A more direct one is the oil import quota system, as has been pointed out, as I mentioned, by my former colleague, Representative Silvio O. Conte of Massachusetts, on many occasions.

The same point is made in a recent letter to the President by another member of this committee, Representative Addabbo of New York.

Its impact on the supply of fuel as well as its cost is quite telling. A Presidential Cabinet Task Force on Oil Import Controls reported in February of this year that the American consumer is paying $4.85 billion annually to have less oil. Homeowners and business users paid $900 million of this premium, while the taxpayer by car, train, or plane, paid $2.9 billion. New York State alone paid $429 million. That might be well and good if we had oil when needed. But now we have a shortage while millions of barrels of fuel are excluded from the market.

This quota system combines with another factor to keep 1.7 million barrels a day off the market from existing operating wells within the United States.

The market demand prorationing practiced by the Texas and Louisiana Public Utility Commissions keeps production well below capacity to keep these prices high. This artificial limit on supplying 1.7 million barrels a day can be compared with a national consumption of 14.8 million barrels a day, and the National Petroleum Council's predicted deficit of 200,000 barrels a day.

I, for one, would rather have a national body deciding whether there will be a fuel shortage in the Northeast than two State regulatory bodies necessarily comfortable with the oil industry in their States. Then there is the oil industry itself. It is increasingly expanding to the point where it now controls natural gas supplies and reportedly has large holdings in coal and nuclear fuel production.

The concentration of ownership and control of energy in a few hands raises very grave questions. Certainly it could reach a point, if it hasn't already, in which national energy policy would in fact be nothing more than the maximization of profit by an industry that is an oligopoly. And that would neither be conducive to national security or to a national clean oil policy.

In any event, a review of the facts led me to believe that we have no real fuel shortage in the sense that there are adequate supplies of oil, coal, and gas, both inside the United States and abroad. What we do have is a shortage created by the policy decisions of public and private bodies. If fuel or electricity must be rationed this winter, it will be as a direct result of these policies.

What should be done? I believe that steps can still be taken now which will reduce the possibility of any fuel shortage this winter.

Furthermore, if taken in conjunction with a program of long-term reform, future shortages can be avoided.

Moreover, we can and must have clean fuels this winter. There should be no retreat on clean air standards.

Two premises are essential to meeting this winter's shortage. The first is to recognize that in order to meet a national shortage, temporary suspension of oil quotas will not injure our national security.

The second is that a short-term invasion of reserves is warranted to meet the crisis of the hour if those reserves will be reconstituted when the crisis is passed.

With these two simple premises, the following short-term program is possible to meet immediate needs:

1. The bonus barrel system applicable to the west coast should be made nationwide. This program allows importers to bring in one extra barrel of regular crude oil for every barrel of low sulfur imported oil produced. The program has two benefits, in that it increases the amount of low sulfur fuel and, in effect, can double the present quota if no limit on American import is imposed. It would create a considerable and prompt incentive to bringing in more fuel quickly to take advantage of present high prices. The regulation extending of this program to the Nation as a whole is actually on the books. Yet despite warnings that a fuel shortage was imminent and low sulfur fuel scarce, the regulation would never allow it to take effect, and, in fact, was suspended by the Department of Interior in May of this year. 2. Market prorationing must be abandoned or suspended for the duration. According to the President's task force, under the existing quota system, authorities in the States wrote that effective market demand prorations, principally in Texas and Louisiana, restricts production to what is needed at the prevailing price, and therefore control both price levels and domestic output. Prorationing of 500 barrels per day on the Continental Shelf, a policy presently practiced by the Federal Government itself, could be abandoned immediately, and those wells brought up to the maximum efficient rate.

3. The quota on Canadian imports should be eliminated completely or suspended during the present shortage, so that whatever capacity exists can be drawn into the United States. Only a regulation by the Department of Interior is needed.

4. In any case in which users, such as utilities, can consume natural gas, and low sulphur fuel oil is not available, natural gas should be made available in order to meet pollution control standards.

5. The FTC and the Department of Justice should investigate and act on repeated allegations that producers of gas and oil are deliberately holding their products off the market in order to raise prices. Moreover, the reported control of coal, gas and nuclear fuels by a few oil companies should be closely reviewed both by the Congress and regulatory agencies.

All of these steps should be taken promptly. They should be followed by an overhaul of our approach to the production of fuel and energy. We must resolve to have a national clean fuel policy and more adequate and pollution-free supplies of energy; otherwise, the 60percent increase in energy consumption predicted by the end of the decade will either not be met, thus ending economic growth and recovery, or it will be met with at least a 60-percent increase in pollution to go along with it.

A national clean fuel policy must, therefore, meet these criteria: 1. In order to be a fuel policy rather than a price control mechanism, it must provide an adequate supply of fuel at reasonable prices. The present quota system has failed in this respect, and, according to the February report of the President's task force, in protecting the national security as well. It should be heavily revised or abandoned. 2. In order to be a clean fuel policy it must integrate the demand for economic growth with the environment. Not only should environmental factors be considered in establishing our fuel policy, but en

vironmental agencies, presumably the new Environmental Protection Agency, must be given a major role in setting those policies. Electrical energy considerations must also be reflected through participation of the Federal Power Commission.

A first step would be to add the Environmental Protection Agency to the agencies now included in the President's Oil Policy Committee, not as an observer but as a full participant.

In order for this to be a national clean fuel policy, the decisions must be in the hands of responsible Federal organizations, not State regulatory bodies. Neither should our policy rely on the exclusive judgment of a few large oil firms. Legislation will be necessary, and I hope that the Congress will aggressively assert its leadership in preparing it.

What men have made men can remake. We now have what the New York Times has rightly called a manmade shortage. Prompt Federal action should be able to end it, and to move on to preventing such future shortages.

I would like to thank you once again, Mr. Chairman, and members of the committee, for the opportunity to present my views on this vital issue.

Mr. SMITH. Thank you very much, Mr. Lindsay, for a very good statement. It was very precise and had specific recommendations. I do have some questions.

Mr. EVINS. I want to go along with the chairman in welcoming the mayor. We appreciate very much his coming and presenting his views. I think he has made an excellent statement regarding the summary of the fuel crisis.

I think I would agree with him that the major oil companies, a few major oil companies should not control the oil prices and the coal situation.

We have reports that some of the oil companies have brought up the coal prices. Coal is now in abundant supply, but it cannot be delivered because of a shortage of rail cars and because of other factors.

And I do not think that the solution to this problem is all within the Federal Government. The chairman said that the answer must come, from the Federal Government. Maybe we should take action, of course, in legislation. But we are increasingly warned and told about the few major oil companies that are rationing the supply of oil and buying up the coal stockpiles.

So I appreciate your testimony. And we will certainly evaluate your

views.

Mr. SMITH. Mayor Lindsay, you said that no single agency of the Federal Government is responsible. Have you found any agency whether a single or multiple, that is planning ahead and making plans for the future?

Mayor LINDSAY. No, sir.

Mr. SMITH I notice also that you said you had some recommendations for a temporary solution. I take it therefore that you feel that this needs a long-range solution, and that this involves some Federal agency making some definite plans for the future?

Mayor LINDSAY. Yes, sir; that is absolutely right, Mr. Chairman. I have been prowling through a multitude of studies on the subject, and the more I read the studies the more confused I, as a layman, get. There seems to be a good deal of study going on. But I sense that there

is an absence of a clear strategy, a clear plan, positive identification of who is responsible for it, and the timetable for carrying out that strategy. I believe that this committee would have a very difficult time in trying to discover that strategy. I don't know who the one person is that you could invite to come before you from the Federal Government and say, "OK, you have got 2 hours to sit here and tell us exactly what the strategy is, what the plan is, what will happen 6 months from now, what will happen a year from now, and what will happen 10 years from now, who is doing what to whom, and what we can expect." I am not sure that you could discover those answers. Mr. SMITH. Of course, in the long run, this is a very vital and important thing for Americans. And we intend to call on these agencies and to ask them if they are planning, and if they are not, why not, and if they need legislation why they are not making these plans.

Do you have any assurance whatsoever from power companies in the New York area that they will have peaking power available next year or the year after, or at any time in the future?

Mayor LINDSAY. Well, that is a hard question. I don't want to try to speak for Consolidated Edison of New York. They really ought to speak for themselves. We have had during this summer's pressures, as you well know-the New York area and the east coast in general have had a very, very difficult and, at times, a dangerous condition of shortages during peak load periods. I couldn't sit here and say that we are assured in the governmental end of New York City that that won't happen during the cold winter months, as well as during the terrible pressures of the summer. And I would doubt very much if Mr. Luce of Consolidated Edison can give you assurances on that any more than he could them to us.

Mr. Carballo, my assistant, has some figures here that may be useful. This is Manuel Carballo.

What are these figures here, Manuel?

Mr. CARBALLO. The Consolidated Edison Co. has told us that they have on hand approximately 10 days' reserve of low sulphur fuels. They then have anywhere from 60 to 90 days of coal, which is of course much more a polluting fuel than the low sulphur fuels and oils available to the company.

One of the problems Con Edison would have-as the chairman stated, they should of course set it out themselves-but one of the problems they would have in their meeting peak power capacity during the winter is going to be in assuring the adequacy of the fuel reserves and the fuel supplies available.

Mr. SMITH. Given enough coal and oil to transform into electric energy, do they have a capacity to produce enough electricity to meet the peak period?

Mr. CARBALLO. The projected demand for the winter is considerably more than the summer. They have two major generators still out of order. One is the Ravenswood No. 3 plant, which produces from 800 to 1 million megowatts. That was originally to be repaired by the end of the summer. It is now projected that it will be available some time in the spring.

The other facility is New York Consolidated Edison Co's. only nuclear plant producing approximately 200 megawatts. That facility is also out of service.

They would be best qualified to project whether they feel that, given their present generating plants, that they would be able to produce sufficient amounts of power. But, for the moment, they have told us that they feel that they can make it through the winter.

Mr. SMITH. They have a franchise from New York City; do they? Mayor LINDSAY. They are the sole supplier of electrical energy for New York City, and Westchester County, outside of New York City. Mr. SMITH. You spoke of a legal remedy. Perhaps it may not be a fair question if it isn't, just say so-but would you have leverage on them through the franchise? Do they have responsibilities under the franchise?

Mayor LINDSAY. Well, that is a good question. The crunch that we just went through in respect to Consolidated Edison's application to the city to build an extension of their partial fuel-burning plant in Astoria-Queens is a good example of what happens. Some years ago Consolidated Edison under its then management, made a written agreement with the city-I was a signatory-in which, among a lot of other things which I won't go into involving the subject of cleaner fuels and air pollution, part of the agreement was not to build any more partial fuel burning outlets in New York City. They came to us and said that they couldn't live up to the agreement. And because of a variety of factors that were then unpredictable, they asked us to grant the necessary technical licensing-building permits, et cetera, et cetera-to go forward with an addition in Queens, AstoriaQueens.

The only power that the city had, or the legal rights that the city had, was to blockade them with certain municipal powers having to do with the installation of boilers, and building permits, et cetera. And even then they might have been able to override us. But it would have been a very nasty show. So we finally gave them the necessary permits to build 50 percent of what they had asked. But we were in the position of having to make that decision after a frightful row in which one agency of the Federal Government came down on one side and said, "Let them have the whole thing," and another agency of the Federal Government said, "Don't give them anything because of environmental problems," and the State of New York split the ways. So it all came down to us in the city to make the final decision, which we did. Consolidated Edison was not happy, but said that they could live with it.

One of the problems that compounded all of this in the process has been inadequate supplies of natural gas, which has been very damaging to us from the point of view of the environment.

Mr. SMITH. It presents quite a different legal problem, though, if they fail to furnish enough electricity rather than the pollution aspect? Mayor LINDSAY. Yes.

The main point is that Consolidated Edison, which, as I pointed out, is the sole supplier of New York City, has legal responsibility only to the Federal Power Commission and New York State Public Service Commission. It doesn't report to the city and we don't have any legal power from a regulatory point of view.

Mr. SMITH. We will have the chairman of the Public Service Commission of New York later to answer some questions on that.