hat virtually every other industrialized nation in the world does, exept ours. In Britain, in the industrialized nations of Europe, utilities urn higher sulfur coal than we are permitted to burn in this country. They say that they cannot yet take the sulfur out of stack gases. They re working on ways to do that, but until they are successful, they will permit utilities and other industries to utilize the higher sulfur coal. The condition is that those users build a tall stack, 400 or 500 feet tall, nd emit the effluent gases at approximately 80 miles an hour.

The sulfur dioxide comes back to the earth eventually, but when t does, it is so diluted that it is not considered to be harmful. Our EPA does not give us any credit for tall stacks. Therefore, we must ourn only low-sulfur coal.

The result is to put pressure on the price and supply of our lowsulfur coal, of low-sulfur oil that we have to import, and of our natural ras. While tall stacks are not a permanent solution, you could get some redit for this use, pressure would be removed from the fuel market. But the EPA will give us almost no audience to this position.

Mr. D'AMICO. Mr. Crawford, we have heard that along the eastern coast, perhaps 93 percent of the energy used by the electric utilities is dependent upon imported fuel.

Is there that great a reliance on imported fuel across the Nation? Mr. CRAWFORD. No, I would not say that is true. It is true along the east coast, because the companies there have had no choice but to go to low sulfur oil. Most of them formerly burned coal. But you can't. buy 0.3 percent or 0.4 percent sulfur coal, or at least, it is available in very limited quantities. Therefore, as the States and cities along the east coast have gone to lower sulfur requirements the companies have had to go to low sulfur oil.

There is very little low sulfur oil in this country. Companies with access to deep water could bring it in from Libya and Algeria. That is why you have this great preponderance along the east coast.

To be able to benefit from these imports, you have to have access to the oil. A few hundred miles inland, in the American Electric Power System area, for example, or in Duke Power Company's service area in western North Carolina, to build an oil pipeline from the Atlantic Ocean up there would be a very expensive thing to do. Such companies continue to burn coal.

If you reach the point where low sulfur coal is not available and oil cannot be brought in, the companies are in an untenable position. That is the kind of acute problem we will be facing in a few years.

Mr. D'AMICO. Is it true to a lesser extent on the west coast? Mr. CRAWFORD. Yes. As I understand it, Southern California Edison brings in nearly all of their oil from Indonesia. Again, it is very low

sulfur oil.

Mr. D'AMICO. Are they working on any desulfurization plants? Mr. CRAWFORD. From the standpoint of the oil companies or the utilities?

Mr. D'AMICO. The utility.

Mr. CRAWFORD. The utilities certainly are, because there is no such process that works yet on a reliable basis. There is no practicable way to take sulfur out of the stack gases; despite EPA's conclusion that there is. We maintain steadfastly that there is not.

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Mr. CRAWFORD. The efficiency is limited by the laws of thermodynamics pertaining to steam cycles. It is a function of the operating temperatures of the engine. Perhaps the maximum is approximately 40 percent, and some of the new plants do approach the 40 percent.

Mr. HOWARD. Isn't the fuel cell one aspect of development for the future in energy, and isn't the fuel cell able to come up to 65 percent efficiency?

Mr. CRAWFORD. Yes, sir.

Mr. HOWARD. I think there was testimony on that last week.

Mr. CRAWFORD. Yes, sir; that's approximately correct. Work has been underway for fuel cells for many years, and the potential efficiency is on the order of 65 percent. Developments to this point would not indicate that fuel cells will be economically feasible in the near future. We hope that they will be in the more distant future, and we plan to develop this as a matter of high priority in our research

program.

Mr. HOWARD. Do you feel possibly in the public interest it might be proper for the Federal Government to be involved in this aspect of what, in the end, will be a more efficient method of providing power? Will fuel cells always remain financially improbable?

In other words, if the Federal Government were to get involved in developing this, and assumed some of the great expense for its development, would it then be possible to visualize its utilization by industry as a private function without further Government help or subsidy?

Mr. CRAWFORD. I don't know that participation by the Government will necessarily change the economics of fuel cells. I believe that virtually everything that can be done is being done on developing fuel cells.

Mr. HOWARD. What I meant was, the economic feasibility is not there now. Would it be more economically feasible if impetus is given during the tough, difficult, expensive development period by the Federal Government so that the Government would be able to phase itself out of the area on a percentage basis later on, or will it always be

Mr. CRAWFORD. I would expect the economic penalty that the fuel cells now operate under will be lessened as the development program ensues over the coming years. I would point out, however, that fuel cells are not expected to be able to provide the basic loads of the utility industry. They are looked at more for peaking requirements.

I might add this, also, Mr. Chairman. In the electric utility industry, we welcome the cooperation of the Federal Government in research programs and, indeed, we have been meeting regularly with Dr. David and some of his associates; Mr. Smith, the Assistant Secretary of the Interior, sits on the Electrical Research Council. We believe the Federal Government should help work along on these research projects with us.

Our feeling is that the proper place for Government assistance is in basic research and in the experimental research and demonstration plants. Once the equipment gets to approach the point of commercialability, then perhaps the Federal Government can better spend its development funds elsewhere.

Mr. HOWARD. Will the breeder reactor have any better efficiency than the 1 or 2 percent now produced by conventional fission reactors?

Mr. CRAWFORD. Yes, sir, indeed it will. This, of course, is the main reason for developing it.

As you indicate, we now use uranium to the extent of about 2 percent efficiency in the water reactors. The breeder uses uranium about 30 times more efficiently. Therefore, instead of using 2 percent of the uranium, we're talking about using perhaps 60 percent of the uranium. The conservation of energy resources, and the greater thermal efficiency are two of the principal advantages of its development. Mr. HOWARD. Thank you.

Counsel?

Mr. D'AMICO. Mr. Crawford, you indicated that your organization represents investor-owned companies?

Mr. CRAWFORD. Yes.

Mr. D'AMICO Could you briefly indicate to us what other kinds of corporations, companies, or organizations there are, that are distributing electricity to the American people?

Mr. CRAWFORD. They really aren't corporations. The Edison Electric Institute represents virtually all of the investor-owned electric utilities in the country. Another form of power suppliers is the municipal which owns a distribution system and in some cases, the generation as well.

Another type is the rural electric cooperative.

Mr. D'AMICO. As you go along, if you know, can you tell us the relative numbers in each group?

Mr. CRAWFORD. I don't know that I can give you the number of power suppliers, but the co-ops run into the hundreds, if not a few thousand. But I am sure Mr. Robinson can give you that.

There are many municipals, more municipals than there would be private companies. The other form of power suppliers is the Federal Government, through the TVA or the Interior Department. Perhaps what you're looking for is the relative size of the investor-owned segment versus the public segment. That varies between 75- and 80-percent private, depending on what criterion you wish to use.

Mr. D'AMICO. The Edison Electric Institute would represent if you know, how many meters?

Mr. CRAWFORD. The member companies of the institute serve approximately 57 million ultimate customers.

Mr. D'AMICo. You indicate:

From the point of view of the ability of the electric utility industry to provide the capacity needed to generate this energy, and from the point of view of the availability of resources, new and developing, we see no reason this level of energy supply cannot be achieved.

Could you explain that a little bit?

Mr. CRAWFORD. Yes. What I'm saying, Mr. D'Amico, in essence, is really this: If I can be as succinct as possible about it, our basic position is that we should use our energy resources wisely, that we should avoid wasting energy. Once we pass that point, the electric utility industry should provide to the American people what the American people say they need in terms of electric power supply.

We believe we can do that if the circumstances are such that we are not prevented from doing it. There are three aspects. From the standpoint of fuel, we believe that long-term there is enough fuel to provide whatever power needs are required in this country. There is a tendency

to look at existing supplies of various fuels and to say-"when we run out of that, we're all through." But if you look back in time. the same thing could have been said with respect to other fuels-wood, for example.

Continuing research opens up new fuel resources, for example, just what we've been talking about here, the breeder reactor. It will be such a much more efficient way to utilize uranium. We get into fusion; solar power is a possibility; who knows what else will be developed.

We are saying that on the basis of the past, and the research and development program which we envision ahead of us, that the fuels will be there long-term. We have some problems short-term. So from the fuel standpoint, we believe that we can provide what power is needed. From the standpoint of being able to finance the expansion, this industry doubles about every 10 years. We believe we can raise the capital to double every 10 years if our earnings are sufficient to attract the capital. There are indications that the regulatory authorities in the country have taken this into account.

The final part of it is that the institutional mechanisms will be available to permit us to construct the facilities that are needed and are planned. This is what I think we do not have. We need some better way to coordinate Government policies so as not to inhibit the completion of construction projects.

In essence, this is why we feel we can provide whatever power is required by the Nation.

Mr. D'AMICO. To what extent would earnings have to be increased in order to afford the ability to follow through on this increased capacity such as you indicate?

Mr. CRAWFORD. I don't think that question can be answered on an overall basis. It depends on the financial requirements of the individual company or the individual power supplier. These matters are gone into at great length by the State, Federal, and local regulatory bodies.

The point is, the utility must be able to earn enough money to attract capital in competition with others who are trying to attract capital to build facilities.

Mr. D'AMICO. Are you speaking of 10 percent, 30 percent, 100, 300 or 600 percent or what?

Mr. CRAWFORD. I don't know that I could hazard a guess. It varies too much between power suppliers. I could try to get you something along that line if you're interested in it.

Mr. D'AMICO. But you wouldn't unequivocally say "No" when I mentioned 600 percent?

Mr. CRAWFORD. Yes, I would say "No." I would say that's much too much. Whether it's 40, 50 or 60 percent over the next 30 years, I would like to think about that.

Mr. D'AMICO. So far as fuel is concerned, is this fuel that will be extracted from our own Nation, or is it fuel which in large part will have to be imported?

Mr. CRAWFORD. I would like to think that in large part it would be from our own Nation. We have hundreds of years of coal supply in this country. The problem is that we can't use most of it.

One of the things we must do is find a way to use this coal. We could use it today in powerplant operations if the Environmental Protection Administration would give us credit for using tall stacks. This is