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Status report on law of the sea conference : Hearing before the Subcommittee on Minerals, Materials and Fuels of the Committee on Interior and Insular Affairs, United States Senate, Ninety-fourth congress, first session (Volume pt. 4) online

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of November, 1969. In addition, the Institute gives its full endorsement
to the conclusions and recommendations of the National Petroleum Council as
expressed in its March, 1975 report entitled Ocean Petroleum Resources .

I hope that you will give these recommendations your full consider-
ation as you participate in the formulation of an official United States posi-
tion on the Law of the Sea.

Sincerely your







American Petroleum
Institute Statement of






The four-fold increase in world oil prices
following the outbreak of the October 1973
war in the Middle East signaled the dramatic
close of the era of low-cost energy resources
which, for generations, had been the corner-
stone of this nation's unprecedented economic

High-cost imports presently supply ap-
proximately one-third of liquid petroleum de-
mand, and domestic production of both crude
oil and natural gas has fallen below the levels
of a year ago. The President has established
as a national goal achievement of a satisfac-
tory level of energy self-sufficiency. Oil and
natural gas presently supply some 77% of total
domestic energy requirements and progress
toward the goal of increased self-sufficiency is
dependent in substantial measure on the degree
of success achieved in developing additional
sources of domestic petroleum supplies.

The continental margin of the United
States, which already accounts for 17% of
domestic petroleum production, is one of the
most promising domestic sources for significant
new discoveries of oil and natural gas. It is
therefore of critical importance that any agree-
ment accepted by the United States in the pend-
ing negotiations of a new international treaty
on the law of the sea protect and reinforce the
exclusive rights that the United States clearly
enjoys under both conventional and customary
rules of international law to the seabed and
subsoil mineral resources of the nation's entire
continental margin.

It is also important to the national in-
terest that American private enterprise be as-
sured the opportunity of access on a sound and
nondiscriminatory basis to the petroleum re-
sources of the international seabed area be-
yond the continental margin.

For these reasons, the American Petrole-
um Institute has been prompted to adopt the
following policy.


Policy on National Jurisdiction
Over Seabed Resources

The United States has exclusive jurisdic-
tion over the seabed and subsoil resources off
its shores out to the seaward edge of the con-
tinental margin. The importance of these sub-
sea resources to the nation's future economic
growth and security is such that the United
States should stand unequivocally on its full
rights as confirmed by international law and
should insist on their unqualified recognition
in any new convention on the law of the sea to
which it may become a party.

The United States should continue to in-
sist in the Law of the Sea Conference upon
treaty provisions assuring integrity of invest-
ment and of contractual rights relating to ex-
ploration and production of the mineral re-
sources of the seabed of the continental mar-
gins and establishing international procedures
and institutions for the compulsory and peace-
ful settlement of disputes arising from such ex-
ploratory and producing operations. Reciprocal
application to our own continental margin
would properly and naturally follow.

There is also an obvious international in-
terest in the prevention of unreasonable inter-
ference with other uses of the high seas and
in the protection of the ocean from pollution.

Subject only to appropriate accommoda-
tion of international interests with respect to
the specific matters referred to above, any
treaty to be agreed upon should recognize that
a coastal nation's development of its seabed
resources should be in accordance with its own
laws and policies.

The present policy of the Department of
the Interior of issuing leases for tracts on the
Outer Continental Shelf in waters deeper than
200 meters under existing domestic law is in
accordance with the rights of the United States
under international law, both conventional and
customary. It is in line with the practice of the


many other nations, some 50 in number, which
have authorized petroleum development off
their coasts in waters deeper than 200 meters.
It also clearly serves the energy needs of the
country and should therefore be continued in
effect and applied without change in progres-
sively deeper waters. Such leases should not be
conditioned upon the unknown terms of a pos-
sible future treaty or treaties, as this would
introduce an intolerable insecurity in invest-
ments made pursuant to rights granted by the

Policy on Seabed Resource
Development in Areas Beyond
National Jurisdiction

An important petroleum interest in por-
tions of the international seabed area beyond
the limits of national jurisdiction should not
be ruled out despite the fact that the primary
petroleum interest for some years to come will
be in the thick sediments of the continental
margins within the seabed resource jurisdic-
tion of the coastal nations. Accordingly, it is
important from the standpoint of petroleum
production as well as hard minerals mining
that the United States continue to stand on its
present position in the international negotia-

All subsea resources beyond the limits of
national jurisdiction should be regulated under
an international regime to be established by
treaty for the benefit of all signatory nations.
This regime should be regulatory in nature and
not operational. It should not itself have the
power to undertake the development of re-
sources either directly or through service con-
tracts or joint arrangements, but should in-
stead encourage the competitive development
of resources by others in the most efficient and
timely manner. It should have no power over
rates of production, prices or markets; but, in-
stead, these matters should be left to individual


signatory nations with respect to operations
under their sponsorship.

The management of the international
regime should be governed by a balanced
board, representing a fair mix of interests of
the developed and developing nations and
should not be hampered from the outset with
detailed specific leasing rules or other restric-
tions embedded in a treaty. It should operate
on a nondiscriminatory basis with incentives
for the attraction of capital and technology on
a fair and competitive basis with adequate
safeguards for the assurance of security of ten-
ure and integrity of investment. Its objective
should be the promotion of exploitation
through terms and arrangements which would
necessarily have to be at least as attractive to
investors as those offered by coastal nations


1. Oil and natural gas are the nation's
prime energy fuels. Even with the recent im-
portant developments in Alaska, the best avail-
able estimates are that additions to domestic
reserves through onshore petroleum discoveries
will be unable to keep pace with withdrawals
with a resultant decline in onshore reserve in-
ventories. It is likely, therefore, that increasing
dependence will be placed on U.S. offshore
petroleum areas. Although only a small frac-
tion of the seabed under U.S. jurisdiction has
been explored, experts. view this area as offer-
ing one of the most promising provinces for
the discovery of oil and natural gas to supply
the nation's rising petroleum requirements.

2. There is a present technological capa-
bility to operate . in water depths of at least
1,500 feet and by 1978 to 1980 the capability
is expected to extend to approximately 3,000
feet. But offshore operations are extremely ex-
pensive, and costs rise considerably as water
depths increase. Offshore platforms alone now
run into tens of millions of dollars apiece, and


drilling expenditures often run as high as $5
to $6 million for a single well. Offshore leases
also represent a sizable outlay — oil companies
paid the federal government $11.9 billion in
offshore lease bonuses between January 1967
and October 1974. Companies risking funds
of this magnitude must have the economic in-
centive and security of lease tenure which can
best be assured by continuation of the U.S.
seabed-resource jurisdiction confirmed under
the terms of international law, both conven-
tional and customary.

3. On the basic question of the seaward
extent of the national jurisdiction of the coastal
nations, the 1958 Geneva Convention on the
Continental Shelf, which has been ratified by
the United States and 53 other nations, is gen-
erally acknowledged to be declaratory of the
exclusive sovereign rights of the coastal nations
under general principles of international law
to the natural resources of the "continental
shelf," which is defined in the Convention as:

"the seabed and subsoil of the submarine areas
adjacent to the coast but outside the area of the
territorial sea, to a depth of 200 meters or, beyond
that limit, to where the depth of the superjacent
waters admits of the exploitation of the natural
resources of the said areas . . ."

4. The sovereign rights of the coastal na-
tions pertain solely to the resources on and
beneath the seabed, and in no way affect the
legal status of freedom of the seas overlying
the ocean floor, and of the airspace above
those waters.

5. Under the terms of the 1958 Geneva
Convention on the Continental Shelf, these
rights are exclusive in the sense that if the
coastal nation does not explore the Continental
Shelf or exploit its natural resources, no one
may undertake these activities or make a claim
to the Continental Shelf without the express
consent of the coastal nation. This means that


only the coastal nation or its designees may
take advantage of advances in technology to
explore and exploit the area covered by the
Convention. Given the rapid advances that are
taking place in deep water technology and the
outlook for an eventual capability to explore
and exploit at any depth, it also means that it
is the test of adjacency, as that test is laid
down in the 1958 Geneva Convention on the
Continental Shelf, that will determine the
outer limit of coastal nation rights under the
Convention. Applying this test in the light of
the preparatory works that led to the Conven-
tion, the National Petroleum Council, the
Committee on Deep Sea Mineral Resources of
the American Branch of the International Law
Association, and the American Bar Associa-
tion all have concluded that the area within
which the coastal nation has a protected right
to exercise exclusive jurisdiction and control
for purposes of exploration and exploitation of
seabed resources includes the entire submerged
portion of the continent.

This view finds support in the North Sea
Continental Shelf Cases, in which the Interna-
tional Court of Justice stated in the following
incisive language:

"(W)hat the Court entertains no doubt is the most
fundamental of ail the rules of law relating to the
continental shelf, enshrined in Article 2 of the
1958 Geneva Convention, though quite independ-
ent of it, — namely the rights of the coastal State
in respect of the area of continental shelf that
constitutes a natural prolongation of its land ter-
ritory into and under the sea exist ipso facto and
ab initio, by virtue of its sovereignty over the land,
and as an extension of it in an exercise of sov-
ereign rights for the purpose of exploring the sea-
bed and exploiting its natural resources. In short,
there is here an inherent right . . . To echo the
language of the Geneva Convention, it is 'ex-
clusive' in the sense that if the coastal State does
not choose to explore or exploit the areas of shelf
appertaining to it, that is its own affair, but no
one may do so without its express consent."


6. As events of the winter of 1973-1974
have emphatically demonstrated, the nation's
mounting dependence on imported petroleum
and the accompanying loss of its formerly
ample reserve productive capacity have cost it
the independence of international oil supply
emergencies that it enjoyed as recently as the
1967 Middle East Crisis. The seabed resources
of the U.S. continental margin represent a vital
petroleum energy potential, not only for the
nation's normal future requirements but for
those that may arise in the event of future in-
ternational emergencies. The United States,
therefore, must maintain its jurisdictional
rights over these resources under existing in-
ternational law.

7. There appears to be broad agreement
in the 1 aw of the Sea Conference for a coastal
state economic /one extending seaward 200
miles from the coast within which coastal na-
tions would exercise resource jurisdiction.
There is also strong coastal nation support for
coastal nation jurisdiction over the seabed re-
sources o\' the entire continental margin where
it extends beyond the economic /one. U.S.
support for this view should be. and remain, a
fundamental element oi the U.S. position in
the on-going negotiations.

S. In the international negotiations now
in progress regarding seabed resources in areas
beyond the limits of national jurisdiction,
strong differences have developed between the
developed countries and the so-called group
of 77 developing countries, now numbering in
excess of one hundred due to new admissions
to the United Nations. The latter wish control
of the international regime to be vested in a
bod} governed by the concept of one-country.
one-vote, which would, of course, give com-
plete control to the developing countries due
to their overwhelming superiority of numbers.
1 'he\ also desire the regime to include an
operating agency which could either develop
the seabed resources itself or determine the
terms and conditions on which, and the periods


of time for which, it would enter into service
contracts or joint arrangements for such de-
velopment. The countries with land-based
production of the minerals to be found in the
international seabed area further wish for
production on land to enjoy a preferential
status and to that end argue for an interna-
tional regime with authority to control rates of
production, prices and market allocation of the
mineral resources of the international seabed
area. The present position of the United States
in opposition, as summarized in this policy
-statement, is essential to the protection of vital
U.S. interests in both hard minerals and, for
the longer range, petroleum and should there-
fore be and remain a fundamental element of
the U.S. position in the on-going negotiations.

May 1975





Washington. DC 20930


Annual Report

The establishment of a 200-mile U.S. Economic Resource Zone for the ocean

waters off our coasts is recommended by the National Advisory Committee on

Oceans and Atmosphere (NACOA) in its Fourth Annual Report, released today, as

a first step in protecting coastal fisheries against overfishing.

"We cannot afford to wait but must take action now, even if interim," the
Committee said. Urgent action is required to bring the living resources of the
ocean, and other vulnerable aspects of the marine environment, under "positive
rational management," NACOA wrote.

In previous reports NACOA had counseled patience in awaiting the outcome
of the Law of the Sea Conference held first in Caracas, Venezuela in 1974, then
in Geneva, Switzerland, in 1975. The Conference, the Committee said, has not
yet been able to reach agreement even after protracted preparation and nego-

The 25-man Advisory Committee, whose members are appointed by the President
from outside the Federal establishment, was created by Congress in 1971 and re-
ports directly to the President and to the Congress. It is required by law to
maintain a continuing review of the marine and atmospheric science and service
programs of the United States. Dr. William J. Hargis , Jr., Director of the
Virginia Institute of Marine Sciences, Gloucester Point, Va . , is Chairman.

In addition to the need for an Economic Resources Zone off our coasts, the
Committee report treats various features involved in the balanced management of
offshore development and environmental protection, and notes with concern the
slackening support for basic research in the oceans and atmosphere which is
needed to understand the environment, its properties, and its resources.

NACOA urges that, as the United States gets ready for the management of an
Economic Resources Zone, it take explicit account of our own interests but with
due regard for our international obligations. The issues with foreign policy
impact include fisheries management, freedom of science, and by analogy -
although in general outside the Economic Resources Zone - the mining of minerals
from the bottom of the deep sea.



As a matter of largely domestic concern, NACOA urges that we get on with
oil and gas development on the outer continental shelf, and the siting of power
plants and of deep water ports in a framework that assures environmental pro-
tection and a voice for both State and local officials.

To clear the way for energy resource exploitation offshore, NACOA recom-
mends amending current coastal zone legislation to compensate states adversely
affected by offshore development of oil and gas, that private industry continue
its role in oil and gas exploration and development, and that environmental
impact assessments required for approval of energy resource exploitation be
developed in two stages reflecting the different degree of hazard involved in
exploration as compared with development. The Committee also recommends ex-
pansion of the informational services of NOAA's Office of Coastal Zone Manage-
ment to serve the rapidly growing states' needs of coastal zone managers.

In making a sweep through a number of oceanic and atmospheric programs
which, "though not major in dollars, are large in importance because they are
at the cutting edge," NACOA summarizes a recent special report recommending some
changes on emphasis in the NSF's well-regarded International Decade of Ocean
Exploration, and another report proposing an Institute for Engineering Research
in the Oceans. It examines with concern the fading support for basic research
in oceanography by the Navy, and the static quality of the shipbuilding program
for oceanographic research.

In its discussion of atmospheric matters, NACOA points out that weather
modification to help increase rainfall in semi-arid areas is a potential means
for increasing the world food supply and recommends that research in weather
modification be given a central management focus and coordinated to insure more
rapid progress in understanding the phenomena involved. Inadvertent weather
modification is viewed as a part of the more general concern for the adverse
affects of climate change, including the recently suspected weakening of the
stratospheric ozone shield attributed to release of chlorof lourocarbons from
spray cans and refrigerants, and the effects of large quantities of waste heat
released to the atmosphere from power generating facilities. NACOA accordingly
recommends the establishment of a coherent national climate program and an in-
crease in the stratospheric monitoring effort. NACOA also calls attention to
the continuing need for well instrumented aircraft for hurricane reconnaissance
to provide essential information not available from other sources to help main-
tain the effectiveness of the hurricane prediction and warning service.

"A Report to the President and the Congress" by the National Advisory
Committee on Oceans and Atmosphere, Fourth Annual Report, June 30, 1975, is for
sale by the Superintendent of Documents, U.S. Government Printing Office,
Washington, D.C. 20402, at $1.20 a copy.

Douglas L. Brooks David A. Katcher

Telephone - 202 - 967-3343 Telephone - 202 - 967-3613

29 September 1975


Congressional Research Service


July 14, 1975

T o: Senate Subcommittee on Minerals,

Materials, and Fuels

-<*— — — m \ • i l

From: American Law Division

Subject: Factual Comparison of the Informal Single Negotiating Text

of the Third United Nations Conference on the Law of the Sea
(Geneva Session) with United States Seabed Proposals Prior
to the Geneva Session

Reference is made to your request concerning the above sub-
ject. Specifically, you have asked for a factual comparison of the Nego -
tiating Text which emerged from the Geneva Session of the Third United
Nations Law of the Sea Conference (May 9, 1975) with United States
proposals prior to that Session. The comparison which follows draws
primarily, for the United States position, upon the United States Draft
Appendix to the Law of the Sea Treaty Concerning Mineral Resource
Development in the International Sea-bed Area , United Nations, Third
Conference the Law of the Sea, doc. A/Conf. 62/C 1/L. 6, 13 August
1974 [Hereinafter cited as Draft Appendix ]. Where appropriate, the Draft
Appendix has been supplemented by appropriate official statements of the
United States delegation as contained in "Status Report on Law of the
Sea Conference, " Hearings Before the Subcommittee on Minerals, Mate-
rials, and Fuels of the Committee on Interior and Insular Affairs of the
U. S. Senate, 93d Cong. , 2d Sess. (1974) [Hereinafter cited as Hearings ].



No effort has been made herein to assess the relative policy
merits of either the Negotiating Text or the U. S. Draft Appendix and
statements. Rather, we have attempted to present a factual compari-
son of both positions under those subject categories which seem to form
the basis of possible controversy.

A word of caution is in order with respect to the accuracy of
the official proposals which have been made in this area and which are
contained in this paper. Neither the U. S. Draft Appendix or official
public pronouncements or the Negotiating Text necessarily reflect the
actual proposals or degree of flexibility which possibly exists in the Con-
ference negotiations at the present time. It was recently stated, for
example, that "the negotiating text which emerged from Committee I
[Seabed Committee] is not an accurate reflection of the behind-the-scenes
negotiations that occurred in that committee. That text is at considerable
variance with the seven weeks of negotiation that preceded negotiation of
that text. " "Status Report of the Law of the Sea Conference, " Hearings
Before the Subcommittee on Minerals, Materials, and Fuels of the Com-
mittee on the Interior and Insular Affairs, 94th Cong. , 1st Sess. 30
(June 4, 1975) [Transcript of Proceedings].



I. Entities Permitted to Explore and Exploit the Seabed Area
Negotiating Text

The Negotiating Text indicates generally that the seabed and
ocean floor and subsoil thereof beyond the limits of national jurisdiction
are open for use for peaceful purposes by all States Parties without dis-
crimination in accordance with the Convention and regulations adopted
thereunder [Arts. 2 and 8]. All activities of exploration and exploita-
tion in the seabed area, as well as other associated activities, such as
scientific research, are to be conducted directly by the Authority [Art.
22(1)]. The Authority is authorized, however, to carry out these acti-
vities through other entities, such as States Parties, State enterprizes,
and natural and juridical persons possessing the nationality of States or
being under the effective control of States [Art. 22(2)]. Participation in
exploration and exploitation activities by the developing States is to be
promoted in light of their special needs and interests [Art. 18]. Al-
though the Authority is not to discriminate in granting opportunities for
activities in the seabed area, special consideration for the needs and
interests of developing States is not to be deemed discrimination [Art.

When the Authority carries out its activities through other
entities, legal arrangements between the Authority and the entity must
be made which ensure the Authority's direct and effective control at

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Online LibraryMaterials United States. Congress. Senate. Committee on InteStatus report on law of the sea conference : Hearing before the Subcommittee on Minerals, Materials and Fuels of the Committee on Interior and Insular Affairs, United States Senate, Ninety-fourth congress, first session (Volume pt. 4) → online text (page 6 of 14)