hazards that you have described, is within the limitations of technology today? Dr. MEANS. I believe so, yes. We have laid down a tentative class of conditions as to smoke content and so forth, and the list was presented to some of the leading experts on air pollution in the country and they said these are pretty strong, but they are capable of being met. Senator MUSKIE. Are such "clean" refineries-and I put the word "clean" in quotes-are such "clean" refineries presently in existence anywhere? Dr. MEANS. I'm sorry, I didn't hear that. Senator MUSKIE. Are such "clean" refineries presently in existence anywhere? Dr. MEANS. The St. Croix refinery, I thought, was pretty clean from the air pollution point of view. There was a wisp of smoke coming out of the stacks and they couldn't smell it in any direction. In fact, I asked the manager to take me to the point that smells worst and he said, "But we don't smell. If you want to put your head inside some of these tanks, we can get plenty of smell, but we don't smell." And they didn't smell. Senator MUSKIE. This refinery is relatively new? Dr. MEANS. Yes, this is a 3-year-old refinery. Senator MUSKIE. It is located on St. Croix Island in the Virgin Island chain? Dr. MEANS. Yes, some of the people are from St. Thomas Senator MUSKIE. But that's in the Virgin Islands? Dr. MEANS. What? Senator MUSKIE. It's in the Virgin Islands? Dr. MEANS. It's in the Virgin Islands, yes. Senator MUSKIE. Which is a very popular recreational area- Senator MUSKIE. At what end of the island is it located? I have flown over St. Croix. I don't recall what Dr. MEANS. I haven't got my geography in mind. However, there is also a refinery in Puerto Rico and that is the one that smells. It puts more sulphur into the air than is necessary. Senator MUSKIE. With respect to the St. Croix refinery, is it clean because of public or government requirements in the area, or Dr. MEANS. It is my understanding that the Governor of the island required it, but also the Department of the Interior put pressure. Senator MUSKIE. So it would be useful for the record to get those regulations in the policies that were imposed on the St. Croix refinery? Dr. MEANS. Yes, I believe that you would find that definite conditions were laid down in the negotiations. Senator MUSKIE. In the case of the St. Croix refinery, is there a Government agency, Federal or local, which monitors the operation of the refinery, to guard against the breaches of Dr. MEANS. I just don't know that. Senator MUSKIE. Thank you, Dr. Means, very much for your helpful testimony. Dr. MEANS. Thank you. (Information relative to the St. Croix refinery follows:) DEPARTMENT OF THE INTERIOR NEWS RELEASE TERMS AND CONDITIONS OF VIRGIN ISLANDS OIL IMPORT ALLOCATIONS SET Secretary of the Interior Stewart L. Udall today announced the conditions under which he has formally approved an oil import allocation for the Hess Oil and Chemical Company for use in its Virgin Islands petrochemical complex. The 10-year allocation will be 15,000 barrels daily, effective January 1, 1968, subject to the following conditions: 1. Royalty payments of $7,500 per day will be made semi-annually to the Virgin Islands Conservation Fund. 2. During the first two years, legal residents of the Virgin Islands will constitute 75% of the employees of the facility; 80%, the third; 85%, the fourth; and 90% thereafter. Within 12 months, no fewer than 400 people must be in permanent employment and within 36 months no fewer than 500 people. 3. Within 12 months, funds will be expended or obligated to assure a total investment in the Virgin Islands investment of no less than $70 million in refining, petrochemical, and related facilities. The facility will include a 30,000 barrel per day vacuum gas oil sulfurization plant and an 18,000 barrel per day benzene, toulene, xylene plant. In addition, $30 million will be expended or obligated within 36 months following the granting of the allocation for petrochemical and related facilities which will be of a type to insure increased employment on the Islands. 4. During January, February, and December of each year, No. 2 heating oil produced at the Virgin Island's facility will be shipped to the East Coast at a rate of 15,000 barrels per day. Such shipments will commence in January 1968. 5. The Virgin Islands facility will utilize (other than processing for others) Western Hemisphere feedstocks to the maximum extent compatible with the production of low-sulfur fuel oil. Such utilization will be no less than 50% of feedstocks or 50,000 barrels per day, whichever is greater. Petrochemical feedstocks produced in excess of the needs of the Hess facility will be made available competitively for local Virgin Islands manufacturing purposes on a firstrefusal, non-interruptable basis. 6. The Hess facilities will be operated to prevent environmental pollution in accordance with the applicable laws, regulations, and requirements of the Virgin Islands Government. The company also agrees to consult with the Department of the Interior on the developing technology of desulfurizing feedstocks, or products, or the removal of sulfur from stack gases. When it is agreed that such techniques are technically sound and economically feasible, they will be used in the operation of the Virgin Island's facility. 7. The company agrees to pay normal tariffs on petroleum products brought to the United States which otherwise would not be payable on such products coming from the Virgin Islands. It is estimated that this may amount to as much as $6,000,000 additional annually into the United States Treasury. Secretary Udall said that the Hess Oil and Chemical Company has agreed to these terms. The text of the allocation is attached : ALLOCATIONS TO HESS OIL & CHEMICAL CORP., OF IMPORTS OF In accordance with Proclamation 3279, as amended, and subject to all of the applicable provisions of Oil Import Regulation 1, as revised and amended, an allocation effective January 1, 1968, is hereby made to the Hess Oil and Chemical Corporation (hereinafter referred to as Hess) of 15,000 b/d per calendar year of imports into Districts I-IV of finished products. This allocation shall remain in effect for a period of ten years from its effective date subject to the following terms and conditions: 1. Subject to the provisions of Article 7 of the Agreement dated September 1, 1965 (the Agreement) between the Government of the Virgin Islands (the Government) and Hess Oil Virgin Islands Corp. (Hovic), Hovic shall, in accordance with the terms and conditions of a certain Supplemental Agreement dated September 13, 1966 (the Supplemental Agreement) between the Govern ment and Hovic, pay to the Government a royalty of $7,500 per day. Notwithstanding the time for payment specified in the Supplemental Agreement royalties accruing for each semi-annual period ending June 30 and December 31 respectively shall be paid within two weeks thereafter into the special Virgin Islands Conservation Fund authorized by Act No. 2036, dated August 7th, 1967, of the Seventh Legis.ature of the Virgin Islands of the United States, Third Special Session. Hovic shall have no right of offset under paragraph 3 (d) of the Supplemental Agreement, as amended. However, offsets may be made as provided in paragraphs 3 (b) and 3 (c) and the provisions respecting renegotiation and/or arbitration as provided in paragraph 5 of the Supplemental Agreement shall remain in effect. Any adjustment in royalty payments resulting from renegotiation under Article 5 of the Supplement shall be subject to the approval of the Secretary. The Secretary also may participate in arbitrations pursuant to Article No. 11 of the Agreement. 2. The provisions of Article 3 of said Agreement of September 1, 1965, to the contrary notwithstanding, Hovic, together with its affiliates, (as defined in paragraph 2 (A) of the Agreement) shall, subsequent to the effective date of the allocation, employ not less than the following percentage of legal residents of the Virgin Islands in the operation and maintenance of its oil refinery and related facilities, including petrochemical facilities: 75% during the first two years, 80% during the third year, 85% during the fourth year, 90% during the fifth and all years thereafter. 3. Within 12 months from the effective date of the allocation, Hovic, together with its affiliates, shall have no fewer than 400 people, exclusive of construction personnel, in permanent employment and within 36 months from the effective date Hovic, together with its affiliates, shall have no fewer than 500 people, exclusive of construction personnel, in permanent employment. 4. Within 12 months from the effective date of the allocation, Hovic, together with its affiliates, shall have expended or obligated or caused to be expended or obligated, sums sufficient to provide a total investment of not less than $70,000,000 in oil refinery, petrochemical and related facilities in the Virgin Islands which shall include a 30,000 b/d vacuum gas oil desulfurization plant and an 18,000 b/d benzene, toluene, xylene plant. Within 36 months from the effective date of the allocation, Hovic, together with its affiliates, shall have expended or obligated, or caused to be expended or obligated, additional sums of not less than $30,000,000 which additional sums shall be for petrochemical and related facilities in the Virgin Islands of types which will afford maximum employment on the Islands. In addition, Hess and Hovic shall use their best efforts to promote the establishment in the Virgin Islands of additional petrochemical facilities and, particularly, of facilities for the production of consumer goods from petrochemicals in furtherance of the objective of increasing and upgrading opportunities for employment in the Virgin Islands by the development of a major petrochemical complex therein. 5. For so long as importation of No. 2 heating oil is restricted, and unless otherwise waived by the Secretary, Hess shall ship into District I No. 2 heating oil at the rate of 15,000 b/d during the months of January, February and December of each year after the effective date of the allocation. 6. The Secretary or his authorized representative shall be given access, upon request, to inspect Hovic's Virgin Islands refinery and petrochemical facilities and all records of transactions pertaining to construction thereof, purchase of feedstocks and purchases and sales of finished products, unfinished oils, and petrochemicals produced by such refinery and petrochemical facilities. Any information so obtained shall be solely for the confidential use of the Secretary and Department of the Interior. 7. Feedstock produced by Hovic for the development of a petrochemical and petrochemical conversion industry in the Virgin Islands, which is in excess of the needs of Hess, Hovic or its affiliates, shall be made available at competitive prices to any person, for local Virgin Islands manufacturing purposes, who is otherwise ready, willing, able and qualified to utilize such feedstock for conversion purposes in the Virgin Islands on a first right of refusal and a firm non-interruptable basis. 8. Hovic and its affiliates shall in the operation of their plant on the Virgin Islands comply with all applicable laws, regulations and lawful requirements of the Virgin Islands Government including those relating to the prevention of environmental pollution. 9. Subsequent to the effective date of the allocation Hess shall claim no exemption under Headnote 3 (a) of the Tariff Schedules of the U.S. (19 U.S.C. 1202 [1964 Edition] from duties which would otherwise be owing to the United States on imports of finished or unfinished oils produced by it in the Virgin Islands which may move into the U.S. Customs Territory. 10. Hovic shall utilize (other than for processing for others) in its Virgin Islands facilities Western Hemisphere (North America, South America, Central America and the West Indies) petroleum feedstocks to the maximum extent compatible with the continued production of low sulfur residual fuel oil meeting existing or future maximum sulfur content requirements into the U.S. markets provided that in no event shall such utilization be less than one-half of the petroleum feedstocks of its Virgin Island plant or 50,000 b/d whichever is greater. Hovic also, on a best efforts basis, shall supplement its refinery petroleum feedstocks with low sulfur crude from the Western Hemisphere if and when the same is available at competitive prices. 11. Hovic shall, from time to time, review with the appropriate Bureaus and Offices of the Department of the Interior the developing techniques and technology for desulfurization of petroleum feedstocks or its products or the removal of sulfur in stack gases and shall, to the extent that it is mutually agreed that they are technically sound and economically feasible, make use of such techniques and technology in the operation of its Virgin Islands plant. 12. Hess guarantees the performance by Hovic of all the terms and conditions of this allocation. STEWART L. UDALL, Secretary of the Interior. Senator MUSKIE. Our next witness is Dr. Max Blumer of the Woods Hole Oceanographic Institution, Woods Hole, Mass. Dr. Blumer, it is a pleasure to welcome you this morning. STATEMENT OF MAX BLUMER, WOODS HOLE OCEANOGRAPHIC INSTITUTION, WOODS HOLE, MASS. Dr. BLUMER. Thank you, Senator Muskie. I have updated testimony from the version that I first submitted to you as a result of our continued research in this area. I am grateful for the invitation to appear before the Subcommittee on Air and Water Pollution to discuss the impact of the oil port and refinery operations on the coastal ecology and on food derived from the sea. I have been involved with the study of hydrocarbons in the sea and with the development of methods for their analysis for the last 11 years at the Woods Hole Oceanographic Institution. An oil spill close to our laboratory last fall has shown us how suitable these methods are for studying the fate of pollution in the environment and how much new information we can gain through the judicious application of such techniques. This new information I want to discuss. I will preface this with a review of the toxicity of oil in the environment and then later I will discuss the existing countermeasures and I will close by giving you my estimate of the effect of port and refinery operations on the ecology and fisheries in this area. TOXICITY OF OIL AND OIL PRODUCTS The toxicity of crude oil and oil products to marine life and the danger of oil pollution to the marine ecology has been established in several independent ways. Studies of crude oil composition have shown that oil contains both fast-acting poisons and others which act more slowly but are equally severe in their effect. Some of them are known to cause cancer. Laboratory studies on many marine animals have demonstrated the toxicity of oil and oil products. Field studies have shown the disastrous effect of oil spills on marine organisms in their normal natural habitat. From such investigations we know that all crude oils and all oil products, with the exception of some highly purified substances, are poisons for all marine organisms. Pollution with crude oil and oil fractions can damage marine life in many different ways: It can kill directly through coating and asphyxiation, through contact poisoning of organisms, and through exposure to the water-soluble toxic components of oil at some distance in space and time from the accident. It can destroy the generally more sensitive juvenile forms of organisms. It destroys the food sources of higher species. Oil and oil products that are taken up by organisms reduce resistance to infection and other stresses. Also, this may result in failure to reproduce. Oil pollution exposes organisms to long-term poisons, e.g. carcinogens. At low concentration levels oil pollution may interrupt any of the numerous events necessary for the feeding, migration and propagation of marine species and for the survival of those species which stand higher in the marine food web. We wish to comment on the problem of petroleum and cancer. Some years ago a high incidence of skin cancer in some refinery personnel was observed. The cause was traced to prolonged skin contact by these persons with petroleum and with refinery products. Better plant design and education, aimed at preventing the skin contact, have since reduced or eliminated this hazard (Eckart, 1967). However, these incidents have demonstrated that oil and oil products can cause cancer in man, and these findings were supported by the isolation from petroleum of chemicals that are known to cause cancer and that were actually shown to induce cancer in test animals (Cook et al., 1958; Carruthers et al., 1967; Graef and Winter, 1968). Safeguards in plant operations protect the public from this hazard. However, when oil is spilled into the environment, we lose control over it and should again be concerned about the possible public health hazard from cancer-causing chemicals in the oil. We have shown that marine organisms take up and retain hydrocarbons to which they are exposed. These are transferred to and retained by predators. In this way even animals that were not directly exposed to a spill can become polluted by eating contaminated animals. This and the presence of cancer-causing chemicals in oil pollution implies that the marketing and eating of oil-contaminated fish and shellfish may constitute a public health hazard. THE OIL SPILL OF WEST FALMOUTH, MASS. In September 1969 a fuel barge went aground off West Falmouth on Cape Cod, Mass. Approximately 650 tons of No. 2 fuel oil were discharged into the coastal waters. Chemists and biologists at Woods Hole are studying the immediate and long-term effects of this spill. |