Government
Lame ducks disagree on environmental issue Only a few days before they left office, former Commerce Secretary Elliot I. Richardson and former Environmental Protection Agency administrator Russell E. Train got together in Chicago to deliver their final pronouncements on the direction the government's environmental program should be taking. The occasion was a government-industry conference on pollution control, sponsored jointly by Commerce and EPA. As it turned out, the joint sponsors had some fundamental disagreements. According to Richardson, one of society's most pressing current needs is a more rational process of regulation. "There exists in our regulatory processes today a large measure of unreasonableness," Richardson says, "not only in the way that we go about implementing generally laudable public goals, but in the debate that the process has spawned—a debate that often has been excessively emotional, self-righteous, simplistic, and ideological, shedding more heat than light on the subject." Specifically, "there is a definite lack of flexibility in much of the environmental legislation enacted by Congress," Richardson contends. "When adminstrators of regulatory agencies seek to provide such flexibility on their own, they invite court battles and other challenges." Also, economic considerations have been grossly underrepresented, Richardson says. He cites a study made by the Council on Environmental Quality projecting costs of $486.2 billion for envi-
Train: defends regulatory approach 16
C&ENJan. 31, 1977
ronmental protection during the period 1975-84. "It appears likely that some industries will not be able both to finance the investment [for compliance with environmental rules] and to finance growth in capacity," he says, adding that "in some instances we will be unable to maintain U.S. self-sufficiency in critical materials as a result." Richardson calls for "more economic reality" in the regulatory process, including appropriate legislative amendments. "Emissions, damages, and benefits have yet to be brought together and related to costs so we can compare the benefits per dollar of expenditures on various regulations," he says. Benefits may have exceeded costs in some cases, but it is clear that costs have exceeded benefits in others. For instance, "it appears that costs of compliance with the Federal Water Pollution Control Act over the period 1972 to 2000 would exceed the benefits of that compliance." Train, not surprisingly, defends EPA's current regulatory approach. He argues that the costs of cleaning up pollution are not new costs created by regulations but costs that are now being borne by society as a whole. "All the normal incentives of a competitive free enterprise system work to encourage the disposal of vast volumes of wastes into the environment, at the expense of public health and welfare," Train says. Thus, environmental laws are necessary to "internalize" that expense. It usually turns out, he adds, that the cost of cleaning up pollution at the source is a good deal cheaper than the cost of adverse health effects and other damage otherwise borne by society. In any event, Train says, the economy is not being stifled by environmental controls; they have only 0.4 to 0.5% impact on the cost of living. Furthermore, the impact on employment is "probably positive," since many new jobs have been created as a result of environmental requirements. Train also sees the water pollution control laws and regulations as well conceived, although he agrees that Congress should review the law carefully and make necessary "midcourse corrections." However, he sees no need for "slipping" either 1977 or 1983 requirements. He notes that most industries already are in compliance with the 1977 requirements. The two ex-officials do agree in some areas. Both predict that the future will bring increasing emphasis on reducing pollution by basic changes in processes, rather than by development of ever more complicated "add-on" controls. And both
Richardson: lack of flexibility
concur that there should be greater economic incentives for industry to comply with environmental regulations. Richardson calls for "fines" for polluters that fail to meet standards, and also for subsidies for abatement of pollution. Train goes along with the concept of charges for failure to meet compliance schedules. However, he argues that subsidies would "steer effort into capital-intensive directions" when the emphasis should be on process changes that might not require so much capital. Train also took note of a "rumor" that the new Carter Administration was considering making EPA part of a reorganized Interior Department. "I see no pluses—only minuses" in such a move, he said. "EPA's overriding concern is protection of the public health. To put the agency in a nonhealth-related department would be a backward step." D
Reports detail U.S. energy situation The Federal Energy Administration and the National Research Council have released back-to-back reports on thé U.S. energy situation. Both are preliminary, with their final versions expected in April and June, respectively, but here the resemblance ends. FEA's report contains detailed statistics on energy for the next nine years, whereas NRC's report is an outline of the direction the council is
taking and the issues it is addressing in assessing the appropriate roles of nuclear and alternative energy systems during the period 1985 to 2010. According to FEA, which made the assumption that current laws and regulations will be left unchanged for the next nine years, oil imports will continue to grow—from 7.2 million bbl per day in 1976 to 7.6 million bbl per day in 1985. And if controls on domestic crude oil are continued beyond the expiration in May 1979, an additional 400,000 to 2.2 million bbl per day of oil imports will be necessary by 1985. Assuming that world oil prices increase 2% per year in real terms, FEA estimates that continued domestic oil price controls could result in a loss of crude production of about 600,000 bbl per day in 1980 and 1.4 million bbl per day in 1985, compared with production projections under decontrolled conditions. Energy consumption, as a result of higher energy prices and approved conservation programs, is expected to grow at an average annual rate of 2.5% through 1985, instead of the historical growth rate of 3.5% per year before the embargo. Energy demand in 1985 is expected to reach 91 quadrillion Btu (quads), which is equivalent to 44 million bbl per day of oil. Demand in 1976 was 73 quads. FEA points out that energy consumption is a function of the economy. A 1 percentage point lower annual growth rate in real gross national product, for instance, could reduce energy demand nearly 9% from the forecast level for 1985. Also a function of the economy is electricity demand, which is projected to grow at a rate of about 5% per year through 1985 as compared to the historical rate of about 8%. A 1 percentage point lower annual economic growth rate could lower growth of electricity demand to about 4% per year. By 1985, FEA predicts, the U.S. could generate 70% of its electricity from coal and nuclear power, compared with about 54% today. Nuclear power alone, it says, could account for 23% of total electricity generation by 1985, compared with about 9% today. FEA forecasts that natural gas production, in the absence of price deregulation, will decrease from 19 trillion cu ft in 1976 to 17 trillion cu ft in 1985. If there is deregulation, production could increase to 21 trillion cu ft by 1985. And if the Alaskan gas pipeline is constructed by 1985, gas production could be boosted by 1.2 trillion cu ft for use by the contiguous 48 states. Even with the pipeline and other new sources, FEA estimates that shortages of gas to industrial and commercial users in 1985 could reach 3.5 trillion cu ft. With the continued regulation of natural gas, FEA predicts that coal consumption will be on the rise. Coal production is projected to increase from 660 million tons in 1976 to 1 billion tons in 1985. About 710 million tons is expected to come from the eastern U.S. and the remainder from the West. And exportation of coal, primarily metallurgical coal, could reach 90 million tons in 1985, com-
Federal Alert—new legislation This C&EN report lists new legislation introduced between Jan. 7 and Jan. 14. Senate and House bills are listed under areas of interest by bill number, primary sponsor, and the committee to which the bill has been referred.
SENATE Education. S. 32—Kennedy (D.-Mass.). Establishes, under direction of NSF, fellowships for the continued education of scientists and engineers who have been engaged in their careers for at least three years, authorizes spending $7.5 million in first two years; referred to Labor & Public Welfare. Energy. S. 36—Jackson (D.-Wash.). Authorizes $1.3 billion for the Energy Research & Development Administration's nonnuclear R&D programs in fiscal 1977, referred to Interior & Insular Affairs. S. 37—Jackson (D.-Wash.). Authorizes $300 million in federal loan guarantees for demonstration plants to produce synthetic fuels from biomass, loan guarantees for demonstration of other energy technologies, subject to Congressional approval; referred to Interior & Insular Affairs. S. 56—Mathias (R.-Md.). Phases in over five years new tariffs of $2.00 per bbl on residual fuel oil, $3.00 per bbl on middle distillates and jet fuel, $4.00 per bbl on gasoline; referred to Finance. Environment. S. 7—Metcalfe (D.-Mont.). Provides for federal regulation of surface coal mining operations and for acquisition and reclamation of abandoned mines; referred to Interior & Insular Affairs. S. 9—Jackson (D.-Wash). Sets policy guidelines for outer continental shelf leasing, requires five-year leasing program, provides for two decision processes to separate exploration from development and production; referred to Interior & Insular Affairs. S. 251, 252, 253—Muskie (D.-Me.). Amend the Clean Air Act, set auto emission standards, provide for nondegradation of clean air areas; referred to Public Works. Health. S. 3—Kennedy (D.-Mass.). Provides complete medical, dental services for all U.S. residents under national health insurance program; referred to Labor & Public Welfare. Government operations. S. 2—Muskie (D.-Me.). Sets out five-year schedule for mandatory reauthorization of all federal programs, where no such reauthorization is provided no money can be spent to carry out the program; referred to Government Operations.
Research. S. 126—Cranston (D.-Calif.). Authorizes a three-year, $220 million program of research on earthquake prediction; referred to Commerce. S. 248—Dole (R.-Kan.). Establishes 22member national agricultural research policy advisory board, raises the authorization for existing agricultural research programs to $600 million in fiscal 1978, authorizes spending $750 million over three years for new competitive grants program; referred to Agriculture & Forestry. Safety. S. 21—Domenici (R.-N.M.). Directs the Occupational Safety & Health Administration to provide on-site consultation, at the request of employers, prohibits issuance of citations in connection with such visits; referred to Education & Labor. S. 180—Bartlett (R.-Okla.). Exempts from OSHA's jurisdiction businesses that employ fewer than 25 people, provides that no OSHA standard can be applied so as to require replacement of nonobsolete equipment, directs inspectors to suggest means of correcting any violation they find in a workplace; referred to Labor & Public Welfare. HOUSE Antitrust. H.R. 166—Eilberg (D.-Pa.). Prohibits control of alternative energy sources by integrated oil companies; referred to Judiciary. H.R. 1659—Edwards (D.-Ala.). Prohibits the Federal Trade Commission from requiring any person, partnership, or corporation to file line of business reports; referred to Interstate & Foreign Commerce. H.R. 1767—Eckhardt (D.-Tex.). Allows court suits seeking redress for violations relating to unfair or deceptive practices to be brought by persons, partnerships, or corporations injured by such violations; referred to Interstate & Foreign Commerce. Consumerism. H.R. 1660—Eilberg (D.-Pa.). Requires that drugs and pharmaceuticals be prominently labeled as to the date beyond which potency or efficacy becomes diminished; referred to Interstate & Foreign Commerce. Economy. H.R. 1675—Harrington (D.Mass.). Establishes a system of regional development banks to provide venture, modernization, expansion capital for private enterprises to increase employment in various regions of the U.S.; referred to Banking, Finance & Urban Affairs. Foreign investment. H.R. 1758—Carney (D.-Ohio). Requires notification by foreign investors of proposed acquisitions of equity securities of U.S. companies, authorizes President to prohibit such acquisitions; referred to Interstate & Foreign Commerce.
Nuclear. S. 63—Mathias (R.-Md.). Establishes an independent, self-financing government agency to control existing and future commercial and military radioactive waste facilities; referred to Atomic Energy.
Nuclear. H.R. 1857—Mathis (D.-Ga.). Creates a National Power Resources Authority responsible for the development of nuclear power facilities; referred to Interstate & Foreign Commerce.
S. 266—Jackson (D.-Wash.). Authorizes $5.3 billion for ERDA's nuclear programs in fiscal 1977, plus $227 million for programs on environmental research and safety and basic energy sciences; referred to Atomic Energy.
Taxes. H.R. 1903—Seiberling (D.-Ohio). Encourages modernization of manufacturing plants by providing an additional investment credit for machinery placed in service in existing manufacturing plants or in nearby plants; referred to Ways & Means.
Jan. 31, 1977 C&EN 17
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pared with about 60 million tons in 1976. The newer technologies, such as solar, geothermal, and synthetic fuels, are forecast to make a small contribution to total energy needs by 1985—about 1%. But FEA predicts that they could con tribute as much as 11% by 2000. FEA estimates that U.S. investment in facilities needed to provide energy re quirements of 1985 could total $650 bil lion in terms of 1975 dollars in the next nine years, compared to about $325 billion over the past 10 years. The largest in vestments, it adds, will be in the oil and gas supply sectors where costs will double by 1985, to $370 billion. The second energy report, prepared by NRC, picks up in time where the FEA report leaves off. Commissioned by the Energy Research & Development Ad ministration, it presents no findings or recommendations. What it does is list the questions NRC will answer in its final report and the premises upon which the final report will be based. In its interim report, NRC says that it is looking at the extent to which govern ment regulation, subsidies, and manage ment should be used as a supplement to market operations in achieving demand reduction or supply increases. An issue under this topic would be the examination of the roles of legislated performance standards, regulated prices, and taxes in stimulating improvements in efficiency of energy end-use systems. Another issue would be a study of the allocation, distri bution, and insurance of risks in com mercialization of new supply technologies, including risks of R&D, investment, and safety. According to NRC, the final report will discuss such issues as to what extent the U.S. can and should draw on its fossil fuel resources until long-term energy tech nologies can take over, how rapidly the U.S. can and should expand its use of coal, and what role nuclear energy can and should play in the U.S. energy supply system. It also will study whether fusion is a practical long-term energy source, and the impact of U.S. energy policy on the global economic situation. The final report, NRC says, will be based on a wide variety of scenarios, ranging from one in which total national energy use in 2010 would be no more than that used today to one in which use would be three times as large. The different scenarios also will involve different mixes of supply sources and end-use patterns. For instance, a low-growth scenario might come about as the result of improvements in the efficiency of energy end-use sys tems, moratoriums imposed on the de velopment of nuclear energy or on the mining or combustion of coal, and/or a steady rise in the real price of energy. A high-growth scenario, on the other hand, might result from a decrease in the real price of energy; early technical break throughs in breeder reactors, synthetic fuels, solar energy, or fusion; and/or re laxed environmental regulations affecting the supply and use of energy. D
