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50 States border the OCS (Connecticut and Pennsylvania are considered to have Tidal Coast line, not General Coast Line). Five of these States have less than 50 miles of General Coast line, and one only 53 miles. Out of 12,400 miles of Coast Line, two States (Alaska 6.610 mi., Florida 1,350 mi.) have 23 of the Coast line. The General Coast line of New Hampshire is but 13 miles while adjacent Maine, with which it is not too dissimilar, has 228 miles and neighboring and greatly similar Vermont has none.

The potential wealth in the sea and the depth, breadth, and avail. ability of the Shelf for production bears little relation to Coast line or any concept of taxation.

None of these elements bear any relation to the revenue needs of the Coastal States.

States with a sparse population scattered over a large area can cite these as reasons why road, school, police, fire and other service costs are high. States with a concentrated population can cite density as a factor that raises costs. States whose commodities are exported can cite this situation.

We know of no reason why a coastal state should be permitted to tax oil that originates outside its boundaries, whether it be in adjacent coastal waters or in an adjacent state, simply because it is landed in that state.

The Administration has proposed a comprehensive system of Federal revenue sharing which seeks to distribute Federal revenues in a manner advantageous to the 50 States so as to better equip them to meet their particular needs. These proposals leave untouched all of the present shared revenue and payment-in-lieu of tax systems involving Federal lands and resources. However, both as a result of PLLRC and other studies, suggestions have been made that the shared revenues and PILT better conform to the tax contributions from similar lands and resources within the several states. The major disadvantage of the proposal implied by Que. 58 is that it would, in effect, create a new inequitable revenue sharing system. It would immediately benefit : few coastal states, probably never benefit some coastal states, and be relatively detrimental to at least 28 States.

A second disadvantage is that it would provide cash benefits to a few States but create no obligation to provide governmental service to the revenue producing Shelf area.

A third disadvantage is that it is bottomed on the concept that geographic proximity is a sound rationale for Federal revenue sharing.

The advantages in the proposal are thus highly limited to those States whose Shelf can and will produce revenue. In those few cases substantial revenues well beyond any burdens would be derived.


Requested statements for the Hearing Record of June 19, 1972 on

Federal Leasing and Disposal Policies



Washington, D.O., August 7, 1972. Hon. HENRY M. JACKSON, Chairman, Committee on Interior and Insular Affairs, 0.8. Senate, Washington, D.C.

DEAR SENATOR JACKSON: In response to the request in your letter of June 1, 1972, concerning leasing and disposal policies for energy resources on the public lands, we are pleased to enclose herewith for the record answers to those questions in Attachment A and B to your letter that are within the areas of competence or concern of the Atomic Energy Commission.

If we may be of any further help or supply any additional information, please let us know. Sincerely,


(For the General Manager). Enclosure.


(1) ich energy resources on the public lands (a) are now, (6) could be, made available in the foreseeable future, as a major element in the nation's energy supply?

Answer. Uranium is now available as a major element in the nation's energy supply. Approximately 60% of the known reserves and estimated additional uranium resources are on public and Indian lands.

The Commission is also working on a nuclear explosion method of stimulating natural gas production from tight formations. Assuming continued success in this effort and public acceptance of the technology, a trillion or more cubic feet of natural gas could be made available in this way each year beginning in the late 1970's. Up to two or three hundred trillion feet of gas in formations on public lands are potentially amenable to production by the nuclear method.

In FY 1973, under expanded authority of a recent amendment to the Atomic Energy Act, the Commission has also begun support of non-nuclear energy applications aimed at “the preservation and enhancement of a viable environment by developing more efficient methods to meet the Nation's energy needs." It is expected that part of the Commission's support will be directed to new methods of exploiting geothermal energy, oil shale, coal and other resources on public lands. The Commission's interest in these resources, is in the technical side of resource management, up to and including the pilot project or demonstration stage. The Commission, while interested in and affected by leasing and disposal policies as they impact on recovery of such resources from the public lands, is not responsible for the development and management of those policies. In specific cases, the Commission makes known its views to the Department of the Interior on policy matters affecting the Commission's work.

(2) What are the principal goals and objectives of the government with respect to management of each resource?

Answer. Uranium, although used primarily as a fuel, is a metal and occurs in nature like other metals. It is, therefore, subject to the mining laws and other pertinent legislation. While the management of mineral resources is in general the responsibility of the Department of the Interior, the AEC is very much


1 42 U.S.C. 2051a (6).

interested, pursuant to its statutory authority (42 USC 2097), in the development of uranium resources and their availability to provide the fuel for the development of nuclear power as a viable energy option. For this reason, the AEC maintains a close review of uranium exploration, resource development, and production capability.

The AEC also has broad powers under the Atomic Energy Act of 1934, as amended (42 USC 2091-99), to issue licenses for and to distribute source material which includes uranium (42 USC 2014 (z)); to issue rules and regulations, or orders requiring reports of ownership, possession, extraction, etc., of uranium; to purchase, take, requisition, condemn, or otherwise acquire any interest in real property containing uranium. The Commission is also authorized, subject to certain limitations, to issue permits for prospecting, exploration, and mining on lands belonging to the United States.

Except for the period (1947 to 1966) when the primary use of uranium was for defense purposes, and except for certain lands (approximately 40 square miles, located primarily in western Colorado) acquired during the early part of that period for government exploration, which the AEC now proposes to lease for private mining operations, the Commission has not considered it necessary to exercise its statutory authority relating to uranium on the public lands other than by the licensing of processing (milling) operations.

(a) To what extent is each goal or objective specifically set out in law, or adopted at the discretion of the Department?

Answer. The AEC's statutory authority is set out in the Atomic Energy Act of 1954, as amended (42 USC 2011 et seq.).

(6) 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 mari. mization of government revenues reconciled?)

Answer. With respect to its proposed limited leasing program, the Commission hopes to maximize both conservation of resources and Government revenues by procedures, including competitive bidding and appropriate royalty rates. which will encourage the orderly development and maximum economic recorers of the total uranium resources in the area.

(c) What is the basis for any differences in goals or objectives with respect to different energy resources?

Answer. Although AEC has a basic concern over the maximum effective development of all energy resources to meet the energy needs of the country, its primary responsibility under the act is in the area of nuclear resources.

(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?

Answer. The Commission believes that the energy requirements of the nation are of such magnitude that the management of energy resources should be kept under continual review in the light of current energy requirements and goals. The AEC has a program of review and assessment of nuclear fuel resources including general assessment of foreign resources.

(3) How do you relate the Mining and Minerals Policy Act to Department of Interior policy regarding federal leasing of energy minerals?

Answer. Not applicable.

(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 take into account national and regional demand and alternative sources of supply (including outstanding inactive, nonproducing federal lenses. private and state lands, etc.)? In particular, what are the Department of Interior's policies for leasing coal, Outer Continental Shelf oil and gas, oil shale, and geothermal resources ?

Answer. The Commission is intensely interested in the long-term availability of uranium and is supporting a vigorous reactor development program, with the objective of making more efficient use of uranium resources, and a uranium resource evaluation program to assess the long-term availability of uranium and to provide information for long-range planning and for establishing public policy.

(5) 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.

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