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I say "generally responsive" because we have been somewhat selective in our answers to the questions propounded. We have, in fact, attempted to confine our efforts to matters about which we feel we have developed experience and knowledge which should benefit your committee. Many of the problems have been adequately defined and explored by others who have previously appeared before you with whom we dealt perfunctorily. Those matters on which we elaborated reflect the views and consensus of Louisiana citizens and State professions who have the experience and discernment to cope with our complex coastal problems. I earnestly invite your attention to the views expressed.
On a final note, we firmly believe in multi-use of our coastal area and the resolution of problems arising from competing interests by cooperation and State supervision rather than outright ban of activity.
STATEMENT ON BEHALF OF THE STATE OF LOUISIANA REGARDING OUTER
CONTINENTAL SHELF POLICIES
Question A-5. What additional changes in the existing legal regime or Federal organizational structure merit Congressional consideration and review?
Answer. At least two major problems long held in abeyance must be faced when the litigation between the United States and the State of Louisiana is settled and the coastline of the State and its seaward boundary fixed.
It is necessary to trace a bit of the history of the Louisiana Tidelands dispute to understand how these problems could be tolerated in former years without any need for an organizational entity or particular legal regime to deal with them. Now the legal construct of the dispute has changed with the result that problems long swept under the rug must be brought forth and made the subject of careful study and action. The two major problems we refer to are the ambulatory boundary question and the matter of conservation regulation, especially the formation of units to avoid the drilling of unnecessary wells in offshore Louisiana near the boundary between State and Federal jurisdiction.
In the mid-1950's, the dispute between the State of Louisiana and the United States resulted in a total shut-down of the oil and gas offshore industry. The Supreme Court issued an injunction against both parties preventing any leasing or drilling pending an agreement between the governments. A agreement resulted and was used to partially lift the injunction; it is known as the 1956 Interim Agreement. Under it, the submerged lands of offshore Louisiana were divided into four zones. Zone 1 consisted of a three-mile belt measured from the so-called Chapman Line (a line drawn in 1950 to represent the Federal coastline claim). Zone 1 was recognized as within Louisiana jurisdiction. Zones 2 and 3 comprised the disputed area, with Zone 4 consisting of submerged lands clearly recognized as Federal.
The result of this arrangement was that as an accidental matter, a large buffer zone existed. a sort of "no man's land", that was to be either jointly administered, or as in Zone 2, not developed or leased at all except to prevent drainage. Consequently, minor, even substantial, changes in the coastline were not likely to pose serious title risks since oil company leaseholders had lease title protection in the buffer zones under the Interim Agreement. Jeopardy to oil or gas leasing or development due to investment insecurity associated with changing coastline was thus incidentally avoided as a result of the coastline dispute. Also, since no leases could be granted in Zone 2, except under very limited circumstances, the opportunity for drainage and off-set problems to occur has been greatly minimized over the sixteen years that the Interim Agreement has been in effect. The result is that when the litigation is resolved, either entirely or in large part, as is imminent, the buffer effect will disappear. Not a broad disputed zone, but a line will divide the properties that are now declared to be clearly federal or clearly State by the Supreme Court.
The Supreme Court has held that Louisiana has a right to territorial gains which result from accretion. Studies during the 1950's, sponsored by the Mississippi River Commission, showed the tremendously increased flow of the Atchafalaya River during the 20th Century with an enormously enhanced sediment
load. It was predicted that the increased sediments would, starting sometime during the 1970's, build a delta land mass projecting 50 miles seaward into the Gulf of Mexico. We speak of a major new land mass that is to grow outward from the mouth of the lower Atchafalaya River through Atchafalaya Bay and into the Gulf of Mexico. Several hundred square miles of land will be added to the State and Nation, according to the best geological minds in this country. Technical consultants who have visited the area have seen new land building in the Atchafalaya Bay area. Already, an inland system of lakes some forty miles long and five or six miles wide, has been filled with sediments. Now the sediment flow that filled the lakes is being carried down to the bay and into the Gulf. This will not only project a great new land mass at the mouth of the Atchafalaya, but geologists has informed us that many of these sediments will be swept westward. Land growth will occur along substantial segments of the western Louisiana coast.
The State of Louisiana lost hundreds of square miles of land during the 20th Century according to studies of the Louisiana Coastal Studies Institute, principally because of activities of various federal agencies. For example, the Army Engineers closed off Bayou Lafourche in 1904 and did major engineering works in the Mississippi Delta which have prevented natural land building forces from balancing land destruction forces such as subsidence and erosion. We are at a moment in time when the major losses to be suffered by these works of the federal government have been suffered, and Louisiana is about to experience, during the 1970's and 1980's, major land building phenomena which should partially offset the severe boundary and land loss inequities it has silently suffered over past decades. Therefore, any approach to resolution of these problems based merely upon a "Let's freeze the boundary" solution would be overly simplistic. However, we do not rule out the appropriateness of considering such an approach in studies to ascertain alternative salutions to the problem of ambulatory boundaries and related title and unitization complexities.
The State of Louisiana will, under the present administration commence studies of potential solutions to these problems. We think until such studies are completed, the Congress should not precipitately act on the ambulatory boundary problem. The Congress should, however, be informed of the existence of this little known and less considered matter of great magnitude. It is, indeed, a matter of tremendous magnitude that cannot be appreciated adequately by those who are familiar only with small rivers and small river actions. We have in Louisiana the mouth of one of the greatest rivers in the world which over the centuries has changed from place to place and created the most unique and complex of coastal environs. Neither the Courts nor the Congress have heretofore adequately provided for the singular circumstances which result from the peculiar geological and ecological realities of the Louisiana coast. Too often these were treated as though it were appropriate to lump the coastal problems of Louisiana with those of other coastal States.
Many extraordinary events testify to the singular character of our coast. In 1837, the Mississippi flooded its banks at Venice and opened a cut known as The Jump, which build more than one hundred square miles of land into the Gulf of Mexico. At another time, the daughter of a French fisherman known as Baptiste Collette cut a little two foot pirogue canal which the river quickly enlarged and used to build scores of square miles of land into the Gulf. Elsewhere, as bayous were closed artificially or naturally, great masses of lands have fallen back into the Gulf. So, when we speak of the big changes that are coming at the Atchafalaya Bay and which will continue to occur in the Mississippi Delta, there is much in our coastal history that supports this prognosis.
Ambulatory Boundary Recommendations
But what does this have to do with the question of whether there is a need for change in the existing legal regime or federal organizational structure? We think it indicates that the problem of the ambulatory boundary is so large, so complex and so fraught with need to carefully consider the equities as they may relate to many problems, that there should be special and substantial study by both the federal and State governments to ascertain appropriate changes in law and administrative structures. Many matters are affected : revenue sharing, title security for the oil and gas industry to protect and encourage investiems, relationship to unitization to reduce the number of wells that would otherwise have to be drilled, future jurisdictional needs other than for oil and gas development
over the great new Atchafalaya Delta, ecological and economic impact, and planning for resource utilization of the great new swamp lands to be built, and legal problems of avoiding future State-federal conflict.
We plan to seek the cooperation of affected State agencies and scientific and legal specialists in Louisiana to consider these problems and, after appropriate technical studies, to seek cooperation with federal agencies in developing recommendations to the Congress for its consideration and review. In our judgment, the Congress should in the meantime support studies to deal with this matter. However, the technical character of the problem, its uniqueness to the Louisiana situation and the greater intensity of oil and gas development along the Louisiana coastal zone warrants that this matter be intensively studied separately from the broad hearings dealing with the Outer Continental Shelf problems of the entire United States coast. In short, it is our recommendation to this Committee that it recommend that further hearings be held specially dealing with the highly changeable character of the Louisiana coast and the ambulatory problem posed by the Supreme Court's 1969 decision in United States vs. Louisiana, if negotiations between the Executive Branches of the Louisiana and the federal government do not result in early resolution of the problem.
Conservation Problems and Recommendations
Sound oil and gas conservation regulation is required for many reasons: to prevent inequities in the development of oil and gas properties; to minimize adverse ecological impact; to maximize recovery of important resources in the most practical and economic fashion. It is in the interest of the industry and the public to have no more drilling than is necessary to efficiently and economically drain these underground resources. The Louisiana Mineral Board and the Louisiana Department of Conservation, in their dealings with counterpart federal agencies, have always sought to cooperate fully in the development of unitization agreements or other plans for development of resources along boundaries. They have sought to encourage efficient and economical development that would yet serve the equitable interests of each government participating in revenues from pools that might underlie both sides of a boundary or potential boundary. The experience has been less than satisfactory. The federal government refuses to negotiate at higher levels and insists upon having negotiations conducted by low level officials subject to one-sided review by higher federal authority. Consequently, any understanding by Louisiana officials with federal officials can seldom be relied upon and years later may be reversed by the higher federal authority. Louisiana is unable to obtain direct negotiation between higher State and federal authorities. Years are consumed and still agreement is not reached in final form on the few locales where development has been at the edge of and on both sides of the Zone 1-Zone 2 boundary. In December of 1971, great stretches of the Louisiana coast were adjudicated by the Supreme Court on one side of the line and we expect that a decree will be rendered this year adjudicating title on the other side of the line, causing clearly adjudicated State-federal areas to bound each other with the multiplication of drainage, off-set and unitization problems that are sure to develop. A quasi-adjudicative agency should be established, with joint federal-State representation thereon to create a mechanism for Louisiana to have "its day in Court" on unitization and conservation problems. Otherwise, the absence of agreement and interminable years of unsuccessful negotiation is apt to be repeated at scores of locations along the Louisiana coast with great injury to the State of Louisiana that could only be rectified by the State making demands upon its mineral lessees to drill wells to off-set wells on the federal side of the line. These were the very problems that, in the early days of the oil industry, caused lands to be peppered with derricks unnecessarily and with tremendous economic and geologic waste.
Louisiana believes that if the federal officials responsible for unit negotiations know that there is an independent agency or an independent arbiter available to fairly and objectively consider the claims of the State as to geologic and petroleum engineering problems affecting unit questions, these federal officials will be more apt to promptly agree on reasonable voluntary plans for units Actual resort to hearings before such an adjudicative body might well prove unnecessary in most instances.
If equity cannot be served by the creation of such a body to either arbitrate or adjudicate adversary proceedings between State and federal technical agencies, the result will be an unfortunate proliferation of unnecessary wells, financial burdens on the industry and higher prices for oil and gas. However, again this
is in an area where ill-considered action could defeat desired ends. The subject matter is interrelated to complexities of the ambulatory boundary problem which. as we have earlier suggested, is a matter that in itself, should receive the most careful expert attention. We recommend therefore, to this Committee that it take note of the need for legislation on this important problem now and the realization that such need will increase in the future. After technical studies, we have initiated are completed, Louisiana expects to come back to the Congress with specific recommendations and hopefully gain the concurrence of the administration on the proposals Louisiana will submit.
Question G-4. What should the role of the State government be with respect to Federal decision-making concerning:
Answer. (a) Exploration?: The States should have a very active role in Federal decision-making concerning exploration on OCS lands bordering the States' jurisdiction. In order to accomplish this, special policies should be developed by a joint State-Federal effort with regard to such matters as drilling regulations. the spacing or density of wells, production allowables, production handling and unitization procedures. Louisiana has long played a significant role in regulating seismic exploration in offshore areas. By agreement with the Department of the Interior, the State of Louisiana develops, promulgates and enforces all regulations to the edge of the OCS for the protection of fishing areas in Louisiana and on the OCS.
(b) Leasing?: The States should be informed about Federal leasing proposals and have the opportunity to approve or oppose the leasing of certain areas. There have been instances in Louisiana when agreements were worked out with the Federal Government whereby leasing and exploration in specific areas would be programmed so as not to interfere with peak shrimping seasons. These agreements were based on shrimp population dynamics research made available by the State. (c) Environmental regulations on OCS lands bordering the States' jurisdiction?: The States have what may be termed an overriding interest in Environmental regulations on OCS lands bordering the States' jurisdiction. The States are probably in a better position to either develop or evaluate environmental regulations in their coastal waters and on the adjoining OCS since, generally. they have a greater amount of scientific information on the local ecosystem. Because of this, we would strongly recommend that Environmental regulations developed for the OCS be thoroughly coordinated with and approved by the border states.
Question G-5. Are there high priority research or administrative programs related to OCS administration that remain unfunded, underfunded, or short of personnel?
Answer. Without question, a considerable amount of high priority research should be directed to determining the effects of chronic oil pollution and localized accidental spills. While present fishery production in Louisiana would indicate that serious toxic effects from oil do not occur, this question is still largely unanswered and must be answered before unlimited mineral exploration can be condoned throughout the ocean areas. Additional work is also needed to determine the effects of buried and unburied pipelines. At the present time, it appears that it will be very difficult to bury pipelines in water depths beyond the two hundred foot contour line. Thirdly, if dispersants or other types of chemical control of oil pollution is advocated, a considerable amount of bioassy work is needed to determine whether the toxicity of such chemicals alone or in combination with oil is more detrimental to the environment than oil alone.
Question I-2. In light of existing and projected demands for energy and the simultaneous requirements to protect the marine environment, what alternative sources of energy other than OCS petroleum from future leases are readily available and at what economic costs and environmental risks?
Answer. With regard to Louisiana, the most objective and far reaching method of obtaining alternative sources of energy, other than leasing of the OCS, would be increased onshore private exploration for oil and gas which should be encouraged by permitting a general rise in the price of crude oil which we consider depressed as compared with other products except natural gas. While such a price rise would obviously be eventually borne by the consumer, it offers a prac tical means of halting the declining rate of exploratory effort and encouraging additional drilling for onshore reserves that are badly needed.
Regarding natural gas, the greatest possible incentive to achieve accelerated exploration that could be given to the oil and gas industry and indirectly benefit
the consuming public would be to remove the FPC price restrictions entirely and let the price of gas seek its natural level. The renewed interest in exploratory drilling not only would result in substantially increased reserve of gas, but it would also increase oil production substantially. Again, the resulting cost increase to the consumer would more than be overcome by the insurance to them of a reliable and steady domestic supply of natural gas.
Question 1-3. What would be the economic, security of supply, and environmental consequences of alternative strategies for the scheduling of OCS resource development (e.g. postponing development and consumption of these resources until the need for them is greater, due to increased costs or unavailability of imported oil) ?
Answer. The postponing of development and subsequent non-consumption of optimistically assumed resource reserves, until such time as imported oil becomes unavailable or the cost of such oil becomes prohibitive would be impractical for several reasons:
(1) The United States would be at the mercy of unfriendly powers in the Middle East and Africa where more than 75% of the known world reserves of oil are located.
(2) Technical and professional personnel and operational equipment would be lost to foreign operations or assimilated into other industries thus destroying the domestic oil and gas industry. This would have a catastrophic effect on the economy. Once this nation postpones development and the domestic industry loses the expert and skilled labor force and the necessary drilling equipment to other nations, it would be virtually impossible to again start up the industry, and the leadtime that has been developed over the years will have vanished forever.
(3) Training centers would be lost and educational endeavors curtailed. (4) Research would virtually terminate.
(5) National security would be endangered as no immediate source of energy would be available in the event imports should suddenly cease. As an illustration, the country as a whole was unable to meet the demands placed upon it by withdrawal of Eastern Hemisphere oil during the Suez Canal crisis in 1956. What shutin capacity we had at that time has largely disappeared in the intervening 16 years. Today's shut-in capacity is insignificant. National security demands that domestic sources be developed to the greatest extent possible.
(6) Environmental damage or oil spill pollution would still be a major concern due to the tremendous amount of imported oil being brought in by large tankers. It is imperative that an orderly development onshore and offshore continue at least until such time in the future as alternative sources of energy, such as nuclear or solar, can be economically generated.
Question J-1. What are the nature and magnitude of environmental risks and problems related to OCS oil and gas development in:
Answer. (a) Geophysical exploration: Historically, geophysical exploration has been accomplished through recordings of refracted sound vibrations derived from under-water explosions. The detrimental effects to the environment as well as the flora and fauna are apparent. We realize that a series of underwater explosions in the Gulf of Mexico is probably insignificant when compared to natural disasters, but it is very possible that these shock waves disrupt the spawning of some of our commercially important species. The impact of such a catastrophe on the states' economy would be incalculated and not worth the risk, since alternate methods appear available.
Recent innovations of seismic instrumentation and exploration indicate that seismic profiling can be accomplished utilizing a much less destructive sound source. Seismic exploration should be limited to these alternate sources.
(b) Drilling and Production: All of the environmental risks involved with drilling and production are not known since the taxic effect of oil in the ecosystem is not clear. However, several problems that may be of immense magnitude to the environmental are recognized:
Accidental and Chronic Pollution
Accidental pollution can be disastrous, costly, create great public concern, and cause spectacular short-term local environmental disruption. Conclusions that may be drawn concerning the effects of accidental pollution include the following: 1. There is little or no evidence that accidental oil pollution has a gross permanent effect on the ecosystem. Whether minor or accumulative effects occur have not been demonstrated.