[U.S. Department of Energy Annual Report to Congress 1978]
[From the U.S. Government Publishing Office, www.gpo.gov]

US. Department of Energy
Annual Report to Congress
1978
DOE/PE-0014
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DOE/PE-0014
Annual Report to Congress
1978
U.S. Department of Energy Office of Policy and Evaluation Washington, D.C. 20585
FOR SALE BY THE SUPERINTENDENT OF DOCUMENTS U.S. GOVERNMENT PRINTING OFFICE WASHINGTON, D.C. 20402
STOCK NO. 061-000-00321-5
All references to years refer to fiscal years unless otherwise noted.
Report contains material covering fiscal year 1978 (October 1977 through September 1978 inclusive). It covers activities of all elements of the Department of Energy except the independent Federal Energy Regulatory Commission which issues its own Annual Report.
Preface
This is the first Annual Report of the U.S. Department of Energy, and covers fiscal year 1978 (October 1, 1977-September 30, 1978). It is supplemented by two reports, National Energy Plan II and Nuclear Non-Proliferation, and two annexes listed on page xii.
iii
[Statement by the Secretary of Energy]
Department of Energy
Washington, D.C. 20585
April 27, 1979
Dear Mr. President:
I am pleased to submit the Annual Report of the Department of Energy, in accordance with section 657 of the Department of Energy Organization Act (Public Law 95-91).
The nation’s demand for energy is increasing, while its supplies of oil and natural gas are diminishing. As these powerful trends have collided in recent years, imports have risen rapidly to fill the gap. Recent events have underscored the cost and vulnerability of such imports. And, unless strong action is taken now and steadfastly sustained, imports-and their costs-will rise rapidly in the future, implying disastrous consequences for the nation’s economy and political security.
The goals of the Department of Energy are equally clear. They are to provide you, the Congress, and the people of the United States with the facts about the energy problem, to provide leadership in seeking solutions, and to carry out the government’s programs and policies in the national interest.
In our first year, the Department focused much of its attention on two priorities: helping to develop and secure enactment of legislation incorporating a comprehensive energy policy for the nation, and establishing a coherent management of the Federal government’s energy activities.
We have made significant strides in both areas. But much remains to be done.
The first National Energy Plan, which you transmitted to the Congress in April of 1977, was the first major effort to deal comprehensively with the broad range of complex energy issues facing the nation. Although it did not include all the measures you proposed, congressional passage of the National Energy Act last fall represented an important first step toward a rational and comprehensive energy policy for the nation.
We are proceeding aggressively to implement that legislation.
The second National Energy Plan, which embodies the initiatives you proposed to the nation on April 5, forms a part of this report. It provides the tools necessary to deal with the remaining issues.
Securing the necessary additional legislation and implementing this policy will require great energy and organizational strength. The advances in energy technology which we will have to foster, the programs which we will have to administer, are substantial.
Until the formation of the Department of Energy, the plethora of Federal energy programs mirrored the national confusion on the energy problem. Diverse organizations, with different legislative mandates and constituencies, pulled in different directions.
The creation of the new department afforded, for the first time, an opportunity to bring together the development of energy policy and the implementation of regulatory, research, and operational responsibilities in a consistent way.
V
The task of forging a new departmental entity from such disparate elements has not been undertaken often. It is not easy. And it would be less than candid to suggest that the task is complete in the case of the Department of Energy. The task has been made doubly difficult by the fact that it is being performed at the same time that we have been overhauling the entire structure of national energy policy.
But, in fact, DOE exists and is working. The experience of the past year has shown the fundamental organizational concepts to be sound. New management processes have been put in place and are beginning to work, often quite well.
Though arduous, the Department’s first year has been encouraging. It is possible to derive satisfaction from the major progress in energy policy embodied in the National Energy Act. The second National Energy Plan will represent further positive steps toward our common goal. Finally, the Department is continuing to develop strength as an effective agency for managing the Federal portion of the nation’s energy activities.
Respectfully,
James R. Schlesinger
Secretary
The President
The White House
Washington, D.C. 20500
vi
Table of Contents
Page
Preface............................................... iii
Statement by the Secretary of Energy................. v
Chapter
1.	Energy Legislation and the Organization of DOE 1
The National Energy Plan........................... 1
Creation of the Department......................... 1
Major Provisions of the DOE Organization Act ...	2
Office of Secretary and Departmental Organization ..................................... 2
National Energy Act................................ 4
Introduction..................................... 4
Energy conservation.............................. 4
Coal conservation................................ 4
Public utility regulation........................ 5
Natural gas pricing.............................. 5
Energy taxes and tax credits..................... 5
Implementing the Act............................. 5
2.	Support Operations	7
Introduction ...................................... 7
Office of Policy and Evaluation.................... 7
Introduction..................................... 7
Functions........................................ 7
Projects ........................................ 8
Directorate of Administration...................... 8
Directorate of Procurement and Contracts Management ...................................... 11
Controller ....................................... 11
General Counsel................................... 11
Inspector General................................. 14
Office of Equal Opportunity....................... 14
Office of Hearings and Appeals.................... 18
Board of Contract Appeals....................... 18
Executive Secretariat............................. 18
Field structure................................... 21
Field offices and laboratories.................. 21
Regional offices................................ 21
3.	Energy Research	25
Introduction ..................................... 25
Overview ....................................... 25
Synopsis of functions, programs, and progress .	25
Energy R&D Policy, Planning, and Coordination .	28
National R&D planning........................... 28
R&D strategies.................................. 29
Coordination of DOE commercialization activities ..................................... 30
International R&D planning...................... 31
International Nuclear Fuel Cycle Evaluation ...	31
Field Operations Management....................... 32
Introduction.................................... 32
Laboratory management........................... 32
Program implementation.......................... 33
Work package proposal and authorization system.......................................... 33
University relations............................ 33
Special purpose university programs............. 34
Basic Energy Sciences............................. 35
Chapter	Page
Introduction................................... 35
Nuclear science................................ 37
Materials sciences............................. 38
Chemical sciences.............................    39
Engineering, mathematical,	and geosciences ...	40
Advanced energy projects....................... 41
Biological energy research..................... 41
High-energy and Nuclear Physics.................. 42
Introduction................................... 42
High-energy physics............................ 43
Nuclear physics................................ 45
Advanced Technology Programs..................... 47
Introduction................................... 47
Division of Advanced Technology Projects ....	47
Satellite Power System......................... 47
4.	Energy Technology	49
Introduction .................................... 49
Fossil Energy Program............................ 52
Introduction................................... 52
Coal .......................................... 52
Petroleum ....................................   56
Natural Gas.................................... 57
Solar, Geothermal, Electric and Storage Systems	58
Introduction................................... 58
Solar technology............................... 58
Geothermal energy.............................. 60
Electric energy systems........................ 60
Energy storage systems......................... 61
Fission Energy..................................   61
Introduction................................... 61
Converter reactor systems...................... 62
Breeder reactor systems........................ 62
Special nuclear systems........................ 63
Naval reactors development..................... 63
Nuclear Waste Management......................... 64
Defense waste management....................... 64
Waste Isolation Pilot Plant.................... 65
Decontamination and decommissioning........	65
Transportation................................. 65
Commercial waste management.................... 65
Spent fuel storage............................. 66
Magnetic Fusion.................................. 66
Introduction................................... 66
Fusion status.................................. 66
5.	Resource Applications	69
Introduction .................................... 69
Federal Power Marketing Administrations......	71
Bonneville Power Administration................ 71
Southwestern Power Administration.............. 71
Southeastern Power Administration.............. 72
Alaska Power Administration.................... 72
Western Area Power Administration.............. 72
Naval Petroleum and Oil Shale Reserves.......	72
Naval petroleum reserves....................... 72
Naval oil shale reserves....................... 73
Uranium Resource Assessment...................... 73
vii
Chapter	Page
Uranium Enrichment................................ 74
Gaseous diffusion operations................. ' 74
Gas centrifuge plant............................. 74
Leasing Programs.................................. 75
Coal Loan Guarantee Program....................... 75
Geothermal loan guarantee program................. 75
Strategic Petroleum Reserve....................... 76
Storage facilities............................... 76
Status of the sites.............................. 76
Oil acquisition and storage...................... 77
6.	Conservation and Solar Applications	79
Introduction ..................................... 79
Overview ........................................ 79
Industrial applications and commercialization ..	81
Buildings and Community Systems................... 83
Development and demonstration of new technology ...................................... 83
Mandatory, cooperative, and voluntary conservation................................... 84
Transportation Energy Conservation................ 86
Development and demonstration of new technology ...................................... 86
Cooperative and voluntary conservation and recycling activities........................... 88
Solar Applications................................ 88
Introduction..................................... 88
Development and demonstration of new technology ...................................... 89
Cooperative and voluntary conservation and recycling activities........................... 92
State and Local Conservation Programs.........	92
Introduction..................................... 92
Cooperative and voluntary conservation and recycling.................................... 93
Cross Sectoral Programs and Program Support ..	96
Cooperative and voluntary conservation and recycling...................................... 96
Planning, policy, and evaluation................ 97
Bu	dget and administration.................... 97
7.	Environmental Impacts and Control
Technologies	99
Introduction ..................................... 99
Technology Impacts................................ 99
Objective ....................................... 99
Policy analysis................................. 106
Technology assessment........................... 106
Environmental impacts........................... 106
Regional assessment............................. 107
Environmental Compliance and Overview.........	107
Objective ...................................... 107
National Environmental Policy Act............... 107
Operational and environmental safety.........	107
Environmental control engineering............... 108
Health and Environmental Research................ 109
Objective ...................................... 109
Human health studies............................ 109
Health effects research......................... 110
Ecological research............................. Ill
Pollutant characterization and safety research..	112
Chapter	Page
Carbon dioxide and climate research............. 112
Staff Support Offices............................. 113
Program coordination............................ 113
Management support.............................. 113
Environmental, Health, and Safety Activities of other DOE Offices............................ 113
Environmental, Health and Safety Agreements with Other Federal Agencies..................... 115
Conclusion........................................ 115
8.	Economic Regulation	117
Introduction ..................................... 117
Organizational Structure.......................... 118
Special Counsel for Compliance.................. 118
Enforcement .................................... 118
Regulations and emergency planning.............. 118
Fuels regulation................................ 120
Utility systems................................. 120
Accomplishments .................................. 121
Compliance...................................... 121
Emergency planning and management............	122
Regulatory development.......................... 123
Utility, intervention and natural gas programs .	124
Other ongoing programs.......................... 124
9.	Intergovernmental and Institutional Relations	129
Introduction ..................................... 129
Congressional Affairs............................. 129
Providing information to Congress............... 129
DOE witnesses at hearings....................... 129
Other activities................................ 131
Relationships with State and Local Governments .	131
Introduction.................................... 131
Assistance to cities............................ 131
Assistance to communities impacted by energy development.............................. 131
Energy Extension Service........................ 132
Activities of other offices concerned with state and local governments..............'...	132
Energy and the Consumer........................... 132
Identification and elimination of institutional barriers...................................... 132
Dialogue and information dissemination......	132
Domestic policy review of solar energy......	133
Other activities................................ 133
Education, Business and Labor..................... 133
Education programs.............................. 133
Business liaison and the inventions program ...	133
Labor and manpower affairs...................... 134
Indian Affairs.................................... 134
Communication with the Public..................... 134
Technical Information Services.................... 135
10.	International Affairs	137
Introduction ..................................... 137
Office of International Policy Development ....	137
Office of International Trade and Resources ...	137
Office of International Programs................ 137
Office of International Energy Research......	139
Support operations.............................  139
viii
Chapter	Page
Principal Activities............................. 139
Policy development and coordination............ 139
Nuclear programs............................... 140
Oil industry operations........................ 140
Oil supply contingency planning................ 140
Cooperation in energy R&D...................... 141
Cooperation with developing countries........	141
Program support activities..................... 142
Major Planned Activities......................... 142
11.	Defense Programs	143
Introduction .................................... 143
Nuclear Weapons Programs......................... 143
Objectives..................................... 143
Achievements .................................. 145
Inertial Confinement Fusion...................... 146
Objectives..................................... 146
Achievements .................................. 146
Nuclear Materials Safeguards and Security......	147
Objectives..................................... 147
Chapter	Page
Achievements .................................. 147
International Security Affairs................... 148
Objectives..................................... 148
Achievements .................................. 148
Classification and Declassification Program....	148
Purpose ....................................... 148
Achievements .................................. 149
Nuclear Materials Production Program............. 149
Objectives..................................... 149
Achievements .................................. 150
12.	Energy Information	151
Introduction .................................... 151
Energy Data Acquisition and Interpretation.....	153
Applied Analysis................................. 153
Information Validation........................... 154
Program Support.................................. 154
Conclusion....................................... 155
Appendices
Appendix
A.	Foreign Direct Investments in U.S. Energy Sources and Supplies	A-l
Introduction ..................................... A-l
The Petroleum and Natural Gas Industries.......	A-2
Summary of foreign investment activity........	A-3
Activities of foreign-controlled companies....	A-4
The Coal Industry................................. A-8
Nuclear Fuel..................................... Aril
Uranium exploration, mining and milling....... A-ll
Nuclear reactors................................ A-ll
Alternative Energy Sources....................... A-ll
B.	Exports of Energy Resources by Foreign
Companies	B-l
Introduction...................................... B-l
The Export of Crude Oil and Refined Oil Products.......................................... B-l
Identification of exporters...................... B-l
Export controls.................................. B-l
Crude oil........................................ B-2
Refined products................................. B-2
Export of Natural Gas............................. B-2
Identification of exporters...................... B-2
Export controls.................................. B-3
Export of Coal.................................... B-3
Identification of exporters...................... B-3
Appendix
Export of Uranium............................... B-4
Identification of exporters................... B-4
Export controls............................... B-4
C.	Major recipients of DOE funding	C-l
D.	Actions Taken Regarding Disclosure of Energy
Assets by DOE Employees	D-l
Introduction ................................... D-l
Section 603 .................................... D-l
Other sections of the Act....................... D-2
E.	Financial Assistance Programs for Alternative Fuel Demonstration Facilities	E-l
Introduction .................................. E-l
Program Development............................ E-2
Potential Effectiveness of the Section 19 Program........................................ E-2
DOE’s Loan Guarantee Proposal and Program Plans.................................. E-3
The Generic Loan Guarantee Proposal............. E-3
Regulation Development.......................... E-3
Contingency Plans............................... E-3
F.	1978 Budget Summary	F-l
Introduction.................................... F-l
ix
List of Tables
Table No.	Title	Page
1.	Location of centers of basic energy sciences activity............................................................. 36
2.	Location of centers of high-energy physics activity............................................................... 44
3.	Location of centers of nuclear physics activity................................................................... 46
4.	Oil in storage at end of 1978 .................................................................................... 77
5.	State energy conservation program grant awards -1978 ............................................................. 93
6.	Weatherization assistance grant awards-1978 ...................................................................... 95
7.	Environment, health and safety laws and regulations governing DOE activities..................................... 100
8.	Structure of environmental programs.............................................................................. 105
9.	Estimatednumberof environment, health and safety projects of Federal agencies.................................... 116
10.	Office of Fuels Regulation-1978 activities....................................................................... 125
11.	Environmental impact statements, environmental assessments, and other reports issued in 1978 .................... 126
12.	Environmental decisions and orders............................................................................... 127
13.	Pamphlets and posters released through Public Affairs............................................................ 134
14.	Volume of technical information activity......................................................................... 135
A-l.	Additions to foreign direct investment in U.S. petroleum......................................................... A-3
A-2.	Foreign direct investment in petroleum and all U.S. industries and U.S. direct investment in foreign industries .	A-3
A-3.	Foreign sources of direct investment in U.S. petroleum -1975-76 ................................................. A-4
A-4.	U.S. petroleum and natural gas production by foreign-controlled companies -1975-77 .............................. A-5
A-5.	U.S. petroleum and natural gas leases and wells -1975-76 ........................................................ A-5
A-6.	U.S. refinery crude runs of foreign-controlled companies -1975-77 ............................................... A-6
A-7.	U.S. gasoline sales by foreign-controlled companies-1975-76 ..................................................... A-7
A-8.	Foreign activity in the U.S. petroleum and natural gas industries -1976-77 ...................................... A-9
A-9.	Foreign activity in the U.S. coal industry-1976-77 ............................................................. A-10
A-10.	Foreign activity in the U.S. nuclear fuel cycle -1976-77 ....................................................... A-10
A-ll.	Foreign activity in U.S. alternative energy sources-1976-77 .................................................... A-12
B-l.	Exports of refined petroleum products and crude oil - January-September 1978 .................................... B-3
C-l.	Procurement and financial assistance in 1978 .................................................................... C-l
C-2.	Contractors awarded $10 million and over during 1978 ............................................................ C-2
F-l.	Budget summary by mission........................................................................................ p.2
F-2.	Energy supply-research and technology development................................................................ F-2
F-3.	Energy supply-production, demonstration and distribution......................................................... F-2
F-4.	Conservation..................................................................................................... F-2
F-5.	Regulation....................................................................................................... F-2
F-6.	Emergency preparedness........................................................................................... F.3
F-7.	Energy information............................................................................................... F.3
F-8.	Environment...................................................................................................... F.3
F-9.	Basic sciences................................................................................................... F-3
F-10.	Atomic energy defense activities................................................................................. F-3
F-ll.	Policy and management............................................................................................ F.3
x
List of Figures
Figure No.	Title	Page
1.	Organization of the Department of Energy....................................................................... 3
2.	Organization of the Office of Policy and Evaluation............................................................ 9
3.	Organization of the Directorate of Administration............................................................. 10
4.	Organization of the Directorate of Procurement and Contracts Management....................................... 12
5.	Organization of the Office of the Controller.................................................................. 13
6.	Organization of the Office of the General Counsel............................................................. 15
7.	Organization of the Office of the Inspector General........................................................... 16
8.	Organization of the Office of Equal Opportunity............................................................... 17
9.	Organization of the Office of Hearings and Appeals............................................................ 19
10.	Organization of the Office of the Executive Secretariat....................................................... 20
11.	Regional offices of the U.S. Department of E nergy............................................................ 22
12.	Organization of the Office of Energy Research................................................................. 26
13.	Range of energy technology programs........................................................................... 50
14.	Organization of the Office of Energy Technology............................................................... 51
15.	Organization of the Office of Resource Applications........................................................... 70
16.	Organization of the Office of Conservation and Solar	Applications......................................... 80
17.	Organization of the Office of Environment.................................................................... 104
18.	Organization of the Economic Regulatory Administration....................................................... 119
19.	Organization of the Office of Intergovernmental and	Institutional Relations.................................. 130
20.	Organization of the Office of International Affairs.......................................................... 138
21.	Organization of the Office of Defense Programs............................................................... 144
22.	Organization of the Energy Information Administration........................................................ 152
xi
Annexes to Annual Report
1. Comprehensive Program and Plan for Federal Energy Education, Extension, and Information Activities. (This report, DOE/CS-0071, is available from the Superintendent of Documents, Government Printing Office, Washington, D.C. 20402.)
2. Automotive Propulsion Research and Development Act of 1978. (This report, DOE/CS-0069, is available upon request from the Department of Energy, Washington, D.C. 20585.)
xii
Chapter 1
Energy Legislation and the Organization of DOE
The National Energy Plan
Within 3 months of assuming office, President Carter submitted his National Energy Plan (NEP) to the Congress and to the Nation.
The NEP, along with accompanying messages to the Congress, detailed five recommended approaches to the energy dilemma:
1.	Conservation and fuel efficiency.
2.	Rational pricing and production policies.
3.	Reasonable certainty and stability in Government policies.
4.	Substitution of abundant energy resources for those in short supply.
5.	Development of nonconventional technologies for the future.
The President stated that a combination of these approaches would help realize three overriding objectives:
1.	The immediate objective of reducing United States’ dependence on foreign oil and consequent vulnerability to supply interruptions.
2.	The medium-term objective of keeping United States’ imports sufficiently low to weather the period when world oil production approaches its capacity limitations.
3.	The long-term objective of having renewable and essentially inexhaustible sources of energy for sustained economic growth.
Creation of the Department
The President also believed-and the Congress agreed-that the responsibility for energy policy, regulation and research, development and demonstration (RD&D) was still fragmented among too many departments and agencies. Consequently, on August 4, 1977, the Department of Energy Organization Act (DOE Act, Public Law 95-91) was passed, establishing a new Department of Energy. DOE was officially activated by Executive Order dated October 1, 1977. Assuming the energy-related functions hitherto vested in many Federal agencies, the Department provided a new and sharpened sense of coherence, direction and focus to the U.S. Government’s role in meeting the challenge of creating a new and more secure energy base for the future.
1
Major Provisions of the DOE Organization Act
The Act provided for a Secretary, a General Counsel, eight Assistant Secretaries, an Inspector General, and a Director of Energy Research. In addition, it called for the creation of two administrations within the Department: an Economic Regulatory Administration through which DOE was to administer programs affecting the pricing, allocation, and importation of oil and natural gas; and an Energy Information Administration responsible for collecting, validating, analyzing, and disseminating energy information. These organizations are headed by administrators whose functions are defined and delegated by the Secretary of Energy.
The Act also established the Federal Energy Regulatory Commission (FERC). Though located within the Department of Energy structure, FERC is an independent agency. The Commission consists of five members, one of whom is designated as Chairman by the President.
The Secretary established a variety of positions to carry out staff functions. These included an Assistant Secretary of Policy and Evaluation, an Executive Secretariat, a Director of Administration, a Director of Procurement and Contracts Management, a Controller, a Director of Hearings and Appeals, and such other entities as the Office of Equal Opportunity and the Board of Contract Appeals. Finally, a field structure was established consisting of ten regional offices each headed by a regional representative of the Secretary, plus field operations offices and laboratories.
The principal units and functions transferred to DOE were the:
Federal Energy Administration: All functions.1 These included oil pricing and allocation, conservation, coal use, strategic petroleum reserves, energy information, and resource development.
Federal Power Commission: All functions. These included natural gas regulation, interstate wholesale electric rate setting, and hydroelectric licensing.
Energy Research and Development Administration: All functions. These included research and development in fossil fuels, nuclear fusion, solar and geothermal sources; uranium enrichment and
1 Some minor functions were transferred to the Department of Transportation. See Sec. 310 of the DOE Act, P.L. 95-91.
production; military applications and safeguards; and conservation, environment and health research.
Department of Interior: Authority over the Southeastern, Southwestern, Alaska, and Bonneville Power Administrations, and the power marketing functions of the Bureau of Reclamation. Also included was the authority to set economic terms for leasing public land for energy development (such as the outer continental shelf), and the authority, formerly held by the Bureau of Mines, for gathering data on fuel supplies, and research and development in mining technology.
Navy Department: Management of naval oil and oil shale reserves.
Interstate Commerce Commission: Functions related to transportation of oil by pipeline, including pipeline valuation and rate setting.
Department of Commerce: Functions related to industrial energy conservation.
Department of Housing and Urban Development: Authority to set energy conservation standards for new buildings.
Office of Secretary and Departmental Organization
The Office of the Secretary consists of the three principals: the Secretary of Energy, the Deputy Secretary, and the Under Secretary. The Secretary directs and supervises the administration of the Department, decides major energy policy issues, acts as the principal energy advisor to the President, and speaks for the Department. The Deputy Secretary is responsible for administrative matters of Department-wide scope, deals with price regulation, allocation and import programs for oil and gas, and oversees the Energy Information Administration. The Under Secretary manages departmental spending, is responsible for policy guidance on conservation matters, and chairs the Department’s Field and Laboratory Coordination Council. A special assistant provides liaison among these three principal officers and the White House, and performs other duties as assigned.
The major departmental organizations reporting to the Secretary are shown in figure 1.
Part of the functional concept of the DOE organization is the centralization of both decisionmaking and management of staff support, and
2
1
OFFICE OF
THE SECRETARY 		----------- (SE) 			 FEDERAL ENERGY	OFFICE OF	iMcpcp-rnp	ppiupdai---pyfpiitivf	OFFICE OF	rniuiMiTTFre
REGULATORY	HEARINGS	INSPECTOR	GENERAL	EXECUTIVE	pnnai	COMMITTEES
COMMISION	AND APPEALS	GENERAL	COUNSEL	SECRETARIAT	OPPORTUNITY	& BOARDS
(FERC)	(HG)	f
I
r
Chapter 8
Economic Regulation
Introduction
The Economic Regulatory Administration7 was established pursuant to Section 206 of the Department of Energy Organization Act. During 1978, it was responsible for establishing and implementing programs authorized by the Emergency Petroleum Allocation Act (EPAA) of 1973, the Energy Supply and Environmental Coordination Act (ESECA) of 1974, the Energy Policy and Conservation Act (EPCA), the Energy Conservation and Production Act (EPCA, the Federal Power Act (FPA), the Natural Gas Act, and other related legislation and Presidential Orders.
During 1978, in carrying out the authorities which were delegated to the Administrator of ERA by the Secretary, ERA established certain priorities to serve the national interest: (1) to eliminate unnecessary regulations; (2) to simplify cumbersome regulations placing an unnecessary burden on industry and the public; (3) to adopt regulations that are consistent with current market conditions and that protect the public interest; (4) to enforce existing Federal energy laws firmly and fairly; (5) to regulate the energy sector to fulfill Congressional mandates; (6) to assure the availability of petroleum products at fair and equitable
prices; (7) to plan for energy emergencies that might interrupt or diminish energy supplies; (8) to develop regulations that provide incentives for the development of synthetic fuels and alternate energy sources; and (9) to support and advocate actions by the utility industry to conserve energy and improve power generating efficiency through its intervention authorities.
The ERA has departmental responsibility for oil pricing, allocation and import programs, enforcement programs, regulatory programs designed to enhance energy conservation, and the modernization of electric utility rate structures to promote efficient use of facilities and equities to consumers. ERA also administers controls on the importation and exportation of natural gas, intervenes in proceedings before the Federal energy regulatory bodies, establishes priorities for curtailment of natural gas, and plans for and oversees emergency energy allocations during periods of shortage.
ERA obligated $83 million for the year 1978 and had an authorized strength of 1,921 employees. During the year, ERA used appropriated funds to
7 This chapter discusses the regulatory activities of the Economic Regulatory Administration exclusive of the activities of the Federal Energy Regulatory Commission.
117
300-288 0-79-9
enforce compliance with the law, to seek out white collar crime and seek relinquishment of large overcharges; to help plan for and handle emergencies that could disrupt the reliability or adequacy of energy supplies; to eliminate unnecessary and develop more effective regulations; and to influence the evolution of utility and industrial practices that make more efficient use of energy resources and encourage conservation.
Organizational Structure
The ERA is comprised of five major organizational components (figure 18): the Office of Special Counsel for Compliance; the Office of Enforcement; the Office of Regulations and Emergency Planning; the Office of Fuels Regulations; and the Office of Utility Systems. These offices are supported by the Office of Operations, Planning and Evaluation and the Office of Public Information.
Special Counsel for Compliance
In May of 1977, a Task Force on Compliance was commissioned, and became known as the Sporkin Task Force. Its purpose: to study the Federal Energy Administration’s organization, methods, and priorities for enforcement of the oil price control laws. A principal organizational recommendation of the Task Force was the creation of a distinct, intensified effort to complete comprehensive audits of prices charged by the major oil refiners (which together constitute 88 percent of refiner capacity, 73 percent of crude oil production, and 72 percent of natural gas liquids processing within the United States), and take appropriate enforcement actions. The Task Force made its report in July of 1977. The FEA Administrator committed the agency to the accomplishment of this and other recommendations of the Task Force, and created the Office of Special Counsel for Compliance.
The Office of Special Counsel for Compliance was activated on December 4, 1977, with responsibility for determining the compliance behavior of the 34 largest refiners, crude oil production, natural gas liquids processing, entitlements, imports and other aspects of activity as they relate to the petroleum pricing and allocation regulations. The Special Counsel is mandated to complete audits by September 1980 and to take retroactive enforcement
actions for the period November 1973 through at least December 1976.
Enforcement
The principal responsibility of the Office of Enforcement is the enforcement of the pricing and allocation regulations issued under the Emergency Petroleum Allocation Act. In addition, this office performs a variety of data gathering and data verification functions supported by the Energy Information Administration relating to the enforcement program. While the Office of Special Counsel exists the activities of the Office of Enforcement exclude the 34 largest refiners.
The mandate of the Office of Enforcement extends from large, sophisticated companies to very small businesses. In some industry segments, such as independent natural gas liquid processors, the number of firms is no more than 500; in others, such as resellers of product, there are over 15,000 firms. As a consequence of the broad and diverse mandate, the Office of Enforcement engages in a high volume of cases.
By rigorously performing its enforcement function, the office seeks not only to deter violations of current controls on crude oil and those products still under price controls, but also to build sufficient credibility to deter future violations if controls on currently uncontrolled products were to be reimposed. Because such reimposition would be likely to occur during a period of economic and social stress when a shortage of petroleum products had arisen, this second aspect of deterrence is an essential element of Enforcement’s mission.
Regulations and emergency planning
During 1978, this office was responsible for identifying and acting on the need to develop, monitor, evaluate, and assess the impact of regulations concerning the price, allocation and importation of crude oil, refined petroleum products and natural gas liquids; programs relating to the production, transportation, and distribution of natural gas and supplemental natural gas supplies, such as liquefied natural gas (LNG) and synthetic natural gas (SNG); and programs relating to mandatory coal conversion under the ESECA.
The office also has responsibility for developing
118
it
Figure 18.-Organization of the Economic Regulatory Administration.
OFFICE OF THE SPECIAL __	OFFICE OF THE
COUNSEL FOR COMPLIANCE	ADMINISTRATOR
__________ OFFICE OF OPERATIONS,
PLANNING AND EVALUATION
OFFICE OF	OFFICE OF REGULATIONS AND	OFFICE OF	OFFICE OF
ENFORCEMENT	EMERGENCY PLANNING	FUELS REGULATION	UTILITY SYSTEMS
and implementing to the point of readiness, comprehensive energy shortage contingency plans for events such as the oil embargo of 1973. In addition, it developed plans for use in short-term national/ regional energy emergencies, such as those occurring during severe weather conditions, work stoppages and electrical blackouts.
Fuels regulation
The Office of Fuels Regulation was responsible during the year for administering the ESECA Coal Conversion Program, initiating implementation plans for the proposed Powerplant and Industrial Fuel Use Act of 1978 (FUA), assisting in the preparation of regulations for implementing the FUA, as well as price and allocation programs for crude oil and petroleum products, and allocation programs for natural gas liquids and natural gas.
Under the authority of ESECA, this office issues utility and industrial Prohibition Orders prohibiting the continued use of oil and gas, and utility and industrial construction orders requiring the installation of combustor units which are capable of burning coal. The implementation of these orders can potentially yield significant oil and gas savings. With the enactment of the FUA, potential petroleum and natural gas savings are even greater.
The crude oil price and allocation programs administered by this office include: (1) the Canadian Crude Oil Allocation Program, which allocates scarce imported Canadian crude oil to priority classes of refiners; (2) the Crude Oil Buy/Sell Program, which ensures the availability of crude oil to small refiners which have insufficient crude oil supplies of their own; (3) the Entitlement Program, which roughly equalizes crude oil acquisition costs to domestic refiners and also provides entitlements benefits to East Coast importers of residual fuel oil as well as Puerto Rican importers of naptha (this program provides additional benefits for small refiners and refiners buying heavy California crude oil); (4) the Transfer Pricing Program, which determines legal selling prices for imported crude oil purchased from refiners’ foreign affiliates; (5) the First Purchaser Program, which monitors the actual first sale prices of crude oil to ensure composite prices established by the EPCA and ECPA are not exceeded; (6) the Mandatory Oil Imports Program, which issues licenses and collects fees for crude oil and product imports; (7) the Crude Oil Resale Program, which monitors the prices
charged by firms engaged in the purchase, gathering, transporting, selling, exchanging, and brokering of crude oil between the lease and the refiner; (8) the Enhanced Oil Recovery Program, which approves the sale of incremental crude oil from certain approved projects at free market prices; (9) the Refinery Yield Program, which identifier problems in product supply/demand balances and recommends solutions making changes in product yields by U.S. refiners; and (10) the Refinery Certification Program, which certifies refining capacity for entry into crude oil allocation programs and for relief from crude oil import fees.
This office also allocates certain controlled petroleum products and natural gas products; retains the capability to reimpose price allocation controls in the event of a shortage; evaluates applications for exports or imports of natural gas, including LNG. This office has assumed certain responsibilities which were previously under the jurisdiction of the former Federal Power Commission to review applications to import gas either overland by pipeline or, as in the case of LNG, by sea.
Utility systems
Utility Systems is responsible for DOE programs in the areas of electric utility system planning and coordination, system reliability, strategic emergency planning and response, electric and gas utility rate structure, technical and financial assistance to state regulatory agencies, and all DOE interventions before the Federal Energy Regulatory Commission (FERC), other Federal agencies and state regulatory agencies.
The office also administers provisions of the Federal Power Act delegated by the Secretary to the ERA. Such provisions relate to long-range utility planning, system coordination and interconnections designed to assure the reliability of bulk power supply, emergency interconnections and energy transfers, and selected cost-related investigations.
In addition, the Office of Utility Systems undertakes and supports studies of innovative rate structures for electric and gas utilities. It performs studies of regulatory and institutional constraints to the introduction of unconventional source technologies such as solar and cogeneration to provide a technical and empirical basis for increased efficiency in utility system structure and opera
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tions, and energy supply adequacy. The office also provides technical and financial assistance to state regulatory agencies to upgrade their technical expertise and develop needed staff capabilities in the areas of electric and gas utility regulation.
The Office of Utility Systems is comprised of three divisions: Utility Regulatory Assistance, Interventions, and Power Supply and Reliability. Working through local public agencies, the division of Utility Regulatory Assistance conducts rate design and load management experiments, supports implementation of innovative rates and the establishment of state consumer offices, provides technical assistance to state PUC’s through in-house resources and the National Regulatory Research Institute, and monitors developments in rate design, load management and metering technology for an information and technology transfer program with state commissions.
The Interventions Division advocates national energy policy positions in regulatory proceedings before FERC, state PUC’s, and other Federal regulatory agencies. And the Power Supply and Reliability Division performs bulk power supply planning studies and adequacy assessments to evaluate the impact of various actions by utilities and regulators on future power supply adequacy, reliability, electricity costs and fuels consumption. It also promotes voluntary interconnections and coordination; participates in Regional Reliability Council activities; encourages and provides incentives for programs to improve powerplant availability; licenses electric power exports and approves border interconnections; and exercises authority related to emergency interconnections and energy transfers. It plans for and responds to regional and national electric power system emergencies, including national defense activities; and performs major policy studies, including those dealing with system reliability and the national grid.
Accomplishments
Compliance
The Offices of Special Counsel for Compliance and of Enforcement strengthened the Department’s audit and enforcement programs during the year. The July 1977 Sporkin Report was severely critical of the results achieved by the FEA’s enforcement
program and provided more than a hundred recommendations for ways that the Department could improve its enforcement activities. ERA treated the Sporkin Report as a blueprint to work dramatic changes in the enforcement program and soon reoriented its enforcement effort to identify present and past violations of its regulations, to concentrate on large or willful violations and finally to close the books on embargo period violations, potentially amounting to billions of dollars.
A separate unit of Special Investigations was established during 1978 in the national office. Its sole mission was to investigate possible willful violations, excluding the major refiners for whom similar investigations are conducted by the Office of Special Counsel. During the year, six criminal convictions were secured and the number of willful violation cases referred to the Department of Justice was greatly increased over 1977.
Civil overcharges identified in DOE enforcement documents more than doubled to almost $1.75 billion at the end of 1978, rising from slightly more than $800 million at the start of 1978. In the first year of DOE, ERA’s compliance programs under the Emergency Petroleum Allocation Act secured over $2 million in civil penalties and over $95 million in refunds.
In addition, during the year the U.S. Attorney General and the Secretary of Energy signed a memorandum of understanding in which guidelines were established between the two departments for the litigation of DOE cases, which provides the department with greater involvement in the litigation of its cases.
Compliance priorities in ERA were reordered by establishing the distinct Office of Special Counsel (OSC), with about half of the enforcement resources and the mandate to audit the Nation’s 34 largest refiners and take related enforcement action. During 1978, OSC virtually completed the intensified field audits of the two largest refiners, Exxon and Texaco, and initiated intensified audits of 14 additional major refiners.
OSC’s multidisciplinary teams of professionals-attorneys, auditors and data specialists-worked against tight deadlines to resolve the issue of alleged past overcharges by the largest oil companies, correcting the pre-DOE failure to complete a single major oil company audit. OSC’s professionals build cases as a team rather than having cases begun by auditors, referred to attorneys, and then perhaps rejected because of a legal deficiency.
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The team approach also solves the problem of lengthy delays while requests for legal opinions are pending. Strict deadlines were set for the various stages of case review; new procedures expedite the review, approval and issuance of subpoenas and other enforcement documents. Subpoenas were issued to 31 major refiners demanding access to computerized recordkeeping systems; appropriate access arrangements were successfully negotiated. Because of manpower limitations and the difficulty of hiring permanent personnel for a program that will end after fulfillment of its relatively short-term mission, OSC supplemented its resources with contractual audit and computer assistance. These contracts contain stringent conflict-of-interest and standard-of-conduct provisions, comparable to those imposed on full-time DOE personnel. Special attention was paid to encourage the participation of minority firms, ten of which are providing professional auditing services.
OSC also designed enforcement and litigation strategies, which affected maximum dollar recoveries. During 1978, approximately $200 million was taken directly to United States District Court by the Special Counsel for Compliance, bypassing the protracted administrative appeals process. The Special Counsel also pioneered the compromise of overcharge cases.
DOE can secure refunds directly to small business consumers, to state and local government as consumers, and to individual citizens via, for example, their electric utility bills where utilities were overcharged for fuel oil. However, where the injured party cannot be identified or an effective or efficient means of refunding cannot be established, the Department requires deposit of recovered claims in the United States Treasury.
The Office of Enforcement, responsible for audits of all firms other than the 34 major refiners, revised its focus to concentrate on large firms, significant overcharges, and willful violations. The office relocated auditors in the field to the sites of greatest potential for discovering overcharges and closed offices with insufficient amounts of work. During the year, approximately 40 enforcement offices were closed in the field and the employees relocated to sites where their skills were needed.
During the same period, the office closed hundreds of cases against small companies where identified overcharges were small and redeployed its resources to important civil and criminal matters previously unattended. In the process, the inven
tory of pending cases dropped from over 2,500 at the year’s beginning to less than 1,300 at year’s end.
Emergency planning and management
The Office of Regulations and Emergency Planning, the Office of Fuels Regulation, and the Office of Utility Systems devoted resources during the year to developing realistic measures to be implemented in the event of a severe supply interruption as well as weather-related energy emergencies.
To improve its state of readiness, ERA published and held hearings on four proposals: (1) standby price and allocation regulations for crude oil; (2) standby price and allocation regulations for petroleum products; (3) regulations to provide for U.S. participation in the international allocation of petroleum to meet U.S. obligations under the International Energy Agreement; and (4) a standby gasoline rationing plan. Each of these proposals will receive further attention in 1979.
ERA also issued a Winter Energy Emergency Planning Guide, setting forth actions which Federal, state, and local governments could take to mitigate winter energy emergencies. The guide recommends various measures to deal with potential shortages of coal, natural gas, electricity, petroleum and propane. It contains plans for more than 50 standby programs and procedures, along with recommendations for their use in cases of mild, moderate, or severe winter-related energy short-falls. In conjunction with winter emergency planning, an Energy Emergency Center was established to serve as the focal Federal point of communication for coordination of Federal, state and local energy emergency activities. The center was activated on December 4, 1977, and was in operation throughout the 1977-78 winter.
During the 111-day 1978 coal strike, the longest in the history of the United States, ERA performed its emergency management coordinative responsibility but did not have to exercise its emergency powers under ESECA and the FPA.
Federal efforts to mitigate the impact of a coal strike had begun in the summer of 1977 in anticipation of a work stoppage. Pre-emergency planning resulted in the development of a series of plans to lessen the adverse effects of a strike to the maximum degree possible. The work stoppage, which began in early December 1977, had adverse effects
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that were felt most strongly in the east-central area of the Nation, which is highly dependent on coal. During the strike the ERA, other departmental entities, and the Federal Government as a whole, worked closely with states and utilities to best serve the needs of industry and the individuals in the affected area. DOE gathered and shared energy information with the states, industries and White House staff and tried to maximize the generation and importation of electric power into the impacted area in cooperation with Federal and state governments and the utility industry. ERA established an emergency operations center at Canton, Ohio, to maintain an on-the-spot team to monitor utility coal stockpiles, and electric power flow and transactions at the new centers of the affected area. In addition, specific coal supply problems were identified by governmental and private sectors; the movement of available supplies of coal to meet utilities’ needs was jointly encouraged; and a conservation strategy was adopted by the Federal, state and private sectors. The Department of Energy did not directly intervene in the coal strike. ERA possessed the authority to order power transfers under the Federal Power Act, Section 202(c), and allocate coal under the Energy Supply and Environmental Coordination Act, Section 2. As it turned out, events obviated the need to exercise these authorities. Nonetheless, the necessary regulations and orders had been prepared and were ready for use. The supply-conservation strategy adopted by the Federal Government, and exercised with the cooperation of states and utilities, ensured that sufficient amounts of power were imported into the impacted area and that available supplies were wisely used. In addition, a Coal Supply Task Force was successful in identifying and coordinating the movement of coal from non-traditional sources to utilities in the seriously affected east-central region. Consequently, during the period of the coal strike, no serious threats to the health and safety of the populace materialized and strike-related unemployment in the impacted area was minimized. Throughout the work stoppage, electric service to all utility customers continued uninterrupted except for voluntary and state-mandated curtailments.
Regulatory development
ERA’s regulatory development efforts focused in
the Office of Regulation and Emergency Planning were aimed at restraining oil imports by providing incentives to the domestic production of crude oil and alternative fuels and removing regulatory barriers for increasing domestic supply; enhancing competition within the domestic petroleum industry; and achieving the statutory goals of price equity.
For the past few years, the California crude oil market has been depressed for a variety of reasons. During 1978, ERA adopted a regulation to stimulate the production of heavy, high-sulfur California crude oil of which there are substantial reserves. This regulation provided further entitlement benefits for purchasers of heavy California crude, therby making it more attractive to refiners. Price incentives were announced for the production of crude oil by tertiary recovery methods to encourage the recovery of known sources of oil which might otherwise be left in the ground; and regulations were issued designed to provide an incentive for owners of low-production oil wells to combine their operations so that overall production would be increased. A rule was issued to remove existing regulatory impediments for marketing of blended petroleum products such as gasohol, and regulations were adopted to encourage the domestic production of petroleum substitutes. These latter regulations enable such products to compete more readily with imported crude oil.
ERA reviewed the necessity for existing product controls and advanced actions to deregulate motor gasoline, aviation gasoline, and kerosene jet fuel. When these products are decontrolled, only crude oil, natural gas liquids-propane, butane and natural gasolines-and synthetic natural gas feedstocks will remain under petroleum price and allocation controls.
In addition, ERA released a report and held public hearings on the appropriateness of changing the small refiner bias. Initially adopted by the FEA in 1974, the small refiner bias was designed to ensure the competitive position of small refiners who typically face proportionally higher operating costs and capital expenditure requirements than major refiners. However, the bias appeared to be overcompensating small refiners, resulting in proliferation of small, inefficient refiners.
ERA announced its intention to amend the entitlements program to include domestic crude oil
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used for purposes other than refining. Inclusion of non-refining uses of crude oil will assure that these users pay the same amount for crude oil as refiners do under the entitlements program. ERA also held public hearings on a simplified mechanism for controlling crude oil prices, and proposed changes to the entitlements program to equalize subsidies for residual fuel oil. The proposed changes affecting fuel oil prices were made to reduce regional price inequities by extending the effects of domestic price controls to areas such as the east coast and the upper mid-west that historically have been dependent on residual fuel oil imports.
In anticipation of the passage of the Powerplant and Industrial Fuel Use Act, now a part of the NEA, ERA began program planning and the development of implementing regulations.
Utility, intervention and natural gas programs
These programs are consolidated in the Office of Utility Systems, Office of Fuels Regulation, and Office of Regulations and Emergency Planning. Existing utility practices do not uniformly promote conservation or provide rate structures that are equitable to consumers. To influence utility practices, ERA intervened in regulatory proceedings to advocate true cost-of-service rates coupled with conservation by utility customers. The interventions were specifically geared towards eliminating declining block rates, encouraging time-of-use rates, establishing nondiscriminatory rates for cogeneration and solar, and encouraging conservation services to consumers. ERA also intervened in a proceeding before the Federal Energy Regulatory Commission involving rate treatment for a large-scale coal gasification plant and tariffs for the Trans Alaska Pipeline. ERA also intervened in proceedings before the Interstate Commerce Commission to establish new guidelines for setting rail rates for the movement of western coal to utilities and a proposed coal tariff increase. In both proceedings, ERA highlighted the possible adverse impact on our coal conversion program. In 12 states, ERA funded consumer office pilot projects resulting in approximately 50 cases before state and Federal regulatory bodies.
To assist public utility commissions in future decisions, ERA began to formulate guidelines for ratemaking and rules for cost-of-service rates. A National Power Grid Study was initiated, the results of which will provide the basis to increase coordination among utility systems for improved efficiency. The one-year study will be supervised by ERA’s Office of Utility Systems with assistance from other DOE organizations, as well as utility and regulatory representatives and private consultants. The study will consider technical, economic and institutional issues surrounding a greater connectivity of the United States grid. It will also seek to determine if greater economy, reliability and conservation of scarce fossil fuels can be achieved through increased levels of system interconnection and coordinated operation.
Exercising the authority over natural gas imports which the Department of Energy Organization Act assigned to the Secretary, ERA issued the first two significant opinions on the importation of LNG. Decisions on the importation and exporta- 1 tion of natural gas must reflect international, national and regional concerns for economic policy, dependence on foreign supplies, and impact on national energy strategies.
1 2 3 4
During the year, ERA continued to operate the EPAA-mandated crude oil programs, such as the Canadian Crude Oil Allocation Program, the Crude Oil Buy/Sell Program, the Entitlements Program, 5 the Transfer Pricing Program, the First Purchase Program, and the Refinery Yield Program. ERA also continued operation of the EPAA-mandated petroleum products programs such as the allocation of motor gasoline, aviation fuels, propane, and butane and naphtha for SNG plant use.
Reports and studies were developed analyzing the competitive viability of marketers of gasoline, No.
2 heating oil prices for the 1977-78 heating season, the impact of EPA’s lead phase-down on motor gasoline supplies, and the availability of alternate fuels for propane. ERA also participated in an evidentiary hearing on middle distillate conducted by DOE’s Office of Hearings and Appeals. Other significant activities, reports, studies and decisions are described in tables 10, 11, and 12.
Other ongoing programs
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Table 10. -Office of Fuels Regulation-1978 activities
[During fiscal year 1978 the following were issued (pursuant to Energy Supply and Environmental Coordination Act of 1974)]
Notices of intention			
Name		Location	Issued (1978)
Industrial			
1. Scott Paper Company		Winslow, ME	April 25
2. Avtex Fiber		Front Royal, VA	April 25
3. Martin Marietta Cement		Atlanta, GA	April 25
4. Ashgrove Cement		Chanute, KS	April 25
Utility			
5. Elk River; United Power Assoc.		Elk River, MN	January 31
6. Clark; Central Telephone & Utilities		Cannon City, CO	May 8
7. Martin Drake; City of Colo. Springs		Colo. Springs, CO	May 8
8. Valmont; Public Service of Colorado		Boulder, CO	July 31
9. Arapahoe; Public Service of Colorado		Denver, CO	July 31
10. Cameo; Public Service of Colorado		Palisade, CO	July 31
11. Cherokee; Public Service of Colorado		Denver, CO	July 31
Prohibition orders			
			Equivalent
Name	Units	Issued	oil savings
			(bbl/yr)
Industrial 1. Avtex Fibers	2	July 14, 1978	Not releasable
Utility 2. Elk River	3	April 12, 1978	255,000	-
Notices of effectiveness
Industrial construction orders -issued June 12, 1978
1. Republic Steel	Grand River, OH	2 Units
2. Bellefield Boiler Plant	Pittsburgh, PA	6 Units
3. Philip Morris/Miller Brewing	Eden, NC	2 Units
4. United States Steel	Mt. Iron, MN	2 Units
Total oil equivalent saved for industrial construction order NOEs is 1,621,000 bbl/yr.
Utility prohibition orders
5. Sutherland; Iowa Electric Light & Power Company, Marshalltown, IA, 3 units, 1,289,000 bbl/yr, NOE issued 1/17/78
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Table 11. -Environmental impact statements, environmental assessments, and other reports issued in 1978
Item	Date	Description/summary
Baltimore Gas & Electric Co.	April	EIS on the allocation of SNG feedstock for BG&E plant at Sellers Point, MD.
Columbia LNG Corporation	August	EA on the allocation of SNG feedstock for the Columbia SNG plant at Green Springs, OH.
Study entitled, “Preliminary Fuel Availability Study for the 1978-79 Winter Heating Season”	August	An assessment of the availability of propane, middle distillates, and residual fuel oil for the 1978-79 winter heating season.
Paper entitled, “Analysis of the Competitive Viability of Marketers of Motor Gasoline”	March 1	This analysis deals with the trends in marketing shares of the major categories of marketers in the distribution chain. Also the analysis indicates the dealer price and margin trends.
Paper entitled, “Analysis of No. 2 Heating Oil Prices for the 1977-78 Heating Season”	June 30	This analysis deals with the trends in home heating prices and suggests the reasons for increases at various points in the distribution chain. Comparisons are made with 1976-77 heating season experience.
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Table 12. -Environmental decisions and orders
Decision and order	Authority	Date issued	Description/summary
Four long-term D&O’s for SNG Feedstock	EPAA		
Indiana Gas Company	EPAA	Nov. 10, 1977	Five year order from date of completion of SNG plant. Annual allocation of 3,470,000 barrels of domestic naphtha.
CNG Transmission Co.	EPAA	Dec. 21, 1977	Order effective through March 31, 1982. Annual allocation 1,127,470 barrels of imported butane.
Air Products & Chemicals Co.	EPAA	April 24, 1978	Order effective through December 31, 1983. This is a pilot plant which will use gas oil as primary feedstock. Annual allocation 275,000 barrels domestic naptha.
Baltimore Gas & Electric Co.	EPAA	July 28, 1978	Order effective through March 31, 1982. Annual allocation 2,160,000 barrels of imported naptha plus 156,816 barrels of propane for Btu enrichment.
Two long-term D&O’s for Btu enrichment	EPAA		
Philadelphia Gas Works	EPAA	March 24, 1978	Issued for an indefinite period (as long as company has a valid feedstock assignment order). Annual allocation of 155,854 barrels of propane.
Philadelphia Electric Co.	EPAA	June 30, 1978	Five year order (to December 31, 1983) based on operation of Air Products and Chemicals Co. SNG plant. Annual allocation of 59,524 barrels of propane.
Midwestern Gas Transmission Co.	Natural Gas Act	March 15, 1978	D&O authorizing importation of natural gas from Canada
St. Lawrence Gas Co.	Natural Gas Act	December 23, 1977	D&O to dismiss petition for importation of natural gas.
Northwest Pipeline Corp.	Natural Gas Act	January 9, 1978	C&O authorizing importation of natural gas from Canada.
Distrigas LNG import proposal	Natural Gas Act	December 31, 1977	D&O authorizing importation of LNG from Algeria.
Pertamina	Natural Gas Act	December 23, 1977	D&O denying petition for declaratory order authorizing importation of natural gas and request for hearing.
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Chapter 9
Intergovernmental and Institutional Relations
Introduction
The Assistant Secretary for Intergovernmental and Institutional Relations (IR) is responsible for the Department’s contacts with other governmental units and agencies; with organized groups in the fields of education, business, labor and consumer affairs; with the press; and with individual users of energy. Activities of the major components of this office in 1978 are described below. The organization of the office is shown in Figure 19.
Congressional Affairs
The principal point of contact between the Department and Congress is IR’s Office of Congressional Affairs. Two of the office’s major areas of activity are: (1) supplying information on energy matters to members of Congress, to their staffs, and to the staffs of Congressional committees and subcommittees, and (2) providing witnesses for Congressional hearings on energy-related matters.
Providing information to Congress
DOE receives a large volume of requests for information from Congress. These requests are chan
neled through the Office of Congressional Affairs, which identifies the person or persons in the Department who can provide the information. The information is sent back through the Office of Congressional Affairs, which arranges it in an appropriate format and forwards it to the individual or group in Congress who made the request.
During 1978, this workload involved approximately 800 written inquiries per month, plus Congressional telephone inquiries averaging several hundred per week and sometimes reaching hundreds per day.
DOE witnesses at hearings
Congress holds numerous hearings on energy-related matters in the course of a year, and requests or invites witnesses from DOE to testify in many of them. In 1978, DOE witnesses participated in over 225 hearings related to energy.
Most frequently, the committee or subcommittee chairman transmits a memorandum to DOE, through the Office of Congressional Affairs, notifying the Department that a hearing will be held at a specified date on a specified subject, and inviting an appearance by one or more DOE witnesses.
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Figure 19.-Organization of the Office of Intergovernmental and Institutional Relations.
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Other activities
In addition to serving Congress, the Office of Congressional Affairs maintains detailed records on energy legislation currently before Congress and on laws already passed. The office answers approximately 50 queries per day from other branches of the Federal Government, from state and local officials, and from the general public. The office also provides early notification to Congress concerning DOE contracts and grants. All members of Congress are informed prior to announcement to the press of all contracts and awards of $50,000 or more. Approximately one hundred such contracts are awarded per month.
Relationships with State and Local Governments
Introduction
Active participation of state and local governments in the formulation and implementation of national energy policies can be accomplished only by a constant flow of information between DOE and states and communities. In particular, DOE must consult state and local governments on energy initiatives and regulatory programs early in the development process to facilitate comprehensive policy development. Oversight of these communications functions is the responsibility of the Office of Intergovernmental Affairs.
DOE’s program to involve state and local governments in the formulation of DOE policy and program development was significantly expanded during the year. A major part of this program involves relationships with associations representing such constituencies as state legislatures, governors, mayors, and urban officials. DOE entered into contractual relationships with a number of these groups, permitting analyses, opinions, and recommendations to be prepared relating to proposed DOE policies that affect state and local governments. DOE consulted with these groups on such wide-ranging topics as energy resource development, assistance to cities and communities impacted by energy development, contingency gasoline rationing plans, nuclear waste management, and siting of nuclear facilities.
During the year, the Office of Intergovernmental Affairs also established a local government Energy
Policy Advisory Committee, to become active in 1979. Composed primarily of local officials, this committee will provide another channel for communication with local governments. In addition to responding to DOE-initiated queries, the committee will be responsible for bringing local-level problems and concerns to DOE’s attention.
Other major activities of the Office of Intergovernmental Affairs are discussed below.
Assistance to cities
DOE awarded a grant to the City of Chicago, representing the Urban Consortium for Technology Initiatives, to help the consortium’s members plan to meet future energy needs. The grant’s goals are to help urban governments obtain energy technology information, find technical assistance when needed, identify and use available energy technologies, and demonstrate new urban technologies.
The consortium plans to initiate a number of projects. For example:
1.	The City of Chicago will develop a method that other cities can use to analyze the energy impact of various community development plans.
2.	The City of Baltimore will develop a feasibility study to evaluate major landfill sites for potential methane production, and to identify incentives that will encourage industries to relocate on completed landfill sites.
3.	The City of Los Angeles will develop a management guide for retrofitting municipal buildings with solar heating and cooling systems.
4.	Dade County, Florida will develop a methodology for producing alternative management strategies, and select those that will best meet the urban energy program objectives.
5.	The City of Seattle will develop a prototype course on administration of public energy programs, to be conducted at several local universities.
Assistance to communities impacted by energy development
Large-scale energy activities may adversely impact nearby communities, especially in rural or iso
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lated areas. Although over the long term, such developments would usually expand the local tax base and employment opportunities, in the short term rapid increases in population can overstrain local planning, management, and financing capabilities, and result in a serious inability to deliver essential services.
DOE is involved in impact assistance in two areas. First, under the Atomic Energy Community Act, DOE provides assistance to certain communities affected by nuclear energy development. Thus, during 1978, DOE provided financial assistance to Los Alamos, New Mexico, County and the Los Alamos school system; Oak Ridge, Tennessee, and Roane and Anderson Counties (also Tennessee); and Richland, Washington, and the Richland school system. Second, the recently enacted Powerplant and Industrial Fuel Use Act established a program to assist areas impacted by increased coal or uranium production. In 1979, this program is to be implemented by the Farmers’ Home Administration, U.S. Department of Agriculture, in consultation and coordination with DOE.
Energy Extension Service
The Energy Extension Service,8 a pilot program involving ten states, seeks to provide citizens and small consumers with reliable and accessible expertise concerning technologies and options for energy conservation and the use of renewable energy resources. The program includes a system for the collection and use of information from consumers regarding their problems in adopting energy conservation or renewable resource measures.
Under the program, DOE provides grants to the participating pilot states, which are responsible for designing state-level efforts to achieve the objectives established by the Congress in the National Energy Extension Service Act. To facilitate the transition to a nationwide program, DOE provided small grants to the non-pilot states to assist them in tracking the pilot program and prepare for their own programs.
8 On December 21, 1978, the Energy Extension Service was transferred from IR to the Office of the Assistant Secretary for Conservation and Solar Applications (CS).
Activities of other offices concerned with state and local governments
In addition to IR’s Office of Intergovernmental Affairs, there are three other headquarters offices within DOE whose responsibilities pertain primarily to state and local governments. One is the Office of State and Local Programs under the Assistant Secretary for Conservation and Solar Applications. This office administers DOE’s state energy conservation grants programs. Another is the State and Local Programs Division under the Assistant Secretary for Policy and Evaluation. This Division analyzes energy issues affecting state and local governments. The third is the Energy Emergency Center, under DOE’s Economic Regulatory Administration. The principal function of the center is to serve as a clearinghouse for information needed by non-Federal governmental officials to cope with energy emergencies. Each of these headquarters offices utilizes the DOE regional offices to conduct its relations with state and local entities, as well as to help assure appropriate coordination among the programs.
Energy and the Consumer
DOE’s Office of Consumer Affairs conducts programs that deal with the concerns of individual consumers and consumer organizations.
Identification and elimination of institutional barriers
The Office of Consumer Affairs initiated, as a joint project with the Defense Civil Preparedness Agency, a study and evaluation of institutional barriers that prevent individuals and small groups from securing information, assistance, and funding for carrying out conservation and renewable energy projects at the individual and community levels. The office is also involved in a state-by-state study to identify barriers to the development and use of renewable energy resources.
Dialogue and information dissemination
In 1978, the office conducted six consumer-oriented briefings on energy subjects in Washington, each of which was attended by at least 250 persons,
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most of them representatives of leading national public interest groups, consumer groups, and environmental groups. In planning the briefings, the office contacted a broad spectrum of such groups to find out what topics they would most like to have discussed in a briefing format. The topics selected were: (1) DOE’s role in nuclear policies and programs; (2) DOE’s role in support of small-scale, appropriate technology; (3) utility rate design; (4) energy and consumer protection, competition, and fraud; (5) energy and urban policies/programs; and (6) energy and food.
Domestic policy review of solar energy
Domestic policy reviews are undertaken at the direction of the President on major national problems and issues. The President requested that such a review be made of solar energy. DOE was named the lead agency for the review, which was conducted with the participation of 23 other agencies of the Government.
The Office of Consumer Affairs sent a list of the questions addressed to public interest groups, the solar industry, the university community, environmental groups, state and local governments, and Indian tribal organizations. It then organized 11 public meetings in various regions of the United States, and a final public session in Washington. A total of 3,000 citizens submitted oral or written testimony, and 10,000 attended the meetings. A report based on the testimony and discussions was prepared, circulated to the participants, and transmitted to the White House as a contribution to the domestic policy review.
Other activities
Other activities of the Office of Consumer Affairs included the management of all DOE Advisory Committees, which provide counsel and advice to the Department in many areas; preparing a study on funded public participation in proceedings before various regulatory bodies; and management of three public meetings relating to the Interagency Review of Nuclear Waste Management.
Education, Business and Labor
Educational, business liaison and inventions, and
labor and manpower programs are the responsibility of the Office of Education, Business and Labor Affairs. They are described in sequence.
Education programs
During 1978, over 1,100 students and faculty took part in DOE energy research projects at DOE laboratories and Energy Research Centers, in areas such as biomedical and environmental research, coal gasification, magnetohydrodynamics, land reclamation, basic ecology, energy storage, and instrumentation and control. Such activities enhance the knowledge and experience of faculty while contributing to DOE’s research efforts. Cooperative arrangements are established for faculty to continue to work on campus or make periodic visits back to the DOE facility for consultation with staff members.
One hundred and twenty graduate trainees were supported at 56 universities for training in energy-related fields. Over 900 people from minority backgrounds were assisted in programs that will help them to enter or continue studies in energy-related engineering.
In other education programs, 2,000 elementary, secondary, and middle school teachers were trained in energy fundamentals and aided in incorporating energy issues into their classroom exercises. Over 3 million pieces of energy curriculum materials were developed and distributed to teachers.
Business liaison and the inventions program
The office’s Division of Business Programs provides communication and liaison with business and industry, and their trade and professional associations. The division advises business of energy policies, plans, programs, and problems, and solicits their assistance and points of view.
The division also administers a program to encourage useful energy-related inventions. The inventions are given a first screening for DOE by the National Bureau of Standards (NBS), and then DOE takes appropriate action on the most promising. As of April 30, 1978, NBS had received 8,582 inventions for evaluation, made decisions on 7,181 of them, and 62 inventions it considered eligible for DOE support. Of those now pending with the Na
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tional Bureau of Standards, approximately a hundred are likely to be similarly identified. DOE provided contracts or grants during the year to 19 inventors and aided three others with business or technical assistance.
Labor and manpower affairs
The division carries out liaison activities with organized labor, maintains a manpower information system known as CEMIS (for Comprehensive Energy Manpower Information System), and publishes Manpower for Energy Research. In addition, studies are in progress concerning employment trends in nuclear energy and coal production.
Indian Affairs
The Special Assistant for Indian Affairs is responsible for guiding and coordinating all DOE activities involving Indian tribes. DOE’s objectives are to identify and resolve obstacles which inhibit sound and equitable management or development of energy resources owned by the tribes.
The Special Assistant works with the Council of Energy Resource Tribes and other Indian groups to help coordinate and achieve funding for projects, workshops, and other activities of particular benefit to the tribes. This has included working with the financial community to secure the investment capital needed for the development of tribal energy resources.
Communication with the Public
The Office of Public Affairs serves as DOE’s point of contact with the Nation’s press, and it also manages a broad program of public awareness of energy-related activities.
In 1978, about 3 million people visited DOE energy presentations and exhibits in science museums, and 5.5 million people attended 250 showings of other DOE energy presentations and demonstrations, all prepared and disseminated by the Office of Public Affairs. About 400,000 people, many of them community leaders, participated in DOE workshops help in cooperation with citizen’s groups in the 50 states and the District of Columbia. Thirty-four pamphlets, booklets, and posters were published, and over 10 million copies were
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disseminated through service clubs, airport and supermarket displays, exhibits, and in response to individual requests. OPA was involved in two special campaigns during the year, one to supplement the National Sun Day observance in which 3.5 million copies of eight pamphlets and posters were distributed through volunteer Sun Day offices, and the other to distribute the 1977 pamphlet How to Save Money by Saving Energy through the Alliance to Save Energy organization and the Boy Scouts of America. This distribution involved 4.7 million copies. Table 13 lists principal pamphlets and posters released during the year.
A series of public service announcements on energy and conservation needs was produced and distributed for television broadcast, as was a major film on auto fuel economy. A very large audience was reached through audiovisual techniques-radio programs, television, public service announcements and news features, and the production and free-loan distribution of films to schools, civic clubs, professional groups and television stations. The estimated value of free air time provided by the electronic media is more than $7 million. Using free space donated by major national publications, a major print ad campaign of public service messages was conducted.
Table 13. -Pamphlets and posters released through Public Affairs
Title	Distribution*
New releases	
Gas Turbines for Efficient Power Generation	200,000
Fuels from Biomass	100,000
Ocean Thermal Energy Conservation	100,000
Enhanced Recovery of Oil and Gas	400,000
Flywheels	300,000
Winter Survival	750,000
Hydrogen Fuel	200,000
Selected Department of Energy Publications	100,000
Solar Energy for Agriculture and Industry	100,000
Put the Sun to Work Today	500,000
She will thank you for Conserving Energy	
(poster)	200,000
Solar Poster	125,000
Revised releases	
Solar Energy for Heating and Cooling	600,000
I’ve Got a Question About Solar Energy	600,000
How to Improve the Efficiency of Your Oil	
Fired Furnace	500,000
* Between October 1, 1977 and September 30, 1978.
Technical Information Services
The Office of Technical Information operates a centralized facility for the gathering, storage, and retrieval of scientific, technical, and practical energy information. The major functions of this office are to:
1.	Provide, through its Technical Information Center (TIC), a central source of information services and products. TIC collects, catalogs, announces, and distributes reports of DOE research, and similar documents from other U.S. Government agencies, organizations, and foreign sources.
2.	Develop and maintain, through TIC, DOE’s Energy Information Data Base (bibliographic) for on-line access.
3.	Identify useful information as it emanates from DOE programs, and develop information packages that address the needs of target audiences.
4.	Maintain a file of computer programs developed in DOE so that they may be shared.
In 1978, the office developed a Technical Informa
tion Management System under which technical and scientific information produced through DOE contracts will be entered in the data base, and made available to DOE, its contractors, and the general public. The office also responded to 210,000 energy information requests, 14,000 reference and literature search requests, and distributed 1,030 computer software packages. A summary of 1978 activity appears in table 14.
Table 14- - Volume of technical information activity
Title	Distribution*
Revised releases	
Energy Savings Through Automatic	
Thermostat Controls	520,000
Insulate Your Water Heater and Save Fuel	520,000
Energy from the Winds	600,000
Fuel Cells	100,000
Citizen’s Workshop	500,000
Magnetic Fusion	300,000
Solar Energy	1,000,000
Nuclear Power in Space	60,000
Solar Electricity from Photovoltaic Conversion	1,000,000
Tips for Energy Savers	500,000
* Between October 1, 1977 and September 30, 1978.
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Chapter 10
International Affairs
Introduction
The Department of Energy’s international missions, functions and activities are closely meshed with broad U.S. foreign policy goals. The Office of International Affairs (IA) has primary responsibility for developing international energy policy for DOE. IA represents the Department in intergovernmental and international energy discussions and seeks to assure that U.S. international energy policy is consistent with domestic energy objectives.
IA has deputy assistant secretaries in four areas; international policy development, international trade and resources, international programs and international energy research. See figure 20.
Office of International Policy Development
This office is responsible for assessing and developing strategies and policies towards special world regions and country groupings, such as oil exporting, developing and Eastern bloc countries. The office also manages a pilot program for energy assistance to developing countries.
Office of International Trade and Resources
The area of responsibility of this office includes the formulation of U.S. energy trade policies with particular emphasis on oil and natural gas imports and coal and energy equipment exports. It also coordinates international contingency planning and represents the United States in selected activities of the International Energy Agency (IEA). In performing these activities, Trade and Resources monitors and assesses activities in world energy markets and trade, including the operations of international energy industries that have a major impact upon the security, price and supply of energy to the United States and its allies. The office’s responsibilities and activities become particularly important during international energy supply emergencies.
Office of International Programs
This office is the focal point within DOE for the identification, monitoring and assessment of foreign energy technologies actually or potentially beneficial to the United States. It is also responsi-
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Figure 20.-Organization of the Office of International Affairs.
OVERSEAS OFFICES
OFFICE OF THE ASSISTANT SECRETARY
OFFICE OF INTERNATIONAL
— PROGRAM SUPPORT
DEPUTY ASSISTANT	DEPUTY ASSISTANT	DEPUTY ASSISTANT
SECRETARY FOR	SECRETARY FOR	SECRETARY FOR	SECRETARY FOR
INTERNATIONAL POLICY	INTERNATIONALPROGRAMS	INTERNATIONAL TRADE AND	INTERNATIONAL ENERGY
DEVELOPMENT	IN I tHNAI IUNAL rKUuHAIVIo	RESOURCES	______RESEARCH_____
OFFICE OF STRATEGIC	nccirt: nc	OFFICE nF	OFFICE OF
—	SUPPLY AND	--- OFFICE OF	—	UFHLt Ur	—. INTERNATIONAL MARKET
TECHNOLOGY POLICY	NUCLEAR AFFAIRS	INDUSTRY OPERATIONS	ANALYSIS
OFFICE OF	OFFICE OF	—_	OFFICE OF	_	OFFICE OF
SPECIAL REGIONS POLICY	INTERNATIONAL PROGRAMS	RESOURCE TRADE	CURRENT ASSESSMENTS
ble for negotiating and maintaining cooperative energy arrangements with foreign governments and with international organizations, as well as for DOE’s nuclear nonproliferation activities and nuclear export controls. In addition, International Programs represents the Department at the International Atomic Energy Agency (IAEA) and the Nuclear Energy Agency (NEA), and in IAE activities related to research and development.
Office of International Energy Research
This office analyzes international energy markets, employing modeling and forecasting techniques to identify trends and relationships. Additionally, it serves as the point of liaison with the intelligence community on nonmilitary aspects of international energy and provides intelligence briefings to the Secretary and other departmental offices.
Support operations
Five DOE overseas representatives report to the Assistant Secretary for International Affairs. Three are stationed in Paris, Bonn and Tokyo and two at the Organization for Economic Cooperation and Development (Paris) and at the European Economic Community (Brussels). Their function is to monitor and report on energy developments abroad and to represent DOE in day-to-day dealings with foreign governments and international organizations. An Office of International Program Support provides administrative, budgetary and management support for Department-wide activities, including foreign travel, unclassified visits and assignments for foreign nationals to DOE headquarters, field organizations and contractor facilities, e.g., national laboratories, and United States recruitment for international organizations.
Principal Activities
IA’s principal activities consist of policy development and coordination; nuclear programs; oil industry operations; oil supply contingency planning; cooperation in energy research and development; cooperation with developing countries; and program support.
Policy development and coordination
IA helps define the assumptions of United States energy policy, identifies key issues and reviews the implications of various U.S. energy policies under a wide range of scenarios.
Activities relating to policy involve assessments of current developments and trends affecting world energy markets, including energy emergency situations; formulating policy toward key countries, country groupings and international organizations; analyzing the impact of alternative United States policies toward importing and exporting energy-related goods and services; and preparing for international negotiations involving major energy and economic issues. Examples of these activities were the Bonn Economic Summit in July, a series of energy negotiations with Mexico and Canada, and almost continuous contact with the IE A.
IA’s international energy policy-related responsibilities have special significance in the light of concerns over a potentially tight world oil market beginning in the early 1980’s. Studies are being conducted of future trends of the international energy market, of the effect of these trends on the United States and its allies, and of the types of policy initiatives needed to enhance U.S. energy security. Planning takes into account the policy positions of the major energy producing, developing, and oil consuming countries and also of the operations of the international oil industry. Energy developments in important Communist nations are followed closely and related to their political and economic relationships with the United States. The relationship of domestic energy policies to foreign energy policy is studied closely to ensure consistency in overall U.S. energy policy. IA is also responsible for projecting future international trade in energy resources and energy equipment. Policy options are formulated to improve the price, security, and distribution of current U.S. trade in energy and energy equipment. Such options include strategies for multilateral and bilateral negotiations, import and export controls, international maritime agreements and domestic energy regulations and legislation. I A, with the cooperation of the Energy Information Administration, also evaluates the international economic and balance-of-payments implications of energy imports and exports. And it plays a key role in interagency projections of future oil prices, im
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port levels and balance of payments consequences of U.S. oil imports under alternative pricing scenarios.
In addition, energy market analyses are made of the resource potential and production capacities of key countries. With the aid of modeling techniques, long-term forecasts are made of global energy supply and demand balances as well as price trends and their impact on the economies of the United States and the industrial nations. Other studies assess prospects for the development of alternative energy sources and the pace of interfuel substitution.
Nuclear programs
Working in close contact with DOE technical divisions, IA is responsible for developing and coordinating the Department’s international nuclear policy. Under the provisions of the Nuclear Non-Proliferation Act of 1978, IA takes the lead in Executive Branch review and approval of subsequent arrangements, which includes such things as fuel contracts and retransfers of materials concluded as part of agreements for cooperation with foreign governments in the peaceful uses of nuclear energy. It also participates in Executive Branch interagency deliberations of nuclear export license applications made to the Nuclear Regulatory Commission.
In conjunction with the Department of State, IA represents DOE in negotiating new agreements for nuclear cooperation and renegotiating existing agreements to bring them into compliance with the Nuclear Non-Proliferation Act. The office also actively contributes to the development of nuclear export and nonproliferation policy, including matters pertaining to fuel assurances, fuel cycle studies, spent fuel disposition and the application of international safeguards to peaceful nuclear activities. Many of these areas are pursued on a multilateral basis through the IAEA, the IEA, the NEA, and the 43 nation International Nuclear Fuel Cycle Evaluation (INFCE).
Oil industry operations
IA monitors and analyzes the operations of multinational and national oil companies, with particular focus on the changing relationships between multinational companies and host governments.
This function serves as a principal source of information for DOE on the changing structure of the international oil industry, on world refinery and tanker capacity, and on the global flow of company capital. IA assesses information submitted to the Energy Information Administration by nearly 50 U.S. oil companies on foreign crude oil costs, crude oil import prices, and product import prices. The relevant data are aggregated and sent to the IEA for use in its collective storehouse of information known as the General Information System.
International Affairs heads the U.S. delegation to lEA’s Standing Group on the Oil Market. In the first 6 months of 1978, the delegation participated in the development of an IEA financial information system for reporting worldwide oil industry capital expenditures. It also assisted the Energy Information Administration in the design of the foreign section of the DOE financial reporting system, which serves as the basis for U.S. submissions of financial information to the IEA.
Several studies relating to the international oil industry were published by IA during the year, including Technical Analysis of the International Oil Market, Foreign Direct Investment in U.S. Energy Sources and Supplies, and An Analysis of Current Trends in United States Access to World Oil.
Oil supply contingency planning
Since 1973, agencies and groups within the National Security Council (NSC) mechanism have been concerned with national security issues resulting from the dependence of the United States and its key allies and trading partners on imported oil. During the White House review of the 1978 DOE budget, the President expressed his concerns about the possibility of future oil supply interruptions and the need to develop comprehensive contingency plans to cope with such interruptions. IA has a leading role in formulating the Department’s plans in this area, providing primary input to NSC studies and coordinating input from other DOE offices.
As part of this effort, the office has focused on the emergency management measures of the lEA’s International Energy Program (which serves as an oil allocation system during supply disruptions). A test of lEA’s emergency allocation system, conducted from March through May 1978, assisted member governments in evaluating the effectiveness of their emergency preparations and national
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systems. This test involved the IEA and its secretariat, 33 international oil companies and some 200 affiliates, and the 19 IEA member governments. IA led DOE participation during the test.
IA also represents the United States on the North Atlantic Treaty Organization’s Petroleum Planning Committee, which develops and tests plans for the allocation of petroleum to the civil sector of the NATO countries during wartime.
Support activities for the Strategic Petroleum Reserve have included analyses of the possible size, duration and character of potential petroleum supply interruptions. A range of international procurement options and their probable market impacts have been analyzed.
Cooperation in energy R&D
R&D cooperation with other nations is another important activity of International Affairs. Its objectives include the acceleration of technical progress, the reduction of wasteful duplication of effort, support of U.S. foreign policy, and expansion of commercial opportunities for U.S. industry.
The Office of International Programs assists in identifying technical developments in other nations that are of potential benefit to the United States, brings together the appropriate DOE program offices with potential foreign collaborators and provides overall policy guidance and coordination with the Department of State. As part of this effort, IA prepares and negotiates agreements for cooperation and helps evaluate the benefits of ongoing joint activities.
International R&D cooperation is pursued both bilaterally and multilaterally. At the end of 1978, DOE was a party to, or responsible for, the implementation of 23 R&D technical exchange agreements with governments or R&D entities of 15 foreign countries. Nine bilateral R&D technical exchange agreements were under negotiation with R&D entities of seven countries. Furthermore, 20 cooperative agreements with R&D entities of 14 countries were being considered. Particularly noteworthy bilateral agreements were the $100 million cooperative agreement in solar energy research and development signed in October 1977 with Saudi Arabia and a cooperative agreement in energy research and development with Japan under the “Fukuda Initiative” (so called because it was inaugurated under the premiership of Takeo Fukuda).
The Department’s multilateral R&D cooperation efforts are conducted through several international organizations, including the IEA, IAEA, NEA, and the NATO Committee on the Challenges of Modern Society.
For some years, the IEA has been the primary focus for U.S. multilateral R&D cooperation, and DOE has taken a leading role in supporting the agency’s programs by committing significant resources in personnel and financing to cooperative projects in various technologies, including coal, solar, fusion, geothermal and conservation. By the end of 1978, the United States had signed a total of 30 IEA cooperative R&D agreements. Of particular importance is an agreement in which the United States, the United Kingdom and the Federal Republic of Germany are each contributing equal funds over an 8-year period towards the design, construction and operation of a facility to study the capabilities of a pressurized fluidized coal combustion system. Another important agreement involves small solar power systems involving 10 member countries that are jointly funding a design study leading to construction and operation of two 500-kilowatt solar plants (of different design) to be built in Almeria, Spain.
Cooperation with developing countries
IA’s developing countries activities have included participation in several bilateral joint science and technology commissions. The aim of this participation has been to encourage the strengthening of lesser developed countries’ capabilities to identify energy options and to adapt suitable energy technologies to domestic uses. With policy guidance from the Department of State, DOE commenced a pilot program intended to advance the use of alternative energy technologies in developing countries. Initial efforts were focused on showing that the United States could, through collaborative efforts with selected developing countries, assist in working up alternative energy strategies. Cooperative energy assessments were conducted during the year with Egypt and Peru.
Other developing country activities are being conducted in support of Presidential foreign policy initiatives. For example, IA is engaged in bilateral energy R&D activities with such countries as Brazil and India.
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Program support activities
IA provides specialized support for a number of DOE-wide international activities. During the year, the International Affairs Support Group coordinated approximately 250 foreign national visits to DOE headquarters, about 1,550 visits to DOE’s field and contractor organizations, and approximately 500 assignments of foreign scientists to various laboratories and research facilities for periods of up to a year. Participation of about 350 Americans in some 150 IAEA technical meetings was coordinated and 197 Americans were nominated for professional staff positions in the agency. (Twenty-five were offered positions, bringing the United States to its maximum entitlement of 86 posts subject to geographic distribution.) About 2,500 foreign trips were processed through DOE’s foreign travel control system managed by the support group.
Major Planned Activities
IA plans to continue its policy-related activities, with particular emphasis on monitoring international energy markets and encouraging international energy cooperation.
DOE initiatives in the IEA and NATO are expected to have a major impact on contingency planning for the allocation of crude oil and petroleum products during supply interruptions. The Office works closely with the Economic Regulatory Administration and other DOE offices to ensure that the U.S. emergency standby crude oil allocation program is closely coordinated in concept, design and operation with the IEA emergency allocation system.
Bilateral activities include LNG policy review and discussions on energy supplies with Mexico and Canada, and the continuation of the United States/Canada study on joint petroleum storage facilities and bulk electricity exchanges.
In accordance with the Nuclear Non-Proliferation Act of 1978, International Affairs will continue to work with the Department of State in negotiating new agreements for cooperation and renegotiating existing nuclear agreements in the peaceful uses of nuclear energy. It also plans to conclude new bilateral and trilateral agreements involving supply within the IAEA. IA will seek to replace, modify, or supersede all existing agreements (24 bilaterals, plus three multilateral agreements with EURATOM and IAEA), as well as negotiate new agreements with additional countries. The final agreements will be submitted to the President
following approval by the Secretaries of State and Energy.
The office also will participate actively in guiding the U.S. contribution to the INFCE, which is scheduled to make its final report in early 1980.
Major multilateral R&D activities planned for 1979 include participation in the IEA review of national R&D programs, further development of an IEA R&D strategy, and conclusion of new IEA cooperative agreements in conservation and other technology fields. IA also expects to conclude the nine bilateral technical exchange agreements now under negotiation in the fields of solar, geothermal, fossil, electric vehicle, electricity transmission, waste management and nuclear energy and to negotiate additional agreements in these fields as well as fusion, conservation and the environmental effects of energy production.
IA will also play a key role in the development of several new broad cooperative energy programs. For example, as part of the Fukuda Initiative, a joint cooperative program in fusion and coal conversion will be negotiated with Japan; another stems from the March 1978 agreement between President Carter and President Geisel of Brazil to establish a cooperative non-nuclear energy R&D program. In addition, planning will continue for carrying out the United States/Saudi Arabia solar agreement, under which each country will contribute $50 million over 5 years, as well as joint reactor safety programs with Japan and the United Kingdom.
This office has been actively involved in U.S. preparations for the United Nations Conference on Science and Technology for Development scheduled for August 1979. A principal task is the preparation of position papers and the development of proposals for U.S. initiatives for cooperation with the developing countries in the field of energy.
In providing the United States representative to the NATO Petroleum Planning Committee, the Office of International Affairs coordinates and provides data for the overall development of NATO plans and programs for coping with an oil/shipping emergency. These plans and programs are designed to provide the civilian sectors of NATO economies with critical petroleum supplies during periods of crisis. IA will also devote significant resources to continuing support of the Strategic Petroleum Reserve program and the development within the Department of a detailed and comprehensive national response plan for petroleumcontingencies.
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Chapter 11
Defense Programs
Introduction
The Assistant Secretary for Defense Programs is responsible to the Secretary of Energy for the direction and management of the Department’s nuclear weapons, nuclear materials production, inertial confinement fusion, nuclear materials safeguards and security, international security affairs, and classification programs. In addition, Defense Programs is responsible to the Secretary for the overall direction and management of the DOE nuclear weapons complex (figure 21).
Defense Programs (DP) has three field offices: Albuquerque Operations (ALO); Nevada Operations (NVO); and Savannah River Operations (SRO). ALO is responsible for the overall management and direction of nuclear weapons production and surveillance activities and for the administration of contracts for the operation of the Los Alamos Scientific Laboratory and the Sandia Laboratories. Responsibilities of NVO involve the management, operation, and maintenance of the Nevada Test Site. Responsibilities at SRO include field direction and management of the nuclear materials production program at Savannah River and contract administration for the Savannah River plant and laboratory.
The DOE nuclear weapons complex consists of the three nuclear weapons laboratories, the Los Alamos Scientific Laboratory, the Lawrence Livermore Laboratory, and Sandia Laboratories; ALO and its seven nuclear weapons production plants; NVO and the Nevada Test Site; SRO and the Savannah River Laboratory; and those elements of the Oak Ridge and San Francisco Operations Offices involved in the nuclear weapons program.
Nuclear Weapons Program
Objectives
The nuclear weapons program involves both the Department of Defense and DOE. The statutory basis for DOE’s nuclear weapons responsibilities is the Atomic Energy Act of 1954, as amended, and the Department of Energy Organization Act of 1977, which transferred the nuclear weapons functions of ERDA to DOE. The mission of the DOE nuclear weapons program is to conduct experiments and do research and development in the military application of atomic energy and to provide nuclear weapons and parts in support of U.S.
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Figure 21.-Organization of the Office of Defense Programs.
OFFICE OF THE
ASSISTANT SECRETARY
OFFICE OF
POLICY ANALYSIS ---------
AND OPERATIONS
OFFICE OF	OFFICE OF
INSTITUTIONAL LIAISON --------------------------------------------------------RESOURCE
AND COMMUNICATIONS	MANAGEMENT
OFFICE OF	nr-	OFFICE OF
OFFICE 0F	0FFICE 0F	INTERNATIONA!	°FF,CE °F	SAFEGUARDS
MILITARY APPLICATION	LASER FUSION	SECURITY AFFAIRS	CLASSIFICATION	AND SEcUR)TY
ALBUQUERQUE	SAVANNAH RIVER	NEVADA
OPERATIONS OFFICE	OPERATIONS OFFICE	OPERATIONS OFFICE
national policy and national security objectives. The nuclear weapons program level and direction, including the composition of the nuclear weapons stockpile and the underground nuclear test program, are established jointly by the Department of Defense (DOD) and DOE and are approved annually by the President.
DOE’s responsibilities include research, development, engineering, testing, production, and retirement of nuclear weapons; transportation of nuclear weapons to and from DOD receiving points; systematic evaluation of stockpile weapons and ancillary hardware for reliability and performance; and maintenance of the capability to respond to nuclear accidents or incidents.
R&D is conducted primarily by the three weapons laboratories. Activities include feasibility evaluation, detailed design, development of components and materials, testing, and certification of nuclear designs weaponized for production in stockpile quantities. In addition, the laboratories monitor the production of nuclear weapons and conduct a stockpile quality and reliability program.
Nuclear testing, an integral part of the nuclear weapons research and development effort, is conducted within the constraints of the Limited Test Ban Treaty of 1963; and, since March 31, 1976, also within the constraints of the proposed Threshold Test Ban Treaty. Testing is accomplished at the Nevada Test Site.
Nuclear weapons are produced at seven Government-owned, contractor-operated plants having a wide range of manufacturing skills and special capabilities. These include the ability to produce components from uranium, plutonium, and other rare elements and their compounds. Levels of precision, quality, reliability, and process control are extremely demanding.
Achievements
During 1978, DOE designed, developed, tested, and produced nuclear weapons as directed by the President for entry into the U.S. stockpile. New technologies and devices that might be applied to nuclear weapon systems were also pursued. Procedures for enhancing the safety of nuclear weapons during storage, handling, and transportation were developed and tested. In cooperation with DOD, a reassessment was completed during the year of the safety of all stockpile nuclear weapons. DOE continued production of the B6I-M0D 5 bomb and commenced production of the Trident/
Poseidon warhead. The necessary training weapons, field-test and handling equipment, component spares, and retrofit materiel for stockpile improvement were provided. Production support was continued for the quality assurance and stockpile reliability assessment program. Maximum reuse of components from retired obsolete weapon systems continued to provide cost savings in production, maintenance, and training activities.
The nuclear weapons laboratories continued investigating new weapon technologies and studying the feasibility of new nuclear concepts. Major emphasis was placed on nuclear weapons safety in abnormal environments and on means of providing maximum security against unfriendly forces. Developmental progress continued on advanced concepts to enhance the safety of nuclear weapons during storage, handling, and transportation. Exploration continued for technologies that increase the military utility of nuclear weapons and minimize the use of special nuclear materials. Such advances in nuclear weapons technology have contributed to savings in overall weapon system costs and are expected to continue to do so.
New developments were pursued during the year to bolster U.S. nuclear deterrence and to create new strategic options. Development engineering continued on a new Minuteman III warhead, improved versions of the B61 bombs, the Army’s 8-inch Artillery Fired Atomic Projectile, and the common warhead for the Air Force’s Air Launched Cruise Missile. Development engineering was continued for the new 155 mm Artillery Fired Atomic Projectile, the Standard Missile (SM-2) warhead, a warhead for the Ground Launched Cruise Missile and a Modern Strategic Bomb.
DOE is continuing joint program studies with DOD to determine the feasibility of providing nuclear capabilities for such existing and new weapons systems as the Pershing II, the Missile X, and the Advanced Strategic Air Launched Missile. Advanced development work also continued on other reentry vehicle warheads such as the Trident II.
DOE continued the underground nuclear testing program at the Nevada Test Site, conducting various DOE-sponsored and DOD-sponsored nuclear tests as approved by the President and within constraints of the applicable treaties. In the interest of public and environmental safety, all proposed nuclear tests are reviewed in detail by scientific and technical experts to assure compliance with established DOE safety and containment cri
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teria. The nuclear weapons testing program is also conducted in accordance with requirements of the National Environmental Policy Act.
Construction continued on a new plutonium and waste treatment facility at the Rocky Flat Plant in Colorado; during 1978, the waste treatment portion of the facility was completed and plans call for all new facilities to be ready by 1980. This will be followed by decontamination of existing facilities. Construction activities related to the new plutonium processing facility at Los Alamos, New Mexico, was completed in 1978. Also, during the year, decontamination of existing facilities was initiated. Completion of decontamination activities is scheduled for 1980.
In response to presidential directive during January 1978, the DOE Nuclear Emergency Search Team provided assistance to the Government of Canada in locating and recovering nuclear reactor debris from the Soviet satellite, Cosmos 954.
Inertial Confinement Fusion
Objectives
The DOE program in inertial confinement fusion (ICF) is designed to develop and demonstrate its application to nuclear weapons design, development, testing and simulation and as an inexhaustible energy source. Fusion is brought about by combining, under intense heat and pressure, two light ions (usually deuterium and tritium) to produce a third ion. The attendant release of energy is achieved by focusing lasers or beams of charged particles onto the fusion fuel, which is encased in a small pellet.
The ICF program has five specific objectives:
1.	Demonstrate the scientific feasibility of ICF through experiments designed to achieve a high pellet energy gain (the ratio of energy out of the fusion pellet to the beam energy required to drive the fusion reaction).
2.	Develop and evaluate candidate fusion drivers and select one for employment in an engineering test facility.
3.	Develop a technology base for the preceding objectives.
4.	Demonstrate the engineering feasibility of ICF through operation of an experimental power reactor in the late 1990’s to early 2000’s, and demonstrate commercial feasibili
ty through operation of a demonstration power reactor in the 2005-2010 timeframe.
5.	Assist nuclear weapons technology development through improved understanding of weapons physics and the ability to simulate weapons effects on a laboratory scale.
Demonstration of scientific feasibility and fusion driver selection as well as the development of nuclear weapon technology are being carried out primarily through the three DOE weapons laboratories-Los Alamos, Lawrence Livermore, and Sandia, where it was initiated during the 1960’s and where the initial applications to weapons technology are being made.
Achievements
Several major program objectives have already been met, including the development of intense pulsed beam sources and the successful implosion of small fuel pellets to produce thermonuclear yields. In November 1977, the first major facility to be completed in the program, the Shiva glass laser at Lawrence Livermore Laboratory, was brought into operation and during 1978 achieved its design energy level of 10 kilojoules. Shiva is expected to achieve significant thermonuclear burn; and, later, a thousand times liquid density compression of the fusion pellet. These are both key milestones of the ICF program. The Nova laser facility, a direct upgrade of Shiva, will eventually be capable of generating 200-300 kilojoules. The conceptual design for Nova was completed in 1977, followed last year by an architectural-engineering study.
In parallel with the glass lasers at Lawrence Livermore Laboratory, a gas laser medium (carbon dioxide) is employed at Los Alamos Scientific Laboratory. The eight-beam Helios CO2 laser was completed in 1978. The more powerful Antares CO2 laser is approaching the modular demonstration stage. Tests on a prototype module of the six-module Antares facility were completed last year. During the year, work continued in exploring alternate laser media, which should lead to the selection, by the end of 1979, of an advanced laser for development to the 1-kilojoule level. Initial operation of the advanced laser is projected for 1982.
In the area of particle beams program, a potential alternate to the laser as a fusion driver, the 8-terawatt Proto II electron beam generator at Sandia Laboratories, was operated for the conduct of target experiments to demonstrate beam-
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focusing capability. In addition, during the year work began on assembling the 30-terawatt accelerator of the electron beam fusion facility, which is designed to cause significant thermonuclear burn of fusion targets using electron beams. Also in the particle beam area, calculations and experiments were carried out in the relatively new concept of adapting heavy ion beam technology to fusion. Conceptual designs are being developed for an approach to heavy ion fusion. Based on future experimental results, an accelerator qualification experiment could begin in 1981.
Nuclear Materials Safeguards and Security
Objectives
Under the Atomic Energy Act of 1954, DOE has legislative responsibilities for the protection of special nuclear materials and classified information. The objective of this program is to develop and support safeguards systems capable of deterring and preventing acts of theft or sabotage involving nuclear or classified materials and facilities as well as early detection of diversion of nuclear materials. The program involves:
1.	Analyzing the possible threat of theft and sabotage.
2.	Developing safeguards and security system designs and testing and evaluating the effectiveness of safeguards and security equipment, and systems at DOE facilities.
3.	Assisting the International Atomic Energy Agency with international safeguards and measurement problems, including training of IAEA inspectors.
4.	Determining the adequacy of foreign physical security systems at nuclear facilities and in transit to protect U.S.-origin nuclear materials exported from this country.
5.	Conducting joint technical projects concerning safeguards and security technology and systems, with other governments expressing interest in upgrading their programs.
6.	Maintaining the national nuclear materials data base and information support system for accountancy, control and management requirements in support of domestic and international safeguards.
Achievements
During 1978, DOE continued to make significant progress in improving safeguards and security capabilities. New systems were installed in accordance with the planned upgrade program for modernizing DOE safeguards capabilities. Guard equipment and training were updated; more accurate nuclear material measurement equipment permitting more frequent and timely checks were introduced; and special procedures for governing personnel access to special nuclear materials were established.
The technology and equipment developed from this program were applied toward developing concepts and plans for protecting the strategic petroleum reserve and the Bonneville Power Administration facilities; they were also utilized by the Nuclear Regulatory Commission in developing regulatory guidelines and by the General Services Administration in establishing equipment procurement specifications.
For the past several years, the United States has promoted a policy of assuring the physical security of nuclear facilities on a global basis, especially requiring adequate physical security for U.S. nuclear materials sent abroad. The Nuclear Non-Proliferation Act of 1978 made the latter a matter of statute. DOE assesses recipient countries’ physical security measures before recommending approval or denial of licenses for export or retransfer of shipments exceeding 5 kilograms of highly enriched uranium U-235 or 2 kilograms of U-235 contained in plutonium. DOE teams have visited more than 40 countries receiving U.S. nuclear materials to evaluate their physical security measures. Also, representatives of more than 20 countries and Euratom have visited this country to observe American methods, discuss their own protection problems, and exchange expertise. Special training programs involving physical security and safeguards technologies are being carried out for representatives of foreign countries.
As an adjunct to its domestic nuclear safeguards program, DOE maintains close cooperation with the IAEA to strengthen agency safeguards techniques and equipments, to train its inspectors, and to refine and implement physical security guidelines. As a result of the Nuclear Non-Proliferation Act of 1978, DOE is expanding its program of training personnel from other countries in physical security techniques.
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International Security Affairs
Objectives
Efforts in this area focused on developing and implementing U.S. policies aimed at limiting domestic and foreign nuclear weapon testing, preventing the proliferation of nuclear weapon technology and materials, and ensuring the best possible technical capabilities for verifying nuclear test ban treaties.
Achievements
As a result of the presidential initiative for a Comprehensive Test Ban Treaty (CTBT), DOE assigned high priority to advancing nuclear test ban verification technologies. These efforts have been built on activities carried out in connection with the 1963 Limited Test Ban Treaty (LTBT), the 1974 Threshold Test Ban Treaty (TTBT), and the 1976 Peaceful Nuclear Explosions Treaty (PNET). DOE and its predecessor agencies participated in the conference of the Committee on Disarmament and the trilateral U.S.-UK-USSR negotiations on a Comprehensive Test Ban Treaty in Geneva.
Both the TTBT and PNET await Senate ratification. The signing of the PNET activated programs long underway to monitor compliance with both treaties. These programs, conducted primarily at DOE weapons laboratories, are directed at research, development, fabrication, testing and continued improvement of U.S. capability to detect, locate and identify nuclear explosions conducted in a variety of conditions and environments. They involve the development of improved technologies and instrumentation to monitor underground nuclear explosions in various types of media by seismic means, as well as methods to monitor atmospheric and space explosions.
The PNET contains a historic provision for on-site observation of nuclear explosions. To implement this provision, DOE has developed and continues to refine the capability to deploy observation teams and the requisite equipment for on-site verification. DOE planning calls for continued emphasis on development of verification capability in connection with CTBT, which also may contain on-site features.
In 1978, DOE pursued a vigorous continuing program of seismic research aimed at improving U.S. ability to verify both the TTBT and a CTBT. A major accomplishment was development of the first
model of a national seismic station (NSS), a compact, automated and tamper-detecting unit like those expected to be used in verification of a CTBT. Also involved was the preparation of a site at McMinnville, Tennessee, for field testing in 1979. If the treaty permits, such NSS would be placed in territories of the treaty parties to form regional seismic networks that would greatly augment long-range teleseismic capabilities.
Under the Atomic Energy Act of 1954, as amended, and the Nuclear Non-Proliferation Act of 1978, DOE plays a central role in the formulation and implementation of U.S. non-proliferation policies. Through its continuing review of nuclear export license applications, DOE partipates in Executive Branch recommendations to the Nuclear Regulatory Commission and the Department of Commerce, which must approve licenses for nuclear and other sensitive exports. A key DOE responsibility is to assure that exports of special nuclear materials or sensitive technologies are not inimical to U.S. interests or national security. DOE also provides non-proliferation guidance to U.S. representatives in the London nuclear suppliers conference, which develops nuclear export policies and participates in the International Nuclear Fuel Cycle Evaluation program to explore ways to reduce proliferation risks in nuclear development. In connection with its non-proliferation responsibilities, in 1978 DOE regularly contributed technical advice and assistance to the interagency effort to monitor worldwide nuclear activities and to discourage the spread of various national nuclear programs. The development of improved methods for tracking the worldwide stock and flows of special nuclear materials was advanced during the year.
DOE is also engaged in efforts to frame an International Convention on Physical Security, a treaty which would lay down protection standards for nuclear materials and equipment in international transit and address the responsibilities of countries for protecting their own materials and facilities. In 1977, and again last year, DOE representatives participated in conferences in Vienna to draft such a convention.
Classification and Declassification Program
Purpose
The Department of Energy is responsible for establishing and implementing policy for the
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classification of Restricted Data, Formerly Restricted Data and National Security Information within DOE’s jurisdiction in accordance with the requirements of the Atomic Energy Act of 1954, as amended, and applicable executive orders. In addition, the Department has a responsibility for the continuous review of Restricted Data and other classified information to determine what information may be declassified and disseminated in the interest of scientific and technical progress and the general public welfare, without damage to the national security.
Operating under the Assistant Secretary for Defense Programs, the Office of Classification conducts the Department’s classification and declassification programs. In carrying out this responsibility, the office establishes and implements policies and procedures for classification, declassification and dissemination of Restricted Data and other classified information under DOE’s jurisdiction. The office prepares classification guides covering all such areas of classified information, which are then used for making classification determinations within the Department and, as appropriate, by other agencies of the U.S. Government. In addition, the office serves as the point of contact within the Department for all classification matters, including those involving other domestic agencies and foreign governments, and represents the Department on the Interagency Classification Review Committee.
Achievements
The Department of Energy has placed considerable emphasis on the area of nuclear proliferation. Specifically, the Department is directly involved in the U.S. support of INFCE and is providing a national support program in this area under the Nonproliferation Alternate Systems Assessment Program (NASAP). In the interest of controlling the flow of sensitive information within these programs, the Office of Classification developed, in coordination with other concerned Government agencies, a classification guide on nuclear proliferation. In addition to providing this guidance for programs and studies related to the proliferation of special nuclear material and nuclear weapons, the Office of Classification has to date reviewed for classification over 500 U.S. reports prepared in support of INFCE, NASAP and other nuclear proliferation-related studies.
The Freedom of Information Act requires major review efforts on the part of the Office of Classification, involving all documents requested of the Department under the provisions of the Act containing classified information. In 1978, there were 78 actions under the Act; 18 were in process at the end of the year. In addition, 49 mandatory review requests under Executive Orders 11652 and 12065 were received. Six requests were in process at the end of the year. With regard to the comprehensive declassification program, during the year 42,351 documents were reviewed, of which 14,395 were determined to be unclassified in this same period. Almost one and a half million documents have been declassified since the inception of the program in 1971.
Additional and revised classification guidance has been issued in such areas as inertial confinement fusion, nuclear testing, computer codes, Comprehensive Test Ban, weapon design concepts, E-beam fusion, weapon test yields and nuclear test detection satellites. New guidance has been developed for peaceful nuclear explosives verification activities and in the gas centrifuge area for use in connection with the design, construction and procurement activities of the Portsmouth Gas Centrifuge Plant.
In addition, the Office of Classification participated in the interagency group that drafted the new Executive Order on “National Security Information” (Executive Order 12065) and the implementing directive for that order.
Nuclear Materials Production Program
Objectives
Nuclear Materials Production (NMP) is chartered to sustain a flexible base program to respond to near-term and long-term requirements for the production of nuclear materials. Specific NMP objectives are:
1.	Provide nuclear materials (primary products-plutonium and tritium) for national defense requirements.
2.	Provide nuclear materials for DOE reactor research and development programs, other Government agencies, and industry.
3.	Receive, store, and process nonproduction fuels from domestic and foreign reactors used
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for research and materials testing for recovery of enriched uranium and plutonium.
4.	Achieve and maintain technical capability to perform necessary process improvements and develop advanced technology to support production operations.
Achievements
During 1978, the Nuclear Materials Production Program:
1.	Produced and provided the nuclear materials required to meet national defense needs of the NMP program’s primary objective.
2.	Provided nuclear materials for other DOE
research and development programs, other Government agencies, and industry.
3.	Completed a comprehensive review of facilities and equipment to identify deficiencies that may adversely affect productivity and production efficiency.
4.	Achieved an outstanding safety record at nuclear materials production sites.
The above achievements were accomplished by operating the reactor fuel feed system at Oak Ridge, Tennessee; Fernaid, Ohio; and Ashtabula, Ohio; three production reactors and two chemical processing facilities at the Savannah River Plant near Aiken, South Carolina; one dual-purpose reactor at the Hanford Plant near Richland, Washington; and supporting facilities and operations.
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Chapter 12
Energy Information
Introduction
The Department of Energy Organization A.ct provided a measure of statutory independence to the Energy Information Administration (EIA).9 Its mission: to carry out the primary energy information gathering, analysis, and dissemination functions of the new Department. The EIA began its existence on October 1, 1977, incorporating the energy information programs and personnel of the Federal Energy Administration’s Office of Energy Information and Analysis, the Federal Power Commission, and the Department of Interior’s Bureau of Mines. (See figure 22.)
In establishing the Energy Information Administration in 1977, Congress assigned it the responsibility for:
. . . carrying out a central, comprehensive, and unified energy data and information program which will collect, evaluate, assemble, analyze, and disseminate data and information which is
9 The Energy Information Administration is required by law to prepare its own annual report to the Congress and the public. The reader is directed to the EIA Annual Report to Congress, 1978, Volume One (DOE/EIA-0173/1) for a more complete description of its mission and a more detailed presentation of its organization and accomplishments for 1978.
relevant to energy resource reserves, energy production, demand, and technology, and related economic and statistical information, or which is relevant to the adequacy of energy resources to meet demands in the near and longer term future for the Nation’s economic and social needs.
In fulfilling this responsibility, the Energy Information Administration serves the needs of five different sets of customers in the energy area: legislators, regulators, program managers and analysts, executive and industrial decision-makers, and the general public. The information needs of these five groups include:
1.	Broad description of the U.S. energy situation.
2.	Information about trends.
3.	Detailed information about particular fuels and industries.
4.	Detailed information to enable regulatory analysis and case disposition.
5.	Forecasts of future trends.
6.	Analyses of probable impacts of proposed regulations.
7.	Analyses of probable consequences of various proposed policies.
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Figure 22.-Organization of the Energy Information Administration.
FUELS DATA OFFICES
EXECUTIVE _	OFFICE OF	ADVISORY
COMMITTEE ”	THE ADMINISTRATOR —— COUNCIL
-----------L - I !—	1	■ ।	"	-----------1
0FFICE0F	nFFicFnF
PROJECT ACCOUNTABILITY	......_0FFI“	„	OFFICE OF
AND CONTROL	MANAGEMENT SERVICES	PLANNING AND EVALUATION
-----------1__________ 	1___________________1 1 1 ASSISTANT ADMINISTRATOR_cno^Vrv^_______________ASSISTANT ADMINISTRATOR	OFFICE OF	OFFICE OF
FOR ENERGY DATA	"vALmATtON	FOR APPLIED ANALYSIS	ENERGY WFORMATIOU	PROGRAM DEVELOPMENT
OFFICE OF	nrcmc nr	OFFICE OF	NATIONAL
ENERGY DATA	ANALYSIS	ENERGY	FINANCIAL
“	AND	“ VALIDATION	--- OVERSIGHT	— INFORMATION	-- REPORTING
INTERPRETATION	RESOURCES	AND	CENTER0	SYSTEMS PROJECT
________ _________ 	J		ACCESS______ btNitH OFFICE OF________OFFICE OF________________™°VF________________________ENERGY	OIL AND GAS
— ENERGY DATA	— VALIDATION	--- E^ERGY	L_ INFORMATION	__
DEVELOPMENT	ANALYSIS	SOURCE	ADMINISTRATION
6	analysis	clearinghouse	systems project
OFFICE OF
ENERGY DATA	OFFICE OF	OFFICE OF	C0AL
—■	STANDARDSAND	*— SYSTEMS	— ENERGY	L— PERFORMANCE
STATISTICAL	VALIDATION	USE ANALYSIS	AND COMPETITION
DESIGN	PROJECT
OFFICE OF	OFFICE OF
ADPSERVICES	-- INTEGRATIVE
ANALYSIS OFFICE OF ENERGY INDUSTRY ANALYSIS
Meeting the needs of these customers shapes EIA’s data gathering, analysis, and dissemination efforts. The quality of the information produced is also crucial to the decisions that may be reached by each of these groups.
Energy Data Acquisition and Interpretation
The Energy Data Acquisition and Interpretation program is carried out by two offices. The Office of Energy Data is responsible for managing and operating EIA’s data gathering and data processing system, and for generating regular statistical reports. Major activities include:
1.	Collecting and maintaining energy data.
2.	Interpreting energy statistics.
3.	Developing and producing energy data reports.
4.	Operating energy information systems for the Economic Regulatory Administration, the Federal Energy Regulatory Commission, and other parts of the Department of Energy.
5.	Administering DOE’s energy data forms clearance process.
6.	Controlling survey design and energy data standards.
7.	Managing the Energy Information Administration’s computer facility.
8.	Developing new energy data systems.
The Office of Program Development is responsible for developing and implementing major high-priority energy data systems. Three projects are currently underway: a financial reporting system project; an oil and gas information system project; and a special coal studies project.
During 1978, these offices:
1.	Operated 49 major primary data gathering systems involving the collection and processing of approximately 650,000 individual survey forms, and substantially enhanced the quality of the data by improving survey instruments and processing procedures.
2.	Reduced respondent burden by 1.2 million man-hours, or nearly one-fourth from 1977 levels, by eliminating 16 survey forms and reducing the scope of 13 additional forms, without a significant loss in the amount of energy information provided.
3.	Produced 450 separate periodic or one-time statistical reports about energy supply, demand, and prices, which were distributed to nearly one million individuals. Significant examples of the reports include: Monthly Energy Review, Winter Energy Data Bulletin, National Electric Rate Book, Petroleum Demand Watch, and the Annual Report to Congress (1977, Volume III).
4.	Began initial implementation of four new, major energy data systems on oil and gas production and reserves; energy industry financial reporting; residential, commercial, and industrial energy consumption; and energy emergency management.
5.	Supported the programmatic and regulatory energy information requirements of other components of the Department, and assisted the Federal Energy Regulatory Commission and the Economic Regulatory Administration in determining data requirements and designing survey forms to implement the Natural Gas Policy Act and the Powerplant and Industrial Fuel Use Act.
In 1979, EIA will continue to operate and improve existing data systems, further reduce respondent burden, and collect information to support implementation of the National Energy Act. The first results of the surveys on energy consumption, industry financial reporting and oil and gas information will be published in preliminary reports. In addition, an interim Energy Emergency Management Information System will be implemented. An effort to classify and index energy information will be initiated based upon a system design completed in 1978.
Applied Analysis
The Office of Applied Analysis manages the EIA’s major analytical programs and prepares special projections required by the Department of Energy and the Congress. Primary responsibilities of this office include maintaining oversight of the EIA’s models and analytical products; conducting analyses of energy sources and energy use; performing economic analyses of energy industries and markets; and providing integrative analyses related to broad energy issues.
During the year, the Office of Applied Analysis:
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1.	Published the EIA’s first consolidated set of alternative projections of energy supply and demand and their impacts in Volume II of the EIA’s 1977 Annual Report to Congress.
2.	Published 55 analysis and technical memoranda which document and interpret the results of detailed, exhaustive analyses. These analyses were done at the request of congressional committee leadership, DOE, and other governmental and private groups, as well as at the initiative of El A. The analyses dealt with a wide range of current energy issues, such as the then proposed National Energy Act, motor gasoline pricing regulations, proposed regulations under the Powerplant and Industrial Fuel Use Act, petroleum supply interruptions, and the nuclear fuel cycle.
3.	Instituted procedures to assure objectivity in the preparation of analyses. Client requests, including underlying assumptions, must be specified in writing. After a thorough internal technical review, the results are made publicly available along with complete documentation of the assumptions and methodology utilized in preparing the analysis.
4.	Improved and extended analysis capabilities in virtually every area, especially the integration of short-term forecasting models and the initial development of long-range forecasting systems.
The Office of Applied Analysis will continue during 1979 to provide analysis services on request, and to upgrade the quality of analysis capabilities and model documentation and portability. Two major efforts started in 1978 and scheduled for completion in 1979 are the forecasts of energy futures for Volume III of El A Annual Report and analytical support for the biennial National Energy Policy Plan. The reference forecasts for the National Energy Plan are taken from the 1978 EIA Annual Report to Congress, which also contains alternative forecasts derived from EIA assumptions.
Information Validation
The Office of Energy Information Validation ensures the meaningfulness and accuracy of EIA’s statistical series, analyses, and forecasts. The principal activities of this office include validations of
existing data collection systems; preliminary advisory review of proposed new and revised data collection forms and systems; advisory review of requirements for energy information; special studies of apparent discrepancies and other issues in energy formation; field validations of specific data; and validations of models and analyses.
In 1978, the Office of Energy Information Validation:
1.	Started work on pilot validation studies of 14 existing data systems. These studies led to important recommendations for improving the individual systems and contributed significantly to the development of a data validation methodology. The studies will be completed in 1979.
2.	Reviewed 130 proposals for new or revised data collection forms. These reviews resulted in technical improvements in the final forms and survey plans.
3.	Assisted the development of major new systems for oil and gas information, industry financial reporting, and consumption information. This assistance improved systems design prior to implementation of the systems.
The office will continue during 1979 to review proposed new and revised data collection forms and assist the development of major new systems. There will be major validation studies of information systems related by subject area, such as fuel substitutability. In addition, methodology development will begin for validating forecasting models and projections.
The Office of Project Accountability and Control handles the disposition of correspondence to and from the Energy Information Administration, maintains the official EIA documents registry, and tracks the progress of all agency projects and significant activities.
Program Support
The Office of Energy Information Services operates the National Energy Information Center and the Energy Information Administration Clearinghouse to support EIA’s energy information dissemination program. The National Energy Information Center provides information and assistance to Federal, state, and local agencies; the academic community; industrial and commercial
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organizations; and the general public. The Center also develops information exchange programs and acts as a focal point for reference and referral services concerning energy information. The Energy Information Administration Clearinghouse provides for the uniform production of all official EIA publications according to EIA and other relevant publication standards and clearance procedures. The Clearinghouse also registers and maintains an archive of EIA publications and distributes them to the user community.
The Office of Management Services assists EIA managers in all phases of budget preparation and execution and personnel and procurement management, and provides logistical services to carry out the program functions of the Department.
The Office of Planning and Evaluation assists the Administrator and Deputy Administrator in coordinating EIA’s overall planning activities, including the development of new programs, the evaluation of existing programs, and the coordination of legislative activities.
Conclusion
EIA’s 1977 Annual Report to Congress stated that a large part of the Energy Information Ad
ministration’s work agenda for the upcoming year would be based upon the priority needs identified in the Professional Audit Review Team (PART) report of 1977.10 The foregoing list of activities is consistent with the observations of PART and the commitment of the Secretary of Energy to respond to those observations.
While the accomplishments of the Energy Information Administration during 1978 were substantial, significant tasks remain in establishing a comprehensive, reliable base of energy information. The major tasks for 1979 have been summarized above. Much of the agenda for the years to come has been established by programs initiated in 1978. For example, although the major new information systems will produce initial results in 1979, it will be several years before they are complete. While the program of energy information validation will complete most of the methodological development in 1979, substantive validations will be produced in 1979 and succeeding years. Most important, during 1978 the tone was set for the future production of high-quality statistical and analytical products and for the exercise of impartial professional judgment.
10 PART was created by legislation to assess the activities of the Energy Information Administration and to report its findings yearly to the Congress and to the President.
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Appendix A
Foreign Direct Investment in U.S. Energy Sources and Supplies for 1976 and 1977
Introduction
Section 26 of the Federal Energy Administration Act of 1974 (Public Law 93-275) required the Administrator to conduct a comprehensive review of foreign investment in domestic energy industries.
This section states:
The Administrator will conduct a comprehensive review of foreign ownership of, influence on, and control of domestic energy sources and supplies. Such review shall draw upon existing information, where available, and any independent investigation necessary by the Administration. The Administrator shall, on or before the expiration of the 180-day period following the effective date of the Act, report to the Congress as to the extent and forms of such foreign ownership of, influence on, and control of domestic energy sources and supplies, and shall therafter continue to monitor such ownership, influence and control.
Section 657, subpart 8, of the Department of Energy Organization Act (Public Law 95-91), requires that the DOE Annual Report shall include:
To the extent practicable, a summary of activities in the United States by companies or persons which are foreign owned or controlled
and which own or control U.S. energy sources and supplies, including the magnitude of annual foreign direct investment in the energy sector in the United States and exports of energy resources from the United States by foreign owned or controlled business entities or persons, and such other related matters as the Secretary may deem appropriate.
In December 1974, FEA submitted to Congress a report entitled Foreign Ownership, Control and Influence on Domestic Energy Sources and Supplies. A second report was prepared in November 1976. On October 1, 1977, the FEA and other Federal energy agencies were consolidated into the Department of Energy (DOE). In pursuit of the responsibilities assumed from FEA, the DOE has prepared this report to reflect 1976 and preliminary 1977 foreign direct investment (FDI) transactions in U.S. energy sources and supplies.
This report concentrates on foreign direct investment in domestic energy sources and supplies as distinguished from foreign portfolio investment. Foreign direct investment, as used in this report, means “... the direct, indirect, or a combination of direct and indirect ownership of 10 percent or more of the voting stock of an incorporated U.S.
A-l
300-288 0-79-12
business enterprise or the equivalent interest in an unincorporated U.S. business enterprise.” This is the definition used by the Department of Commerce’s Bureau of Economic Analysis (BEA). The term “foreign direct investment” will be used interchangeably with “foreign-owned,” or “foreign-controlled,” and is abbreviated “FDI.” “Foreign investor” will be referred to as “foreign owner” or “parent.”
Most companies identified in the BEA report are U.S. affiliates or subsidiaries of foreign companies. Although a number of these companies are 100 percent owned by foreign interests, in many instances U.S. investors have significant, often majority, interests.
The major sources used in preparing this study were:
1.	1976 and 1977 (where available) annual reports, statistical supplements to the annual reports, and form 10-K’s of those energy companies identified as being controlled by foreign interests.
2.	Survey of current business report entitled Aspects of International Investment, published by the U.S. Department of Commerce, Bureau of Economic Analysis.
3.	Biweekly reports entitled Foreign Direct Investment Activity in the United States, prepared by the U.S. Department of Commerce, Bureau of International Economic Policy and Research.
Information relating to 1977, FDI is included to the extent it is available at the time of publication. In 1976 and 1977, FDI in U.S. energy sources and supplies remained small relative to total domestic investment, and significantly less than U.S. investment in the energy sources and supplies of foreign countries. Virtually all FDI was from Western European and Canadian companies, with a small but increasing volume from Latin America.
The preponderance of new FDI represented reinvestments of U.S. earnings, offsetting reductions resulting from accounting adjustments and sales of U.S. properties by foreign interests to U.S. purchasers.
Shell Oil Company, Standard Oil Company of Ohio and American Petrofina continued to maintain their position as the dominant vehicles for direct foreign investors in U.S. energy. In 1976, these three companies accounted for 6 percent of all U.S. crude oil and natural gas liquids production, 3.6 percent of U.S. natural gas production, 11.9 per
A-2
cent of U.S. refinery capacity and 9 percent of U.S. gasoline sales. In 1977, their share of U.S. crude oil and natural gas liquids production rose to 7.2 percent but their share of U.S. refinery capacity declined to 11.4 percent. Their share of U.S. natural gas production remained unchanged.
British Petroleum’s interest in the Standard Oil Company of Ohio increased further as the latter’s production of crude oil in the Alaskan North Slope rose in 1977. A further increase was expected in 1978.
In addition to their participation in the U.S. petroleum industry, these three companies continued to expand investments in other energy sources. In 1976 and 1977, Shell Oil Company and the Standard Oil Company of Ohio increased their investment in U.S. coal production, and Shell increased its involvement in the development of U.S. alternative energy sources.
Burmah Oil and Gas Company, formerly one of the larger foreign-owned companies active in U.S. petroleum, was purchased in July 1976 by Aminoil International, Inc., a subsidiary of R. J. Reynolds. Burmah Oil and Gas, Inc., renamed Aminoil U.S.A., Inc., has therefore reverted to U.S. ownership.
The Petroleum and Natural Gas Industries
At the end of 1976, FDI was $5.9 billion, compared to $6.2 billion at year-end 1975. FDI in U.S. petroleum declined from 22.9 percent of FDI in all U.S. industries in 1973 to 19.6 percent in 1976. Table A-l indicates additions to FDI in U.S. petroleum for 1975 and 1976, table A-2 FDI in petroleum and all U.S. industries and U.S. direct investment in foreign industries, and table A-3 foreign sources of direct investment in U.S. petroleum in 1975 and 1976.
Table A-l. -Additions to foreign direct investment in U.S. petroleum (millions of dollars)				
Year	Total	Capital inflows	Reinvested earnings	Valuation adjustments
1975	599	79	520	0
1976	-313	394	534	-1,240
Source: U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current Business, “Foreign Direct Investment in the United States 1976,” October 1977.
The decline in 1976 was largely due to the ownership transfer of a sizeable petroleum investment from a deceased U.K. resident to his U.S. estate. Another contributing factor was the July 1976 purchase of Burmah Oil and Gas Company by a U.S. company. Apart from these adjustments, the increase in 1976 was considerably larger than in 1975.
Additions to FDI in U.S. petroleum largely represent equity increases in existing U.S. affiliates by foreign parents in other oil consuming countries, primarily in Europe and Canada. Europe accounted for 84.5 percent of the total in 1976, a 4 percent decline from 1975 resulting from the negative adjustment previously mentioned. Canada’s share increased from 9.5 percent of the total in 1975 to 11.5 percent in 1976. The bulk of the remaining interests were held by Latin American investors. Japan accounted for a nominal 0.6 percent, while OPEC’s direct investment remained insignificant.
United States direct investment in the petroleum industry of foreign countries has always been several times greater than FDI in U.S. petroleum. In 1976, it was approximately five times greater, as shown in table A-2.
Summary of foreign investment activity
Oil and Gas Production: The seven companies which represent the major foreign interests in the United States produced 638 thousand barrels a day of crude oil and natural gas liquids and 813 billion cubic feet of natural gas in 1976, representing 6.6 percent and 4.1 percent respectively of total U.S. production. This percentage represents approximately the same share as that in 1975, as shown in table A-4. Shell Oil Company alone produced 84 percent of the total foreign-owned oil and gas.
Table A-2. -Foreign direct investment in petroleum and all U.S. industries and U.S. direct investment inforeign industries 1
(billions of dollars)
Year	FDI in U.S. petroleum 2	Total FDI in U.S.3	Percent petroleum of total	U.S. DI in foreign petroleum	Total U.S. DI abroad 4	Percent petroleum of total
1973	4.7	20.5	22.9	24.9	101.3	24.5
1974	5.6	25.1	22.3	21.5	110.1	19.5
1975	6.2	27.6	22.4	26.2	124.2	21.0
1976	5.9	30.1	19.6	29.7	137.2	21.6
1 Source: U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current Business, “U.S. Direct Investment Abroad in 1976,” August 1977 and “The International Investment Position of the United States: Developments in 1976,” October 1977.
2 Petroleum Industry-includes all phases of petroleum exploration, production, refining, transport, and marketing.
3 The FDI position is the value of foreign parents’ net equity in, and outstanding loans to, U.S. affiliates at yearend.
4 The value of U.S. parents’ net equity in and loans to foreign affiliates.	v
A-3
Table A-3. -Foreign sources of direct investment in U.S. petroleum-1975-76 1
(millions of dollars)
	Position year-end 1975	Percent of total	Position year-end 1976	Percent of total
All areas	6,213	100	5,901	100
Cana, del	596	9.5	679	11.5
Europe	5,478	88.2	4,985	84.5
EEC	5,398	86.9	4,904	83.1
Other	80	1.3	81	1.4
Japan	2	—	38	0.6
Australia, New Zealand and South Africa	3	—	4	0.1
Latin America	101	1.6	173	2.9
OPEC	-2	—	2	0.03
Total of undisclosed sources 4	40	0.6	20	0.3
1 Source: U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current Business, “Foreign Direct Investment in the United States, 1976” October 1977.
2 Suppressed to avoid disclosure of data of individual companies.
3 Less than $500,000.
4 Includes * items as well as Middle East, Africa, Asia, and the Pacific.
The three major foreign-owned companies for which 1977 production data are available produced 704 thousand barrels a day of oil and 730 billion cubic feet of gas. These producing rates represented an increase of 1.2 percent and 1.0 percent respectively from the previous year. The improved 1977 performance in oil production reflects the coming onstream of Sohio’s Alaskan crude in June of that year.
Lease Ownership: According to the Independent Petroleum Association of America, there were 398,990 acres under lease for petroleum production in the United States on January 1, 1977. The five foreign-owned companies for which data are available held approximately 3 percent of this acreage (table A-5), a decline from 1973 foreign ownership of 10.9 percent.
Producible Wells: Five of the foreign-owned companies held net interests in 16,900 producible oil and gas wells in 1976, approximately 2.6 percent of the 640,000 U.S. total (table A-5).
Refining and Gasoline Marketing: As of January 1, 1977, there were 273 refineries operating in the United States, with crude oil capacity of 15.9 million barrels daily. The 23 refineries owned by foreign companies accounted for 12.2 percent of U.S. refinery capacity, a decline from 13.0 percent in 1975. Shell, Sohio and American Petrofina accounted for 15 of the 23 foreign-owned refineries
and had a capacity of 1.8 million barrels of crude oil daily, or 94 percent of foreign-controlled refinery crude capacity. One U.S. refinery was transferred to foreign ownership in 1977 with the purchase by Total Petroleum (N.A.) from Apco Oil of a 46,000 barrels-per-day refinery in Kansas.
The foreign-owned companies sold gasoline through 30,295 branded retail outlets in 1976 compared to 31,064 in 1975. In 1976, this figure represented 16.2 percent of total U.S. outlets. These companies accounted for 10.2 percent of total U.S. gasoline sales in 1975; 1976 gasoline sales data available for two major foreign-owned companies indicate that this share has increased only slightly, to 10.7 percent. Tables A-6 and A-7 show foreign ownership of U.S. refineries and service stations in 1975 and 1976.
Activities of foreign-controlled companies
Shell Oil Company: Shell Oil Company (Shell), a fully integrated petroleum company, is a major subsidiary (69 percent owned) of the Royal Dutch/ Shell Group. With an estimated 54 percent share of the total $5.9 billion FDI in U.S. petroleum in 1976, Shell maintained its position as the seventh largest U.S. energy corporation.
A-4
Table A-L - U.S. petroleum and natural gas production by foreign-controlled companies -1975-77
Company	Petroleum and natural gas liquids			Natural gas		
	1975	1976	1977	1975	1976	1977
		(barrels per day)		(millions of cubic feet)		
Shell Oil Company	555,000	535,000	518,000	678,535 3	681,090	682,550
Standard Oil of Ohio	27,617	25,479	167,278 1	32,685	28,969	31,370
Texas Pacific	38,365	38,356 2	N.A.	59,600	59,600 2	N.A.
American Petrofina	20,315	19,775	19,367	18,220	17,334	16,483
Husky Oil, Ltd.	14,359	14,084	N.A.	7,177	7,121	N.A.
Elf/Aquitaine	2,000	2,000	N.A.	11,786	11,7862	N.A.
CFP/Total Petroleum						
(North America) Ltd.	496	3,309	N.A.	2,565 4	7,379 4	N.A.
Total of above	658,152	638,003	704,645 6	810,568	813,279	730,403 6
Total for U.S. 5	10,008,000	9,735,000	9,863,000	20,109,000	19,952,000	20,025,000
Percent foreign of total	6.6	6.6		4.0	4.1	
N.A.-Not available
1	Includes 143,831 B/D Alaskan production (average daily production of Alaskan Prudhoe Bay oil since June 19, 1977 was 267,848 barrels).
2	1975 data used; 1976 not available.
3	Shell has revised this figure downward since publication of its 1975 annual report, used in the 1976 FEA report.
4	Natural gas sales.
5	Source: Department of Energy’s Energy Information Administration, Monthly Energy Review, March 1979.
6	Total of three companies for which 1977 data are available.
Sources: Company annual reports and statistical supplements for individual company data.
Table A-5.-U.S. petroleum and natural gas leases and wells-1975-76
Company	Leases		Producible wells	
	1975	1976	1975	1976
	(thousands of net acres)		(thousands of net wells)	
Shell Oil Company	8,663	9,671 1	9.5	9.5 3
Standard Oil of Ohio	446	442	1.9	1.7
American Petrofina 2	301	322	2.6	2.6
Husky Oil Company	1,173	996	0.2	N.A.
Aquitaine Oil Company	881	N.A.	N.A.	N.A.
Total Petroleum				
(North America) Ltd.	508	792	N.A.	0.2
Texas Pacific Oil Co.	N.A.	N.A.	2.9	2.9 3
Total of above	11,972	12,223	17.1	16.9
Total for U.S. 4	396,173	398,990	639.0	640.8
Percent foreign of total	3.0	3.1	2.7	2.6
N.A.-Not available
1	Undeveloped net acreage for the United States plus total producing acreage.
2	Provided by American Petrofina.
3	1975 data; 1976 not available.
4	Source: Independent Petroleum Association of America.
Source: Annual reports and statistical supplements to the annual reports of the companies listed unless otherwise noted. The companies appearing in this table have been identified in this report as representing the significant investment.
Notes: Net acres is defined as gross acreage adjusted to reflect the percentage of ownership in the working interest. Gross acreage is any acreage covered by a working interest, regardless of the percentage ownership in the interest. Net wells is defined as the company interest share for all wells in which it has interests.
A-5
In 1977, Shell produced 5.3 percent of all U.S. crude oil and natural gas liquids compared to 5.5 percent the previous year. Its share of U.S. natural gas production was 3.4 percent for both 1976 and 1977. At year-end 1976, Shell estimated that it owned approximately 6.1 percent of domestic proved crude oil reserves and about 3.1 percent of net proved U.S. natural gas reserves.
More than half of Shell’s capital spending in 1976 was for oil and gas exploration and development. In 1977, these expenditures increased 12 percent over 1976. Shell’s 1977 U.S. refinery crude capacity represented 7.2 percent of total U.S. crude capacity compared to 7.6 percent in 1976. The company’s branded retail gasoline outlets represented 10.3 percent of the U.S. total in both 1975 and 1976. Sales from those outlets accounted for 7.3 percent of all U.S. gasoline sales in 1976, up from 6.8 percent in 1975.
Standard Oil Company of Ohio: Standard Oil Company of Ohio (Sohio) represents the major interest of the British Petroleum Company, Ltd. (BP), in the United States. BP’s investment in Sohio was initially 1.000 shares of special stock which entitled BP to the same rights as approximately a 25 percent common stock interest. The number of shares of common stock to which the 1,000 shares of special stock are equivalent will rise with increases in the sustainable net oil production from Sohio’s Prudhoe Bay properties. It will reach a maximum of approximately 54 percent if such production reaches 600,000 barrels a day prior to January 1, 1984.
With the opening of the Alaska Pipeline, Sohio’s Prudhoe Bay production rose to 212,000 barrels a day in June and 250,000 barrels a day in October. As a result, BP’s interest in Sohio increased from about 26 percent to over 40 percent during 1977. Sohio’s share of the total $5.9 billion FDI in U.S. petroleum was approximately 6.8 percent in 1976. In 1976, before the opening of the Alaska Pipeline, Sohio ranked twentieth in gross sales among U.S. integrated petroleum companies, producing only 0.26 percent of total U.S. crude oil and natural gas liquids and 0.14 percent of total U.S. natural gas. In 1977, Sohio produced 1.7 percent of total U.S. crude oil and natural gas liquids, but its natural gas production remained relatively unchanged.
Sohio holds approximately 135,000 net acres of state oil and gas leases in Alaska, 96,396 of these in the Prudhoe Bay field. Sohio’s refinery crude capacity of 449,000 barrels a day in 1977 represented 2.8 percent of the U.S. total compared to 2.9 percent in 1976. The company operated 4,659 branded retail gasoline outlets by year-end 1976, accounting for 2.4 percent of the U.S. total, down from 2.6 percent in 1975. Its gasoline sales from these outlets increased to 1.8 percent of U.S. sales in 1976, up from 1.6 percent in 1975.
American Petrofina: American Petrofina is a U.S. subsidiary of Petrofina, S.A., a Belgian petroleum company. Petrofina, S.A. holds directly, or indirectly, 73 percent of the common stock of American Petrofina. The company is the twentyfifth largest energy company in the United States and the 212th largest U.S. corporation.
Table A-6. -U.S. refinery crude capacity of foreign-controlled companies-1975-77 1
Company	Operating refineries		Crude oil throughput operating capacity		
	1/1/76	1/1/77	1/1/75	1/1/76	1/1/77
				(barrels per day)	
Shell Oil Co.	8	8	1,150,000	1,135,400	1,135,400
BP-Sohio	3	3	431,000	431,000	449,000
American Petrofina	4	4	200,000	200,000	226,000
Husky Oil Co.	3	3	57,400	57,400	57,400
Total Petroleum, Inc.	1	1	42,182	42,182	41,000
Canadian Hydrocarbons:					
Thunderbird Petroleum, Inc.	3	3	14,439	14,439	14,439
Ultramar: Golden Eagle Refining Co.	1	1	13,000	13,000	13,000
Total of above	23	23	1,908,021	1,893,421	1,936,239
Total for the U.S.	265	273	14,696,750	14,867,529	15,861,735
Percent foreign of total	8.7	8.4	13.0	12.7	12.2
1 Source: U.S. Department of the Interior, Bureau of the Mines, Mineral Industry Surveys, Petroleum Refineries in the United States and Puerto Rico, January 1, 1975, 1976, and 1977.
A-6
Table A-7.-U.S. gasoline sales by foreign-controlled companies-1975-76 1
Branded retail outlets 2	Gasoline sales
Company	1975	1976	1975	1976
	(millions of gallons)		(millions of gallons)	
Shell Oil Company	19,656	19,236	7,091	7,911
BP-Sohio	4,906	4,659	1,696	1,915
American Petrofina	v.	5,158	5,046	1,027	N.A.
Husky Oil Company	573	606	230	N.A.
Total Petroleum Inc.	647	639	130	N.A.
Canadian Hydrocarbons: Thunderbird Petroleum Inc.	124	109	55	N.A.
Ultramar: Golden Eagle Refining Co.	N.A.	N.A.	208	N.A.
Burmah	N.A.	N.A.	136	N.A.
Total of above	31,064	30,295	10,573	9,826 4
Total of the U.S.	189,480 3	186,579 3	103,580	108,953
Percent foreign of total	16.7	16.2	10.2	10.7
N.A.-Not available
1 Source: National Petroleum News Factbook Issue, mid-May 1976 and 1977.
2 Includes garages, motel, grocery stores, and service stations.
3 U.S. Department of Commerce, Bureau of Domestic Commerce; estimate of total U.S. service stations based on 1972 census data and trade association data. By Census definition only establishments earning 50 percent or more of their income from the sales or service of petroleum products are service stations. Reported in National Petroleum News Factbook Issue, mid-May 1977.
4 Total of two companies for which 1976 data are available.
In 1977, American Petrofina produced approximately 0.19 percent of total U.S. production of crude oil and condensate and 0.08 percent of total U.S. natural gas production. In 1976, American Petrofina produced 0.20 percent and 0.09 percent respectively. The company’s refinery crude capacity in 1977 represented 1.4 percent of the U.S. total, compared to 1.3 percent in 1976.
In 1975 and 1976, American Petrofina owned and operated four refineries. On February 15,1977, the company sold to Pestor Refining Company for approximately $32.8 million in cash and notes, its 22,500 barrel a day refinery at El Dorado, Kansas and certain marketing properties in several western states.
American Petrofina’s branded retail gasoline retail outlets were 2.7 percent of the U.S. total in 1975 and 1976.
Total Petroleum (North America) Ltd.: Total Petroleum (North America) Ltd. (Topna), is an affiliate of the Compagnie Frangaise des Petroles (CFP), 35 percent of whose shares are owned by the French Government. CFP and its wholly owned subsidiary, Total American, Inc., together own 49 percent of Topna’s voting shares.
Topna is engaged in exploration and production of crude oil in Canada and the United States. Topna’s
U.S. oil and gas production, which was negligible in 1973, rose to 3,309 barrels a day in 1976.
Topna completed a merger with Hanover Petroleum Corporation, an independent U.S. petroleum company, on April 30, 1976. Acquisition of Hanover added 3,079 barrels per day to Topna’s U.S. oil production and 18,210 million cubic feet per day to natural gas sales. Excluding Hanover, Topna’s U.S. crude oil production increased 70 percent and its U.S. natural gas sales by 14 percent in 1976.
Topna operated one U.S. refinery in 1976 with a capacity of 41,000 barrels a day (0.3 percent of the U.S. total). As noted earlier, the company acquired for $65 million a second U.S. refinery in 1977, adding 46,000 barrels a day to its operating capacity. Topna estimates that its gasoline sales during 1976 accounted for less than 0.5 percent of the gasoline sold in the United States.
Husky Oil Company: Husky Oil Company is the U.S. subsidiary of Husky Oil, Ltd., of Canada.
In 1976, Husky produced 0.14 percent of all U.S. crude oil and natural gas liquids and 0.04 percent of U.S. natural gas production, maintaining its 1975 shares. Husky’s 1975 and 1976 U.S. refinery crude capacity comprised 0.4 percent of the U.S. total. The company’s branded retail gasoline outlets were 0.3 percent of the U.S. total.
A-7
Aquitane Oil Corporation: Aquitaine Oil Corporation is a wholly owned subsidiary of the Societe Nationale Elf Aquitaine. Effective in 1976, the assets of the Elf Aquitaine group were amalgamated into SNPA, changing the former’s name to Societe Nationale Elf Aquitaine. The company produced less than 1.0 percent of U.S. crude and natural gas.
Texas Pacific Oil Company Inc.: Texas Pacific Oil Company, Inc., is a subsidiary of the Canadian Company Distillers Corporation/Seagrams, Ltd. Texas Pacific produces approximately 0.4 percent of U.S. petroleum production.
Other Foreign Activity: Table A-8 lists new foreign activities in the U.S. petroleum and natural gas sector in 1976 and 1977. None of these activities significantly affect foreign investment in these U.S. sectors, the bulk of which is accounted for by the major foreign-controlled companies on which this report has focused. Activities of other companies noted in table A-8 entail several acquisitions, including:
1. United Canso Oil and Gas acquisition of Pantepec International, Inc. United Canso Oil and Gas, Ltd. is a Canadian company with two wholly owned subsidiaries, including Canso Oil and Gas, Inc., U.S.A. In 1976, United Canso merged with Pantepec, a U.S. domiciled company involved in petroleum exploration in Australia, the Philippines, and Canada.
2. Asamera Oil Corporation, Ltd., acquisition of the Refinery Corporation. Asamera is incorporated in Canada and conducts wholesale marketing and exploration/production operations in the United States through wholly-owned Asamera Oil U.S.A., Inc. Effective July 1, 1976, Asamera Oil U.S.A., Inc., acquired for $9 million the petroleum refinery properties, assets, and inventories of the Refinery Corporation. The acquired refinery, located in Denver, has a capacity of 21,500 barrels a day.
The Coal Industry
The November 1976 FEA report identified 16 foreign interests participating in the domestic coal industry. Fourteen of these were foreign-owned companies; the remaining interests were the Canadian Hydroelectric Power Commission and the
A-8
Romanian Government. The present report has identified five additional foreign investments for 1976 and 1977.
Of the 1976 to 1977 investments, the Coalarbed transaction is the most significant. Beginning its U.S. operations in 1975 with the acquisition of the Red Ash Sales Company in West Virginia, the ARBED Steel Company of Luxembourg now holds more than 14,000 acres in West Virginia, with coal resources in excess of 36 million short tons. In addition to the ongoing development of its Red Ash properties, Coalarbed is projecting the acquisition of substantial coal reserves through the purchase of mineral rights, the purchase of operating companies, and joint venture projects with existing coal operating companies.
The 1976 FEA report noted that Shell Oil Company, a foreign-owned enterprise, had yet to begin coal production. Following a favorable environmental decision by the U.S. Supreme Court in June 1976 that cleared the way for the development of coal reserves in five western states, Shell accelerated its plans to develop its Wyoming acreage. Although production on this project is not expected to begin until after 1980, which incidentally marks the production date of many of Shell’s other major U.S. coal projects, Shell continues to acquire coal properties, including Seaway Coal Company in 1977 (table A-9). Shell maintains that it currently holds under lease some 2.3 billion tons of proved and potential coal reserves.
Similarly, the Standard Oil Company of Ohio, through its wholly-owned subsidiary, the Old Ben Coal Corporation (Old Ben), is working to expand its investment in U.S. coal production. The company is committing approximately $90 million to the development of two new deep mines in Illinois and to an associated coal preparation plant. The two mines are expected to reach combined production of 4.5 million tons per year by 1981.
Old Ben continues to retain its position as a leading producer of U.S. bituminous coal, although it ranked 12th in 1976 compared to 11th in 1975. 1 Old Ben’s production in 1976 reached 9,715,406-a 4.9 percent increase over its 1975 production rate of 9,257,715. Old Ben produced 1.4 percent of the estimated 1976 U.S. tonnage.
1 Keystone Coal Industry Manual, 1977.
Table A-8. -Foreign activity in U.S. petroleum and natural gas industries -1976-77
Country, parent company/ affiliate which holds interest in U.S.	U.S. investment	Type of interest	Type of activity
		1976 Activities	
Belgium, Empain family	Newton Refining Corp, and Northeast Oil Service, Inc.	Acquisition	Wholesale petroleum production
Canada, Asamera Oil, Inc.	The Refinery Corp.	Acquisition -100%	Petroleum refining
Canada, United Canso Oil and Gas, Ltd.	Pantepec International, Inc.	Acquisition	Crude petroleum and natural gas
Canada, Canada Development Corp.	Texasgulf, Inc.	Equity increase	Crude petroleum and natural gas
Federal Republic of Germany, Friedrich Flick Group	Oil Resources, Inc.	Acquisition	Oil and gas wells
Saudi Arabia, group of Saudi Arabian Investors	Arabian Shield Development Co.	Acquisition - 36%	Crude petroleum and natural gas
South Africa, Anglo American Holding Corp, of South Africa, Ltd.	Norris Oil Corp.	Purchase of drilling rights	Crude petroleum and natural gas
		1977 Activities	
Canada, Canadian Pacific, Ltd.	Ametel, Inc.	Equity increase	Petroleum product distribution
Canada, Bow Valley Industries, Ltd.	Flying Diamond Oil Corp.	Acquisition	Crude petroleum
Canada, Total Petroleum (North America) Ltd.	APCO Oil Co.	Acquisition	Produces oil and natural gas, markets petroleum products, oil and gas exploration
Federal Republic of Germany, Friedrick Flick Group	William T. Burton Industries	Joint venture	Oil and gas exploration
Federal Republic of Germany, Friedrick Flick Group	Glosscock Drilling, Inc.	Acquisition	Oil well drilling
Japan, Mitsubishi Corp.	Amorient Petroleum Co.	Joint venture	Expansion of terminal capacity, markets fuel oil and distillates
Netherlands, Royal Dutch Shell Group	Amoco Petroleum Co.	Joint venture	Oil and gas exploration in Gulf of Mexico
A-9
Table A-9. -Foreign activity in the U.S. coal industry-1976-77
Country, parent company/affiliate holding interest in U.S.	U.S. investment	Type of interest
	1976 Activities	
Federal Republic of Germany, Friedrich Flick Group	Colowyo Coal Co.	Joint venture
	1977 Activities	
Austria, Voest-Alpine AG	Virginia Crews Coal Co., Rose Branch Development Co., Blue Sales and Processing Co., Blueco	Acquisition
France, Charbonnages de France; Soc. Lorraine and Meridionale de Laminage Continu, S.A.; Soc. Metallurgique de Normandie, S.A.; and US Inor, S.A.	Hawley Coal Mining Corp.	Equity increase
Netherlands, Shell Oil Co.	Seaway Coal Co.	Acquisition
Luxembourg, Acieries Reunies de Burbach-Eich-Dudelange, S.A. (ARBED)	Coalarbed	New subsidiary
Table A-10. -Foreign activity in the U.S. nuclear fuel cycle-1976-77
Country, parent company/affiliate holding interest in U.S.	U.S. investment	Type of interest	Type of activity
France, Cie. Frangaise des Petroles and Soc. Pechiney Ugine Kuhlman/Minatome Corp.	Mineral Energy, Inc.	Joint venture	Exploration and development of uranium properties
France, COGE MA	French-American Metals Corp. (FRANCO)	Equity 100%	Uranium mining
Other companies reported to be involved in exploration/production:
Canada — American Copper and Nickel, Canpet, Canso, Cominco, Consolidated Monarch, Denison Host Ventures, Keradamex, Magellan, Mineral Resources, Noranda, Rio Algom, Robertson, Sioux Mountain and Cobre Exploration, Voyager
France - Acquitaine Oil, CFC, Mokta, Urania
United - CEGB, Consolidated Goldfields, Triad
Kingdom
Germany - Uranerz, Urangesellschaft
Japan	- Dowa, Kyodo, Nissho-IWAI
Italy	- AGIP
A-10
Nuclear Fuel
Fifteen U.S. companies reported that foreign interests provided full or partial funding of their 1976 exploration activities.2 (See table A-10.) The total foreign increment amounted to $13.18 million or about 8 percent of the $171 million total 1976 domestic exploration expenditure. In 1976, foreign interests produced approximately 560 tons of uranium which represented 4 percent of total U.S. production of 14,000 tons, compared to 600 tons or 5 percent of U.S. 1975 production of 12,300 tons.
Uranium exploration, mining and milling
Of particular interest during 1976 to 1977 was the acquisition of a permit by the French-American Metals Corporation (FRANCO), a wholly-owned subsidiary of COGEMA Corporation of Paris, to prospect for uranium in North Carolina’s Pisgah National Forest. Uranium oxide in the permit area has been estimated at 11,000 tons. If the estimated deposits are found, they would represent the first significant uranium discovery east of the Mississippi River. In addition, FRANCO has obtained mineral leases on land in the Texas Panhandle.
The Standard Oil Company of Ohio and its partner, Reserve Oil and Minerals Corporation, own uranium properties consisting of approximately 120,000 acres in New Mexico. Sohio is a 50 percent owner of the property from which production began in December 1976 and the operating manager of the mine and mill complex. Although scheduled production levels have not yet been achieved, the annual rate of production from this mine is expected to reach approximately 500 short tons of uranium ore concentrates.
Sohio’s uranium reserves, estimated in 1975 at approximately 4.2 million tons, are expected to be sufficient to maintain production for approximately 12 to 15 years.
Nuclear reactors
The General Atomic Company, a 50/50 partnership between the Royal Dutch/Shell Group and the Gulf
2 U.S. Energy Research and Development Administration, Uranium Exploration Expenditures in 1976 and Plans for 1977-1978, May 1977.
Oil Corporation, has been in the process of developing and marketing a high temperature gas-cooled reactor (HTGR) and its associated nuclear fuel. By the end of 1976, General Atomic’s 300 megawatt demonstration plant began generating electricity, but due to technical problems the plant is currently not in commercial operation. In addition to the development of the HTGR, General Atomic is also involved in the design and development of a gas-cooled fast-breeder reactor, a closed-cycle gasturbine HTGR and a process-heat HTGR.
Alternative Energy Sources
Financial and technological risks associated with the development of alternative energy sources continue to inhibit foreign direct investment in U.S. companies engaged in the development of other energy sources.
Some investment did occur in 1976 and 1977 (see table A-ll). In 1976, Shell Oil Company invested an additional $3.6 million in S.E.S., Inc., a Delaware company involved in the development of cadmium sulfide solar cells, which convert sunlight directly into electricity. At year-end 1976, Shell had an 80 percent equity interest in the U.S. company and a total investment of $6.6 million. During 1977, Shell invested an additional $2 million in S.E.S. bringing Shell’s total investment in the company to $8.6 million.
The Compagnie Franchise des Petroles acquired a majority holding in Photon Power Inc., another U.S. manufacturer of solar cells.
In the field of geothermal energy, Shell signed in 1977 its first contract for the sale of geothermal steam produced in The Geysers field located in northern California. Under this contract, Shell will supply to an electrical power generation plant 2 million pounds per hour of dry steam for 25 years. Shell’s acquisition of two new geothermal tracts brings the company’s total geothermal holding to 19,865 acres in The Geysers area.
A-ll
Table A-11.-Foreign activity in the U.S. alternative energy sources-1976-77
Country, parent company/affiliate which holds interest in U.S.	U.S. investment	Type of interest	Type of activity
France, Cie. Frangaise des Petroles	Photon Power, Inc.	Equity interest Manufactures solar cells
Netherlands, Shell Oil Co.	S.E.S., Inc.	Equity interest Manufactures solar cells
Sweden, Alfa-Laval	Delaval Separator Co.	Develops equipment to produce electricity by tapping solar energy in ocean water
A-12
Appendix B
Exports of Energy Resources by Foreign Companies
Introduction
Appendix B addresses “exports of energy resources from the United States by foreign-owned or controlled business entities or persons and such other related matters as the Secretary may deem appropriate,” in conjunction with Appendix A, which covers foreign direct investment in United States energy sources and supplies in 1976 and 1977. These complete the reporting requirement of Section 657, Subpart (8), of the DOE Organization Act.
The direct export of U.S. energy resources by foreign-owned companies is relatively insignificant. However, U.S. laws and regulations impose licensing requirements which rigorously control the export of crude oil, refined products, natural gas, and uranium.
There are no foreign entities currently engaged in the export of natural gas and uranium. Several companies that have been identified with foreign interests are involved in the limited export of refined oil products. With respect to coal, it is currently impossible to determine to what extent brokers involved in the export of U.S. coal represent foreign entities.
The Export of Crude Oil and Refined Oil Products
Identification of exporters
Exports of energy-related products by foreign-owned companies operating in the United States are even less significant, being limited to napthas and gasoline reference fuels and amounting to an average of less than 730 barrels a day, or about four one-thousandths of 1 percent of total U.S. consumption of refined petroleum products. (The names of such companies cannot be included in this report as the information is regarded as proprietary data, under the terms by which the information was collected by the Office of Export Administration, Department of Commerce.)
Export controls
All exports of crude oil and energy-related refined petroleum products are controlled by the U.S. Government. Authority for such control is derived from four sources: (1) The Export Administration Act of 1969, as amended; (2) Section 103 of the Energy Policy and Conservation Act; (3) Section
B-l
201(11) of the Naval Petroleum Reserves Production Act of 1976; and (4) Section 28 of the Outer Continental Shelf Lands Act, as amended. The export from the United States of crude oil is prohibited without a validated export license from the Office of Export Administration of the U.S. Department of Commerce. Commerce Department regulations currently provide that, with the exception of foreign policy or national security considerations, licenses will be issued only if it is established that such export is consistent with the national interest and the purposes of the Energy Policy and Conservation Act and meets at least one of the following four conditions:
1.	The export will be temporary, the commodity being exported for convenience or increased efficiency of transportation across parts of an adjacent foreign state and shall reenter the United States in the same form; or
2.	The export will result directly in the importation into the United States of an equal or greater quantity of that same commodity, such transaction being carried out for convenience or increased efficiency of transportation with persons or the government of an adjacent foreign state; or
3.	If the crude or partially refined petroleum was produced from a Naval Petroleum Reserve or if it has been or will be transported by pipeline over a right-of-way granted pursuant to Section 28 of the Mineral Leasing Act of 1920 (30 U.S.C. & 185), the President makes and publishes an express finding that the export(s) will not diminish the total quality or quantity of petroleum available to the United States and that such export(s) are in the national interest and are in accord with the Export Administration Act of 1969 as amended; or
4.	The commodity was not produced from the Naval Petroleum Reserves and was not and will not be transported by pipeline over rights-of-way granted pursuant to Section 28 of the Mineral Leasing Act of 1920, and such commodity will be exported as part of an overall transaction which will result directly in the importation into the United States of a quantity and quality of commodities from Petroleum Commodity Groups other than crude oil or partly refined petroleum products which is not less than the quantity and quality of such commodities for which an export license is sought and the commodities im
B-2
ported into the United States as part of this overall transaction will be sold at prices no higher than the lowest price at which they could have been reasonably sold had the export not taken place and the Group A commodity been refined at the nearest U.S. refinery capable of processing it within a reasonable period of time, and for compelling economic or technological reasons, beyond the control of the applicant the Group A commodity cannot reasonably be processed within the United States.
Exports of energy-related refined petroleum products are also prohibited without a license. Quotas have been established for each type of refined product and licenses are generally only issued to the extent of the export’s share of the overall quota for a particular produce.
Crude oil
Only insignificant quantities of crude oil are actually exported. Approximately 100,000 barrels a day, or 1.0 percent of total U.S. production, are exchanged for equal quantities of Canadian crude as part of the Canadian/Domestic Crude Oil Exchange Program. Since such exchanges minimize acquisition costs through improved efficiency of transportation they are mutually beneficial. The net effect of such exchanges on the amount of crude available for domestic use is virtually zero.
Refined products
Exports of most refined petroleum products are minimal. As illustrated in table B-l, exports of energy-related refined products (i.e., motor gasoline, aviation gasoline, jet fuel, LPG’s methane, kerosine, distillate fuel oil, residual fuel oil, special naphthas, and still gas) amount to about 1 percent of total U.S. production.
Export of Natural Gas
Identification of exporters
To the best of DOE’s knowledge, the companies exporting gas are U.S.-owned entities. With the exception of Phillips Petroleum and Marathon Oil Company, the companies exporting gas are gas
Table B-l. -Exports of refined petroleum products and crude oil-January-September 1978
Exports as a
U.S.	percentage of
production Exports production
		(thousands	
		of barrels)	
Motor gasoline	1,923,727	350	0.02
Aviation gasoline	10,541	-	-
Jet fuel(naphtha			
and kerosine)	264,849	361	0.1
Ethane (including			
ethylene	113,555	-	-
LPG’s	305,904	7,447	1.8
Kerosine	40,524	28	0.07
Distillate fuel oil	843,968	991	0.1
Residual fuel oil	457,589	3,605	0.8
Special naphthas	26,951	557	2.1
Lubricants	51,283	5,598	14.5
Wax	5,152	417	8.1
Coke	99,912	30,021	30.0
Asphalt	125,359	103	0.08
Road Oil	2,651	—		
Miscellaneous products	34,469	128	0.4
Unfinished oils	5,978	—		
Still gas for fuel	148,948	—		
Petrochemical			
feedstocks	166,144	6,534	3.9
Other	104,040		
Total refined			
petroleum	4,725,566	56,137	1.2
Crude Oil	2,275,257	33,576 1	1.5
1 Not exports per se, but oil exchanged for Canadian crude for logistical reasons.
Source: Energy Information Administration, Energy Data Reports: Petroleum Statement Monthly, September 1978.
transmission and/or distribution companies with limited energy resource production capacity.
Export controls
exports of gas. Section 402(a)(c)(f) vests in the Federal Energy Regulatory Commission (FERC) most of the remainder of the authority formerly exercised by the Federal Power Commission (FPC).
In response to Government and industry concerns about the potential legal and policy problems arising from the possible overlap of jurisdiction between the Secretary and the FERC, the Secretary issued Delegation Orders 0204-25 and 0204-26 (October 18, 1978). In these orders, the Secretary delegated different aspects of his import and export authority to the Administrator for the Energy Regulatory Administration (ERA) and to the FERC.
The delegation to the Administrator of ERA (0204-25) allows him to determine whether a proposed export of natural gas is not inconsistent with the public interest standard of Section 3 of the NGA. This determination would be based upon a number of considerations which may include: (1) The proposed price charged at the point of exportation; (2) consistency with DOE regulations or statements of policy specifically applicable to imports or exports of natural gas; (3) the national need for the gas proposed to be exported; and (4) such other matters within the scope of Section 3 of the NGA as the Administrator finds appropriate.
The delegation to the FERC (0204-26) grants it the authority to exercise all functions under Section 3 of the NGA which have not been delegated to the Administrator and which have not been previously exercised by him in addition to the functions under Sections 4, 5, and 7 of the NGA. Reserved to the FERC under the DOE Act, FERC has the authority to approve or disapprove applications for the siting, construction, and operation of particular natural gas export facilities while the Administrator has the authority to promulgate regulations or develop statements or policy governing such cases. FERC is also responsible for the continuing supervision of export projects through the ongoing review of energy company export tariffs.
The Department of Energy Organization Act vests in the Secretary, or his delegate, the legal authority to regulate imports and exports of natural gas. Section 402(f) of the Act specifically reserves to the Secretary all authority (including Section 3 of the Natural Gas Act (NGA)), to regulate imports and
Export of Coal
Identification of exporters
Identification of coal exports by producing company or mine is currently not available since trans
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actions are generally controlled by independent coal brokers. Most export coal is for metallurgical requirements and is a blend of coals from a number of suppliers with individual constituents vary mg by shipment. Currently available information does not permit identification of the coal brokers or coal exporters of record by national origin. However, it appears that companies exporting coal are U.S.-owned coal/energy corporations. The Department of Energy has no authority to regulate or control coal exports.
Export of Uranium
Identification of exporters
Only four companies export uranium; all four are U.S.-owned companies. The names of the exporters cannot be identified in this report because such information is regarded as proprietary data
under the terms by which export data are collected by the DOE Assistant Secretary for Resource Applications.
Export controls
The export of uranium from domestic sources is controlled under the Atomic Energy Act of 1954, as amended, and under the Nuclear Non-Proliferation Act of 1978. The licensing of uranium exporters is controlled by the Nuclear Energy Regulatory Commission. In essence, exporters are granted licenses only if they maintain a U.S. business address and office, and can certify a legitimate energy need for the uranium.
There is no specific distinction between foreign and domestic corporations for purposes of issuing export licenses; however, the destination of such exports is clearly stated. The principal recipients of U.S. uranium are Japan, West Germany, Taiwan, and Belgium.
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Appendix C Major Recipients of DOE Funding
Tables C-l and C-2 summarize DOE contract funding and financial assistance activities during 1978.
Table C-l. -Procurement and financial assistance in 1978
Total number of prime awards to the private sector where contract value was greater than $10,000 and for which there were 1978 obligations____________________________ 4 855
Total dollars awarded to the private sector, including awards to state and local governments--------------------------------- $ 7.8 billion
Total dollars awarded to small businesses, including awards by GOCO contractors________	$ 1.1 billion
Total dollars awarded to minority businesses, including awards by GOCO contractors........	$72.8 million
Total number of accepted unsolicited proposals from all sources_____________________ 1 355
Total dollar amount for accepted unsolicited proposals----------------------------------- $263 million
Total number of prime awards to universities where contract value was greater than $10,000 and for which there were 1978
obligations_________________________________ 1 461
Total dollars awarded to universities_______	$ 1.8 billion
Total number of financial assistance awards..	1,849
Total dollar amount for financial assistance action-------------------------------------- $228 million
Total number of prime contracts administered------------------------------------- 9,578
Total number of contractors doing business with DOE____________________________________
Total number of universities doing business with DOE____________________________________
300-288 0-79-13
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Table C-2. - Contractors awarded $10 million and over during 1978
	Total year
Contractor	obligations *
University of California	$992,907,128
Union Carbide Corporation	818,009,073
Sandia Corporation	459,588,086
Dupont, E. I.	365,219,030
Rockwell International Corporation	349,031,388
Westinghouse Electric	303,104,456
Tennessee Valley Authority	279,340,678
Bendix Corporation	266,700,544
AUA and University of Chicago	261,828,597
E G & G, Inc.	232,503,379
General Electric Company	208,801,511
Ohio Valley Electric Company	188,822,095
Westinghouse Hanford Company	188,403,314
Associated Universities	135,360,805
Reynolds Electric & Engineering	133,000,000
Garrett Corporation	101,374,424
Princeton University	101,755,273
Babcock & Wilcox Company	93,168,266
Battelle Memorial Institute	92,598,361
Electric Energy, Inc.	92,161,911
University Research Association, Inc.	90,849,391
Stanford Leland Junior University	84,231,997
Goodyear Atomic Corporation	72,460,429
Combustion Engineering	59,921,391
Monsanto Research Corporation	54,149,192
Contractor
J. A. Jones Construction
Massachusetts Institute of Technology Mason & Hanger-Silas Mason General Atomic Company Rust Engineering Corporation United Nuclear Industries, Inc.
Allied Chemical Corporation United Nuclear Corporation Exxon Research & Engineering Company Holmes and Naver, Inc.
Swinerton and Walberg
ZIA Company
Commonwealth Research Corporation TRW, Inc.
National Lead Company of Ohio
Jones Boecon
Burns & Roe, Inc.
Ashland Oil Company
Iowa State University-Ames Curtiss Wright Corporation Fenix and Scisson, Inc.
Avco Everett Research Lab
Nissho Iwai American Corporation University of Rochester
* Dollar amount subject to continuous updating.
Total year obligations *
52,965,042 47,966,088 47,450,607 45,782,808 41,193,900 39,911,958 37,515,947 31,560,838 29,941,783 29,499,941
29,015,019 27,454,319 24,163,197 23,820,280 22,030,447 21,810,918 18,764,953 16,424,435 15,349,616 15,155,000 14,562,260 14,109,821 11,528,205 10,408,756
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Appendix D
Actions Taken Regarding Disclosure of Energy Assets by DOE Employees
Introduction
Section 603(a) of the Department of Energy Organization Act requires the disclosure by departmental employees of energy assets, within 30 days after commencing service with the Department and annually thereafter. Section 603(b)(2) provides that a report “with respect to such disclosures and actions taken in regard thereto during the preceding calendar year” be included in the Annual Report. This report covers the period October 1, 1977 through December 31, 1978, with regard to the requirements of Section 603(a) and several other sections of Title VI.
Section 603
In October 1977, the Department made two general requests to employees for submission of reports, to fulfill the initial requirement to file within 30 days of commencing service with the Department; and, in May 1978, to fulfill the annual May 15 filing requirement. Subsequently, reports have been submitted by new employees upon entry of duty.
Section 603 requires all employees of the Department to file, except those holding positions at or below Grade-12 on the General Schedule, which have been determined to be a nonregulatory and nonpolicymaking nature. In accordance with Section 603(c) of the Act, the Department published a notice in the Federal Register (43 F.R. 3746, January 27, 1978) identifying positions and classes of positions that meet these criteria and are therefore exempted from the disclosure requirements.
Reports have been received as follows:
Regular employees (not supervisory).... 8,128 Regular employees (supervisory)_____	725
Special Government employees________	234
Intergovernmental Personnel Act
appointees and others________________ 26
The term “supervisory employee” is defined in Section 601(a). It refers in general to employees at Grade-16 or above, and to certain others.
Following the first request for submission of reports, several individual employees and union locals representing Department employees challenged the Department’s program to implement the financial disclosure provisions of the Act and Executive Order 11222 -AFGE Local 421 v.
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Schlesinger (443) F. Supp. 431, D.D.C., 1978). The challenge focused on that part of the program addressed primarily to the Executive Order, i.e., Part B of Form DOE-459, which requires submission of financial interest information similar to that required of all Federal employees under agency regulations issued in accordance with the Executive Order and implementing Civil Service Commission (now Office of Personnel Management) regulations. That portion (Part A) of the form implementing only Section 603 of the Act was not challenged and was found by the court to be “amply supported by Section 603(b)” of the Act.
With regard to the challenged portion of the form, the court held that Section 1(a) of Part B was an unconstitutionally broad invasion of employees’ First Amendment rights. That portion of the form was ordered to be stricken and the Department was directed to notify employees who had responded to that section of the form of their right to have information thus provided by them deleted and returned on written request made within 20 days from date of notice. Further, the court rejected the Department’s argument that regulations of predecessor agencies remained in effect pursuant to Section 705 of the Act, and directed the Department to proceed in accordance with Civil Service Commission regulations at 5 C.F.R., Part 735 and secure Commission approval within 6 months of the date of the Court Order (i.e., by July 13, 1978), or provide employees with the same right to deletion and return of information submitted in response to the remaining portions of Part B.
As directed by the court, the Department issued a memorandum to all employees dated February 13, 1978 notifying employees of their right to have information submitted in response to Section 1(a), Part B, Form DOE-459, deleted and returned. Responses were provided to 61 employees who requested return of this portion of their submitted forms. Subsequently, on July 20, 1978 the Department notified employees of their rights to have all of Part B of their submitted forms returned to them. This option was exercised by 157 employees and they were provided with this portion of their forms.
Regulations required to be issued pursuant to Section 603(b)(1) of the Act were in preparation at the time of the litigation discussed above. They were published for public comment and review on October 19, 1978 (43 F.R. 48922). Final regulations taking into account comments received from the
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public and from within the Department were transmitted to the Office of Personnel Management for review on February 23, 1979.
Other Sections of the Act
In accordance with Section 601(c)(1), the Department prepared and published a list of energy concerns as defined in Section 601(b). The list was made available to employees by memorandum of March 2, 1978 and includes approximately 22,900 entities. The lists includes persons, businesses, companies, corporations and other entities engaged in energy-related activities as described in Section 601(b). Nearly all entities were selected through use of Standard Industrial Classification (SIC) numbers, as published in the Standard Industrial Classification Manual, 1972, prepared by the statistical policy division, Executive Office of the President, Office of Management and Budget.
Employees were cautioned that the list should not be considered all-inclusive. The energy concern list is undergoing continuous review, with republication expected during 1979.
Section 602(a) prohibits supervisory employees from knowingly receiving any compensation from, or holding any official relation with, any energy concern, or holding stocks or bonds of any energy concern, or having any pecuniary interest therein. As a result of the review of financial interest reports submitted by supervisory employees, 156 employees were directed to divest themselves of energy concern holdings.
Section 602(c) provides that where exceptional hardship would result, or where the interest is a pension, insurance or other similarly vested interest, the divestiture requirements of Section 602(a) may be waived by the Secretary of Energy for a prescribed period. Pursuant to this authority, the Secretary granted 11 waivers for exceptional hardship and 35 for vested pensions. Three exceptional hardship waivers are pending.
Section 604 requires supervisory employees of the Department to file a report identifying energy concerns from which they have received compensation in excess of $2,500 in any of the previous 5 calendar years. In November 1977, heads of headquarters offices and field organizations were requested to identify positions meeting the criteria of Section 601(a) and employees occupying those positions, and to provide copies of the prior compensation reporting form (Form DOE-460) to these employees for completion and submission. New
employees filling supervisory position were also requested to submit the Form DOE-460. Prior employment reports were submitted by 725 supervisory employees in accordance with this provision. Section 605 establishes restrictions on postemployment activities of former supervisory employees. The Department regularly provides advice to departing employees regarding these restrictions, and the requirement in subsection (b)(1) that former supervisory employees file reports of employment with energy concerns on May 15 of the first and second years following termination of Department employment. Few reports have been received under this provision, since the first reporting date, May 15, 1978, covered only supervisory employees who left the Department between October 1,1977 and December 31,1977. The next reporting date is May 15, 1979, covering calendar year 1978.
Section 605 also provides for the waiver of restrictions placed on former supervisory employees who have outstanding scientific and technological qualifications to engage in otherwise forbidden activities on matters in a scientific or technological
field, where the national interest would be served. One such waiver has been granted and one is under active consideration.
Section 606 limits participation by supervisory employees in matters involving former employers that are energy concerns. Waiver of these limitations is allowed where the application of the limitation would work an exceptional hardship on the employee or would be contrary to the national interest. Two such waivers have been granted.
Section 607 provides that reports submitted pursuant to Title VI shall be available to the public. Departmental policy is to release copies of reports to individuals upon request. Two requests have been received for copies of reports submitted by a total of 25 identified employees. Publicly available portions of the Forms DOE-459 were released in response to these requests. The Department also provided copies of the publicly available portions of Forms DOE-459 and DOE-460 to a congressman
Section 608 establishes civil and criminal penalties for violation of the reporting and other Title VI requirements. No such actions have been taken.
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Appendix E
Financial Assistance Programs for Alternative Fuel Demonstration Facilities
Introduction
The Department of Energy Act of 1978-Civilian Applications (Public Law 95-238, Section 207) amends the Federal Non-Nuclear Energy Research and Development Act of 1974 (Public Law 93-577) to authorize the Department of Energy (DOE) to support financially alternative fuel demonstration facilities. These amendments (Section 19 of the 1974 Act) require DOE to report to the Congress annually on the opportunities and alternatives for implementing an alternative fuel financial assistance program and to report on DOE’s specific program plans and recommendations.
Appendix E outlines DOE’s existing financial assistance authority, describes current program development, analyzes the potential effectiveness of the existing financial assistance authority, and explains DOE’s intention to propose generic loan guarantee authority to replace the authority created by the section 19 amendments.
The section 19 amendments authorize DOE to provide financial assistance for alternative fuel energy demonstration facilities. Specifically, DOE is authorized to:
1.	Provide loan guarantees for financing the construction and startup costs of demonstration facilities converting domestic coal, oil shale, biomass, and other domestic resources into alternative fuels
2.	Enter into cooperative agreements to share the estimated design, construction, operating, and maintenance costs of modular facilities converting oil shale into alternative fuels.
3.	Provide community impact assistance in the form of grants, loan guarantees, and direct loans to support planning and community development efforts in areas impacted by demonstration facilities.
4.	Provide loan guarantees for financing the construction and start-up costs of demonstration facilities used in converting municipal or industrial wastes, sewage sludge, or other municipal organic wastes into synthetic fuels.
5.	Provide loan guarantees for financing the construction and start-up costs of demonstration facilities generating desirable forms of energy, including synthetic fuels, from municipal or industrial wastes, sewage sludge, or other municipal organic wastes.
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6.	Provide interest differential assistance on taxable obligations, guaranteed by DOE, which are issued by governments that would otherwise issue tax exempt obligations for financing municipal or industrial waste demonstration factilities.
Program Development
Congress appropriated $7 million for 1979 to permit DOE to implement this financial assistance program. Of this $7 million, DOE has directed $6.5 million to domestic coal, oil shale, and biomass programs and $0.5 million to municipal and industrial waste programs. Congress stipulated that DOE should use the appropriations to prepare regulations; develop evaluation criteria; prepare a comprehensive program; issue proposal requests; evaluate returned proposals; and select proposals for funding. Congress did not appropriate any money for issuing loan guarantees.
Since the passage of section 19 in September 1978, DOE has prepared for an alternative fuel financial assistance program by drafting regulations and developing evaluation criteria, specifications for comprehensive programs, and internal management and policy guidelines for possible implementation of loan guarantee programs. DOE’s specific activities include the following:
1.	The Office of Resource Applications is developing regulations to implement section 19.a-x. DOE expects to publish these guidelines for public comment no later than May 1979. These regulations will include community impact assistance provisions, notification and approval procedures for state, local, and Federal officials and agencies, and detailed criteria for loan guarantee agreements.
2.	The Office of Resource Applications has engaged in additional planning effort to assure that it will be able to proceed with the implementation of a loan guarantee program. These include establishing the administrative framework for a high-Btu loan guarantee program, analyzing the critical points in the process of issuing a loan guarantee, and exploring a variety of solicitation options.
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3.	The Office of Conservation and Solar Applications is developing regulations to implement section 19.y, as required by law. DOE expects to publish these guidelines for public comment in early May.
4.	Resource Applications has issued a program interest notice in order to obtain information to assess the feasibility of using low- or medium-Btu gas from coal in a variety of industrial applications or commercial gasification systems. Responses to this notice will be useful to DOE as it plans for a domestic coal loan guarantee program.
5.	The Office of Financial Policy in the Controller’s Office has developed a set of internal financial management procedures and policy guidelines for DOE’s loan guarantee programs. These procedures and policies are in place and will provide the control and analytical framework for an alternative fuel loan guarantee program.
In summary, DOE believes that it has established the necessary controls, administrative framework, and policies to enable it to implement effective nonnuclear loan guarantee and other financial assistance programs. Furthermore, in the process of developing regulations and planning for these programs, DOE has increased its knowledge of how to evaluate, structure, and monitor loan guarantee proposals and its understanding of the financial assistance needs of the developers of alternative fuel technologies.
Potential Effectiveness of the Section 19 Program
Although DOE has established the policies and controls needed to implement an alternative fuel demonstration financial assistance program, it is unlikely that it will be able to implement an effective program under its existing authority. From the process of developing regulations and planning for section 19 implementation, DOE has concluded that section 19’s authority is too restrictive and too cumbersome to permit it to issue loan guarantees for desirable energy technology demonstrations in a reasonable period of time.
Since the Nation is facing the prospect of oil and gas shortages in the next decade, DOE must aggressively develop and bring to commercialization new energy technologies for energy supplies.
However, the authority provided in section 19 is not broad enough to permit DOE to demonstrate the commercial viability of renewable resource technologies, including solar and wind technologies.
Furthermore, the legislative constraints in section 19 will prevent DOE from issuing guarantees for most energy technology demonstrations in a reasonable time period. These constraints include requiring proposal review from FTC, Interior, Attorney General, EPA, and Treasury; notifying Congress of proposed transactions 90 days prior to finalization; notifying local authorities and affected state and local governments; and obtaining project approval from governors and other affected parties. While DOE appreciates the need for many of these procedures to apply to certain large-scale projects, these procedures would needlessly delay and hinder smaller projects.
DOE’s Loan Guarantee Proposal and Program Plans
DOE believes that new authority is needed to enable it to issue loan guarantees for renewable resource and other advanced energy technologies. It is clear that procedures for issuing loan guarantees must be simplified, especially for projects requiring less than $50 million in assistance. Moreover, the time and cost to the Government, lender and borrower of issuing loan guarantees should be reduced, thus helping to encourage the private sector to invest in economically-promising but commercially-untested energy technologies.
The Generic Loan Guarantee Proposal
DOE is considering proposing loan guarantee authority for non-nuclear energy technologies, which would replace the section 19 financial assistance program. Proposed legislation would allow DOE to establish by rule the procedures under which loan guarantees would be made. However, proposed legislation would preserve Congressional control over large-scale projects.
Regulation Development
DOE will procede to publish proposed guidelines for the municipal and industrial waste loan guarantee program. It is planned to publish proposed guidelines for the generic alternative fuel demonstration loan guarantee program to enable DOE to receive valuable public comment about the implementation of domestic coal, oil shale, and biomass loan guarantee programs and community impact assistance.
Contingency Plans
If DOE does not obtain the proposed guarantee authority modifications, it will seek implementation of the section 19 loan guarantee authority. DOE would then submit to the Congress a comprehensive report and implementation plan as required by section 19.
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Appendix F
1978 Budget Summary
Introduction
Ten primary missions were used to consolidate the first (1978) DOE budget: energy supply (research and technology development); energy supply (production, demonstration, and distribution); conservation; regulation; emergency preparedness; energy information; environment; basic sciences; atomic energy defense activities; and policy and management. Eleven summary tables covering estimated 1978 budget authority and budget obligations follow. All data are given in millions of dollars.
Table F-l. -Budget summary by mission (estimated)1
Table F-3. -Energy supply-production, demonstration and distribution
	Budget authority	Budget obligations
	(in millions)	
Energy supply: research and technology development Energy supply: Production,	$ 2,696	$2,448
demonstration and distribution	908	800
Conservation	692	473
Regulation	83	86
Emergency preparedness	3,595	2,029
Energy information	48	46
Environment	218	203
Basic sciences	397	363
Atomic energy defense activities	2,512	2,308
Policy and management	388	394
Subtotal	$11,537	$9,150
Pending/proposed supplementals	-1,126	- 110
Legislative proposals	—	—
Other adjustments	- 128	- 218
Total Department of Energy	$10,283	$8,822
1 On a comparable basis, the estimate would be $439 million budget authority and $394 million budget outlays.
	Budget authority	Budget obligations
	(in millions)	
Coal	$ 10.6	$ $2.9
Naval petroleum and shale reserves	152.1	83.0 2
Solar	87.2	83.7
Uranium enrichment activities (NET)	471.0	409.3
Uranium resource assessment	64.8	54.7
Multi-resource	0.5	0.6
Geothermal resources development fund	15.0	6.6
Power marketing administration	107.3	159.8
Total energy supply (P, D & D)	$908.5	$800.6
2 Total program outlays are estimated at $278.8 million in 1978. This is included in the “Petroleum Reserve” account of the Funds-Appropriated-to-the-President chapter of the Budget.
Table F-f. - Conservation
Budget authority
Budget obligations
Table F-2. -Energy supply -research and technology development
Budget	Budget
authority	obligations
(in millions)
(in millions)
Utilities	$ 54.6	$ 43.9
Residential and commercial	125.5	109.6
Industrial	29.6	21.7
Transportation	65.0	51.0
Federal	0.6	0.7
State/local	297.1	147.9
Multi-sector	119.5	98.7
Total conservation	$691.9	$473.5
Coal	$ 579.1	$ 520.1
Petroleum	74.1	62.5
Gas	31.0	26.5
Solar	302.7	225.2
Geothermal	106.2	81.9
Magnetic fusion	325.4	279.1
Fuel cycle R&D	284.9	212.8
Breeder reactor	517.1	610.6
Nuclear research and applications	226.7	206.8
Light water reactor facilities	28.1	24.6
International spent fuel storage	5.0	5.0
Hydroelectric	10.0	7.5
Biomass	20.7	15.2
Basic energy sciences	177.4	164.1
Advanced technology & assessment	7.5	5.7
Total energy supply (R&TD)	$2,695.9	$2,447.6
Total F-5. -Regulation
Budget authority
Budget obligations
(in millions)
Petroleum	$2.9	$ 2.9
Gas	12.9	13.2
Hydro	7.6	7.6
Multi-resource	59.5	62.1
Total regulation	$83.3	$85.8
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Total F-6. -Emergency preparedness
Total F-9. -Basic sciences
	Budget authority	Budget obligations
	(in millions)	
Strategic petroleum reserve	$3,589.6	$2,024.1 3
Multi-resource:		
Materials	0.2	0.1
Emergency preparedness	5.7	4.6
Subtotal - multi-resource	5.9	4.7
Total emergency		
preparedness	$3,595.5	$2,028.8
3 Total program outlays in 1978 are $2,269.1 billion. Of this amount, $245 million is included in the “Petroleum Reserves” account of the Funds-Appropriated-to-the-President chapter of the Budget.
Life sciences research and biomedical applications
High energy physics Nuclear physics
Total basic sciences
Budget authority
Budget obligations
(in millions)
$ 42.5
274.2
80.4
$397.1
$ 41.0 238.4
83.3
$362.7
Total F-10. -Atomic energy defense activities
Budget authority
Budget obligations
Total F-7. -Energy information
Budget	Budget
authority	obligations
(in millions)
(in millions)
Inertial confinement fusion	$ 129.6	$ 122.2
Naval reactor development	247.4	251.8
Weapons activities	1,395.3	1,270.9
Intelligence and arms control	24.7	23.3
Special materials production	674.7	602.9
Nuclear materials security and safeguards	40.7	36.7
Unobligated balances	-	-
Total atomic energy defense activities	$2,512.4	$2,307.8
Information analysis	$17.4	$17.8
Collection and dissemination	19.6	17.7
ADP 4 services to other functions	11.1	11.0
Total energy information	$48.1	$46.5
4 Automatic data processing
Total F-ll. -Policy and management
Budget	Budget
authority	obligations
(in millions)
Total F-8. -Environment
Budget	Budget
authority	obligations
(in millions)
Environmental research and		
development		
Overview and assessment Biomedical and environmental	$ 51.4	$ 44.8
research	166.4	158.0
Total environmental research		
and development	$217.8	$202.8
General systems studies Program direction and management	$ 14.9	$ 15.5
support	326.9	359.7
Institutional relations	29.4	30.8
Consumer affairs and special impact	0.6	0.5
In-house energy management	1.7	0.8
Security investigations	12.2	12.6
Public awareness	3.8	3.8
EEO 5 contractor compliance Decontamination	3.8	4.0
and decommissioning International cooperation	18.2	16.3
nonnuclear technologies	5.2	5.6
Other supporting activities	14.0	7.8
Cost of work for others	18.3	18.2
Miscellaneous revenues Changes in inventories and	-100.7	-100.7
working capital	40.0	19.5
Total policy and management	$388.3	$394.4
5 Equal Employment Opportunity
U. S. GOVERNMENT PRINTING OFFICE : 1979 0 - 300-288
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