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Refinery input:
Crude oil:

Domestic:

ALTERNATIVE 11 OIL SUPPLY AND CONSUMPTION IN REGIONS OF DISTRICT V, 1972-1990

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Subtotal.

1, 192 1, 167 2,492

3,486 4,033 1, 133 1,093 2,013 2, 831 3,237

759

732 1,360 1,908 2, 203

59

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Total refinery supply.

2,022 2,160 3, 386 3, 877 4, 478 1, 562 1,657 2,638 3,017 3, 435 1, 020 1,083 1,798 2,031 2,335

460

503

698 860

1,043

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Total oil supply.

2,159 2,324 3,496 3, 987 4, 588 1, 585 1,715 2,698 3,027 3, 445 1, 058 1,152 1, 805 2,038 2, 342

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574

609

798 960

1, 143

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109

126

146

277 314 534 621

733

160

182

354 401

468

104

120

275

307

348

117

132

180

220

265

Residual..

321 421 732

755

824 242

331

603 598

633

180

246

368

389

437

79

90

129

157

191

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2, 324 3,496 3,987 4, 588 1,585 1,715 2,698 3,027 3,445 1,058 1,152 1, 805 2,038 2,342

1 Alternative 1 oil supply assumes a high level of oil availability from Alaska and from California federal offshore.

2 Includes markets served in Nevada and in Arizona.

3 Alaska, Hawaii, Pacific Northwest and a portion of Arizona.

Assumed to all go to Southern California refineries; some may in fact go to Northern California refineries.

5 Includes ethane and special naphthas.

• Consists of high sulfur coke and fuel oil and various specialty products. Source: Developed by S. H. Clark Associates.

231 301

324

347

164 165 219

232

245

47

48

55

60

64

4, 488 1, 585 1,715 100 0

2,598 2,927 3, 345 0 100 100 100

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Refinery input: Crude oil:

Domestic:

ALTERNATIVE 2 OIL SUPPLY AND CONSUMPTION IN REGIONS OF DISTRICT V, 1973-90

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500

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25

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478

644

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1 Alternative 1 oil supply assumes a high level of oil availability from Alaska and from California federal offshore.

2 Includes markets served in Nevada and in Arizona.

3 Alaska, Hawaii, Pacific Northwest and a portion of Arizona.

+ Assumed to all go to Southern California refineries; some may in fact also go to Northern California refineries.

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3 Includes 0.3 quadrillion Btu for coal gasification projects, equivalent to about 25,000,000 tons of coal input.
* Includes 2.0 quadrillion Btu for coal gasification projects, equivalent to about 150,000,000 tons of coal input.

$ Includes 4.0 quadrillion Btu for coal gasification projects, equivalent to about 300,000,000 tons of coal input.
Note: Details may not add to totals due to rounding.

Source: Historical-Bureau of Mines. Projected-S. H. Clark Associates.

Mr. ANDERSON. Gentlemen, my name is Gordon Anderson.
Senator TUNNEY. Do you have a prepared statement?

Mr. ANDERSON. Yes, I have copies of it. I am appearing independently from the Western Oil and Gas Association. I am president of the Santa Fe Drilling Co., a subsidiary of the Santa Fe Corp. I am speaking on the subject of offshore drilling from the viewpoint of the

contractor.

I am in complete sympathy with all those who have expressed a sincere concern over the environmental considerations involved in offshore drilling. Santa Fe is a California company and the home offices are in southern California and have been for 27 years.

I was born here and lived here all my life. I would not recommend any action which I believed to be detrimental to our environment. In considering oil exploration, the alternatives are not to have offshore drilling or clean beaches.

My experience indicates we can have both. The real issue is whether we should develop the offshore resources with the skill and technology at our demand or whether we will be more dependent on foreign sources of oil supply.

There is no time to decide whether we can explore off California but rather how we can best proceed. Current exploration in the North Sea is an indication of what can be accomplished. The countries bordering on the North Sea, including some of the most advanced nations in Europe, are almost totally dependent on other countries for their oil needs. Our operation in California is moderate in comparison with the North Sea. The climate, adverse sea conditions add to the most challenging conditions encountered by the offshore drilling industry. But more than 600 wells have been 'drilled in the hostile vicinity.

By 1976, there will be 73 rigs exploring the North Sea reserves and there has never been a major oil spill resulting from widespread activities in the North Sea.

46-037-75—8

Training and the technology rejected here has been welcome by these countries bordering the North Sea, and most of the drilling there is being done by American rigs under the supervision of American engineers and with our technology.

Our industry today, especially the offshore segments of our industry, is highly sophisticated. The danger of an accident resulting from human error has been reduced. There have been many technological improvements since the 1969 oil spill in Santa Barbara Channel.

We have more sophisticated blowout equipment. Our chokes now in use are able to control well flow and preset pressure. There have been improvements on motion compensators to reduce the motion of the drill pipe through blowout. We have better detection instruments. We have better trained people. Our offshore rigs whether working in this country or abroad are built to the highest standard of U.S. coastal guides in the American Bureau of Shipping.

These standards require survival and they must remain moored in their floating position while subjected to 100-foot waves and 100-milean-hour winds. Some people may have a stereotyped picture of men who drill for oil. Our personnel continue to improve as much as our equipment.

Strong backs and weak minds are no longer adequate. We have professional engineers supervising our proceedings in every part of the world. Santa Fe, like most drilling contractors operating offshore, has training programs for men offshore.

We have in-house studies where we make closed-circuit programs for presentation of drilling rigs. We have sponsors of several technical schools in this country.

I cite the programs because we are representative of what the entire industry is doing. We in the drilling industry assure you we are concerned about our environment. We recognize the problems that face the industry and the dangers inherent in the operation. I am not telling you we can drill for oil anywhere, especially offshore, without risk, but the risk has been reduced and with the world political and economic situation as it is, there is less risk in drilling than not drilling.

It is time we took a positive attitude. Let's not spend our time convincing each other the task is possible. Let's get with the task we feel must be accomplished.

Senator TUNNEY. Thank you. Mr. Fox?

Mr. Fox. My name is Stark Fox. I am executive vice president of Independent Oil and Gas Producers of California, which as the name implies, is a trade association of independent producers of oil in California. Its membership accounts for approximately 20 percent of the State's production.

If I may be permitted to stretch the meaning a little, I appear here as an amicus curiae, a friend of the court. Put another way, I am a disinterested interested party. Disinterested because none of the companies for whom I work is financially capable of participating in the Outer Continental Shelf program. They all have white chips, some of them have red chips, but none has the blue chips necessary to participate in the development of offshore oil resources.

Interested because it is as certain as it is certain that I am here that this Nation desperately needs all the domestic oil it can develop and produce. It is also certain that the development should start right now,

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