PAGENO="0001" 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 PAGENO="0002" 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) PAGENO="0003" 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 (~) PAGENO="0004" PAGENO="0005" 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) PAGENO="0006" PAGENO="0007" 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) PAGENO="0008" 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. PAGENO="0009" 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 - - PAGENO="0010" 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. PAGENO="0011" `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 PAGENO="0012" 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 PAGENO="0013" 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~ PAGENO="0014" 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? PAGENO="0015" 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. 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I0\ L ~rCD'.~ ~_ H ~ ~ P1&) h9&u~4 0 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. ru - - - - - i~n1 P'S CD ~- ~ LI -~ ru `-a ~ ~ ~ ~ - ~ ~L ~ CD `4 I-~ ~J1ICD0-J iruru o o ,OD ,~I0 0~ 10 0 I~I0 ~ 1~j0 0 .ru 0 r-, o 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 I ~I ~I `-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 -.t (4 `44 U C (4 N 14 `41 N-to0ttoN-~ ~ 0. ~w `.10 4-4 ~ ~ `.4444 -4) ~ I 0 0t0~Ct0 0 0 0 0 0t0t 0~(\i `-4 `.4 N -4 ~\ C.) 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(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 *