even when they talk about landside impact on the east coast one thing is lost sight of. I often wonder when people talk about landside impact what these people think is happening to the increased quantities of crude that are now being imported on the east coast. The answer is very simple, I think. The answer is that that crude is being refined in existing refinery capacity. The fact is, also, that existing refinery capacity in what I would call the metropolitan New York/Philadelphia area, which includes the refineries of Linden and those in the Philadelphia area and lying all over between-I think it is a recognized fact that those refineries, without adding so much as a square meter of ground, can increase their refinery output by anywhere from two to two-and-a-half times. In short, refining as an operation is going to be increased.

It can, however, be increased at existing facilities. Now, what is the alternative to that? There is nothing more exportable than refinery capacities because refineries really change almost every day. The technology is such that they literally change every day and if they are not to be supplied with adequate supplies fo crude, they can very easily be exported to places like the Bahamas.

What does that really mean? It certainly does not do anything for the environment. Why doesn't it do anything for the environment? Well, it certainly does not do anything to eliminate the passage of vessels in American harbors, because all you are really talking about is taking crude oil to the Bahamas and refining it there and transporting it to the United States. So that the volume of traffic remains

the same.

What you really are doing is you are bringing in far more toxic products. I think everybody would agree that the toxic dangers of the refined aromatic ends of crude oil are far gerater than crude oil itself.

I just won't go into the economic cost, for example, to the State of New Jersey or the State of Pennsylvania, if they should lose their refineries. I think Governor Edwards this morning made it pretty clear that a refinery complex is an important element of any State's economic picture, and I would guess, percentagewise, roughly 20 to 25 percent of the refinery capacity in the United States is located in New York, New Jersey, Pennsylvania area. I do not think any of those States, if faced with the issue presented that way, would be prepared to say that they wanted that capacity to be moved offshore.

I think it is important to point out that the local communities involved in this project-when I say involved, I mean the local communities in which the terminal facilities, the tank farm, would be located-have passed resolutions in which they have said that they are in favor, in principle, of having the facilities located in Cumberland County and in the town of Greenwich.

Senator HOLLINGS. Mr. Hill, how many permits would be required for your particular project, approximately how many agencies?

Mr. HILL. I was just about to turn my attention to that, Senator. I just don't really know. We have applied with the Corps. We got a letter back from the Corps in which they invited us to perfect our application. However, they advised us that they would not hold a public hearing required by statute until we had gotten the approval

of the State of Delaware, the Delaware River Basin Commission which is a compact commission, and the State of New Jersey.

In the present statutory framework, I do not really know how to go about applying for those permits. I do not know, for example, whether I have to ask the State of New Jersey whether I can locate this facility 36 miles offshore. I do not know where in the Delaware Bay, if you like, I have to start to deal with the State of New Jersey.

Those waters are clearly navigable waters. They are clearly within the jurisdiction of the Corps. They are clearly subject to Federal jurisdiction under the Federal Submerged Lands Act. On the other hand, I do not know what assertion of jurisdiction New Jersey is going to make. They do have-there is a constitutional leasing arrangement. The rental monies go to the State education system. And as far as Delaware is concerned, I do not know what I have to ask Delaware for. These facilities never get within even the so-called territorial waters of the State of Delaware.

Senator HOLLINGS. You have got to ask whether or not to pass a bill providing a veto.

Mr. HILL. Well, it is our view, Senator, that the so-called Coastal Zone Management Act, the 1971 act in Delaware, does not have anything to do with us. It does not have any more to do with us than traffic regulations do. It does not, by its terms, get to us. On the other hand, the Corps seems to have the view that I ought to go and do something with the State of Delaware. But I am frank to say that I do not know what to do with the State of Delaware.

The Corps has told me they are not going to act on my application until Delaware acts, but I do not know how to get to the State of Delaware and I do not know what to ask them to do. I was hoping that Senator Biden would still be here because I thought I might ask him. I do not know what to do.

The State of New Jersey is much the same. For example, pending legislation, which I think both Senator Williams and Case referred to yesterday as far as I am concerned, the reach of that statute does not get to us, either. It is a very curious statute. One of the things it prohibits is bringing these facilities onshore, but it is very specific in naming those counties where they do not want any such facility, however, Cumberland County was expressly excluded from the reach of the statute. Obviously, as a result, I am in a funny position in the State of New Jersey.

This brings me in the reach of S. 80 because I think, if these facilities are going to go forward, we must have Federal licensing legislation was well as certification legislation; or, put another way, I think that except insofar as the facilities are actually located within the State, unless we are going to have litigation that is going to go on for interminable lengths of time, there must be Federal preemption at both the licensing level and the environmental level. Without that, it is just inconceivable to me and I speak as a very lonely voice-it is inconceivable to me that the private sector is going to be willing to fall into what is now, in my judgment, just a legislative morass where we do not even know where to apply, much less what the legislative standards are.

We are willing-we think we are willing to meet almost any kind of standards. Certainly with the project we have in mind, which is a relatively simple project this should be relatively simple. I think it is kind of unfortunate when these things get referred to as superports. There is nothing really very super about them. They are really very simple installations.

Senator HOLLINGS. What is the relative cost?

Mr. HILL. I think the total cost of the facility as we propose itand, of course, this will depend on environmental safety devices and that kind of thing that would be required to be installed-but we are looking at something between $200 and $300 million. It is easy enough to break down. Indeed, if the committee needs it, Texas A. & M. did a study, an economic study, on one of these port facilities off the State of Texas-and they have broken it down item by item. They have costed out the buoys, the pipeline, the booster stations, the tank farms and the like, and their figures are much the same as we come up with.

Senator HOLLINGS. Is there something comparable anywhere else in the world that we can look at?

Mr. HILL. Yes, sir. I have often thought, as a matter of fact, that probably-and I look at this really from the private sector-that the cheapest thing we could do and probably the most effective, rather than filing statements here, would be to load a bunch of people on airplanes and show them how these things operate.

Senator HOLLINGS. In Japan?

Mr. HILL. Yes, sir, they are in Japan. They are in Australia. There are several in the United Kingdom that are operational, off the coast of Peru, off the coast of Oman. There must be close to a dozen of them in the Persian Gulf. There really isn't anything exotic about these things.

There are places where staff members of this committee or, indeed, members of the committee itself—and certainly we know the people who are operating them. We know the people who have installed them and certainly if there is anything we could do to make the facilities available to the representatives of the committee we would be just more than delighted. I think just seeing these systems and seeing how they operate and seeing the operational safeguards that can be used would help.

Mr. Moody, when he testified yesterday, did point out that the ability to control the operation of a new supertanker is certainly a whole lot greater than one's ability to control these wretched little tramp tankers that operate along coastal waters.

Once again, apart from regulation, you are dealing with people who I am not going to call them responsible; I am just going to say they are motivated by enlightened self-interest. They do not want spills and they train their people and they spend a lot of money at it, and the quality of their crews is just infinitely better.

I do not know whether you have had an opportunity to read how these supertankers are operated, but they actually have families living aboard these things now. These are not the ordinary seamen you read about in books. This is a whole different world. These people literally live on these tankers. That is their home. These voyages

from the Persian Gulf are 60 days. And when these fellows operate them, they ars technicians. They are not people who ran away from home in Ceylon or someplace like that. They are pretty well-trained people.

The only other and my comments are very general. I would be concerned to see a kind of generalized veto power left in the individual States. I think that if Congress reaches the conclusion that the construction of the deepwater port is something that is in the national interest, as measured by the requirements of the Nation, it seems to me that Congress is going to have to assume the responsibility of legislation to control the installation of these facilities.

I do not really know of any example of a veto power being left to the states, but my experience is limted, No. 1; No. 2, I do not know how you would ever go about overriding that kind of a veto. I think every veto, even the veto of the President of the United States, is subject to being overridden by the Congress. Certainly, I think this would be necessary when the State Governors get that kind of authority. I must say, I have a lot of trouble with how you would structure that and on whom you would impose that unenviable task. I do not know that the courts are the appropriate place for it because you would be faced with this problem of whether his action was arbitrary and capricious and what court do you go to? Do you go to a Federal court of a State court? I just do not know how you deal with the problem.

In a way, I think it is almost unfair to a Governor of State who, after all, is not charged normally with dealing with issues of national interest. His basic charge is to the people of his State who may, in certain instances, have a different view that must necessarily be overridden by the Congress. I think that is what the interstate commerce laws are all about. I think this is what the foreign commerce clause is all about.

I cannot imagine, for example, Congress saying to the State of New York that the State of New York has the right to bar cargoes of Russian wheat. It would be just inconceivable to me that the Governor of the State of New York would be granted that kind of power. I must say to you, I do not know how this is any different. There may be different considerations, but the effect of it is exactly the same.

Senator HOLLINGS. Very good, Mr. Hill. We appreciate very much your thoughtful presentation here today because it shows the vacuum we are operating in. We hope to fill that vacuum.

Mr. HILL. Yes, sir. Thank you.

[The statement follows:]

STATEMENT OF THOMAS W. HILL, JR., PRESIDENT; INTERCONTINENTAL
PIPELINE Co., INC.

I. My name is Thomas W. Hill, Jr. I am president of Intercontinental Pipeline Co., Inc., and senior partner in the law firm of Spear and Hill located in New York City. My law firm acts as general counsel to Intercontinental. II. Intercontinental Pipeline has filed a proposal with the U.S. Army Corps of Engineers requesting permits to enable us to construct, install and operate a deepwater port facility for the mooring and unloading of supertankers. We believe that the installation can be accomplished with minimal immediate envi

rommentat impact and that any immediate impact can be corrected upon completion of the project. The overall environmental impact of the project will be sitive one; compared with any possible alternative, our project would reduce the risk of oil spillages and consequential environmental damage.

This deepwater port is to be installed in the Atlantic Ocean approximately 40 miles southeast of Cape May. It will include submarine pipelines under the ocean floor and in the bed of the Delaware Bay, connecting an offshore mooring system to onshore terminal facilities at a 200-acre site in the Town of Greenwich, Cumberland County, New Jersey. We believe that our proposal, which is being designed by Hudson Engineers, Inc., professional engineers and consultants of Philadelphia, would be a major contribution to the solution of the national energy crisis presently developing in our country, and the economic and, most importantly, environmental problems of the nation and of New Jersey and Delaware.

The Town of Greenwich, New Jersey, where the pipeline would come ashore, has approved in principle the proposed terminal facility as well as the installation of a tank farm. (Resolution, dated December 11, 1972). In addition, the Cumberland County Advisory Board, in a resolution dated January 29, 1973, has similarly supported the construction of a deepwater port facility as proposed by my company.

Before discussing our proposal in more detail, I would like to tell you something about our company.

Intercontinental Pipeline is a recently organized New Jersey corporation. I have had experience in the oil and gas industry, both as a lawyer and as the former president of a New York Stock Exchange listed international natural resources company, Belco Petroleum Corporation. I and my law firm have represented clients in oil and gas matters, as well as in corporate and financial matters, in the United States and abroad.

We have assembled a group of advisors and participants, in addition to Hudson Engineering, which we think brings to our corporation t he experience and skill necessary to enable it successfully to accomplish its objectives.

Intercontinental Pipeline benefits from the advice and assistance of two very prominent members of the Southern New Jersey community.

Mr. Sidney L. Brody is a commissioner and immediate past chairman of the Cumberland County Economic Development Commission. Mr. Brody has been directly involved in much of Cumberland County's development over the past fifteen years, and brings an intimate knowledge of Southern New Jersey's problems to the corporation.

Mr. William Cowart, Jr. is senior vice presieent of Atlantic City Electric Co. in Atlantic City, New Jersey. Mr. Cowart has a B.S. in electric engineering and an M.S. in nuclear physics. A former Air Force Colonel, he was operations officer for the atomic and hydrogen bomb tests at Enewitok in the 1940's and at Nevada in the 1950's. He has also done research in nuclear physics and is credited with discovering selenium 73.

Intercontinental will also have the benefit of the advice and counsel of experienced and prominent members of the oil and gas indutry.

For example, Mr. Robert C. Houser will furnish our company with experience and advice in the construction of the single buoy mooring system. Mr. Houser is chairman of the executive committee and a director of Imodco Inc. of Los Angeles, California. Imodco has designed, directed and installed almost half of all of the single buoy mooring systems which have been installed around the world.

Intercontinental has also had the advice of Robert B. Anderson, who served, among other things, as Secretary of the Treasury from 1957 to 1961 and who is now engaged in the investment banking business.

III. We have concluded, after a fairly extensive review, that the construction and installation of the deepwater port facility, pipelines and related equipment will cost well in excess of 200 million dollars. Intercontinental Pipeline presently has the financial resources to conduct the studies and process the data to obtain the necessary permits and licenses, and to prepare the engineering plans and to commence the construction of such a facility. Discussions with prominent investment banking firms have obtained assurances that once these preliminary matters are concluded, the corporation will have adequate assistance in obtaining the funds necessary to complete construction of the mooring and tank farm. system, pipeli