Fuel Investigation

The purpose of the hearings, which it is the intention of the committee to hold during this present week, is to ascertain what has been done by departments of government to relieve the present fuel shortage. I have been informed that there are some 13 committees of Congress that have in one way or another given consideration to this subject. Hearings can be held indefinitely. They are of little use unless there is something done as a result of the facts that are revealed in those hearings.

This committee is of the opinion that it is time something was done. On December 19, last, this committee, by resolution, unanimously adopted and set forth nine points in which it was the opinion of the committee that government agencies could be helpful immediately in relieving to some extent the present oil shortage. We are anxious to know what has been done by departments of government with respect to the suggestions that this committee has made. And if they cannot be complied with, why?

We are hopeful in this way to obtain some relief immediately. We are well aware that there are certain phases of the question that cannot be relieved immediately, and with respect to which there is needed a long-range program such as that suggested by this committee. yesterday in its report.

But for the immediate present, and immediate future, it would seem as if something could and should be done. It is therefore our intention in these hearings this week to endeavor to put our finger on those things that can be immediately done, and which in our opinion would be helpful, and ascertain whether those things have been done or will be done.

The first witness whom we will hear today will be Mr. William C. Foster, Under Secretary of the Department of Commerce. We would like to have Mr. Foster's statement, and with particular reference to point 1 on the program adopted by this committee on December 19, reading as follows:

The Export Control Authority should be exercised to prohibit or curtail the exportation of fuel oil and other petroleum products to alleviate the present shortage.

I do not mean to indicate to the witness that this is the only matter on which we wish to hear from him at this time, but that, in the

opinion of the committee, this is one very important phase of the whole situation which we are anxious to have some report on from the Department of Commerce.

STATEMENT OF HON. WILLIAM C. FOSTER, UNDER SECRETARY OF THE DEPARTMENT OF COMMERCE, ACCOMPANIED BY ADRIAN FISHER, SOLICITOR; T. C. BLAISDELL; AND C. M. STULL

Mr. FOSTER. Mr. Chairman, I have a brief prepared statement which, with your permission, I would like to read. It directs itself primarily to the point which you have discussed, but also touches on some other actions and activities which we have taken. If I may read most of that, Mr. Chairman, I should be glad then to comment on other points as you desire.

I am appearing here this morning in response to two letters which you addressed to the Secretary, on January 19 and 20, 1948. In the first of those letters you enclosed a copy of the resolution which this committee had adopted on December 19, following the close of its hearings on the current shortages of petroleum, and you requested the Secretary to report what has been done by the Department during the interim in the field of export controls.

The second letter requested that this report be made in person before the committee this morning. I am appearing for the Secretary who is unable to be here because of a prior engagement which he made to meet with representatives of the farm equipment manufacturers to discuss certain urgent problems of their industry.

That, Mr. Chairman, is in connection with the voluntary agreements under Public Law 395.

The CHAIRMAN. I suggest that the two letters referred to be made a part of the record at this point. (The letters are as follows:)

Hon. W. AVERELL HARRIMAN,

Secretary, United States Department of Commerce,

Washington 25, D. C.

JANUARY 19, 1948.

MY DEAR MR. SECRETARY: After some days of intensive hearings on the current shortages of petroleum, this committee, on December 19, unanimously adopted the resolution attached. We are now proposing next week again to review the situation. I should like, accordingly, at that time to be able to report to the committee just what has been done during the interim on each of the matters covered by the resolution.

Would you therefore kindly inform me at your very earliest convenience regarding the steps that may have been taken covering the items which appear to fall within your administrative jurisdiction, namely, paragraphs (1) and (8).

Very truly yours,

CHARLES A. WOLVERTON, Chairman.

JANUARY 20, 1948.

MY DEAR MR. SECRETARY: Referring to my letter of January 19 wherein you were asked to inform the committee the steps that have been taken pursuant to the resolution on petroleum the committee adopted on December 19, 1947, I would now like to ask you if it would be possible for you to make the reply in person before the committee on Tuesday, January 27th, at 10 a. m.

Very truly yours,

CHARLES A. WOLVERTON, Chairman.

Mr. FOSTER. I should like at the outset briefly to describe the export side of the petroleum situation as it has developed since the end of the war, so that our recent administrative decisions in administering export controls may be seen in their proper perspective. Controls over the export of petroleum products were in effect all during the war. Shortly after VJ-day, there was a substantial reduction in our military petroleum requirements and a general easing of supply, so most petroleum products were removed from export control. Heating fuels-gas oil, distillate fuel oil, and residual fuel oil—were kept under control for another year until the end of 1946.

Toward the middle of 1947, there was a sudden marked increase in domestic consumption of gasoline, fuel oil, and other petroleum products. Mainly, it resulted from increases in off-highway use of motor fuel for farm purposes, and large increases in the number of Diesel locomotives and industrial and domestic oil burners.

At the same time, it was felt that some petroleum products must continue to be permitted to go abroad to aid in economic reconstruction. About 40 percent of our petroleum exports have been going to western Europe, whose indigenous production can meet only 5 percent of its requirements. In order to meet food production goals, petroleum is needed to operate agricultural machinery. It is also necessary for motor transportation, and until coal supplies become adequate, it is vital for railway and waterway transport. Moreover, there are American firms operating abroad that must be kept supplied, as, for example, American air lines.

Without intending to minimize the seriousness of some of our local shortages, it would seem appropriate to point out at this time that exports have played a relatively minor role in creating them. In absolute terms, exports in 1946 and 1947 were considerably below prewar levels. In terms of the proportion of United States supply exported, the drop from the prewar period has been even more marked. The following table is pertinent in this connection.

(The table is as follows:)

Mr. FOSTER. You will note exports of crude oil in 1947 to all destinations totaled 48 million barrels, as against 72 million barrels in 1939. In the meantime, domestic supply of crude oil jumped from 1.3 billion barrels to almost 2 billion barrels, so that 2.5 percent

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Fuel Investigation: Hearings Before the Committee on Interstate and ..., Part 1