FINAL PHASE

ROADWAY DR. AUTOMATED TRAIN RIDING ON TOP
OF COMPLETED CA EMENT. INCL SERVICE-MAINTENANCE CREWS

On behalf of the companies collectively referred to as the Columbia Gas System, we are submitting herewith comments on Senate Bill 1081. This is in lieu of appearing before your Committee as previously requested.

A. COLUMBIA'S INTEREST.

The Columbia Gas System is an integrated natural
gas system serving directly or indirectly over 4 million
customers in the seven states of Maryland, Virginia, Ohio,
Kentucky, Pennsylvania, West Virginia, New York and the
District of Columbia. Currently the bulk of its gas
supply comes from the southwest and off-shore in the Gulf
of Mexico.

In order to establish a position in the gas reserves of Prudhoe Bay, Columbia made a committment to advance $200 Million to BP Oil Corporation (a subsidiary of Standard Oil of Ohio), such advance to be repaid out of the delivery and sale of crude oil from Prudhoe Bay. An advance of $60 Million on account of such commitment was made in 1971. Accordingly, Columbia has a financial interest in the early construction of the oil pipeline.

More important, however, is the need for gas from Alaska. As the Committee knows, the gas cannot be produced before oil is also produced. Furthermore, it is unrealistic to assume that any authorizations or financing of the gas pipeline from Alaska to the lower 48 states (a project exceeding an estimated $5 Billion) will be granted until the oil pipeline has been authorized and under construction.

B. NEED FOR NEW GAS RESERVES.

There is a misconception in this nation as to the present seriousness of the overall energy, and more particularly the gas supply, situation. Excluding the use of energy for transportation, gas supplies about 50% of the nation's energy. It would be extremely difficult, if not impossible, to convert any significant part of this load to other fuel sources--primarily because of the short supply of the other fuels and secondarily because of the cost and time to convert to other fuels.

Attached is data taken from a recent Report of the Federal Power Commission. Attention is directed to Chart 17, and the line marked 1971 Reserves. This indicates that the 62 reporting interstate pipelines which supply the bulk of gas service to the United States could deliver 13.7 trillion cubic feet in 1971 from existing reserves. This capability sharply declines. Note the sharp annual decline commencing with the seventh year (1978)--about 7-8% each year. Consequently, delay in building the Alaskan oil line with comparable delay in building the gas supply line (with an estimated capacity of 2 billion cubic feet per day or almost .75 Tcf annually) would immeasurably impair offsetting this sharp decline in available gas. While it won't solve the gas supply problem, it will ease it.

Any realistic appraisal indicates that it will not be possible, even under the very optimum conditions, to attach sufficient new reserves either in the form of domestic reserves, synthetic gas from reforming plants, imported LNG or gas from Alaska to maintain existing levels of gas supply