Our witness today will be Assistant Secretary of the Interior Harrison Loesch who is in charge of Public Land Management of the Federal Government.

Secretary Loesch has appeared before this committee on several occasions and has for the past 312 years been very effectively administering the Public Lands Division of the Department of the Interior. So we are very pleased to have you, Secretary Loesch. If you would identify the gentlemen that accompany you and then proceed, we would appreciate it.

STATEMENT OF HON. HARRISON LOESCH, ASSISTANT SECRETARY FOR PUBLIC LAND MANAGEMENT, DEPARTMENT OF THE INTERIOR, ACCOMPANIED BY MIKE HARVEY, CHIEF, DIVISION OF LEGISLATION; DALE ZIMMERMAN, ACTING CHIEF, DIVISION OF UPLAND MINERALS; JOHN SPRAGUE, CHIEF, DIVISION OF OFFSHORE MINERALS

Mr. LOESCH. Thank you very much, Mr. Chairman.

I am accompanied this morning by Mr. Mike Harvey, Chief of the Legislative Division of the Bureau of Land Management, Mr. Dale Zimmerman, Acting Chief of the Upland Minerals Division of the Bureau, and Mr. John Sprague, who is the Chief of the Offshore Minerals Division.

Senator Moss. We are pleased that you have these gentlemen with you and we may want to direct some questions to them.

Mr. LOESCH. Thank you, Mr. Chairman.

I am pleased to appear before you today on behalf of the Department of the Interior to discuss the Department's leasing and disposal policies for energy resources on the public lands.

We appreciate the concern expressed by the Senate over national energy policy which prompted it to adopt Senate Resolution 45 authorizing a national fuels and energy policy study.

We are glad to be able to assist you in your deliberations and are looking forward to the study report which we are sure will be useful to us in carrying out our responsibilities.

President Nixon expressed his concern over our national energy supply last year in his clean energy message of June 4, 1971. As the President pointed out, "a plentiful supply of energy is something the American people have taken very much for granted. . . But the assumption that sufficient energy will always be readily available has been brought sharply into question within the last year." The President proposed a broad program designed to insure an adequate supply of clean energy for the years ahead.

The Department of the Interior has a vital role in carrying out the President's program, which is designed to assure that energy resources are developed in a manner consistent with preservation of environmental quality.

A major part of this responsibility is exercised as part of our management of the public lands.

As you are well aware, Mr. Chairman, and members of the committee, the Department has the direct responsibility for management of

more than 500 million acres of public lands including public domain, national parks, and wildlife refuges.

The energy resources in most of these lands can be leased under the Mineral Leasing Act of 1920 or the Acquired Land Leasing Act of 1947.

The Department also leases energy resources under these two acts which are found on Federal lands administered by other agencies, principally the Forest Service and the Department of Defense.

In addition, the Department is responsible for management of all mineral resources on the Outer Continental Shelf.

These lands are becoming an increasingly important source of energy resources. In addition to traditional sources such as oil and gas, and coal, we are expanding our programs to include geothermal steam and oil shale.

A number of agencies within the Department of the Interior are involved in energy resource matters. Those directly concerned with leasing and disposal policies on the public lands are the Bureau of Land Management and the Geological Survey.

We understand that you are also concerned about Indian lands. We believe that since these are privately owned lands which are held in trust by the Department for the owners-the Indian people—that these should be treated separately.

For this reason, in preparing our answers to the comprehensive issues and questions which you submitted to the Department on May 17, we will provide a separate response for Indian lands.

You indicated that you would like us to discuss today the general issues set forth in attachment "A" to your May 17 letter.

I believe the best way for me to do this would be to take up the questions one by one and give you our answers.

From here on, Mr. Chairman, I intend to briefly run through this. My statement is some 50 pages long with the comprehensive answers to the questions in that attachment, and I do not intend to burden the committee by reading the entire statement, which was only furnished to you, I am sorry to say, this morning. I will go through the questions briefly, if that is satisfactory to you, Mr. Chairman.

(The text of the full statement appears at the end of the oral presentation.)

Senator Moss. That will be satisfactory.

The entire statement, of course will be reproduced in the record as though read in full and we will be pleased to have you give us abbreviated answers where that is possible to do so.

Mr. LOESCH. Thank you, Mr. Chairman.

The first question, which deals with the energy resources on the public lands which (a) are now, or (b) could be, made available in the foreseeable future, as a major element in the Nation's energy supply.

Oil, gas, coal, uranium, and waterpower are available on the public lands; and, oil shale, tar sands, and geothermal resources will be available in the foreseeable future.

The rest of the answer to question one elaborates on that statement with various statistics as to percentage of energy supply and so on. Question two, which deals with the principal goals and objectives of the Government with respect to management of each resource, and then some subheads.

Addressing the question first, the Department of the Interior's major goals and objectives with respect to the management of the publicly owned mineral resources are:

(1) To assure orderly and timely resource development;

(2) To protect the environment;

(3) To insure the public a fair market value return on the disposition of its resources.

(a) Each of the above goals and objectives is based on legal mandate. They are contained within.

The answer to subhead "a" sets out all of the major acts under which we operate in this area.

Frankly, there is no area which is adopted at the full discretion of the Department. All of the goals and objectives are covered in one way or another by one or more of the acts.

(b) To what extent is each goal or objective compatible with other objectives for the management of individual resources? For example, how are encouragement of current development, conservation of supplies for future use, and maximization of Government revenues reconciled?

Of course here we have one of the gut questions in the whole issue that you as a committee are now studying. They are not necessarily, however that these goals and objectives-mutually incompatible. We try to obtain an optimum balance among the three. We must leave to your judgment how near we obtain that objective.

Subsection C of question 2, what is the basis for any differences in goals or objectives with respect to different energy resources?

The answer to that is that there are no basic differences in goals and objectives. Those goals apply equally to all of the various energy resources and they form the declaration of policy in the administration's proposed revision of the Mineral Leasing Act submitted last

year.

(d) To what extent do the goals and objectives of the principal legal authorities under which individual energy resources are managed require review to determine if they are consistent with today's energy requirements and environmental goals?

In brief response to that I may say that the OCS Lands Act requires review to examine the multiple-use responsibilities of the Department with regard to such items as erection of supertanker ports, rights-ofway for purposes other than oil and gas such as telephone transmission lines and third, the positive management of historic, scientific, and other potential multiple-use sites.

The mining and leasing acts require amendment to more clearly define the management responsibilities of the Department.

These clarifications are outlined in the administration's proposed Mineral Leasing Act, the Mined Area Protection Act, National Resource Land Management Act, and the mining law.

Question 3. How do you relate the Mining and Minerals Policy Act to Department of Interior policy regarding Federal leasing of energy minerals?

Answer 3. The Mining and Minerals Policy Act of 1970, Public Law 91-631, concisely enunciates and sets forth the national minerals policy. That act sets forth what should be a national minerals policy. The responsibility for carrying out the policy is assigned to the Sec

retary of the Interior and he is directed to do so "when exercising his authority under such programs as may be authorized by law other than the act."

Question 4. For which energy resources does your Department, or agency, have a long-term schedule, plan, or strategy for leasing or disposal?

To what extent, and how, does each taken into account national and regional demand and alternative sources of supply, including outstanding inactive, nonproducing Federal leases, private and State lands, et cetera?

In particular, what are the Department of Interior's policies for leasing coal, Outer Continental Shelf oil and gas, oil shale, and geothermal resources?

And I may say here, Mr. Chairman, that the answer to this question is quite lengthy, but yet, in itself, does not cover or fully answer the question which is covered throughout this paper and particularly in answer to, I believe it is question 9, which we will get to in a few minutes.

But suffice to say here that as our planning system develops, it will provide the framework for a long-term strategy for the leasing and disposal of Federal energy resources.

The system will take into account national and regional demand and alternative sources of supply. The Department's policy is to lease or dispose of these resources only when we meet the three major mineral management goals and objectives of orderly and timely resource development, protection of the environment, and the receipt of fair market value for leased resources.

I think perhaps the most controversial, well, I don't know, they are all perhaps controversial, but the receipt of fair market value is a question we will devote ourselves more specifically to later in the

answer.

You are aware that we have our proposed 5-year schedule of offshore leasing which is directed at orderly resource development. The answer details how we manage that, goes into the fact that we are presently engaged in an experimental plan for the development of oil shale by a trial on six selected tracts, two in each of three States, Wyoming, Colorado and Utah for consideration in the prototype shale leasing program.

We plan to hold the first competitive lease sale on geothermal steam this year.

Next question. In view of the large acreage and probable quantities of some energy resources in private ownership, or under current Federal lease, what is your position on the need to issue additional leases or prospecting permits? Consider especially coal and oil shale.

Answer 5. The Department's present position is to proceed cautiously on the issuance of further coal leases and permits pending an analysis of the quantity and quality of coal already under lease, and the demand and need for additional coal.

In addition, the Department plans to incorporate terms and conditions in the outstanding leases upon their renewal in order to foster their development.

In regard to oil shale, the quality and quantity of oil shale deposits on private lands generally does not match the best of the Federal de

posits. Therefore, Federal leasing of oil shale should be encouraged. And that is what we are attempting to do in our current program.

In regard to uranium, known reserves of relatively low cost uranium fall far short of the Nation's requirements. Where possible, Federal lands should be open to mining claim location and the Department should continue to consider prospecting permits.

In his clean energy message of June 1971, the President underscored the critical national need for clean energy and directed the Department to accelerate offshore oil and gas leasing and to prepare a 5-year leasing schedule for oil and gas on the Outer Continental Shelf.

The Department is operating under this tentative 5-year lease schedule. The President also emphasized the importance of a geothermal leasing program and an oil shale leasing program which have been developed.

Additional onshore oil and gas leases are needed, but it is even more important that the leases be issued under conditions which will promote orderly development. It is believed that a system of all competitive leasing with appropriate requirements for exploration and development, instead of the present noncompetitive leasing system, would be more responsive to supply and demand and would lead to less holding of leases primarily for speculation.

The administration's proposed bill to reform the mineral leasing laws would provide that, with minor exceptions, all leases would be issued competitively.

Question 6. For each resource, what conditions regarding land reclamation, protection of other resources, or environmental quality, are currently required for exploration or energy resource production on the public lands?

As to oil and gas on the OCS, all major oil sales are considered major actions which can significantly affect the quality of the human environment and consequently require the preparation of environmental impact statements.

Compliance with detailed lease stipulations, operating regulations and orders designed to protect the environment is required of all lessees and operators on the OCS.

(a) Section 102 (c) of NEPA prescribes the specific minimal content of environmental impact statements required of all major actions affecting the environment.

Section (5) of the OCS Lands Act provides the Secretary broad discretionary authority to prescribe such rules and regulations as may be necessary to administer leasing on the OCS.

(b) The OCS leasing regulations provides for bonding all lessees, these bonds are being conditioned on compliance with all terms of the lease.

(c) The OCS operating regulations provide for the suspension of operations, including production, which in the Department's judgment threatens immediate, serious, or irreparable harm to the environment.

Any nonproducing lease may be canceled administratively whenever the lessee fails to comply with any provision of the OCS Act or lease or applicable regulations in force and effect on the date of issuance of