the action proposed individually. The amounts so far expended or projected, while impressive in total, seem to be only a small proportion of the expenditures by any one of these companies for research. On the other hand, the research program involved is specifically limited to conventional mining and retorting methods, in which, as I have noted, others are independently active. Moreover, since Government facilities were to be used, conditions were imposed on the availability of technology, including both patents and background information, considerably more stringent than would be the case were this a joint arrangement not involving the Government facilities. Patents, both those there developed, and those held by the participants which are necessary to the use of the patents here developed, are to be available on reasonable royalties to those companies considered "responsible" by the Secretary. And background know-how is to be made public. Some head start is given these companies in exploitation of this background technology, 3 years as to some of it; but as I pointed out this project concerns conventional processing techniques. The fact that costs and other factors dictate that shale liquids derived by conventional techniques are likely only very gradually to become part of refinery supply would seem to minimize the competitive advantage of this headstart. Nevertheless, the actual developments should be closely watched. Future research operations in which the Government participates, either directly or by subsidy, including the subsidy involved in lease grants, should be conditioned on provisions insuring that the technology involved is broadly available on reasonable terms. To conclude: the potential of shale is enormous; its realization highly problematical; and care must be taken in whatever leasing program is to be followed that it insure the potential for ample competition, in the event that reduction of shale oil becomes economically feasible. If it is appropriate on balance to lease some part of these lands to stimulate research, the amount to be leased should not be so great as to bar competitive access by others should shale costs reach economic levels, and the result of the subsidized research ought to be widely available. Let me just add to that last comment that I do not mean to imply that a private joint venture not involving subsidy might not appropriately be compelled to make its technology available. That would raise an ordinary antitrust question on which I do not want to imply any judgment here. That concludes my formal testimony, Mr. Chairman. Senator HART. Thank you very much, Mr. Turner. You comment about the Rifle plant, and describe in general the activities that have gone forward there. You may recall that several years ago I wrote your predecessor, Mr. Orrick-this was when that contract was being discussed--and in the letter I expressed concern and pointed up the possibilities of monopoly as a consequence even of the industry-government contract there. And Mr. Orrick replied that the Department would make no antitrust exemption in connection with the agreement, and that it would keep an eye on the development. And clearly you have indicated in your prepared statement that you are continuing observation. And you wind up by saying that the actual development should be closely watched. We are glad of that. But have you anything further that you would like to say in commenting on this? I mean, who particularly will be doing the watching from the standpoint of the Department of Justice. Mr. TURNER. If anybody would, it would be my colleague, Mr. Lamont whom I brought with me today. Senator HART. You say if anybody. Why don't you say he will? Senator HART. What the future holds with respect to this resource is indeed beclouded with the usual drapery of the uncertainty of history. But let me ask this question. As the cloak parts, or as the effort is being made to penetrate and to exploit and develop and to market, will the Department of Justice, and particularly Mr. Lamont, assume the responsibility for observing the developments, and if anticompetitive implications are discerned, react quickly by raising a question as to the prudence of the course. Mr. TURNER. I can assure you that the Antitrust Division will, yes. Senator HART. In response to my letter to Mr. Orrick, we were advised the Justice Department would do exactly as you are saying. Has there up to this point been anything developed which has caused you to react? Mr. LAMONT. No. This matter was assigned for investigation almost immediately. There was a preliminary examination. It was concluded that nothing had developed up to about a year ago that wanted action. Since that time we have simply kept in touch with what is being done to the extent that we can-I mean to the extent that it is reasonably possible. Senator HART. The correspondence which I have commented on, namely my letter to the Attorney General and Mr. Orrick's reply, were made a part of this record in connection with my opening state ment. Now, if you find this as this development goes forward, I would hope that you would advise the subcommittee with respect to it. Mr. TURNER. I can assure you we will. Senator HART. Mr. Lamont, for the record, can you briefly give us the background of this Interstate Oil Compact? I ask because I am going to ask you a question with respect to it and I cannot summarize it for the record. Are you in a position to briefly explain what the Interstate Oil Compact is? Mr. LAMONT. Well, in 1935 there was an agreement that was entered among the oil-producing States, and ratified, or consented to by congressional resolution at that time. This compact is now subscribed to by, I think, 30 States. It provides very generally that the States that are involved will take action to insure conservation. It does not exactly define what conservation is. It also provides for the establishment of an Interstate Oil Compact Commission. This compact and this commission so provided, as we believe, and we have under a joint resolution been required to observe its operations for some years-this commission and the compact simply serve as a means of exchanging of information among the States involved, a vehicle through which to exchange ideas and discuss problems that are common to the States. It is periodically renewed. Beginning in 1935 it was renewed in 2year intervals until 1942. From 1942 to date it has been renewed at 4-year intervals. There is a current renewal proposal now before the Senate before one of the committes of the Senate. I believe it is Senate Joint Resolution 35. Senator HART. Now, you say that the compact and the commission are intended to enable States to practice conservation of this resource as well as exchange information. Now, there has been some indication here that that purpose is not being achieved or has been lost sight of-that the compact and commission are now more sensitive to the price maintenance consequences of their decisions than they are of their conservation aspects and implications. Can you comment on that? Mr. LAMONT. Well, one thing I would note on that-that the States, in their prorationing activities, the market control aspects, do not purport to act nor do they need to act under the authority of the compact. There is a wholly independent statutory base--the so-called Connally Hot Oil Act-15 U.S.C. 616 et seq.-which provides for the necessary consent of the Congress to a State's interference with interstate commerce by virtue of prorationing. I think, in other words, the answer to the whole operation to which you refer is independently based, and the compact and the commission as such do not participate in the limitation activities. Mr. CHUMBRIS. For clarification, if I recall, the Peerless case, which goes back to 1951 or 1953, indicated that price and conservation were sort of intertwined, and that is why the Supreme Court held in that case that the State of Oklahoma could consider price in its conservation policies in dealing with natural gas. Later came the Phillips case which of course went into another area. But in the Peerless case the Supreme Court held the State of Oklahoma, under the 10th amendment, has the right to consider price and conservation as a police power of the State, even though some aspects of it may get into interstate commerce, and run contrary to the interstate commerce clause of the Constitution. Mr. TURNER. I have a recollection of those cases because I was clerking on the Supreme Court when they came down-that is the Peerless case. I think you have quite accurately described it. I would just put in the suggestion, however, that the court obviously did not pass on the question as to what the real purpose of the instant regulations was. Of course, as you say, the argument is made that maintenance of minimum prices is an aid to conservation, and in a sense I suppose it is. The higher the price, the less of the commodity is going to be sold, so you conserve in that sense. It is also possible that at a higher price there will be greater efforts made, at least presently or ultimately, to guard against wastage of natural gas or petroleum products, and greater efforts will be made to extract the last ounce, so to speak. Those are the arguments that are made. I would just suggest that they are not necessarily decisive arguments, and that there are some arguments the other way. Mr. CHUMBRIS. I did not want to get to the real merits of either one of the two cases, but to point out that price and conservation are intertwined. And also when we talk about conservation we are talking about conservation of the product, whether it be natural gas or oilnot conservation in the sense we have been discussing the last 3 days, when we were talking about the conservation of the topography of the States involved. Mr. TURNER. That is right. Senator HART. Congress is to be advised, I understand, annually of the operation of the Compact. Would you provide for the record the copy of the report last filed, and it will be entered in the record. Mr. TURNER. We will do that. (The information to be supplied by Mr. Turner may be found at p. 614.) Senator HART. That will reflect, I take it, the most current evaluation on your part of the operation of the Compact. Would you want to use this opportunity to up-date the report? Mr. LAMONT. No. Senator HART. Did I understand you to say there is pending a resolution that would extend it? Mr. LAMONT. Extend the Compact; yes, sir. Senator HART. Have you testified in connection with that resolution? Mr. TURNER. Not to my knowledge; no. Mr. CHUMBRIS. Point of clarification. This Interstate Compact Commission is one in which the members meet regularly. If I am not mistaken, I think they meet about four times a year. And the Governnors of all of those States almost uniformly attend those Interstate Compact Commission meetings. It is just like any other group that might be interested in that particular resource in that particular State. And it is one that is not taken very lightly. It is a very active type of commission. As a mater of fact, I attended several of those myself way back in the fifties. And I know they go into great detail. Senator HART. I have the vague and terrible impression that as Lieutenant Governor of Michigan I was on that. So I think the correct statement is to say that oil-interested States are very active. Mr. LAMONT. And your colleague, Senator Hansen, was active on the commission at one time, I believe. Senator HART. I beg your pardon? Mr. LAMONT. I said your colleague, Senator Hansen, was active on the commission at one time. Senator HART. I think in earlier discussion in connection with these hearings, that point was made. In the Secretary's announcement of his program, in connection with oil shale, and in his testimony yesterday, we discussed the possibility of consortiums of oil companies being developed for the purpose of going into this research and development. Do you feel that any proposed consortium first should be approved by the Department of Justice? Mr. TURNER. Well, that is a hard question to answer, Senator. I think we would certainly be interested in seeing what the proposals were. And I would suppose that informally and voluntarily any of these things will be sent to us for any comments that we may wish to make. We certainly feel these are potentially important arrangements. And, as I say, within the Government quite commonly these matters, even without statutory or other compulsion, are referred to the Department of Justice. Even though we have no statutory authority to approve or reject, our comments are given fairly serious consideration, and I would expect that that would happen on any arrangements here. Senator HART. Well, in your very opening statement you said that you disclaimed any competence or intention in the geological problems, and so on. You need not be in the least uncomfortable with me, because that describes me, too. But after a few days of listening, we understand clearly that we are discussing something with fantastic theoretical value-I use your adjective there-and of enormous potential value— just in the boxcar figures, no matter how you slice it. And we are on the eve of the announcement of a program intended ultimately to introduce into commerce this resource, if the economics justify it. And the program contemplates-and I know the Secretary wants to build in all the protective devices that ingenuity can suggest that major petroleum companies will put up some money to do some research. They will have made available to them acreage sufficient to do a research. Then if they break through, more. No one knows for sure what the answer will be, but if the answer is a success story, the Department of Justice will be knee-deep in the implications that will follow. Now, why doesn't it follow that the Department of Justice should be in knee-deep from the very beginning? Maybe nothing will ever develop. But if it does, wouldn't you kick yourself if you had to say then "If we had only had a chance to voice this concern, if we could have only pointed up this arrangement as containing the possibility of-of having this anticompetitive effect, it would have been better. Why doesn't it follow that among all the other protective devices that the Secretary is trying to build in here, there should be provision for a Department of Justice review of every one of these arrangements? Mr. TURNER. I offer no objection to that. I would hasten to add, how ever Senator HART. Offering no objection, I do not know how the bureaucracy works. Does that mean you await an invitation, or is it not correct to ask to be invited? Mr. TURNER. I could go further than that, and I can say that the Department of Interior has always been quite aware of the fact that we are interested in matters of this kind. We have reviewed light and power contracts, wheeling arrangements. It is, I would think, fair to say common practice for Interior to raise matters of this kind with us. If you will hold just a minute, I can check in a little more detail, because Mr. Lamont has been liasion with Interior for us for a long time. Mr. Chairman, let me continue. As you know, the Secretary's program is just in the general stages of formulation at this point. And we have not been as yet invited to comment, but we have every expectation that we will be, and we will make sure that we will. Senator HART. That is good. This is not to suggest that I thought the Secretary of Interior might not ask. But it is just one of those things that it is more comfortable to know that you will doublecheck. I raise that also because of the experience, as I understand it, involved in that Rifle contract, where the Department of Justice at the |