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Show Oil, gas, and natural gas liquids comprise the greatest current production of all Shelf minerals. Proved reserves are 2.9 billion barrels of oil and natural gas liquids and 30.3 billion cubic feet of gas. There is no satisfactory basis for determining undiscovered recoverable resources, but estimates suggest a range of 34 to 220 billion barrels of liquids and 170 to 1,100 trillion cubic feet of natural gas. Although only oil, gas, natural gas liquids, and sulphur are presently being produced from the Federal portion of the Continental Shelf, a wide range of other minerals of varying quality and quantity are also known to exist on the Shelf. Currently, however, there is no significant demand for those deposits, and required supplies of such minerals are being furnished by onshore sources of foreign markets. In terms of dollar value, the resources of the Continental Shelf have already contributed substantially to the national Treasury. Receipts as of June 30, 1968, from the sale of leases on the Shelf and from rentals and royalties totaled over $2.7 billion. Questions concerning the extent of the jurisdiction over the Shelf of the Federal Government, vis-a-vis the states and other nations are important. However, the Organic Art of the Commission limits its study in this area to "lands defined by appropriate statute, treaty, or judicial determination as being under the control of the United States in the Outer Continental Shelf." 5 Therefore, the Commission has confined its detailed policy examination and its recommendations to the administration of the mineral resources of the Outer Continental Shelf which belong to the United States, whatever the extent of national jurisdiction. Authority Over the Shelf Recommendation 72: Complete authority over all activities on the Outer Continental Shelf should continue to be vested by statute in the Federal Government. Moreover, all Federal functions pertaining to that authority, including navigational safety, safety on or about structures and islands used for mineral activities, pollution control and supervision, mapping and charting, oceanographic and other scientific research, preservation and protection of the living resources of the sea, and occupancy uses of the Outer Continental Shelf, should be consolidated within the Government to the greatest possible degree. The exclusivity of Federal jurisdiction over the seabed and subsoil of the Outer Continental Shelf has been recognized by treaties, Presidential proclamation, congressional action, and judicial decision. Adjacent states have no authority to enforce their civil or criminal laws on the Shelf beyond the 3-mile or 3-league limit. To the extent that they are not inconsistent with Federal statutes or regulations, the provisions of state civil and criminal laws are incorporated by reference and made applicable to the Shelf as though they were Federal law. The effect of this assimilation is that the enforcement of these state laws is entirely a Federal matter. The Commission finds no valid reason for extension of state jurisdiction to the Shelf, since to do so would be contrary to the national character of the Continental Shelf lands and to the established position and obligations of the United States in international law and treaties. The administration of the Outer Continental Shelf Lands Act has not been free of problems. But the Act itself, as an authority for leasing, has worked well, and the leasing procedures adopted to implement the Act have been relatively free of major problems. Conservation Regulations Although the Commission is not concerned with techniques of production control, it recognizes that one of the most important methods of attaining the maximum recovery from an oil reservoir is the limitation of the rate of production. Production control, therefore, is an integral part of mineral production management. The Outer Continental Shelf Lands ActG gives the Secretary of the Interior unrestricted authority to regulate and conserve the production of mineral resources from the Outer Continental Shelf. He may, if he chooses, institute a system of production controls for oil which would depart from the system used by adjoining states. However, the Act specifically authorizes the Secretary to cooperate with the adjacent states in their conservation efforts. A number of states administer programs to prora-tion the amounts of crude oil that can be produced from fields within their boundaries.7 Prorationing 5 See specifically 43 U.S.C. § 1400(g) (1964). 188 0 43 U.S.C. § 1334 (1964). 7 Proration has been defined as the rules and procedures by which a regulatory agency determines total crude oil production for a state and allocates the total among the various reservoirs and to the producers in each reservoir. The maximum "allowable" production from each well is fixed for a given period of time. Production in excess of the allowable is prohibited. Prorationing measures were adopted in order to regulate the rate at which the owners of overlying lands could withdraw oil from a common reservoir. Some prorationing states establish allowables on the basis of the "maximum efficient rate" of production (MER) that will conserve field pressures and accomplish the maximum primary recovery of oil in each pool or reservoir. Other states also apply a |