468 



As was pointed out, it is almost given that once a lease is sold for 

 exploratory drilling, even with a production and development EIS, 

 if it is a commercial find and it can be developed, it is very difficult 

 to stop. But I think the other point that needs to be made is that 

 generally the States are making a balancing test and recommend- 

 ing that certain areas not be leased, either because of a lack of en- 

 vironmental information or scientific data. 



For example, in parts of the submarine canyons in the deep 

 water area, as we are now faced with in this upcoming lease sale, 

 or because information has come in which indicates to us that the 

 area is much more important or sensitive than we were led to be- 

 lieve initially, and therefore either should not be offered again for 

 sale or not included in a call area. 



Mr. D'Amours. Do the States in making that balance, rely upon 

 the resource information? 



Ms. Hughes. The resource estimates 



Mr. D'Amours. The resource estimates provided by the Depart- 

 ment of the Interior and the USGS? 



Ms. Hughes. Yes. 



Mr. D'Amours. You do rely upon them? 



Ms. Hughes. It is the only information we have to go on. 



Mr. D'Amours. OK. 



So Mr. Colgan and Ms. Hughes — Mr. Colgan, if I understand 

 your answer to my question, you said you were satisfied with lease 

 sale 42, that the exploratory process was not harmful, or not par- 

 ticularly harmful, at least until further information came in that 

 was sufficient to satisfy any qualms you may have had, but that 

 you felt differently about the exploratory process as it affects the 

 deep water areas involved in lease sale 52. 



Given that fear, and given the fact that the only way you can 

 determine relative risks is through resource estimates provided by 

 the DOI, would you agree or disagree with the Department of Inte- 

 rior's testimony this morning that there is no substantial risk 

 posed in exploratory drilling, and that therefore the resource esti- 

 mates are not all that relevant to that part of the process? 



Mr. Colgan. Let me give you my own interpretation of the re- 

 source estimates, and then try to address the question. 



The resource estimates are done by the Department of Interior 

 on a remote sensing basis. They do it on by geophysical examina- 

 tion, the same kind of preliminary analysis that the oil companies 

 do. In fact, the Department shares much of the oil company's geo- 

 physical information. That information is not conclusive with 

 regard to the presence of hydrocarbons on any specific tract or any 

 specific basin. 



The ultimate fact about oil and gas is that you have to drill to 

 find it. I know of no other way to find out whether there is oil and 

 gas there than to put a hole in the ground. So we use the resource 

 estimates as general indications of an area's potential. 



In one sense the resource estimates for Georges Bank are opti- 

 mistic, because they tend toward natural gas, a relatively safer, 

 and more beneficial energy resource than oil. In that sense the re- 

 source estimates are somewhat encouraging. But I would not con- 

 clude, either based on the resource estimates or on the environ- 

 mental studies to date, that exploratory drilling is risk-free. The 



