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«LEGAL ASPECTS OF OFFSHORE OIL AND GAS OPERATIONS OLIVER L. STONE* The states' own title to the lands, minerals and other things underlying the ...»

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The semicircle test requires that a bay must comprise at least as much water area within its closing line as would be contained in a semicircle with a diameter equal to the length of the closing line. Unquestionably the 24-mile closing line together with the semicircle test now represents the position of the United States. (Footnote omitted.) Employing the foregoing test, the Court held that of the various "bays" along California's coast, only Monterey Bay was an inland water.

44. U.N. Doc. No. A/Conf. 13/L. 55 (1958). This Convention will be discussed later.

NATURAL RESOURCES JOURNAL [VOL. 8

wise ratified and which is now in effect. To center on the analogy:

If the Convention on the Territorial Sea and the Contiguous Zone was judicially acceptable to make certain the legislative uncertainty in the coverage to seaward of the Submerged Lands Act-i.e., the outer limits of "inland waters"-is not the Convention on the Continental Shelf equally acceptable to add certainty to the seaward extent of the Outer Shelf Act?

Although the question of the geographical limit to seaward on the Secretary's leasing power under the Outer Shelf Act has not been judicially determined, 45 it has been dealt with at the administrative level. On May 5, 1961, the Associate Solicitor of the United States Department of the Interior issued a memorandum dealing with the applicability of the Act to certain areas off the California coast.4" The question was whether the geographical coverage of the Act extended to phosphate deposits lying about 40 miles off the mainland of Southern California. The depth of the water in the area ranged between 258 feet and 4,020 feet with the

45. While not dealing specifically with the question being discussed, a case of general interest is Employers Mutual Casualty Co. v. Samuels, 407 S.W. 2d 839 (Tex.

Civ. App., 1966) (writ of error "Refused. No reversible error" by Supreme Court of Texas). The deceased was insured under a policy which applied to death "sustained in the United States of America, its territories or possessions." The deceased met death when an airplane in which he was a passenger crashed into the waters of the Gulf of Mexico more than 3 leagues from the Texas coast but overlying the outer continental shelf. After reviewing the Submerged Lands Act, the Outer Continental Shelf Lands Act, the Convention on the Continental Shelf and the Supreme Court's decree in United States v. Louisiana, 361 U.S. 1 (1960), the court concluded that the waters overlying the continental shelf outside of the state's boundary were "high seas," and "as a matter of law," not part of the United States, or a territory or possession thereof, hence the death was not covered by the policy.

On rehearing [407 S.W. 2d 839, 845-847 (Tex. Civ. App., 1966)] an interesting additional point was urged to but rejected by the court. In 1945, by statute, Texas extended her marine boundary "to the outer edge of the Continental Shelf." This statute was urged as bringing the site of the crash within Texas and hence within the United States. Reference was made to United States v. Louisiana, supra, which limited Texas' boundary to 3 leagues into the Gulf, and wherein the Court said [339 U.S.

699, 705 (1950) ]:

We intimate no opinion on the power of a State to extend, define, or establish its external territorial limits or on the consequences of any such extension vis-a-vis persons other than the United States or those acting on behalf of or pursuant to its authority.

The Court, treating rather summarily with this rather forceful contention, held that Texas' attempt to so extend its boundary was ineffective at least for purposes of this case, because (1) it purports to extend the territorial boundaries of the United States, a power vested solely in the federal government, and (2) it is inconsistent with the Submerged Lands Act.

46. M-36615. The Opinion is reproduced in Gower, Fed. Serv.-Cont. Shelf; OCS 1961-25.

OFFSHORE OIL AND GAS OPERATIONS

JULY 1968] greater part being in more than 600 feet of water. Between the area in question and the California mainland there is a deep channel of about 3,600 feet.

The Associate Solicitor concluded that the leasing provisions of the Act were applicable to the designated area. His conclusion is based principally on the definition of the continental shelf appearing in the Convention on the Continental Shelf. He finds that the ratification of this Convention by the United States constitutes the first definition of the continental shelf officially adopted by the United States that sets any seaward limit. Although he concludes that the Convention does not amend the Outer Shelf Act, it is, he reasons, "an indication of the extent of the area of seabed and subsoil over which the United States asserts jurisdiction, control, and

power of disposition...,,11 And, he concludes that:

[S]ince the United States has now asserted rights to the seabed and subsoil as far seaward as exploitation is possible, it is clear that the Outer Continental Shelf Lands Act is now applicable to all those areas. There is no question that the area...falls within the scope of the definition in the Convention and is, therefore, subject to leasing under the Act.

The memorandum approaches the problem from a purely domestic standpoint. There was no need to consider the extent to which the United States, as against other nations, can validly assert jurisdiction and control over the minerals underlying the seabed. As I read the memorandum, its main thrust is that, to whatever extent the United States lawfully asserts rights to submarine minerals, the Outer Shelf Act applies to the leasing of such minerals as are thus lawfully brought under jurisdiction and control of the federal government.4 9 The Associate Solicitor's conclusion, that the SecId.





48. Id.

49. While apparently recognizing that the memorandum reaches the correct conclusion in light of the specific facts involved, there has been some disagreement with its language if interpreted to mean that exploitability alone, without reference to other factors, is the sole criterion of the Act's outer reach. See Tubman, The Legal Status of Minerals Located On or Beneath the Ocean Floor Beyond the Continental Shelf, Marine Technology Society Second Annual Conference 379, 387 et seq. (1966). The proceedings of the Second Annual Conference of the Marine Technology Society will be referred to hereafter as M.T.S. To the extent, if any, the Opinion indicates the United States can lawfully assert sovereign rights under the Convention on the Continental Shelf without limit into the oceans and without regard to the area being "adjacent" to the United States coast (even assuming exploitability), it would seem to go beyond the Convention's authorization to coastal nations, as will be hereafter discussed.

NATURAL RESOURCES JOURNAL [VOL. 8

retary's leasing authority is coextensive with the United States' valid assertion of jurisdiction over natural resources in the continental shelf seems to be completely compatible with the philosophy and intent of the Act. 0 It appears also to find support in the rationale of the second California case, as heretofore indicated.

The Solicitor of the Department of the Interior recently remarked with reference to the foregoing opinion of the Associate Solicitor that: "The Opinion was submitted to the Departments of State and Justice to determine whether they had objections and

they registered none."'" On that same occasion the Solicitor remarked:

That Opinion [M-36615 of the Associate Solicitor] has provided the basis for subsequent Department actions on lands beyond the 200 meter isobath. The most noteworthy was a letter Opinion of February 1, 1967, from Deputy Solicitor Edward Weinberg to Brigadier General John A. B. Dillard, Corps of Engineers, United States Army. The letter involved a proposal by a private group to build a private island on Cortez Bank, a rise in the ocean floor off the California coast. The Bank is located about 50 miles from San Clemente Island and 100 miles from the mainland. It is a rise of only 22 feet deep at its shallowest point, but it is separated from San Clemente Island and the mainland by ocean floor trenches as much as 4,000 to 5,000 feet deep. The Deputy Solicitor's letter made clear that the Department of the Interior believed that Cortez Bank was an area of United States jurisdiction under the Outer Continental Shelf Lands Act and the Convention. The area was covered by leasing maps reWhen the United States Senate Committee was considering whether to give its consent to the Convention, it had been informed that no implementing federal legislation would be required. Hearings, Conventions on the Law of the Sea, Sen. Foreign Relations Comm., 86th Cong., 2d Sess. 92, hereafter cited as Sen. Comm. Hearings.

United States Congressman Edwin E. Willis of Louisiana was designated chairman of a special House subcomm. to study the operation of the Submerged Lands and Outer Continental Shelf Lands Acts. In that capacity he was designated as a Congressional observer at the 1958 Geneva Convention on the Law of the Sea. Mr. William R. Foley, General Counsel, Committee on the Judiciary, United States House of Representatives, attended the conference with Congressman Willis. R. Slovenko, Oil and Gas Operations: Legal Considerations in the Tidelands and on Land 32-34, 39 (1963).

In late 1958, Congressman Willis stated with reference to the Continental Shelf Convention:

"This particular convention... follows the basic pattern of our own Outer Continental Shelf Lands Act." Id. at 35-36. In 1961, Mr. Foley wrote: "The Convention on the Continental Shelf was, in my opinion, an international codification of the Outer Continental Shelf Lands Act with minor changes." Id. at 42.

51. "Administration of Laws for the Exploitation of Offshore Minerals in the United States and Abroad," remarks by Frank J. Barry, Solicitor, Department of the Interior, at American Bar Association National Institute on Marine Resources, Long Beach, California, June 9, 1967, p. 12.

OFFSHORE OIL AND GAS OPERATIONS

JULY 1968] garded as an affirmative assertion of jurisdiction by the United States and by the emplacement of a Coast Guard buoy. Additionally, a published scientific report showed the Bank to be an extension of the land mass of Southern California.

The letter indicated that the Department would regard the attempt to create an island as a trespass and would request the Attorney General to seek an injunction.

The private group nonetheless towed a cement ship to the Bank and attempted to sink it there as the first phase of the filling operation. They missed the mark, and also capsized their towing tug. The Coast Guard came to the rescue of the crew.

More recently the Department has indicated an assertion of jurisdiction beyond the 200 meter line by publishing leasing maps for areas off the Southern California coast as far as 100 miles from the mainland, at depths as great as 6,000 feet. Additionally, oil and gas leases have been issued in an area 30 miles off the Oregon coast in water as deep as 1,500 feet.

You may want to know whether the Department has decided on a line beyond which it will not lease, or has decided to lease as far out as anyone might suggest. The answer on both counts is no. Each case will be considered individually, with consultation with the State and Justice Departments where appropriate.

As noted, the Secretary of Interior has granted oil and gas leases pursuant to the Act covering areas off the West Coast of the United States, in water depths substantially in excess of 600 feet. Hence, it is clear that he, too, is convinced that the 600-foot water depth line is not a limitation upon the leasing authority conferred upon him by the Act. That view appears to find support at the congressional level. 53 Moreover, the Secretary of Interior announced in June 1965 that he had authorized approval of plans of a company to conduct

52. Id. at 12-13.

53. In 1964 Congress passed an act [16 U.S.C.A. §§ 1081-1085 (1967)] prohibiting foreign vessels or any master or other person in charge of such vessels from engaging, inter alia, "in the taking of any Continental Shelf fishery resource which appertains to the United States" [16 U.S.C.A. § 1081 (1967)]. The Act defines the term "Continental Shelf" as it is defined in the Convention on the Continental Shelf [16 U.S.C.A. § 1085 (1967)]. The Committee Report states that there are "now two bases upon which the United States could claim the resources of the Continental Shelf. First, pursuant to the provisions of the 1953 Submerged Lands Act and Outer Continental Shelf Lands Act, and, second, provisions found in the International Convention on the Continental Shelf [soon expected to take effect]." H.R. No. 1356, 88th Cong., 2d Sess., U.S. Code Cong. & Adm. News 2186 (1964). This is an indication that in 1964 the Committee felt, and so advised the House of Representatives, that the Outer Continental Shelf Lands Act and the Convention on the Continental Shelf covered the same "ground."

NATURAL RESOURCES JOURNAL [VOL. 8

a core drilling project on the continental slope in the Gulf of Mexico off the coasts of Texas, Louisiana, and Florida, in waters ranging in depth from 600 to 3,500 feet.5 4 This "permit" or authorization is not to be confused with the grant of an oil and gas or other mineral lease. The Secretary made clear that "No rights to any mineral leases will be obtained from these core drilling programs.

And, on May 26, 1967, the U.S. Geological Survey announced approval of plans for another company to conduct a core drilling program on the continental slope beyond the continental shelf "off Florida and northward to points seaward of Cape Cod and Georges Bank." The release states that "No rights to any mineral leases will be obtained from these core drilling programs."5 It also indicates that about 21 core holes will be drilled beneath the floor of the Atlantic Ocean, in water ranging in depths from 650 to 5,000 feet.

The depth of penetration in each core test is limited to a maximum of 1,000 feet.



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