137 



Dr. James. We grant can exploration permit, first of all ; yes. 



Mr. Fascell. How do we grant one beyond the continental shelf 

 and beyond the continental slope ? 



Dr. James. We don't grant any beyond the continental slope but 

 there are permits for exploration at least close to the edge of the slope 

 on the east coast. A consortium of companies has been drilling off the 

 east coast with such a permit. 



Mr. Fascell. As far as you Imow, Dr. James, the United States has 

 not granted any exploration rights beyond the continental slope? 



Dr. James. That's right. 



Mr. Fascell. Please go on. 



Dr. James. Perhaps I have to qualify that a little bit. 



The continental slope is very difficult to define off California. There 

 are 



Mr. Fascell. So we may have? The answer is, we may have? 



Dr. James. We may have, off California 



Mr. Fascell. And we won't know until someone questions it. 



Dr. James (continuing). Because we get into deep water relatively 

 quickly offshore in California. The geology offshore in California is 

 complicated and we can get into deep water quickly. Wlien we are in 

 the oceanic depths it is another question, but we are in fairly deep 

 water. I think there are drillings that are going on there at depths, I 

 believe, at around 3,000 feet. 



Mr. Bascom. I don't think there is anything that goes that deep, 

 but around 1,000. 



Mr. Fascell. Mr. Bascom, I understand the Treasury Department 

 has a nding that resources or earnings from mining operations con- 

 ducted beyond the continental shelf, when brought into the United 

 States are subject to import duty; is that correct? 



Mr. Bascom. I have heard that ruling ; yes, sir. 



Mr. Fascell. It would be rather interesting from a business point 

 of view to know, whether or not one was in the United States or out- 

 side the United States in connection with its continental shelf limits. 

 It would seem quite important. 



If a businessman obtained a lease or an exploration permit from 

 the Bureau of Mines or the Department of the Interior, it seems to me 

 to be prima facie evidence from the standpoint of the Treasury that 

 he, the operator, wouldn't have to pay an import duty. That raises the 

 important question of people going to the Department of the Interior 

 to get exploration rights, when the demarkation might be fuzzy, or 

 where the continental shelf runs out 200 or 300 miles beyond where it 

 ought to. This would appear to result in saving a lot on import duty. 



Is there a problem on that today ? 



Mr. Bascom. I think I should be completely frank with you and 

 say that the United States is one of the most difficult countries to deal 

 with in the world. I don't mean this unkindly. We have a set of laws 

 and our people carry them out, but it is not easy to make an arrange- 

 ment of any kind with the U.S. Government or settle questions of 

 passports or flags 



Mr. Fascell. You mean too many chiefs and not enough Indians ? 



Mr. Bascom. No, I don't exactly mean that. Most countries are 

 rather anxious to have their offshore deposits explored by somebody 

 else at somebody else's costs, and to split whatever profits might come 

 about. 



