326 



Economic Aspects 



floor because of the more permanent nature 

 of the mining facihties, blocking of free ship 

 movements, and pollution dangers from 

 runaway oil wells (Mouton, 1952; Thomas- 

 son, 1958). With these questions in con- 

 sideration, the United States provided for 

 the administration of the outer part of its 

 continental shelf by enactment of the Outer 

 Continental Shelf Lands Act in 1953 (Pub- 

 lic Law 212, 83rd Congress, 1st Session, 67, 

 Statute 462). This act claims the subsoil 

 and sea bed of the outer continental shelf as 

 subject to the jurisdiction, control, and dis- 

 position of the United States government, 

 but it does not affect the international rights 

 of navigation and fishing. Similar rights for 

 all coastal nations were approved by a 

 United Nations Conference on the Law of 

 the Sea in April 1958. The whole question 

 of precise legal definition of the shelf edge 

 as a seaward limit for national territorial 

 claims may well turn out to be a useless one 

 because of the recent development of equip- 

 ment capable of drilling in water depths 

 much greater than those of the continental 

 shelf. Clearly, a new concept of territorial 

 limit is necessary. 



Extraction of petroleum and natural gas 

 started at the shore and subsequently pro- 

 ceeded farther seaward. Leases for produc- 

 tion from tidelands and submerged lands 

 were first issued by states, namely, Cali- 

 fornia, Texas, and Louisiana. When the 

 large size of the revenues became obvious, 

 legal disputes arose over whether the states 

 or the federal government had the right to 

 license and tax these operations. A long 

 series of legislative and judicial maneuvers 

 ended with the Submerged Lands Act of 1953 

 (Public Law 31, 83rd Congress, 1st Session, 

 67, Statute 29). The act determined that 

 title, ownership, and the right to manage, 

 administer, lease, develop, and use the lands 

 and natural resources of the sea floor to a 

 distance of 3 statute miles (4.8 km) from the 

 coast belongs to the states. Thus exploita- 

 tion of the shelf beyond a line 3 statute 

 miles from the coastline is controlled by the 

 federal government and inshore of that line 

 by state governments. There, of course, re- 

 main many legal questions for particular 



areas as to what constitutes the coast. For 

 example, does the coastline extend around 

 or across the mouth of bays? San Diego 

 Bay represents no problem, but what about 

 San Pedro and Santa Monica Bays? More 

 important, the State of California holds that 

 the coastline should be taken as a line join- 

 ing the seaward sides of the farthest off"shore 

 islands, whereas the United States govern- 

 ment considers that the coastline follows 

 the mainland; this question will also be 

 settled in time by the courts. 



Locally along the coast petroleum has 

 been found off the shores of various cities. 

 These properties, extending to various dis- 

 tances from shore, have been assigned by 

 the State of California to some of the cities, 

 so that off'shore oil is controlled by Redondo 

 Beach, Long Beach, and Newport Beach. 

 Thus the sizes of sea floor areas controlled 

 by various governmental units vary in pro- 

 portion to the size and power of the unit, 

 municipal, state, and federal. To date, the 

 state-controlled lands are the most interest- 

 ing because they are much larger than mu- 

 nicipally controlled lands and are far more 

 exploited than federally controlled lands 

 owing to their nearness to shore. The his- 

 tory of offshore leasing by the State of Cali- 

 fornia has been well summarized by Krueger 

 (1958). Until 1921 California's policy was 

 one of silent acquiescence toward offshore 

 exploitation. A 1921 California statute and 

 its 1923 amendment authorized the Surveyor- 

 General to issue 2-year prospecting leases on 

 640-acre units of submerged land. If valu- 

 able deposits of oil or gas were discovered, 

 the permittee was entitled to lease 160 acres 

 of the land for 20 years at 5 per cent royalty. 

 Proven property was leased for 20-year peri- 

 ods at one-eighth royalty plus a bonus bid 

 factor. For various reasons, including an 

 unfavorable court decision in 1929, leasing 

 under the 1921 act was ended after about 100 

 permits and leases had been issued. 



The State Lands Act of 1938 was the next 

 major action, creating the State Lands Com- 

 mission and giving it authority to administer, 

 control, and lease all tidelands and sub- 

 merged lands owned by the State. Leases 

 were awarded at first on the basis of sliding 



