643 
We agree generally with this recommendation, but feel that it should be 
broadened to include other mineral industries as well as the petroleum industry. 
Moreover, special attention should be given to the phrase “consistent with secu- 
rity and proprietary considerations.” Private industry should not be required to 
make public highly confidential information which it has assembled at high 
cost, such as interpretations of, and certain classes of, geological and geophysical 
information. To do so would retard research, development and exploration. 
2. U.S. legal and regulatory considerations (p. 124) 
In discussing legal and regulatory considerations applicable to petroleum, the 
Report contains this recommendation (p. 127) : 
“The Commission recommends that leasing and regulatory policies for offshore 
oil be geared to a rate of development reflecting all aspects of national interests. 
Strong support should be given to accomplishing the analysis necessary to pro- 
vide a basis for decisions on development rates. In scheduling its Federal lease 
sales the Government should give adequate consideration to industry’s need to 
plan its exploration and development programs in an orderly and effective 
fashion. For example, it is recommended that longer periods of advance notice 
be provided for Federal lease sales.” 
We agree generally with this recommendation. However, as to rate of devel- 
opment, private industry, which will undertake this development, should have a 
significant voice in the decisionmaking process. With respect to the scheduling of 
Federal lease sales, we agree that longer periods of advance notice should be 
provided, but flexibility should be retained so that when companies have ex- 
pended huge sums of money in conducting geological and geophysical surveys 
in the offshore areas, they should be afforded the opportunity of bidding on the 
acreage for the purpose of acquiring leases. 
We believe, moreover, that the Federal leasing for oil and gas should have 
as its principal objective not the short-run maximizing of Federal income, but 
rather the long term objective of finding and developing adequate petroleum re- 
serves within this nation’s control. Experience under the Outer Continental Shelf 
Lands Act does not indicate that development of oil and gas on the U.S. con- 
tinental shelf has been too rapid. Because of the declining reserves to produc- 
tion ratio for both oil and gas on the land areas of the United States, a contin- 
uing and accelerated effort to discover petroleum reserves in the offshore areas 
under the jurisdiction and control of the United States is needed in our national 
interest and security. 
B. Natural gas (p. 127)* 
The Report points out that offshore gas is chiefly explored for and produced 
by oil companies, Transportation (in pipelines) is regulated by the Federal 
Power Commission, and distribution to consumers is regulated by State or local 
governments. Sales are predicted to increase about 4% per year for the next ten 
years, and with declining reserves on land it is important to encourage a greater 
rate of exploration and development. To this end FPC policies should be modi- 
fied in two respects. 
First, with respect to new natural gas pipeline construction, the Report states 
that the Federal Power Commission should reexamine its policies to determine 
the extent to which efforts to establish proven reserves result in disclosures ad- 
verse to a company, and the FPC should devise methods by which such impact, 
if any, might be legitimately minimized (p. 128). 
We agree with this suggestion. 
Second, with respect to wellhead price regulation, the Report recommends (p. 
128): 
oe the Federal Power Commission reexamine its differential price policies 
for natural gas and make such adjustments as it deeems advisable to reflect 
adequately the increased cost of offshore production.” 
We agree with this recommendation. 
With respect to the regulation of interstate natural gas pipelines, the Report 
also recommends (p. 129) : 
“that in order to encourage innovative research and development activities, the 
Federal Power Commission review its accounting regulations relating to research 
and development to determine whether such regulations are consistent with the 
3 The Standing Committee on World Order Under Law is of the opinion that this section 
should be deleted on the ground that it largely involves matters beyond the appropriate 
scope of this report. 
