512 





EXECUTIVE = - 



__3^ = - = = - .,jir.. ■ t^iCnA^C; e SAPDINGEH 



June 30, 1983 



The Honorable Norman D' Amours 

 Rayburn House Office Building 

 Room 2242 

 Washington, DC 20515 



Dear Representative D'Amours: 



At the conclusion of my appearance before your committee on 

 June 27, 1983 you asked for my and my fellow panel members' 

 opinion as to changes in the standards for OCS decisions which 

 the Congress might consider. In the pressures of time I was not 

 able to provide the thoughtful answer which your question 

 deserved. This issue is a most important one, and I would like 

 to take this opportunity to expand somewhat on the changes which 

 Congress should consider. I hope these comments reach you in 

 time for inclusion in the record of the hearing. 



Doug Foy suggested eight seperate issues for consideration. 

 I will take those issues as my point of departure, though not 

 necessarily in the order in which Doug presented them. 



1 . Require Meaningful Resource Estimates . The resource 

 estimates attached to Lease Sale 52 have become a major source of 

 concern. It is important to understand how these estimates are 

 derived, and what the limitations are in using them. 



To develop these estimates, the Department of the Interior 

 reviews its own and oil companies seismic survey data. This data 

 is usually collected on a fairly wide geographic area. The data 

 reveals to the geologist the presence or absence of geologic 

 formations which may contain oil and/or gas. There are a wide 

 variety of such formations, and identifying them in the seismic 

 data is as much art as science. 



Based upon the number and types of structures which a given 

 interpreter finds, the geological information can be compared 

 statistically to the past record of such formations in bearing 

 oil or gas. It is this statistical comparison that leads to the 

 resource estimates. 



Any given type of structure will have had a varied history 

 of containing oil and gas, and there will be a range of 

 hydrocarbon potential for each structure type. These ranges can 

 be statistically summed for all the structures identified in an 

 area, and it is the mean or average of these summed ranges which 

 constitute the resource estimate. 



JUL - ■"^°* 



