GEOLOGICAL SURVEY CIRCULAR 720 

Mineral Resource 

Management of the 

Outer Continental Shelf 

Mineral Resource 

Management of the 

Outer Continental Shelf 

By M. V. Adams, C. B. John, R. F. Kelly 

A. E. LaPointe, and R. W. Meurer 

G E 0 L 0 G I CAL 5 U R V E Y C I R C U LA R 720 

Leasing procedures, evaluation of resources, 

and supervision of production operations on 

leased lands of the Outer Continental Shelf 

1975 
United States Department of the Interior 

Geological Survey 

V. E. McKelvey, Director 

First Printing 1975 

Second Printing 1976 

Third Printing 1978 

Library of Congress catalog card no. 75-600041 

Free on application to the U.S. Geological Survey, National Center, Reston, Virginia 22092 
CONTENTS 

Page 

Abstract,................................................................................. 1 

Introduction .................................... , ...... ,............................... I 

Legislative background ....................... ........................... I 

Outer Continental Shelf................................................. 2 

Historical background.................................................... 2 

Statistical background ......................................... ,.......... 3 

Lease sales ............. ,.................................................. 3 

Production and royalty value ............ ,..................... 4 

Land and Water Conserva~ion Fund...................... 4 

Leasing procedure for the Outer Continental Shelf............. 7 

Leasing schedule ............................. ,............................... 8 

Collection of geological and geophysical data .......... ,... 8 

Geological activity ............................................ ~....... 9 

Geophysical activity ... ,.,.......................................... 9 

Environmental baseline data studies.............................. 9 

Resource reports ............................................................. 10 

Call for nominations .............. , .................... , ................ ,. I 0 

Tract selection ... ....... ............ ........... ...... .............. ........... I 0 

Environmental Impact Statement .................................. 10 

Draft statement ....... , .......... , ............ , ........................ 10 

Public hearing ....................... , ................................. 11 

Final stateme~t ........... , ............................. ,.............. 11 

Decision by the Secretary ........... , .................................... 11 

Notice of sale ................................................... ,.............. 11 

Detailed resource evaluation of each tract ........ ,............ 11 

Lease sale........................................................................ II 

Decision to accept or reject biqs......................... ............ 11 

Issuance of lease ... ,.......................................................... 12 

Coordination with state and federal agencies................ 12 

Page 

Resource evaluation ............................................................... 12 

Geophysics .......................................................... , ........... 12 

Regional mapping .................................................. 13 

Detailed mapping .................................................... 13 

Bright spot analysis ...................................... , .......... 14 

High resolution surveys ................................. , ....... , 14 

Geology ........................................................................... 14 

Data analysis and support .. , .......................... ,. ........ 14 

Reserve estimates ..................................................... 14 

Tract evaluation.,.................................................... 15 

Engineering ... ,................................................................ 15 

Management of leased lands .................................. , ............... 16 

Oil and gas lease contract.............................................. 16 

Safety and pollution control ....... , ........... ,...................... 16 

Supervision of drilling operations ................................. 16 

Supervision of production operations ........................... 18 

Field inspection ...... , ....................................... ,............... 23 

Resource conservation .................................................... 24 

Unitization .................... ,.......................................... 24 

Production control ............................ , ...... , .............. 25 

Royalty accountiftg .... ,,, ............. ,,................................... 25 

Efforts to increase operational margin of safety............ 25 

Future Outer Continental Shelf activity............................... 26 

Statistical background ................. ,. ............... , ............... ,. 26 

Areal extent and location ...... ,....... .... .. ...... ..................... 27 

Lead time .......... ,............................................................. 30 

C:Onclusions ................... , .. , ..................................... ,............... 31 

Selected references ................... ,.............................................. 'I 

ILLUSTRATIONS 

Page 

FIGU~E I. Outer Continental Shelf royalty re\'enue and funding of the Land and Water Conservation Fund, by fiscal 

years 1969 to 1974 ........................................................... , ............................................................................. ,............... 8 

2. Schematic diagram of a marine seismic prospecting system ............. , ..................... , ... , ..... , .......... ,................................. 13 

3, Multifold seismic reflection data (standard processing) ... , ............. , .......... ,.................................................................... 15 

'l. Multifold seismic reflenion data (high fidelity-bright spot-processing), ...... , ..................................... ,..................... 15 

5. Self-contained fixed drilling and production platform ...................................................... ,.......................................... 17 

6. jack-up mobile drilling platform ............ , .............................................................. , .......... , .......... ,................................. 19 

7. Floating mobile drilling platform ............................................. , ..................................... , .............................................. 20 

8. Semi-submersible mobile drilling platform .................. , .... , ................................................ ,........................................... 21 

9. Blowout preventcr assembly for installation on the ocean floor................................................................................... 22 

10. Schematic diagram showing casing program and production safety system of a typical 12,000-foot well, 

Gulf of Mexico ............................................................................. , ..................................................................... ,......... 23 

ll. Profile of the <·ontinental margin .................. , ............................. ,.................................................................................. 30 

III 
TABLE l. 

2. 

3. 

·!. 

5. 

6. 

7. 

8. 

9. 

10. 

ll. 

12. 

13. 

H. 

15. 

IV 

TABLES 

Page 

Outer Continental Shelf lease sales by years, states, minerals......................................................................................... 3 

Summary of Outer Continental Shelf lease sales, October 13, 195·1 through December 20, 1973, by state 

and n1ineral .. . . . . . . . .. . . . . . . . . . .......... .. . . . . . . .. . . . . . .. . . . . . . . . . .. . . . ... . . .. . . .. . . . . ... . . . . . . .. . . . . . ... . . . . ... . . . . . . .. . . .. .. . . . . . .... . . . . . . . . . . . . .. . . . .. . ... . . .. . . . . . . . .... 4 

Outer Continental Shelf producing and non-producing leases (oil, gas, salt, and sulfur) undt·r supervision, 

by years, as of Decen1ber 31 ... .. ........ ....... ......................... ...... ........ ... .... ....... ......... ....... ....... ........... ....... ...... ... .. . ............ 4 

Outer Continental Shelf producing and non-producing leases (oil, gas, salt, and sulfur) under supervision 

as of December 31, 1973, by states and products.......................................................................................................... 4 

Outer Continental Shelf revenue and production value, percentage cumulative revenue of cumulative 

production value, calendar years 1953-1973 .............................................................................................. ,.................. 5 

Cumulative bonuses, minimum royalties, rentals, shut-in gas payments, and royalties, Outer Continental 

Shelf, by states, August 7, 1954 to December 31, 1973 ................................................................................................. 5 

Land and Water Conservation Fund planning, acquisition, and development grants to states as of 

June30, 1974 ......................................................................................................................................................... , ....... 6 

Funding of the Land and Water Conservation Fund by Outer Continental Shelf receipts, fiscal years 

1969 to 1974 ................................................................................................................................................................... 7 

Outer Continental Shelf receipts, fiscal years 1969 to 197-1............................................................................................. 7 

Distribution of ratios of incidents of non-compliance to potential items of non-compliance by eve'lt class, 

observed during December 1970 through April 1974 inspections of productiqn sites ................................................ 24 

Unit plans and percentage of unitized production Outer Continental Shelf, calendar years 1956 to 1973 ................... 26 

Total offshore state and federal oil and condensate production ..................................................................................... 27 

Total offshore state and federal gas production .............................................................................................................. 28 

Total United States and Outer Continental Shelf production of crude oil and condensate, and gas and 

percentage of OCS production of total United States production .............................................................................. 29 

Continental seabeds adjacent to the United States .......................................................................................................... 30 

SYSTEM OF MEASUREMENT UNITS 

[The following report uses the English system of units. The English umts can be converted to metrk units 

by multiplying by the factors given m the following list] 

To convert 

English unit 

Acres ......................... , ................................ . 

Barrels (oil) .............................................. .. 

Cubic feet .................................................. . 

Feet ............................................................ . 

Miles, statute ............................................ .. 

geographical or nautical .............. .. 

Square miles, statute ................................ .. 

Multiply by 

0.4047 

4.047xi0-3 

0.159 

l.590xl0 2 

2.832xi0-2 

28.32 

0.3048 

1.609 

1.852 

2.590 

To obta£n 

Metric unit 

Hectares (ha). 

Square kilometres (km2). 

Cubic metres (m3 ). 

Litres (I). 

Cubic metres (m3). 

Litres (l). 

Metres (m). 

Kilometres (km). 

Kilometres (km). 

Square kilometres (km2). 
Mineral Resource Management of the 

Outer Continental Shelf 

By Maurice V. Adams, Charles B. John, Robert F. Kelly 

Alfred E; LaPointe, and Robert W. Meurer 

ABSTRACT 

An important function of the Geological Survey is the 

evaluation and management of the mineral resources of the Outer 

Continental Shelf, particularly with respect to oil and gas, salt, 

and sulfur. 

Production of oil and gas from the Outer Continental Shelf of 

the United States has increased substantially over the past 20 years 

and represents an increasing percentage of total United States 

production. As discovery of major onshore production of oil and 

gas has become more difficult, the search has moved into the surrounding waters where submerged sedimentary formations are 

conducive to the accumulation of oil and gas. Increased energy 

demands of recent years have accelerated the pace of offshore 

operations with a corresponding improvement in technology as 

exploration and development have proceeded farther from shore 

and into deeper water. While improved technology and enforcement of more stringent regulations have made offshore operations 

safer, it is unrealistic to believe that completely accident-free 

operations can ever be achieved. 

Only slightly more than six percent of the world's continental 

terrace is adjacent to the United States, but less than one percent 

has been explored for oil and gas. Since the lead time for 

the development of offshore oil and gas resources can be as 

much as a decade, they do not provide an immediate energy supply but should be viewed in the light of a near-term source with 

a potential of becoming a medium-range source of supply 

pending the development of alternative energy sources. 

Revenues from the Outer Continental Shelf are deposited to the 

general fund of the United States Treasury. A major portion of 

these funds is allocated to the Land and Water Conservation Fund, 

the largest Federal grant-in-aid program of assistance to States, 

counties, and cities for the acquisition and development of public 

parks, open space, and recreation lands and water. 

INTRODUCTION 

The Geological Survey is a bureau-level 

organization within the Department of the Interior 

that was established by the Act of March 3, 1879 (20 

Stat. 394; 43 U.S.C. 31), which provided for "the 

classification of the public lands and the 

examination of the geological structure, mineral 

resources, and products of the national domain.'' 

Subsequent legislation established that: 

The broad objectives of the Geological Survey are t') perform 

surveys, investigations, and research covering to:-x>graphy, 

geology, and the mineral and water resources of the United States; 

classify land as to mineral character and water a'ld power 

resources; enforce departmental regulations applicable to oil, gas, 

and other mining leases, permits, licenses, development contracts, 

and gas storage contracts; and publish and dissem~nate data 

relative to the foregoing activities. 

The Geological Survey accomplishes a portion of 

its objectives on the Outer Continental Shelf 

through the delegation of certain activitio.s to its 

Conservation Division which: 

• • • classifies Federal lands as to their value for leasable minerals; 

supervises the operations of private industry on oil anc gas leases 

on the Outer Continental Shelf to ensure maximum utilization 

and prevent waste of resources, to limit environment1'1 damage 

and pollution and to protect public health and safety; assures the 

public a fair market return for the disposition of its mineral 

resources; establishes maximum rates of production for 

producing wells; maintains production accounts ar<l collects 

royalties; and provides certain Federal agencies geologic and 

engineering advice, evaluations, and inspection services. 

LEGISLATIVE BACKGROUND 

On September 28, 1945, President Truman issued 

Proclamation 2667, upheld by the Supreme Court in 

1947, which stated that "the Governmert of the 

United States regards the natural resources of the 

subsoil and seabed of the continental shelf beneath 

the high seas but contiguous to the coas~s of the 

United States as appertaining to the Unite<! States, 

subject to its jurisdiction and control." Alth'lugh the 

oil industry had been moving offshore for nearly half 

a century, this proclamation essentially arrested 

further development. 
The Submerged Lands Act of May 22, 1953 (67 

Stat. 29; 43 U.S.C. 130_1-1315) returned to all the 

coastal States a belt of submerged lands seaward of 

their coastlines to a distance of 3 geographical miles 

and extended to each the opportunity to prove 

entitlement in judicial proceedings to a greater grant 

up to 3 marine leagues (9 geographical miles) 

through proof that it had in its charter a boundary 

extending more than 3 miles from its coast when it 

came into the Union, or such an extended boundary 

had been approved by Congress prior to enactment 

of the Submerged Lands Act. The act preserved 

Federal ownership and control of the subsoil and 

seabed of the submerged lands lying seaward of the 

belt granted the coastal States. 

The Outer Continental Shelf Lands Act of August 

7, 1953 (67 Stat. 462; 43 U.S.C. 1331-1343) reaffirmed 

that those lands beyond the 3 geographical mile 

limit, or more, appertain to and are subject to the 

jurisdiction, control, and power of disposition of the 

Federal Government, and authorized the Secretary of 

the Interior to grant mineral leases to Outer 

Continental Shelf lands and to prescribe such 

regulations as might be necessary to carry out the 

provisions of the act. With respect to oil, gas, sulfur, 

and other mineral operations on the Outer 

Continental Shelf, the Secretary has promulgated 

the regulations contained in Part 250 of Title 30 of 

the Code of Federal Regulations. These regulations 

are implemented and enforced by the U.S. Geological Survey. 

OUTER CONTINENTAL SHELF 

The legal and physiographic definitions of 

continental shelf are not the same. Legally, the Outer 

Continental Shelf comprises that part of the 

continental margin adjacent to the United States 

which remained subject to Federal jurisdiction and 

control after enactment of the Submerged Lands Act. 

The 1958 Geneva Convention on the Continental 

Shelf, which the United States ratified in 1961, 

defines the seaward limit of the continental shelf as 

out "to a depth of 200 meters or, beyond that limit, to 

where the depth of the superadjacent waters admits 

to the exploitation of the natural resources of the said 

areas "" "" * .'' However, this definition of seaward 

limits is not precise, nor has a precise definition been 

developed at subsequent conventions on the law of 

the sea. Under the provisions of the Outer 

Continental Shelf Lands Act, the subsoil and the 

seabed underlying these ocean waters belong to the 

United States and are subject to its jurisdiction and 

control. The act specifically excludes the high seas of 

2 

the waters above the Outer Cortinental Shelf 

particularly with respect to the rights to navigation 

and fishing. Because the seabed, subsoil, and any 

resource they may contain belong solely to the 

United States, they become a propert.y of all citizens 

of the United States and must be administered for the 

mutual benefit of all. The Submerged Lands Act and 

the Outer Continental Shelf Lands Act established 

an equitable division of the ownership and 

jurisdiction of the mineral resources of the 

continental shelf between the coastal States and the 

Federal Government. However, exploitation of the 

resources must be conducted in a manner that will 

result in a minimum of disruptior to the waters 

overlying the Outer Continental Shelf, the navigable 

waters within the seaward boundary of the adjacent 

State, and the public and private property located on 

the adjoining mainland (Adams, 1972). 

HISTORICAL BACKGROU:'rD 

The earliest offshore oil productio"l in the United 

States was developed off Summerland, Calif., in 

1896. The offshore portion of the field was an 

extension of an onshore discovery that had been 

made prior to 1894. The offshore wells were drilled 

from wooden piers extending out (':"om the shoreline. In all, more than 400 shallow wells were drilled 

and completed at a depth of about fi)O feet. At that 

time, the State of California had no authority to lease 

tidelands areas, so these wells were drilled under 

leases obtained from the littorallandcwners (Adams, 

1972). 

The discovery of the Creole field in 1938 in the 

Gulf of Mexico, 1~ miles from shore in 26 feet of 

water, marked the petroleum industry's first 

successful venture into open, unprotected waters. In 

November 1947, a discovery was made in Ship Shoal 

Block 32 off the Louisiana coast, 12 rriles from shore 

in water 16 feet deep. This well was d'<> first offshore 

well to be drilled out of sight of land. It was also the 

first offshore well drilled from a mobile platform, 

thus initiating the technology that has subsequently been utilized to drill mo~e than 18,000 

offshore oil and gas wells in the waters of the United 

States. Of these, more than 11,000 have been drilled 

in Outer Continental Shelf waters (Ccfshore, 1974). 

From this beginning, technology tas advanced to 

the stage that production platfonns have been 

installed in the Gulf of Mexico in water depths up to 

373 feet. In the Santa Barbara Channel off California, seven exploratory wells have been drilled in 

water more than 1 ,200 feet deep. One of these wells, 

currently a water-depth record in the United States, 
was successfully drilled in 1,497 feet of water to a 

total depth of 10,453 feet (Adams, 1972). For the same 

area of the Santa Barbara Channel, a fixed drilling 

and production platform, 940 feet tall to be placed in 

850 feet of water, is under construction (U.S. Geol. 

Survey, 1974a). 

STATISTICAL BACKGROUND 

LEASE SALES 

Under the provisions of the Outer Continental 

Shelf Lands Act, the Secretary of the Interior "is 

authorized to grant to the highest responsible qualified bidder by competitive bidding under regulations promulgated in advance, oil and gas leases on 

submerged lands of the Outer Continental Shelf 

* * *." Additionally, the Secretary is authorized to 

issue leases on the Outer Continental Shelf for sulfur 

and "to grant * * * leases of any mineral other than 

oil, gas, and sulfur in any area of the Outer 

Continental Shelf not then under lease for such 

mineral * * *.'' 

Three lease sales in 1954 resulted in the issuance of 

114 leases ( 109 for oil and gas and 5 for sulfur) which 

covered 486,870 acres and brought a total bonus of 

$140,969,005 and a first-year rental of $1,435,625 for 

areas off the coast of Texas and Louisiana. By 1973, 

two lease sales resulted in the granting of 187 oil and 

gas leases covtring 1,032,570 acres and bringing a 

total bonus of $3_.082,462,611 and a first year rental of 

$3,097,716 for areas off the coasts of Texas, 

Mississippi, Louisiana, Alabama, and Florida. 

During the 20-year period from 1954 through 

1973, there have been a total of 33 lease sales off the 

coasts of Alabama, California, Florida, Louisiana, 

Mississippi, Oregon, Texas, and Washington. Three 

sales for sulfur leases resulted in the granting of 59 

leases covering 102,625 acres for a total bonus of 

$35,688,959 and a first-year rental of $282,875. Two 

sales of salt leases brought a bonus of $105,814 and a 

first-year rental of $14,985 for two leases covering 

4,995 acres. The remaining 28 sales were for oil and 

gas leases. A total of 1,966 oil and gas leases covering 

9,012,345 acres were granted for a total bonus of 

$9,770,196,127 and a first-year rental of $29,651,320. 

Overall, 2,027 leases comprising 9,119,965 acres have 

been granted, resulting in a total bonus of 

$9,805,990,900 and a first-year rental of $29,949,180 

(tables 1 and 2). 

As of December 31, 1973, the total number of leases 

under supervision, including salt and sulfur, was 

1,266 covering 5,613,983 acres. Of this total, 726 

leases were producing or producible and 540 were 

non-producing. The non-producing leases are still 

in an exploratory stage where commercial produc3 

TABLE I.-Outer Continental Shelf lease sales by yetlrs, states, 

minerals 

[After Harris, W. M., Piper, S. K., and McFarlane, B. E., 197-4] 

liate of Adjacent No. of First year 

sale state Mineral leases Acreage Bonus rental 

10-13-54 Louisiana Oil & Cas 90 394,721 $116,378,476 $ 1,184,175 

10-13-54 Louisiana Sulfur 

11-9-54 Texas Oil & Cas 

Total 1954 

7-12-55 Louisiana Oil & Gas 

7-11-55 Texas Oil & Gas 

Total 1955 

5-26-50 Florida Oil & Gas 

8-11-59 Louisiana Oil & Gas 

Total 1959 

2·26-60 Louisiana Oil & Gas 

2-26-60 Texas Oil & Gas 

5-19-60 Louisiana Salt 

Total 1960 

12·15-61 California Phosphate 

5-12-65 Refunded 

3-13-62 Louisiana Oil & Gas 

3-16-62 Texas Oil & Gas 

Louisiana Oil & Gas 

10-9-62 Louisiana Oil & Gns 

Total 1962 

5·14-63 California Oil & Gas 

4-28-64 Louis lana Oil & Gas 

10-1-64 Oregon Oil & Gas 

10-1-64 Washington Oil & Gas 

Total 1964 

12-14-65 Texas Sulfur 

3-29-66 Louisiana Oil & Gas 

10-18-66 Louisiana Oil & Gas 

12-15-66 California Oil & Gas 

Total 1966 

6-13-67 Louisiana Oil & Gas 

9-5-67 Louisiana Salt 

Total 1967 

2-6-68 California Oil & Gas 

5-21•68 Texas Oil & Gas 

11-19-68 Louisiana Oil & Gas 

Total 1968 

1·14-69 Louisiana Oil & Gas 

5-13•69 Louisiana Sulfur 

12-16-69 Louisiana Oil & Gas 

Total 1969 

7-21·70 Louisiana Oil & Gas 

12·15-70 Louisiana Oil & Gas 

Total 1970 

11-4-71 Louisiana Oil & Gas 

9-12-72 Louisiana Oil & Gas 

12-19-72 Louisiana Oil & Gas 

Total 1972 

6-19-73 Louisiana Oil & Gas 

6-19-73 Texas Oil & Gas 

12-20·73 Alabama Oil & Gas 

12-20-73 Florida Oil & Gas 

12-20-73 LouiSiana Oil & Gas 

12-20-7:1 ~!ississippi Oil & Gas 

Total 1973 

Grand Total 

25,000 1,233,500 50,000 

114 486,870 140,969,005 1,435,625 

94 252,807 100,091,263 758,442 

_I!_ 149,760 8,437,462 ~ 

121 402,567 108,528,725 1,207,722 

23 132,480 1,711,872 397,440 

__!!!. ~ 88,035,121 388,200 

42 171,300 89,746,993 785,640 

99 464,046 246,909,784 l,3n,l59 

48 240,480 35,732,031 721,440 

_.!~~~ 

148 707,026 282,717,065 2,121,099 

30,240 122,000 

__®. ~) (122,000) 

206 951,811 177,260,305 

10 28,800 557.720 

195 927.746 267.775' 727 

_2.. ~ 43,887,~ 

420 1,924,535 489,481,111 

...22. 312,945 _12,807,587 

23 32,673 60,340,626 

74 425,433 27.768,772 

_I!_ 155,420 7. 764,928 

124 613,526 95,874,326 

~ ~ 33,740,309 

17 35,056 88,845,963 

24 104,717 99,164,930 

_.! ~ 21,189,000 

42 141,768 209,199,893 

158 744,456 510,079,178 

_.!~ ~ 

159 746,951 510,109,742 

71 363,181 602,719,262 

llO 541,304 593,899,046 

~ ~~ ~~68,789 

197 934,167 1,346,487,097 

20 48,sns 44,037,339 

5,625 715 ,ISO 

~ ~ 66,908,196 

40 114,283 111,660,685 

19 44,642 97.769,013 

....!.!! 551,398 846,784,660 

137 596,040 944,553,673 

__.!!. ~ 96,304,522 

62 290,321 585,827,925 

~ 535,874 1,665,519,631 

178 826,195 2,251,347,551> 

20,000 53,901,709 

96 527,173 1,537,495,671 

13 74,106 135,834,100 

1>2 357,120 1,100,399,131 

19,611 139:130,000 

~ ~ 115,702,000 

187 1,032,570 3,082,462,611 

2,027 9,119,9(>5 $9,805,990,900 

15,120 

2,855,433 

86,400 

2, 783,238 

~ 

5,886,851 

~ 

326,780 

1,276,302 

466,260 

2,069,342 

~ 

350,570 

523,600 

~ 

884,150 

2,233,458 

~ 

2,240,943 

1,089,543 

1,623,915 

~ 

3,010,278 

485,050 

16,875 

601,550 

1,103,475 

446,420 

1,654,194 

2,100,614 

1,607,661 

2,478,657 

60,000 

1,581,519 

222,318 

1,071,31>0 

58,839 

3,097,716 

$29,949,180 
tion has not been discovered (tables 3 and 4 ). 

PRODUCTION AND ROYALTY VALUE 

All oil and gas leases on the Outer Continental 

Shelf issued through 1973 have required a royalty 

rate of 162/3 percent in the amount or value of 

production from the Lease. The annual rental or 

minimum royalty required for leases in unproven 

areas has been $3 per acre. In the cases of leases in 

proven areas, the annual rental or minimum royalty 

has generally been $10 per acre. Although the dollar 

amount of rental or minimum royalty is the same, 

rental is paid at the beginning of the lease year on 

lands that have not been proven producible; whereas 

minimum royalty is paid at the end of the lease year 

on lands that have been determined by the 

Geological Survey to be capable of producing oil or 

gas in paying quantities. 

The production value of all products from the 

Outer Continental Shelf in 1953 was $5,036,861. Of 

this amount the total revenue to the Federal Treasury 

was $2,358,172. In 1954, total revenue from Outer 

Continental Shelf lands was $147,660,265 and the 

production value was $14,370,098. By 1973, the 

production value of all products from Outer 

Continental Shelf lands was $2,486,864,855 and the 

total revenue to the Federal Treasury was 

$3,494,981,440 (tables 5 and 6). 

Cumulative data through 1973 indicate the total 

production value of all products from Outer 

Continental Shelf lands is $15,729,172,944 and total 

revenue is $12,577,602,478. The total revenue to the 

United States Treasury through 1973 has amounted 

to 80 percent of the total production value of all 

products from Outer Continental Shelf lands. 

TABLE 2.-Summary of Outer Continental Shelf lease sales, Oct· 

ober 13, 1954 through December 20, 1973, by state and mineral 

[Arter Harm. W. M .. P1pe1, S. K .. and Mcfarlane, B. E.. 1971] 

Lease sales 

By state By mineral 

Alab3111a 

California 

Florida 

Louisiana 

Mississippi 

Oregon 

Texas 

Washington 

Total 

Oil and gas 

Salt 

Sulfur 

Total 

No. of 

leases 

13 

129 

85 

Acreage Bonus 

74,106 s 135,834,100 

678,121 6l6,7\~.849 

489,600 1,102,111,003 

1,333 S,r.36,059 5. 546,874.980 

liS, 702,000 

27,768,772 

2,233,219,268 

34,560 

14 425,433 

360 1,626,666 

27 155,420 7. 764,928 

2. 027 9,119,965 $9,805,990,900 

1,966 9,012,345 $9,770,196,127 

4,995 105,814 

59 102,6i5 35,688,959 

2,027 9,119,965 $9,805,990,900 

First year 

rental 

s 222,318 

2,038,361 

1,4(,$,800 

19,493,455 

103,680 

1,276,302 

4,880,004 

466,260 

$29. !149 ,180 

$29,651,320 

14,9i5 

282,875 

$29 '949 ,180 

4 

TABLE 3.-0uter Continental Shelf producing and non-producing leases (oil, gas, salt, and sulfur) under supervision, by 

years, as of December 31 

[After Harris, W. M., Piper, S. K., and McFarlane, B. E., 1974] 

Producing 

leases 

Non-producing 

leases 

Total 

Year Acreage Hlaber Acreage Hlaber Acreage 

1954 

1955 

1956 

1951' 

1958 

1959 

1960 

1961 

1962 

1963 

1964 

1965 

1966 

1967 

1968 

1969 

1970 

1971 

1972 

1973 

58 

106 

171 

213 

240,028 

438,076 

674,176 

775,566 

230 969,575 

272 1,102,660 

299 1,167,499 

315 1,228,839 

332 1,300,955 

363 1,431,82'7 

375 1,504,462 

425 1,679,617 

488 1,964 ,52!1 

525 2,086,074 

538 2,156,185 

568 2,308,538 

608 2,529,909 

649 2,709,991 

698 2,914,964 

726 3,039,418 

420 1,288,665 

505 1,938,656 

391 1,181,162 

208 709,941 

162 

117 

170 

148 

551,377 

384,446 

823,321 

705,367 

526 2,424,225 

524 2,458,188 

606 2,870,912 

512 2,450,253 

486 2,128,147 

358 1,519,663 

485 2,199,604 

453 2,004. 712 

409 1,750,765 

434 1,892,294 

325 1,423,103 

540 2. 574,565 

478 1,528,693 

611 2,376. 732 

562 1,855,338 

421 1,485,507 

392 1,520,952 

389 1,487,106 

469 1,990,820 

463 1,934,206 

858 3,725,180 

887 3,890,015 

981 4,375. 374 

937 4,129,870 

974 4,092,676 

883 3,605, 737 

1,023 4,355,789 

1,021 4,313,250 

1,017 4,280,674 

1,083 4,602,291 

1,023 4,338,067 

1,266 5,613,983 

LAND AND WATER CONSER VATIC N FUND 

Revenue from the Outer Continental Shelf 1s a 

major source of funds for the Lani and Water 

Conservation Fund. The fund is the largest Federal 

grant-in-aid program of assistance to states, 

counties, and cities for the acquisition and development of public parks, open space, and recreation 

lands and water (table 7). In addition, the fund pays 

acquisition costs for authorized areas b .... ing added to 

the national systems of parks, forests, wildlife 

refuges, wild and scenic rivers, and scer.ic and recreation trails. 

TABLE 4.-0uter Continental Shelf producing and non-producing leases (oil, gas, salt, and sulfur) under supervision as of 

December 31, 1973, by states and products 

[Aftt·r Harns, W. M., Piper, S. K., and McFarlane, B. E., 1974) 

Adjacent state 

Md product 

Alabaaa - Oi I ~ ~as 

California -Oil ~ Gas 

Florida - Oll & Gas 

L()uisiana - Oil li Gas 

Louisiana-Salt 

Louisiana·Sulfur 

Mississippi - Ot1 & Gas 

Texas 

Total 

17 

660 

42 

126 

Producin~ 

leases 

Acreage 

82,576 

2,769,934 

4,995 

6,953 

174,960 

3,039,418 

Non-producing 

leases 

13 

52 

62 

97 

540 

74.106 

269.301 

357,120 

13 

69 

62 

1,306 .336 969 

1,875 

34.560 

531.267 139 

2,574,565 1,266 

Total 

Acrta~e 

74,106 

351,877 

357,120 

4,076,270 

4,995 

1,121 

34,560 

706,227 

5,613,V8J 
TABLE 5.-0uter Continental Shelf revenue and production value, percentage cumulatwe revenue of cumulative production value, 

calendar years 1953-1973 

[Aftl·r Harri~. W. l\1., Piper, S. K., dnd McFarlane, B. E .. 197'1] 

Year 

1953 

1954 

1955 

1956 

1957 

1958 

1959 

1960 

1961 

1962 

1963 

1964 

1965 

19{>6 

1967 

1968 

1969 

1970 

1971 

1972 

1973 

Bonuses 

- $ 

140,969,005 

108,528,725 

89.746,993 

282,717,065 

Miniroyalties 

68,581 

184,396 

171,036 

316,975 

314,121 

489,481,111 517,722 

12.807.587 668.339 

95,874,326 820,343 

33,740,309 1,072,699 

209,199,893 1,367,250 

510,109,742 1,891,515 

1,346,487,097 .2,145,178 

111,660,685 1,923,632 

944,553,673 1, 745,864 

96,304,522 1,891,000 

2,251,347,556 2,019,533 

3,082,462,611 2,391,249 

Rentals 

1,359,630 

3,855,333 

3,406,351 

4,006,193 

3,270,122 

2,420,584 

2,285, 725 

3,073,861 

8,412,207 

8,435,184 

9, 798,573 

8, 731,378 

6,869,277 

6,208,936 

8,230,787 

8,:H2,607 

8,607,855 

7. 741,997 

7,984,897 

8,948,816 

Shut-in 

gas 

payments 

30,650 

86,950 

122,000 

79,950 

110,268 

121,218 

84,984 

37,100 

62,200 

52,950 

45,800 

38,450 

41,700 

41,400 

52,300 

41,650 

47.700 

32,300 

49,550 

52,650 

Royalties 

967,892 

2, 748,977 

S, 140,006 

7,629,383 

11,391,245 

17,423,878 

26,539,977 

37,095,301 

47,920,332 

66,096,334 

76,999,225 

88,400,230 

102.862.540 

136,987,537 

157,607,609 

201,136,931 

240,090,666 

283.494.568 

350.042.488 

363.556.339 

401,126,114 

Total 

revenue 

2,358,172 

147,660.265 

117,197.082 

11,715,526 

14,840,216 

20,150,076 

118,828,715 

323,781,831 

51,345,414 

Total 

c11111u1ative 

revenue 

2,358,172 

150,018,437 

267,215,519 

278.931.045 

293,771,261 

313,921,337 

432,750,052 

756,531,883 

807,877,297 

Total 

production 

value 

5,036,861 $ 

14,370,098 

27,060,679 

39,497,871 

61,072,588 

96,471,136 

150,472,527 

200,969,615 

273,636,456 

Total 

cumulative 

pr~~~~!o'l ::~~ lj 

5,036,6<;1 47 

19,406,SS9 774 

46,467 ,f38 575 

85,965,509 324 

147 ,038,<'97 200 

243,509,233 129 

393,981,760 110 

594,951,375 127 

868,587,831 93 

564,569,574 1,372,446,871 376,675,900 1,245,263,731 102 

98,963,285 1,471,410,156 450,866,484 1,696,130,215 87 

194,939,272 1,666,349,428 506,783,510 2,202,913, 725 76 

146,445,376 1,812,794,804 594,222,732 2,797,136,457 65 

354,465,657 2,167,260,461 801,724,611 3,598,861,068 60 

675,859,202 2,843,119,663 947,214,691 4,546,075,759 63 

1,558,052,293 4,401,171,956 1,179,912,209 S, 725,987,968 77 

362,029,240 4,763,201,196 1,443,870,472 7,169,858,440 66 

1,238,449,660 6,001,650,856 1,707,593,450 8,877,451,890 68 

456,012,307 6,457,663,163 2,135,677,078 11,013,128,968 59 

2,624,957,875 9,082,621,038 2,229,179,121 13,242,308,089 69 

3,494,981,440 12,577,602,478 2,486,864,855 15,729,172,944 80 

Total $9,805,990,900 $19,509,433 $125,563,453 $1,281,120 $2,625,257,572 $12,577,602,478 $12,577,602,478 $15,729,172,944 $15,729,172,944 80 

y Percentage accwau1ated revenue of acc:wnulated production value. 

TABLE 6.-Cumulative bonuses, mmzmum royalties, rentals, shut-in gas payments, and royalties Outer Continental Shelf, by 

states, August 7, 1954 to December 31, 1973 

[Aft<'r Harri~. W. l\1., Piper, S. K., and 1\kfatlane, B. E., 19il] 

State 

Alabama 

California 

Florida 

Louisiana 

Mississippi 

Oregon 

Texas 

Washington 

Total 

Bonuses 

$ 135,834,100 

636,715,849 

1' 102,111,003 

5,546,874,980 

115.702.000 

27,768,772 

2,233,219,268 

7,764,928 

$9,805,990,900 

$ 

Minimum 

royalties 

201,695 

18,210,623 

1,097,115 

$19,509,433 

$ 

Rentals 

222,318 

8,883,564 

2,453,760 

94,457,835 

103,680 

3,759,021 

14,284,195 

1,399,080 

$125,563,453 

5 

Shut-in gas 

payments 

$ 

1,281,120 

$1,281,120 

Royalties 

$ 

58,561,372 

2,529,875,983 

36,820,217 

$2,625,257,572 

$ 

Total 

136,056,418 

704,362,480 

1,104,564,763 

8,190,700,541 

115,805,680 

31,527,793 

2,285,420,795 

9,164,008 

$12,577,602,478 
TABLE 7.-Land and Water Consen•ation Ftmd pla1111i1lg, acquisition, and development grants to states 

as of june 30, 1974 

Planning Acquisition bevelOilllent 1otal 

States N .. ber Aliount N11111ber Alllount Nullller Alllount N'*ber AIIOunt 

Alabua ------~--------------------------~~~--~~~----------------------------------~----~ 

Alaska 

AriZona 

Arkansas 

Calitornil 

Colorado 

Ddaware 

llbtriet of Col,.bia 

Florhla 

Georgia 

Hawaii 

ldllho 

tllinoU 

Indiana 

Iowa 

Kansas 

«entucky 

Louisiana 

Maine 

Maryland 

Massachul6ttS 

Minrtdata 

Mississippi 

Missouri 

Mofttana 

Nebraska 

Nevada 

New Hupshlre 

New Jersey 

New Mexico 

New York 

North Caroline 

North DatoCl 

Ohio 

OUelloaa 

oteaon 

Penllsylvaala 

Rllode lslaad 

South Cerolina 

So11th Dakota 

'fenriessee 

Texas 

Utah 

Veraont 

Vlrainla 

Washington 

lfUt Vlr1inia 

WiSconsin 

Wy0111i111 

Alllerlcaa SeliG& 

Gu3111 

Puerto llieo 

Virgin Islands 

1otal 

10 

194 

s 127,605.51 

305,973.94 

148,755.70 

259,Sl4.94 

607,116.74 

36,264.83 

60,446.63 

83,498.56 

197,228.00 

401,>71.18 

205,782.88 

163,250.00 

57 ,603.6~ 

t46,2JL49 

?3,02%.61 

144,895.19 

194,240.92 

334,557.10 

92,589.00 

412,250.94 

273,979.26 

340,136.97 

227,470.64 

229,661.19 

1!17,108.25 

51,347.02 

207,866.52 

l55,635.55 

32,500.00 

197,197.91 

567,895.36 

323,271.68 

45,919.10 

385,850.00 

275 ,944<57 

371,583.21 

554,158.25 

255,963.07 

365,596.95 

24,733.46 

206,164.07 

1,074,581.98 

139,228.76 

96,787,57 

46,138.14 

225,796.85 

61,941.22 

39,397.37 

348,371.35 

34,100.00 

125,000.00 

92,400.00 

11,629,131.82 

58 

37 

61 

39 

123 

101 

110 

52 

69 

11 

40 

169 

65 

180 

50 

98 

74 

104 

•• 

60 

197 

261 

28 

255 

73 

93 

12 

so 

29 

34 

75 

116 

84 

157 

51 

147 

37 

53 

12 

74 

64 

94 

53 

11 

49 

lOS 

52 

416 

34 

2,098,215.14 

3,455,751.50 

4,128,672.25 

3,~26,384.93 

45,4!15,272.32 

5,197,285.85 

13,212,!10.66 

5,632. ~~1. 30 

202,400.00 

21,690,280.79 

5,499,308.67 

3,755,336.41 

1, 251,104.97 

37,848,729.20 

4,465,594.22 

6,341,218.54 

2,400,108.25 

3,715,905.64 

1,994,323.06 

5,296,762.36 

15,126,237.2!1 

9,318,$50.61 

13,106,742.00 

9,264,4!8.29 

1,239,833.39 

1,491,220,64 

2,532,912.45 

6,856,210.57 

2, 744,403.47 

12,058,749.79 

1,096,8&7.05 

12,369,647.63 

7,254,571.11 

717,024.06 

21,006,913.22 

2,126,720.20 

12,965,828.89 

4,$54,119.58 

2 ,a79, 120. sa 

1,259,314.11 

1,344,529.80 

6,716,611.17 

1,664,590.62 

3,911,612.04 

4,51'7 ,ll7.1i0 

14.454.205.08 

1,141,413. 73 

1,191,389.61 

11,561,696.12 

!43,~16.09 

15,000.00 

358,320.00 

2$3,740.25 

4,503 398,240,956.26 

6 

142 $ 13,232,893.12 

91 5,843,799.19 

211 10,271,111.33 

79 7,731,507.65 

116 23,658,245.75 

344 •• ~04,067.57 

2,068,591.12 

2,718,060.00 

27 

38 

15& 

54 

140 

29 

126 

305 

176 

175 

131 

134 

161 

!12 

325 

330 

104 

224 

239 

49 

83 

162 

231 

ItO 

195 

417 

153 

231 

393 

lSI 

62 

211 

317 

120 

245 

102 

100 

64 

Ill 

104 

!a2 

317 

lS 

20 

5,261,331.75 

5,479,U!I.SO 

U,807,0U.Sl 

S,JSO,lli.OJ 

8,016,766.11 

2,454,42!1.09 

15,385,1J8.13 

7,018,413.31 

10,557,99$.33 

11,535,643.67 

10,868,593.81 

3,S26,6U.16 

5,14P,241.07 

15,653,)42.57 

19,45!1,119.51 

7,185,937.11 

10,243,096.3!1 

11,2R6,1SD.37 

1,!105,997.97 

8,143,460.42 

3,188,625.69 

4,407,563.53 

19,904,202.74 

9,213,6!12.26 

50,347,711.70 

10,415,482.25 

1,502,626.81 

19,220,865.95 

10,464,7611.11 

4,341,!154.17 

42,400,398.29 

5,104,823.25 

10,005,60!.05 

9,625,259.11 

11,037,564.08 

32,041,165.29 

7 ,956,516.ta 

3,SS4,621.30 

1,334,792.98 

'7 ,493 ,326. 71 

lo,a•a,l5!1,11 

1,534,743.73 

a,OU,955.46 

S67 ,128.43 

701,830.50 

6,101,139.76 

321,210.87 

203 $15,458,713.77 

131 9,605,524.63 

277 14,556,316.28 

125 11,217,707. S2 

313 69,760,634.81 

441 U,S37 ,616.24 

121 

60 

so 

11 

232 

74 

114 

201 

196 

489 

229 

279 

220 

243 

256 

155 

524 

591 

137 

480 

300 

334 

65 

136 

192 

2&2 

270 

316 

505 

313 

217 

543 

29& 

117 

367 

395 

117 

341 

159 

184 

114 

204 

151 

aoo 

357 

16 

13 

31 

12 

15,341,214.41 

1,434,155.16 

5,660,959. 75 

27,169,520.29 

19,707,891.36 

9,311,237.32 

9,431,121.01 

40,360,761.92 

1!1,997,664,54 

13,439,724.46 

13,102,991.77 

15,445,790.23 

20,1!17 ,474.14 

• '91$. !165. 22 

21,675,471.36 

25,314,144.12 

32,140,540.77 

16,791,0!13.14 

11,710,400.42 

2S,8J7,804.35 

9,595,026.16 

11,427 ,71!1.19 

10,952,702,78 

1,307,602.55 

31,995,452.53 

10, $71,477,22 

63,,215,324.69 

17,993,32$.71 

11,265,570.74 

40,,613,629.17 

12,,167 ,433.88 

17,679,367,04 

47,509,376.12 

• 240,506.90 

11.630,512 .u 

10 9114,521.37 

17,960,340.02 

41.717,337.19 

12,077,427.78 

I :U&,$53.47 

21,135,136.20 

16,561,537.56 

12,149,190,01 

20 '142 ,837. 22 

a 703,542.90 

567,828.43 

750,930.50 

6,$84 ,459. 76 

667,351.12 

8,814 S72,991,317 ,90 IS,S&l 982,861,475.98 
The fund, which is administered by the Bureau of 

Outdoor Recreation in the Department of the 

Interior, was established by Congress in 1964 (Pub. 

L. 88-578, Sept. 3, 1964, 78 Stat. 897). Amendments to 

the original legislation provided that the annual 

income of the fund be not less than $200,000,000 for 

the fiscal years of 1968, 1969, and 1970 and 

$300,000,000 for the fiscal years of 1971 through 1989 

(Pub. L. 89-72, July 9, 1965,79 Stat. 218; Pub. L. 90-

401, July 15, 1968,82 Stat. 354; Pub. L. 91-308, July 7, 

1970, 84 Stat. 410; and Pub. L. 91-485, Oct. 22, 1970, 

84 Stat. 1084). These amendments also provided that, 

to the extent other appropriations are not sufficient 

to make the total annual income of the fund an1ount 

to these levels, an amount sufficient to cover the 

remainder would be credited to the fund from 

revenues due and payable to the United States for 

deposit in the Treasury as miscellaneous receipts 

under the Outer Continental Shelf Lands Act. 

For the 6 fiscal years from 1969 through 1974, the 

total statutory Eunding of the Land and Water 

Conservation Fund has amounted to 1.6 billion 

dollars. Of this amount, receipts under the Outer 

Cont1nental Shelf Lands Act have provided 1.1 

billion dollars or 71 percent of the total funding 

(table 8). 

The total receipts from the Outer Continental 

Shelf during this period have amounted to 12.5 

billion dollars, of which 10.2 billion dollars was in 

net bonuses and rents, 1.3 billion dollars was in 

royalties, and 1.0 billion dollars was held in escrow 

funds (table 9). 

The 1.1 billion dollars allocated to the Land and 

Water Conservation Fund has atnounted to 11.1 

percent of the net bonuses and rents, 86.9 pecent of 

the royalties (fig. 1 ), or 9.1 percent of tre total 

revenue from the Outer Continental Shelf. 

LEASING PROCEDURE FOR THE OUTER 

CONTINENTAL SHELF 

The initial step in the leasing process, which is 

primarily the responsibility of the Bureau cf Land 

Management with technical assistance from Geological Survey, is the selection of general areas for 

inclusion in a schedule. Factors underlying this 

selection include initial assessments of oil and gas 

potential as estimated by both industry and Government, environmental resources that might be 

affected by Outer Continental Shelf development, 

alternative energy sources, the availability of 

technology, and the proximity to tnarkets. These are 

TABLE 8.-Funding of the Land and Water Conservation Fund 

by Outer Continental Shelf receipts, fiscal years 1969 to 197-1 

Fiscal Statutory Funding from OCS receipts 

years funding level Amount Percent 

1969 200. 000. 000 126,873,300.34 63.4 

1970 200. 000. 000 107,882,204.45 53.9 

1971 ~00. 000. 000 210,092,090.91 70.0 

1972 300. 000. 000 223,677,068.29 74.6 

1973 300.000.000 223,983,125.92 74.7 

1974 300. 000. 000 243,889,917.71 81.3 

Total $1,600,000,000 $1,136,397.707.62 71.0 

TABLE 9.-0uter Continental Shelf receipts, fiscal years 1969 to JCJ7-I 

Fiscal Bonuses and rents Royalties Escrow Total 

year 

1969 $ 350,194,610.43 $ 78,083,889.47 $ 285,633,591.67 $ 713,912,091.57 

1970 73,280,497.60 113,580,953.89 146,947,619.87 333,8C9,071.36 

1971 890,634,479.13 159,914,891.13 221,707,956.30 1,272,257,326.56 

1972 28,029,741.58 251,323,014.27 183,327,304.02 462,6£0,059.87 

1973 !12,928,891,918.88 !11,026,685,097.63 !!(1,017,163,160.24} 2,938,413,856.27 

1974 6,340,292,958.91 408,101,161.00 66' 311 '861. 88 6,814,7C~,981.79 

Sub-total $ 10,611,324,206.53 $ 2,037,689,007.39 $ (113,234,826.50} $ 12,535,778,387.42 

393,184,441.83 !1730,151,695.29 !11,123,336,137.12 -0-

Total $ 10,218,139;764.70 $ 1,307,537,312.10 $ 1,010,101,310.62 $ 12,535,778,387.42 

!! On July 31, 1972, $1,123,336,137.12 was transferred from escrow to general fund accounts. $393,184,441.83 was 

transferred to bonuses and rents and $730,151,695.29 was transferred to royalties. 

7 
500 

WJ Royalty revenue 

ea Land and Water 

Conservation Fund 

400 (f) 

a:: 

<t 

.J 

.J 

0 

0 

LL 6-YEAR AVERAGE 

0 300 .-l (f) 

z 

~ 

.J 

.J 

~ 

200 

100 

1969 1970 1971 1972 1973 1974 

FIGURE I.-Outer Continental Shelf royalty revenue and funding of the Land and Water Conservatio•l Fund, 

by fiscal years 1969 to 1974. 

weighed and balanced in developing a schedule of 

proposed lease sales which will result in the most 

expeditious discovery and production of oil and gas. 

Once an area is scheduled for a possible sale, several 

activities occur: (1) an acceleration of industry's 

collection of geological and geophysical data under 

permits issued by the Geological Survey, (2) Department of the Interior baseline data studies, (3) the 

sequential steps of the sale process, and (4) detailed 

resource evaluation of each tract by the Geological 

Survey. 

LEASING SCHEDULE 

A leasing schedule is the framework used to determine the timing and initiation of individual sale 

procedures. It is continually being updated and 

revised within the Department of the Interior. 

Improved resource information has been acquired 

and the overall supporting analysis is being refined 

in line with the current energy situation. In the 

development of the schedule, the Department of the 

Interior considers its three leasing objectives of 

orderly resource development, protection of the 

8 

environment, and receipt of fair mar1<et value. These 

objectives constitute overall policy guidelines for the 

Outer Continental Shelf leasing program and 

consideration accorded to each may vary from one 

component to another. 

Various options are reviewed from the perspective 

of receipt of fair market value. The size and 

frequency of sales can induce or inhibit a 

competitive market which affects the Government's 

receipt of fair market value. Full consideration of all 

objectives results in the development of a leasing 

schedule. However, as stated earlier, this schedule is 

tentative and is continually subje-:ted to review, 

updating, and revision. 

COLLECTION OF GEOLOGICAL AND 

GEOPHYSICAL DATA 

Most of the information used by b-:>th the Government and industry on the oil and gas potential of 

various Outer Continental Shelf areas is acquired by 

geological and geophysical surveys. A considerable 

amount of these data are collected. under permits 
issued by the Geological Survey, by specialized data 

collection firms which sell or furnish the information to oil companies and the Department of the 

Interior. 

GEOLOGICAL ACTIVITY 

Geological exploration of the Outer Continental 

Shelf consists of bottom sampling, shallow coring, 

and deep stratigraphic testing. Usually, a program of 

bottom sampling and shallow coring is conducted 

simultaneously using a small marine drilling vessel. 

Bottom samples are obtained by dropping a 

weighted tube to the ocean floor and recovering it 

with an attached wire line. Penetration is normally 

limited to a few feet depending upon the nature of 

the ocean floor. The sample obtained is useful in 

identifying the type and origin of the formation. If 

the formation is sedimentary, the geologic age can be 

determined by identification of fossils. 

Shallow coring is performed by conventional 

rotary drilling equipment. Choice of location is carefully controlled to avoid any hazards that might 

cause environmental harm. Penetration is limited 

usually to the recovery of several feet of consolidated 

rock. Geological examination of the cores provides 

useful information on the general geology of an area. 

A deep stratigraphic test is drilled for the 

acquisition of geoscientific information and may go 

as deep as 16,000 feet. Stipulations require that the 

test be drilled on an off-structure location, that no 

testing will be permitted, and that data will be 

released within 60 days following the first lease sale 

in the area. By electrical logging of the hole and 

examination of drill cuttings and cores, the complete 

geological section can be determined. 

GEOPHYSICAL ACTIVITY 

Geophysical exploration by measuring the 

velocity of shock, or seismic waves through various 

rock formations provides additional information at 

all depths. The shallow information is of value in 

identifying potentially hazardous conditions such as 

surface faulting, potential slide areas, or shallow gas 

pockets. This type of information is valuable in the 

choice and approval of drilling and platform 

locations. 

Deep-penetration seismic information is used for 

regional and detailed mapping. Geophysicists 

interpret these data by mapping two or more seismic 

reflections corresponding to the depths of expected 

hydrocarbon production. These maps show the 

types of structures such as salt domes, folds, or faults 

that are most likely to be encountered in the area. 

9 

These geological and geophysical data arc used by 

industry in nominating tracts for lease and 

preparing bids for lease sales. The Geologica 1 Survey 

uses the information for general sale area identification, tract selection, resource evaluation, and lease 

management. 

ENVIRONMENTAL BASELINE DATA STUOIES 

Baseline studies are conducted in frontier areas to 

establish an environmental benchmark against 

which future measurements, taken during the 

monitoring phase, can be compared for the purpose 

of detecting possible adverse effects resulting from 

exploration and development activities These 

studies are designed after thorough assessment of 

published and unpublished data, on-going research, 

and planned research. Each study is designed with 

scientific input that is acquired in part through 

environmental symposiums held near the area to be 

studied. The study design is further reviewctl by the 

Outer Continental Shelf Research Managenent Advisory Board. This Board was established i'l March 

1974 to provide advice to the Department concerning design and implementation of enviro'lmental 

development on the Outer Continental Shelf. The 

Board consists of a chairman, appointee by the 

Assistant Secretary for Land and Water Resources, 

representatives of Environmental Protection 

Agency, National Oceanic and Atmosph~ric Administration, Geological Survey and the f'ish and 

Wildlife Service, in addition to representatives of the 

Governors of the 21 Coastal States. 

Studies cover a wide range of disciplines irduding 

geology, geophysics, biology, physical oceanography, meteorology, and trace metal and hydrocarbon chemistry. These studies, conducted by 

contract with universities, National Oceanic and 

Atmospheric Administration, and the Ge.<:>logical 

Survey, include generation of original data c--. well as 

analysis of existing information. 

Results of these efforts will be used by the Department in making management decisions regarding 

the development of marine mineral resources. 

Where available, the results will be used in tract 

selection, environmental impact analyses, formulation of lease stipulations, and modification of Outer 

Continental Shelf operating orders or lear~ng and 

operating regulations. 

Environmental monitoring begins after the 

baseline study is complete and after a sale ir held, to 

determine if petroleum exploration or production 

activities are affecting the environment. If adverse 

changes are detected, additional stipulations will be 
added to leases, or changes would be made in the 

Outer Continental Shelf operating orders to mitigate 

or eliminate these adverse effects. 

RESOURCE REPORTS 

When an area is being considered for leasing, the 

Director of the Bureau of Land Management 

requests the U.S. Geological Survey to make a prenomination summary report on the geology and 

potential mineral resources of the area. In addition 

to the geologic report, resource reports as to possible 

effects of leasing on the total environment are 

requested from other Federal bureaus and departments with appropriate expertise such as the Fish 

and Wildlife Service, National Park Service, Bureau 

of Outdoor Recreation, Bureau of Mines, Bureau of 

Indian Affairs. Forest Service, National Oceanic and 

Atmospheric Administration, Environmental 

Protection Agency, Coast Guard, National 

Aeronautics and Space Administration, Federal 

Power Commission, Departments of Defense and 

Treasury. and the Federal Energy Administration. 

Resource reports are also requested from the adjacent 

State through the office of the governor. These 

reports are usually made at least 30 days prior to a 

call for nominations. 

CALL FOR NOMINATIONS 

The call for nominations is an official notice to the 

public and the oil and gas industry, published in the 

Federal Register and dissetninated by a news release, 

to obtain an indication of interest in individual 

offshore tracts which may subsequently be offered 

for lease. Calls are issued for large contiguous areas 

usually embracing several million acres offshore a 

single state. The call for nominations also serves as 

an additional source of information by requesting 

comments on the proposal from any interested 

person or agency-State and local governments, 

environmental and conservation groups, academic 

and research institutions, business and professional 

groups, community organizations, and individuals. 

In addition to stating which tracts in an area should 

be studied for possible leasing because of their oil 

and gas potential, all respondents are requested to 

provide environmental, economic, and technical 

information on why specific tracts within an area 

should be excluded from the leasing process because 

of significant etwironmental consideration or other 

resource conflicts, such as fishing or recreation. 

TRACT SELECTION 

The Bureau of Land Management and Geo10 

logical Survey use the nominations cf industry, the 

resource and environmental information received 

from other Federal, State, and local agencies, information received from the public, as w~~n as their own 

resource, environmental, technological, and 

·economic information to select tracts for further 

analysis in the environmental impact statement. 

Selection of tracts is made on the basis of need to 

develop prospective geologic structures and trends, 

to protect tracts in imminent danger of drainage, and 

to choose tracts most prospective for production. 

Certain tracts may be deleted at this st.age because of 

overriding environmental considerat;0ns. 

The list of selected tracts is published in the 

Federal Register as well as being disseminated in a 

news release prior to the availability of the draft 

environmental statement. 

ENVIRONMENTAL IMPACT STATEMENT 

DRAFT STATEMENT 

The draft statement is prepared by the Bureau of 

Land Management as the lead agency with scientific 

assistance from the Geological Surve~r. During preparation, numerous contacts are made at the field 

level with the academic community, p'"ivate research 

groups, environmental organizations, and State and 

local officials. These contacts are essential in order to 

help insure a maximum understanding of the 

environmental and economic concerns and to help 

gain an understanding of how the local citizenry 

perceives the issues involved. 

The draft statement includes, amon~ other things, 

a description of the lease proposal, a description of 

the marine and nearby onshore ervironment, a 

detailed analysis on a tract-by-tract basis of any 

possible adverse impacts on the environment, 

mitigating measures included in th<:.> proposal to 

reduce the possibility of adverse impacts, alternatives to the proposal, and the consultation and coordination with others in preparatio'l. of the statement. It also covers the technology necessary for 

exploration, development, and prodw::tion from the 

proposed sale, as well as possible cnshore socioeconomic impacts. 

Pertinent published and unpublish<:.>d reports and 

resource evaluations are reviewed in preparation of 

the draft environmental statement. Wl'~n ready, it is 

submitted to the Council on Environn1ental Quality 

and made available to the public for co'l.sideration. A 

notice of its availability is published in the Federal 

Register and the news media are informed by a news 

release. 
PUBLIC HEARING 

At least 30 days after publication of the draft 

environmental statement, a public hearing is held at 

a city in the vicinity of the proposed sale. A notice of 

the public hearing is published in the Federal 

Register and a news release is issued. Environ· 

mental organizations, the academic community, 

government representatives, industry, and the 

general public are invited to testify orally or in 

writing on the draft environmental statement in 

order to obtain the widest spectrum of views and 

information possible. All comments submitted for 

the public hearing are then considered in pre· 

paration of the final environmental statement. 

FINAL STATEMENT 

The comments and contributions of data received 

through the public hearings and the official review 

process are studied, along with any other late·arising 

information, and incorporated into the final 

environmental statement. The environmental state· 

ments are unbiased reporting documents which 

provide a basis for deciding whether or not to hold a 

sale, to delete particular tracts, or to place restrictions 

on specific tracts. The final statement is submitted to 

the Council on Environmental Quality and made 

available to the public. Notice o£ its availability is 

published in the Federal Register and disseminated 

to the news media by a news release. 

DECISION BY THE SECRETARY 

At least 30 days after the submission of the final 

environmental statement to the Council on Environ· 

mental Quality, the Secretary of the Interior decides 

whether the proposed sale will be held. The Secretary 

considers all environmental, resource, economic, 

and technical information available in the draft 

statement, public hearing, and final statement, as 

well as other pertinent information in order to weigh 

all factors related to his decision. 

If the decision is that a sale will be held, determinations are made concerning which tracts will be 

offered and what the lease terms will be. The lease 

terms may be tailored to special requirements for any 

tract, and any tract may be withdrawn at any stage of 

this procedure on the basis of late-arising environmental data. 

NOTICE OF SALE 

If a decision is made to hold a sale, a notice is published in the Federal Register giving at least 30 days 

advance notice of the date, place, and time that bids 

are to be opened, the tracts to be included in the sale, 

II 

the terms under which the sale will be held, and any 

special stipulations that may be imposed on particular tracts. 

DETAILED RESOURCE EVALUATION OF EACr TRACT 

Following the announcement of tracts and during 

the preparation and review of the enviro'lmental 

statements, the Geological Survey geologists, geo· 

physicists, and petroleum engineers prepare detailed 

estimates of the value of the oil and gas on each tract 

that is being considered for sale. These estinates are 

based upon geophysical and geological data 

acquired by industry under permit and by the 

Department itself, geological data the Derartment 

has if other wells have been drilled in the area or 

other geological studies, engineering data relative to 

the facilities and costs of discovering and producing 

the oil and gas, and £actors considering the 

probability that oil and gas actually exists on a 

speci£ic tract. These estimates are deliverEd to the 

Bureau of Land Management immediately after the 

sale for use in determining whether a lease shall be 

issued. 

LEASE SALE 

Typically, leases are sold on the basis cf a cash 

bonus bid with a one·sixth fixed royalty. The 

manager of the appropriate Bureau of Land 

Management office conducts the sale, publicly 

opening and reading all sealed bids. After tl'<:> public 

reading, the bids are checked for technical and legal 

adequacy and sufficient bonus, 20 percent of which 

must accompany the bid. The Government reserves 

the right to reject any or all bids. Acceptance or rejection of bids is not made until after the post·sale 

evaluation. 

DECISION TO ACCEPT OR REJECT BIDS 

Whether individual leases shall be issuec is based 

on an analysis of elements related to the Department 

of the Interior's stated goals of orderly and timely 

resource development, environmental protection, 

and receipt of fair market value. Protection of the 

environment is considered in advance of a sale and 

each tract is discussed in the environmentzl impact 

statement. The decision to award a lea~e to the 

highest bidder is made only after the Depart'Tlent has 

evaluated that bid in terms of its own information 

concerning the tract's value. As discussed ezrlier, the 

Geological Survey spends the four to six months 

prior to a sale preparing detailed estimates of the 

value of oil and gas on each tract. These estimates, 

coupled with indicators of competition expressed at 
the sale, are used by the Department in determining 

if fair market value has been received. 

ISSUANCE OF LEASE 

For each lease where the bid is found acceptable 

and the decision to Lease is made, the Bureau of Land 

Management issues a lease to the successful bidder. 

Upon issuance of the lease, the remaining 80 per· 

cent of the bonus bid and the first year's rental are 

due. Once the lease is issued, collection of rents and 

royalties and supervision of lease operations become 

the responsibility of the Geological Survey. 

COORDINATION WITH STATE AND 

FEDERAL AGENCIES 

Throughout the leasing process, the Department 

has continued liaison with the National Oceano· 

graphic and Atmospheric Administration, Army 

Corps of Engineers, the Coast Guard, Environ· 

mental Protection Agency, and all other Government agencies that play a role in managing the Outer 

Continental Shelf. The Department also seeks 

liaison with the appropriate coastal State agencies 

that play an active role in their State's coastal lands. 

The concern for sound coastal zone management 

and liaison with these other Federal agencies does 

not stop with the issuance of a lease but continues 

through the exploration and production phases. If 

oil and gas are found, pipeline permits are issued by 

the Department of the Interior, but only after all 

safety precautions are met. A pipeline management 

planning system will be implemented in all frontier 

areas to minimize both onshore and offshore 

impacts. Pipeline routing on the Outer Continental 

Shelf is determined after consultation with State 

officials who have authority over pipeline rights-ofway in State waters and onshore. Special provisions 

are made to minimize hazards such as fishing nets 

becoming snagged on pipelines. In addition, the 

Department willingly assists coastal States who 

request information for use in their assessment of the 

onshore environmental and economic impact of 

potential oil and gas development offshore. 

As earlier noted, each pipeline laid on the Outer 

Continental Shelf requires a permit which may be 

subject to stipulations for· safety and environmental 

protection. Among these stipulations is a requirement that all pipelines in less than 200-foot water 

depth be buried to a depth of at least 3 feet and all 

valves and taps be buried regardless of depth. Close 

attention is given to bottom stability, tides, and 

currents. Each permit application is subjected to an 

environmental assessment. 

12 

Shore-bound pipelines require permits from both 

the Federal Government and the a<ijacent State. 

Department of the Interior personne1 work closely 

with State authorities to assure that the requirements of each are fully met and to select safe routes 

that will result in the minimum environmental 

damage and the least adverse onshore impact. It is 

only when oil or gas are found in commercial 

quantities that it is possible to fully analyze the 

impact and to develop plans for the routing of the 

pipeline and the associated onshore activity. 

RESOURCE EVALUATION 

In 1967, the Geological Survey established a 

mineral-resource evaluation program to develop 

improved methods of selecting and evaluating Outer 

Continental Shelf tracts proposed for leasing. Since 

establishing the program, the Geolog~r.al Survey has 

expanded its geophysical, geological, and 

engineering capability to map, select, and evaluate 

the resource potential of the Outer Continental 

Shelf. 

The primary responsibility of the resource evaluation and analysis program is to investigate the 

mineral potential of the Outer Continental Shelf, 

predominantly for oil and gas, sodium (salt), and 

sulfur. Data have been obtained and dQveloped in all 

offshore areas of the contiguous United States and 

parts of Alaska. 

GEOPHYSICS 

Geophysics is the application of thQ principles of 

physics at or near the surface of the earth to determine the geology beneath the surface. General 

seismology is that branch of geophysics concerned 

with the study of earthquakes and the measurement 

of elastic properties of the earth. In exploration 

seismology, energy is transmitted into the earth and 

the recorded reflection provides the subsurface information for the delineation of geological structures. 

The most common sources of ener;'!Y for offshore 

seismic prospecting are air or gas guns which 

generate the seismic wave without the use of 

explosives. An array of various size guns provides 

sufficient energy to penetrate over 20,000 feet of formation in most areas. 

The geophones that detect the reflected seismic 

energy are sensitive instruments enchsed in a cable 

up to 9,000 feet long which is towed behind a ship. 

The cable is a 4-inch-thick flexible tube which 

contains the geophones and the wiF~s to carry the 

information to the recorders aboard ship. The cable 

is filled with oil to provide buoyancy and better 

acoustic coupling with the water and is fitted with 
stabilizers to control its depth below the water (fig. 

2). 

The ship-borne equipment records the seismic 

signals on magnetic tape in digital format. These 

field data are processed in a digital computer to 

eliminate unwanted "noise" or random energy. After the data have been processed to obtain maximum 

quality, they are displayed in the forn1 of a vertical 

cross section. 

REGIONAL MAPPING 

Prior to a call for nominations of tracts for leasing, 

geophysical service companies conduct regional 

geophysical surveys of an area of interest operating 

under a permit issued by the Geological Survey. 

These surveys provide a network of seismic lines for 

reconnaissance mapping. Geological Survey geophysicists undertake a regional interpretation of 

these data by mapping two or more seismic reflections corresponding to the depths of expected oil or 

gas production. These maps, which show the types 

of structures such as salt domes, anticlines, synclines, 

or faulting are used in selecting tracts to be offered 

for leasing. 

DETAILED MAPPING 

Once the tracts have been selected for lea sing, a 

detailed evaluation of each tract is begun. If any 

wells have been drilled in the vicinity, geolog:sts and 

paleontologists identify the depths of faults, their 

magnitude and direction, the depth and gee 1ogical 

ages of prospective producing horizons, the depth of 

occurrence of paleontological markers or fossils, and 

their paleoecologic zone. During preliminary 

investigation, all evidence pointing to the p.-esence 

of structural traps conducive to the accumulation of 

oil and gas is noted. 

Geophysicists select at least two horizons to assure 

continuity in fault patterns and to show d:fferent 

rates and directions of dip. These horizons are 

selected at or near the productive zones founc1 in any 

nearby wells or, alternatively, at the best seismic 

reflectors near specified paleontological markers. 

The depths to the reflector are transferred from the 

seismic sections to a map. Points of equal depths are 

joined by contours depicting the geologic st'"ucture 

in three dimensions. These maps identify potential 

reservoirs, along with the sand thickness and sand 

Seismic Streamer 

up to 9000' 

F1cu RE 2.-Schematic diagram of a marine seismic prospecting system. 

13 
percentage data. Regionally and locally, seismic 

velocities in intervals of formation correlate with 

sand-to-shale ratios. Thus, even in the absence of 

information from wells, seismic structures may be 

evaluated as potential oil reservoirs from seismic 

structural and velocity information alone. 

BRIGHT SPOT ANALYSIS 

Ever since the discovery of petroleum, it has been 

the dream of prospectors to discover a means of determining the presence of oil or gas before drilling a 

well. Since late 1972, the best method to come into 

widespread use is a seismic process called "bright 

spots." Seismic reflections are caused by velocity 

changes in a formation. The greater the velocity 

difference between two geologic layers, the greater 

the amplitude of the reflected energy. Since the 

velocity in a gas- or oil-saturated sand is lower than 

in either a water-saturated or nonporous sand, the 

presence of oil or gas in the sand will cause a two- to 

five-fold increase in the amplitude of the reflected 

energy. By recording and processing the data in a 

manner that preserves the true amplitudes of reflections, it is possible to identify gas- or' oil-bearing 

sands. These specially processed data are displayed 

on separate cross sections as an aid in interpretation 

of the prospect (figs. 3 and 4). 

HIGH RESOLUTION SURVEYS 

Shallow high resolution seismic data are used in 

Geological Survey programs in: ( 1) lease management for approving or rejecting plans of exploration or applications for permits to drill, (2) lease 

evaluation, (3) environmental impact assessment, (4) 

special studies, and (5) pollution prevention. Surface 

and shallow subsurface geologic hazards, when 

properly identified and correlated with surrounding strata, seldom prevent conducting a 

minimal risk program of exploration and development. High resolution data are used to detect fault 

scarps and salt domes that penetrate the sea floor, 

bottom irregularities, mud mounds, mud waves, 

potential slide areas, geologic unconformities, old 

river channels, shallow gas accumulations, and gas 

seeps. 

Surface high resolution data are obtained with the 

side-scan sonar, which by recording reflected sound 

waves has the capability of identifying topographic 

irregularities, pipelines, and other objects on the sea 

floor. By comparing the intensity and shape of 

recorded echoes, various bottom materials can be 

identified. 

14 

GEOLOGY 

The Geological Survey is delegated five major 

areas of geological investigation for resource evaluation of the Outer Continental Shelf; namely, data 

analysis and support, reserve estimates, tract evaluation, reservoir studies, and unitization. Reservoir 

studies and unitization are discussed later under 

Mana gem en t of Leased Land. Eacl' of these areas 

involves multidisciplinary tasks that are essential to 

the management of Federal offshore mineral 

resources. 

DATA ANALYSIS AND SUPP'JRT 

The Geological Survey conducts paleontological 

investigations including biofacie:' and paleoenvironmental studies and correlatic n utilizing biostratigraphic zones. Staff scientists examine cores 

and borings from wells to determine their relationship to Outer Continental Shelf mineral 

exploration. Drill cuttings are examined for correlation, geological age dating, and paleoecological 

data. Analysis of electrical well S'Irveys (electric 

logs), cores, and thin sections of cor,~s results in the 

preparation of comprehensive clastic and carbonate 

reports, maps, and cross sections. 

Geological Survey scientists and engineers 

compile, correlate, and interpret subfllfface geologic 

and geochemical data and prepare rraps essential to 

the estimation of mineral resources and reserves. 

Rock units and biostratigraphic zones are located, 

identified, and traced; areal extent is mapped; and 

mineralogy, lithology, organic rem::tins, and other 

physical characteristics are describe-:!. Specific subsurface studies are performed for pro"pective areas of 

lease sales by the preparation of sand and carbonate 

maps and the projection of known producing trends, 

structures, and provinces into Outer Continental 

Shelf areas. The Geological Survey prepares 

geologic summary reports and geologic framework 

descriptions for environmental imp::tct statements. 

RESERVE ESTIMATES 

Detailed subsurface geologic studies, by 

Geological Survey scientists and engineers, identify 

lands subject to drainage, determine the areal extent 

and reserves of oil and gas reservoirs underlying 

unleased and undrilled lands, and assist in 

evaluating tracts for competitive lease sales. As 

development of a lease progresses, reserve estimates 

are refined and updated to assure conservation of the 

mineral resources to obtain maximum ultimate 

recovery. 
TRACT EVALUATION 

Tract evaluation requires geologic investigations 

to establish the fair market value of areas offered at a 

lease sale to aid in the decision to accept or reject 

bids. Such investigations provide subsurface 

geologic data, including net effective pay thicknesses, areal reservoir limits, hydrocarbon-water 

contacts, and sand occurrences which the reservoir 

engineer uses in his evaluation calculations. The 

results of these investigations are displayed as 

structural and isopachous (thickness) maps. 

ENGINEERING 

Reservoir engineering evaluation commences 

after geophysicists and geologists have interpreted 

and described the geologic nature of an oil and gas 

prospect. The engineer is concerned with the 

characteristics that determine the volume of oil and 

gas present and the economics of their recovery. 

Values for many individual geological and 

engineering factors of a reservoir cannot be measured 

directly before a tract is drilled, so estimates must be 

made of the value for each factor. Hence, a range of 

possible values for these factors must be considered. 

The proper handling of uncertainty in the data is 

one of the most difficult tasks in the analytical 

evaluation process. The "range of values" concept 

recognizes that there is not a unique solution to the 

FtGURE3.-Multifold seismic reflection data (standard processing). Courtesy of Teledyne Corporation. 

FtGURE4 .-Multifold seismic reflection data (high fidelity - bright spot-processing). Courtesy of Teledyne Corporation. 

15 
evaluation equation but rather an infinite number of 

possible solutions. 

Thus, the Geological Survey works to correlate all 

available data-seismic reflection and bright-spot 

sections, near-surface high resolution and velocity 

data, and geologic and engineering information-to provide the best possible solution to 

offshore land classification and evaluation 

problems. 

MANAGEMENT OF LEASED LANDS 

The Geological Survey's lease management 

mission is concerned with personnel and equipment safety, conservation of resources, and prevention of pollution. Supervision is carried out 

through a set of rules and regulations that are implemented through field inspections and by review <t>f 

applications and proposed plans. · 

OIL AND GAS LEASE CONTRACT 

The oil and gas mineral lease grants the right to 

the lessee to conduct necessary operations to discover 

and produce petroleum from Outer Continental 

Shelf submerged lands. The lease also reserves to the 

lessor (U.S. Government) such rights as: leasing of 

other minerals, geological and geophysical exploration, rights-of-way, the right to take royalty in the 

amount or value of production, the authority to 

suspend operations and production, and the right to 

extract helium from all gas produced. The oil and 

gas lease further spells out requirements including 

surety bonding, royalty and rental payments, tenus, 

and assignments. An oil and gas lease covers a 

compact area not exceeding 5,760 acres and the 

primary term is five years, continuing thereafter as 

long as oil and gas may be produced in paying 

quantities or approved drilling or well reworking 

operations are conducted. 

SAFETY AND POLLUTION CONTROL 

Assurance of safe clean operations is accomplishfd 

by implementation of the Code of Federal Regulations supplemented by Outer Continental Sh¢1£ 

Orders and Notices issued to the lessees and 

operators. The rules and regulations are frequentily 

reviewed and revised through a process allowing for 

public, local government, and industry input to 

reflect changing technology and environmental and 

safety standards. These regulations define the 

responsibility and authority of the Geological 

Survey to regulate operations, to exercise control 

over drilling and production, and to require that 

equipment be adequate for the safe conduct of 

16 

operations. The safe conduct of operations is 

accomplished by requiring the lessee to satisfy safety 

system and operating procedure requirements as 

specified in Regulations and Orders. The principal 

objectives of safety systems are threefold: (I) to 

prevent accidents, (2) to minimize the effects of 

accidents if they do happen despite precautions, and 

(3) to repair the damage that may result from a 

serious accident and prevent any permanent 

environmental effects. These objectives are 

applicable to the operation as a whole and to its 

component parts. They can also serve as criteria by 

which the adequacy of safety systems may be 

evaluated. In establishing ,_§afety system requirements, stress is placed on the development of 

redundancy by requiring back-up devices and 

procedures that provide for safety if a critical item of 

equipment fails (McKelvey, 1973). 

SUPERVISION OF DRILLING OPERATIONS 

Before drilling can be initiated, the lessee must 

submit an Application for Permit to Drill. The 

application must include a contingency plan for 

handling emergencies during drilling, such as spills 

and fires; a plan of exploration and development; 

significant geological markers anticipated; and 

specific information on such items as the drilling 

rig, casing design, cementing program, drilling 

fluid program, and blowout preventer equipment. 

Geological Survey geologists, geophysicists, and 

engineers review the application for compliance 

with orders and regulations and for potentially 

hazardous conditions that may be anticipated. 

Unusual hazardous conditions such as surface 

faulting, potential slide areas, shallow gas pockets, 

or deeper abnormal pressures are made known to the 

operator. If the possibility exists that a potential 

hazard might cause an accident during the drilling 

operation, the lessee may be required to change the 

drilling plan. Only after the Geological Survey is 

completely satisfied that safety and environmental 

requirements can be met will the permit to drill be 

approved. 

Offshore drilling facilities used by the petroleum 

industry to explore, develop, and produce oil and gas 

can be categorized as fixed and mobile platforms. 

Fixed platforms are permanently attached to the 

ocean floor and are used primarily for development 

drilling and production operations (fig. 5 ). Mobile 

platforms are used for exploratory drilling and are at 

a given location for a limited period of time. They 

can be classified as bottom-founded, surface-type, 
FIGURE 5.- Self-contained fixed drilling and production platform. 

17 
and column-stabilized. All drilling vessels are 

floated to location and are held in position by resting 

on the ocean floor or with an anchor system. The 

anchor system may consist of heavy anchors and 

anchor wires, a dynamic self-positioning system, or a 

combination of the two (Harris, 1972, p. 29-34). 

Bottom-founded drilling units may be either selfelevating or submersible and both are limited to 

operation in relatively shallow water. The submersible drilling vessel is flooded until the hull rests 

on bottom. This type has been used extensively in the 

marshy areas of the Gulf of Mexico, but its capability 

is limited to very shallow water. The bottomfounded, self-elevating drilling vessel, commonly 

called a "jack-up," raises the hull out of the water 

with legs resting on the ocean floor. Units of this 

type are limited to a maximum water depth of 200 to 

300 feet (fig. 6). 

Surface-type drilling vessels may be either ship or 

barge units. Both types float on the surface of the 

water during drilling operations and are held on 

location by their anchoring system. They differ only 

in that the ship is self-propelled, whereas the barge 

must be towed to location. These vessels, commonly 

called "floaters," can drill in water depths as great as 

2,500 feet, but they are subject to all of the motion of a 

floating object; namely, surge, sway, heave, roll, 

pitch, and yaw (fig. 7). 

The column-stabilized, or semisubmersible, 

drilling vessel differs radically in appearance from 

traditional vessels. It has a platform or deck area that 

is supported by columns connected to large underwater displacement hulls, or vertical caissons, or a 

combination of the two. The basic purpose of the 

general design is to reduce wave forces by locating 

the major buoyancy members beneath the surface of 

the water. These vessels are subject to the same six 

motions as floating vessels but to a lesser degree 

because they have a natural roll period that is usually 

out of the range of motion-creating wave periods. 

These vessels may or may not be self-propelled and 

are maintained on location in a manner similar to 

the floating vessel. Their water-depth capability is 

comparable to that of the floating vessel (fig. 8). 

Drilling vessels are modified by a center opening 

through the vessel, commonly called a "moonpool," for conducting drilling operations. All vessels 

are equipped with a drilling mast or derrick, 

hoisting equipment, rotary table, mud pumps and 

tanks, and other equipment necessary for drilling. 

The drilling equipment is essentially the same. as 

that used for onshore drilling, but with some special 

18 

modifications for operation in the marine environment. 

Multiple development wells are drilled from an 

offshore platform in a gradual curve (deviated from 

the vertical) by controlled directional drilling. With 

this method, as many as 60 development wells can be 

drilled from one platform, thus reducing the number 

of platforms. 

Exploratory wells are drilled in accordance with 

established guidelines. As the well is being drilled, 

casing and drilling fluid (mud) programs are 

followed as approved in the application. Drilling 

mud normally keeps the well under controL However, subsurface pressures greater than that exerted 

by the mud column can cause flow of subsurface 

fluids (oil, gas, or water) into the well bore. To 

control this flow, blowout preventers are required. 

The blowout preventer assembly is a series of large 

valves attached to the top of the casing (fig. 9). The 

Geological Survey has requirements for the use of remotely controlled, hydraulically operated blowout 

preventers during all drilling operations. 

SUPERVISION OF PRODUCTION OPERATIONS 

Applications to install drilling and production 

platforms and related equipment are reviewed to 

insure that the design is appropriate for the existing 

conditions. Geological Survey engineers perform 

systems design analysis to discover any potential 

hazards. The analysis includes the review of a 

mechanical flow and safety system schematic 

diagram to insure that the production system 

conforms to safety standards. The design of the 

structure, the production processing equipment, 

and the personnel facilities, together with incoming 

and departing pipelines, are checked against 

requirements to assure that these components will 

properly integrate into an effective platform safety 

system. A barrel of oil entering the well bore passes 

through a subsurface safety valve, an automatic failclosed wellhead valve, a flowline which is protected 

by high- and low-pressure sensors, a check valve, 

hydrocarbon handling pressure vessels protected 

with high- and low-pressure and liquid level sensors, 

and shipping pumps protected by high- and lowpressure sensors. Any abnormal operating condition will result in an automatic production system 

shut-in. Pneumatic and hydraulic control systems 

are equipped with fusible links which melt in the 

event of fire and, as a result of the loss of pressure, 

activate fail-closed valves. Emergency shut-in 

controls, located at strategic points on the platform, 
FIGURE 6.-Jack-up mobile drilling platform. 

19 
FIGURE 7.-Floating mobile drilling platform. 

20 
FIGURE B.- Semi-submersible mobile drilling platform. 

21 
FIGURE 9.- Blowout preventer assembly for installation on the ocean floor. 

22 
are an integral part of the safety shut-in system and 

afford a backup means for manually effecting a 

complete shut-in of the entire facility. In addition to 

such manual controls at the central panel, others are 

located on the boat landing and helicopter pad for 

use in the event of an emergency evacuation of the 

facility. 

After a development well is drilled and cased, the 

casing is perforated with shaped explosive charges or 

bullets to establish a path for oil or gas to flow from 

the fornlatioh into the well bore. Another string of 

pipe, called tubing, is run inside the casing as a 

conduit for the oil or gas to flow to the surface. Flow 

at the surface is controlled by a set of wellhead valves, 

commonly referred to as a "Christmas tree," placed 

on top of the tubing. The required subsurface safety 

valve is installed when the well is placed on 

production (fig. 10). 

When a field is depleted and abandonment is 

necessary, the operator must plug the wells in 

accordance with Geological Survey requirements. 

All oil and gas zones must be isolated and any freshwater zones must be protected with cement plugs. An 

additional cement plug is required just below the 

ocean floor to further insure a permanent seal. All 

casing is cut off below the ocean floor and the 

location is cleared. 

FIELD INSPECTION 

The Geological Survey has the specific responsibility to inspect, monitor, and document the dayto-day activities and operations of the petroleum 

industry on the Outer Continental Shelf by on-site 

inspection and witnessing of the testing of safety and 

pollution control equipment. The inspection 

program administers a fair, but firm, uniform 

enforcement policy that insures conforrrance to 

standards that result in a safe, prude'1t, and 

pollution-free operation. 

To facilitate inspections, the Outer Cortinental 

Shelf Orders and Regulations have been condensed 

into a checklist composed of questions that are 

answered by the inspection team either positively for 

compliance or negatively for noncomplianre. Each 

incident of noncompliance requires that the 

inspector take a prescribed enforcement action 

which will result in either a warning or a sl'utdown 

of operations. If the incident results in a shutdown, 

MANUAL EMERGENCY 

SHUT-IN VALVE ON 

HELl COPTER DECK MANUAL EMERGENCY SHUT -IN VALVE ..A 

ON RIG FLOOR/V 

FUSIBLE 

PLUGS 

FUSIBLE PLUGS 

HIGH LOW PRESSURE SENSOR 

} 

MAIIJAL EMERGENCY 

SHUT-IN VALVE 

AT BOAt LANDING 

l 

nt-tt-lt.......,~ LOW-PRESSURE 

OCEAN FLOOR CONTROL LINES 

TUBING 

l 'STRUCTRUAL CASillO 

1 00' + OEPTHS BELOW OCEAN FLOOR 

[ 

.......... CONOUCTOR CASING 

6001 - 900' 

"-..SURFACE CASING -

3,000' • 4,000' 

INTERMEDIATE CASING 

8,000' - 10,000' 

FIGURE l 0.-Schematic diagram showing casing program and production safety system of a typicall2,000-foot wdl, Gulf of Mexico. 

23 
the condition must be corrected before operations 

can be resumed (Krahl and Moody, 1972; Solanas, 

1973). 

The checklist used by the inspectors is a listing of 

potential incidents of noncompliance, or "PINC's." 

The actual incidents of noncompliance observed, 

termed "INC's," are counted at each inspection site, 

and the INC to PINC ratio is used as a basic measurement of the degree of compliance. Results of 

inspections are shown in table 10. 

Inspection teams of petroleum engineering technicians visit Outer Continental Shelf facilities, 

traveling to the activities by helicopter and boat; 

observing the water surface for any incidents of 

pollution while enroute. Additional flights are made 

TABLE 10.-Distribution of ratios of incidents of non-compliance to potential items of non-compliance by event class 

observed during December 1970 through April 1974 inspections of production sites 

Inspection Event class 

Blowout Pollution Fire 

Decelllber 1970 • 003 .127 .16S 

February 1971 .032 .044 

March 

April 

Juney 

July!! 

August 

September.Y 

Nove~~~ber!! 

January 1972 

March!! 

May !I 

August !! 

.002 .036 

0 

0 

0 

0 

.021 

.020 

.040 

.020 

.02S 

.036 

.012 

.021 

.013 

,014 

SepteJDber 0 .021 

NoveJDber 0 .016 

January 1973!/ 0 .024 

March!/ 0 • 034 

June .004 .018 

SepteJDberlf 0 ,034 

NoveJDber . 002 • 025 

April 1974!1 0 .024 

.033 

.001 

0 

.001 

.005 

0 

.003 

.009 

.023 

0 

.051 

.002 

,008 

General 

Safety 

.009 

.019 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Others 

.216 

.016 

.016 

.011 

.001 

.012 

,003 

.001 

0 

• 001 

.013 

0 

.010 

,001 

.004 

,001 

0 

,001 

0 

,008 

,005 

Total 

.166 

.020 

• 018 

.010 

.012 

.028 

.006 

.006 

.017 

.004 

.018 

.013 

.014 

.oos 

.005 

.019 

.026 

.oos 

.028 

,010 

.013 

y Partial inspections were made during June. July. and November 

1971; March, May, and August 1972; January, March, and 

September 1973; and April 1974. 

y complete inspections of previously inspected sites were ••de 

during September 1971. 

24 

for the sole purpbse of pollution detection. 

Inspections of drilling rigs and relatei equipment in 

the Gulf of Mexico are conducted at least once 

during the drilling o£ each wildcat wdl and during 

drilling of the first development well from a platform. New production facilities are inspected upon 

commencement of operations. All rrajor platforms 

are scheduled for inspection semi-annually. All 

drilling rigs and production platforms in the Dos 

Cuadras Field in the Santa Barbara Channel are 

inspected daily. 

Blowouts, fires, pipeline leaks, and other accidents 

are investigated by the inspection teams. These 

investigations establish the contributing factors in 

accidents in order to avoid similar future incidents. 

The Geological Survey has instituted a "Safety 

Alert" program to inform all op~rators of the 

probable cause of accidents. "Safety Alert" notices 

are sent to all Outer Continental Shelf operators to 

provide details of a hazardous situation that has 

resulted in an accident. This infornation enables 

operators not involved in a particular incident to 

evaluate similar situations in their O"">erations, and 

thus, help eliminate potentially hazardous 

situations . 

RESOURCE CONSERVATIC~ 

UNITIZATION 

Even though oil and gas are finely distributed 

throughout the pore spaces of the has~. rock in which 

they accumulate, the accumulations are commonly 

but improperly called pools, or reservoirs, several of 

which may occur within a single field . 

Frequently a single reservoir may underlie leases 

belonging to two or more separate owners, causing a 

strong motivation for each competing owner to 

produce as much oil and gas as pos"ible from his 

own lease before the reservoir is exhausted. In the 

past this situation has led to mucb needless and 

costly drilling and large scale waste of oil and gas. A 

number of conservation measure.:-. have been 

instituted to curb such wasteful practices. An 

especially effective conservation mea~ure is that of 

unitization. 

Unitization is the practice of pooling all interest, 

ownership, and control in a, p'"ospective or 

producing oil and gas field, or pzrt of a field, 

through an agreement which provide~ for development and operation of the property as a unit by a 

single operator. Unitization can be used to maxi~ 

mize oil and gas recovery from competitively 

operated pools, to eliminate the drilling of 
unnecessary wells, to reduce development and 

production costs, and to protect the correlative rights 

of operators, lessees, and royalty interest owners. The 

majority of secondary recovery operations cannot be 

initiated effectively in competitively operated oil and 

gas reservoirs without unitization. 

Unitization results in unified exploration, 

development, and exploitation of the reservoir, field, 

or area as a unit under one control. Ownership of 

production is in proportion to the percentage 

interest ascribed to each reservoir and each lessee 

shares in production and expenses of the unit. 

A role of the Geological Survey as a regulatory 

agency is to encourage voluntary unitization, to 

effect involuntary unitization where it is deemed 

necessary for conservation purposes, and to 

administer and supervise operations in approved 

unitized areas. Administering and initiating unitization plans involves geologic and engineering studies 

of areas in need of unitization, proposal of equitable 

allocation of participation in unitized areas, review 

of proposed plans of exploration and development, 

development of standard forms of unitization agreements, and reveiw and approval of unitization 

agreements (table 11 ). 

PRODUCTION CONTROL 

The maximum efficient rate of an oil and gas 

reservoir is the maximum rate at which hydro· 

carbons may be withdrawn without causing damage 

to the reservoir. Production at rates in excess of the 

maximum efficient rate results in the dissipation of 

reservoir energy to no useful good and the reduction 

of the total amount of oil and gas which may 

ultimately be recovered. Maximum efficient rates 

may be predicted by geological and engineering 

studies, physical or simulated reservoir models, or a 

combination of both. 

In its task of conserving natural resources, the 

Geological Survey determines and establishes 

maximum efficient. rates of production for the oil 

and gas reservoirs on the Outer Continental Shelf. 

ROYALTY ACCOUNTING 

The accounting staff collects rents and royalties, 

audits leasehold royalty accounts, and accounts for 

the sale of royalty oil taken in kind and sold to small 

refiners. Production procedures are monitored from 

the time Outer Continental Shelf products are 

produced and transported through pipelines or 

barge systems to onshore measurement and sales 

points. The amount and value of all products are 

determined to assure receipt of fair market value. 

Royalties from the sale of liquid hydrocarbons 

extracted by gas processing plants are reveh,,ed for 

accounting accuracy. Fair market value for royalty 

purposes is based on such factors as postec price, 

price received by the lessee, and highest price paid for 

a part or majority of production of like qualit:r in the 

same field. For production data see tables 12, 13, and 

14. 

EFFORTS TO INCREASE OPERATIONAL 

MARGIN OF SAFETY 

Overall oil industry response to the task of 

improving safety and antipollution aspects of Outer 

Continental Shelf operations has been one of willing 

cooperation. Ongoing projects which will increase 

the operational margin of safety in the fut·ue are 

being implemented. Although impossible to 

quantify, the oil industry has made subrt.antial 

expenditures to comply with the rigid requirements 

established by the Geological Survey in the past five 

years. Even greater safety is expected in the future. 

At the request of the Geological Survey, studies of 

Outer Continental Shelf operations were conoiucted 

by an in-house group of systems analysts, a team of 

quality control and management specialists from the 

National Aeronautics and Space Administration, 

and the Marine Board of the National Acad Qmy of 

Engineering. These studies, as well as a subs('>quent 

technological study made by an interdisciplinary 

research team at the University of Oklahoma and an 

environmental assessment made by the Council on 

Environmental Quality, were evaluated by a Geological Survey work group. The studies and evalua· 

tions have been the foundation upon which both 

industry and government projects aimed at ir~uring 

safer operations have been established. 

The overall program for increasing Outer 

Continental Shelf safety is reviewed Jw the 

Geological Survey at the district, area, regional, and 

headquarters levels. The internal efforts are re.viewed 

by a committee which operates under the aus~ices of 

the Marine Board of the National Academy of 

Engineering. 

The American Petroleum Institute, and industry 

trade association, has created permanent committees for equipment standardization, personnel 

training, and research programs relating tc Outer 

Continental Shelf safety and antipollution efforts. 

The Standardization Committee is devdoping 

equipment standards which will include c;·•Jalitycontrol requirements. The Research Committee is 

recommending and overseeing safety and antipollution research projects. The Trainir.~ and 

25 
Motivation Committee is attacking one of the most 

difficult projects, that of insuring that personnel are 

properly trained and motivated to carry out safely all 

tasks involved in marine oil and gas drilling and 

production operations. 

the Outer Continental Lands Act in 1953, development of oil and gas production in the offshore waters 

of the United States has progressed substantially. 

With onshore production declining, it is probable 

that future development of the offshore areas will 

proceed at an accelerated rate. FUTURE OUTER CONTINENTAL SHELF 

ACTIVITY 

STATISTICAL BACKGROUND 

Since the passage of the Submerged Lands Act and 

From the Outer Continental Shelf, offshore 

Louisiana oil and gas production started in 1953, 

offshore Texas oil production started in 1955 and gas 

production in 1966, and offshore California oil and 

T.\BLE 11.-Unit plans and percentage of wziti::.ed productwn Outer Contznental Shelf, calendar years 19S6 through 1973 

[After Harri,, W. l\1. Pipn, S .. K., and Mc:Farlane, B. E., 1974] 

Year 

1956 

1957 

1958 

1959 

1960 

1961 

1962 

1963 

1964 

1965 

1966 

1967 

1968 

1969 

1970 

1971 

1972 

1973 

Through 

1973 

Approved!! 

Number 

11 

2 

1 

4 

1 

1 

5 

7 

16 

7 

3 

29 

18 

7 

15 

15 

142 

Acreage 

314,172 

35,477 

22,500 

104,400 

5,001 

15,000 

22,270 

94,144 

198,753 

317,176 

171 '702 

29,803 

49,279 

96,083 

4,166 

87,963 

136,690 

1,704,579 

Unit plans 

Terminated!/ 

Number Acreage 

1 38,250 

1 22,499 

52,501 

35,047 

1,260 

1 273 

3 127,820 

1 51,600 

24,062 

3 101,864 

2 72,606 

13 71,405 

3 51,981 

30 651,168 

Outstanding 

Number 

11 

12 

13 

16 

15 

15 

15 

16 

21 

28 

43 

47 

49 

78 

93 

98 

100 

112 

112 

Acreage 

314,172 

311,399 

333,899 

415,800 

368,300 

348,253 

348,253 

370,523 

463,407 

662,160 

979,063 

1,022,945 

1,001,148 

1,026,365 

1,020,584 

952,144 

968,702 

1,.053,411 

1,053,411 

!I Includes expansions and contractions of unit plan agreements. 

26 

Percentage of 

total production 

Oil 

4 

11 

20 

23 

28 

34 

37 

37 

38 

37 

38 

40 

40 

40 

43 

37 

37 

34 

37 

Gas 

3 

7 

13 

15 

16 

16 

28 

32 

30 

27 

27 

27 

26 

24 

24 
gas production started in 1968; offshore Alaska has 

yet to initiate either oil or gas production. Through 

1973, production of oil from the Outer Continental 

Shelf has amounted to 54 percent of the total offshore 

production, and production of gas has amounted to 

73 percent (tables 12 and 13). 

0.24 percent. By 1973, the figure for crude oil and 

condensate had increased to 11.76 percent of the total 

United States production and that for gas to 14.02 

percent of the total (table 14). 

AREAL EXTENT AND LOCATION 

In 1953, the production of crude oil and 

condensate from the Outer Continental Shelf 

amounted to only 0.05 percent of the total United 

States production and gas production atnounted to 

The continental margin (fig. 11) is the submerged 

extension of a continent from the shoreline to the 

abyssal depths of the adjoining ocean. The 

continental margin consists of the continental 

TABLE 12.-Total offshore state and federal all and condensate production, in thousands of barrels 

[After Harris. W. M .. P1per, S. K., and McFarlane, B. E., 1974] 

Alaska California Louisiana Texas Total 

!.!!!:. Thousands Percent 

of 

Thousands Percent Thousands Percent Thousands Percent Thousands Percent 

Prior 

1954 

1955 

1956 

1957 

1958 

1959 

1960 

1961 

1962 

1963 

1964 

1965 

1966 

1967 

1968 

1969 

1970 

1971 

1972 

1973 

Barrels State OCS 

6 

30 

2,650 

15,937 

52,530 

60,887 

70,007 

66,152 

63,749 

61,715 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

of of 

Barrels State OCS Barrels State OCS 

422,385 100 - 54,803 98 2 

32,665 100 - 15,926 79 21 

33,252 100 - 25,731 74 26 

32,348 100 - 40,906 13 27 

30,561 100 - 52,835 70 30 

28,363 100 - 57,381 57 43 

26,787 100 - 72,793 51 49 

28,074 100 - 88,122 44 56 

29,887 100 - 103,197 38 62 

34,613 100 - 126,801 29 71 

38,346 100 - 149,087 30 70 

40,526 100 - 173,709 29 71 

42,772 100 - 199,293 27 73 

53,294 100 - 243,080 23 77 

64,807 100 - 284,033 23 77 

85,339 98 2 329,922 20 80 

96,145 90 10 365,691 18 82 

104,283 76 24 398,378 16 84 

101,717 69 31 444,363 13 87 

95,418 76 24 452,584 14 86 

89,218 79 21 429,465 13 87 

Total 393,663 100 - 1,510,800 93 7 4,108,100 24 76 

of of 

Barrels State OCS Barrels State OCS 

10 

156 

140 

256 

470 

499 

5.J7 

292 

803 

669 

578 

557 

1.246 

3,400 

3,400 

3,109 

3,046 

2,885 

3,035 

3,013 

28,136 

100 

99 

90 10 

98 2 

100 

100 

100 

100 

100 

92 8 

99 

99 

477,188 

48,601 

59,139 

73,394 

83,652 

86,214 

100,079 

116,763 

133,376 

162,217 

188,102 

214,819 

242,652 

29 71 300,270 

16 84 368,177 

9 91 471,191 

11 89 525,832 

26 74 575,714 

42 58 615,117 

43 57 614,786 

46 54 583,416 

40 60 6,040,699 

100 

93 7 

89 11 

85 15 

81 19 

71 29 

64 36 

57 43 

52 48 

45 55 

44 56 

43 57 

40 60 

37 63 

40 60 

43 57 

41 59 

37 63 

32 68 

33 67 

32 68 

46 54 

Source: Bureau of !-lines, Alaska Scouting Service, Conservation Committee of California, Louisiana State 1-linera1 Board, 

Louisiana Department of Conservation, and Texas Railroad Commission. 

Louisiana and Texas are estimated in part. 

27 
terrace and the continental rise. The continental 

terrace consists o[ the relatively gently sloping 

continental she I£ and the more steeply· dipping 

continental slope. The continental rise is that 

portion of the continental margin from the base of 

the continental slope to the abyssal depths of the 

ocean. The continental rise dips more steeply than 

the continental shelf but less steeply than the 

continental slope. 

The total area of the world's continental margin is 

about 28.8 million square miles or 1r .4 billion acres. 

The continental shelf occupies abo·tt 10.5 million 

square miles or 6. 7 billion acres and the continental 

slope covers about 10.9 million square miles or 7 

billion acres. The continental rise covers about 7.41 

million square miles or 4. 74 billion acres. The total 

area of the continental margin makes up about 20.6 

percent of the world's ocean floor or an area of more 

TABLE 13.-Total offshore state and federal gas production, in millions of cubic feet 

(Alter Harrb. W. M., Piper, S. K .. and McFarlane, B. E., 197.J) 

Year 

Prior 

1954 

1955 

1956 

1957 

1958 

1959 

1960 

1961 

1962 

1963 

1964 

1965 

1966 

1967 

1968 

1969 

1970 

1971 

1972 

1973 

Alaska 

Percent 

t-1-ICF state OCS 

10 

1,200 

s:324 

22,844 

44,393 

82,369 

83,750 

74,982 

72,526 

100 

100 

100 

100 

100 

100 

100 

100 

100 

California Louisiana 

t-Jt.ICF 

1,113 

5,903 

10,671 

25,769 

35,323 

40,770 

46,839 

46,732 

86,565 

81,326 

71,225 

60,484 

44,830 

37,581 

Percent 

state OCS 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

91,675 

81,325 

121,279 

136,527 

160,472 

233,967 

329,280 

408,388 

458,481 

588,361 

706,545 

783,474 

871,124 

100 - 1,265,899 

100 - 1,655,223 

99 1 2,057,291 

94 6 2,478,745 

83 17 2,800,104 

74 26 3,219,200 

78 22 3,480,831 

81 19 3,614,892 

Per-:ent 

state OCS 

78 22 

31 69 

33 67 

39 61 

49 51 

45 55 

37 63 

33 67 

31 69 

23 77 

20 80 

21 79 

26 74 

24 76 

34 66 

31 69 

26 74 

19 81 

18 82 

17 83 

15 85 

Texas Total 

Percent Percent 

~ttCF state OCS Mt-ICF state OCS 

3,440 

6,880 

6,880 

13,765 

24,080 

24,080 

30,960 

13,760 

41,280 

30,960 

30,960 

27,520 

59,259 

127,473 

154,631 

240,212 

264,420 

387,245 

156,772 

159,000 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

91,675 

8 ... ,765 

128,159 

143,407 

17 ... ,237 

2Sf,047 

353,360 

44(',461 

47f,144 

64(',312 

76'!.274 

84r,7S7 

93r,424 

29 71 1,373,197 

22 78 1,837,752 

29 71 2,321,331 

47 53 2,84 ... ,676 

so 50 3,218,118 

67 33 3,75~.679 

6 94 3,757,415 

6 94 3,883,999 

78 22 

34 66 

37 63 

42 58 

53 47 

51 49 

41 59 

38 62 

33 67 

29 71 

26 74 

27 73 

31 69 

27 73 

35 65 

34 66 

31 69 

25 75 

26 74 

19 81 

17 83 

Total 390,398 100 595,131 91 9 25,543,083 23 77 1,803,577 48 52 28,332,189 27 73 

Source: Bureau of Mines, Alaska Scouting Service, Conservation Committee of California, Louisiana State Mineral Board, 

Louisiana Department of Conservation, and Texas Railroad Commission. 

Louisiana and Texas are estimated in part. 

28 
than half of the land area of the earth (McKelvey and 

others, 1969). 

For the conterminous 48 states of the United 

States, the continental sea beds out to the 8,200·foot 

water depth cover 532,900 square miles or 

341,056,000 acres. In addition, there are 795,100 

square miles or 508,864,000 acres adjacent to Alaska 

and 4,000 square miles or 2,560,000 acres adj::.cent to 

Hawaii. Of the total area of the continental sea bed 

adjacent to the United States, 853,300 square miles or 

TABLE 14.~ Total United States and Outer Continental Shelf production of crude oil and condensate, and gas, and percentage 

of OCS production of total United States production 

Year 

1953 

1954 

1955 

1956 

1957 

1958 

1959 

1960 

1961 

1962 

1963 

1964 

1965 

1966 

1967 

1968 

1969 

1970 

1971 

1972 

1973 

Total 

[After Harris. W. 1\f .• Piper. S. K., and McFarlane, B. [., 1974] 

Crude oil and condensate production 

Thousands of barrels 

Total U.S. 

2,357,082 

2,314,988 

2,484,428 

2,617,283 

2,616,901 

2,448,987 

2,574,590 

2,574,933 

2,621,758 

2,676,189 

2,752,723 

2,786,822 

2,848,514 

3,027,763 

3,215,742 

3,329,042 

3,371,751 

3,517,450 

3,453,914 

3,455,000 

3,356,000 

60,401,860 

Total OCS 

1,151 

3,342 

6,705 

11,015 

16,070 

24,769 

35,698 

49,666 

64,330 

89,737 

104,579 

122,500 

144,969 

188,714 

221,862 

268,996 

312,860 

360,646 

418,549 

411,886 

394,730 

3,252,774 

OCS percent 

.of U,S. 

.OS 

.14 

.27 

.42 

.61 

1.01 

1.39 

1.93 

2.45 

3.35 

3.80 

4.40 

5.09 

6.23 

6.90 

8,08 

9.28 

10.25 

12.12 

11.92 

11.76 

5.39 

Gas production 

Millions of cubic feet 

Total U.S. 

8,396,916 

8,742,546 

9,405,351 

10,081,923 

10,680,258 

11,030,298 

11,619,951 

12,771,038 

13,254,025 

13,876,622 

14,666,559 

15,462,143 

16,039,753 

17,206,628 

18,171,325 

19,322,400 

20,698,240 

21,920,642 

22,493,000 

22,532,000 

22,900,000 

321,271,618 

Total OCS 

19,881 

56,325 

81,279 

82,893 

82,574 

127,693 

207,156 

273,034 

318,280 

451,953 

564,353 

621 J 731 

645,589 

1,007,447 

1,187,216 

1,524,178 

1,954,487 

2,418,677 

2,777,043 

3,038,555 

3,211,588 

20,651,932 

ocr percent 

('( u.s. 

.24 

.64 

.86 

.82 

.77 

1.16 

1.78 

2.14 

2.40 

3.26 

3,85 

4.02 

4.03 

5,86 

6.53 

7,89 

9.44 

11.03 

12.55 

13.49 

14.02 

6.43 

Source: Total United States production - MINERALS YEARBOOK and mineral industry surveys, Bureau of t'~nes. 

1973 total United States produc~ion data are preliminary and subject tQ change. 

29 
Land Ocean 

~ Shelf edge 

~ 

0.1° - 130m 

Continental 

~ shelf 

I 1 ,400-3,200 m slope 

65 km 15-80 km-

~4000m 

I 

I - I 

Continental terrace Continental rise Oe,.,p sea bed 

Continental margin 

FIGURE 11.-Profi1e of the continental margin, Numbers shown are worldwide averages. After McKelvey, Stoertz, a"'d Vedder ( 1969). 

546, 112,000 acres are between the shoreline and the 

656~foot water depth. The remaining 478,700 square 

miles or 306,368,000 acres are located between the 

656~foot and 8,200-foot water depths. The portion of 

the continental sea bed in State areas accounts for 

48,000 square miles or 30,720,000 acres of the area out 

to the 656-foot water depth (table 15). 

The base of the continental slope occurs at an 

average depth of about 8,200 feet. As mentioned 

earlier, the world's continental terrace, which 

includes the continental shelf and the continental 

slope, covers an area of 21,400,000 square miles. 

Therefore, the 1,332,000 square miles adjacent to the 

United States amounts to 6.22 percent of the world 

total. 

LEAD TIME 

For oil or gas to be discovered, developed, and 

marketed in a usable energy form requires a lead time 

of several years. Usually by the time a lease is issued, 

most of the detailed geological and geophysical 

investigations have been completed. Exploratory 

30 

drilling may result in a commercial discovery early 

in the life of a lease or it may occur near the end of the 

5-year, primary term. On the average, if a lease does 

prove productive, the discovery will be made in the 

TABLE 15.-Continental seabeds adjacent to the United States 

Rea ion 

Hawaii 

Alaska 

Pacific Coast 

Gulf Coast 

Atlantic Coast 

Tote,l 

(Thousands of square statute rr:;les) 

[After U.S. Department of the Interior, 1969) 

State letwetm State lf'twetm 200 

lanclsl/ U.ait and 200 l'~d 2,500 aetre depth aetn depths 

0.4~/ S.6 

22.t $60.0 212.2 

4.5 15.4 76.2 

13,5 107.5 84.2 

7.1 122.0 102.5 

48.0 8os.s 478.7 

Total 

4,0 

7t5.1 

t6.1 

205.2 

231.6 

1,SS2.0 

l/ Areas within S nautical aUes of coastline, ex-:ept for Texa1 and 

the Gulf Co!lst of Plorict. where the boundaries "" ~ leaps 

distant. 

a1 Includes State areas. 
range of 1.5 to 4.5 years after the lease sale. In 

response to a survey by the Bureau of Land Management (U.S. Bur. Land Management, 1974), 25 oil and 

gas or related companies made estimates of the time 

period required, after discovery, to achieve initial 

and peak production in 17 Outer Continental Shelf 

areas. These companies estimated that it would take 

on the order of 2.5 to 6.5 years to attain initial 

production and 5.5 to 9.5 years to reach peak 

production. The total time, after a lease sale, to 

achieve initial production would be in the range of 4 

to 11 years, and to attain peak production would be 

in the range of 7 to 14 years. 

CONCLUSIONS 

The foregoing discussion of the management of 

the mineral resources of the Outer Continental Shelf 

leads to the following conclusions: 

• Production of oil and gas from the Outer 

Continental Shelf of the United States has 

increased substantially over the past 20 years. 

• The oil and gas production from the Outer 

Continental Shelf represents an increasing percentage of the total United States production as 

onshore production has declined and offshore 

production has increased. 

• Whereas exploration for oil and gas in the onshore 

portion of the United States has proceeded for 

more than 115 years, extensive offshore exploration has been limited to the past 25 years. 

• Because of the accelerated pace of offshore 

exploration, the present state of offshore development approximately corresponds to the stage of 

onshore development that existed during the 

second decade of this century. 

• Energy demands are increasing at an accelerated 

pace and technology has improved 

correspondingly. 

• Improved technology and enforcement of more 

stringent regulations have made offshore 

operations safer, but it is unrealistic to believe that 

completely accident-free operations can ever be 

achieved. 

• With expanded offshore development, the 

management of the mineral resources of the Outer 

Continental Shelf will become an increasingly 

significant function. 

• While the United States has only slightly more 

than six percent of the world's continental terrace, 

only a small portion has been explored. Hopefully, further exploration will be fruitful and will 

aid the Nation in attaining a position of selfsufficiency. 

31 

• Because of increasing demands for energy, it is 

probable that production of oil and gas will not be 

sufficient to meet long-term requiF~ments. 

However, based on current technology in the 

production of energy, oil and gas are the best 

short-term energy forms available. 

• The lead time for the development of offshore oil 

and gas resources is on the order of a decade from 

the time of the lease sale to peak production. 

SELECTED REFERENCES 

Adams, M. V., 1972, Regulation and supervision of 0 .\ter Continental Shelf operations on the Pacific coast: Offshore 

Technology Con£., 4th Ann., Houston, Tex., 1972, Paper 

1713,9p. 

Berryhill, H. L., Jr., 1974, The worldwide search for petroleum 

offshore-a status report for the quarter century 1947-72: 

U.S. Geol. Survey Circ. 694, 27 p. 

Harris, L. M., 1972, An introduction to deepwater floating 

drilling operations: Tulsa, Okla., Petroleum P :blishing 

Company. 

Harris, W. M., Piper, S. K., and McFarlane, B. E., 1974, Outer 

Continental Shelf statistics-oil, gas, sulfur, salt, leasing, 

drilling, production, income, 1953 through 1973, calendar 

year 1973: U.S. Geol. Survey Conserv. Div. Spec. Rept., 

83 p. 

Krahl, R. B., and Moody, D. V., 1972, Gulf coast lease management inspection program: Offshore Technology Con£., 4th 

Ann., Houston, Tex., 1972, Paper 1714, 6 p. 

Marine Board, National Academy of Engineering, 1972, Outer 

Continental Shelf resource development safety: a review of 

technology and regulation for the systematic min\mization 

of environmental intrusion from petroleum products: 197 p. 

McKelvey, V. E., 1973, Environmental protection in offshore 

petroleum operations: Amsterdam, Netherlands, Elsevier 

Sci. Publishing Company, Ocean Management, v. 1, p. 

119-128. 

McKelvey, V. E., Stoertz, G. E., and Vedder, J. G., 1969, Subsea 

physiographic provinces and their mineral potential, in 

Subsea mineral resources and problems related to their 

development: U.S. Geol. Survey Circ. 619, p. 1-10. 

National Aeronautics and Space Administration, 1971, Applicability of NASA contract quality management ar'.l failure 

mode effect analysis procedures to the USGS 0\lter Continental Shelf oil and gas lease management program: 

NASA rept. to U.S. Geol. Survey, 36 p., Novembe. 

Offshore, 1974, Count of all wells drilled in U.S. wate¥s alltime 

to January 1, 1974: Offshore, v. 34, no. 7, p. 90. 

Oklahoma University Technology Assessment Group, Kash, D. 

E., chm., 1973, Energy under the oceans: Oklaho:-na Univ. 

Press, Oklahoma Univ. Sci. Public Policy Progr2m Rept., 

378 p. 

Solanas, D. W., 1973, Update-OCS lease management program: 

Offshore Technology Con£., 5th Ann., Houston, Tex., 1973, 

Paper 1754, 10 p. 

U.S. Bureau of Land Management, 1974, Report on the responses received in reply to the request for comments on 

potential future Outer Continental Shelf oil and ga<; leasing: 

48 p. 
(U.S.] Council on Environmental Quality, 1974, OCS oil and 

gas-An environmental assessment: Washington, D.C., 

Council Environmental Quality Repl. to the President, v. 

I. 214 p. 

U.S. Department of the Interior: 1969, Petroleum and sulfur 

on the U.S. Continental Shelf: 61 p. 

U.S. Geological Survey, 1972, Outer Continental Shelf lease 

management study-Safety and pollution control: Washington, D.C., U.S. Geol. Survey Water Resources Div. Systems Lab. Group rept., 116 p. 

32 

-trU.S. Government Printing Office: 1978-777-102/20 

U.S. Geological Survey, 1973, Report of the Work Group on OCS 

Safety and Pollution Control [May 1973]: Washington, D.C., 

:~:) p. 

___ l974a, Final environmental statement, proposed plan of 

development Santa Ynez Unit, Santa Barbara Channel, off 

California: U.S. Geol. Survey FES 74-20, v. I. 421 p. 

___ 1974b, Supplement No.1 to the report of the Work Group 

on OCS Safety and Pollution Control [May 1973]: Washington, D.C., 26 p., May 1974. 

___ l974c, Supplement No.2 to the report of the Work Group 

on OCS Safety and Pollution Control [May 1973]: Washington, D.C., 13 p., May 1974.