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APPENDIX-Continued

The State of Alaska:

1. Prepared statement of Robert H. Loeffler.

2. Letter from Hon. Harold Runnels to Robert Loeffler, dated October 23,

1979, transmitting additional questions to Mr. Loeffler

3. Letter from Robert Loeffler to Hon. Harold Runnels, dated November 19, 1979, responding to the questions in Mr. Runnels' letter of October 23, 1979

Office of the Federal Inspector, Alaska Natural Gas Transportation System: 1. Prepared statement of John T. Rhett, Jr.

Page

869

878

880

884

2. Letter from Hon. Harold Runnels to John T. Rhett, dated October 23, 1979, transmitting additional questions to Mr. Rhett

900

3. Letter from John T. Rhett to Hon. Harold Runnels, dated November 6, 1979, responding to the questions in Mr. Runnels' letter of October 23, 1979

4. Document entitled, "Quarterly Report to the President and Congress on the Construction of the Alaska Natural Gas Transportation System," dated October 1979.....

U.S. Department of the Interior:

1. Prepared statement of Hon. James W. Curlin
2. Letter from Hon. Guy Martin, Assistant Secretary for Land and Water
Resources, U.S. Department of the Interior, to Hon. Paul E. Goulding,
Acting Administrator, General Services Administration, dated June 15,
1979, outlining problems associated with the Haines-Fairbanks right-of-
way and its relationship to the proposed Alaska Natural Gas Transpor-
tation System (ANGTS)

3. Letter from Hon. Harold Runnels to Hon. James W. Curlin, dated
October 23, 1979, transmitting additional questions to Mr. Curlin
4. Letter from Hon. James W. Curlin to Hon. Harold Runnels, dated
December 19, 1979, enclosing responses to questions in Mr. Runnels'
letter of October 23, 1979

5. Letter from Hon. James W. Curlin to Hon. Harold Runnels, dated
November 1, 1979, enclosing responses to Mr. Clausen's request for
information on the length of time taken by the Department in issuing
rights-of-way grants for ANGTS and specifically for Pacific Gas Trans-
mission Co.....

Federal Energy Regulatory Commission:

1. Prepared statement of Hon. Charles B. Curtis (with attachments)..........
A. Attachment 1: Document entitled, "Federal Energy Regulatory
Commission Actions for the Alaska Natural Gas Transportation
System"

B. Attachment 2: Letter from Don S. Smith, Vice Chairman, FERC,
to Hon. John Dingell, chairman, Subcommittee on Energy and
Power, dated May 16, 1979, responding to Mr. Dingell's letter of
February 9, 1979, to Secretary Schlesinger, concerning U.S.
Government effort to insure that U.S. firms have a fair chance to
compete in the Canadian portion of the Alaska gas pipeline
project.

2. Letter from Hon. Harold Runnels to Hon. Charles B. Curtis, dated
October 23, 1979, transmitting additional questions to Mr. Curtis
3. Letter from Hon. Charles B. Curtis to Hon. Harold Runnels, dated
December 26, 1979, responding to the questions in Mr. Runnels' letter of
October 23, 1979

902

908

934

944

959

961

965

968

976

986

993

995

4. Document from the Canadian National Energy Board identified as Order No. GH-4-79, and including notice of hearing

1002

5. Document from the Canadian National Energy Board identified as Order No. RH-2-79, and including a notice of hearing.

1013

6. Commission opinion issued August 6, 1979, docket Nos. CP78-123, et al., entitled, "Order Approving Alaska Segment Design Specifications and Initial System Capacity".

1027

Office of the Chief of Engineers, Department of the Army:

1. Prepared statement of Brig. Gen. Hugh G. Robinson

1035

ALASKA NATURAL GAS TRANSPORTATION

SYSTEM

MONDAY, OCTOBER 15, 1979

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS,
COMMITTEE ON INTERIOR AND INSULAR AFFAIRS,
Washington, D.C.

The subcommittee met, pursuant to notice, at 9:47 a.m., in room 1324, Longworth House Office Building, Hon. Harold Runnels (chairman of the subcommittee) presiding.

Mr. RUNNELS. The subcommittee will come to order.

Today the Oversight and Investigations Subcommittee will begin hearings on the Alaska Natural Gas Transportation System. This subcommittee has been assigned legislative jurisdiction over this project by the House Committee on Interior and Insular Affairs, a responsibility conferred upon the committee under rule X of the rules of the House of Representatives through assignment of jurisdiction over public lands.

I have called these hearings because I feel it is essential for all Members of Congress and the public to be kept informed of the progress toward construction of what will likely be the largest privately financed international business venture of all time. Because the pipeline will transport a domestically produced energy resource from the North Slope of Alaska, through Canada, to critical markets in the Midwest and the west coast, it is unique in an otherwise complicated and uncertain national energy picture.

Two factors, the pipeline's impact on our domestic energy supply picture and the reorganization of Government to accomplish a specific energy goal, underscore my interest in holding these hearings. Today, we will hear from the four project sponsors who will be building the pipeline. We hope to find out how much it will cost and when it is expected to be completed.

Tomorrow we will hear testimony from the new Federal inspector, Mr. John Rhett, who will function as the "one window" contact point with the project sponsors and will carry with him all Federal authority on matters pertaining to preconstruction, construction and initial operation of the system. I believe that Mr. Rhett fully appreciates that the success of this approach will depend on his ability to achieve prompt, coordinated decisionmaking.

There are questions about the pipeline which cannot yet be answered. We want to learn about these issues, whether they are environmental, technical, or financial, and about the issues which have already been resolved through the diligent efforts of the sponsors and the Federal agencies. This subcommittee intends to

keep an open minded and supportive position in the process of identifying and resolving conflicting interests. In any project of this magnitude and complexity those interests are serious and can have long-range impacts. It is our intention to continue to bring significant issues to light through further hearings in the months ahead. When the transcripts of these hearings are printed, a staff report on the status of this project will also be printed as part of the hearing record. I hope all of you will have a chance to read it. I would at this time like to thank the witnesses for coming today. Many have had long distances to travel and are taking time away from busy schedules, and we appreciate the effort which they have made. We intend to make their complete testimony available for full distribution to our congressional colleagues and the public. I would ask that all witnesses summarize their statements in about 10 minutes, if that is possible. We will then follow with questions. Mr. Clausen.

Mr. CLAUSEN. Thank you, Mr. Chairman.

I want to commend you for scheduling these oversight hearings on the proposed Alaska Natural Gas Transportation System and to join with you in welcoming the witnesses to the committee. I am hopeful we can develop the kind of hearing and the data in this hearing process that you have articulated in your opening statement.

Today, we in the Congress realize the urgent national need for establishing energy distribution systems to various regions of our Nation. Hopefully, these hearings will reflect congressional concern in seeing that such systems are actually established.

It seems only yesterday that we as members of the Subcommittee on Public Lands reported a bill entitled Alaska Natural Gas Transportation Act for the full Interior Committee to consider. The primary purpose of this legislation was to expedite a decision on the delivery of the Alaska natural gas to U. S. markets. As you will recall, while this legislation was being considered I expressed three main areas of interest:

One, a provision for new facilities to assure direct gas deliveries to the western and eastern regions of the United States; and second, a need for one department, entity, or administrator to be responsible for approving preconstruction, construction, and initial operation of the gas system; and third, to recognize a need for coordination and cooperation toward achieving energy self-sufficiency here in this Western Hemisphere.

Fortunately, in 1976 Congress enacted the Alaska Natural Gas Transportation Act and mandated that new facilities must be included within the particular route selection by the President. Later, in September 1977, Congress received and approved the President's route decision. In a short period of time afterward, an executive policy board came into existence and later a Federal inspector position was created.

We are now in a position to receive through this subcommittee's oversight and investigative authority an update on the progress toward achieving construction of an Alaska natural gas transportation system.

Mr. Chairman, I am hopeful the subcommittee members and staff will exhibit as much vigor and determination in addressing

the proposed transportation system as we have in addressing the equitable distribution of Alaska North Slope crude oil. Again, Mr. Chairman, we, the members of the committee, are grateful and deeply in your debt for moving quickly in taking the initiative to permit us to develop the kind of a hearing record that is in our area of jurisdiction and responsibility. So I commend you, sir.

Mr. RUNNELS. Do any other members of the subcommittee have an opening statement?

Mr. LAGOMARSINO. Mr. Chairman, just a few words.

I want to join my colleague Mr. Clausen, in commending you and in commending him for holding these hearings. I think while perhaps other oversight committees of the Congress get more press and while they do things that might be more dramatic, the record will show that the work of this subcommittee has been very constructive and has already resulted in some very important legislation and some important issues being discussed and brought to the attention of the public. We made some changes; we have not just made headlines. So I compliment the gentleman.

Mr. RUNNELS. Any other opening statement? If not, I thank each one of you for being here this morning.

Before proceeding to our first witness, we will have inserted as part of the hearing record the staff report previously mentioned, including the appendixes to that report; plus a prepared statement submitted by the General Accounting Office.

Hearing no objection, so ordered.

[The report referred to above entitled, "Alaska Natural Gas Transportation System: Status Report"; and the prepared statement from the General Accounting Office may be found in the appendix. See table of contents for page number.]

Mr. RUNNELS. Our first witness will be Mr. Robert L. Pierce, president and chief executive officer of the Foothills Pipe Lines (Yukon) Ltd.

Is Mr. Pierce here?

Mr. MCMILLIAN. We requested a change in schedule.

Mr. RUNNELS. I know but we are going to try to keep to our schedule and call witnesses as we had them on the witness list. Is Mr. Pierce in the room?

Mr. PIERCE. Yes.

Mr. RUNNELS. You may proceed.

[Prepared statement of Robert L. Pierce may be found in the appendix.]

STATEMENT OF ROBERT L. PIERCE, PRESIDENT AND CHIEF EXECUTIVE OFFICER, FOOTHILLS PIPE LINES (YUKON) LTD.; ACCOMPANIED BY MURRAY STEWART, EXECUTIVE VICE PRESIDENT; BRUCE SIMPSON, AND RICK COOKE, EXECUTIVE ASSISTANTS

Mr. PIERCE. Mr. Chairman, members of the committee, my name is Robert L. Pierce, president and chief executive officer of Foothills Pipe Lines, Yukon, the company essentially responsible for the construction of the Alaska Highway System in Canada. With me is Mr. Murray Stewart, executive vice president, sitting behind us are Mr. Bruce Simpson and my executive assistant, Mr. Rick

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