Our coal mines are what is known as "captive" coal mines. That term means, in substance, that the coal produced in our mines is not sold in the market. It is captive in the sense that it is produced only for the purpose of operating coke ovens in steel producing plants. A commercial coal operator, that is, one who mines coal to sell it and thereby make a profit, is in the business to make money. If the Congress were to decide that as between the coal industry and the natural gas industry the latter is the more important and that therefore it should have the right to condemn the properties or mines of the coal industry when deemed advisable for the betterment of the natural gas industry, it would be at least theoretically possible for a commercial coal operator whose property was condemned to be awarded adequate compensation therefor by the courts.

That is not so in our case or in the case of any other captive operator. We do not mine coal because we want to make money out of selling the coal. We mine coal because we must have it to make steel, and without making a substantial part of our own requirements we cannot obtain the right kind of coal in the right quantities at the right time. The principal benefit of a captive coal-mine operation is the assurance to the steel plant coke-oven operator of a steady supply of the same coal day after day. Changes and variations in the type of coal supplied to a coke-oven operator have a very bad effect on his operations. This is true at all times, but particularly when, because of the great demand for steel, and also for the byproducts of coke-oven operations, such as toluol and other coal chemicals, the coke-oven operator must seek maximum production.

Senator SCHOEPPEL. Where would they get the power to condemn the coal mine?

Mr. BROEKER. Under S. 525 as it stands, they would.

Senator PURTELL. There is a question whether they have the power under present law to condemn for storage. S. 525 simply says-and we have extended the scope of this hearing beyond S. 525 somewhat, and I welcome it, but actually the bill asks that the act itself be amended by striking out the words "and the necessary land or other property" and inserting in lieu thereof "and the necessary land or interest in land, or other property." There is some question in some peoples' mind whether the power to condemn for storage does not now exist. Then the bill goes on to say and by striking out "for the location of compressor stations" and inserting in lieu thereof "for the storage of gas or for the location of compressor stations."

Mr. BROEKER. It is for the storage of gas, and that is not in there now. Now, as I understand it, they cannot condemn for the storage. This assurance of a steady supply is an intangible something that we do not believe could be compensated for in any eminent-domain proceeding. It is extremely important, but the rules which govern awards in condemnation proceedings do not contemplate compensation for this intangible something, which cannot be valued, in money, because its value is too indefinite and speculative. The operator of a commercial coal mine might, at least theoretically, be given the full value of his business in an eminent-domain proceeding and then go into some other business. A captive operator cannot do that. He must stay in the coal business in order that steel may continue to be produced. Senator SCHOEPPEL. I would agree with you, and I do not contemplate that the bill in itself, in its final form that might be reported

out or might not, would permit any such a situation that you envision, or feaure of condemnation.

Mr. BROEKER. I am glad to hear that.

Senator SCHOEPPEL. But if there are safeguarding factors put into it, and I have every reason to believe that there will be many safeguards put into it and that is going to be the result, that it is going to be perfectly apparent as we hear the witnesses who testify, but I do not contend that the law should be wide open and permit arbitrary exercising of eminent domain to the great injury to a potential industry as important as the steel industry and the captive mines of this country, and I do not think that that is in contemplation here.

Mr. BROEKER. I am very glad to hear that, because we are faced with that problem.

A different phase of the matter, but an equally important one, is that in any eminent-domain proceeding we would be losing metallurgical coal-that is, coal which has the characteristics which make it suitable for us in producing in modern byproduct coke-ovens coke which can be used in a blast furnace to make pig iron. The successful operation of the coke oven requires coal, or rather, a mixture of coals, having certain volatile and ash characteristics, and the coke which is produced must not contain too much sulfur or other chemicals which would be harmful in the blast furnace. The coke must also have certain qualities of hardness. This quality of coking, incidentally, is one that can be determined only by experimentation-the chemical analysis of coal will not tell you whether it will coke.

The quantity of metallurgical coal is by no means unlimited-it is in fact very limited. Bethlehem has employees whose sole job is to search for new reserves of metallurgical coal. The steel industry has spent a tremendous amount of money in recent years on coal washing and cleaning plants so that we can use in our coke ovens more of what metallurgical coal we do have.

The sum and substance of the situation is that metallurgical coal is essential to the steel industry and that the available reserves of it are so small that we believe that Congress should not take any action which would in effect classify the coal-mine industry as less important to the public welfare-the national welfare-than the natural gas industry.

I am not trying to say that metallurgical coal in the ground is so vital that not a ton of it, or an acre or so of it, here and there, can be spared. What I am trying to say is that metallurgical coal-mine operations are so essential that Congress should not enact S. 525 because under it, as we read it, a natural gas company which desired to establish a storage pool underneath one of our coal mines, or one of our reserve coal areas, could condemn the entire coal seam.

I understand that representatives of at least one gas company have indicated to certain coal company representatives that that is probably the best solution to the whole problem-just condemn the coal seam and then you won't have any gas storage under a coal mine, because you won't have a coal mine. That approach could certainly have disastrous results to the steel industry.

The same sort of disastrous results could follow if a gas company were allowed to condemn not the entire coal seam but a large area of coal around each gas well that is connected to the storage reservoir and the coal underneath the network of surface pipelines tying together

all such wells-that kind of condemnation could leave the mine operator with such a broken up coal area that he couldn't mine it.

I have mentioned that Bethlehem produces about 80 percent of its coking coal requirements. The remainder is purchased from commercial operators. What I have said about the scarcity of metallurgical coal is as applicable to metallurgical coal mines operated by commercial coal operators as to those operated by Bethlehem and other "captive" operators, and from the point of view of the national welfare it would be bad to make either kind of mine subject to condemnation for the benefit of the natural-gas industry.

For the reasons which I have given, we believe that any statute giving natural-gas companies the power of eminent domain in connection with the establishment of underground storage reservoirs should contain provisions carefully safeguarding the interests of the owners of coal seams so that the effect, or the practical effect, of the exercise of the power of condemnation will not be to require the shutting down of coal mines.

We believe, further, that such safeguards can be better administered by the several States more intimately concerned with the problems than by any Federal agency. For these reasons, then, as well as because of the problems of safety which are applicable generally both to "captive" and commercial operators, we believe that the entire problem of the storage of natural gas underneath coal seams should be left to the several States and that S. 525 should not be passed.

I have talked about coal seams and coal mines. I wish to say in conclusion that it is quite possible that the same problems in all respects could arise with respect to other underground mining operations. For example, Bethlehem has underground iron ore mining operations in Pennsylvania, and I think that S. 525 could have the same ill effects on those iron ore mining operations as we are afraid. it would have on our coal mine operations.

Our interest in this matter is not academic. One of those four coal mines on that map there on the easel is one of our coal mines. We have been fussing with this problem for 2 years since we found out that that gas pool was there. We found that out. We were not told. We had no notice.

The procedure of the Federal Power Commission has not been to consider that. I think the gas company that has that pool has some kind of a certificate. We did not know that that pool was there until we found out one day. Our interest, as I said, is not academic at all. We have been greatly concerned about the situation since we found it out.

Senator SCHOEPPEL. In other words, you do feel that if we have some legislation it should take into consideration all these valid factors you mentioned?

Mr. BROEKER. Oh, yes, indeed, Senator. I think it is a terrifically complicated problem. I have had a little bit to do with what Mr. Forester was talking about, the proposals for satisfactory legislation in Pennsylvania, and it is extremely complicated. This is about all I know about it. It is not something that can be done simply, I am afraid.

Senator PURTELL. Have you any further questions, Senator Schoeppel?

Senator SCHOEPPEL. No, sir.

Senator PURTELL. Senator Monroney, do you have any questions? Senator MONRONEY. No questions.

Senator PURTELL. Thank you, Mr. Broeker.

The next witness will be Mr. Charles Ferguson, Safety Director of the United Mine Workers of America, Washington, D. C.

STATEMENT OF CHARLES FERGUSON, DIRECTOR, SAFETY DIVISION, UNITED MINE WORKERS OF AMERICA

Mr. FERGUSON. My name is Charles Ferguson. I am Safety Director of the International Union, United Mine Workers of America, Washington, D. C.

I am appearing here representing the International Union of the United Mine Workers in opposition of Senate bill No. 525.

Through the facilities of its legal department and the safety division, our organization has made a rather exhaustive study of the gasstorage problem and the various pieces of proposed legislation affecting it, including Senate bill No. 525.

While our organization is not opposed to underground gas storage as such, we nevertheless believe the passage of this legislation is not in the best interests of the safety of the man engaged in the coal mines of the United States.

I myself am a practical coal miner with 17 years' experience in the coal mines of America, a large portion of which was spent in the coal mines. of Pennsylvania. I have served in every capacity in the coal mining industry from common laborer to that of assistant mine foreman, safety director, fireboss and coal inspector.

I therefore believe I have the experience necessary to render a practical opinion on the safety aspects of this proposed legislation and the hazards that will accompany the granting of an unrestricted Federal right of eminent domain. During the time I was an assistant mine foreman, because of the lack of regulatory legislation as to the location and proper plugging of abandoned wells, a cutting machine cut into an uncharted, unknown gas well. It was only by the quick thinking of the miners involved and prompt action in cutting off electrical power from the effected section, and the removal of the men that a major catastrophe was averted.

In my work as safety director of the mine workers' organization, I am familiar with conditions in coal mines throughout the Nation. I believe the unregulated storage of gas under and around the coal mines in the various areas will create another major disaster potential in addition to those that we have faced down through the years.

Any grant of a right of eminent domain for gas storage should and must be accompanied by adequate regulation wherever the proposed storage might be under or near a coal mine. This regulation should properly be performed by the States in order to adequately take care of local geological conditions.

It is well known that all coal mines are potentially gassy within themselves, and an explosion of methane is always a probability.

Continued efforts to minimize the natural hazards of the industry have been made down through the years by the cooperation of the coal industry, the United Mine Workers of America, Federal and State agencies and other interested parties. One significant result of this effort was the passage of Public Law 552, the Federal Coal Mine

Safety Act, which was primarily designed to prevent gas explosions and other major casastrophes in coal mines. We sincerely believe that Senate bill No. 525 is in direct contravention of the action and intent of the Congress when it enacted Public Law 552.

Introduction of additional natural gas under extremely high and unregulated pressures and the right to do so by Federal eminent domain without adequate statutory safeguards will certainly increase the hazard to the employees in the industry and may lead to disaster as bad as, if not worse than, the Centralia and New Orient explosions which occurred in Illinois. These disasters resulted in the unnecessary deaths of 230 coal miners and left a large number of widows and fatherless children.

It is known throughout the industry that there have been mine explosions which are directly attributable to the leakage of natural gas into the open workings of certain coal mines. If this or similar Federal legislation is passed, the probability of future explosions will be greatly increased.

I therefore in my official capacity and on behalf of the International Union of the United Mine Workers of America, our entire membership and their families which number well over a million Americans, urge that this legislation should not be passed.

I appreciate the privilege of appearing here, and will be glad to answer any questions which the committee may want to put to me, if I can.

Senator PURTELL. You used the word "unregulated" in two instances, and we agree with you that it should not be unregulated. I don't know of anybody who expressed the opinion that it should be, but you said "any grant of a right of eminent domain for gas storage should and must be accompanied by adequate regulation wherever the proposed storage might be under or near a coal mine. This regulation should properly be performed by the States in order to adequately take care of local geological conditions."

Chairman Kuykendall of the Federal Power Commission testified before the subcommittee on March 3 that the Natural Gas Act now permitted the States to impose their own health and safety regulations. and that S. 525 would not change this at all.

Mr. FERGUSON. I can only say there, being a layman, and on the advice of our legal department, I am told that S. 525 in its present form, and I am not familiar with any act, would give to the gas company the authority on their own findings and on their own motion, so to speak, give them the right to store gas at any place where they feel suitable. To me that poses a very serious problem.

Senator PURTELL. In view of the Federal Power Commission Chairman's statement on March 3, don't you feel that that throws a different light on it?

Mr. FERGUSON. I would feel that that statement is correct, and if that is true then it might change the situation. The mineworkers have certain definite recommendations that we would like to get onto the record in this hearing.

Senator PURTELL. We would like to have them.

Mr. FERGUSON. The first change that we believe should be made is that under the existing conditions that the States will recommend a practical method of imposing these regulations. But failing that, failure on the part of the States themselves to assume these obligations,