cess of $2 million. This figure does not include expenditures by individual companies in this field.

In the light of this broad background of experience, we come here in the hope of making a constructive contribution to the discussion. We believe it is imperative to maintain forward motion toward the objective of cleaning the air, and to avoid false starts, backward steps, and wrong turns. Such mistakes are easy to make when the subject with which we are concerned involves so many unanswered questions, so many unsettled differences of opinion among recognized experts, so many doubts and uncertainties.

Let me illustrate with a case history of such a mistake. At one point in Los Angeles' search for a solution to its smog problem, the city fathers concluded that the oil refineries in the area might be to blame. Refineries were summarily required to install very stringent controls. But after special refinery emission control devices were installed, the city's smog problem remained as bad as ever. Only through later adequate research work was it found that the cause lay elsewhere. A considerable part of this research was sponsored by API. The API work, at the Franklin Institute, established the validity of Prof. A. J. Haagen-Smit's theory that sunlight acting upon a mixture of hydrocarbons and nitrogen oxides produces smog-forming ozone.

The cost of the false start in Los Angeles was high. To the petroleum industry-and ultimately, of course, its customers-the cost was $50 million. The cost to the community was intolerable delay. Time was wasted while the community waited to see if the devices would work-time that could have been better spent trying to find the real cause of the pollution problem.

An air pollution problem is always complex. It cannot be solved by the simple writing of a rule that will act like a magic formula. The recently promulgated HEW regulations on heating installations in new Federal facilities offer an excellent case in point.

As you know, the Department has issued a set of proposed instructions that would, if adopted, force Government agencies to use in these buildings fuels with a sulfur content of less than 1 percent. The regulations state that the "emission should not exceed 1 pound of total sulfur oxides per million B.t.u. heat input for installations below 10 million B.t.u. per hour heat input in any community, and for all installations in standard metropolitan statistical areas or standard consolidated areas whose central city has a population greater than 2 million and a population density greater than 15,000 per square mile."

It is the petroleum industry's feeling that the application of these rules to new buildings is merely the opening phase. Soon the older Government-owned buildings will have to comply with similar regulations. The cost to the taxpayer, who will have to pay for the necessary conversion, is anybody's guess.

This would be a problem even if it stopped with Federal buildings, but we know that is not to be the case. These regulations will set a pattern for all local, State, and regional pollution agencies. Indeed, rules of the Department are meant to be examples, as was made clear in the statement of James M. Quigley, Assistant Secretary

of Health, Education, and Welfare, when he testified before this committee on June 10, and I quote:

If we are successful in bringing Federal air pollution sources under the highest practicable degree of control *** we will demonstrate for all to see that the control of air pollution sources can be accomplished promptly and economically.

Of course, Federal buildings should set the example. But we believe it should be a practical example, and one in keeping with the real needs of an effective air pollution control program. And we think that is exactly where these recommendations on sulfur oxide emissions fall short.

Let us look at the economic and technical feasibility of attempting to comply with rigid standards such as the HEW instructions propose.

The HEW instruction would mean for residual fuel oil a sulfur content restriction to about nine-tenths of 1 percent. For coal it would be even more restrictive.

By, in effect, setting the sulfur limit at nine-tenths of 1 percent, this rule would exclude more than 95 percent of available residual fuel oil. The coal industry has made about the same point in regard to the application of this rule to their product.

The point has been made, however, that this rule, as written, involves only new Federal installations, and a relatively small amount of low-sulfur fuel would fill the requirement. In this connection it is important that you know that low-sulfur residual fuel oil is essential to the manufacturing processes of certain metallurgical and ceramic industries, and most of the available supply-provided at substantially higher cost-is now being consumed by them.

Further, to segregate any minute amounts of low-sulfur residual fuel oil that might happen to remain and to distribute it in small quantities to thousands of Government installations around the country would require separate facilities for storage, bulk transportation, and delivery. It would be completely impracticable for any company to provide this kind of special service. It is a certainty that most Government facilities would be unable to get low-sulfur residual fuel oil to meet the HEW instructions.

We sincerely wish it were possible to make low-sulfur residual fuel oil available to any customer who might want it. But stringent restriction on sulfur content of the kind proposed will create economic and technical problems that the petroleum industry is not now able to meet. We are diligently pursuring research but at this moment those problems are not solved, and we are, therefore, in no position to comply with such standards.

The American Petroleum Institute recently surveyed the principal suppliers of heavy fuel oil to obtain the latest information on development of processes for residual oil desulfurization and cost of their application.

The survey showed this information: Assuming continuation of the present principal sources of heavy fuel oil supply, some companies believe it is possible to reduce the sulfur content of average heavy fuel oil to 2 percent, but only at a cost to the consumer of 40 cents per barrel. This would be a great cost increase for a product that now

sells for $2.25 a barrel; and even then we would be far short of the standard of less than 1-percent sulfur content that, in effect, is now being proposed by HEW.

The companies covered by the survey I just mentioned, reported that no process has yet demonstrated commercial capability which will achieve a greater percentage of sulfur reduction. The only remaining alternative is blending heavy fuel oil with the higher-priced No. 2 home heating fuel. Such a blending procedure, however, could actually increase the cost beyond a figure of around $1 per barrel quoted not long ago by the Bureau of Mines. The effect would be to make this heavy oil so expensive that it would no longer be a marketable commodity for most purposes. Present consumers of this fuel would find it priced out of their reach. If this were only the Federal Government doing this to itself, and, in effect, to the taxpayers who foot the bills, that would be serious enough. But let me repeat, it is not intended that the idea should stop here. The HEW instruction is clearly meant as a rule to be copied by every community in this country.

We know that this is a rule that cannot economically be followed. Not even natural gas offers a suitable alternative to residual oil and coal. Secretary of the Interior Stewart Udall, in a letter to the chairman of this committee, pointed to the factor of conservation of that natural resource, and said that:

Efforts to increase the use of one fuel in preference to another must be considered from more than an air pollution standpoint.

Even the current president of the American Gas Association, Mr. Guy Wadsworth, has warned members of his industry-the distributors of natural gas-that severe dislocation of that industry would be threatened. "Any sharp change-about," he said, "one that would cause large volume industrial demand (for natural gas) to skyrocket wherever smog becomes a problem could rapidly siphon off huge portions of existing reserves and turn the economics of serving gas topsyturvy."

We submit that there are practical alternatives, workable alternatives, to the approach now being advocated by HEW. In fact it is the conviction of the petroleum industry's technologists--and we have a great many of them-that a system which, in effect, limits the sulfur content of fuels is least suitable as a control method.

With sulfur content limitation, the consumer is forced to pay a higher price for every barrel of fuel and is simultaneously denied the opportunity to consider pollution abatement by whatever method is the most economical in his circumstances.

Petroleum industry experts hold that the most desirable control approach is through monitoring of ambient air. Such a method applies measurement and control directly to the specific problem requiring a solution. It also gives the fuel consumer the advantage of maximum flexibility in choosing the most economic solution to his particular problem.

It should be kept in mind that air pollution episodes the acute probems are not chronic. They are temporary situations that can come about only in some areas-and only under certain, and very infrequent, adverse weather conditions. As one of these rare situations develops, an ambient air monitoring system can give the alarm, and

appropriate, prearranged measures can be taken promptly. Such measures might include a temporary shift to a lower-sulfur fuel, or even-in an extremely rare case-more drastic action such as the suspension of some plant operations.

Even recognizing the present shortcomings and gaps in present knowledge, we in the oil industry believe there is sufficient information now available to permit development of a workable control procedure based on ambient air monitoring. Such a system can be effective and it is attainable right now.

A simple weighing of facts shows that such a system at this time is far more practical and economic than the sulfur oxides abatement course proposed by HEW. If such a procedure as that in the HEW instruction were generally adopted by a city such as New York, the high price of stringent control would be borne by fuel consumers 365 days a year-and that price would come to tens of millions of dollars. Yet the prime problem occurs, at most, on but a few days a year when abnormal atmospheric conditions prevail. The cost to control peak concentrations of sulfur oxides that may occur on such days is but a fraction of the cost that would be entailed in stringently limiting the sulfur content of fuels consumed all year long.

We want to clean up the air generally; that is our goal, the public's goal, the Government's goal, the goal of petroleum and of all other industries that I know about. But most urgent of all is the need to avert those combinations of conditions that could lead to serious consequences. That is why we believe the whole question must be approached from a realistic standpoint rather than by the adoption of standards that are so far from attainable as to discourage further efforts.

From this same practical viewpoint we believe that H.R. 7429 could be improved and strengthened by bringing to bear more technical knowledge and the views of other Government agencies in carrying out its objectives. As presently drafted, this bill appears to give the Secretary of the Department of Health, Education, and Welfare the right to set standards for Federal installations without consulting any technical committee, other agencies of Government or the industries that may be affected.

We do not, for a moment, question the technical ability, sincerity, or dedication of HEW. Nevertheless, in a matter as complex and as filled with uncertainties as this one is, the responsibility for such decisions should be shared.

For this reason we suggest that the measure be amended to provide that, before the Secretary of Health, Education, and Welfare takes action in setting standards for Federal installations, the Bureau of the Budget would have to give its approval based on findings made after a public hearing held under the supervision of the Bureau. Such a hearing would permit full consideration by other Government agencies of the technical justifications for the proposed standards, the economic consequences to industrial and private consumers, and the impact on other governmental programs and policies-conservation of our natural resources, for example.

Since we believe that Federal regulations should also be flexible enough to reflect differences in local conditions, provision should be

made for consultation on specific standards between HEW and the officials of the areas to be affected.

We also favor the establishment of an advisory committee composed of representatives of industry and interested Government agencies to assist and counsel the Secretary of HEW in dealing with the problem of sulfur oxides in the atmosphere.

With the present great gaps in scientific knowledge on this subject, with the present inexact and groping nature of all efforts to cope with this problem, such a provision would seem to recommend itself as a safeguard for both the Department of Health, Education, and Welfare and the public at large.

Such an advisory committee, in our view, should include representatives of the Department of Health, Education, and Welfare, the Department of the Interior, the Department of Commerce, the Department of Defense, the Federal Power Commission, and perhaps other Government agencies, along with representatives of the fuels and power industries. Such a combination of agency and industry representation will assure the balancing of pollution abatement, resource conservation, defense, and economic needs.

This advisory committee, cooperating with the Secretary of HEW and turning to such outside technical and medical experts as might be required, could make a much-needed contribution in two vital areas: first, practical techniques for the removal of sulfur from residual oil and coal could be pursued; second, sound and reliable standards with respect to human tolerance of sulfur emissions could be determined. For the petroleum industry's part, I can assure you of our desire to assist in all ways that we can to further the cause of cleaning the Nation's air. This includes our willingness to cooperate in the selection and adoption of monitoring techniques and control measures that will insure minimum sulfur oxide and other concentrations of pollutants. We believe there is much work to be done in this field-in achieving uniformity of techniques and terminology and in developing greater knowledge of the effects of specific contaminant levels. With respect to ambient air monitoring there is a decided need for understanding and agreement on the proper location and number of measuring stations within a particular community.

Since 1953, knowledge has advanced to a point that allows control engineers to knock the peaks off potentially dangerous situations that can occur when pollutants climb sharply during periods of atmospheric inversion and similar abnormal conditions. They may not yet know how to return air to pristine purity but they are competent to hold sulfur, for instance, below the levels generally considered harmful.

This is the reason why American Petroleum Institute representatives, at a meeting on June 11, ended with these words a statement to a group of Government agency representatives considering the limitation of sulfur content of fuels

* as a beginning, we believe that our collective objective should be reduction of high sulfur oxide concentrations that may occur during abnormal atmospheric conditions. We believe that controls aimed primarily at reducing sulfur oxide concentrations during those times in which normal atmospheric conditions prevail will cause an unwarranted disruption of the economy and will accomplish little toward reduction of peak concentrations that may occur under adverse weather conditions. Any levels established can be modified to a greater