from such original point to intermediate points for transshipment or refinement' and the term 'geographical area' would appear necessary?" If you wish this can be submitted for the record. Also, please submit for the record the language that would accomplish your recommendation in this regard. A. Several questions arise with respect to the language reading "including movements from such original point to intermediate points for transshipment or refinement." First, it is not clear whether the preference percentage is to apply to oil from a foreign point by ship to another foreign point with the final leg across the U.S. border by pipeline or perhaps land transportation. For instance, will oil from the Middle East by tanker to a point in a contiguous foreign country such as Canada or Mexico but with the final import media being a pipeline or transportation by other than ocean "vessels" be included in the total for preference percentage application? Another question pertains to the meaning of "intermediate point" in case the intermediate point is in a territory or possession of the United States. Suppose oil goes by tanker to Puerto Rico and is then transshipped to the U.S. mainland. In such case the preference percent clearly applies to the first leg. However, with regard to the transportation from Puerto Rico to the mainland, it is assumed that the Jones Act applies so that all would be in U.S. tankers. If HRB8193 et al were to be enacted, would these circumstances reduce the required percentage on the Puerto Rico to mainland leg to 20, 25 or 30 percent? We do not feel that it should or would. Suppose instead of Puerto Rico, a port in the Virgin Islands were used as the transshipment point? In that event, the leg from some distant point in the Middle East, North Africa or elsewhere would be covered by the language of the bill. However, the leg from the Virgin Islands to the mainland is exempt from the Jones Act and the 20, 25 or 30 percent preference rather than 100 percent would apply. We propose that a definition of the United States be added to the bill to make clear that it is intended to include "its territories and possessions." This would be accomplished by inserting "its territories and possessions" after "United States" in lines 4 and 8 on page 2 of the bill. [From The Washington Post, Nov. 13, 1973] U.S. MOVES TO PATCH UP DISAGREEMENT IN ATLANTIC ALLIANCE (By Dan Morgan) American representatives left for Europe last night to make a fresh attempt at resolving the sharpest disagreement in the Atlantic alliance over political, military and economic questions in years. The American delegation, which will spend a day in Brussels today discussing the North Atlantic Treaty Organization and Middle East matters, will take up a proposal for a joint Atlantic declaration of political and economic principles in Copenhagen Wednesday with representatives of the nine Common Market countries. A leading American official said last week that the writing of the declaration was now stalled over "fundamental" differences in philosophy between the American and European Middle East conflict, in which the European nations were neutral and refused to back the U.S. pro-Israeli policy, will affect the Atlantic atmosphere for months. Participating in the talks for the United States will be Assistant Secretary of State Walter J. Stoessel Jr., and a close aide of Secretary of State Henry A. Kissinger, Helmut Sonnenfeldt. Sonnenfeldt, recently confirmed as under secretary of the Treasury, will be traveling to Europe in his capacity as member of the National Security Council, a spokesman said yesterday. American officials yesterday sought to discourage suggestions that relations with Europeans had reached a serious impasse. They conceded that the deep disagreement over Middle East policy between the United States and its NATO allies had not "gone away," but said that "frank exchanges have led to a very thorough re-examination on both sides." These exchanges have put the dispute into "perspective," they said. However, even as officials on both sides of the Atlantic attempted to smooth over some of the differences, new frictions were emerging. American officials in Washington were understood to be furious at the publication in full Friday in a New York Times dispatch from Brussels of their Sept. 29 proposal for a declaration of common political principles. U.S. officials are known to feel that the premature unveiling of the proposal showed lack of good will on the part of the Europeans. Also, leading West German officials were said to feel that the United States deceived them and other allies at several points during the Middle East crisis. Defense Secretary James Schlesinger reported last week after an Atlantic alliance meeting in The Hague that he had reached a "common understanding" with his West German counterpart about use of American supplies and equipment based in Germany. Only of the sharpest European-American flareups during the recent Middle East crisis occurred after the West German foreign ministry protested the loading of American military equipment onto Israeli ships at the port of Bremerhaven. Beyond such specific frictions, the crisis produced still unresolved differences between the United States and Surope over the strategic role of NATO. The United States took the view that the crisis was a matter for NATO strategic concern because it raised the danger that "the Soviet hand would be at the spigot of Europe's oil." But instead of backing the American effort to maintain a military balance in the Mideast by resupplying Israel, the Europeans took a number of steps to dissociate themselves from Washington and keep on good terms with the 'Arabs. In 1971, the United States supplied 74 percent of its own energy requirements from domestic sources. In the same year, the Common Market countries imported 66 percent of their fuel requirements, mostly from the Middle East. Though the Arab oil embargo so far is directed only against the United policy to deal with their impending oil shortages. France, for instance, has refused to join in a plan to avoid a price war over the oil supplies. From the American viewpoint, the crisis was seen as confirming the military and political weakness of Europe, partly because Europe still lack any institution for dealing with overlapping economic and security matters. For their part, the Europeans say the frictions predated the crisis. Europeans assert that the U.S. has not given them adequate credit for helping to support the dollar and sharing the costs of running NATO. They complain that the United States too often uses its security umbrella to extract economic advantages. Mr. CLARK. Mr. Downing. Mr. DOWNING. Thank you, Mr. Chairman. Thank you very much, Mr. Hood, for a very excellent comment or statement. You are talking about requirements in the bill 20, 25, and 30 percent. Is that not a permissive item in this legislation? I mean you do not have to meet that? Mr. HOOD. Yes, sir. The final provision of the legislation, as presently drafted, extends an alternative to the Secretary of Commerce to determine whether or not shipbuilding capacity is adequate to meet the percentage milestones. Mr. DOWNING. That is right, these are hoped for goals you say we can meet? Mr. Hood. Yes, sir. Mr. DOWNING. If you are wrong, they would still be worthyMr. HOOD. As I said, Mr. Downing, no two forecasts in this area seem to agree. Mr. DOWNING. Thank you for an excellent contribution. Mr. HOOD. Thank you, sir. Mr. Cook. We thank you very much. Ernie. Mr. CORRADO. Mr. Hood, you pin the justification of this oil import percentage on the award of construction contracts and I think you mentioned there are 90 some applications. Mr. Hoop. 98 I believe. Mr. CORRADO. One of the things that troubles me a little, is this not limited by the amount of subsidy money that is available? Mr. HOOD. Yes sir, to a great extent. Mr. CORRADO. It is not likely any of these operators will build without subsidy and I think that there are only a couple hundred million dollars available and it is not clear exactly how much will be available in the next fiscal year, or thereafter. So it seemsMr. HOOD. Yes. Mr. CORRADO [continuing]. So it seems to me that is the bottleneck. Mr. HOOD. I alluded to that in my statement, Mr. Corrado. And you will recall Assistant Secretary Blackwell indicated that he expected to maintain a CDS level of $193 million per year for tanker construction. This, in his judgment, would enable a 20-percent penetration. Thank you, Mr. Chairman. Mr. CLARK. Thank you very much, Ed, for an excellent statement and answering forthrightly the questions propounded to you. Meeting is adjourned. [Whereupon, at 11:03 a.m., the meeting adjourned.] 31-583-74---19 ENERGY TRANSPORTATION SECURITY ACT OF 1974 TUESDAY, DECEMBER 4, 1973 HOUSE OF REPRESENTATIVE, SUBCOMMITTEE ON MERCHANT MARINE OF THE COMMITTEE ON MERCHANT MARINE AND FISHERIES, Washington, D.C. The subcommittee met at 10:10 a.m., in room 1334, Cannon House Office Building, Hon. Frank M. Clark, (chairman of the subcommittee) presiding. Mr. CLARK. The Subcommittee on Merchant Marine will please come to order. This morning we continue hearings on H.R. 8193 and similar bills that would require a percentage of our oil imports be carried on U.S.-flag vessels. We look forward to hearing from several witnesses who have the distinction of serving on the Commission on American Shipbuilding. The Commission was created by the Merchant Marine Act of 1970, to carry out a series of tasks and submit a report to the President. After a thorough study, this report was submitted on October 19, 1973. Some of the conclusions of this report it appears parallel the basic thrust of H.R. 8193. Therefore, the subcommittee looks forward to receiving the testimony of these gentlemen on the proposed legislation. Our first witness this morning is Rear Admiral Albert G. Mumma, U.S. Navy Retired, Chairman, Commission on American Shipbuilding. Admiral, if you will take the stand and if you will, for the record, give who your people are that are with you. STATEMENT OF REAR ADM. ALBERT G. MUMMA, U.S. NAVY (RET.), PRIVATE CONSULTANT, SHORT HILLS, N.J.; ACCOMPANIED BY JOHN H. LANCASTER, EXECUTIVE DIRECTOR, COMMISSION ON AMERICAN SHIPBUILDING Admiral MUMMA. Mr. Chairman, Madam Chairman, I thank you very much for the privilege of testifying before this committee concerning H.R. 8193. I am offering my personal views. Though these views are in general in basic agreement with the views of the majority of the Commission on American Shipbuilding, which report was submitted to the President and to the Congress on October 19, I still would like to emphasize they are the ones that I hold personally. |