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Energy Crisis Seminar of the Producers' Council, Grand Rapids, MI, October 18, 1972
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Energy Crisis Seminar of the Producers' Council, Grand Rapids, MI, October 18, 1972
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The original documents are located in Box D33, folder "Energy Crisis Seminar of the
Producers' Council, Grand Rapids, MI, October 18, 1972" of the Ford Congressional
Papers: Press Secretary and Speech File 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. The Council 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States of America his copyrights in all of his unpublished writings in National Archives collections.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.
NOTES
GRAND RAPIDS, MICH.
OCT. 18, 1972
IOUSE OF REPRESENTATIVES, U.S.
OFFICE OF THE MINORITY LEADER
PUBLIC DOCUMENT
Herald R. 3rd
M.C.
OFFICIAL BUSINESS
WEDNESDAY
3 P.M.
ENERGY CRISIS SEMINAR OF THE
PRODUCERS' COUNCIL
FOOD
KENT STATE Room
LIBRARY
PANTLIND HOTEL
Digitized from Box D33 of The Ford Congressional Papers: Press Secretary and Speech File at the Gerald R. Ford Presidential Library
S.A. MORMAN & Co.
BUILDERS SUPPLIES
300 FRANKLIN STREET, S.W.
GRAND RAPIDS. MICHIGAN 49502
616-245-0583
October 2, 1972
The Hon. Gerald R. Ford, M.C.
P/also me card
Office of the Minority Leader
House of Representatives
Washington, D.C. 20515
Tack force get report on Engy
Dear Jerry,
We are delighted to hear that you can be with us
October 18 to deliver the keynote speech at the Energy Crises
Seminar given by Producers' Council at the Pantlind Hotel,
Kent State Room. We will look for you about 3:00 p.m.
Again, you will be most welcome to stay for a drink and
dinner if you like. We understand, though, that you may find
it necessary to leave after an hour or so.
Also, we are aware that the whole thing is conditioned
on the Congress adjourning or recessing before the 18th.
A Mr. Bowersox, of the National headquarters of Producers'
Council, located in Washington, will send you some additional
background material, which of course you may use if you see
fit.
We look forward to seeing you on the 18th. Our members
are enthusiastic about having you with us, and I am sure
our guests will be also.
Thank you for finding the time to do it.
Cordially,
S.A. MORMAN & CO.
JohnBapter John C. Baxter, Pres.
JCB/ps
BERALD R.FORD VIBRARY
ESTAbLISHED 1857
The
Producers'
Council,
Inc.
news
1717 MASSACHUSETTS AVENUE, N.W. / WASHINGTON, D.C. 20036 (202) 667-8727
CONTACT: Francis X. Brown
DATE: July 25, 1972
(202) 667-8727
FOR IMMEDIATE RELEASE
PRODUCERS' COUNCIL TO PRESENT
ENERGY CONSERVATION SEMINAR
Some practical suggestions on how to reduce heating and cooling
costs and conserve energy will be outlined by a group of Producers'
Council members during a series of Energy Conservation Seminars to be
presented in over 50 major cities across the nation.
Developed as a service to the construction industry, in response
to numerous statements from government officials and others of a
growing "energy crisis", the educational seminars will stress how to
effect the most efficient use of energy through proper initial design,
and through proper utilization and application of building products and
equipment.
Technical staffs of key manufacturers, whose products have a direct
relationship to the energy problem, have developed comprehensive
presentations. Considerable attention is devoted to "first costs vs.
life cycle costs" and the economic fallacy of the "low first-cost
syndrome."
Attending the half-day seminar, which will be presented in
cooperation with the Council's local chapters, will be owner/investors,
architects, engineers, building mangers, contractors, government officals
and others.
-more-
QUALITY BUILDING PRODUCERS COUNCIL
NATIONAL ORGANIZATION OF MANUFACTURERS OF QUALITY BUILDING PRODUCTS
ADD I PRODUCERS' COUNCIL TO PRESENT ENERGY CONSERVATION SEMINAR
The program format in each city will be a keynote address on
the extent of the energy crisis, followed by five 15 minute sessions
illustrating energy saving ideas in the selection and application of
Insulation
ighting
glass
heating and air conditioning
and
utilities. Exhibits, demonstrating some of the energy conservation
ideas, will supplement the educational portion of the program.
Sponsors are: American Public Power Association; American Gas
Association; Amspec, Inc.; Apache Foam Products; Armstrong Cork Co;
Barber-Colman Company; C-E Glass, Inc.; Electric Energy Association;
W. R. Grace and Co.; Grefco, Inc.; Johns-Manville Corp.; Libbey-
Owens-Ford Co.; Owens Corning Fiberglas Corp.; PPG Industries, Inc.;
Silbrico Corporation; Westinghouse Electric Corp.
The
Producers'
Council,
Inc.
news
1717 MASSACHUSETTS AVENUE, N.W. / WASHINGTON, D.C. 20036 (202) 667-8727
CONTACT: FRANCIS X. BROWN
FOR IMMEDIATE RELEASE
(202) 667-8727
August 17, 1972
INTERIOR SECRETARY MORTON
TO SPEAK AT
PRODUCERS' COUNCIL ENERGY SEMINAR
Secretary of the Interior Rogers C. B. Morton and Arthur F. Sampson,
acting administrator, General Services Administration, head a list of
prominent officials and energy experts who will participate in an Energy
Conservation Seminar being presented by Producers' Council In 52 major
cities across the nation, beginning September 6th.
The secretary will keynote the Washington, D.C. meeting on September
12th and the Cleveland, Ohio meeting on October 10th.
Sampson is scheduled to be a keynoter in San Francisco on September
12th; in Philadelphia on September 27th; New York on October 4th; Honolulu
on November 13th; and Pittsburgh on November 16th.
Participation of these two top government officials is Indicative of
the high national priority being given the energy problem and efforts being
extended to alert the nation that energy must be used more efficiently
if our present reserves are to meet the Increasing demands of modern
civilization.
Prime objective of the half-day seminars is to demonstrate, through
technical presentation and exhibits, how operating costs can be cut and how
energy can be used more efficiently through better design and better :
COUNCIL
NATIONAL ORGANIZATION OF MANUFACTURERS OF QUALITY BUILDING PRODUCTS
ADD I -INTERIOR SECRETARY MORTON TO SPEAK AT ENERGY SEMINAR
initial selection and application of building products and equipment.
Attending in each city will be owner/investors, architects, engineers,
contractors, subcontractors, government officials, school and hospital
administrators, manufacturers and others.
Sponsoring Council members are: American Gas Association; American
Public Power Association; Amspec, Inc.; Apache Foam Products; Armstrong
Cork Co.; Barber-Colman Company; C-E Glass, Inc.; Electric Energy Association;
W. R. Grace & Co.; Grefco, Inc.; Johns-Manville Corp.; Libbey Owens-Ford
Co.; Owens-Corning Fiberglas Corp.; PPG Industries, Inc.; Silbrico
Corporation; and Westinghouse Electric Corp.
Other keynoters, and the cities in which they will be speaking, are:
Chicago -Walter Meisen, assistant commissioner for construction management,
General Services Administration; Birmingham and Nashville John F. Galuardi,
acting commissioner, Public Buildings Service, General Services Adminis-
tration; Hartford --Dan Luskin, commissioner of Environmental Protection,
State of Connecticut; San Diego --Dr. Gerald Johnson, director, Division of
Applied Technology, Atomic Energy Commission; Cincinnati --John Larson,
assistant secretary for policy and programs, Department of the Interior;
Baltimore --Richard S. Bodman, assistant secretary for management and budget,
Department of the Interior; St. Louis --Marvin E. Jones, chairman, Missouri
State Public Services Commission; Portland, Oregon --Donald Frisby, president,
Pacific Power Company and Albany and Syracuse -- Joseph C. Swidler, chairman,
Public Service Commission, State of New York ,and former chairman of Federal
Power Commission. Keynoters for other cities on the itinerary are in the
process of being confirmed.
Registration information can be obtained by contacting local Producers'
Council chapters or the national office located at 1717 Massachusetts Avenue,
N.W. Washington, D.C. 20036.
osa
News Release
UNITED STATES GOVERNMENT
GENERAL SERVICES ADMINISTRATION
Office of Information - Room 6117- 18th and F Streets, NW. -Washington, D.C. 20405 - (202) 343-4511
September 29, 1972
GSA #5904
FOR IMMEDIATE RELEASE
GSA Chief To Keynote
Five Energy Seminars
Arthur F. Sampson, head of the General Services Administration, has
been invited by the Producers Council to keynote a number of energy con-
servation seminars throughout the country.
The seminars, many of which are to run concurrently, feature energy
experts in some 50 cities.
"President Nixon has expressed continuing interest in our efforts
to conserve energy in construction and use of federal buildings,"
Sampson said.
The seminars focus on ways to reduce operating costs and to use
energy more efficiently through better building design and use of materials.
Sampson said that GSA already is governed by the following considerations
in its building designs:
--availability of automatic or individual heating and cooling controls;
--working hours during which the building is to be occupied;
--type of material on the exterior;
--general interior design;
--use of glass with its relatively high heat transmission coefficient;
--type of concrete finish;
--overuse of building material for structural safety standards that
are necessarily high.
In addition, as a pioneer project in the event the energy problem
develops into a full bloom crisis, GSA is examining sites for a model
building from the standpoint of energy conservation, Sampson said.
2
Meanwhile, in operating many federal buildings today, GSA saves
energy through such measures as reducing operating hours of air-condi-
tioning and educating occupants to turn off lights that aren't being
used.
Sampson speaks at the Commodore Hotel in New York on October 4
at 1:15 p.m.
# # #
GERALD FORD LIBRARY
This suggested keynote speech is being provided as an "insurance factor" in
the event your keynoter has to cance! at the last minute and a substitute
must be obtained on short notice.
KEYNOTE SPEECH
ENERGY CONSERVATION SEMINAR
Seeing so many here today is, to me, an indication of the concern most
of us have over this energy crisis
...
a crisis that is certain to have a
dramatic impact on the growth of the building industry.
For, no matter how you slice it, the energy crisis is going to affect
all of us. If we don't come up with better design, better construction,
and better selection and application of building products and equipment,
there is going to be restricted growth, less construction, unhappy con-
sumers, and less business for all of us.
Let's dig a little deeper into the problem and find out what we are
faced with.
Let's briefly review the overall energy balance and the prospective
trends regarding energy supply and demand in the years ahead.
In 1971, this nation consumed close to 70 quadrillion British thermal
units. Included in the total are some 5.5 billion barrels of oil,
511 million tons of coal, and 22 trillion cubic feet of natural gas.
These totals are supplemented by relatively small quantities of hydro-
power and uranium.
In the last ten years, the world has consumed as much petroleum as
was produced during the entire century prior to 1959 -- and the United
- 2 - -
States is the leading energy consumer. With only six percent of the world's
people, we consume 35% of the world's energy. And, our energy consumption
is expected to increase in the years ahead as our population increases.
A National Petroleum Council Study projects the growth of energy con-
sumption in the United States by some 50% to a total in 1980 in excess of
100 quadrillion BTUs. It is estimated that by 1980 nuclear energy will
have expanded some fortyfold over 1970 and will be supplying close to
10% of total energy consumption. Coal consumption will have Increased to
800 million tons, with natural gas and hydropower expected to Increase
only slightly. Petroleum consumption is expected to show a dramatic
increase, with an annual consumption of 8.3 billion barrels in 1980, as
compared with 5.5 billion barrels in 1971. Most of the Increase, Incl-
dentally, is expected to be supplied by the Middle East, which is hardly
a stable area, politically.
And, competing for this Middle East oil will be other consumer
nations. For example, 80 percent of Japan's energy comes from oil
...
87 percent for Western Europe. By 1980, Japan's consumption will
quadruple and Western Europe's will double.
The Common Market nations of Europe are, today, embarked upon a
common community policy for energy. The objective of this poiicy is
threefold:
- 3 -
to increase and coordinate efforts in research and
development
to secure an adequate supply of energy at low and
stable prices
to create a common market for energy.
So, concern is not limited to the United States alone. The concern
is worldwide.
The Ford Foundation has recently undertaken a 15-month, $2-million
study to "help prepare an informed and reasoned base for a nationa!
energy policy."
In testimony before the Interior and Insular Affairs Committee of
the House of Representatives, George A. Lincoln, director, Office of
Emergency Preparedness, said: "National energy policies are now in
the same category of importance as national security and foreign policy,
and need to be given the same level of attention.
"Energy security is rapidly becoming a critical component of
national security."
We must assume, then, that the shortage is real and that it is here
now.
What do we do?
- 4 -
"Nuclear and coal," according to a recent speech by James R.
Schlesinger, chairman, U.S. Atomic Energy Commission, "are the energy
sources in which our own resources permit far more extended uses in the
foreseeable future without undue dependence on overseas supplies. They
afford major possibilities for substitution."
Continuing, the chairman stated that a recent National Power Survey
by the Federal Power Commission estimates that by 1990 53% of thermo-
electric generating capacity in this country will be nuclear. The AEC's
breeder development is intended to increase by a factor of 60 or 70 the
exploitation of the energy content in uranium."
This is an optimistic statement. Many hurdles must be cleared before
projection becomes fact. Power plant siting is one of the biggest.
In the meantime, what can the building industry do to conserve
energy
... to utilize more efficiently the energy that is now available?
Many practical suggestions will be offered today by subsequent
speakers. The members of Producers' Council are to be commended for
taking the initiative in researching the energy problem, as it relates
to them, and making the findings available to the construction Industry . --
not only here, but in 52 other cities across the United States.
All of us must help.
The designer must design better -- considering more carefully,
for example, the siting of a building to enhance natural lighting and,
- 5 -
at the same time, reduce the air conditioning load and heat loss.
The builder must build better
double checking to make
sure the products and equipment installed to conserve energy are Installed
properly.
The manufacturer must devote more funds to research and
development. Better methods of insulation, better environmental control
systems, and better heat transfer equipment, etc., will be required.
The producer who is doing something about this problem today is the
producer who will have the competitive edge tomorrow.
And, most important, building owners can advance significantly
the energy conservation cause by adopting an open-minded attitude toward
utilizing advanced systems and building materials. Unless owners are
willing to purchase these Innovative systems and materials -- which may
cost more initially, but less over the life span of a building, considering
savings in maintenance and operating costs -- energy conservation will
probably be effected by other means.
There is already talk of limiting demand for certain fuels
of raising prices to restrict use
...
and instituting, through building
codes, regulations governing:
maximum allowable wattage per square foot for lighting purposes
maximum allowable brightness for advertising purposes
maximum heat settings that will be permitted for different uses
the minimum temperature that must be arrived at before air
conditioning can be used.
- 6 - -
Before closing, I would like to read to you several important
recommendations pertaining to energy conservation which resulted from the
International Environmental Conference sponsored by the General Services
Administration last April. These recommendations reflect the thinking of
many knowledgeable people and are worthy of careful study by all of us.
They are:
1. Design for life cycle cost rather than Initial cost.
2. Develop a procedure to create ad hoc design teams including
all disciplines to solve design and environmental problems.
3. Consider designing a facility to be as self-contained as
possible. Resources such as power and water (except for
startup and emergency) should not be drawn from a community's
resources.
4. Propose standards to optimize (minimize) energy consumption
in building operation.
5.
Identify the engineering and economic advantage of total
energy for private and public building clusters.
6.
Identify and use the building materials that require the least
amount of energy for their production.
7. Consider using exhaust air to precondition incoming air. Also
consider use of waste heat from utility sources, such as
lighting, so that they will contribute to the heat values for
the building. Locate buildings near power plants in order
to use waste heat.
- 7 -
8.
In general, central heating and cooling distribution plants
should be used wherever possible.
9.
Reduce environmental requirements as much as possible. For
example:
a. Maintain lower temperature in the winter.
b Permit higher dry bulb temperatures in air-conditioned
space in the summer.
C. Do not heat, cool, or illuminate unoccupled space,
passageways, lobbies and similar space to the degree of
fully occupied space.
10. GSA should allocate and limit quantities of energy allowable,
by building occupancy and use, in all of its buildings.
The energy crisis is a critical problem. It is not someone else's
problem. It is your problem ... my problem. It is a problem, the
solution to which, requires team action.
This seminar today is a start in that direction.
end
DEPARTMENT of the INTERIOR
news release
OFFICE OF THE SECRETARY
For Release to PM's, September 12, 1972
MORTON CALLS FOR BETTER ENERGY HOUSEKEEPING
In a major address today before the Producers Council Energy
Conservation Seminar in Washington, D. C., Secretary of the Interior
Rogers C. B. Morton said that, "although we have not experienced a full-
blown energy crisis, the experiences of the last months have been
invaluable. 11
Citing the increases in America's energy demands, Morton noted:
"Today Americans use twice the electrical energy they did 10 years ago
...
demands for natural gas have increased faster than we have discovered it,
and
...
our total oil needs by 1980 will increase by 50 percent. "
Reviewing the Administration's efforts to achieve President Nixon's
goal of "a sufficient supply of clean energy
...
to sustain healthy economic
growth and improve the quality of our national life, 11 Morton highlighted
research efforts to perfect coal gasification, geothermal steam, fast breeder
reactors and solar energy processes.
Secretary Morton called for Americans to "pair the spirit and dynamism
of our 'environmental ethic' with an 'energy ethic,'' and proposed that "the
first action to stave off energy shortfalls is to reassess all our energy usage
patterns - in short to reorder our energy housekeeping."
The Interior Secretary also reviewed the comparative funding for research
and development by privately owned power companies in 1970 -- when, he said,
212 privately owned power companies spent $46 million on research and
development and $88. 7 million on advertising. "In my view this kind of
emphasis is not in the public interest, " Morton concluded.
He added that meeting the energy needs of the future "will take the
kind of vision and responsibility as well as spirited leadership that the
President has shown in his program for clean energy. It's a tough problem
but the President has made a good beginning. We must continue to progress."
# # # #
DEPARTMENT of the INTERIOR
news release
OFFICE OF THE SECRETARY
For Release at time of delivery September 12, 1972
ROGERS C. B. MORTON REMARKS AT THE PRODUCERS COUNCIL ENERGY
CONSERVATION SEMINAR, WASHINGTON, D. C., STATLER HILTON,
SEPTEMBER 12, 1972, 2:00 P.M.
In my capacity as trustee of the public lands and the Nation's natural,
wildlife, and mineral resources, I am frequently named as defendant in suits
brought against government environmentalists, by environmentalists amongst
our citizens.
As of this morning almost 350 suits are pending, one of which is a tort
case alleging improprieties by one of our Park Service bears.
The one suit that I haven't been named in is one from a disgruntled
citizen who can't get gas for his car, or fuel for his furnace, or electricity
for his lights.
The unfortunate fact, however, is that some Secretary of the Interior
in the distant future may have that experience.
has
For several years went the Department of the Interior have been working
to inform the Nation of threatening energy shortfalls
As the President
said in his Clean Energy Message, we need to create "A sufficient supply
of clean energy
to sustain healthy economic growth and improve the
quality of our national life. 11
Dr.
havę also been working to develop more effective uses of our energy,
at still economical prices
-- to develop positive programs to utilize our vast, untapped energy
assets;
-- to develop an awareness that energy assets are finite;
-- to develop an "energy ethic" if you will.
This is the substance of the President's Clean Energy Message -- the
first Presidential message of its kind -- and we are responding.
By no means do I wish to infer that the lights will go be out before I finish
speaking -- I know they wouldn't dare -- but the potential of an energy crisis
is of immense proportion.
GERA
2
Today Americans UNC twice the electrical energy they did 10 years ago,
and this still is expected to increase 5 times by the year 2000.
Since 1968 our demands for natural gas have increased faster than we have
discovered it, and already new priorities in marketing policy have been con-
sidered and put into effect.
Our total oil needs will by 1980 increase by 50% and/at the current rate
of exploration we will have to import one-third of our oil requirements.
Electric power alone required a $4.00 investment to generate $1.00 in
sales.
So much for the increase in energy consumption. Let's examine supply
projections for the immediate future.
Nuclear power: Plant construction across the Nation has been stalled
because of lags in equipment availability, and positive action to ensure that
they meet environmental criteria. If we don't perfect the fast breeder reactor
we can anticipate a shortage of low-cost uranium supplies by the year 2000.
Coal: Although our greatest fossil fuel resources are coal, much of our
coal supplies have been out of the marketplace because they don't meet
sulfur oxide emission standards.
Natural gas: As I mentioned, discoveries of new gas have not followed
the increase of new demands because of low prices. The low price of gas
has stimulated consumption and discouraged exploration. The average well-
head price in constant dollars has declines since 1963. Intrastate gas commands
a 25 to 50 percent premium over current yearly average interstate domestic
wellhead prices. The FPC is now moving - despite severe criticism -- to
free gas producers from some of these price limitations. This shortage
ought to prove one thing to us: "You can't repeal the law of supply and demand. 11
Oil: Development of domestic petroleum resources has declined and we
have become increasingly dependent upon foreign imports. In the last 20 years,
geophysical exploration in the U.S. has decreased 72 percent, exploratory
wells drilled have decreased 44 percent, and overall drilling activity is down
63 percent, In 1971 about a fourth of our oil demands were filled with foreign
imports - nearly four million barrels a day.
Even with Alaskan oil, we face the prospect of depending upon the
politically unstable Mid-Eastern countries for up to a third of our oil supply
by 1985.
1 BERALD RE LIBRARY FORD
3
The economic implications of this are ominous. A Chase Manhattan
report suggeststhat by this time, "the annual balance of payments deficit
for petroléum alone could be as much as 25 billion dollars -- a deficit the
Nation could not tolerate."
The strategic implications are even more ominous.
This dependence on Mideast oil would force us to compete with our
friends and allies in the international marketplace and could weaken their
position.
In summary: We are not in the midst of a full-blown energy crisis,
despite the occurrence of seasonal "brownouts, 11 but as the margins between
supply and demand become narrow, it is difficult to look beyond the immediate
future with optimism.
Although I'm too tall for the role, I feel like Alice in Wonderland when
she asked the Cheshire Cat if she was headed in the right direction.
He replied simply, "That depends on where you want to go."
It's my belief that President Nixon's Clean Energy Message holds that
direction, and that our new directions for clean burning economical energy
systems will provide America with continued social and economic progress.
Unlike those who propound Zero Growth, I share the conviction of Henry
Wallich, the noted Yale economist. He responded to the controversial Club
of Rome MIT Study "Limits of Growth. 11 He said and I quote,
"What the world needs is not to stop growth, but to stimulate and guide
it into channels that will permit growth to continue in our life and probably
for many generations. TT
I believe that American can pair the spirit and dynamism of our "Environ-
mental Ethic" with an "Energy Ethic" which is just as relevant to our future.
Just as we have begun to realize that all development doesn't necessarily
result in progress, we are also gaining an awareness that our energy resources
are finite, and that not all patterns of energy consumption may be necessary.
As a partial reply to the Cheshire Cat, I propose that the first action to
stave off energy shortfalls, is to reassess all our energy usage patterns.
In short to reorder our energy housekeeping.
The Office of Emergency Preparedness recently issued a report on
energy conservation. It suggests that conservation measures can considerably
reduce U.S. energy requirements.
GERALD FORD UGRARY
4
Look at Transportation. In 1970, 25 percent of the total energy in
America was used for transportation. Automobiles use 55 percent, with
trucks and aircrafts 21 and 7.5 percent respectively.
Through reordering transportation patterns we can effect enormous
energy savings through using more energy-efficient systems.
Under the President's leadership a broad spectrum of research and
development to design more efficient propulsions and traffic systems has
been initiated.
Local and Federal government action to stimulate more efficient less
pollutant transportation measures are already having great effect -- but we
must further encourage Americans to use transportation which utilizes
energy more efficiently.
Let's look at residential and commercial usage. Through more energy-
efficient design, and improved insulation we can drastically reduce fuel
utilization to heat and cool our living and working spaces.
Good insulation will increase heating and cooling system efficiency by
as much as 30 percent. And the cost of meeting new Federal Housing
Administration standards to conserve energy in the average home, can be
amortized in one year in the average climate.
For the American consumer -- there are few investments that surpass
insulation in providing sound returns while contributing to the needs of our
national energy ethic.
For the commercial buildings owners it's more than that -- it's simply
good business practice.
Energy usage patterns have an incredible effect on our national energy
picture.
If, for example, all residential thermostats were set two degrees higher
during the summer and two degrees lower during the winter energy savings
could be equivalent to one percent of the total oil and gas consumption.
As simplistic as these measures are, they will produce significant
returns in halting the possibilities of energy shortages during peak usage
periods.
GERALD LIBRARY
5
Although we have not experienced a full-blown-energy crisis the
experiences of the last months have been invaluable.
I have always subscribed to the belief that crisis heightens the vision,
energy, and interest of our people and the energy outlook is no exception.
The Department of the Interior is following the President's lead in pro-
moting energy research and development -- from experiments with geothermal
steam, to coal gasification and oil shale development.
Produce Deprit
Elsewhere we are working with the fast breeder reactor, and solar energy.
Industry is beginning to become more involved in meeting national energy
needs with R&D for more effective and cleaner energy sources.
Nevertheless there are great areas that still require new action, and new
commitments.
The overall R&D figure for the electrical utility industry represented
less than a quarter of 1 percent of gross revenues for 1970 which the
President's Office of Science and Technology called, "A remarkably small
percentage by most industry standards."
A recent article in HAR PERS by Anthony Wolff which discussed this
same point noted that in 1970, 212 privately owned power companies spent
$46 million on Research and Development. At the same time, $88. 7 million
was spent directly on advertising -- to stimulate sale of appliances and the
use of more energy.
In my view, this kind of emphasis is not in the public interest. In fact,
if it continues, it would be downright irresponsible
and it would reflect
narrow self-interest.
Nevertheless, many of the leaders in the power industry are getting
behind the need for energy conservation.
One exceptional leader in this area is Charles Luce whose "Save a Watt"
program at Con Edison in New York City is already beginning to have an impact.
I believe that our technology, as well as the developing awareness amongst
all Americans will lead our Nation into an era of increasing economic and
social progress -- with abundant, and clean energy for this growth.
FORD LIBRARY & GERALD
6
One thing, Kowever, is that we are no longer in an era or country --
or for that matter a globe -- in which economic and environmental interests
can be segregated.
Meeting these needs will take the kind of vision and responsibility as
well as spirited leadership that the President has shown in his program for
clean energy. It's a tough problem but the President has made a good
beginning. We must continue to progress.
####
GERALD R. LIBRARY FORD
JAMES A. MCCLURE, IDAHO, CHAIRMAN
MICHAEL D. HATHAWAY, DIRECTOR
1620 LONGWORTH HOUSE OFFICE BLDG.
202-225-5841
TASK FORCE ON ENERGY AND RESOURCES
REPUBLICAN RESEARCH COMMITTEE
U.S. HOUSE OF REPRESENTATIVES
WASHINGTON, D.C. 20515
May, 1972
CAMPAIGN FACT SHEET
The Energy Crisis
The news media has told the American public that there exists an "energy crisis."
Typical newspaper headlines have read:
"Facing the Energy Crisis"
"Fuel Crisis, Big Oil Imports Face U.S. by '80s"
"U.S. Energy Crisis: Light Dims at End of the Tunnel"
"Power Crisis, Suits Linked"
"Oil, Foreign Policy, and the Energy Crisis"
"Power Needs by 1990 Seen Quadrupled"
"Energy Crisis is Predicted by Dr. Lapp"
"Action to Avoid Depending on Imported Fuels is Urged"
nigh-level Administration officials have told the public that our energy situ-
ation constitutes a serious national problem. For example:
President Nixon, in his Energy Message to Congress on June 4, 1971, said:
"For most of our history, a plentiful supply of energy is something the
American people have taken very much for granted. In the past twenty years
alone, we have been able to double our consumption of energy without ex-
hausting the supply. But the assumption that sufficient energy will al-
ways be readily available has been brought sharply into question within the
last year. The brownouts that have affected some areas of our country,
the sharp increases in certain fuel prices and our growing awareness of
the environmental consequences of energy production have all demonstrated
that we cannot take our energy supply for granted any longer."
Secretary of the Interior Morton, in the Foreward to the Department of the
ENERGY CRISIS/2
Interior report, United States Energy - A Summary Review, said:
"Our Nation is facing a difficult and serious energy situation. Supplies of
natural gas are not increasing consonant with the demands for that clean fuel.
A shortage of electric generating capacity increases the probability of future
brownouts in major population areas. The necessary clean air regulations mean
higher fuel costs and supply problems for major urban areas. Actions to over-
come these problems will require informed public decisions and responsive mecha-
nisms within the Federal Government, so that the benefits of plentiful, clean
energy can continue to be enjoyed by the American people."
Secretary of Commerce Peterson, in a speech at the National Press Club on April
4, 1972, said:
"The U.S. formerly had sufficient energy reserves to meet almost all of its
needs and sustain economic growth. In fact, this abundant supply of low cost
energy has provided the base for much of our industrial might.
"There are a variety of broad options for dealing with this energy crisis."
Secretary of the Treasury Connally, in testimony before the House Committee on
Interior and Insular Affairs on April 18, 1972, said:
"There are few material things more important to our Nation and our industrial
civilization than energy. Our industry, transportation and the public utilities
which light, heat, and cool our homes, hospitals, and schools must have energy
generated from oil, gas, coal, nuclear and hydropower, and other sources in
order to function.
in spite of this, I am afraid it takes a Northeast brownout or a Suez crisis to
waken the public to its reliance on energy. Unfortunately, between emergencies
the public tends to take energy for granted, and tends to disregard the com-
pelling need for a strong and effective policy on energy geared to avoid national
catastrophe in the future."
Within the Congress, there are several studies of energy and resource problems in
progress, including:
1. A national fuels and energy policy study by the Senate Interior and Insular
Affairs Committee.
2. A study of the fuel and energy situation by the House Interior and Insular
Affairs Committee.
3. A study of the research and development aspects of producing and transmitting
energy by the Task Force on Energy of the House Science and Astronautics Committee.
4. A study of energy and resources in the United States relating to a national
energy program by the House Republican Task Force on Energy and Resources.
ENERGY CRISIS/3
In general, these and other studies are directed at three basic goals:
1. Definition of the "energy crisis," including determination of its extent, causes,
and future consequences.
2. Establishment of a national energy policy.
3. Development of a national energy program for accomplishing such a policy, consis-
tent with other national goals.
Primary energy consumption in the United States for 1970 was:
Primary Energy Consumption
Consuming Sector
Trillion BTU
Percentage
Residential/Commercial
12,994
19.2
Industrial
17,798
26.2
Transportation
16,282
24.0
Electric Utilities
16,695
24.6
Non-energy and Misc.
4,058
6.0
Total:
67,827
100.0
[Note: Primary energy is produced directly from various fuels and sources, and includes
energy required by the electric utilities to produce electricity. Electricity,
or electrical energy, is considered a secondary energy source.]
Total energy consumption (primary plus secondary) in the United States for 1970 was:
Total Energy Consumption
Consuming Sector
Trillion BTU
Percentage
Residential/Commercial
15,761
23.2
Industrial
20,056
29.6
Transportation
16,313
24.1
Non-energy and Misc.
4,058
6.0
Electricity Conversion
11,639
17.1
Total:
67,827
100.0
[Note 1: The difference between total and primary energy consumption for any specific con-
suming sector represents the amount of electrical energy consumed. For instance,
the industrial sector consumed 17,798 trillion BTU of primary energy plus an addi-
tional 2,258 trillion BTU of secondary energy (i.e. electricity) for a total energy
consumption of 20,056 trillion BTU.]
ENERGY CRISIS/4
Consumption of fuel resources in the United States for 1970 was:
Fuel
Total Consumption
Electric Utility
Coal (Million short tons)
519
322
Natural Gas (Billion
cubic feet)
22,412
3,894
Fuel Oil (million
barrels)
804
332
*Uranium Ore (short tons)
- -
7,500
*Required feed supply for diffusion plants
Installed electric power capacity in the United States at the end of 1970 was:
Type of Plant
Installed Capacity,
at End of 1970 (megawatts)
Fossil Fuel (steam)
260,000
Hydroelectric
55,000
Gas Turbine and Diesel
19,000
Nuclear
6,000
Total
340,000
The possibility of power shortages is expressed in terms of reserve margins. For
example, if an utility estimates a summer peak load of 20,000 megawatts (MW) and
plans to have 24,000 MW of capacity available, it then has a reserve margin of
4,000 MW, or 20%. This reserve margin is not surplus capacity. It represents a
necessary component of generating capacity for covering equipment failures, mal-
functions, and essential maintenance. In general, a reserve margin of at least
20% is essential to assure reliable electric service. Reserve margins for the
summer of 1972 and the winter of 1972-73 are listed below, by reliability region:
Reliability Region
Reserve Margin (%),
Reserved Margin (%),
as scheduled
after delays*
Summer, 72
Winter, 72-73
Summer, 72
Winter, 72-73
East Central
18.6
16.0
10.1
6.0
Texas
22.8
40.5
9.8
16.1
Mid-Atlantic
20.8
31.5
15.3
25.3
Mid-American (Interpool)
24.4
33.5
4.9
12.2
Mid-Continent
13.3
19.4
7.8
13.1
Northeast
31.5
27.4
24.1
16.5
Southeastern
14.9
21.0
6.3
8.7
Southwest
20.0
49.2
17.5
46.4
Western
30.7
22.7
29.3
19.0
*Reserve margins if scheduled new steam electric generating units are delayed.
[Note: The relationship between reserve margins and power reliability is non-linear.
For example, if a 20% reserve margin results in only one occasion in ten years when
generating capability might be insufficient to meet load requirements, then a re-
duction to 10% reserve margin will result in six occasions per year when load cur-
tailment could be expected. In other words, reduction of reserve margin by 50% in-
creases the probability of insufficient capacity by sixty-fold.]
ENERGY CRISIS/5
Several specific areas of the United States face the possibility of having reserve
margins below 20% for the coming summer, due to delays in new generating plants.
Among these areas are New York, Northern Illinois-Wisconsin, lowa, Virginia-Carolinas,
Rocky Mountain, Florida and TVA.
The available supply of electrical energy in the United States for 1971 was:
Source
Production (million kilowatt-hours)
Electric Utility
1,613,936
Industrial
103,585
Total
1,717,521
Sales to ultimate customers for 1971, based on preliminary data, were:
Customer
Sales (million kilowatt-hour)
Percentage of total
Residential
499,147
34
Commercial
328,561
22
Industrial
589,766
40
Other
50,608
4
Total
1,468,082
Estimated uses of residential electricity, for 1970, were:
Residential Electricity Sales
(billion kilowatt-hours)
Kitchen use
Refrigeration
84
Cooking
32
Other
23
Cleaning and Grooming
Water heating
69
Cleaning appliances
31
Lighting
71
Radio & Television
34
Space heating
31
Air conditioning
27
Miscellaneous appliances
46
448
Projected requirements for electric power capacity are:
Type of Plant
Projected Installed Capacity (megawatts)
1980
1990
Fossil Fuel Steam
390,000
558,000
Nuclear
140,000
475,000
Hydroelectric
95,000
152,000
Gas Turbine and Diesel
40,000
75,000
Total
665,000
1,260,000
ENERGY CRISIS/6
[Note: and The projected capital costs for this new capacity, with associated transmission
tween distribution facilities, is in the order of $400 billion to $500 billion be-
1970 and 1990.]
Projected fuel requirements for electric power generation:
Fuel
1980
1990
Coal (Million short tons)
500
700
Natural gas (billion
cubic feet)
3,800
4,200
Fuel oil (million barrels)
640
800
Uranium Ore (short tons)
without plutonium recycle 41,000
217,000
with plutonium recycle
38,000
108,000
Air estimated: pollution resulting from fossil fuel powerplant operations, for 1968, is
Sulfur Oxides
Nitrogen Oxides
Particulates
(megawatt hours)
Source
Generated
Amount
Percent
Amount
Percent
Amount
Percent
(Million)
(Million
of U.S.
(Million
of U.S.
(Million
of U.S.
tons)
Total
tons)
Total
tons)
Total
Coal-fired
685
15.5
46.69
3.0
14.57
5.6
19.79
Oil-fired
104
1.3
3.91
0.4
1.94
0.02
0.07
Natural gas
304
0.6
2.91
Total
1,093
16.8
50.60
4.0
19.42
5.62
19.86
Water requirements for electric power plant cooling during 1970 are estimated:
Fresh
Saline
111,000 cubic feet per second
46,000 cubic feet per second
In addition, 1,400 cubic feet per second of fresh water was consumed.
Research and development is underway on several advanced sources of electric power,
including:
1. Liquid metal cooled fast breeder reactors (LMFBR)
2. Gas cooled fast breeder reactors (GCFBR)
3. Molten salt breeder reactors (MSBR)
4. Light water breeder reactors (LWBR)
5. Magnetohydrodynamic generators (MHD)
6. Electrogasdynamic generators (EGD)
7. Fusion reactors (CTR)
ENERGY CRISIS/7
8. Geothermal energy
9. Fuel cells
10. Thermionic generation
11. Thermoelectric generation
12. Solar generation
In addition, some interest has been shown in producing electricity from tidal energy
and wind energy, despite past decisions that these sources were not feasible.
At present, three fossil fuels provide 95% of the energy used in the United States:
U.S. Demand
Fuel
1970
%
2000 (Estimated)
%
Petroleum (million
barrels)
5,367
43
12,000
35
Natural gas (trillion
cubic feet)
22
33
46
26
Coal (million short
tons)
527
20
1,000
14
[Note: The remaining 4% In 1970 and 25% in 2000 is comprised of energy derived from
hydropower, nuclear power, and miscellaneous sources.
At the beginning of the 21st Century, fossil fuels will account for an estimated
75% of the U.S. total energy demand.
The demand for nuclear energy and other energy sources, such as hydropower and
geothermal:
Energy Source
U.S. Energy Demand (trillion BTU)
1970
2000
Nuclear power
208
43,528
Hydropower, geothermal,
and misc.
2,647
5,056
[Note: Even though U.S. energy demands will continue to be met primarily by fossil fuels,
the importance of nuclear power, hydropower, geothermal, and other sources should
not be underestimated. The availability or lack of these sources will determine
the difference between reliable electric power and blackouts.]
Natural gas consumption in the United States from 1966 to 1970
equalled the annual demand. Additions to gas reserves, however, began declining
and in 1968 reserve additions were 8 trillion cubic feet less than annual con-
sumption. The following data show the projected unsatisfied demand for the United
States in the coming years:
ENERGY CRISIS/8
Year
Annual Demand
Annual Consumption
Unsatisfied Demand
1970
22.6
22.6
0
1971
24.6
23.7
0.9
1972
26.1
24.8
1.3
1973
27.7
25.8
1.9
1975
29.8
26.2
3.6
1980
34.5
25.0
9.5
1990
46.4
29.3
17.1
[Note: All units are in terms of trillion cubic feet._
The unsatisfied demand illustrates why natural gas rationing has begun in the
United States, and why it will continue.*
[Note: *The Supreme Court is presently deciding whether or not the Federal Power
Commission has authority to allocate available supplies. In addition, the Com-
mission recently denied an application for new service because the gas would have
been used by an electric utility. Several cities and regions in the U.S., including
Washington, D. C., have already been told that their gas utilities will not accept
any new customers, including new residential consumers.]
The decrease in domestic production of natural gas was, and is, projected to be:
Year
Domestic Production (TcF) Deficit (Consumption less domestic
Production) (TcF)
1971
22.8
0.9
23.8
1.0
1972
1973
24.7
1.1
24.7
1.5
1975
1980
20.4
4.6
1990
17.8
11.5
[Note: This deficit will be met by pipeline imports (from Canada and Mexico), LNG im-
ports (from Algeria and Venezuela, primarily), Alaskan gas, and synthetic gas
from coal or liquid hydrocarbons (such as naptha and crude oil). Of these supple-
mental supplies, LNG will be the largest single source. In other words, despite
large-scale rationing of natural gas, the U.S. will still increasingly depend on
foreign sources for an appreciable percentage of its supply.]
Price ranges for the additional supplies are estimated below, in terms of dollars
per thousand cubic feet (McF).
Source
Price Range
Synthetic gas: coal
0.90 - 1.95
Synthetic gas: oil or naptha
1.00 - 1.70
Pipeline gas: Alaska
1.00 - 1.35
LNG: Algeria (long-term
contract)
1.00 - 1.89
[Note: These prices can be compared with the average price received by major interstate
pipeline companies for natural gas sold for resale -- about 45¢ per McF. The
companies pay domestic producers about 20¢/McF for the gas.]
The consumer will not feel the full impact of these higher priced supplements
immediately. The supplemental supplies will be mixed with lower costs domestic
gas, thereby increasing the consumer's costs only slightly, compared to the ab-
solute cost.
ENERGY CRISIS/9
Petroleum demand in the United States for 1971 averaged 15,367,000 barrels
per day or a total of 5.61 billion barrels for the year.
The following data indicate the individual product demand:
Product Demand
1971 (barrels per day)
Gasoline
6,035,000
Kerosine
990,000
Distillate
2,690,000
Residual
2,289,000
All other
3,363,000
Total
15,367,000
New supplies of petroleum averaged 15,466,000 barrels per day for the same year,
or a total annual supply of 5.65 billion barrels, of which 1.4 billion barrels
was imported:
New Supply
1971 (barrels per day)
Crude oil production
9,536,000
Natural gas liquid production
1,703,000
Crude oil imports
1,669,000
Residual fuel imports
1,542,000
Other products imports
642,000
Net processing gain
374,000
Total
15,466,000
U.S. domestic production is expected to peak by 1975. In fact, the two largest
producing states, Texas and Louisiana, are now operating essentially at capacity.
[Note: Effective the first of April this year, the lid was lifted on Texas production,
which is now on a 100 percent allowables factor. Production from the Alaskan North
Slope, if it becomes available by 1975, will make up some of the decrease in
"lower-48" production, but is not expected to keep pace with the increasing demand.]
Total oil demand for the United States is estimated to be:
Year
Demand (billion barrels)
1975
6.6
1985
9.6
Oil Imports are projected at 35% of demand by 1975 and over 45% by 1985, assuming that
Alaskan North Slope oil is available. Without Alaskan production, imports could
exceed 55% by 1985.
[Note I: Imports will originate from either Canada or the Organization of Petroleum Ex-
porting Countries (OPEC). Limited expansion of import levels from Canada is pos-
sible, but are expected to meet only a small percentage of the import demand. OPEC
reserves, however, equal over 80% of the free world's total reserves. (OPEC is com-
prised of Abu Dhabi, Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar,
Saudi Arabia, and Venzuela.)_
ENERGY CRISIS/10
[Note 2: It has been estimated that by 1985, United States oil imports will require 367
tankers of the 250,000 dwt class. (At today's prices, that number of tankers
would cost about $24 billion.) At present, the U.S. does not have port facilities
for handling this size tanker, and construction of such facilities has been
opposed in several states and localities.]
[Note 3: Oil imports presently have a significant impact on the U.S. balance-of-trade.
In 1971, the U.S. imported over $3.3 billion worth of oil, both crude and products.
(Total trade deficit in 1971 was $2 billion.) Estimates for the value of future
oil imports are above $6 billion for 1975 and over $15 billion by 1985.]
Production of synthetic crude oil is possible from three sources:
Source
Estimated U.S. Potential (billion barrels)
Oil shale
1,800 (total)
Tar sands
20 (total)
Organic waste
2 (annually)
[Note: Technical problems and high production costs will limit supplies from these three
sources.]
Demand for coal in the United States:
Year
Annual Demand
Cumulative Demand
(million short tons)
1970-2000 (million short tons)
1970
527
1975
615
1985
850
2000
1,000
22,000
Estimated U.S. coal resources:
Depths less than 1,000
Recoverable under current economic
feet (million short tons)
conditions and mining technology
(million short tons)
1,600,000
200,000 (min.) - 400,000 (max.)
Coal production techniques:
U.S. Production (thousand short tons)
Year
Deep mine
% of total
Strip
% of total
Auger
% of total
1970
338,788
56.2
244,117
40.5
20,027
3.3
[Note: Electric utilities received 331.4 million short tons, or 55% of total production.
Electric utilities received about 198 million short ton of surface-mined coal, or
approximately 75% of surface-mined production.]
Low-sulphur coal accounts for approximately 70% of the estimated recoverable re-
serves of strippable coal:
ENERGY CRISIS/11
Estimated U.S. Strippable Coal Reserves (billion short tons
Total
Recoverable
Less
than
1%
I
-
2%
S
Over 2% S
119
45
31.8
4.0
9.2
Removal of sulphur from coal can be partially accomplished before combustion by
mechanical cleaning, removing only the pyritic sulphur. Organic sulphur, which
comprises about 50% of the total sulphur, can be removed only through expensive
chemical processes, such as coal gasification:
Processes for Coal Gasification
Process
Status
Lurgi
Commercially available, but end-product is low-BTU
and must be methanated.
HYGAS
Pilot plant constructed near Chicago; process under
development by IGI.
CO₂ Acceptor
Pilot plant near completion at Rapid City, S.D.;
operated by Consolidation Coal.
BCR Bi-Gas
Contract awarded to Bituminos Coal Research for
pilot plant near Homer City, Pa.
[Note: Gasification removes not only sulphur, but also ash, which can comprise as much as
20% of coal.]
Projected demand for coal for commercial gasification in the United States:
Year
Demand (Million short tons)
1980
0
1985
86
1990
213
[Note: By 1990, an estimated 3 trillion cubic feet annually of synthetic gas could be
produced from coal. Commercial plants, capable of producing 250 million cubic
feet per day, are estimated to cost from $175 - 250 million each. In addition,
each plant would require a coal mine capable of producing approximately 6 million
tons of coal a year. (If lignite or subbituminous coal is used, the tonnage re-
quirement would increase.) Each plant will also require substantial electrical
energy and water supplies.]
Nixon Administration actions to insure an adequate future supply of clear energy, include:
1. Accelerate the liquid metal fast breeder reactor program in partnership with the
electric utility industry.
2. Accelerate the coal gasification program, in partnership with the natural gas
industry.
3. Expand the sulphur oxide control program and add two new demonstration projects.
ENERGY CRISIS/12
4. Accelerate oil and gas leasing on the Outer Continental Shelf.
5. Expedite the oil shale development program.
6. Expedite geothermal leasing.
7. Release funds, $16 million, to start the Cascade Improvement Program at the
uranium enrichment plants.
8. Make assessments of new technology, such as solar energy, and establish priorities
for future research.
9. Urge enactment of power plant siting legislation.
10. Urge establishment of an energy administration within the proposed Department of
Natural Resources.
To conserve energy, the Nixon Administration is:
Issuing new home insulation standards for federally-insured homes.
Developing and publishing information on energy intensive equipment for consumers.
Developing plans for improving energy utilization in transportation systems.
Administration decisions are due soon on such questions as:
1. Permit application for the Trans-Alaskan Pipeline.
2. Increasing oil import quotas.
3. Allowing increased imports of petroleum feedstocks for producing synthetic gas.
The House of Representatives recently passed H.R. 13752, to allow temporary operation of
nuclear power plants stalled by environmental lawsuits. The legislation was designed to
insure that environmental protection would not be decreased, while at the same time easing
the threat of a power shortage. In coming months, the Congress may be considering addi-
tional legislation designed to ensure adequate supplies of clean energy, such as:
1. Legislation concerning natural gas reserve data, sanctity of natural gas contracts,
and allocation of gas supplies during shortages.
2. Legislation to allow environmentally-acceptable siting of electric power plants
and routing of transmission lines, to improve the reliability of electric service,
and to meet emergencies during power shortages.
3. Legislation to control strip-mining.
Solutions to the long-range energy crisis will come from new technology, increased ex-
ploration and development of domestic energy sources, improved utilization of energy,
and more effective organization of the energy policy decision-making process.
Short-range solutions will rely primarily on combined legislative-administrative action
designed to make maximum use of available supplies, while at the same time searching for
short-term supplements. The lead times for new energy sources range from three years for
opening a new coal mine to seven years (or more) to construct a new nuclear power plant.
The energy crisis of today was born during the 1960's. The actions taken today will de-
termine whether or not the crisis will live into the 1980's. In any case, the 1970's will
continue to be a period of shortages and unreliable supplies, but the overall impacts
can be substantially reduced if the Congress and the Administration will establish the
necessary policies and programs which are now lacking.
JAMES A. MCCLURE, IDAHO, CHAIRMAN
MICHAEL D. HATHAWAY, DIRECTOR
1620 LONGWORTH HOUSE OFFICE BLDG.
202-225-5841
TASK FORCE ON ENERGY AND RESOURCES
REPUBLICAN RESEARCH COMMITTEE
U.S. HOUSE OF REPRESENTATIVES
WASHINGTON, D.C. 20515
ELECTRIC POWER SHORTAGES
Until 1965, Americans occasionally experienced temporary shortages of
electric power, caused by storm damage, accidents involving power lines
and poles, or failures of transformers and associated equipment. In
November of 1965, the major Northeast blackout publicized the critical
nature of reliable electric power, but was itself not caused by a lack
of generating capacity, but instead was due to cascading equipment mal-
functions. Since that time, however, deficiencies in generating cap
acity have been the major concern regarding electric power reliability.
For the summer of 1972, the Federal Power Commission has found that the
following regions have serious reliability problems:
New York
Estimated peak loads
20,050 MW
Planned capacity
24,414 MW
Estimated reserve margin
4,364 MW
21.8%
Without Indian Point No. 2
Nuclear Unit
3,491 MW
17.4%
Without Indian Point No. 2,
Northport No. 3, and Bowline
Point No. 1 units
2,483 MW
12.3%
Northern Illinois-Wisconsin
Estimated peak loads
18,414 MW
Planned capacity
20,920 MW
Estimated reserve margin
2,506 MW
13.6%
Without Quad Cities No. 1 & 2 (at 405 MW combined)
and Point Beach nuclear units
1,604 MW
8.7%
Without Quad Cities No. 1 & 2 (at 405 MW combined)
Point Beach, and Powerton No. 5
units
764 MW
4.2%
PAGE TWO:
Iowa
Estimated peak loads
3,117 MW
Planned capacity
3,476 MW
Estimated reserve margin
359 MW
11.5%
Without Quad Cities No. 1 & 2 (at 404 MW combined)
nuclear unit
-45 MW
-1.5%
Without Quad Cities No. 1 & 2 (at 404 MW combined)
and Neal No. 2 units
-366 MW
-11.7%
Virginia-Carolinas
Estimated peak loads
20,605 MW
Planned capacity 1/
23,038 MW
Estimated reserve margin
2,433 MW
11.8%
Without Oconee No. 1 and
Surry No. 1 nuclear units
812 MW
3.9%
Without Oconee No. 1, Surry No. 1,
Cliffside No. 5, and Sutton No. 3
units
-178 MW
-0.9%
Florida
Estimated peak loads
11,706 MW
Planned capacity
13,454 MW
Estimated reserve margin
1,748 MW
14.9%
Without Turkey Point No. 3
nuclear unit @ 400 MW)
1,348 MW
11.5%
Without Turkey Point No. 3
(@ 400 MW), Sanford No. 4 and
Northside No. 2 units
665 MW
5.7%
1/
Does not reflect elimination of 841 megawatts associated with Oconee No. 1
which has had serious mechanical problems since the above study was made.
(NOTE: A reserve margin of 20% is generally considered minimum for
reliable electric service.)
PAGE THREE:
Contingency plans have been prepared by the electric utilities for
shortage situations, and filed with the FPC. In general, the nine
steps to be taken, in sequence, when blackouts threaten a service
area are:
1. When possible, purchase from neigh-
boring utilities sufficient capa-
bility to meet the forecast peak
load plus an adequate reserve margin
to cover forecast error and reason-
able contingencies.
2. Operate all generating facilities at
maximum ratings.
3. Maximize emergency purchases from
interconnected systems to the extent
that transmission line loadings permit.
4.
Reduce non-essential electric power
usage at all utility-owned power
plants and office facilities.
5. Discontinue service to contractually
interruptible loads.
6. Request voluntary reduction of
non-essential loads of large commer-
cial and industrial customers.
7. Reduce voltage up to five percent as
required.
8. Make a public request through the news
media for all customers to limit
electric usage.
9. Manually disconnect selected low priority
loads as required. (This selectivity is to
facilitate service maintenance to critical
loads, e.g. public health and safety.)
Rotate load disconnections where the shortage
is expected to extend for several hours.
PAGE FOUR:
The increased demand for electric power results from:
1. Population increases.
2. Improved standards of living.
3. New and expanded uses for electricity (such as mass transit,
pollution control, and industrial processes.)
4. Shifts from other sources of energy to electricity (such as
shifts from coal, due to air quality requirements, and from
natural gas, due to supply shortages and curtailments.)
Rationing of electric power has been suggested as one possibility.
In New York City, Mayor Lindsay has urged the Public Service Commission
to restrain Consolidated Edison from supplying electricity for heating
buildings, either under construction or planned.
In Pennsylvania, the Chairman of the Public Utilities Commission, George
Bloom, has said that the Commission may have to forbid electric utilities
to accept new customers, until such time that reliable service can be
assured for existing customers.
In Detroit, the Michigan Public Service Commission has been told by a
city social planning analyst that rates for large users of electricity should
be appreciably increased, thereby possibly limiting usage and demand.
To provide for new power plants, to meet future needs, while at the
same time ensuring protection of the environment, the Nixon Admin-
istration has urged enactment of power plant siting legislation, now
pending before the House Interstate and Foreign Commerce Committee.
Simultaneously, the Federal Government, acting through the Joint Board
on Fuel Supply and Fuel Transport, has instituted programs for encouraging
energy conservation. One program, described in GSA Bulletin FPMR D-91,
calls for reducing electric loads in buildings and facilities operated
by Federal agencies. In addition, the Department of Commerce has specifi-
cally requested private industries to cooperate with individual electric
utilities to develop plans for meeting shortages.
The Office of Consumer Affairs has undertaken an information program to
encourage energy conservation by the general public. Two documents,
prepared in conjunction with the National Bureau of Standards, have been
distributed concerning saving energy in the home.
Energy conservation has become a more frequent theme for utility advertise-
ments. Ads have appeared concerning improved building insulation, efficiency
ratings for appliances, and the importance of regular maintenance for
consuming equipment.
Electric power demand for typical household appliances has been provided
by the Federal Power Commission:
PAGE FIVE:
RESIDENTIAL APPLIANCES
AVERAGE WATTAGE
Electric range
12,000
Electric clothes dryer
5,000
Electric hot water heater
4,500
Dishwasher
1,200
Electric frying pan
1,200
Iron
1,000
Toaster
1,000
Waffle iron
1,000
Coffee maker
900
Vacuum cleaner
600
Washing machine
500
Hair dryer
400
TV, black and white
200
TV, color
300
Air conditioners
1,000 - 10,000
Electric carving knife
90
Radio
80
Sewing machine
80
Electric shaver
15
Electric toothbrush
10
In summary, the United States faces an increase in electric power require-
ments from 340,000 megawatts in 1970 to 665,000 megawatts in 1980, and
to 1,260,000 in 1990. R&D is underway to provide clean, reliable sources
of electric power, which should start becoming available in commercial
quantities during the 1980's. During the 1970's, conservation of energy
plus more supplemental sources will be required to prevent electric
power shortages. New high-voltage transmission lines, now under construct-
ion and being planned, will enable greater exchanges of power between
geographic regions, but will require improved coordination between the
Federal government, and State and local governments. In addition, all
levels of government, together with the electric utility industry, will
need to work towards providing the general public with a better under-
standing of the electric power problem.
JAMES A. MCCLURE, IDAHO, CHAIRMAN
MICHAEL D. HATHAWAY, DIRECTOR
1620 LONGWORTH HOUSE OFFICE BLDG.
202-225-5841
TASK FORCE ON ENERGY AND RESOURCES
REPUBLICAN RESEARCH COMMITTEE
Arlene Knight
Research Assistant
U.S. HOUSE OF REPRESENTATIVES
WASHINGTON, D.C. 20515
Campaign Fact Sheet
The Natural Gas Shortage
Is there a natural gas shortage?
These headlines represent a sampling of recent newspaper and magazine articles
dealing with the natural gas supply:
Gas Company Forbids New Industry Accounts
Worry Over a Key Fuel: Will There Be Enough?
Gas Shortage Poses a Nationwide Threat of Cutbacks
Price of Gas Could Double
Nationwide Gas Crisis Nears
Gas Shortage Causes Housing Crunch
Gas Shortage May Snuff Out D.C. Firm
America Is Running Out of Gas
Government officials, gas industry representatives, scientists and other members
of the academic world have recently made statements such as these:
Pinkney Walker, Federal Power Commissioner, said recently, "The natural gas
shortage is every bit as serious as it appears and likely to get worse." In
another statement Walker said, "Having realized the premium value of natural
gas, there are now serious doubts about its availability."
Dr. M.A. Adelman, economics professor at MIT, said, "There is now a serious shortage
of natural gas," in testimony before the Senate Committee on Interior and Insular
Affairs on February 25, 1972.
In the same hearings, Assistant Secretary Hollis Dole, of the Department of the
Interior, said, "perhaps in ten to fifteen years, once again natural gas will
be in sufficient supply."
Dr. Ralph Lapp, before the House Committee on Interior and Insular Affairs, said
on April 12, 1972, "New additions to reserves will be made, but these have not
kept pace with increased consumption. The gas shortages are the result."
George Lawrence, Vice President of the American Gas Association, said, "Let
this Committee in its highly important deliberations on the nation's fuels
and energy crisis make no mistake about it. The gas shortage is real and
serious.
2
Walter Rogers, President of the Independent Natural Gas Association of America,
reports, we do not have an endless supply of energy fuels. The greatest
impending shortage is in natural gas, and it would appear that every effort
should be made to avoid the crisis that must result if remedial action is not
promptly taken."
John J. McKetta, Professor of Chemical Engineering at the University of Texas,
Austin, has said, "Beginning in 1967 we consistently have discovered less gas
than we have produced or used. The discovery line will never again cross the
used or produced line throughout the rest of our lives."
John Nassikas, Chairman of the Federal Power Commission, said on April 19, 1972,
"In my opinion, it is indisputable, and the evidence so indicates, that deliver-
able natural gas supplies have deteriorated to intolerable levels. Demand for
natural gas has exceeded the most optimistic forecasts and environmental con-
siderations will further accelerate the requirements for this clean-burning
fuel. On the other hand, there has been a decline in the exploration and
development for natural gas
"
The shortage of natural gas has developed because demand is increasing more
rapidly than supply. The significance of natural gas as a primary source of
energy, in the U.S., is demonstrated by the fact that in 1970 1/3 of the total
energy consumed was supplied by natural gas; 49% of the industrial market,
60% of the commercial market, and 52% of the residential market energy needs
were met with natural gas.
Natural gas is attractive because of its low price and minimum environmental
impact, a factor that is increasingly important as pollution control laws become
more stringent.
The Annual Report of the Council of Economic Advisors released in February, 1972,
stated, "Currently a shortage does exist in the natural gas market. Wellhead
prices of gas for interstate delivery, which are regulated by the Federal Power
Commission (FPC), have not been high enough to induce a supply equal to the
growing demand."
2a
UNITED STATES GAS SUPPLY-DEMAND BALANCE
Actual 1966-1970; Projected 1971-1990
(All Volumes in Trillions of Cubic Feet @ 14.73 Psia and 60° Fahrenheit)
Net
Gas
Gas
Gas From
Un-
Annual
Pipeline
LNG
From
From
Liquid Hy-
Domestic
Annual
Satisfied
Reserve
Year-end
Year
Demand
1/
R/P
Imports
Imports
Coal
Alaska
drocarbons
Production
Consumption
Demand
Additions
Reserves
Ratio
1966
17.9
0.4
-
-
-
-
17.5
17.9
0.0
19.2
286.4
16.4
1967
18.8
0.5
-
-
-
-
18.4
18.8
0.0
21.1
289.3
15.8
1968
19.9
0.6
*
-
-
-
19.3
19.9
0.0
12.0
282.1
14.6
1969
21.3
0.7
*
-
-
-
20.6
21.3
0.0
8.3
269.9
13.1
1970
22.6
0.8
*
-
-
-
21.8
22.6
0.0
11.1
259.6
11.9
1971
24.6
0.9
*
-
-
-
22.8
23.7
0.9
12.0
248.8
10.9
1972
26.1
1.0
*
-
-
**
23.8
24.8
1.3
13.0
238.0
10.0
1973
27.7
1.1
*
-
-
**
24.7
25.8
1.9
14.0
227.3
9.2
1974
28.8
1.1
*
-
-
**
24.8
25.9
2.9
15.0
217.4
8.8
1975
29.8
1.2
0.3
-
-
**
24.7
26.2
3.6
16.0
208.7
8.4
1980
34.5
1.6
2.0
0.3
0.7
**
20.4
25.0
9.5
17.0
186.1
9.1
1985
39.8
1.9
3.0
1.4
1.3
**
18.5
26.1
13.7
17.0
175.4
9.5
1990
46.4
1.9
4.0
3.3
2.3
**
17.8
29.3
17.1
17.0
170.4
9.6
1971-1990
Totals
707.6
31.1
38.0
17.3
20.6
**
414.2
521.2
186.4
325.0
-
-
*
Very small volumes
** Insufficient data for quantitative projection: unsatisfied demand will be reduced by the amount of SNG actually produced.
Contiguous 48 states.
UNITED STATES GAS SUPPLY-DEMAND BALANCE
(Contiguous 48 States)
50
50
Percent of
Domestic Undiscovered
Potential
Potential Recoverable
Recoverable
Reserves
Reserves
40
(Trillion Cubic Feet)
Discovered by 1990
40
P.G.C.
851
38%
Annual Demand
U.S.G.S.
1,550
21%
Unsatisfied Demand
30
30
Annual Consumption
Trillion Cubic Feet
Gas From Coal
Gas From Alaska
LNG Imports
Trillion Cubic Feet
20
Net Pipeline Imports
20
Domestic Production
Production From
Potential Natural
Gas Reserves*
10
10
Production From
1970 Proven Reserves
1966
1970
1975
1980
1985
1990
*U.S. Natural Gas Reserve Additions (1971-1990) Total 325 Trillion Cubic Feet.
3
Effects of the gas shortage can be seen in a variety of ways across the nation.
Industry has already been affected in areas where utilities are rationing gas to
industrial and commercial customers with "interruptible" contracts. Such contracts
allow cutbacks in service when gas is needed to maintain service to higher priority
customers, such as homes and hospitals. Another way industry is being affected
is by refusal of utilities to set up new contracts. Some residential areas are
also being affected.
Weather is a major factor in determining how serious the effects of the gas
shortage will be in the immediate future. Two mild winters have already decreased
the extent of gas shortages. An unusually hot summer, with heavy energy demands
due to air conditioning needs, or a very cold winter with high heating demands,
could necessitate more severe cutbacks or shut-offs.
A February survey by the National Association of Regulatory Utility Commissioners
revealed that curtailments or priority schedules are already a reality in many
states:
Alabama - has an approved plan for natural gas conservation.
Arizona - Some companies have curtailed or stopped service to large industrial
users with interruptible clauses during severe shortages. Several utilities have
built up oil reserves for emergency use.
Arkansas - The State Public Service Commission has close control over the actions
of Arkansas Louisiana Gas Company (Arkla). The PSC has called Arkla's gas supply
inadequate and ordered the company to set up a schedule of curtailment procedures.
California - has had a system of curtailments during shortages since the 1940's
and has a plan which allows firm non-residential service only where residential
service is assured or where a substitute can be used. Pacific Lighting Corporation,
located in southern California, has predicted that it will be able to supply only
46% of the needs of its interruptible users in 1974.
Colorado - There has been a tightening of interruptible service.
Connecticut - The Public Utilities Commission has instructed all companies to
examine their contracts and supplies. Connecticut Power and Light Company has
been allowed, since early 1971, to reject all new customers or added loads from
old customers because of the supply shortage. A system of priorities has been
set up by the Company, in response to orders from the Commission, which allows
maximum volumes of 500,000 BTU per hour for residential and 2,000,000 BTU per hour
for industrial customers.
Delaware - The Public Service Commission has curtailed natural gas distribution in
the state. It has also ordered Delmarva Power and Light to supply new users only
if the company can guarantee existing users. Delmarva is not allowed to supply
any homes switching to gas heating and is to discourage new gas appliances.
Advertising is only permitted for replacement appliances or those which would
be used during low-usage periods.
D.C. The Public Service Commission has called for an investigation and public
hearings on the gas shortage. Only in the case of priority or extreme hardship
cases has service been added since February. Washington Gas Light, serving the
District and portions of Maryland and Virginia is taking no new customers, residential
or otherwise.
4
Florida - Two of Florida's three gas suppliers have curtailed gas for certain
periods due to the shortage.
Georgia - Utilities have been informed that no additional gas will be available
from suppliers.
Idaho - The Public Utilities Commission continually monitors the supply which is
not yet at the critical point. An end-use policy is currently being developed
by the Public Utilities Commission.
Illinois - The Commerce Commission and gas distributors have set up a plan which
includes rationing according to priorities, provision of alternate fuel supplies,
and interruptible service contracts based on weather conditions. Central Illinois
Light Company, Central Illinois Power Service, Illinois Power Company, and Peoples
Gas Light and Coke are curtailing installations to new industrial and commercial
customers. Peoples Gas of Chicago has had waiting lists since June of 1970 of
prospective commercial and industrial users who have already filed applications.
Illinois Gas is making no new connections to industry.
Indiana - The State Public Service Commission allows each utility to set up its
own rules for curtailment. Two firms, Indiana Gas Company, Inc., and Indiana
Utilities have restrictions on new commercial and industrial installation.
Iowa - Iowa utilities are limiting new sales to industry and commercial users and
closely watching all commitments, including those to residential users.
Kansas - Curtailments have recently been extended from cold weather to other seasons.
Kentucky - Senator Cook said on March 2 that "in many instances small and large
industry is being denied expansion because of the lack of an adequate gas supply."
Louisiana - The Texas Gulf Sulphur Company has said it may be forced to close
down its Louisiana sulphur mine unless it is able to get more gas.
Maine - has adequate present and future supplies.
Maryland - Washington Gas Light Company has been ordered to restrict new gas sales
sharply because its supplier has only enough gas to meet current contracts. The
Company announced in March that it will not provide any new gas tie-ins to builders
or consumers. Columbia Gas has instituted a freeze on sales of interruptible gas
and accepts no new loads over 2000 cubic feet per hour per customer. Columbia
Gas Transmission Corporation has notified customers that they will not receive
additional gas beyond that needed for residential use after Oct. 31, 1972. On
the Eastern Shore and in the Cambridge area, applications are accepted only for
residential or domestic use, or commercial customers using less than 2000 cubic
feet per day. Utilities are refusing new service to apartment houses and single
family developments in addition to commercial and industrial users.
Massachusetts - The Department of Public Utilities is currently reviewing the
supply of each company in order to determine if any curtailments are necessary.
5
Michigan - The Public Service Commission has recently ordered restrictions, even
on residential sales, and has set up priorities for service. New residential,
commercial, and industrial customers have been forbidden in the Southern Division
of the Michigan Gas Utilities Company and new commercial and industrial customers
over 12,000,000 cubic feet per year are forbidden in the Western Division. Con-
sumers Power of Jackson has a long waiting list of small commercial and industrial
applicants. Battle Creek Utility, which along with Michigan Consolidated is
restricted in accepting new commercial and industrial customers, has a waiting
list of 700 applicants.
Minnesota - Montana-Dakota Utilities is restricting new commercial and industrial
users.
Mississippi - Several major gas companies have included curtailment plans in
their tariff rate schedules for 1971.
Missouri - The Public Service Commission has approved priorities for curtailment
set up by individual companies. Missouri Public Service Company discontinues
accepting applications during periods of shortage and accepts them in order of
priorities when the shortage eases. Missouri Power and Light has placed restrictions
on new commercial and industrial installations.
Montana - No gas shortage is foreseen.
Nevada - The Public Service Commission has set up priorities in the event of a
gas shortage.
New Hampshire - The primary supplier for the state is Tennessee Gas Pipeline
Company which has notified the N.H. customers that no increases in contracts can
be given. Utilities are accepting only new business which can be filled in line
with priorities established by the P.U.C.
New Jersey - The Department of Public Utilities has issued an order to establish
procedures to insure maintenance of service to residential users and "essential
community services and installations," when curtailment is necessary. The
Board has also ordered utilities to prepare in advance and file with the news
media a series of public appeals to all customers for voluntary reduction in
gas use and suggestions for conserving gas used for heating and for cooking and
drying clothes; these appeals will be used immediately when curtailment is
necessary. Each utility must submit its plans and policies for new customers.
New Jersey Natural Gas has placed restrictions on new commercial and industrial
users.
New Mexico EI Paso Gas, in response to a New Mexico community group seeking new
industry, said it was not interested in new users, which curbs hope of industry
for the town.
New York - The Public Service Commission has a policy on curtailments, and
currently restricts all new customers except residential. Industrial and
commercial customers are required to have dual fuel facilities. Niagara-Mohawk,
New York Electric and Gas, and Orange and Rockland have restrictions on all new
installations. Consolidated Edison of New York accepts only certain residential
customers. Last winter, Brooklyn Union Gas Company cut off its service to
6
interruptible customers in November because of shortages during the winter season.
The staff of the New York Department of Public Service, in its 1971 report on
gas supplies, recommended that the Federal government take control of available
fuel supplies, including natural gas. Among their conclusions and recommendations
were:
The demand for gas be regulated by end-use controls.
Domestic supplies of natural gas be directed to high-priority firm markets.
All fuels, including natural gas, be directed to their most efficient uses.
The report stated that it "is impossible for any single state to effectively
control energy sources and uses which affect that state."
North Carolina - The State Utilities Commission in 1970 set up procedures for
limiting service after the state's largest supplier (Transco) stated it could
not meet all the needs of its customers.
Ohio - Columbia Gas of Ohio and the Ohio Valley Gas Company in October, 1971,
announced that they would not accept new industrial loads or large new commercial
loads. This action was taken in addition to the April 1970 freeze on industrial
and commercial customers. East Ohio Gas is accepting no new customers. Permission
for Columbia Gas and Ohio Valley Gas to refuse service to new residential customers
was granted on June 23, 1972, by the Public Utilities Commission. The companies
made the request when they learned that they can expect no increase in supplies
over last winter's supply. This means that they will not be able to meet even the
normal 2% increase of their approximately 400,000 residential customers. Ohio
home-builders responded by saying that such a freeze means new homes will be
higher priced since an all-electric home costs 10% more to build than a gas
home. Concern was also expressed as to whether the electric company could fill
the increased needs.
Oklahoma - The Oklahoma Corporation Commission regulates gas production and public
utilities. Lone Star Gas was denied permission to sell gas to a new Weyerhaeuser
plant at Valiant, Oklahoma.
Pennsylvania - The Public Utility Commission conducted extensive investigation of
the natural gas shortage and concluded that none of the possible solutions would
have any effect on the shortage for at least 5 years. As a result, all gas
utilities must file detailed reports of many phases of operation, reasons for
changes greater than 5%, and procedures for curtailment. In addition, all ad-
vertising and promotional activities were halted and new customers limited. The
Pittsburgh area is already feeling a housing pinch due to the shortage. The P.U.C.
has ordered gas companies to take on new residential customers only if it can
guarantee satisfactory service to all old and new consumers during the next five
years, a provision which some of the gas companies are unable to meet. As a result,
builders are forced to turn to electricity, which puts some new homes out of the
reach of people seeking FHA help. Columbia Gas of Pennsylvania has announced an
indefinite ban on all new sales; Columbia serves 22 Western Pennsylvania counties.
UGI of Philadelphia discourages new industries.
South Carolina - Several S.C. utilities have set up voluntary curtailment programs
including restriction of new sales and denial of service of firm gas to new
commercial and industrial users. The Emergency Load Shedding Plan of Carolina
Pipeline Company was developed for use in a shortage - it would first be voluntary
and then, if necessary, become mandatory. In the Plan, all interruptible service
7
is first curtailed, then all industrial customers are asked to cut back to
minimum usage; churches, schools, and public buildings are asked to reduce
thermostat settings as far as possible, and church services and school sessions
may be curtailed; commercial customers are asked to curtail operations; and,
finally, the general public is asked through the news media to curtail gas usage
as much as possible.
Tennessee - Three companies have voluntarily set up priorities for curtailment and
service limitation in case of a gas shortage. Nashville Gas Company has put into
effect a revised natural gas tariff giving emergency curtailment procedures
because the company's supplies have been curtailed.
Texas - The Railroad Commission says that FPC price levels must be raised to
encourage new exploration and relieve the gas shortage. Monsanto Company and
the Texas Gulf Sulphur Company sued United Gas Pipeline Company for failing to
deliver promised gas supplies which it did not have. The FPC in June refused to
allow Lone Star Gas Company of Dallas to change its pipeline system to sell gas
to a new industrial plant.
Utah - The,state has adequate natural gas reserves for about fifteen years.
Vermont - No curtailment is anticipated.
Virginia - The State Corporation Commission has powers allowing almost instant
curtailment of gas usage in event of a shortage. For example, two years ago a
large industry was ordered to cut its use from 38,000 cubic feet to 19,000 cubic
feet per day because of a sharp temperature drop causing heightened needs of other
consumers; the industry complied in less than half an hour. The Commission has
granted all requests by companies to curtail new usage. Columbia Gas of Virginia
has been ordered to refuse gas service to any new customers, including residential,
by the Commission. Columbia was the first gas company in the state to limit
residential service, but 12 of the 14 companies serving the state have been re-
stricted in some way.
Washington - A meeting is scheduled soon of the Pacific Northwest's regulatory
agencies, gas distributors, and suppliers to attempt to solve the gas supply problem.
West Virginia - The Public Service Commission is considering requests by gas
companies to refuse to accept new industrial and commercial customers. Columbia
Gas of W. Va. currently accepts none.
Wisconsin - The Public Service Commission is handling the gas shortage separately
with each company. A number of companies have filed requests to limit sales to new
customers or added gas to old customers. Wisconsin Fuel and Light currently accepts
no new customers.
Wyoming - No shortage is foreseen, but in the event of one, the legislature might
attempt to curtail exports of natural gas.
8
Actions to increase natural gas supplies include:
1. Legislation (pending) to guarantee contract agreements concerning natural
gas prices (i.e. the "Sanctity of Contract" bills, H.R. 2513 and S. 2467).
2. Regulatory policies to increase the wellhead price of interstate gas,
thereby increasing the economically recoverable reserve base.
3. Research and Development for increasing production of natural gas, such
as the Plowshare Program which uses nuclear detonations to fracture tight
formations and stimulate gas flows.
4. Research and Development for providing supplemental sources of gas, such
as producing synthetic gas from coal.
5. Acceleration of lease programs for Federal lands on the Outer Continental
Shelf, to increase exploratory drilling and production of both oil and
natural gas.
In addition, improvements in building insulation standards can conserve natural
gas used for space heating. And, as new research and development programs for
removing sulphur dioxides and other pollutants from coal-burning systems become
operational, the demand for natural gas to meet air pollution standards can be
reduced.
But, the demand for natural gas in new areas, such as automobile engines and fuel
cells, will increase.
The United States faces both a short-term gas shortage, resulting in varying degrees
of government control at all levels, and a long-term shortage, which can be partially
alleviated by new policies and programs.
JAMES A. MCCLURE, IDAHO, CHAIRMAN
MICHAEL D. HATHAWAY, DIRECTOR
1620 LONGWORTH HOUSE OFFICE BLDG.
202-225-5841
TASK FORCE ON ENERGY AND RESOURCES
REPUBLICAN RESEARCH COMMITTEE
U.S. HOUSE OF REPRESENTATIVES
WASHINGTON, D.C. 20515
August, 1972
CAMPAIGN FACT SHEET
THE TRANS-ALASKA PIPELINE
Secretary of the Interior Morton announced on May 11, 1972, that he had decided to
grant right-of-way permits for the proposed Trans-Alaska Pipeline.
[Note: Because of injunctions issued in pending litigation, actual permits could
not be granted. The court order requires that notice of the Secretary's
intent to grant the permits be given to the plaintiffs.]
The Final Environmental Impact Statement on the application for a right-of-way was
made public by the Interior Department on March 20, 1972. It consisted of six
volumes and three supplemental volumes, totaling over 3,800 pages, and was the re-
sult of approximately 175 man-years of work. It can be described as "the most
thorough and lengthy impact statement ever published."
[Note: A draft statement was made public on January 15, 1971. It was the subject of
eight days of public hearings, during which time oral testimony was taken
from 297 individuals. The transcript of the hearings comprises ten volumes
totalling 2,118 pages, accompanied by 15 volumes of exhibits totalling 4,317
pages. Supplemental testimony submitted comprises 12 volumes totalling 3,639
pages.]
Secretary Morton said, in his announcement on March II, 1972:
"I am convinced that it is our best national interest to avoid all further
delays and uncertainties in planning the development of Alaska North Slope
oil reserves by having a secure pipeline located under the total jurisdic-
tion and for the exclusive use of the United States."
In his conclusion, he stated:
"Recognizing the need to protect the Alaskan environment, we have developed
the strictest environmental regulations to control design and construction
of the biggest non-Government project in history. These regulations will be
strictly enforced."
Environmental concerns associated with the pipeline include:
1. Possible onshore oil spills, resulting from earthquakes, permafrost instability,
landslides, sabotage, etc.
2. Possible offshore oil spills, resulting from tanker operations between Port
Valdez and terminals on the West Coast and elsewhere.
3. Disruption of wildlife migration patterns and habitats.
The Trans-Alaska Pipeline/2
The primary alternative to the Trans-Alaska pipeline is to construct a pipeline
through Canada, eliminating the need for tanker shipments. Opposition by the De-
partment of Interior to this alternative is based on:
1. Additional delays of 3 to 5 years for oil deliveries to the Continental U.S.
2. Additional costs (about $6 billion for a Canadian route compared to about $2.8
billion for the Alaskan route plus $1.7 billion for tankers).
3. Increased environmental impacts, resulting from the increased pipeline length
(about 3,000 miles via Canada's MacKenzie River Valley).
4. Lack of total U.S. control over the pipeline, including a probable necessity for
sharing the pipeline capacity.
Background of the pipeline is:
January, 1968 - Atlantic Richfield and Humble Oil discover oil at Prudhoe Bay.
February, 1968 - ARCO, Humble, and BP announce plans for a 48-inch pipeline to Valdez.
April, 1969 - $100 million worth of 48-inch pipe ordered from Japan (delivery com-
pleted in October, 1971).
August - September, 1969 - Department of the Interior holds public hearings in Alaska
concerning environmental protection.
September, 1969 - Alaska sells to oil companies North Slope leases worth $900
million.
December, 1969 - Congress passes the National Environmental Policy Act.
March, 1970 - Department of the Interior sued by environmental groups.
April, 1970 - Federal Court enjoins Interior from issuing pipeline permit.
August, 1970 - Alyeska Pipeline Service Co. formed to design, construct and operate
the pipeline.
[Note: Alyeska's application is for a 48-inch oil pipeline right-of-way across
Federal lands in Alaska between Prudhoe Bay on the North Slope to Valdez
on the South Coast. The total pipeline would be about 789 miles long,
with about 641 miles traversing Federal lands.]
The pipeline is to be owned by:
Company
Percentage
BP
28%
Atlantic Richfield
28%
Humble Oil
26%
Mobil Oil
9%
Phillips Petroleum
3%
Union Oil
3%
Amerada Hess
3%
North Slope oil reserves are presently estimated at 10 billion barrels. (U.S. "lower-
48" reserves are 28 billion barrels. Production in 1971 was 3 1/2 billion barrels.)
North Slope natural gas reserves are presently estimated at 26 trillion cubic feet.
(U.S. "lower-48" reserves are 253 trillion cubic feet. Production in 1971 was 22
trillion cubic feet.)
The Trans - Alaska Pipeline/3
Production from the North Slope could begin by 1976 and could ultimately reach 2
million barrels per day approximately 10% of future demand.
Oil tanker traffic between Port Valdez and U.S. ports is to be in domestic ships, due
to the requirements of the Jones Act. Full production of 2 million barrels per day
would require about 41 tankers, with a projected 33 to be built in U.S. shipyards.
Approval of the pipeline is predicated on the following:
1. The pipeline is to be designed to survive "contingency-plan" earthquakes, and
to continue to operate during "operating" earthquakes. ("Contingency-plan" quakes
equal or exceed any ever recorded within 100 miles of the pipeline route, and are
expected to occur once every 200 years. "Operating" quakes are half as powerful.)
2. Soil conditions and stability are to be determined through analysis of over
15,000 soil samples, with approximately 2,500 core holes being drilled along the
route.
3. Permafrost instability is to be avoided either by aboveground berm and pile-bent
construction (following a zigzag pattern to allow for thermal contraction or expansion)
or special buried construction to prevent thawing of permafrost.
4. Disruption of wildlife migration patterns is to be avoided, using gradual under-
passes or crossing ramps where necessary.
5. Check valves and gate-type block valves are to be installed at close intervals to
isolate sections of the pipeline in case of a leak, and for testing and maintenance,
especially on both sides of the Yukon River and on both sides of the Denali Fault
(in the Alaska Range). Pipeline conditions are to be constantly monitored to detect
any possible leaks.
Production of natural gas, an environmentally desirable clean fuel, from the Prudhoe
Bay Field is to be sent by pipeline through Canada to the Midwest. The natural gas
cannot be produced or shipped until after the oil pipeline is completed. Any delay
in the oil pipeline will delay the gas pipeline by approximately the same length of
time.
West Coast oil requirements are presently projected to exceed domestic supply through
the 1970's and 1980's. If the West Coast does not receive Prudhoe Bay oil on schedule,
then tanker import levels, primarily from Indonesia and the Persian Gulf, would have
to be increased to satisfy demand. Since the remainder of the U.S. will also be re-
quired to increase oil tanker import levels during this period, the only forseeable
alternatives to increasing West Coast tanker imports are increased offshore drilling
or rationing.
Price increases for imported oil, instituted by the Organization of Petroleum Ex-
porting Countries, might force the price of crude petroleum up to $5.00 per barrel,
The Trans-Alaska Pipeline/4
however. At this price range, production of shale oil could become commercially
feasible, but production levels are unknown at this time.
In summary, the decision of the Secretary of the Interior to approve permits for
the Trans-Alaska pipeline is based on:
1. The Trans-Alaska route offers the least environmental impact of the feasible
alternatives. In addition, it will provide natural gas, needed to meet air quality
standards, earlier than the alternatives.
2. The need for oil and natural gas in the "lower-48" requires Prudhoe Bay production
in order to prevent increased oil imports (affecting both national security and the
balance-of-payments) or scarcity, with the resulting possibility of rationing and
unacceptable price increases.
On August 15, 1972, U.S. District Judge George L. Hart, Jr. lifted the injunction
which has blocked construction of the pipeline since April, 1970. Judge Hart ruled
that Secretary Morton had complied with the National Environmental Policy Act.
However, the environmental groups who had obtained the injunction (on grounds that
the Secretary of the Interior had violated the law by failing to prepare an environ-
mental impact statement as required by NEPA) have served notice of appeal in the
U.S. Court of Appeals for the District of Columbia. (The State of Alaska may ask
the Supreme Court to take the case directly, bypassing the Court of Appeals).
Alyeska Pipeline Service Company has stated that no pipe will be laid before the
Appeals Court rules.
JAMES A. MCCLURE, IDAHO, CHAIRMAN
MICHAEL D. HATHAWAY, DIRECTOR
1620 LONGWORTH HOUSE OFFICE BLDG.
202-225-5841
TASK FORCE ON ENERGY AND RESOURCES
REPUBLICAN RESEARCH COMMITTEE
U.S. HOUSE OF REPRESENTATIVES
WASHINGTON, D.C. 20515
September, 1972
Campaign Fact Sheet
OPEC
The Organization of Petroleum Exporting Countries (OPEC) is the common denominator
for several controversial issues involving U.S. Government policy as regards supplies
of petroleum and petroleum products. Among these political issues are:
1. The Trans-Alaska pipeline
2. Offshore leasing and drilling
3. Super-tanker port construction
4. Oil refinery construction and operation
5. Oil shale leasing and development
6. Consumer price increases
7. U.S./Israel relations
8. Rationing and end-use controls
Present projections for U.S. oil supply and demand indicate that by 1985 the U.S.
could be dependent on OPEC-controlled supplies for over 40% of its requirements.
(this estimate assumes available Alaskan North Slope production of two million
barrels per day.)
[Note: Imports of natural gas and SYNGAS feedstocks from OPEC are projected
to also rise. This subject will be presented in a separate fact sheet.)
The nature of OPEC is, therefore, a necessary consideration for future U.S. energy
policy decisions. Specifically, the options available with regard to the issues
listed above will vary considerably based on different estimates of future reli-
ability of the OPEC countries as a primary source of U.S. oil imports.
The eleven nations that make up the Organization of Petroleum Exporting Countries
(Abu Dhabi, Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi
Arabia, and Venezuela) contain 80 to 85 percent of the known petroleum reserves
in the world. OPEC was organized in 1960, primarily in opposition to posted price
reductions instituted by the major oil companies in the face of weak market condi-
tions. Since 1969, the Organization has become increasingly prominent in negotia-
tions with the oil companies on several issues, including participation of the
host countries in the share of ownership of foreign-owned oil companies.
OPEC/2
John Connally, then Secretary of the Treasury, speaking before the House Committee on
Interior and Insular Affairs on April 18, said, "The international oil situation is
currently in ferment. The countries comprising the Organization of Petroleum Exporting
Countries have strengthened their cartel to the extent that they are confronting the in-
ternational oil companies and the consuming countries in a manner unparalleled in recent
economic history."
OPEC countries share of profits from oil concessions is estimated to average over 70
percent of total profits.
Present goals of OPEC include 20 to 51 percent equity participation in operating com-
panies plus a share in downstream operations (refining, transporting, and marketing in
the consuming countries).
Abu Dhabi is the leading state of the Federation of Arab Emirates and a major oil pro-
ducer of the Persian Gulf region. In 1971, Abu Dhabi produced 950 thousand barrels per
day. Reserves are estimated to be 19 billion barrels.
Kuwait, holding 12 percent of the total free world's oil reserves, or 66 billion barrels,
has recently placed limitations on daily output of crude oil in order to protect her
reserves. In 1971, Kuwait produced nearly 3.2 million barrels per day.
Qatar produced 450 thousand barrels per day in 1971. Reserves are 6 billion barrels.
Iran plays a major role in the Gulf. She has the strongest military role as well as
being one of the world's top oil exporters. Iran is sometimes out of step with the
Arab nations in the region because of political differences. Iran's production figures
are 4.5 million barrels per day for 1971 and reserves are 56 billion barrels.
On June 1, 1972, Iraq nationalized the Western-owned Iraq Petroleum Company, citing
as the reason the cut-back in oil production and the accompanying drop in revenue for
Iraq which occurred when prices of the oil became non-competitive because of Iraq's
revenue demands. The action also was apparently encouraged by a recent treaty with the
Soviet Union which includes the purchase of Iraq oil. On June 13, Baghdad Radio reported
that the Soviet Union and Iraq were studying the establishment of a joint tanker and mari-
time transport company. In order to financially support Iraq until more markets are found,
several member countries of the Organization of Arab Petroleum Exporting Countries agreed
to loan the country 135 million dollars. Iraq has the full backing of the OPEC members,
according to the Baghdad Observer. Iraq has reserves of 36 billion barrels and 1971 pro-
duction was slightly over 1.7 million barrels per day.
Saudi Arabia, which now ranks as the world's top oil exporter, seeks 20 percent increasing
to 51 percent participation. In 1971, 4.8 million barrels per day were produced and the
published reserves are 145 billion barrels.
In Algeria, all non-French and 51 percent of French operations have been nationalized.
The government owns 77 percent of the oil output and 100 percent of gas production and
pipelines. About 720 thousand barrels per day were produced in 1971 and reserves amount
to 12 billion barrels.
In December of 1971, Libya nationalized the holdings of British Petroleum Company because
of what was termed "British conspiracy" in the Iranian take-over of three islands in the
OPEC/3
Strait of Hormuz in November of 1971. The nationalization has produced problems for
Libya, since she lacks the personnel necessary to run the operation and is also having
trouble marketing the oil. The Eastern bloc countries are pruchasing oil and the USSR
has signed an agreement to provide technical assistance for exploration and production.
1971 production amounted to 2.75 million barrels per day and published reserves stand
at 25 billion barrels.
Nigeria holds 51 percent of the operations of new non-producing concessions and is possibly
planning to seek 33 percent in old concessions. 1.5 million barrels per day were produced
in 1971 and reserves are estimated at 11.7 billion barrels.
Indonesia produced 850 thousand barrels per day in 1971 and has reserves of 10 billion
barrels. The state-owned oil company has an oil monopoly, although exploration and ex-
ploitation contracts are granted to outside firms on a production-sharing basis.
Venezuela, the largest and one of the most dependable of OPEC oil suppliers, may be
posing some new problems. During 1971, the government raised oil-industry taxes and na-
tionalized natural gas. Currently, the Venezuelan congress is considering legislation
under which the state oil company would take over all marketing of petroleum products.
Venezuelan oil production in 1971 averaged about 3.5 million barrels a day and reserves
are estimated to be 14 billion barrels.
The extent of U.S. dependence on oil from OPEC nations was pointed out recently by James
Akins, Director of the Office of Fuels and Energy of the Department of State, who said
that by 1980 Libya, Saudi Arabia, Kuwait, Iraq and, possibly, Abu Dhabi will be pro-
ducing more than the spare capacity of a combination of all other producing nations. "Any
one of those countries could cause a supply crisis by cutting off its production and any
two could cause a serious one. Unfortunately, we may already be at that point."
The same idea has been expressed by Lord Strathalmond, Managing Director of British Petro-
leum Company, who noted that the only source large enough to meet the needs of the im-
porting countries (U.S., Western Europe, and Japan) during the next decade will be the
Middle East and Africa.
Hollis Dole, Assistant Secretary of the Interior for Mineral Resources, said on June 12
that the U.S. may have to import 15 to 17 million barrels per day by 1985, with as much
as 11 million barrels coming from the Middle East.
Under Secretary of State John Irwin 11, in Hearings before the House Committee on Interior
and Insular Affairs, said, "As the East Coast of the U.S. is now dependent on imports to
supply 95 percent of its residual fuel requirements, we are tied to a large extent to
the policies -- economic, trade, political -- of the countries which control refinery
production for the U.S. market
we should be aware of this dependence in reviewing
the course fo future policies."
In the same hearings on April 11, Barry Shillito, Assistant Secretary of Defense, said,
"Supply must not be hostage to the whims of others if our security is to be assured."
According to Walter Levy, oil economist and consultant, the biggest concern is "oil
availability on acceptable commercial terms, strategically secure and not subject to
political blackmail." There are examples when reliability of supply has been a problem.
One such instance occurred in 1970 when Libya cut-back her oil output which, coupled with
a break in the Trans-Arabian pipeline and the closed Suez Canal, created a situation
which caused the oil companies to meet the financial demands of the OPEC members.
OPEC/4
Another significant factor to be considered is the Arab reaction to the U.S. Israel
relationship. In January, 1972, the Cairo newspaper, Al-Ahram, urged the Arab states to
impose additional taxes on U.S. oil firms and to give no more concessions to American firms
because of the decision of the U.S. to resume delivery of Phantom fighter-bombers to
Israel. Also in January, an Egyptian oil expert drew up a plan for "unified Arab strategy
for action against United States oil interests in the Middle East." Another example oc-
curred after the 1967 war, when Arab nations embargoed oil shipments for a time to the
United States, Britain and West Germany.
Libyan Prime Minister Quaddafi attacked Britain and the U.S. in June, 1972, in these words:
"The sacred message of all faithful Moslems and patriotic Arabs today is to fight Britain
and the United States and if the two powers choose to fight us here in the Middle East,
then we will fight them on their own lands. I swear if by the end of this year, 1972,
the wrongs and perfidy are not corrected and erased, then I will escalate the struggle
against Britain and the United States. I will fight them with all the power we have and
can have, on their own lands."
George Lincoln, Director of the Office of Emergency Preparedness, said on April 11, "The
world oil scene, as well as the U.S. energy scene, has experienced a revolution in the
last three years
We'd better recognize this revolution now."
James Akins, before the House Subcommittee on the Near East, said on July 15, 1971, "An
awful lot of reputations have been lost by people predicting the Arabs would never take
any action that wasn't in their short-term economic interest. The Arabs do that sort
of thing; I shall add that not only Arabs but a lot of other people in the world sometimes
do the same.
"Take the case of Iran. When the Iranians nationalized production, oil production was
closed down completely. Iran was the biggest producer in the Middle East at the time.
And was down for three years.
"I am not saying the Arabs would cut off all production for three years. I think, how-
ever, that they might cut off oil deliveries in order to try to achieve some political
aim; and if they were to do this, there would be no way this oil could be made up else-
where
...
"In another situation, when possibly the United States would be more involved or if there
were to be a new outbreak of hostilities, even without U.S. involvement, I don't think
we can say it would be out of the question for Arabs to cut off oil deliveries again.
This is a possibility we always have to reckon with.
"If we thought the oil were always going to flow, then we could relax. It is the danger
of the oil being cut off and the fact that there is no way this oil can be made up outside
of the Arab world that makes the situation dangerous."
[Note: Mr. Akins attended the Eighth Arab Petroleum Congress, held in Algiers from May
28 to June 3, 1972. He reports that, for the first time at an important Arab
conference, there was "widespread recognition that Arab oil is finite, that it is
already possible to see it peaking out and declining, that it is not in the Arab's
interests to allow the companies to continue expansion of production at will, and
that the producing countries, most notably Saudi Arabia, must follow Libya's and
Kuwait's leads in imposing production limitations." Mr. Akins predicts at least
a doubling in the current price of Persian Gulf oil.]
OPEC's support for the Iraqi nationalization of the Iraq Petroleum Company assets was
expressed at a special meeting in Beirut on June 9, 1972. At that meeting, a reso-
lution was passed calling for production ceilings in OPEC-member states to prevent re-
placement of the nationalized Iraqi crude in world oil markets.
PRODUCERS'
COUNCIL,
INC.
The
National
Association
of
Quality
Building
Products
Manufacturers
The Producers' Council, Inc.
Established in 1921, the Producers' Council has
served the construction industry for over 50 years.
It is an organization recognized for integrity and
quality of product of its member companies. This
reputation has earned the Council a unique position
within the architectural profession-a position of
mutual trust and interdependency-which is now
being extended to all members of the building team.
As the construction industry changes, so does the
In brief
Council. For it is only through change, and recog-
nition that changes are occurring, that progress is
Building products manufacturers can
made and the needs of the membership are satisfied.
benefit from Producers' Council
through:
The Producers' Council is unique, both in struc-
ture and membership. It is the only association
Grass roots contact in 53 chap-
dedicated to programs and service for the entire
ters-a low cost marketing network
building products field-and with a membership
reaching architects, engineers, build-
consisting of a wide cross section of quality build-
ing owners, home builders and other
ing products manufacturers.
"decision makers."
An information pipeline to the
What it does
construction industry to keep abreast
Provides a channel of communication with, and
of trends and changing market con-
service to design professionals and other key indi-
ditions.
viduals in the construction industry who influence
Association with a reputable organi-
the selection of building products. Fifty-three local
zation respected for its integrity,
chapters present product oriented programs attract-
quality of membership and leader-
ing annually 60,000 concerned specifiers and users
ship in the construction industry.
of products.
Studies and conferences on impor-
Maintains effective programs and conferences to
tant subjects such as distribution,
determine trends in industry and government and
building systems, land utilization,
changes in the market place.
mortgage financing, and product
Gives the product manufacturer a means by
literature standards.
which he can extend his services, knowledge and
Being an integral part of the "build-
experience effectively and economically to the
ing team"-on the "inside" of a
public.
movement that will govern the des-
Who belongs
tiny of the construction industry of
the future and have a tremendous
Council membership consists of over 120 national
impact on traditional marketing
building products companies and 80 subsidiaries,
methods.
representing the largest cross section of quality
Some of the Council's activities and
product selection of any association in the con-
services are highlighted on the fol-
struction industry.
lowing pages
grouped into Sec-
Over 4,000 chapter members in all major market-
tions on Marketing, Information, and
ing centers in the United States.
Industry Communication.
"Life used to be enormously uncompli-
cated for manufacturers of construction
materials. They simply supplied boards
Product exhibits
display of latest
or beams or tiles and let somebody else
products of all chapter members in
worry about assembling them. But, as
new materials and new products gener-
urban areas and "satellite" cities.
ated new competition, one manufacturer
after another has been forced into strange
MARKETING SERVICES
and complex businesses-not only to pro-
tect traditional markets but also to help
produce new ones."
The Market Mode-
Pathways to Corporate Growth
Theodore Levitt
Chapters as a marketing tool
Speaker meetings
...
important national
Chapters in 53 of the nation's
and local construction industry topics
major market areas. Sustained by over
which affect use of products, such as
4,000 members, these chapters pre-
this Honolulu meeting.
sent product oriented meetings,
which are attended by architects,
engineers, specification writers, con-
tractors, home builders, building
MOINTRYS, Come
owners, local, state and federal gov-
ernment officials, school and hospital
administrators, and many others.
Similar meetings are held in the sub-
urbs and over 250 outlying "satellite"
cities
greatly expanding the mar-
Product informational meetings
spon-
keting base and ensuring local rep-
sored by one or more member companies
resentatives, agents, or distributors of
to highlight new products, new use or
members maximum service and prod-
installation technique.
uct exposure in the nation's major
marketing areas.
For an average chapter dues pay-
ment of $150 per year, a member can
reach over 1,000 "decision makers"
in a favorable business climate where
personal contact and mutual trust are
paramount. (This type of relationship
will take on more importance in the
Seminars, open forums, round-table work-
years immediately ahead as the "era
shops
for better intra-industry com-
of systems building" picks up mo-
munication.
mentum and the manufacturer, as a
participating member of the building
team, is involved much earlier in the
planning stage.)
Other meetings include:
The Council chapter program is an
Box lunch meetings held in the offices
of architects and engineers-at the de-
excellent marketing service for build-
cision making source.
ing products manufacturers
a
Multi-sponsored/team programs
means of utilizing group meetings to
groups of members make combined
lower marketing costs.
product/service presentations to select
audiences.
What They Say About
Producers' Council Chapters
PC Chapter Members
developments and responsible for the speci-
"It (the chapter) provided me the oppor-
fication of many dollars worth of building
tunity to get on a first-name basis with the
products.
people most important to my success as a
salesman."
Specifiers
"I joined as a newcomer to the area and
"I believe the functions provided by the
saved myself many months of running in
Producers' Council do a great deal to fos-
circles by getting to meet most of the archi-
ter the best relationships between the pro-
tects I needed to know, the fast way."
ducer and the architect."
"I could cite many examples where our
"Your seminars have been put on with
products have been specified or approved
a professional approach and you have given
simply because the architects had become
our profession insight into the research
familiar with me, my product and my com-
activity that manufacturers are giving con-
pany through the activities and programs
struction methods and building materials."
of Producers' Council."
"Any Council member always has his
"Being active in our chapter has in-
foot in our front door
creased my contacts and opened many
doors, which automatically increased my
"The monthly informational meetings
sales."
have fostered a more thorough understand-
ing of the products presented and we are
"By attending meetings, I have been able
therefore pleased to give prime considera-
to be in on a great deal of information I
tion to those products when planning and
might otherwise have missed leads on
specifying."
jobs in early stages, how to handle certain
types of people, and the right person to
"The group presentation method has cer-
see in larger firms."
tainly made me familiar with all Producers'
Council members and, as a natural reac-
"As a manufacturer's agent, I pay the
tion, I like to do business with people I
dues from my own pocket and consider
know."
I'm saving money. I know of no other way
one man could cover the number of archi-
" the combination of the seminars
tects I must keep in contact with and at
and the individuals have certainly influ-
such a small cost."
enced my attitude in that there is no doubt
but what our office always prefers doing
Low cost product exposure to a select audi-
business with manufacturers belonging to
ence of architects, consulting engineers and
Producers' Council and the individuals rep-
other specifiers, interested in new product
resenting them."
More Marketing Services
The Era of the Building Team
In 1971, the Council launched a new con-
cept
the National Conference and
Exposition for the Building Team. Inaugu-
rated in conjunction with the convention
of The American Institute of Architects, it
offers an opportunity for all members of
the building team to discuss the critical
Construction Marketing Seminars attract
decisions facing the industry and to view
a large audience twice a year to evaluate
industry trends, hear economic forecasts,
the latest product technology. It will be
and to be informed of developments in
an annual event
a new service for the
industry and government which will affect
entire construction industry. For the manu-
corporate planning.
facturer
an opportunity to reach all the
key members of the Building Team-in one
place
at one time.
the
Sales Representatives Institutes provide
building
team
member firms with an excellent means
of instructing new salesmen on buying
practices in the construction industry,
while alerting veteran salesmen of new
industry trends and changing market
conditions.
-
Congratulations
to the AIA and th
Producers' Council
We
to
Hs
the
for recognizing the significance of-and
bringing to reality- a national Conference and
Exposition for THE BUILDING TEAM
III
I
4
the
-
-
-
the
I
!
Background Sessions, with limited attend-
ance to enhance discussion and informa-
the
Cobo Hall, Detroit, Michigan
tion exchange, are held periodically to
June
21
and
22,
1971
review important developments affecting
Engineering
News-Record
marketing decisions, such as "systems
The
=
construction" and the impact on tradi-
#
tional marketing methods.
Council News
Effective communications is the key to
successful operation in today's economy.
Market conditions are changing. People
are changing. Their methods of operation
are changing. In the construction industry
more attention is being directed to sys-
tems, components, industrialization, per-
formance specifications. Products are be-
coming more complex. The Council, rep-
resenting the major producers of building
products, has an immense communications
job in helping its members keep the indus-
try abreast of the many new products com-
ing onto the market. It meets this chal-
lenge with a series of external and internal
publications.
The Money Dilemma
/
,
The Money Mirage
#
/
BUILDING CODES
AND THE
BRODUCERS PRODUCTS
HOUSING
AND
-
INFORMATION
The Systems Approach
URBAN
To Construction:
DEVELOPMENT
67
An Industry Report
W
/
I
THE
-
MONEY
CRISIS
/
Impact of
1
BUILDING SYSTEMS
on the
CONSTRUCTION
INDUSTRY
/
I
1
/
//
1
I
/
-
I
INDUSTRIALIZATION
NEW
IDEAS
OF HOUSING
FOR
SCHOOL
!
CONSTRUCTION
SEMINAR PROGRAM
/
Present
The Producers' Council, Inc.
we're building something that is going to last
...
so we are influencing our environment. You and I
influence the environment of every person in this
nation. Everyone is touched by what you and I do,
we've got to do it right
do a better job jointly,
instead of going off in our several directions, which
has been our characteristic difficulty for ages.
Robert F. Hastings, FAIA.
A conference for building products manufacturers
"The Hard Choices—
jointly sponsored by the Council and the Building
Will We Have the Courage
Research Institute to review and evaluate the Federal
to Make Them?"
Government's movement toward building systems and
pre-coordinated components.
A special conference sponsored by the Council and
conducted at the AIA National Convention to examine
the Forces Affecting Change in the Construction
Industry.
Through its involvement in many industry-wide
programs on both national and local levels, the
Sherman Maisel, Member of Board of Governors, Fed-
Council is a strong influence within the con-
eral Reserve System, speaking before an audience of
struction world. It assures the presentation of
key executives from Council membership to review
the checks and balances affecting money flow in the
the manufacturers' viewpoint as industry changes
construction industry. Seated (I. to r.) Dr. Preston
occur.
Martin, chairman, Federal Home Loan Bank Board,
Joint cooperative committees with the American
and Kenneth D. McLean, professional staff member
Institute of Architects, the Consulting Engineers
of the Senate Committee on Banking & Currency,
both of whom participated in the conference. These
Council, the Construction Specifications Institute,
conferences, conducted annually, search for ways and
and the National Association of Home Builders
means of achieving a stable money market which
meet nationally and locally to discuss events and
for the manufacturer means a leveling out of the
matters of mutual concern. Similar liaison is
peaks and valleys of production, sales and profit.
maintained with contractor and builder groups,
construction research groups, building owners
and financial institutions, and with that most
important "owner," the Federal Government.
The Producers' Council maintains constant con-
tact with such major agencies as the General
Services Administration, Department of Health,
Education, and Welfare, and Department of
Housing and Urban Development to alert
members to any pending changes in Federal
procurement procedures, new approaches in
construction, or other government plans or ac-
tivities that may affect their business.
By its continual contact with all members of the
Robert L. Kunzig, Administrator of the General Services
Building Team, the Council can channel the
Administration, at a TV interview during the past
Council Annual Meeting, discussing GSA's movement
manufacturers' viewpoint through its informa-
INDUSTRY COMMUNICATION
toward building systems and performance specifica-
tion and education programs.
tions.
The Construction Industry Advertising and Product
Literature Competition and Conference, designed to
assist the manufacturers and their agencies in pro-
ducing the most effective product data possible. Spon-
sors of this effort, coordinated and administered by
Producers' Council, are seven major organizations in
the construction industry.
"During this decade as producers-both large and
small-we can expect to be involved in a more ex-
panded role of industry leadership. Recognizing this,
the Producers' Council stands ready to serve your
firm through a number of effective services geared to
to this period of rapid change."
Robert B. Darling
Vice President and General Manager
Barber-Colman of Canada, Ltd.
Producers' Council, Inc.
1717 Massachusetts Ave., N.W.
Washington, D.C. 20036
(202) 667-8727
THE WASHINGTON POST Thursday, April 13, 1972
Rogers Morton Says Public
Must Help Conserve Power
Secretary of Interior Rogers
nation must pay as
"We haven't run out
me areas of the
B. Morton said yesterday Shortages
Energy Crisis
Power Possible in Area
Is Predicted
By Dr. Lapp
evey
You are Invited
to a Special Seminar
for the Construction Industry
WITH SOME PRACTICAL SOLUTIONS TO
THE ENERGY CRISIS
sponsored by concerned members of
PRODUCERS' COUNCIL, INC.
ment into
Crisis of `immense proportions'
but espe-
ergy.
Udall (D-
n
in energy, says Interior head
es Lapp's
k
threat to
10
By CLAUDE POWE
rado, Wyoming and Utah later this sts' mis-
Daily Journal Senior Editor
year.
"The nation is facing an energy
ive
a very
Sec-
the public is
Fuel Crisis
C.'B.
Power Needs
ous 1 energy
with the en-
od is spoiling
Faces Nation
By 1990 Seen
r and my job
t any cost!' "
By Early '80s
Quadrupled
ere is severe
mental back-
Ry James L. Rowe Jr.
By Marilyn Berg
Iding that he
Washington Post Staff
Interior Secretary I
State to Investigate
goals but
Morton said yeste
he United States is
fuel and power cris
To Limit Electricity Ways Use
Commission The state's announced Public Service|those KNIGHT
By MICHAEL
dav
IBRAR
emand for Electrical Power
vi
stu
Seen Quadrupling by 1990 us Je a
d
For a while we didn't pay any attention. We
In short, we must go
Sponsors
just called it
a power failure
BACK TO THE DRAWING BOARD
or a fuel shortage
to find practical solutions through the design
American Gas Association
Now we know better. Now we call it
of energy-conserving buildings and systems.
American Public Power Association
Energy conservation as a design criterion has
THE ENERGY CRISIS
high priority today, but could be law tomorrow.
Amspec, Inc.
This timely seminar offers you an opportunity
Apache Foam Products
to prepare for the future. Among its features:
Armstrong Cork Co.
and some are predicting that it's only the be-
ginning.
Barber-Colman Company
Assessment of energy outlook in our area.
C-E Glass, Inc.
UNLESS
new sources of clean energy are
Ideas on designing to conserve energy.
Electric Energy Association
introduced very soon
W.R. Grace & Co.
AND
Introduction of new building products and
Grefco, Inc.
present supplies are conserved and
equipment geared to efficient use of en-
Johns-Manville Corp.
managed more efficiently.
ergy.
Libbey-Owens-Ford Co.
BUT
at the very least, the costs of energy
Exhibits and demonstrations of energy-
Owens-Corning Fiberglas Corp.
will rise significantly and the impact
conserving product application.
PPG Industries, Inc.
on the construction industry, the
national welfare, and our individual
Silbrico Corporation
comfort and convenience could be
Facts and figures to prove to owners that
profound.
Westinghouse Electric Corp.
a construction penny added is an operat-
ing dollar saved.
so
it's time for our industry to talk
This seminar has been developed in cooperation
about this situation and come up
Review of regulatory moves and pro-
with major Federal Agencies and prominent au-
with some sensible answers.
posals.
thorities in private practice.
POWER BROWNOUTS THIS SUMMER
CON ED IS FORCED
-AREAS ON THE DANGER LIST
TO CUT VOLTAGE
C.
d
C
There is a strong prospect of wide-
this summer is traced by officials mainly
to 20 per cent of peak summer demand
Peak Demand and a Failure
c
spread power shortages in large areas of
to delays in bringing new generating
the United States this summer.
plants into full operat
Bring 3% Reduction
D
On March 27, the Chairman of the
plants and 35 conve
Federal Power Commission, John N.
are scheduled to start
Nassikas, warned that dangerously low
them are threatened W
Are We Waiting
S
By ROBERT D. McADDEN
Confronted with the largest
supplies of electricity are ahead in five
slow delivery of equi;
demand for electrical power of
regions: New York, northern Mlinois and
putes and federal rules
the summer and the abrunt loss
Wisconsin, Iowa, Florida
of
th
ginia-Carolinas area.
For
The complete picture
electrical-power resources
State Plans to Investigate Ways
mer has not yet been cr
Of Limiting the Use of Electricity
The
EW YORK TIMES, WEDNESDAY, JULY 19. 1972
Lights to Go Out
Demand for Power Nears
Record as Blackout Ends
-
electricity Swelter t THE Bv NEW YORK TIMES, WEDNESDAY. Increases JULY 19. 1972
Brooklyn Power Restored
After 13-Hour Breakdown
the Consolic
2 Utility utility Companies companies Ask in the metropolitan region
By
Post Staff Writer
Subways, which have inde-
Council in New England and
Two rate increases.
YORK, July 18-
pendent power sources, con-
with two Canadian utilities,
About
250,000 New Yorkers
tinued to operate,
Ontario Hydro and Hydro
Make sure anyair conditioner you buy
ins were slowed be
Quebec.
in Ed supplies eled-
"Of course the Canadian
or the signals.
companies have their peak de-
can pass this save-a-watt test.
were no reports of
mands in the winter," said
persons trapped in elevators. a
Wallace, "whereas most U.S.
homes in. a
widespread occurence during
utilities have it in the sum-
at
about and-maintenance
area
of
the 1965 blackout.
mer. So that provides a little
rose
were powerless for
A
Con
Ed
an, Roy
balance."
tion llian in the
em was
nt
ar
Warns
of
Heavy use of air condition-
source,
Ing. equipment during Mon-
Demand for Power Nears
te
Record as Blackout Ends
FPC
vas not
day's 94-degree heat helped
e, and
cause the
ct
Major
Power
Shortages
For-
New York
percent last year. And in the West, the commis- of 23.8
there is an indicated reserve
Architects
the FPC said, south-
mummer's 18.8 percent.
Engineers
are:
Contractors
if significant out
House, to Avert Brownouts,
e
Specialty Contractors
units are experience
Owner/Investors
generally the warme
Backs Operation of A-Plants
e
Building
air conditioners
it,
Managers
Public Officials
School, Hospital and Institutional
tion, said he bill was "strictly
nt
Administrators.
The House Interior Commit-
the
e
The Energy Crisis
Build to Avert It
red
Peak Capacity
indust:
Vepco said.
tic resources.
of about 71
Rep. Chet Holifield (D-
eak
load
Calif.) said "We're at danger-
Bob Burch, chairman of the
only about
Jor-
to
he
ously low reserves of power in
Import Policy Committee of
approved 283
load
reduction.
8
and
sent
many
to
parts
of
the
the Independent Petroleum
nation
and