for all damages resulting from a spill up to $35 million and the new fund liable for damages beyond that amount.

Finally, a new section 30 provides for the establishment of a fund to compensate fishermen whose activities, or gear, may be damaged by OCS activities.

II. PURPOSES OF THE LEGISLATION

H.R. 1614, will amend the Outer Continental Shelf Lands Act of 1953 to provide a new statutory regime for the management of the oil and natural gas resources of the Outer Continental Shelf. It will expedite the systematic development of the OCS, while protecting our marine and coastal environment.

The United States is becoming increasingly dependent on foreign sources of oil. This dependence must be reduced. When the Select Committee began its work almost 22 years ago, the United States was importing approximately 35 percent of the oil it consumed. Since then the level of our imports has steadily risen, and the Nation is now obtaining about 50 percent of its oil from foreign sources. For example, since the 1973 embargo, the share of U.S. oil imports supplied from the Middle East has increased from 14 percent to 36 percent. Because of this level of imports, the Nation's economy remains vulnerable to another oil embargo, which would cause severe internal dislocations. Our payments for foreign oil constitute a continuing threat to the maintenance of a favorable international balance of payments. Finally, reliance on foreign oil may also risk our ultimate national security. The basic purpose of H.R. 1614 is to promote the swift, orderly and efficient exploitation of our almost untapped domestic oil and gas resources in the Outer Continental Shelf. During the 1980's, oil and gas development on the OCS is likely to be one of the single largest sources of additional domestic energy, and at a lower expense than most alternatives in terms of development and impact costs.

Development of our OCS resources will afford us needed time-as much as a generation-within which to develop alternative sources of energy before the inevitable exhaustion of the world's traditional supply of fossil fuels. It will provide time to bring on-line, and improve energy technologies dealing with, solar, geothermal, oil shale, coal gasification and liquefaction, nuclear, and other energy forms. The OCS Lands Act of 1953 has never really been amended and is outmoded. No legislation exists for coordination and compensation for injury to other users of the OCS besides the oil and gas industry. No comprehensive national legislation presently exists for responsibility and liability for the effects of oil pollution resulting from activities on the Shelf. In addition, specific mechanisms are needed to involve states, and local governments within states, in all OCS decisions. When consideration of the predecessor bill (H.R. 6218) to H.R. 1614 began, no statute provided for consultation with, and funds for, states which can be adversely impacted by activities on the Shelf. Since that time with the passage of the Coastal Zone Management Act of 1976, the planning capacities of the coastal States have been enhanced by some Federal funds and planning assistance. However, OCS decisionmaking is not limited in effect to coastal zone policies and far more financing is needed in order to ameliorate the undue burdens which can be expected to strain the public services and economic

infrastructures of affected States. Finally, only vague legislation exists as to balancing of resource needs, environmental quality, and long term energy policies. The purpose of H.R. 1614, by requiring development of an OCS plan, establishing new management and regulatory requirements, mandating coordination with affected States, and providing compensation for damage to fishermen's gear, for spills and for adverse impacts, is to cure these defects.

The lands of the Outer Continental Shelf that extend beyond 3 miles from our coastline belong to the Federal Government, (except where court decisions have recognized that Texas and Florida have jurisdiction for three marine leagues off their coasts in the Gulf of Mexico), and it has historically leased these lands to private industry for the exploration and development of the energy resources that lie beneath them. The leases have been awarded by auction, traditionally on the basis of cash bonus bids. With the present shortage of investment capital that will prevail for many years, increasing risks of uncertainty, and the increasing integration and concentration of energy industries, there is now doubt whether cash bonus bidding remains the best system for the future. One purpose of H.R. 1614, is to authorize alternative leasing arrangements and require experimentation with them. It will enable the Secretary of the Interior, who administers the federal leasing program, to strike a proper balance between securing a fair return to the Federal Government for the lease of its lands, increasing competition in exploitation of resources, and providing the incentive of a fair profit to the oil companies, which must risk their investment capital.

Federal administration of the leasing program and Federal regulation of offshore oil and gas development have been essentially a closed process involving the Secretary of the Interior and the oil industry. While the Secretary has on occasion sought or heard outside views, he has done so by rules established in his own discretion. Decisionmaking for the development of offshore oil and gas must be opened so that the coastal and other States affected by offshore oil and gas activities may participate in the process on a regular basis and so that affected local communities and the public at large may have an opportunity to be heard. Another purpose of H.R. 1614, is to provide statutory mechanisms that will open the decisionmaking process to a wide variety of views. The committee recognizes that a new Secretary of the Interior has made important reforms in the OCS process. The committee also believes that many of these reforms were based on the extensive record and recommendations it made. It is essential to codify these, and establish further reforms.

Congress has a special constitutional responsibility to make all needful rules and regulations respecting the territory or other property belonging to the United States. (U.S. Constitution, art. IV, sec. 3, clause 2). The Outer Continental Shelf Lands Act is essentially a carte blanche delegation of authority to the Secretary of the Interior. The increased importance of OCS resources, the increased consideration of environmental and onshore impacts and emphasis on comprehensive land use planning, require that Congress detail standards and criteria for the Secretary to follow in the exercise of his authority.

Regulations affecting the safety of the environment, of employees, and of marine life, have been the responsibility of the Coast Guard and the Department of the Interior since the OCS Lands Act of 1953.

Information has often been insufficient as to whether this responsibility is being adequately handled. Some activities remain unregulated. Others are underregulated. Compensation for spills has been inadequate. With the leasing of areas in risky frontier areas, modern statutory guidelines are essential. H.R. 1614 resolves these problems. It provides for studies, reports, and a review of safety regulations, and for coordinated and organized supervision by the most appropriate federal agencies with the most expertise. H.R. 1614 provides for periodic review mechanisms to balance environmental and other safety risks against the benefits and dangers of activities. H.R. 1614 establishes liability requirements and compensation for oil spills.

Exploitation of potential offshore oil and gas reserves will have a severe impact on the states, particularly in the earlier years. After a discovery, offshore oil and gas will have to be brought to shore, processed, stored, and transported. The States will need Federal assistance so that they can take proper steps to minimize the adverse environmental impact of exploration and then the onshore handling of the offshore oil and gas produced. They will also need federal assistance so that they can provide a proper infrastructure-new housing, schools, roads, and expanded municipal services in areas that are suddenly impacted. H.R. 1614 authorizes a form of direct grants as a statutory vehicle for providing this assistance.

The purposes of H.R. 1614 can be summarized by its important provisions which include, inter alia, the following:

1. Declare a national policy for the Outer Continental Shelf.

2. Improve provisions for lease administration, including the suspension or temporary prohibition of activities, or lease cancellations. 3. Revise bidding and lease administration, including the introduction of alternative bidding systems.

4. Require the submission of exploration and development plans. 5. Allow new exploration techniques.

6. Require the development of a 5-year leasing plan.

7. Provide for coordination and consultation with Governors of affected States and through them affected local governments.

8. Require baseline and monitoring studies.

9. Require the review and enforcement of safety regulations, including the use of the best available and safest technology where economically achieveable.

10. Reduce frivolous lawsuits and delays by providing consolidated and expeditious procedures for citizen suits and judicial review. 11. Provide for an OCS information program.

12. Establish an offshore oil spill pollution fund.

13. Provide grants to impacted states.

14. Establish fishermen's contingency funds.

III. BACKGROUND 1

The creation in 1975 of the Ad Hoc Select Committee on the Outer Continental Shelf resulted from public concern about the then Depart

1 For a more detailed discussion of the issues covered in this section, see "Effects of Offshore Oil and Natural Gas Development on the Coastal Zone", a study prepared pursuant to the request of Hon. John M. Murphy, Chairman, for the use of the Ad Hoc Select Committee on Outer Continental Shelf by the Library of Congress, Congressional Research Service (Washington, D.C.: U.S. Government Printing Office, 1976) 396 pp.

ment of Interior's accelerated OCS leasing schedule under the general authority of the OCS Lands Act. This act was 23 years old and, most felt, in need of modernization. Congressional concern led to numerous bills to amend the OCS law which were referred to three or more House committees. Creation of the Select Committee avoided parliamentary confusion and delay.

Issues emerge on the American political agenda for a variety of reasons. Frequently, as in the case of Outer Continental Shelf oil and gas development, they arise for public consideration from a combination of pressures from outside the national political system, from scientific and technological advances, from efforts to protect vested interests, from changing levels and types of political consciousness, from new demands on scarce resources, from catastrophic events and from even pure chance.

A brief look at the history of the OCS question will reveal that these factors, plus many others, have converged to bring this issue to the attention of the United States Congress and then to heighten congressional interest in reform.

The Truman Proclamation and Early Federal-State Conflict

The Outer Continental Shelf Lands Act 2 was passed in 1953, after a series of events, from the middle 1940's to early 1950's, raised the issue of Tidelands Oil and Federal/State conflict over offshore resource jurisdiction to the public consciousness.

3

On September 28, 1945, President Harry S. Truman issued a Proclamation on the Continental Shelf stating that the Government of the United States "regards the natural resources of the subsoil and seabed of the continental shelf beneath the high seas contiguous to the coasts of the United States and appertaining to the United States, subject to its jurisdiction and control." Although not so stated in the Proclamation, the continental shelf was considered to be that area contiguous to the Continent covered by no more than 100 fathoms (600 feet; 200 meters) of water. The Truman Proclamation and the claim of the United States was subsequently recognized by the Geneva Convention of the Continental Shelf."

However, a number of jurisdictional problems arose between the U.S. Federal Government and certain State Governments. In 1947 the Supreme Court, rejecting prior rulings in this area, held that the Federal Government had "paramount rights" over the area 3 miles seaward from the normal low water mark on the California coast.5 Similar decisions were made in Louisiana and Texas cases in 1950.6 In effect, then, the Court had decided that these States had no title to, or property interest in, the submerged lands off of their respective coasts outside their inland waters.

However, there was a real question whether the Mineral Leasing Act of 1920 applied to the Outer Continental Shelf and whether it was necessary for the Congress to explicitly confer this authority on the Interior Department.

2 Public Law 212, 83d Cong., 1st_sess., 67 Stat. 462, 43 U.S.C. 1331, et seq.

3 Executive Order 9633, Federal Register 12304 (1945); 59 Stat. 885.

43 U.N. Doc. A/Conf. 13/L.55, T.I.A.S. 5578.

5 United States v. California, 332 U.S. 19 (1947).

United States v. Louisiana, 339 U.S. 699 (1950); United States v. Texas, 339 U.S. 707 (1950).

Congressional Action, 1953

To resolve these jurisdictional issues statutorily, Congress passed two acts in 1953 which helped to clarify the distinction in FederalState control. The Submerged Lands Act of 1953 gives the coastal States exclusive rights to the resources up to 3 geographical miles from the coast. Subsequent court cases provided that, for historic reasons, the boundaries of Texas and Florida extended for three marine leagues (approximately 1011⁄2 miles) from their coast lines into the Gulf of Mexico. The Act also reaffirmed the jurisdiction, power and control of the United States beyond that point.

Although the Submerged Lands Act established coastal and seaward boundaries for Federal and State governmental jurisdiction, it was silent on the matter of Federal leasing for Outer Continental Shelf mineral resources. To remedy this situation, Congress passed the Outer Continental Shelf Lands Act of 1953 (OCSLA).

This legislation defines the OCS as all lands lying seaward and outside of State waters (3 miles) "and of which the subsoil and seabed (belong) to the United States and are subject to its jurisdiction and control". It also establishes very general guidelines and directives for the Secretary of the Interior in managing the resources of the OCS and in leasing tracts for oil and gas, and other mineral exploration and development.

Given the complexity of the OCS oil and gas issue and its implications for both the Federal and State Governments, the OCSLA is an all too general piece of legislation containing few mandates for the Secretary of the Interior in carrying out his important responsibilities in leasing OCS oil and gas resources. Much of the recent criticism leveled at the Act is based on its lack of specificity.

In its administration of the OCS oil and gas program, the Department of Interior fills in some details through its authority to promulgate rules and regulations which are published in the Federal Register. Lacking in the permanency or visibility of positive law and indicating a piecemeal approach to modernization, revision and modification, much criticism has been directed toward the Department's past OCS rulemaking, which is often considered the result of the lack of specific directives in the OCSLA.

Legislative History Since 1953

There has been only one limited amendment to the Outer Continental Shelf Lands Act since 1953.9 However, a number of statutes have been passed that have application to OCS areas and operations.10 Specifically, the

Fish and Wildlife Act of 1956.11-Establishes the United States Fish and Wildlife Service to study, protect and manage the fish resources under U.S. jurisdiction.

? Public Law 31, 93d Cong., 1st sess., 67 Stat. 29, 43 U.S.C. 1301 et seq.

8 See generally, 30 CFR 250.1 et seq.; 43 CFR 2883.0 et seq., and 3300.00 et seq. The Deepwater Port Act, January 3, 1975, Public Law 93-627, & 19 (f). 88 Stat. 2146, required the state laws applicable to OCS activities to be continually updated. See 43 U.S.C. 1333, as amended (1977 Supp.).

10 For a description of the various statutory responsibilities of the Federal agencies as to OCS activities, see "Agency by Agency Analyses, Federal Role in OCS Oil and Gas Development," prepared for this Committee by Oceans Program of the Office of Technology Assessment (May 1977) (available as a Committee Print of the Committee).

11 Act of August 8, 1956. 70 Stat. 1119, as amended, 16 U.S.C. 742(a) et seq.