can do, because I have talked with some of the gas-operating people of some of the largest systems, and have discussed, for instance, the Indianapolis situation with them, and it is pretty evident that that peak load can be provided for by the use of the storage facilities of the present manufactured-gas plants, in many places, and in that way they could avoid the overstressing the pipe lines at the peak-load period.

Mr. LEA. Well, you have, for instance, seasonal manufacturing, on a large scale, or in a city that consumes large quantities of gas for household purposes, a blizzard hits the city and everybody turns on the gas.

Mr. CHANTLAND. Yes.

Mr. LEA. It is up to the gas company to try to maintain the necessary pressure to meet that demand.

Mr. CHANTLAND. Yes.

Mr. LEA. That presents a pretty difficult situation, does it not? Mr. CHANTLAND. That is a difficult problem, yes, and that is the place where the reserve facilities in the old manufactured gas plant, the use of its tanks, could be taken into account, fill those reserve tanks with gas and be able to meet that peak load, and therefore lessen the demand on their pipe line capacity.

Mr. COLE. You mean by transferring gas from the tanks?

Mr. CHANTLAND. Yes; make gas, or take the gas from the line and put it into the reserve facilities during slack.

Mr. COLE. You mean from the natural storage into the artificial storage?

Mr. CHANTLAND. They can do that by making use of the present manufactured gas storage equipment; it might present some problem, but they can use the present manufactured storage with some changes, prhaps, by making it tighter, as I understand that natural gas is a little more fugitive in character than the manufactured gas. But they could transfer this natural gas into their storage facilities to protect them against the peak loads. I am not an engineer, but am giving you what has been suggested as a possible way to meet that problem.

Mr. LEA. Colonel, what is the estimated period of exhaustion of the present known natural gas supply in the United States?

Mr. CHANTLAND. I do not believe anyone has been able to say, or make a prediction of that, because I think it is ever changing. The only figure that I would be able to give you is the one that I stated in my remarks a while ago, based on the testimony from geologists and people on whom we felt we could rely, and those figures, based on the present rate of exhaustion, you might say "ad lib" with no rstrictions, would run anywhere from 10 to 50 years, or better. As I say, these figures are changing. In the eastern fields, the older fields, many wells are down somewhat in supply, but they are having new ones put in all the time, so that I do not believe that any such a figure can be stated with any degree of accuracy. The gas is being used, but it is also being discovered, and wls are being drilled all the time.

Mr. LEA. How rapidly does the pressure decline in fields like the Panhandle?

Mr. CHANTLAND. I wish that I could recall; we had some very good figures submitted on that. The reduction in pressure has been kept. Very definite figures have been kept within areas in the Panhandle, particularly in the center and outer sections of the field, but I do not feel that I could quote a figure on an important question like that. That is one of the ways they have of fixing compensation to the one they buy from. They determine the pressure and then take that. The better companies take what they call typical wells, and measure the test at the beginning and the end of the year, and determine in that way what the supply is and use that factor in their compensation. They use that decline in pressure as one of the factors.

Mr. LEA. Where there are large fields with a considerable number of owners how definitely can the engineers determine the total available supply and its location with reference to different ownerships? Mr. CHANTLAND. That apparently is not so difficult. You are talking now about the problem of ratable taking so as to determine the amount that is to be paid one owner and how much to another, are you?

Mr. LEA. I had two things in mind: One was the reliability of the estimates from the standpoint of exhaustion.

Mr. CHANTLAND. Yes.

Mr. LEA. And also the relative rights of the joint owners in the field. How can that be appraised?

Mr. CHANTLAND. They do appraise them, but of course, the first question, for the field-you are talking in very big figures. As I said, the estimate of reserves in the Panhandle field is some thirteen or fourteen trillion cubic feet; and in the Hugoton field, six or seven trillion and higher.

Mr. LEA. What is it in the Michigan field?

Mr. CHANTLAND. In Michigan-there is very serious controversy over that; it is a newly developed field and naturally, of course, there have been no real or substantial figures arrived at. So perhaps you can minimize that.

On the matter of proration, it does not seem so difficult, because they can outline the field very well, and the pressure is more or less constant for similar positions in the field, so they can tell with a certain degree of accuracy. There is not a great deal of trouble in knowing what the man on section 1, or a man on section 2, for instance, should have for their share into a gas line.

Mr. LEA. How broad a base of experience have we to determine that question, that is, the duration of the field and the quantity? In other words, what base of experience have we that would enable us to get at the problem more reliably?

Mr. CHANTLAND. I am thinking more particularly of the fields where we have the big reserves, than the small fields.

Mr. LEA. Yes.

Mr. CHANTLAND. I think they have been going long enough out there so that they have determined quite definitely what the rate of decline in pressure is over a period of years. I think the Bureau of Mines has statistics on that.

Mr. COLE. Which bureau?

Mr. CHANTLAND. The Bureau of Mines.

Mr. COLE. The Bureau of Mines?

Mr. CHANTLAND. Yes; I think they have rather complete statistics showing the pressure decrease and the amount taken out; they have collected quite a little bit of data on that.

Mr. COLE. Rather complete statistics on the very thing this bill would cover; is that right?

Mr. CHANTLAND. Well, I do not know

Mr. COLE. That is what it does, is it not; because I understand the Federal Power Commission is permitted to set up the necessary number of experts to determine what this bill requires in order to establish rates and to establish some, at least, of the information that is now available in the Bureau of Mines.

Mr. CHANTLAND. Some of the figures we had were secured from the Bureau of Mines, and I do not assume that any of their work would be lost; wherever necessary the Power Commission would make use of the Bureau of Mines' figures.

Mr. COLE. You have made use of the Bureau of Mines' figures, you say?

Mr. CHANTLAND. We have taken figures from them.

Mr. COLE. I mean have you used their personnel; you did not use their personnel?

Mr. CHANTLAND. No; because we went into the accounts. Many of these questions are not those of our investigation. You appreciate that I am a lawyer. You are taking me quite widely into the engineering field, and I am just doing the best I can.

And there are stated principles that go into ratable taking, and all of those things must be taken into consideration in dealing with these companies. It must be an equitable matter.

Mr. LEA. And I would assume that the body set up with the responsibility of administering the law, if it had the facts available from a reliable source, would have common sense enough to avail itself of those facts, and of the experience of men in other departments in getting that information.

Mr. CHANTLAND. I would assume so.

Mr. LEA. There is one problem that suggested itself to me this morning in the startling figures about the extent of gas production and its great development as carried on in recent years, and that is as to what would happen if this supply should be rapidly depleted with so many industries and perhaps homes depending on it.

Mr. CHANTLAND. Is that not just stating one more powerful reason why the whole problem should be taken hold of immediately?

Mr. LEA. Well, I think that is true. But what is the protection of these communities that are depending upon gas supply for fuel? Last year I was out in the Central West where a little community some years back developed a natural-gas supply which lasted for a few years but was suddenly exhausted. That community became a pitiful specter for quite a number of years until another fuel was developed, and I am wondering how far it is possible to guard against that?

Mr. CHANTLAND. I think it is a very serious thing to let this gas go to waste as it is, where each is trying to take his biggest immediate profit. There is no allocation or proration among them, and it is much more serious than it would be if you were to take hold of it and substantially limit it. It would result in conservation, and in the end the owners would realize more than otherwise. They could be dealt with fairly, and I think would be satisfied, if they realized they were receiving their equitable return.

Mr. LEA. Based on the figures you gave us this morning as to the estimate of waste that has been occurring, how does that waste compare with the amount of gas that is actually consumed?

Mr. CHANTLAND. The comparison which I have already stated to you is the only one I can make. The waste equals the domestic consumption and commercial use of natural gas in the entire country. The domestic use is about 16 percent and the commercial use is about 10 percent. In other words, that is, taking the total of the two, around 25 percent of all.

Mr. LEA. Yes. So far as you have been able to ascertain, what is the reason why these States in which these wells are located have not been able to more effectively and actively restrain this useless waste? Mr. CHANTLAND. Well, Mr. Chairman, remember, this whole thing is new. Texas made one effort and was set back. Louisiana has a good law. I do not think it has gone to the higher courts, but apparently it will not need to, if the testimony before the Commission, even by people in the industry, representatives of the Standard Oil Co. of Louisiana, and of the Mississippi River Fuel Co., I think it was, who said that they could work satisfactorily with that law. It seems to work out pretty well as a conservation statute.

Regarding the Oklahoma situation I am not familiar with it. Since this new Kansas field has come in, that is the Hugeton field, they are getting some market, but there is some waste at the present time.

Mr. LEA. I thought the gas out there was being conserved.

Mr. CHANTLAND. I think if there was some allocation between the States there would not be much difficulty in working it out.

Mr. LEA. You are a lawyer?
Mr. CHANTLAND. Yes.

Mr. LEA. What limitation of power do you think the Federal Government has in regard to conserving gas in the States and in its production?

Mr. CHANTLAND. I believe that that is best stated in the draft of the bill that has been submitted by the Commission. I think we have worked it out there. We reached the conclusion that that was about the only way it could be done, that is something that would be in the nature of a standing invitation to the States to enter into these compacts with the idea that the Government would have the information and deal fairly, and would have this law on the statute books that would then make shipments of gas produced or attempted to be produced and shipped in violation of the State laws (which would be written into the compact as a part of the contract) would be contraband. I believe that would tend toward conservation. I do not believe there is any other way it can be carried out. I know that Mr. Cole asked several questions along that line yesterday and I believe Mr. De Vane put them back on his side of the net. But we reached the conclusion stated.

Mr. LEA. In other words, you think the Federal Government should ally itself with the State governments in the protection and conservation of its resources!

Mr. CHANTLAND. Yes, and on that line, Mr. Lea, that memorandum which I handed to you, a copy of it, has quite a little bit of study on both propositions; one that of compacts, that is the extent of the compact, and the other the right of the Government, under law, to ban from interstate commerce of gas that has been produced in violation of the State laws if covered by compact.

Mr. LEA. The Federal Government, I take it, would have no greater power to put a ban on interstate shipments by reason of the compact than it has against any other single State law.

Mr. CHANTLAND. The difference is this, that in this instance it would be in aid of; it would not be taking something away from them, but would be aiding the States, and there the distinction is drawn, which I think is sound.

Mr. LEA. It is your judgment that one State can cooperate with another in a conservation program. Mr. CHANTLAND. Yes; and I think the more States the better. Mr. Lea. Why do you think that?

Mr. CHANTLAND. Well, then, there is not left the question of one State feeling that it is going to lose; to use the words that came into existence recently, "chiseled" against-that your next door neighbor is chiseling on something. If they feel they are getting a square deal, and they are getting a reasonable allocation and amount for their supply, why naturally they will do it. But I cannot see how they can hope to fight it out alone.

Mr. LEA. Could the Federal Government make as a condition precedent for the transmission or transportation of gas in interstate commerce a requirement that pay for the gas must have been contributed jointly to the owners of the sources from which it came?

Mr. CHANTLAND. Yes; I think so, if the State law is there, and that State law is written into the compact; I see no reason why it should not.

Mr. LEA. If there was no State law on that subject, what would happen?

Mr. CHANTLAND. I think it could not be done. I think the Federal law would be good only as an aid to the State law.

Mr. LEA. You spoke about the problem of common carriers by pipe line. What are the reasons for and against providing the obligation of common carrier on pipe lines?

Mr. CHANTLAND. The reasons are perhaps not so much against the idea of making the obligation as they are factual, against the legal situation. The Supreme Court has said, of course, very definitely, that you cannot make a person a common carrier by declaring him to be one. The facts are the things which control. And in the natural-gas pipe-line industry the natural-gas pipe-line company carries to a large extent its own gas, whether it is produced by the company or purchased from others, so that a large number of them are outside of the field of common carriers.

An attempt was made in the bill drafted, which we submitted to you, to put that obligation in the alternative, which we felt might help out, because there are very few pipe-line companies that do not purchase some gas. Then, if they purchase some, they should purchase ratably, and the gas companies that do not want to do that should assume the obligation of common carrier. The alternative is put up to them.

Mr. LEA. You spoke of the number of holding companies engaged in or having ownership in companies engaged in the gas business.