October 7, 1978
Page 34497
Mr. MUSKIE. Mr. President, the conference report on the Interior Appropriations Act (H.R. 12932) which the Senate is now considering, includes provisions that are very important to the New England region. These provisions have to do with the residual fuel oil entitlements program.
As many of my colleagues know, the New England region is heavily dependent on expensive imported residual oil. In fact, imported residual oil is the mainstay of electric utilities, hospitals, apartment buildings and industry in the region. A full 93 percent of the residual fuel oil used by New England's utilities is imported.
The residual oil entitlements program is designed to insure that the benefits of price controlled, lower cost domestic crude oil are shared equitably by consumers of all petroleum products — including residual fuel oil — in every region. But the program has never been fully developed.
Consumers of residual oil, particularly in import dependent regions, have never shared fully in the benefits of the entitlements program. In fact, this product has received an entitlement of only about one-third of that enjoyed by all other products.
Earlier this year, the Department of Energy proposed administrative changes to remedy this problem. However, final action was never taken on these changes because of the deep controversy that has historically surrounded this issue.
The conference report on the Interior appropriations bill includes provisions which will settle this controversy and help make sense of this important program. These provisions are the product of a concerted and sincere effort by myself and a number of my Senate colleagues. They were adopted by the Senate during its consideration of this appropriations bill on August 9.
I especially want to thank the Senator from Louisiana (Mr. JOHNSTON) for his assistance and cooperation in this matter. And I want to add that our efforts yielded not only agreement on entitlements but also agreement on a set of general objects for the development of a comprehensive refining policy in our Nation, a matter that should receive even more attention in the next Congress. Most importantly, the compromise agreement in this legislation provides an increase in the value of the entitlement for residual fuel oil from about 50 cents per barrel to about 80 cents per barrel. Further, it would do away with certain other anomalies that exist in the program.
So, our action here today will provide significant and fair price relief to users of imported residual oil. But, the job will not be finished. Another, and equally important part of this compromise agreement must be implemented by the President: the 63-cents-per-barrel import fee currently imposed on this product must be lifted.
During the development of this compromise agreement, Department of Energy Secretary Schlesinger and members of the White House staff made firm commitments to recommend to the President that he take action to lift these fees. I am confident that these commitments will soon be fulfilled, and I am looking forward to the time when this important compromise is fully