Chairman NASSIKAS. I do not believe so, because the procedure that we go through is that the AEC, as the lead agency, makes their determination in the form of a draft environmental statement and then they ask for the advice of the Federal Power Commission. We are qualified and equipped to determine the power alternatives and the power effects, although I will hasten to add, as I have testified before another committee, that our resources are at marginal levels directly as a result of NEPA, and I do not know whether we will be able to make the kind of alternatives analysis required as a result of NEPA.

Senator BAKER. I understand that under NEPA, the lead agency must make a balancing judgment, that is, the judgment on whether we should or should not go forward with a particular project, including in that balancing judgmental process the question of alternatives.

Now, take your own agency, the Federal Power Commission, as a more familiar example. In making that balancing judgment, under section 102, in considering the alternatives, does the Federal Power Commission continue to be the lead agency, if it decides that a nuclear powerplant is superior to a fossil fuel electric generating plant?

What I am saying, if you do continue to be the lead agency, must you duplicate the expertise of the Corps of Engineers, the Tennessee Valley Authority, the Department of the Interior, or the AEC, in order to fully explore the alternative possibilities to arrive at a balancing judgment?

Chairman NASSIKAS. The answer is both yes and no in a sense. Senator BAKER. How much yes and how much no?

Chairman NASSIKAS. Well, I will explain it. Yes; in the sense that we have to make a reasonable analysis, and we have to have the expertise, either on our staff, or through consultation with the other agencies. In addition, in our lead agency responsibilities, we call on other agencies to review our environmental impact statements, and our staff analysis.

Now, the coordination of this kind of thing does become somewhat difficult, because you do have a number of agencies that are really concerned with an analysis of the same kind of alternatives, so that you do have a duplication problem in this respect. Does that answer your question?

Senator BAKER. Yes, sir.

In that same vein, and then I will stop this line of questioning, and let you continue with your statement, you say that because production of North Slope Alaskan gas is largely predicated on production of Alaskan oil, development of gas resources has been delayed. Then on page five, you discuss whether the environmental risk associated with the exploration and development of these reserves, meaning Alaskan gas and oil, is balanced by the known benefits of exploiting them. This is, I think another description of the balancing judgment required by NEPA, but the question arose in my mind as to who makes that balancing judgment.

Clearly the Federal Power Commission is involved, clearly the Department of the Interior is involved in terms of the ecological impact of pipeline, and subordinately, many other agencies, including the AEC are involved.

Who is the lead agency?

Is FPC the lead agency?

Chairman NASSIKAS. The lead agency as to TAPS, the hot oil pipeline, is the Department of the Interior.

As to the gas pipeline, for example, out of Prudhoe Bay, it would have to cross Federal lands and the lead agency in this respect would be the Bureau of Land Management of the Department of the Interior. As to the ultimate certification of a gas pipeline, if it happened to follow a route down the McKenzie River Delta, via one of several alternate routes through Canada to either our midwest or our farwest, the certification of the project for the Federal Government, including its overall environmental impact, would be determined by the Federal Power Commission. This is a complex type of review involving different lead agencies at different times in the development of the project. We cannot say that there is one lead agency in all respects as to the development of the gas.

Senator BAKER. I do not want to put words in your mouth, but I begin to infer that you may think that we need some more definitive way to choose a lead agency, or we need to consider the possibility of creating a lead agency for all seasons.

Chairman NASSIKAS. Well, CEQ of course currently does select the lead agency when there is any question and it is empowered under NEPA to make the overall recommendations as to which agency is best qualified.

I would like to approach the answer to your question, which I think is a very good one, Mr. Chairman, on the basis that really the heart of the problem is not only the selection of a lead agency, but also the manner in which we are organized as a government to evaluate energy resources.

You have a twofold problem here. One relates to the environmental impact statement and the environmental review, and the other is the development of needed resources. I recommended about 21⁄2 years ago, and recently repeated the recommendation to the Senate Interior Committee that we establish an adjunct to the Office of the President, a National Energy Resources Council. I believe this is needed. I think this will assist in making the kind of determination that you and I are discussing here today.

Senator BAKER. Thank you very much.

I apologize.

Senator FANNIN. Mr. Chairman, time is very important in so many cases, and, of course, you have already covered some of the items that have been under consideration for months. I notice that we have this same time element, that perhaps is not as critical as the Alaskan pipeline, and other programs that are contemplated. You as the lead agency state that you can determine other alternatives; just what criteria do you have that would clarify that you have this authority. The big problem as I see, we are always arguing over whether or not you can make a decision in that regard.

Naturally we are having hearings to try to clarify some of these matters, but until that time, is there sufficient criteria, or guidelines that you can follow on which these decisions can be made?

Chairman NASSIKAS. Well, yes, under our assigned responsibilities by Congress, under both the Federal Power Act and Natural Gas Act, we, of course, are the lead agency in all of our licensing responsibilities.

We also have issued a rulemaking with several revisions, order Nos. 415 and 415-A and 415-B, in which we indicate what our procedures are, and what some of the guidelines are.

We also have issued a number of guidelines which industry should follow with reference to projects when they contemplate applying to us for a license or certificate to construct facilities.

Senator FANNIN. There are many delays, and I refer to the 102 as an instance that calls for delays.

Do you feel that we are going to be able to coordinate efforts, and correct this, even before we get through with whatever hearings, or whatever determinations are to be made by Congress? Is it not within your authority to go forward with some of these decisions, without waiting the time that is required for doing what we are doing now?

We do not know whether this will be weeks or months, or what time will be involved.

Chairman NASSIKAS. While answering this question Senator Fannin, and I will try to be responsive, I would like to indicate that we are exercising every legal remedy that we have in order to make NEPA work as applied to the Federal Power Commission. We now have an application for rehearing before the second circuit in the so-called Pasny case in which that court held, in a narrow decision, that some of the things we were doing to implement NEPA were not correct.

The same circuit in another case- Scenic Hudson II-sustained everything we did, and I have this in my statement. The court stated that we were fully complying with NEPA.

We intend to go to the Supreme Court of the United States, on the Pasny case. Intervenors and petitioners in the Scenic Hudson case are also appealing to the Supreme Court of the United States.

In the meantime, the Commission itself through our order No. No. 415-B, and through an order that we issued as of yesterday, has affirmed our view that what we are doing is perfectly proper, perfectly legal. We intend to carry out our responsibilities under NEPA in line with what the courts ultimately, we hope, will interpret as our proper role.

In other words, I am not saying to you, as a committee, that right now we need a legislative change at the Federal Power Commission to carry out our regulatory responsibilities.

Now, if the Supreme Court on the other hand should disagree with our position in the Pasny case, I believe it will be essential to recommend to the Congress a change in NEPA, and also a substantial change in our budget.

Senator FANNIN. Thank you.

Senator BAKER. Thank you, Senator Fannin.

I have one more question. I notice in your statement, you make the observation that environmental and economic matters must be pragmatically resolved through judgments reflecting a balanced and equitable weighing of the benefits of authorizing a project against the detriment of further delay.

I think most people would agree with that, but I would be very interested to know how you would go about making such a balancing judgment, as a practical matter, in terms of the relationship between environmental values and economic benefits.

I am thinking of two examples, Mr. Chairman, that occurred to me, while you were in colloquy with Senator Fannin.

In my own part of the country, I am particularly interested in the ravages of surface mining, strip mining, which I happen to believe is the greatest environmental insult we have in our part of the country, but in trying to make that pragmatic judgment, between environmental versus economic factors, I am afraid economic factors would always win, because the value of the land, as mountain land, is probably not great.

The value of the coal in terms of an immediate energy crisis is substantial, but the value of mountains, as mountains, must be taken into account someplace—that is, environmentally, are you going to scalp a mountain range to provide the energy requirements of the moment? So, can you reassure me on how this pragmatic determination can be made so that environmental values, in the long term, will be taken into account and abutted directly against the economic advantages short term?

Chairman NASSIKAS. Anytime we strip mine for coal, obviously there is a change in that environment. I have viewed strip mining for coal. There may be an irretrievable commitment of a resource, or commitment of the land, or irretrievable degradation. There may be, without getting involved in detail, methods by which land can be recovered, can be reforested, and this type of thing.

I recently visited Four Corners in Farmington, N. Mex. I testified before this committee regarding the Four Corners project in November of 1971. In my testimony, there was an analysis of the alternatives to the proposed development at Four Corners and of the utilization of the coal resources out there. We analyzed what the next 10-year potential is, as to hydro, as to nuclear alternatives, as to gas turbine alternatives, and as to oil alternatives-thinking of the west coast.

We thought not only of the strip mining effect on the New Mexico Mesa, but also of the power needs of the city of Los Angeles, and of some of the other cities in Arizona, New Mexico, Nevada, and southern California. In making a determination, we have to recognize that there is going to be a degradation of the landscape. It may not be restored to the same state that it was in before, but we have to consider what the alternatives are.

You cannot have a nuclear alternative on the west coast, at least not under present development, because regulating authorities are studying what the effect is of terrain, earthquakes, and this kind of thing regarding nuclear options to coal development, or coal resources. Now, another option, obviously, which many people are suggesting, is to cut back on the growth of energy, to cut back on the growth of power, to cut back on TVA, which uses coal, and to cut back on the private utilities. I believe that we can handle this problem without cutting back on our energy growth over the course of the next 10 to 20 years. I think we can preserve our environment even if we must accept some degradation.

Now, as to how we do this, as to what the guidelines are, depends on the evidence in each case.

What are the biological effects on human beings, on necessary ecological systems, and then what is the effect, as you say, on strip mining and the landscape, and on our mountains? Then we have to make the decision.

The Scenic Hudson case is an important one in answer to your question. The Scenic Hudson case began 10 years ago and was remanded in 1965 to the Federal Power Commission. After remand, a voluminous record was developed. We are concerned with 1,800 megawatts of instant power which is badly needed in the northeastern area of the United States. The project was certified as of August in the unanimous decision that I wrote, and it was affirmed by the circuit court in a 2-to-1 decision.

Senator BAKER. I think I understand your point of view, but I must confess, Mr. Chairman, that I still have a considerable concern for this problem.

If a man happens to live in these mountains that are being stripped, I suggest that he might put one set of values on it.

If he is looking at it from some distance, he might put a different set of values on it, but what we finally get down to is an overriding question that permeates all of these hearings, and that is who makes that balancing decision, that balancing judgment, and on what basis. I think that is central and key to this whole inquiry, and I think NEPA is silent on those points.

For instance, does the FPC, in your view, make a judgment on the value of stripping of mountain land, and, if so how do you take into account the esthetic values of scenery.

Take the Cumberland Mountain region, its great resource is its scenic beauty. Does the Federal Power Commission take that into consideration?

Does it put a different set of values on the Four Corners situation, where surface mining is an entirely different breed of cat, because out there, instead of 40 or 50 inches of rainfall, they have 10 or less, and they are stripping flat land, and they are not degrading slopes, going into valleys and rivers.

Who makes these judgments, and if the Federal Power Commission does, if it is to be the lead agency, is it going to staff up as if it were the Bureau of Outdoor Recreation, or the Department of Interior itself would?

How are you going to do that?

Chairman NASSIKAS. We would have to rely on the Department of the Interior, which has jurisdiction as to Four Corners. In Tennessee, I am not quite sure whether that might be Interior also.

I know the Federal Power Commission does not have jurisdiction to determine the effect of strip mining. Remember that we do not license fossil fuel plants. Also, there is an issue as to our jurisdiction over fossil plants on appeal to the courts.

In Scenic Hudson, where we do have jurisdiction over a hydroelectric project on navigable waters, or nonnavigable for that matter, we spent about 16 hours viewing the area directly, by air, by land, and from the river. This is a subjective judgment, and I suppose so long as you have human beings, subjective judgment will be subject to question.

Senator BAKER. I am sure it will, but I am sure also the legislative mandate is properly narrow and defined.

Now, it seems to me, one might be able to appropriately conclude this line of inquiry by saying much of my concern in this respect of course comes from the Outer Continental Shelf case, in which the court specifically required the lead agency to consider alternatives.