Louisiana's Oil and Gas Production as Related to National and World Developments
Authors: Menefee J. M. 
Published: December 2007

Introduction

On Dec. 11, 1970, OCS Order No. 11 was issued by the U. S. Dept. of Interior instructing the United States Geological Survey (USGS) to assert exclusive regulatory jurisdiction over operations of leases located 100 percent in Zone 4.

Unfortunately, neither the Louisiana Dept. of Conservation nor I, as Commissioner, received any notice of this regulatory change, and needless to say, many administrative problems could have been reconciled had time been allowed to coordinate the take-over between USGS and the Dept. of Conservation.

Since I became Commissioner of Conservation in 1964, I have cooperated fully with the federal officials in regulating offshore drilling and producing operations. Also I have consistently recognized the fight of the Dept. of Interior, through the USGS, to take over the regulation and the establishment of allowables in the federal offshore area that is free of the tidelands dispute. I adhere to that view now, but I must express concern over the precipitous method that was employed to make the change. I am fearful that serious, unresolved problems will be caused for both governments and for the offshore industry unless the further transition is worked out in an orderly manner.

HISTORY OF FEDERAL AND STATE CONTROL

I consider it appropriate to review at this time the historical background of the regulation of the offshore oil and gas industry. The facts that I will relate are, of course, within my personal knowledge since I became Commissioner, and those relating to events before that were given to me by persons who participated in the discussions and negotiations participated in the discussions and negotiations with the federal government officials.

In 1956 representatives of the federal government and of the state of Louisiana engaged in almost continuous negotiations over offshore problems for a period of approximately 4 months. These discussions resulted in the execution of the Interim Agreement of Oct. 12, 1956, which is still effective as to the offshore lands remaining in dispute between the two governments.

During the 1956 negotiations, a serious controversy arose between the two governments over be jurisdiction and control of the disputed tidelands area. It appeared for a time that this dispute would prevent the consummation of the Interim Agreement. However, the log jam was finally broken by a verbal agreement between the two governments that nothing would be said in the Interim Agreement concerning jurisdiction and regulation, but that the Louisiana Commissioner of Conservation would continue to regulate and fix allowables for the benefit of both governments. This tacit but firm agreement has continued in effect up to the present time, even though there were periodic complaints from the Dept. of justice and one formal statement by former Secretary Stewart Udall that the federal government should assume jurisdiction over the federal waters. In my opinion, this tacit agreement worked very well and to the mutual benefit of both governments.

During the period that Mr. Udall was Secretary of the Interior, I had several conferences with him and other high-ranking Interior officials concerning the offshore regulatory problem. I had a similar conference with former Secretary Hickel after he assumed office, and since have had numerous discussions on this same subject with other officials now holding office in the interior Dept. In all of these instances, I made it clear that I recognized the right of the federal government w take over jurisdiction and control of the federally owned waters. I strongly recommended, however, that if this decision were made in the future, it should be accomplished in an orderly and cooperative fashion, and I stressed particularly the need to have competent representatives of the Dept. of Interior work with my technical staff for several months in order to insure an orderly transition. I made the point that the regulatory operation was too complex to permit an immediate and uncoordinated change of authority. All of the officials with whom I had these discussions appeared to agree fully with me; however, the take-over as it was carried out makes for a changeover which is far from orderly.

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