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    "ocrText": "The original documents are located in Box 13, folder \"Energy Independence Authority (6)\"\nof the James M. Cannon Files at the Gerald R. Ford Presidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. Gerald Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nDigitized from Box 13 of the James M. Cannon Files at the Gerald R. Ford Presidential Library\nTHE WHITE HOUSE\nWASHINGTON\nREQUEST\nOctober 14, 1975\nMEMORANDUM FOR\nJIM CANNON\nFROM\nPAUL MYER\nw\nSUBJECT:\nE. I. A.\nIt is my understanding that due to drafting technicalities,\nthe EIA legislation has been referred only to the Congres-\nsional Banking Committees. This in itself has given rise to\nrumors of attempts to intentionally kill the bill or gaining\nthe political advantage of potentially embarrassing hearings\nfor the Administration. Overall, these Committees should not\nbe looked to for the fair consideration of the legislation.\nIn fact, early indications point to plans for a slow and\nembarrassing burial of the concept. Beyond these obvious\npolitical concerns, substantially, few of the Committees'\nFORD\nmembers have expertise in the energy field.\nPer your request, the following are some tentative comments\nGERALD\non the possible views among Committee members on EIA:\nHouse Committee on Banking, Currency and Housing\n(42 members -- 28 Democrats, 14 Republicans): Chairman Henry\nReuss has made public statements indicating general opposition\nto the EIA concept. The ranking Republican, Albert Johnson of\nPennsylvania, is unknown to me. The Democrats are generally\nliberal and independent legislators with strong partisan views.\nReuss maintains no effective control or leadership over them\nand the Committee remains as unwieldly and chaotic as it was\nunder Patman. Most of the Republicans are strong individual-\nists and they are fairly balanced between the generally\nsenior conservative members and more moderate junior members.\nSenate Committee on Banking, Housing and Urban Affairs\n(14 members -- 8 Democrats, 5 Republicans) : Chairman William\nProxmire's public statements indicate strong opposition. Simi-\nlarly, the ranking Republican member, John Tower, has expressed\nnegative views. My brief comments on the other members are as\nfollows:\n-2-\nSparkman --- unknown.\nWilliams - will follow AFL-CIO line.\nMcIntyre -- unknown; potential impact on New England region\ncould influence views.\nCranston -- unknown, probably opposed.\nStevenson --- probably opposed; anti-oil company role in Senate\nenergy debates.\nBiden -- unknown; unpredictable.\nMorgan -- unknown.\nBrooke -- unknown; should be considered as one of few possible\nsupporters.\nPackwood -- staff comments indicate a possible interest in the\nconcept; wanted to see detailed legislative pro-\nvisions.\nHelms -- unknown; assume conservative opposition.\nGarn - unknown.\nI briefly chatted with Glenn Schleede on Friday. Zarb will be\ncalling a meeting this week to plan FEA's strategy. I need\nyour further guidance as to if and how I am to be involved in\nthis matter.\nFORD LIBRARY & 938839\nCommittees of the House\n285\nINTELLIGENCE (SPECIAL)\nLucien N. Nedzi, of Michigan, Chairman\nBob Wilson, of California, Ranking Minority Member\nBanking, Currency, and Housing\n(Suite 2129, phone 54247, meets first and third Tuesdays)\nHenry S. Reuss, of Wisconsin.\nAlbert W. Johnson, of Pennsylvania.\nWright Patman, of Texas.\nJ. William Stanton, of Ohio.\nWilliam A. Barrett, of Pennsylvania.\nGarry E. Brown, of Michigan.\nLeonor Kretzer (Mrs. John B.) Sullivan,\nChalmers P. Wylie, of Ohio.\nof Missouri.\nJohn H. Rousselot, of California.\nThomas L Ashley, of Ohio.\nStewart B. McKinney, of Connecticut.\nWilliam S. Moorhead, of Pennsylvania.\nJohn B. Conlan, of Arizona.\nJoint\nRobert G. Stephens, Jf., of Georgia.\nGeorge Hansen, of Idaho.\nComms.\nFernand J. St Germain, of Rhode\nRichard T. Schulze, of Pennsylvania.\nE Island.\nWillis D. Gradison, of Ohio.\nHenry B. Gonzalez of Texas.\nHenry J, Hyde, of Illinois.\nCom tee\nJoseph G. Minish, of New Jersey.\nRichard Kelly, of Florida.\nFrank Annunzio, of Illinois.\nCharles E: Grassley, of Iowa.\nAssign.\nThomas M. Rees, of California.\nMillicent Fenwick, of New Jersey.\nJames M. Hanley, of New York.\nAdmin.\nParren J. Mitchell, of Maryland.\nAssts.\nWalter E. Fauntroy, of the District of\n& Secs.\nColumbia.\nLindy (Mrs. Hale) Boggs, of Louisians.\nStephen L Neal, of North Carolina.\nStatis-\nJerry M. Patterson, of California.\ntical\nJames J. Blanchard, of Michigan.\nAndrew Maguire, of New Jersey.\nHarold E. Ford, of Tennessee.\nCarroll Hubbard, Jr., of Kentucky.\nCapi-\ntol\nJohn J. LaFalce, of New York.\nGladys Noon Spellman, of Maryland.\nLes AuCoin, of Oregon.\nPaul E. Tsongas, of Massachusetts.\nButler Derrick, of South Carolina.\nDepts.\nPhilip Hayes, of Indiana.\nMark .W. Hannaford, of California.\nPaul Nelson, Clerk and Staff Director\nAgencies\nSUBCOMMITTEES\nI\nDOMESTIC MONETARY POLICY\nWright Patman, of Texas, Chairman\nJohn B. Conlan, of Arizona, Ranking Minority Member\nHOUSING AND COMMUNITY DEVELOPMENT\nWilliam A. Barrett, of Pennsylvania, Chairman\nGarry Brown, of Michigan, Ranking Minority Member\nECONOMIC STABILIZATION\nGERALD 4. FORD Date - MEDRARK\nThomas L Ashley, of Ohio, Chairman\nStewart B. McKinney, of Connecticut, Ranking Minority Member\nMEMORANDUM\nREQUESTED\nTHE WHITE HOUSE\nWASHINGTON\nOctober 15, 1975\nMEMORANDUM FOR\nJIM CANNON\nFROM\nPAUL MYER\nSUBJECT:\nEIA Committee Referral -\nHouse\nThe referral of bills in the House of Representatives\nis subject to the provisions of Rule X, Rules of the\nHouse of Representatives, 94th Congress.\nThe Speaker refers all bills to the Committee which\nhas jurisdiction over the subject matter of any\nprovision of the legislation. While bills are generally\nsent only to one committee, under the referral proce-\ndures (Rule X, 5 (c)), the Speaker may (1) refer the\nmatter simultaneously to two or more committees for con-\ncurrent consideration or consideration in sequence (sub-\nject to time limitations), or (2) divide the matter\ninto two or more parts (reflecting the different subjects\nand jurisdictions) and refer such part to a different\ncommittee, or (3) refer the matter to a special ad hoc\ncommittee appointed by the Speaker with approval of the\nHouse.\nA brief review of the present situation indicates that\nsimultaneous referral for sequential or concurrent con-\nsideration to appropriate House committees would be the\nmost desirable situation.\nRule X also stipulates the jurisdiction of House Commit-\ntees. The initial referral of the Presidential message\non EIA to Banking, Currency and Housing was based upon\nthat Committee's jurisdiction over matters pertaining\nto \"financial aid to commerce and industry.\" However,\nsince the legislation has not been formally introduced\nin the House, I believe that referral to additional\ncommittees under Rule X, 5 (c) would be in order.\nGERALD FORD\n-2-\nA jurisdictional claim could possibly be made by three\nadditional committees: Science and Technology, Joint\nAtomic Energy Committee, and Interstate and Foreign\nCommerce. From a practical and political standpoint,\nthe Committee on Science and Technology would perhaps\nbe the most advantageous. This Committee has jurisdic-\ntion over \"all energy research and development except\nnuclear.\" Joint Atomic Energy, because of the nuclear\nresearch aspects, might therefore lay claim to a part of\nthe bill. Certainly, Commerce, based on their past and\npresent performance on energy policy would not be desir-\nable.\nIn addition to the phone calls and contacts with Albert\nwe discussed on the phone, co-sponsors from additional\ncommittees at the time of introduction could be helpful\nin determining the referral issue.\nFORD\nGERALD\nus\n+\n*\n@\n*\n7\nn\n*\nOFFICE OF THE VICE PrESidENT\nWASHINGTON\nNovember 13, 1975\nMEMORANDUM FOR JIM CANNON\nFROM:\nPeter J. Wallison Peter\nSUBJECT;\nEnergy Independence Authority\nIn case you have not seen it, I have\nattached a statement by AFL-CIO President\nGeorge Meany endorsing the Energy Independence\nAuthority.\nIf you have any questions, please call.\nAttachment\nfrom\nAFL-\nCIO\nDEPARTMENT\nRELATIONS\n(202) 637-5010\nFor Release:\nA.M. PAPERS, FRIDAY, NOVEMBER 14. 1975\nAFL-CIO President George Meany today made the following statement:\nOn the basis of the analysis and recommendations of the AFL-CIO\nEnergy Policy Committee, the AFL-CIO endorses the concept of the Energy\nIndependence Authority, a proposal initiated by Vice President Rockefeller\nand introduced in the Congress by the Ford Administration.\nPrivate industry, left to itself, cannot and will not resolve the\nenergy crisis which still plagues this nation. The American people should\nnot be deluded by the current easy availability of energy supplies. While\nthe gas lines have disappeared, the dependence of the United States on oil\nfrom insecure foreign sources still exists. This nation is more vulnerable\nto an Arab oil embargo today than in 1973. Government must provide the\ninititative and incentive for development of energy projects that will place\nthis nation on the road to energy independence.\nIt is estimated that capital in the amount of $600 to $800 billion\nwill be needed in the next ten years to finance investments for energy\nindependence. Most projects would be capitalized from private sources;\nhowever, those deemed vital to the national interest but unable to secure\nprivate capital, would be financed through a new government corporation\nwith authority to make direct loans, provide loan guarantees, and other\nfinancial assistance to energy independence projects.\nWhile the AFL-CIO does endorse the creation of an Energy Independence\nAuthority and the basic program set forth in the bill, we expect to have a\nnumber of proposals for improvements in the specific terms of this measure.\nAt the proper time, we will testify before Congress on the legislation\nand will make detailed proposals and suggestions to strengthen the bill.\nThe federation's Energy Policy Committee --- composed of Secretary-\nTreasurer Lane Kirkland, Vice Presidents Paul Hall, Martin Ward, William\nSidell, A. F. Grospiron, Murray Finley and Joseph Keenan -- will continue\nits study of this and other proposals.\n-30-\nThe\nAFL-\nCIO\nDEPARTMENT OF PUBLIC RELATIONS\n(202) 637-5010\nFor Release:\nEIA\nA.M. PAPERS, FRIDAY, NOVEMBER 14. 1975\nF₁ 6\nAFL-CIO President George Meany today made the following statement:\nOn the basis of the analysis and recommendations of the AFL-CIO\nEnergy Policy Committee, the AFL-CIO endorses the concept of the Energy\nIndependence Authority, a proposal initiated by Vice President Rockefeller\nand introduced in the Congress by the Ford Administration.\nPrivate industry, left to itself, cannot and will not resolve the\nenergy crisis which still plagues this nation. The American people should\nnot be deluded by the current easy availability of energy supplies. While\nthe gas lines have disappeared, the dependence of the United States on oil\nfrom insecure foreign sources still exists. This nation is more vulnerable\nto an Arab oil embargo today than in 1973. Government must provide the\ninititative and incentive for development of energy projects that will place\nthis nation on the road to energy independence.\nIt is estimated that capital in the amount of $600 to $800 billion\nwill be needed in the next ten years to finance investments for energy\nindependence. Most projects would be capitalized from private sources;\nhowever, those deemed vital to the national interest but unable to secure\nprivate capital, would be financed through a new government corporation\nwith authority to make direct loans, provide loan guarantees, and other\nfinancial assistance to energy independence projects.\nWhile the AFL-CIO does endorse the creation of an Energy Independence\nAuthority and the basic program set forth in the bill, we expect to have a\nnumber of proposals for improvements in the specific terms of this measure.\nAt the proper time, we will testify before Congress on the legislation\nand will make detailed proposals and suggestions to strengthen the bill.\nThe federation's Energy Policy Committee -- composed of Secretary-\nTreasurer Lane Kirkland, Vice Presidents Paul Hall, Martin Ward, William\nSidell, A. F. Grospiron, Murray Finley and Joseph Keenan - will continue\nits study of this and other proposals.\nFORD\n-30-\nGERALD R.\n*\nOFFICE OF THE VICE PRESIDENT\nWASHINGTON\nNovember 18, 1975\nFili\nMEMORANDUM FOR THE VICE PRESIDENT\nFROM:\nROGER W. HOOKER, JR. Roger\nSUBJECT; EIA\nAttached, as introduced by Bob\nGriffin, at my request, in yesterday's\nCongressional Record are:\n1. Your October 6 remarks\non EIA before business\nexecutives here in Washington.\n2. George Meany's endorsement\nof the concept on EIA.\nWe are having these pages reproduced\nfor further inexpensive distribution as\nappropriate.\nCC Peter Wallison\nJim Cannon\nDick Allison\nJack Veneman\nHugh Morrow\nBob Armao\n0802 LIBRATE &\nCongressional Record\nUnited States\nof America\nPROCEEDINGS AND DEBATES OF THE\n94th\nCONGRESS, FIRST SESSION\nVol. 121\nWASHINGTON, MONDAY, NOVEMBER 17, 1975\nNo. 171\nNovember 17, 1975\nCONGRESSIONAL RECORD-SENATE\nS 20185\nThen as we got into the mid-60's OPEC had\ndid was of course it really hit the coal indus-\nbeen formed and we became a net importer,\ntry over the head BO that our greatest re-\ndidn't have the reserves to dominate world\nsource was least developed and had more\nprices and therefore triggered by the conflict\nproblems and while gas when it was first\nin the Middle East, the Arab countries finally\ncontrolled was a byproduct of oil and was\nmoved and in two years raised prices 500\nbeing burned and therefore was in surplus.\npercent.\nThe price that was set was so low that as\nTOWARD ENERGY INDEPENDENCE\npeople shifted to gas they were unable to get\nAt that point, particularly the Eastern Sea-\nMr. GRIFFIN. Mr. President, on Oc-\nboard of this country suffered quite a set-\nthe production, the increased production or\neven if they could get production-like in\ntober 6, the Vice President addressed a\nback because of the boycott and the price\nthe case of Texas-they couldn't ship it on\nmeeting of business executives here in\nincrease. The boycott, let's face it, there were\nthe interstate lines.\nWashington on the energy problems. I\nenough leaks and there were enough coun-\nNow as you know-we had a meeting in\ncommend his remarks to my colleagues,\ntries that didn't join it so that it really\nthis room, as a matter of fact, with a group\nand ask unanimous consent that the text\nwasn't as overwhelming as it might have\nof Governors who came in organized by Jim\nbe printed in the RECORD following my\nbeen.-\nRhodes of Ohio pointing out that they had\nI was at that point Governor of New York\nlost 600,000 man days of work last year due\nremarks.\nIn addition, Mr. President, AFL-CIO\ndeeply concerned; but Libya allowed oil to go\nto the shortages of gas and it was going to\nto one of the British Islands in the Carib-\nbe a lot-that was a warm winter-worse next\nPresident George Meany has endorsed\nbean and be refined there and come into New\nyear and his people, the industrial groups\nthe concept of the administration's en-\nYork for power and so forth which if they\nin his State were willing to finance produc-\nergy proposal and I ask unanimous con-\nhad really tightened down we would have\ntion of gas at higher prices if they could\nsent that his statement be printed in the\nbeen in a much more difficult situation.\njust get permission to move it on interstate\nRECORD.\nThe President, as you all know, spent a\npipelines and the concept of a common car-\nThere being no objection, the material\nlot of time discussing the economics and hav-\nrier be adopted rather than a regulated price.\nwas ordered to be printed in the RECORD,\ning the summit meetings when. he first took\nThat has been very slow in coming because\noffice last fall a year ago. One of the major\nthe Federal Power Commission was afraid\nas follows:\nsubjects was this question of energy. He\nthat if they made such a ruling that they\nTHE VICE PRESIDENT'S ADDRESS\ncame out of those with a clear determination\nwould be challenged in the courts by the\nI want to thank all of you very much for\nfor energy independence as being essential\necologists and that they would then be over-\ncoming here today and for giving me a chance\nfor this country's national security; second,\nruled. So they wanted legislation.\nto visit with you, try to outline first briefly\nthat this should be achieved by 1985.\nI only mention this because where gov-\nthe conceptual thinking in back of this pro-\nHe then worked out the details of legisla-\nernment stepped in to regulate one phase of\ngram and then answer or at least discuss your\ntion which would encourage private enter-\nthe energy industry it totally disrupted the\nquestions. I will do my best to answer them.\nprise because energy has always been a pri-\nindustry and shows very- clearly what can\nI think the legislation will go up this week.\nvate enterprise operation in this country ex-\nhappen through government regulation. The\nThe subject is a complicated one and there\ncept for Nayal reserves, which would en-\nPresident, as you know, has fought regula-\nhave been varying points of view as you all\ncourage private enterprise to accelerate pro--\ntion and he has been for decontrol. He\nknow by reading the press. Therefore, it has\nduction-domestically.\nwanted an orderly decontrol on oil. He\ncaused some difficulty in trying to get the\nI don't think we really have recognized\nwanted 39 months. But then we go back to\nthing worked out so that it could be put in\nquite as clearly as it seems to me the fact\nwhat has happened in Congress. He sent up\ndetailed language for the legislation and the\nexists that this-because there is a great\na 500 and some-page bill.\ndeal of talk about the free market system-\nThis bill was complicated and the public\nmessage.\nI hesitate to talk about the whole subject\nthat the free market system should do this\nI don't think has really since the energy\nbecause I know everybody in this room is\nand that they should be the ones that with-\ncrisis that they saw two years ago when\ntotally familiar with the subject, but let me\nout Government intervention except through\nthere were lines waiting for gasoline-has\njust for the record give you a brief outline\na framework of laws which would give in-\neased off. It was really sort of personified\nof the past and how it came about as to where\ncentive.\nAllright. The framework of laws has never\nwe are now.\nThis country of course up to the 1960's was\nbeen achieved because one can speculate\nthe major producer and exporter and had\nhere-but first it is a complicated subject\nthe reserves to export additional amounts if\nand it was complicated when-I have to\nnecessary and so when on two or three occa-\nagain go back a second. It was complicated\nsions other nations around the world tried\nwhen the United States Government con-\nto raise the prices of oil substantially, we just\ntrolled the price of interstate gas at a very\nexported more and were able to hold the\nlow price so that the most desirable fuel\nprice.\nturns out to be the cheapest fuel. What it\nCONGRESSIONAL RECORD-SENATE\nNovember 17, 1975\nat a meeting of the Midwestern Governors'\n$100 billion basis over ten years because that\nOr does one come to the conclusion reluc-\nwhere none other than Governor Exon asked\nis the life of the corporation, would prob-\ntantly or just as a suspicion even-not B. con-\nme if there really was an energy crisis. He\nably average out to about $10 billion B year.\nclusion-that there would be those in Con-\nsaid, \"How can there be an energy crisis\nIf this country moves towards self-suffici-\ngress in the opposition party who would just\nwhen there is plenty of oil and gas around?\"\nency it would take $60 billion to $80 billion\nas soon have the issue or would just as soon\nI said, \"You have really expressed the whole\na year and so $10 billion is 12, 14 percent of\nsee us run short of energy. have the Presi-\nthing right there. There is plenty of oil and\nthe total that is required.\ndent take off controls because they lapsed\ngas around because we are importing now\nWhat would the conditions be in determ-\nand not be able to work out an orderly ex-\nalmost 40 percent of our consumption.\"\ning how this money would be used? The con-\ntension and then have perhaps chaotic con-\nDomestic consumption is going down. So\nditions are simply two basically: One, that\nditions in 1976 and maybe this would be\nas long as we import it there isn't a crisis\nit contributes to the self-sufficiency; two,\npolitically advantageous?\nin the sense that you are thinking of it, but\nthat it would be used for financing through\nOne hesitates to even think that anyone\nif the Middle East situation blew up again\nprivate enterprise just as the Military buys\nfor political purposes would be willing to see\nor if for some other reason other than price\nits equipment through private enterprise\nthe Nation run the risks which we are run-\nor through a boycott we could then find\nwhere those objectives, those investments\nning and have the people suffer in a way that\nourselves in the middle of a full-blown cri-\ncannot be obtained by private enterprise\nthey might suffer very easily were such a\nsis which for certain parts of the country\nthemselves; in other words, where they\nchaotic situation exist. But one can't elimi-\nwould be total disaster. And I don't\neither can't get the money or for some rea-\nnate that possibility entirely.\nthink anyone has really figured out how\nson are unwilling, to; primarily can't get it,\nBut whatever the situation is, there is no\nthis country would survive & really effective\ncan't get it because they can't earn.\naction. Therefore, we are in a stalemate. The\nboycott because we don't have transporta-\nIf you take a look at the utility indus-\nproblem is getting worse and we are up to\ntion from the west to the east to handle\ntry-what, 70 percent of the atomic power\nnow close to $30 billion with a 10 percent\nthe movement of energy in sufficient quan-\nplants?-and of course atomic power is the\nincrease in foreign exchange imports. Luck-\ntities to keep our operations going; our so-\ngreat potential we have in this country for\n11y our farmers have been tremendously pro-\nciety going.\nenergy. The others are important, but the\nductive. So they are producing a major new\nWe just have seen a 10 percent increase\nlong-term, major producer us energy is\nsource of foreign exchange. Other areas have\ntake effect in the world oil prices and as I\natomic for the time being; solar and thermal,\nbeen able to export. So our balance of pay-\nsay Congress has not taken any effective\nout further.\nments is reasonable at the moment, but with\naction: little pieces of action, but no com-\nI will come back to gas, coal and oil in a\nconsumption going up, with production go-\nprehensive action. Finally, the management-\nminute. But let's say these 70 percent or 70\ning down, with the depletion allowance taken\nlabor committee had some concepts as to\npercent of the atomic power plants that\noff, with the old oil still under control-it is\nhow to encourage through incentive industry\nwere planned were cancelled. There is a whole\nnot under control at the moment but pos-\nto invest more domestically.\nvery complicated series of reasons as to why.\nsibly under control-nobody can afford to\nThat legislation hasn't gotten off the\nLocal regulations of the State Public Serv-\nput the money into the secondary retrieval\nlaunching pad in Congress.\nice Commissions where they can't get rate\nof oil because it falls under old oil.\nSo as I view the situation we find ourselves\nincreases so they can't earn enough money to\nSo that we have the situation where as I\nin a free market industry, but the free mar-\nbe able to borrow the money is one factor.\nsay our production is declining and our con-\nket has been a world market. Now national\nAlso you can't get the increase you are on\nsumption is increasing and nobody thinks\npolicy expressed by the President is that we\nline with your power. These atomic power\nthere is a crisis.\nshould be a self-sufficient, independent pro-\nplants, most efficient ones, cost about $1 bil-\nLet's go to the areas that the Energy In-\nducer of energy. We have the resources. No-\nlion. Therefore, you would have 81 billion up\ndependence Authority might serve. The best\nbody knows yet at what price. That is a na-\nnot for four years as it used to be, but now\nillustration is rubber reserve under Bernie\ntional policy superseding a free market posi-\nwith all of the filings that you have to make\nBaruch in World War II which did a heck of\ntion because the free market was an inter-\non impact statements, the local suits, it is\na job. They contracted with six or seven pri-\nnational one. Then a great many people\nup to between 10 and 11 years. So you have\nvate companies to develop synthetic rubber\nhave felt that this OPEC price structure\n81 billion tied up for 10 or 11 years with no\nproduction and of that group I think four\nwould break down as production increased.\nbasis for earning. That is one very good\nor five came through with processes or varia-\nWalter Levy who is one of the most so-\nreason.\ntions of a basic process which were success-\nphisticated people in the business and many\nAlso uncertainties are another and all\nful. They sold the company, the plants and\nof you know him, has said right along there\nkinds of regulations from Washington. The\nthe process and we have a new industry in\nwasn't a chance; that they would do ex-\nlabor-management recommendations were to\nthe United States. It was a self-liquidating\nactly what they did do. He predicted that\nencourage and allow for a greater accumula-\nsix or eight months ago, or even longer may-\noperation.\ntion of capital by corporations.\nThis corporation, the concept of this\nbe, that they would not decrease the price;\nOf course, the bill was immediately tagged\ncorporation is a self-liquidating corporation\nthey would not break the price; they would\nby the opposition as being just a special in-\nto finance those risks, which private enter-\nhold and they would increase the price. That\nterest bill for big business and big industry\nprise cannot or will not undertake at the\nis what has happened.\nand for capital rather than for the people\nSo when people say that the use of Fed-\npresent time to contribute to self-sufficiency\nwhich is an easy, cheap shot politically, but\nand do it to the maximum degree possible-\neral funds through a structure that is in\nit isn't going to help the country.\na sense comparable to the RFC conceptually,\nwith private capital participation and\nSo that bill hasn't gotten off. The real\nbut not for bailouts, but for stimulating\nthrough private industry and then sell it as\nquestion has to be first how does govern-\nnew industry or new production, and they\nrapidly as possible.\nment when it has set a national policy that\nLet me take three or four different areas.\nsay this is an allocation of capital and this\ncuts across a free market operation work\nis going to-take it from a whole lot of other\nFirst, we have ERDA. Some people say what\nwith the industry in trying to work that out;\ndo you need this for if you have ERDA?\nthings, the answer on the allocation of cap-\nin this case domestic production?\nERDA's powers go to laboratory experiments\nital is very simple. The President has said\nour national policy is self-sufficiency by 1985.\nThe first approach the President has was\nrelating to energy. But they do not have the\nthis very comprehensive legislation.\nfunds or the authority to take those labora-\nThe estimates vary between $600 billion\nand $800 billion will be required to achieve\nOne has to ask is it that the Congress go-\ntory experiments and take them out onto a\ning through this evolutionary change that\nfull commercial production. Of course. here\nthat object. That is out of about $4 trillion\nyou move from a limited expense to a much\n$300 billion that has been estimated as in-\nall of our establishment institutions have\nlarger expense. The commercial production\ndustry's capital requirements during this\ngone through is unable with such an over-\nis essential in order to find out what the cost\nten-year period for meeting needs of the\nwhelming majority by the opposition to the\nof energy would be.\nAmerican people and our responsibilities in\nExecutive Branch-in other words, the\nFor instance, gasification of coal is being\nthe world.\nDemocratic Party as distinct from the Re-\ndone and so its liquefaction of coal in South\nWe will fall short of that as estimated-\npublican Party-is it unable to organize it-\nAfrica. It comes out between $30 and $40 a\nagain these are all estimates; therefore, they\nself and does the committee structure of 300\nbarrel equivalent energy. But it does produce\nare just guestimates-fall short by about\ndifferent committees which the Congress has\ngas. It is essential.\n$600 billion.\nin both Houses, is it so cumbersome and does\nThere are new methods that can come up\nSo there is going to be a shortage. Nobody\nit involve so many committees when you\nthat would take a little longer to go down\nknows how much money will come back into\nhave a comprehensive piece of legislation of\nthe line which might reduce it to $20 a barrel\ninvestments from Arab countries where the\nthis kind, does this make it impossible for\nequivalent of oil or even down to $11, plus\naccumulation of capital is taken place. But\nthe Congress to act effectively and rapidly in\nthe fact that there is then the possibility\nI would imagine that Saudi Arabia alone is\nthe national interest through jurisdictional\nof In-Situ, drilling a hole down in the deep\nup to about $7 billion now in investment\ndisputes, et cetera, et cetera and within the\ncoal mine, setting off an explosion, setting it\nin treasuries. These securities, were this cor-\nHouse the Caucus which is in conflict with\non fire: the heat does the same thing under-\nporation to be passed by the Congress on the\nthe committees?\nground that is done on top and you would\nCONGRESSIONAL RECORD SENATE\n20187\nthe created by the burn-\ntion of shale, drill down, put off an explosion,\ncatalyst to get or to help get us off dend\nunderground.\nset it on fire, draw off the gas, the gasified\ncenter in becoming self-sufficient as a nation\nare those who feel that this will be\noil and recondense it.\nacross the board in all of these fields on B.\na far cheaper method but an experiment like\nThe Livermore Laboratories have done\nself-liquidating basis, that this is essential\nthat would cost $200 million to find out.\nsome work on this with Edward Teller and\nfor our national security, to our industrial\nA gasification plant, surface plant is about\nthey feel, although nobody else is willing yet\ngrowth, to employment. That is a pretty good\n81 billion. There is a need for 18 to 24 sur-\nto agree with them, that this might be pro-\ncombination of the three.\nface gasification plants, traditional, known,\nduced at the rate of between the cost of 87\nIf we don't do it, in my opinion, there are\nproven style right now for the next-having\nand $8 a barrel.\nelements in this country and some of them\nto be built right now if we are going to meet\nIf it were that, this would be one of the\nin the Congress who would like to see in-\nthe gas supplies and this is what the gas in-\ngreat bonanzas that has happened to this\ndustry fail and not be able to meet the needs\ndustry is looking for. There right away is $18\ncountry. It would be fantastic.\nof the country and then say, fine, we told\nbillion to $24 billion to produce gas the most\nThe Occidental company is the only com-\nyou the system was no good; that capitalism\nexpensive way.\nSome may have to be produced. Laws\npany that I know that has done any major\ndoesn't work; that private enterprise doesn't\nwork in the field but they can't afford this\nwork. Therefore, we have got to take it over.\nchange. We can get them changed so that\ngas can be purchased in another area, sur-\nkind of an experiment.\nThen we will move as the British moved\nplus gas and piped through the interstate\nMany of the companies bought I think\ntaking over one industry after another and\ngas system. It is complicated. But that is\nover $1 billion in leases out in Colorado for\nof course the problems that grow out of that;\none area.\nshale, but they were going to do surface\nthen they start subsidizing; then unlimited\nCoal, of course, gets tied up with the whole\nmining. None of them have gone ahead be-\ncapacity to pay and, therefore, you get into\necological problem. I visited out in Wyoming,\ncause of the uncertainties and the ecological\nthe most difficult situation and the most\nGillette, one of the most fascinating mines\nproblems. So-that is another area.\ndangerous situation where you have neither\nwhere they took off 23 feet of surface, then\nThen you come down-I have covered the\na capitalist system nor a socialist system and\n70 feet of coal, clay underneath; they took\ncoal, oil, gas; not covered it but mentioned\nyou have the worst of both and nobody can\nthe topsoil off first, stacked it; then took the\nthem-to the question of electricity through\nmake an investment because they don't know\nrest off, put it behind where they are digging\natomic.\nwhat the conditions are going to be, what the\nthe hole and then end up by putting the\nOne of the standard methods of financing,\nregulations are going to be, what the re-\ntopsoil back on, making six lakes, 6,000 acres.\nwhether it is airplanes or a lot of other\nsources are going to be. Therefore, you have\nThe only difference you will find is you will\nthings in this country, is the lease purchase\na plurality and we have higher unemploy-\nhave lakes which you never had before.\noperation where somebody finances an air-\nment and demand for more expenditures by\nThe growth will be as good if not better\nplane and the company purchases it. It is\nthe Federal Government which the President\nand the only other difference is it will be 123\nperfectly conceivable that an atomic power\nhas had the courage to resist to a degree that\nfeet lower than it was before. But I was\nplant costing 81 billion could be financed by\nis perfectly extraordinary and if he didn't, we\nthere. The antelope were grazing still right\nthe government under a contract with a pri-\nwould have more inflation.\naround where the mining operation was\nvate company for lease purchase with a con-\nThis is then also I would say to you, those\ngoing on. This whole mine which produces\ntract with the Public Service Commission\nwho study this question, that Fabian social-\n20,000-I guess 20 million tons a year, has 55\nthat as and when it comes on line the rates\nists like inflation because that is the quickest\npeople. Everything is automated, the whole\nwill be such that this company can earn\nway to equalize capital that you can do in\nthing. It is a superb operation. In other\nwords, it can be done. But they had to build\nwhatever is necessary to pay back.\nany country. You don't have to expropriate\ntheir own railroad to get it to the main line.\nThe President in his message to the Con-\nanything Just people's values are gone be-\ngress in January said we need 200 atomic\ncause inflation just wipes them out and the\nThey are servicing midwestern cities. If you\npower plants by 1985. We now have maybe 60.\nGermans went through that and we know\nwant-let's say if as a nation we decide or\nThe remaining ones, 70 percent were can-\nwhat happened from that.\nit proves to be feasible-to produce low-\ncelled. California has the proposition next\nSo I would just like to say that while this\nsulfur coal in the west and the ecological\nproblems are worked out and this whole\nJune banning all atomic power plants in Call-\nhas been opposed and we all know that be-\ncause you all read it in the papers; because\nthing has got to be done so that we don't\nfornia; and Oregon on Friday; they have got\none of the same.\nit says it would be a first step towards gov-\nget our energy at the expense of our environ-\nIf this country bans atomic power plants\nernment takeover.\nment. I am confident we can do both to-\nand we don't move in these other fields, we\nThe President has already said we have to\ngether and the research can be done together.\nare going to be totally in a situation which\nhave an allocation of capital. He has asked\nBut then you come to the problem that a\nlot of railroads can only move coal cars at the\nthere are some ecologists who would like to\nprivate enterprise to do it. So it isn't a ques-\nrate of ten miles'an hour because of the con-\nsee a no-growth society. A no-growth society\ntion of taking the capital from housing and\nmeans no jobs for the young people that are\nall of these other areas that people talk\ndition of the roadbeds. There is about 811\ncoming on because our whole society has been\nabout. There is plenty of money right now\nbillion of roadbed work to be done in this\ngeared to increased employment based on in-\nin the savings and loan associations. People\ncountry.\ncreased productivity.\nhaven't got enough confidence to invest in\nIt is also conceivable that this corporation\nI happen to think that that is the hallmark\nhousing. So it isn't that.\ncould loan, but I don't think the railroads\nof America. It is our strength. It is our suc-\nSecondly, as far as a step towards socialism,\ncan borrow money. Therefore, they might buy\ncess and that we can do the ecological side of\nI think it is exactly the opposite. I think it\npreferred stock in a railroad to give them the\nthis problem plus the development side.\nis government's showing their concern for\nfunds or to invest the funds to fix up their\nYou come to industry itself and energy. I\nthe present system, free enterprise and capi-\nroadbeds which could then be earned out of\ndon't know. There are close to 18 States that\ntal and that they are trying to help stimu-\ncoal: all of this being contingent upon a\nare going to be in a serious condition-in-\nlate and bridge over this period,\nconversion of eastern plants from oil to coal.\ndustries in 18 States-if they don't get gas\nThere is one other thing I forgot to say\nIf they do, they have got to have coal. The\nthis winter. But here is how complicated this\nand then I will stop; that is, that the Federal\ncoal has got to be produced. It has got to be\ngets. If we have a cold winter, even if the\nEnergy Administration would have the re-\ntransported so that you have got to have the\ninterstate pipelines are allowed to be used,\nsponsibility of acting as the clearing house\ngovernment in a position or somebody in a\nthere is going to still be a shortage because\nfor all of the ecological and regulatory func-\nposition to be the catalyst, the fallback posi-\nthere isn't enough gas being produced to\ntions that government has at State and Fed-\ntion where private enterprise cannot or will\nsell.\neral levels, State, Federal and local levels.\nnot finance the effort to achieve this\nThat means that industry which depends\nSo all of them would be cleared through\nindependence.\non gas and gas is a small percentage, whether\nthis. They would then make recommenda-\nAll of it then could be sold. No loans are\nit is textiles in South Carolina or glass in\ntions to simplify these structures based on\nmade after; no commitments made after ten\nPennsylvania or what not, they all need it,\ntheir experience. Any private operation which\nyears.\nbut it is a small percentage of their cost.\nwas investing in capital to achieve energy\nOil, we have got twice as much oil in shale\nSo they would then go in and probably buy\nself-sufficiency could also use this corpora-\nas you all know in this country as the Arabs\nup propane because they could come in and\ntion as the clearing house for all of its con-\nhave oil in the Middle East in known reserves.\nbuy propane. But propane gas is what the\ntacts with government.\nThe problem is to get it out. You can mine\nfarmers depend on to dry their crops and to\nSo that they could get a system which\nthe shale. You can cook the oil out. Then you\nheat their homes and they are small buyers.\nwould accelerate and maybe cut down on the\nend up with what I call talcum powder which\nThey are not big buyers. So the next thing\ntime because with a loss or time due to the\nis in a much larger volume than the shale\nyou would have to have would be control of\ndelays and the suits that take place. This is\nyou have mined because it has been cooked\npropane and it is just going to take this gov-\na very, very serious thing in terms of cost\nand 80 it is not dissolved. There is very little\nernment one by one further and further into\nand expense.\nwater where the shale is. Therefore, what do\ncontrols and the more government gets into\nI would also say the way the legislation is\nyou do with the stuff? You could fill a valley\ncontrols in my opinion the more they distort\nbeing drafted it would give the board the\nbut if you have a heavy wind, this stuff is\nthe economy and make it difficult for us to\ndiscretion, a five-man board the discretion\ngoing to blow all over the west.\nget back on a sound basis.\nso that there wouldn't be a basis for suits.\nAgain, you can do an experiment for $200\nTherefore, in conclusion, It seems to me\nIn other words, you couldn't sue the cor-\nmillion of trying to develop In-Situ produc-\nthat this idea of the government acting as a\nporation for a decision because all of the key\n20188\nCONGRESSIONAL RECORD-SENATE\nNovember 17, 1975\ndecisions are left to the judgment of the\ntype of plant such as the rubber plants in\nwillingly enter into such contracts, but If\nboard.\nWorld War II. Is there any way you are going\nyou do you could do that right now without\nTherefore, there aren't criteria and there-\nto insure that this legislation is 60 worded\nhaving to have the lease-back arrangement\nfore hopefully we can keep this from getting\nthat someone of a different philosophical\nand the Federal Government build the\nanother-I hope too many of you aren't\noutlook cannot turn this energy independ-\nplants.\nlawyers because I don't want to cut down\nence agency into a Federal oil and gas cor-\nThe VICE PRESIDENT. Great. Then we\non the business-but hopefully we can get\nporation running the same way as TVA?\nwouldn't have to put any Federal money in.\nthis thing so that we can get It rolling and\nThe VICE PRESIDENT. It requires that every-\nQUESTION. I would think that would be\nget action fast and decisions made the way\nthing be sold and that it be self-liquidat-\nthe place to look; is the Federal Government\nthey are done in private enterprise as dis-\ning and it be done through private enter-\nusing its influence with the State commis-\ntinct from the way they are done too often\nprise and with private enterprise participa-\nsions to get the rates up? That will bring\nin government.\ntion. I think the private enterprise participa-\nthe capital in and you won't have to build\nThat I think is the summary. Any ques-\ntion is one of the most important. For in-\nthe plants through the government.\ntions we can get into would develop details\nstance, if you build a power plant, atomic\nThe VICE PRESIDENT. There is only one flaw\nof the situation, but that in essence is the\npower plant under lease purchase contract\nin your argument, if you will forgive me-at\nsummary.\nwith a contract with the Public Service Com-\nleast a political flaw; and, that is, as one who\nI should say perhaps what makes me think\nmission, you actually then have 8 contrac-\nonly two years ago left Governorship and who\nit will go through Congress. This is some-\ntual relationship so that the ownership, un-\nsaw the beginning of the pressures due to,\nthing that labor wants very badly. It is jobs\nless somebody abrogates the contract, is in\nfirst, ecology on using non-sulphur fuels and\nthrough industry and not jobs through dole.\nthe hands or will be in the hands of the\nthe increased cost in getting the non-sulphur\nTherefore, I am pretty sure labor is going\nprivate enterprise. Nothing will be done\ncoal, non-sulphur oil; then the embargo and\nto give it very strong support. If industry\nwhere the government sets up some new\nthen the world price increase of 500 percent.\nat the same time feels it is desirable and\nform of TVA.\nThese poor public service commissioners have\nworthwhile and gives it support, then I think\nIt happens that the Governor of Pennsyl-\nhad to take double and triple the cost of\nits passage has got very great. potential.\nvania who is a declared candidate for the\nelectricity to consumers, if not more.\nIf industry is opposed to it, that will nul-\nFresidency, Governor Schapp, has got a pro-\nTheir problem is right now that they have\nlify labor support and probably nothing\ngram he has been trying to get-I don't know\ngone through 80 many increases-this is true\nwould happen. But I think it is a turning\nwhether it has surfaced yet-other Gover-\nbecause I was very close to the commission\npoint for this country and if we don't have\nnors in the Eastern Seaboard to join in spon-\nthere and when I got a new commissioner,\nenergy we are not going to have growing in-\nsoring which involves a TVA at the mine\nChairman of the Commission, who had been\ndustry; if we don't have a growing industry,\nheads to produce electricity at the mine\na strong consumer advocate, I said, \"Look,\nwe are not going to have jobs and we are\nheads which would be owned by the govern-\nin your advocacy of the protection of the\ngoing to have a lot of problems. We have\nment, mined and then distributed from\nconsumer do you include-this is before I\ngot them, but they will be worse.\nthere.\noffered him the job-the protection of the\nSo that I think-that we are on the verge.\nconsumers' need for additional power in the\nThank you.\nAre there any questions?\nI flew to the coast Thursday night with &\nfuture? If so, do you visualize that that is\nQUESTION. Mr Vice President, could you\nSenator who has introduced a bill to break\ngoing to take higher rates and more money\nrelate this program to the $6 billion syn-\nup the oil business and have just producers,\nin order to get the capital in?\" He said, \"I\nthetic fuel program that we read about re-\ndistributors, marketers, each one would be\nread you. I agree with you and you have no\ncently? Is it part of it?\nin a separate company. I only mention that.\nproblem.\" I took him on.\nThe VICE PRESIDENT. The $6 billion syn-\nThis is a Republican and it shows that people\nHe did a superb job. He was pilloried by\nthetic fuel program is one that Senator Jack-\nare looking in Congress for ways-or politi-\nthe public. He was sued by my own attorney\nson has proposed. It hasn't passed yet. So\ncal in political life-of being responsive to\ngeneral. (Laughter) It was purely political. I\nwhat we did in the thinking on this was to\nthe public but not, in my opinion, too clear\nlove him, too, and he was sued by the city.\njust make a provision that they would be\nas to what the impact would be on our\nIn other words, these people have been in\ncomplimentary if that passes. In other words,\nsystem.\nthe most difficult political situations because\nof course, that is an outright expenditure.\nSir:\nevery consumer of electricity-I can only\nIn other words, that is government putting\nQUESTION. Mr. Vice President, you indi-\nspeak for New York, but I suppose it is very\nthe money in the budget expenditure. This\ncated that this authority would be able to\nsimilar in other parts-has just gone through\nother one is a loan or an investment or a\nproduce hopefully about 14 percent, I believe\nthe most unbelievable increases in cost.\nguarantee of a loan and on a self-liquidat-\nyou said, of the energy needed?\nSo my reason for thinking what I say is\ning basis. So that is the difference. But if\nThe VICE PRESIDENT. Capital.\nthey would be so glad to see something built\nthat one passes, fine. Whatever they do that\nQUESTION. Of the capital.\nthat will protect the needs of the community\nwouldn't have to be done here.\nThe VICE PRESIDENT. Of the capital needed\nbut doesn't have to raise the rates until fur-\nSo that they will be totally complimentary.\nto meet the self-sufficiency.\nther down the road when they may not even\nQUESTION. Mr. Vice President, you men-\nQUESTION. Is there some way this could be\nbe on the commission. (Laughter) They\ntioned many of the traditional sources of\nhelpful if private industry does not come\nwould be very happy, in my opinion-this is\nenergy but you hardly touched on solar\nforth with the other 86? Do you think there\na political judgment-to sign a contract for\nenergy. I wonder. Here is one that has few\nis any problem in that other 86 being raised\nthe future whereas they could not go through\necological problems and would it be partic-\nduring that period of time?\nanother major increase now particularly as\nipating in this program and how?\nThe VICE PRESIDENT. Let's take a case in\nthe people aren't going to get the benefit for\nThe VICE PRESIDENT. Again, solar energy\npoint. Let's say they invested $200 million\n11 years. The alternative to this is, what is\nand thermal energy are very important parts.\nin either an In-Situ gasification of coal or\nhappening again in New York State where\nThey are not large scale producers of energy\nIn-Situ gasification of oil project and it\nwe had an authority which was created to\nimmediately, but they are very important\nproved to be within let's say lower cost of.\ndevelop hydro-electric power on the St. Law-\nparts of the program. Any group who has\npresent imported oil prices. I don't think you\nrence with Canada. Each of us has a power\nsomething, who wants to produce any new\nwould have to worry about it because the\nauthority. We run it jointly.\nprocess or develop equipment or whatever or\ngovernment would not continue. They would\nThis power authority now being the only\nmay be for solar energy would, if they can't\nsell, either sell the process or make it avail-\none that could raise the money has already\nget the funds themselves, be eligible for as-\nable, whatever the procedure would be,\nbuilt one atomic power plant. It is now going\nsistance in the way of a loan, a loan guar-\nwhatever they did in the rubber research\ninto a second atomic power plant. It has\nantee from this authority.\ntype of thing. I think you would find then\nbuilt the grid to connect it and the first\nI should mention also that conservation is\na tremendous amount of capital. Capital\nthing you know we are going to see this\nincluded in here. In other words, support\ngoes where it can get earnings. If capital can\nsame thing happen that government is going\nfor the conservation of energy if that can't\nfind attractive earnings in producing energy\nto come in to meet the demands. I just think\nget its own financing because you can save\nin this country for self-sufficiency, they will\nif you believe in private enterprise, if you\na lot of energy which would reduce the need\ninvest in it. If they can't, they will invest\nbelieve in the capitalist system, you have to\nto produce it; and that that is part of this,\nin the McDonald Hamburger stands, not that\nstand up and see what does it take to help\ntoo, Pipelines are included in this as eligible\nI am against them. I am for them.\nthat system work? You have got the very\nif they can't get the financing.\n(Laughter) But they are not going to solve\nsimple and right answer. If government\nAlaska could produce an awful lot more\nour energy problem. We have a free capital\nwould just get off their backs, then we\noil if they opened up more lands; five, six,\nmarket. They go where the returns are. The\nwouldn't have any problem. But this is a\nseven million barrels a day. That would\nquestion is can the government help point\ndemocracy. Government is the creation of the\ntake four or five pipelines. So you are talk-\nthe way to good returns?\npeople and it has got politicians like myself\ning a lot of money and that has to be bal-\nQUESTION. Sir, you mentioned in connec-\nin it and they may not be always as totally\nanced out.\ntion with the nuclear power plants a con-\nobjective in their views of what is needed\nSir:\ntract between the Federal Government and\nbecause of these political pressures. There-\nQUESTION. Mr. Vice President, you had\nthe State Public Service Commission. I don't\nfore, I think here is a possibility\nmentioned the government-owned, contract-\nthink you will get many States that will\nIf we can do what you say, perfect. They\nNovember 17, 1975\nCONGRESSIONAL RECORD SENATE\nwill try. But we talked about shortcutting\nof those, including Anitrust, and so forth\nsome of the environmental requirements. If\nand 50 forth. So they finally had to give It up.\nyou did that, the legislation would be killed.\nIf there is a central group and you get\nBo we have got to live within this, but let's\nsome very able people who understand the\nhave & central point where we can clear all\nlaw, the ecology, production, and so forth, I\nof this stuff and where you develop perhaps\nthink this unit could become an extremely\nstandard forms and 50 forth and to the degree\nefficient unit.\nwe can get what you suggest, wonderful.\nI am not sure why in many cases these\nThen no money would be needed.\nthings can't be standardized. Why do you\nThank you.\nhave to spend a great deal of money each\nSir; way in the back?\ntime you file an impact statement, start-\nQUESTION. Mr. Vice President, I am won-\ning from scratch? The impacts can't be that\ndering about the effect of this plan on com-\ndifferent. There are certain criteria that go\npetition within the LNG industry. For ex-\ninto them. I have a feeling, I don't know, I\nample, if one small project were to be given\nhave & feeling this could be a very interest-\nsubstantial Federal help or one Alaska pipe-\ning and useful step.\nline, what would the effect be on other appli-\nThank you very much. I apologize for\ncants who didn't get help?\nhaving to go, but I go to open the Senate\nThe VICE PRESIDENT. There is a very in-\nand I am not allowed to speak there. That\nteresting thought here and that is I think-\nis why perhaps I talk so long here. I can't\ndon't hold me on this one-but I think it\nspeak up there without unanimous consent,\nwill be in the legislation that no loan would\nwhich I don't get very often.\nbe made below the rates of what & prime pro-\nI would love to follow up. If any of you\nducer of energy can get in the open market.\nhave questions as time goes by on this, of\nIn other words, the government won't come\ncourse, you get the legislation shortly, but\nin and take a weak company-this is not a\nI would be delighted to see them because to\nbailout. This is not going to be for the bail-\nme this has got to be the heart of our future\ning out of a defunct company. This will only\nstrength and vitality as a nation; our ability\nbe to produce energy to achieve these goals.\nto meet our people's needs; to provide em-\nBut the rate of the loan would not be lower\nployment; to be secure and to meet our re-\nthan what the prime rate would be for a\nsponsibilities around the world.\nsuccessful company.\nI think we have got to get rolling as far\nMost companies will not want to borrow\nas this economy is concerned if we are go-\nfrom the government, I imagine, if they\ning to stay the leader of the free world or if\ncan get it from private.\nthe free world is going to have 8 leader. Let\nSir?\nme put it that way.\nQUESTION. What provision is made, Mr.\nThank you very much, indeed.\nVice President, in the event that loan is in\ndefault?\nMR. MEANY'S STATEMENT\nThe VICE PRESIDENT. I think the plant, the\nOn the basis of the analysis and recom-\noperation, whatever it is, would be completed\nmendations of the AFL-CIO Energy Policy\nand the property sold. They take a loss. If\nCommittee, the AFL-CIO endorses the con-\nyou are in this business of trying to produce\ncept of the Energy Independence Authority,\nrisk or go into risk areas, you are going to\na proposal initiated by Vice President Rocke-\nhave some major successes and some failures.\nfeller and introduced in the Congress by the\nI think that is why 25 percent of the capital\nFord Administration.\nor 25 percent of the $100 billion will be equity\nPrivate industry, left to itself, cannot and\nand 75 percent loans.\nwill not resolve the energy crisis which still\nI hope that they will make enough suc-\nplagues this nation. The American people\ncesses which they can sell at & profit to over-\nshould not be deluded by the current easy\ncome the losses which would be at & loss, you\navailability of energy supplies. While the gas\nknow, where there would be a default. But\nlines have disappeared, the dependence of\nthen they have just got to sell it. This is spe-\nthe United States on oil from insecure foreign\ncifically stated not to become a government\nsources still exists. This nation is more\noperation.\nvulnerable to an Arab oil embargo today than\nSir?\nin 1973. Government must provide the\nQUESTION. Mr. Vice President, please de-\ninitiative and incentive for development of\ntail a little more of this clearing house con-\nenergy projects that will place this nation\ncept. What authority would that have? Is it\non the road to energy independence.\nadvisory primarily? Is it in the ecology field\nIt is estimated that capital in the amount\nonly? Or could it spread to other areas of\nof $600 to $800 billion will be needed in the\nagencies?\nnext ten years to finance investments for\nThe VICE PRESIDENT. Any clearances that\nenergy independence. Most projects would be\nwould be by & division of FEA which would\ncapitalized from private sources; however,\nspecialize in government clearances, of all\nthose deemed vital to the national interest\ntypes, and so if there is a project which con-\nbut unable to secure private capital, would\ntributes towards energy self-sufficiency, fi-\nbe financed through a new government cor-\nnanced or not financed, partially or not by\nporation with authority to make direct loans,\nthe government, they would be eligible. to\nprovide loan guarantees, and other financial\nhave all of their clearances done through\nassistance to energy independence projects.\nthis division.\nWhile the AFL-CIO does endorse the crea-\nThis could very well lead to recommenda-\ntion of an Energy Independence Authority\ntions-I think it will be so stated in the leg-`\nand the basic program set forth in the\nislation-as to simplification of clearances.\nbill, we expect to have a number of proposals\nTo me the most interesting case, a friend of\nfor improvements in the specific terms of\nmine who is a lawyer in New York tried to set\nthis measure.\nup a corporation for the seven utility com-\nAt the proper time, we will testify before\npanies in New York State last year, which\nCongress on the legislation and will make\nwould be a financing construction company.\ndetailed proposals and suggestions to\nThe credits weren't strong enough to do it\nstrengthen the bill.\nthemselves so they wanted to set up a joint\nThe federation's Energy Policy Commit-\ncompany.\ntee-composed of Secretary-Treasury Lane\nHe said there were, I have forgotten, 14,\nKirkland, Vice Presidents Paul Hall, Martin\n17 different regulatory bodies, State and na-\nWard, William Sidell, A. F. Grospiron, Mur-\ntional, which were involved. He could not\nray Finley and Joseph Keenan-will continue\ndevice & corporation which could meet all.\nits study of this and other proposals.\nCongressional Record\nUnited States\nof America\nPROCEEDINGS AND DEBATES OF THE\n94th\nCONGRESS, FIRST SESSION\nVol. 121\nWASHINGTON, MONDAY, NOVEMBER 17, 1975\nNo. 171\nNovember 17, 1975\nCONGRESSIONAL RECORD-SENATE\n20185\nThen as we got into the mid-60's OPEC had\ndid was of course it really hit the coal indus-\nbeen formed and we became a net importer,\ntry over the head so that our greatest re-\ndidn't have the reserves to dominate world\nsource was least developed and had more\nprices and therefore triggered by the conflict\nproblems and while gas when it was first\nin the Middle East, the Arab countries finally\ncontrolled was a byproduct of oil and was\nmoved and in two years raised prices 500\nbeing burned and therefore was in surplus.\npercent.\nThe price that was set was so low that as\nTOWARD ENERGY INDEPENDENCE\npeople shifted to gas they were unable to get\nAt that point, particularly the Eastern Sea-\nMr. GRIFFIN. Mr. President, on Oc-\nthe production, the increased production or\nboard of this country suffered quite a set-\ntober 6, the Vice President addressed a\neven if they could get production-like in\nback because of the boycott and the price\nthe case of Texas-they couldn't ship it on\nmeeting of business executives here in\nincrease. The boycott, let's face it, there were\nthe interstate lines.\nWashington on the energy problems. I\nenough leaks and there were enough coun-\nNow as you know-we had a meeting in\ncommend his remarks to my colleagues,\ntries that didn't join it so that it really\nthis room, as a matter of fact, with a group\nand ask unanimous consent that the text\nwasn't as overwhelming as it might have\nof Governors who came in organized by Jim\nbe printed in the RECORD following my\nbeen.-\nRhodes of Ohio pointing out that they had\nI was at that point Governor of New York\nlost 600,000 man days of work last year due\nremarks.\nIn addition, Mr. President, AFL-CIO\ndeeply concerned; but Libya allowed oil to go\nto the shortages of gas and it was going to\nto one of the British Islands in the Carib-\nbe a lot-that was a warm winter-worse next\nPresident George Meany has endorsed\nbean and be refined there and come into New\nyear and his people, the industrial groups\nthe concept of the administration's en-\nYork for power and so forth which if they\nin his State were willing to finance produc-\nergy proposal and I ask unanimous con-\nhad really tightened down we would have\ntion of gas at higher prices if they could\nsent that his statement be printed in the\nbeen in a much more difficult situation.\njust get permission to move it on interstate\nRECORD.\nThe President, as you all know, spent a\npipelines and the concept of a common car-\nThere being no objection; the material\nlot of time discussing the economics and hav-\nrier be adopted rather than a regulated price.\nwas ordered to be printed in the RECORD,\ning the summit meetings when he first took\nThat has been very slow in coming because\noffice last fall a year ago. One of the major\nthe Federal Power Commission was afraid\nas follows:\nsubjects was this question of energy. He\nthat if they made such a ruling that they\nTHE VICE PRESIDENT'S ADDRESS\ncame out of those with a clear determination\nwould be challenged in the courts by the\nI want to thank all of you very much for\nfor energy independence as being essential\necologists and that they would then be over-\ncoming here today and for giving me a chance\nfor this country's national security; second,\nruled. So they wanted legislation.\nto visit with you, try to outline first briefiy\nthat this should be achieved by 1985.\nI only mention this because where gov-\nthe conceptual thinking in back of this pro-\nHe then worked out the details of legisla-\nernment stepped in to regulate one phase of\ngram and then answer or at least discuss your\ntion which would encourage private enter-\nthe energy industry it totally disrupted the\nquestions. I will do my best to answer them.\nprise because energy has always been a pri-\nindustry and shows very. clearly what can\nI think the legislation will go up this week.\nvate enterprise operation in this country ex-\nhappen through government regulation. The\nThe subject is a complicated one and there\ncept for Naval reserves, which would en-\nPresident, as you know, has fought regula-\nhave been varying points of view as you all\ncourage private enterprise to accelerate pro-\ntion and he has been for decontrol. He\nknow by reading the press. Therefore, it has\nduction domestically.\nwanted an orderly decontrol on oil. He\ncaused some difficulty in trying to get the\nI don't think we really have recognized\nwanted 39 months. But then we go back to\nthing worked out so that it could be put in\nquite as clearly as it seems to me the fact\nwhat has happened in Congress. He sent up\ndetailed language for the legislation and the\nexists that this-because there is & great\na 500 and some-page bill.\ndeal of talk about the free market system-\nThis bill was complicated and the public\nmessage.\nI hesitate to talk about the whole subject\nthat the free market system should do this\nI don't think has really since the energy\nbecause I know everybody in this room is\nand that they should be the ones that with-\ncrisis that they saw two years ago when\ntotally familiar with the subject, but let me\nout Government intervention except through\nthere were lines waiting for gasoline-has\njust for the record give you a brief outline\na framework of laws which would give in-\neased off. It was really sort of personified\nof the past and how it came about as to where\ncentive.\nAllright. The framework of laws has never\nwe are now.\nThis country of course up to the 1960's was\nbeen achieved because one can speculate\nthe major producer and exporter and had\nhere-but first it is a complicated subject\nthe reserves to export additional amounts if\nand it was complicated when-I have to\nnecessary and so when on two or three occa-\nagain go back a second. It was complicated\nsions other nations around the world tried\nwhen the United States Government con-\nFORS\nto raise the prices of oil substantially, we just\ntrolled the price of interstate gas at a very\nexported more and were able to hold the\nlow price 50 that the most desirable fuel\nturns out to be the cheapest fuel. What it\nprice.\nGERALD\n20186\nCONGRESSIONAL RECORD-SENATE\nNovember 17, 1975\nat a meeting of the Midwestern Governors'\n$100 billion basis over ten years because that\nOr does one come to the conclusion reluc-\nwhere none other than Governor Exon asked\n1s the life of the corporation, would prob-\ntantly or just as a suspicion even-not & con-\nme if there really was an energy crisis. He\nably average out to about $10 billion a year.\nclusion-that there would be those in Con-\nsaid, \"How can there be an energy crisis\nIf this country moves towards self-suffici-\ngress in the opposition party who would just\nwhen there is plenty of oil and gas around?\"\nency it would take $60 billion to $80 billion\nas soon have the issue or would just as soon\nI said, \"You have really expressed the whole\na year and so $10 billion is 12, 14 percent of\nsee us run short of energy, have the Presi-\nthing right there. There is plenty of oil and\nthe total that is required.\ndent take off controls because they lapsed\ngas around because we are importing now\nWhat would the conditions be in determ-\nand not be able to work out an orderly ex-\nalmost 40 percent of our consumption.\"\ning how this money would be used? The con-\ntension and then have perhaps chaotic con-\nDomestic consumption is going down. So\nditions are simply two basically: One, that\nditions in 1976 and maybe this would be\nas long as we import it there isn't a crisis\nit contributes to the self-sufficiency; two,\npolitically advantageous?\nin the sense that you are thinking of it, but\nthat it would be used for financing through\nOne hesitates to even think that anyone\nif the Middle East situation blew up again\nprivate enterprise just as the Military buys\nfor political purposes would be willing to see\nor if for some other reason other than price\nits equipment through private enterprise\nthe Nation run the risks which we are run-\nor through a boycott we could then find\nwhere those objectives, those investments\nning and have the people suffer in a way that\nourselves in the middle of a full-blown cri-\ncannot be obtained by private enterprise\nthey might suffer very easily were such a\nsis which for certain parts of the country\nthemselves; in other words, where they\nchaotic situation exist. But one can't elimi-\nwould\nbe\ntotal\ndisaster. And I don't\neither can't get the money or for some rea-\nnate that possibility entirely.\nthink anyone has really figured out how\nson are unwilling to; primarily can't get it,\nBut whatever the situation is, there is no\nthis country would survive a really effective\ncan't get it because they can't earn.\naction. Therefore, we are in a stalemate. The\nboycott because we don't have transporta-\nIf you take a look at the utility indus-\nproblem is getting worse and we are up to\ntion from the west to the east to handle\ntry-what, 70 percent of the atomic power\nnow close to $30 billion with a 10 percent\nthe movement of energy in sufficient quan-\nplants?-and of çóurse atomic power is the\nincrease in foreign exchange imports. Luck-\ntities to keep our operations going; our so-\ngreat potential we have in this country for\nily our farmers have been tremendously pro-\nclety going.\nenergy. The others are important, but the\nductive. So they are producing a major new\nWe just have seen a 10 percent increase\nlong-term, major producer of energy is\nsource of foreign exchange. Other areas have\ntake effect in the world oil prices and as I\natomic for the time being; solar and thermal,\nbeen able to export. So our balance of pay-\nsay Congress has not taken any effective\nout further.\nments is reasonable at the moment, but with\naction; little pieces of action, but no com-\nI will come back to gas, coal and oil in a\nconsumption going up, with production go-\nprehensive action. Finally, the management-\nminute. But let's say these 70 percent or 70\ning down, with the depletion allowance taken\nlabor committee had some concepts as to\npercent of the atomic power plants that\noff, with the old oil still under control-it is\nhow to encourage through incentive industry\nwere planned were cancelled. There is a whole\nnot under control at the moment but pos-\nto invest more domestically.\nvery complicated series of reasons as to why.\nsibly under control-nobody can afford to\nThat legislation hasn't gotten off the\nLocal regulations of the State Public Serv-\nput the money into the secondary retrieval\nlaunching pad in Congress.\nice Commissions where they can't get rate\nof oil because it falls under old oil.\nSo as I view the situation we find ourselves\nincreases so they can't earn enough money to\nSo that we have the situation where as I\nin a free market industry, but the free mar-\nbe able to borrow the money is one factor.\nsay our production is declining and our con-\nket has been a world market. Now national\nAlso you can't get the increase you are on\nsumption is increasing and nobody thinks\npolicy expressed by the President is that we\nline with your power. These atomic power\nthere is a crisis.\nshould be a self-sufficient, independent pro-\nplants, most efficient ones, cost about $1 bil-\nLet's go to the areas that the Energy In-\nducer of energy. We have the resources. No-\nlion. Therefore, you would have $1 billion up\ndependence Authority might serve. The best\nbody knows yet at what price. That is a na-\nnot for four years as it used to be, but now\nillustration is rubber reserve under Bernie\ntional policy superseding a free market posi-\nwith all of the filings that you have to make\nBaruch in World War II which did a heck of\ntion because the free market was an inter-\non impact statements, the local suits, it is\na.job. They contracted with six or seven pri-\nnational one. Then a great many people\nup to between 10 and 11 years. So you have\nvate companies to develop synthetic rubber\nhave felt that this OPEC price structure\n$1 billion tied up for 10 or 11 years with no\nproduction and of that group I think four\nwould break down as production increased.\nbasis for earning. That is one very good\nor five came through with processes or varia-\nWalter Levy who is one of the most so-\nreason.\ntions of & basic process which were success-\nphisticated people in the business and many\nAlso uncertainties are another and all\nful. They sold the company, the plants and\nof you know him, has said right along there\nkinds of regulations from Washington. The\nthe process and we have a new industry in\nwasn't a chance; that they would do ex-\nlabor-management recommendations were to\nthe United States. It was a self-liquidating\nactly what they did do. He predicted that\nencourage and allow for a greater accumula-\nsix or eight months ago, or even longer may-\noperation.\ntion of capital by corporations.\nThis corporation, the concept of this\nbe, that they would not decrease the price;\nOf course, the bill was immediately tagged\nthey would not break the price; they would\ncorporation is a self-liquidating corporation\nby the opposition as being just a special in-\nto finance those risks, which private enter-\nhold and they would increase the price. That\nterest bill for big business and big industry\nis what has happened.\nprise cannot or will not undertake at the\nand for capital rather than for the people\nSo when people say that the use of Fed-\npresent time to contribute to self-sufficiency\nwhich is an easy, cheap shot politically, but\neral funds through a structure that is in\nand do it to the maximum degree possible-\nit isn't going to help the country.\na sense comparable to the RFC conceptually,\nwith private capital participation and\nSo that bill hasn't gotten off. The real\nbut not for ballouts, but for stimulating\nthrough private industry and then sell it as\nquestion has to be first how does govern-\nnew industry or new production, and they\nrapidly as possible.\nment when it has set a national policy. that\nsay this is an allocation of capital and this\nLet me take three or four different areas.\ncuts across a free market operation work\nis going to take 1t from a whole lot of other\nFirst, we have ERDA. Some people say what\nwith the industry in trying to work that out;\nthings, the answer on the allocation of cap-\ndo you need this for if you have ERDA?\nin this case domestic production?\nital is very simple. The President has said\nERDA's powers go to laboratory experiments\nour national policy is self-sufficiency by 1985.\nThe first approach the President has was\nrelating to energy. But they do not have the\nthis very comprehensive legislation.\nfunds or the authority to take those labora-\nThe estimates vary between $600 billion\nOne has to ask is it that the Congress go-\ntory experiments and take them out onto a\nand $800 billion will be required to achieve\nthat object. That is out of about $4 trillion\ning through this evolutionary change that\nfull commercial production. Of course, here\n$300 billion that has been estimated as in-\nall of our establishment institutions have\nyou move from a limited expense to a much\nlarger expense. The commercial production\ndustry's capital requirements during this\ngone through is unable with such an over-\nis essential in order to find out what the cost\nten-year period for meeting needs of the\nwhelming majority by the opposition to the\nof energy would be.\nAmerican people and our responsibilities in\nExecutive Branch-in other words, the\nFor instance, gasification of coal is being\nthe world.\nDemocratic Party as distinct from the Re-\ndone and so its liquefaction of coal in South\nWe will fall short of that as estimated-\npublican Party-is it unable to organize it-\nAfrica. It comes out between $30 and $40 a\nagain these are all estimates; therefore, they\nself and does the committee structure of 300\nbarrel equivalent energy. But it does produce\nare just guestimates-fall short by about\ndifferent committees which the Congress has\ngas. It is essential.\n$600 billion.\nin both Houses, is it so cumbersome and does\nThere are new methods that can come up\nSo there is going to be a shortage. Nobody\nit involve so many committees when you\nthat would take a little longer to go down\nknows how much money will come back into\nhave a comprehensive piece of legislation of\nthe line which might reduce it to $20 a barrel\ninvestments from Arab countries where the\nthis kind, does this make it impossible for\nequivalent of óil or even down to $11, plus\naccumulation of capital is taken place. But\nthe Congress to act effectively and rapidly in\nthe fact that there is then the possibility\nI would imagine that Saudi Arabia alone is\nthe national interest through jurisdictional\nof In-Situ, drilling a hole down in the deep\nup to about $7 billion now in investment\ndisputes, et cetera, et cetera and within the\ncoal mine, setting off an explosion, setting it\nin treasuries. These securities, were this cor-\nHouse the Caucus which is in conflict with\non fire: the heat does the same thing under-\nporation to be passed by the Congress on the\nthe committees?\nground that is done on top and you would\nCONGRESSIONAL RECORD\n20187\ncreated\nby\nthe\nburn-\ntion of shale, drill down, put off an explosion,\ncatalyst to get or to help get us off dead\nset it on fire, draw off the gas, the gasified\ncenter in becoming self-sufficient as a nation\nare those who feel that this will be\noil and recondense it.\nacross the board in all of these fields on a\na fur cheaper method but an experiment like\nThe Livermore Laboratories have done\nself-liquidating basis, that this is essential\nthat would cost $200 million to find out.\nsome work on this with Edward Teller and\nfor our national security, to our industrial\nA gasification plant, surface plant is about\nthey feel, although nobody else is willing yet\ngrowth, to employment. That is a pretty good\n$1 billion. There is a need for 18 to 24 sur-\nto agree with them, that this might be pro-\ncombination of the three.\nface gasification plants, traditional, known,\nduced at the rate of between the cost of $7\nIf we don't do it, in my opinion, there are\nproven style right now for the next-having\nand $8 a barrel.\nelements in this country and some of them\nto be built right now if we are going to meet\nIf it were that, this would be one of the\nin the Congress who would like to see in-\nthe gas supplies and this is what the gas in-\ngreat bonanzas that has happened to this\ndustry fail and not be able to meet the needs\ndustry is looking for. There right away 18 $18\ncountry. It would be fantastic.\nof the country and then say, fine, we told\nbillion to $24 billion to produce gas the most\nThe Occidental company is the only com-\nyou the system was no good; that capitalism\nexpensive way.\npany that I know that has done any major\ndoesn't work; that private enterprise doesn't\nSome may have to be produced. Laws\nwork in the field but-they can't afford this\nwork. Therefore, we have got to take it over.\nchange. We can get them changed so that\nkind of an experiment.\nThen we will move as the British moved\ngas can be purchased in another area, sur-\nplus gas and piped through the interstate\nMany of the companies bought I think\ntaking over one industry after another and\nover $1 billion in leases out in Colorado for\nof course the problems that grow out of that;\ngas system. It is complicated. But that is\nshale, but they were going to do surface\nthen they start subsidizing; then unlimited\none area.\nmining. None of them have gone ahead be-\ncapacity to pay and, therefore, you get into\nCoal, of course, gets tied up with the whole\necological problem. I visited out in Wyoming,\ncause of the uncertainties and the ecological\nthe most difficult situation and the most\nGillette, one of the most fascinating mines\nproblems. that is another area.\ndangerous situation where you have neither\nwhere they took off 23 feet of surface, then\nThen you come down-I have covered the\na capitalist system nor a socialist system and\n70 feet of coal. clay underneath; they took\ncoal, oil, gas; not covered Lt but mentioned\nyou have the worst of both and nobody can\nthe topsoil off first, stacked it; then took the\nthem-to the question of electricity through\nmake an investment because they don't know\nrest off. put it behind where they are digging\natomic.\nwhat the conditions are going to be, what the\nthe hole and then end up by putting the\nOne of the standard methods of financing,\nregulations are going to be, what the re-\ntopsoil back on, making six lakes, 6,000 acres.\nwhether it is airplanes or a lot of other\nsources are going to be. Therefore, you have\nThe only difference you will find is you will\nthings in this country, is the lease purchase\na plurality and we have higher unemploy-\nhave lakes which you never had before.\noperation where somebody finances an air-,\nment and demand for more expenditures by\nThe growth will be as good if not better\nplane and the company purchases it. It is\nthe Federal Government which the President\nand the only other difference is it will be 123\nperfectly conceivable that an atomic power\nhas had the courage to resist to a degree that\nfeet lower than it was before. But I was\nplant costing 81 billion could be financed by\nis perfectly extraordinary and if he didn't, we\nthere. The antelope were grazing still right\nthe government under a contract with e. pri-\nwould have more inflation.\naround where the mining operation was\nvate company for lease purchase with a con-\nThis is then also I would say to you, those\ngoing on. This whole mine which produces\ntract with the Public Service Commission\nwho study this question, that Fabian social-\n20,000-I guess 20 million tons a year, has 55\nthat as and when it comes on line the rates\nists like inflation because that is the quickest\npeople. Everything is automated, the whole\nwill be such that this company can earn\nway to equalize capital that you can in\nthing. It is a superb operation. In other\nwhatever is necessary to pay back.\nany country. You don't have to expropriate\nwords, it can be done. But they had to build\nThe President in his message to the Con-\nanything. Just people's values are gone be-\ntheir own railroad to get it to the main line.\ngress in January said we need 200 atomic\ncause inflation just wipes them out and the\nThey are servicing midwestern cities. If you\npower plants by 1985. We now have maybe 60.\nGermans went through that and we know\nwant-let's say if as a nation we decide or\nThe remaining ones, 70 percent were can-\nwhat happened from that.\nit proves to be feasible-to produce low-\ncelled. California has the proposition next\nSo I would just like to say that while this\nsulfur coal in the west and the ecological\nJune banning all atomic power plants in Cali-\nhas been opposed and we all know that be-\nproblems are worked out and this whole\nfornia; and Oregon on Friday; they have got\ncause you all read it in the papers; because\nthing has got to be done 60 that we don't\none of the same.\nit says it would be a first step towards gov-\nget our energy at the expense of our environ-\nIf this country bans atomic power plants\nernment takeover.\nment. I am confident we can do both to-\nand we don't move in these other fields, we\nThe President has already said we have to\ngether and the research can be done together.\nare going to be totally in a situation which\nhave an allocation of capital. He has asked\nBut then you come to the problem that a\nthere are some ecologists who would like to\nprivate enterprise to do it. So it isn't a ques-\nlot of railroads can only move coal cars at the\nsee a no-growth society. A no-growth society\ntion of taking the capital from housing and\nrate of ten miles an hour because of the con-\nmeans no jobs for the young people that are\nall of these other areas that people talk\ndition of the roadbeds. There is about $11\ncoming on because our whole society has been\nabout. There is plenty of money right now\nbillion of roadbed work to be done in this\ngeared to increased employment based on in-\nin the savings and loan associations. People\ncountry.\ncreased productivity.\nhaven't got enough confidence to invest in\nIt is also conceivable that this corporation\nI happen to think that that is the hallmark\nhousing. So it isn't that.\ncould loan, but I don't think the railroads\nof America. It 18 our strength. It is our suc-\nSecondly, as far as a step towards socialism,\ncan borrow money. Therefore, they might buy\ncess and that we can do the ecological side of\nI think it is exactly the opposite. I think it\npreferred stock in a railroad to give them the\nthis problem plus the development side.\nis government's showing their concern for\nfunds or to invest the funds to fix up their\nYou come to industry itself and energy. I\nthe present system, free enterprise and capi-\nroadbeds which could then be earned out of\ndon't know. There are close to 18 States that\ntal and that they are trying to help stimu-\ncoal: all of this being contingent upon a\nare going to be in a serious condition-in-\nlate and bridge over this period.\nconversion of eastern plants from oil to coal.\ndustries in 18 States-if they don't get gas\nThere is one other thing I forgot to say\nIf they do, they have got to have coal. The\nthis winter. But here is how complicated this\nand then I will stop; that is, that the Federal\ncoal has got to be produced. It has got to be\ngets. If we have a cold winter, even if the\nEnergy Administration would have the re-\ntransported so that you have got to have the\ninterstate pipelines are allowed to be used,\nsponsibility of acting as the clearing house\ngovernment in a position or somebody in a\nthere is going to still be a shortage because\nfor all of the ecological and regulatory func-\nposition to be the catalyst, the fallback posi-\nthere isn't enough gas being produced to\ntions that government has at State and Fed-\ntion where private enterprise cannot or will\nsell.\neral levels, State, Federal and local levels.\nnot finance the effort to achieve this\nThat means that industry which depends\nSo all of them would be cleared through\nindependence.\non gas and gas is a small percentage, whether\nthis. They would then make recommenda-\nAll of it then could be sold. No loans are\nit is textiles in South Carolina or glass in\ntions to simplify these structures based on\nmade after; no commitments made after ten\nPennsylvania or what not, they all need it,\ntheir experience. Any private operation which\nyears.\nbut it is a small percentage of their cost.\nwas investing in capital to achieve energy\nOil, we have got twice as much oil in shale\nSo they would then go in and probably buy\nself-sufficiency could also use this corpora-\nas you all know in this country as the Arabs\nup propane because they could come in and\ntion as the clearing house for all of its con-\nhave oil in the Middle East in known reserves.\nbuy propane. But propane gas is what the\ntacts with government.\nThe problem is to get it out. You can mine\nfarmers depend on to dry their crops and to\nSo that they could get a system which\nthe shale. You can cook the oil out. Then you\nheat their homes and they are small buyers.\nwould accelerate and maybe cut down on the\nend up with what I call talcum powder which\nThey are not big buyers. So the next thing\ntime because with a loss or time due to the\nis in a much larger volume than the shale\nyou would have to have would be control of\ndelays and the suits that take place. This is\nyou have mined because it has been cooked\npropane and it is just going to take this gov-\na very, very serious thing in terms of cost\nand 80 it is not dissolved. There is very little\nernment one by one further and further into\nand expense.\nwater where the shale is. Therefore, what do\ncontrols and the more government gets into\nI would also say the way the legislation is\nyou do with the stuff? You could fill a valley\ncontrols in my opinion the more they distort\nbeing drafted it would give the board the\nbut if you have a heavy wind, this stuff is\nthe economy and make it difficult for us to\ndiscretion, a five-man board the discretion\ngoing to blow all over the west.\nget back on a sound basis.\nso that there wouldn't be a basis for suits.\nAgain, you can do an experiment for $200\nTherefore, in conclusion, it seems to me\nIn other words, you couldn't sue the cor-\nmillion of trying to develop In-Situ produc-\nthat this idea of the government acting as a\nporation for a decision because all of the key\n20188\nCONGRESSIONAL RECORD-SENATE\nNovember 17, 1975\ndecisions are left to the judgment of the\ntype of plant such as the rubber plants in\nwillingly enter into such contracts, but if\nboard.\nWorld War II. Is there any way you are going\nyou do you could do that right now without\nTherefore, there aren't criteria and there-\nto insure that this legislation is so worded\nhaving to have the lease-back arrangement\nfore hopefully we can keep this from getting\nthat someone of a different philosophical\nand the Federal Government build the\nanother-I hope too many of you aren't\noutlook cannot turn this energy independ-\nplants.\nlawyers because I don't want to cut down\nence agency into a Federal oil and gas cor-\nThe VICE PRESIDENT. Great. Then we\non the business-but hopefully we can get\nporation running the same way as TVA?\nwouldn't have to put any Federal money in.\nthis thing so that we can get it rolling and\nThe VICE PRESIDENT. It requires that every-\nQUESTION. I would think that would be\nget action fast and decisions made the way\nthing be sold and that it be self-liquidat-\nthe place to look; is the Federal Government\nthey are done in private enterprise as dis-\ning and it be done through private enter-\nusing its influence with the State commis-\ntinct from the way they are done too often\nprise and with private enterprise participa-\nsions to get the rates up? That will bring\nin government.\ntion. I think the private enterprise participa-\nthe capital in and you won't have to build\nThat I think is the summary. Any ques-\ntion is one of the most important. For in-\nthe plants through the government.\ntions we can get into would develop details\nstance, if you build a power plant, atomic\nThe VICE PRESIDENT. There is only one flaw\nof the situation, but that in essence is the\npower plant under lease purchase contract\nin your argument, if you will forgive me-at\nsummary.\nwith a contract with the Public Service Com-\nleast a political flaw; and, that is, as one who\nI should say perhaps what makes me think\nmission, you actually then have a contrac-\nonly two years ago left Governorship and who\nit will go through Congress. This is some-\ntual relationship so that the ownership, un-\nsaw the beginning of the pressures due to,\nthing that labor wants very badly. It is jobs\nless somebody abrogates the contract, is in\nfirst, ecology on using non-sulphur fuels and\nthrough industry and not jobs through dole.\nthe hands or will be in the hands of the\nthe increased cost in getting the non-sulphur\nTherefore, I am pretty sure labor is going\nprivate enterprise. Nothing will be done\ncoal, non-sulphur oil; then the embargo and\nto give it very strong support. If industry\nwhere the government sets up some new\nthen the world price increase of 500 percent.\nat the same time feels it is desirable and\nform of TVA.\nThese poor public service commissioners have\nworthwhile and gives it support, then I think\nIt happens that the Governor of Pennsyl-\nhad to take double and triple the cost of\nits passage has got very great. potential.\nvania who is a declared candidate for the\nelectricity to consumers, if not more.\nIf industry is opposed to it, that will nul-\nPresidency, Governor Schapp, has got a pro-\nTheir problem is right now that they have\nlify labor support and probably nothing\ngram he has been trying to get-I don't know\ngone through so many increases-this is true\nwould happen. But I think it is a turning\nwhether it has surfaced yet-other Gover-\nbecause I was very close to the commission\npoint for this country and if we don't have\nnors in the Eastern Seaboard to join in spon-\nthere and when I got a new commissioner,\nenergy we are not going to have growing In-\nsoring which involves a TVA at the mine\nChairman of the Commission, who had been\ndustry; if we don't have a growing industry,\nheads to produce electricity at the mine\na strong consumer advocate, I said, \"Look,\nwe are not going to have jobs and we are\nheads which would be owned by the govern-\nin your advocacy of the protection of the\ngoing to have a lot of problems. We have\nment, mined and then distributed from\nconsumer do you include-this is before I\ngot them, but they will be worse.\nthere.\noffered him the job-the protection of the\nThank you.\nSo that I think-that we are on the verge.\nconsumers' need for additional power in the\nAre there any questions?\nI flew to the coast Thursday night with a\nfuture? If so, do you visualize that that 18\nQUESTION. Mr Vice President, could you\nSenator who has introduced a bill to break\ngoing to take higher rates and more money\nrelate this program to the $6 billion syn-\nup the oil business and have just producers,\nin order to get the capital in?\" He said, \"I\nthetic fuel program that we read about re-\ndistributors, marketers, each one would be\nread you. I agree with you and you have no\ncently? Is it part of it?\nin a separate company. I only mention that.\nproblem.\" I took him on.\nThe VICE PRESIDENT. The $6 billion syn-\nThis is a Republican and it shows that people\nHe did a superb job. He was pilloried by\nthetic fuel program is one that Senator Jack-\nare looking in Congress for ways-or politi-\nthe public. He was sued by my own attorney\nson has proposed. It hasn't passed yet. So\ncal in political life-of being responsive to\ngeneral. (Laughter) It was purely political. I\nwhat we did in the thinking on this was to\nthe public but not, in my opinion, too clear\nlove him, too, and he was sued by the city.\njust make a provision that they would be\nas to what the impact would be on our\nIn other words, these people have been in\ncomplimentary if that passes. In other words,\nsystem.\nthe most difficult political situations because\nof course, that is an outright expenditure.\nSir:\nevery consumer of electricity-I can only\nIn other words, that is government putting\nQUESTION. Mr. Vice President, you indi-\nspeak for New York, but I suppose it is very\nthe money in the budget expenditure. This\ncated that this authority would be able to\nsimilar in other parts-has just gone through\nother one is a loan or an investment or a\nproduce hopefully about 14 percent, I believe\nthe most unbelievable increases in cost.\nguarantee of a loan and on a self-liquidat-\nyou said, of the energy needed?\nSo my reason for thinking what I say is\ning basis. So that is the difference. But if\nThe VICE PRESIDENT. Capital.\nthey would be so glad to see something built\nthat one passes, fine. Whatever they do that\nQUESTION. Of the capital.\nthat will protect the needs of the community\nwouldn't have to be done here.\nThe VICE PRESIDENT. Of the capital needed\nbut doesn't have to raise the rates until fur-\nSo that they will be totally complimentary.\nto meet the self-sufficiency.\nther down the road when they may not even\nQUESTION. Mr. Vice President, you men-\nQUESTION. Is there some way this could be\nbe on the commission. (Laughter) They\ntioned many of the traditional sources of\nhelpful if private industry does not come\nwould be very happy, in my opinion-this is\nenergy but you hardly touched on solar\nforth with the other 86? Do you think there\na political judgment-to sign a contract for\nenergy. I wonder. Here is one that has few\nis any problem in that other 86 being raised\nthe future whereas they could not go through\necological problems and would it be partic-\nduring that period of time?\nanother major increase now particularly as\nipating in this program and how?\nThe VICE PRESIDENT. Let's take a case in\nthe people aren't going to get the benefit for\nThe VICE PRESIDENT. Again, solar energy\npoint. Let's say they invested $200 million\n11 years. The alternative to this is, what is\nand thermal energy are very important parts.\nin either an In-Situ gasification of coal or\nhappening again in New York State where\nThey are not large scale producers of energy\nIn-Situ gasification of oil project and it\nwe had an authority which was created to\nimmediately, but they are very important\nproved to be within let's say lower cost of\ndevelop hydro-electric power on the St. Law-\nparts of the program. Any group who has\npresent imported oil prices. I don't think you\nrence with Canada. Each of us has a power\nsomething, who wants to produce any new\nwould have to worry about it because the\nauthority. We run it jointly.\nprocess or develop equipment or whatever or\ngovernment would not continue. They would\nThis power authority now being the only\nmay be for solar energy would, if they can't\nsell, either sell the process or make it avail-\none that could raise the money has already\nget the funds themselves, be eligible for as-\nable, whatever the procedure would be,\nbuilt one atomic power plant. It is now going\nsistance in the way of a loan, a loan guar-\nwhatever they did in the rubber research\ninto a second atomic power plant. It has\nantee from this authority.\ntype of thing. I think you would find then\nbuilt the grid to connect it and the first\nI should mention also that conservation 16\na tremendous amount of capital. Capital\nthing you know we are going to see this\nincluded in here. In other words, support\ngoes where it can get earriings. If capital can\nsame thing happen that government is going\nfor the conservation of energy if that can't\nfind attractive earnings in producing energy\nto come in to meet the demands. I just think\nget its own financing because you can save\nin this country for self-sufficiency, they will\nif you believe in private enterprise, if you\na lot of energy which would reduce the need\ninvest in it. If they can't, they will invest\nbelieve in the capitalist system, you have to\nto produce it; and that that is part of this,\nin the McDonald Hamburger stands, not that\nstand up and see what does it take to help\ntoo, Pipelines are included in this as eligible\nI am against them. I am for them.\nthat system work? You have got the very\nif they can't get the financing.\n(Laughter) But they are not going to solve\nsimple and right answer. If government\nAlaska could produce an awful lot more\nour energy problem. We have a free capital\nwould just get off their backs, then we\noil if they opened up more lands; five, six,\nmarket. They go where the returns are. The\nwouldn't have any problem. But this is a\nseven million barrels a day. That would\nquestion is can the government help point\ndemocracy. Government is the creation of the\ntake four or five pipelines. So you are talk-\nthe way to good returns?\npeople and it has got politicians like myself\ning a lot of money and that has to be bal-\nQUESTION. Sir, you mentioned in connec-\nin it and they may not be always as totally\nanced out.\ntion with the nuclear power plants a con-\nobjective in their views of what is needed\nSir:\ntract between the Federal Government and\nbecause of these political pressures. There-\nQUESTION. Mr. Vice President, you had\nthe State Public Service Commission. I don't\nfore, I think here is a possibility\nmentioned the government-owned, contract-\nthink you will get many States that will\nIf we can do what you say, perfect. They\nNovember 17, 1975\nCONGRESSIONAL RECORD-SENATE\nwill try. But we talked about shortcutting\nof those, including Anitrust, and so forth\nsome of the environmental requirements. If\nand so forth. So they finally had to give It up.\nyou did that, the legislation would be killed.\nIf there is a central group and you get\nSo we have got to live within this, but let's\nsome very able people who understand the\nhave a central point where we can clear all\nlaw, the ecology, production, and so forth, I\nof this stuff and where you develop perhaps\nthink this unit could become an extremely\nstandard forms and so forth and to the degree\nefficient unit.\nwe can get what you suggest, wonderful.\nI am not sure why in many cases these\nThen no money would be needed.\nthings can't be standardized. Why do you\nThank you.\nhave to spend a great deal of money each\nSir; way in the back?\ntime you file an impact statement, start-\nQUESTION. Mr. Vice President, I am won-\ning from scratch? The impacts can't be that\ndering about the effect of this plan on com-\ndifferent. There are certain criteria that go\npetition within the LNG industry. For ex-\ninto them. I have a feeling, I don't know, I\nample, if one small project were to be given\nhave a feeling this could be a very interest-\nsubstantial Federal help or one Alaska pipe-\ning and useful step.\nline, what would the effect be on other appli-\nThank you very much. I apologize for\ncants who didn't get help?\nhaving to go, but I go to open the Senate\nThe VICE PRESIDENT. There is a very in-\nand I am not allowed to speak there. That\nteresting thought here and that is I think-\nis why perhaps I talk so long here. I can't\ndon't hold me on this one-but I think it\nspeak up there without unanimous consent,\nwill be in the legislation that no loan would\nwhich I don't get very often.\nbe made below the rates of what a prime pro-\nI would love to follow up. If any of you\nducer of energy can get in the open market.\nhave questions as time goes by on this, of\nIn other words, the government won't come\ncourse, you get the legislation shortly. but\nin and take a weak company-this is not a\nI would be delighted to see them because to\nbailout. This is not going to be for the bail-\nme this has got to be the heart of our future\ning out of a defunct company. This will only\nstrength and vitality as a nation: our ability\nbe to produce energy to achieve these goals.\nto meet our people's needs; to provide em-\nBut the rate of the loan would not be lower\nployment; to be secure and to meet our re-\nthan what the prime rate would be for a\nsponsibilities around the world.\nsuccessful company.\nI think we have got to get rolling as far\nMost companies will not want to borrow\nas this economy is concerned if we are go-\nfrom the government, I imagine, if they\ning to stay the leader of the free world or if\ncan get it from private.\nthe free world is going to have & leader. Let\nSir?\nme put it that way.\nQUESTION. What provision is made, Mr.\nThank you very much, indeed.\nVice President, in the event that loan is in\ndefault?\nMR. MEANY'S STATEMENT\nThe VICE PRESIDENT. I think the plant, the\nOn the basis of the analysis and recom-\noperation, whatever it is, would be completed\nmendations of the AFL-CIO Energy Policy\nand the property sold. They take a loss. If\nCommittee, the AFL-CIO endorses the con-\nyou are in this business of trying to produce\ncept of the Energy Independence Authority,\nrisk or go into risk areas, you are going to\na proposal initiated by Vice President Rocke-\nhave some major successes and some failures.\nfeller and introduced in the Congress by the\nI think that is why 25 percent of the capital\nFord Administration.\nor 25 percent of the $100 billion will be equity\nPrivate industry, left to itself, cannot and\nand 75 percent loans.\nwill not resolve the energy crisis which still\nI hope that they will make enough suc-\nplagues this nation. The American people\ncesses which they can sell at a profit to over-\nshould not be deluded by the current easy\ncome the losses which would be at & loss, you\navailability of energy supplies. While the gas\nknow, where there would be a default. But\nlines have disappeared, the dependence of\nthen they have just got to sell it. This is spe-\nthe United States on oil from Insecure foreign\ncifically stated not to become a government\nsources still exists. This nation is more\noperation.\nvulnerable to an Arab oil embargo today than\nSir?\nin 1973. Government must provide the\nQUESTION. Mr. Vice President, please de-\ninitiative and incentive for development of\ntall a little more of this clearing house con-\nenergy projects that will place this nation\ncept. What authority would that have? Is it\non the road to energy independence.\nadvisory primarily? Is it in the ecology field\nIt is estimated that capital in the amount\nonly? Or could it spread to other areas of\nof $600 to $800 billion will be needed in the\nagencies?\nnext ten years to finance investments for\nThe VICE PRESIDENT. Any clearances that\nenergy independence. Most projects would be\nwould be by & division of FEA which would\ncapitalized from private sources; however,\nspecialize in government clearances, of all\nthose deemed vital to the national interest\ntypes, and so if there is a project which con-\nbut unable to secure private capital, would\ntributes towards energy self-sufficiency, fl-\nbe financed through a new government cor-\nnanced or not financed, partially or not by\nporation with authority to make direct loans,\nthe government, they would be eligible, to\nprovide loan guarantees, and other financial\nhave all of their clearances done through\nassistance to energy independence projects.\nthis division.\nWhile the AFL-CIO does endorse the crea-\nThis could very well lead to recommenda-\ntion of an Energy Independence Authority\ntions—I think it will be so stated in the leg-\nand the basic program set forth in the\nislation-as to simplification of clearances.\nbill, we expect to have a number of proposals\nTo me the most interesting case, a friend of\nfor improvements in the specific terms of\nmine who is a lawyer in New York tried to set\nthis measure.\nup a corporation for the seven utility com-\nAt the proper time, we will testify before\npanies in New York State last year, which\nCongress on the legislation and will make\nwould be a financing construction company.\ndetailed proposals and suggestions to\nThe credits weren't strong enough to do it\nstrengthen the bill.\nthemselves so they wanted to set up a joint\nThe federation's Energy Policy Commit-\ncompany.\ntee-composed. of Secretary-Treasury Lane\nHe said there were, I have forgotten, 14,\nKirkland, Vice Presidents Paul Hall, Martin\n17 different regulatory bodies, State and na-\nWard, William Sidell, A. F. Grospiron, Mur-\ntional, which were involved. He could not\nray Finley and Joseph Keenan-will continue\ndevice a corporation which could meet all.\nits study of this and other proposals."
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