licensed for the first quarter of 1948, according to my information, is 12,000,000 barrels, as compared with approximately 17,000,000 barrels exported during the same period in 1947. These are separate from quantities supplied by or to the military for certain areas, which may or may not come from the United States. It is the announced intention of the Deparrtment of Commerce to scrutinize even more rigidly all applications for petroleum export licenses during the balance of the current year, and to add to the list of petroleum products subject to such control. We are told that petroleum export volume has already been reduced below the amounts indicated as minimum for nations whose economies we hope to maintain in our own national interest. Representatives of the Department of the Interior have participated in the determination of total export quotas for each. quarter, but not in the determination of destinations and to only a limited extent in the determination of the products making up the totals. I may say that, as a result of the questions raised by this committee, the Review Committee about which you have heard the Export Review Committee-has expeditiously intensified a study that it was already making to see whether further reductions could be made in the 12,000,000 barrel quota for this quarter. That intensive study is now going on. The CHAIRMAN. That is very gratifying. Mr. BALL. No. 2: The second recommendation of your committee urged that wherever possible, the temporary use of naval vessels should be authorized, to transport fuel oil to those sections of the United States where such shortages exist In this regard, I am informed that the Navy has been releasing one tanker vessel, in operating condition and for commercial use, for each T-2 vessel turned over to the Navy by the Maritime Commission for repair in Navy yards and for eventual operation. The Department of the Navy can supply exact information on the matter. The Navy has already supplied, I understand, full and exact information on the matter. It should be pointed out, however, that even though enough tankers are made available to transport all available supplies of fuel oils from Gulf coast to east coast States, the shortage will not thus be alleviated in the inland States, which are served only by pipe lines, railroad tank cars, and river barges. 3. With regard to your third recommendation, namely, that the Maritime Commission should desist, for such time as such shortages exist, from completing the transfer to foreign purchasers of tankers owned by the United States Government it is my understanding that all repairable T-2 and Liberty-type tanker vessels remaining in the Maritime Commission fleet, with the exception of 50 units assigned to the Navy, had been sold by December 15, 1947. I cannot testify as to the extent to which the foreign purchases have been or can be withheld from actual delivery, although I am informed that the Maritime Commission has not completed any deliveries to foreign buyers within the last month or so. Whether any short-term advantage would result from withholding sales to foreign purchasers I do not feel qualified to say, but I am convinced that for the longer term the delivery of these tankers for foreign-flag service will serve the needs of the United States at least as well as their sale to Americans or their retention for charter by the Maritime Commission. 4. The fourth recommendation of your committee, namely, that the Maritime Commission undertake to secure the use of as many as possible of the tanker vessels already sold, has been acted upon by the Maritime Commission and the petroleum industry, with diligence and with excellent results. Some 20 tankers have been returned to coastwise service between Gulf coast and east coast ports, and by the 1st of February the number may be increased to as many as 30. A report to the National Petroleum Council on January 22 predicted that by the middle of February there would be enough tankers in service to handle all the petroleum tanker requirements of the east coast. I am inclined to think this estimate is somewhat too optimistic and that tanker capacity to the east coast may not be in easy supply until some time in March. Whether or not there will be sufficient volumes of crude oil and refined products to utilize all the added tanker capacity remains to be seen. 5. Your committee also recommended that the Secretary of the Interior should take all possible and appropriate action to coordinate the activities of his Department, and of other departments and agencies of the Government, with those of appropriate State officials, to bring about all possible alleviation of fuel-oil shortages in the individual States. This suggestion was acted upon promptly and with encouraging results. Late in December, as you know, Senator Tobey telegraphed suggestions to the governors of 22 States, urging them to appoint State emergency fuel oil coordinators to handle shortage problems. As Director of the Oil and Gas Division, I sent out follow-up telegrams to these governors and to 11 others as well, in order to assure full appreciation of the serious nature of the situation in every affected State. A number of mayors had also appointed municipal coordinators or citizens' committees to serve a similar purpose in their respective localities. As soon as it was established that most of the governors of the shortage States had appointed such coordinators, and acting on a further suggestion from Senator Tobey, I invited the State coordinators or equivalent officials and their advisers and assistants, together with such local officials as they cared to ask, to come to Washington to meet with each other and with representatives of all interested Government agencies and of the petroleum industry, to discuss common problems and exchange ideas as to ways and means of dealing with them. The meeting was held in the Interior Auditorium on January 15. It was attended by representatives of 23 States and the District of Columbia, and their advisers, of several municipalities including Detroit and New York City, 26 Federal departments and agencies, the National Petroleum Council, a number of petroleum trade associations, and the Association of American Railroads, as well as by Members of Congress and staff representatives of members and of congressional committees. The facts of the shortage situation and the reasons therefor were presented in detail. The problems encountered in meeting State and local situations were discussed by State and city officials who have already had experience in solving them. Questions in the minds of the newer officials were answered. Every coordinator present was called on to review his problems and his methods. The necessity for all-out conservation of available fuel-oil supplies was emphasized. I believe that the State delegations gained from the meeting a clearer idea of the job to be done and how to apply themselves most effectively to performing it. We will, of course, continue to lend advice and assistance to these State officials to the limit of our ability to do so. As we have no authority to allocate or divert supplies, anywhere or to any class of consumers, our assistance is necessarily confined to giving advice. and information, but the repeated calls we receive suggest that this service is valued. I may say that we are trying to render an additional service by acting as a clearinghouse for information among the State coordinators. As we get in from the State coordinators details of their organizations or of their problems, we are circulating those around so that all of them will have the benefit of them. That seems to be meeting with a grateful response. 6. The sixth recommendation of your committee was that the petroleum industry should establish voluntary committees to effect maximum cooperation in securing the most efficient use of all equipment available for the production and transportation of fuel oil. In this respect, I am satisfied that virtually all units of the industry are doing everything they know how to make more supplies available where they are most needed. Under existing law, however, the Department of Justice must sanction any concerted effort to accomplish such an objective. The possibility of sanctioning concerted industry action has been provided by the Anti-Inflation Act, Public Law 395. We have been moving as rapidly as possible to implement this Public Law 395 (S. J. Res. 167), which provides for voluntary agreements on the part of industry, to aid in curbing inflationary tendencies and to promote orderly and equitable distribution. On December 23, without waiting for approval of the resolution by the President, I requested the National Petroleum Council to create a special committee to formulate such an agreement to be considered by the council as a whole, and, upon approval, to be submitted respectively to the Secretary of the Interior, the Director of the Office of Defense Transportation, and the Attorney General, as stipulated in the act. When the act had been signed a formal request was made by the Secretary of the Interior. I submit for the record copies of the formal and informal requests. (The matter referred to is as follows:) Mr. WALTER S. HALLANAN, DEPARTMENT OF THE INTERIOR, Chairman, National Petroleum Council, Care, Plymouth Oil Co., Pittsburgh, Pa. DEAR MR. HALLANAN: By Executive order of January 3, 1948, the President delegated to me the authority with respect to petroleum, including its products and natural gas, vested in him by Public Law 395 of the Eightieth Congress, and to the Office of Defense Transportation the authority so vested with respect to the allocation of transportation facilities and equipment. As you know, the purposes of this law as stated therein are "to aid in stabilizing the economy of the United States, to aid in curbing inflationary tendencies, to promote the orderly and equitable distribution of goods and facilities, and to aid in preventing mal distribution of goods and facilities which basically affect the cost of living or industrial production." In order to carry out the purposes of the law with respect to petroleum, the appropriate agencies of the Government are authorized to consult with representatives of industry and business with a view to encouraging the making by persons engaged in industry and business of voluntary agreements: (1) Providing for allocation of transportation facilities and equipment; and (2) Providng for priority allocation and inventory control of scarce commodities which basically affect the cost of living or industrial production. That there is need for action in respect to the orderly and equitable distribution of petroleum and its products and to prevent maldistribution is commonly recognized, viz, the findings of the Senate Small Business Committee's Oil Subcommittee and the House Committee on Interstate and Foreign Commerce among others. I am advised by the ODT that a similar need exists with respect to the allocation of transportation facilities and equipment, and I have been asked by that agency to request on its behalf the advice of the National Petroleum Council on this matter. Therefore, this will confirm my request that the National Petroleum Council establish a committee to consider and report, together with such recommendations as it deems appropriate, as to actions, including but not limited to plans and voluntary agreements, that can be taken by industry and/or Government under Public Law 395 with respect to petroleum, including petroleum products and natural gas, and petroleum transportation facilities and equipment, to carry out the purposes of the said law. I further request that the council's recommendations and report describe the need for such agreements or plans as may be recommended, the methods and means by which they may best be carried out, and the results that may be expected therefrom. Because of the current and prospective seriousness of the petroleum situation, the Department of the Interior and the Office of Defense Transportation would like the Council's recommendations and advice at the earliest possible moment. Sincerely, J. A. KRUG, Secretary of the Interior. [Night letter] WALTER S. HALLANAN, WASHINGTON, D. C., December 23, 1947. Chairman, National Petroleum Council, Care Plymouth Oil Co., Pittsburgh, Pa.: In view of probability that President will sign Senate Joint Resolution 167, authorizing voluntary agreements by industry and business for purposes stated in resolution, and that Secretary will thereupon ask National Petroleum Council to recommend such voluntary agreements or plans of voluntary action for allocation of petroleum-transportation facilities and equipment and for priority allocation and inventory control of petroleum and petroleum products as it considers necessary, practicable, and effective, and to advise methods and means by which such agreements or plans may best be carried out and expected results, I request immediate appointment of council committee to prepare such advice and recommendations for submission to council at earliest practicable date. MAX W. BALL. Mr. BALL. By the time the resolution became law the Committee on Voluntary Petroleum Allocation Agreements had been formed and was at work. The council met here in Washington on January 22, heard the report of the committee, and unanimously approved the plan of action which the committee recommended. I submit for the record a copy of the report of the committee. (The report above referred to is as follows:) REPORT OF NATIONAL PETROLEUM COUNCIL COMMITTEE ON VOLUNTARY PETROLEUM ALLOCATION AGREEMENTS The individual members of the National Petroleum Council Committee, appointed by Mr. Walter S. Hallanan on January 9, have given much individual as well as collective thought to the assignment placed before the committee as outlined in Mr. J. A. Krug's letter of January 7. That communication requested the committee to consider and report such recommendations as it deems appropriate as to actions including, but not limited to, plans and voluntary agreements that can be made by industry and/or government under Public Law 395 with respect to petroleum including petroleum products and natural gas and petroleum transportation facilities and equipn ent, to carry out the purposes of said law. After individual and group consideration, the committee met January 21 and reviewed the problem. A statement of the findings and recommendations of the committee follows. The first responsibility of the committee is to summarize the nature of the current supply situation, particularly with respect to middle distillates, including kerosene, Diesel fuel and distillate fuels Nos. 1 through 4 and to designate the nature and location of problems now confronting the industry. An The current problems before the oil industry stem from the rapid growth in the demand for all petroleum products and in particular for middle distillates. analysis of the problem of supply or distribution of petroleum products, therefore, must consider the patterns of demand growth for the several products in the different geographical areas of the country. It is believed that the clearest explanation for the extraordinary demands can be seen from the following comparison of the increases in the numbers of petroleum consumption units. Growth of petroleum-consuming units, 1941-46 and estimated 1947 The first three types of consumption units represent a major portion of the gasoline market. The second three classifications of consumption units constitute the major portion of the middle distillate market. It is readily apparent why there is a winter problem in the oil industry in some parts of the country. To meet the requirements of the market, the various units of the industry have competed vigorously, each trying to bring greater quantities of finished products to the consumer. Such competitive urge we believe to be largely responsible for the remarkable expansion efforts revealed by the following table. Few major industries have been able to approach the substantial gains shown over 1941. Expansion of petroleum supplies consumed, 1941, 1946 and estimated 1947 |