IS 



The Needs of the Oil, Gas, and Mineral 

 Industries 



Daily worldwide production of subsea oil 

 has reached about 5 million barrels, about 16 

 per cent of total world oil recovery, and is 

 expected to reach one-third of total world 

 production within 10 years. Tlie search for 

 new reserves is stimulated by forecasts of 

 tripled consumption within 20 yeai-s and by 

 political instability in some oil-producing 

 nations. 



The seabed also offers a great source of new 

 reserves of natural gas. For the foreseeable 

 future, oil and gas will be the most valuable 

 minerals the nation can obtain from the sea. 



Predicting the Nation's requirements for 

 ocean mmerals other than gas and oil is diffi- 

 cult. The time when it will be as economic to 

 recover hard minerals from the sea as from 

 the land depends on such factors as rate of 

 consumption, exploration and recovery tech- 

 nology, transportation costs, the availability 

 of substitutes, re-use techniques, discovery of 

 new land deposits, and the reliability of im- 

 port sources. Even the extension of petroleum 

 operations into deeper water will depend to a 

 considerable extent on how competitive such 

 petroleum recovery may be with shale and 

 tar sands. 



While the offshore oil and gas industries 

 are thriving, the offshore hard mineral indus- 

 try is still in its infancy. 



The Commission's recommendations seek 

 to improve the institutional framework 

 within which these industries operate, to 

 identify promising sea bottom mineral areas, 

 and to improve the fundamental technology 

 that will make it possible to exploit undersea 

 minerals commercially. 



Surveys The Federal Government should 

 undertake a major effort to survey the geol- 

 ogy and geophysics of the continental 



The open-ocean dredge 

 Pomona, which began diamond 

 mining operations off the Coast of 

 South Africa in 1966, is part of the 

 pioneering equipment of the offshore 

 hard mineral industry. 



shelves and slopes in order to determine their 

 mineral potentials. The basic survey data will 

 be invaluable to industry in its further ex- 

 ploratory work to identify and determine the 

 economic value of specific deposits. 



Institutional Arrangements One of the 



principal difficulties facing the offshore petro- 

 leum industry is uncertainty about the sched- 

 uling of Federal and State lease sales. The 

 Commission recommends that lease sales be 

 announced earlier than is the present practice 

 to permit industi-y to plan ahead in an orderly 

 and efficient manner regarding its use of 

 capital, manpower, and technical resources. 

 The Commission also recommends that the 

 Federal Power Commission reexamine its 

 differential price policies for natural gas and 

 adjust them, if necessary, to reflect adequately 

 the increased cost of offshore production. 

 Further, the Commission recommends that, 

 in order to encourage research and develop- 



