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1975/03/20 - Mike Duval (2)
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18514778
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1975/03/20 - Mike Duval (2)
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James M. Cannon Files (Ford Administration)
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The original documents are located in Box 43, folder "1975/03/20 - Mike Duval (2)" of the James M. Cannon Files at the Gerald R. Ford Presidential Library. Copyright Notice The copyright law of the United States (Title 17, United States Code) governs the making of photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United States of America his copyrights in all of his unpublished writings in National Archives collections. Works prepared by U.S. Government employees as part of their official duties are in the public domain. The copyrights to materials written by other individuals or organizations are presumed to remain with them. If you think any of the information displayed in the PDF is subject to a valid copyright claim, please contact the Gerald R. Ford Presidential Library. THE WHITE HOUSE WASHINGTON March 19, 1975 TO: JEAN McLANE FROM: Glenn Glenn Schleede Here is a copy for Mr. Cannon's use of the paper we used for the meeting on catalytic converters at 2:15. We didn't have a copy to leave with him. Attachment Digitized from Box 43 of the James M. Cannon Files at the Gerald R. Ford Presidential Library Draft 3/17/75 STATEMENT OF PROBLEM - POSSIBLE ACTION PLAN Auto Emission-Fuel Economy-Catalytic Converter I. ACTION FORCING EVENTS A. Clean Air Hearings underway in both Houses. There is pressure to do something. Pressure will grow as June 30 deadline for auto companies decision on 1977 models approaches. B. We need to have a new Administration position on both auto emission and fuel economy. C. Hearings underway in Senate Commerce Committee - headed toward mandatory fuel economy standards. D. OMB undertaking interagency effort to develop new legislative proposal on auto emissions for 1977-81. E. FEA, Transportation and ERC are headed toward a new position on fuel economy standards - includes discussions with auto companies. Zarb intends to have a position in a few days. F. It seems clear that the President wants a responsible course of action and a responsible position laid out quickly: 1. This may or may not be consistent with rushing in with new fuel economy and emission standards beyond 1977. 2. Laying out a responsible position could put the President in a clear leadership position on the issue and, probably, head off mandatory fuel economy standards until there is a better basis for deciding the right balance between air quality, fuel economy, auto cost. G. As public perception grows, there probably will be growing pressure for somebody to "do something". Not clear anybody will have credibility, including Congress, auto companies, EPA, or the Administration (which probably will be accused of merely trying to save the auto companies). II. PROBLEMS THE ADMINISTRATION MUST ADDRESS A. Develop recommended auto emission standards for 1977 model year. 1. Auto companies must know by June 30, 1975. - 2 - 2. Five possible options, by order of liklihood: HC CO NOX a. Train decision for 1977 (which is the least rigorous allowed under current law) 1.5 15.0 2.0 b. Maintain 75-76 standards, including NOx at 3. 1 to avoid cost and fuel economy penalty - law change required. 1.5 15.0 3.1 C. Adopt tighter standards recommended by the President - law change required. .9 9.0 3.1 d. Slightly less rigorous standards than 75-76 to open technical options and assure catalyst not needed (law change) 2.0 20.0 3.1 e. Return to 73-74 standards (law change) 3.0 28.0 3.1 B. Develop recommended position on fuel economy goals for 1980 and auto emission standards for 1978-81 model years -- - which reflects the right balance. C. Review the processes of Government which led to the catalytic converter-sulfate decision to see whether something can be learned which would prevent similar events in the future. III. CONSTRAINTS A. Dearth of good factual information. B. Lack of agreement on facts. C. Most information on emissions, relationship of auto emissions to air quality, etc. in the hands of EPA which will probably continue to be less than cooperative. D. Lack of objectivity and credibility on the parts of most players, including even the National Academy of Science which did a study of the issue for the Senate Public Works Committee, which study has been discredited. E. Time. IV. POSSIBLE PLAN OF ACTION A. Instruct ERC (including FEA, DOT and EPA) 1. Not to come to final position on recommended fuel economy standards, 2. To participate in the interagency effort outlined below. - 3 - B. Allow the OMB-led exercise go ahead -- with target of April 5 -- on developing recommended auto emission standards for 1977 and compiling facts related to 1978-81 emission standards and 1980 fuel economy goals to see what kind of decisions are possible; i. e., see whether the situation is clear enough to warrant an Administration position on 1978-81 emission standards and 1980 fuel economy goals. C. Expand the OMB-led effort (Option A) or set up a new interagency group (Option B) to develop by April 15 a "Grey Paper" containing as much as possible of the inf ormation outlined in Tab A - which could be made public if necessary. D. Head for target of submission of 1977 emission standards proposal, if it is different from Train's decision, by April 10. E. Develop and issue Presidential statement on catalytic converter decision and what he is going to do about it by April 10. Outline at Tab B. F. Appoint an outside Presidentially appointed Commission to review entire air quality, fuel economy and initial car cost issue to present: 1. Findings of fact -- a White Paper -- containing the information outlined in Tab A, to be ready by June 30. (They could use the Grey paper as one input. ) 2. Recommendations as to auto emission standards, fuel economy goals by July 31. 3. Identification of work that should be done to get in a better position to make national decisions on these points for years ahead, also by July 31. G. Appoint a second group -- either inside Government or outside -- to review the whole catalytic converter decision process to see what can be learned to head off future similar events. Should include evaluation of: Organization. Regulatory development and review process. Adequacy of information for decisions. Inside group may be less able to criticize Congressional role. Could call for tripartite (Congressional, Executive Branch, public) membership. TABS TAB A - Outline for Presidential Statement TAB B - Coverage for a White Paper TAB C - Potential Members for a Commission TAB D - Cabinet Meeting - Talking Points TAR F Arenda for OMB Effort which begins March 18 TAB A TAB A APPROACH AND TOPICS FOR A WHITE PAPER ON AIR QUALITY, AUTO EMISSION CONTROLS, FUEL ECONOMY I. BASIC APPROACH A. Lay out facts as they are known. B. Show range of disagreement where there is a dispute as to facts. C. Identify gaps in data. D. Show arguments justifying particular judgments or interpretations where there is a disagreement on either fact or opinion. E. Assume that the Clean Air Act and the regulations implementing it can be changed, if necessary, to arrive at the requirements and course of action that is in the nation's best interest. F. Target should be a clear presentation of the tradeoffs among air. quality, public health, public welfare, esthetics, safety, fuel economy, initial car cost, and car maintenance costs, durability and performance. II. PRELIMINARY OUTLINE FOR WHITE PAPER A. Historical Data 1. Brief chronology of the events leading to current and future statutory auto emission standards, including Executive Branch and Congressional actions. 2. Describe the automobile and fuel modifications that have been made thus far (all years, at least since 1968) to control emissions. Show impact on emissions, air quality (to the extent possible), fuel economy, initial car cost, maintenance cost, performance, fuel specifications, etc. B. Current Ambient Air Quality Situation 1. Describe current ambient air quality situation, showing trends and frequency and duration of violation of current standards. 2. Show sources and relative importance of air pollutants of concern, whether or not there is an existing criteria document and ambient standard. Show to the extent possible the amounts and relative importance of natural sources of pollutants. Show by area to the extent possible. - 2 - C. Expected future air quality trends. 1. Show expected trends by area and by source, mobile, stationary, natural, broken down to the extent possible to show relative importance of various control alternatives. 2. Show assumptions leading to future projections. D. Ambient Air Quality Standards 1. Show current and possible future ambient air quality standards, primary and secondary. 2. Summarize health, welfare and aesthetic effects leading to conclusions on current or possible future ambient standards. 3. Describe criticisms of existing standards, and arguments supporting different ones. E. Costs of Air Pollution and benefits of Reduction: 1. Summarize current information on costs and benefits of reducing air pollution. 2. Describe confidence limits associated with data. F. Discuss alternatives and the impacts of various tradeoffs between control of pollutants from auto VS. stationary sources -- costs, air quality benefits. G. For various auto emission standards, show: 1. technological options for achieving, together with -- 2. the impact on: a. auto emissions. b. ambient air quality by area which has auto related pollutant problem; health and welfare impacts. c. initial car cost impact. d. fuel economy impact. e. implications for fuel specifications. f. safety. g. maintenance impact, durability, and related consumer costs. h. performance impact. i. capability of industry to achieve, and the investment cost, etc. necessary to achieve. j. time frame for achieving. H. For projections of ambient air quality impact, describe assumptions as to population growth, dispersion, number of cars, vehicle miles traveled, fuel economy, gasoline availability and use, and other factors that go into or should be considered in - 3 - an estimate of future air quality. Indicate disagreements with approach, if any; modifications required; weaknesses, etc; and their implications for auto emissions or transportation plan requirements. I. Describe the need or absence. of need for no-lead or low-lead gasoline and the health, air quality and other impacts of various positions. Also, disagreements on positions, if any. J. Summarize potential new regulations or other requirements impacting auto emissions, transportation controls, or indirect sources which might have an effect on a national decision on auto emission requirements. K. The rationale for and implications of the threshold theory of health damage that underlies the Clean Air Act; the alternatives. L. Accuracy of ability to measure. 1. Describe the relative accuracy of air quality instrumentation, monitoring systems, and predictive models for the various auto related pollutants of concern. 2. Describe the significance of our ability to measure and predict to our actions to improve air quality and to our ability to strike a balance between air quality and other objectives. M. Special topics for coverage: 1. Present and future of the catalytic converter. 2. Status and outlook for the sulfate problem, covering mobil and stationary sources of sulfates. 3. The justification for and alternatives to a single national (49 state) standard for auto emissions. TAB B TAB B PRESIDENTIAL STATEMENT* - OUTLINE I. Our National Drive to improve the quality of life for all Americans often leads us to set rigorous goals and objectives and tight deadlines. II. Events have shown that our drive to achieve some goals, e.g., air quality goals, presents a conflict with our drive to achieve other national goals, public health, safety, energy III. The series of actions that have led to the initial decision to set standards requiring catalytic converters - and the subsequent decision by EPA that catalytic converters may cause a health hazard even worse than the health problem it sought to minimize -- illustrates: 1. The complexity of the task of improving air quality. 2. The implication of air quality requirements for other national goals. 3. The kind of costs that are imposed on consumers. 4. The implications of proceeding with rigid requirements without: - full understanding of the impacts. - full public knowledge of the impacts. IV. Now faced with the job of finding: 1. The best balance among conflicting objectives. 2. The best set of requirements for the years ahead. V. Must avoid more precipitious actions -- either in the form of premature air quality requirements or mandatory fuel economy requirements. VI. President's plan of action: 1. 1977 auto emission standards. 2. 1978-81 auto emission standards and fuel economy goals - National Commission. 3. Review of the process of Government that led us through the path that has cost billions in consumer dollars and may have caused a serious or potentially serious health problem. VII. Other points to cover along the way: 1. Issue is not protecting the auto industry, instead it is protecting citizens, consumers and taxpayers. 2. There is blame to be shared by all - Congress, Exeuctive Branch, auto industry, environmentalists. But not the consumer and the citizens who have had to pay the bill. Use philosopy, tone of Taking Points - Tab D. TAB C TAB C POSSIBLE MEMBERS OF AN OUTSIDE COMMISSION TO STUDY FUEL ECONOMY, AUTO EMISSIONS ISSUE A. Chairman - Should be someone who is able to lead and coordinate a highly complex cost-risk-benefit analysis. Preferably someone who is already familiar to some extent with the Clean Air Act and the actions that have been taken to implement it. 1. Don Rice - President of Rand Corporation, former Associate Director of OMB (Natural Resources) 2. - Director of Ames Laboratory of NASA. B. Member - Having thorough knowledge of the environmental health issues. 1. Ivan Bennett - Head of the New York University Medical School, Deputy Director of the Office of Science and Technology until 1969. M.D. 2. Dr. Morton Corn, Department of Occupational Health, University of Pittsburgh. Regarded widely as a top occupational health and epidemiology expert. 3. Dr. Brian McMahon, Chairman, Department of Epidemiology, Harvard School of Public Health. C. Member - Having thorough knowledge of the automotive technology issues. 1. Philip Meyers, Professor of Mechnical Engineering, University of Wisconsin. Past President of Society of Automotive Engineers, Member of National Academy of Engineering. Did not participate in NAS-NAE air pollution study. 2. John Heywood, Department of Mechnical Engineering, MIT. Extensive research and writing experience on motor vehicle issues but apparently has no direct industry experience. D. Other potential members or leading advisers 1. William Simmons - Director of the California Air Resources Board, Knowledgeable about California problems; California's criticisms of EPA's approach to air quality control; and about the special problems of natural sources of air pollution which complicate air quality control problems. 2. Selected members from the committees and panels that prepared the recent National Academy of Sciences-National Academy of of Engineering study on air quality and auto emission control for the Senate Public Works Committee. List attached. Problem with this is that the summary version of the study has been discredited. COORDINATING COMMITTEE (of AIR the QUALITY for Commission STUDIES on Natural Resources) HERBERT A. SIMON, Carnegie-Mellon University, Pittsburgh, Pa., Chairman IVAN BENNETT, New York University Medical Center, New York, New York JAMES D. EBERT, Carnegie Institution of Washington, Baltimore, Md. EDWARD GINZTON, Varian Associates, Palo Alto, California BERNARD GREENBERG, University of North Carolina, Chapel Hill, N.C. HERSCHEL E. GRIFFIN, University of Pittsburgh, Pittsburgh, Pa. GEORGE HIDY, Rockwell International, Thousand Oaks, California HOWARD JOHNSON, Massachusetts Institute of Technology, Cambridge, Mass. J. ROSS MACDONALD, University of North Carolina, Chapel Hill, N.C. JOHN MEYER, National Bureau of Economic Research, Cambridge, Mass. GORDON J. F. MACDONALD, Dartmouth College, Hanover, New Hampshire (ex officio) DAVID HOLTZ, Staff Officer I. COMMITTEE ON THE RELATIONSHIP OF EMISSIONS TO AMBIENT AIR QUALITY GEORGE HIDY, Rockwell International, Thousand Oaks, California, Chairman ALAN ESCHENROEDER, General Research Corporation, Santa Barbara, California RICHARD HURN, U.S. Bureau of Mines, Bartlesville, Oklahoma HAROLD JOHNSTON, University of California, Berkeley, California JAMES MAHONEY, Environmental Research & Technology, Incorporated, Lexington, Massachusetts PETER MUELLER, Environmental Research & Technology, Incorporated, Newport Beach, California JOHN SEINFELD, California Institute of Technology, Pasadena, California JOHN TRIJONIS, TRW, Incorporated, Redondo Beach, California DAVID HOLTZ, Staff Officer RONALD TIPTON, Staff Officer II. COMMITTEE ON THE COSTS AND BENEFITS OF AUTOMOBILE EMISSION CONTROL John Meyer, National Bureau of Economic Research, and Harvard University, Cambridge Massachusetts, Chairman Victor Fuchs, National Bureau of Economic Research, and Stanford University, Palo Alto, California John Kain, Harvard University, Cambridge, Massachusetts John Krutilla, Resources for the Future, Washington, D.C. Lester Lave, Carnegie-Mellon University, Pittsburgh, Pennsylvania Lester Lees, California Institute of Technology, Pasadena, California Herbert vania Simon, Carnegie-Mellon University, Pittsburgh, Pennsyl- Jan Stolwijk, Yale University, New Haven, Connecticut George Tolley, University of Chicago, Chicago, Illinois Raphael Kasper, Staff Officer Ronald Tipton, Staff Officer Gregory Ingram, Harvard University, Cambridge, Massachusetts, Di- rector of Staff Research III. Subcommittee on Health Effects of Air Pollutants of the Committee on Medical and Biologic Effects of Environmental Pollutants HERSCHEL E. GRIFFIN, University of Pittsburgh Graduate School of Public Health, Pittsburgh, Pennsylvania, Chairman BERTRAM W. CARNOW, University of Illinois School of Public Health, Chicago, Illinois RONALD F. COBURN, University of Pennsylvania School of Medicine, Philadelphia, Pennsylvania T. TIMOTHY CROCKER, University of California College of Medicine, Irvine, California SHELDON K. FRIEDLANDER, California Institute of Technology, Pasadena, California IAN T. T. HIGGINS, University of Michigan School of Public Health, Ann Arbor, Michigan JOHN REDMOND, JR., Staff Officer Panel on Airborne Particles of the Committee on Medical and Biologic Effects of Environmental Pollutants Panel on Carbon Monoxide I. T. T. Higgins, Chairman of the R. E. Albert R. J. Charlson B. G. Ferris, Jr. Committee on Medical and Biologic Effects of Environmental Pollutants R. Frank M. Lippmann B. Y. H. Liu Ronald F. Coburn, Chairman P. E. Morrow Eric R. Allen K. T. Whitby Stephen Ayres J. Redmond, Jr., Staff Officer Donald Bartlett, Jr. Steven M. Horvath Lewis H. Kuller and the Victor G. Laties Lawrence D. Longo Panel on Sulfur Oxides Edward P. Radford, Jr. of the James Frazier, Staff Officer Task Force on Health Effects Committee on Medical and Biologic Effects of Environmental Pollutants B. W. Carnow, Chairman of the Y. Alarie P. Meier Panel on Nitrogen Oxides J. A. Nadel E. D. Palmes of the Committee on Medical and Biologic Effects of Environmental Pollutants J. Redmond, Jr., Staff Officer E. Goldstein, Chairman Task Force on Interactions of Pollutants in Producing Health Effects R. Ehrlich C. M. Shy of the L. F. Wolterink Committee on Medical and Biologic Effects of Environmental Pollutants E. E. Force and J. Redmond, Jr., Staff Officers C. M. Shy, Chairman Panel on Photochemical Oxidants and Ozone Y. Alarie D. V. Bates of the R. Frank J. D. Hackney Committee on Medical and Biologic Effects of Environmental Pollutants S. M. Horvath J. A. Nadel E. E. Force and J. Redmond, Jr., Staff Office S. K. Friedlander, Chairman B. Altshuler A. Q. Eschenroeder J. D. Hackney Task Force on Effects on Plants FORD W. W. Heck J. R. McCarroll P. R. Miller D. C. McCune P. K. Mueller W. W. Heck S. D. Murphy J. Redmond, Jr., Staff Officer K. R. Wilson GERALD J. A. Frazier, Staff Officer TAB D THE WHITE HOUSE WASHINGTON March 11, 1975 MEMORANDUM FOR JIM CONNOR THROUGH: JIM CANNON FROM: MIKE DUVAL SUBJECT: TALKING POINTS -- CABINET MEETING The attached is long but the subject is fundamental -- it is an attempt to establish a philosophical base for our domestic policy. If the President decides to use this, I recommend that Nessen not specifically cover the "Truth in Government" theme in his briefing. Let the tone leak out from the Cabinet. Let the President build up to this theme slowly. DRAFT M. Duval (3/11/75) TALKING POINTS - CABINET MEETING DISCUSSION ON THE CATALYTIC CONVERTER I think that the most important lesson for all of us, from the experience we have had with the catalytic converter, is that we should exercise far greater care when we propose legislation and take regulatory and Executive action. It is obvious that the American public will pay a very high price for the decisions made by the Congress and by the Executive Branch concerning these automobile polution regulations. I think it is fair to say that if we had known the full cost which ultimately will flow from these actions prior to making the regulatory decisions which locked us onto this course, the specific legislation and regulatory action might have been very different. I have a very basic philosophy concerning my approach to these kinds of regulatory actions and to legislation which sets them in motion. It can be summed up by the phrase: "Truth in Govern- ment." By this, I mean that we should level with the American people and tell them the true price of government actions and who's going to pay for it. This is the principle that I followed with my Fiscal 1976 Budget and in my State of the Union Address and subsequent legislation. I believe in laying out the true costs of my actions. For example, the price tag of my energy proposals is right out there for everyone to see. It's $30 billion a year and this will result in a one-time 2% increase in the CPI. Contrast this clearly-defined price tag with the Democrats' so-called Pastore-Wright plan. Although my energy and economic advisers think that the total price tag of their plan will equal or exceed mine, this will show up in hidden costs which will ultimately result from quotas and allocation and further government intrusion into the market- place. In short, while their proposal is politically attractive because it doesn't appear that anyone will have to pay the bill, I don't think government decisions should be made this way. I think the people should know the true cost of the programs proposed here in Washington and, importantly, who's going to pay the bill and when. I have taken some steps myself to implement this "Truth in Government" philosophy. In addition to the State of the Union and Budget Messages, I have signed an Executive Order requiring that an Inflation Impact Statement be prepared for every govern- ment action under my control. If an honest Inflation Impact Statement had been done when the initial decisions were made concerning the catalytic converter, I suspect we would not be faced with the problem confronting us today. Of course, it's not just the environmental regulations which raise this issue. There are literally thousands of examples, but I recall speci- fically the problem we had with the truck brake regulation issued by the Department of Transportation before you, Bill (Coleman), came on board. I had to make a decision on 2 New Year's Eve out in Vail to let that regulation go forward because we were so far down the road that, to hold it up would have imposed economic hardship on the industries which had geared up to implement the Federal rule. As a result, we are increasing the cost of trucks and trailers 5-7% and, I now understand, this regulation may force many little companies out of business. I have no doubt that many of the energy regulations create the same kind of dislocations. The point here is that each one of you must control the actions of your departments and agencies to insure that the full cost of every proposal and regulatory action you take is laid out clearly. I think it is also important that this be done in time so that a real choice can be made between going forward or not. Too often, the economic consequences of the regulation only come to light so late in the process that there really isn't any opportunity to pull back. The pressures to go forward come from the legislation itself, from law suits which have been brought by proponents on one side or the other, from industry who will be benefitted or hurt by the proposed rule and, often from within the agency itself when the Federal officials in charge of implementation become advocates for one course of action or another. As each of you makes the day-to-day regulatory and policy decisions, I want you to think through very carefully the impact of those decisions a year from now, five years from now, ten years from now. Think through what will happen if those policies and programs are to be implemented by some future administration which might not be as conscious as we are of preserving the freedom of individual choice and the market mechanism. One discipline that should assist you is to ask three questions each time you face an important govern- mental decision: 1. What is the problem -- specifically -- that I am being asked to solve? 2. Does the proposed solution in fact solve the problem? 3. What additional problems will this government "solution" create? It is this last step that we so very often fail to take. Of course, concerning the catalytic converter, we need to make a decision concerning my proposed legislation which is now pending before Congress recommending that we adopt a modified California standard. I submitted this legislation because it was part of the compromise worked out whereby the automobile manufacturers could achieve a 40% increase in auto efficiency by 1979, without a large increase in the cost of cars and with reasonable environmental standards still intact. 3 It is clear from the decisions and conclusions reached by Russ Train, that we must reconsider my legislative proposal. We can't dillydally around on this one because I want the Congress to move quickly on my entire energy plan, but now one part of it may no longer be valid. Accordingly, I want to be able to review my decision on the long-range automobile polution standards and submit new legislation, if necessary, prior to the Easter recess. I understand that Frank Zarb and Russ Train already have studies underway and that they are coordinating this with the Department of Transportation. I'd like the Domestic Council to follow up on this so that I can have the views of all the interested agencies and departments and final recommendations very quickly. TAB E TAB E AGENDA 3/18/75 I. Explanation of Administrator Train's recommended five-year automobile emission standards (EPA). II. Areas of Discussion: a. the air quality, technological and economic impacts of EPA's recommended HC and CO standards for 1977-1979 model years. Also impacts associated with extending these standards through 1981. b. Air quality, technological and economic impacts of EPA's recommended NOx standard for model years 1978-1981. c. Impact of EPA's recommended NOx standard on President's 40 percent fuel economy improvement goal. d. Should- NOx standard be set administratively after 1981 (President's proposal) or should standard be kept indefinitely (EPA's recommendation) e. Air quality, technological and economic impacts of setting sulfate standard for 1979 model year. Impacts of setting standard for 1978; for 1980. III. Next Steps: a. Time frame for recommending changes, if any, to President's proposal (OMB). b. Methods of analysis - task forces, individual agency views, etc. c. Tasks - with estimated dates of completion. 1. resolve differences between HC and CO standards ( ) 2. resolve differences between NOx standards ( ) 3. resolve setting of NOx level after 1981 ( ) 4. sulfate standard ( ) Attachment FORD & LIBRARY GERALD ATTACHMENT Model Year HC CO NOₓ 1976 EPA Recommended 1.5 15 3.1 President's Proposal 1.5 15 3.1 1977 EPA Recommended 1.5 15 2.0 President's Proposal .9 9.0 3.1 1978-1979 EPA Recommended 1.5 15 2.0 President's Proposal .9 9.0 3.1 1980-1981 EPA Recommended .9 9.0 2.0 President's Proposal .9 9.0 3.1 1982 EPA Recommended .4 3.4 2.0 President's Proposal N/A N/A Set Adminis- tratively FORD & LIBRARY Feb OIL STORAGE REPORT by Edward Teller Gary Higgins Tom Palmeiri Stuart Winter April 4, 1975 OIL STORAGE REPORT We have further investigated ways of quickly establishing a large oil storage capacity within the United States. Some of the numbers we communicated by phone have turned out to be too conservative. We now find that existing salt mines and presently available tanker ships could provide storage for 500 to 800 million barrels. This space would be available start- ing immediately for the ships and within six months for the mines. Arab Imports We now find that we are importing about two millions barrels per day from Arab countries. One million comes directly as crude oil and another million is shipped to intermediate countries where it is refined and then imported into the U. S. as a finished product. Five hundred million barrels of stored oil, therefore, could completely replace all our Arab imports for eight months even in case of a totally effective embargo. Shut-in productive capacity which could be turned on rapidly in non- Arab exporting countries (Venezuela, Nigeria, Indonesia, etc.) exceeds two million barrels per day. Additional productive capacity also exists in the United States. Elk Hills could begin producing 130,000 barrels per day in three to four months, but availability of this oil appears limited by local pipeline capacity. Storage Oil Tankers - The most readily available storage is in empty tanker ships. According to persons at Global Marine Corporation and the Maritime Administration, the total idle tanker capacity amounts to 185 million barrels. As of January 1975, total worldwide orders for new ships would provide ca- pacity for an additional 1000 million barrels. In the first message this figure was greatly underestimated. Some of these orders have been cancelled due to reduced shipping demand but for the near future it appears that the number of idle ships will continue to grow. Chartering such space in the present depressed market would cost from $1.50 to $4.00/barrel/year depending on the availability. The cost would probably go up as the number of idle ships decreased. To purchase the ships would cost well over $10.00/barrel. In addition to being used for storage, a large number of ships will be required to transport large quantities of oil to other storage sites. Salt Mines and Wells - The second kind of available storage is in existing rock-salt mines and solution mined salt wells. People at Fenix and Scisson (mining and consulting engineers) and at the International Salt Company have said that space for 750 million barrels could be made available with little or no disruption of the nation's salt industry. These mines and wells are in Louisiana and Texas close to existing pipe- lines. Purchasing and converting them to oil storage use would cost from $1.00 to $1.50 per barrel. Conversion could be accomplished in two to six months. Another storage option that could accomodate 100 million barrels within six months is the creation of man-made surface storage ponds. According to individuals in the Army Corps of Engineers such ponds could be excavated, lined and covered at a cost of $1.00/barrel. Some environmental problems may exist (for instance, due to dispersal by extremely strong winds) but such problems appear to be solvable. Mines, other than salt mines, may provide additional storage space but the uncertainty about their tightness (ability to retain oil) and their distance from existing pipelines relegates them to a lower level of consideration. Recommendations We recommend the following actions: (1) Begin leasing the needed ships. (2) Make arrangements for the use of salt mines and wells. (2a) As a contingency, make plans for establishing surface storage. (3) Obtain the pipeline supplies that will be needed to move the oil to the storage sites and from Elk Hills to a refinery. (4) Write an environmental impact statement for each form of storage. In the case of surface storage, some research may be necessary to obtain a suitable surface cover. This research should be initiated immediately. Conclusions For approximately one billion dollars and in approximately one-half year, substantial oil storage can be established in the United States. Since such storage would give us considerable leverage in any negotiations, it is recommended that serious consideration be given to the establishment of such storage. APPENDIX I. Mechanism of an Embargo II. Background Information On Storage Options III. Circulating Stocks IV. Acknowledgements APPENDIX I. Mechanism of an Embargo The following total productive capacities and shut-in capacities are relevant when one considers the possibility of an embargo. Total Productive Capacity Amount Shut-In (millions of barrels per/ (millions of day) barrels per/da Arab countries with low population 21.1 9.8 (Saudi Arabia, Kuwait, Libya, Emirates) Arab countries with high population 4.1 0.9 (Iraq, Algeria, Egypt) Non-Arab exporting countries 14.0 2.2 (Iran, Venequela, Nigeria, Indonesia, Ecuador) An embargo exclusively against the U. S. can therefore be replaced by presently shut-in wells from non-Arab countries. By increasing their shut-in capacity the Arab countries having low populations could create a worldwide scarcity which could make an embargo against the U. S. effective. It should be realized that this can be done only by a further decrease in production in the countries of low population where the percentage of shut-in capacity is already quite large. Having available stored oil under control of the U.S. could decrease the threat of an embargo. II. Background Information on Storage Options We have divided our results into two categories. The first category includes existing volumes that can be readily converted into storage facilities. The second category suggests projects to construct new storage facilties. Because of the need for construction, more uncertainty is involved, and so these are listed separately. Briefly our recommendations are: I. EXISTING VOLUMES A. Utilize presently available storage space in rock-salt mines. Available Volume = 138 MMB Time = 3 Months Cost = $1.10/bb1 B. Utilize available space in solution-mined salt wells. Available Volume = 612 MMB Time = 2 Months Cost = $1.30 - $1.50/bbl C. Utilize available oil tankers for storage. Available Volume = 100 MMB Time = 3-6 months Rental Cost = $1.50-$3.50/bbl/yr Total Available Volume = 850 MMB Typical Total Time = 6 months II. NEW CONSTRUCTION A. An intensive program of solution mining of salt domes. Volume = 100 MMB Time = 6-9 months Cost = about $3.00/bbl B. Construction of environmentally acceptable surface reservoirs. Volume = 100 MMB Time = 3 months Cost = $1.00/bbl C. For product storage, an intensive program to survey and obtain space in operating mines. Volume = several hundred MMB Time = 6-9 months Cost = less than $2.00/bbl depending on location D. For product storage, an intensive program to locate, survey and refurbish shut-down mines and abandoned mines. Volume = 2-3 times that of operating mines Time = 9-12 months Cost = less than $2.00/bbl depending on location FORT WORTH DALLAS Grond Soline MISSISSIPPI SHREVEPORT MONROE , JACKSON TYLER ALABAMA Winnfield Olin Matheson WACO O Pittsburg Plate ALEXANDRIA Mcintosh Glass TEXAS LOUISIANA MOBILE Kaiser Olin Matheson Solvay Exxon BATON ROUGE AUSTIN Storks Anse to Butte Boyou Choctow o OSulphur Mines Sorrento, BEAUMONT Dorrow O Wyandotte Chem. Hockley Jefferson Island Nopoleonville Spindletop o OHockberry,West Allied Chem. Avery Island NEW ORLEANS HOUSTON Borbers Hill Weeks Island Cote Blonche Island Pierce Junction SAN ANTONIO Belle isle Dow Chem. Blue Ridge Diamond Crystal Hookern Chem. C O Strotton Bryon Mound Ridge GULF OF MEX International Salt Co. Cargills Freeport Sulpher Co. Morton Salt Co.1 Dome Tower N LEGEND Salt Co. Solt dome with solt produced from brine wells Solt dome with solt produced by room-and-pillar mining Large Rock Salt Solt dome with solt produced by both brine wells and CORPUS CHRISTI room- and-piller mining mines close to coast Polongono 20 o 20 40 60 80 100 Scole, miles Location and ownership of all operating rock salt mines and brine wells in Louisiana The following is a more detailed explanation of the various options. I.a. ROCK SALT MINES Five large salt mines are located in Louisiana on the Gulf Coast. These are shown on the enclosed map. In these mines there is presently available 138 MMB of storage capacity with no adverse effect on the salt industry. We mention these mines first because they have easy access to oil trunk lines and to port facilities where the supplies could enter the country. It would take about six months to install the necessary equip- ment to convert parts of these mines to storage facilities. Costs would run about $30 million per mine, or about $1.10/bbl. In the North, we have specific information on three mines owned by the International Salt Company. The volumes available are: Cleveland 48 MMB Detroit 118 MMB Retsof, NY 229 MMB Total 395 MMB (Int'l Salt Co. only) These mines would have access to the St. Lawrence Seaway but would require new pipeline construction since they do not lie near major oil fields. International Salt Company also has experience in converting their mines to storage. The have quoted $30 million and six months for conver- sion for each mine. Thus in the North we have identified 395 MMB of po- tential storage capacity at a cost of about $0.23/bbl, exclusive of the pipeline to access the facilties. I.b. BRINE WELLS Again the the Gulf states, we have considered solution mined wells in salt domes. Storage in these wells is a developed technology. As of 1971, petroleum products in salt domes occupied volumes of 24 MMB in Louisiana, 84 MMB in Texas, and 5 MMB in Missiissippi. See the enclosed map. Our information is that as of January 1975, there are 262 NMB of capacity available in Louisiam, and another 350 MMB available in Texas. Thus a total of 612 MMB could presently be converted to storage. Brine wells are much smaller than rock-salt caverns, with sizes typically 4 to 10 MMB. Thus a storage facility could involve about 60 or more wells. The cost to buy these wells would be about $1.30 to $1.50/bbl. Because the technology of conversion is well established, they could be ready to accept the oil in about two months. I.c. TANKERS There are presently 30 VLCC's (Very Large Crude Carriers) in the Persian Gulf that are awaiting a charter. The average capacity of these tankers is about 2 MMB. They are free because of cutback in Arab production. Another 20 of these tankers are temporarily out of service for various reasons. All of these tankers could be brought into service in about three months. The volume available is about 100 MMB. These ships are under the flags of various countries (Greece, Libya, Panama, Japan, Scandanavian countries, etc.). They could be bought or leased, depending on the time they would be held as storage facilities. The purchase cost of a VLCC comes to about $15.50/bb1. The lease price is presently about $1.50 to $4.00/bbl/yr. II.c. OPERATING MINES These cavities would be useful for product storage in that they are widely dispersed grographically, and all are served by rail connections. In 1974, engineers at Fenix and Scisson, Inc. (F&S) did a study for the EPA to determine the suitability of mines for storage of wastes. Of the 672 operating mines in the country (excluding coal), F&S identi- fied 172 that look promising for storage. Although estimates for total volume are hundreds of MMB, the volumes of these mines are poorly estimated. For products however, storage in the range 10 to 100 MB per mine would suffice and all the above mines would qualify. Conversion could take about 6 months, at a cost of less than $2.00/bbl. F&S has recently bought and converted an iron mine in South Africa for $0.40/bb1. Thus the technology is proven and the ability to realize this option is assured. II.d. SHUT-DOWN AND ABANDONED MINES Shut-down mines are also a possibility. Beneath Kansas City, a lime- stone mine is used for warehouse storage. Its volume is about 400 MMB. Two other shut-down mines that we have identified represent 20 MMB in Illinois and 20 MMB in Ohio. A program to document and determine the suitability of shut-down mines could take about 3 months. As with operating mines, conversion could be accomplished in about 6 months, for a total of 9 months until the facilities are useful. The volume of abandoned mines is estimated to be 2 to 3 times that of operating mines. Although the actual useable volume is not presently known, it is our understanding that the Bureau of Mines and the Geological Survey are now involved in a study that will determine these volumes. Results should be available within a few months. F&S estimate that documentation and surveying could be completed in about 6 months, with another 6 months to convert the suitable mines. Cost would again not exceed $2.00/bb1, depending on location. Finally with all the options and corresponding volume that could be made available, there is enough flexibility such that other less desirable options need not be considered. Among these are Steel tank storage, with its high cost. Nuclear cavities or craters, with the adverse sentiment it arouses. Shut in storage or storage in abandoned oil wells, with the ensuing loss of oil and high economic cost. III. CIRCULATING STOCKS Our oil economy consumes approximately 16 million barrels per day. A little more than 50 days supply is available in this country at a time in the form of crude oil, intermediate and as products. Only a fraction of this unit can be counted on as stocks. In fact any significant decrease of the total that exists (~ 900 million bbls) will cause dis- turbances requiring actions of various severity. Therefore we have not counted on this circulating stock in any way as a cushion in case of an embargo. IV. ACKNOWLEDGEMENTS The information was assembled by G. Higgins x8582 T. Palmieri x8835 S. Winter x8582 Lawrence Livermore Laboratory P. O. Box 808 Livermore, CA 94550 (415-447-1100) We have received much assistance from all of the following. Mr. Paul and Mr. Jacoby Mr. R. Stone Minerals & Mines Dept. Fenix & Scisson International Salt Co. 5305 East Fifteenth Street Clark Summit, Penn. P.O. Box 15609 (717-587-5131, x408) Tulsa, Oklahoma 74115 (918-835-9471) Mr. D. Richner Mr. F. Wood Terraneers Ltd. The Salt Institute 9234 Mentor Avenue 206 N. Washington Mentor, Ohio 44060 Alexandria, Va. (216-255-9113) (703-549-4648) R. Curtis Crook, President Rear Admiral N. Sonenshein, USN (Ret.) Global. Marine Corporation 5959 West Century Blvd. Los Angeles, CA (213-649-1222) LAWRENCE LIVERMORE LABORATO! P - ail storage ail storage April 4, 1975 The Honorable Nelson A. Rockefeller The Vice-President of the United States Washington, D. C. 20500 Dear Nelson: The following is a brief report on oil storage which is to super- sede the material transmitted to you by telephone on March 28, 1975. The report was prepared with most active collaboration of my friends in Livermore. As you will see, substantial and relatively inexpensive storage for oil can be made available. In addition to the short report, I am transmitting an appendix giving some details. We should be most happy to answer any questions or to go into further details. Sincerely, Tward EDWARD TELLER ET:tw OIL STORAGE REPORT by Edward Teller Gary Higgins Tom Palmeiri Stuart Winter April 4, 1975 OIL STORAGE REPORT We have further investigated ways of quickly establishing a large oil storage capacity within the United States. Some of the numbers we communicated by phone have turned out to be too conservative. We now find that existing salt mines and presently available tanker ships could provide storage for 500 to 800 million barrels. This space would be available start- ing immediately for the ships and within six months for the mines. Arab Imports We now find that we are importing about two millions barrels per day from Arab countries. One million comes directly as crude oil and another million is shipped to intermediate countries where it is refined and then imported into the U. S. as a finished product. Five hundred million barrels of stored oil, therefore, could completely replace all our Arab imports for eight months even in case of a totally effective embargo. Shut-in productive capacity which could be turned on rapidly in non- Arab exporting countries (Venezuela, Nigeria, Indonesia, etc.) exceeds two million barrels per day. Additional productive capacity also exists in the United States. Elk Hills could begin producing 130,000 barrels per day in three to four months, but availability of this oil appears limited by local pipeline capacity. Storage Oil Tankers - The most readily available storage is in empty tanker ships. According to persons at Global Marine Corporation and the Maritime Administration, the total idle tanker capacity amounts to 185 million barrels. As of January 1975, total worldwide orders for new ships would provide ca- pacity for an additional 1000 million barrels. In the first message this figure was greatly underestimated. Some of these orders have been cancelled due to reduced shipping demand but for the near future it appears that the number of idle ships will continue to grow. Chartering such space in the present depressed market would cost from $1.50 to $4.00/barrel/year depending on the availability. The cost would probably go up as the number of idle ships decreased. To purchase the ships would cost well over $10.00/barrel. In addition to being used for storage, a large number of ships will be required to transport large quantities of oil to other storage sites. Salt Mines and Wells - The second kind of available storage is in existing rock-salt mines and solution mined salt wells. People at Fenix and Scisson (mining and consulting engineers) and at the International Salt Company have said that space for 750 million barrels could be made available with little or no disruption of the nation's salt industry. These mines and wells are in Louisiana and Texas close to existing pipe- lines. Purchasing and converting them to oil storage use would cost from $1.00 to $1.50 per barrel. Conversion could be accomplished in two to six months. Another storage option that could accomodate 100 million barrels within six months is the creation of man-made surface storage ponds. According to individuals in the Army Corps of Engineers such ponds could be excavated, lined and covered at a cost of $1.00/barrel. Some environmental problems may exist (for instance, due to dispersal by extremely strong winds) but such problems appear to be solvable. Mines, other than salt mines, may provide additional storage space but the uncertainty about their tightness (ability to retain oil) and their distance from existing pipelines relegates them to a lower level of consideration. Recommendations We recommend the following actions: (1) Begin leasing the needed ships. (2) Make arrangements for the use of salt mines and wells. (2a) As a contingency, make plans for establishing surface storage. (3) Obtain the pipeline supplies that will be needed to move the oil to the storage sites and from Elk Hills to a refinery. (4) Write an environmental impact statement for each form of storage. In the case of surface storage, some. research may be necessary to obtain a suitable surface cover. This research should be initiated immediately. Conclusions For approximately one billion dollars and in approximately one-half year, substantial oil storage can be established in the United States. Since such storage would give us considerable leverage in any negotiations, it is recommended that serious consideration be given to the establishment of such storage. APPENDIX I. Mechanism of an Embargo II. Background Information On Storage Options III. Circulating Stocks IV. Acknowledgements APPENDIX I. Mechanism of an Embargo The following total productive capacities and shut-in capacities are relevant when one considers the possibility of an embargo. Total Productive Capacity Amount Shut- (millions of barrels per/ (millions of day) barrels per/ Arab countries with low population 21.1 9.8 (Saudi Arabia, Kuwait, Libya, Emirates) Arab countries with high population 4.1 0.9 (Iraq, Algeria, Egypt) Non-Arab exporting countries 14.0 2.2 (Iran, Venequela, Nigeria, Indonesia, Ecuador) An embargo exclusively against the U. S. can therefore be replaced by presently shut-in wells from non-Arab countries. By increasing their shut-in capacity the Arab countries having low populations could create a worldwide scarcity which could make an embargo against the U. S. effective. It should be realized that this can be done only by a further decrease in production in the countries of low population where the percentage of shut-in capacity is already quite large. Having available stored oil under control of the U.S. could decrease the threat of an embargo. II. Background Information on Storage Options We have divided our results into two categories. The first category includes existing volumes that can be readily converted into storage facilities. The second category suggests projects to construct new storage facilties. Because of the need for construction, more uncertainty is involved, and so these are listed separately. Briefly our recommendations are: I. EXISTING VOLUMES A. Utilize presently available storage space in rock-salt mines. Available Volume = 138 MMB Time = 3 Months Cost = $1.10/bb1 B. Utilize available space in solution-mined salt wells. Available Volume = 612 MMB Time = 2 Months Cost = $1.30 - $1.50/bbl C. Utilize available oil tankers for storage. Available Volume = 100 MMB Time = 3-6 months Rental Cost = $1.50-$3.50/bbl/yr Total Available Volume = 850 MMB Typical Total Time = 6 months II. NEW CONSTRUCTION A. An intensive program of solution mining of salt domes. Volume = 100 MMB Time = 6-9 months Cost = about $3.00/bbl B. Construction of environmentally acceptable surface reservoirs. Volume = 100 MMB Time = 3 months Cost = $1.00/bbl C. For product storage, an intensive program to survey and obtain space in operating mines. Volume = several hundred MMB Time = 6-9 months Cost = less than $2.00/bbl depending on location D. For product storage, an intensive program to locate, survey and refurbish shut-down mines and abandoned mines. Volume = 2-3 times that of operating mines Time = 9-12 months Cost = less than $2.00/bbl depending on location FORT WORTH DALLAS MISSISSIPPI Grand Soline SHREVEPORT MONROE JACKSON TYLER IALABAMA Winnfield Olin Matheson WACO O ALEXANDRIA Mcintosh Pittsburg Plate Glass TEXAS MOBILE LOUISIANA Kaiser Olin Matheson Solvay Exxon BATON ROUGE Anse to Butte Boyou Choctow AUSTIN Storks O o Sorrento OSulphur Mines BEAUMONT DorrowO Wyandotte Chem. Jefferson Island Hockley Napoleonville Allied Chem. Spindletop o OMackberry. West Avery Island NEW ORLEANS HOUSTON Borbers Hill Weeks Island Cote Blanche Island Pierce Junction o Dow Chem. Belle isle SAN ANTONIO Blue Ridge Diamond Crystal Hookern Chem. C 0 Stratton Ridge M E X Internationa Bryon Mound OF Salt Co. Cargills GULF Freeport Sulpher Co. Morton Salt Co. Dome Tower N LEGEND Salt Co. Solt dome with solt produced from brine wells Solt dome with solt produced by room-and-pillar mining Large Rock Salt Solt dome with solt produced by both brine wells and mines close to room-and-pillor mining CORPUS CHRISTI coast 20 0 20 40 60 80 100 Polangone Scale, miles Location and ownership of all operating rock salt mines and brine wells in Louisiana The following is a more detailed explanation of the various options. I.a. ROCK SALT MINES Five large salt mines are located in Louisiana on the Gulf Coast. These are shown on the enclosed map. In these mines there is presently available 138 MMB of storage capacity with no adverse effect on the salt industry. We mention these mines first because they have easy access to oil trunk lines and to port facilities where the supplies could enter the country. It would take about six months to install the necessary equip- ment to convert parts of these mines to storage facilities. Costs would run about $30 million per mine, or about $1.10/bbl. In the North, we have specific information on three mines owned by the International Salt Company. The volumes available are: Cleveland 48 MMB Detroit 118 MMB Retsof, NY 229 MMB Total 395 MMB (Int'l Salt Co. only) These mines would have access to the St. Lawrence Seaway but would require new pipeline construction since they do not lie near major oil fields. International Salt Company also has experience in converting their mines to storage. The have quoted $30 million and six months for conver- sion for each mine. Thus in the North we have identified 395 MMB of po- tential storage capacity at a cost of about $0.23/bbl, exclusive of the pipeline to access the facilties. I.b. BRINE WELLS Again the the Gulf states, we have considered solution mined wells in salt domes. Storage in these wells is a developed technology. As of 1971, petroleum products in salt domes occupied volumes of 24 MMB in Louisiana, 84 MMB in Texas, and 5 MMB in Missiissippi. See the enclosed map. Our information is that as of January 1975, there are 262 NMB of capacity available in Louisiam, and another 350 MMB available in Texas. Thus a total of 612 MMB could presently be converted to storage. Brine wells are much smaller than rock-salt caverns, with sizes typically 4 to 10 MMB. Thus a storage facility could involve about 60 or more wells. The cost to buy these wells would be about $1.30 to $1.50/bbl. Because the technology of conversion is well established, they could be ready to accept the oil in about two months. I.c. TANKERS There are presently 30 VLCC's (Very Large Crude Carriers) in the Persian Gulf that are awaiting a charter. The average capacity of these tankers is about 2 MMB. They are free because of cutback in Arab production. Another 20 of these tankers are temporarily out of service for various reasons. All of these tankers could be brought into service in about three months. The volume available is about 100 MMB. These ships are under the flags of various countries (Greece, Libya, Panama, Japan, Scandanavian countries, etc.). They could be bought or leased, depending on the time they would be held as storage facilities. The purchase cost of a VLCC comes to about $15.50/bbl. The lease price is presently about $1.50 to $4.00/bbl/yr. II.c. OPERATING MINES These cavities would be useful for product storage in that they are widely dispersed grographically, and all are served by rail connections. In 1974, engineers at Fenix and Scisson, Inc. (F&S) did a study for the EPA to determine the suitability of mines for storage of wastes. Of the 672 operating mines in the country (excluding coal), F&S identi- fied 172 that look promising for storage. Although estimates for total volume are hundreds of MMB, the volumes of these mines are poorly estimated. For products however, storage in the range 10 to 100 MB per mine would suffice and all the above mines would qualify. Conversion could take about 6 months, at a cost of less than $2.00/bbl. F&S has recently bought and converted an iron mine in South Africa for $0.40/bbl. Thus the technology is proven and the ability to realize this option is assured. II.d. SHUT-DOWN AND ABANDONED MINES Shut-down mines are also a possibility. Beneath Kansas City, a lime- stone mine is used for warehouse storage. Its volume is about 400 MMB. Two other shut-down mines that we have identified represent 20 MMB in Illinois and 20 MMB in Ohio. A program to document and determine the suitability of shut-down mines could take about 3 months. As with operating mines, conversion could be accomplished in about 6 months, for a total of 9 months until the facilities are useful. The volume of abandoned mines is estimated to be 2 to 3 times that of operating mines. Although the actual useable volume is not presently known, it is our understanding that the Bureau of Mines and the Geological Survey are now involved in a study that will determine these volumes. Results should be available within a few months. F&S estimate that documentation and surveying could be completed in about 6 months, with another 6 months to convert the suitable mines. Cost would again not exceed $2.00/bbl, depending on location. Finally with all the options and corresponding volume that could be made available, there is enough flexibility such that other less desirable options need not be considered. Among these are Steel tank storage, with its high cost. Nuclear cavities or craters, with the adverse sentiment it arouses. Shut in storage or storage in abandoned oil wells, with the ensuing loss of oil and high economic cost. III. CIRCULATING STOCKS Our oil economy consumes approximately 16 million barrels per day. A little more than 50 days supply is available in this country at a time in the form of crude oil, intermediate and as products. Only a fraction of this unit can be counted on as stocks. In fact any significant decrease of the total that exists (2 900 million bbls) will cause dis- turbances requiring actions of various severity. Therefore we have not counted on this circulating stock in any way as a cushion in case of an embargo. IV. ACKNOWLEDGEMENTS The information was assembled by G. Higgins x8582 T. Palmieri x8835 S. Winter x8582 Lawrence Livermore Laboratory P. 0. Box 808 Livermore, CA 94550 (415-447-1100) We have received much assistance from all of the following. Mr. Paul and Mr. Jacoby Mr. R. Stone Minerals & Mines Dept. Fenix & Scisson International Salt Co. 5305 East Fifteenth Street Clark Summit, Penn. P.O. Box 15609 (717-587-5131, x408) Tulsa, Oklahoma 74115 (918-835-9471) Mr. D. Richner Mr. F. Wood Terraneers Ltd. The Salt Institute 9234 Mentor Avenue 206 N. Washington Mentor, Ohio 44060 Alexandria, Va. (216-255-9113) (703-549-4648) R. Curtis Crook, President Rear Admiral N. Sonenshein, USN (Ret.) Global. Marine Corporation 5959 West Century Blvd. Los Angeles, CA (213-649-1222) THE WHITE HOUSE FYI WASHINGTON JMC: Copies routed to Dick Parsons Mike Duval p issues note m THE WHITE HOUSE WASHINGTON April 10, 1975 MEMORANDUM FOR: JIM CANNON FROM: MAX FRIEDERSDORF m.G. Jim, this material was presented to me during a visit by Carl Wallace, a former top aide to Mel Laird and a very close friend of the President. I know that you will be interested in his position on these two issues. April 10, 1975 Dear Carl: It was a pleasure seeing you again yesterday and I appreciate your taking the time to stop by and give me your views regarding H.R. 3211, the Overseas Citizens Voting Rights Act of 1975, and H.R. 5055, the Energy Conservation and Conversion Act of 1975. I certainly appreciate having the benefit of your thinking on these two matters and will advise other members of the President's staff of your views. Please let me know whenever I can be of further assistance. with cordial regard, Sincerely yours, Max L. Friedersderf Assistant to the President Mr. Carl S. Wallace Corporate Vice President Purolator, Inc. 1800 K Street, N.W. Suite 614 Washington, D.C. 20006 MLF:jg CC: Jim Cannon w/inc. FORD & 03RALD LIBRARY Purolator, Inc. 1800 K Street, N.W., Suite 614 Washington, D.C. 20006 202 659-2750 Carl S. Wallace Corporate Vice President Max- Enclosed is a copy of a letter & have sent to Bacher Conable and sereral committee. other members of the Ways & means the President is to cut back on the Streems tome that the intent of consumption of gasoline, primarily by private individuals Companies such as Purolator regulated by the d. C. C. and any Couniel and Purolator Security are essential coutes. products over established It would seem logical to me that be exempt from any gasoline tax. regulated motor carriers should Carl Address GERALD R.FORD Purolator, Inc. 1800 K Street, N.W., Suite 614 Washington, D. C. 20006 202 659-2750 Carl S. Wallace Corporate Vice President April 3, 1975 Dear Barber: It is my understanding that the markup of H.R. 5005, The Energy Conservation and Conversion Act of 1975, will begin shortly after Congress returns on April 7th. Purolator Services, Inc., courier and armored car services, uses approximately 16 million gallons of gasoline a year, and you can readily see that a 5¢ per gallon gaso- line tax would have a great effect on our business. Purolator Security provides armored car service for the transportation of coin, currency, securities, food stamps, bullion, precious metals and other valuables. Purolator Courier provides expedited ground and air courier services throughout the United States and transports a wide variety of time-critical commodities, including cardio-vascular instru- ments, radioactive isotopes, blood, surgical arterial grafts, checks in the process of collection to and from Federal Reserve Centers and clearinghouses, and other urgent accounting data for banks. These companies carry essential products over established routes and are regulated by the I.C.C. and the Public Service Commissions in the various states. We believe that all regulated motor carriers should be exempt from the proposed increased tax on gasoline. If the regulated motor carriers are not granted an exemption, we will have to request appropriate rate increases from the respective state Public Utility Commissions to offset the tax. It appears to me that this would be inflationary in nature, and I feel sure that this is not the intent of the bill. I realize the complexity of dealing with inflation, recession, and the energy crisis but feel that the exemption of regulated motor carriers from the tax increase would be in the best interests of all the people in the United States. I urge your support of this position as you consider this very important energy bill before the Ways and Means Committee. Sincerely, Carl S. Wallace The Honorable Barber B. Conable, Jr. The House of Representatives Washington, D. C. 20515 CHAIRMAN J. Kevin Murphy PHONE 202 833 1973 President Purolator Services, Inc. Carl Wallace Executive Director HON. CHAIRMEN Charles R. Barr bipartisan President Public Affairs Analysts, Inc. ncommittee Clement M. Brown, Jr. Olin Corporation FOR ABSENTEE VOTING George Bush Chairman Republican National Committee IBOOK STREET N.W., WASHINGTON, D.C. 20006 Richard H. Moore Cleary, Gottlieb. Steen & Hamilton AMBASSADORS' COMMITTEE Hon. Sargent Shriver Chairman April 3, 1975 Hon. William Attwood Hon. William McC. Blair Hon. Chester Bowles Hon. Andrew V. Corry Hon. Arthur J. Goldberg EUROPEAN CHAIRMEN Hon. W. Averell Harriman Alfred E. Davidson Hon. James Loeb Harvey S. Gerry Hon. Gerard C. Smith EUROPEAN CO-ORDINATOR MEMBERS* Kent Fry Dear John: Purolator Services, Inc. Kathleen Bennett Washington Representative COUNTRY COMMITTEES Public Affairs Analysts, Inc. BELGIUM Anthony van Zwaren De David E. Birenbaum, Fried, Frank, Harris, On January 15, 19$5, The Overseas Citizens Voting Zwarenstein Unifast S.A. Shriver & Kampelman Rights Act of 1975, was introduced in the Senate by 1-3 Rue de Bas-Fosses 7490 Brain-Le-Comte, Belgium James M. Carrillo President Senator Mathias (for himself, and Senators Pell, Goldwater CANAL ZONE The American Club of Madrid Nan Dietz, Vice Chairman Bayh, Brock and Roth). An almost identical bill was Canal Zone Democratic Party Clifford R. Dammers, Post Office Box 699 Cleary, Gottlieb, Steen & Balboa, Canal Zone Hamilton passed by the Senate unanimously in the 93rd Congress. FRANCE Huskel Ekaireb Alfred E. Davidson & President Harvey S. Gerry Merck Sharp & Dome On February 19, 1975, H.R. 3211 was introduced in Bipartisan Committee on International Division Absentee Voting 20 Place Vendome Dr. R. H. Edwin Espy General Secretary the House of Representatives by Congressman Dent (for 75 Paris ler, France National Council of the GERMANY Churches of Christ himself and Congressman Hays), and separate bills were in- Robert V. Daly, )r. O'Haire, Connor & Jones W.P. FitzGerald troduced by Congressmen Frenzel and Gude. H.R. 3211 is Friedrich-Ebert-Anlage : 3 Esso Eastern, Inc. Frankfurt-Main, Germany American Chamber of Commerce in Korea identical to S. 95. The Frenzel and Gude bills are HONG KONG Bernard Blair Thomas Flanagan Vice President virtually identical. Hearings have been held by the President Carmack Trading & Pan American Bernie Goodrich Subcommittee on Elections, and this bill is expected to Investment Co., Hong Kong James W. Sweitzer Assistant Manager Public Affairs Dept. ITT be referred to the House Administration Committee immedi- Manufacturers Hanover ASIA, Ltd., Hong Kong Ben Holt Fourcade & Holt ately following the Easter Recess. c/o American Chamber of Commerce in Hong Kong 322 Edinburgh House, Hong Kon Steve Hopkins ITALY-MILAN Vice President First National City Bank As Executive Director of the Bipartisan Committee Herman H. Burdick, General Secretary American Chamber of Pat Hutar Chicago, Illinois on Absentee Voting, I strongly urge your support of this Commerce in Italy 12, via Agmello-20121 Milan James B. Kennedy bill. There are some 750,000 American civilians residing Phone: 80 79 55/6-87 35 Partner ITALY-ROME Asesores de Pensiones, S.A. abroad who are barred from participating in Presidential Donald Malone Procter & Gamble Dr. Peter Laussig President or Congressional elections. Members of the military and Box 10075 Via Chopin, Rome Tita Chemical-Taiwan federal employees overseas can vote in these elections, KOREA Franklin 1. Lunding, Jr. H.E. O'Neill Roan & Grossman and I believe these private citizens should have the same c/o American Chamber of Commerce in Korea Clark MacGregor Vice President rights. These private citizens are vitally affected by 529 Bando Building Seoul, Korea United Aircraft Corp. David T. McGovern, actions which the President and the Congress take, and the ylian Fromer Shearman & Sterling P.O. Box 346 J. Eugene Marans deserve to be represented in the Congress of the United Port Lewis, Mauritius Cleary, Gottlieb, Steen States. MEXICO & Hamilton Carl D. Ross, President Inversiones Alba, S.A. Joe Miller Reforma 336 Ass't. Executive Vice President Mexico, D.F. American Medical Association In the course of their stay overseas, Americans John E. Smith, Jr. Mrs. Charles Mincbere Partner President pro tem meet many more of the average citizens than our official Mariceting Mix de Mexico, S.A. Association of Americans Rio Mixcoac 20-2 Resident Overseas representatives, both civilian and military, possibly can Mexico, D.F. Robert A. Newman NETHERLANDS TRW and certainly should be our best ambassadors. However, G. Russell Pipe Frans van Mieristraat 10 Brother Thomas More Page, C.F.X. this becomes extremely difficult when they are confronted Amsterdam, Holland Home Phone: 020-79-74-53 Executive Director of Office Phone: 020-79-50-85 the Catholic Mission with a question such as, "If your country is so great, why SPAIN Robert T. Snure Public Affairs Department aren't you allowed to vote?" Brigham Day Secretary General U.S. Chamber of Commerce American Chamber of Commerce in Spain Dick Stuart Avda, Generalisimo Franco, 477 Vice President Barcelona 11, Spain Government Affairs American Express Co. THAILAND W. Clement Stone Ralph C. Lambert & Martin McClintock Combined Insurance Cos. c/o American Chamber of of America Commerce in Thailand James Trowbridge 140 Wireless Road The Ford Foundation P.O. Box 703 Representative for Peru Bangkok, Thailand UNITED KINGDOM Bishop Paul A. Washburn President Anthony'Hyde, Chairman Board of Global Ministries Democratic Nat'l. Comm. The United Methodist Church Overseas in England and Walter Whitmyre V.W. Warren Pearl, Chairman IBM-Taiwan Republican Committee 20 Chester Square James E. Wood, Jr. London S.W. 1., England Executive Director Baptist Joint Committee of Public Affairs During the last Congress some of the Republican members of the House Subcommittee on Elections objected to the postcard registration feature and the payment of postage for overseas voters. These two objectionable features have been removed from the bills as introduced in the Senate and House. I hope you will give this bill your wholehearted support when it reaches the House floor. Sincerely, Carl S. Wallace Executive Director The Honorable John J. Rhodes The House of Representatives Washington, D. C. Ham Committee to uport their much. will in Bull Buttu & Wiggini may office 4014 CONGRESSIONAL RECORD-SENATE March 17, 1975 fication in either the threatened or endan- sures cannot be relieved in any other way, represents the "extraordinary case where gered classes. there would appear to be no basis for legally population pressures cannot be other- It might also be possible to amend the valid regulations on regulated taking. Also, wise relieved." Act, giving a qualified but protected status the principal language establishes the goal Again, we are aware of the deep commit- to the species under study. This qualified of other regulations, to be promulgated, as ment with which the personnel in the De- status could be limited to a reasonably ade- the restoration of species to a non-threatened partment of the Interior have approached the quate study period, (such as, two years). or or non-endangered status. preservation of endangered and threatened might protect the studied species on Fed- In this regard, the regulations promul- species. Implementation of this law will un- eral lands, or on certain classes of Federal gated regarding the three species of kangaroo doubtedly aid in protecting both endangered lands only. This alternative however, also are not consistent with the letter or the species and environmental quality through- raises the controversial issue of competing spirit of the Endangered Species Act of 1973. out the U.S. and the world. In that regard, State and Federal powers over the manage- The regulations purport to allow importa- we hope our comments are helpful in further ment of wild animals, an issue which Mr. tion of taken kangaroos when (1) a sus- administration of the law and in achieving Widman of this office has discussed with tained yield program is established that (2) its objectives. your staff. It would appear desirable to have is not detrimental to the survival of the Sincerely, any potential legislative solution to this species. Neither the "sustained yield pro- RUSSELL W. PETERSON, controversy developed before introducing an gram" nor the "not detrimental" test meet Chairman. amendment to extend the coverage of the the statutory criterion, showing that Act. population pressures cannot be otherwise In regard to the specific problem of the relieved. Thus, we believe that the regula- REBUTTAL TO CRITICS OF OVER- grizzly bear, we have checked the matter with tions should be revised or interpreted so as SEAS VOTING LEGISLATION the Department of the Interior. As you know, to be in keeping with the mandate of the Mr. GOLDWATER. Mr. President, it during the court proceeding that Department Act. has been brought to my attention that agreed to initiate an independent study of the The rules submitted with the proposed grizzly bear's status. We are advised that the listing of the grizzly bear are also trouble- some questions were raised recently at final report of that study has now been sub- some. One portion of the proposal indicates hearings by the House Subcommittee on mitted to Interior. and that Interior is plan- that de facto regulations will be promulgated Elections with respect to the constitu- ning to take appropriate action on the grizzly which allow the taking (mostly by sport tionality of legislation strengthening the bear in the immediate future. hunting) of up to 25 bears per year in the voting rights of overseas citizens. While the Council has no immediate sug- Bob Marshall Ecosystem. Again, in our PRECEDENT OF 1970 LAW SUPPORTS TURTHER gestions for resolving all these issues, we view, the Secretary must first fulfill the ACTION BY CONGRESS would be happy to review any proposal statutory burden by showing that the pro- which you might develop. posed taking by hunting will be the "extra- Frankly, I cannot see any doubt at all Sincerely, ordinary case" which follows substantial about the constitutionality of the pro- RUSSELL W. PETERSON, attempts to relieve population pressures by posed law. It is a logical extension of a Chairman. other means. In our view, this test, again, law on the same subject which I authored has not been met and we believe that the in 1970 and which was upheld as a valid COUNCIL ON ENVIRONMENTAL QUALITY, regulations and proposal for final action exercise of Congress powers by the U.S. Washington, D.C., February 3, 1975. should be revised accordingly. Supreme Court 6 months later. Hon. ROGERS C. B. MORTON, One other portion of the proposed regula- Secretary of the Interior, tions concerning grizzly bears is also of spe- This law is section 202 of the Voting Washington, D.C. cial concern to us. The regulations pertain- Rights Act Amendments of 1970, which DEAR MR. SECRETARY: On December 30, 1974, ing to listing of grizzlies in the Yellowstone extended absentee registration and bal- notice of rule making appeared in the Fed- ecosystem state that depredating bears may loting rights to American citizens who eral Register regarding the threatened kan- be taken. Similarly, the de facto regulations were denied the right to vote because they garoos. Similarly, on January 2, 1975, notice for the Bob Marshall Ecosystem state that were away from home on election day of proposed rule making appeared in the nuisance (including depredating) bears may and were not allowed to register absentee Register regarding the grizzly bear. This be taken. or obtain absentee ballots. One of the letter represents the Council's comments on We feel that the regulations in both cases those two actions. should clearly differentiate between bears stated purposes of the law, spelled out We commend the Department of the In- causing depredations on public and on during Senate floor action on it, is the terior for taking these two actions. We real- private lands. On public lands, no threatened intent to facilitate the vote in Presiden- ize that both have been highly controversial grizzly bears should be taken except for tial elections for Americans outside the and there have been numerous delays and clear reasons of human safety. United States. false starts. With these two actions, the Grizzly bears, and in fact all endangered The law also struck down the dura- Department is taking its first steps in public and threatened species, are valued highly by tional waiting periods preventing Ameri- implementation of the Endangered Species the people of this nation. Public lands are Act of 1973, which was an important com- cans from voting for President and Vice lands held in trust for all Americans, not ponent of the Administration's Environmen- President solely because they had made just one or another special interest group. tal Program. As a consequence, these two a change of households before the elec- Certain uses of these lands require spe- actions take on considerable significance as cific regulation and are a privilege, not a tion. Section 202, in which these provi- potential precedents. right. Grazing and ranching are such uses. sions were set forth, was upheld in In that regard, elements of the actions Thus, in determining which of such dis- Oregon V. Mitchell, 400 U.S. 112 (1970). concern us greatly, particularly in light of cretionary uses may be allowed or may have In overhauling State residence and ab- the intent and substantive provisions of the priority, the public land manager must con- sentee regulations in Presidential elec- Act. sider the impact of the proposed use on other tions, Congress had relied upon at least Section 4(d) of the Endangered Species public uses or values of those lands. Where four district grounds for the exercise of Act requires the Secretary of the Interior there are public values, particularly wild- to promulgate "such regulations as he deems congressional authority. In the case of life such as the threatened grizzly on public necessary and advisable to provide for the lands, it may be logically argued that if Oregon, the Supreme Court seized upon conservation of such (threatened) species." livestock owner wishes the privilege of graz- each of these justifications in holding for (Emphasis added). Conservation is defined, ing domestic livestock on the same area, he the validity of the statute. inter alia, as to use all methods must accept some losses from the wildlife First, section 202 rests upon Congress and procedures which are necessary to bring as part of the cost of doing his business on power to secure the rights inherent in any endangered species or threatened species that public land. In such a case the restora- national citizenship, which include the to the point at which the measures provided tion of the threatened species should be rec- right to vote for Federal officers. Since pursuant to this chapter (the Act) are no ognized as having a greater public value than these rights adhere to U.S. citizenship. longer necessary. Such methods and proce- the economic return to the affected rancher. dures included research, census, law Considering this, we-believe that taking of a rather than citizenship of a State, we enforcement, habitat acquisition and, threatened species committing depredations, acted to protect the rights under the nec- in the extraordinary case where population or otherwise being a "nuisance," on public essary and proper clause of article I of pressures within a given ecosystem cannot lands should be prohibited in any case not the Constitution. be otherwise relieved, may include regulated involving direct threats to human safety. In A related basis for congressional power taking" (16 U.S.C. 1532) (Emphasis added). fact, we suggest that the intent of Section 7 was our design to protect the funda- This language clearly restricts the use of (16 U.S.C. 1536) of the Act, inter alia, to mental, national right of travel by a regulated taking to the "extraordinary case" prohibit taking (killing) of endangered or citizen. where population pressures cannot be other- threatened species on lands belonging to wise relieved. In the absence of facts which all of the American people, in any situation A third basis of Congress authority clearly establish that the population pres- where it cannot be shown that such taking that was asserted is our power to enforce March 17, 1975 CONGRESSIONAL RECORD-SENATE 4015 the privileges and immunities guaranteed acts with a purpose of protecting these been expressly necognized as a right dl- to citizens of all the States. Here we were rights or privileges in a narrowly drawn rectly secured to citizens by the Consti- mindful of correcting the maze of con- manner, rather than with the purpose tution. flicting State and local requirements ap- of passing general legislation over a Contrary to the blanket statement by plicable to Presidential elections which State-reserved field, Congress possesses opponents of overseas voting legislation created a serious inequality of treat- power to establish specific regulations at- that no Supreme Court opinions indicate ment among citizens of one State as com- tacking a particular problem in that the existence of any inherent constitu- pared with citizens of the other States. field. tional right to vote in Federal elections, Fourth, we viewed section 202 as an POWER OF CONGRESS RESTS ON WELL-SETTLED other than the lone opinion of Justice exercise of power under the 14th amend- CASE LAW Black in Oregon, there are at least five ment. In this context, we were protecting Applying the above rules to the pend- Supreme Court decisions in which such against a discriminatory classification in ing legislation on behalf of overseas citi- a right has been specifically mentioned: voting made between citizens who were zens, I am confident Congress is on firm United States V. Classic, 313 U.S. 299, 314, able to be physically present at the time ground in proposing to expand the 1970 315 (1941) Twining V. New Jersey, 211 of registration or voting and those who vote law to cover congressional as well U.S. 78, 97 (1908) Wiley V. Sinkler, 179 could not be present in person. Also, we as Presidential elections. The case law U.S. 58, 62 (1900); In Te Quarles, 158 considered the unfair classification made may be summarized as follows: U.S. 532, 538 (1895) and Ex parte Yar- between citizens who were new residents First. In the past 10 years there have borough, 110 U.S. 651, 663 (1884). (Also and those who were longtime residents been, at least eight Supreme Court de- see the opinion of Justice Frankfurter in of a State or locality. cisions upsetting State and local elec- United States V. Williams, 341 U.S. 70, at In light of similar laws in many of the tion practices founded upon the principle 79 (1951). States which indicated that States could of a strict judicial scrutiny under In Twining, the Supreme Court plainly satisfy their legitimate interests by the the 14th amendment of the State or announced that: rules legislated in section 202, we in Con- local governmental objectives and meth- Among the rights and privileges of Na- gress could not find any compelling rea- ods. Bullock V. Carter, 405 U.S. 134, 144 tional citizenship recognized by this court son why a State should condition the (1972) Dunn V. Blumstein, 405 U.S. 330, [is] the right to vote for National of- right to vote for President on the dura- 337 (1972) Evans V. Cornman, 398 U.S. ficers." 211 U.S., at 97. tion of resident's physical presence or 419, 424, 426 (1970) Phoenix V. Kolod- Fourth. Opponents of overseas voting absence at the polls. ziejski, 399 U.S. 204, 205 (1970) Cipri- legislation argue that elections for Presi- Eight members of the Supreme Court ano V. City of Houma, 395 U.S. 701, 704 dential electors may be State rather than upheld Congress' power to adopt the uni- (1969) ; Kramer V. Union School District, Federal elections for constitutional pur- form regulations of section 202. Justice 395 U.S. 621, 628 (1969) Harper V. Va. poses. This argument ignores the deci- Brennan, joined by Justices Marshall Board of Elections, 383 U.S. 663, 670 sion of In re Quarles, where the Supreme and White, rested his opinion squarely (1966) and Carrington V. Rash, 380 U.S. Court expressly stated that: upon the "compelling interest" doctrine 89 (1965). Among the rights secured to citizens di- and Congress' power to enforce the 14th Second. In at least three of the above rectly by the Constitution is "the right to amendment by "eliminating an unneces- cases, the Supreme Court has overturned vote for presidential electors or members of sary burden on the right of interstate State rules which were purported to be Congress." 158 U.S., at 535. (Emphasis migration" (400 U.S., at 239) bona fide residence requirements. added.) Justice Douglas also upheld section 202 In Carrington V. Rash, 380 U.S. 89 These same critics mistakenly cite as a 14th amendment matter, but tied (1965), the Court overturned the use by Burroughs V. United States, 290 U.S. 534 his opinion to section 1 of that amend- Texas of an irrebuttable statutory pre- (1934), in support of their position. Bur- ment, the privileges and immunities sumption that excluded servicemen from roughs specifically considers and rejects clause. the vote by classifying them as nonresi- the very suggestion raised by the critics, Justice Stewart, jointed by Chief Jus- dents. holding that Presidential electors, "exer- tice Burger and Justice Blackmun, sus- In Evans V. Cornman, 398 U.S. 419 cise Federal functions under, and dis- tained section 202 on the ground of Con- (1970), the Court struck down a Mary- charge duties in virtue of authority con- gress' authority to protect and facilitate land statute which created a presump- ferred by, the Constitution of the United the exercise of privileges of U.S. citizen- tion that persons living on a Federal en- States." Id. at 545. Thus Burroughs actu- ship under the Necessary and Proper clave within the State did not fulfill the ally can be cited as additional support for Clause of Article I. He stated that the residence requirement for voting in the power of Congress to legislate with privilege of free travel, without loss of Maryland. respect to Presidential elections. the right to vote, "finds its protection In Dunn V. Blumstein, 405 U.S. 330 Fifth. Critics of overseas voting legis- in the Federal Government and is na- (1970), the Court held unconstitutional lation assert that the liberty to travel tional in character" (400 U.S., at 287). the 1-year durational waiting period abroad is seemingly not as absolute as Justice Black based his opinion sus- Tennessee had used as a precondition the right of interstate travel. Again, the taining section 202 on the final authority to voting in that State. critics ignore the clear message of the of Congress to make laws governing Fed- Ironically, Dunn, which overturned a Supreme Court. eral elections and Congress' general State residence rule, is cited by opponents In Kent V. Dulles, 357 U.S. 116, 126 powers under the Necessary and Proper of the overseas voting bill for the propo- (1958), the Supreme Court plainly Clause of Article I. sition that such rules are immune from equated the right of interstate travel Only Justice Harlan believed section the reach of Congress. To the contrary, with the right to travel abroad. 202 was invalid on any ground. the Supreme Court observed in Dunn The Court stated: The fact that the Court divided in that: "Freedom of movement across frontiers in choosing alternative grounds for uphold- If it was not clear then [referring to 1965], either direction, and inside frontiers as well, ing section 202 is argued by some as de- it is certainly clear now that a more exact- was a part of our heritage. Travel abroad, like priving the case of precedential weight. ing test is required for any statute that travel within the country, may be necessary But what this restricted view overlooks "places a condition on the exercise of the for a livelihood. It may be as close to the is the fact that eight Members of the right to vote." 405 U.S., at 337. heart of the individual as the choice of what Court actually did unite on the prin- Thus, the Supreme Court has made it he eats, or wears, or reads. Freedom of move- ment is basic in our scheme of values." 357 ciple that the jurisdiction of the States clear that the States may not use a bona U.S. at 126. over matters normally considered as be- fide residence rule in such a way that it Far from taking a narrower view of ing within their primary domain is sub- could sweep an entire group of otherwise Congress power to secure the vote to ject to the superior power of Congress to qualified U.S. citizens off the voting rolls, travelers abroad, than of its comparable vindicate personal rights or privileges of unless the restriction is proven necessary power with respect to interstate travelers. citizenship which the Court has deter- to promote a compelling State interest. the Supreme Court has given a broad mined to be secured by the Constitution. Third. The right to vote for national protection to foreign travel. In Aptheker Moreover, Oregon clearly stands for elective officers, including Members of against Secretary of State, the Court con- the proposition that so long as Congress Congress and Presidential electors, has sidered freedom of movement abroad to S 4016 CONGRESSIONAL RECORD-SENATE March 17, 1975 be of such great importance that the in making statements pertinent to the While an exhaustive search of historical Court held this personal liberty para- application, such as a claim to being last records has not been undertaken, the fol- mount to a substantial governmental in- domiciled in such State prior to depar- lowing chronology and facts are clear. terest in restricting travel based on ture from the United States. 1. The construction of a suitable building grounds of national security, 378 U.S. Thus, Congress can act, consistent with to house the Nation's air and space col- lections has been a long-awaited event. The 500, 505, 508 (1964). the highest standards of our constitu- act of August 12, 1946, establishing the Na- LEGISLATION IS CONSISTENT WITH BASIC SCHEME tional system, to establish uniform, na- tional Air Museum, included provisions for OF REPRESENTATIVE GOVERNMENT tional practices securing the right of a method of selecting a site for a National In summary, it is clear the proposed Americans abroad to participate in the Air Museum to be located in the Nation's overseas voting legislation is constitu- choice of Federal officers whose decisions Capital. The act of September 6, 1958, desig- tional. Its object is to protect and fa- and programs affect them directly and nated the site for a building to be on the cilitate the right of almost 1 million substantially. Mall from Fourth to Seventh Streets, In- dependence Avenue to Jefferson Drive, S.W. U.S. citizens to vote in Federal elections. 2. During the period of the late 1950's and These citizens have a direct and substan- NATIONAL AIR AND SPACE MUSEUM early 1960's, the Smithsonian Institution tial interest in decisions and policies engaged in preplanning studies for this new acted upon by the public officials chosen Mr. MOSS. Mr. President, having re- museum building. During this period it was in Federal elections, the President and cently been appointed to be a member of concluded, as part of the planning process, Vice President and Members of Congress. the Board of Regents of the Smithsonian that the costs of such a building should not Institution, I was disturbed to read an exceed $40,000,000, which the Institution Action by Congress is required if over- believed would produce an outstanding seas citizens are to be brought within the article on February 28 in the Washington building to commemorate American attain- basic system of representative govern- Post indicating that the construction of ments. ment. No single State can guarantee the the National Air and Space Museum is 3. A "Schedule of Building Projects" was franchise to all or most of these persons. experiencing a cost overrun. included by the Smithsonian in both its FY In order to establish a uniform process Michael Collins, the Director of the 1962 and FY 1963 budget submissions to the by which all or most overseas citizens can museum, has set the matter straight in Congress. The Schedule in the FY 1962 sub- enjoy an equal opportunity to vote in a letter to the editor of the Post published mission (page 32) projected the FY 1963 request for a planning appropriation of Federal elections, it is necessary for Con- on March 10. $1,820,000 and an FY 1965 construction ap- gress to enact appropriate implementing I ask unanimous consent that Mr. propriation of $37,680,000 for the NASM legislation. Collins' letter be printed in the RECORD. building. These two amounts total $39,500,- The specific procedures which Con- There being no objection, the letter 000. The Schedule in the FY 1963 document gress uses in the pending overseas vot- was ordered to be printed in the RECORD, (page 57) maintained the two amounts but ing bill are, in general, derived from sec- as follows: slipped the Schedule to FY 1964 and FY tion 202 of the Voting Rights Act Amend- [Letter to the editor, Washington Post, 1966. This Schedule, dated January 2, 1962, would appear to be the source of the 1962 ments of 1970, which in turn were drawn Mar. 10, 1975] "original estimate" cited in the GAO re- from the proven practice of the States MUSEUM'S CosT port. themselves. In section 202 we made a Your February 26 front page story con- 4. In 1963, the Smithsonian revised its finding that these practices were applied cerning construction cost overruns states cost estimate to $41,920,000, including a by many States with respect to some of that the National Air and Space Museum will total of $1,875,000 for planning. Actual plan- have a 6% overrun. While it may seem a ning appropriations in the amounts of $511,- their residents without significant fraud small point, those of us working on this 000 and $1,364,000, for a total of $1,875,000 or administrative difficulty in their own project are proud of the fact that there will were made available to the Institution by elections, and in the overseas voting bill be no overrun, in terms of either time or the Interior and Related Agencies Appropri- we again make the same finding. money. The building will be ready for its ation Acts for the fiscal years 1964 and 1965, If some of the States can use these public opening in July 1976, as originally respectively. This planning was completed practices successfully for purposes of planned, and it will cost no more than its and the project approved by the Commission voting, and determining residence for original $41.9-minion price tag. of Fine Arts and the National Capital Plan- MICHAEL COBLINS, ning Commission. The cost of the building, voting, by certain citizens from such Director, built to those plans and specifications, was State, such as absentee servicemen and National Air and Space Museum. estimated to be $40,000,000 in 1965. women and their accompanying depend- Washington. 5. In 1966, the Congress enacted legislation ents, then surely we in Congress may authorizing the construction of the NASM properly find that there is no compelling Mr. MOSS. Mr. President, at my re- but deferred appropriations for construc- reason why all States should not use the quest, Mike Collins has provided me with tion until expenditures for the Vietnam war same practices for protecting the vote of background information on the status of had shown a substantial reduction. citizens with at least an equal nexus with the National Air and Space Museum con- 6. By the early 1970's, when it appeared the particular State. Whatever the inter- struction. So that the record may be com- this project might be allowed to proceed, it pletely clear in this regard, I ask unani- was obvious that as a result of rising costs of est of the States in more narrowly defin- mous consent that the background state- labor and materials over the intervening ing residence for purposes of purely years, the 1965 plans would now cost be- State, county, and municipal offices, there ment be printed in the RECORD. tween $60 and $70 million to implement is no compelling need for using a stricter This major and important construc- Consequently, in its FY 1972 budget, the test in Federal elections than the one tion project, even though delayed for Smithsonian requested an appropriation of set forth in the pending legislation. many years, is not overrunning. $1,900,000 for planning and redesign of the I would remind critics of the proposal There being no objection, the state- museum building with the goal of using the ment was ordered to be printed in the latest design and construction techniques that the bill is not open ended. It only to lower the cost of the building to $40,000,- applies to Federal elections. It only cov- RECORD, as follows: 000-the estimate of ten years earlier. Those ers U.S. citizens who have a past nexus, a STATEMENT ON PURPORTED CosT OVERRUN ON new planning funds were appropriated and domicile, in the particular State where THE NATIONAL AIR AND SPACE MUSEUM the redesign-completed and approved by the they are seeking to vote in Federal elec- CONSTRUCTION Commission of Fine Arts and the National tions. GAO's report to the Congress of February Capital Planning Commission. 24, 1975, entitled "Financial Status of Major 7. For FY 1973 the Institution requested a Moreover, the absentee citizen must Civil Acquisitions, December 31, 1973" cites construction appropriation of $40,000,000. comply with all applicable qualifications on page 27 that the National Air and Space The Interior and Related Agencies Appro- and valid procedural requirements of a Museum's current cost estimate of $41,900,- priation Act for that year provided an ap- State. Each State will retain full power to 000 exceeds by $2,400,000 (6 percent) the propriation of $13,000,000 and contract au- test whether an applicant for absentee 1962 estimate of $39,500,000. While both of thority for an additional $27,000,000. Ap- registration or voting first, is of legal age; these amounts do pertain to this building, propriations to liquidate the contract su- second, is incapacitated by reason of in- their comparison over this extended period thority were provided in FY 1974 ($17,000.- sanity; third, is disqualified as a con- is completely misleading. This comparison, 000) and FY 1975 ($7,000,000) and are re- however, since it is now a matter of record, quested for FY 1976 ($3,000,000, the balance victed felon; fourth, meets the prescribed deserves to be explained. There 18 no cost of the approved amount). time and manner for making applica- overrun against the funds actually appropri- 8. The construction of the new museum tion; and fifth, is accurate or truthful ated for this project. building started in the fall 1972, and is DCW FEDERAL HEROY FEDERAL ENERGY ADMINISTRATION WASHINGTON, D.C. 20461 ADMINIST DEPORTMENT April 28, 1975 OFFICE OF THE ADMINISTRATOR MEMORANDUM FOR THE PRESIDENT SUBJECT: Energy Options for May 1 FROM: Frank G. Zarb THRU: Rogers C. B. Morton STATUS OF NEGOTIATIONS Since our meeting last week, we have vigorously pursued our negotiations with Congressmen Ullman and Dingell in an effort to reach agreement on basic differences. Both chairmen have been receptive to our concerns and the May 1 deadline and are proceeding in some favorable directions. At the same time, neither chairman seems to have complete control over his committee, overall progress is slow, and significant differences in approach still persist. The situation in each committee is briefly summarized in the following: Ways and Means The committee is moving towards a bill that will rely primarily on price effects and market forces to achieve our conservation goals. It is likely that the price effects will be approximately equal to the $2.00 tax fee in our program, but applied in a selective manner and phased in over a longer period of time. Specific provisions include: $1.00 per barrel import fee or 10% of the value of imported crude oil, whichever is higher. A lower fee for imported products (1/2 the crude oil rate for two years) Although we have argued for a higher fee for imported products to protect and stimulate domestic refining capacity, the committee's approach is a concession to the Northeast. - 2 - An ad valorem tax on new autos, starting in 1976, based on auto fuel efficiency. The tax, which would be between 2-10% in 1977 and rise to 16% in 1980, has strong support in the committee and is viewed by the chairman as being popular through- out the House. A gasoline tax of an as yet undetermined amount. The tax is likely to start low in 1976 and rise to the 20¢ level in 1980. An industrial fuels tax that rises to $1.00 per barrel over a several year period. In addition to these market mechanisms, the committee strongly favors the establishment of an import quota system to assure that domestic conservation savings result in reductions in imports and a standby Federal petroleum import purchasing authority. Although our efforts to delete these provisions to date have not been successful, primarily because the chairmen believe that these provisions will have to be included in any legislation that is to be successful in the House, we have been successful in convincing the committee to render the provisions essentially harmless. Commerce Committee Progress in the Commerce Committee is much slower and the conceptual directions much less favorable than in Ways and Means. Several important issues have been put off until next week or later, including decontrol of old oil, emergency storage and coal conversion. Although there is a general commitment to decontrol, any decontrol provision from this committee is likely to be phased in over a several year period (e.g. 3-5) and there are disturbing amendments that would roll back the price of new oil as part of any phased decontrol scheme. To date, the Committee has agreed on the following provisions: Establishment of a fixed level of consumption of gasoline at 98 percent of comparable months in 1973- 1974. Although some Presidential discretion is allowed, this allocation approach could be large enough to result in noticeable physical shortages:- - 3 - Standby emergency authorities that require sub- mission of contingency plans to the Congress for approval prior to their implementation. Action in the Senate remains slow and is tending towards multi-tier crude oil pricing systems and reductions in new oil prices. Active consideration is also being given towards price ceilings on all new natural gas, including the intra- state market which is now unregulated. Unrealistic, mandatory conservation programs are also being considered. OPTIONS FOR MAY 1 ACTION of the basic options regarding the May 1st deadline for the 60 days you provided Congress to develop an energy package, three appear to merit primary consideration: impose the second dollar on the import fee, take steps towards decontrol, or do both. OPTION 1: Impose the second dollar of the import fee. Unless the national security proclamation is further amended before May 1, the import fee will rise to $2.00 per barrel on crude oil and $.60 per barrel on products. This action will result in an immediate attempt to override your veto of legislation prohibiting any increase in fees after January 15, 1975. If the veto is not sustained, you will not be able to increase import fees for 90 days, the $1.00 already in existence will be rescinded, and our strength for the rest of the program could be eroded. If, on the other hand, the veto is sustained, it would be a clear sign of strength and a ratification, however narrow, of the market approach to our energy problems. It is our judgment that the veto could be sustained by a slim margin if an all-out effort is launched, but it could go either way. Imposition of the second dollar will place additional pressure on Ullman and possibly give the impression that the Administration is not happy with his progress to date or the direction of the Committee's bill, even though the Committee: is farther along than any other in the Congress, - 4 - has agreed to let us keep the $1.00 now in effect, is moving toward other price mechanisms that would be comparable to your program in both magnitude and philosophy if not in specific application, and is likely to produce legislation that has perhaps the highest degree of probability of being acceptable to both the House and the Administration. In spite of this signal, however, Ullman would be in a position to push his bill as a response to your action, arguing that his bill would effectively roll-back the second dollar while enacting other positive provisions. He might see this as a better response than a negative action to simply negate the second dollar by pushing for an override of the vetoed bill that would suspend your tariff authority for 90 days. A decision not to impose the second dollar would express general satisfaction with Ullman's efforts, give him additional time to produce a bill, and avoid strong moves/pressures from the New England delegation. At the same time, the viability of one of our major action-forcing levers would be seriously undermined. Failure to impose the second dollar now in the face of a poor performance by the Congress might be an indication of the fact that we do not intend to use it in the future. OPTION 2: Initiate decontrol procedures. Under this option, the second dollar would be held in abeyance for an unspecified period of time (an always present threat if the Congress doesn't move) and a phased decontrol plan would be submitted to the Congress within 15 days (to allow for 10 days of public hearings) for its 5 day period to approve or disapprove such a plan. The phased plan, which would be a two year program designed to remove 1/4 of old oil from control every six months, would be comparable in approach if slightly faster in speed, than the approaches that have some support in the Commerce Committee. Although this action could result in punitive legislation, it is a further compromise from your original proposal of immediate decontrol, it places us on a firm decontrol schedule if successful, and has considerable chances of being viewed as an acceptable solution by the Congress, particularly since it can be construed as an action by - 5 - the President. As one of the most critical pieces of your entire legislative program, a move on decontrol while holding the second dollar might enhance the chances for the decontrol plan to be approved. The New England delegation, at least, would not actively oppose the plan. n OPTION 3: Impose the second dollar and initiate decontrol proceedings. This action which combines the basic advantages and disadvantages, opportunities and pitfalls, of options 1 and 2, would be a strong move by the Administration to re-energize the entire Congress on energy legislation. The basic arguments for this option are two-fold: Although Ullman is making some progress, his legislation faces many steps and obstacles before final Congressional action. The likelihood of action on his bill and others by the Congress is remote over the next several months, and the chances of legislation highly objection- able to the Administration are good if we do not main- tain a show of strength. If successful, this option would represent 90% of the economic components of your energy program, even though achieved in a less efficient manner. All that would essentially be lacking is a windfall profits tax. The basic problems with this action center in its magnitude and force. Prospects for negative legislation, parti- cularly on the tariff, are higher for this option than options 1 or 2. RECOMMENDATION Given the lack of progress by the Congress to date, the need for maximum pressure to keep the Congress from trying to avoid the tough decisions required by the nation's energy situation, and the problems being generated by continued controls on old oil, the ERC recommends that the following actions proceed on May 1: Announce the imposition of the second dollar if we are reasonably certain of being able to sustain your veto; Initiate decontrol proceedings. - 6 - If we cannot sustain the veto, then the ERC would recommend the second option - decontrol with an indefinite hold on the second dollar. The ERC further recommends the following sequence of events leading up to the announcement of your decision: 1. Monday afternoon - President meets with advisers; no final decisions are made, and public statements indicate only that the President has met with his advisers to review the options. 2. Wednesday morning - President meets first with Republican leadership to inform them of his decision, and then with Ullman and Dingell, separately if option 3, together if option 2. 3. Wednesday afternoon - Public announcement of decision. 4. Thursday - Press briefing by President or by Zarb.