I believe that concludes my brief general statement, Mr. Chairman, but I should be glad to endeavor to answer any questions that members of the committee might want to ask me.

The CHAIRMAN. Are there any questions?

Senator ECTON. Mr. Chairman

The CHAIRMAN. Senator Ecton.

Senator ECTON. I think it would be very helpful to the committee in considering this type of legislation if you would tell us exactly, Mr. White, just how Senate Joint Resolution No. 20 will affect the leases now outstanding or those that are under application.

Mr. WHITE. You are speaking of the leases issued by the States, Senator Ecton?

Senator ECTON. Both. I understand that the Federal Government has issued some, too, is that true?

Mr. WHITE. No, sir. The Federal Government has not.
Senator ECTON. There have been applications, is that it?

Mr. WHITE. That is correct, sir. A total, I guess, of about 900 applications for Federal leases have been filed with the Interior Department over a period of about 17 years. Most of those applications, I would say about 700, relate to areas along the coast of California, and about 200 of them relate to areas in the Gulf of Mexico adjacent to Louisiana and Texas.

I can, if the committee wishes, indicate my views with respect to the recognition of the State leases, and also discuss the matter of the applications for Federal leases which were submitted to the Department.

The CHAIRMAN. That will be quite appropriate.

Mr. WHITE. The Solicitor General, in his testimony this morning, touched upon the problem of the recognition of the leases issued by the respective States of California, Texas, and Louisiana. With respect to submerged lands of the Continental Shelf adjacent to their shores.

Now, this bill would provide that such leases, if they meet the prescribed standards which the Congress would lay down in the legislation itself, should be continued in force and effect under their terms and conditions, except that the Secretary of the Interior, in effect, would be substituted for the issuing State as lessor.

The areas involved in the leases issued by the respective States are considerable. That is especially true with respect to Louisiana, which State has issued leases on large areas of submerged lands of the Continental Shelf. And let me interject the explanation that when I use the term, I mean the areas claimed by the executive branch of the Government as being submerged lands of the Continental Shelf.

The State of Louisiana has issued leases on these lands aggregating a total acreage of approximately 2,043,000 acres. The State of Texas has issued leases on these lands aggregating a total of 377,848 acres. Now, the State of California, because the Continental Shelf is relatively narrow there and the submerged coastal areas known or thought to contain oil and gas deposits are less numerous, has issued leases which aggregate only 10,705 acres.

If this proposed legislation were to be enacted, it is assumed that virtually all of the leases which I mentioned a moment ago would be recognized by the Federal Government, and the lessees would be permitted, that is, the persons holding the State leases would be per

mitted to continue existing operations under their leases, and they would be permitted to inaugurate new operations under their leases, and to hold the areas under lease with the sanction of the Federal Government for the remainder of the terms prescribed in the leases issued by the several States.

Senator ECTON. Then what effect would it have on those people who have made application to the Federal Government for leases, to the Interior Department? What will be their status?

Mr. WHITE. The resolution itself provides in section 8 that the provisions of this measure shall not affect the rights, if any, which may have been acquired by any person under any law of the United States on lands that are subject to the provisions of the joint resolution. As I understand it, the purpose of that provision is to preserve for the persons who have filed applications for Federal leases the right to continue their court cases-and there are several cases pending at the present time-in an effort to overthrow the decisions of the Solicitor of the Interior Department and of the Attorney General with respect to the applicability of the Mineral Leasing Act.

Now, if they were to succeed in these efforts which they are making in court, they presumably would be able to mandamus the Secretary of the Interior and compel the issuance of Federal leases on the particular areas involved, which, of course, would mean that the attempt to recognize conflicting State leases or the attempt to authorize the Secretary of the Interior to issue new leases on the same areas would not become effective under this joint resolution.

Senator ECTON. Then Mr. White, is it your opinion as the Solicitor for the Interior Department that no one, whether he has a lease now or whether he has an application in the Interior Department for a lease, will be hurt by this Senate Joint Resolution No. 20?

Mr. WHITE. It is my opinion that they will not be hurt.

Senator ECTON. You honestly believe that no one interested can be hurt by this Senate Joint Resolution No. 20.

Mr. WHITE. I believe that people of the categories that you mentioned would not be hurt: (a) the people who hold State leases; (b) the people who seek to assert rights under applications for Federal leases.

Senator ECTON. Yes.

The CHAIRMAN. I think it ought to be clear, Mr. White, that the purpose of section 8 was to preserve any rights that such applicants under the Federal Mineral Leasing Act may be able to establish in their pending lawsuits. They are all well advised that it is the opinion of the Department of the Interior and the Department of Justice that the Mineral Leasing Act does not cover the submerged lands, and therefore that these applications for permits and leases never had any validity. That, however, is a question to be determined by the court, and this committee has received a request from former Senator Wheeler and from others who desire-Secretary Ickes, I think, is coming, too- to discuss that problem before the committee. And they will be heard.

Senator ECTON. There is one other question that I want to ask Mr. White while he is on the stand.

Is it true that we could assume that Senate Joint Resolution No. 20, for all practical purposes, is a moratorium on the controversal issues

involved in this matter? Is that a natural assumption? Is that reasonable?

Mr. WHITE. It is my understanding that the purpose of the resolution is to permit existing operations to continue and to provide a means whereby further exploration and development may be undertaken, pending the time when the Congress endeavors finally to dispose of this whole problem, either through the enactment of what is called a quitclaim bill or through stabilizing and making permanent some sort of Federal administration.

Senator ECTON. That has been my opinion, and I just wondered if you interpreted that that way, too.

Mr. WHITE. That is my understanding of the purpose of the measure. The CHAIRMAN. Are there any other questions?

Senator LONG. Yes. I want to ask one or two. How much demand have you had for leasing in the Gulf of Mexico and leasing off California at the present time, in addition to these present State leases? That is, areas not covered by these existing State leases?

Mr. WHITE. I have mentioned that approximately 900 applications for leases under the Mineral Leasing Act have been filed with the Department. Other than that, we have had only

Senator LONG. Do you know how many of these areas that you have had application for are not covered by the existing State leases? Do you have any idea to what extent that would be?

Mr. WHITE. They would be relatively few, I think, for this reason. I believe that the people who filed applications for Federal leases, generally speaking, filed on areas which are now within the geological structures of producing fields.

Senator LONG. And these State leases apparently cover most of the better seismograph prospects relatively near the shore, do they not? Mr. WHITE. It is my understanding that such is the case.

The CHAIRMAN. Senator Long, your attention is called to the map which has previously been presented to the committee.

Senator LONG. I wonder if that map does show that. In other words, this is a map that was submitted to the committee of the leases in the Gulf of Mexico, which are very extensive, particularly off the Louisiana shore, and, as I understand it, those do cover the best geological prospects that have been covered to date. Is that correct? Mr. WHITE. That is my understanding; yes, sir.

Senator LONG. Now, those people holding those leases under present circumstances, because of the legal doubts and because of the orders of court, cannot develop those leases; is that correct?

Mr. WHITE. That is true, sir.

Senator LONG. The question I had in mind was what objection there would be to the first phase of this bill standing alone, that is, to permit those persons who hold leases under the States to simply go ahead and develop and produce on those leases, more or less assuring them that the assertion of Federal authority was not going to divest them of any rights that they had by virtue of their State leases.

Mr. WHITE. It has been the view of the Interior Departmentand by that I mean primarily the view of the Secretary of the Interior, who has given this matter a great deal of personel attention-that the matter of recognizing State leases is just one phase of a large and important problem, and that it would be unfortunate if the Congress

were to confine its efforts merely to that one phase of the problem and were to fail to make provision for the issuance of new leases which would permit further exploration to discover new deposits.

I think I mentioned a moment ago that the geologists in the Geological Survey think that further exploration would result in the discovery of new fields that would probably double the amount of the known reserves in the Gulf within a period of 4 or 5 years.

Senator LONG. Of course, merely drilling the areas that are leased that have not been drilled would accomplish the same effect, would it not? In other words, most of these present leases beyond the inland waters have not been drilled, and merely drilling those would undoubtedly increase the known reserves, would it not?

Mr. WHITE. It would certainly increase the production substantially, although I think that most of them, or at least a great many of the leases, do cover known structures, so that it might very well be that drilling under existing leases would not tremendously increase the known reserves of the area, but it certainly would result in an expansion of production.

Senator LONG. I am sure you know that there is only a small number of these existing leases in the Gulf of Mexico that have been drilled to the present date.

Mr. WHITE. Yes, sir.

Senator LONG. And even in those that have been drilled, in many cases they involve a relatively large structure, where one dry hole does not condemn the structure, where it would in some cases require quite a large number of dry holes, possibly 10 or 20 exploratory wells, to condemn such a structure as that.

Mr. WHITE. I think that the point you are making, Senator, is very well illustrated by the fact that the leases under which actual operations were in process on December 11, 1950, aggregated only 217,000 acres, whereas the total acreage under lease from Louisiana alone amounted to 2,043,000 acres, and the acreage under lease from the State of Texas aggregated 377,000 acres.

Senator LONG. Now, using your figures, that would illustrate that there is in fact less than 10 percent of the Louisiana leases that are presently being drilled, and that in other words, there are drilling operations going on in only about 10 percent of the Louisiana leases, leaving 90 percent of them yet to be drilled if materials could be obtained.

You are familiar with the fact, I am sure, that to drill in the Gulf of Mexico requires material tremendously in excess of that necessary to drill dry land. It is necessary to fabricate an entire platform and take it out and sink it in the Gulf of Mexico. Usually I believe it is a steel platform.

You are familiar with that, I am sure.

Mr. WHITE. I have seen movies of it; yes, sir.

Senator LONG. The problem is tremendous, even from an engineering point of view, and it requires a large amount of equipment. Therefore, it would seem to me that the present leases would require just about all the materials that could conceivably be made available any time in the near future to develop the existing leases, if those leases were confirmed by the Federal Government, and if those operators were turned loose to develop them.

Mr. WHITE. I am not sure to what extent that is true, Senator. I am not informed as to the availability of materials, although I assume they are rather tight at the present time.

Senator LONG. That is the reason it occurred to me that we could immediately increase production if the present operators under State leases were permitted to go ahead and develop their leases. That one phase alone is one thing that, of course, the States would be in no position to object to, the States having granted such leases, and that is one phase of the bill that to me does not seem necessarily controver sial unless the Government should say that that standing alone is not a good proposal.

Now, about some of these other proposals, there are some doubts, and there will be objections, as you will see. But I have as yet heard no objection on behalf of the States to at least ratification of the existing leases. But certainly no one could expect a man who went out and leased under a State lease and on whom a Federal application has been filed, not knowing whether his lease is going to be upheld or not, to go and invest millions of dollars in attempting to drill a well in those areas.

Mr. WHITE. That is very true. Certainly, the situation is unfortunate in that the lack of certainty is a detrimental factor in the present situation.

Senator LONG. Sooner or later someone is going to have to decide, either the Congress or the courts or someone else, whether these people who have made application under Federal leases, who have no leases now, but are applying for the leases, are on the side of those persons who actually hold leases and have been working to explore and develop those State leases.

Mr. WHITE. Of course, the Supreme Court has ruled with respect to the State leases, since there has been a determination in each of the three cases that the lessor had nothing to grant to the lessee which necessarily means that the lessee actually got nothing in the way of legal rights. The question as to the legal rights of persons who have filed for Federal leases under the Mineral Leasing Act is pending in court at the present time, and there has been no court decision on it as yet.

If I may just add a word there, I would say that in my opinion, the problem both as to the States' lessees and as to those persons who have sought Federal leases under the Mineral Leasing Act is one that lies in the field of equity rather than in the field of legal rights. I do not believe-in fact, I am positive-that the States' lessees have no legal rights in these areas. They have claims based on equitable considerations arising from the fact that they took leases from the States, which asserted the power as soverigns, to grant the leases, and they have maintained their leases in good standing, either through drilling and production or through the payment of rentals or such other steps as were required by the provisions of their leases.

So they say, now that the Supreme Court has held that the States under whose authority they took the leases did not have any legal power to grant them, that the Federal Government ought, as a matter of equity and fair play, to recognize them for Federal purposes and permit the States' lessees to continue to maintain their leases in force and effect.