152 



applying, and if there are not competing applications a license is 

 issued ? 



Dr. Cain. The business of leasing is run by one of the Department of 

 the Interior bureaus, the Bureau of Land Management, which handles 

 leasing problems on the land as well as on the continental shelf. 



"Wlien there is sufficient knowledge on Interior's part and when there 

 is sufficient interest on the part of industry, defined tracts are opened 

 for leasing bids. They are competitive bids. The basis is a defined one 

 with competitors differing according to — what is the word I am look- 

 ing for — the addition to the minimum that they are willing to offer 

 above the established royalty basis, if and when production occurs. 



Mr. Frelingiiuysex. It is not clear to me what happens. You say 

 when there is sufficient knowledge on the Department's part. Knowl- 

 edge of what ? That there is oil beneath the sea 



Dr. Cain". Yes. On the basis of knowledge of a geological survey 

 that the Department has and also the probability — because a lot of this 

 involves exploration without assurance — that productive oil wells can 

 be developed. When there is sufficient geological knowledge and suf- 

 ficient interest on the part of industry, then we see no reason to hold 

 back on exploration. 



Mr. Frelinghfysen. There doesn't have to be competition in order 

 to qualify for the issuance of a license ^ Or does there have to be com- 

 petition ? 



Dr. Cain. I think all the tracts are offered subject to competitive 

 bidding. 



Mr. Frelinghuysen. It is open for competition, but it wouldn't 

 be necessary to have competition in order to receive a license, would it? 



Dr. Cain. I believe that is correct. This is not the area of my as- 

 sistant secretaiyship. I said I believe and I know that is not a good 

 answer. 



Mr. Frelinghuysen. I didn't mean to press you if it isn't your area. 



I notice that you say that a phosphate lease has been granted off the 

 California coast up to a depth of 4,000 feet. How could this be described 

 as the continental shelf ? 



Dr. Cain. This is a topographic situation under the water, where 

 the continental shelf has an approximate seaward boundary and 

 within that a deep trench like a canyon or valley. The area of the 

 lease is by no means involving water of great depth. But there is within 

 it a canyon that is deep. Any production probably would come in the 

 more shallow^ waters. 



Mr. Freetnghuysen. The convention allows exploration beyond the 

 shelf as long as there is the technical capacity to develop the resources, 

 doesn't it? 



Dr. Cain. That is correct. In this case I am told that there is no 

 question but what you are within generally recognized shelf areas, but 

 there is a deep trench within them that makes the range of total depths 

 very great. 



This is relatively insignificant, I believe. It is not related to the 

 issue of the lease. It is not as if one had gone beyond the 200-meter 

 limit as defining shelf geologically on out to a 4,000-foot depth where 

 the bottom is generally deep. 



Mr. Freeinghuysen. Why do we need to worry much one way or 

 another who has title to these deep sea resources, assuming that these 



