that in any attempt to work it out by agreement there is a tendency to forget the little fellow.

The United Natural Gas Co. that we have just, by our telegram last night tried to provide for, that is as nearly flat on its back as any company in the United States as far as gas supply is concerned today and has been for the last several weeks, that company was almost left out of consideration in connection with the availability of gas from the Texas Eastern, or Big Inch Pipe Line System, until this Commission came in and said, in connection with out authorization, that that company must be protected.

In other words, the United Natural Gas Co., if it had not been for the intervention of the Federal Power Commission, and its authority in the matter, would not have got any gas from the Big Inch lines whatsoever until the capacity of that line had been brought to more than 310,000,000 cubic feet. It is only 260,000,000 cubic feet today. And if it had not been for the position taken by the Federal Power Commission, there would have been no regular supply to the United Natural this year from the Texas Eastern system.

Actually, as a result of our taking the position which protected that company, that company was able to build, itself, a direct connection with the Big Inch lines. Last year it got gas relayed to it in a very unsatisfactory way through two other systems. This year they have their own connection with the Big Inch Pipe Line, and that makes it possible in this very critical situation today to get this 10,000,000 in, if Panhandle can make it available under the telegraphic order that we sent out last night.

Mr. SADOWSKI. That would be all lovely if the Big Inch would supply old, established areas who had been accustomed to using natural gas, and was used for that purpose. But it has been pointed out to me by another member of Congress, some of this gas is going into coal-producing areas, and they have just recently converted from coal heaters to gas heaters.

Commissioner OLDS. There has been a lot of conversion all over the country, in the coal areas and elsewhere.

Mr. SADOWSKI. Once they convert, they say "I am using this gas to heat my home; I have got to have it." So immediately they are placed on a priority as above the commercial user, or industrial user. But if they were never encouraged at this particular moment to convert, if these new areas bad not been brought in as customers for this natural gas, we would not be facing the shortage we are in the Middle West today.

Commissioner OLDS. I think there is no important case of any kind where gas is being delivered to areas which have just recently been served with natural gas to the detriment of the area in which you are interested, Mr. Congressman. The Commission in authorizing the operation of the Big Inch lines by the Texas Eastern on a permanent basis, made sure that initially, during this shortage year, that the Texas Eastern gas should go only, I thing with perhaps a minor exception, but I think I can say to all intents and purposes, only to areas that had previously been and were at the time the authorization was given, dependent on natural gas.

Mr. O'Connor said there were no exceptions. The Texas Eastern gas is going only to those areas which are already dependent on natural gas.

Mr. SADOWSKI. Let me ask you this question: If the District of Columbia had not converted to natural gas, where would that supply of natural gas go to otherwise? Would it not go into Ohio and Kentucky areas?

Commissioner OLDS. I think that if the District of Columbia was using no natural gas, that the natural gas now going to the District of Columbia would probably go into the Columbia system which serves West Virginia, Ohio, and western Pennsylvania.

Mr. SADOWSKI. That automatically would have taken a load off of the Panhandle Eastern lines, and would have given us a greater supply, would it not?

Commissioner OLDS. I think it might have helped somewhat, although there is a rigid limitation on the amount of gas, natural gas, that presently can be taken by the District of Columbia system, in this area.

Mr. SADOWSKI. I think that the Federal Power Commission ought to take into consideration old areas like Detroit, who have been using natural gas for the past 15 years and longer, as having some sort of priority over this natural gas, as against areas that have just come in this year.

Commissioner OLDS. I agree with you.

Mr. SADOWSKI. I cannot understand why we should be faced with a situation as we have today, which is more desperate than some of the biggest strikes we have ever had in Detroit. They have not been as damaging as this present gas shut-off.

Mr. BUSBEY. Will the gentleman yield right there?

Mr. SADOWSKI. Yes.

Mr. BUSBEY. Mr. Olds, I would like to ascertain to what extent other States have curtailed their installations of gas as we have in Illinois. I know for some time, I think since July 1, 1945, we have refused to hook up any new installations of gas users out there.

And there has been a big howl from people building new homes who want to put in gas, but they just cannot get it. To what extent have other States cooperated in that manner?

Commissioner OLDS. Practically all the States involved have in one way or another made an effort to curtail the expansion of use of natural gas by strictly space heating customers. There have been various plans for doing that. I met last spring with Chairman Biggs of your State commission. We had a good day's discussion on the question of whether that restriction you are talking about should be extended for another year. The result was that your State commission did extend that for another year.

The Indiana commission has been very active along the same line. As a matter of fact, there was a meeting in Indianapolis at which the State commissions from your State, from Indiana, from Michigan, and from Ohio-I have forgotten whether West Virginia and Kentucky were in on it or not-there was a meeting of State commissions to discuss and try to work out, last spring, some kind of standardizing practice in the ways of restrictions on expansion of house heating.

There were a good many loopholes, particularly in the beginning of that house heating control effort. There was a loophole because there were certain parts of the rules and regulations which said that if there was a hardship case natural-gas equipment could be put into the house. Well, you know all you have to do is, like back in the

days of prohibition, when you wanted a bottle of scotch you went and got a prescription from a doctor.

So it was possible to get a prescription from a doctor and go to the gas company and say "It is a hardship case, and we have got to put in gas space heating."

There were other elements in the picture.

Mr. BUSBEY. I do not think the utilities and the commissions have recognized hardship cases in Illinois.

Commissioner OLDS. They did initially. I think they did not this year. All the State commissions have put in much more stringent restrictions than they did the previous year.

There is another factor that came into the picture that did lead to some expansion in spite of the restrictions, and that is in general the understanding was that the restrictions ran only to applications that were filed after the restriction order went into effect.

Well, if there was any lag between the time that it was under discussion and the time when the restriction order went into effect, a lot of applications poured into these companies, and I think most of them were still permitting the installation of space heating for quite a while, even into this year, as a result of the hang-over of those orders, those applications that came in before the restriction order became effective.

I think it was brought out by Mr. O'Connor, as far as the Ohio restrictions are concerned, the matter is before the courts. A test case was brought up, I think, in the city of Akron last year, against the East Ohio Co., and the court held that the company had no business putting in any restrictions, that anybody who wanted any gashouse heating was entitled to it.

That went up to a higher court, and again the company was held to be required, under the Public Utilities Act, to serve a customer if the customer asked for service.

Only quite recently the Ohio commission, that is during the time when we were discussing it during the autumn, I think it was, August, September, somewhere along there, the Ohio commission itself put in a restriction order which is also before the Supreme Court of Ohio today I do not think the decision has been handed down-as to whether it is finally possible to restrict a consumer in his desire to put in gas space heating or not in Ohio.

That was a factor in the situation and made it difficult in Ohio. That is about the situation.

Now in the States west of Mississippi

Mr. SADOWSKI. Mr. Commissioner, how many new areas, like the District of Columbia, how many natural-gas-using areas have been created in the last year?

Commissioner OLDS. I should say, except for the District of Columbia, I know of none. I know of no instance where there has been an expansion to in any way affect this Appalachian area or the Panhandle area, an expansion into territory not hitherto served by natural gas.

You want to recall this fact: Probably the oldest natural-gas-using area in the country is the Appalachian area. It started out itself with 25,000,000,000,000 cubic feet of gas reserves. It has pretty nearly used up those gas reserves. It has only 10 years' supply on the basis of the present use of those reserves, and the present use does not any

where near meet the needs of the people who have become accustomed to using natural gas, because they were originally sitting on top of their own reserves. Those reserves were in West Virginia, Kentucky, Pennsylvania, New York State, and Ohio. And there were some important reserves in Michigan itself.

The use of natural gas in a lot of this area, that we are dealing with when we are trying to help out the United Natural Gas Co., goes back 40 years. It goes back to the time when there were important reserves in Pennsylvania and New York State itself.

In some cases those reserves were to a certain extent squandered. A lot of New York reserves were dumped on the industrial market at a very low rate, and used up in 4 or 5 years, those reserves in the Oriskany sands.

Mr. SADOWSKI. I know for the last 2 or 3 years the Commission has been in contact with this fight and this problem between the Panhandle Eastern and the Michigan Consolidated. But I certainly hope that the Commission is not taking the point of view that we are going to try to punish Consolidated, Michigan Consolidated Gas Co., or punish the Panhandle Eastern, and I hope they are not thinking in terms of punishing a utility, because something much deeper is involved here. This punishment is not leveled at a company, it is aimed at the people, at the consumers in the Detroit area. We must not let that enter into the deliberations in the Power Commission.

In other words, it seems to me you have not tried to show the friendly and cooperative spirit there to help us out of our problem in Michigan.

Commissioner OLDS. I can assure you

Mr. SADOWSKI. The answer given by Mr. O'Connor was, "Well, Consolidated should have done something about it." Whether they did or did not do the proper thing that does not enter into the question. now. We must get some sympathy and help from the Commission at this time; the people of Detroit are looking toward some solution of this thing; and it is up to you to help us in this problem.

Commissioner OLDS. I can assure you, Mr. Congressman, that the Commission has neither severally nor individually the slightest thought of any punitive action in connection with this serious gas shortage situation.

One of our big problems has been to deal with this in a helpful way, with the Michigan situation. We were faced, just within the last 2 days, in our efforts to deal with this situation, with material that was going into our record upstairs in our hearing room, showing this practical crisis situation, not in terms of simply manufacturing activity and employment, but in terms of people actually having to abandon their homes in other areas.

At 11:30 at night, after my first day of conference with the representatives of the Michigan situation, I had calls from Indiana communities that said that the pressure at their gate had gone down to 2 pounds, and that their homes were all off. They were the ones that were affected by this order insofar as it runs through the Kentucky Natural system.

We have calls coming in day and night, even at our homes, telling us about these situations, where you have homes actually being deprived of natural gas.

There is one thing I would like to clear up that has been implicit in your questions about the arrangement between Michigan Consolidated and Michigan Gas Storage for the storage of this gas, and the 30-percent figure that seems to have caused some question.

I might say that that 30 percent figure was suggested by Mr. Fink himself; the initial suggestion came from Mr. Fink as president of the Michigan Consolidated Co.

Last May or June, I think it was, when I first began to attempt to get these various companies together to discuss this single problem, we knew that, beginning in 1946 and in much larger quantities in 1947, large amounts of gas were being used in Detroit which had not been used in previous years for interruptible industrial purposes. The industrial companies were buying the gas primarily because it was cheap, not because it was especially adapted to their processes. About 20 to 25 million of that, as I understand it from Mr. Fink, was going under boilers of one kind or another. It was boiler fuel gas.

That gas was being used during the summer periods and interrupted during the winter periods. That gas, we felt, in terms of the interest of the entire State of Michigan, in terms of the interest of the other customers served by the Panhandle system, should be going into storage if it was humanly possible to get it into storage.

We started out a series of conferences in June with Michigan Consolidated, with Panhandle, with Michigan Gas Storage, to see whether that gas that was being used in Detroit under boilers, where the companies that were using it were equipped to use either powdered coal or oil as a substitute, whether that gas being used for those industrial purposes could not be put in storage to help meet this winter situation.

There was an important factor in it, not merely in terms of this winter situation. You have as one of the biggest assets in your State, from a natural gas standpoint, storage fields. You have fields that were once producing fields, in which you could ultimately store probably 25 to 35 billion cubic feet of gas each year. That is a tremendously valuable thing in terms of your ultimate stable supply of gas.

The Michigan Consolidated owns certain of those fields; the Consumers Power Co. owned others of those fields. Now they have transferred them to the Michigan Gas Storage Co., which is jointly owned by Panhandle and Consumers Power Co.

If those fields are allowed to be drawn down by producing them to a point where the pressure gets down to, in the case of these Michigan Gas Storage fields, to under 350 pounds pressure per square inch, you are going to have water encroachment.

Those fields may be ultimately ruined as potential assets in terms of the gas supply of Michigan. The same thing applies to the Austin field, which is perhaps the primary field, owned by the Michigan Consolidated Co.

Those fields-I think perhaps you have asked questions as to what could be done to meet this situation if the two companies had been friendly. I think the matter might have been worked out without putting the blame on either of them, so that there could have been a coordinated use, earlier use perhaps of those storage fields, and if that had been done your situation would be better. But that is water over the dam.