this is four times greater than is needed for economical development, and that is reiterated in your statement, that this is four times as large. I want to know what experience you have had or what experience you know of that there have been drillings to tell us that 51,000 acres is four times as large as the area that is needed.

Mr. ANDERSON. Mr. Saylor, we have consistently recommmended and supported the 10,240-acre figure, and I assume that "four times" probably comes from 4 times 10. As far as the experts are concerned, I don't know to whom the message refers. About the best deduction I can make would be that probably whoever wrote this message considered that the Interior Department people were the most knowledgeable, and therefore they were referred to as experts.

Mr. SAYLOR. Well, that is certainly damning you with faint praise, to say nothing else. Do you know how close you can drill a well? Can you put one within a hundred feet?

Mr. ANDERSON. I don't know, but I would assume it would be based on the basin. From my observation in Sonoma County, I believe some of the wells are closer than 400 feet. Others are at least 600 feet apart. Mr. Weinberg has some information here that he would quote from the report, I believe.

Mr. WEINBERG. My attention has been called to the report of the California Senate Permanent Factfinding Committee on Natural Resources, which was given to the 1967 regular session of the legislature, The report is entitled "Geothermal Resources," and at page 22 there is a statement here that

Well spacing in steam fields is much closer than is usual in oil and gas fields At the geysers in Sonoma County the wells are between 165 and 500 feet apart while in New Zealand they are between 330 to 660 feet apart.

This statement goes on to say—

There does not appear to have been any interference between producing wells in these fields and the close spacing has a definite advantage in terms of the cost of the gathering system.

Mr. SAYLOR. Mr. Weinberg, that is a report of the State of California?

Mr. WEINBERG. Correct.

Mr. SAYLOR. To one of its factfinding committees of the Legislature of the State of California. Are we to assume from your answer that there is nobody in the Interior Department who can give us the answer?

Mr. WEINBERG. No. Mr. Wayland happened to hand me the report. Mr. SAYLOR. Well, does Mr. Wayland have any knowledge other than that that you know of?

Mr. WEINBERG. I don't know, Mr. Saylor.

Mr. SAYLOR. This is adopting somebody else's testimony.

Mr. WEINBERG. Mr. Saylor, this morning in answer to a question from Mr. Kazen, I pointed out that the Secretary had been advised by the Bureau of Land Management as an agency in connection with this question of maximum acreage, and it was the recommendation of the Bureau of Land Management that the acreage be confined to an aggregate of 10,240 acres within any one State, for what they consider to be valid reasons of antimonopoly on the ground that they did not believe that a single applicant should not be permitted to acquire leases for a major portion of the usable public lands geothermal

resources in any one State and in that light they regarded aggregate holdings of 51,200 acres to be excessive. This was the basis of the Department's position.

Mr. SAYLOR. Who in the Bureau of Land Management came to that conclusion?

Mr. WEINBERG. That was the conclusion of the Bureau.

Mr. SAYLOR. Then they are all experts; is that it?

Mr. WEINBERG. They are the agency that administers the public lands, and in that respect, they are experts by experience, yes, in public land matters.

Mr. SAYLOR. Well, since they are experts, they have been letting all of this steam go to waste for all these years, this great natural resource which the President refers to, and they have not made any attempt to ask Congress to pass a bill. I wonder where they get their expertise?

Mr. WEINBERG. Well, I think the Department has been recommending legislation for 3 or 4 years.

Mr. SAYLOR. Mr. Moon is in the room. He works for BLM; is that correct?

Mr. FISHMAN. Yes, sir; he does.

Mr. SAYLOR. Is he an expert that we can call on?

Mr. FISHMAN. I think he ought to speak for himself, Congressman Saylor.

Mr. ŠAYLOR. Mr. Secretary, he comes under your jurisdiction. Is he an expert?

Mr. ANDERSON. I cannot testify as to his state of expertise.

Mr. SAYLOR. In other words, you are not going to attempt to qualify him. I will have to qualify Mr. Moon when he comes forward himself. Mr. ANDERSON. I am not going to prequalify him.

Mr. SAYLOR. All right, we will take care of that. Now then, the third reason the President gave says that the bill only provided the royalties where payable on steam sold or utilized. This would encourage wanton waste of a precious natural asset.

Now, what about this precious national asset that has been going to waste for the last year or 4 years? What about it? Should we ask the Justice Department to prosecute the President and the Secretary of Interior because they have not done anything about conserving this previous national asset that has been going to waste, because he says Congress has been very negligent in their duty, in the approach that they took? I mean is the Chief Executive even worse? Is the Secretary of Interior worse?

Mr. ANDERSON. As to what?

Mr. WEINBERG. Are you directing that

Mr. SAYLOR. I am directing that to either one of you three who are not experts but you are the present witnesses.

Mr. WEINBERG. The President speaks for the executive branch and he made his statement. You do not expect me to undertake to debate with the President or the Secretary of the Interior, do you, Mr. Saylor?

Mr. SAYLOR. Well, I don't know. You are still a citizen of this country. You are still guaranteed the right of free speech or the right of petition under the Constitution.

Mr. WEINBERG. That is correct.

Mr. SAYLOR. The only limitation that I know of placed upon you as a Federal employee in that respect is the Hatch Act that you cannot engage in political activity. Commenting on a decision of the President or a message of the President does not violate the Hatch Act or any provisions thereof.

Mr. WEINBERG. NO.

Mr. SAYLOR. I want to know whether you agree with it?

Mr. WEINBERG. This was the President's view after he had considered the bill, and this is the position of the administration. I am not here to argue with it.

Mr. SAYLOR. All right. Now, the next reason he gave was, he said that this bill "didn't provide specific and clear authority for the Government to readjust the lease terms and conditions at suitable intervals."

He said:

The public deserves this protection because we still know so little about our geothermal resources.

A rather inconsistent statement, that at one place we rely upon experts who know all about it, and do not want any "grandfather" clauses, and in the next place we have to have limitations because we know so little about it. Of course, I understand there is an old saying that consistency is the hobgobble of small minds, and I sure wouldn't want to accuse the President of having a small mind, but certainly the message is inconsistent, and the reasons are inconsistent. Does anybody care to comment on that in the Interior Department?

Mr. WEINBERG. Well, with respect to the renegotiation authority, yes, we are prepared to comment. The Department has consistently recommended that geothermal steam leases be subject to a readjustment

clause.

Mr. SAYLOR. Is there any other mineral outside of coal and I think potassium that are subject to periodic review?

Mr. WEINBERG. I think there are one or two others.

Mr. SAYLOR. Phosphate and oil shale?

Mr. FISHMAN. Yes, sir.

Mr. SAYLOR. Well, how about oil and gas?

Mr. WEINBERG. No, it is not.

Mr. SAYLOR. It is not?

Mr. WEINBERG. No.

Mr. SAYLOR. Well, since this is oil and gas that comes from drilling wells in areas where you might hit a dry hole, and therefore, you allow that to be used to exhaustion under a lease, why shouldn't the same theory work here?

Mr. WEINBERG. These are questions of judgment, and it is the Department's judgment that a periodic review of the royalties would not be inappropriate, because this is not an established industry as is the case of oil and gas.

Mr. SAYLOR. The situation in the Department as I recall it on oil and gas has not changed as I recall it since we have had the original Mineral Leasing Act; isn't that right?

Mr. WEINBERG. Well, that is true, but neither has it with respect to coal. It apparnetly has not been the intention of Congress that there be an all or nothing policy on such matters as redetermination of royal

ties. That is demonstrated by the fact that the oil shale provisions, for example, are in the same 1920 act, as is oil and gas.

Mr. SAYLOR. Well, my recollection on some of these biddings for oil and gas found on the Outer Continental shelf, the Secretary of the Interior expected such large bids and received such large bids from the oil and gas people it was necessary to set up a separate branch of one of the large banks down there as the depository for all the money that the oil and gas people put up.

Now, this involved millions upon millions of dollars, and there was no readjustment in those leases, and by comparison here as we know we are talking about peanuts. Now, how do you explain the difference? Is it because oil and gas is so big that you fellows are afraid to tackle it? Mr. WEINBERG. Well, we are concentrating on geothermal steam at this point in time.

Mr. SAYLOR. Well, I know, I realize that this is the hearing, but this committee deals with both of them.

Mr. WEINBERG. This is correct, but there is no legislation before the committee nor has the Department made a proposal, nor has anyone else, to change the royalty system on oil and gas leasing.

Mr. SAYLOR. Well no, but I thought that the oil and gas people ought to know whether or not this is in the back of your minds, Mr. Weinberg, and whether or not you as a career employee down there figure that if you get away with this as far as the geothermal steam people are concerned, the next people that will be called upon will be the oil and gas people?

Mr. WEINBERG. I don't think they are really worried. We have had no expressions of concern from them.

Mr. SAYLOR. Well, they are concerned because I see some of the representatives in the room. It is not going idly by. These hearings they realize are going to have some effect upon them.

Now, then, one of the last reasons the President gave, he says that— The bill gave the developers 20 years in which to begin production. As our scientists and engineers say this is too long a period.

Do you happen to know who the scientists were and who the engineers were?

Mr. ANDERSON. If I can go back to the experts, it is scientists and engineers again, we have recommended 10 years, Mr. Saylor. We feel that the 10-year period, we should be able to put a lease into production. Mr. SAYLOR. Well, suppose a company goes out there and this is a speculative field. They finally get enough money, after they have competed on an open bid which you want, they have a little difficulty raising cash. They finally get enough money to put down a drill, and they go down quite some distance and they get a dry hole and they do not have any more money. They have got to go out and try and locate a little more. Is it the recommendation of the Department that we are encouraging bankruptcy? The reason I ask that, there have been more bankruptcies under this last administration in the last couple of years than there have been in the history of our country, so I just wanted to know whether or not you want to put these people into bankruptcy, too.

Mr. ANDERSON. No, Mr. Saylor, we definitely do not want to encourage bankruptcy. I would like to see any lessee that gets a lease to be

successful. We are as interested as anyone else in having a good operation.

Mr. SAYLOR. All right. Now, Mr. Anderson, you have got this statement that you gave this morning, and it has a very profound statement in it at the beginning of the second paragraph. "Geothermal steam is produced from the natural heat of the earth." What is the natural heat of the earth?

Mr. ANDERSON. Well, I would say that it is something other than manmade heat down there.

Mr. SAYLOR. How about the solar system, when the sun is up and down and it heats things in Death Valley to 130 degrees during the day. Is that natural heat or is that unnatural heat?

Mr. ANDERSON. I would say that is natural heat.

Mr. SAYLOR. Well, I don't know that that produces any steam, but I just wondered. It seemed to be a rather poor choice of descriptive adjective.

Now then, you go on farther and say: "In some locations such as the Imperial Valley of California minerals are believed to constitute sufficient value to serve as an economic factor independent of power generation."

That is your statement, sir. Now, where do you get this "belief”? What leads you to that belief?

Mr. ANDERSON. This is a judgment factor from past testimony and information that has come to us that there are many valuable minerals in the steam, in that particular area.

Mr. SAYLOR. Since this information has come to you, can you make it available to this committee?

Mr. ANDERSON. We have had applications for mineral leases and permits there.

Mr. SAYLOR. Have you granted any mineral leases down there? Mr. ANDERSON. No, sir.

Mr. WEINBERG. Not for geothermal steam.

Mr. SAYLOR. That is not what I asked. I asked had you granted any leases down there on these minerals?

Mr. WEINBERG. Mr. Saylor, there was an application which stated, as I recall it, expressly that the purpose was to obtain minerals from the steam resource, and this is what this statement is based on, and we would be glad to make available to the committee the application and the Department's action upon it.

Mr. SAYLOR. You did not grant that lease?

Mr. WEINBERG. No, that is correct.

Mr. SAYLOR. Why not?

Mr. WEINBERG. Because it did not meet the requirements of the mineral leasing law.

Mr. SAYLOR. Did your department come up here with any recommendation to change the mineral leasing law?

Mr. WEINBERG. We are up here with the recommendation that this legislation be passed so that we can grant leases for steam containing these minerals.

Mr. SAYLOR. In other words, it is your belief as well as some other people in the minerals industry that you have got to resort to the systems that were known back in 1920 wher the Mineral Leasing Act was passed, or 1872 when the original Mining Act was passed, and

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