LETTER OF TRANSMITTAL Hon. SAM J. ERVIN, Jr. U.S. SENATE, Washington, D.C., November 5, 1973. Chairman, Government Operations Committee DEAR MR. CHAIRMAN: As you know, at the end of August, I traveled abroad on behalf of the Committee to study international and European aspects of the energy problem. As is my usual practice after such official trips, I am submitting my report of findings and conclusions. I hope they will be of interest to you and other members of the Committee, particularly as we continue our hearings on the creation of a Department of Energy and Natural Resources. I had delayed submitting my report to you so that it might include observations and comments on the most recent Middle East conflict and its effect on the world energy picture. With best wishes, (V) ABE RIBICOFF. PETROPOLITICS AND THE AMERICAN ENERGY SHORTAGE I. Introduction There has been growing concern over future energy shortages in the United States, and much talk about an "energy crisis." The feeling is widespread that the Federal Government must organize itself better in order to reconcile the increasing demands for energy with a peaking of domestic oil production, harm to our balance of payments position, and dangerous dependence on Middle East oil. Since almost every other industrialized nation in the world is more dependent on foreign sources of energy than the United States, and is generally more efficient in using energy, perhaps this country can learn from their experience. It is also apparent that the world's growing appetite for energy may lead to disastrous competition as Western Europe, Japan, and the United States begin competing for the same finite resources. In order to find some answers to these problems, I traveled to London and Paris last August on behalf of the Government Operations Committee. I had a number of wide-ranging discussions in Europe with the people dealing directly with these problems-with the heads of foreign oil companies, with foreign envoys to the Organization of Economic Cooperation and Development (OECD), with British and French government officials, and with American personnel abroad. Before my trip the Subcommittee on Reorganization, Research and International Organizations, which I chair, had already begun hearings on the proposal to create a new Department of Energy and Natural Resources, S. 2135. Further hearings will be held on this important legislation, and I feel that some of the issues I have raised in this report must be considered if our nation is to develop a coherent energy policy. The following is a listing of some of the people I had discussions with in London and Paris: LONDON F. R. Peter Vinter, CB, Deputy Secretary, Department of Trade George S. Whitehead, Assistant Under Secretary, Foreign and Brian C. Cubbon, Deputy Secretary, Cabinet Office H. Bryan Thomas, Director, Corporate Development, Burmah Oil Frank McFadzean, Chairman, Shell International Geoffrey Chandler, Coordinator, Trade Relations, Shell PARIS Yves Girard, Deputy to the Secretary General for Energy, French Jean-Louis Beffa, Direction des Caburants, Ministry of Industry Emilio Gerelli, Deputy Director, Environment Directorate. Dr. Wolfgang Haussermann, Nuclear Energy Agency, OECD Robert Ovart, Secretary of Energy Committee, Industry and II. The Legislative Context As a Senator from New England, problems associated with energy shortages were not new to me. For a number of years the residents of my home State of Connecticut and citizens in other parts of New England had been paying premium prices for No. 2 fuel oil to heat their homes. Independent dealers, who supplied 25 percent of all the gasoline and 40 percent of all the heating oil to Connecticut residents had their own special problems. During the months preceding my trip, I had strongly advocated a variety of legislative proposals and had taken other actions to ensure the continued flow of petroleum products to New England at the lowest possible prices to consumers. In January I had cosponsored the New England States Fuel Oil Act to permit unlimited imports of No. 2 home heating oil. Later I sought and received assurance from the Administration that its new Oil Policy Committee would establish a special subcommittee to deal with Connecticut and New England's particular problems. In February, I conducted a hearing on Reorganization Plan No. 1 of 1973, which transferred the chairmanship of the Oil Policy Committee from the Director of the Office of Emergency Planning to the Deputy Secretary of the Treasury. At the hearing, the Deputy Secretary agreed to establish a New England Regional Advisory Committee which would include independent fuel oil dealers so that their views could be considered in the deliberations of the committee. In March I had joined in introducing Senate Resolution 74, calling on President Nixon to begin negotiations with the other major oil consuming nations leading to bargaining on a government-to-government basis with oil producing states and their own unified entitythe Organization of Petroleum Exporting Countries (OPEC). In May I had cosponsored legislation providing for continued sales by major oil companies of gasoline to independent gasoline retailers at the same percentage levels as in a previous base period, and to assure equitable distribution of petroleum products to all regions of the country. Along with a number of other Senators, I had also signed a letter to President Nixon urging him to use the authority granted him by the Congress in the Economic Stabilization Act to allocate crude and petroleum products, so that healthy competition of the small independent refiners and gasoline marketers would not be eliminated. |