close to national boundaries that might be subject 

 to dispute. But the problem is bound to arise 

 sooner or later. 



Here is an example of how the Outer Conti- 

 nental Shelf Lands Act controls the operation of a 

 typical (oil) company,' "^ derived from remarks by 

 Mr. Frank Barry, former Solicitor of the Depart- 

 ment of the Interior, that the Act was designed 

 principally for oil and gas production techniques. 

 The question arises whether it is an adequate 

 vehicle for the exploitation of other minerals. 

 Representatives of the mining industry say that it 

 is not. Interior's Bureau of Land Management, in a 

 recent report to the PubUc Land Law Review 

 Commission, stated that the OCS Act does not 

 offer much incentive for exploration and extrac- 

 tion of minerals other than oil and gas.'® BLM 

 also pointed out that the present law offers no 

 reward to the discoverer of a mineral deposit on 

 the seafloor. 



Spokesmen for the mining industry point out 

 that fundamental differences exist in the philo- 

 sophy, techniques, and costs of exploring for and 

 exploiting oil and gas and exploring for and 

 exploiting hard minerals. 



The oil industry was easily attracted into the 

 marine environment because the geology con- 

 trolling the distribution of reservoirs commonly 

 extends in uninterrupted sequence offshore. The 

 same technology used on land, with modifications, 

 was available to develop oil in progressively deeper 

 waters. In the case of hard mineral deposits, only a 

 few types of placers and bedded deposits like coal 

 extend from onshore to offshore and the projec- 

 tion of favorable target areas is much more 

 difficult. The oil industry has had long experience 

 in evaluating concealed targets, and because of the 

 highly efficient geophysical and geological tech- 

 niques used in the exploration for oil and gas 

 reservoirs, the ratio of discovery holes to total 

 exploration holes is high. 



In contrast, the mining industry has only 

 recently attacked the problem of concealed targets 

 because most of the rich ore deposits that have 

 sustained the Nation's needs were exposed on land 



Material in the following paragraphs relating to the 

 OCS Act is summarized from Remarks by Frank J. Barry, 

 Solicitor, Department of the Interior, to American Bar 

 Association, June 9, 1967. 



^^Ocean Industry, Vol. 3, No. 5, May 1968, p. 13. 



at the surface and discovered by surface pros- 

 pecting. The technology and techniques for dis- 

 covering concealed deposits, even on land, are stUl 

 primitive and inefficient. The ratio of discoveries 

 to targets explored is very low compared to that of 

 oU and gas. 



Virtually a whole new technology to search for 

 offshore sub-bottom lode and bedded deposits will 

 have to be devised. Offshore placer and nodule 

 deposits will be somewhat easier to explore for 

 than concealed bedrock deposits but will still pose 

 considerable difficulties. A great many samples 

 must be taken to define a placer deposit, and often 

 the best material lies in cracks and depressions in 

 the bedrock surface at the base of the unconsoli- 

 dated material where it is difficult or impossible to 

 reach. 



Exploration costs are high for all concealed 

 targets whether they be oil, gas, or mineral, but 

 once an oil target has been located the discovery 

 hole can be easily converted into a producing unit 

 and extraction and operating costs are not exces- 

 sive. In contrast, a discovery hole in a hard mineral 

 deposit cannot quickly be converted into a pro- 

 duction unit. Instead, the rate of exploration and 

 development expenditure increases after discovery. 

 Tlie aggregate capital invested builds up substan- 

 tially without any compensating revenue, usually 

 over a period of several years. 



Most important mineral commodities are 

 products for world trade, and the market price is 

 set over the years by those producers who can 

 supply the demand at the lowest possible cost. 

 Mineral developers must evaluate any exploration 

 venture in the light of this world picture. They 

 must eliminate prospects with the lowest geologic 

 potential or poorest indicated financial return and 

 concentrate on the most profitable. 



Our Continental Shelf will be explored by 

 private industry only if it appears that ore deposits 

 which might be present can be discovered and 

 extracted more profitably there than elsewhere. 

 Favorable land and ocean mining laws of other 

 countries put them in direct competition with U.S. 

 offshore exploration doDars. If the United States 

 wishes to develop— or even test the likely extent of 

 its offshore hard mineral resources— it will have to 

 entice private industry exploration dollars from 

 other kinds of exploration, in the United States 

 and abroad on land and on the shelves of other 

 countries. 



VII-116 



