Images de page
PDF
ePub

COMMITTEE ON GOVERNMENT OPERATIONS

JACK BROOKS, Texas, Chairman DON PUQUA, Florida

FRANK HORTON, New York JOHN CONYERS, JR., Michigan

THOMAS N. KINDNESS, Ohio CARDISS COLLINS, Illinois

ROBERT S. WALKER, Pennsylvania GLENN ENGLISH, Oklahoma

WILLIAM F. CLINGER, JR., Pennsylvania HENRY A. WAXMAN, California

ALFRED A. (AL) MOCANDLESS, California TED WEISS, New York

LARRY E. CRAIG, Idaho MIKE SYNAR, Oklahorna

HOWARD C. NIELSON, Utah STEPHEN L NEAL, North Carolina

JIM SAXTON, New Jersey DOUG BARNARD, JR., Georgia

PATRICK L. SWINDALL, Georgia BARNEY FRANK, Massachusetts

THOMAS D. (TOM) DELAY, Texas TOM LANTOS, California

DAVID S. MONSON, Utah ROBERT E, WISE, JR., West Virginia

JOSEPH J. DIOGUARDI, New YORK BARBARA BOXER, California

JOHN G. ROWLAND, Connecticut SANDER M LEVIN, Michigan

RICHARD K. ARMEY, Texas MAJOR R, OWENS, New York

JIM LIGHTFOOT, Iowa
EDOLPHUS TOWNS, New York

JOHN R. MILLER, Washington
JOHN M. SPRATT, JR., South Carolina
JOE KOLTER, Pennsylvania
BEN ERDREICH, Alabama
GERALD D. KLECZKA, Wisconsin
ALBERT G, BUSTAMANTE, Texas
MATTHEW G. MARTINEZ, California

WILLIAM M. JONES, General Counsel

JOHN E. MOORE, Staff Administrator
STEPHEN M. DANIELs, Minority Staff Director and Counsel

ENVIRONMENT, ENERGY, AND NATURAL RESOURCES SUBCOMMITTEE

MIKE SYNAR, Oklahoma, Chairman ROBERT E, WISE, JR., West Virginia

WILLIAM F. CLINGER, JR., Pennsylvania BARBARA BOXER, California

THOMAS D. (TOM) DELAY, Texas JOE KOLTER, Pennsylvania

RICHARD K. ARMEY, Texas EDOLPHUS TOWNS, New York

JOHN R. MILLER, Washington ALBERT G. BUSTAMANTE, Texas

JACK BROOKS, Texas

Ex OFFICIO

FRANK HORTON, New York
SANDRA ZEUNE HARRIS, Staff Director
LYNN STEVENS, Professional Staff Member

Heidi I. IRGENS, Staff Assistant
JAMES TAPPER, Minority Professional Staff

(IT)

CONTENTS

[ocr errors]

Page
Hearings held on:

April 1.

April 2...

Statement of:

Boggs, Danny J., Deputy Secretary, Department of Energy.

Cooper, Dr. Mark N., director of energy, Consumer Federation of

America ..........

Gravelle, Dr. Jane G., specialist in industry analysis and finance, Eco

nomics Division, Congressional Research Service............

Hammons, Sam, Oklahoma representative of the Interstate Oil Compact

Commission .....

Jones, Jeffrey A., Deputy Director, Energy Programs, Office of the Secre-

tary of Defense, Department of Defense ........

Kelley, Michael T., Deputy Assistant Secretary for Basic Industries,

International Trade Administration, Department of Commerce, accom-

panied by Doug Perry, Office of Energy ....

338

Lichtblau, John H., president, Petroleum Industry Research Foundation,

Inc....

157

Lodwick, Seeley, Commissioner, U.S. International Trade Commission,

accompanied by John J. Gersic, Chief, Energy and Chemicals Division ... 328

Peach, J. Dexter, Director, Resources, Community and Economic Develop-

ment, U.S. General Accounting Office, accompanied by F. Kevin

Boland, Senior Associate Director, and Clifford Gardner, Group Direc-

tor ................

Perry, Richard C., consultant, appearing on behalf of the Petrochemical

Energy Group...............................

Reinstein, R.A., Director, Energy and Chemical Trade Policy, Office of

the U.S. Trade Representative...

Schuler, Dr. G. Henry M., Dewey F. Bartlett Chair in Energy Security,

Center for Strategic and International Studies, Georgetown University..

Steuart, Leonard P., II, president, Steuart Petroleum Co...

Stratman, Joseph L., senior vice president, Texas City Refining, Inc.,

accompanied by George Jandacek, vice president, Crown Central Petro-

leum Co...

........... 409

Synar, Hon. Mike, a Representative in Congress from the State of Okla-

homa, and chairman, Environment, Energy, and Natural Resources

Subcommittee: Opening statement ........

Tell, William K., Jr., senior vice president, Texaco, Inc., accompanied by

James A. McNamara, director, government relations ..........

Unsell, Lloyd N., executive vice president, Independent Petroleum Asso-

ciation of America .......

Van Arsdall, R. Thomas, vice president, agricultural inputs and services,

National Council of Farmer Cooperatives.

436

Letters, statements, etc., submitted for the record by:

Armey, Hon. Richard K., a Representative in Congress from the State of

Texas: Introductory statement..........

Boggs, Danny J., Deputy Secretary, Department of Energy

Charts demonstrating problems in past forecasting .............

............... 49-52

Cost of SPR expansions ..........

42-43

Examining reporting of gasoline and light end blending components

imports in EIA monthly surveys ........

Net stock-adjusted imports .........

32-33

Prepared statement.................

14-29

Product import numbers discrepancies ..............

[graphic]
[graphic]
[ocr errors]
[ocr errors]
[ocr errors]
[graphic]
[ocr errors]
[ocr errors]

.......

[ocr errors]

Page
Letters, statements, etc., submitted for the record by-Continued
Boggs, Danny J., Deputy Secretary, Department of Energy-Continued

U.S. conglomerates investing in overseas refineries................
U.S. and foreign plant costs...........

....... 38-39 Boland, F. Kevin, Senior Associate Director, Resources, Community and

Economic Development, U.S. General Accounting Office: October 3,

1984, prepared statement before certain House subcommittees ................ 84-92 Cooper, Dr. Mark N., director of energy, Consumer Federation of America: Prepared statement.

180-311 DeLay, Hon. Thomas D. (Tom), a Representative in Congress from the

State of Texas: Opening statement ........ Gravelle, Dr. Jane G., specialist in industry analysis and finance, Eco nomics Division, Congressional Research Service: Prepared statement

............................................................................................. ................ 507-512 Hammons, Sam, Oklahoma representative of the Interstate Oil Compact Commission: Prepared statement...

............................ 536-541 Jones, Jeffrey A., Deputy Director, Energy Programs, Office of the Secretary of Defense, Department of Defense:

Cost of defending sea lanes in peacetime and national emergencies ... 82
Prepared statement with attachments ......

........... 56-70 Kelley, Michael T., Deputy Assistant Secretary for Basic Industries,

International Trade Administration, Department of Commerce: Pre-
pared statement....

............. 342-347
Lichtblau, John H., president, Petroleum Industry Research Foundation,
Inc.:
December 28, 1984, letter to Secretary Hodel concerning Treasury
Department's tax reform proposal .........

... 172-174 Prepared statement ............

........... 162-171 Lodwick, Seeley, Commissioner, U.S. International Trade Commission: Prepared statement .............

................ 332-338 Miller, Hon. John R., a Representative in Congress from the State of

Washington: Opening statement ................. Peach, J. Dexter, Director, Resources, Community and Economic Development, U.S. General Accounting Office: Prepared statement.

..... 98-109 Perry, Richard C., consultant, appearing on behalf of the Petrochemical Energy Group: Prepared statement .............

.... 489-499 Reinstein, R.A., Director, Energy and Chemical Trade Policy, Office of

the U.S. Trade Representative: Prepared statement...... ........... 322-327 Schuler, Dr. G. Henry M., Dewey F. Bartlett Chair in Energy Security,

Center for Strategic and International Studies, Georgetown University:
Prepared statement .......

................ 118-151 Steuart, Leonard P., II, president, Steuart Petroleum Co.: Prepared statement..........

............ 457-485 Stratman, Joseph L., senior vice president, Texas City Refining, Inc.: Prepared statement ......

........... 412-434 Synar, Hon. Mike, a Representative in Congress from the State of Okla

homa, and chairman, Environment, Energy, and Natural Resources
Subcommittee:
January 22, 1985, article from the Platts Oilgram News entitled "EC

Study Hinges Attitude to Mideast Products on Actions by U.S.,
Japan".

398 March 25, 1985, article from U.S. Oil Week entitled "Shell Sees

Summer Price War; Plans Import Binge in East" .... Tell, William K., Jr., senior vice president, Texaco, Inc.: Prepared statement .........

............... 367-396 Texaco's crude oil input to the Port Arthur/Port Neches plants ......... 404 Unsell, Lloyd N., executive vice president, Independent Petroleum Association of America: Prepared statement ..............

............. 519-533 Van Arsdall, R. Thomas, vice president, agricultural inputs and services,

National Council of Farmer Cooperatives: Prepared statement .......... 438-446

............

[ocr errors]

...

[ocr errors]

APPENDIXES

Appendix 1 ..........................................................................................................
Appendix 2 ......

547 842

REVIEW OF LONG-TERM WORLD OIL OUTLOOK; PETROLEUM PRODUCT IMPORTS; AND ENERGY-RELATED TAX REFORM PROPOSALS

MONDAY, APRIL 1, 1985

HOUSE OF REPRESENTATIVES,

ENVIRONMENT, ENERGY,
AND NATURAL RESOURCES SUBCOMMITTEE
OF THE COMMITTEE ON GOVERNMENT OPERATIONS,

Washington, DC. The subcommittee met, pursuant to notice, at 1 p.m., in room 2154, Rayburn House Office Building, Hon. Mike Synar (chairman of the subcommittee) presiding.

Present: Representatives Mike Synar, Albert G. Bustamante, William F. Clinger, Jr., Thomas D. (Tom) DeLay, and John R. Miller.

Also present: Sandra Z. Harris, staff director; Lynn Stevens, professional staff member; Heidi I. Irgens, staff assistant; and James Tapper, minority professional staff, Committee on Government Operations.

they are ferable internet. Herrimetime has improve importo rls to

OPENING STATEMENT OF CHAIRMAN SYNAR Mr. SYNAR. The subcommittee will come to order.

Today, the subcommittee begins 2 days of hearings on the longterm world oil outlook and U.S. energy security vulnerability, and two related, but more specific, issues: oil product imports, and oil and gas related tax reform proposals.

Being from Oklahoma, these issues are of particular concern to me and certainly to our subcommittee members from Texas. But they are of concern to our entire subcommittee, as well, in light of our considerable interest in energy security issues in the past.

Energy Secretary John Herrington said recently, “* * * it is clear that the Nation's energy situation has improved significantly in recent years." This is true. Total U.S. net oil imports last year were about 4.5 million barrels a day—not counting imports for the strategic petroleum reserve-or roughly 29 percent of U.S. oil consumption for the year.

Today's numbers look good in comparison to many years during the 1970's. But there are some alarming trends on the horizon. Last year, oil imports ended a several-year decline and, instead, jumped 8 percent—the first annual increase since 1979. Domestic oil consumption rose 3 percent. Oil prices are relatively low, and this, no doubt, is one reason why our consumption and import

levels are once again creeping upward. The oil price shocks of the seventies have been forgotten.

Some oil experts predict oil prices will remain stable or decline in the next few years. If this proves to be true, then I suggest our oil outlook may be more perilous than it appears today. Indeed, some industry officials are warning that we are now at a crossroads and that we soon could find ourselves back in an energy situation very similar to what we faced in 1977 and 1978.

Most oil experts predict that U.S. oil production will continue to fall as U.S. oil consumption increases over the next two decades. It is in this context that we should look at some undeniable, yet not too pleasant, facts about the world oil picture.

The Soviet Union, which currently has a 17-percent edge over the United States in terms of oil production, will increase that margin in the coming years because proven Soviet oil reserves are more than twice that of U.S. oil reserves; Soviet gas reserves are seven times as large.

Seventy-four percent of the world's proven oil reserves are in the Middle East and North Africa. In fact, proven reserves in the Middle East alone exceed the reserves of all of the world's other areas combined.

It is with these statistics in mind that I turn to two more specific issues that may affect our domestic energy picture: Recent dramatic increases in oil product imports and proposed oil, and gas-related tax reforms which would reduce domestic exploration and production.

Our dependence on oil imports-about one-third of U.S. oil demand-is now higher than it was before the Arab oil embargo of 1983. Between 1981 and 1984, the number of operating refineries in this Nation declined 35 percent-from over 300 to just over 200 in number.

About 2 million barrels per day of capacity was permanently shut down in that period, and 1 million more was idled. I am told that since January of this year, another 1 million barrels per day of refining capacity has been closed down. Independent refiners accounted for almost 90 percent of the shutdowns, accounting for about 82 percent of the lost capacity.

Government and industry officials say that the Treasury Department's tax simplification plan could cause oil production to fall 12 to 142 million barrels a day from 1987 to 1995. These tax reforms would most affect independent oil companies, who accounted for about 87 percent of all exploratory oil and gas drilling from 1974 to 1983, and who were responsible for 17 percent to 38 percent of the additions to U.S. oil reserves, and 33 percent to 68 percent additions to our natural gas reserves. The number of drilling rigs operating already has fallen dramatically because of current market conditions.

Today, we will hear testimony on the broad issue of long-term world oil supplies, product imports and energy-related tax reform proposals generally. Tomorrow, we will focus specifically on oil product imports and the tax reform proposals as they relate to the oil and gas industry.

I would like to mention that, in addition to the testimony from our witnesses today, the subcommittee also has received written

of reited for cent of industrylan could987

« PrécédentContinuer »