Hon. JAMES A. McCLURE, U.S. DEPARTMENT OF THE INTERIOR, DEAR MR. MCCLURE: This is in response to your May 24 letter which requested additional information to supplement our May 17 testimony before the Subcommittee on Mines and Mining. We are delighted to provide you with the following answers to your questions which, to facilitate understanding, are repeated in order below. 1. How many different energy studies are now being conducted by Government? Is your Department participating in all of these studies? The number of energy studies being conducted by Government is difficult to determine. An indication may be obtained from the attached listing of recently completed studies or those in progress. The Department of the Interior is conducting numerous studies, is participating in studies being conducted by the Office of Emergency Preparedness, is sponsoring other studies, and is contributing basic data to most studies in progress. The number of studies may be determined from the listing. 2. It was recently announced that the National Science Foundation had requested an appropriaton of $12 or $13 million to do research work in the energy field and to determine our energy needs. Is your Department participating in this proposed study? Will there be any overlap or duplication with what the Department of the Interior is already doing in this area? The Department of the Interior is aware of the general outline of the Energy component of the RANN Program and wishes to make this Program generally responsive to what we consider to be the Nation's critical energy needs. A step we have already taken in this direction is to review proposals made to the Foundation for energy research support. Moreover, the Department's Deputy Science Adviser will serve as the Departmental representative on a RANN Coordination Committee which will be established under the auspices of the Office of Science and Technology. 3. On page 10 of your prepared statement you state, "On December 4, 1970, the President added production rate control on undisputed Federal offshore lands to the Geological Survey's regulatory responsibilities. Capability needed to discharge that new responsibility is in the process of being established." Would you please elaborate upon what capability is needed that the Survey does not now have and what is being done to create that capability. Production rates for offshore oil and gas wells, prior to the President's Order of December 4, 1970, were, by informal agreement, controlled by the State of Louisiana on both State and Federal lands off Louisiana. Allowable production rates for each well, based on estimates of market demand were set by State orders. Federal lessees, under instruction from the Geological Survey, produced their wells at the rates set forth in the State orders. The President's action terminated the practice of producing wells in the undisputed area in accordance with rates established by the State. Consequently, the Secretary of the Interior is now exercising exclusive production and conservation responsibilities for the undisputed lands off Louisiana and elsewhere. For most oil and gas reservoirs there is a maximum rate of production which, if exceeded, will ultimately result in substantially reduced total recovery from the reservoir. In the interests of conservation this maximum efficient rate (MER) should not be exceeded. The determination of the MER for a reservoir is based on the analysis of geologic and engineering factors such as reservoir size, porosity, permeability, the type of drive which forces the oil or gas to the well bores, and the attitude of the host structure. To properly discharge the Secretary's conservation and production control responsibilities, the Geological Survey needs to create the engineering and geologic capability to acquire and analyze the data for each well and reservoir in order to establish the MER and to review established rates periodically, or whenever there is a change in producing conditions such as the drilling of a new well. The Survey also needs the capability to obtain, and maintain in readily retrievable form, the production records of all wells to assure that established rates are not exceeded. As was reported by the Survey in hearings before the House Interior Appropriations Subcommittee, funds amounting to 64-402-71- -9 $1.3 million and a staff of 87 would be required for these purposes in FY 1972. Action to create the needed capability will be undertaken promptly at such time as funds and personnel become available. 4. Why does your proposed "Mined Area Protection Act of 1971" (H.R. 5689 and S. 993) not cover the extraction of minerals via wells or pipes or the smelting of ores? (a) Doesn't the extraction of minerals by wells or pipes create environmental problems? (b) Doesn't smelting ore create environmental problems? (c) Do you intend proposing some other environmental protection solution regarding those methods? The "Mined Area Protection Act of 1971" (H.R. 5689 and S. 993) does not cover the extraction of minerals via wells or pipes because of the lack of similarity of environmental effects from this method of mineral production with those associated with other methods of production. Production via wells or pipes generally involves single point discharge of pollutants and lacks the areal extent of discharge associated with other methods of production, say surface mining. Although the extraction of minerals by wells or pipes does create environmental problems, these problems are less complex than those generated by methods of mining that involve multiple dispersed discharges of pollutants and can be adequately covered by existing water quality standards developed by the States under the Water Pollution Control Act. Smelting of ores is also not covered in the proposed legislation, it too being a single point discharge type of situation that is currently most directly affected by standards developed under the Clean Air Act. Moreover, we believe adequate legislation exists within the framework of the Federal Metal and Nonmetallic Mine Safety Act of 1966 and/or the Occupational Safety and Health Act of 1970 to initiate smelter inspections and to assist in limiting the environmental problems associated with the smelting of ores. There remains, however, the question of which legislation should apply. Representatives of the Department of Labor and the Department of the Interior have been meeting to resolve the division of authority and related problems that are associated with Federal inspections of smelters. We hope that these problems will be solved in the very near future. Currently no additional legislation is proposed to cover mineral production via wells or pipes or the smelting of ores. The Department of the Interior will remain cognizant of the environmental pollutants evolved from these sources and the effectiveness of existing laws in dealing with these problems. Should future evaluations of environmental conditions associated with these aspects of the mineral industry indicate ineffectiveness of existing laws, the Department will propose legislation adequate to promote environmental improvements in these areas. 5. Would you please elaborate upon the problems you alluded to, created by your interpretation of authority granted under the Solid Waste Disposal Act of 1965, as amended in the Resource Recovery Act of 1970 and the Environmental Protection Agency's interpretation of that authority. Title 1 of the Solid Waste Disposal Act of 1965 (PL 89-272) defined the Department of the Interior's role under this Act as : "The term 'Secretary' means the Secretary of HEW (now EPA); except that such term means the Secretary of the Interior with respect to problems of solid waste resulting from the extraction, processing, or utilization of minerals or fossil fuels where the generation, production, or reuse of such waste is or may be controlled within the extraction, processing, or utilization facility or facilities and where such control is a feature of the technology or economy of the operation of such facility or facilities.” The underlined language forms the basis for EPA's view that this Department's authorities and responsibilities for metal, mineral, and energy recovery and reuse are derived only from this one authority. As a matter of fact, Section 208 of the Act states: "This Act shall not be construed as superseding or limiting the authorities and responsibilities, under any provisions of the law, of the Secretary of the Interior, or any other Federal Officer, department, or agency." Interior's position has been that the Resource Recovery Act (PL 91-512), which is an extension and amendment of the Solid Waste Disposal Act, is not the single authority from which all agencies of the Government must derive total authority when exercising concern for problems relating to solid wastes (or all environmental issues for that matter). For example, the Act was seen adding or subtracting nothing from existing authorities in the course of testimony preceding its enactment (S. 2005) as illustrated by the following extract: "This Department (Interior) as well as other departments of the Federal Government are presently conducting a wide range of programs in the area of solid waste disposal. The present authorities under which this Department is operating are quote broad, and the enactment of additional legislation at this time for the purpose of expanding the activities of our solid waste disposal programs does not appear necessary." Passage of the Act did not repeal any existing related authorities. Interior strongly supports the lead-agency concept and recognizes that broad concern now centers in EPA in regard to environmental matters. Congress too recognized EPA's significance in this regard but noted, in conference on the Act, that: "It should be noted that in this context that under Reorganization Plan No. 3 of 1970 the functions of the Secretary of the Interior under the Solid Waste Disposal Act will not be transferred." Similarly, Interior's jurisdiction in regard to problems of mineral and fuel supply is not diminished and cannot be exercised without appropriate concern for related environment problems, particularly in regard to solid wastes. Presumably EPA may not, at the moment, appreciate how significantly recycling of waste materials relates to problems of primary supply. Taking a single program for illustrative purposes, Interior would see the mineral content of urban wastes as an "ore" yielding to the same technology applied to primary sources and promising, if successful, to accommodate much of the foreseeable material requirements. It should be specifically noted that Interior's authority under the Resource Recovery Act of 1970 is exactly what it was under the Solid Waste Disposal Act of 1965, and during the intervening years no one has applied the limiting interpretation now employed by EPA. Enactment of PL 631, the Mining and Minerals Policy Act of 1970 (S. 719) on December 31, 1970, adds further reasons to question the jurisdictional concepts advanced by EPA. This Act obligates Interior, as a matter of National Policy, to be concerned with solid waste issues in addition to problems of primary mineral and fuel supply. These issues include . . . reclamation of metals and minerals to help assure satisfaction of industrial, security and environmental needs, . . . research, including the use and recycling of scrap, . . . study and development of methods for disposal control and reclamation of mineral waste products .. etc. Most significantly, this law states: "It shall be the responsibility of the Secretary of the Interior to carry out this policy when exercising his authority under such programs as may be authorized by law other than this Act." 6. Mr. Secretary, has your office evaluated the effect of the acquisition and merger of a number of coal mining enterprises by the large oil producers? Can you give us the benefit of such an evaluation? Acquisition of coal mining interests by oil companies was initiated in 1966 with Continental Oil's action to acquire the Consolidation Coal Company, one of the Nation's largest coal producers. This action was followed subsequently by Occidental Petroleum's acquisition of the Island Creek Coal Company in January 1968. Since 1968 several coal producing companies have been acquired by petroleum interests. The attached Table No. 1 shows the energy interests of the 25 largest petroleum companies ranked by assets as of early 1970. As indicated, about half of the top 25 oil companies have a vested interest in coal. Table No. 2 shows coal owned by petroleum firms, as of 1969, and indicates that approximately 25 percent of the 1969 total coal production came from petroleum owned coal companies. Table No. 3 contains descriptive notes on the listed petroleum companies, as to coal ownership characteristics. These notes have been gleaned from the myriad of sources indicated at the bottom of the table. In written testimony given to the Senate Committee on Interior and Insular Affairs, C. Howard Hardesty, Jr., Senior Vice President of Continental Oil Company and William Bellano, President of Occidental Oil stated that "these mergers make abundantly clear that diverse activities by petroleum companies have actually increased rather than decreased competition." In the three-year period, 1967 through 1969, capital outlays and commitments by Consolidation Coal Company for new mines and expanded capacity at existing mines totalled $174 million. This compares with $65 million spent by Consolidation Coal for the same purposes in the three-year period prior to the merger. Since 1966 (the merger year) Consolidation Coal has developed or is in the process of developing 15 new mines which are forecasted to yield approximately 80 million tons of coal by the end of 1972. Likewise Occidental Oil has moved Island Creek Coal Company into a stronger competitive position within the coal industry by sanctioning Island Creek's development plans to open 21 new mines by the end of 1975, which will roughly triple Island Creek's production over the 1969 figure. As requested, we are sending a copy of this response to the Committee on Interior and Insular Affairs. Potential nuclear power growth patterns... Target date of completion Dec. 1970. Atomic Energy of Canada Ltd. (Chalk River Energy consumption: Its growth and pattern...... June 1969. Congressional Committees (House Republican Research Committee Rep. James A. McClure, Chairman). (Senate Interior Committee-Sen. Jackson, Chairman). (Senate Public Works Committee). Department of the Interior.... Task force on energy and resources. Long range Dec. 1972. Study of national fuels and energy policy.... Sept. 1, 1972. Some environmental implications of national fuels Dec. 1970. Environmental criteria for electrical transmission 1970. (Bureau of Mines)....... (Bureau of Land Management).. Supply and demand for energy in the United States 1969, 1970. May 1970. Sept. 1970. on the Southwest environment. North Central power supply.. (Bureau of Land Management/Bureau of Impact of power transmission lines and their effect (Geological Survey -M. King Hubbert). Department of Justice. Federal Power Commission. Federal Trade Commission..... Energy resources for power production. Updating 1964 electric power survey natural gas (Contact Mr. Meyer, Office of Policy Planning (Bureau of Economics and Bureau of Concentrated industry study on energy. National Academy of Engineering. (Requested by Department of the (Requested by Department of the Interior). National Science Foundation RAND Corp..... Oak Ridge National Lab.. Booze, Allen, and Hamilton.. Intertechnology Corp...... Office of Emergency Preparedness Power plant siting-Environmental problems.. U.S. energy requirements for 1970-85 and general Projection of energy demand. Methodology of Environment and technology assessment.. Energy systems analyses-Physical sciences and Contact Mr. Charles Primoff or Miss Doris Oil import quota modifications.. Survey of summer and winter energy. (Electrical 1970 and continpower fuels.) Comprehensive energy study.. uing. In progress nearing completion. Price investigations: Report on crude oil and gas Nov. 1970. prices. Organization ENERGY STUDIES RECENTLY COMPLETED OR CONTINUING-Continued Title/purpose of study Target date of completion Office of Science and Technology (Pacific Northwest Lab., Batelle Memorial Review and comparison of selected United States Dec. 1969. Inst.) Stanford Research Inst... Resources for the future..... Resources for the future energy forecasts. Flectric power and the environment. End uses of energy. Technical deficiencies in con- Gas price regulations. Eighteen-month study. Ten July 1, 1971. Sept. 1971. Contact Mr. Sam Schurr, Energy Division: Effect of Mid-Eastern oil on Western World pros- May 1971. 462-4400 Council of Economic Advisors. Academic Industry Group.. (Requested by Dept. Interior, McKetta, chairman) pects. Energy in the world economy.. Others in progress. Clean energy through winter 1970. To study the total energy situation.. Sept. 1971. Dec. 1971. Completed. |