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I think it would be wise, instead of requiring rationing of fuels and power, for the administration to ration fuels.

I also do not believe realistically, although we well recognize the problem and will try, I don't believe realistically we can allocate a ration quantitatively and qualitatively with equal emphasis. We should ration quantitatively first, and qualitatively where practical and possible.

Fourth, on the Federal and State relations, we believe that we need more explicit description of Federal resource if the States do not respond and cooperate and Federal agencies cannot feasibly implement local programs. We prefer that in your consideration of the environmental model in which we set the standards and the States then plan with those standards and perhaps sanctions.

I have some concern about the provision of subsidizing the Department of Transportation. It is difficult and perhaps promotes inefficiency. We hope there are better ways of encouraging rapid transit. We agree with that intent.

Sixth, I have real concern about the requirement that the President or the administration have the power to require production in our domestic fields in excess of the maximum efficient rates-MER. We believe that virtually every field is almost at 100 percent. There is perhaps, and we are going to look for it, some additional supply but we think that it is better to provide discretionary authority in our reliance on the individual State's cooperation. If we do indeed, at the Federal level or any level, I suppose, require supply compliance in excess of a MER, we run the great risk of stealing from the future to meet the current emergency.

Finally, I would like to strongly recommend consideration of some of the additional measures that I described earlier.

Temporary authority, as I say, for FPC to deregulate the price of new natural gas at the wellhead.

Authority for the AEC to grant temporary operating licenses. Authority for the President to require nationwide daylight savings time year round.

Just as an aside, may I say on a news show I got mixed up and said it just backwards. I indicated daylight savings would provide more daylight at the beginning of the day instead of the other way around. The CHAIRMAN. That happens in Washington.

Governor Love. We will, if you wish, be glad to provide more detailed comments on S. 2589. But in conclusion, let me repeat again our appreciation of the approach and our indication that this bill does represent a major step in the right direction. We simply believe that with the specifics I have mentioned we do need flexibility and we need the ability to move rapidly to meet emergency actions.

Thank you, Mr. Chairman.


The CHAIRMAN. Thank you, Governor Love. I am going to be brief and may I say to my colleagues what I think we should do when we mark up the bill tomorrow, and I say this in the presence of all of the representatives of the administration here, that I would like to have your people, a representative from each of the Departments, to be present to assist in going through the bill, because we are dealing with an emergency situation and want to do as intelligent a job as we can and avoid as many mistakes as possible. So I would like to make

that clear at the outset that we will be marking up the bill tomorrow in the Interior Committee and I would like to have one representative certainly, from each of the agencies that are involved specifically in this legislation, so that we will have the full input.

Might I just ask a couple of questions?

How long do you think it would take to set up a rationing system for gasoline? Have you had any estimate on that? I know it took several months in World War II and you had all the advantages of deep public concern during that conflict. Have you had any estimate at all? Can you give us some ball park figure?

Governor LovE. Yes. As you undoubtedly know, we have been through the Department of the Interior, we started some time ago, some intensive work to at least do the planning about how the program would work and the State proposal on the program is ready now or will be in the next few days. But our experience with this distillate allocation program points up the need for a very large and very competent kind of staff. Frankly, I don't think that we are at the point where we have met the requirements of that allocation program although we have added people and we are moving ahead.

In addition, it is my belief that we are going to need stronger industry input, people who indeed have had experience in the distribution of petroleum products and there is a constraint there insofar as the antitrust laws are concerned. We are finding it impossible to get oil companies to join together in meeting in the same room and so on. But this is not responsive. The best estimate I have is that it would take a minimum of 45 days and we think more accurately some 60 days to put it in place.

The CHAIRMAN. Sixty days once you got the full authority to move? Governor LOVE. Yes.

The CHAIRMAN. We are talking now, of course, of rationing of gasoline at the consumer user level?

Governor Love. Yes.

The CHAIRMAN. We are not talking about allocations of petroleum products which is, of course, totally different. I wanted to make that clear for the record.

Governor Love. Yes.

Mr. Chairman, if I may express my opinion, I think probably that kind of timing would not be too intrusive or objectionable as far as I see the situation in that rationing of gasoline now would not have major impact on the availability of the distillates this winter. It would obviously save some gasoline to make the impact of the shortage on gasoline next year less severe, but the timing, it seems to me, is of sufficient response to that problem.

The CHAIRMAN. Isn't it fair to say that everyday we can start saving in the energy area, the less of an abrupt precipitious bump we are going to get 2 months from now or even 6 weeks from now?

Governor LovE. I think that needs to be understood. If we do nothing in the distillate area, I have some figures that would show we would get along perhaps even as late as through January with no particular impact, and then it drops precipitously to a shortage perhaps in February or March of up to 48 percent in one petroleum district.

The CHAIRMAN. It reaches disastrous proportions later on if you fail to start moving in immediately?

Governor LOVE. That's very true.

The CHAIRMAN. We have had reports from time to time that there are shut-in gas and oil wells from which they are just withholding production. Would you favor in these cases where it is very clear that they are just withholding oil from the marketplace, authority to move in and procure that oil?

Governor Love. I had not considered it before. My understanding is on some of the wells that are not producing particularly gas, there are other problems such as the failure to have them connected to the pipeline system. But if indeed there are wells that are simply not being produced for whatever reason, we can get by the problem, the legal problems that seem to be possibly there, why certainly we need the oil.

The CHAIRMAN. If we are going to get public support in making sacrifices, I think we all agree that there must be equitable burden sharing. I am sure you take that position and it seems to me that the President will need some power to deal with some of these specific situations that are clear cut. I am not talking about an argument about whether they are in reserve now for some legitimate reason, but where there is a clear effort to withhold from the marketplace at a time when we have stringent restrictions on all segments of our society you agree then that there should be a means by which you can deal with that problem? Governor Love. Yes.

The CHAIRMAN. Senator Fannin.

Senator FANNIN. I have just one point. I would like to ask the Governor if he thinks it would be fair to force this production we are talking about and hold the amount that would be allowed the producer to one-third the value of oil? That is practically what we would be doing if we said you have to produce and furnish the product into the natural gaslines of this Nation.

Governor LovE. We are faced with a very extreme shortage and I think the equitable response to that is through some increase in price in the Cost of Living Council rules, rather than withholding.

I just feel that the emergency is such, Senator Fannin, that we are going to have to call on all of the resources we can get.

Senator FANNIN. I certainly agree, but I think we should realize that it is share and share alike. If we are going to expect the gas keepers or the producers to furnish the product, they should be fairly compensated and I think you agree with that.

Governor LOVE. Yes.

Senator FANNIN. Thank you.

The CHAIRMAN. Senator Moss.

Senator Moss. I don't have any questions at this time, Mr. Chairman. The CHAIRMAN. Senator Hansen.

Senator HANSEN. Governor Love, you said in effect, in response to a question from Senator Jackson, that while you had not studied the problem specifically, I gather that you have some inclination to agree with him that if it could be demonstrated that there was a deliberate withholding of supply now, action ought to be taken to make that supply available. Did I understand your response?

Governor Love. Yes, that is my general impression or decision at the moment, yes.

Senator HANSEN. Thinking that I may know just a little bit about intentions of people in the industry I cannot believe that there is any

significant effort in this country now to do what Senator Jackson's questions would imply.

I would ask you if you know of any evidence that inclines you to believe that the industry is deliberately trying to withhold supply that could be produced at a rate not in excess of the maximum efficient rate. Governor Love. I do not have that information, but Secretary Brinegar asked leave to respond to that question.

Senator HANSEN. Fine.

Secretary BRINEGAR. I would just like to make an observation at this point.

As you know, I, a year ago was in the office trying to produce oil and gas. I watched the events of the past year very carefully. It is my judg ment that there is no deliberate withholding from the market of any oil or gas of such magnitude that it would be worth the effort to try to find. There are, probably, some gas discoveries in the gulf that have been essentially shut down because of the prices the gas could be sold at. It was not a good use of the company's money to complete the well or make the hookups.

If gas in deregulated as the President has asked many times, I would just expect the market forces would fairly promptly cause those wells to be reentered and the gas to be hooked up.

As you all know, our most environmentally clean fuel can be brought to the market in additional quantity. I think it is worth an inquiry, but I would make a judgment that the best thing you will find is that the price system do its work.

Senator HANSEN. Mr. Secretary, are you aware that because of the effect of the NEPA laws, your Department, the Department of Transportation, is now permitting the use of 750,000 barrels of diesel fuel per year that is 32 million gallons of diesel fuel per year to haul Wyoming coals to Chicago to turn the wheels for Con Ed when Illinois. is the fourth largest producing coal State of the 50.

Secretary BRINEGAR. I don't believe our department is involved in that decision, sir.

Senator HANSEN. Do you think it should be? Do you have some control over the trains?

Secretary BRINEGAR. Not in the sense of overriding the NEPA requirements for the fuel.

Senator HANSEN. Would it be your recommendation that NEPA laws be suspended to permit this savings of 311⁄2 million gallons of diesel fuel annually in order to take advantage of the coal in close' proximity to those powerplants in Chicago?

Secretary BRINEGAR. I think the authority embraced in the President's request and, perhaps embedded in the proposed bill, would permit that to happen promptly if that turns out to be the right thing and, I think it may well be.

Senator HANSEN. When we speak about withholding oil from the market, are you aware that the Belle Fourche pipeline has had an application to build a pipeline of about 100 miles in length that involves crossing some natural grasslands for about 20 miles?

It has been held up and the best estimate I get is that by next April they may be able to look at an environmental impact statement. At the present time only part of the oil that could be on the market and be made available for use this winter is getting there because all that

they can get out of that well is what little bit can trickle out by virtue of truck transportation.

Secretary BRINEGAR. I am not aware of it, sir.

Secretary WAKEFIELD. Could I respond to Senator Hansen's question that he raised on the shut-in?


Secretary WAKEFIELD. Senator Hansen, I first came to Washington in February 1970 with the Federal Power Commission and the very first day I was on the job, I was in a hearing in which accusations were made that the industry was shutting-in natural gas supplies to raise the price of natural gas.

It is now almost 4 years later and I have yet to hear any evidence pointing to a specific instance where that was happening. It is always this broad innuendo that there are a number of gas well shutin. We know how many there are, we keep records in the Geological Survey, but in every instance, we have the reason and it is usually because of problems with the well or inadequate pipeline facilities.

But, I would hope that if there are any instances where gas is deliberately being withheld from the market for the purposes of withholding shortages or driving up prices if we can see some specific evidence of that so it would be useful.

The CHAIRMAN. In any event, it won't hurt to have the authority to deal with it.

Senator Johnston.

Senator JOHNSTON. Governor Love, on pages 3 and 4 of the bill, there is language which is susceptible of interpretation that you are asking for the authority to supersede the power of the FPC and supersede the exemptions granted to intrastate gas.

This is a matter of quite some moment to my State and many others. The chairman tells me, and I think most members of the committee tell me, that there is no intent to regulate intrastate gas.

I want to know if that is correct and if the administration will support language clearing up this bill to take out the regulation of intrastate gas?

Governor Love. The administration has no position which runs contrary to that. We will support the power in the FPC to suspend on a basis of emergency regulation; the price of new gas is not our intent. and if the language so states to deal with the problem of attempting to bring into regulation intrastate gas, that is not our intention.

Senator JOHNSTON. You would have no objection then to clearing up this language and making it clear that you are not regulating intrastate gas?

Governor LOVE. Is that the will of the committee as well?

The CHAIRMAN. I can only speak for myself. I don't believe that in this emergency legislation we can start reviewing the whole gas controversy including deregulation. And a major part of the gas controversy also involves the regulation or the lack of it of intrastate gas. If we do that we will be on the floor for weeks.

This is an emergency bill. I believe that would be my judgment, and I hope my colleagues will go along with me, but we don't need to vote on it now.

Senator FANNIN. Sir, I understand you have committed that you will.

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