Rachel Larson, Ph.D. candidate in Economics, University of Chicago. (National Science Foundation Graduate Fellow); A.B. University of Pennsylvania, 1962, M.A. University of Chicago, 1965.

Richard Mancke, from the University of Chicago faculty: Ph.D. in Economics from Massachusetts Institute of Technology, 1969, B.A. Colgate University, 1965 (Phi Beta Kappa; National Science Foundation Traineeship).

Thomas Stoel, Law clerk 1968-1969 to Associate Supreme Court Justice John M. Harlan; B.A. Princeton, 1962, LL.B. Harvard, 1965 (Law Review), Ph.D. Oxford, 1968 (Rhodes Scholar).

Herbert Winokur, former staff assistant to the Assistant Secretary of Defense (Comptroller); A.B. Harvard, 1964, Ph.D. in Decision and Control Theory from Harvard, 1967.

CONSULTANTS

Edward Erickson, Associate Professor of Economics at North Carolina State University; Ph.D. in Economics from Vanderbilt, 1968, B.A. Pennsylvania State University, 1969.

Thomas Stauffer, Ph.D candidate in Economics and Middle Eastern Studies, Harvard Sc.B. Massachusetts Institute of Technology, 1954 (Sigma Xi), M.A. Harvard, 1964.

Roland S. Homet, Jr.: Born: November 22, 1932, Monte Estoril, Portugal.

Schools: Villars, Switzerland; Scarborough Country Day School, Scarborough, New York; Phillips Academy, Andover, Massachusetts, 1950; A.B., Harvard University, m.c.l., 1954, LLB, Harvard Law School, mcl., 1961.

Paper: "Constitutional Guides to the Extra-National Reach of Regulatory Legislation."

Experience: Research Associate, Fund for the Republic (now Center for the Study of Democratic Institutions) New York, 1954; U.S. Naval Reserve, Lieutenant (j.g.), on active duty at sea, 1955-58; Law Clerk, Associate Justice Felix Frankfurter, Supreme Court, 1961-62; Associate, Cleary, Gottlieb, Steen & Hamilton, Washington, D.C., 1962-66; Assistant Legal Adviser for Euopean Affairs, Department of State, 1966–69; Chief Counsel, Cabinet Task Force on Oil Import Control, April 1969—present.

Mr. ASPINALL. You referred, General, several times to the Canadian, our relationships with the Canadians. As I understand it, there is a report about to be released relative to a new understanding; is that correct?

Mr. LINCOLN. I believe the White House is about to make a statement concerning our relations with the Canadians.

Mr. ASPINALL. I do not wish to be premature. Will you give us a copy of that statement when it is released?

Mr. LINCOLN. I will provide for the record a copy of that statement. Mr. ASPINALL. I would ask, Mr. Chairman, it be made a part of the record at this point.

Mr. EDMONDSON. Without objection, so ordered. (The information follows:)

THE WHITE HOUSE,

OFFICE OF THE WHITE HOUSE PRESS SECRETARY,
March 10, 1970.

MODIFYING PROCLAMATION NO. 3279, RELATING TO IMPORTS OF PETROLEUM AND PETROLEUM PRODUCTS BY THE PRESIDENT OF THE UNITED STATES OF AMERICA

A PROCLAMATION

Pursuant to section 2 of the Act of July 1, 1954, as amended (72 Stat. 678), and section 232 of the Trade Expansion Act of 1962 (76 Stat. 877), findings and determinations have been made that adjustments in the imports of crude oil, unfinished oils and finished products were necessary so that such imports would not threaten to impair the national security, and such adjustments have been made by Proclamation 3279 of March 10, 1959, as amended from time to time.

The Cabinet Task Force on Oil Import Control, established in March 1969 to

Proclamation No. 3279, as amended, submitted, on February 2, 1970, a report concluding that the existing overland exemption in combination with a system of restriction based on international agreements does not effectively serve our national security interests and leads to inequities within the United States, and recommending that volumetric restrictions on the importation of Canadian oil be established as a means of interim control during the period of transition to an alternative United States-Canada energy policy.

The director of the Office of Emergency Preparedness, with the concurrence of the Oil Policy Committee, has recommended that the importation into Districts I-IV of Canadian crude and unfinished oils heretofore subject to voluntary controls, while exempt from mandatory controls, be limited to 395,000 average barrels per day in the period March 1, 1970, through December 31, 1970, in order to institute a more effective system of import control for the accomplishment of the national security purposes of Proclamation 3279, as amended.

I agree with the recommendation of the Director and deem it necessary in the interest of the national security objectives of Proclamation 3279 to establish an orderly limitation on the importation into Districts I-IV of Canadian crude and unfinished oils.

Now, therefore. I, Richard Nixon, President of the United States of America, acting under and by virtue of the authority vested in me by the Constitution and statutes, including section 232 of the Trade Expansion Act of 1962, do hereby proclaim that:

(1) Effective immediately, a new section 1A, reading as follows, is added to Proclamation 3279, as amended:

"Sec. 1A. (a) Notwithstanding the provisions of clause (4) of paragraph (a) of section 1 of this Proclamation, during the period March 1, 1970, through December 31, 1970, crude and unfinished oils imported from Canada into Districts I-IV shall not exceed 395,000 average barrels daily and during the period March 30, 1970, through December 31, 1970, no crude oil or unfinished oils imported from Canada may be entered for consumption or withdrawn from warehouse for consumption in Districts I-IV except by or for the account of a person to whom a license has been issued by the Secretary of the Interior pursuant to an allocation made to such person in accordance with regulations issued by the Secretary with the concurrence of the Director of the Office of Emergency Preparedness. "(b) The Secretary, pursuant to such regulations, shall make allocations effective for the period March 1, 1970, through June 30, 1970, provided however, that such allocations shall be subject to adjustment based on revised allocations for the period from March 1, 1970, through December 31, 1970, which shall be issued no later than June 30, 1970. The regulations shall further provide that all such oils imported during the period March 1, 1970, through December 31, 1970, by a person to whom such an allocation is made shall be chargeable against his allocation. Licenses issued under the allocations shall permit the entry for consumption or withdrawal from warehouse for consumption only of crude oil produced in Canada and unfinished oils processed from crude oil or natural gas produced in Canada which have been transported into the United States by pipeline. rail, or other overland means of transportation.

"(c) The Secretary, by regulation, shall establish the maximum proportion of such allocation which may be used for the importation of unfinished oils."

(2) Section 4(a) of Proclamation 3279, as amended, is amended by striking "Defense" and substituting therefor “Justice”.

In witness whereof. I have hereunto set my hand this tenth day of March. in the year of our Lord nineteen hundred and seventy, and of the Independence of the United States of America the one hundred and ninety-fourth.

RICHARD ΝΙΧΟΝ.

THE WHITE HOUSE,

OFFICE OF THE WHITE HOUSE PRESS SECRETARY.

March 10, 1970.

The President has today issued a proclamation, effective March 1, 1970, establishing a temporary, formal limitation on imports of crude oil and unfinished oil from Canada into Districts I-IV. The formal limitation to 395,000 barrels per day for the remainder of 1970 permits a substantially higher level of imports

upon between the two governments. The Canadian Government has been consulted about the need for formal limitation, which is necessary because the voluntary control arrangements have proved unworkable.

The Cabinet Task Force on Oil Import Control recommended and the President on February 20 directed that efforts be made to develop a freer exchange of petroleum, natural gas and other energy resources between the United States and Canada. Although it is now necessary to impose formal controls on the level of imports, it is expected that discussions will continue with Canada looking toward the conclusion of an agreement permitting freer exchange of energy resources between the two countries.

The institution of formal controls and an increase in imports were recommended by the Director of the Office of Emergency Preparedness after consultation with the Oil Policy Committee announced by the President on February 20, 1970, consisting of representatives of the Departments of State, Treasury, Defense, Interior, Commerce, and Justice, and the Council of Economic Advisors. Under the understanding on oil reached in 1967, the Canadian authorities undertook to seek by voluntary arrangements with industry to limit the volume of Canadian oil exports to the United States to levels of 306,000 barrels per day in 1969, and 332,000 barrels per day in 1970. The flow of oil from Canada, however, has recently risen to levels much higher than anticipated under the agreement.

It has become clear that the voluntary controls are not workable. The breakdown of voluntary controls is impairing the management of the present import control program and the orderly development of future oil import policies. The Director of the Office of Emergency Preparedness, after consultation with the other members of the Oil Policy Committee, has therefore concluded that the existing method of restricting imports from Canada does not serve our National Security interests effectively, and leads to inequities within the U.S. He recommends that pending the establishment of alternative arrangements, volumetric restriction on Canadian imports should be employed as a means of interim control during the period of transition arrangements.

Proposed regulations covering the apportionment of quantities of the imports from Canada will be published within a few days for public comment by March 20, 1970. The regulations will be issued by the Secretary of the Interior, with the concurrence of the Director of the Office of Emergency Preparedness in time to take effect on March 30, 1970. Although actual licensing will not begin until March 30, the allocation system will take account of imports from the beginning of March, so that no advantage will accrue to any importer by reason of imports during March prior to the institution of the licensing system. The import levels established by today's proclamation should be adequate to meet the needs of the U.S. refineries and consumers who have clearly depended upon supplies from Canada.

Another additional provision in the proclamation is the substitution of a Department of Justice member for the Department of Defense member on the Oil Import Appeals Board. This was also recommended by the Cabinet Task Force on Oil Import Control.

OIL IMPORT ADMINISTRATION, DEPARTMENT OF THE INTERIOR

(Oil Import Regulation 1 (Revision 5))

CANADIAN OVERLAND IMPORTS-DISTRICTS I-IV ALLOCATIONS

On March 10, 1970, Proclamation 3279 was amended to impose a quantitative limitation on the importation of crude oils and unfinished oils from Canada into Districts I-IV during the period March 1, 1970 through December 31, 1970. As amended, the Proclamation provides that not to exceed 395,000 average barrels daily of such oils may be imported from Canada into Districts I-IV during that period. The Proclamation provides also (1) that during the period March 30, 1970 through December 31, 1970, no such oils may be imported except under licenses issued pursuant to allocations made by the Secretary of the Interior in accordance with regulations concurred in by the Director of the Office of Emergency Preparedness, (2) that such licenses shall permit the importation only of Cambodian oils overland, and (3) that regulations be issued providing for allocations for

quirement, it is proposed to recommend to the Secretary of the Interior and to the Director of the Office of Emergency Preparedness that Oil Import Regulation 1 (Revision 5) be amended by revising section 23 to read as set forth below. Persons interested may submit written comments on the proposed amendment to Administrator, Oil Import Administration, Department of the Interior, Washington, D.C. 20240, on or before March 20, 1970. The regulations must be issued and the allocations and licenses issued thereunder by March 30, 1970. This necessitates the short period for comment. Each person who submits comments is asked to provide ten copies. J. J. SIMMONS, III, Administrator, Oil Import Administration.

Sec. 23. Canadian overland imports—Districts I–IV

(a) As used in this section the term "Canadian overland imports" means crude oil and unfinished oils (1) which are entered for consumption or withdrawn from warehouse for consumption in Districts I-IV, (2) which, if crude oil, was produced in Canada, and, if unfinished oils, were processed from crude oil or natural gas produced in Canada, and (3) which were or are transported into the United States by pipeline, rail, or other means of overland transportation. (b) The Administrator shall make allocations of 395,000 average barrels daily of Canadian overland imports for the period March 1, 1970 through June 30, 1970, but such allocations shall be reduced as provided in paragraph (h) of this section. (c) To be eligible for an allocation of imports under this section, a person must have in Districts I-IV a facility or facilities for processing Canadian overland imports or pipeline facilities using crude oil as fuel.

(d) (1) Except as provided in subparagraph (2) of this paragraph, each eligible applicant shall receive an allocation in an equal share of the remainder of the imports that is available for allocation after allocations are made pursuant to subparagraph (2) of this paragraph. However, such allocation shall be reduced, as provided in paragraph (h) of this section, by the amount of Canadian overland imports which such person imported during the period March 1, 1970 through March 29, 1970, or which were imported during that period and which were purchased by such person.

(2) If an eligible applicant processed Canadian overland imports in his facility or facilities during the period October 1, 1968 through September 30, 1969, and if an allocation computed under subparagraph (1) of this paragraph would be less than the average barrels daily of Canadian overland imports that the applicant processed in his facility or facilities during the period October 1, 1968 through September 30, 1969, multiplied by 1.05, the applicant shall receive an allocation under this section equal to the average barrels daily of Canadian overland imports that the applicant processed in his facility or facilities, multipled by 1.05, multiplied by 122. However, such allocation shall be reduced, as provided in paragraph (h) of this section, by the amount of Canadian overland imports which such person imported during the period March 1, 1970 through March 29, 1970, or which were imported during that period and which were purchased by such person.

(3) No person shall receive an allocation under subparagraph (1) and subparagraph (2) of this paragraph.

(4) Under an allocation made pursuant to this section, a person may import the full amount of the allocation as unfinished oils.

(e) No person shall receive an allocation under this section in excess of 95% of the operating capacity as of January 1, 1969 of the facility or facilities covered by the application expressed in average barrels daily multiplied by 122. Such operating capacity shall be subject to verification by the Administrator.

(f) Each allocation made under this section shall be subject to adjustment based on revised allocations for the period March 1, 1970 through December 31, 1970.

(g) Licenses issued under allocations made pursuant to this section shall permit only Canadian overland imports to be entered for consumption or withdrawn from warehouse for consumption in Districts I-IV.

(h) (1) A person to whom an allocation is made under this section shall report and certify in writing to the Administrator, Oil Import Administration, Department of the Interior, Washington, D.C. 20240, by April 15, 1970 the total quantity of Canadian overland imports which that person imported during the period

and which were purchased by such person. The amount so reported and certified shall be subject to verification by the Administrator. If a person to whom such an allocation is made fails to file by April 15, 1970 the written report and certification required by this subparagraph (1), the Administrator shall suspend all license issued under that allocation until the written report and certification is received.

(2) The quantity of Canadian overland imports reported and certified by a person as provided in subparagraph (1) of this paragraph shall be charged against, and entered upon, the license issued to that person under his allocation and shall serve to reduce his allocation in that amount.

(i) An allocation made pursuant to this section shall not be sold, assigned, or otherwise transferred. Each person who imports Canadian overland imports under an allocation made pursuant to this section shall process or consume such imports only in his own facility or facilities. Such imports shall not be exchanged. (j) An application for an allocation under this section shall be made by letter or telegram to, the Administrator, Oil Import Administration, Department of the Interior, Washington, D.C. 20240. Applications must be received by the Administrator no later than 12 o'clock noon, Eastern Standard time, on March 20, 1970. an application must contain the following information, which shall be certified by an officer of the applicant:

(1) The nature of the applicant's facility or facilities.

(2) The location or locations of the facility or facilities.

(3) The average barrels daily of Canadian overland imports processed or consumed in the applicant's facility or facilities during the period October 1, 1968 through September 30, 1969.

(4) The operating capacity, as of January 1, 1969, expressed in average barrels per calendar day of the facility or facilities in which Canadian imports will be processed.

An officer of an applicant shall also certify in his application that, if an allocation of Canadian overland imports is made to the applicant under this section, the applicant will process or consume all such imports in his facility or facilities before July 31, 1970.

(k) If a person who receives an allocation of Canadian overland imports under this section fails to import the total quantity of such imports specified in the allocation or if he fails to process all such imports in his facility or facilities before July 31, 1970, then any allocation for Districts I-IV to which such person may be entitled under section 9. 10, or 25 of this regulation for the allocation period beginning January 1, 1971 shall be reduced by the Administrator by the amount of Canadian overland imports which such person has failed to import or which such person has failed to process in his facility or facilities before July 31, 1970, except that the Administrator need not make such a reduction to the extent that such person demonstrates to the satisfaction of the Administrator that such failures were without such person's fault and were beyond his control.

Mr. ASPINALL. I have one more question.

Reading from the Cabinet task force report, it indicates, one, that a judgment has been made to change the present quota system; two, that a tariff system should be adopted; and, three, that the machinery for administering a tariff system be laid out.

Is it the responsibility of the Oil Policy Committee to implement these judgments; if so, will this be by legislation or by Executive order?

Mr. LINCOLN. Since the President has not made a decision as yet as to what he wishes to do, it is not the responsibility of the Oil Policy Committee at this point to move forward on the tariff system, or, I would say, to move forward on any long-range adjustment.

We are told by the President that we should note the consultations between the Department of State, Department of Defense, and our allies, and that we should give close attention to the information developed by congressional hearings before moving to make any recom