APPLICATION FOR PERMIT TO DRILL, DEEPEN, OR PLUG BACK

Form approved.

Budget Bureau No. 42-R1425.

5. LEASE DESIGNATION AND SERIAL NO.

GCS Tract F-0241

6. 1 INDIAN, ALLOTTEE OR THIRE NAMB

IN ABOVE SPACE DESCRIBE PROPOSED PROGRAM: If proposal is to deepen or plug back, give data on present productive zone and proposed new productive zone. If proposal is to drill or deepen directionally, give pertinent data on subsurface locations and measured and true vertical depths. Give blowout preventer program, if any.

Well No. A-41.

OCS Tract P-0241.

PROPOSED PROGRAM

1. Drill 124" directional hole to 610'. Open hole to 171⁄2'' to 610'.

2. Run 13% 61# J-55 seal-lock casing to 600'. Cement through shoe with 650 sax Class G cement with 2% CaCl2.

3. Install 13%" 3000 psi W.P. Shaffer unitized wellhead. 135%" bore 3000 psi W.P. riser spool 12'' Series 900 Shaffer double-gate blowout preventer with blind and 41⁄2" pipe rams and 12'' Series 900 "GK" Hydril preventer.

4. Drill 124" directional hole to 2740'.

Top of Upper 402 Zone: 675' (measured depth).

Total depth: 2740′ (measured depth), 2260' T.V.D.

Bottom hole location: Lambert Grid Zone VI.X=986,030; Y=804,087.

5. Run IES, density and dipmeter logs.

6 Run 95%" 40# N-80 buttress-thread blank casing to 2730'. Cement through shoe with 700 sax Class G cement mixed with 25 lbs. Gilsonite/sack and 2% CaCl2. 7. Run cement bond log after 24 hours.

8. Change over to completion fluid and jet perforate at intervals with %'' jets. 9. Sand-pack each perforated interval using Malliburton pressure-pack technique.

10. Clean out sand inside of 95%'' casing.

11. Set retrievable bridge plug at 1275'.

12. Run Reda submersible pump on 2%" BUE 8rd J-55 turbing and test interval 775'-1250'.

Contingent on first test kill well with completion fluid.

Pull tubing and pump. Reset bridge plug 1625'.

Run pump and tubing and test interval 775-1600'.

13. Kill well with completion fluid. Pull tubing and pump. Retrieve bridge plug. 14. Run pump and tubing to 2700'. Place well on production to clean out completion fluid.

15. Shut well in until tide into shore facilities.

CONDITIONS OF APPROVAL TO DRILL OCS WELL

Approval is further subject to the following specific conditions:

1. The date actual drilling is started shall be reported promptly to the District Engineer.

2. A drilling progress report (one copy, no prescribed form) shall be submitted weekly showing the principal items of work done during the week.

3. Adequate blowout prevention equipment as outlined in OCS Ordier No. 2 shall be installed, tested, and maintained.

4. Any change in the approved program must receive prior approval from this office.

5. Any unusual occurrence such as pollution, serious injury to personnel, loss of equipment overboard, damage caused by drifting of drilling vessel off location, well blowout, major equipment failure, etc., should be reported immediately to the District Engineer by telephone.

6. The District Engineer shall be notified in advance in the event of water shut-off tests, casing tests, and production tests,

7. Before a completion program is commenced or the hole is abandoned, the District Engineer shall be allowed sufficient time to examine well records and give separate approval for this portion of the drilling program.

8. The Notice of Intention to abandon a well shall be submitted on Form 9331 as outlined in OCS Order No. 3 notwithstanding any verbal approval to abandon that may have been given by this office. A Subsequent Report, Form 9-331, must be submitted not later than 30 days after completion of the approved work. 9. The pertinent and applicable reports required under 30 CFR 250.90 through 250.95 of the OCS Operating Regulations will be properly and timely submitted. Electric logs and other logging surveys, core description and conventional analysis, stratigraphic determination, formation tests, log and history (Form 9-330) shall be submitted to this office within 30 days after the completion, suspension, or abandonment of the well, in duplicate.

10. Approval of this application to drill does not constitute approval to do other operations, including the setting of anchor pilings, unless details of these operations are submitted with this application. If anchor pilings are necessary, a letter requestng approval and containing the following information shall be filed: number of anchor pilings, depth of piling, design of piling, method of removing piling or top of piling upon completion or abandonment of the well in order that the ocean floor will be left clean. Verbal approval may be given by the Los Angeles District Engineer (U.S.G.S.) provided a written application is filed for approval. Senator MONTOYA. Our next witness is Mr. J. G. Stearns, director of the Department of Conservation for the State of California.

STATEMENT OF JAMES G. STEARNS, DIRECTOR, DEPARTMENT OF CONSERVATION, STATE OF CALIFORNIA

Mr. STEARNS. Mr. Chairman and members of the committee, I am James G. Stearns, director of the California Department of Conservation which is a part of the California Resources Agency.

Within the department of conservation are these operating divisions: divisions of forestry, oil and gas, mines and geology and soil conservation. The recently enacted executive branch reorganization has also added the division of State lands to the department.

Conservation camp crews from the division of forestry have been directly involved in cleaup work of oil contamination resulting from the Santa Barbara Channel oil spill. A maximum force of about 400 men, including supervisory and support personnel, were employed in this work.

An additional 2,200 men were and are available if needed. These crews are an effective, mobile, self-contained hand labor force normally employed in forest fire fighting, but are also utilized in other emergencies such as flood control and cleanup.

25-679-69-pt. 311

From our observations, cooperation between all the operating elements-State, Federal, and local agencies and industry-in containment and cleanup operations has been excellent.

FEDERAL-STATE JURISDICTION

Unfortunately, in this situation the division of oil and gas and the division of State lands could only be concerned and frustrated observers since the leakage occurred in Federal waters. By statute, the division of oil and gas supervises the drilling, operation, maintenance, and abandonment of all wells drilled within the boundaries of the State.

By agreement, this includes wells located on Federal mineral interests on land within the State boundaries. The State lands commission, through the division of State lands, has jurisdiction over the exploration and leasing of mineral interests owned by the State, including all tide and submerged lands.

Leases and permits granted thereby include specific requirements for operations conducted on State lands. Many hundreds of wells and coreholes have been drilled on State submerged lands without serious mishap, under the joint regulation and supervision of these two State divisions.

In addition, prior to 1965, many hundreds of coreholes were drilled in the disputed area on what is now the Federal Outer Continental Shelf, under the joint regulation and supervision of these same two State of California agencies, also without serious mishap.

After the 1965 Supreme Court ruling which set the State boundary at 3 miles from the coastline, the U.S. Department of Interior, through the U.S. Geological Survey, took over the regulation and supervision of oil exploration and drilling operations beyond the 3-mile limit.

Offshore drilling programs proposed by oil operators are evaluated by State agencies on an individual, well-by-well basis. Each evaluation takes into full account the geologic and drilling conditions to be expected in the area as determined from long experience and known geologic data on the entire Continental Shelf prior to 1965, and within the 3-mile limit since that time.

The State requirement for setting a second string of casing before drilling deeper than 1,200 feet is one result of this experience. Even this requirement is somewhat flexible so that provision can be made for unusual conditions. The continuously expanding knowledge of offshore geology and drilling conditions, so vital to the prudent planning of drilling programs, has been arbitrarily severed at this political boundary since its establishment. There is no significant exchange of offshore geologic and drilling information between State and Federal agencies.

TEXAS-LOUISIANA JURISDICTION

This disjointed state of regulation and supervision of oil operations off our shores is in sharp contrast to that of offshore Texas and Louisiana. By tacit agreement with the Department of Interior, and with the consent of the industry, these States regulate all offshore drilling and production operations including those on the federally owned Outer Continental Shelf.

This allows the knowledge and experience gained from all offshore oil operations to be applied to local conditions on a continuing basis, taking all other resource values into account.

Texas, Louisiana, and California are the three largest oil producing States. They have been in the business of regulating and supervising onshore and offshore oil operations for a long time. Each of these States has the personnel, experience, operating procedures, and facilities to do an effective job in this field.

This is supported by the fact that, to my knowledge, there have been no "Santa Barbaras" resulting from offshore drilling operations under the supervision of these States.

California is the only State of the three which does not now regulate and supervise all oil operations on its adjacent Continental Shelf. The Department of Interior apparently has the authority to change this situation without additional legislation.

California is most willing to extend its responsibility for regulation and supervision to the Outer Continental Shelf with this function being financially supported by the producers in the extended coverage area in the same manner that this function is supported on land and within the 3-mile limit. This consists of a current annual assessment of 2.6478 mils per barrel of oil or per 10,000 cubic feet of gas produced, or less than one-eighth of 1 percent of the gross product value.

While the record of the State of California in the field of regulating offshore oil operations is excellent, our agencies are not complacent. Even with the best of plans and supervision, accidents are possible.

Our agencies, in cooperation with industry, are presently reviewing all offshore requirements. This review will probably result in further safeguards. Additionally, we hope to be invited to participate any studies to be conducted under Federal auspices.

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I would like to say further, if I may, that our division of oil and gas and the State lands division are conducting a very, very thorough investigation of all of their experience to date and be very assured that, not only in this sort of circumstances but in other circumstances that might arise, we might be too close to the wind ourselves.

We are not a bit complacent about this at this time. We want to assert; we want to at least have a place at the table in determining how regulation is done in water that can get on the beach, so we will reaffirm that.

The other day before the President's Science Committee, I pointed out two areas where I think the Federal Government could be of substantial assistance not only to California but the other Pacific Coast States. One would be in getting a very thorough and comprehensive job of mapping done on the Continental Shelf and tidelands for the development of oil and gas as well as other minerals. We need this information so we can regulate whoever regulates on the basis of known facts so far as possible.

Chemical research needed

The other area where we need among us additional emphasis is in the area of research on chemicals to combat these kinds of spills. My