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In recent weeks, members and staff of this committee have heard from independent oil producers and refiners, and antitrust lawyers that oil pipelines usually are not indeed common carriers, and that monopolistic pipeline control is an important contributor to the current inability of independent refiners and marketers to serve their customers.

There are also authorities who hold that the Alaska pipeline application is legally vulnerable on common carrier and antitrust grounds, and that this project's problems in conforming to the Mineral Leasing Act and the National Environmental Policy Act might be resolved only to see a prolonged legal tangle over its common carrier status or its conformity to the anti-merger provisions of the Clayton Act.

For decades there have been complaints that oil pipelines are in violation of the common carrier section of the Mineral Leasing Act, or of the Hepburn Act, the Elkins Act or the Clayton Act. There has never been a clear resolution of these complaints in the courts or before the Interstate Commerce Commission, and it is not likely or even desirable that they be completely resolved now in a right-of-way bill. Furthermore, the oil companies and the Interior Department seem to be confident that the ICT's regulatory authority over pipelines, together with a 1941 antitrust consent decree make these questions moot. We were, however, assured by the same authorities that the right-ofway width limit in the Mineral Leasing Act was not a serious obstacle to authorization of the trans-Alaska pipeline, and I believe that the committee should at least pay some attention to the common carrier problem.

Oil pipelines are unique among interstate utilities in that no agency or regulatory commission explicitly has the authority to grant a certificate of public necessity or convenience. Unlike the case of railroads, motor carriers, airlines or even gas pipelines, there is no Federal entity charged with examining an oil pipeline's organization, financing, scale, location, or economic impacts to determine whether the application is in the public interest. In the absence of any legitimate public forum for considering all the questions of public interest in an oil pipeline application, requirements of the National Environmental Policy Act are being used in part as a clumsy substitute for the certification proceedings required for other public utility projects. An important question that the committee must now face is just who is to determine what pipelines are built, where and how.

Most of today's witnesses are not prepared to address the public utility aspects of pipeline right-of-way legislation, which have only recently been brought to the committee's attention. I do plan, however, to address detailed questions on these issues to the Interior Department, the Interstate Commerce Commission, the Federal Trade Commision, and the Justice Department. These inquiries and answers to them will be incorporated into the record of this hearing. Also, with unanimous consent, I would like to include in the record for background the "Comparison of Federal Regulation of Liquid and Gas Pipelines” prepared for the committee by the Congressional Research Service, and some relevant excerpts from a report of the House Subcommittee on Special Small Business Problems, "Anticompetitive Impact of Oil Company Ownership of Petroleum Products Pipelines.” This latter report pro

vides a valuable summary of the legislative and legal history of pipeline regulation.

There are a number of other latent issues of public policy raised by the procedures and policies for granting rights-of-way across public lands. Almost any issue of energy policy, environmental policy, or business policy can be argued to be related in some way to right-ofway policy. This committee cannot, however, resolve all of these problems in the context of the present legislation. We do need to act promptly because of the court's decision on the Alaska pipeline has cast a legal cloud over many existing rights-of-way, and seems to erect a barrier to construction of new piplines and other essential public facilities across public lands. We will have to find a balance here that permits rapid action to solve a real and pressing problem, without the undue haste that will create or perpetuate more serious problems for the future.



The first witness is Mr. Brock Evans, Washington representative of the Sierra Club.

Mr. Evans, we are delighted to welcome you to the committee, especially in view of the fact that you come from Seattle, Wash.

Mr. Evans. It is a very nice place to be from, Mr. Chairman, thank you.

The CHAIRMAN. A very nice place to be. Mr. Evans. Yes, sir, I miss it. I wonder if I might at the beginning of my statement introduce for the record the statement of Mr. Bruce Driver of the Environmental Policy Center.

He was on the witness list and was unable to be here and I would like to offer his statement for the record. In essence, he feels that there are serious problems with the discretionary aspects of the legislation.

The CHAIRMAN. Without objection it will be included in the record. Mr. Evans. Thank you. [The statement referred to follows:]


POLICY CENTER I am Bruce Driver, a Washington representative of the Environmental Policy Center, a research and information group with offices in Washington, D.C. I speak today also for the Northern Plains Resources Council, an environmental group with over 1000 active members in Northern Plains states. I wish to restrict my remarks to S. 1081 and Title IV of the Administration's BLM Organic Act.

Although we have not had time to analyze this legislation's potential effects on the public lands, we can make the following observations:

1. We are concerned that the Secretary of the Interior would have too much discretion in setting width and other limitations to rights-of-way. For example, Title IV and S. 1081 attach no width limitations to any of the rights-of-way for which the Secretary may issue a permit, lease or license. Current right-of-way law does attach width limitations, for example, to railway rights-of-way which may be only 200 feet wide (43 U.S.C. 934), canals and other irrigation-related waterways which may be 100 feet in width (43 U.S.C. 946) and electric transmission lines which may be 400 feet wide (43 U.S.C. 961). The legislative history of these statutes does not yield definitive explanations for these limitations in all cases. For some of the statutes enacted before 1900 records of committee proceed

ings are not available. Perhaps an overriding concern behind width restrictions has been to limit the amount of land a private entity could carve out of the public domain, regardless of whether or not "fair market value” has been obtained by the Government for the right-of-way. Another good reason for limitations now may be to restrict environmental damage.

The existing limitations may in some sense appear arbitrary. But it does not follow that the concept of statutory width limitations is arbitrary and must be jettisoned along with the existing limitations, if indeed the existing limitations should be altered. We think that a better solution may be to study existing limitations in view of modern needs and to impose new limitations if necessary. Do we know whether or not railways now need more than 200 feet in right-of-way? What are the needs of modern electrical transmission systems for right-of-way space? These and other questions should be answered before dismantling the system of statutory width restrictions. It has been remarked that the Alska Pipeline decision has "cast a cloud" on all rights-of-way. We assert that Title IV and S. 1081 may cast a greater cloud of uncertainty on future rights-of-way because of the discretion allowed the Secretary. But the burden of uncertainty will likely shift from those asking for the right-of-way to those interested in preserving the non-renewable resources of the public lands. In light of the increasing demand for fossil fuel and water resources of the public lands, we question whether this is sound environmental policy. In short, we believe that the idea of allowing the Secretary wide-ranging discretion bears further examination by more interests over a longer period of time than has been available.

2. Title IV and S. 1081 contain no explicit vehicle for public participation in right-of-way decisions. There is no language regarding the way in which these decisions should be made in the context of the land use planning strictures of a BLM Organic Act. Furthermore, it appears that these bills would allow decisions to be made regarding common carriers in a framework lacking the informational inputs characterizing decisions made with respect to common carriers after state regulatory proceedings.

3. We approve of the requirement to utilize common corridors when possible. However, unless the system of corridors is in some way tied to resource development at the initial planning stage, we are not very hopeful that common corridors will be the rule rather than the exception. Decisions regarding resource development have been made in a helter skelter fashion to date; for example, federal coal leases have been issued in the Northern Plains without much thought given to marketing the energy from the coal resource. The result of this will be to make the design of common corridors very difficult at the time of development of these leased reserves.

4. There are some issues which are not clearly resolved in either Title IV or S. 1081's wording. Does the proposed right-of-way legislation extend to lands the surface estate of which is in private ownership, but in which the federal government has reserved a mineral interest? What is the effect of the legislation on federal regulatory commission jurisdiction, particularly the Interstate Commerce Commission? For example, could a width limitation included in an I.C.C. permit to a railroad to build an interstate rail-line be superseded by a right-of-way permit issued by the Secretary?

Mr. Evans. We appreciate the opportunity to be here before you today because we feel this legislation goes far beyond its immediate and stated purpose, which is to either make some technical changes in the Mineral Leasing Act of 1920, or to completely reform present procedures for the granting of rights of way across Federal lands for all types of uses.

We would like to outline our concerns in somewhat more detail for you here. Because the subject is so complex and because the notice of this hearing has been so short, we feel it is imperative that further and more extensive hearings be scheduled and we reserve the right to submit further testimony at a later date.

Mr. Chairman, in the Congressional Record of March 6, 1973, you stated that the hearings today will only deal with the substantive

legislative proposals concerning the granting of rights-of-way across Federal lands, including the bills mentioned above. You further stated that you would not hear any testimony regarding the desirability and routing of the Trans-Alaska pipeline, because these hearings would only deal with the right-of-way issue. We intend to bide by your stated rules; however, we must point out at the very beginning that the so-called right-of-way legislation, in our judgment is the Alaska pipeline issue.

If S. 1081, for example, becomes law in its present form, it will in fact be the bill and the vehicle by which Congress authorizes the trans-Alaska pipeline. While it is true that S. 1081 will have other results also, we know, and so does everyone else, that the Alaska pipeline will be one of its immediate and primary results.

S. 1081, among other things, authorizes the Secretary, presumably the Secretary of Interior, although it is not so stated to grant, issue or renew rights-of-way over, upon or through the Federal lands for pipelines and other systems for the transportation of oil or natural gas and storage in terminal facilities in connection therewith, section 3(a).

These rights-of-way shall extend to the lands occupied by the pipe and its appurtenances, lands occupied by its maintenance facilities, and such adjacent lands as are necessary to protect the environment and to provide for access, operation, maintenance, or public safety. (Subsection C.)

Under certain conditions, the pipeline systems shall be constructed and operated as common carriers. The Secretary is further directed to grant nonexclusive and multiple use rights-of-way, whenever practical and consistent with certain environmental policies and engineering practice, and to require applicants for right-of-way to use them in common, where appropriate. (Section 4.)

The Secretary further shall specify the boundaries of each rightof-way, but only as precisely as is practical. Section 5 (a). He may authorize the use of such additional lands as he determines to be necessary for the construction, operation, maintenance or termination of the project, or for access thereto. (Section 5(a).)

The Secretary determines the duration of each right-of-way, section 5(b), and is apparently given full power to issue regulations and terms and conditions regarding such matters as extent, application, charges, location and construction, et cetera. (Section 5 (c).)

The Secretary shall issue regulations to protect the environment, section 5(d), and each right-of-way permit shall contain terms and conditions for environmental protection among other things, section 6, but again it is all up to the Secretary and what he deems necessary, section 6.

Many of the complex and complicating features of this legislation, as well as an analysis of the other bills, have been omitted in this brief analysis; but the thrust and substance is the same:

From henceforth, the Secretary of Interior has fundamentally a free hand to issue permits for pipelines such as the Alaska pipeline, without regard to any former statutes limiting the amount of rightof-way.

The present Secretary of Interior has already stated his intention and desire to grant a permit for the trans-Alaska pipeline. He has stated that he has felt that existing environmental regulations, already promulgated and required by his department, are sufficient. He has stated these things in the face of a rising tide of protests, well documented, about the enormous environmental damage that will be done if the pipeline is constructed in its present form.

Thus, the effect of this bill in its present form will be to permit the Secretary to do what he says he is going to do: to issue a permit for the Trans-Alaska pipeline. It will be up to him to set the regulations in terms of the permit, but he says he has already done this; even if he does it again, he will certainly issue the permit.

And further, in our judgment, it is incorrect to say that the Federal courts will be able to consider the pipeline issue on its environmental merits, once this legislation eliminates the alleged technicalities of the recent decision.

If this eventuality occurs, and the matter goes back into court, the court will be only able to consider a procedural matter; it will be only able to consider whether or not the Department of Interior has complied with certain procedures set forth and required by the National Environmental Policy Act. It will not ever be able to consider the pipeline on its merits.

I think Mr. Smith brought this out well during the last hearing. Thus we see the practical result of this legislation as authorizing the Alaska pipeline. That is why the pipeline should be a proper subject of discussion today, and if not, proper discussion of it should be permitted in some other form of Congress.

Vasts amounts of public land and coastline are involved in any decision which authorizes this pipeline. Other nations are involved, and they are very disturbed. Other alternatives exists to the present proposed route of the pipeline. They should all be given a full airing by Congress, and Congress should decide. And the Alaska pipeline issue should be decided on its own merits, rather than through the vehicle of some technical amendments to the present right-of-way laws, important as these may be.

It has been stated that there is an urgency to rush this right-of-way legislation through, because the recent Federal court decision on the pipeline allegedly has cast a cloud over all Federal rights-of-way, for all purposes. However, to the best of our knowedge, very few, if any grants of rights-of-way across Federal lands, other than the Alaska pipeline itself, have been or are likely to be challenged in the near future on the grounds of failure to comply with the terms of the Mineral Leasing Act of 1920.

And, of course, the court decision itself only dealt with that specific act and not with statutes or regulations authorizing rights-of-way for transmission lines, aqueducts, cow paths, or other facilities.

A recent check by our office with the Federal Power Commission revealed the information that, at least for the next half year or so, there appear to be no pipeline or other facilities about to be constructed which would require a larger right-of-way than presently permitted under law. Thus, it appears to us that there is no immediate

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