The CHAIRMAN. As I understand that situation, at least on the basis of the testimony before this committee, there are possibly two alternatives here for the elimination of pollution in the exhaust emission of cars. One is through the use of lead-free gas or gas with a very small amount of lead and the catalyst system. The other is to continue to use gas with the present quantities of lead and an afterburner and a trap. Am I correct? Dr. GEE. Yes, sir. The CHAIRMAN. So you are saying that if we put the tax on lead we are really confining future exploration and development along the lines of low-lead or lead-free gasoline and a catalyst, rather than leaving the opportunity open to experiment in both directions? Dr. GEE. Yes, sir, and in order to meet 1975 requirements on particulate emissions and certainly 1980 requirements one will need a trap of some kind. If trapping is required, one must ask the fundamental question, why remove lead? The CHAIRMAN. I see your point quite well and I think that is the problem we face: Shall we confine future developments in one line of action or shall we leave both avenues open? Mr. BYRNES. I wondered about whether the thermal process could be equally effective where you had an unleaded product. In other words, even though we take the route of unleaded gas, don't we still have the question of which can be developed the easiest, or best, or most efficient way: A catalyst or a thermal reactor? Dr. GEE. That is certainly a correct statement in a technical sense but the price one pays is the additional cost to the motoring public, the general confusion that will exist in the petroleum industry, the large costs that will be expended for refinery capacity, the higher prices which chemical companies such as ours would be forced to pay for aromatics, and the variety of other problems that have been pointed out by previous witnesses. Mr. BYRNES. You said to the chairman that you had not experimented with unleaded gas, in terms of your experimentation with the thermal process. Dr. GEE. We have much more data with leaded gas. Mr. BYRNES. As far as you are concerned, there is no reason to believe that the same system will not work on unleaded, because the system does not depend on lead for its operations. Dr. GEE. That is a correct statement to the best of my knowledge. The CHAIRMAN. But we don't have any assurance that the public is going to be satisfied in the future with car performance based upon lead-free gasoline because of the differences in the type of motor, the possible slower pick-up and performance, and the additional cost of gasoline consumption. I am impressed with your point that you and all others should be allowed to go forward on both of these avenues to find out whether it is the lead initially that we want out of the gasoline or whether we want some lead in the gasoline and control emissions to prevent the lead from getting into the air. I said earlier that as far as I was concerned it was not the lead in the gas, it was the lead in the exhaust emissions that bothered me. Mr. BYRNES. I am not quarreling with what the chairman has just said. What does deeply disturb me is whether or not we are pursuing a faulty course. There seems to be at least the idea that lead is a great contributor to pollution and we have to get rid of it, but, if in getting rid of it we add something that is worse as a pollutant, namely, the aromatics then we are going around in circles and getting worseif that is the fact. We are not just going around in a circle but we are spinning off into an area of greater pollution. Dr. GEE. This is certainly a possibility, a projection of what could well happen, yes, sir. This is basically our concern. Mr. BYRNES. I wonder why that particular factor was not mentioned to a greater degree by the technical advisory panel on automotive fuels and air pollution. They call attention to a probability, but they did not put very much of a red flag on it, as I read their report. You call attention to a statement they have on it, but it does not seem to me that they expected anybody to be very concerned about this. Yet the way you present the situation it is something that we had better be concerned with. Dr. DIGGS. We share your concern and I think that is what we tried to express here that it is a basic problem and it ought to be studied before precipituous moves are made. The CHAIRMAN. Apparently from what a number of witnesses are saying, the time has not yet arrved for us to make a decision about this matter. Is that what you are saying, really? Dr. GEE. Yes, sir. Mr. BETTS. Assuming we did abandon the tax route, what would you suggest or what is the incentive to go ahead? Are the industries themselves taking it upon themselves to see that cars in the future have these antipollutant devices or should some legislation be passed as the Senate has passed? I believe we need some incentive, don't we? Dr. GEE. We believe there is adequate legislation under which the scretary of Health, Education and Welfare can set emission standards as he is doing. We think this is the proper route, that the standards should be set as severely as they need to be to protect the public health and again that the industry should be left, the petroleum industry, the automotive industry, the lead industry to meet those standards within the bounds of the most efficient and economic methods possible. Mr. BETTS. Then you go along with the House-passed legislation that requires HEW to set these standards and you go along with that rather than the tax routes as the incentive? Dr. GEE. Yes, sir. The CHAIRMAN. I think that statement has been made by practically every witness who has had any question about the use of a tax method to control this problem. We set certain standards of what we want by 1970 or 1980. Should we leave the industry involved open to use such avenues as may appear possible to reach those goals? That is what you are saying. Dr. GEE. Yes, sir. The CHAIRMAN. If there are no further questions, thank you very much for your interesting testimony. Now, we have the Ethyl Corp. here, Mr. Lawrence E. Blanchard, Jr., to tell us why, when, and where. We appreciate having you gentlemen. I say that because I understand you are a sizeable producer of leaded gasoline. STATEMENT OF LAWRENCE E. BLANCHARD, JR., EXECUTIVE VICE PRESIDENT, ETHYL CORP.; ACCOMPANIED BY HOWARD HESSELBERG, COORDINATOR OF AIR CONSERVATION Mr. BLANCHARD. Our name certainly seems to be linked with the product. The CHAIRMAN. Through your own advertising. Mr. BLANCHARD. Mr. Chairman and members of the committee. My name is Lawrence E. Blanchard. At the outset, I want to thank you for giving me this opportunity to appear today and discuss some of the very important issues raised by the administration's proposal to levy a so-called environmental control tax, in the form of an excise tax, at the rate of $4.25 per pound of lead contained in lead antiknock compounds added to gasoline. I am a resident of Richmond, Va. I am executive vice president of Ethyl Corp., which 47 years ago introduced into commercial use the gasoline additive known as lead antiknock compounds, or tetraethyl lead, now an essential component of 98 percent of all motor gasoline made in the United States. We, at Ethyl, believe that a careful analysis of the proposed lead tax will demonstrate that it makes no sense, economically or politically— and, above all, makes no sense as an environmental control measure. For a proper understanding of the issues involved, I would like to give you a little bit of background on lead antiknock compounds and the role they play in the operation of motor vehicles. I have sat here and heard you gentlemen subjected to the technical jargon over weeks but, as a man with a nontechnical background, no one knows better than I how confusing the subject is. WHAT LEAD ANTIKNOCKS DO FOR AUTO PERFORMANCE High compression engines furnish greater power and better fuel mileage for a given size engine, and the compression ratios of cars manufactured in this country have gradually increased from about four to one, back in the twenties, to the level of nine or 10 to one at the present time. The compression ratio of the engine is limited by knock, the uncontrolled and explosive combination of the fuel in the engine cylinders. Knocks results in severe power loss, possible engine damage, and increased nitrogen oxide emissions into the atmosphere. The measure of a fuel's resistance to knocking is its octane number, the higher the octane number, the higher the resistance to knock. Lead antiknock compounds increase the octane number of gasoline and, thereby, prevent knocking, and, therefore, preventing the development of the most efficient type of engines. At the present time, without the addition of any lead antiknocks to gasoline, the regular gasolines produced by U.S. refineries have an average octane level of about 88. Premium gasolines have an average octane level of about 93 before lead antiknocks are added. The use of small amounts of tetraethyl lead, which is a complex chemical-about a teaspoonful per gallon-adds about six to eight octane numbers, raising the antiknock quality of most regular gas to an octane number of about 94 and premium to about 100. General speaking, our car population is divided into two general categories those needing regular gas of 94 octane and those needing premium gas of 100 octane. On the national average, about 60 percent of the cars on the road are regular gas cars and about 40 percent are premium gas cars. In other words, the cars were manufactured by Detroit to require these grades of gasoline. This is the status with respect to approximately 100 million cars on the road today. I will emphasize here that octane numbers of 94 to 100 can be achieved in ways other than adding lead antiknocks, the chief alternative being the addition of relatively expensive, chemically manufactured high octane components known as hydrocarbons. This was the approach by one oil company for years in one part of the east coast market. More about these aromatics later, but suffice it to say that, in general terms, these are ringed molecular structures, as distinguished from so-called straight chain molecular structures which are used in most other gasoline components. The greatest and most obvious advantage of the addition of lead antiknocks to gasoline for many, many years has been that they obtained the extra octanes in the cheapest way and enabled gasoline to be produced for your and my automobile for from 2 or 4 cents a gallon cheaper than could have been accomplished by the addition of complex aromatic compounds. We estimate that this has saved the motoring public at least $30 billion since World War II. Another important result of the use of lead antiknocks has been that gasoline of a given octane rating could be produced at a saving of about 6 percent in the amount of crude oil used up at the refinery. To put this in better perspective, it has been conservatively estimated that every year lead antiknocks conserve 250 million barrels of crude oil-equal to at least two-thirds of the total oil produced in the State of California. And this country is again learning, in what is being called an emergy crisis, just as we did in World War II, that domestic oil reserves are vitally important. From this brief statement, we trust you will understand that Ethyl is quite proud of the contributions it has made to the automotive and oil industries, and to the consuming public, through the development of the magic ingredient that has made 100 octane synonymous with efficiency, power, and economy throughout the world for about 50 years. By the same token, I hope you can understand some of our frustrations with developments which have occurred, with respect to this product, since the beginning of this year. Even though I recognize that January 1 marked the beginning of the so-called environmental decade, being changed from a hero into a scapegoat in a few short months has been quite a traumatic experience. As Dr. Ragone put it last week, it was literally a miracle discovery and no one has been able to come up with a good substitute, regardless of millions of dollars spent on research, since it was invented. Ironically enough, our present problems originated with a speech on January 14 by Mr. Cole, the president of General Motors. I call this ironical because tetraethyl lead was invented at General Motors in 1921 by the great Thomas Midgley who worked under the direction of General Motors' famous Charles Kettering. Mr. Cole said, in January, that ultimately-possibly by 1975-GM expected to produce cars requiring lead-free gasoline because lead probably interfered with sophisticated types of catalytic devices that they hoped to put on their cars by that time. This speech was reported in many newspapers, which attributed to Mr. Cole colorful language he never used-"Get the lead out, says General Motors president." This clever headline marked the beginning of one of the most publicized campaigns against any product in recent history. Almost immediately, the slogan was picked up by the press, certain environmentalists and certain government officials as an attrative rallying point for all sorts of ecological arguments. After all, even if they had no immediate solution to the complex problems of automotive air pollution, here was one part of its that certainly sounded simple. Starting immediately after Mr. Cole's speech, there were introduced in various State legislatures, including California, legislative measures designed to limit or restrict lead antiknocks in gasoline. Also, the administration proposed, in Congress, new measures designed to give the Secretary of HEW direct regulatory power over all gasoline components. As you know, H.R. 17255 has been passed by the House by an overwhelming vote. But not as a mandate as some references were made to it yesterday but with the proviso, then in that bill, that any decision by HEW must be only on the basis of relevant medical and scientific evidence. A bill is now also being considered in the Senate. We have appeared at all of these exhaustive legislative hearings before State legislative committees and congressional committees, and the legis lative results, to date, indicate that we are getting across our conviction that getting the lead out may cause more problems than it solves. But in the midst of these lengthy hearings, we were met with a new type of attack, begun on May 19, 1970, when the administration suddenly requested the Congress to adopt a confiscatory lead tax. THE LEAD TAX IS CONFISCATORY AND DESTRUCTIVE The proposed tax amounts to about four and one-half times, or 450 percent, of the selling price of lead antiknock compounds. This is the same as a $15,000 excise tax on an automobile selling for $3,400, or a $1,000 excise tax on a washing machine selling for $224, or a $1.50 excise tax on a 35-cent loaf of bread. Since the tax is proposed to be passed on to the motorist as a means of forcing him to change his buying habits, the motorist will be paying an additional 2.3 cents per gallon just for the tax-not to mention other costs such as interest on inventories or for such an inflated price if he owns a car requiring today's high-performance gasolines, and the basic burden of the new tax upon the public will be at least $1.6 billion per year, according to administration estimates. Chief Justice Marshall warned, early in the life of this country, that the power to tax is the power to destroy. The proposed tax on lead in gasoline is a classic example of the abuse of the taxing power. As you |