Conversation 122-003

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So any person who would say, look, I'm going to be included in the energy, they find that.

So all of you would recognize that you were here because, and I'm speaking for you because either you're the chairman or ranking members of the committee.

They couldn't have mom.

As far as two or three others here, they have, you know, presented paper and spoke directly to me.

That'll sort of protect our lives.

Thank you.

without going into any general talks that everybody wants to do.

This stuff is important.

I'll simply characterize it at the beginning by saying it has been customarily referred to energy as the energy crisis.

That's kind of the language we use about all these things.

If we're an energy crisis,

And that characterization was in Iraq.

We will be paying a different degree of attention than we are today.

It is a very serious problem, but it is not yet in crisis.

And the actions we take following this meeting will keep it from becoming a crisis.

That's what this is all about.

And I think that the crisis attitude and attitude

My lights are going to go off, I'm going to rag them against me, and so forth and so on.

And perhaps we'll have maybe sporadic problems in different parts of the country, as there have been over the years with a variety of reasons.

As far as the energy requirements of this country are at the present time, it is not a crisis in proportion, as various reasons will show.

However, the problems in the future are enormous.

I'll just close with one final thing, then.

We've been thinking about this problem.

As a matter of fact, ever since the election, over the past three months, I've been reading on it interminably.

And it involves some very difficult political calls.

It involves, for example, some of us around here who went through...

We've got to tackle the price of natural gas.

This hasn't passed.

We've got to tackle the whole question of the environment.

And we've got to choose.

Do we want a beautiful environment with our lights so that we can see it?

We prefer to have those lights so that we can see whatever the environment is.

I'm over-dramatizing because there are many environmentalists around here who are going to say, well, maybe electric light is a bad bench in the first place.

It requires us to burn coal and create smog.

It makes it very difficult.

I've gone through all of these top political calls and I've made them myself, and I don't try to tell

I just want you to know, I thought of these things.

I thought of all of these things very thoughtfully.

Because we have to look down the road to this point.

Five years from now, and in various areas one year from now, or one month from now, that we could have a crisis in various areas in five years from now, and maybe 10 years from now, we could have an anti-crisis again.

Unless we act now.

Under these circumstances, we decided to tie this company back.

I remember we had an airplane go into California by the breeder end.

We made that decision.

We thought it was despite the fact that many people are afraid of any kind of use.

Your area was not sophisticated enough.

Fast move, you've got to move.

Move in that direction, you've got to move.

But the breeder reactor is going to be on straight.

It'll be mighty handy around 10, 15 years, not a woman.

And we may need to broaden this before we ever get that number.

Nevertheless, we started with those actions.

But now, to the presentation, which John Erdman will moderate, and which will cover, I guess, the waterfront.

But I have no advice or questions.

Mr. President, Mr. Speaker, gentlemen,

The agenda this morning is designed to leave as much time for your questions as possible in recognizing that in this room there are a number of members who have shown a great deal of leadership and have become exceedingly familiar with the intricacies of this subject.

I'll cover very briefly the present legislative posture of the subject.

Secretary Schultz will give you a rather full development of the proposals to the energy

Henry Kissinger will talk briefly about the foreign policy implications.

And we try to leave a rather generous portion of time, we hope as much as 30 or 40 minutes, for your questions and comments.

This is the work product of a subcommittee of the domestic council, which has been chaired by Secretary Morton, and a working group, interdepartmental working group, which has been chaired by Peter Plank,

which has been at work on this problem for well over a year.

Just one personal note, I saw Raj out on the West Coast when he was there.

He's coming along, he believes, quite well.

I discussed his message with him, and he's been in constant touch with him.

He is able to work, even though he isn't able to be here today, sir.

As you know, a committee in the White House has been operating for the past several months

consisting of Secretary Schultz and Henry Kissinger and myself, and backed by a very able staff headed by Charles Dibona, who is here.

I'm going to suggest that Mr. Dibona should simply preside over the question period to save time.

He's the technical expert in the room on this, and I think through his ages we can figure the questions in.

I need to say that we have four

Pieces of legislation presently before the Congress are referred to in the message.

The power plant siting bill, the mining areas bill, the Alaska pipeline bill, and the DLM organic act.

I won't spend any time describing those to you, but if there are any specific questions or comments, we can talk about those during the question period.

New legislation, which will go at this time.

There are three pieces.

a resubmittal of the Santa Barbara Channel legislation, which contemplates the reacquisition by the government of those oil leases in the Santa Barbara Channel where we had the blowout and seeding problems to prevent any likelihood of the development of those leases.

Secondly, the Deepwater Port Facilities Act

which conflicts the licensing of deep water ports outside of the three-mile limit by the federal government at appropriate places.

This is an extremely important piece of legislation in view of the trend in oil transportation towards supertankers, and it could result in real benefits to the American petroleum consumer since the establishment of these deep water ports can cut freight as much as 30% the cost of freight

I said, what have these water ports got to do with this whole thing?

We don't have any port in the United States today that will take any of those great big tanks.

That's crap.

The ones that are being built will have no ports to take any of the ones that are being built.

So 400,000 tons is what we just had.

That's correct.

The third piece of legislation is why the president referred to pricing of natural gas, natural gas supply.

This provides that new natural gas, either new development or new dedications of natural gas to interstate commerce, will be in effect deregulated so that the price of natural gas can keep the market price subject only to an additional rate.

and the Secretary of Interior to establish a ceiling should we find that the market price becomes unreasonable.

Brief interruption here at this point.

We had a tough political call.

The purists in this area said we regulate natural gas security.

And that actually, if we didn't have the problem of people concerned about the price of natural gas, and we're thinking only primarily of energy, it would have been the right thing to do.

The difficulty with deregulating it, old and new, and I talked to Russell Long about this, who had a great interest in natural gas they produced in Louisiana, and he agreed the difficulty with that, it would be a bonanza to not only would it raise prices immediately, but it would be a bonanza to those

who had to drill their wells and were producing at the present time.

So this is basically a compromise, right, John?

Yes, sir.

As I mentioned to you, General Howfield and Craig Cosner just before the meeting, we are not submitting at this time our bill for the establishment of the Department of Energy and Natural Resources.

As you will recognize, that is a different proposal than our Department of Natural Resources reorganization bill, which we submitted in the last conference.

It's still at work.

We're still conducting consultation with members of Congress on the proposals, and it would be the subject of a separate set of briefings, and we're simply not prepared at this time to say that we have concluded our consultation sufficiently to move forward with that piece of legislation.

So that's not a subject matter of this message, except in rather collateral terms of the message on organizations.

Now that is a very dumbed-down text.

I'll be glad to take your questions at the question time on this, but I'd like to yield at this time to Secretary of the Treasury in order that he can give you a much more detailed view of the contents of the message.

President and my fellow speakers, let me just say one word of background that reflects

recent experiences that I have had in negotiating on international monetary matters, it was quite striking to me in these various meetings, three major meetings over the last month, that there were, in a sense, two agendas in every meeting.

We met and we talked about the international monetary system and so on and the problems with it, and that we'd have a coffee break or go to lunch or something

And always somebody would take my arm and take me off in the corner and say, now the real problem here, George, is energy.

And what are we going to do about it?

It is a world problem.

Of course, from the standpoint of the finance ministers, and they don't have a full view of the matter, but in some ways money does sum up the problem.

It becomes very dramatic.

We see, for example, that if you

If you look at the reserves, not the oil reserves, but the financial reserves of the oil exporting nations, they represent about $10 billion right now.

That's a manageable number for the international monetary scene.

On the other hand, if you project out current trends, you take varying price assumptions,

Assume, commonly, you take $4 oil or $5 oil like that, you have $5 oil, you get very quickly up to a flow of receipts to the oil-producing nations on the order of $60 billion a year.

And if you net out from that their imports,

you still see that reserves accumulating at the rate of, depending on your assumptions, $10 to $20 billion per year, and half of that in Saudi Arabia all by itself.

Now, that is a problem that really stimulates the imagination of financial people, not only from the standpoint of how to make the monetary system work,

but also from the standpoint of what it suggests about trading patterns, because each of these says to itself, I had to generate a terrific flow of exports in order to have the wherewithal to pay for the energy I need.

And so it was a terrific strain on what's called the non-energy trading system.

So I just mentioned that as a bit of background to show how people are, not only ourselves, but around the world about this problem.

And in a sense to say that the projections that are put forward are, in a way, projections that you can't allow to come to pass.

Therefore, policy actions of one kind or another need to be taken.

In our case, we're much better off than Western Europe.

We're much better off than Japan because we have so much...

Energy, here ourselves, oil, gas, coal, nuclear, and so on.

We're much better than that.

Hydro, don't forget.

Hydro, thanks.

There are, there are, but I think I've named the main one.

So we can have a strategy, and then we need to implement it with real effort, and we can, I think, get somewhere with this problem.

Now, in terms of the overall strategy that's represented in the message,

It seems to me it would be, well, described like this.

We want to build up our domestic resources in as powerful a way as we can through integrated policies that affect incentives or price or whatever you want to call that.

Work on the environment.

How can we do the things we need to do in a way that is compatible with environmental needs?

And to a great extent, these things are going to be done through the application of resources.

So that is part one of the strategy, how to build up domestic resources.

In the meantime, number two, we need to meet our immediate needs.

And we know the only way we can meet our immediate needs is through importing oil.

import other things too, but basically oil.

So we have to meet these immediate needs through imports.

But we need to so construct our import system that it provides the kind of assurance and continuity and incentives to encourage our domestic exploration and development.

Thus, we work toward, over a period of time, a much greater element of basic self-sufficiency.

And in that process, we not only become more self-sufficient ourselves, but we provide a powerful bargaining lever against the high prices that now have come to pass for the oil that we have to import.

Those prices are basically

what the market will bear and are a long way away from the actual costs incurred in developing the oil.

So that is, by the way, an overall strategy.

And without wanting to repeat at all the things that John has gone over, let me just quickly identify the elements here as I see them.

First of all,

I found that working on this, I revisited the subject of the oil import control system, although Bill Simon, the Deputy Secretary of the Treasury, has been chairman of that committee and has worked out the program here.

We have found that the present quota system has become obsolete.

There are annual realignments continually taking place within it.

There has been in force a frequent alteration of the program that's led to a kind of patchwork quality to it as we try to meet this need and that need and some other needs.

And the dissatisfaction that has emerged with the program has led to a lot of uncertainty in the industry about what is actually going to happen.

It's difficult for them to make their plans under those circumstances.

Therefore, the President has decided that we should change the system, not eliminate the oil import program as such, because we need it in order to stimulate our own production, but to change it in a way that we think suits the future better than the present situation.

And this calls for, first, the elimination of all quantitative restrictions on the import of oil.

Second, Georgia used importance by eliminating, and we're not talking about temporary, that's...

Right.

Well, of course, I think it's temporary because you can always reestablish it by something later, but...

What we're doing is we're fighting the bullet here.

There's a lot of talk about how we can eliminate for a while.

This is eliminating truce.

Let me just go through it so you can see the structure of how this is going to work.

Well, I think the oil industry has been shifting its view on this program quite drastically.

And in fact, everybody's thinking has been stirred up tremendously by their realization of the energy problem that we have.

But first of all, we would eliminate quantitative restrictions.

Second, we would move to a license fee system for imports.

That is, if you want to import, you have to get a license, and then you pay a fee.

And there is a schedule, a two-tier schedule of fees that are identified, starting with the present fee structure that is represented by the tariff, which is paid on all imports and which would be eliminated and replaced by this fee.

Then as a transition measure, we would have the present quota tickets that are given out

And people holding those tickets would be entitled to import without paying a fee.

So they would have a special advantage.

Now, the reason for that is for a two-fold transition consideration.

Number one, we have many independent refiners who have come into business and made their investments and so forth on the basis of the present system.

and who also have an important role to play in meeting our immediate needs.

And the act here of giving the quota tickets at least some value means that they can make trades with the crude imported companies and get crude into their own refineries and continue to serve the country and themselves.

So you have that transition problem.

The second is that by allowing people with quota tickets to import

without paying the fee.

Since there are enough quota tickets to cover virtually all the imports we would want this year, we give attention to our own internal inflation and price problem by not having the price of oil raised by the imposition of a fee right now.

So we are changing the system as a long-run proposition, giving, I think, a greater sense of assurance to the industry

about the conditions under which they will operate.

And by having this be a much lower fee on crude than on product, we encourage domestic exploration and production, because this means the U.S. price will be higher than the world price.

And we also encourage the development of refining capacity because the fee on product is higher than the fee on crude.

And we haven't had a refinery built in this country, I think, since about 1965.

And we need those.

So this is, there are various special arrangements that I think take care adequately of the petrochemical industry and others with special problems, as you'll see when you look at this.

I think the program to get in court, what we can and what we need only highlights the point that John made, Senator Maxson made earlier, and that is the importance of these court reports.

I won't say any more about that, but it's obvious.

because we're going to have substantial imports.

We should figure out how to get those imports in the most economical way and from all we can understand in the way that is most considerate of environmental problems.

Both these things are better met by deep water ports and large tankers than our present small tanker system.

John has mentioned the

move on natural gas, the President has expanded on that somewhat, that we think is a very important part of this fully packaged.

Here we have a situation where the price is so low that we encourage uneconomic uses and we discourage production of the best fuel we have, the easiest to use and the environmentally the best.

So I understand it's the cleanest.

It's the cleanest.

It's the one fuel the environmental support.

Yes, and we are so pricey that we discourage the production of it.

And we encourage, you know, this is one of the more affluent friends of mine commented.

He said that, you know, if the price of natural gas were a lot higher, I wouldn't use it to keep my swimming pool all winter.

But it only shows the sense in which this very low price has led to money cannot be used.

Now I think from the standpoint of the consumer, in addition to the protection of the convention of a power on the part of the Secretary of Interior to oppose stealing if the price runs wild, that there's also the protection that the roll-in of new gas

means that the consumer is not going to be immediately hit with an entire price because you don't get new gas until you find it and produce it.

And at the same time, as you know, the well-had price of natural gas is less than 20% of the delivered price, so most of the price of natural gas is found in the transportation system.

As part of the process of developing our own resources, of course, we have the Outer Continental Shelf and we have Alaska.

Forty percent of estimated reserves are in the Outer Continental Shelf.

And we need to get at these reserves and produce them and bring them in.

The program that the President has decided on would triple annual leases by 1979.

And this means in the Gulf, expanding leasing beyond the 200-meter depth.

It means in the Pacific, resuming leasing beyond the Channel Islands based on individual environmental assessments.

And the Santa Barbara legislation to repurchase is resubmitted.

In the Atlantic, the Council on Environmental Quality will lead a study which we expect can be completed within a year on how to handle the leasing there.

And a geological survey work will be undertaken in the Alaska Gulf to move that along as best we can.

Now, beyond that, the president is proposing the application of the concept of the investment tax credit to exploration for new oil and gas, new oil and gas.

And the way this would work is that you would have, in effect, the tax credit on intangible building costs.

And it would apply at a 7% rate.

In the case of a dry hole, it would apply on a 12% rate.

In the case of a wet hole, that is, we want to pay off more on success than on failure, but still encourage people to take the risks that are involved in finding a dry hole.

We have worked very hard on the question of how you tell new exploration from development, and we feel that we have a method of doing that.

As far as the elastic pipeline is concerned,

We feel that we need that desperately to delay too long, just to, given the present estimates of Alaskan reserves, the output from Alaska could be the equivalent of a third of our present imports.

So it's potentially a great opportunity.

source, and I think there are grounds for believing that once that deal is really opened up, we will find that it contains a lot more than is currently estimated.

And here we have the right-of-way bill that you have before you, that Senator Jackson has about reported out, which plays a critical role here.

So that was my recommendation for a week.

I know this has been highly controversial.

One, environmental standards.

And then two, one of the things that has made it, why not go through Canada?

And also the idea of the Midwest is going to take a bad rap here.

Martin prepared an excellent three-page single-space.

It's going to take you a time to read it.

letter on this which he gave me in California at the time that he made his statement.

I think it answers these questions very effectively and many of you are pretty interested in it.

The department is just asking the jury department to present over the Martin letter in which he recommended that we forward this legislation.

Yes, go ahead.

It tries to, I think, you know, it tries to, but it might very effectively answer the environmental question, the question about why you can't go through Canada.

Incidentally, I don't know why that states.

I mean, we cannot have Canada with much as we love Georgia, you know, they call it the Georgian thing.

The Canadians have it, too.

But much as we love the Canadians, we cannot let the future of oil and gas in some of the countries

To that extent, there's a couple of companies we left in the hands of the Mideast.

Well, I think in order for, if there is eventually a Canadian pipeline, it couldn't come to pass unless a substantial fraction of the proposed Alaska pipeline were built to begin with.

And so the right-of-way provisions that are provided for are necessary.

not only for that but for all other pipelines in the country.

So I think there's a very secure case there.

The subject of research and development is a matter of central importance in all of this.

The federal budget has increased in its size

The 1974 budget is double the 1970 budget.

There has been an escalating amount of money spent in research and development in this area.

Certainly, as the future unfolds here and as we find useful, significant and effective ways to spend money, the criteria that the President proposes is that as we find these, we should find the money to do it.

So that the test is whether or not you have an effective, non-wasteful way to spend money in this area.

Now, beyond that, however, is the question of the organization of R&D.

And we feel that a structure of organization that gives a strong play and incentive to private efforts in R&D is very important.

private enterprise spends about a billion dollars in R&D per year in this area.

And that is a very important component of the total picture so that we have to figure out how to conduct this in a way that doesn't disparage that private R&D effort, but at the same time puts the massive federal thrust in on the types of projects particularly that are very long payout and very large in scope.

The R&D subject, of course, applies to many of the fuel types of questions if you take coal.

The question of how to burn that either in a pre-combustion or post-combustion cleanup manner is a central matter for research and development, as are other aspects of the coal subject.

There and in other places, the R&D subject is of great importance.

Just a word, and then I'll sit down on the subject of nuclear developments.

There are all sorts of aspects to that subject, as we all know.

Any very expert people here that work on that?

It is a striking fact that if you take the same American company,

building the same nuclear power plant with known technology and everything today.

And they build it in Japan or Western Europe.

They can build it in half the time, roughly, that it takes to build it in the United States.

Why?

Because of the procedural problems that we have erected in this country for allowing somebody to go forward

and for once they have gone forward and actually built their plan for allowing that plan to go critical and actually produce the power.

So we have done this to ourselves, and there is a proposal that the President is putting up on the Electric Facilities Citing Act to provide one-stop licensing to air all of the problems that our President couldn't get a decision

and hold that decision and let this work go forward so that in this area where we have been the pioneers, where we have the technology, where we know the engineering, where we're the best in the world, we don't find ourselves in a position of being the worst in the world as far as actually using it is concerned, just because of the procedural delays that we erect for ourselves.

Well, there are many, many other individual subjects, Mr. President, that we could

discussed here, and to some extent they take on the character of a laundry lady, but they're all important, and they all do fit together, and just like Jeff said on Earth, just because two or three of the members were out here expressed considerable interest in coal, and all we had on here on coal was just a research program.

Well, our problems involve, very quick, this is

Well, in coal, we have practically a limitless amount of energy available to us, and our problem is how to mine it in an environmentally attractive way.

Strip mining problem, drip mining problem, and once you use it, you've got the problem of the environment on the other end.

Then you have the problem of the environment on the other end.

It gives us the best coal from the standpoint of drilling, but the greatest environmental problem from the standpoint of mining it.

And I think that the approach to the strip mining and environmental issues is summarized well in a phrase I heard Senator Jackson use in saying that if you can reclaim it, you can strip it.

And that's sort of the approach here, to have our laws set so that we are in that posture.

And then I think these efforts to see how we can burn that coal more effectively from the standpoint of clean air are essential.

Beyond that, we feel that the state should be encouraged

to delay secondary standards where primary standards are not violated under the Clean Air Act.

In other words, if the health and safety standards are met, we can afford to delay some of the secondary standards in order to be able to burn this coal.

The more coal we deny ourselves, the more oil we have to import.

We've got to get this energy from somewhere.

So we can't cut ourselves off from the ability to get this coal and to use it.

And I might say beyond that, you have lots of jobs involved here.

in the coal mining areas.

And frequently you find that those are areas where alternative jobs are just not available.

And if we made it possible for that coal to be undermined, the economic structure is important sections of the country.

Yet that issue is so volatile and horrible that it can affect the governor's race.

So I think that, as I say, there's a tremendous amount to go through.

There's the whole subject of conservation, which is treated as a message and developing further points that are made earlier.

But maybe the best thing is

It's been very interesting to watch Henry become familiar with the domestic implications of the energy problem as we deliberated in this committee.

It's been a very interesting domestic problem.

Dr. Kissinger will ever return to Harvard or what he will do after he completes his career in government.

And his added interest in the domestic aspects and sort of the petroleum side of the energy problem has, of course, been lightened up by this whole study.

But contrary to the rumors that I've heard, he has not leased an Exxon station in Passaic, New Jersey.

Dr. Kissinger.

and whatever investments I make for my post-governmental career will be getting us closer better to hell.

I will speak to you

briefly and strongly counsel me on two separate occasions about the foreign policy implications.

And I will put before you not any answers in which we have arrived, but problems which we are now studying within the NSC system.

Phases for which we hope to have some tentative answers by early summer in place.

In any event, whatever conclusions we come to on the foreign policy and national security side, the measures that have been proposed in the energy methods are essential.

The problems to which we are trying to address ourselves are the following.

We have had a definition of the national security interest with respect to energy, according to which we should be as little dependent on foreign sources as possible.

What we are trying to examine now is the delight of the known reserves in this country, whether this is still the correct definition of the national security interest and at what period.

For example, what could make the case that if our own reserves are finite, that in peacetime that we should in any event develop the production capacity as much as possible

but that a case could be made for the proposition that in peacetime we should import relatively more to preserve our reserves for the case of coercion, rather than exhaust them under conditions where our imports can be more easily achieved.

We have not come to a conclusion yet on this.

It is one of the issues which we have put to our colleagues, which will be put to the National Security Council for consideration by the President, in which we will, of course, present to the leadership.

Another question concerns our policy with respect to the importation of oil from the Middle East.

Should we assume that our sources of supply are fixed?

Or can we direct our imports to certain friendly countries?

For example, we now face a situation where Western might, into Libya for example, is in effect financing anti-Western activities all over Africa.

Last, and in the Mediterranean last year, Libya nearly followed Malta

and withdrew it from NATO as a base and is the Maltese Prime Minister.

Could he figure out a way by which he could keep his population on the go?

and unemployed, he would have accepted Philippian subversion, which is larger than what NATO is putting into the name of it.

The only reason it failed was because Philippian, or the critical reason it failed was the Philippian prime minister thought that the social dislocation of having his whole population unemployed, even though they had income, wouldn't sell it.

might be more than you could foresee.

It is a tremendous power to put into the hands of a country with a population of two million and which is in effect using Western money to pursue an anti-Western policy.

So the question that we are addressing is whether it is possible in granting larger imports to shift the purchase of those to

whether we can produce at least more responsible policies by the way the advanced nations are handling their input.

Now this of course requires a degree of common policy among the energy consuming nations that has up to now not been conceived

You have the situation in Iraq, for example, where France moves in as soon as other countries get it difficult.

And the policy that we have, even if it's excessive, nor at all, will require a high degree of cooperation among the energy-consuming countries.

and an ability by the countries to understand that to try to take Georgia an advantage of the embarrassment of one of them is bound to be disastrous.

of the strategy to be pursued with respect to the foreign policy, there is the issue that oil prices will continue to rise as a result, or make it rise as a result, of the cooperation of the oil-producing nations in the organization of the trophy-producing states called OPEC.

And there again, we have the problem of whether OPEC

to continue to deal with individual companies, with individual nations separately, or whether the energy-consuming nations need to organize themselves in order to deal with the producing nations as a unit.

And if they organize themselves, whether to do this on a governmental basis,

but how the governments are then going to affect the private companies which have to conduct the actual negotiation.

Now it has proved extremely difficult in the past to bring about an organization of oil-consuming or energy-consuming nations.

And there is some question whether we could do better on our own

sent by an attempt to bring about at least common denominators of nations that may not vote together anyway, uh, in a, in a crisis.

And, uh, this, too, is a question to which we, uh, we have had great attention.

If I could take a moment here, speaking quite candidly in this room, we can discuss this quite often.

The difficulty we have here is that the United States, with a number of major companies, very big companies, but each up to very recently competing with each other, is not in a very good position or effective position to work in the international field where you are up against other countries

who, and this is a branch, and the Japanese, who work as an entity.

Now, you've got a problem here, and a trust that comes into it, a problem of cooperation of great giant companies who use each other's throats one way or another.

That's what happens.

The other problem is that the free world nations, and here again,

The Japanese branch of the United States have a lot of things in common.

None of them want the Libyans or any of these other nuts in that area to be getting greater influence in the Mediterranean or elsewhere.

On the other hand, they're all in business for themselves.

That's the problem.

Now the question is, we have two questions.

How can the United States, with its great complex of great companies, be more effectively as a unit in this area?

And it's not just in New York.

There's some others, too, where we have this problem.

But here it is right up to us.

And second, how can the United States get cooperation with the OPEC countries and so forth?

Now, these are subjects that we don't...

third round about publicly, but it is something that you gentlemen in this room should know is the hardest question.

Because if we continue to go as we are at the present time, we could have the major three-world oil-consuming countries in business for themselves.

And with the American companies competing with each other, they're going to tear us apart.

For example, the Iraqi, what do they do?

They expropriate and throw out the British and the rest of

The Franks come in and pick it up.

The Algerians, the Algerians may expropriate the Franks.

So El Paso Natural Gas goes to the Algerian and picks it up.

Now, if we continue to have that, the oil producing companies, the opportunity to play one game against another, and in the United States, one company against another, we're going to just lose our shirts.

Am I overstating that?

That's exactly the problem.

I don't have an answer.

That's what we're up against.

We've talked to the British about it.

We've talked to the Italians about it.

We'll be talking to the Germans.

We'll be talking to the Japanese.

Talking to the various American companies is quite a problem.

They're supposed to all be competing at the very end.

We'll have to hurry if we have any time for questions.

Sorry.

I take a hold of him, which I'd like to see back in my country.

I'm happy to finish.

The problem, then, is the political strategic one among the oil-consuming countries, the economic problem of how to prevent the oil-paying countries from operating an economic blackmail operation.

The problem that George Holt has already mentioned, how they will use these tremendous reserves that they're acquiring, which has, again, an automatic economic aspect of simply the way of these enormous reserves, but it can have the additional aspect of what happens when they begin to use these reserves strategically, which they have not yet done, either to disrupt international markets or perhaps to set up

to conduct a conscious investment policy that could have very serious implications.

Finally, there is the problem of whether in this situation there are some areas of cooperation with adversaries such as the Soviet Union.

In the natural gas area, perhaps even in the oil producing area, which we can use

opposed to the drafts of the energy-consuming nations, and partly to become part of the general strategy of developing other relaxation policies.

Those are the major problems that we now have in the energy systems, together with such issues as how, in a crisis,

the United States can use its own reserves for its own population as well as for a short period for some of its allies.

The fact that, contrary to most other energy-consuming nations, we have the advantage that we do have substantial reserves in our own country or under our immediate control, and therefore we have choices which other energy-consuming nations do not have.

And all of our experience and response indicates

that our energy policies can be one of the most creative aspects of our foreign policy in relation to Japan and Western Europe if we can design it in the proper way of whatever the answers to the questions I have put before you gentlemen.

The measures that have been outlined by John Luegmann and George Shultz

In any case, it's actually to give us the basis to act as the dependent representative of energy.

Just wait one second.

The data, the problem, the Stokkeism, which again shows the great problems of a three-nation, with numbers, as the company says, and dealing with one enemy.

Now, for the Stokkeism, in any company's name,

there is total linkage between the economic and political problems.

Second, progress in one field is inevitably tied to progress in another field.

For us, therefore, we look at our situation and we have to protect ourselves from what we may not talk about.

We certainly are going to judge

our forthcoming attitude in the political area by, to a certain extent, by what happens in the Medicare Commission and what's the way, the rule of life statement.

In fact, now, the problem, take the natural gas fields and so on, very big and so forth.

In present time, they're going to appear, the major problem, the major problem is the cost.

Even if they got it out of there and the ship's rest, the cost is still very high, right?

But that's of this time.

You should get the big ships and deep water ports and the pipelines.

I mean, maybe I don't know.

Maybe it is dependent.

That could be.

So that's something we'll be discussing.

But here's the problem.

Here you've got several American companies

trying to race each other to Moscow, and Moscow playing one against the other, which can get the better deal.

And that makes it very difficult.

The Soviet then can play one of our companies against another as an adjunct to their foreign policy, and we sit there and allow them to do it.

That, of course, brings us to another point, which is very, very sensitive.

And John, we didn't touch on it, but I suppose it's implicit in what everybody has said here is that we may have to re-examine the antitrust laws in some of these respects here.

Is that true or not?

Well, that's an ongoing, that's an ongoing... We've been in the area two years ago, sir.

But it's a, I don't mean to prevent anything to do presently.

But you do have the point that right at the present time in this field, you should all know we are talking to all the American companies, right?

That's right.

We're not telling them to get together.

We can't, but their own interests may require them to get together.

That may solve the problem.

Do you speak to Jordan?

Yeah.

Well, we have proposed in connection with the trade bill,

some modifications in the Whip Hovering Act that are designed to clarify the ability of consortia of American companies to work together and oversee.

And I think that is a partial move in this direction.

I'm sure there are other things that we've got to do.

But let me just say, for the benefit of the members here, as I look at the work

I look first at our allies in France and how they are able to handle it one way or another as a unit.

And particularly as I look at the Soviets, at the way they act as a unit.

The United States has got to find a way that a consortium can operate without being exposed to antitrust.

Now that's a nasty word, but...

If otherwise, we cannot solve the problem.

I'd like to introduce Charles Nibona, who is special counsel to the President for Energy Matters.

And I'd like to ask him, Charlie, to take your questions, and we'll attempt to back him up.

Yes, sir.

Senator Byrd.

Mr. President, for too long,

The funds spent for federal research has shown a great imbalance with respect to coal research, with coal research getting the short end of the stick.

That's early.

Yes.

And on July 19, 1973, the total funding for coal research goes to Bureau of Mines and the Office of Coal Research for $33 million.

FY1974, then about 76 million dollars total budgeted for coal energy.

What is contemplated in the program that we're talking about here today for FY1974 and annually for the next few years?

The total amount of research it holds is FY74 is $322 million.

That's 25% increase over FY73.

And it includes $21 billion allocated out of central funds.

We now have an energy budget.

So we'll have a total of about $120 million.

And we'll have big projects

spelled out over the year that will be funded out in 21 million dollars.

Those will be at present looks as if that money will go into things like speeding up coal and gasification, coal and ice bath, the processes for burning coal.

In other words, making coal available in a reasonably clean burning form as early as possible so that you can use this very fast.

So we certainly have to see it ahead, and I consider a good part of my job this coming year to examine R&D, particularly concentrating on what we can do to ensure that we can make a better use of resources, particularly coal, through increased R&D in that area.

Do I understand, let me ask you a second, do I understand you to say that the

research for coal gasification, coal liquefaction, et cetera, will come out of the $21 million bill, sir.

Is that out of the overall?

No, we already have $71 million of the $120 million in liquefaction, gasification, hydrodynamics, and other advanced key burning uses of coal.

In addition to that, we will spend 21 of the 25 million on, often at present, on how to pay for 2,500, 21 of that will be spent on COVID-19.

This also illustrates that in an area where public funds and private funds can work together effectively, we have encouraged that they have taken hold of the Edison Electrical Initiative.

of a big private research effort that is directed in considerable part, not totally, to these areas in the coal subjects.

And they are entering this year, I think, on the order of $100 billion research budget as a private effort, as they expect by next year to get up to around $130 billion or so.

And we have supported that by writing to public utility commissions and so forth.

suggesting that this is associated with the late days and so on.

But it illustrates this point that there's a federal effort and there's a private effort and they need to come together.

Let me say this, Mr. Secretary, the hotel is going to start its $25 million program, and it sells, which will be open for everybody on the cold.

Mr. Secretary, could I suggest that in this instance, you look at the situation, watch the cold research thing, and get on to Bona.

If you think these amounts are inadequate or they're being weighted or something, then we'll do that.

Because we're sure we can have that interplay between Congress and so forth and the administration, which is the way this thing works.

I may ask one quick follow-up question.

Supposing $120 million for research this year in FY74.

Now, what's the follow-up in terms of the FY74?

Yes, the next five years, I'm saying, because this problem is going to be with us for a while.

The 75 in later years is not laid out.

There has been a rather rapid increase in energy R&D.

We're spending 50% more on energy R&D than we did two years ago when the Clean Energy message came out, the President's first message on energy.

We're spending 20% more than last year.

At that rate, we're going to be making an awful lot of money.

in a few more years.

Some of that money for research into control of mine flooding and fires.

Part of that money is in his own research on coal mine safety.

You know how serious that is right then.

There are a number of projects going on in this area.

This money spending on research, we've been doing it for years, and it hasn't produced as much money.

I think it should teach us a lesson, probably, that in the management of this research, we have failed.

I don't know what the Department is going to do when these problems with colic and everything else, they span in interdisciplinary areas.

which he should have adequate advice so he can not only determine what the federal programs are spent on, but the coordination with the private enterprise program.

And so far, I haven't heard anything, Mr. DeVore, about you getting advice from somebody like, well, our national editor.

We sell you for this kind of purpose, but nobody's taking advantage of you.

Are you going to just spend this money like you've been doing it before with the coal research bureau and places like that, throwing it down the hole, or are you going to go up there?

Well, sir, well, there are a number of things we're going to do on that.

The first one is I have a physicist on my staff.

He has spent a good deal of time at the Atomic Energy Commission at the National Science Foundation.

I have spent a good deal of time talking to him, which is nice to hear.

Dr. Ray, and we are now planning to put together a board of eminent scientists to directly advise us on this, and I intend to ask Dr. Ray and Dr. Steve and the National Science Foundation both to sit on that board so that we get direct input at the early stage in directing the ARCE program.

Let me just say that in the field, Craig Hosmer is totally right.

We throw more money down the drain.

I mean, I say that we don't put as much into research as we should, compared to the Japanese, for example, .

All right, we'll give that.

But on the other hand, let's recognize in the field of research and in the field of energy, a lot of it just goes down the drain.

And I say this is for research, and then it goes to subsidized social professors and assistants

that I don't call it research.

Now this is one thing we've got to follow up on in terms of saying that the research really goes into what we're getting at, just to add 25% to the budget.

So Bob Burden can go back and say, gee, we've got 25% marker coal.

I think that he's absolutely right on this point, that a lot of this money, and I'd like for you to, I'd like to, I think it'd be interesting to find out what's happened to the research in the past.

What good has it done?

That's a good place to start and put your voice to work on that immediately.

Uh, who's...

Yes, sir.

Mr. Stein.

Uh, first... Kevin Steele.

Yeah.

Yes, sir.

Cole.

Yes, Cole.

Yeah, that's a lot of things going on.

Well, it seems to be the six things we ought to be doing to help increase domestic supply, and I'm delighted to find we're going to do four of them here.

let the gas price more accurately reflect costs, offshore leases, Alaska, the incentives for new exploration, and two more things.

One of them is to prevent dwelling on government land.

We've got millions of acres of land

Well, we have oil producers at their own expense will go in and start poking holes today.

We get violets on the oil, we get the gas, and so forth.

And that seemed to be something that could be done almost immediately.

And to answer that, we have a study now going on in the interior department looking at the leasing of all public lands, not just .

That includes .

Well, I'm talking about the interior.

That does not, at this time, include the major petroleum reserves, although we are separately looking at that promise.

So we've got to look at this issue.

Of course, we all know it's a sacred cow, but look at it.

I think the congressman's right.

We're also looking at it.

We talked about it in one of our preliminary meetings.

It's very possible that we decided, well, politically, that's just too hot.

But it's going to be a little lot hotter if we don't have air cooling.

We've got 60,000 acres in Crane, and the CO says, Greg, come in and drill.

He says, fine, we need a petroleum.

So that's one area.

Another one is an investment credit on each stripper.

About 70% of our oil is coming from little wells that produce 8, 10, 12 barrels a day.

And we're leaving a third of that oil in the ground permanently.

Because when the cost of water flooding or fire flooding makes the oil more than $4 a barrel, then they just leave it there, and environmentalists say, okay, you've got to plug it up.

So we're leaving a third of the oil down there forever.

And if we could have sort of an incentive for this, what at the present price would be an unproductive cost,

We could go to four and a half or five dollars a barrel, but this is a third of our oil, and we're losing forever because we don't provide an incentive for the guy that has to go into fire, flooding, or water flooding.

Same thing exists in the California fields and in the Texas fields.

All fields.

Secretary, would you look into that yet, or are you going there?

And Senator Jackson had a question.

Well, Mr. President, it seems to me, when one analyzes this problem, I've been spending two years thinking about it.

There are two basic situations.

One is a near term, one is a long term.

You have to start on the premise that we have to get oil abroad.

That's Henry's job.

I think it's clear, and you made an excellent point, that on the foreign policy side, we're a very difficult situation.

Currently, the Japanese get 90% of all their oil from the Middle East.

Europe gets 80%.

We only get 3%, but from here on out, we're going into the Middle East unless there's some coordination.

Among our allies, Atlantic Pacific, we're going to be in deep trouble.

Second point in that area is reliability.

We're assuming, no matter how you look at this problem, we have to have imports.

And foreign policy, I would say, is at the top of the agenda because if

There should be a coup in Saudi Arabia, for instance, which has half of the known oil reserves of the world.

And in the Gulf, you have 50% of the known oil reserves.

Everything we're talking about here is kaput.

I mean, we're in a real, real bind.

Because last year, we imported 27%.

This year, it'll be 35%.

By 1980, it's going to be between 50% and 60%.

So we're in the lineage to buy Saudi Arabia, and then we'll buy Libya.

So the near term is to deal with these emergency situations.

And I think all the experts are assuming an inflow, which I seriously question.

We'll wake up one morning and find out that we're cut off.

And then what do we do?

It seems to me that in connection with all of this, there are two things that we have to do.

One is we have to start building a strategic reserve.

We have a five-day reserve, Mr. President.

We don't have a reserve.

But if you pump it out of the pipelines and out of the tanks, you've got a five-day reserve.

The British have 105, Swedes 120, Europe is moving towards 60.

I have a billion on this.

We're going to try to have hearings on that.

And the second point, which is emergency allocations.

Now, may I say that unless we have some system here of equitable burden sharing,

We're going to find ourselves in a very difficult situation and witness the demise of hundreds of independent operators.

By that, I mean the fellow that has one gas station to the fellow that has 500 gas stations.

And this is already underway.

So it seems to me that if one is going to talk effectively, assuming these countries survive over there, you've got to have a bargaining chip, a bargaining expression.

So first is the need for this reserve that we need to build up so we can build some credibility.

And second is the development of our indigenous sources here.

I just think that we're not going about it with the urgency that we need to go about.

You're talking about indigenous sources.

You're talking about coal.

You're talking about gas.

What else?

Yes, sir.

Here they are, sir.

Coal, liquefaction, and gasification.

Coal, we have 1.3 trillion tons, approximately.

Oil shale, convertible barrels, a minimum of a quarter of a trillion barrels.

Total oil reserves present in the United States as of now is 38.7 billion.

Last year it was 40.

We're already down.

By the way, in that connection, Alaska has over a fourth.

And the truth is,

And we mentioned the Naval Petroleum Reserve, which is absolutely critical.

If you combine PEP4 with Alaska, Prudhoe Bay, you have more oil reserves in Alaska than you have in all 48 states.

You develop your Naval Petroleum Reserve.

Yes, sir.

The original purpose was good.

Carl Vinson was responsible for this during World War I.

His purpose was to provide a source for the need.

which was sound, now the purpose is very broad.

I mean, it has to go, I think, to our reserve capabilities.

Is there any other point, Scoop, that we haven't mentioned?

Yes, sir.

There's these two critical points.

One is a reserve capability, a strategic reserve, Mr. President.

Two is the development of an indigenous capability.

Coal, we've covered.

Oil sales, and what do you have...

geothermal, which has enormous possibilities.

And then, of course, the nuclear is for, then the far off, whether it's solar energy and so on.

But we need to do these two things.

And I think with a greater sense of urgency, because it's going to have an enormous impact on our foreign policy.

And on the foreign policy basis, I think very quietly, you've got to be careful not to stir up the Middle East, but to have some quiet talks

with our friends in the Atlantic community and with the Japanese.

This is critical, it seems to me, but my only observation on all of this is that we have legislation we're going to start hearings on to achieve a capability, not to achieve it, but a capability of health sufficiency in areas that I've mentioned on an indigenous basis in 10 years.

I think that unless, Mr. President, we do this, we're going to find that

cost of petroleum, I just don't know what's going to happen, but it's going to skyrocket because our friends abroad can't fix the price by withholding.

I spent a day and a half talking to Saudis in the country, and I got the distinct impression, even though they're very much pro-Western now, that there's a real danger that the pressure will be on not to use petroleum.

And as one of them turned to me and said, Senator, can you think of a better investment but just on the ground?

And my answer was, yes.

The Libyans are doing this.

The Kuwaitis have learned from Texas their pro-rationing.

We've all heard about the pro-rationing of oil.

The Kuwaitis are doing it now.

The Libyans, of course, have gone ahead on a massive basis to do this very thing.

Let me just say on a foreign policy thing.

This, we are discussing on Americans.

a very comprehensive basis with all the people in the camp.

The difficulty, the difficulty, however, with having such discussions in the public arena is that it's, it is, it puts the producing nation in some of which are extremely irrational and so forth, in a position where they've got the whole world on the throne.

And so you can see, but I can just, I think Henry would back up that we, you can, I will just give you the insurance and stuff, and then hire on the agenda each of the discussions we've had, and we'll continue to be frightening.

That's right.

May the consuming nations have a long way to go before they can grasp that there's a global problem and that there's an opportunity for... That's right.

The consuming nations, Mr. President, unfortunately are very parochial.

Some of our great friends and allies that we...

cold the rain for, just in business for themselves in this area.

That's why we have to link some of these things.

And Rick, go ahead.

Yes, sir.

Mr. President, I'm going to read you.

How serious is the Russian problem?

Is it true that Russia, for the first time, has moved into the Middle East for oil in 1973 as the first nation ever in World War I?

Yes, on the other hand, they have talked to us, in addition to the natural gas,

about the prospect of exporting some oil to us, we had assumed that at some point they would have to import oil themselves, and that of course would compound all the problems that we've described by giving the Middle Eastern countries yet another outlet which is difficult

to get it to a comprehensive pattern.

They have, in some of their recent dealers towards us, in the commercial field, indicated that they'd be prepared to export some oil to us.

We haven't had a chance to get any details on that proposition yet.

I think I don't have the percentages, but they're relatively small.

Yes, they're not secure.

You're referring to ?

There are a number of initiatives in the President's energy message on this subject.

The first one is we're setting up an office of energy conservation in the Department of Interior.

The second step that we're taking is a program of voluntary labeling of appliances and automobiles.

one by the Department of the Bureau of Standards will provide assistance by which tests conditions are set up under which mine manufacturers can test their equipment and then label it in a way that shows the consumer what's happening.

But we have supported the use of the Highway Trust Fund for expenses on .

In addition to that, we have a number of demonstration projects in the federal government which are intended

And let me get to one specific thing.

This is a .

And so the gas mileage today is approximately .

It's pretty hard to go here up here.

It's so old that you've got the environmental kick now.

Are we taking a hard look at balancing the environment with energy on this significant problem?

That's a really good question.

I think we've got to get into it.

I understand.

I know that you would offer one year in compliance with standards.

And of course rapid transit over a period of ten years, maybe we'll have enough subways and so forth that will reduce the number of automobiles, but it may not.

But the real, real point is that, the point that I make is this, that don't we have to fight the bullet with regard to the fact that we are getting more and more automobiles every year.

They get less and less mileage per gallon every year.

And in view of that circumstance, no matter what we do on the supply side, the demand is going to ease up a lot.

I don't know.

What's your view on that?

That is a very great problem.

And we haven't, of course, yet gotten into all the details of that.

Let me tell you, I think we've got to get into that thing.

Now, let's understand here, this is not for the purpose of talking the best interest of the automobile company.

We're not going to be pushing them around.

You know, if you get in a car these days, the real problem is getting out.

I can tell you about the attack on the Prime Minister.

He was coming in with a dagger last night.

You know, he's sitting there in this big, fancy little thing.

Let's not be afraid of that one, too.

Do you agree, Jeff?

I know you're a great environmentalist, so you agree with this.

All right.

There's a very small program at the Department of Transportation to address this as far as I will be of concern.

Should it be larger?

It could be larger and it could be moved along because they're taking three years to examine this.

What you have is a Secretary of Transportation, a real professional in this area.

He's a cool man, and actually, accidentally, he's not in the pocket of the Union Oil Company or anybody else.

He will do whatever drive him.

They're working on it.

Well, he's coming back with, I think he's pretty dedicated to doing something about this.

Well, with the members in your conversation, we're going to have to follow up on this one.

Yeah.

May I ask a third question?

We've talked a lot about the oil and gas and not being parochial, but we do have an electrical energy.

Well, John knows about that very well.

Hydro.

Now, we know, well, I'm talking about the generation of electrical energy.

We know that the domestic uses of electricity double themselves every eight and a half years.

Anyway, I'm not talking about commercial.

And therefore, we've got to get this power-siding bill, Senator Jackson's going to be working on it, the Commerce Committee will.

I think we'll get that done pretty quickly.

Because there's got to be some place between Walden's blog and Charlie Luce.

Well, Maggie, right at that point, of course, the real tragedy, Maggie, on that point is that the states are incapable, Mr. President, of making the decision.

Here's a case.

where the federal government will have to preempt states' rights, and there's going to be a real, real hollow on this, and designate the areas where the energy facilities will be located, and that's your point, and the outloading facilities for the big power.

Now, one other little thing is that we know that we're going to be talking about this energy to be licensed, is what you call it, unless we do something.

Now, out in our country, we've got some hydroelectric dams.

Some of them 80% completed, some 40%, some 20%.

I'm speaking, John, about the Snake.

And the Snake River, we know we're going to finish them.

Every year we delay, the costs go up 12%.

And the quicker they're on the line, the quicker we'll get some generation.

This involves about 3 million kilowatts on these.

And I got all the capabilities of the engineers yesterday, which I'll send down to you people here, what they can do.

The quicker we'll put 3 million kilowatts on the line.

Now, that will relieve some of the things we're talking about.

We know we're going to do it, and then if we pay back, it's 15%.

It seems to me it's kind of wise and foolish not to allow the engineers the budget

to proceed within their capabilities so that we won't delay in the way they're 18 months behind now.

Now here's something we can do right now.

And it does.

Scoop, what were the figures that we finally got to keep it on schedule?

Five and a half, 10 million?

I've forgotten just exactly.

The payment will be larger later on, but it's a small down payment.

I'm glad Mr. Ash came in.

I thought that the problem of budget would come up.

I'm just surprised it came up so late.

Roy, you heard that?

Let's do very quick examination and talk to the senators.

We're shutting down, Mr. President.

A large part of our aluminum capacity was shut down about ten days ago and may be down for several months.

Mr. President, my understanding is that you're putting an application in for a nuclear plant up in our area.

It takes nine years.

Yes, sir.

Is there any way you can...

Yes, there certainly is.

And this message, this message can't replace that problem.

Why don't you take it and cut that down to 18 bucks if at all possible?

The American government doesn't seem that very connected by the Japanese.

There's a part of my side of the company saying it's down.

There's considerable criticism that should be examined that that bill is not going to accomplish its purpose, and it is in this context.

uh, that, uh, you know, we've heard about the division of power, let's say, in executive judicial, and that's to, uh, to do, uh, to do, uh, this, uh, this check balance, but really, the old men that wrote the Constitution, they divided up responsibility for decision-making in areas where it could best be done.

The executive decisions, which have to be done swiftly, were...

What we've done is taken a lot of them.

Because there's been a lot of lawyers in Congress and elsewhere taking a lot of these judicial procedures and applying them to executive decisions.

And that's what's going to sink down.

And if somebody could re-examine this problem in that light, I think we would come to the conclusion that this bill could be improved considerably.

Are you suggesting we put a bullet on the lawyers in Congress?

Well, it doesn't help.

We have a comment from Senator Jack.

Mr. President, the last one.

Senator Jack mentioned about General Steele and what we should be doing.

In the last few weeks in Arizona, the private industry did bring, and they had successful weekend fields on steaming land, high-temperature, steaming with sweet water.

This was a site located by a satellite picture.

And we hope now it's going to open the opportunity for response.

Now, my question is, when is the government going to start their leasing program on field and steaming potential land?

But I suppose that's going to get in the way of the return.

The environmental impact statement on this is really complete with the interior.

They tell me that that will be out in a month or so.

And if that's satisfactory, they will be proceeding with leasing to anticipate this summer.

But as far as the materials that are available, as the details go out, they are kind of interesting.

They consider the message summary of the message, which runs 20 pages.

The summary has a lot of factual data that you don't find in the message itself.

In addition to this written material, for the courtesy of the leadership,

Mr. DeBowen, the experts will be on the Hill this afternoon and available in sessions both with Senate and House.

And I think each of your offices has been circularized.

And if you get an opportunity to call the attention of the members to these sessions, they may be able to back up.

The experts may be able to back up this written material with some answers to questions that some of the other members may have or that you may have, as we did this morning.

Yes, thanks for the motion.

I just want to say that I want to support what Senator Jackson and Craig Hosmer has said here this morning, particularly in regards to which Senator Jackson said, in the coordination of research and development.

I think that's got to be

I'm not here to set a term in billions of dollars or anything like that, but the main thing is that we apply ourselves to practical scientific research rather than be available at this time to bring into play and into implementations those things that we know how to do as well as to try to

I don't think anyone can disagree with anything that's been said here today.

But it's been my experience that there's such a tremendous misunderstanding among the people of our society.

And much of the resistance is predicated upon emotion and not upon fact.

And I think that what we need here in order to achieve the balance that you spoke of between the environment and the need is to get ourselves into a mammoth educational program to make the people understand each other what the problem is.

You see, it's easy enough to call in senators and congressmen and we understand the problem.

But the trouble is you get so much resistance from the outside only because they don't understand it

Things are generated that are built upon false facts and emotion that we never get anywhere.

And it's a hard thing.

We've been talking about a Rome Point nuclear reactor in my state, and I'm telling you all hell broke loose if we just don't understand it.

But a man who has to stand up for election is not going to undertake, as you said, a governor, is not going to jeopardize his position just to accommodate the cabinet rule of the White House.

He's made of himself first.

And I think that in conjunction with what we're trying to do, we ought to have some kind of an educational program to make our people understand all this.

Sir, I don't think you've hit on the biggest problem.

as yet, and that is the merciless competition between the various sources of energy.

And I know that the competitive souls

They've done everything they can, and I think it's up to now anyway, to block the development of nuclear power.

These states told me six years ago they were going to, so I think they've kept their promise very well.

Now, what's the solution to that?

I don't know, but if they keep bossing you, you'll get a real crisis.

You'll find there's tremendous demand for government ownership and operation of all of these distribution lines.

But that, I think, is what is really getting energy on the line.

More than anything else, they finance some good-sounding organization, which is idealistic by nature, and then they go after them.

And that, I think, has been a major problem in the last few years about it.

Mr. President, I wanted to say thank you for calling to move together because I think that these meetings are good, that we can exchange views and all of us hear what's going on, what your plans are, then we can work together a little bit and do a better job.

And I want to congratulate all of you, and I hope you have more of them.

But I just wanted to bring one back.

that 30 years ago Jenny Randolph flew in a plane from Morgantown, West Virginia to Washington, D.C. in a plane that was fueled by gasoline made from coal.

to show you what little progress we've made in those 30 years.

This was done 30 years ago.

And we have over 200 million, no, 200 years of coal in the ground now that can be, I mean, that part that can be used.

And we're certainly got a great potential here that we're just really not using in the highest level yet.

Good job.

We must adjourn because we have another brief meeting left on a special subject with a small group from this group.

So there, I walked up to Bill and I said first that

We've always considered, as I said, the first of the year, this to be an area, since it crosses so many lines, that is particularly a good candidate for cooperation and mutual discussion between the legislator and the executive.

That's what we want, that's the purpose of this meeting, and this is the beginning of it.

Of course, we have several people here that will be working on it, but Mr. Capone is not only a good listener, he understands.

He's involved in the subject, he has the status, and we're ready to give him your information.

We're not just putting ours down.

Second, I think it's important that we understand

We're not going to emphasize as much as we should.

We will go after those aspects that you've mentioned here.

The third point is that, I guess Senator Jackson has made, is that we're looking right now, we're looking at one terribly difficult problem, and that is the lifeline from abroad.

Which, of course, doesn't affect us too much at the moment.

It's something that we've got all, when we're even concerned, and should be concerned about, leaving our lifeline in the hands of Canada.

I mean, what do we think about leaving it in the hands of Libya, Saudi Arabia, etc.?

It's tough.

And we're aware of that.

That's why we've got to go forward in these areas.

Finally, and this is the tough problem,

There's a need for a massive program of information, understanding this area, so that people don't feel that if you put a nuclear power plant up, it's going to poison their kids or give them this and that.

My house in San Clemente is just two miles from the Edison nuclear power plant.

So I'm afraid, but that's only because I suppose I've followed it enough.

Thank you.

whether it's a nuclear power plant in that area, whether it's in the coal field in another area, whether it's in terms of how we handle this difficult problem of balancing

automobile use of gas and environment with the energy consumption.

We've got to tackle these problems and tackle them now or we will be, maybe even while I'm here, in a crisis.

And what we've got to do is to avoid that crisis.

I don't want to give you, I don't want, because I used the term at the beginning as a problem, not a crisis, that I do not consider there's a great sense of urgency.

There is a sense of urgency.

The reason we haven't come to you until this time, we wanted to put it all in one package as we want.

But as far as the urgency is concerned, we must work urgently on the problem in order to avoid a crisis.

And I'd like for you to consider our message.

We'd like action in the legislation.

We'd like your support in the information area to the extent you feel you can get it.

And we'd like also your prodding the administration where you think that we have not acted as effectively as we can.

That's what we're ready to do.

We have several others, of course, partners.

So with that, we'll go off.

I'm glad the lights are still on today.

Thank you.