First, to make contact with all the existing main collectors and disseminators of energy information, public and private, and establish a computerized capability for pulling all that information together for comparison and analysis.

Second, to collect systematically from major energy companies information on their properties and operations, in sworn, mandatory reports.

Third, to divide all this information into three categories for three uses: Public, confidential, and secret.

The reason for that classification of information into three categories is to strike a reasonable balance, to draw a fair boundary line, between two essentially conflicting interests. One is the energy corporation's interest in keeping secret as much as it can of the energy information it has developed at its own expense in hopes of using it to make a profit. The other is the public's interest in having as much of that same information as possible come out in the open, so that the forces of competition or regulation or both can keep those profits within reasonable bounds.

The bill draws this boundary line at a point much more in the public's favor than do existing Federal laws, regulations and policies. We can naturally expect the corporations to contest that redrawing of boundaries as vigorously as they can, and one of the purposes of the forthcoming hearings in the Interior Committee will be to give that difficult problem a full airing.

It is absolutely vital that the Government know how much energy we have and it is the purpose of this legislation to provide the authority and means to get it.

Something that Mark Twain once wrote catches, I think, the mood of the American people today. In volume I of his autobiography, the sage of the Mississippi wrote:

Figures often can beguile, particularly when I have the arranging of them myself. The remark attributed to Disraeli would apply-"There are three kinds of lies-lies, damned lies, and statistics."

Mr. Chairman, we cannot have the American people thinking of our energy statistics as the third and lowest form of lie. The Energy Information Act is intended to establish a national System for providing energy statistics that will be current, complete, analytic, comparable, and above all, believable.

Mr. Chairman, I have two editorials on this issue from the New York Times and the Washington Star-News which I would submit as part of this statement, if the committee wishes to include them in the record, and I have a copy of statements that were made at the time we introduced the bill by Senator Jackson and myself, which may be of some value to the record. I also have a monograph by Ray Watts, who is here with me at the table, of the Select Committee on Small Business, in which he has compiled a number of quotations on the benefits, the costs and the specifics of corporate information disclosure from 1776 to 1973, which I will submit for the committee files or for the record, if the committee believes that they are a valuable part of this hearing record.

Thank you, Mr. Chairman.

Chairman PROXMIRE. Thank you.

We would be delighted to have all that information.

The editorials will be printed in the record at this point and the rest of the material we will look over and include as much as we

can.

[The information follows:]

[Editorial from the New York Times, Jan. 17, 1974]

KNOWLEDGE AND POWER

The credibility gap created by the energy crisis is threatening to match that of Watergate. The paucity of verified facts has provoked angry complaints from Congress and state governments and led to widespread public suspicion that the oil shortage may be "contrived" rather than "real," in the words of New York State's Attorney General.

In response to this pressure, which has been mounting for many weeks, major oil companies now have abandoned some of their secrecy and published statistics on their petroleum stocks. And the Administration's Federal Energy Office (F.E.O.) has departed from its willing dependence on unverified industry data to order a field unit of refinery prices, profits and supplies. These moves are in the right direction. But they do not go far enough. Nor does the information authority requested by the Administration in the emergency energy bill now before Congress, as Federal energy chief William Simon has implicitly acknowledged. He told a Senate subcommittee this week that he would soon propose new legislation providing "mandatory reporting systems and mechanisms to check and enforce their proper operation."

In the pending emergency bill, the Administration inexplicably did not ask a mandate for systematic verification of company reports by the Government, to be conducted regularly on a thorough-going basis. A study by the General Accounting Office concludes that such verification is essential to "credibility of the data on which policy decisions are based."

But leaving such veritication solely to the F.E.O. is not sufficient, for the Government undoubtedly will respect the confidentiality of company data. In what has often been a highly competitive industry, an argument can be made for the right of oil companies to insist on confidentiality. But there is little competition in times of shortage. If public confidence is to be built, an independent review of company and Administration records is vital. It could be carried out by the Congress-perhaps through a joint energy committee or on behalf of Congress by the G.A.O.

Unlike electric power plants, oil is an energy industry "that is almost totally unregulated, Chairman Jackson of the Senate Interior Committee recently noted, adding that the international oil companies, among other things, deal with foreign governments "almost as their own State Department".

The suspicions that this situation has created at present makes it essential either that the public be informed directly or that a Congressionally-responsible body, such as the G.A.O., verify the facts for the country on a regular basis.

[Editorial from the Washington Star-News, Jan. 17, 1974]

GETTING THE ENERGY FACTS

By far the most frustrating aspect of the energy crisis is that nobody knows enough to take its measurement. The government's information about oil supply comes mainly from the petroleum industry, and projections have gone up and down like a roller-coaster during the past year. One day the fuel outlook is horrific, the next day things seem to look much brighter, then the next week brings scary prophecies again. No wonder the public takes a cynical view of the whole affair.

Obviously, the information-gathering system, which always has been a loose and poorly coordinated effort, must be perfected if the energy dilemma is to be coped with, and if the government hopes to generate public confidence. Too many people still question the reality of a critical oil shortage, which undoubt

edly is real in spite of the variations in estimating its size. The Federal Energy Office, under the new directorship of William E. Simon, has tried to estimate for the worst eventualities, but only time will tell whether enough margin has been left for error. Admittedly, the FEO is waiting to see if intolerable car backups develop at service stations before it decides on gasoline rationing. This is what the early aviators referred to as flying by the seat of one's pants.

Of course the big oil companies, upon which the government depends for its data, have been all too secretive about their operations. Simon now is launching the first mission to pry the essential facts from them-about their supplies, prices and profits. Using his own investigators, and agents of the Internal Revenue Service, he proposes to audit every petroleum refinery in the nation, to get a clear picture of total inventories and test the fairness of price hikes. It's a bold stroke, long overdue, but more is needed. This short-term process should be institutionalized in law and expanded for the years of energy insufficiency that lie ahead.

And that would be achieved through legislation offered by Senators Henry M. Jackson of Washington and Gaylord Nelson of Wisconsin. Their full-disclosure bill calls for creation of a federal Bureau of Energy Information, empowered to collect all needed facts from every element of the energy industry. No less important than acquiring this vast information is having such a central, separate agency to coordinate and analyze it.

Some beneficial alterations in the bill may be proposed, in hearings to be held soon, but the concept is right. For energy, as we all finally have realized, is the key element in our economic life, and shocking surprises of supply and demand must be avoided in the future. The country could be brought to great grief if a big enough shortage shock should come along.

[From the Congressional Record, Dec. 6, 1973, pp. S22002-S22014]

(By Mr. NELSON (for himself and Mr. JACKSON)

S. 2782. A bill to establish a National Energy Information System, to authorize the Department of the Interior to undertake an inventory of U.S. energy resources on public lands and elsewhere, and for other purposes. Referred to the Committee on Interior and Insular Affairs.

ENERGY INFORMATION ACT

Mr. Nelson. Mr. President, for the first time since World War II, the lights are going out all over America.

Our people are reading this morning's bad news in half-darkened restaurants.

At this moment, Americans are getting traffic tickets for driving over 50, although they have paid-dearly, if not wisely-for cars and highways designed to carry them at 70.

Here and there factories are closing and their employees are being laid off. There are many reports and more rumors of closings of plants, offices, and schools soon to come.

Rationing of gasoline, heating oil, or both seem real possibilities this winter. Suddenly, the concept energy crisis is very personal. Suddenly, the importance of fuel in our accustomed way of life is obvious in a new, more intimate way.

Yet the crisis should not have come as a surprise to the country. There were warnings enough so that 10 years ago we should have had ready contingency short-range plans for any crisis and long-range plans to meet our continuing energy requirements. Although for over two decades a small number of individual experts have repeatedly warned about the impending energy crunch, the President, the Congress, the press, and the public paid scant if any attention to it. They probably did not notice the warnings at all. It was not current news. It was not today. And for most of those who did notice the warnings it was considered alarmist nonsense because, after all, some magic technology would solve the problem in timely fashion anyhow.

It should be specifically noted that it was the environmentalists and resource experts who understood the problem and issued the warnings. If their advice had been followed we would not now be in this critical situation.

The question now is where do we go from here? No single cause is responsible for our plight, and no simple remedy will cure our situation. Still we must pinpoint each separate mistake that has contributed to our present condition and correct it as best we can.

One major mistake in American practice and policy is quite obvious: We have failed to manage energy because we have failed to manage energy information. We are sitting in the dark because we have been making our energy policy in the dark.

The "we" in these remarks refers, generally, to the whole American people and their government; but, most specifically, to the President, the executive branch, and the Congress.

Three especially important shortcomings in our management, mismanagement, and failure to manage energy information stand out.

UNKNOWN RESOURCES

Failure No. 1 is that we have never obtained a thorough public inventory of our energy resources. The Government has never taken the trouble to determine the energy resources in the public lands of the United States, and has accepted the word of private interests about the resources in the private lands. Without Government inventories of public reserves, without Government validation of private reserves, our speculation about our long-term energy situation is just that: speculation. Surely the subject is important enough to deserve something better than guesswork.

INFORMATION EXPLOSION

Failure No. 2 is that we have not developed better methods-indeed we have developed no thorough, systematic methods at all-for the comprehension and use by the Congress and the public of the massive amounts of energy information that are available. We have not faced up to the problem of the information explosion.

GOVERNMENT AND CORPORATE SECRECY

Failure No. 3 is that we have not insisted that a great deal of other vital energy information that has not been available to us, to the Congress and the public, be made available. We have not faced up to the problem of government and corporate secrecy.

NATIONAL ENERGY INFORMATION SYSTEM

The bill we are introducing today, the Energy Information Act, is intended to avoid these mistakes in the future by dealing forthrightly with all three of these past failures.

It does so by establishing a National Energy Information System to be operated by a new agency, the Bureau of Energy Information, which will be a coequal sister agency of the Bureau of the Census. The Bureau, together with the Department of the Interior, will have all necessary powers to correct these old failures.

In function, the Bureau of Energy Information will somewhat resemble an amalgamation of the statistical and analytical roles of the Bureau of the Census, the Bureau of Mines, the Congressional Research Service, the American Petroleum Institute, the American Gas Association, and the Texas Railroad Commission; but the new Bureau will specialize in energy information of the "hard," objective, smallest-unit, statistical-base variety. The bill expressly contemplates that the Bureau will draw on the work of each of those and many other-public and private energy information gatherers and analysers, without displacing any of them and, to the utmost extent practicably, without duplicating any of the immensely useful work they are all doing. Rather than redoing the work of others, the Bureau will be directed to tie together and relate and compare the work of others, but also to fill in certain large and vital gaps in the work of others. And it will make the results of all that work available, in a more manageable form, to those who need them.

THE ENERGY INFORMATION PYRAMID

The two problems we need to solve the great proliferation of energy information and the great secrecy of some energy information-are so interrelated that they are most easily discussed together.

All the information in the world about our supplies and consumption of energy might be likened to a great pyramid, immense at the bottom, a tiny point at the top.

In the base level of the pyramid are all the smallest unitary, objective, quantitative facts of supply and demand. Examples on the supply side would include the proved reserves and daily production of a known oilwell, the crude oil input and refined product output of a particular, refinery, the route and cargo of a named tanker, the daily quantity and type of product moving through a specified pipeline, the kilowatt hours generated by a particular electrical plant, the contents of identified fuel storage tanks, the daily sales of a particular service station.

On the consumption side examples would include the jet fuel burned by a named airliner, the coal consumed in a particular powerplant or steel mill, the natural gas burned in Mr. X's home and Mr. Y's apartment building. Obviously, each fact has two components-one of things, the other of people. Every building-block fact in the foundation layer of our pyramid includes the name of a person, country, or company having a proprietary or controlling interest in the energy resource that is being produced, transported, converted, or consumed.

The second layer of the pyramid is smaller than the base, the third still smaller, and so on. The second and all successive layers to the top are not only supported by the bottom layer-they are the bottom layer, condensed and repeated and rerepeated at progressive stages of summary and analysis. Each upper level is only as good-that is, reliable as the basic facts that were taken into it from the layer beneath, and the process by which those facts were selected and summarized and analyzed and presented.

VISIBLE AND INVISIBLE FACTS

While the pyramid of energy information is built-as all pyramids must be from the bottom up, it is viewed by most of us from the top down, or in little spots and patches, here and there, near the top, or near where we happen to be.

Just as in the case of the real great pyramid, in our pyramid of energy information the bottom layer, the basic layer that supports everything above it, is completely hidden from us. Most of the blocks are on the inside; but even the outside blocks of the lowest layers are covered up by the sands.

In the past, this invisibility of the foundation facts of energy information has not troubled many Americans. The blocks of the pyramid that they could see, near where they lived and worked, looked good enough, and the banner waving from the very top looked best of all. It read, “Energy Is Cheap and Abundant."

Now-it seems suddenly to most citizens, although some of us have been warning for years that it would happen-the blocks near where we live and work look dark and crumbling, and the banner at the very top has been changed. It now proclaims, in every language of the world and in letters high enough for all but the blind and illiterate to read. "There isn't Enough Energy."

These shocking changes in the appearance of the part of our energy information pyramid that we can see are making all of us-in and out of the Congress-look more closely at the whole pyramid, and start to wonder and ask about the parts we have never seen.

This new curiosity is a healthy thing. "Knowledge is power," Francis Bacon wrote in the 16th century. To increase our power to deal with the energy crisis, we need to know many things about energy that we have not troubled ourselves to know before. Furthermore, it is not enough merely to "know" some "fact"; we need to know how we know. When our source for a particular fragment of knowledge is something other than our own observation and experience, we will be wise to inquire about our source's source. There is real peril, if we omit this, that some fact we are learning about oil will prove, actually, to be snake oil.