October 8, 1968
Page 29512
BIGGEST ECONOMIC GIVEAWAYS
Mr. PRICE of Texas. Mr. Speaker, I ask unanimous consent to address the House for 1 minute, to revise and extend my remarks, and to include extraneous matter.
The SPEAKER pro tempore. Is there objection to the request of the gentleman from Texas?
There was no objection.
Mr. PRICE of Texas. Mr. Speaker, the political skids are being greased in the Democratic Party and inside the Johnson administration for one of the biggest economic giveaways ever conferred upon a private company by the U.S. Government.
This giveaway will be in the form of a special privilege to Occidental Petroleum Corp., to import 300,000 barrels a day of foreign oil into a "foreign trade zone" at Machiasport, Maine, with the exclusive right to market 200,000 barrels daily of that oil in the United States.
Other U.S. refineries, subject to quota limitations under the mandatory oil import program, will have to get by on imports of about 9 percent of their refinery throughput of crude oil.
This project would confer an economic advantage of at least $40,000,000 a year upon one company.
It will make a sham and a mockery of the mandatory oil import program which every Government study ever conducted has confirmed as vital if we are to maintain oil supplies adequate to provide for our own security.
The Machiasport project will build into the oil import program, an iniquitous economic sanctuary for one company. It would confer special privilege upon that company of a magnitude almost beyond imagination.
It will deal a death blow to equity among companies which should be treated equally under the oil import program. It will therefore be the beginning of the end of that program. It will thus accelerate our dependence upon foreign oil. And it will aggravate our balance-of-payments deficit by hundreds of millions of dollars annually.
It will foreclose all opportunity for the domestic oil industry to restore its exploration-drilling to levels required to meet the future energy needs of our economy and our national defense. It will necessarily hasten the day of an oil famine in these United States of America.
Dame Fortune, it happens, has smiled upon the applicant company, Occidental Petroleum, in the Libyan desert. This company's discovery well there was reported in the press to be one of the most prolific ever known. Now, it seeks to dump that cheap oil, at a cut rate price, in the American market.
If it is permitted to do so, the American people will one day look upon the act of a favor-giving government as the day misfortune frowned upon our country. The message will come home when this, the world's greatest power, is forced to go begging for oil to the Arab bloc which even now, is playing footsie with Communist Russia.
It is no less than irony that the oil for which Occidental seeks such special favor was the same oil denied to this country and its allies under a Libyan oil embargo during the Middle East crisis in 1967.
Despite these facts, I am prepared to make a prediction. I predict that, unless reason is made to prevail, this unprecedented economic advantage will be conferred upon this one company, Occidental Petroleum. Why do I make this prediction? Because of the "quiet hurry" in which it is being petted along by the administration. One with half a nose can smell a political "deal" in Washington and an administrative "fix" and the "fix" is on in the Johnson administration to slide through this smelly deal.
The Oil Daily, reputable national petroleum newspaper, put it in cold and simple terms in its issue of September 23. Despite intense opposition to the Occidental project, said the Oil Daily:
The political climate looks favorable for approval by the Johnson Administration – before the end of the year.
And what is the big rush by a lame duck administration to hand out such special privilege?
Consumer State congressmen, primarily from New England, are pressuring the administration about fuel oil prices and Occidental Petroleum has appealed to these political instincts by pledging to supply such fuel at radical discount. With this deal, it could well afford to do so. The Oil Daily observed:
Whether the white House would. go along – perhaps to help the fizzling political drive by Vice President Humphrey for the presidency – remains to be seen.
This ambitious project first surfaced just over two months ago when on July 3, the Oil Daily revealed plans for this "trade zone," and said, "Senator Muskie (D-Maine) is now working quietly to press for sympathetic consideration of the scheme by Interior Secretary, Stewart Udall, the oil import control boss in the Johnson Administration."
This news account went on to say: Muskie and some Washington figures who are pushing the appeal for oil imports for a zone refinery at Machiasport, Maine, conferred with Udall in his office about ten days ago.
The July 3, story went on to say that news of the "trade zone" was broken at a New England Governors' Conference, at Stowe, Vt., "about a week ago."
Why at a Governors' conference? Well, Occidental Petroleum – out of the bigness of its corporate heart – has agreed to pay into a New England conservation fund 20 cents per barrel on each barrel of products it is permitted to bring into U.S. market. This will give the New England Governors about $7 million a year for "conservation" projects.
The overwhelming economic advantage which Occidental is seeking is made self-evident by the fact that it could afford, in effect, to "buy" regional political support for this project to the tune of 20 cents a barrel for products sold.
This is a strange and alien new arrangement for "doing business" in these United States. If the project at Machiasport has any merit, it should stand on that merit. Questions arise in one's mind, however, when he searches his memory for another instance when a business of any kind – in New England or anywhere on the U.S. mainland – has agreed to put up such funds for public use for the mere right to get a plant built. This 20 cents per barrel grant has one purpose and one only, so let's call it what it is: "political payola."
The pressure brought from the very start in support of this project by the candidate for Vice President on the Democratic ticket, Senator MUSKIE, indicates that Occidental has indeed done its political homework well. It has the biggest guns in the Democratic Party doing its handiwork for this economic-political windfall.
That is why I am willing to predict approval of this project. It is being masterminded by experts with an inside track in the administration.
Another straw in the wind came when President Johnson issued his choice of names for a 35-member Advisory Committee on Foreign Trade Policy. Prominent in this list is the President of Occidental Petroleum, Dr. Armand Hammer. I would not depreciate Dr. Hammer's qualifications to serve on such a group if he were not at the very moment of his appointment, by rather strange coincidence, bringing about unprecedented political pressures in support of the tremendous economic grand slam his company is seeking at Machiasport. In this circumstance, Dr. Hammer should resign his position, or, in the alternative, should be relieved from this particular "advisory" group as his service thereon qualifies as a flagrant conflict of interest.
There are other signs of the sense of urgency which the Government is attaching to this project. As I said, plans for it surfaced only 2 months ago. The application for designation of the "trade zone" was not filed until later. Yet, the Foreign-Trade Zones Board is moving quietly but rapidly to process this application.
Why such a hurry? This is a lame duck administration, and if it is going to pass out political favors worth multimillions of dollars per year, it must move. It has less than 90 days in which to grant this appetizing bowl of greenback gravy.
So, for once in the Johnson administration, the wheels are turning exceedingly fast. If the administration is going to play favorites on such a scale as this, then it must indeed be worried for the Humphrey-Muskie team. If it were confident of the outcome on November 4, then it could afford to wait in quiet decorum and let the real champion of this big giveaway, EDMUND MUSKIE, push it through to conclusion.
How long Occidental Petroleum played the political game in New England to sew up support for this project is a matter of speculation. It first came to light, as I said, on July 3, with the news that Senator MUSKIE was "working quietly" in Washington to line up the support of Secretary Udall, "who (noted in the Oil Daily) has been a long-time friend."
But it was not until 20 days later, on July 23, that this same newspaper reported in its lead story that:
Occidental Petroleum Corporation was revealed Monday (July 22) as the dominant interest behind the application for a foreign trade zone at Machiasport, Maine, where a 300,000-barrel- daily petroleum refinery is planned, with potent political backing in Washington and New England.
The Oil Daily, at the same time, revealed that plans for this project were originally filed with Interior Secretary Udall by Jack Evans, organizer of Business Development Fund, Inc., and New England Refinery Associates, Inc.
But this news account noted that a new "voluminous brochure" filed with Interior had a covering letter from Occidental Petroleum Corp. to the effect that the application, "is filed on behalf of Occidental Petroleum Corp., which corporation is the owner of Business Development Fund, Inc., and New England Refinery Associates, Inc."
So, after its conception by Mr. Evans, a rather well-known Washington figure also noted in the past for his political ties to Secretary Udall, this grandiose scheme was taken over, apparently, lock, stock, and barrel by Occidental, which knows a good thing when it sees one.
It can be recalled that early in the Kennedy administration, a scandal erupted when the Washington Post revealed that Jack Evans had been soliciting oil companies for Democrat contributions to the Democrat Party at the request of Secretary Udall, according to some press reports.
Mr. Udall, as the Oil Daily said, is the "oil import control boss in the Johnson administration." It is he who must license any imports of oil, whether under ordinary quota allocations as nearly 300 "common" refiners are, or as a condition of political prize taking as Occidental Petroleum prefers.
The oil import program for which Mr. Udall is responsible is a child of the Congress. It is authorized in the defense amendment of the Trade Act. That amendment has only one purpose: to protect defense-vital domestic industries against imports of such volume as threaten to impair the national security.
The Foreign Trade Zones Act also is a child of Congress. Its intent was to encourage domestic manufacture of foreign raw materials for re-export, and to encourage "foreign commerce." There is nothing in the act which remotely indicates that Congress intended such use of "trade zones" as are now contemplated by Occidental Petroleum. What that company seeks, clearly and bluntly, is special treatment outside of the national security provisions of the oil import program; special treatment which would give that company a Government granted handout that would make "Teapot Dome" look like Alice's tea party.
Nobody profited from "Teapot Dome," but if this giant handout is sanctioned by the Johnson administration, Occidental Petroleum will reap a whirlwind of profits because it will be permitted to stake out the whole New England community as a private preserve in which it – and it alone – will be the supplier of cut rate petroleum products as the only U.S. refiner operating on cheap foreign oil which flows in such volumes as to stagger the imagination.
I know New Englanders are attracted by promises of cheap fuel. Who is not? But the fact of the matter is that we cannot have our cake and eat it. We can either have a strong domestic petroleum industry able to meet our future needs, paying American wages, and American costs, and peopled by Americans who can afford to buy New England shoes, and New England lace, and Maine potatoes, or we can take the alternative of building political refineries to operate on Middle East oil upon which, as a result, we would become irretrievably dependent.
The siren call of Occidental's cheap oil will not be so musical the next time the Arab-Israeli passions flame into war and Americans are again denied access to Libyan oil. So-called cheap Middle East African oil is available to us only so long as we do not need it. "Cheap" only until we cannot do without it. But the skids are greased to sell out the Nation's security, and scuttle the oil import program, and hopefully, to reinforce the Muskie-Humphrey ticket in New England. If the course is charted and there is no turning back, no shutting off this special-favor handout, the Democrat ticket just might find that this political deal has worked to put it on the down skids among Americans who do not cotton to such smelly deals.
This whole thing is reminiscent of the TV quiz scandals of several years ago. In those games, the contestants were given the answers before the show. Occidental petroleum has all the political answers to win this game. It promises cheaper fuel to New England. It promises help with the air pollution problem, but the petroleum industry can solve that problem without smelling up the air with political deals. And, it promises $7 million a year to the New England "conservation" fund.
Yes, the right answers are all in; the contestant has done his homework, and the big prize is virtually within grasp. And the sponsors in Washington, like those who paid for "The $64,000 Question," may rue the day.
In the public and in the national interest, the President of the United States should order an investigation of this tremendous economic giveaway to one company, including a look at its potential impact upon the national security of these United States. That investigation should be conducted on an impartial basis in the highest levels of government. It should exclude New England Congressmen and New England Senators who have a bias against domestic oil except in emergencies when it is the only oil available to them. But the domestic petroleum industry cannot be put in mothballs; it cannot be put on the shelf while we turn more and more to unreliable foreign oil controlled by monarchs and dictators who would like nothing better than to see us rendered dependent upon that oil.
Pending such an investigation, the President of the United States should order the Foreign-Trade Zones Board to cancel its October 10 hearing. If he does not, that Board is submitting to political pressure and to political usury, and to political pressures unprecedented although the national security purpose of the oil import program has been subjected to some high and mighty pressures in its short history. Other examples are refinery and petroleum chemical projects in Puerto Rico and the Virgin Islands also involving political kickbacks to the local governments. But the Occidental project makes these look like peanuts.
I, for one, intend to keep exposing this smelly deal for what it is. And, I believe when my colleagues who have labored long years to make this country secure as to vital energy supplies recognize this deal for what it is, there will be a new "march" in Washington; a march on the agencies responsible for oil policy to insist that our oil programs be administered on a basis of equity – not on a basis of monumental privilege-giving and political favor.
[From the Oil Daily, July 3, 1968]
MUSKIE SEEKS UDALL HELP FOR ZONE REFINERY ON MAINE COAST
(Washington Bureau)
WASHINGTON – An air of excitement has been developed here over the possibility that a foreign trade zone might be approved for oil imports on the coast of Maine, where plans are afoot for construction of a large refinery that would make low-sulfur residual fuel oil, among other products.
Senator Muskie (D., Maine) is now working quietly at this end to press for sympathetic consideration of the scheme by Interior Secretary Stewart Udall, the oil import control boss in the Johnson Administration.
Muskie and some Washington figures who are pushing the appeal for oil imports for a zone refinery at Machiasport, Maine, conferred with Udall in his office about ten days ago.
It was MUSKIE, who has been a long-time friend of Udall, who was instrumental (along
with the Kennedy brothers) in finally persuading the Johnson Administration to lift quota controls on imports of residual fuel oil three years ago.
The news about the foreign trade zone for a refinery at Machiasport, Maine, where deepwater is available to handle large tankers, was broken at a New England governors conference at Stone, Vt., about a week ago.
At that time, Maine Governor Curtis revealed that an application had been filed for a zone at Machiasport by the Maine Port Authority, with the Foreign Trade Zone Board in the Commerce Department here.
The application, however, was described as "deficient in a number of respects" by sources at the Foreign Trade Zone Board. A copy of the zone law and regulations have been sent to the Maine authority for study with the suggestion the application be re-filed properly.
Maine Governor Curtis, in an interview in Maine, said this week that he could not disclose the names of "oil companies" who would be involved in majority financing of the refinery project, but he said that it would be about 300,000 barrels daily and cover an area of 1,000 acres.
A causeway would connect the mainland to Starboard Island and to Stone Island where storage tanks would be located.
Critical factor involves obtaining an oil import, quota from the federal government for the proposed refinery, Curtis emphasized. If a quota is granted, then the plant and other facilities can be built, he said.
Of the $73 million total cost for the project, Curtis said about $67 million would come from "oil companies," New England regional funds would provide an additional $500,000, between $1 million and $1.5 million would come from the Economic Development Administration and the Maine Port Authority would provide bond financing of $4 million to $5 million for port development.
Oil interests involved in the project were understood to be conferring with Muskie in the senator's office here Tuesday, but identity of the parties involved, and their discussions, were not available.
So far, Udall has refused to issue a quota of 10,000 b/d sought by Dow Chemical Co. for its zone plant in Bay County, Michigan, despite renewed pressure recently by the company and by the Michigan delegation in Congress that the quota be granted.
Dow, and the Michigan congressmen, have pointed out to Udall that the unemployment rate in the area of Dow's plant is very high, about double the national average, and that without an import quota Dow's facilities at that location will have to be shut down, throwing more people out of work.
In view of Udall's reluctance to grant Dow a quota – based on appeals related to unemployment – observers here found it difficult to imagine Udall granting a quota for a zone on the coast of Maine for a refinery but Udall has surprised everyone before on oil import matters, and Senator Muskie is also credited with being a highly persuasive advocate of projects for his State.
[From the Oil Daily, July 23, 1968]
OXY HOLDS KEY ROLE IN MAINE FTZ MOVE INTERIOR REVEALS DATA ON 300,000-BARREL-DAILY REFINERY – HAS STRONG BACKING IN CAPITAL AND NEW ENGLAND
WASHINGTON. – Occidental Petroleum Corp. was revealed Monday as the dominant interest behind the application for a foreign trade zone at Machias, Maine, where a 300,000-barrel-daily petroleum refinery is planned, with potent political backing in Washington and New England.
The Interior Department Monday made public a voluminous brochure on the project with a covering letter from Occidental informing Interior that the 300,000 b/d crude oil import quota sought for the zone, filed originally by the Business Development Fund, Inc. (Jack Evans) and New England Refinery Associates, Inc., "is filed on behalf of Occidental Petroleum Corp., which corporation is the owner of Business Development Fund, Inc., and New England Refinery Associates, Inc."
A simplified flow chart filed with the application showed that 240,000 b/d of the plant's crude supply would come from Libya and 60,000 b/d in Bachaquero crude oil from Venezuela.
The plant would turn out 4,000 b/d of refinery fuel gas, 53,000 b/d naphtha, 10,000 b/d gasoline, 30,000 b/d JP-4 jet fuel, 91,000 b/d No. 2 fuel oil and marine diesel, 7,000 to 10,000 b/d Navy Special, 7,000 b/d refinery fuel oil, 20,000 b/d high sulfur fuel oil, and 75,000 b/d low sulfur fuel oil.
Some half dozen large independent deepwater terminal operators in New England are also associated with the project but their names were not revealed in the filing made public by Interior.
The project is also strongly backed by the New England Development Commission in which all of the New England state governments participate. It has also been pushed very hard in contacts with top level Administration officials by Senator MUSKIE (D., Maine), ringleader of the New England congressional delegation pressing for approval.
Governor Curtis of Maine, accompanied by staff aides, visited with the executive director of the Foreign Trade Zones Board in the Commerce Department a week ago to discuss details of the application and to make necessary modifications to meet requirements of the zone law.
One primary reason that New England politicians are behind the project is that the application filed with Interior makes clear that the proposed refineries’ posted price policy would provide for discounts of at least 10% from "present price levels" for gasoline, a discount of at least 10% on No. 2 fuel oil for home heating below Boston harbor and/ or U.S. Gulf Coast prices.
Also, the refinery would supply Defense Department jet fuels "at prices at a minimum of 10% below present contract prices." Prices for residual fuel oil would be competitive, the application states, "and in the case of maximum of 1% sulfur fuel (would) lead the way in low-priced levels." Also, Navy Special fuel oil would be competitive with foreign refined oils now supplied to the Defense Department, it was said.
The plant which would be engineered, designed and built by Foster Wheeler Corp. would also have associated ocean terminal storage totaling 15,000,000 barrels, to be built by Chicago Bridge & Iron Co.
The application states that the refined products to be made would be sold by a "cooperative consortium of seven independent non-integrated ocean terminal marketers representing the large non-integrated New England companies operating deepwater ocean terminal facilities, and several smaller marketers, who. will be stockholders in the refinery, thus covering a very substantial portion of the New England market."
The application filed with Interior said that in order for the refinery to adopt a pricing policy to cut costs to consumers, it would be necessary that the company be allocated an import quota of 100,000 b/d of refined products of which the major portion, 90,000 b/d, would be No. 2 home heating fuel oil, and the balance gasoline.
"We have firm markets in New England for all products other than those to be sold and exported to the Department of Defense which is awarded on a bid basis, and others," the application stated.
"Contingent on the awarding of a zone license and quotas, satellite plants – petrochemical, or reduction, pulp and, paper, power, etc – are planned."
All of the marketing of products, domestically, apparently, would be made through the seven independent marketers, who would be associated with the project as stockholders.
The company also plans, according to the application, to make a bonus payment of 20¢ a barrel on all quotas allocated to the New England Marine Resources Foundation, which is now being set up by Governor Curtis and on which all New England governors would be represented on the board of trustees.
On the basis of the quota requested, these bonus payments would exceed $7 million per year to the nonprofit New England foundation.
It was estimated that the basic cost of the zone, the core refinery, and the ocean terminals would be about $65 million for which "financing arrangements have been completed."
Major emphasis on production at the refinery, it was said, would be production of low-sulfur heavy fuel oil and petrochemical feedstocks.
It was estimated that investment in petrochemical facilities adjacent to the plant "would total several hundred millions of dollars."
There have been preliminary talks with a number of other industrial groups, including pulp and paper mills, reducers, power companies, and others, it was said.
The application argued that the project would benefit national security, since the port is one the few in the world capable of handling the largest tankers that can be built, it is far from heavy sea lane traffic, would probably be uncontaminated in an atomic attack, would provide huge storage for an emergency, cut taxpayer costs for military products, benefit balance of payments, and have other advantages.
It also argued that the complex would have a beneficial impact on the domestic economy since it would be located "in one of the most economically depressed counties on the East Coast."
It was also emphasized that the low sulfur residual to be made would meet air pollution control standards (in which Senator Muskie has a substantial interest) and would provide home heating oil for New England consumers and this product is "now in short supply."
[From the Oil Daily, Oct. 2, I968]
OPPONENTS OF MAINE REFINERY HIT BY GOVERNOR
AUGUSTA, MAINE. – Gov. Kenneth M. Curtis hit back at the opposition to the proposed establishment of a foreign trade zone at Portland and a subzone at Machiasport where Occidental Petroleum Corp. plans to build a 300,000-barrel-a-day refinery.
Governor Curtis said that the governors of all six New England states have endorsed the proposal and several will appear to testify before the Foreign Trade Zones Board meeting at Portland on Oct. 10 and 11.
"This unprecedented unanimity and testimony will be supported also by virtually the entire New England congressional delegation, composed of 12 U. S. senators, including Edward M. Kennedy, Edmund Muskie, John O. Pastore and Edward Brooke, and 25 congressmen," he said.
Governor Curtis argued that the benefits of Occidental's plans are enormous and essential to the public interest. "It will lower the cost of heating oil to consumers by approximately $50 million to $60 million annually in the New England area alone, plus reduce the cost of oil to the Department of Defense by 10%, which will save the government of the United States $6 million annually.
"Moreover, the project would make an important strategic contribution to our national security because, coupled with the storage capacity planned, it would represent a dispersal of the U. S. refinery capability," Curtis added.
The governor also pointed out that Washington County, in which the refinery would be located, has been designated a depressed area and that the building of a refinery will eventually attract other important industries to provide employment. He said that last year, the average income of one-third of the county's families was under $3,000.
Curtis noted that while there are 291 refineries in the other 44 states, there is not a single one located in New England. To correct this situation, he said, "the Foreign Trade Zones Board will be urged to act promptly on this application so that the derivative benefits to the public and the national security can be obtained as quickly as possible."
The governor scored the opposition already reported by other major oil companies, including Esso, Gulf, Mobil, Cities Service, Sinclair and Continental.
"The attempt of these oil companies to maintain their large profits and to block any competition which would reduce the price of oil for the people of my state and other New England states is a selfish program which ignores the public interest. What possible basis can there be for this selfish objection to a plan which would reduce the cost to poor families for heating oil and gasoline and at the same time would benefit the national security; therefore, we are determined to see the program through," he stated.
"New England states and their residents have been the victims for the past nine years of grossly inequitable distribution of their fair share of the imported quota of oil."
He argued that the 8% requested quota could be achieved within the 12.2% quota formula protection by redistributing the quota to give New England its fair share. The major oil companies have argued that this plan might destroy the 12.2% guideline.
He further stated that the major oil companies "have made an estimated profit of $5 billion from the value of quotas granted since 1959. This is continuing at the rate of over $500 million a year. It is these quotas over which they insist on keeping monopoly control. This practice is preventing competition within the New England states. Such competition might reduce the oil companies’ profits somewhat but would benefit the public a great deal more."
[From the Journal of Commerce, Sept. 27, 1968]
NEC BACKS MAINE TRADE ZONE
The New England Council (NEC) meeting yesterday at the Statler office building in Boston, launched a campaign in support of a $150 million Machiasport, Me., oil refinery and foreign trade zone for New England.
The refinery would have a 300,000 barrels a day capacity, which the council says is the largest plant of its type in the world ever designed and built from scratch. It said that Machiasport Bay in northern Maine has a large natural harbor, 90 feet deep and ice-free. This depth with a four mile turnaround area will accommodate the largest tankers afloat or on the drawing boards, it was asserted by Occidental Petroleum Carp., the proposed builder.
BIG STORAGE AREA
Plans call for 16,000,000 barrels of oil storage tanks. Port facilities, including general purpose jetties and docks, will be built by the Port Authority of the State of Maine and special oil handling facilities by the refinery company, it was said.
The NEC says it expects speedy approval of the Machias project because "few, if any, industrial projects anywhere have ever been so responsive to national, regional and state economic, social and defense objectives as this one."
Three separate federal government approvals must be obtained before the project can get underway, it was noted.
First the State of Maine must receive approval of its application to establish a foreign trade zone and sub-zone.
Secondly, the Interior Department must issue a license permitting the import of crude oil to the foreign trade zone.
Third, Occidental Petroleum has applied to the Interior Department for a 100,000 daily import quota which allows the refinery to ship 90,000 barrels a day of home heating to New England, along with 10,000 barrels a day of gasoline. This application is under review.
OBJECTIVE NOTED
The NEC said that the objective of the refinery is "to maximize production of low-pollutant, low sulfur, heavy fuel oil for industrial consumers in New England, and No. 2 heating oil for New England home-owners long plagued by annual shortages, and ever higher prices; also, to make products for the U.S. armed forces and for the export market."
It said that low sulfur crude oil would be supplied by Occidental from its Libyan oil fields along with sizable quantities of crude from Venezuela.
It was stated that refined products from the refinery would be marketed in New England by "several large, nonintegrated, independent,, deep-water ocean terminal operators together with several smaller independent marketers."
RECEIVES WIDE SUPPORT
According to the council, the project has received "wide bipartisan political support throughout New England," adding that all six governors of the New England states have unanimously and publicly approved the plan as a New England regional project."
The refinery company, it was stated, has agreed to establish a non-profit natural resources foundation in New England which will receive annual contributions for use in pure and applied research and development of natural and marine resources.
"The project," according to the council, "will result in a sharp reduction in air pollution for a large segment of our population; an important contribution to our balance of payments problem; a strong stimulus to Washington County, Me., one of our most depressed areas; a positive assist to our American-flag tanker fleet and other maritime interests; an ending to our perennial shortages of home heating oil in New England, and a sizable reduction in cost to New England customers of the refinery and to the U.S. Defense Department for refined products used by our armed forces."
Rawleigh Warner, Jr., president of Mobil Oil Corp., said that approval by the Interior Department of special import privileges would mean that the mandatory oil import program could no longer achieve its national security objective of preserving a healthy domestic petroleum industry.
In a memorandum to Interior Secretary Stewart L. Udall, the Mobil executive said: "approval of the Occidental request would make nonsense of the principle of fair and equitable distribution of products which mostly would be brought into the U.S."
He said that "approval of the proposal would constitute virtual agreement that a foreign trade zone could be used for purposes fundamentally at variance with the purposes of such zones to foster foreign trade.”
OBJECTIONS VOICED
Cities Service also voiced objections to the Machias proposal, saying that "it would ultimately destroy the entire oil import program."
Charles S. Mitchell, chairman of the board, asserted, "the proposal is obviously conceived to circumvent the oil import program and permit one company to increase its profits from its own foreign crude supply."
Specifically, Cities Service said, a quota of this size by Occidental of 100,000 barrels a day of refined petroleum products from this trade zone would give one company about 17 per cent of the total allocation to refiners, representing "a windfall of over $40 million for a single company at the expense of all others who participate in the program."
PUBLIC NOTICE: FOREIGN-TRADE ZONES BOARD, PORTLAND, MAINE – APPLICATION FOR A FOREIGN-TRADE ZONE AND SUB-ZONE
NOTICE OF HEARING
Notice is hereby given that an application has been made to the Foreign-Trade Zones Board by the Maine Port Authority, a public corporation, for the privilege of establishing, operating, and maintaining a general purpose foreign-trade zone in Portland and a sub-zone for the purpose of oil refining in Machiasport, Maine, within the Customs District of Portland, Maine of the United States, pursuant to the provisions of the Foreign-Trade Zones Act of June 18, 1934, as amended (48 Stat. 998-1003; 19 U.S.C. 81a – 81u).
The Acting Executive Secretary of the Foreign-Trade Zones Board, pursuant to Board Regulations, has designated N. Norman Engleberg, Office of Business Programs, Business and Defense Services Administration, U.S. Department of Commerce, Washington D.C., as Examiner to investigate the application and accompany exhibits for compliance with Sections 400.600 - 400.608 of said Regulations; and said application having been found to be in order, the Acting Executive Secretary has designated as an Examiners Committee said N. Norman Engleberg, Chairman; Daniel J. Sullivan, Jr., Deputy Assistant Regional Commissioner, Inspection and Control, U.S. Bureau of Customs, Boston, Massachusetts; and Colonel Franklin R. Day, Division Engineer, New England Division, Corps of Engineers, United States Army, Waltham, Massachusetts, in whose districts the proposed zone and sub-zone are to be located, to conduct a thorough investigation of the application and report thereon to the Foreign-Trade Zones Board.
Notice is hereby given, pursuant to the Foreign-Trade Zones Act and Board Regulations, that a public hearing on the application will be held by the Examiners Committee beginning at ten A.M., local time, Thursday October 10, 1968 at Portland, Maine, Maine Courtroom, 156 Federal Street, U.S. District Court Building.
A copy of the application and accompanying exhibits is available for public examination at each of the following locations:
Office of the Regional Commissioner of Customs, Inspection and Control Division, U.S. Customs, 24th Floor of the John F. Kennedy Building, Government Center, Boston, Massachusetts.
Office of the District Director of Customs, 312 Fore Street, Portland, Maine 04111. Office of the Director, U.S. Department of Commerce Field Office, Room 510, John F. Kennedy Federal Building, Boston, Massachusetts.
Office of the Executive Secretary, Foreign trade Zones Board, Room 6827, Main Commerce Building, 14th Street and Constitution Ave. N.W., Washington, D.C.
The proposed general purpose zone consists of approximately 7,930 square feet located on the property of the Maine Port Authority of Portland, now the site of the Maine State Pier. The pier is only 2½ miles away from open water and 10 miles from the Portland lightship. The total area of the proposed sub-zone is 1,680.3 acres, of which 600 acres are available for future expansion.
The sub-zone is located in Machiasport, County of Washington, where Occidental Petroleum Corporation proposes to establish and operate an oil refinery subject to obtaining the necessary licenses from the Oil Import Administrator for the use of foreign crude oil.
The purposes of the hearing are to inform interested parties concerning this application, to afford them an opportunity to express their views relative thereto, and to obtain information useful to the Examiners Committee.
Interested parties or their representatives will be afforded the opportunity to be heard at the hearing; however, for the accuracy of the record and to facilitate proceedings, they should file written request therefor by October 7, 1968, and provide a written summary of their views regarding the application. Requests to be heard and written summaries should be directed to Mr. N. Norman Engleberg, Chairman of the Examiners Committee, Foreign-Trade Zones Board, Room 6827, U.S. Department of Commerce, Washington, D.C. 20230.
Persons not submitting advance written requests may, nevertheless, be heard at the hearing at the discretion of the Examiners Committee. Interested parties not able to be present or represented at the hearing may submit their written views concerning the application to the Examiners Committee as indicated above.
RICHARD E. HULL, Acting Executive Secretary,
Foreign-Trade Zones Board.
Date: September 17, 1968.