At this point the technology is not a drilling technology, but it a mining technology which opens up another range of possibilities for another group with technological know-how to get involved into the multimineral industry, including petroleum and aluminum. I ask this not in the form of a question, but in order to clarify the record here in regard to Mr. Chumbris' remarks. Senator HART. Doctor, did you have anything you would like to add? Mr. MUELLER. No, I have no further comments. Dr. PREWITT. No, thank you, sir. Senator HART. Thank you. Next we had scheduled the vice president of the United Automobile Workers, Pat Greathouse. We regret to learn Mr. Greathouse is not able to be with us. I am delighted to welcome the UAW's Washington legislative spokesman, and old friend, whom we welcome in place of Mr. Greathouse, Frank Wallick. STATEMENT OF PAT GREATHOUSE, VICE PRESIDENT OF THE UNITED AUTOMOBILE AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, AFL-CIO, PRESENTED BY FRANK WALLICK, UAW, WASHINGTON LEGISLATIVE REPRESENTATIVE Mr. WALLICK. Thank you very much, Mr. Chairman and members of the subcommittee. As vice president of UAW and a member of our international executive board's committee on conservation and natural resources development, Mr. Greathouse is grateful for this opportunity to express the views of our membership on the vast problem of oil shale and the dangers of monopolistic development of this great national treasure. First, on behalf of the officers of our organization and our membership, let me say we are deeply indebted to you, Senator Hart, and to other members of your subcommittee and to the staff of the subcommittee, for holding these hearings to explore and shed light on the problem presented by this immense resource. We have followed the testimony of the many expert witnesses you have called and we feel that you are doing a great public service to enlighten the American people on what is at stake in development of oil shale, variously estimated to be worth anywhere from $300 billion to the staggering sum of $2 trillion. Secondly, the UAW feels that the public interest must be uppermost in any consideration of oil shale. As you have heard many times by now, nearly 80 percent of the surveyed deposits of oil shale are on public lands. The past history of careless leasing of Government lands rich in oil and minerals is all too tragic to allow any future leasing to be handled with less than the most prudent and circumspect regard for what is best for the American people. Congress has a sacred duty to prevent another Teapot Dome. Third, we agree with the western Senators who would like to see oil shale developed soon. As a previous witness from the UAW told the Senate Interior Committee earlier this year, "a frozen asset is no asset at all." If the royalties from oil shale are to be used for educa tion, for outdoor recreational land acquisition for social security benefits, for rebuilding American cities-it will do no good to dillydally around for years tilting at legallistic windmills. We do not for a moment believe that oil shale royalties can pick up the tab for all of America's neglected social needs. But the sooner an equitable system of oil shale development can be agreed upon by all of the interested parties-including Congress the sooner its revenues will be available to the American people. Fourth, we favor a public corporation along TVA or Bonneville lines to act as a public yardstick to prod the private oil companies to develop their own oil shale deposits and to help keep them honest in pricing oil for the rest of the American people. The history of TVA and Bonneville shows that electric power rates become steeper the farther away they radiate from Grand Coulee and the Tennessee Valley. The wonderful thing about TVA and Bonneville is that private industry and even the privately owned utilities have grown and prospered from the stimulus of these two public corporations. We are not necessarily suggesting that a public corporation develop all publicly owned oil shale deposits-perhaps only enough to spur and prod the private oil companies to respond with what they presently own. And as a reward for good public behavior on their own land, these private oil companies conceivably could be granted leases on public land so long as an oil shale public corporation was there to protect consumers in pricing. Fifth, we fear as other witnesses before this subcommittee have indicated that oil shale prospects may have been oversold as Utopia. Colorado, Wyoming, and Utah may be in for a rude shock to find that private oil companies would only sit on their leases and there would be no guarantee to the people of those States that any oil, any revenue, or any other public benefit would emerge if Congress and the Secretary of Interior did everything the private oil companies ask of them. Sixth, we believe there are genuine, but not insurmountable questions of conservation which cannot be dismissed lightly. Watersheds, the configuration of terrain, and wildlife would certainly be affected by extraction of oil shale at the present time. These are not questions of monopoly, but they deserve attention by all public-spirited citizens. Seventh, it is absolutely essential to the American people that the allocation of the Mineral Leasing Act of 1920 be changed to reflect contemporary needs. As the subcommittee well knows, the present allocation calls for 52 percent for the reclamation fund, 371⁄2 percent to the States, and only 10 percent to the Federal Government. This formula is totally unrealistic and before any accepted leasing system is approved by the Secretary of Interior, he should ask and the Congress should support a new allocation fair to the pressing needs of our times and to the American people whose assets these are. Eighth, the oil depletion allowance of 272 percent-which would apply to the in situ type of processing-should not go unscathed in any leasing arrangement permitted for oil shale. Oil shale, we are led to understand, "is a known geological structure and has no costly discovery costs"-in the words of the former Director of the Bureau of Land Management, Mr. Charles Stoddard. He asked the question: "Should the oil depletion allowance apply to oil shale development on public lands?" We think not and beseech Congress accordingly. Ninth, some kind of public advisory or watchdog committee with power to make binding recommendations should be created by Congress. The American people cannot afford to have a trillion dollar asset turned over to the private oil companies with few questions asked and little voice in what happens once a Government lease has been granted. There are many men in public life with no axes to grind, such as the chairman of this subcommittee, Senator Philip A. Hart, who would be ideally suited to serve on such a public watchdog committee. The great fear we have is that some obscure bureaucratic decision will be made and appear casually in the Federal Register which will turn over a trillion dollar asset to private oil companies-and that will be the end of it so far as the American people are concerned. Former Senator Paul Douglas, an eminently respected economist in his own right with a longstanding record of unimpeachable integrity, would be an ideal chairman for a public watchdog committee. We feel the private oil companies should welcome such a move. If their actions and their policies can stand the scrutiny of such men as Senator Philip Hart and former Senator Paul Douglas, they can stand before all the American people with a clear conscience and our own fears as private citizens would be laid to rest. Tenth, this subcommittee should make sure that any Government leasing by an oil company does not impede the extraction of minerals needed for the production of aluminum, and any leasing by aluminum companies does not impede the extraction of oil. Surely this is concern for the Senate Subcommittee on Antitrust and Monopoly Legislation. There is a clear duty to the Congress and to the people of this country on this point. Finally, Mr. Chairman, let me reassert the UAW's conviction that we welcome the development of oil shale. The American people want this treasure unlocked and used for the benefit of mankind as a source of energy, as a public yardstick to protect the pricing of oil, and as a way to finance many neglected needs of our times. Again we thank you, Mr. Chairman and your subcommittee and your staff, for scheduling these hearings so the American people can better understand what is at stake in the public lodestone of oil shale. We especially thank you for assembling a broad spectrum of expert witnesses who have discussed this matter pro and con. Only in this way can the Secretary of Interior and the administration, the Congress, and the American people, make the kind of equitable and publicly acceptable decisions which must be made on oil shale. And, Mr. Chairman, I wonder if I could, at this point, add an editorial from the Christian Science Monitor called "Oil Shale in the West." It also expresses the feeling that oil shale is a matter that deserves a great deal of public examination. I think the fact that this is a highly respected newspaper, the fact that the editor, Mr. Edwin Canham, has been a past president of the U.S. Chamber of Commerce, indicates the questions we are raising are not questions that are necessarily questions that concern only members of the labor movement in this country. Senator HART. Thank you very much for offering that for the record, and the editorial you cite will be received. (The editorial referred to entitled "Oil Rush in the West," from the Christian Science Monitor newspaper follows:) [Christian Science Monitor, May 2, 1967] OIL RUSH IN THE WEST Out in the rugged mesa country of Colorado, Utah, and Wyoming lie oil shale deposits equivalent to three times the known crude oil reserves of the whole world and 70 times the known American reserves. Accustomed as we have grown to astronomical figures, we nevertheless find the $5 trillion estimated value of these oil shale deposits a staggering sum. Oil shale is a fine-grained sediment from which oil can be obtained through distillation. Private concerns are presently engaged in a highly competitive, closely guarded, and frantic race to find a commercially profitable extraction process. They have made considerable progress. And we can safely assume that, whether through nuclear energy or some other means, they will succeed. One company claims it will have a plant ready in 1970. Eighty percent of these vast deposits are on government lands. Private oil companies, well aware of the potential value, would like nothing better than to get permission from government for private development. Tremendous pressures will almost certainly be brought to bear on legislators. Some members of Congress are already prepared to turn the lands over to the companies. Public servants would do well to keep fresh in memory the Teapot Dome scandal of the 1920's. The Secretary of the Interior, charged with responsibility in the matter, sought the advice of an investigatory commission which, it turned out, split right down the middle as to whether or not the government should continue to control these lands or lease them to private industry for development. He subsequently announced a broad federal policy and called for private development regulated to "prevent speculation and windfall profits." One economist has suggested that a quasiprivate body, resembling the Communications Satellite Corporation, be set up. Another, who served on the advisory commission, has proposed development contracts similar to those negotiated by government and industry for weaponry development. Others suggest a government corporation like the Tennessee Valley Authority. Regardless of whether private industry is involved, no extraction process should be permitted which would ravage the land or create new pollution problems. These deposits constitute an unbelievably rich resource-a reserve that may prove vital to the national interest as present domestic oil reserves are used up. If properly managed, they could mean a huge sum in the taxpayer's pocket. No decision should be made without thoroughly weighing alternatives. Only after widespread public debate should the government decide the issue of public versus private development. (A combination of the two may well prove the most acceptable answer.) The next move is up to President Johnson. The people need to know where the administration stands on this issue. They need assurance that it will permit no land grab, no exploitation, no giveaway of these vast and lucrative public resources. Senator HART. Because of the nice things you have said about me, I am sort of estopped from asking you questions. Senator HANSEN. No questions. Mr. CHUMBRIS. No questions. Mr. COHEN. No questions. Senator HART. Thank you very much. We are grateful for your statement. The committee has been the better for having had most of the hearings of these last days in the presence of a man whose background and knowledge in this subject exceeds certainly mine, and I think I can without offense to any of my colleagues on the subcommittee say it exceeds theirs, too. As we reach the end of today's session, we would welcome the reaction and comments of Senator Hansen. STATEMENT OF HON. CLIFFORD P. HANSEN, A U.S. SENATOR FROM THE STATE OF WYOMING Senator HANSEN. Mr. Chairman-and I feel that I can address you in more personal terms than that after the past several weeks of work-let me express my appreciation and the appreciation of my staff for being allowed to participate in these hearings before this subcommittee. It has been an education for all of us. Let me thank, also, you Mr. Cohen, you Mr. Chumbris, and you Mr. Bangert for the courtesies and the help that you have extended to us. I am tempted, as a lawyer might be, to recap these entire hearings, in the manner of a "closing argument," but I am not a lawyer and I find myself more in the shoes of a juryman who can scarcely remember the name of the first scheduled witness. So I will refrain from that temptation. I do think that this subcommittee is to be commended for the excellent record that has been compiled and for the depths which you have explored. Let me if I may, confine my remarks to several of the major issues and debates, if you will, which I see emerging from the entire record of these hearings. I do hope that the questions I have asked throughout the hearings will, upon reading, be found to be relevant to these major issues. I view the two major questions that face our Federal Government with respect to oil shale development as being "when?" and "how?" I say Federal Government because I believe, and I am sure that you would agree, that this is a question which involves not only this subcommittee, but many committees of the Senate and House, as well as the entire Congress and several of our major executive departments. I say Federal Government also because this is a question which does involve all of the people of our country and it is our Federal Government which is charged with properly representing our people. Lastly, I say Federal Government because I am firmly convinced that without the formulation of a positive development policy on the part of our Government we will pass into the 21st century and this resource will remain in the ground where it is of no benefit to our Nation. Perhaps, Mr. Chairman, you would ask the questions of "when?" and "how?" in the reverse order. But I believe that unless the urgent demand for the formulation of a Government policy is made clear to the country, no one will ever bother to seriously consider the "how." Secretary Udall testified before you, but unfortunately neither the subcommittee nor the Secretary had the benefit of his Department's proposed leasing program which was still being formulated for the Secretary's approval. Last week the Secretary indicated that this proposed program was nearly ready to present to the Congress and to the public for scrutiny and for comment, suggestions and objections from all quarters, I am hopeful that this tentative program will be released before the end of this week. That would then bring us to the question of "how?" I am sure that the subcommittee would agree that any debate on a matter so large as public versus private development of this resource |