day in the United States alone, and about 22 million barrels per day on a worldwide basis. This will be a significant accomplishment when one realizes that total world petroleum consumption in 1960 was 22 million barrels daily. And, in the long run, our hopes must hinge on the successful commercialization of fusion energy.

"The cost and extent of such programs will be staggering. The National Petroleum Council has estimated that new investment in energy-producing facilities to achieve a high degree of self-sufficiency in the United States alone by 1985 will be $500 billion-before providing for any increase due to inflation. The Chase Manhattan Bank, based on its many years of worldwide energy expertise, has forecast world petroleum investment requirements considerably in excess of $1 trillion over the same period. The availability of capital will be only one of the hurdles in providing for these energy needs. The fabrication and supply of equipment, and the availability of skilled craftsmen and engineering talent will be challenges which must be overcome. To do so will require a planned and extensive move toward standardization of process designs and equipment, and the development of modular plant units which can be prefabricated to a large degree. Such technology will be needed throughout the world and will in itself become a commodity of commerce. The developing economies of the oil exporting nations will before long take advantage of nuclear power as the best means for providing for internal requirements for electric energy and as a means for extending their petroleum resources. Thus, while the oil importing countries are buying oil, the exporting countries can be acquiring advanced energy facilities to augment the base for their growing industrialization and standard of living."

Of course what we need more than anything else is a comprehensive Federal energy policy which I thought we were going to develop when S. Res. 45 was adopted more than four years ago.

But instead we have had countless days of hearings and volume after volume of hearing transcripts many of them duplicating other hearings but so far we have not even an interim report on what the Interior Committee has learned from these hearings.

One obvious result of depletion elimination and other legislation now pending has been a cutback by most oil companies in planned capital investment for 1975 and succeeding years.

It should have been obvious that an added tax bill of $2 billion would have to come from somewhere.

Those so-called obscene oil company profits of last year have shrunk considerably this year and, consequently, the companies' ability to plow back profits in exploration and development.

Last year saw the largest increase in oil company capital spending in 20 years and the largest increase in oil and gas drilling-a 17 percent increase in exploratory drilling. But now as some of us have warned for years, we are risking our national security by continuing to increase our dependence on foreign oil.

Last January, the Senate Finance Committee released a document entitled "Profitability of Selected Major Oil Company Operations." That Committee report didn't find oil company profits as obscene as the Chairman of the Interior Committee had. I would like to enter the Press Release of that report in the Record and offer the document itself to any member of this Subcommittee who might be interested in those findings which have since been updated with the 1974 profit figures of the 10 selected major oil companies that were studied.

It seems to me that not only are the oil companies well suited for the development of any and all energy resources but actually have an obligation to their stockholders. The whole idea of conversion to coal, nuclear, solar, wind and other energy resources is to replace oil and gas that is rapidly being exhausted by an energy-hungry world.

One oil company that got into the nuclear business found that the competition was as tough as it was in the oil business.

Testifying before the Interior Committee's special Subcommittee on Integrated Oil operations, B. R. Dorsey, Chairman of Gulf Oil Corporation said they “. found the competitive structure of the nuclear reactor business much more concentrated than that of the oil industry. We are competing against two dominant nuclear reactor suppliers. They have 75 percent of the market, an entrenched credibility with utility customers, great resources in design and manufacturing and large international marketing capabilities. In addition, Gulf is developing a competing technology-a more efficient reactor. We are considered a welcome ad

dition to this business. Referring in 1971 to Gulf's entry into the nuclear field, AEC Commissioner Ramey said: 'From the standpoint of effective competition, the advent of a large petroleum company, or any new outfit well endowed with technical and financial resources, could provide another force in the nuclear industry able to give the Big Two a run for their money.'"

Existing antitrust legislation and institutions, such as the FTC and the Department of Justice provide adequate safeguards to ensure the Nation's resources are developed in an efficient, competitive manner. In fact, these institutions on previous occasions have studied the entry of petroleum companies into the coal industry and have not found this action to be anticompetitive. For example, the Continental Oil-Consolidation Coal Company case was carefully scrutinized by the Department of Justice. In addition, a recent FTC Staff Report concluded: "The information reported in this study does not indicate that the petroleum company acquisitions of coal companies up to 1970 have had sufficient impact on energy production concentration to be considered anticompetitive. Consequently, this study does not provide any positive support for the proposal that petroleum companies be banned from acquiring coal or uranium companies; nor does it suggest that pertoleum companies be banned from acquiring coal or uranium reserves.'

Uranium provides a demonstration of how this in-place framework can be effectively used to provide alternate energy sources. About 95 percent of U.S. uranium reserves were formed in a geological setting similar to that of conventional oil-sedimentary formations. Atlantic Richfield's uranium exploration program has greatly benefited from the Company's accumulated oil and gas knowledge. Its knowledge of reservoir engineering and secondary recovery techniques have been combined to develop an in-situ process for uranium extraction. A 250,000 pound per year in-situ plant has been constructed in South Texas and is now being started up. This process, which is still under development, is likely to reduce the environmental problems of conventional mining and allow the development of resources which might otherwise have been too small to be commercial.

Companies who do not have the capital and profit base of the oil industry would find it extremely difficult to finance the early entry into new energy sources. A large strip mine on the order of 20 million tons per year can easily cost in excess of $150 million when the exploration, development and construction costs are taken into consideration. A 50,000 barrel per day oil shale complex is estimated to cost in excess of $800 million. How can a small or even medium-sized coal or uranium company be expected to generate the enormous sums of capital required to bring the larger energy projects to fruition?

PRESS RELEASE

January 13. 1975
COMMITTEE ON FINANCE,
U.S. SENATE.

The Senate Finance Committee today released a document entitled "Profitability of Selected Major Oil Company Operations," a comprehensive compilation and analysis of the profitability of operations of ten selected major integrated oil companies. The document is based on material submitted by these companies in response to a Committee questionnaire. A complete understanding of oil industry profits is essential in order to determine industry ability to generate the capital which will be required if the industry is to perform its role in Project Independence, and so that the Congress can make an informed judgment as to the kind of tax structure appropriate to the petroleum industry.

The ten selected companies, which hold about 75 percent of the assets of integrated oil companies in the United States, are Exxon, Texaco, Mobil, Gulf, Standard of California, Standard of Indiana, Shell, Phillips, Sun, and Standard of Ohio. The analysis being released today covers rates of return on shareholders' investment, net income, and overall effective tax rates for these companies for the years 1964-1973, and for the first time sets forth each company's profits on U.S. operations. For example, the study shows that on U.S. operations for 1973 the weighted average rate of return was 11.3% while on foreign operations it was 20.4%. This compares with the weighted return of approximately 12.8% realized by all U.S. manufacturing companies for 1973, based on the figures reported in the Quarterly Financial Report of the Federal Trade Commission for the fourth quarter of 1973.

This analysis confirms earlier testimony that oil company profits on U.S. operations for 1973 were less than the national average for all manufacturing

companies, and that the principal source of the increase in oil company profits for
1973 was the increase in profits from foreign operations.

The analysis also indicates that in 1973 the ten selected companies paid an effec-
tive tax rate on their U.S. operations, including Federal, State and local taxes,
other than excise taxes, of 42.9%.

This analysis released today is a part of the Committee's continuing study of
oil companies' profitability, beginning with Committee hearings held in Jan-
uary and February 1974, and which includes a compilation of data released by the
Committee on February 12, 1974. These reports released on February 12, 1974 and
today were derived from data submitted at the hearings and from reports issued
by the Department of Commerce, the Federal Trade Commission, the Securities
and Exchange Commission, the First National City Bank of New York and from
the responses of oil companies to a Committee questionnaire. The analysis re-
leased today was prepared with the assistance of the Economics Division of the
Congressional Research Service, a part of the Library of Congress. This analysis,
which must be updated to include the results of 1974 oil company operations as
they become available, will be of considerable assistance to the Committee when
it considers tax legislation affecting the petroleum industry.

Copies of the report are available in the Senate Finance Committee, Room 2227,
Dirksen Senate Office Building. Written requests should be accompanied by a re-
turn address label.

CONCENTRATION OF FEDERAL COAL LEASEHOLDS-TOP 20 LESSEES, U.S. TOTALS

CONCENTRATION OF FEDERAL COAL LEASEHOLDS-TOP 5 AND 10 LESSEES, BY STATE

CONCENTRATION OF FEDERAL COAL LEASEHOLDS-TOP 5 AND 10 LESSEES, BY STATE-Continued

DEAR JIM: I guess we were both right about the percentage of Arab oil imports. The enclosed FEA report shows that the percentage of Arab oil for all of 1974 was 12.7 while the percentage for the first quarter of 1975 was 22.7.

Sincerely,

Enclosure.

CLIFFORD P. HANSEN, U.S.S.