per cent more than an equivalent well would be 

 allowed onshore. This ratio was established in 

 1953 when drilling was in very shallow water and 

 close to shore; it has not been modified since that 

 time even though wells are now being drilled 

 nearly 100 miles from shore and production has 

 been estabhshed in 340 feet of water. 



State offshore administration in Texas is organ- 

 ized generally similar to that in Louisiana. The 

 Texas Railroad Commission has the same general 

 functions as the Louisiana Department of Conser- 

 vation, evaluating drilling operations and setting 

 production allowables. The Commission is also 

 involved in pollution control, safety, and other 

 normal aspects of supervising petroleum opera- 

 tions. The Texas Land Office has authority similar 

 to the Louisiana State Mineral Board and is 

 responsible for leases, lease sales, and exploration 

 permits. 



The State Oil and Gas Board is the primary 

 agency administering petroleum operations in 

 Mississippi. Geophysical permits for offshore work 

 must be obtained from the State Marine Conserva- 

 tion Commission. Alabama's Department of Con- 

 servation and Florida's Board of Conservation 

 regulate petroleum operations in the areas under 

 their jurisdiction. 



City and county governments also can have a 

 significant influence locally on offshore petroleum 

 development. Nearly all marine operations require 

 shore-based facilities and accommodations. 

 Through zoning regulations local planning boards 

 may prohibit necessary storage or loading facili- 

 ties, often requiring additional pipelines and on- 

 shore rights-of-way. Some of the coastal cities in 

 California have ownership of submerged lands 

 extending out to the three-mile Umit. One of the 

 largest oil fields in the United States, the offshore 

 East Wilmington field, is owned jointly by the City 

 of Long Beach and the State. 



In addition, California in particular has estab- 

 lished numerous "sanctuaries" specifically to pro- 

 hibit development of offshore oil and gas resources 

 in State waters. In at least the case off Santa 

 Barbara, the Federal Government has honored 

 these "sanctuaries" by establishing an adjacent 

 "buffer zone" in Federal waters where no leases 

 are being offered. 



Recommendation: 



Due consideration should be given to the total 

 resource potential of a given area before it is set 

 aside for any single specific use. Additional co- 

 operation and understanding between industry and 

 the Federal and State governments are necessary 

 to facilitate the multiple-use approach to all 

 offshore areas. 



B. Federal Regulation 



The Federal Government, under the Submerged 

 Lands Act, recognizes State ownership of marine 

 minerals to a distance of three nautical miles from 

 the coast line, with certain exceptions: Texas and 

 Florida have established historical ownership out 

 to three leagues (10.5 statute miles) on the Gulf 

 coast, and Louisiana also claims rights to three 

 leagues. The Outer Continental Shelf Lands Act of 

 1953 delegates to the Secretary of Interior the 

 major responsibility for all oil, gas, and mineral 

 resource development on the Outer Continental 

 Shelf (OCS), which lies seaward of the boundary of 

 State jurisdiction. The seaward limit of the Outer 

 Continental Shelf is not defined by this Act. Two 

 Bureaus of the Department of the Interior prepare 

 rules and regulations and supervise operations: the 

 Bureau of Land Management is responsible for 

 leasing OCS areas and the Geological Survey is 

 responsible for regulation after leasing, as well as 

 for all geological and geophysical exploration. 



The Department of the Interior, through its 

 Bureau of Land Management, accepts nominations 

 for specific areas and determines when lease sales 

 are to be held, which leases will be offered, and for 

 which OCS areas. Leases are issued by competitive 

 sealed bids on a cash bonus basis, with a fixed 

 royalty rate of 16-2/3 per cent (although the 

 minimum royalty allowed by the OCS Act is 

 12-1/2 per cent) and a size normally of 5,760 acres 

 (a square of three miles on each side). The primary 

 term of the lease is for five years and so long 

 thereafter as oil or gas is produced in paying 

 quantities. Each successful bidder must furnish an 

 OCS bond for $100,000. The Bureau of Land 

 Management is also responsible for controlling 

 pipeline rights-of-way. 



It is difficult for many companies to maintain a 

 broad base in exploration and production activities 

 with the very large budgetary and manpower 

 commitments presently imposed by the irregular 

 offshore lease sales. 



VII-216 



