Mr. BROWN. In order to do that, I would like to ask Phil Smith if he would come forward at this time and give us a little perspective in that area, and after that we will call our panel up. Mr. Smith, you may go ahead. Mr. SMITH. Good morning, Mr. Chairman. I have a long statement which I would like to submit for the record, and then briefly summarize several key points. So we can proceed with the questions which you wish to ask of all of us, this seems the best plan. Mr. BROWN. Without objection it will be made a part of the record. [The biographical sketch of Mr. Smith follows:] PHILIP M. SMITH Philip M. Smith is the Associate Director for Natural Resources and Commercial Services, Office of Science and Technology Policy, Executive Office of the President, Washington, D.C. Mr. Smith was born in Springfield, Ohio in 1932. He received a B.Sc. in 1954 and a M.A. in 1955 from Ohio State University. Subsequently, he was an officer in the United States Army, serving as a specialist in polar logistics and transportation in Greenland and Antarctica. During the International Geophysical Year he was a member of the staff of the U.S. National Committee for the IGY, of the National Academy of Sciences. Mr. Smith joined the National Science Foundation in 1958 when the U.S. Antarctic Research Program activities were assumed by the Foundation. He served subsequently between 1958 and 1973 in a variety of positions at NSF. In 1973, Mr. Smith became a member of the staff of the Office of Management and Budget, serving as Acting Branch Chief for the General Science Branch. In 1974, he returned to the National Science Foundation to serve as Assistant to the Director in his capacities as Director and Science Adviser to Presidents Nixon and Ford. In 1976, with the establishment of the Office of Science and Technology Policy in the Executive Office of the President, he transferred to that office, serving Presidents Ford and Carter. Mr. Smith was Executive Secretary of the President's Committee on the National Medal of Science, 1974-76. Mr. Smith resides in Washington, D.C. STATEMENT BY PHILIP M. SMITH, ASSOCIATE DIRECTOR, NATURAL RESOURCES AND COMMERCIAL SERVICES, OFFICE OF SCIENCE AND TECHNOLOGY POLICY Mr. SMITH. You will hear from some of the other witnesses today about the scientific and also the engineering and technical and operational issues associated with the proposed ocean margin drilling program. We believe this is a project which is a logical extension and follows the work that has been done on the national program over the last decade or more, the deep sea drilling project, and its following international phase. The ocean margin drilling project is now in a position that we can take it to its next step, which is to do the more detailed engineering studies, the design of the riser, the ship modification issues that would be associated to moving to an operational phase. It is this next phase we are proposing as part of the President's budget request for the National Science Foundation in fiscal year 1981. There will be $10 million in money requested in this budget, as you know. We have an agreement with a number of companies in the oil industry that they will contribute an equal amount. My testimony covers primarily issues that the Executive Office itself has been critically involved in as we have carried out discussions with the scientific community, the National Science Foundation, industry, and to some extent the other nations. 63-392 O - 80 - 17 These White House and Executive Office issues essentially deal with the nature of the agreement with the oil companies, the budgetary and management considerations that we dealt with all during the autumn. as we were considering the way in which we might go forward with this program, the international participation, issues associated with resource evaluation, and the question of the costs and benefits. Now as you know, we have worked out an agreement, largely under the leadership of Dr. Press, Dr. Hackerman, Dr. Atkinson and Dr. Pimentel, with a number of companies within the oil industry, to undertake the next phase of this project, and hopefully the entirety of the 10-year, seven hundred million dollar program. The key feature of the agreement deals with sharing the cost, both between the Government and industry and within the industry itself. Back-away provisions so that we can, at each step of the way, evaluate the next steps, and decide whether we wish to go forward, the arrangements for data, and finally arrangements for the entry of additional companies are all included in the agreement. These are spelled out precisely in my testimony, and we can elaborate today or further, as you wish. This agreement we are seeking to work out with the oil companies is of great interest to the administration. We believe that there are a number of research projects or programs of this kind where cooperation between an industrial sector and the Government is appropriate. There is no segment of our American industrial economy that has been more aggressive about pursuing risky but significant long-range technologies and investments than has the oil industry. It has been very aggressive in developing new geophysical survey techniques, large structures for offshore work and so forth. Nonetheless, there are frontier elements of this activity where both the science itself and some technological development might go forward more quickly and sooner if we undertake them in a shared way between Government and industry, and that is exactly what we are proposing to do. We believe that the research is of benefit to all of us, and that because of that, it is appropriate to seek to work out an agreement of this kind. The particular benefits derived from the program that is proposed that fall more closely in this industrial sector than they would to others, relate to the basic scientific knowledge we would receive from exploring the continental margins, and in the technological development we propose that will be available to the participating companies. As you know, Mr. Chairman, we have a similar somewhat analagous agreement with the automotive sector, and we hope to undertake some additional projects of this kind. We would like very much to seek the encouragement and understanding of the Congress in supporting these types of research activities where we work together-Government and industry. Now there were a number of budget and management decisions which were important. First, a very important thing to understand is that this project, due to the fiscal constraints, would not go forward soon if it were going to be entirely funded as a Federal activity. By jointly funding this program, we are in all probability advancing the activity by perhaps half a decade over the time in which it might go forward if it were wholly funded on the Federal budget. Another important decision relates to the discussion we just had with Dr. Atkinson and his staff. It has to do with the relationship of large-scale science projections of this kind to the overall program support of the National Science Foundation. We are very cognizant of the policies of the Foundation and the National Science Board. We support them. We have encouraged their development, and we believe this project has been well considered in light of National Science Board Policy. As it came forward out of the scientific community, it was considered by the Foundation and the Board, in relation to the overall program, and it very definitely is considered a project that would fall in the category of large science. It has to be considered in its own right, that is, not competed against general disciplinary support, not competed against the Foundation's budget as a whole. I address some of the features of this in more detail in my testimony. There was also some discussion about the possibility of dividing the budget between two or three departments and agencies or having it centralized. After much deliberation, we felt that this project, because of its management and operational aspects, would be better funded if we had the funding in a single agency. We have some other activities that we have in the 1981 budget, for example, the National Oceanographic Satellite System which we have elected to fund in a different way with the funding shared between several agencies, and we can discuss this at greater length if you so desire. We believe the Foundation is an agency capable and very qualified to manage this program of basic research. It was an extraordinary record of running large national programs. As you know, the Foundation has recently supervised the construction of a very large array which has come in on schedule and under cost. We will continue to seek international cooperation in this program with the countries that have been participating, and also with some additional countries. As you know when the President was in Mexico some 6 or so months ago, he discussed this project with the President of Mexico. We have an agreement in principal to continue discussions of the ocean margin drilling program with Mexico. There are discussions also going on with some of the other countries. This international activity, as it develops, would reduce equally the industry and Federal cost of the program. Much has been said of resource evaluation, stimulated in part perhaps by the method of working out a cooperative arrangement with the oil industry. All of us have very clear views, however that this program is a program of basic research. It will provide a framework for further work, but I could not emphasize enough the fact that this is a very first exploratory or preliminary basic research phase of the kind of work that must go on in great detail in further subsequent work carried out by industry before one could say that we are in a position to evaluate the resources in the outer continental margin. Now the question of the cost of the program, curiously has become a subject of much discussion. The question being raised is whether the program is worth the cost. It is to be sure a costly program over 10 years, some $450 or $500 million which, due to projected inflation, would be $700 million over the decade. However, this in itself is not an unduly large sum of money. We have many national research programs going forward of comparable magnitude. Over a period of 10 years they have financial support in this realm. As you know, Mr. Chairman, probably this committee more than any other committee of the Congress has wrestled and dealt with the question of what the expected payoff of basic research will be. It is not possible, of course, in any way to organize cost-benefit analyses for this kind of a project. We are simply moving into an area where we have limited knowledge at the present time, the results are quite literally on the frontier of knowledge. So it is not possible to work out precisely cost-benefit analyses. We would hope that the scientific community and industry and the public as well as the Congress would all approve the program on the basis that this is a basic research program in which we are investing in fact in information that will accrue in many different ways, unexpected ways, to the benefit of the nation in the future. Thank you. [The prepared statement of Mr. Smith follows:] TESTIMONY OF PHILIP M. SMITH ASSOCIATE DIRECTOR, OFFICE OF SCIENCE AND TECHNOLOGY POLICY ON THE OCEAN MARGIN DRILLING PROGRAM BEFORE THE SUBCOMMITTEE ON SCIENCE, RESEARCH AND TECHLOLOGY February 6, 1980 Mr. Chairman, Members of the Subcommittee, it is a pleasure to testify today on behalf of Dr. Press and our colleagues in the Executive Office of the President on the Ocean Margin Drilling Program. This program is, as you know, directed toward the scientific exploration of one of the earth's last unexplored frontiers -- the ocean margin, the region of the earth's crust between the continental shelf and the deep ocean abyss. It represents a major national commitment of research funds. Estimated costs for the first 10 years of the Ocean Margin Drilling Program are $700 million. It is an ambitious undertaking both scientifically and technologically, one that challenges our best scientific, engineering, and managerial capabilities. The Ocean Margin Drilling Program will, to be successful, require concerted team effort that draws on the scientific and engineering strengths of our universities, and industry, working together in a constructive partnership. If we are successful in creating this partnership we will develop advanced ocean engineering technology including riser technology, deep ocean blow-out prevention, and well control; we will advance the drilling capability to allow recovery of nearly 20,000 feet of margin sediment core in about 13,000 feet of water. Sub-sea bottom technology will also be advanced. These new tools provide the opportunity to gain new understanding of the passive and active ocean margins, including insight into the growth evolution and break-up of continents and ocean basin formation, problems of crust formation and orogenesis and paleo-environment. The data can provide a framework for the future assessment of hydrocarbons and other resources. Many of the scientific and the engineering aspects of the Ocean Margin Drilling Program will be addressed in detail by other witnesses. The concept has been under discussion in the scientific community for a number of years. Several major reviews and reports have been prepared on it. The project has come from the scientific community. We have found the several reports and their recommendations, including those of the National Science Board, on the future of deep sea drilling and the scientific problems of the ocean margins to be persuasive. The challenge has been to find a way to move forward, taking into account the ocean margin program's scientific objectives and other scientific needs and priorities, the general disciplinary support levels in earth and ocean sciences, overall fiscal constraints and priorities, |