CONSERVATION AND CONTROL OF SUBMERGED COASTAL LANDS BENEATH INLAND WATERS AND OF CERTAIN RESOURCES OF SAID LANDS

MONDAY, AUGUST 29, 1949

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE No. 1 OF THE COMMITTEE ON THE JUDICIARY,

Washington, D. C. The committee met, pursuant to adjournment, at 10:40 a. m., in room 346, House Office Building, Hon. Ed Gossett, presiding. Mr. GOSSETT. The commite will come to order.

We are glad to have with us this morning Secretary Krug, of the Department of the Interior, and the Solicitor General from the Department of Justic. For the record we might say that last year's hearings have been incorporated by reference and it is not the purpose of these hearings to duplicate all of last year's hearings. We are simply trying to supplement, for the purposes of the record, testimony as it relates primarily to the two bills, H. R. 5992 and

H. R. 5991.

These bills have been referred to as the compromise bills, H. R. 5591 being the State's version of what a compromise might be or should be, whereas the other bill is alleged to be the Government's proposals for compromise.

Mr. Krug, if you please, just proceed, sir.

STATEMENT OF HON. J. A. KRUG, SECRETARY, DEPARTMENT OF THE INTERIOR

Secretary KRUG. Mr. Chairman and gentlemen, I greatly appreciate the opportunity of discussing with you the subject of proposed legislation relating to submerged lands.

It is my purpose, in appearing before you, to state my conviction that legislation on this subject should be enacted promptly by the Congress, and that such legislation should be based upon the following proposed measures: First, H. R. 5280, a bill to quiet the titles of the several States to the tidelands—that is, the lands that are regularly covered and uncovered by the flow of the ebb of the tide and to the lands beneath navigable inland waters, situated within the exterior boundaries of the States; second, the suggested bill which the Secretary of Defense, the Attorney General, and the Secretary of the Interior jointly forwarded to the Congress on February 1, 1949, and which, if enacted, would provide for the issuance of oil and gas leases on the submerged lands of the continental shelves lying beneath the waters of the open sea adjacent to the shores of the United States

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and Alaska. I offer a copy of this proposed bill, together with a copy of the joint letter of transmittal and a copy of an explanatory statement prepared by representatives of the Department of Justice, the Department of the Interior, and the Department of Defense, for inclusion in the record.

I desire to emphasize at this point that the suggested bill does not provide for the issuance by the Federal Government of oil and gas leases on the tidelands within the costal States. The Government has never made, and does not now make, any claim of right or title respecting these tidelands.

It should be stated, in connection with the material just submitted, that H. R. 354, if revised in the manner suggested in my letter of March 16, 1949, to the chairman of the Public Lands Committee of the House, would be identical with the proposed bill previously mentioned as having been forwarded by the three Cabinet members to the Congress on February 1, 1949. I offer a copy of my letter dated March 16 for inclusion in the record.

H. R. 5992, which has been referred to erroneously as an Interior Department bill, represents the result of an effort to redraft H. R. 5991 so as to eliminate or revise those provisions which seem to be clearly objectionable. H. R. 5992 is not sponsored by the Department of the Interior. The executive branch of the Government stands on the other proposed legislation dealing with the submerged lands, which I referred to a moment ago.

Let me make it plain, before I proceed any further, that I strongly oppose, and that the President has informed me that he strongly opposes, the various pending bills which are designed to transfer to the coastal States, as a gift, the immensely valuable rights which the people of all the United States have in the submerged lands and mineral resources of the continental shelves. This objection on my part, and on the part of the President, extends with equal force to any proposed measure, such as H. R. 5991, which would delegate to the coastal States the power to control and manage, under State law, the development of the oil and gas deposits in the submerged coastal lands beneath those portions of the open sea which are within the seaward boundaries of the coastal States.

As I have previously indicated, we in the executive branch of the Government are not concerned with the tidelands situated within the boundaries of the coastal States. On the other hand, we are vitally concerned with the submerged lands of the continental shelves beneath the open sea adjacent to the shores of the United States and Alaska. These lands begin at the low-water mark along the open sea, or at the seaward boundary of inland waters-such as bays, ports, and the mouths of rivers-and extend seaward for varying distances at different places.

The continental shelves are slightly submerged portions of the continents that surround all the continental areas of the earth. Along some portions of the coasts, they are very broad, gently sloping platforms; and, at other places, they are narrow. The outer boundary of each shelf is marked by an increase in the gradient of slope of the sea floor. This occurs generally at a depth of approximately 100 fathoms, or 600 feet. Beyond the 100-fathom line, the outer slopes of the continental shelves are inclined more steeply toward the ocean deeps.

Along the Atlantic coast and in the Gulf of Mexico, the continental shelves are generally very broad. Off the New England coast, where the width is greatest, the Shelf extends seaward about 250 miles. Elsewhere along the Atlantic coast, it ranges in width from about 40 to about 100 miles, except for a relatively narrow strip along the east coast of Florida. In the Gulf of Mexico, the average width of the broad Shelf off the west coast of Florida is about 150 miles; and elsewhere in the Gulf the Shelf is from 40 to 150 miles wide, except where the land area formed by the Delta of the Mississippi River has been extended across the Shelf almost to its outer edge.

Off the Pacific Coast States, the Continental Shelf is relatively narrow, ranging in width from 5 miles or less to a maximum of about 40 miles.

The continental shelves along the coasts of the United States comprise a total area of approximately 290,000 square miles, with nearly 270,000 square miles, or over 90 percent of the total area, located along the Atlantic and Gulf coasts.

The Continental Shelf adjoining the Alaska coast has a very large area, totaling about 600,000 square miles. The shelf forms a broad link with Asia across the Bering Sea, and it extends northward from the Bering Straits and the Arctic coast for distances that average more than 100 miles.

The occurrence of oil in parts of the Continental Shelf beneath the waters of the Gulf of Mexico has been demonstrated by discoveries offshore along the coasts of Texas and Louisiana, and we may consider that the important reserves of oil developed beneath the Delta of the Mississippi River are also indicative of the presence of oil in the shelf east and west of the Delta. The available stratigraphic information and the indications of the presence of numerous salt domes on the Continental Shelf beneath the Gulf of Mexico adjacent to Texas and Louisiana are strongly suggestive that the potentially productive area is very large and is possibly limited only by the technologic problems incident to drilling in unprotected water.

In general, the Continental Shelf adjacent to the Atlantic coast is considered to be a less likely source of oil and gas than the submerged areas of the Continental Shelf in the Gulf of Mexico.

Insofar as the Continental Shelf adjacent to the Pacific Coast States is concerned, the presence of extensive and valuable deposits of oil in the shelf adjacent to the California coast has already been demonstrated through the production of oil from those deposits.

The Continental Shelf adjacent to Alaska is contiguous to known areas of petroleum-bearing strata, both along the south, or Gulf of Alaska coast, and on the north, or Arctic coast. Scanty information also indicates that parts of the shelf beneath the Bering Sea may be potential oil-bearing areas.

The geologic evidence leaves little room for doubt that portions of the continental shelves adjacent to the coasts of Texas, Louisiana, and California contain large potential reserves of petroleum. A comparison of land areas in these States that are underlain in part by producing fields, with adjacent areas on the continental shelves that are thought to be underlain by similar geologic features, can be used as a means of arriving at figures suggestive of the order of magnitude of the petroleum reserves in these shelves.

Based on the quantity of petroleum that has been discovered in the coastal belt of Texas and Louisiana in an area comparable in size to the area of the adjoining Continental Shelf, the petroleum reserves of the Continental Shelf off the Texas and Louisiana coasts may be estimated as totaling approximately 13,000,000,000 barrels. A comparison of areas of the Continental Shelf along the coast of California adjacent to areas on land which are productive of petroleum leads to the inference that the potential reserves of the shelf area adjacent to California may aggregate about 2,000,000,000 barrels.

Wallace Pratt, one of the leading petroleum geologists of the United States, has compared estimates of the volume of the sedimentary rocks beneath the continental shelves with estimates of the volume of sedimentary rocks in the United States; and, from our experience in finding oil in the United States, he concludes that the Continental Shelves of the earth should contain more than 1,000 billion barrels of oil. As the portions of the continental shelves contiguous to the coasts of the United States and Alaska include nearly one-tenth of the total shelf area, one might infer from Mr. Pratt's estimate that the shelves adjacent to the United States and Alaska contain a grand total of nearly 100,000,000,000 barrels of oil. This figure may be compared with the estimated proved reserves of approximately 23,000,000,000 barrels of crude oil in the continental United States.

It is unnecessary, I am sure, to emphasize the importance of the oil reserves in the continental shelves to the economy and to the defense of the United States. In this connection, I should like to offer for inclusion in the record, and to read aloud, a letter dated August 29, 1949, from the Secretary of Defense, stressing the importance, from the standpoint of national defense, of retaining in the Federal Government ownership and management of the oil and gas deposits in the submerged lands of the Continental Shelves.

The postwar demand for oil in this country has surpassed the wartime peak. The total domestic demand for petroleum and its products in 1948 exceeded the wartime high established in 1945 by 18 percent, and amounted to a total consumption of 2,108,000,000 barrels during 1948. As previously indicated, the estimated proved reserves of crude oil in the United States amount only to approximately 23,000,000,000 barrels. The 1948 demand represented peacetime uses of petroleum and its products. The need for petroleum would vastly increase in the event of another war.

Therefore, the oil reserves in the Continental Shelves contiguous to the coasts of the United States and Alaska are vital to the economy and defense of the United States as a whole. The people of the United States cannot afford to make a gift of these tremendously valuable resources to a few coastal States, and then buy back their own oil to meet the needs of the Nation for defense and other governmental purposes. Instead, the people of the United States, acting through their Government, ought to manage and conserve these oil reserves for the economic benefit and common defense of the Nation as a whole.

Being of this view, the Secretary of Defense, the Attorney General, and the Secretary of the Interior jointly submitted to the Congress on February 1 a proposed bill to promote the development and conservation of certain resources in the submerged coastal lands

adjacent to the shores of the United States, which had been drafted jointly by personnel of the three Departments. It has since been introduced in the Senate as S. 923. This proposed bill has not been introduced in the House; but, as previously indicated, a few relatively minor changes in H. R. 354 would make it identical with the proposed bill submitted by the three Departments.

This bill suggested by the executive branch of the Government makes provision for the conservation and development of oil and gas in the Continental Shelves beneath the open sea, and for the extension of equitable relief to the States and their political subdivision, grantees, and lessees with respect to actions taken by them in producing oil from lands beneath the open sea before the date of the Supreme Court decision in the case of the United States against California. Perhaps this is not the occasion for a detailed description or justification of the bill proposed by the executive branch, but I should like to summarize its high lights.

The bill emphasizes the major premise of the vital relationship to our national security of the petroleum in the Continental Shelves beneath the open sea. It declares that the petroleum resources should be conserved as a national asset vital to the security of the Nation, and requires the administration of the act to confirm to that policy. The President is authorized to withdraw any of the submerged coastal lands from leasing under the act and to reserve the oil deposits in the interest of national security, thus providing for the storage of petroleum underground for future military use. Defense motivations also suggested the provision under which the Secretary of Defense, with the approval of the President, may designate areas of the Continental Shelves beneath the open sea that are needed for national defense uses; and while the areas are so designated, no lease may be issued for any part of these areas except with the approval of the Secretary of Defense.

The bill makes provision for the issuance of oil and gas leases covering submerged lands of the Continental Shelves beneath the open sea, but such leases are not to be granted with respect to lands reserved by the President. Also, there are special provisions with respect to the issuance by the Federal Government of exchange leases to persons who held leases on submerged coastal lands from the States at the time of the Supreme Court decision in the California case.

In accordance with the Federal policy of endeavoring to prevent an undue concentration, in the hands of a few powerful interests, of control over the development of the mineral resources in Governmentowned lands, the proposed bill contains an acreage-limitation provision. It provides that no person may hold oil and gas leases on more than 128,000 acres of submerged coastal lands in any one of the three coastal regions, the Pacific Ocean or the Gulf of Mexico or the Atlantic Ocean; and that, of the total maximum acreage within a coastal region, not more than 30,720 acres of producing lands may be held under lease by one person. These figures of 128,000 acres and 30,720 acres are, of course, merely suggestions for the consideration of the Congress. The executive branch of the Government is interested in the antimonopoly principle that is involved here, rather than in the specific acreage figures, and asks the Congress to enact whatever provision on this point the Congress deems best designed to accomplish the objective in view.