coming for many years-repeatedly and specifically warned against the hazards of dependence upon foreign oil supplies.

In early 1973 the "Second Annual Report of the Secretary of the Interior Under the Mining and Minerals Policy Act of 1970” clearly described the unfavorable energy supply-demand trends confronting the United States. The report recommended several corrective governmental policy actions some of which have been taken under stimulus of the Arab oil embargo. Thus, in summary, hard data developed in Interior have been adequate to alert us to the hazard. Now that shortage has occurred, however, the data are insufficient to provide a basis for energy allocation, and it appears that the information system may be barely adequate for general longer term planning in the light of current uncertainties. We have requested additional funds to strengthen our capability.

In the course of reassessing our data collection functions in the light of the new requirements we have identified a number of problem areas. The design of a basic, practical, and effective information system to assess the consequences of policies, existing and potential, is a major problem. The system must be responsive to change and yet maintain continuity. The standardization of definitions, the format of statistical reports that limits items that can be collected, and the organization of primary data to improve its retrievability and usefulness are difficult problems because of the complexity of the energy industries.

Problems arise with the sorting of fact from conjecture in the statistical area. This is especially true in reserve reporting. Collection of data has been necessarily confined to the collection of information where there is a recognition of standardized definitions and of procedures such as are reported in the measured and indicated categories.

The capability to conduct analytical studies that could provide energy information essential to an adequate data system is seriously inadequate.

The matching of statistical information is a difficulty that confronts and often precludes good analysis. Current information systems have essentially been designed to serve specific purposes than being multipurpose. This limits the utilization of collected data. Improvements are being made but greater improvements are essential. A recognition of a requirement for the need of proprietary information results in some limit to data collection. This is especially true in the cost-price and reserve information areas.

The cost of obtaining specific information as well as the time required are major problems. Although timeliness is essential, faster compilation of reliable indepth data on a national basis even for emergency purposes, is impractical under current reporting concepts when the magnitude of the energy industries is considered. Improvements also are needed in the relation of energy to smaller geographical areas.

Data relating to international operations of energy industries are seriously inadequate. Improvements in data collection, processing, analysis, and publication must be made. Standardization of defini

tions and procedures or improvements in matching methods is a must in this area.

Mr. Chairman, in closing I would like to reiterate the two main points of my testimony this morning.

First, the products of the mineral intelligence effort in the statistical area have for the most part been adequate for Government and industry needs. However, at times, imposed limitations have deterred the collection of some desirable data and the development of related analysis.

Second, statistical requirements change from time to time, and the Department of the Interior data collection and analysis efforts have, within their funding limitations, been responsive to those changes.

This concludes my oral statement, Mr. Chairman, and I shall be pleased to attempt to answer any questions that you or the other members of the subcommittee may care to ask.

Chairman PROXMIRE. Thank you.

[The prepared statement of Mr. Rigg follows:]

PREPARED STATEMENT OF HON. JOHN B. RIGG

I. INTRODUCTION

My name is John B. Rigg. I am Deputy Assistant Secretary-Minerals, Department of the Interior. Under my jurisdiction are the United States Geological Survey and the Bureau of Mines. I am here to discuss the adequacy of the energy industry statistics.

The Bureau of Mines has the responsibility for collecting and publishing those statistics. To assess their adequacy, it is important that we understand the background and procedures used for data collection and analysis.

Secretary Morton is well aware that the statistical base for Government planning needs improvement. Indeed, in his Second Annual Report to the Congress under the Mining and Minerals Policy Act of 1970 he pointed out the problem that the U.S. Government information base for the conduct of its mineral responsibilities is grossly inadequate.

To an ever accelerating degree our Government must act promptly on questions of national and international concern involving mineral resources, reserves, production, use, and technology.

Government policies and programs are no better than the data upon which they are based.

In a free society government does not have detailed knowledge of many aspects of research, mineral reserves in private hands, investment plans, process details, etc.

Information on foreign mineral operations is even more fragmentary.

Currently information is scattered among a number of agencies: Interior, Commerce, Treasury, Securities and Exchange Commission, Federal Power Commission, Atomic Energy Commission, etc.

Secretary Morton indicated that the solution to the above problem was that government organization must be improved and streamlined, and cooperative measures must be developed so that information available in the public and private sectors can be brought to bear properly upon questions of concern to all.

History

II. BACKGROUND

The present Bureau of Mines procedures for data collection and analysis evolved from almost 100 years of collecting mineral information by many Government agencies. The first report of the U.S. Geological Survey, published 1880, states: “ . . . mining cannot be prosecuted without drawing upon some industries for supplies and in its turn furnishing others with raw materials. This well understood interdependence of human pursuits makes it desirable for the public at large that information should be collected concerning many other features of the mining industry besides its mere production."

Under an arrangement with the Census Bureau, the Geological Survey was entrusted in 1880 with the first mineral census over the entire United States. "Mineral Resources of the United States, 1882" began the annual series that continues unbroken to the present (sinue 1932 as the "Minerals Yearbook”). The Survey continued its role of collecting mineral information through fiscal year 1925.

On July 1 of that year the data collection activities of the Survey were transferred to the Bureau of Mines which at the same time was transferred to the Department of Commerce. By fiscal year 1928, all mineral statistical surveys and economic inquiries formerly handled in the Geological Survey and the Bureau of Foreign and Domestic Commerce were consolidated in the Bureau of Mines.

In 1934, the Bureau of Mines was transferred back to the Department of the Interior. Some consideration was given to leaving the data collection function in the Department of Commerce, but it was finally decided to continue that responsibility in the Bureau of Mines.

Present organization

Many years of experience with various organizational forms have resulted in the present modus operandi of the Bureau's data collection and analysis activities. Basic to the system are the commodity and area specialists located at the Washington Headquarters. These senior employees are scientists or engineers with many years' experience in mining or related fields both with Government and private industry.

There are 80 specialists sharing the responsibility for 324 commodities and geographic areas monitored by the Bureau (110 commodities, 50 States, 5 U.S. territories or possessions, and 159 foreign countries). While this would indicate an average of four separate responsibilities for each specialist, only one would be assigned where the commodity or geographic area is of major mineral importance as, for example, zinc, West Virginia and U.S.S.R. These specialists live on a daily basis with their commodities and geographic areas. It is necessary for them to know and keep in contact with the key personnel in the industry, the production facilities, trade associations, and consumers of their particular commodity. For the States, they work closely with State Geologists, State Mining Bureaus, and other State agencies, other commodity specialists, and the Bureau of Mines State Liaison Officers. For foreign country assignments, they work with commercial and mineral attaches of foreign and U.S. embassies, with individual firms and international trade associations, and directly with governments involved.

The entire operation is under the direction of the Bureau's Assistant Director-Mineral Supply, operating through four commodity divisions, three supporting offices and four field offices. The specialists receive support from statisticians, economists and engineers both within their commodity division and also in the field offices. Staff support is available through the three Headquarters offices. All the offices and divisions become involved to varying degrees in specialized commodity or area studies. The manning table lists a total staff of 558, with 301 professional and 257 support personnel. Hiring freezes and budget restrictions, however, have kept personnel well below that level and as of the first quarter of fiscal year 1974 the total was about 100 below full strength. The operating budget for fiscal 1974 is approximately $11.5 million.

Energy industry statistics are primarily the responsibility of the Division of Fossil Fuels which has an authorized staff of 95 with 43 professional and 52 support personnel and a fiscal 1974 budget of approximately $2 million. The Division is organized into four branches, Petroleum, Natural Gas, Coal and Interfuels and Special Studies. The Uranium and Thorium Specialist is assigned to the Division of Nonferrous Metals.

Data collection procedures

The specialists in the four Bureau commodity divisions supported by the field and Headquarters offices utilize a large number of sources of information including:

1. Voluntary Industry Canvasses—monthly, quarterly, semi-annual, annual, 200 surveys, 150,000 responses.

2. State Agencies-State Geologists, State regulatory agencies, etc., aided by Federal-State cooperative agreements.

3. Personal contact-frequent visits in person and by telephone, and correspondence with industry leaders.

4. Bureau of Mines State Liaison Officers.

5. Trade Associations—publications, meetings, and conventions.

6. Technical Societies-journals and meetings.

7. Federal Agencies-Federal Power Commission, Department of Commerce, Federal Trade Commission, Atomic Energy Commission, etc.

8. Published data-periodicals, technical reports, foreign service dispatches, books, company annual reports and reports to the SEC and other agencies. 9. Special Studies-field investigation of selected industries or areas.

10. U.S. Geological Survey resource reports.-The Geological Survey provides information on the much broader category of "resources," and makes detailed special studies in support of assignments made by the Secretary. A recent example of a major Geological Survey resource study is Professional Paper 820, "United States Mineral Resources" issued in mid-1973. The Geological Survey requires, and makes available to the Bureau of Mines and the public, data on mineral production from mineral leases on Federal lands and the Outer Continental Shelf.

11. U.S. Bureau of Mines reserve and resource reports.

12. Office of Oil and Gas Special Studies and Data.

13. Grants to universities for special studies.

14. United Nations reports.

15. Mineral and commercial embassy attaches.

16. Mining Enforcement and Safety Administration industry surveys.

The data are reviewed, verified, and finalized by the specialists and published at least annually and often more frequently (monthly or quarterly). The annual "Minerals Yearbook," a statistical summary by commodity and by area, is recognized as the most comprehensive assemblance of mineral data available in the world. In addition, annual Commodity Statements are prepared for internal use and published in an edited edition every 5 years as "Mineral Facts and Problems." These statements not only review supply and demand historical data, but also consider the outlook-future supply/demand relationship. A section is included on reserves and resources and possible problems and future trends in the industry are predicted.

III. WHAT IS INFORMATION ADEQUACY?

This committee is making a specific and urgent inquiry. Although I am reluctant to introduce philosophic consideration that may divert us from our main course, I believe it is vital to an understanding of the diverse and shifting nature of informational needs for commercial and governmental decisionmaking. We can only measure information adequacy in the context of these shifting needs.

The mission of the mineral intelligence unit of the Bureau of Mines has been defined as follows:

"To collect, analyze, and disseminate mineral supply and demand information and evaluate means and costs of meeting national mineral objectives.”

Measured against this mission the Bureau's energy information setup has for the most part been adequate. Analysis of this information led scientists and engineers into research on oil shale and coal gasification with sufficient leadtime to develop invaluable basic knowledge for current expanded research in these areas. Metallurgical and mining research programs also were guided into such useful research as that on special property materials for nuclear energy generation and on advanced mining methods for coal and oil shale.

Industry has made wide use of Bureau data for commercial decisions. Although it is difficult for us to measure the data's adequacy for such use, our working relationship with industry invites criticism, comment, and suggested improvements. The system is not static, but responds to expressed changes in requirements. Our confidence in the adequacy of the information system was supported by a survey in 1968 by Opinions Research Corporation on Bureau of Mines Statistical Publications. The survey revealed that the diverse audience for these reports found them generally adequate.

There have been special circumstances, however, under which rapid change has overrun the ability to adapt to new and sometimes critical requirements. In wartime, data collection has had to be expanded to meet needs of defense agencies. When the environmental and land-use issues blossomed almost over

night, they revealed shortcomings in our basic data that have not yet been fully overcome. We do believe we have met Interior's and Congressional needs in these areas, but have found it difficult and costly to satisfy EPA.

The latestest test of adequacy is the energy crisis. Even with the advantage of hindsight, it does not seem that any set of physical facts would have forewarned us of the combination of events that precipitated the crisis. Nevertheless, in early 1973 the Second Annual Report of the Secretary of the Interior Under the Mining and Minerals Policy Act of 1970 clearly described the unfavorable energy supply-demand trends confronting the United States. The report recommended several corrective governmental policy actions some of which have been taken under stimulus of the Arabian oil embargo.

Thus, in summary, hard data developed in Interior have been adequate to alert us to the hazard. Now that a shortage has occurred, however, the data are insufficient to provide a basis for energy allocation, and it appears that the information system may be barely adequate for general longer-term planning in the light of current uncertainties. We have requested additional funds to strengthen our capability.

IV. THE ENERGY INDUSTRIES

Energy permeates the entire fabric of an industrial society. Thus, industries involved with energy range from those manufacturing the specialized tools needed to search for or produce fuels to the remote small store selling gasoline or heating oil to an ultimate consumer. Intermediary fossil fuels industries include the exploration firms, producers, extractors, transporters, refiners, importers, and distributors. One of the large associated energy industries is that of electric energy generation and distribution by public utilities.

The magnitude and diverse nature of the energy industries precludes combining them into a discrete unit for informational needs. The Department of the Interior has a long history of involvement in energy resources, energy minerals production and hydroelectric generation. Consequently, Interior has been held responsible for energy industries data collection in the part of the spectrum from exploration to production of mineral fuel commodities and on a limited basis, electric energy. In response to increasing need, the Department expanded its concern on a limited basis to distribution and consumption. Departmental analytical efforts encompass nearly all of the energy industries. The initial data collection responsibility for some important elements, however, is properly assigned to other agencies.

Oil and gas

V. ENERGY DATA COLLECTED AND PUBLISHED

The Bureau of Mines conducts 26 separate industry canvasses involving the petroleum and natural gas industry. Ten of these are monthly surveys, 15 are annual and 1, Crude Oil Pipeline and Storage Survey, is on a 3-year basis. The number of establishments contacted range from as few as 12, District V Petroleum Supplement, to as many as 5,000, Fuel Oil and Kerosine Sales and Inventories.

Six monthly, 1 quarterly, and 8 annual Mineral Industry Surveys are distributed free to industry and interested Federal and State agencies. Data also are published in the annual "Minerals Yearbook" and every 5 years in "Mineral Facts and Problems."

The results of the Bureau of Mines canvasses of the oil and gas industry for operating data both monthly and annually on a voluntary basis have been highly satisfactory. A comparison of the information received in these canvasses with related data from other sources indicates a high degree of accuracy.

In the survey of the petroleum refining operations for September 1973 264 plants were canvassed, of which 250 reported. The operating data on the 14 unreported plants, representing 5.3 percent of all the companies canvassed, were estimated based on reports previously submitted by these companies. These estimated data amounted to 0.3 percent of the total crude oil refinery runs for the month. This reporting pattern is representative for other months. The accuracy and reliability of the survey is shown by a comparison of refinery crude runs to the supply of crude oil as indicated by State production figures and the amounts of crude imports.