Senator SPONG. These hearings will be in recess until 1:30 when we will hear testimony from the Standard Oil Co. of Indiana. At that time, we will be joined by Chairman Randolph of the Public Works Committee.

(Brief recess.)

Senator RANDOLPH. Good afternoon, gentlemen.

We will continue the hearing and hear Mr. Robert C. Gunness.

Mr. Gunness, you have associates sitting with you. For the purposes of our record, I wish you would identify them and perhaps we may have an opportunity to hear them briefly. Certainly their statements will be included in the record, and you may proceed as you desire. Do identify the men who sat with you at this time.

STATEMENT OF ROBERT C. GUNNESS, PRESIDENT, STANDARD OIL CO. (INDIANA), ACCOMPANIED BY PHILIP C. WHITE, GENERAL MANAGER OF RESEARCH; AND RUSSELL C. MALLATT, COORDINATOR FOR AIR AND WATER CONSERVATION

Mr. GUNNESS. Thank you very much, Mr. Chairman.

Members of the committee, my name is Robert C. Gunness, and I am president of Standard Oil Co., Indiana.

I would like to introduce Mr. Philip C. White, and Mr. Russell C. Mallatt. Dr. White is our general manager of research. Mr. Mallatt is Standard's coordinator for air and water conservation.

On behalf of our company, I would like to express our appreciation for the opportunity to appear here today.

Our company recognizes that environmental pollution presents a serious threat to the well-being of our Nation, and we strongly support the desire of Congress to take steps to assure cleaner air and water.

We recognize that many of the blueprints for our national struggle against air pollution emanated from this committee. We also know that much of the legislation which the Congress enacted was made more effective and produced beneficial results largely because, in framing this legislation, you gentlemen were willing to take into account the technical and economic considerations brought before this committee by expert witnesses.

Today, we would like to discuss those areas of your inquiry in which our company has had direct experience. We hope the information we shall furnish will be of help to you in evaluating some of the provisions and implications of proposed legislation.

Specifically, we would like to comment on section 5 of S. 3466 which would authorize fuel composition standards and registration of fuels. In doing so, we would like to discuss recent developments with respect to lead in gasoline and to provide related background information. We would also like to comment on provisions of S. 3229 relating to Federal funding of so-called low-emission alternatives to the internal combustion engine.

Senator RANDOLPH. At that point, Mr. Gunness, a question. I have noted your background; although you are now the president of Standard Oil Co., of Indiana, you first began your work with this organization in research and development, is that correct?

Mr. GUNNESS. Yes, it is, sir.

Senator RANDOLPH. I think it is important to document for the record that you speak as someone who understands the problems of research by reason of having come through various levels of research responsibility with your organization. For that reason, we look upon your testimony as coming not only from the president of a company, but from a man with direct leadership in all phases of the company's scope of activities.

(A brief biography of Mr. Gunness follows:)

ROBERT C. GUNNESS, PRESIDENT, STANDARD OIL COMPANY (INDIANA)

Mr. Gunness joined the Research and Development staff of Standard Oil Company (Indiana) in 1938; became Assistant Director of Research in 1943; Associate Director of Research in 1945; and Manager of Research in 1947. In 1952 he was appointed Assistant General Manager of Manufacturing; was elected to Board of Directors in 1953; and was named Executive Vice President in 1956, with the assignment of directing and coordinating activities of the manufacturing, sales, and supply and transportation departments. He was assigned additional responsibilities in 1958, primarily in the field of coordinating of activities of some of the company's major subsidiaries. He was elected president in 1965.

Mr. Gunness was born in Fargo, North Dakota, in 1911; grew up in Amherst, Massachusetts, receiving his Bachelor of Science in Chemistry from the University of Massachusetts, and later earning a Doctorate of Science Degree in Chemical Engineering at Massachusetts Institute of Technology. He remained at MIT as an Assistant Professor of Chemical Engineering for two years.

Dr. Gunness is a specialist in distillation and heat transfer and is prominent in the development of new processes in petroleum refining.

In 1951 he came to Washington on leave from the company to become Vice Chairman of the Research and Development Board of the Department of Defense.

Mr. GUNNESS. Thank you very much for your comments, Mr. Chairman.

First, I would like to commend you, the chairman, and cosponsors of S. 3229 for those provisions which would extend authority to establish national vehicular emission standards to forms of transportation other than the internal combustion engine.

Marketing, as our company does, in 48 States, we believe that the establishment of emission standards by the Federal Government is the most practical way to regulate contributions to air pollution caused by the operation of motor vehicles. We believe that it would place an intolerable burden on both the petroleum and the automobile industries if such regulation were left to the individual States, with a predictable tangle of conflicting standards. Federal standards for control of emissions from other forms of transportation should prove equally beneficial.

The promulgation of technologically and economically feasible standards on a national basis, well in advance of their effective dates, permits industry to plan and prepare on a rational basis, assuring that the standards will be met. Competitive forces in the economy are brought into action, concentrating the efforts and ingenuity of research, engineering, and other personnel to develop the best solutions.

Indeed, the recent flurry of announcements regarding lower compression-ratio engines and the proposed reduction of lead in gasoline, which we will discuss in more detail later, is a prime example of competitive forces already at work preparing to meet anticipated Federal 1975 and 1980 emission standards.

In my comments on these developments, let me note that I am presenting the experience and judgments of myself and my own company, and that I cannot presume to speak for the petroleum industry at large. In many of the areas involved, substantial differences in viewpoint have been expressed. I would further remark that my comments are being made at a time when there is a great deal of uncertainty as to the specific needs of the automotive engine which will be coming out of Detroit this fall, and thereafter. Further changes in manufac turers' plans could conceivably render certain of my remarks obsolete. Standard of Indiana has been conducting research on automotive emissions in special laboratory facilities for more than a decade. Since 1966, we have also engaged in, or have financially supported, extensive joint research with others in both the petroleum and automotive industries, and with the Federal Government, in seeking ways to eliminate automotive pollution. The studies we have carried out, or jointly supported, cover not only the impact on emissions of fuels, additives, lubricants, and engine design, but also control of evaporations by various devices for the carburetor, fuel tank, crankcase. and tail pipe. Senator RANDOLPH. You don't call that exhaust?

Mr. GUNNESs. Exhaust: yes.

I think the record of collective achievement by the automotive mannfacturers to date has been excellent. Through crankcase ventilation control, reduction of evaporation from the fuel system, use of secondary air in the exhaust, and engine adjustment and redesign, and 80percent reduction in total hydrocarbon and carbon monoxide emissions has been achieved in newer cars.

Going beyond this point. technology has been developed for the further reduction of hydrocarbons, carbon monoxide, and nitrogen oxides from automobile exhaust. One system, based on temperature effects, involves carburetion and timing adjustments in conjunction with exhaust-gas recirculation and afterburners. It does a commendable job.

For still lower emissions we must turn to a more advanced approach. A catalytic system appears to be required in which one catalyst reduces nitrogen oxides to nitrogen and byproducts and another catalyst converts hydrocarbons and carbon monoxide to carbon dioxide and water. Both systems are limited in their capabilities, particularly as related to service life, when used with fuels containing lead. Afterburners are corroded by the halogen scavengers contained in the lead fluid, and controls of the exhaust gas recirculation system are fouled by lead deposits. All known exhaust catalysts are gradually deactivated by lead and the catalyst for reduction of nitrogen oxides is poisoned ranidlv.

These adverse effects are unfortunate from the point of view of the gasoline manufacturer, and of the consumer, since use of lead is a relatively cheap way to get the higher octane fuels required by modern cars. Therefore, we have tried hard to overcome the adverse effects of lead so that it may be retained in gasoline.

We have directed much of our own recent research toward the development of effective lead traps and lead-resistant catalysts. Several types of lead traps were investigated, but we found none to be more than 50-percent effective. We tested more than 200 catalysts, particularly those useful in reducing emissions of nitrogen oxides, and found none that performed satisfactorily with leaded fuels. We did find a

number of catalysts that work effectively for extended periods of time, but only with unleaded fuels.

That is not to say that future research may not be able to overcome the adverse effects of lead in gasoline. However, at this point in time we do not foresee how it can be accomplished and we have no promising leads.

On the basis of our present technology, we and many other knowledgeable people in both the automotive and the oil industries have reached the conclusion that ultimate reductions in automotive air pollution from the internal combustion engine will not be possible unless lead is eliminated from gasolines. This conclusion has been reached entirely aside from the question of lead in exhausts as a health hazard, this being still a controversial matter. Only when the more advanced emission control equipment is used with unleaded fuel can the ultimate reductions in emissions be achieved.

In the light of the foregoing, John E. Swearingen, chairman of the board of my company, has announced that to help reduce pollution by the automobile, Indiana Standard will make unleaded gasoline available in its marketing areas at such time as the automakers distribute cars requiring such fuel. Many of our stations will be equipped for such distribution by the end of this year and essentially all the remainder by the end of 1971.

I am sure the committee is aware that elimination of lead from gasoline poses major problems to both automotive and fuel manufacturers. Without lead, gasoline is normally so low in octane number that modifications in engine design are required to permit satisfactory operation.

Although fuel octane numbers can be partially restored by more intensive refining, this result can be accomplished only at the expense of a lower yield of product from crude, ranging between 5 and 10 percent, and at substantially increased capital and operating costs. In short, it costs more to make lead-free gasoline, and the cost rises with each increase in octane number.

According to recent announcements by auto manufacturers, it appears that automobiles with engines having compression ratios lowered to enable operation on a 91 octane unleaded fuel will begin to appear late in 1970. There is also the recent suggestion that engines be modified to operate a low lead-content fuel, say one-half cubic centimeter per gallon, rather than the present level of nearly 3 cubic centimeters per gallon. As we understand the manufacturers' plans, the projected 1971 model cars will not be equipped to do a much better job of pollution control than are current cars, even though operated on unleaded or low-lead fuel. Proposed 1971 model cars will also be able to operate on fully leaded gasolines, as at least one manufacturer has stated.

It is misleading to imply that the major benefits that the removal of lead from gasoline can bring to automotive pollution control will be available this fall, or perahps for several years. I think it most important that this matter be clearly understood. The ultimate benefits of lead removal can only be obtained when the most advanced emission control equipment is incorporated in all cars on the road and they operate only on unleaded gasoline.

Until such time as Detroit equips new, lower compression-ratio cars with advanced control devices, little improvement in air quality will result from having unleaded gasolines generally available.

Yet, my company, and others, presently plan to have low-octane, lead-free or low-lead gasoline available, to the extent practical, by the end of this year. This effort is necessary if we are to meet the anticipated demand for fuel designed to meet the needs of the 1971 car models as announced by one manufacturer. Early introduction of low compression-ratio engines will advance the date at which cars requiring high-octane, leaded premium gasolines will be displaced from our highways and to that extent will accelerate the time when major inroads can be made on the automotive pollution problem.

We have studied the proposed 1975 Federal emission standards and consider them attainable and in the public interest. We urge that, despite the fact that some distribution of unleaded fuels may occur this fall, and increasingly thereafter, no legislative or administrative action be taken which would restrict the use of lead in gasoline before the 1975 standards take effect. Such restriction would be premature-not only because few cars would be equipped to take advantage of it, but also because general distribution of unleaded fuels will take many months to achieve.

Contrary to some opinions expressed recently, we believe that in preparing to meet the 1975 standards, the petroleum industry faces a formidable job of financing and building additional refining capacity and in providing additional marketing and distribution facilities.

It is very important to our industry, and to our customers that there be an orderly transition from the present situation, in which all cars are designed to operate on high-octane, lead-containing fuels, to that point in time-perhaps 8 or 10 years hence-when all cars then on the road are designed to operate on lead-free fuels. We think this transition can be made without the necessity of legislative or administrative compulsion other than the imposition of emission standards. We urge that this viewpoint be accepted and that further restrictions be minimized, since they inevitably limit competitive and technical progress.

It has been suggested by one automotive manufacturer, and more recently by a representative of the Office of Science and Technology, that the transition can be eased for the petroleum industry by adjusting all cars now on the road to operate at lower octane numbers than presently required. This, in turn, would permit the petroleum industry to supply a leaded premium-grade fuel, of, say, 97 octane number, to meet the requirements of present premium-grade cars, and an unleaded fuel, of, say, 91 octane number, to meet the needs of both existing regular-grade cars and all new model cars. Such a program would obstensibly permit the petroleum industry to avoid a heavy investment in new refining facilities and at the same time serve the public needs with only two grades of fuel.

Although we agree that such a program, if it could be effectively carried out, would reduce the need for major new refining investments, we have serious doubts as to its practicality. Let us recognize that there are nearly 100 million cars and trucks on the road which would require adjustment to permit operation on the proposed lower octane fuels, and that the outcome would be impaired performance. There have been suggestions from the automakers, and others, that relatively inexpensive adjustments can be made, which would reduce