List of permits issued by State lands commission in connection with geophysical exploration in the tide and submerged lands of California (in chronological order of issuance)—Continued Mr. PYLES. These permits cover portions of the Continental Shelf extending from Dana Point in Orange County on the south, to Pismo in San Luis Obispo County on the north, a total distance along the coast of about 250 miles. Eighteen companies have participated in this exploration program. They have expended in excess of 42 million dollars. In general, the exploration has been concentrated in areas adjacent to existing oil fields, extending from the shore to approximately the 100-fathom600-foot-line and including a small area adjacent to the northern channel islands off Santa Barbara. The width of the area explored varies from a minimum of 2 miles to a maximum of 20 miles. At this point may I call your committee's attention to a map showing the oil fields on shore, the islands and channels, the line of the Continental Shelf, and the areas explored under the permits. That is exhibit E on your right. The shaded area adjacent to the coast is the area that has been worked by seismograph in the geophysical operations. The red line to the left is the edge of the Continental Shelf, as explained on the first large map. Mr. WALTER. What is the greatest distance from the shore to the Shelf? Mr. PYLES. I do not believe I understand the question. Mr. WALTER. From the shore out to the edge of the Shelf? Mr. PYLES. From the edge it would be approximately 120 miles from the coast to the red line offshore from southern California. The information acquired by the companies engaged in geophysical exploration of the Continental Shelf of California indicates the existence of geologic structures similar to those of producing areas on or adjacent to the shore. As is the case with the exploration on land, the existence of petroleum deposits in these offshore structures can only be determined by actual drilling operations. A great deal is known concerning the oil fields on or adjacent to the coast of California. By virtue of the data and information available engineers have made estimates of the probable recovery therefrom. Because the areas thus far explored offshore are geologically similar to those now producing on land, it is logical to make a comparison between the two. Upon this basis, the possible oil reserves of the areas thus far explored offshore are estimated to be approximately 4,000,000,000 barrels. The areas thus far selected for geophysical exploration have necessarily been limited to areas within which the companies feel that it is or shortly will be possible to drill in the light of present knowledge. Present knowledge indicates that we can, or soon will be able to, drill in water depths of at least 500 feet. The prospect of conducting drilling operations within these or similar areas presents problems never heretofore encountered. The geophysical exploration upon the Continental Shelf in the Gulf of Mexico adjacent to Texas, Louisiana, and Mississippi has been in comparatively shallow waters. We will be confronted in California with the problem of drilling in water down to depths of at least 50 fathoms-300 feet-in order to adequately test structures which may exist only a few miles from the shore. It is estimated that the expense of constructing a suitable drilling platform and for the necessary extra drilling equipment required to drill an exploratory well in depths of 300 feet of water will be in excess of a million and a half dollars. In addition, the expense of transporting men and materials to, and in conducting exploratory operations on, such a structure, will be much greater than is the case in drilling upon land. These items are only the beginning, for once a discovery has been made, the problems and expense of developing and producing an entire oil field from such deep waters are beyond present calculation. From the indication of the existence of geologic structures within the areas thus far explored, it is further reasonable to assume that many additional structures exist in as yet unexplored areas of our Continental Shelf. The exploration and development of such other structures will undoubtedly take place as rapidly as technological developments advance. Within the past 10 years our knowledge and experience in conducting drilling operations offshore have increased tremendously. It is reasonable to assume that this knowledge and experience will continue to advance in the future at the same rate as in the past or at an even faster rate. If this proves to be the case, it is not unreasonable to visualize drilling in water to depths of 100 fathoms-600 feet-or more, within the next 5 years. As this is accomplished, new sources of petroleum will become available to us in ever-increasing quantities within the United States. In comparison with the geophysical exploration for oil on land in California, such exploration in the waters along the coast of California is in its infancy. It is the general opinion among competent geologists that the area of the Continental Shelf of California offers far greater possibilities for augmenting the future oil reserves of the State than does the upland area. The petroleum industry in California is fully aware of this fact, as the present program of geophysical exploration offshore signifies. In conclusion: 1. Until the Supreme Court decision in 1947, and ever since the adoption of California's constitution in 1849, which was accepted as the basis for its admission to the Union in 1850—a period of nearly 100 years-California, and Californians, had in good faith believed and acted upon the belief that the State owned the tide and submerged lands within its boundaries, as set forth in its constitution. 2. During that period, California and persons acting pursuant to its permission, had financed and developed facilities and improvements, including petroleum development, in the inland waters and marginal belt, of a value in excess of $3,000,000,000. 3. The Seventy-ninth Congress in 1946, in approving a joint resolution-House Joint Resolution 225-quitclaiming to the adjacent States a 3-mile belt under the ocean beyond the low-water mark, recognized these equities. The President's veto of this resolution was based upon a legal issue involved; it did not, however, disavow the equities of Ĉalifornia and its lessees. 4. In fact, the President of the United States, and the Attorney General, have recognized the necessity and propriety of action by the Congress to provide for the equities of the State and those who have operated in good faith under it. The supplemental brief filed by the Attorney General in the Supreme Court case in March 1947, declares: * * * The President had authorized him to say that there is no desire on the part of the President or of any Federal official to destroy or confiscate any honest or bona fide investment, or to deprive the State or its subdivisions of any reasonable expectation of return from the areas that have been developed. The President recognizes that in the event the decision of this Court is favorable to the United States, it will be necessary to have congressional action looking toward the future management of the resources in this area. And he also intends to recommend to the Congress that legislation be enacted recognizing both prospectively and retrospectively, any equities of the State and those who have operated under it, to the fullest extent consistent with the national interests. 5. The Supreme Court decision, in June, 1947, held that California was not the owner of the 3-mile belt along its coast lying seaward of ordinary low-water mark outside of the inland waters. 6. No one yet knows where the exact seaward boundary of California-or of the other coastal States-may be. This cannot be ascertained until an official determination thereof is made. 7. The Supreme Court decision, as I understand it, determined the legal issue. The Court, however, recognized the fact that California and its lessees had in good faith acquired substantial equities in these lands. It declared, in its decision: * we cannot and do not assume that Congress, which has constitutional control over Government property, will execute its powers in such way as to bring about injustices to States, their subdivisions, or persons acting pursuant to their permission. 8. Thus, the Congress, the President, and the Supreme Court support the propriety of the recognition, and the necessity of the settlement, by the Congress, as a matter of policy, of the interests of California and California― in the marginal sea within the boundaries set forth in its constitution. 9. The importance of petroleum to the safety of this Nation, as World War II so indisputedly demonstrated, cannot be overemphasized. As stated in November 1945 by Ralph K. Davies, Deputy Petroleum Administrator for War, before the United States Senate Special Committee To Investigate Petroleum Resources, of which committee Senator O'Mahoney was the chairman Our overseas forces required nearly twice as many tons of oil as of arms and armament, ammunition, transportation and construction equipment, food, cloth ing, shelter, medical supplies, and all other materials together. In both essentiality and quantity, oil has become the greatest of all munitions. Great as the overseas requirements were, two and one-half times as much was required for the war-supporting economy at home. 10. The need for discovering and making available new sources of petroleum within our continental limits to provide for the safety and for the economy of this Nation is fully recognized by our Government. The President's proclamation in September 1945, declaring the "Policy of the United States with respect to the natural resources of the subsoil and sea bed of the Continental Shelf" states that our Government holds the view that efforts to discover and make available new supplies of these resources should be encouraged. The indicated-and as yet barely touched-potentialities of the Continental Shelf, both within and without State boundaries, offer far greater possibilities for augmenting our future oil reserves than does our more fully explored land area. This need for new petroleum reserves, together with the fact that the Continental Shelf offers the greatest potential source of such reserves within our continental limits, constitute an impelling urgency for action by your committee and by the Congress to recognize and to reconcile the interests of California and of the United States, and thus to assure the prompt and adequate exploration and development of the Continental Shelf. To accomplish these ends we urge the enactment of legislation such as H. R. 5991 or some other legislation of similar import. Thank you. Mr. WALTER. Thank you very much, Mr. Pyles. Mr. Gossett. Mr. GOSSETT. In your judgment, from the public viewpoint, assuming the essentiality of full and adequate production, would we get more and better exploration and production in your opinion under H. R. 5991, than we would get under H. R. 5992? Mr. PYLES. In my opinion you would have better results under H. R. 5991. Mr. GOSSETT. That is all. Mr. WALTER. Thank you, Mr. Pyles. Mr. Gee, who is your next witness? Mr. GEE. We would next like to present a witness who has had great experience and knowledge in connection with the exploration for the location of structures and domes that are thought to be productive of oil. We all recognize that this problem itself is a more difficult one on submerged lands than on the uplands. We have asked Mr. E. F. Bullard, of Tulsa, to explain the exploration program in the offshore submerged lands. Mr. Bullard, will you come forward? STATEMENT OF E. F. BULLARD, GEOLOGIST, PRESIDENT, Mr. BULLARD. My name is E. F. Bullard. I am a geologist by profession, having graduated from Yale in 1921 with a degree of Ph. B. For 28 years I have been in the oil industry, serving with the Stanolind Oil & Gas Co., or its predecessors, as geologist, chief geologist, director of exploration, vice president, and finally, in 1945, as president, the position which I now hold. As the main producing subsidiary of the Standard Oil Co. of Indiana, Stanolind Oil & Gas Co. operates in 22 States with a daily gross production of about 250,000 barrels of oil. I am glad of having the opportunity of appearing before this committee. Many of you were members of the last Congress when extended hearings on the tidelands were conducted. Since then the industry has been confronted with new problems in exploring for oil in the Gulf of Mexico. As in any other business, some problems could be anticipated and some could not. I should like to show you today why the exploration of submerged coastal lands is a big job. To do that job properly, it will need the resources, energies and abilities of the American oil industry. Greater oil reserves within our territorial limits will make a stronger United States, a nation more secure in whatever future crises that may arise. Exploration, as you know, includes three major phases, prospecting by geologists and geophysicists, leasing of potential oil-producing blocks, and finally drilling to prove whether oil is actually there or not. Even in normal land operations, exploration can be the most costly activity of oil-producing companies. Marine exploration, on the scale necessary in the Gulf of Mexico, is a still more strenuous and expensive undertaking, even for the largest oil companies. The large cash outlays, the great risks, make it mandatory to staff all offshore exploration organizations only with the most experienced men. Selected and highly trained geologists, geophysicists, meteorologists, paleontologists, land men, surveyors, technicians for radar and radio—all are needed. The work of these scientists must also be closely coordinated with all other phases of the exploratory operations-the engineers who design and construct the drilling platforms, the marine experts who design, build, and operate the special boat and port equipment, and, finally, the drillers who must dig the deep exploratory holes. All these men constantly work under adverse conditions. Their work, therefore, calls for unusual safety precautions. Altogether, looking for oil at sea is often exciting, frequently hazardous, but always a trying job. In the following discussion I will generalize briefly about onshore and offshore geological structures. Although numerous exceptions are always present, the over-all picture conveyed is believed to be correct. Now, may I call your attention to exhibit No. 1, which shows the oil fields of the Gulf coast, showing producing trends. On this map of the Gulf-coast area, the producing trends are outlined. A producing trend includes those fields which produce from oil sands of the same geologic age. The northernmost trend produces from the older Tertiary formations, and the oil in each succeeding trend to the south is from successively younger formations. Exhibit No. 2 shows a diagrammatic cross section of Tertiary hori zons. The reason for this succession from old to younger formations is readily apparent on this cross section. It represents subsurface conditions from a point about 50 miles up the Sabine River, diagonally to the coast and 40 miles out into the Gulf. We can trace a formation like |