TABLE 6.—Changes in the use of coal, oil, and natural gas at electric public utility plants in New England and the Middle Atlantic States having coal and other fuel-burning facilities during 1948 and 1949, based on percent of power generated by the respective fuels

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TABLE 7.-Consumption of fuel by electric utilities in New England and the Middle Atlantic States for production of electric energy during comparable periods in 1948, 1949, and 1950

[Coal in short tons; oil in 42-gallon barrels; gas in thousands of cubic feet]

Secretary CHAPMAN. Mr. Chairman, that concludes my prepared remarks.

I want to say that I have been thinking of this problem for a considerable time, and I feel that we have reached a point in our national economy, irrespective of any possible national crisis that may be forseeable, that we need to study carefully the conditions that exist, and to study the relationships between the competing fuels of the country, because our natural resources, particularly the three, natural gas, coal, and oil, are not replaceable. Hydroelectric power is, of course, replaceable and continuous, but the other three are not. We need the advice and the assistance of this committee, and the advice of Congress, on the course to follow in developing and programing in this energy field.

Thank you, Mr. Chairman.

The CHAIRMAN. Are there any questions?

Senator Murray.

Senator MURRAY. No; I don't think of any questions to ask. It seems to me that the Secretary has laid the situation before us very clearly and effectively.

The CHAIRMAN. Senator Lehman.

Senator LEHMAN. I have no questions.

The CHAIRMAN. Senator Anderson.

Senator ANDERSON. I think most of us who have been watching coal mining realize that coal mines are closing, and that they are going to continue to close, regardless of how much investigation we have in the matter, when you are up against a competitive situation where industry prefers to use a supply of fuel that is more dependable. Some of us have seen railroads discontinue their service, and coal mines close down. The industry of the country is thinking about that. I think, most significant is the situation with the railroads, where they have long hung onto their coal, because they have been carrying coal on their own lines, and wanted to take care of their own customers. But even they are now transferring their business to other types of fuel.

I think, therefore, if we are going into it, we must not have an investigation of just coal, but must look at the whole fuel picture, as the Secretary has suggested.

Secretary CHAPMAN. One of the railroads has closed its own coal mine, operating right on its own line. But we must not overlook this fact that coal is one of the basic industries of this country. It is one of the largest reserves of natural resources that we have in this country. We must not overlook any opportunity to develop and protect the industry. We must give attention to some means that will provide an incentive for the continued development and production of the coal industry, which for many generations has been one of the basic industries of the country.

Irrespective of the fact that there have been great losses in the coal industry in the past 2 years, it is still too valuable an energy resource for us to think of letting it lie idle in the ground, without trying to strengthen and develop it.

Senator LEHMAN. Mr. Secretary, I note, on page 5, you say that the bituminous coal production reached a high of 631,000,000 tons in 1947. Was there a great increase between 1945 and 1947 and, if there was, was that largely due to the export trade?

Secretary CHAPMAN. I am speaking from memory, but I think that was largely due to the export trade. There was a rather gradual increase during that period, until it reached its peak in that year. I think most of that was due to the export trade.

Senator ANDERSON. I recognize what the Secretary has said about coal being a basic industry, but I can't help remembering that I had a grandfather who had a business of cutting ice out of the river, and putting it into a horse-drawn vehicle, and selling that ice in town; and he was put out of business by a little copper wire which provided electricity for an electric refrigerator. Coal is somewhat up against the same proposition, when people come along with a pipeline and bring in gas.

I know, in the area where I live, and just neighboring the area where the Secretary lives, there is a coal mine on the border between the two States. It has supplied the railroad with fuel for years and years, but it is being closed, and the town is being moved out. noticed last week that the trees were being supplied, free of charge, to parks in other cities. There won't be a semblance of that town ever having been there in another 6 months.

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Secretary CHAPMAN. That is right. That is the problem we have to deal with in the energy situation. Regardless of these difficulties which arise in competing fuels, we cannot allow coal to be wiped out simply by saying these other agencies have taken its place.

Senator ANDERSON. Mr. Secretary, on that line, aren't the reserves of coal, generally speaking, far greater than the known reserves of some of these other fuels?

Secretary CHAPMAN. Yes, the reserve of coal is greater than the known reserves of any other fuel.

Senator MYERS. I understand that our reserves of coal are about 95 percent of all the reserves of fuels and energy.

Senator ANDERSON. You can find enough coal, in the various States in the West, to run the country for hundreds of years.

Secretary CHAPMAN. I remember that when I first came to the Government I was tremendously impressed with a figure published by the Bureau of Mines. One of their mineralogists had given an estimate of the coal reserves in Wyoming, Colorado, and New Mexico. When I read the figure, I couldn't believe it. I thought it was a typographical error. I checked to ascertain if there was a mistake, and was told: "No; that is trillions of tons, not millions."

You speak of it in those terms. There are variations in grades and qualities of coal, of course. The thing that I am concerned about at the moment is that the Nation gets the very best use of all of these competing fuels and energies that we are using now.

We are using them at a rather high rate at the moment. We are using oil at a higher rate than we did at the peak of the war.

Senator ANDERSON. Mr. Secretary, do you see any possibility of development in the use of coal by tying into mines that might otherwise close the generation of electricity at the mine, and supplying that electricity to cooperatives?

Secretary CHAPMAN. I think that is a real possibility. We haven't made any technical study to determine the feasibility of that, completely, but there have been some more-or-less preliminary studies made, which lead us to believe that the idea is feasible, and that a certain amount of that could be done.

Senator ANDERSON. There has been much suggestion made in the agricultural field that the Government ought to try to find new ways of utilizing agricultural products. The Government is spending money for research on agricultural products. Do you feel that the Government would be justified in spending some money in this field of coal, to see if we can better utilize coal at the mine in the generation and transmission of electric energy?

Secretary CHAPMAN. Senator, I believe that after you have made this study that is indicated by these resolutions, you will have the answer. It seems to me that these resolutions have sufficient force to provide us with the basic information needed. I say this as a preliminary to answering your question. There isn't any question in my mind that the Federal Government has demonstrated that the money spent on experimental work, in Interior, Agriculture, and in other agencies of Government, has been returned a thousandfold to the Government.

One typical example touches my own Department. Ten years ago we brought to the attention of this committee the project to develop oil from shale, and synthetic oil from coal. Senator O'Mahoney, who was the chairman then as now, held hearings and called before his committee the experts in the respective fields to testify on the feasibility of the projects or whether it was just a dream of a bureaucrat seeking a new way to extend his jurisdiction. The chairman found, according to the report of the committee, that the project was feasible and that it was desirable to make an expenditure of money to determine the feasibility of this thing.

The first authorization, I believe, was $33,000,000. That was expended. I think the second authorization has been authorized and appropriation made. We spent that money in two areas. I will speak of the one with which I am most familiar.

We developed an oil-shale demonstration plant. This is a step further than a pilot plant. I inspected the plant that the Bureau of Mines was operating in Pittsburgh and found that the staff there was carrying on something like a "coffee pot" operation, trying to determine how many byproducts could be obtained and what efficiency could be attained in producing gasoline from coal. While the work was limited it was extremely useful. I have never found a group of people that so impressed me as those scientists working for the Bureau of Mines at Pittsburgh.

When I returned to Washington after visiting the Pittsburgh plant, we proposed an increase in the money for the experimental work. With the increase we set up this demonstration plant, to move one step further.

I am not talking now about putting the Government in business. I am talking about putting the Government into the experimental fact-finding field so that the information will be available to everybody, and for everybody.

So we built this demonstration plant out in western Colorado for producing oil from shale. They are producing 400 barrels a day now out of solid shale rock.

Some of you people may not be familiar with how this has developed. We have two estimates from the geologists. One is conservative. He says that there are 70,000,000,000 barrels of oil, possible, of production from this oil-shale field, alone.

That plant is today turning out 400 barrels of oil a day. The staff at the shale oil plant is studying and learning the techniques. They are giving a lot of attention to it. One of the problems was when we started the shale plant, we had only the Fischer Tropsch process there. This was a cumbersome process but nevertheless it was effective. Several oil companies, probably a dozen of them, assigned their engineers to stay there and work this plant, to see what they could learn about it. One of them, particularly, devoted more time than the others. And they helped us to develop a mechanical device that improved that process, a continuous rotary system; the crushed rock would continue to flow into the rotary system, and it was possible to keep the thing going for 24 hours a day, if that is necessary.

That made possible, for the first time, a measure of competition. I would say that competition is within reach now. Synthetics could compete if we knew that the price of oil was going to remain the same for the next 3 or 4 years. In that case, the petroleum industry could afford to invest the amount of capital required to build one of the synthetic plants that I am talking about. But the price of oil might drop the day after the plant was put in operation and they would be left holding the bag for 25 or 40 million dollars on a synthetic fuel plant.

The manufacture of synthetic oil is not yet at the point where I think private industry would want to move in. But the know-how is there. We could build a plant to produce all the oil needed in the world in a crisis, but it would take time.

Senator ANDERSON. You think it important that this be pilot-plant stage to the actual operating stage?

Secretary CHAPMAN. I do.

In the electric power field, you don't need so much investigation into the development.

The CHAIRMAN. You need to place it in perspective with these other fuels, more than anything else. Mr. Secretary, there are two problems presented to this committee. The first of these is the question involving the objectives of such a study as is proposed by three of the measures before us. The other concerns only the method by which the study is to take place. We have been discussing, this morning, largely the general objectives. I should like, however, in order to bring the matter into focus, to point out that the resolution of Senator Myers calls for a study by this committee, and the purposes of that study, as set forth in the resolution, are to determine the available fuel reserves, and present and future probable consumption; to formulate a national fuel policy; to recommend methods to encourage the development to assure the availability of fuels, and to make a report. That study, obviously, will be carried on by this committee, through its staff or through a staff to be selected.

Secretary CHAPMAN. That is right.

The CHAIRMAN. The resolution of Senator Myers calls for an appropriation from the contingent fund of the Senate. That, of course, would be the traditional way of financing committee studies.

The bill introduced by Senator Humphrey, as I pointed out in the beginning, requires action by both Houses of Congress, and would establish a special bipartisan commission to consist of 18 members, 6 of whom would be selected by the President. These would include the Chairman of the Council of Economic Advisers, the Secretary