Mr. CHANTLAND. I have no comparable statistics, or knowledge, offhand, Mr. Lea, that I can give you. Mr. LEA. To what extent do these companies engaged in the transportation of gas also engage in the development and discovery of it? Mr. CHANTLAND. I believe it is fair to say-I may be in errorthat the gas companies probably do more prospecting, what is commonly termed "wildcatting" than the oil companies. As I say, I may be wrong, but that is my memory, that they do more than the oil companies. I do not know why that is, but I think it is the case. Maybe the outlet for oil is much bigger or easier, because in oil you do not have to rely solely on pipe lines for transporting it. Mr. LEA. You will have opportunity to put into the record, Colonel, a correct statement on that. Mr. CHANTLAND. Thank you. Mr. LEA. The committee will stand adjourned until 10 o'clock Tuesday morning. (Thereupon, at 11:55 a. m., an adjournment was taken until 10 a. m., Tuesday, Apr. 7, 1936.) NATURAL GAS TUESDAY, APRIL 7, 1936 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE OF THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D. C. The subcommittee met, pursuant to call, in the committee rooms, at 10 a. m., Hon. William P. Cole, presiding. Mr. COLE. The committee will come to order please. I am sorry to announce that Mr. Lea, chairman of this subcommittee, is not able to be here this morning. Mr. Battle, we will be pleased to hear you. Will you please state your full name, and for whom you appear? STATEMENT OF JOHN D. BATTLE, EXECUTIVE SECRETARY OF THE NATIONAL ASSOCIATION OF BITUMINOUS COAL ORGANIZATION, WASHINGTON, D. C. Mr. BATTLE. Mr. Chairman and members of the committee: My name is John D. Battle. I am executive secretary of the National Coal Association, an organization of bituminous-coal producers throughout the United States. My address is in the Southern Building, Washington, D. C. As a representative of the bituminous coal-mining industry I approach a discussion of this bill, which is apparently designed to regulate the natural-gas industry by the Federal Government, with some misgivings. I do not come here as a spokesman for one industry proposing that you regulate another industry, even though that industry is a competitor of ours. I come here for the purpose of pointing out to you certain defects in this bill which in my opinion make it practically nil insofar as benefiting anyone is concerned. I must, of course, consider this bill as having been introduced in good faith and I therefore treat it most seriously. It is said to be for the purpose of regulating the transportation and sale of natural gas in interstate commerce and then in section 1, it seems to me, when the exceptions are taken into consideration, there is very little, if anything, left to regulate. For instance, let us analyze section 1 briefly, and that is about the only section in which I am interested. The bill first declares the business of transporting and selling natural gas for ultimate distribution to the public to be affected with a public interest and that Federal regulation in matters relating to 71 the transportation of natural gas and the sale thereof in interstate and foreign commerce is necessary in the public interest. I am not a lawyer. Therefore, I do not discuss the question of the Federal power in the premises. I merely wish to point out some of the practical features in connection with this proposed law. Then the bill provides that it shall not apply to the distribution of natural gas moving locally in low-pressure mains or to the facilities used for such distribution or to the production of natural gas. Thus production control is eliminated. I am not clear on the distinction between low-pressure and high-pressure mains-there is nothing in the bill to indicate what the dividing line is; it may be thoroughly understood by those familiar with the industry-but at least it does not apply to natural gas moving in low-pressure mains. Likewise, it does not apply to the distribution locally, and then there is a further exception to the effect that it does not apply to the sale of natural gas for industrial use. Consequently, the only phase of the industry, as I see it, that it is proposed to regulate is after the gathering ceases and the gas is turned into a main line, so to speak, until it reaches the city gate, and only then when it is moving in high-pressure mains across State lines. If I am wrong in this interpretation of the bill, I hope that I may be corrected now. But if I have properly construed the bill, then if this high-pressure main line goes directly by 25 manufacturing plants, there is nothing to provide for any regulation of the price that may be charged for this gas, as gas for industrial use is exempted from the bill. If there were some domestic consumers along the line not subjected to State or city regulation, I presume the price of natural gas to them would come within the provisions of this bill, and if there were governmental buildings, such as hospitals, Army posts, and so forth, located along the pipe line not subject to city or State control, I presume the price to those institutions under this bill could be regulated. Now let us determine who uses natural gas. According to the United States Bureau of Mines-and I wish to put this statement of the Bureau in the record if it has not already been placed there by others. I will just describe that if— Mr. COLE. That is a statement issued by the Bureau of Mines? Mr. BATTLE. It is a report of the Bureau of Mines, Mineral Market Report, No. M.M.S. 414, for the year 1934, Statistical and Economic Surveys, Petroleum Economics Division, with a caption "Natural Gas Industry Registers Material Recovery in 1934." Mr. COLE. You want to make that a part of your statement? Mr. BATTLE. I would like to do so. Mr. COLE. It may be made a part of the record. (The statement above referred to is printed in the record as follows:) Mineral Market Reports October 29, 1935. DEPARTMENT OF THE INTERIOR UNITED STATES BUREAU OF MINES (John W. Finch, Director) STATISTICAL AND ECONOMIC SURVEYS, PETROLEUM ECONOMICS DIVISION Natural-gas industry registers material recovery in 1934 The marketed production of natural gas, which had been adversely influenced by the depression of 1931, 1932, and 1933, registered a notable recovery in 1934, when the total output was 14 percent above the level of 1933, according to the United States Bureau of Mines, Department of the Interior. The total output in 1934 was 1,770,721,000,000 cubic feet, compared with 1,555,474,000,000 cubic feet in 1933 and with 1,943,421,000,000 cubic feet in the peak year of 1930. Although the distribution of natural gas for domestic purposes increased slightly, the major portion of the recovery in total distribution in 1934 was due to a material gain in demand for industrial purposes. The downward trend in the value of natural gas at the wells, which began in 1929, was continued in 1934 when the producers received an average of 6 cents per thousand cubic feet, compared with an average of 6.2 cents in 1933. As in most recent years, the decrease in the average well value conformed to the decline in Texas, the leading producing State. If it were not for the consumption of large quantities of 2-cent gas in Texas for field purposes and in carbon-black manufacture, the national average would be considerably above 6 cents; in fact, the producers in some States receive more than 20 cents per M. Although the average price paid by domestic and commercial consumers increased slightly in 1934, the decline in the average industrial price was sufficient to cause the average value of the entire production at points of consumption to decline from 23.7 cents per thousand cubic feet in 1933 to 22.3 cents in 1934. The total consumption of natural gas, or production (1,770,721,000,000 cubic feet) plus imports from Canada (68,000,000 cubic feet) minus exports to Canada and Mexico (5,801,000,000 cubic feet), amounted to 1,764,988,000,000 cubic feet. Of this total, 554,542,000,000 cubic feet (31 percent) was used for field purposes; 288,236,000,000 cubic feet (16 percent) was used by domestic consumers; 91,261,000,000 cubic feet (5 percent), by commercial consumers; 229,933,000,000 cubic feet (13 percent) was consumed in carbon-black manufacture; 127,896,000,000 cubic feet (7 percent) was consumed at electric public-utility power plants; 79,965,000,000 cubic feet (5 percent), at petroleum refineries; and 27,331,000,000 cubic feet (2 percent), at cement plants, leaving 365,824,000,000 cubic feet (21 percent) consumed for "other" industrial purposes. Compared with 1933, these data indicate chiefly gains in the ratios for carbon black and refinery consumption, balanced by a decrease in the ratio for domestic consumption. The number of domestic and commercial consumers of natural gas in 1934 was 7,566,000, compared with 7,232,000 for the previous year. Included in the 1934 figure are 2,147,000 consumers of mixed gas, compared with 2,038,000 in 1933. The number of gas wells completed increased from 932 in 1933 to 1,373 .in 1934, but the number of producing gas wells declined from 53,660 on December 31, 1933, to 53,260 on December 31, 1934. The number of employees in the natural-gas industry, as reported by the distributors, increased from 48,500 on December 31, 1933, to 52,300 on December 31, 1934. The total interstate and export movement of natural gas rose from 346,810,400,000 cubic feet in 1933 to 414,183,000,000 cubic feet in 1934, an increase of 19 percent. The proportion of total natural-gas consumption moved in inter state and foreign commerce increased in 1934, a development which resulted more from the increased shipments through the established systems than from operations of new lines. |