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Government which would provide additional supplies of oil and gas. It would appear these two steps would accomplish that objective, at least they would tend to accomplish it.

As to the timing, it is my understanding that this is not the type of development that would provide relief very soon. After the lands are opened up, exploration and development would have to take place. It is probably a matter of 2 or 3 years, at least.

Mr. Howard. It has been said that when someone does get the rights to this offshore acreage, that it is not used or utilized. Many of the big companies that do get this right just hold on to it.

Wouldn't you say this is somewhat against the whole idea of having these sales? If the people who purchase it aren't going to use it, then what's the sense of Interior letting them have it?

Mr. CRAWFORD. If that is true, then I would say it certainly is not the purpose of the sales. I do not know if it is true or not.

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Mr. HOWARD. It has been claimed.

If it were true, do you think it might be proper that reasonable time limits be set for investigation into this acreage, and if something is productive in that area, that another reasonable mandate of time would be in order for the development and production of this resource? The whole idea of doing these sales is to provide more fuel for the Nation's needs.

Mr. CRAWFORD. Yes, Mr. Howard. I am not an expert on oil and gas matters, but, as a general conclusion, what you have said makes good sense. When areas are bid in, they should be developed over some reasonable period of time.

Mr. Howard. On a smaller level—and I don't know whether you can answer this or not—but this is something that has been on my mind: We talk about saving fuel and avoiding waste, and having people be sure to turn out their lights when they are not really needed, so that we can save a great deal of energy.

The fact and the figure that I get, which I presume is accurate, is that the normal electric bulb is 10-percent efficient for light, 90 percent going in conduction and heat. It is extremely inefficient for its main purpose—that of producing light.

How much research is being done on this basic thing—to get a little more light and a little less waste from the vast number of electric light bulbs ?

Mr. CRAWFORD. It may be an inefficient use of energy, but it is the most efficient way we know of to light a space.

Mr. HOWARD. Are we doing as much research, to find something better, because they have been pretty much the same, I

years and vears and years.

Mr. CRAWFORD. Research is continually going on in these areas by the bulb manufacturers. Fluorescent lights are more efficient than the normal incandescent lights. That's something of fairly recent vintage.

If you take the usage of electricity by all the small anpliances in this country, it only amounts to about 4 percent of the total kilowatt hours.

Kilowatt hours are used basically in keeping industry and commerce running and creating jobs, and in operating labor-saving devices. I think, as I indicated earlier, that we should avoid wasting energy and

guess, for

we should use it wisely, but I do not believe we will save a large percentage of our consumption this way.

Mr. HOWARD. That's only a part of the 4 percent of the total energy

Mr. CRAWFORD. The 4 percent includes radios, vacuum cleaners, irons, and clocks, for instance, and all the rest, which are really not frivolous uses at all.

Mr. HOWARD. What would you say, then, has the greatest impact on waste? Can you think of one single kind of waste in this country which is then not in the normal residential consumer area, because those consume only 4 percent, you say.

Mr. CRAWFORD. You're talking about electricity now, or other uses of energy!

Mr. HOWARD. Let's consider all uses of energy that have the biggest waste-which has the greatest impact on our resource availability?

Mr. CRAWFORD. Individual automobiles. If you compare the efficiency of an automobile driven by gasoline, it is about 10 percent. If it were electrically driven, if you had a suitable kind of electric vehicle, and you count up all the losses—the generation, the transmission and all the rest—it is 20 percent efficiency. This is twice as efficient as the individual automobile.

Mr. HOWARD. That's an area where they think it is going to be half by 1980. With the demands for a less-polluting engine, it appears that, as far as the gasoline consumption is concerned, you're going to get half the mileage that you do today, which would mean you would need twice the fuel to go the same number of miles.

Mr. CRAWFORD. That will aggrevate the problem.

Mr. HOWARD. How about the wasteful uses of electricity, which really have an impact on the total amount of use?

Mr. CRAWFORD. In electrically heating a house, inferior insulation would be a source of wasted energy. Also, the point that was made earlier this morning that buildings could be designed without windows, unlike some modern structures. These are opportunities for savings. Mr. HOWARD. Is there much loss in transmission? Mr. CRAWFORD. It's on the order of 5 to 6 percent of the total. Mr. Howard. Thank you very much, Mr. Crawford. We certainly ppreciate your coming here, and your testimony. We hope that as we evelop our hearings, if we find specific areas of interest where we may e able

to call upon you for informationMr. CRAWFORD. Please do so. Mr. HOWARD. Thank you very much. The next witness this afternoon is Mr. Charles A. Robinson, Jr., ff counsel to the general manager, National Rural Electric Coerative Association.

ITEMENT OF CHARLES A. ROBINSON, STAFF COUNSEL, NAIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION; ACCOMANIED BY DONALD SMITH, STAFF ECONOMIST, AND BRADLEY OCH, STAFF ELECTRICAL ENGINEER r. HOWARD. Welcome to the subcommittee, Mr. Robinson. e do have your prepared statement and, without objection, it will ade a part of the record.

So would you please identify each of the gentlemen who are with you, and then proceed as you wish.

(The statement referred to follows:)

STATEMENT OF CHARLES A. ROBINSON, JR., STAFF COUNSEL TO THE GENERAL

MANAGER, NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION My name is Charles A. Robinson, Jr. I am staff Counsel to the General Manager of the National Rural Electric Cooperative Association (NRECA). NRECA is the national service organization of REA financed electric systems which deliver electricity to about 25 million people in 46 states. These systems have constructed 44% of all electric distribution lines in the U.S. to serve 8% of its consumers representing 5% of total industry sales. Their facilities spread across 2,578 of the nation's 3,072 counties.

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The U.S. is currently transitioning from a nation of readily available, easily produced and plentiful raw energy resources into one which suddenly finds itself substantially short of these resour s. At the present ne, the U.S. derives its energy requirements approximately as follows:

Percent Oil

43. O Natural gas.

32.8 Coal

20.1 Nuclear

.3 Water power

3.8

Total

100. O Quite anomalously, the raw materials on which we depend for 75.8% of our energy supply, oil and gas, are those which are apparently in shortest supply. Estimates are that in 1970 the U.S. consumed oil at the rate of 14.7 million barrels per day, but produced only 11.3 million barrels per day; and that by 1980 consumption will rise to 20-25 million barrels per day, with presently known reserves (including Alaska's North Slope) able to produce only 11.8 million barrels per day. Thus, by 1980, imports will account for 47.5% of our total petroleum requirements. By 1985, the forecast is that we will be importing petroleum at the rate of 14.8 million barrels per day at a cost of about $20 billion per year. Supplies of natural gas are already being rationed among competing consumers. Both the NPC and independent experts are forecasting that even including foreseeable supplies of imported LNG (liquid natural gas) and SNG (synthetic natural gas), the demand for gas by 1985 will be from 150% to 200% of the supply.

Coal is our most abundant in-being fossil fuel. It is estimated that even assuming "full" dependence on coal to supply the nation's total energy needs, known reserves are sufficient for many centuries to come. However, estimates are that at least 80% of all coal lying east of the Mississippi, close to large centers of population and industry, is of the high sulphur variety which cannot meet new environmental protection standards. This coal will, in all probability, not be generally usable until we develop workable techniques for either de. sulphurizing it before it is burned or removing the sulphur oxides from its combustion gases. Low sulphur western coal from Montana and Wyoming can be delivered to eastern population centers, but at costs on the order of $.65 per million BTU; three times the traditional price level for boiler fuel.

Quite obviously, it is suicidal to continue increasing our total consumption of energy resources at an annual compound rate of from 3% to 5% unless we take some parallel measures to assure our future supplies of these resources.

OUR FOSSIL FUEL POLICY FRAMEWORK IS OBSOLETE Many knowledgeable people who have been observing our dangerous drift toward an “energy crisis”, are calling for development of a “national energy policy". A "national energy policy" means vastly different things to widely different groups, i.e., more profits to producers, cheaper fuel to consumers, clean air and water and the end of strip mining to environmentalists, prompt power plant site certification and abolition of import quotas to suppliers of electricity, the end of regulation to gas pipelines, and an abundance of gas to industries.

Notwithstanding these seemingly irreconcilable differences, as to how a "national energy policy" should be directed, the widely diverse types of individuals and organizations which are voicing support for the concept of such a policy strongly evidence a broad dissatisfaction with the status quo and a desire for some resolution of the present contradictory scheme of statutes and economic policies within which our energy industries operate.

We respectfully point out that the existing policy framework is premised on an abundance of easily produced raw energy materials, and is designed to influence market conditions under those circumstances. Indeed, many of our Federal and state environmental protection statutes were enacted within this same context of energy abundance. Now, however, for the first time in its history, the United States and its energy producing and processing industries are operating against an existing or impending shortage of these materials.

It is reasonable, we think, to assume that the legal framework which we designed to handle economic and environmental problems in an economy based on abundance of raw energy material, will not work very well under conditions wherein these commodities are scarce. For instance, pro-rationing statutes and import quotas are designed to limit competition and protect the seller's profit against an over-supplied market.

Now, however, with demand for oil exceeding the supply, such protection is not required. The new problems will stem from a limited number of very large corporations possessing the power to control the availability of resources that are at once scarce and in tremendous demand. This kind of situation is substantially aggravated by environmental protection measures which rule out the use of a large part of our fuel reserves.

Under such circumstances, and barring any immediate major technological break-through, prices for usable energy materials, (oil, gas, uranium, coal etc.) will inexorably rise to unacceptable levels unless controls are applied or competing products become available and are allowed to reach the market. In other words, pending coal gasification and/or desulphurization techniques, we face, in the raw energy material supply business, a seller controlled market; the type of market which generally requires some kind of measures to protect the purchasers.

It goes without saying that fuel producers and processors are entitled to earn a fair profit and one commensurate with the increasing cost of deep-water drilling, industrial health and safety requirements, environmental protection measures, restoration of strip mined land, and all of the other business risks. And, it may well be that higher prices will stimulate successful exploration for new fuel resources. We must, however, guard against a fuel market in which prices and quantities are wholly seller controlled. We need to establish the parameters of fair pricing in our fuels industry, during this period of scarcity, and develop the statutory framework capable of holding prices within those parameters.

Ideally, we suggest a complete overhaul of all Federal statutes dealing with energy, and consolidation of all Federal functions which are primarily concerned with energy matters into one administrative control area. This is, we recognize, an ambitious objective and one which is perhaps unattainable. We point out, however, that whatever new Federal laws are enacted in response to the "energy crisis” or the "power crisis” should be directed at the objective of one-agency Federal energy responsibility. Realistically, this is one mechanism through which to approach a national energy policy".

THE SHORTAGE OF ELECTRICITY

The evidence seems rather clear now that unless new forces are brought to bear, the “power crisis” will not disappear or even substantially moderate. America's electric utility industry is in real trouble. It is now generally accepted that prior Federal Power Commission estimates of 15% as an adequate reserve level are wrong, and that more like 20% to 25% is really needed. In terms of the nation's total generation (370 million kw.) this means FPC was previously underestimating 1972 requirements by between 18 and 37 million kilowatts, and that the nation now finds itself lacking between $3.6 and $7.4 billion worth of necessary generation.

Compared with Chairman Nassikas' assertion of 20% to 25% as a desirable reserve level, his staff recently forecast that during the 1972 summer peak load period, electric utilities in the contiguous 48 states will, as a whole, show generation reserves of only 17% above peak load. Even this figure is deceptively optimistic. The Southeast and West Central areas show 1972 reserve margins of 11% and 12% respectively, and unexpected delays in the availability of 500 megawatts of pumped storage hydro in 502 megawatts of nuclear capacity may well reduce New England's 1972 summer reserves to 10% or below.

During his testimony of June 1, 1972 before the Senate Committee on Commerce, FPC Chairman Nassikas said:

"Every day that passes without Congressional authorization of an overall power plant siting mechanism adds to the uncertainty that this Nation's electric utilities will be able to continue to meet their utility load responsibilities."

Part of the problem, at least, arises from the fact that the same unreliability of the big new generating units, which is causing FPC and the utilities themselves to recognize that the need for increased reserve margins, is also making it almost impossible to accurately forecast what the actual reserve margin will be on any given date. Advance estimates of reserve generation assume that existing machines will operate when the button is pushed, and that new units will be completed on schedule.

Therefore, if a unit does not respond when it is needed, predicted reserves disappear. This uncertainty is vastly aggravated by the increasing use of very large individual generating units, which though theoretically more economic, are less reliable than the older smaller ones, and in some cases may collectively constitute a substantial part of total system capacity. Loss of one such machine'may of itself cut system generation by 15%. If a second unit is also lost, a serious emergency will almost certainly ensue, unless large blocks of power can be imported from neighboring systems.

Meanwhile, electric system loads continue to set new records. For instance, between 1966 and 1971, inclusive, rural electric system sales to ultimate consumers climbed from 45.6 million KWH to 75.5 million KWH, an average annual compound growth rate of over 10%; a doubling in less than seven years. As a matter of record. rural electric system total sales of electricity did virtually double between 1964 and 1971; from 38.3 to 76.1 million KWH-a seven year cumulative growth of 96%. Industry-wide, sales of electricity show an average annual compound growth rate of 7% during the years 1966–1971 equivalent to a two-fold increase each decade.

Two factors contribute to electrical growth; population increases and higher per capita consumption. U.S. per capita use of electricity has risen according to the following table :

Kilowatts

per year 1940

1, 380 1950

2, 580 1960

4, 700 1970

8,000 Estimates are that this annual per capita consumption of electricity will reach 13,000 KWH by 1980, 22,000 KWH by 1990 and 33,000 KWH by the year 2000. Thus, even if population growth reduces to zero, the demand for electricity will apparently continue expanding at an annual compound rate of about 5.6%.

What we are speaking of is total U.S. electric consumption in the year 2000 of 10,000 billion KWH per year. At 40% conversion efficiency, this is equal to 25 BTU of fuel inpuet i.e., 10 billion tons of coal or 42.5 billion barrels of oil. FPC estimates of electric industry fuel mix are as follows:

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In 1970, coal accounted for 54% of electric utility system fuel and 322 million tons were burned. In 1990 (FPC estimate), coal will account for 44% less of total electric utility fuel than it did in 1970 but 100% more will be required-614 million tons. This is more than the entire 1970 domestic production figure of 606 million tons.

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