-
tions follows:
1. ~ Operating plans must be submitted and approved by the Geological
Survey (GS) before each stage of operations is initiated (exploration,
development, abandoment). Approval of all operations must be obtained
prior to their commenceümnt. /
2. Operator Inspection and Tes~ng: The operator is required to inspect
all aspects of the safety systems at specified intervals, e.g., daily
pollution inspection on manned facilities, "frequent" inspection on
unmanned fa~i1ities, monthly test of check valves. Detailed records
of inspections and tests are required.
75
411
~./ ~
I.
`F
77-463 0 - 12 - pt. 1 - 21
-~4,4~-~ ~
PAGENO="0418"
412
3. p~çs: The operator is required to report all spills or leakage of
oil to CS without delay. He is also required to notify CS of any un-
usual condition, problem or malfunction within 24 hours. 1/
4. Safety Devices: Required safety devices include: Subsurface safety
devices, high-low pressure shut-in controls, high-low liquid level
shut-in controls, pressure relief valves, automatic fail-close valves
at the well head, automatic fire fighting systems, automatic gas
detector and alarm systems, and other safety devices on production
equipment; high-low pressure sensing devices and automatic shut-in
valves on pipelines; and blowout preventers, related well control
equipment, and mud system monitoring equipment on drilling wells.
5. Waste Disposal: The lessee is prohibited from disposing into the
ocean any oil (except that oil in produced waste water must average
no more than 50 ppm) 2/, untreated waste material or other materials
which may be harmful to aquatic life or wildlife. Any drilling mud
which may contain toxic substance must be neutralized before it can
be disposed of in the ocean* Drill cuttings and sand must be
processed, and oil removed, before they can be disposed of in the
ocean.
6. Site Clearance: When an installation is no longer needed for develop-
ment of the lease, the well is plugged with cement and all casings and
piling must be severed and removed to at least 15 feet below the ocean
~/ 30 CFR 250.45
VOCS Order No. 8 (2.A.(5), Gulf of Mexico.
76
PAGENO="0419"
413
floor and the location must `be dragged to clear the site of any
obstruction. `
7. Debris: Regulations and OCS orders prohibit the ctispQsalof debris
into the Gulf of Mexico. Solid waste must be either incinerated or
transported to shore for disposal.
8. Contingency Plans and Equipment: `The operator is required to have
an approved plan for controlling and removing pollutiøn which pro~
vides for:
a. Standby pollution control equipment, including containment
booms, sldnmiing apparatus, and approved chemical dispersants
immediately awailable to the operator at a land based
location.
b. Regular inspection and iñaintenance of~ such equi.pment.
B. Special ~tip~ukaj~i~ns -
Leases for oil and gas exploration and de~elopmént are subject tq
all OCS operating regulatthns and orders. Additionally, in some
cases the lease may include special stipulations which are considered
necessary for the protectionof a particular resource. These
stipulations can be designed to meet the needs of a particular
resource, e.g., wildlife or waterfowl refuges, -fishing-areas, or
certain recreation areas, etc., which might be `q~iite sensitive to
development of the lease. (Also see Sec. III.C, "Areas of Special
Consideration" of this statement.)
77
PAGENO="0420"
414
C. Departures
A departure (waiver) from OCS orders or other rules of the CS Super-
visor may be granted when such a departure is determined to be
necessary for ( 30 CFR, 250.12 (b)):
a) the proper control of a well,
b) conservation of natural resources,
c) protection of aquatic life,
d) protection of human health and safety,
e) protection of property, or
f) protection of the environment.
For example, iii the case of subsurface safety devices, a waiver may
be granted only when the following technical conditions exist:
a) When artificial lift is required.
b) When the flowing tubing pressure at the weliheaci is
100 psig or less.
c) When the subsurface device causes sand to plug the
tubing or sand makes the subsurface safety device
inoperative.
d) When well flow rate fluctuation or water production
prevents a well equipped with a subsurface safety
device from producing.
e) When the mechanical condition of the well does not
permit the installation of a subsurface safety device
or when such a device cannot be installed at the pre-
scribed minimum depth of 1,000 feet or more below the
ocean floor.
78
PAGENO="0421"
These waj4p5~5 are technically based decisjo~9 and are granted in
Situations only where ezpe~~ judgment determines that better, safer
operations would result from operation5 under the waiwer.
\ S S
cj
S *~
;S
SSS~~
- S?_~__~
S -
79
PAGENO="0422"
416
11. Inspection
Evidence of compliance with the regulations and lease requirements is
obtained through surveillance of the operations under the lease and
enforcement of specific requirements. The inspection system of the
Geological Survey includes: (1) review and approval' of plans before
each operating stage is initiated, (2) close review and follow-up as
necessary, by GS inspectors, of all reports required of the operator
by the regulations and orders, (3) on-site inspection and (4) aerial
monitoring through the use of helicopters (operators are also required
to inform each other of oil spills or other irregularities which they
observe).
1. ~p~rator reports: A comprehensive reporting system covering all oil
spills and any unusual conditions (For example: reporting and in-
vestigation of a persistent oil slick from an unknown source such as
a sunken ship or natural oil seep) is required by the orders and is
a key factor in monitoring operations. Operators are also required
to maintain records for GS inspection of required periodic tests of
safety equipment. Compliance with reporting requirements can be assured
only by periodic on-the-site inspection and aerial monitoring.
2. On-site inspection: During the course of drilling, all operations
are inspected at least one time. Leases in certain areas or in a
particular development stage may require more inspections to assure
the achievement of safety objectives. GS has recently adopted a
systematical inspection program and a more stringent enforcement
policy. This has resulted in increased operator compliance along
with greater coverage of production operations and better documentation
of inspection results. 80
PAGENO="0423"
417
A program of intensive inspections is used on OCS leases, for example,
periodically all available inspectors may devote a w~ek to inspecting
production platforms and drilling wells selected on a random basis;
inspections during other periods are conducted on a regular basis with
emphasis on operations believed to require special attention. The
number of CS field personnel (inspectors) has increased from 9 technicians
and 5 engi~ieers as of January 1, 1970, to 24 technicians and 13 engineers
as of January 1, 1972. During the period January 1 to December 31, 1971,
these technicians spent 2,965 inspection days or 29,974 man-hours, and
engineers 362 inspection days or 3,697 man-hours in the field. Detailed
inspections were conducted on 1072 producing platforms in the Gulf of
Mexico. Approximately fifty percent of these inspections were un-
announced. Included in these inspections were 9,020 well completions.
Also, during this period, 631 drilling rigs were inspected. As of
December 31, 1971, there were 8,789 completions capable of producing
oil and gas on OCS lands offshore Louisiana. Approximately 80 drilling
rigs are operating in Gulf of Mexico OCS waters at this time.
3. Aerial Monitoring:
"Fly-overs" of the OCS operating areas are programmed on a seven day
per week basis by CS inspectors. Any indications of oil pollution or
other noncompliance will be followed immediately by an on-site inspection.
During the period January 1 through December 31, 1971, 1,276 pollution
surveillance flights were made. The six helicopters chartered by the
Geological Survey for use of the inspecting personnel flew a total of
4,854 hours. S
83.
PAGENO="0424"
418
E. Enforcement
The enforcement policy is intended to: (1) reduce the incidents of
noncompliance of lease requirements which may lead to loss of life,
loss of property, or damage to the environment; and (2) maintain a
uniform enforcement policy to be applied to all operations affecting
OCS lands in the Gulf of Mexico. When, in the course of an inspection,
a requirement pertaining to the prevention of oil pollution or any
other safety hazard is found to be in noncompliance, the operation
will be shut-in until it is brought into compliance. After a shut-in,
the operation can only be resumed by authorization of the GS; in ~ll
cases, this requires reinspection or a waiver of the inspection re-
quirement. Minor incidents of noncompliance may require only a warn-
ing that corrections be made within a week. The operation will he
shut-in if the required corrections are not made.
Additional penalities for noncompliance are specified in P.L. 83-212,
Outer Continental Shelf Lands Act, Sec. 5(a)(2). "Any person who
kn~owingly and willfully violates any rule or regulation prescribed by
the Secretary for the prevention of waste, the conservation of the
natural resources, or the protection of correlative rights shall be
deemed guilty of a misdemeanor and ~punishable by a fine of not more.
than $2,000 or by imprdsonnent, and each day of violation shall be
deemed to be a separate offense." Also Sec. 5(b)(l) `and (2) provide
for cancellation of nonproducing and producing leases by notice
subject to judicial review or appropriate judicial proceedings.
82
PAGENO="0425"
419 /
F Contingency Action
Oil spills will occasionally occur as a result of natural disasters,
equipment failure or human error * In the event that such an emergency-
occurs, the following action will be taken:
1. In the case of any spill, the operator is required to
initiate action to control and remove the oil pollution
in accordance with his approved emergency plan. In any
case, a spill or leakage of less than 15 bbls. requires a
report from~the operator as to the nature-of the spill
or leakage, why it occurred and what ~teps were taken
to correct it. A spill of 15-50 bbls. must be reported
by telephone immediately to GS and confirmed in writing.
A spill of over 50 bbls, or one of any magnitude that
cannot be immediately controlled, must be reported
immediately to the Coast Guard and the Environmental
Protection Agency as well as to ~S. -
The National Oil and Hazardous Materials Pollution Contingency Plan
was developed pursuant to the provisions of the Federal Water Pol1ut~
- Control Act as amended (33 U.S.C. 1101). - Section ll(c)(2) of that
2. If the operator should be unable to control and remove
the pollution, the Regional or National Contingency Plan
may be activated and the designated Federal oiiscene commander
would take over control and clean-up operations at the oper~
expense.
83
PAGENO="0426"
420
statute authorizes the President, within sixty days after the
section becomes effective, to prepare and publish such a Plan. The
Plan provides for efficient, coordin~ated, aitd effective action to minimiz
damage from oil (and other) discharges, including containment, dispersal,
and removal. The Plan includes (a) assignment of duties and responsi-
bilities, (b) identification, procurement, maintenance and storage
of equipment and supplies, (c) establishment of a strike force and
emergency task forces, (d) a system of surveillance and notice,
(e) establishment of national center to coordinate response operations,
(f) procedures and techniques to be employed in identifying, containing,
dispersing and removing oil, and (g) a schedule identifying dispersants
and other chemicals that may be used in carrying out the Plan, the
waters in which they may be used, and quantities which may be safely
used. The Plan is to be revised from time to time as necessary.
Operation of the National Contingency Plan requires a nationwide net
of regional contingency plans. Cuidelines for that nationwide net are
established in the National Plan. This Plan provides for a pattern
of coordinated and integrated responses to pollution spills by
departments and agencies of the Federal government. It establishes
a national response team and provides guidelines for the establishment
of regional contingency plans and response.teams, The Plan also
promotes the coordination and direction of Federal, State, and local
response systems and encourages the development of local government and
~rivaye capabilities to handle such pollution spills.
8!~
PAGENO="0427"
421
The objectives of the Plan are: to develop appropriate preventive
and preparedness measures and effective systems for discovering and
reporting the existence of a pollution spill; to institute promptly
measures to restrict further sptead of the pollutant; to assure
that the public health, welfare, and natural resources are
provided adequate protection to provide for the application of
techniques to clean-up and dispose of the collected pollutaits~ to
provide for a scientific respor~se to spills as appropriate; to
provide strike fortes of trained personnel and adequate equipment
to polluting spills; and to institute actions to recover clean-up
costs and to effect enforcement of existing Federal statutes and
regulations i~stied thereunder. Detailed guidance toward the
accomplishment of these objectives is contained in the basic Plan,
the annexes and the regional plans.
The plan is effective for all United States navigable waters
including inland rivers, Great Lakes, coastal terrItorial waters,
and the contiguous zone and high seas beyond this zone where
exists a threat to United States waters,shoreface, or shelf-bottom.
Its provisions are applicable to allFedéral agencies.
85
PAGENO="0428"
422~
G. Research on Advanced Technology
GS is evaluating the advantages and disadvantages of `using remote or
surface controlled subsurface valves (hydraulically activated sub-
surf ace safety devices not dependent on well pressures) on the Gulf
of Mexico oil and gas leases. It is also studying different kinds of
fire control systems. EPA and Coast Guard are conducting research on
containment and recovery devices (booms and skimmers). When the
results of these studies, and any other similar studies so indicate,
the requirement for use of better techniques and equipment will be
incorporated into the OCS regulations and orders as appropriate. If
incorporated, the requirements will be applied to all leases.
El. Geqphysical Information
High-resolution geophysical data cover~.ng approximately 75% of the
tracts to be offered for sale have been purchased and are being
analyzed by GS geophysical personnel. This data, in the area of
coverage, will provide definitive information on (1) thickness of
the unconsolidated sèdinients; (2) structural configurations on
shallow seismic horizons (300-500' below ocean bottom); (3) anomaly
maps identifying sea floor anomalies, mud mounds, mud waves or poten-
t~al slide areas, pipelines and other objects on the sea floor, and
bore hole locations as interpreted from a combined analysis of several
geophysical measurements; and (4) contoured water bottom maps.
86
PAGENO="0429"
In addition to the Interior Department's requirements, the operators
must comply with applicable navigation and inspection laws and re-.
gulations administered by the U.S. Coast Guard. These relate to
safety of personnel and display of prescribed navigational lights
and signals for the safety of navigation. Permits to install islands
and fixed structures and the drilling of wells from mobile drilling
vessels must also be obtained from the U.S. Army Corps of Engineers,
which is authorized by the Outer Continental Shelf Lands Act to
prevent obstructions to navigation. Pipeline construction must be
In compliance with standards established by the Office of Pipeline
Safety, Department of Transportation. The Department of Labor
establishes Occupational Safety and Health Standards which are
applicable to OCS operations.
Moreover, an industry-cooperative venture for oil spill and cleanup
measures is in the final stages of formation. This cooperative will
be called the "Clean Gulf Associates" and will be open for membership
to ali producers, operators and lease owners in the Gulf of Mexico. It
is envisioned that it will be able to ". . . meet any and all oil spill
contingencies from producing operations any where in the Gulf of Mexico
offshore the United States." 1/ Completion of the agreement leading to the
creation of Clean Gulf Associates is expected momentarily and the
organization is expected to be in operation prior to holding this
proposed lease sale.
1/ Letter from Mr. E. 0. Bell, Chairman, Offshore Operators Committ
to Mr. Burton W. Silcock, Director, Bureau of Land Management,
dated March 9, 1972. 87
PAGENO="0430"
/ 424
V. Unavoidable Adverse Environmental Effects
Unavoidable adverse effects from this proposed sale can be
identi~fied as follows:
A. Oil Pollution Effects on Marine Environment
Some oil pollution will occur from development of the proposed
tracts if the sale is implemented. The recently strengthened regula-
tions and operating orders are as stringent as technology allows at
this time. Although increased Federal inspection and the large costs
involved in controlling, containing and cleaning up spilled oil have
combined to generate an awareness of the necessity to improve the OCS
safety record, no regulation or enforcement can guarantee that there
will be no pollution from oil producing operations on the OCS. Natural
disasters, equipment failure and human error could occur despite exist-
ing regulations and enforcement procedures. Federal standards will do
much to widen the margin of safety on OCS operations, but they cannot
guarantee there will be no oil pollution.
The marine environment is rich in both its variety and forms of marine
life. Pok1ution can affect, in varying degrees, all forms of marine
plant and animal life from those that are lowest in the food chain to
those at the top. The degree of pollution, duration, and the physical
condition under which it occurs determine the extent of the impact. A
normal balance may be regained in a short period of time or the ~impact
may be more severe and recovery may require a span of many years. The
88
PAGENO="0431"
425.
normal "health" of the ecosystems in any case is disrupted and a balance
is lost during the period of recovery.
Shorebirds, waterbirds and migratory waterfowl frequently are the most
obvious victims of oil poflution because they are likely to come into
d~1.rect contact with it. Contamination by oil destroys the waterproof
qualities of their plumage a condition from which they seldom recover,
even when careful rehabilitation is attempted. Similarly, bird species
are vulnerable if beaches and marshes become contaminated by oil,
especially if vegetation and food sources are destroyed. In the northern
hemisphere, hundreds of thousands of swimming and `diving bi~ds have
perished in this way during and since World War II, and marked reduction
of sone nesting populations of sea birds from such mortality has been
documented. 1/ However, no such problem has been documented in the
* Gulf of Mexico as a result of oil spills.
1/ Aldrich, J. W., "Review of the Problem of the Birds Contaminated by
Oil and Their Rehabilitation". Resource Publication 87. U.S.
Department of the Interior, Bureau of Sport Fisheries and Wildlife,
1970.
89.
PAGENO="0432"
426
B. PiDeline Construction Effects on Marshes and Bottom Resources
Approximately 97% of OCS oil production in the Gulf of Mexico is
transported to shore by pipeline. Some new pipelines would be required
to move production of oil and gas from the tracts proposed for leasing
in this offering to the Louisiana coastal uplands for processing or
redistribution. Additional pipeline construction could contribute to
marsh destruction. The adverse effects may be either short-term or
permanent, and may be minor or serious, depending on the methods employed
in laying pipelines and their location. These effects can be substantially
reduced with adequate planning and by using the most appropriate construc-
tion techniques. For example, pipeline corridors should be established
and existing pipeline canals should be used whenever possible so that
adverse impacts are restricted to fewer locations. Where possible, pipe-
lines should come ashore on elevated terrain to minimize damage to marsh-
lands. Where necessary, bulkheads can be placed in canals to prevent
salt-water intrusion and to maintain existing drainage and water-exchange
routes. To protect oysters, pipelines usually can be routed around major
oyster reefs, ~nd where shallow estuaries are to be crossed, the canal
can be backfilled; in many cases so can canals through marshlands.
Although all of these measures help to alleviate the problem, the impact
of pipeline installation on the coastal environment requires the joint
effort of many agencies and authorities for successful resolution. Agencies
having responsibility or jurisdiction over all or part of oil and gas
pipeline installation or operation in coastal areas are: (1) Department
90
PAGENO="0433"
427
of the Interior, (a) Bureau of Land Management--.rights-of-VaY for common
carrier lines and gas pipelines on the OCS, (b) Geological Survey--juris-
diction over producer owned gathering lines and flowlines on the OCS, (c)
Bureau of Sport Fisheries and Wildlife--protection of fish and wildlife
resourceè and their habitat through consultation with the Corps of
Engineers in the process of issuing Federal permits in navigable waters;
(2) U. S. Army Corps of Engineers--issues permits for construction (including
pipelines) on OCS and in~ navigable waters; (3) Federal Power Commission--
grants certificates of convenience and necessity prior to construction of
interstate natural gas. pipelines; (4) Interstate Commerce Commission--grants
approval of the tariff rates for transportation of oil by common-carrier
pipelines; (5) State of Louisiana--grants rights-of-way through navigable
waters under State jurisdiction; and (6) Department of Transportation,
Office of Pipeline Safety--establishes standards for pipeline construction.
At present, the cooperative effort between the Department of the Interior
and the Corps of Engineers and State conservation agencies is responsible
for minimizing the impact of pipeline (and other) construction in navigable
waters of the United States. The Corps of Engineers, through authority
of the Rivers and Harbors Act of 1899, (33 U.S.C. 403) asserts authority
over and requires a permit for construction in all t~avigable waters of
the United States. Offshore lands beneath navigable waters subject to the
navigation jurisdiction of the Corps of Engineers is defined in the Si.tb-
merged Ladds Act (43 U.S.C11301) and includes all lands permanently or
periodically covered by tidal waters up to the line of mean high tide.
91
77-463 0 - 72 - pt. 1 - 28
PAGENO="0434"
428
The Department of the Interior and its Bureau of Sport Fisheries and Wildlife
has responsibility and authority under several statutes, including the Fish
and Wildlife Act of 1956, the Estuary Protection Act, the Endangered Species
Act, the Migratory Bird Conservation Act, and the Fish and Wildlife
Coordination Act, to preserve, conserve, protect and enhance' fish and
wildlife resources and their habitat.
The Bureau of Sport Fisheries and Wildlife, with assistance from appropriate
State Conservation agencies, mow reviews all applications to the Corps of
Engineers for `permits to construct pipelines in navigable waters and
assesses theit potential impact on fish and' wildlife resources and the
environment. When appropriate,' the Bureau recommends to the Corps specific
modification of' project plans which are needed to reduce impact on these
resources. Occasionally a project plan is so conceived that significant
impact cannot be avoided and a satisfactory alternative is available; a
recommendation that the permit not be issued would be appropriate. The
Corps of Engineers has the authority under the Rivers and Harbors Act to
condition or deny .a permit on the basis of environmental considerations. 1/
Much of Louisia~. ¶arshlands outside of wildlife refuges are privately
owned but those that are below the line of mean high tide are subject to
Federal' regulation (as navigable waters) through applièation of the Corps
of Engineers permit system'. Significantly large areas of Louisiana' s
privately `owned marshlands are below mean high tide and are interspersed
1/ See Zabel v. Tabb, 430 f.2d 199 (5th Cir. 1970).
92
PAGENO="0435"
429
with waterways or adjoin open tidal waters.' Many private marshland'
owners require that certain protective stipulations must be met or
construction methods employed before granting rights-.of-way for a
pipeline across their property.
Thus, Federal or State 1/ authorities or private marshland owners may
require, depending upon circumstances and' location, that a pipeline be
buried, that canals be backfilled where possible, that bulkheads be
erected to prevent saltwater intrusion, the kind of dredging equipment
to be used, the inclusion of shut-off valves, specific placement or
disposal of spoil or, in the case of a private landowner, that pipeline
corridors be established.
The Bureau of Land Management has initiated a study to investigate the
extent and character of damage to Louisiana coastal resources from pipe-
line construction. The second phase, or longer term portion of the study,
will attempt to develop criteria for pipeline system planning for
application in OCS ares which have not been subjected to extensive mineral
development. High priority will be given to developing criteria for the
protection of bottom and shore line resources in this study.
1/ The State of Louisiana, by Act 35 of 1971, (LSA, R.S. 51:1362), created
the Lowisiana Advisory Commission on Coastal and Marine Resources. This
Commission is composed of representatives from the fishing, petroleum
and transportation industries as well as the State Government, labor
unions, and private'conservation and recreation groups. We are informed
that the Commission is now holding hearings on the possibilities of
damage to marshlands from future drilling, production and pipeline
operations.
93
PAGENO="0436"
- 430
C. Structures in Conflict with Commercial Fishi~g
The erection of more structures on the OCS may affect commercial
fishing operations. The impact from platforms can be kept to a
minimum, however, by only allowing those structures necessary for
proper development and production of the mineral resources, and by
placing them with due regard to fishing operations. Insufficient
data exists on what effect the incremental discharge of oil may have
on the fishery resource and its supporting food web.
91~
PAGENO="0437"
431
D. Oi]Pollution Effects on Recreation Resources
A major spill or chronic minor spillage could affect the beaches,
water areas and historic sites making them at least temporarily
unuseable for recreational purposes. If such pollution incidents
occurred during periods of normal heavy visitor use, loss of recrea-
tional enjoyment and use and the loss in economic benefit to the
vicinity could be substantial.
Water sports, such as sw*iipming, diving, spearfishing, underwater
photography, fishing for finfish and shellfish, boating and water-
skiing would be most directly affected by an oil spill. Other marine-
related activities such as.beachcombing, shelling, painting, shoreline
nature study, camping and sunbathing woOld be made much less attractive
for an indeterminate period, depending upon the promptness and efficiency
of the clean-up effort.
95
PAGENO="0438"
432
E. Structures in Relation to Shipping
The Port of New Orleans is one of the major commercial arteries in
the United States, and shipping, both to and from the port, is increasing
constantly.~/safety fairways have been established to permit safe passage
of vessel traffic into and out of the port. Anchorage areas are simi-
larly designated for safety purposes.
While exploratory drilling in shipping lanes is permitted with approval
by the Corps of Engineers, installation of fixed structures (as previously
described in Section III. A.2 of this statement) is prohibited. Production
can be initiated, however, by directional drilling from a portion of the
tract outside the lane or from adjacent leaseholds outside of fairways.
Despite the installation of navigational aids, the erection of additional
platforms on the OCS, particularly those adjacent to fairways, poses an
increased hazard to shipping.
~/ See Attachment E.
96
PAGENO="0439"
433.
VI. RelationsbiP between Local Short-Term Use and Main~ena~co.~~
cement of Long-Term P~,oducti!~,j~yj
The short-term use of the proposed sale area would be the extrac-
tion of oil and gas from those tracts which prove eoonomically pro-
ductive. However, since the total hydrocarbon reserves are finite,
the extraction would also lower the long-term productivity of the oil
and gas resources of the Gulf of Mexico.
Limited daily oil spillage will occur from the development of the
proposed tracts. Accidents associ~ated with oil and gas production .
could occur. The long-term effects of oil spillage in the marine
envirofllflezLt are not clearly understood. Although local effects of
oil spills in this and other areas have been summarized in several
reports, the studies have varied in procedure, the extent and com-
position of the products spilled has differed, and a variety of natural
and physical conditions have been present. The long-term effects of
incremental and major spillage of oil on the environment cannot be
projected until reliable data become available which will permit an
analysis of the net result of the combined effects. The additional
stresC which the ecosystem can absorb is limited, but at present,
the bounds of these limitations are not known. St. Aznant observes,
"Certainly the significance of the continual addition to and accumu-
lative effect of sublethal pollutants in the environment is probably
the most important ecological question facing us today". ~/
~J St. Amant, Lyle S., "Biological Effects of Petroleum Exploration and
Production in Coastal Louisiana", Louisiana WLldlife and Fisheries
Commission, December 1970, p. 30.
9T
PAGENO="0440"
434
A primary concern is the effect of the breakdown of oil in the marine
environment. Among the fractions from the petroleum breakdown are
aromatic compounds some of which (toluene and benzene) are very toxic
on contact. Other aromatic compounds, inôlüding those with carcinogenic
properties, are dangerous. if ingested, and there is concern that they
might be concentrated and transferred through the marine food chain to
man. 1/ The regulations under which further development would occur
are the most stringent ever promulgated. With strict enforcement of
these regulations and their further improvement, the possibility of
adverse effects from the proposed action would be minimized.
1/ )1. Blumer, "Oil Pollution of the Sea", ~p~çit., pp. 6-12.
98
PAGENO="0441"
435
VII. Irreversible or Irretrievable Commitment of Resources
With further development of oil bearing OCS lands offshore Louisiana,
the major irreversible or irretrievable commitment of resources would be
the mineral production itself. Some irretrievable loss of marsh or
estuary also would be incurred in the laying of onshore pipelines. Such
losses and their impact can and will be minimized through proper planning
and by using the most appropriate construction techniques. This will be
assured through the cooperalive efforts of this Department and the U.S.
Army, Corps of Engineers (who must approve all construction in navigable
waters) and other responsible Federal and State agencies.
The major significance of oil Bpillage in the marine environment is its
potential effect on wildlife, such as waterfowl and other birds, from
direct contact, and particularly on the delicately balanced relation-
ships among living things and between living things and their environment.
"Marine life is interconnected in a web of interrelated food chains all
of which depends in the end on the chemical situation in the marine
environment. Diversity of .species is an essential characteristic of
these food webs, for diversity is associated with stability in ecological
systems." 1/ At this time, there is no evidence that low level spillage
has led to an irreversible commitment of resources, nor is there any
conclusive evidence that it has not.
1/ Schachter, 0. and Serwer, D., "Marine Pollution Problems and Remedies",
The American Journal of International Law, Vol. 65, 1971, pp. 84-111.
99
PAGENO="0442"
436
* VIII. Alternatives to the Proposed Action
A. Hold the Sale in Modified Form
The proposed sale could be held by offering only those tracts
determined to have a low potential for environmental risks. Those
tracts believed to have high environmental risks could be deleted
from the sale and considered for offering at a later date, should
improved technology or other circumstances warrant. The analysis of
the tracts included in this proposed sale indicates that none pose
environmental risk so high as to be classified as "unacceptable". In
preparation of the final environmental impact statement, the comments
of the reviewers of this draft concerning tracts which may be viewed
by them as having "unacceptable risk" will be considered. This alter-
native could alsO allow for special stipulations (in addition to those
presented in Sec. III. C) on any proposed tract wb~re additional
requirements might be necessary to protect the environment or to mini-
size or eliminate possible conflicts with, or potential damage to,
other resource values or commercial uses of the Gulf of Mexico and
the adjacent land areas.
100
PAGENO="0443"
437
B. ~~raw the Sale
In addition to modification of the proposed sale, all tracts could
be withdrawn from consideration from leasing. A decision to withdraw
the sale completely or to seriously limit the number of tracts to be
leased would lead to either a reduction in projected future energy demand
or development of alternative sources of energy.
The oil and gas from tracts projected for leasing at this sale would
represent a significant contribution toward meeting domestic energy needs.
The sale is expected to supply relatively short..run energy requirements
(i.e. 5 to 15 years). Few alternatives exist to help offset the need
for domestic oil and gas during this period. The alternatives discussed
below are those which are considered to be reasonably available to meet
projected energy demands in the event the proposed sale is withdrawn.
The following represents a list of reasonably available energy sources
or actions which if implemented might be considered as alternatives to
offshore oil and gas in supplying short~.run energy needs:
1. Increased oil imports
2. Increased onshore oil and gas production
3. Increased nuclear power
1~. Increased use of coal
5. Increased hydroelectric power
6. Modification of FPC natural gas pricing
7. Modification of market.demand prorationing systems
8. Oil shale production
In addition to consideration of these alternatives as presented below, this
discussion will consider the possibility of reducing energy demand as a
method which might limit all or some of the energy demand to be satisfied
by this sale.
101
PAGENO="0444"
438
There are additional potential energy sources which hold great promise
for the future. They are not, however, sources which are considered to be
rea~onably available to meet short..run energy demand, since their utilization
will depend on future technologic development economics and adequate
~environaental safeguards.
The development of energy sources such as desulfurizatlon of coal, coal
liquefaction and, gasification, tar sands~ geothermal resources and solar
energy are in this category, but their impact on the energy supply will
not likely be felt until after 1980. These, energy sources are considered
to be supplements rather than true alternatives to offshore oil and gas
development in the short.run.' Therefore, energy sources in this category
will not receive examination, at,this time, as possible alternatives to
this proposed 0GB oil and gas lease sale. ~/
~/ These alternatives have received detailed consideration by the Department
as part of the Environmental Impact Statement and the administrative review
for the Trans..Alaska Pipeline, and are available for examination by all
interested parties.
102
PAGENO="0445"
439
1. Increased Oil Imports
Based upon the Department of the Interior's Economic and Security
Aspects of the Trans-Alaska Pipeline analysis, estimated 1980 otl demand
will most likely be 22 million batrels per day. The comparison of pro-
jected domestic production deficits relative to that projected demand
under the various assumptions considered, ranges from 8 million barrels
per day (41% of demand to as high as 16.2 million barrels per day
(657~ of demand). Such deficits must be provided for either by (i) reduc-
tion in demand as discussed later in this statement, (ii) increased oil
imports, or (iii) development of additionel sources of domestic supply
This section discusses the alternative of increased oil imports which
could be accomplished in two ways:
1. Increased imports under the Mandatory Oil Import Program.
2. Elimination of the Import Program controls, which would allow
lower cost.foreign imports to enter the United States to whatever extent
market systems accommodate the use of such oil in lieu of domestic pro-
duction.
A major issue relative to this consideration is the extent to which
foreign import controls must be maintained to assure domestic production
capabilities required to meet national security needs. The West Coast
is under a quota system which allows overseas imports up to the amount
required td meet area demands in excess of domestic production and
overland imports. In the absence of oil from the proposed OCS sale, it
is assumed that imports would continue to be allowed to come into the
West coast on this same basis. The question of increased imports therefore
103
PAGENO="0446"
440
is primarily one of impact of other areas in the United States.
There are certain environmental advantages associated with the
transporting of oil in United States vessels over which adequate en-
vironmental control can be maintained, versus foreign vessels subject
only to destination controls. By contrast, there can be greater en-
vironmental hazards associated with tanker transportation that parallels
coastal areas versus routes that cross the open oceans. There also can
be significant environmental considerations associated with the addi-
tional facilities required to handle larger ships and increased import
volumes in the eastern and Gulf Coast regions.
Assuming that there would be no substantive change in U.S. energy
policy, analysis indicates that additional import facilities soon will
be needed in the eastern and Gulf regions either with or without the
OCS oil.
The context in which imports are considered within this alternative
relate primarily to the import of approximately 0.1 to 0.2 million barrels
of oil per day in lieu of a like amount of oil and gas to be produced from
the OCS sale.
If the oil import controls were eliminated, water-borne imports could
increase by as much as 7 million barrels per day and the related impacts
could be significantly different from the nature and magnitued of those
directly related to an oil for oil and gas substitution for this sing~e
OCS sale.
10k
PAGENO="0447"
441
a. Mandatory Oil Import ~
The Mandatory Oil Import Program was established by Presidential
Proclamation No. 3279 on March 10, 1959, to "preserve to the g$ateet
extent possible a vigorous, healthy petroleum' industry in the United
States." It is a national security program designed to accomplish the
objectives of Section 232 of the Trade Expansion Act ~f 1962, as amended,
and its predecessor acts.
The most authoritative definitions of these national security objectives
are to be found in the legislation and Proclamation 3279, as amended.
The most recent official analysis of the objectives is in the Report of
the Cabinet Task Force on Oil Import Control, February, 1970. As noted
in that report, objective standards to be used for appraising the threat
to national security are not stated with precision. A study of the
pertinent documents establishes the following criteria:
1. The need to guarantee supplies sufficient to meet the needs of
U.S. military forces and defense industries;
2. The need for sufficient supply of crude oil and its derivatives
to meet essential civilian demands and sustain economic growth; and
3. The need to foster exploration and development so as to insure
against a depletion of reserves to an extent which would jeopardize the
capability of the petroleum industry to meet future demands without un-
due reliance on foreign sources of questionable reliability.
Of necessity, the magnitudes of essential needs mentioned above and the
reliability of foreign sources of oil are continuously evaluated by the
105
PAGENO="0448"
442
responsible government officials. In addition to the quantitative and
and qualitative evaluation of oil supply and demand, there are three
basic functions performed under the Mandatory Oil Import Program: The
degree of import restriction is regulated through the establishment and
periodic revision of a variety of quota levels; permitted imports are
allocated among eligible domestic claimants; and implementing programs
are administered on a day-to-day basis.
Policy direction, coordination, and surveillance of oil imports are
responsibilities of the Director, Office of Emergency Preparedness,
with the advice of the President's Oil Policy Committee which he chairs.
Program administration is a responsibility of the Secretary of the
Interior.
Changes in the Mandatory Oil Import Program are accomplished by Presi-
dential Proclamations and implementing Oil Import Regulations promulgated
by the Secretary of the Interior with the concurrence of the Director,
Office of Emergency Preparedness.
Quotas for the importation of petroleum are published annually for
Petroleum Administration Districts I-IV (States East of the Rocky
Mountains), District V (West Coast States, plus Alaska and Hawaii),
and Puerto Rico. For purposes of import controls, petroleum imports
are categorized as crude, unfinished oils, finished products, No. 2
fuel oil, and residual fuel oil.
106
PAGENO="0449"
443
Except for the importation of unrestricted licensed quantities of residual
fuel from overseas sources into District I (the East Coast States plus
Vermont and West Virginia), of 45,000 barrels per day of No. 2 fuel oil
from Western Hemisphere sources into District I, and of residual fuel
imported overland from Canada into Districts II-IV, product imports are
almost negligible, and have been intentionally discouraged to minimize
the "exportation" of refining capacity.
Special arrangements are made for imports into Puerto Rico, and for ship-
ments of relatively small quantities of products from Puerto Rico (64,000
barrels per day) and the Virgin Islands (15,000 barrels per day) to the
mainland.
Virtually all imported unfinished oils (15% of the license in Districts
I-IV and 25% in District V), as well as crude imports are further pro-
cessed upon entry into the U.S. These oils are imported primarily by
refiners, although some licenses are granted to petrochemical producers.
Allocations to refiners are made according to a sliding scale based on
refinery inputs. Petrochemical allocations are computed as a percentage
of inputs. (11.2% iii Districts I-IV and 11.9% in District V).
The quota for imports into District V is computed as the amount required
to supplement estimated domestic crude production and quota-free overland
imports from Canada so as to meet estimated demand in the District. The
quota for imports into District I-IV, other than residual fuel and certain
products which enter without restriction (Canadian NOL, Western Hemisphere
LPG), was calculated as a percentage of estimated domestic consumption
107
77-463 0 - 72 - pt. 1 - 29
PAGENO="0450"
444
during the early years of the Mandatory Oil Import Program. At the
present time, the quota is computed as 12.2% of estimated domestic
production in Districts I-IV, plus annual increments of the magnitude
recommended by the priority Report of the Cabinet Task Force o~ Oil
Import Control. It can reasonably be assumed that the quota for
Districts I-~IV will be allowed to expand further as increases in
demand continue to outstrip domestic production capacity.
On the average, imported petroleum has been less expensive than domestically
produced petroleum, therefore, increased imports have some effect upon on
petroleum prices. It generally is agreed that, were the oil import quotas
to be substantially increased or the quota system abolished in its entirety,
imports presumably would increase, the domestic price of oil over the short
term wou2d fall (perhaps to the price of imported price of imported oil if
controls were abandoned entirely), consumption would rise somewhat in
response to lower price, and marginal domestic production (primarily onshore)
wotild be forced out of production. It also is possible that domestic
exploration and development incentives would be reduced resulting in a
decline in the development of new domestic oil and gas resources.
If additional imports were allowed under the quota and allocation systems
as they now exist, there would probably be no substantial change from
current trends with respect to the mix of imports between crude, un-
finished oils and products. If the quota system were abolished, however,
it is likely that an increasing proportion of imports would be unfinished
108
PAGENO="0451"
445
oils and products. In effect, the "export" of refining capacity would
be greater if imports were not controlled than it would be if the same
quantity of oil entered under the existing control system.
The Manadory Oil Import Program has been, and continues to be, a
subject involving wide differences of opinion, much of which centers
around a difference of perception of the relative importance of security
of supply and consumer price. Prom a technical standpoint, there also
is disagreement of how the increase of imports within the program or the
elimination of oil import restrictions would affect domestic oil sup
on the level of imports from insecure sources which would be "acceptable,"
and on the level of emergency production capability that could be main-
tained under alternative import assumptions.
In considering the modification or elimination of the Manadatory Oil Import
Program as an alternative to the production of oil and gas from the proposed
OCS sale, a particular concern is the security of Middle East supply sources
which have been characterized by instability and international tension.
The supplies of oil from that area may be subject to interruption for
political or economic reasons with little or no advance warning. In
their comments relative to the Department of the Interior's Analysis of
the Economic and Security Aspects of the Trans-Alaska Pipeline,
the Secretaries of State and Defense and the Director of the
109
PAGENO="0452"
446
Office of Emergency Preparedness indicated their concern that "failure
to obtain desired additional oil supplies (from the North Slope) will
necessitate increasing imports from insecure sources to such high levels
that a long-term foreign supply disruption could slow down industry and
imperil our national security." As noted in Chapter V of the Interior
analysis, failure to bring the 2 million barrels/day of North Slope oil
to market would raise dependence on Eastern Hemisphere oil from a range
of 22 to 34 percent to range 31 to 39 percent of domestic demand in 1980
and from a range of 33 to 41 percent to a range of 40 to 49 percent in 1985.
While the potential volume from this proposed sate is only about 10 percent
the North Slope ;voluine, it involves the same types of consideration but ~f
different impact scales.
A systematic treatment of the oil import subject is contained in
the report of the Cabinet Task Force on Oil Imporl Control, (The Oil
Import Question, 1970). The majority of the task force expressed
a preference for tariffs over the present system as the basic method
of restricting imports. There was, however, concurrence that no more
than 10 percent of U.S. requirements should be met by imports from the
Eastern Hemisphere. Such a limitation would require some type, of con-
tinuing import controls. In a "separate report" section, a minority
argued that the ~ndatory Oil Import program has in fact worked effec-
tively and that the proposed tariff Would be undesirable for a variety
of reasons.
110
PAGENO="0453"
447
A subcommittee of the House Coimnittee on Interior and Insular Affairs
held extensive hearings on the Task Force report; the tone of most of
the testimony was in opposition to the conclusions and recommendations
of the report. 1/
The Oil Import Question identified eight major difficulties that might
attend dependence on foreign supplies:
"(1) War might possibly increase our petroleum requirements beyond
the ability or willingness of foreign sources to supply us.
(2) In a prolonged conventional war, the enemy might sink the
tankers needed to import oil or to carry it to market from
domestic production sources such as Alaska.
(3) Local or regional revolution, hostilities, or guerilla activities
might physically interrupt foreign production or transportation.
(4) Exporting countries might be taken over by radical governments
unwilling to do business with us or our allies.
(5) Communist countries might induce exporting countries to deny
their oil to the West.
(6) A group of exporting countries might act in concert to deny
their oil to us, as occured briefly in the wake of the 1967
Arab-~Israeli War. .
(7) Exporting countries might take over the assets of American or
European companies.
1/ U.S., Congress, House, Committee on Interior and Insular Affairs, Oil
Import Controls, Hearings, before the Subcommittee on Mines and Mining,
March and April, 1970.
ill
PAGENO="0454"
448
(8) Exporting countries might form an effective cartel raising
oil prices substantially."
A subsequent study made by the Petroleum Industry Research Foundation
reexamined the principal assumptions and conclusions of the Task Force
regarding U.S. dependency on oil imports in 1980 under various price
assumptions, (Oil Imports and the National Interest, 1971). This study
raised questions relative to an indicated overstatement of both U.S. pro-
duction and Western Hemisphere imports and understatement of demand for
imports from the Eastern Hemisphere which in turn raised further question
as to the extent to which the United States should depend on Middle East-
ern and North African petroleum sources..
A Joint Economic Committee Background Study relative to the April 15,
1971, OEP Report on price increases in crude oil and gasoline raised
numerous questions relative to the need for, and effectiveness of, the
Mandatory Oil Import Program. 11
Thus, the security problem has two principal parts: a question of military
security, and a question of economic security. Both advocates and critcs
of the Oil Import Program have tended to ~ocus principally on the economic
security issue.
As primarily indicated the crux of, the argument against importing a sub-
stantial fraction of the nation's oil (and hence, for developing the
resources of the proposed OCS scale) is that the sources of additional
foreign oil--in general, the Middle East and Indonesia--are "insecure'~,
1/ U.S., Congress, Joint Economic Committee, Report on Crude Oil and
Gasoline Price Increases of November 1970, a Background Study,
November 3, 1971.
PAGENO="0455"
449
and might be tempted to withold oil exports to the United States for
political and/or economic gain (generally in an environment short of war,
though local conflicts in volatile areas are not inconceivable).
A study by Drs. Schurr and Roman for Resources for the Future 1/ notes that
the question of supply interruptions--
"needs to be dealt with in the interests of both the importing and
exporting countries because supply interruptions are economically
damaging to both. Not only do they have sharp short-run effects
which are economically painful, but their longer-run consequences
can also be damaging if channels of comeerce are diverted into
alternatives which impose a permanent economic penalty upon both
those countries that well oil and those that buy."
However, this interdependence does not guarahtee that interruptions will
not occur. The study points to interrruptions from the shutdown of
Iranian production beginning in 1951, the closure of the Suez Canal and
attendant lengthening of transportation routes in 1956-1957 and again
from 1967 to the present, andquotes Walter Levy, a leading international
oil authority and consultant, as saying:
"Nor can the West rely on the importance of uninterrupted oil
operations and oil revenues to Middle East governments as a
deterrent to hostile actions. Economic considerations, important
as they are to the relatively impoverished countries of the area,
become insignificant when confronted with political neceysities
or political pretentions."
1/ San H. Shurr and Paul T. Roman, et. al., Middle Eastern Oil and the
Western World: Prospects and Problems. NëiE York: American ~1sevier,
1971. -
113
PAGENO="0456"
450
Eleven major oil producing countries have joined the Organization of
Petroleum Exporting Countries (OPEC), in an attempt to obtain greater
bargaining power in their dealings with the international oil companies.
A 5-year agreement reached in 1971 with the Persian Gulf countries pro-
vides for substantial increases in the payments to the host governments.
The other members followed suit with equal or larger increases. In the
second year of the agreement, the OPEC countries now are calling both
for further increases to compensate for the de-valuation of the dollar,
and for participation as part owners in the oil companies exploiting
their resources. If OPEC can maintain cohesiveness in the face of diverse
national deman4s and historical relationships, continuing pressure for
economic and political concessions by the oil-4mporting countries may
be anticipated. The Oil Import Program is an attempt to mitigate any
such pressures.
Based upon the assumption that at least minimum national security controls
will be maintained, little of the additional oil required to be imported
to offset oil and gas from the proposed OCS sale could be provided from
Canada or other "secure" sources.
If the oil import program were abandoned, some of the Canadian supply
might no longer be exported to the United States because of the lower
price of imported supplies.
Calculations of foreign source contributions for 1980 generally assume
that preference will be exhibited in this order, i.e., that Canada will
provide as much as she is able, then the other Western Hemisphere countries
ilk
PAGENO="0457"
demand and total domestic au
by esseatiall~r unlimited I
cost in security and balance ot
:ween gross
;tern Hemisphere supply would be made up
Projections of potential .cuoiatributlons from Canada and other Western
Hemisphere nations are shown in the following table. AddiUonal impact
from Canada will require substantial additional discoveries and further
country. However, these do
production, loca ly in the
rnited States, but Imports slightly more than the amount to the
Canadian East .Coast. Canada's ability and willingness to maintain and
increase its exports depends on its ability to satisfy domestic demands,
to increase production, and to find sufficiently stable and attractive
markets.
115
PAGENO="0458"
452
Projections of Imports from Canada and
Other Western Hemisphere Sources
(million barrels per day)
* Schurr 1.66
N. P.C. --
Draft E.I.S. --
Canada -- -- -- 0.95 1.64
Other W.H. -- -- -- 2.00 2/ 1.80
Total 6/ -- -- -- 2.95 3.44
Maximum Estimate Canada -- -- 1.63 2.20
Other W.H. -- --. -- 3.25 3.50
Total -- 4.85 5.70
1/ Schurr, Sam H., Paul T. Homan, et. al., Middle Eastern Oil and the Western World:
Prospects and Problems, New York, American Elsevier, 1971, p. 28. Schurr gives
* imports in four categories; Middle East, North Africa, Caribbean, and "Other";
the assumption that "other" represents Canada appears consistent with other
projections.
2/ National Petroleum Council, "U. S. Energy Outlook: An Initial Appraisal,
- 1971-1985," Vol. 1, July 15, 1971, pp. 26, 28.
3/ Draft Environmental Impact Statement for the ¶E~ans Alaska Pipeline, prepared
by Department of the Interior, January 1971, p. 185.
4/ Assuming all Latin American excess capacity reaches the United. States: see
National Petroleum Council, p. 28.
2/ Assumed for present purposes, based on the NPC argument that total for 1985
would be 1.80 mb/day.
6/ Obtained by adding minimum (maximum) values for Canada and other Western Hemisphe
7/ Appendix L, part 3, vol. II of USD1, "An Analysis of the Economic and Security...
~/ Synerude Submission, exhibit 2, to Proceedings concerning Application No. 5899
to Albert Energy Resources Conservation Board, 21 September 1971.
Import Source
Canada
Other West. Hem.
Source !2~2 ~2~2I2 ~2I~ !2~9. !2~
Schurr 1/
N.P.C. 2/
Draft EI.S. 3/
Bu. Mines 7/ -
Syncrude 87
.41
-- 0.70
0.76
.78
1.10
0.95
1.60
1:63
Total West.
1.90
2.20
1.64
-- 2.46 2.82
2.20 2:90 ~:2~
Minimum Estimate
Hem. Schurr
2.07
--
3.24
3.77
--
N.P.C.
--
--
--
--
3.70
Draft E.I.S.
--
2.90
4.00
4.8~
* 5.70
4/
~. t~O
116
PAGENO="0459"
453
The contribution of other Western Hemisp~iere nations will be determined
by their attitude toward their oil industries (which, though largely owned
by the international oil companies, are subject to local government regula-
tion and, occasionally, expropriation), by patterns of domestic demand,
financial status, and development preferences, so that the projections of
export potential to the 13. S_ are conjectural.
Although the projection show substantiAl increases in impoi~ts from
South America and the Caribbean ("Other Western Hemisphere"), other sources
cite declining reserve-to-production ratios in Venezuela and the 6.4 percent
annual growth in Latin America demand as evidence that demand in South
America will more than absorb any increases in production. 1/ Recent
discoveries in Ecuador, though still in the preliminary stage, may yield
at least 1 million barrels per day by the late 1970's. 2/
Based upon the assumption that existing institutional structures will
be continued, these projections may be compared with the overall crude oil
deficit projections to obtain a balance that probably would be provided by
the Eastern Hemisphere. 3/ This is reflected in the following table.
However, it must be recognized that if all controls on imports were
abandoned, the deficits would be much higher than is reflected in these
calculations. -
1/ Alberta Energy Resources Conservation Board, Proceedings Concerning
Application No. 5849, September, 1971.
2/ Oil and Gas Journal, February 8, 1971, pp. 24-26.
3/ USD1, "An Analysis of the Economic and Security Aspects of the Thans-
Alaska Pipeline," Vols. I and II, and Suppleaent, 1971.
117
PAGENO="0460"
454
RANGE OF PROJECTED DEPENDENCE ON EASTERN HENISPHERE
1980 and 1985
(million barrels per day) (percent of demand)
Year
.
Contribution of
Western Hemisphere
Domestic Deficit Estimate
Low (8.1) Median (11.6) High
(16
1980
Low (2.95)
5.15 (26%) 8.65 (39%) 13.25
(53~
`
High (`+.85)
3.25 (16%) 6.75 (31%) 11.35
(k5%
1985
Low (3.kk)
Domestic Deficit Estimate
Low (11.1) Median (16.6) High
(22
7.66 (33%) 13.16 (L19%) 18.76
(61%
High (5.70)
5.kO (23%) 10.90 (ko%) 16.50
(53%
It has been argued that the national security objectives of the oil
import program could be met in other ways. Generally, these alternatives
are means of coping with an interruption of supplies: Consuming countries
can draw down oil stocks (which depend on storage capacity), expand
production from remaining sources (with varying incremental volume, cost,
and time lag), or reduce demand by rationing (of varying formality and
intensity). The potential of the first two could be inci~eased by
pre-crisis planning and investment. It should be emphasized that such
measures are alternatives to the oil import program, not to production from
the proposed OCS sale.
118
PAGENO="0461"
4M
The various "security alternatives," such as~ storage, would generally
involve capital investment, import of the oil for the security inventory
(in certain cases) and import of oil to replace, the foregone domestic
productj~, The national security and economic aspects of such alternatives
are discussed in detail in se~'eraj stUdies. .~/
As previously indicated in the introduction to this section, oil
imports could be increased within the structure of the oil import quota
system or the system could be abandoned. In the former case, the
additional imports could be set at levels to specifically replace a
compara~,1e amount of CC'S production. ,
1/ USD1, Trans~-Ajasj~ Pipeline S~rstem, Environmental 1m~act Statement; The
~rn~i9~est1on, op. cit., and, U.S. Congress, House, 0il~,~
.c2.~trols, 1970. op. cit.
PAGENO="0462"
456
b. Relationship of Oil from the Proposed OCS Sale to Foreign Imports
In this analysis, Mid East oil is considered to be an alternative
to the oil and gas which could be produced by the proposed OCS lease
sale. Imported oil from other sources (except Canada) would be similar
in environmental impact to the impacts from importation of Mid East oil. We
have not included Canadian oil, which could be imported by pipeline, as an
alternative because we assume that Canadian oil will be imported to the ex-
tent of Canadian reserve capacjty with,orwithout, the proposed sale.
Table l,"Daily Distribution of Oil from East Louisiana OCS Sale and
Distribution of Alternative Foreign Imports," presents the distribution
and consumption patterns of oil from the proposed sale when the proposed
leases are in full production (estimated 6 years after leasing). The
table also shows the import and distribution pattern of an equivalent
amount of Mid East oil.
The expected range of production for the proposed sale is 75,000 to
150,000 barrels per day. Based on current distribution patterns, this
oil would be consumed as follows: PAD I - 43.8%; PAD II - 25.5%;
PAD III - 29.5%; PAD IV 0 0.3%; and PAD V - 0.9%. Oil from the proposed
sale would be distributed to PAD I by pipeline (42.2%), Tanker (55.9%)
and Barge (1.9%). Oil would be distributed to PAD II by pipeline
(87.4%) and Tanker (12.6%). Oil to PAD III and IV would be entirely
by pipeline.
120
PAGENO="0463"
If) C~
0
0
H
H
H
U
0(f) 0 0~ 0
I1'8. 0 If)r4 0
~ r-I
H
H
H
ifl. 0
f41J 0
~-IU) r-~
H
H
OH 0
~. 0
c~1U I-)
0
0
1-4 ~c1 ~o
4 a)
I) r~ cn 1*~ U
C * ~ 1-4
I - Ii Ia
`8 a)
8 4
U
£0
0 anOa) 0 0
~cc~ 8
PAGENO="0464"
458
We assume that most of `the imported oil to replace the oil from the
OCS sale would be imported in PAD I (74,325 - 148,650 barrels) since
PAD I has the largest sumption under existing patterns and because
oil imported into PAD I can free PAD III production for use in PAD III
and for transfer to'distri~ts II and IV. A small amount of oil (675 1,350,
barrels) would be impotted in PAD V to exactly replace oil from the
proposed sale which .would be' consumed in that district under existing
distribution patterns. JJnder this assumption, the entire amount of
imported oil would `be used in the districts where they are imported
thus freeing oil from PdD III to meet consumption requirements in that
district and in PAD II ~and IV. This oil would be imported into PAD I and
V by tanker and into the other districts in a manner similar to that for
oil from the proposed OCS sale. Consumption in all districts under
this alternative is the same as for oil produced by the proposed OCS sale.
Table 2, "Daily Distribution of Gas from East Louisiana Sale and DistributIon
of Alternative Foreign Imports by Consuming Regions," presents the distribution
of consumption patterns of gas from'the proposed sale when the proposed
leases are in full production (estimated 6 years after leasing) by the
consuming regions of the Future Requirements Committee as reported for
1970. The table also shows the import and distribution patterns of
Mid East oil which would produce an equivaluent amount of energy to the
gas from the proposed sale, We assume, in this analysis, that oil must
substitute for gas because gas is not now available from foreign sources.
`While we assume direct substitutibility of oil for gas, we realize that
the necessary plant conversion to accomplish this substitution may not
be possible in the short-run.
122
PAGENO="0465"
DaiJ~y Distribution o! Gas from East Louisiana Sale and
Distribution of Alternative Poreign Imports
by Consuming ±~egiona
Table 2
New Eng.
Appalachian
Southeast
Great
Lakes
Mid.
Conti.
Gulf
Coast
Hi La.
. Hi Lo
Hi
Lo
Hi
Lo
Hi
Lo
Hi
Lo
7.6
3.8
136.8
68.4
67.2
,33.6
66.8
33.4
7.6
3.8.
114.0
57.0
1.9
1.9
34.2
34.2
16.8
16.8
16.7
16.7
1.9
1.9
28.5
28.5
0
Proposed OCS Sale
Gas consumed
(mmcf per day)
% of sale pro.
Oil equivalent
in terms of btu's
~ (nr bbls per day) ~( 1.4 .6 24.3 12.2 11.9 6.0 11.9 5.9 1.4 .6 20.3 10.2
Inter-District
S~4~tents
Pipeline % 100 100 100 100 100 100 100 100 100 100 100 100
Forej~n Imports.
Total Imports (rn bbls) 71.2 35.6
Oil consumed (m bbls) 1.4 .6 24.3 12.2 11.9 6.0 11.9 5.9 1.4 .6 20.3 10.2
Import Method
Pipeline % 100 100 100 100 100 100 100 100 100 100
Tanker % 100 100
Barge%
Source: Appalachian Mid East Gulf Coast Gulf Coast Gulf Coast Gulf Coast
* Consuming Regions of the ~iture Requirements Committee as reported for 1970
7 . .~`
PAGENO="0466"
1/ Based on distribution of South Lousiana gas to the consuming regions of the Future Requirements
Committee as reported for 1970, each of the regions include the following states: New England,
Maine, Vermont, Massachusetts, New Hampshire, Connecticut, Rhode Island; Appalachian: New York,
Ohio, Pennsylvania, New Jersey, Delaware, Maryland, Kentucky, West Virginia, District of Columbia,
Virginia; Southeast: Tennessee, North Carolina, South.Carolina, Georgia, Alabama, Florida;
Great Lakes: Michigan, Wisconsin, illinois, Indiana; Mid Continent: Kansas, Missouri, Oklahoma;
- and Gulf. Coast: Texas, Arkansas, Mississippi and Louisiana.
2/ Conversion factors fof 5.8 x 106 BTU's per barrel of oil and 1,032 BTU's per cubic feet of gas
were use4 to arrive at 35,587 to T1,17~ barrels of oil as an amount of energy equivalent to
200,000 to 1100,000 tcf of gas.
12k
PAGENO="0467"
461
The expected range of production for the proposed sale is 200,000 to
liOO,000 mcf of gas per day. The equivalent amounts of oil to replace.
this gas would be 35,587 to 71,174 barrels based on conversion factors
of 5.8 X k06 BTU's per barrels of oil and 1,032 BTU's per cubic feet
of gas. The gas from the proposed OCS sale based on current distribution
patterns would be consumed as follows: New England - 1.9%; Appalachian -
34.2%; Southeast 16.8%; Great Lakes - 16.7%; Mid Continent 1.9%; and
Gulf Coast - 28.5%. Gas would be distributed to all regions by pipeline.
We assume that the entire amount of imported oil to replace the gas production.
from the proposed sale would be imported by tankers to the Appalachian
Region (New York). This oil would be consumed in the Appalachian
Region or be transported to New England to meet the equivalent energy
consumption of the gas from the proposed sale. In addition, the
imported oil would replace gas transferred to Appalachia from the
Gulf Coast allowing Gulf Coast gas to flow to the other regions. Dis-
tribution to all regions, except Appalachia, would be by pipeline.
In summary, this alternative involves the import of 109,912 to 219,824
barrels of oil per day to the East Coast (PAD I), primarily to New York,
and 675 to 1,350 barrels of oil per day to the West Coast, PAD V. Based
on the capacity of a 120,000 DWT tanker (921,200 barrels of oil),!'
oil and gas from the proposed OCS sale would require one medium size
tanker about every 4 -8 days to the East Coast and about every 2 - 4
years to the West Coast.
1/ Alyeska Pipeline Service Co *, "Marine Transportation System
Description, Valdez to West Coast Port", June 22., 1971, Table 3.
125
PAGENO="0468"
462
c. Potex~tial E~tviroitinCxkt81 Im~act~
The consideration of environmental impacts in this analysis primarily
relates to additional ship traffic and oil handling associated with
vessels and related handling facilities required for increased oil
imports.
Environmental Impacts of Increased Imports
Since approximately 18,000 to 37,000 barrels of oil per day would be
transported to PAD I by tanker from the proposed OCS sale (table 1),
the net volume of additional oil which would result from increased
imports in lieu of the production from the proposed sale would be
91,912-182,824 barrels per day.
The environmental impacts of increased imports can result from four
sources: (1) increased ship traffic to ports with attendant oil
pollution, (2) the construction and operation of increased capacity
of terminals for the receipt of the oil, (3) the transportation of
the oil from offshore terminals to coastal refineries, and (4) local
pollution potential to the ocean at producer sites abroad.
126
PAGENO="0469"
463
Increase in Ship Traffic
Because the tanker requirements to supply the alternative oil to PAD
V, the West Coast, is extremely. small, this analysis will concentrate
on the tanker requirements for PAD I; however, oil pollution calculations
will be made for PAD V.
This analysis estimates that one medium sized tanker (world standards)
of 120,000 DW7 size will be required every 4-8 days to deliver oil to
PAD I (New York) to supply oil equivalent to the oil and gas that would
be produced by the proposed OCS sale.
Daily ship traffic of ships over 100 gross tons has been estimated for
New York at 97 in 1972 and 95 in 1980. An increase of approximately
670,000 larrels per day has been estimated to result in an additional
5 percent increase in ship traffic at New York. 1/ At this rate, in-
creased daily ship traffic in the New York area as a result of importing
the amount of oil included in this analysis would be approximately
0.6% to 1.2% (average).
Three factors are considered in analyzing possible oil pollution as a
result of increased imports: (a) intentional discharge, (b) accidental
discharge and (c) casualty analysis.
1/ Data from "A Study of Maritime Mobile Satellites" Vol. I "Merchant
Vessel PopulationiDistributiOn Present and Porecast" prepared by
Automated Marine International., Newport Beach, California.
127
PAGENO="0470"
464
(a) Intentional Dischar~
The two primary sources of intentionally discharged oil are shoreside
ballast treatment facilities and underway tank cleaning operations.
Any development of ballast treatment facilities would be accomplished
at the loading end of the system and is discussed in paragraph (iv) below.
It may be assumed that all intentionally discharged oil in U. S. waters from
this alternative will come from tank cleaning operations.
To assess fully the impact of tank cleaning operations, three separate
analyses are necessary; one assuming uncontrolled operations, one
assuming load-on-top (LOT) operations, and one assuming compliance with
IMCO standards proposed in the 1969 amendments to the International
Convention for the Prevention of Pollution of the Sea by Oil, l~54.
At the rate of import of .91,912-182,824 barrels per day in the New York
area, the estimated rates of discharge would be 62-124 barrels per day
from uncontrolled operations, 23-45 barrels per day from LOT tank cleaning
operations or 6 to 10 barrels per day assuming compliance with the IMCO
standards. .1/ Similar spillage for PAD V would be 0.3% to 0.6% of the
PAD I rates.
(b) Accldential Dischar~
The 1970 Pollution Incident Reporting Systems (PIRS) data indicate that
approximately 0.00015% of the oil handled in the U.S. was spilled during
transfer operations. 2/ Applying these figures to the indicated through-
put of imported oil, the average volume and number of spills during trans-
1/ USD1, Trans-Alaska Pip~ine ~ Environmental I~p~ct Statement,
op. cit.
2/ U.S. Coast Guard, "Narine Transport Systems of the Trans-Alaska ~`ipe-
- Line System", 1972. 128
PAGENO="0471"
465
fer operations in the New York area would be approximately 0.1 to 0.3
barrels per day. For the West Coast, the rate would be approximately
0.002 barrels per day.
In the restricted waters surrounding harbors and ports the 1970
experience indicates that about 0.00009 percent of the oil handled is
accidentally discharged. ~/ For the New York area, this would amount
to 0.~9 to 0.18 barrels per day spilled per day.
(c) Casualty~ Analysis
The worldwide tanker casualty analysis indicates that 0.0192 percent of
the oil transported is spilled, exclusive to transfer operations.
Applied to the 91,912 to 182,824 barrels per day throughput, this amount
to approximately 16 to 33 barrels per day discharged from casualties. ~/
However, it must be recognized that an average calculation such as this
has little meaning from an environmental impact standpoint. Such impact
could be nominal where small spills are involved or where the spill occurs
in such a manner as to have littel impact on coastal or restricted water
areas. By contact, a single contastraphic incident such as the break-
up of the Torrey Canyon can have disastrous results. The oil spill*
problem is a subject i~nvo1ving considerable study effort. The first
report of the President's Panel on Oil Spills ~( presents considerable
details relative to the subject.
~/ Ibid.
2/ USD1, Trana-Alaska eline System, op. cit.
* ~/ President's Panel on Oil Spills, The Oil Spill Problem, Executive
Office of the President, Office ~of Science and Technology, First
Report, 1969.
129
PAGENO="0472"
466
(ii) Terminal Requirements
On the basis of the requirement of one additional
tanker visit to the Ne~r. York area (120,000 DWT size) every k-8 days
or an increase in ship traffic of 0.6% to l.»=% in 1980, we estimate that
no additional terminal facilities would be required to handle the imports
necessary to offset oil production from the proposed OCS sale.
(iii) Off-Loading-Facilities
We assume that off-loading facilities presently
in place would be used to service imports in this analysis. Oil would
be moved from the terminal facilities to refineries by ways of existing
pipelines. Environmental risk from these operations would be those
attendant to normal pipeline operations, e.g., pipeline leaks and more
importantly, breaks from construction, anchor dragging, etc. These risks
can be minimized by clearly designating pipeline locations and by the
use of automatic shut-down equipment that would detect any sudden drop
in pressure on the line to first shut off pumping equipment and then
S automatically closing sectionalized valves to minimize the quantity of
oil released.
(iv) Pollution Potential at Loading Site
This alternative would result in increased potential
pollution at the loading end (foreign ports) where pollution control
standards may not be as stringent as United States standards; therefor,
this alternative would result in a potential net increase in pollution
potentialon a world-wide basis.
130
PAGENO="0473"
467
2. Increase Onshore Oil and. G~s P~'odu~tion
a. Descriptipu o~ the Alternative
This alternative would require increased exploration, development
and production of oil and gas from the Alaskan North Slope or from onshore
sources in the lower ~ states. Increasing production in the lower l~8
states has definite limitations when consideration is given to the current
low exploratory and discovery rates, high production levels, continuing
declines in reserves and the time required to explore for and develop
hydrocarbon supplies. Trends in exploration and discovery cannot be easily
and quickly reveràed. Development of North Slope resources cannot occur
prior to the establishment of an environmentally safe transportation system.
Domestic development of oil and gas resources occurred initially onshore
but increasing supplies are beginning~ to come forth fr~ the offshore
areas. In 1970 10.29% of the domest~tc U. S. oil st~pplies and 10.96% of the
domestic U. S. gas supplies come from the Gulf of Mexico. These figures
can be compared with the OCS contribution in 1960 of 1.93% of oil supplies
and 2.l1~% of gas supplies. This increasing contribution to domestic pro-
duction is particularly significant when looked at in terms of remaining
resources onshore and the changing relationship between off di ore and onshore
potential.
Although proved reserves offshore total only 5 billiqn barrels of oil and
37.8 trillion cubic feet (tcf) of gas compared with 39 billion barrels -
onshore (including 9.6 on the North Slope of Alaska) and 285,6 tcf (including
26.0 on the North Slope of Alaska), the "indicated .re~erves plus undis..
covered resources producible with current ec~nomics ~a\nd technology" are more
131
PAGENO="0474"
468
nearly equal - 171 billion barrels and 8ko tcf o!fshore and 2k6 billion
barrels and 260 tcf onshore. Even with the exception of the Naval Petroleum
Reserves (NPR) No. 1 and k and the North Slope of Alaska, potential
onshore reserves could be adequate to meet projected' demands but, drilling
efforts have not resulted in discoveries that would offset increased
production.
Proved crude oil reserves in onshore areas of the Lower k8 states have
declined by approximately 3 billion barrels within the past three years
even though recovery efficiencies have increased. During the period
l96k-1970 a cumulative demand for natural gas totaled 126 tcf or 18 tct'
a year, whereas reserve additions only equalled 17 tcf a year. The most
serious decline occurred in 1968 and 1969 when demand totaled 39 tcf and
reserve additions totaled 22 tcf, The ratio of reserves to production
has fallen to about 8.8 for oil and 11.9 for gas.
Onshore geophysical work, leasing and drilling efforts have declined during
the past decade. A number of factors, all adding up to insufficient
economic attractiveness of onshore oil and gas ventures have been cited
for the decline. Probably the most significant of all, is the increasing
difficulty and cost experience by the industry in finding new oil and
gas reservoirs sufficiently large to permit economic production. Only
30 wildcat wells were needed to find a significant field in the late
l9kO's; the number of wells required had nearly doubled by 1960 and
this trend has not been reversed.
132
PAGENO="0475"
469
The importance of finding large fields becomes apparent when it is noted
that last year 63 percent of U.S. production was from only 26~+ giant
fields, There are over 35,000 oil fields in the United States.
Drilling operations in the United States in 1970 were conducted in 3Lf
States, and a total of 29,k67 wells were drilled. The four leading
States iti drilling activity (Texas, Oklahoma, Louisiana, and Kansas)
accounted for 56 percent of the wells drilled.
Additional production could be obtained from onshore sources in the lower
1+8 States by a variety of methods. Removal of prorationing restrictions
is discussed in a separate section. Improved secondary recovex'y systems
could result in additional production from existing or new wells, but this
would require additional research and production testing. Subsidies or
other economic incentives could add to onshore domestic production capacity,
but there have been few studies of the cost or effectiveness of such a
program. Alternatively, certain additional Federal oil resources onshore
could be leased.
Of the onshore oil and gas sources in the Federal domain, those most
attractive economically are on the North Slope of Alaska and in the
Naval Petroleum Reserves (NPR) at ~lk Hills California and in Alaska
adjacent to the Prudhoe Bay area. The North Slope potential is by all
standards significant, yet enviropmental problems associated with the
transportation of these resources could decrease its desirability.
133
PAGENO="0476"
470
In addition to the question of availability of resources, it is important
to view,the probable distribution of the oil and gas from the proposed 008
sale. A transportation network is fairly well established from various
producing regions to selected consuming areas. Based on 1970 distribution
patterns, the anticipated production from the proposed OCS sale would be
distributed in the following manner:
Consuming Area
New England
Appalachia
Southeast
Great Lakes
Mid-Continent
Gulf Coast
Total
Quantity
Natural Gas (MCP Per Day)if
4,750 - 9,500
85,500 - 171,000
42,000 - 84,000
41,750 - 83,500
4,750 - 9,500
71,250 - 142,500
250,000 - 500,000
1970 Distribution (7.)
1.9
34.2
16.8
16.7
1.9
28.5
100.0
District I
(Includes
District II
(Includes
District III
(Gulf Coast)
- District IV 150 - 300
(Includes Rocky Mountain area)
District V 600 - 1,200
(Inclu4es West Coast area)
Total 75,000 - 150,000
T/~ Distribution of gas taken from reports by AGA on natural gas reserves.
2/ Distribution of oil taken from Figure L-4-2, Net Plows, in TAPS.
Oil (Barrels Per Day)2/
37,175 - 64,350
New England, Appalachia, and South Areas)
18,000 - 36,000
Great Lakes and Mid-Continent areas)
24,075 48,150
42.9
24.0
32.1
0.2
0.8
100.0
13k
PAGENO="0477"
471
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135
PAGENO="0478"
Division of Fossil Fuels
Petroleum Branch
October 20, 1971
chart 2
1970 Supply Distribution and Søurces
(Thousand barrels per day)
Crude
Domestic
and
Receipts
Refined
Imports
Crude and
Refined
Production NGL
Products
NGL
Products
District I
55
684
2,829
579
.
(II)
21
(II)
56
S.A.
45%
Carr. &
S.A.
1,868
87%
(III)
652
(III)
2,769
E. Hen.40%
E. Hem.
13%
(IV)
10
(IV)
--
Canada
15%
(V)
1
(V)
4
District II
1,413
(I)
(III)
(IV)
1,730
--
1,456
274
675
120
534
21
Canada
323
100%
Canada
47
100%
District III
7,816
(II)
(IV)
(V)
15
4
11
--
71
68
3
Carr. &
S.A.
60
~
District' IV
709
(III)
(V)
46
27
19
Canada
48
Canada
9
*
District V
1,320
39
154
380
104
(III)
(IV)
8
31
(III)
(IV)
60
94
~
Canada
Indo.
S.A.
58%
19%
6%
,
Carr. &
Canada
S.A.
87%
13%
PAGENO="0479"
473
From the foregoing, it can be seen that OCS oil and gas would tend to
serve the same areas. If onshore production is to serve as an alterna-
tive, production would have to come from areas that similarly could
serve the Midwest and the East Coast. For gas, Chatt I depicts the
regional distribution of natural gas production to consuming regions in
1970. It can be seen that both the East Coast and the Midwest depend
heavily on the Gulf Coast. Since 1967 reserves have been declining in
the Texas Gulf Coast and have been declining since 1965 in South Louisiana.
With regard to oil, the 1970 supply distribution patterns are shown in
Chart 2. It can be seen that `PAD III would be the main source of any
deficit resulting from not holding the sale.
If NPR 2 at Elk Bills, California were developed the oil and gas would
Cot logically be transported to either the Midwest or the East Coast
markets. The same is also true for North Slope oil, if delivered to the
West Coast as proposed for The Trans-Alaska pipeline route of delivery.
The-following section presents a discussion of environmental aspects of
onshore oil and gas development in the lower 48 states and Alaska.
/ 137
PAGENO="0480"
474
b. Environmental Impact - Lower 48
(i) ~pp~cton Air Quality
The impact of additional petroleum production on air quality
stems principally from the emission of particulates into the atmo~phere;
however, some disturbance results from noise and vibrations.
Particulates
Engine exhausts from boats, vehicles and stationary engines result in
emission of the products of combustion that pollute the air. The impact
of this pollution from the level of activity normally associated with
increases in petroleum production is dependent upon climatic conditions,
topography, and localized conditions. Air quality in immediate areas
will undergo some reduction because of removal of ground cover operations,
dust from vehicle traffic, and from occasional equipment failure or blow-
outs. Quality reduction is generally of a temporary nature and has a.
short-term effect.
Vapor venting from storage tanks and vessels, the burning of waste
petroleum and chemical products, especially those containing some sulphur
compounds, could result in not only increases of particulates into the
atmosphere, but the emission of objectionable odors. These impacts on
the environment are also of a short-term nature.
Noise and vibrations
Noise and vibrations from stationary engines used in drilling, and pro-
duction operations and transporting systems disturbs the natural environ-
ment. The impact exists only for the timeframe that the engines are in
use.
138
PAGENO="0481"
P475
Effects of air ~uaUty reauctioi~
It is highly unlikely that air quality reductions from operatioxts
associated ~tith increased petzroleum production would significantly
alter biological conditions affecting the growth of flora. The
feeding and nesting habits of birds and animals, wilderness qualities
and hunting could be altered as a result of noise and vibrations
associated with increased petroleum operations. After termination
of operations a reversion back toward original `conditions would be
expected.
77-463 0 - 72 - p~. 1 - 31 /
PAGENO="0482"
476
(it~ Impact on Water Quality
Access to Area
The construction of roads for access into prospective petroleum producii
areas could affect water quality in that drainage patterns are disturbed
and some erosion is possible. The dredging of canals could result in
increased turbidity and resuspension of bottom sediments.
Production Operations
Entry of foreign substances such as oil, chemicals, brine, and waste
materials into the water cycle is one of the major environmental risks
associated with petroleum production operations. Spills or leaks
allowing oil, brine, and waste substances to enter the water cycle can
result from human error; external corrosion of pipelines and container
vessels; pipeline breaks from vibrations, earthquakes, landslides, ruptures,
or mechanial failures; burning pits and open ditches and blowouts. Methods
to recover and contain spills are being improved. During production,
large amounts of salt water are usually produced as oil fields age.
Such water can create pollution problems from producing wells on land
or freshwater-covered areas. According to a study of the Interstate
Oil Compact Commission (10CC) up to 25 million barrels of salt water are
produced daily from the Nations's oil wells. Proper disposal of produced
brines has been and continues to be of major concern to producing operators.
lko
PAGENO="0483"
477
Subsurface disposal is.s~rict],y regulated by some sta~e conservation agencies
and disposal of salt water is nOtpermitted in freshwater streams.
The principal causes of water pollution from barges transporting petroleum
on inland and coastal waterways are loading and unloading operations;
collisions; ship operations, such as bilge disposal; and human error.
~Data compiled from the Pollution Incident Reporting System (PIRS) of the
U. 5~ Coast Guard show that there were .295 spills attributed to barges
in 1970. Average size of the spills was estimated. to be appromimately
66 barrels per spill. Even though~spill control methods are being improved,
increased movement of petroleum has increased this pollution problem.
Effects of Water Quality Reduction
Reduction of water quality from removal of vegetation, changes in drainage
patterns, and ~erosion result in turbidity ahd siltation of water reservoirs.
Turbidity is considered to be of short-term direction but can affect flora,
fauna, and fishing. The affects are generally short-term in. duration.
Siltation of water reservoirs has long-range environmental impacts in
that the shape and size of the water reservoir is eltered which could have
an adverse impact on flora, fauna, recreation activities, aesthetic
qualitites and perhaps disturb ecological food chain relationships.
The reduction of water quality and its attendant consequences from
introduction of oil,. chemicals, brine,, and waste materials into the
water cycle ranks as a major environmental risk resulting from increasing
petroleum production. The introduction of oil or brine into the water
1/ National Petroleum Council, ~ivironinenta1 ~serva~~, The Oil and Ga~s
Industries, Vol. II, 1972, pg. l~4T.
iki
PAGENO="0484"
478
cycle can result in adverse biological conditions affecting trees, shrubs,
grass, crops, and aquatic plants, birds, land animals, and fish. The
adverse effect of oil or salt water on environmental quality is not of
long-term duration. Oil spills in shallow water, sheltered lagoons and
estuaries, however, impose natural dispersal restriction, causing the
oil to remain trapped or concentrated in such areas for long periods.
Consequently, in some localities, this adverse effect could be long-term.
Wildlife feeding grounds could be damaged. Emulsifiers and wave action
remove oil from the surface by redistributing it as minute droplets through-
out the water. In this form, pollutants can be harmful to waterfowl if
ingested. Generally, the degree of reduction in water quality will
determine the duration of environmental impact. Major reductions in water
quality that significantly disrupt the food chains in bays, lagoons, and
estuaries could have long-term environmental effects.
l~2
PAGENO="0485"
479
(iii) X~ipaot on tand Qualit~i
The modification of land form necessary for' petroleum
prodi~ction results in varying degrees of environmental impacts on the
physical and chemical land characteristics, biological conditions, cultural
factors, and ecological relationships.
Access to ~he Land
Depending upon the terrain and local conditions, access to the land is
normally from existing road networks, extension of these roads, and
expansion of trails. For initial exploratory work, minimum alternations
are made in roadway systems. After decisions are made to drill in a
given area, an improved ràad system is required for the transportation.
of heavy loads. The drilling site must be cleared of vegetationwhicb
present obstacles. Once production has been established newly constructed
roads are normally improved. From these operations environmental impact
can result from removal of top soil and surface vegetation to establish
right-.of-~way corridors and location sites; and alternation of* drainage
patterns and watershed cover.
Principal environmental land ~1egradation from petroleum operations results
from spiils of oil, chemicals, or brine and the disposal of waste materials.
In the construction of roadways surface vegetation is removed and drainage
patterns are modified * As a result, erosion can ocour * Erosion results
in changes in landform. Trees, shrubs, grass, and crops are directly
affected by removal and may be subjected to indirect affects by modification
of drainage patterns and erosiohal siltation. Although nature attempts
~ ~/~:J
PAGENO="0486"
480
to repair environmental degradation, external help may be required.
Soil erosion and siltation can have both direct and indirect impacts
upon the normal behavior and activity patterns of wildlife. Small
animals and birds would not be significantly affected, although their
number in the immediate vicinity of the operations would decrease in
proportion to disturbances and lost habitats.
The magnitude of the imp~ct of expanded road networks on the regions's
aesthetic, cultural, and recreational qualities would depend upon local
conditions and the extent of construction. For initial exploratory
activities normally only minor expansion to road and trail systems need
be made. These expansions are of a temporary nature but do result in
short-term interruptions of land use for grazing and agriculture. Recrea-
tion in the area, especially hunting, could be disturbed for the short-
term, but it can also be aided by the availability of the roads. Some
aesthetics such as wilderness qualities and landscape design may be
affected for longer timeframes because of the necessity in some areas of
establishing corridors.
For drilling, production, and transportation operations, the roadway
system must be improved over that of exploration activities. There is
increased vehicle and truck traffic, heavier loads to be transported,
the need for access for maintenance in all types of weather conditions,
and right-of-way corridors required for the producing and transportation
of petroleum throughout the life of these operations. Additional
disturbances to the land form and removal of additional surface vegeta-
tion, shrubs, and trees together with disturbances in water drainage
patterns can result in sedimentation and erosion processes that affect
lkk
PAGENO="0487"
481
not only flora biological. conditions, but* result in disturbances of fauna.
The habitat of birds and animals' may be altered beyond the life of the
producing and transporting operations. Land use `arid recreation activities
are also disrupted auring drilling, producing and transportation operations.
Aesthetic and' human interest factors are affected for timed-frames beyond the
terminations of operations. Scenic views and vistas, wilderness qualities,
and physical features in some localities could undergo alternations that
could be considered permanent transformations. Population density, employment,
and cultural life styles would change from drilling, production, and trane-.
portation operations. The degree of change would be dependent upon
activity levels. The change would be of long-term impact and directly
affect access, utility networks, waste disposal, and creation of addi-
tional corridors. These effects would not necessarily be adverse.
While t~he construction of pipeline facilities has the potential for
causing unfavorable `environmental effects, the employment of good
construction techniques cai~i minimize or even eliminate most of these
effects. Farming or grazing lands can usually be restored to their original
condition after no more than one growing season by the replacement of
top.soil and the replariting of grass or crops. The aesthetics of
wilderness areas can be preserved by using existing rights-of-way or
minimizing the width of new rights-of-way, and by replacing grass and /
shrubs on the rights-of-way, and `by using such techniques as feathering
and screening or deflecting entrance ways. Any displacement of wild `
animals will ocóur only during the construction. Banks can and should `
be stabilized to avoid erosion during construction. Acceàs and service `
`roads should be maintained with proper cover, water bars and appropriate
slo.pe to avoid oil erosion. Compressor stations~and other abovegrourid `
1k5
PAGENO="0488"
482
facilities can be located in unobtrusive sites and planted with appro-
priate trees and shrubs to enhance their appearance; location, planting
and exhanst design can be used to abate~excessive noise associated with
operation of the compressor stations. Treatment plants can be located
and equippsd with devices to minimize any adverse effects upon air
quality and suitable means, e.g., evaporation ponds or disposal wells,
can be found for preserving the water quality of the surrounding area.
Obviously, every effort should be taken to avoid the constructian of
pipelines facilities in parks, scenic areas, wildlife refuges and places
* noted for their historic value.
A potential source of land pollution is a blowout during drilling but
the frequency of blowouts is small. One hundred and six blowouts
occurred in drilling 273,000 wells in 8 major oil producing States from
1960 through 1970. Most blowouts are from high pressure gas rather than
bil. Other pollutants from blowouts are drilling mud and salt water. 1/
1/ Environmental Conservation, The Oil and Gas Industries, Volume One,
June 1971, National Petroleum Council, p. 63.
i~~6
PAGENO="0489"
483
(iv) Impact of. ~
Perhaps the greatest adverse environmental impact from operatio~ts
results from oil, chemicals, brine, or waste material pollution. This
pollution can result from spills, leaks, blowouts, human errors, or
equipment failure. Although care is exercised to prevent land pollutioit,
there are no fail safe methods to completely protect the environment.
Land pollution from operations, primarily lalt water and accidental
oil spills, can result in soil sterilization that could be of a long-
term nature and affect not only the topsoil but underground water
quality. These problems were mentioned earlier. Vegetation, microflora,
and crops can be adversely affected for short-or long-term durations
depending upon the volume and toxicity of the pollutant, resistance of
the flora, and the techniques and technology employed. Alterations of
the flora itt turn affect the habitat of animals andnesting,feeding,
and presence of birds. Nature has a tendency to overcome the imbalance
and in some cases can repair the environmental degradation in a short
term. Depending upon the, degree of pollution, land uses such as
agriculture, grazing, forestry, and wilderness can be altered for
varying time frames. `In some cases large pollutant concentration could
be sufficient to kill vegetation, trees or crops and disrupt wilderness
areas for lor~g terms. Recreation in areas subjected to large pollutant
concentrations can also be altered'for long time frames, ~whereas nature
tends to overcome small ~environmental imbalances.
1k7
* .* ;,
PAGENO="0490"
484
Depending upon local conditions, aesthetics such as scenic views and
vistas, wilderness qualities, unique ecosystems, or historical sites
and objects may be altered. The degree of alterations would be dependent
upon the degree of pollutant introduction and local conditions. Ecologica]
relationships such as food chains, salinization of surficial material and
water resources could result from pollutant contamination. The degree
of contamination has a bearing upon the term of environmental impact.
In exploring and pipelining, any spills that occur normally would be small.
Major spills could occur in drilling, production, and in the transporta-
tion of petroleum liquids by marine transportation. The Federal Water
Quality Administration (EPA) estimated that 10,000 oil spills occur a year
of which 2,500 are ground spills. ~/ Most ground spills cause little, ground
pollution. According to the 1970 report of the Office of Pipeline Safety
(Department of Transportation) on spills incidents, there was a total
of 3~7 liquid pipeline accidents.. in those accidents spills averaged
approximately 1,780 barrels of crude oil. Principal cause of over 50
percent of accidents was corrosion. Many onsh9re pipelines are old, dating
back to 1920's before techniques for protection against corrosion became
widely used and continued accidents ean be expected from these lines.
With the development and expanded use of cathodic protection of pipelines,
fewer accidents in new lines would be expected but accidents from old
lines will continue to be of concern.
~/ National Petroleum Council, Environmental Conservation, op.cit., pg. lk6.
1k8
PAGENO="0491"
485
Most operational~oceurrenceS that a~veDsely affect the euvi~onmez~t result
in small amounts of pollu4ants being introduced into the environment.
Nature tends to overcome the imbalance and environmental impact is
generally of short-term duration.
lk9
PAGENO="0492"
486
c. Relationship to Alaska North Slope Oil
Under the Trans-Alaska Pipeline proposal, all of the North Slope
Oil would be delivered to the West Coast (PAD v) within the first few years
after full production. Therefore, North Slope Oil cannot be considered
an alternative for production from the proposed OCS lease sale since
99 percent of the oil from the prosed sale would be consumed outside PAD V.
d. Advantages of the Alternative
* Increasing onshore production to replace anticipated reserves
of oil and gas from the proposed OCS sale, would allow more time for other
energy sources to be developed and therefore possibly decrease the need
for reliance on future offshore development. Environmental impact of
oil and gas development in the lower `+8 states can be avoided or minimized
by proper planning, and the utilization of available construction techniques.
Accidents could result in spills, but possibilities of such accidents are
considered minimal. In the event spills or leaks occur, most of the
Dollution can be confined to a limited area. The overland transportation
of the oil and gas is simi'ar in impac.t to the onshore transportation
phase of offshore production. In comparison with other alternatives,
this option avoids the problem of substitutability in that oil and gas
is being supplied in the form required for existing use facilities and
environment, thereby avoiding the need for conversion to use another
form of energy source.
150
PAGENO="0493"
487
~Phe enhanced economic positi.on of the Qr~shore petroleum industry would tend
to compensate for the reduction of income to the offshore industry if the
proposed sale were not held, but there could be some dislocation among
individual companies.
Substantial reserves exist in the Naval Petroleum Reserves both in the
lower 1F8 States and on the North of Alaska, adequate to sustain production
higher than that anticipated from the proposed sale.
The most economically attractive onshore sources of oil andgas are located
either on the Naval Petroleum Reserves No. 1 and k, or on the Alaskan North
Slope. Exploitation of the Naval Petx'oleum Reserves would negate, the
national security purposes for which they were established. Exploitation
of the oil resources of the North Slope of Alaska is contemplated by the
oil companies concerned, and an application for a permit for a pipeline
to bring the oil to market is under consideration. Issuance of such
a permit would result in the exploitation of the North Slope. North
Slope oil is not, however, presently intended for the same markets no~i
being served by the Louisiana OCS. Alaska gas would not be made
available until a route is agreed upon for a gas pipeline and the
construction is allowed to take place.
Additional production from onshore sources other than the Naval Petroleum )
Reserves and the North Slope would likely be from existing provinces
where~production is not now deemed economic. Stimulation of additional
PAGENO="0494"
488
exploration and production probably would require subsidy of some form
for onshore production, or a general rise in prices. A general price
rise would not alter relative economics; that is, development of offshore
resources would continue to be preferable on economic grounds. Either
measure--subsidy or price rise--would impose additional costs on the
consumer and the economy;
152
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489
3. Increased Nuclear Power
a. Description o~ the Alternative
The use of nuclear power as a commercial energy source is expected
to increase considerably in the next 15 years. Installed capacity in 1970
was approximately 7,000 ~. This is projected to increase to 59,000-67,000
MW by 1975, 150,000 MW by 1980, and 300,000 MW by 1985.
~st of the currently operating and planned nuclear plants utilize light
water reactors. In such reactors, the heat energy created in nuclear
fission is removed by the circulation qf water through the fuel core to
generate steAm to turn turbine generators to produce electricity. Four
high-temperature, gas-cooled reactors are also completed or on order.
These utilize helium circulating through the fuel core to boil water
for steam to turn the turbine generators. These reactors are all of the
burner type which consume the naturally occuring isotope of uranium,
ura~uium-235 (0.72% abundance). Breeder types of reactors such as the
liquid metal fast breeder are not expected to be available for commercial
use until the mid 1980's. Thermonuclear fusion ree~ctors are not expected
to be a commercial reality ~much before year 2000.
Since planning, licensing, and construction lead times are approximately
six to eight years, no new additional nuclear plants could be expected
to be a substitute for any OCS oil delivered before 1980.
However, subsequent to 1980, nuclear power plants generating electricity
could be considered -as a substitute for expanded oil and gas production
153
PAGENO="0496"
490
from OCS leasing to the extent that electrical energy could directly replace
oil and gas uses. For the size of incremental production estimated to be
provided from the proposed leases, additional nuclear power plants could
substitute for oil and gas fired electric generating power plants that
otherwise would be supplied by the proposed lease. Electricity produced
from nuclear power also could substitute for house-hold heating ~o the
extent that heating oils and natural gas would come from OCS leasing.
On the assumption that all of the oil production from the proposed leases
would be used to provide fuel for additional oil and gas fired power plants,
five to ten additional nuclear plants of 1,000 megawatts capacity each
would have to be constructed and in operation bet~ieen 1980 and 1985. This
would be as much as two or more years later than the additional production
would begin from the proposed OCS lease. This would represent approxi~atel
a five percent increase in planned capacity.
b. Environmental In~act of the Alternative
The precise environmental impact of additional nuclear plants
cannot be assessed until site location, reactor types and construction
methods are determined. Therefore, their impact can be discussed only in
general in the subsequent text.
i/ The proposed leases are estimated to provide 75-150 thousand bbls.
of crude oil and 250.~500 million Cu. ft. of natural gas per day six years
after leasing. This is the energy equivalent of 245-k90 trillion
BTU annually, 670- l3l~0 billion BTU daily, and 28-. ~6 billion BTtJ hourly.
15k
PAGENO="0497"
491
Environmental problems which could occur as a result of substituting nucleai~
power for oil and gas generating power include those associated with surface
and subsurface mining of uranium ore, changes in land use, disposal of
the waste heat generated by the less efficient nuclear plants, a very
small risk of a serious accident, and the safe storage of highly radio-
active waste materials.
(i) Uranium Mtning and Milling
The construction and operation of additional nuclear generating
plants would require additional mining and milling of uranium ore to supply
the fuel elements for these plants. An incremental operating capacity of
7,500 M~! by 1985 would require !~,200 tons of 13308 for the first core fuels
and 1,300 tons of 13308 for annual reloads without plutonium recycling and
900 tons of ~3°8 with plutonium recycling. At an average ore grade of
0.20 percent U308~ a total ore output of over two million tons would be
required to supply the uranium for the first core fuels, and an annual
output of 0.5 or ~nore million tons would be required for reloads. As
most of the known and potential reserves are concentrated in New Mexico,
Wyoming, and the Colorado Plateau, the incremental mining and milling
activity would be expected to occur there. In 1970, 53% of production
came from underground mines, with most of the remainder coming from openS-pit
mines,
The mining and milling of uranium ore creates certain environmental problems,
particularly land use conflicts and biological hazards. Most of these can
be prevented or minimized by utilizing known measures.
:~.55
77-463 0 - 72 - pt. 1 - 32
PAGENO="0498"
492
In underground mining' in the 1950's excessive exposure to radioactive radon
1/
daughter products ~- resulted in a high incidence of lung cancer. However,
the recommended annual expose levels have been vastly reduced in the past
decade. By maintaining these lower levels, the incidence of lung cancer
among underground uranium miners is expected to be reduced to a level not
significantly higher than that of the population as a whole.
Uranium mining is largely concentrated in relatively isolated areas distant
from large population centers and urban areas. Nontheless, it does have
an adverse aesthetic impact in the areas in which it occurs, from the
removal of the vegetative cover and the creation of overburden and waste
rock. Open-pit nines require considerable acreage, reducing the suitabilIty
of that area for other land use such as grazing, wildlife, and some outdoor
types of recreation. This is a particularly acute problem for uranium as
opposed to other types of open-pit mining, given the comparatively high
amount of overburden removed for the quantity of uranium ore produced.
For underground mining, the extraction of deeper ores will tend to require
continually larger waste rock dump areas. Planning for sequential land
use, followed by the reclamation of mined land and the backfiling of mined-
out slopes with waste rock, can substantially reduce these land use problems.
Such measures will be taken whenever possible.
1/ Radon is arodioactive gas produced by spontaneous decay of uranium.
The gas, inself, disintegrates spontaneously into a so called daughter
products. In the process of spontaneous disintegration, highly
radioactive emissions occur.
.156
PAGENO="0499"
493
Because of the ow concentration of U308 in uranium ore, milling the ore
produces consid4rable amounts of tailings. The milling operation for
7,500 NW of capacity over a 25 year operating life would generate some
15 million tons of tailings. These tailings contain radioactive products
and.if left exposed on the surface, these tailings are subject to erosion
and leaching, which results in the radioactive products entering surface
and ground water systems. In areas downstream to where milling has occurred,
concentrations of these elements substantially above recommended limits
have been found in river water, river sediments, flora and fauna. The
specific adverse effects of these on the overall health of biota are not
fully known; current evidence does, however, indicate increasing concen-
trations through upward stages of food chains. Adequate, methods do exist
and will be used to prevent erosion and leaching and to retain harmful
mill ~ffluents.
Because of their radioactivity, mill tailings pose lo~ig-terxn risks to
human health if used as fill material. They are also a hostile environ-
ment for nearly all biota. Above-ground storage which minimizes
erosion requires that they be covered with gravel or dirt upon which
a vegetative cover can be established. Above-ground storage does
require considerable land area, which displaces other potential uses.
Subsequently, in the future an increasing amount of taiLings may be
utilized to backfill mined-out slopes.
157
PAGENO="0500"
494
(ii) Power Plant Construction and Operation
Assuming an average of three 1,000 MW units per site, the construction
of 7,500 MW of additional nuclear capacity by 1985 could require three
additional plant sites (less if some unite were added to existing
plants). Under current siting criteria, these would be located at
some distance from population centers. Assuming 500 acres per site
(based upon an exclusion area of one-half mile radius around each
plant), these plants, would require a total up to 1,500 acres from which
other uses would be excluded.
Depending on the capacity of the transmission lines which would be
required if nuclear energy were to substitute for the product,ion from
the proposed OCS sale, the transmission line rights-of-way would require
the .use of ten to fifteen acres per mile of line. Certain types of
development such as residences, would be excluded although such land
would still be largely available for other purposes, such as recreation.
These additional transmission lines would have ax± adverse aesthetic
impact by disrupting some scenic vistas.
Construction of the plants would present some short-run environmental
problems, such as the erosion of excavated materials. Special measures
to prevent erosion of excavated materials with subsequent siltation will
be taken.
Operation of the nuclear plants will generate conmmiderable amounts of
waste heat given their comparatively lower thermal efficiency (around
158
PAGENO="0501"
495
33% compared to ko% for new fossil-fueled thermal efficiency plants).
Given this difference in efficiency and on the assumption that fossil
fuel plants release around 25% 1" of their waste heat directly into
the atmosphere, a light water reactor would release approximately
75-80% more waste heat into its cooking, water than a fossil fuel
plant of similar size. The effects of this waste heat will depend
upon the cooling method used and the location of the plant.
Assuming a 15-20 degree F temperature rise,, a "once through" method
of direct discharge into the original source for a 1,000 MW plant would
require 270-360 billion gallons of water per year. The effects of
this heated water depend in part on the size of the body of water into
which it is discharged. The effects along ocean sites, the Great
Lakes, and very large rivers are likely to be modest as the heat is
more readily dispersed and more easily avoidable by aquatic species.
Along smaller lakes and rivers or in bays with limited circulation,
the effects can be more significant. Within the affected areas,
higher water temperatures can produce fish kills, interfere with
fish reproduction, disrupt food chains, decrease dissolved oxygen
content, drive out desirable aquatic speices, and encourage the growth
of undesirable algae which may speed up eutrophication within the
limits of the affected area. However, the heat can be used for
aquaculture and other beneficial uses.
~/ E]aergy Research Needs, Section VI, Resources for the Future.
A E C estimates a 10% - 15% range.
~/ Based on the above Resources for the Future estimate. The range
would be 50% - 60% based on A H C estimates.
159
PAGENO="0502"
496
The use of wet cooking towers, removing the heathy evaporation into
the atmosphere, would not pose the problems of adverse thermal effects.
However, water vapor from the cooling operations could have substantial
effects on local haze, fog, cloud, and ice formation. Chemicals re-
leased in the cooled water or evaporated plume could also have adverse
effects on downstream and downwind biota.
The use of cooling ponds would produce less evaporation than wet cooling
towers, but haze, fog, cloud, and ice formation would still occur
during periods of sub-freezing temperatures. The ponds require addi-
tional acreage (an estimated 1,000-2,000 acres per 1,000 NW unit.)
These may have recreational uses, but they would also displace previous
land uses.
Nuclear power plants, unlike fossil fuel plants, do not emit the usual
products of combustion such as particulates, sulphur oxides, and nitro-
gen oxide. Hence, they do not generate the air pollution problems
stemming from, or require control measures for, such emissions. However,
they do produce radioactive emission whose release must be strictly
limited if adverse affects to the health of humans and other biota
are to be avoided.
In the normal operation of the incremental nuclear generating units,
there would be very small amounts of radionuclides discharged in the
cooling water and gaseous plant effluents. But, assuming that present
standards will be maintained and enforced (these limit the release of
radioactivity to no more than would expose an individual at the plant
boundary to 1% of the individual maximums allowed), the effects of the
160
PAGENO="0503"
497
amounts releases are likely to be negligible, as the average additional
annua~. dose which the affected population would receive would be three
to fcur orders of magnitude less than the average level of natural
radiation exposure.
The operation of nuclear plants poses some risk of accidents. Nuclear
plants are designed to minimize accidents or their adverse effects if
one does occur, utilizing a "defense-in depth" principle. This includes
designing and constructing plants in such a way that accidents are
prevented, designing and constructing plants to contain the effects of
accident which do occur, and siting reactors away from areas of high
population density. Plants are designed to withstand a design basis
accident (DBA), defined as the worst malfunction considered to have
a probability of occurrence high enough to warrant corrective action.
For light water reactors, the worst DBA considered is usually a major
rupture in the cooling system. The maximum radiation dose which
could be received at the site boundary if such an accident occurred
is estimnted for some plants to not exceed the annual dose obtained
from natural radioactivity.
(iii) T~~portation
The nuclear fuel cycle from mining and milling through fuel' pre-
paration, power plant use and reprocessing, to the final storage of
waste materials requires the transportation of radioactive materials
by truck or rail at many stages. The transportation of spent fuel
elements from reactors to processing plants and of high-level waste
from reprocessing plants to storage sites poses a potential hazard
161
PAGENO="0504"
498
of considerable magnitude. Existing transportation regulations and
cask designs have been developed to insure that even if accidents in
transporting these materials do occur, no radioactivity will be re- /
leased to the environment. For the transport of the spent \fuels and
high-level wastes associated with an incremental 7,500 NW capacity,
a very samli number of accidents could be expected to occur during a
25-year operating life. However, these are not expected to produce
any major adverse effects other than those which could be expected
from any other transportation accident.
(iv) Fuel Reprocessing and High-Level Waste Storage
Spend fuel assemblies from reactors are first partially cooled at the
plant site and then transported to fuel reprooessing plants where
usable nuclear fuel materials are recovered from them and radioactive
wastes are seperated. Existing reprocessing capacity is sufficient to
handle this relatively small incremental load as an alternative to the
production from the proposed OCS sale.
While radioactive emissions during reprocessing are greater than those
occurring during normal power generation, the estimated dose to the
affected population is still two orders of magnitude below natural
levels. Hence, the impact of these emissions is not expected to be
significant, even though the chronic effects of such low level radio-
activity are not yet wholly known. S
The high-level radioactive wastes remaining after reprocessing are
~irst concentrated and stored in solution for five years, then evap-
orated to solids, sealed in containers, and put into long-term storage.
162
PAGENO="0505"
499
The 7,500 MW of incremental capacity would produce around 60,000 to
80,000 gallons of high-level waste per year, using a cumulative storage
capacity of 300,000 to koo,000 gallons. This liquid waste, when evap-
orated, would yield around £00 to 800 cubic feet/year in solid waste
materials for each year of operation.
Because of their high concentrations of radioactive nuclides
very slow rates of decay, these waste materials must be totally
isolated from the biosphere for hundreds of thousands of years if serious
adverse effects to. all living organisms are to be avoided. Storage
in salt beds is believed to pose fewer problems. than any other method
of storage. Pilot studies have been conducted for several years and
are contiruing to determine the feasibility of the concept. In the
meantime, wastes will continue to be stored in below surface man-
made engineered storage facilities.
163
PAGENO="0506"
500
References
Joint Committee on Atomic Energy, Congress of the United States,
Environmental Effects of Producing Electric Power, Part 1, 91:1
(Wasbin~ton: Government Printing Office, 1969)
National Petroleum Council, U.S. Energy Outlook: An Initial Appraisal,
l9~7l-I~85, Vol. II (November, 1971)
Patterson, John, U.S. Atomic Energy Commission, "Outlook of Nuclear Fuel",~
paper presented September 29, 1970 at IEEE-AS~ conference,
Pittsburg.
Resources for the Future, Inc. Energy Research Needs (October, 1971)
Rock, R.L., and Walker, D.K., U.S. Bureau of Mines, USD1, Controlling
Employee Exposure to Alpha Radiation in Underground Uranium Mines
(Washington: GPO, 1970)
Oak Ridge National Laboratory, Siting of Fuel Reprocessing Plants and Waste
Management Facilities, ORNL-445l (July, 1969)
U.S. Atomic Energy Commission, Draft Detailed Statement of the Environmental
Consideration Related to the Proposed Issuance of Operating Licenses
to the Florida Power and Light Company for Turkey Point Plant Units
3 and 4 (February, 1972)
USAEC, Draft Supplemental Detailed Statement on teh Environmental Con-
siderations Related to. the Proposed Issuance of an Operating
License to the Wisconsin Electric Power Company for Point Beach
Nuclear Units 1 and 2, (February, 1972)
USAEC, Environmental Statement: Radioactive Waste Repository, Lyons,
Kansas (June, 1971)
USAEC, The Nuclear Industry - 1971 (Washington: GPO, 1971)
U.S. Burau of Mines, USD1, Mineral Facts and Problems, 1970
Washington: GPO, 1970)
161-f
PAGENO="0507"
501
4. Increased Use o~ Coal
Since coal is the most abundant fossil fuel in the Nation, full con-
sideration must be given to its use in solid form or for conversion
into gaseous or liquid forms for meeting energy demands. Since it
has the potential for use in any of these forms, it could be a feasible
substitute for additional natural petroleum and gas supplies, provided
economically feasible use technologies can be developed and applied.
The major problems associated with increased use of coal as a solid fuel
are those associated with the meeting of air quality restrictions. These
are particularly significant relative to power generation uses since the
largest market for coal is in the eastern portion of the Nation where
coal.quality, in terms of sulphur content, tends to be the lowest. The
major deposits of low sulphur coal are in the western states. Considerable
research is being devoted to the development of economically feasible
processes for the treatment of coal before burning to remove excess sulphur,
to improve combustion processes, and to remove pOllutants from stack
gasses after combustion. Where air quality standards can be met, coal
substitute for oil in power generation when facilities are designed to
use solid fuels. To the extent of such substitution feasibility,
including factors of geographic energy source and use patterns, coal
could be considered as a potential partial substitute for oil produced
from the East Louisiana sale. Similarly, coal based synthetics can be
165
PAGENO="0508"
502
considered as a potential partial substitute for gas from the proposed
lease sale. However, no coal-to-pipeline-gas processes have yet reached
a point of commercial application and costs of synthetic gas may be
comparable to the estimated prices of foreign gas shipped in liquefied
form by tanker.
The following sections describe the problems of use of coal as a solid
fuel and the related mining and processing factors.
a. Description of the Alternative
Coal underlies 458,600 square miles in 37 states. The remaining
coal resources were estimated, as of January 1, 1967, to total 3,210 billion
short tone. ~/ The Department of the Interior slightly revised that estimate
to 3,200 billion short tons in January 1972 and further estimated that
2,800 billion short tons are at depths less than 3,000 feet, and 1,600
billion short tons are less than 1,000 feet below the surface. About 390
billion short tons are commercially recoverable under present economic
conditions and mining technology. 2/
The quality of coal has become increasingly important as restrictions are
updated, and new regulations are imposed by local, State, and Federal
governments on the utilization of fuel containing excessive quantities
of sulphur, nitrogen, and particulate matter. As a result of these
1/ Paul Averitt, "Coal Resources of the United States: January 1, 1967,"
U. S. Geological Survey, Bulletin 1275, p. 1, 1969.
2/ U. S. Congress, Senate Committee on Interior and Insular Affairs, The
President's Energy Message, A National Fuels and Energy Policy Study,
Hearings, 1971, 92nd Congress, 1st Session, p. 90.
166
PAGENO="0509"
503
restrictions, low-sulfur coal, or coal containing less than one percent
sulfur, is in great demand for power generation, steel, and manufacturing.
Throughout the United States, utility companies in particular and other
fossil fuel consumers are being forced by public demand and law to use
low-sulfur coal.
At present, the greatest need is for low-sulfur bituminous coal with a
low ash fusion temperature for use in the power plants of the eastern
United States. There is an acute shortage of this type of coal east
of the Mississippi River; however, there is an abundant supply of low~-
sulfur bituminous and sub-bituminous coal and lignite in the Rocky
Mountain States that could be used in power generation, coal gasification,
and coal liquefaction plants.
The remaining resources of low-sulfur bituminous and sub-bituminous coal
and lignite in the Rocky Mountain States were estimated to be 874 billion
short tons as of January 1, 1967. ~/ Of this amount 188 billion short tons
of the remaining resources are in beds, usually ten feet or more thick, and
less than 1,000 feet below the surface. The recoverable resources are
about 440 billion short tons to a depth of 3,000 feet and 94 billion short
tons to a depth of 1,000 feet.
Since 1967, coal production in the Rocky Mountain States has been about
100 million short tons. Therefore, it is assumed that 94 billion short
tons still are available as of January 1972. al
1/ Aver itt, ~p.cit., p * 33.
2/ Averitt, 1972, oral coimnunication.
167
PAGENO="0510"
504
Approximately 45 billion short tons of the recoverable resources could be
extrac,ted by open pit mining, 1/ and 25 billion short tons are so well-
known as to. character, thickness, and tonnage that they are considered
as reserves. 2/
It is estimated that the East Louisiana sale will produce 75-150,000
barrels of oil per day and 200-400,000 MCF of gas per day. The energy
supplied by this sale would be equivalent, on an annual basis, to the
energy produced by 10-20.9 million short tons of 11,000 BTTJ/lb. coal.
In the five-year period from 19.80 to 1985, production from the sale would
supply the equivalent of from 51 to 104.6 million short tons of coal.
The coal resources of the Rocky Mountain States, if interchangeable for
other energy source forms, could be more than adequate to provide the
energy needed even if the East Louisiana sale is not held. The degree of
its substitutability in solid or synthetic, product form could be a con-
trolling factor. The impact of developing a coal industry capable of
producing approximately 100 million short tons of coal during the five-year
period from 1980-1985 .might have substantial environmental and socio-
economic effects.
At present, very large open pit coal mines may produce five million short
tons of coal per year. Very large underground mines may produce 2 million
short tons per year. In order for the Rocky Mountain coal industry.to
produce the additional 10-20.9 million short tons needed each year from
1/ Ibid.
2/ USDI,_Bureau of Mines, "Stripable Reserves of Bituminous Coal and'
Lignite in' the United, States", Information Circular `No 8531 15
168 , p.
PAGENO="0511"
505
1980-1985, approximately 11 large underground !nines or five large open
pit mines, or smaller mines, or some combination thereof, would be
necessary. Such mines could become operational after considerable planning
based on determining the adequacy of large reserves, adequacy of water
supplies, construction of utility and transportation facilities, and
determination of market requirements. Finally, a labor force would have
to~be found and trained to produce the coal within the health and safety
standards of the Federal Government. Local, State, and Federal Government
regulations regarding air, water, and noise pollution also would have to
be met.
About 36 percent of the coal land in the Rocky Mountain States is owned
by the Federal Government. The remainder is largely owned by Indian
tribes, Western railroads, and State governments. The Department of the
Interior is responsible for leasing and managing public-and Indian-owned
coal-bearing land. -
Many very thick and closely spaced beds of lignite and sub-bituminous
coal, containing about one-half of the remaining coal resources in the
Rocky Mountain States, underlie the noi~thern part of the Great Plains.
The coal generally has a low ash fusion temperature, a low sulfur content,
a substantially reduced heating value, and high volatile matter content.
These characteristics suggest that this coal would be preferred for power
generation, gasification, and liquefaction.
169
PAGENO="0512"
506
The coal resources of the Northern Great Plains are so large that the
locations of many open pit and underground mines would very likely be
dictated by proximity to adequate water supplies, existing transportation
facilities, and nearby planned power, gasification, and liquefaction
plants. Most of t1~e larger deposits are owned by the Federal Government,
Indian tribes, railroads, and State Governments. Therefore, the.mining,
rehabilitation, and environmental controls and procedures practiced by
most mining operations would be administered by the Department of the
Interior and cooperating State governments and railroads.
The total remaining coal resources in the basins of the Rocky Mount-aim
are very large, nearly as great as those in the Northern Great Plains,
but extremely thick beds are a rarity rather than a conmion occurrence.
At a few localities within the Rocky Mountain States, deposits of metallurgical
grade bituminous coal and anthracite are known; some of these deposits
are actively mined. Generally, the coal from these deposits is not suited
for power generation, gasification and liquefaction.
The coal resources of the Rocky Mountain basins are so large that the
locations of open pit and underground mines would likely be determined
by x~earness to adequate water supplies, transportation facilities, and.
the plans for nine~-mouth power, gasification, and liquefaction plants.
About 45 percent of the coal resources of the basins is owned -by the
Federal Government, 13 percent by Indian tribes, 13 percent by State
governments., and 12 percent by railroads. The large amount of governmental
170
PAGENO="0513"
507
ownership of the resources indicates that mining, rehabilitation, and
environmental controls and procedures imposed on mining operations could
be fully effective, since they would be administered in large part by
the Department of the Interior .and cooperating State governments.
b. Use of Coal as a Solid Fuel
The expanded use of coal power generation could be a viable alternative
to the use of less abundant fossil fuels (oil and gas) and nuclear energy.
Major limiting considerations are those associated with the extent to
which it can substitute for the form of energy source to be displaced' and,
the solving of problems associated with the meeting of air quality standards.
The sulfur content of U. S. coals ranges from 0.5 to over 7 percent.
About 65 percent contain 1.0 percent or less, and moSt of such coals
are found in the western states, far removed from the area served by oil
and gas produced from the' proposed East Louisiana OCS sale.
Most current production comes from states east of the Mississippi from `
which only 20 percent of the reserves contain 1.0 percent or less sulfur,
while 43 percent contain more than 3.0 percent sulfur. Unless control
measures are available and' employed, during combustion sulfur oxides are
emitted to the atmosphere causing undesirable air pollution environmental
impacts in direct proportion to the sulfur content of the' coal feedstock.. `
Recent environmental regulations applicable to mew electric generating
facilities restrict the emission of sulfur dioxide to 1.2 pounds per million
BTU to fuel as fired; for bituminous coal, this is equivalent to `about ` `
171 `,
77-463 0 - 72 - pt. 1 - 33
PAGENO="0514"
508
0.7 percent sulfur. It is necessary, therefore, to reduce the sulfur*
content of the coal prior to burning or to remove sulfur oxides from
stack gases following combustion in order that coal may continue to be
used for power generation.
Mechanical cleaning of raw coal is only a partial solution to the problem,
since only a small fraction of American coals can be cleaned sufficiently
to meet sulfur emission controls and standards. Mechanical cleaning affects
only pyritic sulfur and leaves untouched the 40 to 60 percent of the sulfur
that is bound in the organic structure of the coal. In addition, freeing
the small particles in which pyrites occur requires fine grinding prior
to cleaning, which in turn adversely affects the cleaning efficiency and
restricts the methods of cleaning that can be applied. Tests of some 322
coals representing most of the steam coals produced in eastern U. S. showed
that, under optimum conditions and present technology, less than 20 percent
of these coals could be cleaned to 0.7% sulfur (Bureau of Mines).
The status of technology for abatement and control of sulfur oxides in
combustion gas was recently reviewed by the National Academy of Engineers,
National Research Council, whose report concluded that ". . . commercially
proven technology for control of sulphur oxides from combustion processes
does not exist". The conclusion remains valid, although a number of
systems are either being installed or operated at the present time on
commercial plants to determine the operational and economic feasibilities
of the processes. 1/
1/ National Research Council (NRC), "Abatement of Sulfur Oxide Emissions
From Stationary Combustion Sources", 1970, National Technical
Information Service, PB 192887, February 15, 1970.
172
PAGENO="0515"
509
President. Nixon in his June 4, 1971, message to the Congress on C1eai~ Energy
emphasized the need for a greatly expanded effort on sulfuroxide control
technology. Federal funding is being directed to demonstrate six
different techniques during the next three or four years.
Coal reserves are ample to meet virtually any ~demand for whieh they can
qualify. Even if the sulfur content of coal is reduced to 0.7% (extremely
difficult for most coals using existing technology), sulfur oxide emissions
pe~ BTU (unit of energy) would still be 1/3 higher than that from oil with
the same sulfur content (but much more readily achievable, and routinely
achieved in commercial applications).
Total costs of cleaned coal, for processes which- do not achieve 0.7 percent
sulfur concentrations, have variously been estimated at $3.~3 to $4.53 per
ton. 1/ The President's proposal for a sulfur emission tax could limit
sulfur emissions but could also add to costs.
Coal,- especially high.~sulfur coal, is available in large quantities in
close proximity to consuming markets, and many existing power plants can
burn only coal. New coal burning plants could be built if air quality -
standards can be met. Process economics for coal desulfurization are
marginal, and optimistic assessments of economics are generally based
on a substantial credit for sale of byproduct sulfur, but the supply of
1/ National Air Pollution Control Administration (NAPCA), "ControlTech-
niques for Sulfur Oxide Air Pollutants", Publications AP-52, Jan. 1969.
173
PAGENO="0516"
510
sulfur has exceeded demand recently, and substantial additional production
of elemental sulfur could cause further disruption of the domestic, sulfur
industry.
c. Production
(i) Underground Hinj~g
The coal in the Rocky Mountain States that is too deeply buried
to be extracted by surface mining would be recovered by underground mining.
The selection of underground mining techniques would depend upon local
geologic phenomena that might influence mining conditions. The type and
extent of such phenomena would affect not only. the economics of mining but
would also affect severity of surface and subsurface environmental impacts.
Because most of the coal resources in the Rocky Mountain States are on
public, Indian, or State lands, environmental impacts can be minimized
by effective enforcement of Federal and State operating regulations.
If the East Louisiana sale is not held and if the Rocky Mountain States
should have to produce an equivalent amount of energy from coal (1o.20,9
milLion short tons per year), the severe short-term environmental impacts
of surface mining could be minimized by underground mining. The manpower
requirements and capital expenditures, however, would be large.
On the basis of an annual production rate of about 2 million short tons
per underground mine, from 6-12 underground mines would be needed. Manpower
17k
PAGENO="0517"
511
for these operations would total froit 3-6 thousand employees and capital
expenditures would range from $144-288 million. 1/
Social Costs in terms of health and safety of mine employees must be
Considered along with the capital expenditures and the environmental
costs of underground coal mining. A. total of 220 men were killed in
1970 in underground coal mining operations. On the basis. of the 1970
injury frequency rate of 1.00 per million man hours continuing into the
1980's, about 6 additional fatalities could be expected annually from
1980-1985 at the underground mines developed to supply the'same amount
of energy as expected from the East Louisiana sale. 2/
Underground recovery of coal from beds less than ten feet thick averages
about 57 percent 3/; however,, as coal bed thickness Increases above ten
feet, the recovery percentage decreases drastically. This decrease is
related to the equipment used qnderground, none of which has the cap-
ability of efficiently extracting coal from beds over ten feet in thick-
ness. EquIpment manufacturers have not been interested because of a lack
in demand in designing machinery specifically for `mining thick beds.
Furthermore, neither public nor private research organizations have
invest igated systems of underground mining to attain high rates of
recovery from thick beds..
1/ National Petroleum Council, Coal Task Croup,"An Initial Appraisal,
.1971-1985", U. S. En~~y Outlook, Vol. II, 1971, p.. 136.
2/ USD1, Bureau of Mines, Office of Accident Analysis, Injury Experience
and Worktime in the Minerals Industries: 1969-70" (Mineral Indus~y
Surveys, July 1971, p. 8.
3/ R. L. Lowrie, "Recovery Percentage of Bituminous Coal Deposits in
the `United States", USD1, Bureau of Mines, 1968,. p. 11..
175
PAGENO="0518"
512
Exploration activity in the Rocky Mountain States has not been directed
towards obtaining the data necessary to design efficient nethods of
underground mining in thick coal beds. Generally, exploration activities
by industry have been directed toward development of near surface' reserves
for open pit mining. Numerous questions concerning local geologic
phenomena and mining conditions remain to be answered about the deeper
resources before large-scale underground mines could be efficiently operated
at most places. Principal among these are: roof strata thickness, composition
and strength; coal bed continuity, quality and thickness; bottom strata
thickness and composition; and the presence or absence of fault systems,
acquifers, or explosive gas-bearing strata. In addition to affecting mine
safety and production efficiency, these geologic phenomena and mining
conditions could strongly influence the environmental impacts of large-
scale underground mining.
Beginning in 1946, experiments in the underground gasfications of coal
were jointly undertaken by the Department of the Interior and private
industry. The object of this work was to determine the feasibility of
bringing the chemical constituents or the energy of coal to the surface
in a gaseous form, usable in the synthesis of liquid or gaseous fuels,
organic chemicals, or the production of electric power. Other objectives
were to materially reduce or eliminate underground mining operations, to
obtain useful products from `coal or other carbonaceous materials that
lie in beds that are not profitable to mine, and to recover the chemical
constituents or the energy of coal remaining in areas when mining operations
176
PAGENO="0519"
51.3 /
have been completed. 1/ From an economic standpoint, the costs of producing
synthetic liquids and gasses through in~situ processes suitable to meet
current energy requirements were found to be excessive and, therefore, were
discounted. Presently., three pipeline gasification ptlot plants are in
various final stages of planning, erection, or testing. It is hoped that
it may be possible to have a commercial synthetic pipeline gas industry
before the end of the decade. This can only be considered as a supplemental
gas supply, however, not as an alternative to conventional supplies.
~
Subsidence of the ground surféce is common above many abandoned
and some active coal mines. The amount of subsidence relates to the mining
method emploi,red, the amount of coal removed, the thickness of the coal bed,
and the composition and strength of rocks overlying the coal. Subsidence
of large areas commonly destroys man-made structures and disrupts the
gi~ound water hydrology, cuts 6ff surface and subsurface water recharge,
adversely affects the qua1~fty of undergr.Qund and surface waters, redirects
the plenned drainage of a mine, disrupts surface drainage, and in periods
of heavy rainfall localizes flooding. It also, in some localities, causes
land slides, and minor earthquakes.
The most successful method of preventing or alleviating surface su'bsidence
problems is to plan mining so that more pillars are left untouched,
Unfortunately, this procedure results in less coal recovery. Much additional
1/ J. L. Elder, Graham, Capp, et.al., "Pield-Scale Experiments in Underground `~
Gasification of Coal at Gorgas, Alabama", USD1, Bureau of Mines, 1957, S
p.3. 5 5 .
177 5 1
S /5 5
S ~5~S 5 5 /5~ ~
PAGENO="0520"
514
research is needed to develop methods of underground mining which will
minimize subsidence of the surface. If such methods cannot be implemented,
the best solution may be to achieve as complete recovery of coal as possible
during mining, then allow controlled subsidence to the point of natural
stabilization and, finally, develop the land surface.
Ground and surface waters entering active underground mine workings are
normally pumped to the surface for disposal. Because of the low-sulphur
content of most Rocky Mountain coals, it is uncertain whether acid-mime
water would be a problem in areas of large-scale mining and above average
precipitation. If acid-mine water problems should develop, it is likely
that the modern treatment methods employed in the coal fields of the
eastern United States could be implemented to abate their impacts. The
large volumes of sludge resulting from such treatment could be emplaced
either in abandoned mine workings or in protected surface mime workings
or in protected surface mine waste disposal areas. Commonly,acid-mine
water drains from abandoned mines and workings. This type of effluent
discharge can be prevented by locating mine entries at elevations above
the prevailing drainage level, by s~ealing abondoned mine entries, and
by emplacing dams at critical points in abandoned underground entries
and haulageways.
Inmost coal producing areas, mining and processing wastes contribute
large volumes of sediment to nearby streams, are sources of acid drainage
and, where waste piles are burning, are sources of air pollution.
178
PAGENO="0521"
515
The n~ost commonly hsed teohnique~o~ prevehting ~rtde~read scattering of
mining and processing wastes'is to compact the waste In ~ay5rs, followed
by sealing with incombustible' soil, after which vegetation is established
to prevent infiltration of surface water and to minimize erosion.
An alternative to surface disposal of mine and cbal processing waste is
to return wastes to abandoned underground mine workings. This is currently
being done to control surface subsidence in mined areas in compliance with
restoration provisions of the Appalachian Regional Development Act of 1965,
1/
as amended. Methods of returning the waste to mined out areas concurrent
with active mining would appear to warrant attention of mining method
reseax~chers.
Dust from mine access roads, coal handling, and processing can be alleviated.
Road dust can be minimized by hard surfacthg, or through abatement techniques,
such as oiling or chemical treatment of the road surface * Dust from coal
handling and processing can be abated by spray treatment at transfer points
and by enclosing coal handling and processing structures. Dusting problems,
in live coal storage piles can be reduced by water sprays or oiling; dead
storage piles canbe sealed with asphaltic or chemical materials.
The potential for long-term enwironmentml impacts from an miderground mine
can be diminished by identifying and eliminating pollution sources prior
i/ C. B. iCenaham and LP. Flint, "Research an~ Programs on Recycling
and Disposal of Minerals, Metal and Energy-Based Solid Wastes,"
`USD1, Bureau of Mines, 1971, pg. 24.
:~
"i'
179
PAGENO="0522"
516
to closure of the mine. Most pollution sources can be eliminated by sealing
and revegetating waste disposal areas; sealing and removing abandoned mine
buildings and structures; and scoring, fertilizing, and revegetating areas
formerly occupied by buildings and structures, mine roads, and supply
storage areas. Consideration should also be given to flushing all wastes
and utilization plant refuse into underground mine voids to remove sources
of surface pollutants and to reduce possible surface subsidence. Such
flushing of all wastes could have either beneficial or detrimental effects
on the ground water hydrology and surface drainage, depending upon local
conditions.
The following favorable environmental effects of underground mining become
evident when compared to surface mining:
When subsidence of the land surface is prevented, the surface effects
of underground mining generally are confined to the areas occupied by
mine buildings, dumps, waste disposal banks and impoundments, water supply
impoundments or wells, coal transportation systems, power supply structures,
and mine supply storage yards.
The areal extent of environmental impacts associated with underground mining
is dependent on pre-planned mining systems designed to assure a high level
of environmental quality during exploration, development, production and
post-production operations. Means of obtaining this assurance are State
and Federal regulations, and the development of an environmental ethic by
all mine operators. The Mined Area Protection Act of 1971 (5. 993 and
H.R. 5689) currently being considered by the 92nd Congress, is an example
180
PAGENO="0523"
517
of pending legislation that would ~equire ~I1 underground and surface
operators to adhere to standards designed to protect the environment. :
Several proviSions of the mandatory safety standards issued under the
Federal Coal Mine Health and Safety Act of 1969 have related environmental
obje~tives~ especially those standards for disposal of nine refuse and
dust, foD coal handling, and for transportation facilities.
Most older coal leases on Federal lands include a provision in the lease
agreement for the protection of the land surface, natural resources, and
improvements. This provision has been broadened over the years to include
environmental considerations.
flnderground mining is less subject to. noises and vibrations than surface
mining., and the surfaue enwironmental effects from drilling, blasting,
and spills and leaks are minimal. ModificatiOns of the habitat, altera-
tion;of ground cover, alteration of surface drainage systems and the
necessity of fertilization application are also less severe. The fol'owing
environmental effects of underground mining are more severe than those
associatàd with surface mining: alteration of ground water hydrology, the
necessity of well drilling, and fluid removal, *the techniques of product
processing and resultant waste, liquid effluent discharges and i~iost accidents.
Many unfavorable environmental impacts of underground coal mining can be
controlled `largely through techniques `developed and used in recent years.
Prevention of environmental degradation by underground mining is dependent
upon'attitudes of mine operators and efficient enforcement of local, State
or Federal regulations.
181
~-~- ~-t -~--~ ~
PAGENO="0524"
518
(ii) Open Pit Mining'
Near surface coal (0 to 200 feet) generally can be extracted
by open pit of surface mining. This method involves the removal of the top
soil and rock (overburden) to expose the coal bed, removal of the coal, and
replacement of the spoil material and, in some instances, replacement of
the top soil. Usually this is accomplished by working in large parallel
trenches `using the overburden of the second trench, or cut, to fill the
first trench.
Surface or open-pit mining of coal has become a major source of solid fuels
and, unless restrained by environmeetal restrictions, all evidence Indicates
that this method will increase in importance. For example, in 1929, open
pit coal production amounted to three percent of the total United States
production. 1/ In 1969, however, open pit mining accounted for approximately
200 million short tons or 35.2 percent of the 560 million short tons total
U. S. production. 2/
It is estimated that for the year 1971, the amount of surface-mined coal
will have increased to about 47 percent of total U. S. production.
1/ P. E * Cash and Bernewitz, "Methods, Costs and Safety in Stripping and
Mining Coal, Copper Ore,. Iron Ore, Baufite, and Pebble. "Phosphate",
USD1, Bureau of Mines, Bulletin 298, 1929, pg. 9.
2/ J. J. Gallagher and L. W. Westerstrom, "Coal-Bituminous and Lignite,".
Minerals Yearbook. Bureau of Mines, 1969, pg. 309.
182
PAGENO="0525"
519 1
The principal reaso~ns for this growth are: (1). full prcxluction can be
reached quickly, (2) the coal ~an be mined more cheaply, and (3) open
pit mining is much safer than underground mining. As to safety, in 1969,
there were 29 fatal and 91~2 non-fatal accidents attributed to open pit
mining of bituminous coáland lignite.
Bimilarl~, ±n 1970, there were 31 fatal and 1,010 non-fatal accidents
connected with open pit mining. During these same periods, however,
underground mining was responsible for 155 fatal and 8,139 non-fatal
accidents, and 219 fatal and 8,710 non-fatal accidents for 1969 and 1970,
respectively.
If the 11-22.5 million short tons of annual coal production reqtiired to
replace the energy supplied b~r the East Louisiana sale, over a five-year
period, should be furnished totally by surface mines, it is believed that
from 3-5 mines of five, million short tons annual capacity each would be
the appropriate number of operations needed. Corrently~ a mine of this
magnitude employs 610 personnel with,a capital expenditure of about
$L~O, 000,000. Therefore, in order for surface mines to supply the lO..»=0.9
million tons of coal needed annually, 1830-3,050 emplo~ees would be needed
with a total capital expenditure of $l20-200 million. This capital
expenditure does not include the necessary financing for coal cleaning
facilities.
1/ Bureau of Mines, Office of Accident Analys±s, ~.cit., pg. 7.
2/ National Petroleum Council, 1971, ~ cit., pg. 1~l..
183
N
c
PAGENO="0526"
520
Open Pit Mining Environmental Impact
There generally are no favorable effects to be found
in the immediate area surrounding a surface coal mine; nevertheless, favor-
able effects become apparent on a regional or national scale when the energy.
needs and total environment of an industrial populace are weighed against a
lack of needed fuel.
The following economic, resource recoverability, time, and health and safety
considerations would appear to favor open pit mining over underground mining
in the Rocky Mountain States and could be interpreted as long-term environ-
mental benefits that would effect the Nation's welfare.
--Supply increasing demand for cheap fuel.
--The availability of large quantities of low sulphur coals which
lend themselves to open pit extractions.
--The ease and low cost of extraction.
--A favorable recovery factor of 80 percent or more.
--Less health and safety hazards.
--The recovery of large quantities of coal which might otherwise
be lost due to unsafe underground conditions.
--The ease of rehabilitation of disturbed lands if revegetation and
acid mine water abatement measures are successful.
There are many serious environmental problems that are directly related to
open pit mining. Principal among these are:
Open pit mining disturbs considerably more surface acreage than under-
ground mining. Underground mining operations, however, because of lower
recovery per unit of area, actually disturb more acreage in three
18 1~
PAGENO="0527"
I : ~.
521 -
dimensions t1~n, an open pit- mine producing a similar tonnage. Unfortunately,
the fufl magnitudes of underground distrubances generally are not seen or
known to exist by the j~blic. As of 1967, it is reported that open pit
coal mines were responsible for l~l percent of the l~nd disturbed by
2:!
surface mining in the United States.
Predictions regarding the total size of the areas which would be disturbed
by the surface mining of nearly 20,000,000 short tons of coal are shown
in the follpwing table:
i/ U.S.]D.I, Surface M1.r4n~ and Our Environment, A Special Report to the
!~j~n l~7 pp. 53~54.
185
PAGENO="0528"
522
PRODUCTION BY SURFACE MINING METHODS
(BASED ON 1,800 TONS PER ACRE FEET)
~IGURES BASED ON 20,000,000 TONS PRODUCTION ANNUALLY OVER 5-YEAR PERIOD)
Coal Bed Recovery Coal Available Per Area Disturbed Area Disturbed
Thickness Factor Sq. Mile @ 80% Rec. Annually (1980-1985)
(Feet) (%) (Tons) (Sq. Miles) (Sq. Miles)
10
80
9,216,000
2.3
11.5
15
80
13,824,000
1.5
7.5
20
80
18,432,000
1.1
5.5
25
80
23,040,000
0.9
4.5
30
80
27,648,000
0.8
4.0
35
80
32,256,000
0.7
3.5
40
80
36,064,000
0.6
3.0
45
80
41,472,000
0.5
2.5
50
80
46,080,000
0.5
2.5
Additional open pit mining of a 10 foot bed of coal, sufficient to ~atiafy
the 100 million short ton energy requirement between 1980 and 1985 would
necessitate the disturbance of 7,360 acres of land. Surface mine production
from a 50-foot bed would disturb 1,600 acre8. Regardlees of whether the
coal is produced from a 10 foot bed or beds up to 50 feet or more in
thickness, rehabilitation of disturbed lands would be required, and speed
in reclaiming and revegetating mined lands womld be important in order
to minimize environmental degradation.
The following table shows the rehabilitation cost on a per ton basis
to whatever degree of restoration is desired:
186
PAGENO="0529"
523
ESTIMATED COSTS IN CENTS PER TON OF COAL FOR REGRADING, RESEEDING, AND
REVEGETATING STRIP..MINED LANDS TO A PLEASING, NATURAL CONTOUR
Assumed tonnage of
coal recovered per
acre
Estimated costs of reclamation per acre (dollars)
~
$1,000 $2,000 $3,000 $4,000 $5,000
10,000
20,000
30,000
40,000
50,000
100,000
0
E4
~
ci)
~4
~,
U)
0
0
.10 .20 .30 .40 .50
.05 .10 .15 .20 .25
.033 .066 .10 .13 .17
~
.025 .05 .075 .10 .13
.02 .04 .06 .08 .10
.01 .02 .03 .04 .05
Climatic conditions are extremely importantin considering the rehabilitation,
reseeding, and revegetat ion of mined lands in the Rocky Mountain States.
Obviously, without proper moisture, the reseeding of reclaimed lands would
serve little purpose and erosion processes would soon destroy the contour
of the rehabilitated lands.
Disruption of the land surface by open pit mining would, unless proper
precautionary measures are implemented, have adverse impacts on all vegetation,
forestry, grazing, crops, birds, land animals, endangered species, habitat,
water supplies, and water quality, all of which would limit the enjoyment
187
77-4&3 0 - 72 - pt. 1 - 34
PAGENO="0530"
524
of hunting, fishing, and allie~d leisure time activities in addition to
affecting scenic vistas and open spaces. Furthermore, nearby agricultural,
residential, commercial and industrial activities could be curtailed or
endangered by environmental effects that were propagated beyond the area
of mining.
Few coal deposits are free of contaminants; therefore, it can be assumed
that under ideal conditions, a 5-percent washer loss would occur. The
handling and placement of approximately 5 million short tons of waste
material (over 5 years) must be considered. The problem would not be
major for surface mines in that the pits from which the coal would be
extracted, could receive this material. Ultimately, the mine pits would
be backfilled, the spoil banks topped off or leveled, the highwalls
backsloped, the top soil replaced, and the area reseeded.
Other short-term problems related to surface coal mining are acid mine
water developing in the open pits, in spoil piles, and in mine processing
waste; silt eroding from the pits, processing waste and spoil piles, and
dust blowing `from the pits, spoil piles, truck haulage roads, railroad
cars, mine processing plant, and processing waste piles. Each of these
problems can be handled effectively by requiring the mining companies to
observe environmental regulations. However, if they are not handled
properly, damage could result which would directly affect surface waters,
soil, trees, shrubs, grazing land, crops, birds, land animals, endangered
species, and could damage or destroy aesthetic and recreational values of
188
PAGENO="0531"
525
scenic views, open space qualities, hunting, and fishing. Addittonally,~
downstream areas far removed from the mine and processing plant could have.
their surface waters adversely affected as to quality and fish, fishing,
and water recreation could be destroyed or restricted.
In comparison with underground mining, surface0 mining is the source of
greater volumes of noise and vibrations from blasting, drilling, heavy
mining equipment, trucks, and landslides. Modifications of the habitat,
alteration of ground cover, alteration of drainage systems, destruction
of land forms, and siltation of nearby streams are also more pronounced
in surface mining. Landslides are more conunon, and subsidence does not
occur beyond that of fill compaction.
With tb~e implementation of proper rehabilitation, reforestation, revegation,
and other environmental safeguards, the unfavorable intpaàts described
heretofore, can be reduced to short~.term problems.
Proper supervision within the scope of present environmental regulations
would result In mined lands being returned to "as good or better than found
conditions," in that some restored lands could lend themselves to recreational
sites, lake impoundments for boating and fishing, picnic areas, and eventually
could promote resort facilities.
The end use to which surface-mined lands can be reclaimed concurrent
with mining is limited only by the capacities of men opereting within pre-
189
PAGENO="0532"
526
vailing geologic, technologic, and economic restraints. In effect, the
short-term economic and energy profits derived from surface mining should
be compared with a possible long-term degradation of the environment.
Such degradation can be prevented if. there is complete cooperation between
all companies, land owners, and governmental bodies acting in concert.
d. Transportation
(1) ~yntems~ /
All new power, gasification, and liquefaction plants could be
situated at, or near, the actual mine locations, thereby having nominal
effect upon existing transportation systems. The end `product of the above
plants (electricity, synthetic gas, and synthetic oil) could be more
readily transported to the market areas by transmission lines and existing,
or new, underground pipelines. Transmission lines and pipelines should
also cause fewer environmental problems than increasing the mileage of
highways or rail routes and building the vast number of highway trucks
and hopper cars necessary to move this vast quantity of low sulfur fuels.
Four systems of transporting coal would be available in the Rocky Mountain
States for moving coal from a mine to a point of utilization. These
systems would be: trucks, railroads, conveyors, and coal slurry pipelines.
A fifth system, water transportation,.may be discounted because of the
lack of navigable waterways. Each system has advantages that would make
it economically attractive for transporting coal to a point of utilization.
Selection of a system would be strongly influenced by the distance to a
utilization plant. Relative costs of coal transportation systems are given
in an attached table.
190
PAGENO="0533"
527
Truck transportation is commonly used for relatively short hauls. Typically,
truck transportation is used to supply mine-mouth utilization plants; the
roads are usually less than 5 miles long, on land leased by the mining
company and have little effect on the general public. In the Rocky Mountain
States, there are usually no intersections with public roads and the traffic
is generally related to the mining operations. Trucks can transport ash
and spent utilization plant materials back to mine pits for disposal, thereby
using the haul in both directions as well as solving a refuse disposal problem.
DATA ON RELATIVE COST OF VARIOUS TRANSPORTATION SYSTEMS
Transportation, cost in mi1ls~per ton mil~
Maddex 1/ Aude 2/ Wellman 3/
Ocean shipping 0.3-10
Pipeline 1.5-10 3-7 (More than 50 miles
no slurry preparation)
River barge 2-4
Railroad 4-15 4-9 (Unit train more
than 400 miles)
Truck 55-70 50-80 (One way haul with
empty return)
CQnveyor belt 20-60 (Less than 15 miles)
Pneumatic 130 (600 totis per
hour, 5 miles)
1/ Philip 3. Maddex, and Ole Skaarup, ,`The Cost of Transporting Ores
and Raw Materials In World Markets. M1~TiIng ~gineerina, June 1970,
pp. 56-57.
V ~. C. Aude, N. T. Coupe,~~ T. L. Thompson, and B. 3. Wtsp. "Slurry
Piping Systems: Trends~ Chemical Engineering, June 2~3, 1971, pp. 74-90.
3/ Paul Weilman and Sidney Katell. "~conomIc ~ialuation of ?neumatic
Transport of Coal at 200,400 and 600 Tons per Hour. Paper in
Pneumatic Transportation of Solids, Proceedings: Institute of Gas
Technology-~ureau of Mines Symposium, Morgantown, W. Va., October
19-20, 1965. Compiled by J. D. Spenser, T. J. Joyce and J. W. Faber,
1966, p. 184.
191
PAGENO="0534"
528
The impact of railroads varies to some degree with the type of motive
power used. Diesel locomotives are sources of exhaust gas and noise
pollution; electric locomotives are not sources of air pollution per
se, however, the poLlution source is the power station. Regardless
of the type of locomotive power used, railroad installations offer means
of transporting other commodities to fulfill the needs of inhabitants
in areas adjacent to coal mines. Rail haulage can serve to transport
ash and spent materials back to the mine pits for disposal, thereby
utilizing the haul in both directions as well as possibly solving the
refuse disposal problem.
Rail installatjons can be constructed to lessen the environmental impact
of the installation on the environment. Ribbon rail with thermite welded
joints can be installed to reduce track noise. Rights-of-way can be
fenced, for safety to animals and humans, with underpasses and grade
separations provided for heavily traveled roads. Coal hoppers can be
partially covered, or the coal can be sprayed to reduce dust loss in
transit. Coal loaMng and unloading facilities can be designed to
consider aesthetics and should include dust suppression equipment. Cut
and fill areas, often sources of silt from erosion, can be constructed
with gentle slopes to permit the growth of erosion inhibiting vegetation
and borrow areas can be covered with top soil set aside for this purpose,
and then revegetated.
192
PAGENO="0535"
529
Overland conveyor systems are used to transport coal from mine to pre-
paration plantS, from truck or railroad unloading hoppers to storage areas
or bunkers and directly to some utilization plants. Generally, these
installations are short; however, locally they may be as long as 15 miles.
Although conveyor structures and transfer point housings are obvious
intrusions on open space vistas, this impact can be lessened through
selective use of colors.
Rights-of-way for conveyor installations require less land than either
truck or rail rights-of-way and do not require the extensive cuts and
fills needed by other transport systems; however, any surface distur-
bances are subject to erosion if not properly revegetated.
The least obtrusive type of transportation system from both land use and
visual standpoints are coal slurry pipelines. Land surface requirements
are minimal because the pipeline is buried and appears at the surface
only at drainage crossings, and pumping stations. Slurry preparation
plants, pumping stations, and terminal coal dewatering and storage
facilities are the only permanent structures. The pipeline, after
installation, does not interfere with the free movement of vehicles,
people, and animals. The only noise sources are at the slurry preparation
plant and at pumping stations. Dust problems associated with pipelines
are confined to the slurry preparation plant where the coal is crushed,
screened and stored; however, dust suppression methods commonly employed
in conventional coal preparation plants minimize this problem.
193
PAGENO="0536"
530
(ii) Ertvironmer~tai Impacts
The major Adverse environmental impaot~ of alternative transportation
systems are air and noise pollution, safety, the ai~ount of land required
~`or rights-of-way, trash disposal and aesthetics.
Air pollution sources are exhaust emissions, road dust, and coal dust.
The level of adverse exhaust emissions can be reduced through efficient
engine maintenance; road dust can be reduced by haul-road surface treat-
ment such as hard surfacing, oiling, or applying water-chemical solutions;
and coal dust can be reduced by truck covers and spraying. Although
mufflers can reduce the level of noise pollution, truck haulage, because
of the large number of noise sources and frequent trips, is commonly
recognized as the noisiest system of transportation.
Collisions between trucks, other vehicles, and animals can occur but do
not normally constitute a serious public hazard because haulage roads
generally are confined to the mining and processing area8.
Land use committed to truck haulage is the largest of any of the coal
trAnsportation systems.
In the Rocky Mountain States, the presence and movement of large numbers
of trucks in open areas may be aesthetically objectionable to the public,
especially if the haulage roads are near public use areas. /
Secondary environmental impacts from truck transportation arise from
improper disposal of tires, expended oil, and used parts. These items
19k
PAGENO="0537"
531
can be disposed of in open cuts of surface nines and then buried with
reclaimed spoil and revegetated. In addition, special disposal pits can
be excavated at underground mining operations where these items can be
buried and the area revegetated. Depending on economics of the particular
mining operation, a reasonable alternative would be to recycle these items.
Rail transportation systems using diesel locomotives are sources of air
and noise pollutants from engine exhaust systems. Effective maintenance
of engine combustion systems and efficient mufflers can reduce the air
and noise pollution levels from these systems. Coal dust lost in transit
can be reduced by using partially covered hoppers or by oiling the coal
during loading. Dusting during loading and unloading can be reduced with
a combination of dust suppression sprays and enclosed chutes or bins.
The right-of-way for a railroad constitutes a permanent conut~itment of the
land surface to this use making it unavailable for other uses. Free travel
of vehicles, people and animals across the committed area is restricted.
The potential for colli8ion8 with traifl8 eXi8t8.
In the open or scenic areas of the Rocky Mountain States, railroad rights-
of-way may be considered as aesthetic intrusions, especially if large
trestles, overpasses, or cut and fill areas are required. Cut and fill
areas can be constructed with gentle slopes and revegetated, and borrow
areas can be reclaimed as mentioned in conjunction with truck transportation
systems. The visual impact of trestles, overpasses, and other appurtenant
structures~can be minimized with effective combinations of eye-pleasing
designs and unobtrusive colors.
195
PAGENO="0538"
532
Conveyor system installations likewise constitute a permanent conunitment
of the land surface and restrict free movement of vehicles, people, and
animals. The right~of-way width is less than that required for truck or
* railroad transportation systems. Uncovered or partly covered conveyors
allow loss of dust in transit because of exposure to winds. Uncovered
transfer points also are a potential source of dust when suppression
devices are not provided. Open, or partly covered conveyors, constitute
a safety hazard to persons or animals when a support structure is installed
close to the ground. Conveyor systems can be fenced or completely enclosed
to eliminate dusting and safety hazards to humans and animals.
Conveyor support structures, either frame or suspension type, as well as
the conveyors, are obvious visual intrusions, especially at points where
the conveyor crosses deep drainage systems. Color treatment of support
structures, enclosures, and transfer structures would lessen this impact.
The principal impacts of coal slurry pipeline systems are: the permanent
commitment of land; providing an adequate water supply; and water disposal.
Large quantities of water, at the rate of one ton of water per ton of
coal, are required'totransport coal in the Black Mesa, Arizona, Pipeline 1'
(Arnold, 1979, p.8). In water deficient areas, this method may not be
an efficient transportation alternative, particularly where the water
must be supplied by deep wells which, when pumped, could have a draw..
down effect on shallower wells that supply people or livestock.
Additionally, water disposal problems at the terminus of a pipeline could
have an impact on water quality if not properly contained or when not
1/ J. N. Arnold, "Discovery and Development of Peabody Coal Company's Black
Mesa Mine," Society of Mining Engineers and American Institute of Mining and
Metallurgical Engineers, PreprintNo. 69-F-349, 1969, pg. 8.
196
PAGENO="0539"
533
economically feasible to recycle the water for transportation purposes.
Coal slurry destined for power, gasification, or liquefaction plants
could be dewatered, the "spent" water used for cooling tower nakeup,
ash handling, and/or evaporated in disposal ponds. The Nohave generating
sthtion in Nevada is utilizing water from the Black Mesa Pipeline in this
manner.
The disposal of solids and water removed from sections of a plugged
pipeline could cause environmental impacts. Holding ponds, equal in
capacity to the, upstream pipeline, could be provided at pumping stations
and at the coal slurry preparation plant for disposal of removed plugs.
The water could be evaporated and the coal could be left in the impound-
ment unless provisions are made for recovery. Compaction. and sealing
would prevent spontaneous ignition, erosion, and accompanying siltation
of the coal left in impoundments. The surface of the impoundment can
then be revegetated with indigenous plants to inhibit erosion of the
seal.
Waste Disposal
Large volumes of waste are generated during coal
mining and processing. The volume of mine waste depends on the type
and characteristics of top and bottom strata, the continuity of a coal
bed, the existence of fault zones, and the tonnage of county rock that
must be mined. The type and volume of waste discarded during coal pro-
cessing, depends upon the specifications for which the coal is being prepared,
197
PAGENO="0540"
534
characteristics and amounts of impurities in the coal bed being mined,
and the efficiency and type of coal processing equipment.
Uncontrolled disposal of coal mining and processing wastes, especially
those containing carbon and trace amounts of sulfur, constitute a source
of land, water, and air pollutants.
Water flowing over waste disposal areas commonly transports silt and
leached minerals to adjacent land and surface water drainage areas.
In addition, dust~size particles commonly are transported by winds to
contaminate adjacent land and water resources. If a waste pile con
taming large amounts of carbon ignites, noxious gases entering the
atmosphere are hazardous to plants, animals and peop1e.~'
Waste disposal areas require a commitment of land resources. Furthermore,
if poorly constructed and uncontrolled, these waste areas present an
unattractive appearance to viewers.
Slides and slump failures commonly occur where waste is deposited on
slopes and where an improper combination of moisture and clay minerals
in the topsoil or in the waste act as lubricants. In such unstable
conditions, large quantities of waste can move downslope and have adverse
effects on land and water resources as well as being safety hazards to
plants, animals, and people.
Should fine coal cleaning be included in the preparation processes for
Rocky Mountain coals, the discarded fine waste would probably be deposited
1/ L. N. NcNay, "Coal Refuse Fires, An Environmental Hazard," USD1, Bureau
of Mtnes, 1970, pg. 8.
l~8
PAGENO="0541"
535
in slurry impoundments where the water would either be decanted for
recycling to the preparation plant or allowed to evaporate. Poorly
designed impoundment dikes in the past have permitted percolating leachate
water to enter downslope surface water drainage areas.
In addition, construction of impoundments on underlying pervious bedrock
commonly results in infiltration of the ground water table by mineralized
water or in percolation of such water through the base of dikes to enter
downstream surface water drainage systems where these types of leakage
commonly affect .àqüatic plant and animal life and should not be permitted.
Unless measures are taken by coal operators to seal and revegetate both
coarse and fine waste upon abandonment of waste disposal areas, many
unfavorable impacts can continue for decades. However, use of appropriate
treatment methods on the part of coal operators, coupled with effective
enforcement of waste disposal regulations promulgated by State and Federal
Covernments, can minimize such effects on the environment. There also
can be beneficial uses of waste materials.
The waste rock, removed during mining is in many areas utilized as
landfill to provide level sites in deeply dissected terrain~. This
type of landfill is an effective method for disposal of mine waste
when properly compacted, sealed, fertilized, reseeded, and reveg-
etated.
199
PAGENO="0542"
536
5. rease Hydroelectric Power
The generating potential of any hydroelectric site is a function of both
stream discharge and the height of fall, hence the better hydroelectric
sites are concentrated in areas with heavy precipitation and large topo..
graphic relief. The following table shows the extent of U.S. potential
and development water-.power capacity:*
Potential Developed
Geographic Power Percent of capacity Percent
Region ~ MW)~ Total Ll03 MWj Developed
New England 4.8 2.7 1.5 31.3
MIddle Atlantic 8.7 4.8 4.2 48.3
East North Central 2.5 1.4 0.9 36.0
West North Central 7.1 3.9 2.7 38.0
South Atlantic 14.8 .2 5.3 35.8
East South Central 9.0 5.0 5.2 57.8
West South Central 5.2 2.9 1.9 36.5
MDuntain 32.9 18.3 6.2 18.8
Pacific 62.2 34.6 23.9 38.4
Alaska 32.6 18.1 .1 0.3
Hawaii 0.1 0.1 - -
Total 179.9 100.0 51.9 28.8
Of the potential hydroelectric capacity of 179,900 MW in the U.S., 95,400
MW is yet to be developed in the lower 48 States, with 65,000 MW concen-
trated in the Ivbuntain and Pacific Regions. Thus 30,400 MW is the potential
for additional hydropower in the East. Hydropower from Alaska, the Pacific
or MDuntain areas of the U.S. probably can not be considered as sources of
* Statistics as of January 1971 obtained informally from FPC
NW = Megawatts
200
PAGENO="0543"
537
additional hydropower for the Eastern U.S~ largel3rbecause the distance
from consuming region and the related transmission problems would make
the àonstruction of transmission lines economically infeasible.
The Federal Power Commission projects electric generating capacity in
the U.S. as follows:
Total Generating Total H~ydro Hydro as
Year ~pacity(I~1~ Capacity (IvM~ Percent of Total
1970 340,058 51,641 15.2
1980 66~,ooo 68,000 10.2
1990 1,260,000 82,000 6.5
The breakdown of the projected 16,400 }`M increase in h~ydro capacity in
1980 over the 1970 capacity for the U.S., assuming the 1970 distribution
of development, would be as follows:
Geographic Incremental Ilydro
Region Capacity (MW)
New England 475
M1~d Atlantic 1,328
East North Central 279
West North Central 853
South Atlantic 1,673
East South Central 1,640
West South Central 607
~untain 1,952
Pacific 7,560
Alaska 33
Hawaii -~
Total 16,400
201
PAGENO="0544"
538
Of the total incremental hydroelectric ca~acity of 16,400 MW, 6,855 MW
can be expected to come from areas other than the Mountain, Pacific,
`Alaska and Hawaii areas.
OCS oil and gas produced from the proposed East Louisiana General Sale,
and the projected incremental hydropower expected to serve areas of the
lower 48 states other than the Mountain and Pacific Areas have been
converted to Btu's for comparison.
~çpç~ted ~uantit~ !TtJ' ~
OCS Oil 75-150,000 B/D 435-870 x lO~
OCS Gas 200-400,000 MCF/D 206-413 x 109
Hydropower 6,855 MW 256 x 109
The potential of hydroelectric power is lin4ted. Of the 95,400 MW yet
to be developed in the lower 48 States, 31,400 is likely to be developed
by 1990 under existing prdgrains. To equal the energy available from the
East Louisiana OCS oil and gas lease sale, hydropower in the Eastern and
Central U. S. would have to be increased by l4,800..29,600 MW. The latter
figure Is far greater than the total potential of 23,500 MW of additional
hydropower in these areas so, even if all of this remaining potential
were developed, and it was fully substitutable for oil and gas uses, it
could serve only as a partial alternative to the oil az~id gas that would
be produced as a result of the proposed East Louisiana OCS sale. There
also are factors of reliability as a source of energy to meet base or
peak requirements because of the seasonality of the energy form and the
fact that few dams are built solely for hydroelectric power generation.
Irrigation, naviga1~ion, municipal, industrial uses, `and flood control
202
PAGENO="0545"
S .. 539 S
are important, and frequently are the dominant uses which may not be
fully compatible with power production needs.
Environmental Impact of the Alternative
Numerous environmental impact statements filed by the Bureau of Reclama- S
tion of the Department of the Interior and by the Corps of Engineers
deecribe environmental impacts of specific hydroelectric projects.
~avorab1e S
Bydroelectric pot~ie~r produces no air pollution, ra~Loactivity waste heat,
nor water pollution (with the exception of the loss of oxygen content in
storage facilities). Dams ttaluable for hydroelectric purposes may be
btherwise useful for such needs as irrigation and flood control. Lakes
behind dams created for hydroelectric purposes provide recreational
opportunities such as swimming, fishing and boating. S S
T1nfavorabl~
Consti~uction of a hydroelectric dam represents an irretrievable commitment S
of the land resources beneath the dam and lake, precluding other uses,
(agriculture, minerals, wildlife habitat, free-flowing river recreation,
and so forth). Alteration of ri~ier flows may lead to siJ~ting behind the
dam, thu5s progressively reducing reservoir capacity and its effective use
and finally, after many years, filling the lake. Alteration of downstream S
f lows from power-plant discharges can cause scouring of banks and bottoms.
203 S
71-463 0 - 72 - pt. 1 - 35 -
~ S *S~
PAGENO="0546"
540
Fish and wildlife habitat may be significantly changed. The reproductive
habitats of anadromnous fish may be severely altered by dam construction,
unless elaborate provision is made for fish ladders or other means to
provide safe fish passage.
204
PAGENO="0547"
N
6. Mo4i~ication of FPC Natural ~aS Pr*~cii~g
This alternative is an action that could assist in improving the invest-
ment cljmate which could attract risk, capital to domestic oil and gas , S
ventures in both domestic onshore and offshore areas. The direct S
ehvironmemtal inpact would be reflected in increased activities in
those areas, For some applications, suchas transportation, gas Is not
directly substitutable for oil. Conversion of vehicles to burn liquified S
or compressed gas, and liquefaction of the gas, while possible, imposes
~ubstantial economic costs, and are not expected to be realistic alterna-
tives to the use of refined petroleum products in this decade.
E~en though the average wellhead price o~ gas for interstate shipment
has increased from $0.18 to $0.245/mcf during the past 2 years (+36Z),
thei~è yet is no positive indication that such price increases have re-
sulted in additional exploitation and production. While there seems to
be consensus that increased prices should provide the necessary iilcen-
tives to accelerate the exploration and development of additional
resourèes, it is not no4z possible to project price/production relation-
ships. However,, based upon currently available informatiOn, it seems . S
that significant price increases probably would be required. These, S
in turn, would impose considerable. cost increases on the consumers.
~Because of the uncertainties of stimulating additional production through
increased price, and the potential of substitutability limitations, it
is felt that an increase in natural gas prices could be considered as
only a partial alternative to offset oil and gas supplies that would be
provided from the'. proposed East Louisiana OCS sale.
205.
S~5,55 `5~~'555~t',555555? ~` `S. S ` S `S -
PAGENO="0548"
542
a. Description of the Alternative
In 1954, the Supreme Court ruled that independent producers of natural
gas, whose sale of gas goes into interstate commerce, were not exempted
from regulation under the Natural Gas Act. Since then, the sale, including
pricing, of gas destined for interstate markets has been subject to Federal
regulations, as administered by the Federal Power Commission (FPC).
The FPC changed its method of price regulation in 1960 from an individual
company "cost-of--service" method to an "area rate" concept which was up-
held by the Supreme Court. The area rate method involves the accumulation
of data sufficient to determine the average unit costs associated with all
aspects of natural gas production. A listing of specific environmental
impacts is not included in this section because any results of the proposed
alternative can be directly attributed to other alternatives. Discussions
of the environmental impact of increased production from onshore and offshore
areas are applicable to this proposed action.
b. Possible I~pact of the Proposed Alternatives
Favorable. Increased gas prices established by FPC policy or legislation
to deregulate gas producers might stimulate additional exploration and
development of gas resources, assuming that adequate resources do exist
onshore as well as offshore. Since natural gas is by far the least
polluting of the fossil fuels at the point of combustion and use, the
availability of additional supplies of gas on a timely basis would benefit
the environment. To the extent onshore gas production in the lower 48
States would be increased, it would reduce the need for gas from other
sources, including the OCS. Environmental problems relating to gas
supplies from some sources such as synthetic gas, are greater than those
associated with conventional production.
206
PAGENO="0549"
543~
Un~avQ1,ie. Many of the remaining areas thought to have significant
gas potentia]. are offshore, so that additional production of gas in
meaningful quantities would give rise to environmental problems
essentially~ like those of OCS leases.
Increased gas prices would raise the cost of gas to the consumer. The
extent of additional supplies of gas generated by increased prices would
depend on the extent of the increase, on the progress gas exploration,
and if, in fact, sufficient additional resources do exist onshore. The
difference between the prices of gas sold in interstate and intrastate
commerce suggests that substantial price rises would have to occur to
induce substantial amounts of new gas to enter the interstate market.
Increased gas prices wig~it cause consumers to prefer other energy forms
which produce more pollution at point of combustion. In terms of
efficiency of energy production at a given cost and in terms of ultimate
cost to the consumer, neither increased use of natural gas nor increased
use of electricity for heating pttrpoeed are competitive with "dirtier"
foz'ms of energy.
SSS'S~
S*SSSSS~
207
PAGENO="0550"
544
7. Modification of Market-Demand Prorationing Systems
Market-demand prorationing is a method used by some producing States to
preserve a prescribed relationship between the amount of crude oil produced
in a given period and an estimated "market demand" for that period. As
currently used, allowable production for each well is determined each
month by a State regulatory agency.
The stated purpose of prorationing is to prevent waste resulting from
production in excess of demand for oil, maximum efficient recovery
rate (MER),, demand for gas, or ability to dispose of associated salt
water. In practice, prorationing also serves to keep supply and demand
at levels roughly sufficient to maintain prices at current levels.
In the late twenties and early thirties, the State laws were ineffective
in keeping oil in excess of allowables ("hot oil") from the large fields
out of interstate commerce. Accordingly congress in 1935 passed the
Connally Hot Oil Act to prohibit interstate shipment of any oil produced
in violation of any State law--thus in effect prohibiting interstate
shipment of oil in excess of State allowable production, sanctioning the
practice of proi~tioning, and giving some conformity to both volumes of
production allowed and enforcement of uniform State practice. An
Interstate Oil Compact Commission composed of State Governors and other
representatives has effectively met these objectives and since 1965,
Federal enforcement of the Connally Act has been curtailed.
208
PAGENO="0551"
,\
~
545
~r
Inasmuch as prorationirig is curr~ntly a State function which, based on
State estimates discussed hex~eixi, is highly likely to become nonfunctional
in the near future, there~is little incentive for the States to rescind
their laws unilaterally. Negotiation- with the states, repeal of the
Connally Hot Oil Act, or attack on the prorationing system in the courts
through antitrust suits could lead to litigation and considerable delay in
implementing this change.
Projections by the Office of Oil and Gas, and industry, suggest that
the increase in demand under curz~ent conditions will be such that
prorai~iontng will cease te function in fact by 197k even without any
State or Federal Government action. In that case, itS elisation would
not be an alternative for the period of interest to the proposed East
Louisiana OCS lease sale since such production would begin subsequent
to that time.
a. Description of the A'ternative
As previously stated the purpose of prorat±oning is to prevent
waste resulting prom production in excess of demand for oil, maximum
efficient re~o~ery rate (ME~R), demand- for gas, or ability to dispose of
associated salt water. Removal of restx~icti'ons undot~btedly would result
in some. increased domestic production of crude oil and natural gas. The
timS required to achieve an increase in producing rates and the magnitude
of the increase is questionable.
209
PAGENO="0552"
546
Market-demand prorationing has already been eliminated on Federal OCS
leasing by Presidential Order~ To eliminate State market-demand pro-
rationing would probably require: (1) voluntary State recision of
their laws, and/or (2) repeal of the Connally Hot Oil Act, possibly
coupled with a subsequent attack on prorationing under antitrust laws,
(3) negotiation with the States to permit production at MER, with the
Federal t~overnment reducing imports by a like amount, or (4) allowing
increased imports, thus forcing prices down and requiring optimum
production from the most efficient fields, This last option would
drive from the market any inefficient or marginal production which could
not meet price competition.
Elimination of State prorationing could result in some additional
crude oil and natural gas being made available with little additional
adverse impact on the environment. Minor increases in land and surface
water pollution would be expected with possible increased flaring of
noncommercial gases and increases in small spills, ruptures or leaks in
field lines or storage systems.
Most excess c~~acity is in a few major fields where facilities may
have to be expanded to handle increased production. Production in-
creases could be limited in the early phase by inability to process
produced salt water and natural gas.
210
PAGENO="0553"
547
YrQduCtive.Capacity never remains constant; there is a need for
continuous reappraisals. In addition, the conditions considered
in estimating productive capacity are not uniform.
Only Texas and Louisiana of the States with market demand proration-
ing have excess productive capacity. Three States: New Mexico, Kansas,
and Oklahoma are produting essentially at 100 percent of maximum
efficient rate (M~R) and have been for some tine 1/.
Actions taken recently by the State of Louisiana indicate that market
demand pi~orationing may have already been abandoned due to the very strong
demand situation for oil. Based on an imdepth study made of the depth
bracket allowable, the Commissioner .of Conservation `promulgated a new
allowable schedule which increased the allowables for producing wells,
pa~ticular1y those completed in deeper horizons. The total a]~
fignte was also raised from 40 ~etcent to a current allowable of
cent. On February 11, 1972, the Commissioner held a statewide aL
hearing and announced his findings that the 75 percent allowable for the
great majority of the fields and teservoirs in the State was the
maximum point at which they'could be produced without creating waste
and injury to the reservoirs themselves.
iT~Richard C.
S Heating~--.S
Interior an
Congt~ess,
S ~
_l Import Controls,M~
211
PAGENO="0554"
548
Texas has the majority of the excess producing capacity in the lower
48 States. Significant volumes are in a limited number of fields,
however, there are disagreements as to how much the output of crude oil
cpuld be increased because of waste and pollution restrictions. Texas
has recently announced setting its April, 1972, allowable at 100 percent.
The State estimates, however, that output will climb by only 150,000 to
200,000 barrels per day. They note this will barely fill requests for
Texas oil by crude purchasers who have asked for 152,754 barrels of oil
per day more in April thai~i they requested in March.
b. Environmental Impact
The impact of increased production on the environment that could result
from removal of proration restrictions is dependent upon the excess
production that would become available and the facilities thai are
available to produce, process, transport, store and dispose of wastes
resulting from additional production.
Favorable
Limited inc~. `~c~d quantities of both oil and natural gas would be produced
to meet fuel requirements and the availability of natural gas with its
clean burning characteristics could aid in improving air quality.
With adequate facilities to handle excess production from a given
reservoir, additional supplies of crude oil would be produced with a
negligible environmental impact in addition to that already existing.
212
PAGENO="0555"
549
Unfavorable
If facilities are not available to handle increased production there
will be adverse impacts on the environment. Overloading established
systems could result in environmental damage where little exists. As
pump pressures are increased to process increased fluids, the number of
oil spills, ruptures or leaks would be expected to increase with r~sulting
damage to land' and water resources. Problems associated with disposal
of salt water wquld increase with increased possibilities of pollution to
land, surface water and vegetation if the disposal system is unable to
operate at increased rates. Efforts to increase water injection ~n disposal
wells coul4 result in casing or formation failures and damage to ground
water resources.
t~ith excess capacities limited `to a few fields, existing surf 5cc and
disposal facilities may not handle additional production, particularly
in offshore areas. Production platforms may not permit additional
equipment. Adequate treating of separated water on offshore platforms `
could be a major problem which could limit production increases. Expanded
activities related to producing, processing, storing and transporting of
crude, oil and natural gas would `increase the need for additional facilities
ea,di~ with their own environmental implications.
213 ,
Construction and' drilling activities associated with the expansion
of facilities to adequately process increased production will have
an impact on land surface use, "surface water and possible ground water
resources * The impact should be temporary and limited.
PAGENO="0556"
550
Eliminiation of market demand proration could have a local adverse impact
on development of petroleum resources. Increased production in area
markets could displace production from marginal stripper wells, many of
which are produced by small operators. Loss of income from these
operations would force permature abandonment of wells with resulting
loss of petroleum supplies and reduced employment and economic
activity in stripper well areas. This is not expected to be a major
factor but could be in some areas.
214
PAGENO="0557"
551
8. oil Shale Production
a. Description of the Alternative
Large areas of the United States are known to contain oil
shale deposits but those in the States of Colorado, Utah and Wyoming
are o±~ greatest potential for ~onmiercial shale-oil production. It is
estimated that some 73 percent of oil shale lands contaititng nearly 80
percent of the shale oil is Federally owned. The highest grade deposits
oo~ur over an area of 17,000 square miles (11 million acres) and con-
tain an estimated 600 billion barrels of oil. Recovery of even a major~
& portion of this potential could provide a liquid petroleum source that
wou]4 meet part or all of future demand.
Three or more retorting processes have been developed to
the point of technological practicability, but none have been demon'-
strated and tested at a commercial production scale. The mining of the
shale presents no particularly difficult technological prdblems as it
can be done by conventional room and pillar underground mining or by
surface mining techniques. The major process barriers to development
of this alternative therefore are the need for full-scale demonstration
and testing to prove the technology and develop necessary cost and other
data for determining economic feasibility. The President `s Clean Energy
Message of June 1~, 1971, included provision for a program ~or orderly
development of oil shale resources. The Department of the Interior
215
* ---*-
PAGENO="0558"
552
currently is considering the offering of up to six developmental eases
(2 in each of the above states) as an initial step in implementation of
the President's proposal. Since the present plan depends primarily on
the industry as to the timing of conitiercial production, it is not pos-
sible to determine if significant production from this source could be
expected by 1980. Furthermore, the development leases will provide the
means whereby potential adverse environmental impacts can be detected
and corrected before large scale production is undertaken. To the
extent that major problems are encountered, delay could be expected.
It would be possible to accelerate the rate at which the necessary
research, development and demonstration is accomplished by an acceler-
ated direct Federal program or by some types of incentives or subsidies
for the private sector effort. Substantial production probably could
be achieved by the 1980-1985 period and to a limited extent might provide
an alternative to the proposed lease sale. However, since development is now
only in the pilot plant stage, oil shale probably will not be available
in significant quantities before 1980 due to a combination of economic,
technical and environmental reasons.
The follwing ~ection discusses the mining, processing and other activities
that would be associated with an assumed full-scale oil shale development
in the States of Wyoming, Utah and Colorado. The potential environmental
impacts are set forth, to the extent of current knowledge, within each
section but with the recognition that additional research, development and
actual demonstration will be required before more precise environmental impacts
and necessary corrective or control actions can be fully identified and evaluate
216
PAGENO="0559"
553
b. Production from Oil Shale Deposits
(i) Subsurface Mining
Using the room-and-pillar method of underground mining,
a maximum of 75% of the shale could be removed. The remainder would be left
as pillars to prevent surface subsidence. The ore would be raised. to the
surface and subsequently transported to the retort by truck or continuous
conveyor belt. Oil production/mined shale volume relationships are shown in
Table B~-l.
Underground mining presents several advantages to open pit i4ning. Pirst,
onl~t 2,90.0 acres of surface area over a 20-year period would be affected by
an underground operation for a 50,000 barrels per day plant, as compared to
5,000 acres in an open pit development. Up to 70% of the waste material can
be returned to the vacant mine for disposal. Surface restoration needs would
be minimal except around shaft openings and retort facilities. Wildlife and
aesthetic values would be less disturbed under this type of operation.
While this type of mining, with most of its operations underground, requires
less surface acres, the disposal of spent shale also must be considered.
methods are available for waste shale disposal (1) total surface dis-
posal, or (2) a combination of surface disposal and return of the waste to
the underground voids left by mining.
Total surfac~e disposal would require the same amount of land as needed for
open pit mining (56 to 80 acres per year). This acreage requirement could
be significantly reduced by disposal of the waste material in the mine.
217
PAGENO="0560"
Table B-i - Volume of shale in place and after mining and retorting for various shale-oil production
rates.
t\)
00
Shale oil production,
barrels per day
Shale mined,
ton per
million
year
Volume of shale, billion
cu. ft.
in place
O.!~
After mining and
ret
per year
ortingl/
50,000
2T
0.6
- 0.7
150,000
82
1.2
1.7
- 2.1
550,000
301
4.5
6.0
- 7.5
1,000,000
550
8.2
11.0
-13.7
1/ Dependent upon size of material discharged from retorting system.
PAGENO="0561"
/ 55~
Proce~sed spent shale, however, has a lo*z~ density than the original
raw shale and occupies a greater volume than the original rock in
place. Therefore, only part of the waste could be returned to the mine
(50 to 70%).
During the initial operation, while the underground mine is being
developed, all waste would temporarily be stored above ground until
sufficient mined~out space for disposal was available. For the 3-y~ear
period needed to reach full capacity, the required surface disposal
area would approxi~ate a total of 96 acres.
`Spent shale disposed' of in underground mines could be subject to leach-
ing if the mine workings were flooded while active or became saturated
after mining operations ceased. Environmental controls such as sealing
off aquifers with concrete have been adequate in similar operations.
Since up to 70% of the waste could eventually be returned to the mine,
dust problems f~om surface piles would be minimized. The shale crush-
ing operation would require enclosed crushing and conveyor facilities,
wherever possible, and protection of the piles of crushed shale from
wind erosion.
The disturbance of underground waters by mining operations, or by waste
used to return spent shale underground for disposal, could have an
adverse effect, on subsurface water quality. Because hydrologic data of
much of the region are incomplete, the eztent of this impact cannot be
`predicted at this time. Specific information developed during core
drilling would reduce the risk' of leasing areas where unavoidable adverse
219
77-46~3 0 - 72 - pt. 1 - 36
PAGENO="0562"
556
impacts on aquifers are likely to occur. Close monitoring of~ the
quality of underground waters; and the prompt action required under the
proposed program to change hazardous operations, would mitigate any
adverse effects.
(ii) Surface Mine Development
This type of mining involves removal and disposal of
the overburden to expose the oil shale for extraction. The quantity `of
overburden material significantly affects the economics and time-span
involved i~ reaching production. Current surface mining techniques,
using existing large-scale equipment, could be expected to permit mine
development at relatively low costs, although costs for environmentally
adequate waste disposal and land restoration may be greater than costs
for underground operations.
Where surface mining is practical, it offers the advantages of greater
recovery of the resource, more efficient operations and lower unit costs,
less hazardous working environment than underground mining, avoidance of
subsequent subsidence problems, and the opportunity to design the result-
ing land surface for improved productivity and land use.
Surface mining presents significant potential environmental problems.
Land required for actual mining activity for a 50,000 barrels per day
operation would directly involve from 200 to 250 acres per year, or
1~,00O to 5,000 acres over a 20-year life of an operation. This amounts
to 16,000 to 20,000 acres to achieve 200,000 barrels per day (the approx-
imate amount needed to replace oil and gas produced from the East
Louisiana sale) over a 20-year span.
220
PAGENO="0563"
557
Duriz~g e~r1y years of surface mine development, overburden disposal
would be off-site, probably in a temporary disposal area. After six
or more years, it would be possible to begin disposing of overburden
in the pit as a part of the overall reclamation process.
Such surface mine operat~ton of 25 gallon/ton oil shale at a 50,000
bbl/day plant capacity would require temporary off-Site storage of up
to 150 million cubic yards of overburden before pit return could begin.
However, by properly selecting the disposal site and applying contour-
techniques to control surface drainage, the area of land affected
could be restricted to koo acres and serious environmental impacts avoided.
The processed spent shale must initially be stored in an area away from
the mine site * Return of the stored processed spent shale to the pit
could begin after pit development is completed (about 6 years). Some
100 acres of land surface would be required for temporary storage space.
During any open-pit mining operation, the topography will be altered and
the environment will be changed. The actual area affected will be
determined by the thickness of the overburden and oil shale, the mining
plan, and the rate of development. Up to 5,000 acres could be involved,
and this would be increased about one-third if waste material is not
returned to the pit. In the long-term, open pits refilled with processed
spent shale and overburden could be revegetated, used by wildlife and
domestic grazing animals and would return to a condition generally equal
to and in some instances better than originally existed.
- 221
PAGENO="0564"
558
Waste disposal areas on flat land would create new "hills", which could
be contoured and revegetated to prevent erosion and mitigate aesthetic
degradation. Canyon and gully disposal areas would gradually be converted
into flatter areas, and also revegetated.
Restoration operations would include contouring to blend with surround-
ings; construction of conduits, retaining dikes and terraces to prevent
erosion, control surface run-off, prevent downstream contamination, and
provide paths for normal water flow; protection of any natural streams;
and revegetation.
Revegetation would be an integral part of watershed protection measures.
It has been experimentally demonstrated that vegetation can be grown on
processed oil shale with adequate reseeding, fertilization, and watering.
A longer range vegetation goal would be the re-establishment of the
naturdl plant community, or suitable replacement, to serve as wildlife
food and cøver. However, a significant amount of research experience
indicates that re-establishment of the fuller range of native browse and
cover species would be difficult.
Certain areas of the oil shale region provide a habitat with an attrac-
tive combination of vegetative, climatic, physiographic, and cultural
conditions for nearly 300 species of wildlife. Pishery habitat is
limited and inhabited principally by non~-game fish populations.
Probable and potential impacts on wildlife and fish are of two general
types: localized impacts at and in the vicinity of the actual oil shale
operations; and impacts resulting from ancillary urbanization and human
pressures.
222
PAGENO="0565"
559
Construction mining operations and servicing of oil shale plants would
have direct and indirect impacts upon the normal behavior and activity
patterns of wildlife in their vicinity. The impacts would be localized
and include such things as: Reduction of food and cover through removal
of overburden and surface vegetation for facilities, roads, etc; and
alteration of wildlife behavior and activity patterns due to disturbance
from equipment, facilities, traff~ic and noise of mining and industrial
operations.
Aquatic habitat is very small in the oil shale areas. However, were an
oil shale operation established within the vicinity of such habitat,
and if unpredicted or uncontrollable changes in the quality of local
surface or groundwater were to occur, there could be impacts on fish
and wildlife populations. Additionally, if use of ground water for
development and operation caused a lowering of natural ground water
discharges, such as springs and seeps, potential.adverse impacts would
occur upon associated ecological features. Supplemental habitat water
development programs such as wells and reservoirs may be required.
Certain species, such as mountain lion,, bear, elk, and mule deer are by
nature incapable of adjusting to the aggregate of human activities in
a developing area (i.e., urban expansion, waste disposal, additional
recreation use, etc.). Although populations of these species in the
oil shale areas would be expected to declLne over time, as a result of
oil shale product~on population pressures, they should not decrease to
the extent that the species would' become rare, endangered or extinct.
A4ded hunting and angling pressures indirectly resulting from imp±~oved'
access and increased local population could reduce hunting and angling
223
PAGENO="0566"
/ 560
quality for some species and in local sLuations where there is educed
animal population and/or increased hunting pressure.
Where parts of the oil shale areas are now used for livestock grazing,
agriculture, or recreation, some unavoidable changes in use patterns
would result.
Development of public oil-shale lands would have little direct impact
on agricultural activities, since most agricultural lands are privately
owned. Some impact could occur if oil shale activities jeopardized water
resources traditionally used for irrigation purposes.
(iii) In-Situ Development
An alternate processing technique should involve
the recovery of oil from the shale by heating underground, in place.
This technique is called in-situ processing and has not been success-
fully developed or demonstrated on a large scale, although considerable
laboratory and field research has been carried out by government and
industry.
Presently pi iDosed heat sources for in situ recovery include underground
combustion, hot natural gas, hot carbon dioxide, superheated steam, hot
solvents, and combinations of two or more of these. It is anticipated
that conduits for introducing heat underground would be provided by
wells, mine shafts and tunnels, fractures created by a variety, of tech-
niques, or by a combination of these.
Surface operations for in situ recovery would be relatively simple, with
the absence of problems associated with mining and spent shale disposal.
224
PAGENO="0567"
561
Disturbance of the original lane surt~ace and vegetation would be expected
to be slight. Earth moving would be limited mostly to grading for well
locations, plant site~ and field roads. It is anticipated 1~hat less than
ten percent of the land surface over an in situ recovery project would
be affected at any one time.
The contamination of underground water could pose a problem, especially
radioactive contamination if a nuclear device were used. All presently
contemplated techniques for such in situ operations involve establish-
ing perme&Dility by fracturing which could change the existing hydrology,
thus introducing problems. For this reason, only limited in situ
operations would be permitted initially, and these would be closely
monitored to prevent environmental degradation. Prior to authorization
of conñnercial in situ processing, adequate control methods would have
to be proven.
c. Processing Oil Shale into Oil
Oil shale processing on the surface would require the handling
of large amounts of materials. The amount of oil shale needed to
support oil sha~e production at rates up to one million barrels per day,
and the volume of both the shale in place and after mining and retorting
is detailed in Table B-.l.
A number of retorting processes have been patented worldwide for the
production of oil from oil shale. Three processes that have been tested
using large experimental equipment appear at this time to offer reason~
able ~~ssibilities of technical and economic success if scaled up to
commercial design size. (Gas-Combustion process developed by the Bureau
225
PAGENO="0568"
562
of Mines, the TOSCO II process of the Oil Shale Corporation, and the
Union Oil Company process.) In each system, heat is applied to raise
the temperature of crushed oil shale to about 9000 ~*, where the, solid
organic material (Kerogen) is converted to a liquid. The equipment,
method of heat application, and operating procedures differ markedly
for eaoh system.
Oils from the retorting processes, with the possible exception of the
TOSCO process, will require upgrading before the oil can be transported
through pipelines to the final product refineries, which are expected
to be located outside of the oil shale region. Modern refinery processes
are suitable for subsequent upgrading. Each process also produces a
retort gas that may be used within the plant as a fuel, or alternatively,
to generate supplemental electrical power for nearby conimunities.
The residue or spent shale resulting from retorting is in the forn of
solid particles ranging from three inches in diameter to a fine powder,
dependjng on the retorting method used. It will normally be dry, but
it ina~ be wet if it is processed to recover saline minerals. Extraction
of saline minerals would minimize the possibility of leaching of them
into groundwater supplies. Methods of disposal will therefore depend
on the physical characteristics of the material, its water content, and
the location of the disposal area, whether surface or subsurface. If
it is to be returned to the mine, this will affect the mine development
plans.*
A 50,000 barrel per day plant would be expected to occupy somewhat
less than 100 a&res for crushing, crushed shale storage, retorting, oil
2Z6
PAGENO="0569"
563
upgrading, oil storage, parking, oft~ice and shop facilities. The
retorting plant itself would require five to ten acres of this total.
Off-site requirements for each plant would have an effect on the
surrounding area to some degree. Access roads, power and gas trans-
mission facilities, waterlines, and oil pipelines would have to be con-
structed. Because only one access road would be required for each site,
relatively little land would be needed for road-building, although in
some areas underpasses and siiitable fencing might be required to reduce
interference with wildlife migration patte'±~ns.
New power lines should be constructed in accordance with the environmental
criteria outlined in recent Federal publications. Natural gas lines,
if required, would be buried underground, using existing techniques
for filling excavations, and reseeding of the right-of-way. Water
supply lines would be buried, employing similar practices. Because the
shale regio~i is now predominantly rural, urbanization would inevitably
have an environmental impact on the area. In general, most new
pennanent urban construction probably would be in existing population
centers at or near the shale lease sites in each State. Temporary
employment for plant construction would be substantial, creating need
for temporary housing (trailer villages, for example) in addition to
permanent housing. Expansion of sdpport facilities (business districts,
hospitals, schools, and other) would also result along with an
accompanying environmental impact on the land. A few mew small
connnunities may appear but are likely to be scattered..
227
PAGENO="0570"
564
One ~.of the greatest impacts would be in the requirement for water for
the retort plants and the disposal of waste water. Approximately 29,000
acre feet annually would be required for 200,000 barrel per day oil shale
progr&xn.
In addition, as much as ten gallons of water per ton of shale could be
produced in the surface retorts. This water would contain dissolved
saline and organic compounds. It could be used to moisten the waste
shale to prevent dust problems. However, it would require treatment
prior to use to remove hydrocarbons and malodorous compounds, and per-
haps dissolved minerals.
Large quantities of natural ground water occur in leached zones of the
deep oil-shale areas, but the location, composition and movement of such
waters have yet to be defined in many aveas. These aquifers may contri-
bute substantially to the overall water supply available to satisfy
requirements for oil shale development.
The nature of the foreseeable problems associated with water quality
would depend largely upon the mineral characteristics of the processed
shale and the method of disposal. All foreseeable problems, outlined
below, are controllable with present technology.
Protective measures such as wetting of spent shale piles, revegetation
of mined areas, construction of canals and culverts for runoff water,
and development dikes and terraces would be required.
Leeching is r~ot believed a problem since waste piles tend to harden
through natural cementation.
228
PAGENO="0571"
565
The rate of waste buildup from a typical 50,000 barrel per day plant
(from ten to twenty feet per acre per year) would exceed the bui]Aup
of soil moisture from the low annual precipitation (one to two feet per
year). ~ecause of this, the water could not saturate the waste contain-
ination, however, it may be necessary initially to construct a permanent
impermeable floor where the waste material is to be deposited. This
barrier would prevent the leach waters from entering underground water
systems and would direct percolating waters toward the impoundment
dams where they could be controlled for treatment; evaporation, or use.
In the. shale-oil upgrading process, the principal source of contaminated
water would be from steam concensed in the gas-processing facilities,
`which would contain dissolved organic compounds. This water wouldbe
purit~ed by conventional refinery ~treatment techniques and used in
processed shale disposal or similar reclamation programs. The water
used in the cooling tower also may contain high concentrations of
dissolved salts. `Again, this would be conventionally treated and used
in shale waste disposal.
The principal problems associated with a saline minerals-extraction
industry would be those* concerned with solids handling in stockpiling
~be spent shale prior to dawsonite roasting and in disposal of the
denuded ~bale after alumina recovery.
No critical air pollution problems would be anticipated in connection
with handling and utilizing the gases produced in oil shale retorting
operations. Regardless of the retorting process, gases would be
229
PAGENO="0572"
566
co-produced with the oil product * The mixture of c~il and gas products
would be conducted via a closed system from the pyrolysis section of the
process operation to a separation and recovery section, in a state
varying from true vapor to mist to liquid, depending upon the particular
process and its operating conditions. Treatment to recover the maximum
amount of oil possible also would remove water and particulate matter.
The remaining product gases yield small amounts of sulfur, which may or
may not be economically recoverable.
Any power plants associated with oil shale development would produce
stack gases which could be sources of air pollution. Such contamination
would be avoided by using the adequate emission control techniques-
for removal of particulate matter and by the control of sulfur and
nitrogen oxides emissions through the use of low sulfur fuels, combus-
tion temperatures control, and scrubbing.
If groundwater use for development and operation resulted in lowering
of natural surface water features, such as springs and seeps, adverse
impacts could occur upon associated ecplogical features, including wild-
life and fish. Such degradation could be avoide~ in most cases by:
lease site selection to avoid aquatic habitat; installation of equip-
ment, procedures, and plans which would avoid loss of degrading
substances to the surface waters; and construction and operating regula-
tions and stipulations which, would control polluting substances arid
keep physical alterations to a minimal level.
Mines and processing plants would intrude on riai~ural setting while in
existence. However, these facilities are expected to be in relatively
remote locations away from highways. 230
PAGENO="0573"
567
The oil shale lands in Colorado, Utah, and Viyoming are located in a
sparsely settled, semi~arid to arid region of moderately high elevation
so the develOpment of oil shale would have a limited impact on existing
uses of the area.
Sinde much of the oil shale resource is on public lands, Ped~ral
regulations and controls could assure adequate environmental protection
measures would be provided for in all development.
With the influx of population and improved accessibility, recreational
activity in the region would increase. Some increased usage could be
sustained, since the recreational potential of the region is largely
untapped. There are limits beyond which the recreational quality of
the region will begin to decline. The wildlife population could with-
stand greater hunting pressure; however, any decrease in the game
population accompanied by an increase in hunters would decrease the
amount of game recovered by each hunter.
To the extent that oil from shale could substitute for oil from the
East Louisiana sale, the environmental impacts of development and
transportation to market of East Louisiana oil would be avoided.
Prom the National security standpoint, oil shale development would
provide an additional major source of petroleum products within the
continental tJi~ited States.
d. Product Transportation
Shale oil from the processing plant sites would be moved
to refinery centers via pipelines from the sites to existing
231
PAGENO="0574"
568
tran~continental pipelines. These ten to twelve inch connecting lines
could be constructed in some cases using existing rights-of-way to ensure
minimum surface disturbance, with appropriate revegetation and positive
maintenance to prevent leakage.
A major source of oil, located near the geographic center of the lower
l~8 States, would be developed and the oil products piped into existing
transcontinental pipelines. The pipelines would avoid major earthquake
regions. Maintenance would be reduced because of lesser opportunity
for breaks caused by natural disasters.
The extent of impacts from oil losses, if they were to occur, upon
habitat a~id associated wildlife and fish populations would depend upon
numerous factors, including; Volume of oil lost, leak location, and
weather conditions; the quantity and quality of wildlife and fish
habitat affected; timing with respect to organism life history atages;
and effectiveness of contingency plans. Most significant impacts would
be on aquatic organisms and water-related birds and mammals * Such
impacts would be minimized by building oil handling facilities and
routing pipelines to avoid the more vulnerable habitats.
Construction of the pipelines together with the accompanying service
roads would cause disruption of the vegetative patters in a semi-arid
region, but revegetation of the construction zone and maintenance of
the service roads should minimize any adverse effects of this construc-
tion* Construction of service roads would provide public and hunter
access to a presently little used area and will place pressure on wildlife.
232
PAGENO="0575"
569
e. Waste D1s~osal
Mining and waste disposal can be conducted either at the
surface or underground. However, disposal of spent shale after
retorting is directly related to the type of mining used. In
addition, depending on the retorting method employed, the spent shale
may vary in particle size from a fine powder to lumps which are up to
three inches in diameter. As discharged from the retort, it will
normally be dry, but water (10% to 20% by weight) may be used on the
disposal piles to reduce dusting and aid consolidation. Transport to
the disposal area may also be accomplished by a water slurry system.
234
PAGENO="0576"
570
References
General
Clean En~rgy Message, President of the United States, June 4, 1971.
Dinneen, G. U., Stanfield, K. E., Cook, G. L., and Sohns, H. W., Develop-
ments in Oil Shale Technology, Chemical Engineering Progress
Synopsium Series, Vol. 64, No. 85, 1968.
Proceedings of the First Five Oil Shale Symposiums, 1964-1968, Colorado
School of Mines quarterly, 1970.
Public Land Law Review Commission, Qne Third of the Nation's Land, Report
to the President and Congress, June, 1970.
Ryan, J. J., and Welles, J. G., Regional Economic Impact of a U. S. Oil
Shale Industry, Denver Research Institute, University of Denver,
July 1966,
Savage, Harry K., The R ock That Burns, 1967.
Schans, J. J., Potential Role of Unconventional Energy Sources in National
Security, 1969-1985, Colorado School of Mines Quarterly, Vol. 64,
No. 4, 1969.
U. S. Department of the Interior, Prospects for Oil Shale Development,
Colorado,* Utah, and Wyoming, Washington, D * C *, May 1968.
U. S. Department of the Interior, Program Statement for the Proposed
Prototype Oil Shale Leasing Program, Washington, D * C., June* 1971.
Wells, Chris, The Elusive Bonanza, 1970.
Resource
Cashiom, W. B *, Geology and Fuel Resources of the Green River Formation,
Southeastern ;Uinta Basin Utah and Colorado, U. S. Geological Survey
Professional Paper 548, 1967.
235
PAGENO="0577"
571
Coffin, D. L., Welder, F. A., and Glanzman, R. K., Geobydrology of -the.
Piceance Creek Structural Basin Between the White and Colorado
Rivers, Northwestern Colorado,. U. S. Geoiogical Survey flydrologic
Investigations Atlas EA-370, 1971.
Culbertgon, W. C *, Geology and Mineral Resources of the Green River
Formation, Wyoming, U.S.A., United Nations Symposium on the Devel-
opment and Utilization of Oil Shale Resources, 1968.
Donnell, .J * R., Tertiary Geology and Oil Shale Resources of the Piceance
Creek Basin Between the Colorado and White Rivers, Northwestern
Colorado, U. S. Geological Survey Bulletin lO82-L, 1961.
Donnell, J. R. and Austin, A. C., Potential Strippable Oil Shale Resources
of the Mahogany Zone (Eocene), Cathedral Bluffs Area, Northwestern
Colorado, U. S. Geological Survey Professional Paper 750-C, 1971.
Donnell, 3. R. and Blair, B. W., Jr., Resource Appraisal of Three Rich
Oil Shale Zones in the Green River Formation, Piceance Creek Basin,
Colorado, Colorado School of Nines Quarterly, Vol. 6~, No. 4,
October 1970.
Duncan, D * C * and Swanson, V. E., Organic-Rich Shale of the United States
and World Land Areas, U. S. Geological Survey Circular No. 523, 1965.
Ritzma, H. R. and Seeley, deBenneville K., Determination of Oil Shale .
Potential, Green River Formation, Uinta Basin, Northeastern Utah,
Utah Geological and Mineralogical Survey Special Studies 26.,
January 1969.
Smith, J. W~, Trudell, L. G., and Stanfield, K. H., Characteristics of
Green River Formation Oil Shales at Bureau of Nines Wyoming Corehole
No. 1, U. S. Bureau of Mines R. I. 7172, September 1968.
236
77-463 0 - 72 - pt. 1 - 37
PAGENO="0578"
572
Smith, John Ward, et al., Oil Yields of Green River Oil Shale from
Colorado Corehole No. 1, U. S. Bureau of Mines R. I. 7071, 1968.
Stanfield, K. E., et al., Oil Yields of Sections of Green River Oil Shale
in Colorado, Utah, and Wyoming, U. S. Bureau of Mines R. I. 5081,
(1965); 5321, (1957); 5614, (1960); 6420, (1964); and 7051, (1967).
Trudell, L. G., et al., Green River Formation Lithology and Oil Shale
Correlations in the Piceance Creek Basin, Colorado, U., S. Bureau of
$ines R. I. 735.7, 1970.
Mining
East, J * H., Jr. and Gardner, E. D., Oil-Shale Mining, Rifle, Colorado,
1944-1956, Bureau of Mines Bulletin 611, 163 pp.,. 1964,
Katell, Sidney and Wellman, Paul, Mining and Conversion of Oil Shale in
a Gas Combustion Retort, U. S. Bureau of Mines Technical Progress
Report 44, October 1971,
Murray, R. G., Economic Factors in the Production of Shale Oil, presented
at th~ 74th National Western Mining Conference, Denver Colorado,
February 1971.
Retorting (Surface)
Cameron, R. J.', .The Cameron and Jones Vertical Kiln for Oil Shale Retort-
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Colorado School of Mines Quarterly, pp. 315-30, 1970.
Clampitt, R. L., Gasz, J. W., Jagel, K. I., and Lawson, J. E., Gas
Combustion Retorting Performance in a Large Demonstration Retort,
presented at the AIME 100th Annual Meeting, March 2, 1971.
Hall, R. N. and Yardumian, L. H., The Economics of Commercial Shale Oil
Production by the TOSCO II Process, Presented to 61st AICHE Annual
Meeting, Los Angeles, December 1-5, 1968.
237
PAGENO="0579"
,573 /
HS~tley, F * L., Union Oil' a Shale Program - Progress Report, presented
at Colorado Mining AssociatiQn Meeting, Denver, Colorado,
February 7, 1957.
Irish, 0. E., Oil Shale Retorting Oil with Shale Recycle, U. S. Patent
3,288,869, assigned to Union Oil Company, May 19, 1964.
Leühart, A. F., The TOSCO Process Economic Sensitivity to the Variables
of Production, API Proceedings, Refining Division, pp. 907-24, 1969.
Natzick, Arthur, et al., Development of the Bureau of Mines Gas-Combustion
Oil-Shale Retorting Process, U. S. Bureau of Mines Bulletin 635,
199 pp., 1966.
Raumiler, R., The' Distillation of Pine-Grained Oil Shale by the Lurgi-
Ruhr~as Process, United Nations Symposium on the Development and
Utilization of Oil Shale Resources, Tallinn, USSR, 1969.
Rurark, J. R., et al., Gas Ccmbustiofl Retorting of Oil Shale Under Anvil
Points Lease Agreement: Stage I, U. S. Bureau of Mines R. I. 7303,
1969.
Retorting (In Situ)
Burwell, E. L., Carpenter H. C., and Sohns, H. W., Experimental In Situ
Retorting of Oil Shale at Rock Springs, Wyoming, U. S. Bureau of
Mines Technical Progress Report 16, June 1969.
Burwell, E. L., Sterner, T. E., and Carpenter, H. C., Shale Oil
Recovery by In Situ Retorting A Pilot Study, J. Of Petroleum
Technc~logy, December 1970.
Dougan, Paul M., Reynolds, Fred S., and Root, Paul J.,The Potential for
In-Situ Retorting of Oil Shale in the Piceance Ci~eek Basin of
PAGENO="0580"
.574
Northwestern Colorado, Colorado School of Mines Quarterly, Vol. 65,
No. 4, 1970.
Grant, Bruce F., Retorting Oil Shale Underground Problens and Possibil-
ities, Colorado School of Mines Quarterly, Vol. 59, No. 3, July 1964.
Shale Oil Processi~g
Benson, D. B. and Berg, L., Catalytic Hydrotreating of Shale Oil, Chem.
Engr. Progress, Vol. 62, No. 8, PP. 61-7, August 1966.
Carpenter, H. C,, et al., A Method for Refining Shale Oil, I&EC, Vol. 48,
pp. 1139-1145, July 1956.
Carver, H. E., Conversion of Oil Shale to Refined Products, proceedings
of the First Five Oil Shale Symposiums, 1964-1968, Colorado School
of Mines Quarterly, 1970.
Cottingham, P. L. and Carpenter, H. C., Hydrocracking of Prehydrogenated
Shale Oil, I&EC Process Design and Development, Vol. 6, No. 2,
pp. 212-17, April 1967.
Hellwig, K. C., Feilelman, S., and Alpert, S. B., Upgrading Feeds by the
H-Oil Process, Chem. Engr. Progress, Vol. 62, No. 8, pp. 71-4,
August 1966.
Montgomery, C. P., Refining of Pyrolytic Shale Oil, I&EC Product Research
and Development, Vol. 7, No. 4, pp. 274-82, December 1968.
Environmental Impacts
Committee on Environmental Problems of Oil Shale, Environmental Problems
of Oil Shale, State of Utah, February 1971.
Hand, John W., Planning for Disposal of Oil Shale Chemical and Mine
Wastes, Colorado, Geological Survey Special Publication No. I,
239
PAGENO="0581"
575
Governor's Conference on EnvirOninental Geology, Denver, May l~2,
1969, pp. 33-37.
Hutchins, John S., et al., The Environmental Aspects of a Commercial Oil
Shale Operation, AIME Environmental Quality Conference, June 1971.
Nevens, T. D., Culbertson, W. J., Jr., and Hollingshead, R., Disposal
/ and Uses of Oil Shale Ash, Final Report, U. S. Bureau of Mines
Project No. SE~-8, submitted by Denver Research Institute, April 1970.
Nevens, T, D., and Rohrman, F. A., Gaseous and Particulate Emissions
from Shale Oil Operations, ACS Div. of Fuel Chem. Preprints, Vol. 10,
No. 1, pp. 65-72, March 22-~3l, 1966.
Special committee of the Governor's Oil Shale Advisory Committee, Report
on Economies of Environmental Protection for a Federal O~.l Shale
Leasing Program, State of colorado, January 1971.
U. S. Department of the Interior, Draft Environmental Impact Statement
for the Prototype Oil Shale Leasing Program, Washington, D * C.,
June 1971.
Ward, J. C., Margheim, G. A., G.O.F. Lof, Water Pollution Potential of
Spent Oil Shale Residues from Above-Ground Retorting, Colorado
State University, Fort Collins, Colorado, 1970.
Wyoming Oil Shale Environmental Planning Committee, Environmental and
Economic Report on Wyoming Oil Shale, State of Wyoming,
February 1971.
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Reduction In Demand
a. Discussion of the Alternative
An alternative to the development of the oil and gas from
the OCS sale could be to reduce the demand for energy so as to make
the development of the oil and gas unnecessary.
Thex'e is a body of thought which is advocating the reduction in the use
of energy on environmental grounds. NcCloskey ~/ presents the basis
of such a position and indicates the kind of public policies that would
be required to implement the program. This includes the replacement
of the market system to determine how much energy shall be produced or
imported and who shall consume energy, with a detailed control on the
production, importation, and use of energy in all sectors and regions of
the economy. In his evaluations relative to controlling energy growth,
he states:.
"A short-run strategy would involve the following changes in
public policy: ending or reducing the many biases in public
policies which provide incentives to energy growth; maintain-
ing and strengthening environmental constraints on energy
growth; reducing energy demands by educating the public to
understand the importance of conservative use of energy;
encouraging intensified research and development in order
to achieve greater efficiencies in energy utilization and
in order to find new, more environmentally acceptable, energy
,~/ Michael McCloskey, "The Energy Crisis: The Issues and A Proposed
Response," Environmental Affairs, Vol. 1, No. e, November 1971,
pp. 587-605.
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`577
sources and discouraging growth in industries that are the
most profligate consumers of energy.' Coordination of' these
efforts would be facilitated through the e~tablishment of
new government agencies, specifically geared to respond to the
energy problem.' Each of these changes would involve efforts
that would go well beyond the traditional bounds of energy policy,
andall could have profound economic and social impacts. Yet
changes are already beginning to occur in all these fields,
and environmentalists are determined to promote them."
Donella B. Meadows, et. al., in a report for the Club of Rome's Project
`on the Predicament of Mankind 1/ presents an argument that the growth
of our population and economy are pressing against a limit which will be
upon us within the next century. `The authors argue that action is needed
mow to reverse these trends' and adjust the world economy to a steady state.
They state, "These conclusions are s~ far reaching and raise so many `
questions for further study that we are quite frankly overwhelmed by the
enormity, of the job that must be done." ~/
The demand for energy in the United States has been increasing at an
average rate of 3.1 percent annually for the last 20 years. Energy
demand in the rest of the world has grown at a rate nearly double that
~/ Donella if. Meadows, et. al., "The Limits to Growtht', A Report for
the Club of Rome's Project on-the Predicament of Mankind, 1972.
2/ Ibid., p. 24.
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4
PAGENO="0584"
578
of the United States in recent years !I. Demand for petroleum increased
by 5.7 percent from World War II to 1955, and then dropped almost to
3.6 percent through 1968 - or about the same as total energy demand in
those years. 2/ But recently the rate of increase of petroleum demand
has begun to rise again.
Energy demand has been closely Correlated with gross national product,
which, jr~ turn, isclç~sely~correlated with both.. popuj.ation and per.
Gapita income4 The increasing use of energy, therefore, has been correlated
with increasing affluence and a rising material standard of living. 3/
Furthermore, the emphasis being placed on improving air quality is further
accentuating the demand for natural gas because its exhaust contain no
sulfur and no part iculates * During the last five years, demand for natural
gas has exceeded the growth rate of demand for total enez~gy. 4/
Reduction in deiaand through reduction in the growth of per capita consumption
is possible. Bureau of the Census projections envision a 22% increase in
per capita consumption by 1975, and a 65% increase by 1985, both relative
to l97O.~'These growth rates could be lessened in two ways: (1) reducing
1/ U~DI, Bureau of Mines, Mineral Facts and Problems, 1970, Bulletin 650,
Washington, D. C., Government Printing Office, p. 13.
2/ Ibid., p.' 147.
3/ USD1, United States Energy~ A Sununary Review, 1972, pp. 2-5.
4/ ~ 34.
5/ Bu7'eau of Census, "Population Estimates and Projections," 1970, Series P-25,
No. !~t~8, Aug. 6, 1970, Washington, D.C., Government Printing Office.
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PAGENO="0585"
- ~579
the rate of growth of demand for the goods and services produced by the
energy demanded, and (2) producing the demanded goods and services more
efficiently.
Coutinued increases in material standard 9f living tend to be equated
with increased number, variety, and size of objects which consume energy
in their construction and operation: automobiles, aircraft, refrigerators,
air conditioners, and the like. Transporat ion uses primarily private
automobiles comprise 55 percent of current petroleum demand. 1/ Increases
in size, performance and amenities (such as automotive air conditioning)
increase fuel consumption. Reduótion in the rate of growth of per capita
energy demand and especially of per capita petroleum demand could
result .from a trend toward smaller cars and increased use of mass transit.
Greatly increased use of air conditioning in recent years had contributed
to the rapid growth of electrical energy consumption; increased use of
insulation could reduce energy requirements for operation.
4dvances in technology offer long~range promises ~f increasing the efficiency
of extraction of energy from fuels. Examples include fuel cells, magnetahyd-ro-
dynamics, and breeder reactors. Any consideration of reduction in demand
must recognize `the nature and magnitude of projected petroleum demand and
natural gas demand and the impacts and adjustments that would have to
be made to acconusodate either a portion or the total of such reduction in
any one of the sectors of use. Adequate evaluation of such effects could
1/ USD1, Mineral acts and Pro~ç~, ~
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580
only be made after intensive study and analysis, which is far beyond
what now is known or. could be developed relative to the scope and timing
of this report and its related decisions.
For illustrative purposes, the following table, using National Petroleum
Council projections of future petroleum consumption by sectors for 1980
shows the relationships of reductions of 75,000 and 150,000 b/d relative
to the projected consumption for each sector. 1/
The transportation sector, which represents over half of the projected
demand, would be the area most subject to major demand reductions, since
such action would represent but .6 to 1.3 percent reductions in 1980.
Whether a reduction of this magnitude, or even a major portion thereof,
1/ National Petroleum Council (NPC), Environmental ~onservation, The Oil
and Gas Industries, Vol. 2, February 1972.
Consumption % Relationship % Relationship
(million b/d) to 75~000 b/d to 150,000 b/d
1980 1980 1980
Sector
Transportation
Residential/commercial
Industrial
Utilities
Petrochemical Feeds
Other
TOTAL
11.774
.6%
1.3%
3.104
2.4%
4.8%
2.256
3.3%
6.6%
2.345
3.2%
6.4%
1.586
4.7%
9.4%
1.264
5.9%
11.8%
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PAGENO="0587"
581
could be accomplished without severe social, economic, quality of life or
even certain environmental adverse impacts is a subject that would have
to be thoroughly analyzed on both a regional and national basis before
there would be an adequate basis for the taking of the kinds of actions
that would be required.
A similar type of analysis would also have to be conducted for reduction
in natural gas supply. The proposed OC$ lease sale is projected to contribute
approximately .2 to .4 percent of total natural gas demand by 1985.
b, Potential Environthental Impacts
I~ a reduction in demand were directed at the oil and natural gas to be
developed from the proposed OCS oil and gas lease sale,all the environ-
mental impacts associated with that development and energy use would be
eliminate4 as a result of the direct tradeoff. It would also eliminate
any environmental damages and any adverse results associated with any
one of the alternatives to the sale.
A major consideration in restricting demand for energy services is that
the cost involved in such a restriction is not related to the environ~
mental damage wbi~h would be prevented by not producing, transporting
and consuming the energy resources involved. In the case where pollution
Standards are introduced and enforced, causing the amount of environ-
mental damage to the air per unit of energy' produced to decrease radically
over the period of a few years, the environmental benefits of the action
decline' but the associated costs do not. Assume, for example, that energy
,demand is reduced by the energy equivalent of 75,000 to 150,000 barrels
of crude oil per day, and this reduction is to be accomplished through
a redu~tion in petroleum use in mobile equipment.
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PAGENO="0588"
582
The following table shows the trend in quantities of air pollutants
emitted from mobile equipment using petroleum products. ~/
Estimated Emissions From Mobile Equipment
(millions of tons per year)
Hydrocarbons
Autos 9.9 12.0 13.0 11.0 5.9 2.4 0.9
Trucks & buses 1.2 1.4 1.7 1.9 1.7 1.4 1.4
Aircraft .3 .3 .2 .3 .2 .1 .1
Off-highway .7 ~ ~7 .6 .6 .6 **~
Total T~T I~T ~i3~ ~ 1~ 2.9
Carbon monoxide 37.3 45.7 55.2 54.3 40.6 24.3 l»=.7
Autos
Trucks & buses 11.1 12.7 15.6 17.4 16.2 14.0 14.2
Aircraft 2.2 1.4 .9 .4 .5 .7 .8
0ff-highway 6.7 6.8 5~7~ . . 4.4 ~
Total ~ ~ 3~71~ 77. 2. "~3~ 31.1
Nitrogen oxide
Autos 3~3 4.o 4.8 5.7 5.0 2.8 1.3
Trucks& buses .8 .9 1.1 1.4 1.6 1.5 `1.7
Aircraft .01 .01 .03 .05 .06 .08 .09
Of f-highway .8 ~j .9 ~ ~j 1.1 1.1
Total ~ 5.8 ~r 8.1 7.6 5.5 ~T
Particulate
Autos .2 .2 .2 .3 .3 .2 .1
Trucks & buses .1 .1 .~1 .2 .2 .2 .2
Aircraft .01 .01 .02 .04 .04 .04 .05
Off-highway .2 .2 .2 .2 .2 .2 .1
Total .5 .5 .5 .7 .7 .6 .5
The impact of the 1968 air pollution standards is quite apparent. It is
also apparent from the table that the amount of air pollution which would
be avoided by a reduction of petroleum use by 75,000 to 150,000 barrels
per day would be much less if this reduction in use occurred in 1985 than
247
PAGENO="0589"
583
if it occurred in 1965. Thus, the cost (measured in terms of energy
services given up) per unit of pollution avoided would be greater in 1985
than in 1965. In general, this cost-benefit ratio of reduced energy
services will vary considerably depending upon the existence, the level,
and the effectiveness of pollution standards.
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584
C. Delay Sale Until New Technolog~r is Available to Provide
Increased Environmental Protectjo~i
The sale could be delayed until new technology is available;
however, basically safe technology is available provided its appli-
cation and use are properly regulated and controlled. As new
technology relating to safety and environmental protection is developed,
1t can be incorporated with existing requirements and applied to all
OCS leases so that bringing on additional production now will not
generally preclude a4aptation of new advances tothe prospective leases.
"Zero risk" does not exist but is an ideal toward which safety systems
are directed. In the history of Federal offshore leasing and production
over the past 25 years only k significant oil spills have occurred in
more than 1,000 leases, 9,000 drill holes, and 1,800 producing plat-
forms.
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585
IX. Consultation. and Coordination with Others
A. Consultation and Coordination in Preparation of
Draft Environmental Statement
1. Federal:
In the preparation of the draft environmental statement
review comments have been solicitated from appropriate Bureaus and
Offices within the Department of the Interior. In addition, the
Environmental Protection Agency, the Department of Commerce, Depart-
ment of Transportation, Atomic Energy Commission, Federal Power
Commission and the Office of Emergency Preparedness have been consulted
throughout the preparation phase of the draft environmental statement.
2. State:
In the preparation of the draft environmental statement,
advice was solicited from the appropriate offices of the following
States: Louisiana, Alabama, Mississippi, Florida and Texas. Consulta-
tions were held with the States of Louisiana and Mississippi in New
Orleans on March 7, 1972.
3. Public:
The testimony and comments resulting from a public he4ring
held in New Orleans, Louisiana on September 8 and 9, 1971, concerning
the proposed OCS general oil and gas lease sale offshore Eastern Louisiana
which was cancelled were considered. Since the area under consideration
250
PAGENO="0592"
586
for this draft environmental statement remains essentially the same
as that of the cancelled sale the public hearing comments and testimony
have been considered as applicable to the present proposed offering.
251
PAGENO="0593"
587
X. Attacbment~
1. Attachment A--Tentative OCS Leasing Schedule
2. Attachment B--Description of blocks by water depth, distance
from shore, acreage and estimated production
3. Attachment C--Figures 1 through 5--Depiction of current and wind
data, Shell pill, January, 1971
k. Attachment D--Summary of recreation and fish and wildlife areas
along the Gulf of Mexico Coast including a map
showing the location of refuges
5. Attachment E--~Daily distribution of shipping traffic in the Gulf
of Mexico
6. Attachment F--Geographic location of proposed blocks showing poten-
tial risk factors
7. Platt --Depiction of blocks proposed for leasing
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