May 20, 1969
Page 13031
THE MACHIASPORT SITUATION
Mr. MUSKIE. Mr. President, on May 8, 1969, the junior Senator from Wyoming (Mr. HANSEN) had printed in the RECORD a brochure entitled "The Machiasport Situation: 20 Questions for the People of Maine."
The brochure was published by the National Resources Council of Maine, a group of concerned citizens who are interested in the protection of the natural environment of Maine. The brochure was printed and sent to many of us involved in the Machiasport foreign-trade zone and refinery battle.
The Honorable Kenneth M. Curtis, Governor of the State of Maine, has prepared a statement that answers these questions posed by the council. His answers show the time, energy, and thought that is being given to every facet of the Machiasport project.
Mr. President, I ask unanimous consent that the Governor's statement be printed in the RECORD.
There being no objection, the statement was ordered to be printed in the RECORD, as follows:
STATEMENT OF GOV. KENNETH M. CURTIS IN RESPONSE TO THE NATURAL RESOURCES COUNCIL OF MAINE CONCERNING THE MACHIASPORT PROJECT
Let me commend the Natural Resources Council for its sponsorship of the recent brochure, the Machiasport Situation:Twenty Questions for the People of Maine. By reemphasizing environmental protection as a policy which must underlie Maine's future economic development, the Council reaffirms and strengthens the position of those of us who believe that the era of unrestrained exploitation of our dwindling natural resources is ending. As Governor, I have been particularly pleased to note a rapidly growing public awareness for intelligent and sound use of our natural resources.
Furthermore, I would commend the Council for its commitment to explore the issue rather than assuming a stance of dogmatic opposition. The questions posed in the brochure reflect a reasonable and legitimate concern in several areas: Will Maine really benefit from the Machiasport proposal? Are measures being taken to anticipate the impact on the local communities? Are proper measures to protect the quality of the Maine environment being formulated? Taking these issues in the order in which your brochure presented them, the answer is in each case an unqualified yes.
I. THE ECONOMIC BENEFITS
The New England region has suffered from continually escalating fuel oil prices. The retail price of #2 heating oil in New England during the last four years has increased by 15%, or 2.2c per gallon which is 62 % faster than the average increase outside the region. Additionally, for the past two winters threatened supply run-outs have forced New England dealers to obtain emergency quota allocations from the U.S. Department of the Interior. The proposed Machiasport project will aid New England by halting the rising price trend and by guaranteeing the region a more dependable supply of #2 heating oil. In its request for a quota allocation last June Occidental Petroleum Corp. clearly stated a commitment to reduce posted prices a minimum of 10 % over Boston Harbor prices. Additionally, this application committed the refinery's operator to supply the Department of Defense jet fuel at prices a minimum of 10 % below present contract prices, to lead the way in price reduction in minium 1 sulfur fuel, and to contribute 20¢ per barrel of quota allocation as a royalty to a Marine Resources Foundation for New England.
What are the specific benefits to Maine? Employment for the core refinery complex is estimated by the constructing engineers to total approximately 360 with an average annual payroll of $2.6 million. In an effort to halt the out-migration of young people from Washington County (42.8% in age group 20-24 and 32.9% in age group 25-29) and to enhance employment opportunities for all residents, we have set a target of at least 85% employment from local sources. Training programs will be offered during the construction period to help qualify local citizens (Washington County-State of Maine). Additionally, Occidental has received inquiries from former Maine residents with the technical skills required to operate a refinery seeking consideration for employment should the project be approved.
But these immediate jobs, plus the numerous jobs available during the refinery construction phase, are only a portion of the proposal's potential impact. Basic to the economic importance of this project is the concept of a core industry, one that lends itself to spin-off development. And while an oil refinery is but one example of such a core facility, it is a particularly auspicious one because of the extremely favorable growth potential of the oil industry. Furthermore, the product mix of this particular refinery, with a daily production of 63,000 BBLS of naphtha, is tailored to stimulate petrochemical development.
The increased employment opportunities that will be generated by the satellite and related industrial facilities should dwarf in significance the economic impact of the refinery. Reliable estimates available to us project a total employment level of approximately 3,000 within a ten to fifteen year period. Conceivably, it could be higher. Beyond this one must consider the continued presence of the labor force that will be required for the construction of the secondary and tertiary facilities. And finally, we can expect increased employment demands in the service sector. Economists estimate 1.5-2.5 new jobs created for every new industrial position introduced into a community.
These potential benefits are certainly not hypothetical. They are instead the result of considerable study and research and are quite reasonable in light of past industry experience and of projected demands for petroleum products and by-products. Note that while all of this is possible, none of it is automatic. Should the initial project be approved many more man-hours of work will be required to ensure that this growth is properly accomplished.
Now to the issue of why a refinery in Machiasport. Without citing endless supporting economic data, it is sufficient to note that Washington County has been officially designated a redevelopment area by the Economic Development Administration. Development of meaningful employment opportunities there is, therefore, of prime importance. The economic benefits of this installation will be of great value to Washington County and to the balanced economic development of the State.
For several reasons, I do not support the proposition that the coastal area be zoned to prevent industrial development. For one, the protection of our natural environment is a problem for all areas of the State and should not be confined to a particular zone. Similarly the recreational potential of our inland lakes and mountains is no less of a resource than our coast. And obviously, the entire State cannot be designated as a park. However, I do strongly support the notion of a balanced plan for the multiple use of our coastal zone. At my encouragement, the State Planning Office has prepared a proposal for a study in this area to be submitted to the New England Regional Commission for possible funding.
Furthermore, the recreational potential and present use of our sea coast, particularly Washington County, is not by itself a satisfactory answer to the needs of that economically depressed area. The out-migration of youth and the static population of the county provides sufficient evidence that many of its residents must leave to find meaningful employment. Many Maine young people will not be satisfied with seasonal careers geared to serving tourists.
Since more stable and rewarding employment opportunities are demanded, I cannot agree that the proposed project is an encroachment on our sea coast resource. Rather it is an effort to capitalize on that resource, particularly the extreme inshore depths of Machias Bay. That resource, greatly enhanced by the introduction of the supertanker era and coupled with the fact that no overland oil pipeline serves New England, dictates that if a refinery is to be constructed in Maine it must be supplied through the coast.
This does not suggest that the refinery must necessarily be located immediately on the coast. The possibility of an inland location for the refinery is being considered, and I have asked Dr. Gardiner Means to present the economic and environmental implications of such a location before the Conservation and Planning Committee and the next meeting of the State Planning Council.
The staff of the Foreign Trade Zones Board has assured us that it would be a relatively simple matter to change the boundaries of the Zone. Such a change would require a public hearing to provide full opportunity for comment by those affected by the new location. On the basis of that hearing, the Board would decide on the merits of the application for an alteration in the Zone's definition. However, an inland location will, in itself, pose certain problems (more difficult hot water dispersal, added capital investment, etc.) that must be weighed against the aesthetic advantages of moving the refinery away from the coast.
II. THE LOCAL COMMUNITIES
While discussing the exact location of the refinery and its related facilities, it is perhaps timely to respond to your concern for the local communities, the problems which the refinery-associated growth will create for them, and the possible means and methods which they might employ to cope with these new strains.
I should first emphasize that all property within a Foreign Trade Zone is taxable and that during the construction phase the imported portion of the labor force will live in temporary quarters on the site, rarely accompanied by their families, and therefore not straining local services and facilities.
Last September I appointed a Conservation and Planning Committee specifically for this project with responsibility for coordinating its multifarious social, economic. and environmental aspects. Appointed to that Committee were the heads of appropriate State agencies, leaders of the affected local communities, and representatives of regional agencies that might be able to lend financial and advisory assistance. The purpose of this Committee is a simple one – to fully involve the local citizens and to make available to them State and regional talent in a coordinated effort to reduce and control the risks that are inherent in all growth and change.
Naturally, the real thrust of this Committee's effort hinges on an affirmative decision by the Foreign Trade Zones Board. At such a time, numerous subcommittees will be appointed to meld local, state, and regional programs designed to ease the transition that the project will unquestionably foster.
There are numerous potential avenues for cooperation among local communities to distribute the burden and the benefits from the location of new industry. The creation of sanitary districts, school administrative districts, and State or local housing authorities is possible and clearly desirable if growth is to be orderly and controlled. Already an informal subgroup of the Conservation and Planning Committee has prepared an application submitted by PRIDE Inc. for a Federal technical assistance grant to assist in the development of a Plan for the Orderly Growth of the Local Communities of East Machias, Machias, Machiasport, and Rogue Bluffs. This plan will provide guidance and suggestions for the local communities in directing development outside the Zone and thus not directly controlled by the State.
In the preparation of this particular application, and in all other planning and development efforts related to the project, local residents were, and will be, fully involved. That was the very reason for the creation of the Conservation and Planning Committee.
Furthermore, the interests of the land owners on the proposed site are fully protected by the laws of our State, which originally defined those rights. Clearly the State has no intention of violating its own statutes, nor does it have any reason to. I can assure you that the interests of local residents have in no way been violated, nor shall they be. Options have been obtained for the major part of the land included in the Foreign Trade Zone application. In exercising its eminent domain powers to obtain such additional land as is necessary, the Port Authority cannot, of course, exceed its powers or move without regard for the constitutional requirement of due process of law. Should you have evidence of specific instances where personal rights have been violated, I suggest you make these known immediately,
III. THE ENVIRONMENT
Initially, let me stress that the vehicle of a Foreign Trade Zone gives us a unique opportunity to directly control the industrial operations within the Zone. Therefore, I have charged the Conservation and Planning Committee with the responsibility for developing the most effective standards possible for the control and prevention of pollution. A subcommittee has been appointed under the chairmanship of Dr. Gardiner Means and composed of local, State, and regional representatives. This group has been working with Federal, State and regional agencies to draft environmental control provisions for inclusion in any lease ultimately negotiated between the State and the Zone's tenants and/or promulgated as rules and regulations governing Zone operations. Included in those agencies consulted have been the Federal Water Pollution Control Agency, the National Air Pollution Control Administration, the New England River Basins Commission, the Department of State (re the International Maritime Consultative Organization), and within Maine, the Water and Air Environmental Improvement Commission and the Department of Sea and Shore Fisheries.
Following the initial drafting effort, the proposed provisions will be submitted to a wide review including that of a professional consultant, who will be retained by the State, and selected in cooperation with the WAEIC. Funding to support this input is being sought from Federal agencies and foundations. Later on, once the Zone is operating, there should be additional funds available through the Marine Resources Foundation for continued research and development in improved environmental control systems.
Naturally, these provisions have to be at least as stringent as existing Federal and State requirements. Fortunately, however, through the Zone mechanism they can be more stringent, filling voids when necessary, and specifically tailored to the particular problems of the petroleum industry. Again, through the unique structure of a Zone-type operation, the State can collect rental fees sufficient to support the employment of a professional staff for monitoring and overseeing the installation and operations of the pollution control systems.
While the initial focus of the pollution subcommittee has been on controlling air and water effluent from the refinery establishing procedures governing the on and off-loading facilities, it is also responsible for the development of appropriate formulas to govern losses occurring from accidental spills and potential disasters. Bonding requirements, insurance protection against demonstrated loss of livelihood, and the establishment of a claims review board will be necessary and have received a preliminary airing before the subcommittee.
Additionally, the Muskie bills presently before Congress will facilitate recovery of clean-up costs by the Federal government, and will lessen the problems of proof for private litigants.
Related to the pollution question is the ultimate location and forms of the tanker loading and off-loading facility. Preliminary surveys have been made by the Foster, Wheeler Company in order to satisfy Zone application requirements. Complete hydrographic and current surveys will be forthcoming once the project has been approved, and the final decision re the exact positioning of the marine facilities will be based upon these studies. Certainly neither the State, nor any of the proposed tenants has any intention of constructing facilities that are unsound from an engineering standpoint. Both the cost and the risk are too great to permit this to happen.
Through its role as operator of the Zone, the State will have a full opportunity to review and evaluate the proposed structures, and to insist that they reflect the latest technological capabilities in soundness of design and in adequacy of environmental control systems.
A great opportunity exists for Maine, and Washington County in particular, to significantly upgrade its economy and to provide meaningful employment opportunities for all who would choose to live here. We would not move to secure this project without insisting that every possible effort be made to protect the quality of our environment. Indeed this is not a problem peculiar to Machiasport or Maine, but one which demands the serious attention of the entire nation. We must also recognize the problems and limitations imposed upon us by our existing economic base The Machiasport proposal is an attempt to improve that base while concurrently insisting that proper environmental safeguards be incorporated into the construction and operation of the project.
In short, we are striving for a meaningful balance – one that provides increased economic opportunity without permitting the environmental decay which has unfortunately occurred in other areas. Advances in modern technology, plus the lessons learned from these past mistakes make such progress possible, provided that government exercises proper vigilance. I promise you that, as Governor, I will exercise and insist upon such vigilance.