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Energy Independence Authority (6)
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The original documents are located in Box 13, folder "Energy Independence Authority (6)"
of the James M. Cannon Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 13 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
THE WHITE HOUSE
WASHINGTON
REQUEST
October 14, 1975
MEMORANDUM FOR
JIM CANNON
FROM
PAUL MYER
w
SUBJECT:
E. I. A.
It is my understanding that due to drafting technicalities,
the EIA legislation has been referred only to the Congres-
sional Banking Committees. This in itself has given rise to
rumors of attempts to intentionally kill the bill or gaining
the political advantage of potentially embarrassing hearings
for the Administration. Overall, these Committees should not
be looked to for the fair consideration of the legislation.
In fact, early indications point to plans for a slow and
embarrassing burial of the concept. Beyond these obvious
political concerns, substantially, few of the Committees'
FORD
members have expertise in the energy field.
Per your request, the following are some tentative comments
GERALD
on the possible views among Committee members on EIA:
House Committee on Banking, Currency and Housing
(42 members -- 28 Democrats, 14 Republicans): Chairman Henry
Reuss has made public statements indicating general opposition
to the EIA concept. The ranking Republican, Albert Johnson of
Pennsylvania, is unknown to me. The Democrats are generally
liberal and independent legislators with strong partisan views.
Reuss maintains no effective control or leadership over them
and the Committee remains as unwieldly and chaotic as it was
under Patman. Most of the Republicans are strong individual-
ists and they are fairly balanced between the generally
senior conservative members and more moderate junior members.
Senate Committee on Banking, Housing and Urban Affairs
(14 members -- 8 Democrats, 5 Republicans) : Chairman William
Proxmire's public statements indicate strong opposition. Simi-
larly, the ranking Republican member, John Tower, has expressed
negative views. My brief comments on the other members are as
follows:
-2-
Sparkman --- unknown.
Williams - will follow AFL-CIO line.
McIntyre -- unknown; potential impact on New England region
could influence views.
Cranston -- unknown, probably opposed.
Stevenson --- probably opposed; anti-oil company role in Senate
energy debates.
Biden -- unknown; unpredictable.
Morgan -- unknown.
Brooke -- unknown; should be considered as one of few possible
supporters.
Packwood -- staff comments indicate a possible interest in the
concept; wanted to see detailed legislative pro-
visions.
Helms -- unknown; assume conservative opposition.
Garn - unknown.
I briefly chatted with Glenn Schleede on Friday. Zarb will be
calling a meeting this week to plan FEA's strategy. I need
your further guidance as to if and how I am to be involved in
this matter.
FORD LIBRARY & 938839
Committees of the House
285
INTELLIGENCE (SPECIAL)
Lucien N. Nedzi, of Michigan, Chairman
Bob Wilson, of California, Ranking Minority Member
Banking, Currency, and Housing
(Suite 2129, phone 54247, meets first and third Tuesdays)
Henry S. Reuss, of Wisconsin.
Albert W. Johnson, of Pennsylvania.
Wright Patman, of Texas.
J. William Stanton, of Ohio.
William A. Barrett, of Pennsylvania.
Garry E. Brown, of Michigan.
Leonor Kretzer (Mrs. John B.) Sullivan,
Chalmers P. Wylie, of Ohio.
of Missouri.
John H. Rousselot, of California.
Thomas L Ashley, of Ohio.
Stewart B. McKinney, of Connecticut.
William S. Moorhead, of Pennsylvania.
John B. Conlan, of Arizona.
Joint
Robert G. Stephens, Jf., of Georgia.
George Hansen, of Idaho.
Comms.
Fernand J. St Germain, of Rhode
Richard T. Schulze, of Pennsylvania.
E Island.
Willis D. Gradison, of Ohio.
Henry B. Gonzalez of Texas.
Henry J, Hyde, of Illinois.
Com tee
Joseph G. Minish, of New Jersey.
Richard Kelly, of Florida.
Frank Annunzio, of Illinois.
Charles E: Grassley, of Iowa.
Assign.
Thomas M. Rees, of California.
Millicent Fenwick, of New Jersey.
James M. Hanley, of New York.
Admin.
Parren J. Mitchell, of Maryland.
Assts.
Walter E. Fauntroy, of the District of
& Secs.
Columbia.
Lindy (Mrs. Hale) Boggs, of Louisians.
Stephen L Neal, of North Carolina.
Statis-
Jerry M. Patterson, of California.
tical
James J. Blanchard, of Michigan.
Andrew Maguire, of New Jersey.
Harold E. Ford, of Tennessee.
Carroll Hubbard, Jr., of Kentucky.
Capi-
tol
John J. LaFalce, of New York.
Gladys Noon Spellman, of Maryland.
Les AuCoin, of Oregon.
Paul E. Tsongas, of Massachusetts.
Butler Derrick, of South Carolina.
Depts.
Philip Hayes, of Indiana.
Mark .W. Hannaford, of California.
Paul Nelson, Clerk and Staff Director
Agencies
SUBCOMMITTEES
I
DOMESTIC MONETARY POLICY
Wright Patman, of Texas, Chairman
John B. Conlan, of Arizona, Ranking Minority Member
HOUSING AND COMMUNITY DEVELOPMENT
William A. Barrett, of Pennsylvania, Chairman
Garry Brown, of Michigan, Ranking Minority Member
ECONOMIC STABILIZATION
GERALD 4. FORD Date - MEDRARK
Thomas L Ashley, of Ohio, Chairman
Stewart B. McKinney, of Connecticut, Ranking Minority Member
MEMORANDUM
REQUESTED
THE WHITE HOUSE
WASHINGTON
October 15, 1975
MEMORANDUM FOR
JIM CANNON
FROM
PAUL MYER
SUBJECT:
EIA Committee Referral -
House
The referral of bills in the House of Representatives
is subject to the provisions of Rule X, Rules of the
House of Representatives, 94th Congress.
The Speaker refers all bills to the Committee which
has jurisdiction over the subject matter of any
provision of the legislation. While bills are generally
sent only to one committee, under the referral proce-
dures (Rule X, 5 (c)), the Speaker may (1) refer the
matter simultaneously to two or more committees for con-
current consideration or consideration in sequence (sub-
ject to time limitations), or (2) divide the matter
into two or more parts (reflecting the different subjects
and jurisdictions) and refer such part to a different
committee, or (3) refer the matter to a special ad hoc
committee appointed by the Speaker with approval of the
House.
A brief review of the present situation indicates that
simultaneous referral for sequential or concurrent con-
sideration to appropriate House committees would be the
most desirable situation.
Rule X also stipulates the jurisdiction of House Commit-
tees. The initial referral of the Presidential message
on EIA to Banking, Currency and Housing was based upon
that Committee's jurisdiction over matters pertaining
to "financial aid to commerce and industry." However,
since the legislation has not been formally introduced
in the House, I believe that referral to additional
committees under Rule X, 5 (c) would be in order.
GERALD FORD
-2-
A jurisdictional claim could possibly be made by three
additional committees: Science and Technology, Joint
Atomic Energy Committee, and Interstate and Foreign
Commerce. From a practical and political standpoint,
the Committee on Science and Technology would perhaps
be the most advantageous. This Committee has jurisdic-
tion over "all energy research and development except
nuclear." Joint Atomic Energy, because of the nuclear
research aspects, might therefore lay claim to a part of
the bill. Certainly, Commerce, based on their past and
present performance on energy policy would not be desir-
able.
In addition to the phone calls and contacts with Albert
we discussed on the phone, co-sponsors from additional
committees at the time of introduction could be helpful
in determining the referral issue.
FORD
GERALD
us
+
*
@
*
7
n
*
OFFICE OF THE VICE PrESidENT
WASHINGTON
November 13, 1975
MEMORANDUM FOR JIM CANNON
FROM:
Peter J. Wallison Peter
SUBJECT;
Energy Independence Authority
In case you have not seen it, I have
attached a statement by AFL-CIO President
George Meany endorsing the Energy Independence
Authority.
If you have any questions, please call.
Attachment
from
AFL-
CIO
DEPARTMENT
RELATIONS
(202) 637-5010
For Release:
A.M. PAPERS, FRIDAY, NOVEMBER 14. 1975
AFL-CIO President George Meany today made the following statement:
On the basis of the analysis and recommendations of the AFL-CIO
Energy Policy Committee, the AFL-CIO endorses the concept of the Energy
Independence Authority, a proposal initiated by Vice President Rockefeller
and introduced in the Congress by the Ford Administration.
Private industry, left to itself, cannot and will not resolve the
energy crisis which still plagues this nation. The American people should
not be deluded by the current easy availability of energy supplies. While
the gas lines have disappeared, the dependence of the United States on oil
from insecure foreign sources still exists. This nation is more vulnerable
to an Arab oil embargo today than in 1973. Government must provide the
inititative and incentive for development of energy projects that will place
this nation on the road to energy independence.
It is estimated that capital in the amount of $600 to $800 billion
will be needed in the next ten years to finance investments for energy
independence. Most projects would be capitalized from private sources;
however, those deemed vital to the national interest but unable to secure
private capital, would be financed through a new government corporation
with authority to make direct loans, provide loan guarantees, and other
financial assistance to energy independence projects.
While the AFL-CIO does endorse the creation of an Energy Independence
Authority and the basic program set forth in the bill, we expect to have a
number of proposals for improvements in the specific terms of this measure.
At the proper time, we will testify before Congress on the legislation
and will make detailed proposals and suggestions to strengthen the bill.
The federation's Energy Policy Committee --- composed of Secretary-
Treasurer Lane Kirkland, Vice Presidents Paul Hall, Martin Ward, William
Sidell, A. F. Grospiron, Murray Finley and Joseph Keenan -- will continue
its study of this and other proposals.
-30-
The
AFL-
CIO
DEPARTMENT OF PUBLIC RELATIONS
(202) 637-5010
For Release:
EIA
A.M. PAPERS, FRIDAY, NOVEMBER 14. 1975
F₁ 6
AFL-CIO President George Meany today made the following statement:
On the basis of the analysis and recommendations of the AFL-CIO
Energy Policy Committee, the AFL-CIO endorses the concept of the Energy
Independence Authority, a proposal initiated by Vice President Rockefeller
and introduced in the Congress by the Ford Administration.
Private industry, left to itself, cannot and will not resolve the
energy crisis which still plagues this nation. The American people should
not be deluded by the current easy availability of energy supplies. While
the gas lines have disappeared, the dependence of the United States on oil
from insecure foreign sources still exists. This nation is more vulnerable
to an Arab oil embargo today than in 1973. Government must provide the
inititative and incentive for development of energy projects that will place
this nation on the road to energy independence.
It is estimated that capital in the amount of $600 to $800 billion
will be needed in the next ten years to finance investments for energy
independence. Most projects would be capitalized from private sources;
however, those deemed vital to the national interest but unable to secure
private capital, would be financed through a new government corporation
with authority to make direct loans, provide loan guarantees, and other
financial assistance to energy independence projects.
While the AFL-CIO does endorse the creation of an Energy Independence
Authority and the basic program set forth in the bill, we expect to have a
number of proposals for improvements in the specific terms of this measure.
At the proper time, we will testify before Congress on the legislation
and will make detailed proposals and suggestions to strengthen the bill.
The federation's Energy Policy Committee -- composed of Secretary-
Treasurer Lane Kirkland, Vice Presidents Paul Hall, Martin Ward, William
Sidell, A. F. Grospiron, Murray Finley and Joseph Keenan - will continue
its study of this and other proposals.
FORD
-30-
GERALD R.
*
OFFICE OF THE VICE PRESIDENT
WASHINGTON
November 18, 1975
Fili
MEMORANDUM FOR THE VICE PRESIDENT
FROM:
ROGER W. HOOKER, JR. Roger
SUBJECT; EIA
Attached, as introduced by Bob
Griffin, at my request, in yesterday's
Congressional Record are:
1. Your October 6 remarks
on EIA before business
executives here in Washington.
2. George Meany's endorsement
of the concept on EIA.
We are having these pages reproduced
for further inexpensive distribution as
appropriate.
CC Peter Wallison
Jim Cannon
Dick Allison
Jack Veneman
Hugh Morrow
Bob Armao
0802 LIBRATE &
Congressional Record
United States
of America
PROCEEDINGS AND DEBATES OF THE
94th
CONGRESS, FIRST SESSION
Vol. 121
WASHINGTON, MONDAY, NOVEMBER 17, 1975
No. 171
November 17, 1975
CONGRESSIONAL RECORD-SENATE
S 20185
Then as we got into the mid-60's OPEC had
did was of course it really hit the coal indus-
been formed and we became a net importer,
try over the head BO that our greatest re-
didn't have the reserves to dominate world
source was least developed and had more
prices and therefore triggered by the conflict
problems and while gas when it was first
in the Middle East, the Arab countries finally
controlled was a byproduct of oil and was
moved and in two years raised prices 500
being burned and therefore was in surplus.
percent.
The price that was set was so low that as
TOWARD ENERGY INDEPENDENCE
people shifted to gas they were unable to get
At that point, particularly the Eastern Sea-
Mr. GRIFFIN. Mr. President, on Oc-
board of this country suffered quite a set-
the production, the increased production or
even if they could get production-like in
tober 6, the Vice President addressed a
back because of the boycott and the price
the case of Texas-they couldn't ship it on
meeting of business executives here in
increase. The boycott, let's face it, there were
the interstate lines.
Washington on the energy problems. I
enough leaks and there were enough coun-
Now as you know-we had a meeting in
commend his remarks to my colleagues,
tries that didn't join it so that it really
this room, as a matter of fact, with a group
and ask unanimous consent that the text
wasn't as overwhelming as it might have
of Governors who came in organized by Jim
be printed in the RECORD following my
been.-
Rhodes of Ohio pointing out that they had
I was at that point Governor of New York
lost 600,000 man days of work last year due
remarks.
In addition, Mr. President, AFL-CIO
deeply concerned; but Libya allowed oil to go
to the shortages of gas and it was going to
to one of the British Islands in the Carib-
be a lot-that was a warm winter-worse next
President George Meany has endorsed
bean and be refined there and come into New
year and his people, the industrial groups
the concept of the administration's en-
York for power and so forth which if they
in his State were willing to finance produc-
ergy proposal and I ask unanimous con-
had really tightened down we would have
tion of gas at higher prices if they could
sent that his statement be printed in the
been in a much more difficult situation.
just get permission to move it on interstate
RECORD.
The President, as you all know, spent a
pipelines and the concept of a common car-
There being no objection, the material
lot of time discussing the economics and hav-
rier be adopted rather than a regulated price.
was ordered to be printed in the RECORD,
ing the summit meetings when. he first took
That has been very slow in coming because
office last fall a year ago. One of the major
the Federal Power Commission was afraid
as follows:
subjects was this question of energy. He
that if they made such a ruling that they
THE VICE PRESIDENT'S ADDRESS
came out of those with a clear determination
would be challenged in the courts by the
I want to thank all of you very much for
for energy independence as being essential
ecologists and that they would then be over-
coming here today and for giving me a chance
for this country's national security; second,
ruled. So they wanted legislation.
to visit with you, try to outline first briefly
that this should be achieved by 1985.
I only mention this because where gov-
the conceptual thinking in back of this pro-
He then worked out the details of legisla-
ernment stepped in to regulate one phase of
gram and then answer or at least discuss your
tion which would encourage private enter-
the energy industry it totally disrupted the
questions. I will do my best to answer them.
prise because energy has always been a pri-
industry and shows very- clearly what can
I think the legislation will go up this week.
vate enterprise operation in this country ex-
happen through government regulation. The
The subject is a complicated one and there
cept for Nayal reserves, which would en-
President, as you know, has fought regula-
have been varying points of view as you all
courage private enterprise to accelerate pro--
tion and he has been for decontrol. He
know by reading the press. Therefore, it has
duction-domestically.
wanted an orderly decontrol on oil. He
caused some difficulty in trying to get the
I don't think we really have recognized
wanted 39 months. But then we go back to
thing worked out so that it could be put in
quite as clearly as it seems to me the fact
what has happened in Congress. He sent up
detailed language for the legislation and the
exists that this-because there is a great
a 500 and some-page bill.
deal of talk about the free market system-
This bill was complicated and the public
message.
I hesitate to talk about the whole subject
that the free market system should do this
I don't think has really since the energy
because I know everybody in this room is
and that they should be the ones that with-
crisis that they saw two years ago when
totally familiar with the subject, but let me
out Government intervention except through
there were lines waiting for gasoline-has
just for the record give you a brief outline
a framework of laws which would give in-
eased off. It was really sort of personified
of the past and how it came about as to where
centive.
Allright. The framework of laws has never
we are now.
This country of course up to the 1960's was
been achieved because one can speculate
the major producer and exporter and had
here-but first it is a complicated subject
the reserves to export additional amounts if
and it was complicated when-I have to
necessary and so when on two or three occa-
again go back a second. It was complicated
sions other nations around the world tried
when the United States Government con-
to raise the prices of oil substantially, we just
trolled the price of interstate gas at a very
exported more and were able to hold the
low price so that the most desirable fuel
price.
turns out to be the cheapest fuel. What it
CONGRESSIONAL RECORD-SENATE
November 17, 1975
at a meeting of the Midwestern Governors'
$100 billion basis over ten years because that
Or does one come to the conclusion reluc-
where none other than Governor Exon asked
is the life of the corporation, would prob-
tantly or just as a suspicion even-not B. con-
me if there really was an energy crisis. He
ably average out to about $10 billion B year.
clusion-that there would be those in Con-
said, "How can there be an energy crisis
If this country moves towards self-suffici-
gress in the opposition party who would just
when there is plenty of oil and gas around?"
ency it would take $60 billion to $80 billion
as soon have the issue or would just as soon
I said, "You have really expressed the whole
a year and so $10 billion is 12, 14 percent of
see us run short of energy. have the Presi-
thing right there. There is plenty of oil and
the total that is required.
dent take off controls because they lapsed
gas around because we are importing now
What would the conditions be in determ-
and not be able to work out an orderly ex-
almost 40 percent of our consumption."
ing how this money would be used? The con-
tension and then have perhaps chaotic con-
Domestic consumption is going down. So
ditions are simply two basically: One, that
ditions in 1976 and maybe this would be
as long as we import it there isn't a crisis
it contributes to the self-sufficiency; two,
politically advantageous?
in the sense that you are thinking of it, but
that it would be used for financing through
One hesitates to even think that anyone
if the Middle East situation blew up again
private enterprise just as the Military buys
for political purposes would be willing to see
or if for some other reason other than price
its equipment through private enterprise
the Nation run the risks which we are run-
or through a boycott we could then find
where those objectives, those investments
ning and have the people suffer in a way that
ourselves in the middle of a full-blown cri-
cannot be obtained by private enterprise
they might suffer very easily were such a
sis which for certain parts of the country
themselves; in other words, where they
chaotic situation exist. But one can't elimi-
would be total disaster. And I don't
either can't get the money or for some rea-
nate that possibility entirely.
think anyone has really figured out how
son are unwilling, to; primarily can't get it,
But whatever the situation is, there is no
this country would survive & really effective
can't get it because they can't earn.
action. Therefore, we are in a stalemate. The
boycott because we don't have transporta-
If you take a look at the utility indus-
problem is getting worse and we are up to
tion from the west to the east to handle
try-what, 70 percent of the atomic power
now close to $30 billion with a 10 percent
the movement of energy in sufficient quan-
plants?-and of course atomic power is the
increase in foreign exchange imports. Luck-
tities to keep our operations going; our so-
great potential we have in this country for
11y our farmers have been tremendously pro-
ciety going.
energy. The others are important, but the
ductive. So they are producing a major new
We just have seen a 10 percent increase
long-term, major producer us energy is
source of foreign exchange. Other areas have
take effect in the world oil prices and as I
atomic for the time being; solar and thermal,
been able to export. So our balance of pay-
say Congress has not taken any effective
out further.
ments is reasonable at the moment, but with
action: little pieces of action, but no com-
I will come back to gas, coal and oil in a
consumption going up, with production go-
prehensive action. Finally, the management-
minute. But let's say these 70 percent or 70
ing down, with the depletion allowance taken
labor committee had some concepts as to
percent of the atomic power plants that
off, with the old oil still under control-it is
how to encourage through incentive industry
were planned were cancelled. There is a whole
not under control at the moment but pos-
to invest more domestically.
very complicated series of reasons as to why.
sibly under control-nobody can afford to
That legislation hasn't gotten off the
Local regulations of the State Public Serv-
put the money into the secondary retrieval
launching pad in Congress.
ice Commissions where they can't get rate
of oil because it falls under old oil.
So as I view the situation we find ourselves
increases so they can't earn enough money to
So that we have the situation where as I
in a free market industry, but the free mar-
be able to borrow the money is one factor.
say our production is declining and our con-
ket has been a world market. Now national
Also you can't get the increase you are on
sumption is increasing and nobody thinks
policy expressed by the President is that we
line with your power. These atomic power
there is a crisis.
should be a self-sufficient, independent pro-
plants, most efficient ones, cost about $1 bil-
Let's go to the areas that the Energy In-
ducer of energy. We have the resources. No-
lion. Therefore, you would have 81 billion up
dependence Authority might serve. The best
body knows yet at what price. That is a na-
not for four years as it used to be, but now
illustration is rubber reserve under Bernie
tional policy superseding a free market posi-
with all of the filings that you have to make
Baruch in World War II which did a heck of
tion because the free market was an inter-
on impact statements, the local suits, it is
a job. They contracted with six or seven pri-
national one. Then a great many people
up to between 10 and 11 years. So you have
vate companies to develop synthetic rubber
have felt that this OPEC price structure
81 billion tied up for 10 or 11 years with no
production and of that group I think four
would break down as production increased.
basis for earning. That is one very good
or five came through with processes or varia-
Walter Levy who is one of the most so-
reason.
tions of a basic process which were success-
phisticated people in the business and many
Also uncertainties are another and all
ful. They sold the company, the plants and
of you know him, has said right along there
kinds of regulations from Washington. The
the process and we have a new industry in
wasn't a chance; that they would do ex-
labor-management recommendations were to
the United States. It was a self-liquidating
actly what they did do. He predicted that
encourage and allow for a greater accumula-
six or eight months ago, or even longer may-
operation.
tion of capital by corporations.
This corporation, the concept of this
be, that they would not decrease the price;
Of course, the bill was immediately tagged
corporation is a self-liquidating corporation
they would not break the price; they would
by the opposition as being just a special in-
to finance those risks, which private enter-
hold and they would increase the price. That
terest bill for big business and big industry
prise cannot or will not undertake at the
is what has happened.
and for capital rather than for the people
So when people say that the use of Fed-
present time to contribute to self-sufficiency
which is an easy, cheap shot politically, but
and do it to the maximum degree possible-
eral funds through a structure that is in
it isn't going to help the country.
a sense comparable to the RFC conceptually,
with private capital participation and
So that bill hasn't gotten off. The real
but not for bailouts, but for stimulating
through private industry and then sell it as
question has to be first how does govern-
new industry or new production, and they
rapidly as possible.
ment when it has set a national policy that
Let me take three or four different areas.
say this is an allocation of capital and this
cuts across a free market operation work
is going to-take it from a whole lot of other
First, we have ERDA. Some people say what
with the industry in trying to work that out;
do you need this for if you have ERDA?
things, the answer on the allocation of cap-
in this case domestic production?
ERDA's powers go to laboratory experiments
ital is very simple. The President has said
our national policy is self-sufficiency by 1985.
The first approach the President has was
relating to energy. But they do not have the
this very comprehensive legislation.
funds or the authority to take those labora-
The estimates vary between $600 billion
and $800 billion will be required to achieve
One has to ask is it that the Congress go-
tory experiments and take them out onto a
ing through this evolutionary change that
full commercial production. Of course. here
that object. That is out of about $4 trillion
you move from a limited expense to a much
$300 billion that has been estimated as in-
all of our establishment institutions have
larger expense. The commercial production
dustry's capital requirements during this
gone through is unable with such an over-
is essential in order to find out what the cost
ten-year period for meeting needs of the
whelming majority by the opposition to the
of energy would be.
American people and our responsibilities in
Executive Branch-in other words, the
For instance, gasification of coal is being
the world.
Democratic Party as distinct from the Re-
done and so its liquefaction of coal in South
We will fall short of that as estimated-
publican Party-is it unable to organize it-
Africa. It comes out between $30 and $40 a
again these are all estimates; therefore, they
self and does the committee structure of 300
barrel equivalent energy. But it does produce
are just guestimates-fall short by about
different committees which the Congress has
gas. It is essential.
$600 billion.
in both Houses, is it so cumbersome and does
There are new methods that can come up
So there is going to be a shortage. Nobody
it involve so many committees when you
that would take a little longer to go down
knows how much money will come back into
have a comprehensive piece of legislation of
the line which might reduce it to $20 a barrel
investments from Arab countries where the
this kind, does this make it impossible for
equivalent of oil or even down to $11, plus
accumulation of capital is taken place. But
the Congress to act effectively and rapidly in
the fact that there is then the possibility
I would imagine that Saudi Arabia alone is
the national interest through jurisdictional
of In-Situ, drilling a hole down in the deep
up to about $7 billion now in investment
disputes, et cetera, et cetera and within the
coal mine, setting off an explosion, setting it
in treasuries. These securities, were this cor-
House the Caucus which is in conflict with
on fire: the heat does the same thing under-
poration to be passed by the Congress on the
the committees?
ground that is done on top and you would
CONGRESSIONAL RECORD SENATE
20187
the created by the burn-
tion of shale, drill down, put off an explosion,
catalyst to get or to help get us off dend
underground.
set it on fire, draw off the gas, the gasified
center in becoming self-sufficient as a nation
are those who feel that this will be
oil and recondense it.
across the board in all of these fields on B.
a far cheaper method but an experiment like
The Livermore Laboratories have done
self-liquidating basis, that this is essential
that would cost $200 million to find out.
some work on this with Edward Teller and
for our national security, to our industrial
A gasification plant, surface plant is about
they feel, although nobody else is willing yet
growth, to employment. That is a pretty good
81 billion. There is a need for 18 to 24 sur-
to agree with them, that this might be pro-
combination of the three.
face gasification plants, traditional, known,
duced at the rate of between the cost of 87
If we don't do it, in my opinion, there are
proven style right now for the next-having
and $8 a barrel.
elements in this country and some of them
to be built right now if we are going to meet
If it were that, this would be one of the
in the Congress who would like to see in-
the gas supplies and this is what the gas in-
great bonanzas that has happened to this
dustry fail and not be able to meet the needs
dustry is looking for. There right away is $18
country. It would be fantastic.
of the country and then say, fine, we told
billion to $24 billion to produce gas the most
The Occidental company is the only com-
you the system was no good; that capitalism
expensive way.
Some may have to be produced. Laws
pany that I know that has done any major
doesn't work; that private enterprise doesn't
work in the field but they can't afford this
work. Therefore, we have got to take it over.
change. We can get them changed so that
gas can be purchased in another area, sur-
kind of an experiment.
Then we will move as the British moved
plus gas and piped through the interstate
Many of the companies bought I think
taking over one industry after another and
gas system. It is complicated. But that is
over $1 billion in leases out in Colorado for
of course the problems that grow out of that;
one area.
shale, but they were going to do surface
then they start subsidizing; then unlimited
Coal, of course, gets tied up with the whole
mining. None of them have gone ahead be-
capacity to pay and, therefore, you get into
ecological problem. I visited out in Wyoming,
cause of the uncertainties and the ecological
the most difficult situation and the most
Gillette, one of the most fascinating mines
problems. So-that is another area.
dangerous situation where you have neither
where they took off 23 feet of surface, then
Then you come down-I have covered the
a capitalist system nor a socialist system and
70 feet of coal, clay underneath; they took
coal, oil, gas; not covered it but mentioned
you have the worst of both and nobody can
the topsoil off first, stacked it; then took the
them-to the question of electricity through
make an investment because they don't know
rest off, put it behind where they are digging
atomic.
what the conditions are going to be, what the
the hole and then end up by putting the
One of the standard methods of financing,
regulations are going to be, what the re-
topsoil back on, making six lakes, 6,000 acres.
whether it is airplanes or a lot of other
sources are going to be. Therefore, you have
The only difference you will find is you will
things in this country, is the lease purchase
a plurality and we have higher unemploy-
have lakes which you never had before.
operation where somebody finances an air-
ment and demand for more expenditures by
The growth will be as good if not better
plane and the company purchases it. It is
the Federal Government which the President
and the only other difference is it will be 123
perfectly conceivable that an atomic power
has had the courage to resist to a degree that
feet lower than it was before. But I was
plant costing 81 billion could be financed by
is perfectly extraordinary and if he didn't, we
there. The antelope were grazing still right
the government under a contract with a pri-
would have more inflation.
around where the mining operation was
vate company for lease purchase with a con-
This is then also I would say to you, those
going on. This whole mine which produces
tract with the Public Service Commission
who study this question, that Fabian social-
20,000-I guess 20 million tons a year, has 55
that as and when it comes on line the rates
ists like inflation because that is the quickest
people. Everything is automated, the whole
will be such that this company can earn
way to equalize capital that you can do in
thing. It is a superb operation. In other
words, it can be done. But they had to build
whatever is necessary to pay back.
any country. You don't have to expropriate
their own railroad to get it to the main line.
The President in his message to the Con-
anything Just people's values are gone be-
gress in January said we need 200 atomic
cause inflation just wipes them out and the
They are servicing midwestern cities. If you
power plants by 1985. We now have maybe 60.
Germans went through that and we know
want-let's say if as a nation we decide or
The remaining ones, 70 percent were can-
what happened from that.
it proves to be feasible-to produce low-
celled. California has the proposition next
So I would just like to say that while this
sulfur coal in the west and the ecological
problems are worked out and this whole
June banning all atomic power plants in Call-
has been opposed and we all know that be-
cause you all read it in the papers; because
thing has got to be done so that we don't
fornia; and Oregon on Friday; they have got
one of the same.
it says it would be a first step towards gov-
get our energy at the expense of our environ-
If this country bans atomic power plants
ernment takeover.
ment. I am confident we can do both to-
and we don't move in these other fields, we
The President has already said we have to
gether and the research can be done together.
are going to be totally in a situation which
have an allocation of capital. He has asked
But then you come to the problem that a
lot of railroads can only move coal cars at the
there are some ecologists who would like to
private enterprise to do it. So it isn't a ques-
rate of ten miles'an hour because of the con-
see a no-growth society. A no-growth society
tion of taking the capital from housing and
means no jobs for the young people that are
all of these other areas that people talk
dition of the roadbeds. There is about 811
coming on because our whole society has been
about. There is plenty of money right now
billion of roadbed work to be done in this
geared to increased employment based on in-
in the savings and loan associations. People
country.
creased productivity.
haven't got enough confidence to invest in
It is also conceivable that this corporation
I happen to think that that is the hallmark
housing. So it isn't that.
could loan, but I don't think the railroads
of America. It is our strength. It is our suc-
Secondly, as far as a step towards socialism,
can borrow money. Therefore, they might buy
cess and that we can do the ecological side of
I think it is exactly the opposite. I think it
preferred stock in a railroad to give them the
this problem plus the development side.
is government's showing their concern for
funds or to invest the funds to fix up their
You come to industry itself and energy. I
the present system, free enterprise and capi-
roadbeds which could then be earned out of
don't know. There are close to 18 States that
tal and that they are trying to help stimu-
coal: all of this being contingent upon a
are going to be in a serious condition-in-
late and bridge over this period,
conversion of eastern plants from oil to coal.
dustries in 18 States-if they don't get gas
There is one other thing I forgot to say
If they do, they have got to have coal. The
this winter. But here is how complicated this
and then I will stop; that is, that the Federal
coal has got to be produced. It has got to be
gets. If we have a cold winter, even if the
Energy Administration would have the re-
transported so that you have got to have the
interstate pipelines are allowed to be used,
sponsibility of acting as the clearing house
government in a position or somebody in a
there is going to still be a shortage because
for all of the ecological and regulatory func-
position to be the catalyst, the fallback posi-
there isn't enough gas being produced to
tions that government has at State and Fed-
tion where private enterprise cannot or will
sell.
eral levels, State, Federal and local levels.
not finance the effort to achieve this
That means that industry which depends
So all of them would be cleared through
independence.
on gas and gas is a small percentage, whether
this. They would then make recommenda-
All of it then could be sold. No loans are
it is textiles in South Carolina or glass in
tions to simplify these structures based on
made after; no commitments made after ten
Pennsylvania or what not, they all need it,
their experience. Any private operation which
years.
but it is a small percentage of their cost.
was investing in capital to achieve energy
Oil, we have got twice as much oil in shale
So they would then go in and probably buy
self-sufficiency could also use this corpora-
as you all know in this country as the Arabs
up propane because they could come in and
tion as the clearing house for all of its con-
have oil in the Middle East in known reserves.
buy propane. But propane gas is what the
tacts with government.
The problem is to get it out. You can mine
farmers depend on to dry their crops and to
So that they could get a system which
the shale. You can cook the oil out. Then you
heat their homes and they are small buyers.
would accelerate and maybe cut down on the
end up with what I call talcum powder which
They are not big buyers. So the next thing
time because with a loss or time due to the
is in a much larger volume than the shale
you would have to have would be control of
delays and the suits that take place. This is
you have mined because it has been cooked
propane and it is just going to take this gov-
a very, very serious thing in terms of cost
and 80 it is not dissolved. There is very little
ernment one by one further and further into
and expense.
water where the shale is. Therefore, what do
controls and the more government gets into
I would also say the way the legislation is
you do with the stuff? You could fill a valley
controls in my opinion the more they distort
being drafted it would give the board the
but if you have a heavy wind, this stuff is
the economy and make it difficult for us to
discretion, a five-man board the discretion
going to blow all over the west.
get back on a sound basis.
so that there wouldn't be a basis for suits.
Again, you can do an experiment for $200
Therefore, in conclusion, It seems to me
In other words, you couldn't sue the cor-
million of trying to develop In-Situ produc-
that this idea of the government acting as a
poration for a decision because all of the key
20188
CONGRESSIONAL RECORD-SENATE
November 17, 1975
decisions are left to the judgment of the
type of plant such as the rubber plants in
willingly enter into such contracts, but If
board.
World War II. Is there any way you are going
you do you could do that right now without
Therefore, there aren't criteria and there-
to insure that this legislation is 60 worded
having to have the lease-back arrangement
fore hopefully we can keep this from getting
that someone of a different philosophical
and the Federal Government build the
another-I hope too many of you aren't
outlook cannot turn this energy independ-
plants.
lawyers because I don't want to cut down
ence agency into a Federal oil and gas cor-
The VICE PRESIDENT. Great. Then we
on the business-but hopefully we can get
poration running the same way as TVA?
wouldn't have to put any Federal money in.
this thing so that we can get It rolling and
The VICE PRESIDENT. It requires that every-
QUESTION. I would think that would be
get action fast and decisions made the way
thing be sold and that it be self-liquidat-
the place to look; is the Federal Government
they are done in private enterprise as dis-
ing and it be done through private enter-
using its influence with the State commis-
tinct from the way they are done too often
prise and with private enterprise participa-
sions to get the rates up? That will bring
in government.
tion. I think the private enterprise participa-
the capital in and you won't have to build
That I think is the summary. Any ques-
tion is one of the most important. For in-
the plants through the government.
tions we can get into would develop details
stance, if you build a power plant, atomic
The VICE PRESIDENT. There is only one flaw
of the situation, but that in essence is the
power plant under lease purchase contract
in your argument, if you will forgive me-at
summary.
with a contract with the Public Service Com-
least a political flaw; and, that is, as one who
I should say perhaps what makes me think
mission, you actually then have 8 contrac-
only two years ago left Governorship and who
it will go through Congress. This is some-
tual relationship so that the ownership, un-
saw the beginning of the pressures due to,
thing that labor wants very badly. It is jobs
less somebody abrogates the contract, is in
first, ecology on using non-sulphur fuels and
through industry and not jobs through dole.
the hands or will be in the hands of the
the increased cost in getting the non-sulphur
Therefore, I am pretty sure labor is going
private enterprise. Nothing will be done
coal, non-sulphur oil; then the embargo and
to give it very strong support. If industry
where the government sets up some new
then the world price increase of 500 percent.
at the same time feels it is desirable and
form of TVA.
These poor public service commissioners have
worthwhile and gives it support, then I think
It happens that the Governor of Pennsyl-
had to take double and triple the cost of
its passage has got very great. potential.
vania who is a declared candidate for the
electricity to consumers, if not more.
If industry is opposed to it, that will nul-
Fresidency, Governor Schapp, has got a pro-
Their problem is right now that they have
lify labor support and probably nothing
gram he has been trying to get-I don't know
gone through 80 many increases-this is true
would happen. But I think it is a turning
whether it has surfaced yet-other Gover-
because I was very close to the commission
point for this country and if we don't have
nors in the Eastern Seaboard to join in spon-
there and when I got a new commissioner,
energy we are not going to have growing in-
soring which involves a TVA at the mine
Chairman of the Commission, who had been
dustry; if we don't have a growing industry,
heads to produce electricity at the mine
a strong consumer advocate, I said, "Look,
we are not going to have jobs and we are
heads which would be owned by the govern-
in your advocacy of the protection of the
going to have a lot of problems. We have
ment, mined and then distributed from
consumer do you include-this is before I
got them, but they will be worse.
there.
offered him the job-the protection of the
So that I think-that we are on the verge.
consumers' need for additional power in the
Thank you.
Are there any questions?
I flew to the coast Thursday night with &
future? If so, do you visualize that that is
QUESTION. Mr Vice President, could you
Senator who has introduced a bill to break
going to take higher rates and more money
relate this program to the $6 billion syn-
up the oil business and have just producers,
in order to get the capital in?" He said, "I
thetic fuel program that we read about re-
distributors, marketers, each one would be
read you. I agree with you and you have no
cently? Is it part of it?
in a separate company. I only mention that.
problem." I took him on.
The VICE PRESIDENT. The $6 billion syn-
This is a Republican and it shows that people
He did a superb job. He was pilloried by
thetic fuel program is one that Senator Jack-
are looking in Congress for ways-or politi-
the public. He was sued by my own attorney
son has proposed. It hasn't passed yet. So
cal in political life-of being responsive to
general. (Laughter) It was purely political. I
what we did in the thinking on this was to
the public but not, in my opinion, too clear
love him, too, and he was sued by the city.
just make a provision that they would be
as to what the impact would be on our
In other words, these people have been in
complimentary if that passes. In other words,
system.
the most difficult political situations because
of course, that is an outright expenditure.
Sir:
every consumer of electricity-I can only
In other words, that is government putting
QUESTION. Mr. Vice President, you indi-
speak for New York, but I suppose it is very
the money in the budget expenditure. This
cated that this authority would be able to
similar in other parts-has just gone through
other one is a loan or an investment or a
produce hopefully about 14 percent, I believe
the most unbelievable increases in cost.
guarantee of a loan and on a self-liquidat-
you said, of the energy needed?
So my reason for thinking what I say is
ing basis. So that is the difference. But if
The VICE PRESIDENT. Capital.
they would be so glad to see something built
that one passes, fine. Whatever they do that
QUESTION. Of the capital.
that will protect the needs of the community
wouldn't have to be done here.
The VICE PRESIDENT. Of the capital needed
but doesn't have to raise the rates until fur-
So that they will be totally complimentary.
to meet the self-sufficiency.
ther down the road when they may not even
QUESTION. Mr. Vice President, you men-
QUESTION. Is there some way this could be
be on the commission. (Laughter) They
tioned many of the traditional sources of
helpful if private industry does not come
would be very happy, in my opinion-this is
energy but you hardly touched on solar
forth with the other 86? Do you think there
a political judgment-to sign a contract for
energy. I wonder. Here is one that has few
is any problem in that other 86 being raised
the future whereas they could not go through
ecological problems and would it be partic-
during that period of time?
another major increase now particularly as
ipating in this program and how?
The VICE PRESIDENT. Let's take a case in
the people aren't going to get the benefit for
The VICE PRESIDENT. Again, solar energy
point. Let's say they invested $200 million
11 years. The alternative to this is, what is
and thermal energy are very important parts.
in either an In-Situ gasification of coal or
happening again in New York State where
They are not large scale producers of energy
In-Situ gasification of oil project and it
we had an authority which was created to
immediately, but they are very important
proved to be within let's say lower cost of.
develop hydro-electric power on the St. Law-
parts of the program. Any group who has
present imported oil prices. I don't think you
rence with Canada. Each of us has a power
something, who wants to produce any new
would have to worry about it because the
authority. We run it jointly.
process or develop equipment or whatever or
government would not continue. They would
This power authority now being the only
may be for solar energy would, if they can't
sell, either sell the process or make it avail-
one that could raise the money has already
get the funds themselves, be eligible for as-
able, whatever the procedure would be,
built one atomic power plant. It is now going
sistance in the way of a loan, a loan guar-
whatever they did in the rubber research
into a second atomic power plant. It has
antee from this authority.
type of thing. I think you would find then
built the grid to connect it and the first
I should mention also that conservation is
a tremendous amount of capital. Capital
thing you know we are going to see this
included in here. In other words, support
goes where it can get earnings. If capital can
same thing happen that government is going
for the conservation of energy if that can't
find attractive earnings in producing energy
to come in to meet the demands. I just think
get its own financing because you can save
in this country for self-sufficiency, they will
if you believe in private enterprise, if you
a lot of energy which would reduce the need
invest in it. If they can't, they will invest
believe in the capitalist system, you have to
to produce it; and that that is part of this,
in the McDonald Hamburger stands, not that
stand up and see what does it take to help
too, Pipelines are included in this as eligible
I am against them. I am for them.
that system work? You have got the very
if they can't get the financing.
(Laughter) But they are not going to solve
simple and right answer. If government
Alaska could produce an awful lot more
our energy problem. We have a free capital
would just get off their backs, then we
oil if they opened up more lands; five, six,
market. They go where the returns are. The
wouldn't have any problem. But this is a
seven million barrels a day. That would
question is can the government help point
democracy. Government is the creation of the
take four or five pipelines. So you are talk-
the way to good returns?
people and it has got politicians like myself
ing a lot of money and that has to be bal-
QUESTION. Sir, you mentioned in connec-
in it and they may not be always as totally
anced out.
tion with the nuclear power plants a con-
objective in their views of what is needed
Sir:
tract between the Federal Government and
because of these political pressures. There-
QUESTION. Mr. Vice President, you had
the State Public Service Commission. I don't
fore, I think here is a possibility
mentioned the government-owned, contract-
think you will get many States that will
If we can do what you say, perfect. They
November 17, 1975
CONGRESSIONAL RECORD SENATE
will try. But we talked about shortcutting
of those, including Anitrust, and so forth
some of the environmental requirements. If
and 50 forth. So they finally had to give It up.
you did that, the legislation would be killed.
If there is a central group and you get
Bo we have got to live within this, but let's
some very able people who understand the
have & central point where we can clear all
law, the ecology, production, and so forth, I
of this stuff and where you develop perhaps
think this unit could become an extremely
standard forms and 50 forth and to the degree
efficient unit.
we can get what you suggest, wonderful.
I am not sure why in many cases these
Then no money would be needed.
things can't be standardized. Why do you
Thank you.
have to spend a great deal of money each
Sir; way in the back?
time you file an impact statement, start-
QUESTION. Mr. Vice President, I am won-
ing from scratch? The impacts can't be that
dering about the effect of this plan on com-
different. There are certain criteria that go
petition within the LNG industry. For ex-
into them. I have a feeling, I don't know, I
ample, if one small project were to be given
have & feeling this could be a very interest-
substantial Federal help or one Alaska pipe-
ing and useful step.
line, what would the effect be on other appli-
Thank you very much. I apologize for
cants who didn't get help?
having to go, but I go to open the Senate
The VICE PRESIDENT. There is a very in-
and I am not allowed to speak there. That
teresting thought here and that is I think-
is why perhaps I talk so long here. I can't
don't hold me on this one-but I think it
speak up there without unanimous consent,
will be in the legislation that no loan would
which I don't get very often.
be made below the rates of what & prime pro-
I would love to follow up. If any of you
ducer of energy can get in the open market.
have questions as time goes by on this, of
In other words, the government won't come
course, you get the legislation shortly, but
in and take a weak company-this is not a
I would be delighted to see them because to
bailout. This is not going to be for the bail-
me this has got to be the heart of our future
ing out of a defunct company. This will only
strength and vitality as a nation; our ability
be to produce energy to achieve these goals.
to meet our people's needs; to provide em-
But the rate of the loan would not be lower
ployment; to be secure and to meet our re-
than what the prime rate would be for a
sponsibilities around the world.
successful company.
I think we have got to get rolling as far
Most companies will not want to borrow
as this economy is concerned if we are go-
from the government, I imagine, if they
ing to stay the leader of the free world or if
can get it from private.
the free world is going to have 8 leader. Let
Sir?
me put it that way.
QUESTION. What provision is made, Mr.
Thank you very much, indeed.
Vice President, in the event that loan is in
default?
MR. MEANY'S STATEMENT
The VICE PRESIDENT. I think the plant, the
On the basis of the analysis and recom-
operation, whatever it is, would be completed
mendations of the AFL-CIO Energy Policy
and the property sold. They take a loss. If
Committee, the AFL-CIO endorses the con-
you are in this business of trying to produce
cept of the Energy Independence Authority,
risk or go into risk areas, you are going to
a proposal initiated by Vice President Rocke-
have some major successes and some failures.
feller and introduced in the Congress by the
I think that is why 25 percent of the capital
Ford Administration.
or 25 percent of the $100 billion will be equity
Private industry, left to itself, cannot and
and 75 percent loans.
will not resolve the energy crisis which still
I hope that they will make enough suc-
plagues this nation. The American people
cesses which they can sell at & profit to over-
should not be deluded by the current easy
come the losses which would be at & loss, you
availability of energy supplies. While the gas
know, where there would be a default. But
lines have disappeared, the dependence of
then they have just got to sell it. This is spe-
the United States on oil from insecure foreign
cifically stated not to become a government
sources still exists. This nation is more
operation.
vulnerable to an Arab oil embargo today than
Sir?
in 1973. Government must provide the
QUESTION. Mr. Vice President, please de-
initiative and incentive for development of
tail a little more of this clearing house con-
energy projects that will place this nation
cept. What authority would that have? Is it
on the road to energy independence.
advisory primarily? Is it in the ecology field
It is estimated that capital in the amount
only? Or could it spread to other areas of
of $600 to $800 billion will be needed in the
agencies?
next ten years to finance investments for
The VICE PRESIDENT. Any clearances that
energy independence. Most projects would be
would be by & division of FEA which would
capitalized from private sources; however,
specialize in government clearances, of all
those deemed vital to the national interest
types, and so if there is a project which con-
but unable to secure private capital, would
tributes towards energy self-sufficiency, fi-
be financed through a new government cor-
nanced or not financed, partially or not by
poration with authority to make direct loans,
the government, they would be eligible. to
provide loan guarantees, and other financial
have all of their clearances done through
assistance to energy independence projects.
this division.
While the AFL-CIO does endorse the crea-
This could very well lead to recommenda-
tion of an Energy Independence Authority
tions-I think it will be so stated in the leg-`
and the basic program set forth in the
islation-as to simplification of clearances.
bill, we expect to have a number of proposals
To me the most interesting case, a friend of
for improvements in the specific terms of
mine who is a lawyer in New York tried to set
this measure.
up a corporation for the seven utility com-
At the proper time, we will testify before
panies in New York State last year, which
Congress on the legislation and will make
would be a financing construction company.
detailed proposals and suggestions to
The credits weren't strong enough to do it
strengthen the bill.
themselves so they wanted to set up a joint
The federation's Energy Policy Commit-
company.
tee-composed of Secretary-Treasury Lane
He said there were, I have forgotten, 14,
Kirkland, Vice Presidents Paul Hall, Martin
17 different regulatory bodies, State and na-
Ward, William Sidell, A. F. Grospiron, Mur-
tional, which were involved. He could not
ray Finley and Joseph Keenan-will continue
device & corporation which could meet all.
its study of this and other proposals.
Congressional Record
United States
of America
PROCEEDINGS AND DEBATES OF THE
94th
CONGRESS, FIRST SESSION
Vol. 121
WASHINGTON, MONDAY, NOVEMBER 17, 1975
No. 171
November 17, 1975
CONGRESSIONAL RECORD-SENATE
20185
Then as we got into the mid-60's OPEC had
did was of course it really hit the coal indus-
been formed and we became a net importer,
try over the head so that our greatest re-
didn't have the reserves to dominate world
source was least developed and had more
prices and therefore triggered by the conflict
problems and while gas when it was first
in the Middle East, the Arab countries finally
controlled was a byproduct of oil and was
moved and in two years raised prices 500
being burned and therefore was in surplus.
percent.
The price that was set was so low that as
TOWARD ENERGY INDEPENDENCE
people shifted to gas they were unable to get
At that point, particularly the Eastern Sea-
Mr. GRIFFIN. Mr. President, on Oc-
the production, the increased production or
board of this country suffered quite a set-
tober 6, the Vice President addressed a
even if they could get production-like in
back because of the boycott and the price
the case of Texas-they couldn't ship it on
meeting of business executives here in
increase. The boycott, let's face it, there were
the interstate lines.
Washington on the energy problems. I
enough leaks and there were enough coun-
Now as you know-we had a meeting in
commend his remarks to my colleagues,
tries that didn't join it so that it really
this room, as a matter of fact, with a group
and ask unanimous consent that the text
wasn't as overwhelming as it might have
of Governors who came in organized by Jim
be printed in the RECORD following my
been.-
Rhodes of Ohio pointing out that they had
I was at that point Governor of New York
lost 600,000 man days of work last year due
remarks.
In addition, Mr. President, AFL-CIO
deeply concerned; but Libya allowed oil to go
to the shortages of gas and it was going to
to one of the British Islands in the Carib-
be a lot-that was a warm winter-worse next
President George Meany has endorsed
bean and be refined there and come into New
year and his people, the industrial groups
the concept of the administration's en-
York for power and so forth which if they
in his State were willing to finance produc-
ergy proposal and I ask unanimous con-
had really tightened down we would have
tion of gas at higher prices if they could
sent that his statement be printed in the
been in a much more difficult situation.
just get permission to move it on interstate
RECORD.
The President, as you all know, spent a
pipelines and the concept of a common car-
There being no objection; the material
lot of time discussing the economics and hav-
rier be adopted rather than a regulated price.
was ordered to be printed in the RECORD,
ing the summit meetings when he first took
That has been very slow in coming because
office last fall a year ago. One of the major
the Federal Power Commission was afraid
as follows:
subjects was this question of energy. He
that if they made such a ruling that they
THE VICE PRESIDENT'S ADDRESS
came out of those with a clear determination
would be challenged in the courts by the
I want to thank all of you very much for
for energy independence as being essential
ecologists and that they would then be over-
coming here today and for giving me a chance
for this country's national security; second,
ruled. So they wanted legislation.
to visit with you, try to outline first briefiy
that this should be achieved by 1985.
I only mention this because where gov-
the conceptual thinking in back of this pro-
He then worked out the details of legisla-
ernment stepped in to regulate one phase of
gram and then answer or at least discuss your
tion which would encourage private enter-
the energy industry it totally disrupted the
questions. I will do my best to answer them.
prise because energy has always been a pri-
industry and shows very. clearly what can
I think the legislation will go up this week.
vate enterprise operation in this country ex-
happen through government regulation. The
The subject is a complicated one and there
cept for Naval reserves, which would en-
President, as you know, has fought regula-
have been varying points of view as you all
courage private enterprise to accelerate pro-
tion and he has been for decontrol. He
know by reading the press. Therefore, it has
duction domestically.
wanted an orderly decontrol on oil. He
caused some difficulty in trying to get the
I don't think we really have recognized
wanted 39 months. But then we go back to
thing worked out so that it could be put in
quite as clearly as it seems to me the fact
what has happened in Congress. He sent up
detailed language for the legislation and the
exists that this-because there is & great
a 500 and some-page bill.
deal of talk about the free market system-
This bill was complicated and the public
message.
I hesitate to talk about the whole subject
that the free market system should do this
I don't think has really since the energy
because I know everybody in this room is
and that they should be the ones that with-
crisis that they saw two years ago when
totally familiar with the subject, but let me
out Government intervention except through
there were lines waiting for gasoline-has
just for the record give you a brief outline
a framework of laws which would give in-
eased off. It was really sort of personified
of the past and how it came about as to where
centive.
Allright. The framework of laws has never
we are now.
This country of course up to the 1960's was
been achieved because one can speculate
the major producer and exporter and had
here-but first it is a complicated subject
the reserves to export additional amounts if
and it was complicated when-I have to
necessary and so when on two or three occa-
again go back a second. It was complicated
sions other nations around the world tried
when the United States Government con-
FORS
to raise the prices of oil substantially, we just
trolled the price of interstate gas at a very
exported more and were able to hold the
low price 50 that the most desirable fuel
turns out to be the cheapest fuel. What it
price.
GERALD
20186
CONGRESSIONAL RECORD-SENATE
November 17, 1975
at a meeting of the Midwestern Governors'
$100 billion basis over ten years because that
Or does one come to the conclusion reluc-
where none other than Governor Exon asked
1s the life of the corporation, would prob-
tantly or just as a suspicion even-not & con-
me if there really was an energy crisis. He
ably average out to about $10 billion a year.
clusion-that there would be those in Con-
said, "How can there be an energy crisis
If this country moves towards self-suffici-
gress in the opposition party who would just
when there is plenty of oil and gas around?"
ency it would take $60 billion to $80 billion
as soon have the issue or would just as soon
I said, "You have really expressed the whole
a year and so $10 billion is 12, 14 percent of
see us run short of energy, have the Presi-
thing right there. There is plenty of oil and
the total that is required.
dent take off controls because they lapsed
gas around because we are importing now
What would the conditions be in determ-
and not be able to work out an orderly ex-
almost 40 percent of our consumption."
ing how this money would be used? The con-
tension and then have perhaps chaotic con-
Domestic consumption is going down. So
ditions are simply two basically: One, that
ditions in 1976 and maybe this would be
as long as we import it there isn't a crisis
it contributes to the self-sufficiency; two,
politically advantageous?
in the sense that you are thinking of it, but
that it would be used for financing through
One hesitates to even think that anyone
if the Middle East situation blew up again
private enterprise just as the Military buys
for political purposes would be willing to see
or if for some other reason other than price
its equipment through private enterprise
the Nation run the risks which we are run-
or through a boycott we could then find
where those objectives, those investments
ning and have the people suffer in a way that
ourselves in the middle of a full-blown cri-
cannot be obtained by private enterprise
they might suffer very easily were such a
sis which for certain parts of the country
themselves; in other words, where they
chaotic situation exist. But one can't elimi-
would
be
total
disaster. And I don't
either can't get the money or for some rea-
nate that possibility entirely.
think anyone has really figured out how
son are unwilling to; primarily can't get it,
But whatever the situation is, there is no
this country would survive a really effective
can't get it because they can't earn.
action. Therefore, we are in a stalemate. The
boycott because we don't have transporta-
If you take a look at the utility indus-
problem is getting worse and we are up to
tion from the west to the east to handle
try-what, 70 percent of the atomic power
now close to $30 billion with a 10 percent
the movement of energy in sufficient quan-
plants?-and of çóurse atomic power is the
increase in foreign exchange imports. Luck-
tities to keep our operations going; our so-
great potential we have in this country for
ily our farmers have been tremendously pro-
clety going.
energy. The others are important, but the
ductive. So they are producing a major new
We just have seen a 10 percent increase
long-term, major producer of energy is
source of foreign exchange. Other areas have
take effect in the world oil prices and as I
atomic for the time being; solar and thermal,
been able to export. So our balance of pay-
say Congress has not taken any effective
out further.
ments is reasonable at the moment, but with
action; little pieces of action, but no com-
I will come back to gas, coal and oil in a
consumption going up, with production go-
prehensive action. Finally, the management-
minute. But let's say these 70 percent or 70
ing down, with the depletion allowance taken
labor committee had some concepts as to
percent of the atomic power plants that
off, with the old oil still under control-it is
how to encourage through incentive industry
were planned were cancelled. There is a whole
not under control at the moment but pos-
to invest more domestically.
very complicated series of reasons as to why.
sibly under control-nobody can afford to
That legislation hasn't gotten off the
Local regulations of the State Public Serv-
put the money into the secondary retrieval
launching pad in Congress.
ice Commissions where they can't get rate
of oil because it falls under old oil.
So as I view the situation we find ourselves
increases so they can't earn enough money to
So that we have the situation where as I
in a free market industry, but the free mar-
be able to borrow the money is one factor.
say our production is declining and our con-
ket has been a world market. Now national
Also you can't get the increase you are on
sumption is increasing and nobody thinks
policy expressed by the President is that we
line with your power. These atomic power
there is a crisis.
should be a self-sufficient, independent pro-
plants, most efficient ones, cost about $1 bil-
Let's go to the areas that the Energy In-
ducer of energy. We have the resources. No-
lion. Therefore, you would have $1 billion up
dependence Authority might serve. The best
body knows yet at what price. That is a na-
not for four years as it used to be, but now
illustration is rubber reserve under Bernie
tional policy superseding a free market posi-
with all of the filings that you have to make
Baruch in World War II which did a heck of
tion because the free market was an inter-
on impact statements, the local suits, it is
a.job. They contracted with six or seven pri-
national one. Then a great many people
up to between 10 and 11 years. So you have
vate companies to develop synthetic rubber
have felt that this OPEC price structure
$1 billion tied up for 10 or 11 years with no
production and of that group I think four
would break down as production increased.
basis for earning. That is one very good
or five came through with processes or varia-
Walter Levy who is one of the most so-
reason.
tions of & basic process which were success-
phisticated people in the business and many
Also uncertainties are another and all
ful. They sold the company, the plants and
of you know him, has said right along there
kinds of regulations from Washington. The
the process and we have a new industry in
wasn't a chance; that they would do ex-
labor-management recommendations were to
the United States. It was a self-liquidating
actly what they did do. He predicted that
encourage and allow for a greater accumula-
six or eight months ago, or even longer may-
operation.
tion of capital by corporations.
This corporation, the concept of this
be, that they would not decrease the price;
Of course, the bill was immediately tagged
they would not break the price; they would
corporation is a self-liquidating corporation
by the opposition as being just a special in-
to finance those risks, which private enter-
hold and they would increase the price. That
terest bill for big business and big industry
is what has happened.
prise cannot or will not undertake at the
and for capital rather than for the people
So when people say that the use of Fed-
present time to contribute to self-sufficiency
which is an easy, cheap shot politically, but
eral funds through a structure that is in
and do it to the maximum degree possible-
it isn't going to help the country.
a sense comparable to the RFC conceptually,
with private capital participation and
So that bill hasn't gotten off. The real
but not for ballouts, but for stimulating
through private industry and then sell it as
question has to be first how does govern-
new industry or new production, and they
rapidly as possible.
ment when it has set a national policy. that
say this is an allocation of capital and this
Let me take three or four different areas.
cuts across a free market operation work
is going to take 1t from a whole lot of other
First, we have ERDA. Some people say what
with the industry in trying to work that out;
things, the answer on the allocation of cap-
do you need this for if you have ERDA?
in this case domestic production?
ital is very simple. The President has said
ERDA's powers go to laboratory experiments
our national policy is self-sufficiency by 1985.
The first approach the President has was
relating to energy. But they do not have the
this very comprehensive legislation.
funds or the authority to take those labora-
The estimates vary between $600 billion
One has to ask is it that the Congress go-
tory experiments and take them out onto a
and $800 billion will be required to achieve
that object. That is out of about $4 trillion
ing through this evolutionary change that
full commercial production. Of course, here
$300 billion that has been estimated as in-
all of our establishment institutions have
you move from a limited expense to a much
larger expense. The commercial production
dustry's capital requirements during this
gone through is unable with such an over-
is essential in order to find out what the cost
ten-year period for meeting needs of the
whelming majority by the opposition to the
of energy would be.
American people and our responsibilities in
Executive Branch-in other words, the
For instance, gasification of coal is being
the world.
Democratic Party as distinct from the Re-
done and so its liquefaction of coal in South
We will fall short of that as estimated-
publican Party-is it unable to organize it-
Africa. It comes out between $30 and $40 a
again these are all estimates; therefore, they
self and does the committee structure of 300
barrel equivalent energy. But it does produce
are just guestimates-fall short by about
different committees which the Congress has
gas. It is essential.
$600 billion.
in both Houses, is it so cumbersome and does
There are new methods that can come up
So there is going to be a shortage. Nobody
it involve so many committees when you
that would take a little longer to go down
knows how much money will come back into
have a comprehensive piece of legislation of
the line which might reduce it to $20 a barrel
investments from Arab countries where the
this kind, does this make it impossible for
equivalent of óil or even down to $11, plus
accumulation of capital is taken place. But
the Congress to act effectively and rapidly in
the fact that there is then the possibility
I would imagine that Saudi Arabia alone is
the national interest through jurisdictional
of In-Situ, drilling a hole down in the deep
up to about $7 billion now in investment
disputes, et cetera, et cetera and within the
coal mine, setting off an explosion, setting it
in treasuries. These securities, were this cor-
House the Caucus which is in conflict with
on fire: the heat does the same thing under-
poration to be passed by the Congress on the
the committees?
ground that is done on top and you would
CONGRESSIONAL RECORD
20187
created
by
the
burn-
tion of shale, drill down, put off an explosion,
catalyst to get or to help get us off dead
set it on fire, draw off the gas, the gasified
center in becoming self-sufficient as a nation
are those who feel that this will be
oil and recondense it.
across the board in all of these fields on a
a fur cheaper method but an experiment like
The Livermore Laboratories have done
self-liquidating basis, that this is essential
that would cost $200 million to find out.
some work on this with Edward Teller and
for our national security, to our industrial
A gasification plant, surface plant is about
they feel, although nobody else is willing yet
growth, to employment. That is a pretty good
$1 billion. There is a need for 18 to 24 sur-
to agree with them, that this might be pro-
combination of the three.
face gasification plants, traditional, known,
duced at the rate of between the cost of $7
If we don't do it, in my opinion, there are
proven style right now for the next-having
and $8 a barrel.
elements in this country and some of them
to be built right now if we are going to meet
If it were that, this would be one of the
in the Congress who would like to see in-
the gas supplies and this is what the gas in-
great bonanzas that has happened to this
dustry fail and not be able to meet the needs
dustry is looking for. There right away 18 $18
country. It would be fantastic.
of the country and then say, fine, we told
billion to $24 billion to produce gas the most
The Occidental company is the only com-
you the system was no good; that capitalism
expensive way.
pany that I know that has done any major
doesn't work; that private enterprise doesn't
Some may have to be produced. Laws
work in the field but-they can't afford this
work. Therefore, we have got to take it over.
change. We can get them changed so that
kind of an experiment.
Then we will move as the British moved
gas can be purchased in another area, sur-
plus gas and piped through the interstate
Many of the companies bought I think
taking over one industry after another and
over $1 billion in leases out in Colorado for
of course the problems that grow out of that;
gas system. It is complicated. But that is
shale, but they were going to do surface
then they start subsidizing; then unlimited
one area.
mining. None of them have gone ahead be-
capacity to pay and, therefore, you get into
Coal, of course, gets tied up with the whole
ecological problem. I visited out in Wyoming,
cause of the uncertainties and the ecological
the most difficult situation and the most
Gillette, one of the most fascinating mines
problems. that is another area.
dangerous situation where you have neither
where they took off 23 feet of surface, then
Then you come down-I have covered the
a capitalist system nor a socialist system and
70 feet of coal. clay underneath; they took
coal, oil, gas; not covered Lt but mentioned
you have the worst of both and nobody can
the topsoil off first, stacked it; then took the
them-to the question of electricity through
make an investment because they don't know
rest off. put it behind where they are digging
atomic.
what the conditions are going to be, what the
the hole and then end up by putting the
One of the standard methods of financing,
regulations are going to be, what the re-
topsoil back on, making six lakes, 6,000 acres.
whether it is airplanes or a lot of other
sources are going to be. Therefore, you have
The only difference you will find is you will
things in this country, is the lease purchase
a plurality and we have higher unemploy-
have lakes which you never had before.
operation where somebody finances an air-,
ment and demand for more expenditures by
The growth will be as good if not better
plane and the company purchases it. It is
the Federal Government which the President
and the only other difference is it will be 123
perfectly conceivable that an atomic power
has had the courage to resist to a degree that
feet lower than it was before. But I was
plant costing 81 billion could be financed by
is perfectly extraordinary and if he didn't, we
there. The antelope were grazing still right
the government under a contract with e. pri-
would have more inflation.
around where the mining operation was
vate company for lease purchase with a con-
This is then also I would say to you, those
going on. This whole mine which produces
tract with the Public Service Commission
who study this question, that Fabian social-
20,000-I guess 20 million tons a year, has 55
that as and when it comes on line the rates
ists like inflation because that is the quickest
people. Everything is automated, the whole
will be such that this company can earn
way to equalize capital that you can in
thing. It is a superb operation. In other
whatever is necessary to pay back.
any country. You don't have to expropriate
words, it can be done. But they had to build
The President in his message to the Con-
anything. Just people's values are gone be-
their own railroad to get it to the main line.
gress in January said we need 200 atomic
cause inflation just wipes them out and the
They are servicing midwestern cities. If you
power plants by 1985. We now have maybe 60.
Germans went through that and we know
want-let's say if as a nation we decide or
The remaining ones, 70 percent were can-
what happened from that.
it proves to be feasible-to produce low-
celled. California has the proposition next
So I would just like to say that while this
sulfur coal in the west and the ecological
June banning all atomic power plants in Cali-
has been opposed and we all know that be-
problems are worked out and this whole
fornia; and Oregon on Friday; they have got
cause you all read it in the papers; because
thing has got to be done 60 that we don't
one of the same.
it says it would be a first step towards gov-
get our energy at the expense of our environ-
If this country bans atomic power plants
ernment takeover.
ment. I am confident we can do both to-
and we don't move in these other fields, we
The President has already said we have to
gether and the research can be done together.
are going to be totally in a situation which
have an allocation of capital. He has asked
But then you come to the problem that a
there are some ecologists who would like to
private enterprise to do it. So it isn't a ques-
lot of railroads can only move coal cars at the
see a no-growth society. A no-growth society
tion of taking the capital from housing and
rate of ten miles an hour because of the con-
means no jobs for the young people that are
all of these other areas that people talk
dition of the roadbeds. There is about $11
coming on because our whole society has been
about. There is plenty of money right now
billion of roadbed work to be done in this
geared to increased employment based on in-
in the savings and loan associations. People
country.
creased productivity.
haven't got enough confidence to invest in
It is also conceivable that this corporation
I happen to think that that is the hallmark
housing. So it isn't that.
could loan, but I don't think the railroads
of America. It 18 our strength. It is our suc-
Secondly, as far as a step towards socialism,
can borrow money. Therefore, they might buy
cess and that we can do the ecological side of
I think it is exactly the opposite. I think it
preferred stock in a railroad to give them the
this problem plus the development side.
is government's showing their concern for
funds or to invest the funds to fix up their
You come to industry itself and energy. I
the present system, free enterprise and capi-
roadbeds which could then be earned out of
don't know. There are close to 18 States that
tal and that they are trying to help stimu-
coal: all of this being contingent upon a
are going to be in a serious condition-in-
late and bridge over this period.
conversion of eastern plants from oil to coal.
dustries in 18 States-if they don't get gas
There is one other thing I forgot to say
If they do, they have got to have coal. The
this winter. But here is how complicated this
and then I will stop; that is, that the Federal
coal has got to be produced. It has got to be
gets. If we have a cold winter, even if the
Energy Administration would have the re-
transported so that you have got to have the
interstate pipelines are allowed to be used,
sponsibility of acting as the clearing house
government in a position or somebody in a
there is going to still be a shortage because
for all of the ecological and regulatory func-
position to be the catalyst, the fallback posi-
there isn't enough gas being produced to
tions that government has at State and Fed-
tion where private enterprise cannot or will
sell.
eral levels, State, Federal and local levels.
not finance the effort to achieve this
That means that industry which depends
So all of them would be cleared through
independence.
on gas and gas is a small percentage, whether
this. They would then make recommenda-
All of it then could be sold. No loans are
it is textiles in South Carolina or glass in
tions to simplify these structures based on
made after; no commitments made after ten
Pennsylvania or what not, they all need it,
their experience. Any private operation which
years.
but it is a small percentage of their cost.
was investing in capital to achieve energy
Oil, we have got twice as much oil in shale
So they would then go in and probably buy
self-sufficiency could also use this corpora-
as you all know in this country as the Arabs
up propane because they could come in and
tion as the clearing house for all of its con-
have oil in the Middle East in known reserves.
buy propane. But propane gas is what the
tacts with government.
The problem is to get it out. You can mine
farmers depend on to dry their crops and to
So that they could get a system which
the shale. You can cook the oil out. Then you
heat their homes and they are small buyers.
would accelerate and maybe cut down on the
end up with what I call talcum powder which
They are not big buyers. So the next thing
time because with a loss or time due to the
is in a much larger volume than the shale
you would have to have would be control of
delays and the suits that take place. This is
you have mined because it has been cooked
propane and it is just going to take this gov-
a very, very serious thing in terms of cost
and 80 it is not dissolved. There is very little
ernment one by one further and further into
and expense.
water where the shale is. Therefore, what do
controls and the more government gets into
I would also say the way the legislation is
you do with the stuff? You could fill a valley
controls in my opinion the more they distort
being drafted it would give the board the
but if you have a heavy wind, this stuff is
the economy and make it difficult for us to
discretion, a five-man board the discretion
going to blow all over the west.
get back on a sound basis.
so that there wouldn't be a basis for suits.
Again, you can do an experiment for $200
Therefore, in conclusion, it seems to me
In other words, you couldn't sue the cor-
million of trying to develop In-Situ produc-
that this idea of the government acting as a
poration for a decision because all of the key
20188
CONGRESSIONAL RECORD-SENATE
November 17, 1975
decisions are left to the judgment of the
type of plant such as the rubber plants in
willingly enter into such contracts, but if
board.
World War II. Is there any way you are going
you do you could do that right now without
Therefore, there aren't criteria and there-
to insure that this legislation is so worded
having to have the lease-back arrangement
fore hopefully we can keep this from getting
that someone of a different philosophical
and the Federal Government build the
another-I hope too many of you aren't
outlook cannot turn this energy independ-
plants.
lawyers because I don't want to cut down
ence agency into a Federal oil and gas cor-
The VICE PRESIDENT. Great. Then we
on the business-but hopefully we can get
poration running the same way as TVA?
wouldn't have to put any Federal money in.
this thing so that we can get it rolling and
The VICE PRESIDENT. It requires that every-
QUESTION. I would think that would be
get action fast and decisions made the way
thing be sold and that it be self-liquidat-
the place to look; is the Federal Government
they are done in private enterprise as dis-
ing and it be done through private enter-
using its influence with the State commis-
tinct from the way they are done too often
prise and with private enterprise participa-
sions to get the rates up? That will bring
in government.
tion. I think the private enterprise participa-
the capital in and you won't have to build
That I think is the summary. Any ques-
tion is one of the most important. For in-
the plants through the government.
tions we can get into would develop details
stance, if you build a power plant, atomic
The VICE PRESIDENT. There is only one flaw
of the situation, but that in essence is the
power plant under lease purchase contract
in your argument, if you will forgive me-at
summary.
with a contract with the Public Service Com-
least a political flaw; and, that is, as one who
I should say perhaps what makes me think
mission, you actually then have a contrac-
only two years ago left Governorship and who
it will go through Congress. This is some-
tual relationship so that the ownership, un-
saw the beginning of the pressures due to,
thing that labor wants very badly. It is jobs
less somebody abrogates the contract, is in
first, ecology on using non-sulphur fuels and
through industry and not jobs through dole.
the hands or will be in the hands of the
the increased cost in getting the non-sulphur
Therefore, I am pretty sure labor is going
private enterprise. Nothing will be done
coal, non-sulphur oil; then the embargo and
to give it very strong support. If industry
where the government sets up some new
then the world price increase of 500 percent.
at the same time feels it is desirable and
form of TVA.
These poor public service commissioners have
worthwhile and gives it support, then I think
It happens that the Governor of Pennsyl-
had to take double and triple the cost of
its passage has got very great. potential.
vania who is a declared candidate for the
electricity to consumers, if not more.
If industry is opposed to it, that will nul-
Presidency, Governor Schapp, has got a pro-
Their problem is right now that they have
lify labor support and probably nothing
gram he has been trying to get-I don't know
gone through so many increases-this is true
would happen. But I think it is a turning
whether it has surfaced yet-other Gover-
because I was very close to the commission
point for this country and if we don't have
nors in the Eastern Seaboard to join in spon-
there and when I got a new commissioner,
energy we are not going to have growing In-
soring which involves a TVA at the mine
Chairman of the Commission, who had been
dustry; if we don't have a growing industry,
heads to produce electricity at the mine
a strong consumer advocate, I said, "Look,
we are not going to have jobs and we are
heads which would be owned by the govern-
in your advocacy of the protection of the
going to have a lot of problems. We have
ment, mined and then distributed from
consumer do you include-this is before I
got them, but they will be worse.
there.
offered him the job-the protection of the
Thank you.
So that I think-that we are on the verge.
consumers' need for additional power in the
Are there any questions?
I flew to the coast Thursday night with a
future? If so, do you visualize that that 18
QUESTION. Mr Vice President, could you
Senator who has introduced a bill to break
going to take higher rates and more money
relate this program to the $6 billion syn-
up the oil business and have just producers,
in order to get the capital in?" He said, "I
thetic fuel program that we read about re-
distributors, marketers, each one would be
read you. I agree with you and you have no
cently? Is it part of it?
in a separate company. I only mention that.
problem." I took him on.
The VICE PRESIDENT. The $6 billion syn-
This is a Republican and it shows that people
He did a superb job. He was pilloried by
thetic fuel program is one that Senator Jack-
are looking in Congress for ways-or politi-
the public. He was sued by my own attorney
son has proposed. It hasn't passed yet. So
cal in political life-of being responsive to
general. (Laughter) It was purely political. I
what we did in the thinking on this was to
the public but not, in my opinion, too clear
love him, too, and he was sued by the city.
just make a provision that they would be
as to what the impact would be on our
In other words, these people have been in
complimentary if that passes. In other words,
system.
the most difficult political situations because
of course, that is an outright expenditure.
Sir:
every consumer of electricity-I can only
In other words, that is government putting
QUESTION. Mr. Vice President, you indi-
speak for New York, but I suppose it is very
the money in the budget expenditure. This
cated that this authority would be able to
similar in other parts-has just gone through
other one is a loan or an investment or a
produce hopefully about 14 percent, I believe
the most unbelievable increases in cost.
guarantee of a loan and on a self-liquidat-
you said, of the energy needed?
So my reason for thinking what I say is
ing basis. So that is the difference. But if
The VICE PRESIDENT. Capital.
they would be so glad to see something built
that one passes, fine. Whatever they do that
QUESTION. Of the capital.
that will protect the needs of the community
wouldn't have to be done here.
The VICE PRESIDENT. Of the capital needed
but doesn't have to raise the rates until fur-
So that they will be totally complimentary.
to meet the self-sufficiency.
ther down the road when they may not even
QUESTION. Mr. Vice President, you men-
QUESTION. Is there some way this could be
be on the commission. (Laughter) They
tioned many of the traditional sources of
helpful if private industry does not come
would be very happy, in my opinion-this is
energy but you hardly touched on solar
forth with the other 86? Do you think there
a political judgment-to sign a contract for
energy. I wonder. Here is one that has few
is any problem in that other 86 being raised
the future whereas they could not go through
ecological problems and would it be partic-
during that period of time?
another major increase now particularly as
ipating in this program and how?
The VICE PRESIDENT. Let's take a case in
the people aren't going to get the benefit for
The VICE PRESIDENT. Again, solar energy
point. Let's say they invested $200 million
11 years. The alternative to this is, what is
and thermal energy are very important parts.
in either an In-Situ gasification of coal or
happening again in New York State where
They are not large scale producers of energy
In-Situ gasification of oil project and it
we had an authority which was created to
immediately, but they are very important
proved to be within let's say lower cost of
develop hydro-electric power on the St. Law-
parts of the program. Any group who has
present imported oil prices. I don't think you
rence with Canada. Each of us has a power
something, who wants to produce any new
would have to worry about it because the
authority. We run it jointly.
process or develop equipment or whatever or
government would not continue. They would
This power authority now being the only
may be for solar energy would, if they can't
sell, either sell the process or make it avail-
one that could raise the money has already
get the funds themselves, be eligible for as-
able, whatever the procedure would be,
built one atomic power plant. It is now going
sistance in the way of a loan, a loan guar-
whatever they did in the rubber research
into a second atomic power plant. It has
antee from this authority.
type of thing. I think you would find then
built the grid to connect it and the first
I should mention also that conservation 16
a tremendous amount of capital. Capital
thing you know we are going to see this
included in here. In other words, support
goes where it can get earriings. If capital can
same thing happen that government is going
for the conservation of energy if that can't
find attractive earnings in producing energy
to come in to meet the demands. I just think
get its own financing because you can save
in this country for self-sufficiency, they will
if you believe in private enterprise, if you
a lot of energy which would reduce the need
invest in it. If they can't, they will invest
believe in the capitalist system, you have to
to produce it; and that that is part of this,
in the McDonald Hamburger stands, not that
stand up and see what does it take to help
too, Pipelines are included in this as eligible
I am against them. I am for them.
that system work? You have got the very
if they can't get the financing.
(Laughter) But they are not going to solve
simple and right answer. If government
Alaska could produce an awful lot more
our energy problem. We have a free capital
would just get off their backs, then we
oil if they opened up more lands; five, six,
market. They go where the returns are. The
wouldn't have any problem. But this is a
seven million barrels a day. That would
question is can the government help point
democracy. Government is the creation of the
take four or five pipelines. So you are talk-
the way to good returns?
people and it has got politicians like myself
ing a lot of money and that has to be bal-
QUESTION. Sir, you mentioned in connec-
in it and they may not be always as totally
anced out.
tion with the nuclear power plants a con-
objective in their views of what is needed
Sir:
tract between the Federal Government and
because of these political pressures. There-
QUESTION. Mr. Vice President, you had
the State Public Service Commission. I don't
fore, I think here is a possibility
mentioned the government-owned, contract-
think you will get many States that will
If we can do what you say, perfect. They
November 17, 1975
CONGRESSIONAL RECORD-SENATE
will try. But we talked about shortcutting
of those, including Anitrust, and so forth
some of the environmental requirements. If
and so forth. So they finally had to give It up.
you did that, the legislation would be killed.
If there is a central group and you get
So we have got to live within this, but let's
some very able people who understand the
have a central point where we can clear all
law, the ecology, production, and so forth, I
of this stuff and where you develop perhaps
think this unit could become an extremely
standard forms and so forth and to the degree
efficient unit.
we can get what you suggest, wonderful.
I am not sure why in many cases these
Then no money would be needed.
things can't be standardized. Why do you
Thank you.
have to spend a great deal of money each
Sir; way in the back?
time you file an impact statement, start-
QUESTION. Mr. Vice President, I am won-
ing from scratch? The impacts can't be that
dering about the effect of this plan on com-
different. There are certain criteria that go
petition within the LNG industry. For ex-
into them. I have a feeling, I don't know, I
ample, if one small project were to be given
have a feeling this could be a very interest-
substantial Federal help or one Alaska pipe-
ing and useful step.
line, what would the effect be on other appli-
Thank you very much. I apologize for
cants who didn't get help?
having to go, but I go to open the Senate
The VICE PRESIDENT. There is a very in-
and I am not allowed to speak there. That
teresting thought here and that is I think-
is why perhaps I talk so long here. I can't
don't hold me on this one-but I think it
speak up there without unanimous consent,
will be in the legislation that no loan would
which I don't get very often.
be made below the rates of what a prime pro-
I would love to follow up. If any of you
ducer of energy can get in the open market.
have questions as time goes by on this, of
In other words, the government won't come
course, you get the legislation shortly. but
in and take a weak company-this is not a
I would be delighted to see them because to
bailout. This is not going to be for the bail-
me this has got to be the heart of our future
ing out of a defunct company. This will only
strength and vitality as a nation: our ability
be to produce energy to achieve these goals.
to meet our people's needs; to provide em-
But the rate of the loan would not be lower
ployment; to be secure and to meet our re-
than what the prime rate would be for a
sponsibilities around the world.
successful company.
I think we have got to get rolling as far
Most companies will not want to borrow
as this economy is concerned if we are go-
from the government, I imagine, if they
ing to stay the leader of the free world or if
can get it from private.
the free world is going to have & leader. Let
Sir?
me put it that way.
QUESTION. What provision is made, Mr.
Thank you very much, indeed.
Vice President, in the event that loan is in
default?
MR. MEANY'S STATEMENT
The VICE PRESIDENT. I think the plant, the
On the basis of the analysis and recom-
operation, whatever it is, would be completed
mendations of the AFL-CIO Energy Policy
and the property sold. They take a loss. If
Committee, the AFL-CIO endorses the con-
you are in this business of trying to produce
cept of the Energy Independence Authority,
risk or go into risk areas, you are going to
a proposal initiated by Vice President Rocke-
have some major successes and some failures.
feller and introduced in the Congress by the
I think that is why 25 percent of the capital
Ford Administration.
or 25 percent of the $100 billion will be equity
Private industry, left to itself, cannot and
and 75 percent loans.
will not resolve the energy crisis which still
I hope that they will make enough suc-
plagues this nation. The American people
cesses which they can sell at a profit to over-
should not be deluded by the current easy
come the losses which would be at & loss, you
availability of energy supplies. While the gas
know, where there would be a default. But
lines have disappeared, the dependence of
then they have just got to sell it. This is spe-
the United States on oil from Insecure foreign
cifically stated not to become a government
sources still exists. This nation is more
operation.
vulnerable to an Arab oil embargo today than
Sir?
in 1973. Government must provide the
QUESTION. Mr. Vice President, please de-
initiative and incentive for development of
tall a little more of this clearing house con-
energy projects that will place this nation
cept. What authority would that have? Is it
on the road to energy independence.
advisory primarily? Is it in the ecology field
It is estimated that capital in the amount
only? Or could it spread to other areas of
of $600 to $800 billion will be needed in the
agencies?
next ten years to finance investments for
The VICE PRESIDENT. Any clearances that
energy independence. Most projects would be
would be by & division of FEA which would
capitalized from private sources; however,
specialize in government clearances, of all
those deemed vital to the national interest
types, and so if there is a project which con-
but unable to secure private capital, would
tributes towards energy self-sufficiency, fl-
be financed through a new government cor-
nanced or not financed, partially or not by
poration with authority to make direct loans,
the government, they would be eligible, to
provide loan guarantees, and other financial
have all of their clearances done through
assistance to energy independence projects.
this division.
While the AFL-CIO does endorse the crea-
This could very well lead to recommenda-
tion of an Energy Independence Authority
tions—I think it will be so stated in the leg-
and the basic program set forth in the
islation-as to simplification of clearances.
bill, we expect to have a number of proposals
To me the most interesting case, a friend of
for improvements in the specific terms of
mine who is a lawyer in New York tried to set
this measure.
up a corporation for the seven utility com-
At the proper time, we will testify before
panies in New York State last year, which
Congress on the legislation and will make
would be a financing construction company.
detailed proposals and suggestions to
The credits weren't strong enough to do it
strengthen the bill.
themselves so they wanted to set up a joint
The federation's Energy Policy Commit-
company.
tee-composed. of Secretary-Treasury Lane
He said there were, I have forgotten, 14,
Kirkland, Vice Presidents Paul Hall, Martin
17 different regulatory bodies, State and na-
Ward, William Sidell, A. F. Grospiron, Mur-
tional, which were involved. He could not
ray Finley and Joseph Keenan-will continue
device a corporation which could meet all.
its study of this and other proposals.