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I have been told informally that the Gubik structure would have to be by competitive bidding. Furthermore, I have been told that that is the only structure that would have to be by competitive bidding.

(Discussion off the record.)

Mr. ABBOTT. Do you feel, on the basis of the statements you have
made with respect to the prospective oil values or petroleum values
in the eastern portion of what is public land order 82, that it would
attract the capital and the technical organization who would enter
into an exploratory program for the development of petroleum
resources?

Mr. REED. I think there is a chance that it would.
Let me point out a couple of things.

Although the United States petroleum reserves are larger than they ever have been, oil is a commodity that can be moved from almost anywhere on the face of the globe to market. There is a very great interest in oil explorations in Alaska right now, as witness the lease applications of a half a dozen or more major oil companies in the parts of Alaska that are open. I think, therefore, that there is a chance that industry might be interested in the area of public land order 82.

There are a couple of deterring factors, however. One of them is geographic, which is obvious I think to most of you who flew over it. Another is the limitation of acreage that can be obtained by a company or an individual, which, to be sure, is larger in Alaska than it used to be, but when you want to take out a lease in northern Alaska you think about square miles, you don't think of acres. You want to pick up a piece as big as New Jersey in order to protect your investment. The degree of interest I just don't know. "It is problematical but I think hopeful.

Mr. ABBOTT. Do you know of your own knowledge what has been done with the drilling equipment that was used by your operating committee?

Mr. Reed. Yes.
Mr. ABBOTT. Could you state that?

Mr. REED. The drilling equipment and much of the supporting equipment in the way of sleds and fittings and prime movers, cranes, and heavy equipment of all kinds is still in the custody of the Navy and still in the warehouses by which we drove at Point Barrow. Å great deal of the excess equipment, especially weasels and caterpillars and LVT's and things of that type have been transferred to the Air Force or to other interested parties, but the Navy has attempted to keep together the old oilfield equipment, plus enough of the moving machinery to get it around where you want it, in the event that it can at some time be turned over to a company for further use.

Mr. ABBOTT. And it is in a usable condition, it has been maintained?

Mr. REED. Yes; it has been very carefully maintained, and except for becoming somewhat outdated it should still be in fine condition.

Let me point out that Point Barrow is a very fine place to store equipment indefinitely (a) because of the low temperatures, and (6) because of the low temperatures the rate of oxidation is very low. In fact, about the best place to put anything in mothballs I know is to put it out on the tundra and leave it. It will stay right there without much deterioration.

Mr. Dawson. In view of the fact that the Secretary has given this committee the opportunity, if it wants to avail itself of that oppor

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tunity, to make a recommendation or express an opinion on that and we are here to glean what we can with regard to the matter, I would appreciate, without your making any commitment--I know you cannot do that, but certainly we are going to have to depend on some professional advice on this matter—if you would give us your best opinion as to what might be done now to develop this area either through the operation of the Government or through private enterprise going in.

Mr. REED. It is a difficult question for me to answer.

Mr. ABBOTT. Could you summarize the factors that would have to go into that decision?

Mr. REED. As long as public land order 82 is in effect, obviously there will be no development. Even if public land order 82 is rescinded there may or may not be any development.

Mr, DAWSON. We might surmise from that until public land order 82 is withdrawn there will be no development.

Mr. REED. That is factual: There can be no development.
Mrs. GREEN. There can be by the Navy, though.

Mr. REED. I suppose the Navy could go back to Congress and ask for a start again on the program.

Mr. O'BRIEN. The Navy has never had any authority to develop. Mr. REED. No; never to develop, but to explore. Mr. ABBOTT. On your exploratory program, one obvious alternative, of course, would be to resume to the extent possible and pick up where the activity was left off; is that not correct?

Mr. REED. Yes. I might point out that very careful thought has gone into preserving and systematizing the record so that, if the program ever starts again, it can start from where it left off.

Mr. ABBOTT. Do your costs operate on somewhat a rapid curve carly and then you level out, that is, month-by-month operation? Or do you continue now? It appears on the basis of your figures that you programed approximately equal funds on an annual basis.

Mr. REED. The cost was running around $6 million a year, which was a program that was as large as could be handled with the equipment that was on the ground.

Mrs. GREEN. We had the tideland oil controversy not very long ago. Is there a relationship between what might happen on this and what happened on the tidelands?

Mr. REED. I don't know.

Mr. ABBOTT. Dr. Reed, one other point. I believe the committee was told informally when we were discussing S. 748 before our Public Lands Subcommittee, which Mrs. Pfost heads, that geologists worldwide are beginning to feel that your submerged lands offshore from oil-bearing areas, or your so-called Continental Shelf, will very frequently contain petroleum deposits which are more easily accessible than over land. And comments of experts in varying degrees are in variance in the fact it will invariably occur or will usually occur. Do you have an opinion because of the geological structure up there as to whether or not there is potential oil in submerged lands in the Continental Shelf land off the cost of Alaska?

Mr. REED. There might well be. We simply don't know for sure. But, extrapolating the geologic picture, I think there certainly could be; yes.

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Actually a over large part of the area of public land order 82 you have, in effect, the sea bottom above water level.

Mr. ABBOTT. What is the depth of the water on the northern coast?

Mr. REED. Generally it is shoal for substantial distance out. The basement rocks are rising northward. But how far they continue to rise we don't know because we have no information beyond the shore line.

Furthermore, we don't even have good information oceanographically. We don't know too much about water depth. There has been some work on it but not very much.

Mr. Dawson. Mrs. Green asked a question with relationship to tidelands oil. I am one who voted against tidelands oil because I felt that was a resource of the Federal Government which it definitely had an interest in and so determined by the Supreme Court. Up bere you have got an entirely different situation, because this is still public domain and will remain so and will be put out at competitive bids by the Government, and the lease rentals would come into the Government. It is simply a question here of determining bow we are going to develop it.

If we first of all decide we are going to develop it rather than keep it locked up, then we come to the question, Are we going to let the Government go in and do all of the drilling and do their own development work? Or are we going to let it out as we in the other States?

All the other States in the Union have public domain lands which operate under the 1920 Mineral Leasing Act, and if Alaska is to be in the same category as the other States, then the only thing to do is to open up the withdrawal and to let them go in and put it out under the regular leasing system that is in effect in the other 48 States of the Union.

Do you agree with that, Mr. Bartlett?

Mr. BARTLETT. I agree positively, and that has been in effect up to this time, too. The laws which operated elsewhere operated here.

Would you not say, Dr. Reed, of your personal, if not your official common knowledge that the interest in having this order revoked was sparked by the desire of the people in Fairbanks to have access to the Gubik reserves? Was that not one of the main points of interest?

Mr. REED. Yes. It is true that the people of Fairbanks have been especially energetic in trying to get the release of Public Land Order 82 because they have been interested in the possibility of developing gas in the Gubik structure. Now that group has tried to raise financing for such a development but they have not been able to get that off the ground, because the first question that the potential source of funds, such as the Metropolitan Life, asks is, What is your title? What is your interest? The answer must be, "This is a closed area. We haven't any."

So their efforts stop right there. Mr. ABBOTT. Along that same line, Dr. Reed, were you present when a gentleman appeared at the Fairbanks hearing when the question was asked as to the relationship of possibly bringing natural gas from Gubik into Fairbanks and its effect upon what I described as lignite deposits, and was corrected to say subbituminous deposits that lie astraddle the Alaska Railroad?

Mr. Reed. I was.

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Mr. ABBOTT. Could you state your opinion?

Mr. REED. That man was Ted Mathews, who was the assistant project manager for Arctic Contractors during the oil exploration program, and I think Ted Mathews probably knows as much about, not only the oil and gas possibilities of the north slope, but also about the economic factors involved as anyone I know.

Mr. ABBOTT. Wasn't it substantially his testimony that not only would it not, taking the long-range view, be damaging to those people who have invested in the subbituminous deposits, but assuming a continuing need for jet aircraft fuel, it might well be the combination of natural gas as a fuel and the subbituminous products as a base product for processing might indeed result in increased economic benefit and gain to both, a mutually advantageous operation.

Mr. REED. I don't mind speculating on that sort of thing as an individual. No policy is involved here. I certainly believe it to be true. I have seen in the Northwest Territories and the Yukon and in northern British Columbia that that is the way you do get development. I am convinced of it. I am speaking as an individual.

Mr. ABBOTT. Is there presently a proposal to carry by pipeline, petroleum from north to south?

Mr. REED. I know of no such proposal. I know of a proposal to carry gas from north to south.

Mir. O'BRIEN. I wish to comment that I have never seen a man in the scientific field reach down to the lay minds as capably as you have done in your testimony here.

Mr. REED. I feel very strongly about this.

Mr. O'BRIEN. I also would like to make the final observation that I believe this is the first public hearing ever to occur on the Alaska Railroad.

The committee stands adjourned.

(Whereupon, at 10:50 a. m., the subcommittee adjourned, to reconvene at the call of the Chair.)

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INDEX

Agricultural resources:

Page
Bureau of Land Management, summary of farmlands in Alaska.---- 18
Civic affairs:
Barrow, hearing at-

235
Barrow Village Council, letter of..

238
Brower, Thomas P., Barrow, letter of.

241
Casperson, Robert H., Fairbanks..

188
Fairbanks Chamber of Commerce, report of..

135
Gillam, Byron A., Nevada Kid' Supermarket, Fairbanks..

175
Langberg, Maurice, president, Utility Board, Hamilton Acres,
Fairbanks.

169
McAtee, Robert L., Fairbanks.

188
Reed, Irving, Territorial highway engineer..

169
Roach, Mrs. Lois, housewife, Fairbanks.

169
Wartes, Rev. William C., Presbyterian Mission, Barrow, letter of..-- 239
Commonwealth status:
Lomen, Ralph, president, Lomen Commercial Co., Nome -

246
Stuart, Alice, editor and publisher, Alaska Calendar for Engagements,
Fairbanks...

221
Education:

Alaskan Health, Education, and Welfare Council of the Second and
Fourth Divisions, resolution of ..

195
Angell
, William, superintendent, Nome Public Schools.

259
Barrow, hearing at.

236
Barrow Village Council, letter of .

238
Boileau, Father, Catholic church, Fairbanks.

197
Brower, Thomas P., Barrow, letter of...

241
Patty, Ernest N., president, University of Alaska -

140, 144
Penrod, Max W., Alaska Native Service...

85
Potter, Ben F., member, Midnight Sun Lions Club, Fairbanks.. 215
Tuilana, Paul, Nome...

280
Wartes, Rev. William C., Presbyterian Mission, Barrow, letter of. 239
Zeiger, William, Barrow, letter of..

241
Elective Governor:
Governor of Alaska, statement of ...

112
Fish and wildlife:

Fish and Wildlife Service, Department of Interior, summary of or-

ganization and jurisdiction in Alaska -
Governor of Alaska, statement of.

112
Rhode, Clarence J., Fish and Wildlife Service, Department of the
Interior..

47

55

Forest resources:

1.4

81
82
112

Bureau of Land Management, summary of forestry program of ----
Forestry Service, Department of Agriculture:

Letter from regional forester, A. W. Greeley, to Hon. Leo W.

O'Brien..

Summary of work of Forest Service in Alaska.
Governor of Alaska, statement of..
Governor of Alaska:

Duties of Governor of Alaska, statement of..
Heintzleman, Hon. B. Frank, Governof of Alaska -
Alaskan Health, Education, and Welfare Council of the Second and

Fourth Divisions, resolution of.
Boileau, Father, Catholic church, Fairbanks.
Gillam, Byron A.,
member, Alaska Board of Health, Fourth Division-

107
108

Health:

195
197
201

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