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Show CHAPTER ELEVEN The Outer Continental Shelf THE CONTINENTAL SHELF is an extension of the continental land mass that is overlain by water. The water and its resources above the Shelf are not considered a part of it and are governed almost entirely by a legal regime that is separate and distinct from that of the Shelf. However, the exploitation of the mineral resources of the Shelf does have an interrelationship with other values in the water and on the sea floor, and the Commission, in carrying out its statutory responsibility to consider the "disposition or restriction on disposition of the mineral resources ... in the Outer Continental Shelf," has taken those values and relationships into account in this study. The United States, by Presidential proclamation in 1945,1 asserted jurisdiction over natural resources of the subsoil and seabed of the Continental Shelf adjacent to our shores. In 1947, the Supreme Court ruled that the United States was possessed of paramount rights over the Outer Continental Shelf seaward of the ordinary low water mark along its coast.2 Following that decision, Congress passed the Submerged Lands Act of 1953,3 granting the coastal states title to the submerged lands seaward from their coasts to a distance of 3 geographical miles and, in the case of Florida and Texas, up to 3 marine leagues in the Gulf of Mexico. Since then, there has been protracted litigation to determine the exact coastlines of these states from which to measure the grant. 1 Pres. Proc. No. 2667, Sept. 28, 1945, 59 stat. 884; Exec. Order No. 9633, Sept. 28, 1945, 3 C.F.R. 1943-1948 Comp. P 437. The term "Outer Continental Shelf" means that portion of the Continental Shelf which is under the jurisdiction of the Federal Government as opposed to that portion which is under the jurisdiction of any state. 2 U. S. v. California, 332 U. S. 19 (1947). 343U.S.C. §§1301-1303, 1311-1315 (1964). Since the Shelf lands, which are under the jurisdiction and control of the Federal Government, are outside the territorial limits of any state, they and their resources differ, in that respect, from the public lands onshore which lie within state borders. They may be more nearly equated legally with the federally owned lands within a territory prior to statehood. However, the public land laws are inapplicable to the Shelf, and in August 1953, Congress enacted the Outer Continental Shelf Lands Act4 to provide a system to govern the issuance and maintenance of mineral leases on the Shelf. Under the Act, the Secretary of the Interior is given limited but discretionary authority to regulate mineral leasing on the Shelf: (a) without prejudice to independent as well as major operators; (b) in such a way as to obtain a fair return for the United States; and (c) so as to insure the fullest recovery of the resource under sound conservation practices. The Act requires that oil and gas leases be issued on a competitive basis, either by cash bonus with a fixed royalty of not less than 12^ percent of the value of production, or on a royalty basis with a fixed cash bonus. With respect to sulphur and other minerals, the Act provides for competitive cash bonus bidding only, and sulphur leases are required to carry a royalty of not less than 5 percent of the value of production. In the case of other minerals, the Secretary of the Interior has been granted wide discretionary authority. However, no regulations for the leasing of those minerals have yet been issued. Only one such lease (for phosphates) has ever been issued, and it was cancelled and the bonus and rentals refunded when it was determined that unexploded naval ordnance on the seabed would prohibit mining operations. 4 43 U.S.C. §§ 1331-1343 (1964). 187 |