The United States is heading full-speed into another energy crisis and its accompanying nightmares. Right now, we are importing a higher percentage of oil than at the height of the 1973 oil embargo, when imported petroleum constituted 35 percent of American oil consumption. Once more, the Energy Information Administration of the Department of Energy warned in its most recent annual report that imports could rise to 55 percent by 1994 and to more than 60 percent by the turn of the century. So where do we turn?

To many of us, the answer is obvious. We turn to coal. We have coal resources unmatched by any nation on earth. One third of the known coal resources are located right here in the United States of America and they will last for hundreds of years.

Anything we can do to promote the increased use of coal to replace oil in the power plants of American industry, especially in the production of electricity, should be done-and done immediately. But the cost of transporting coal remains a major stumbling block. S. 318 will increase coal transportation options by removing a barrier to entry for many new companies who simply want a chance to provide healthy competition in the transportation of coal. Pipelines have clearly demonstrated to be one of the safest, most reliable and most economical transportation methods ever developed. There is nothing experimental about coal slurry piping.

The bill before your Committee provides an alternative system for delivering coal that is competitive, efficient and environmentally sound. It calls for no government subsidy, no expenditures of Federal revenue, strict compliance with all environmental protection statutes and expressly delegates to the states the power to regulate the use or export of water in the interstate coal slurry pipeline system. It would provide jobs in construction and manufacturing, particularly steel.

In order to give the Committee some insight into the jobs impact, let me cite some of the numbers developed by the Bechtel Corporation shortly before the 1983 vote on a similar bill. Using standard Bureau of Labor statistics methods, it was estimated that construction of seven pipelines then under consideration would have created 50,000 jobs for construction workers, another 100,000 would have been created in the construction support sector and another 350,000 in the production of valves, pumps, steel and heavy equipment, for a grand total of 500,000 jobs for the seven pipelines being considered.

Remember that the creation of jobs goes far beyond the initial construction of pipelines. For many utilities, lowering the delivered price of coal would provide incentive for expanding existing power plants and even building new coal-fired power plants.

Furthermore, coal pipelines are particularly well-suited to deliver coal to ships for the export market, a market that is sitting there for American coal producers to develop. Jobs would be created to build new marine terminals and shipyard workers would benefit from an increased need for barges, tankers and other oceangoing vessels.

It is estimated, I might add, that Japan alone will account for 50 percent of the world's steam coal demand by 1990. As I said recent

ly to many of my members, would it not be a nice change to sell more American coal to Japan than they sell cars to us?

The railroad scenario of disastrous consequences in that industry simply does not square with reality. Even the most optimistic forecast suggests that pipelines would be competitive enough to carry only a small percentage of all the coal transported. In any case, since when does fear of competition carry the day in America? Since when do we say, monopoly is good and competition is bad? In the hauling of coal the marketplace is not free and that is one of the reasons this nation needs this bill.

Without the kind of controlled eminent domain procedure this bill provides, the railroads will continue to force pipeline developers into endless and expensive litigation that has made pipeline construction nonfeasible right up to the present moment. The American people and American industry must no longer be denied the right to decide for themselves whether they can or cannot make use of the coal slurry pipeline technology.

During the last Congress, when I testified before your Committee, I said it was outrageous that the railroad industry, using property rights ceded it by the government, had gotten away with the blatant obstructionist tactics they were using. Mr. Chairman, in that respect things have changed. The railroads are not getting away with it. They are finally paying for these underhanded tactics, and they are paying dearly.

Just a few weeks ago, as this Committee knows, a Federal Court in Texas ruled that the Santa Fe Southern Pacific had conspired to block construction of a 1,400 mile ETSI pipeline carrying coal from Wyoming to Texas and Arkansas. Santa Fe Railroad was ordered by a jury to pay $345 million to Energy Transportation Systems, Inc.-which is ETSI-for its part in this conspiracy. Under antitrust laws, Santa Fe would pay triple damages, or $1.035 billion.

Earlier, the other railroads named as conspirators in the ETSI suit chose prudence over valor and settled out of court. This included Burlington Northern, for $175 million, Kansas City Southern for $69 million, Chicago & North Western for $15 million and Union Pacific for an undisclosed amount.

Railroads were also sued by the Houston Lighting & Power Company. They settled that one for some $112 million. It is my understanding the utility will share that award with its customers by giving them a reduced rate. But any savings to those customers will be a drop in the bucket compared to what they would have saved if the railroads had not conspired to kill the ETSI pipeline. Furthermore, the State of South Dakota filed its own lawsuit against just one of the conspiring railroads, Kansas City Southern. South Dakota, which would have sold the water for use in the ETSI pipeline, accused Kansas City Southern of a conspiracy to block pipeline construction resulting in restraint of trade that hurt interstate commerce in general and South Dakota in particular. The jury agreed and awarded South Dakota $200 million, an amount that has already been tripled under the Federal antitrust laws.

All of this, I suppose provides a little balm for some of those injured by the railroads' unrelenting and unfair opposition, but we see it as a stunning example of the truth of the often-repeated adage, justice delayed is justice denied. Even though they are

paying for it now in the sense that it is costing them money, I would suppose the railroads still feel that it was all worthwhile. They did crush the ETSI joint venture after all and have certainly discouraged others who would dare propose another coal slurry pipeline.

Congress can and certainly should put an end to these abusive practices by passing S. 318 without further delay. It will not eliminate railroad opposition, but it will go a long way toward eliminating their opportunities for further manipulation and conspiracy. All we ask is a level playing field. Pipelines deserve a chance to compete fairly and above-board.

Thank you, Mr. Chairman and that concludes my testimony. [The prepared statement of Mr. Boede follows:]

TESTIMONY OF

GENERAL PRESIDENT MARVIN J. BOEDE

UNITED ASSOCIATION OF JOURNEYMEN AND APPRENTICES

OF THE PLUMBING AND PIPE FITTING INDUSTRY

OF THE UNITED STATES AND CANADA, AFL-CIO

BEFORE THE

COMMITTEE ON ENERGY AND NATURAL RESOURCES

UNITED STATES SENATE

THURSDAY, APRIL 20, 1989

MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE, I AM MARVIN J. BOEDE, GENERAL PRESIDENT OF THE 335,000-MEMBER UNITED ASSOCIATION OF PLUMBERS AND PIPEFITTERS, AND I AM HERE TODAY TO TESTIFY IN STRONG SUPPORT OF S.318, THE COAL DISTRIBUTION AND UTILIZATION ACT.

I SHOULD POINT OUT ALSO THAT I AM VICE PRESIDENT OF THE BUILDING AND CONSTRUCTION TRADES DEPARTMENT OF THE AFL-CIO, MADE UP OF 15 NATIONAL AND INTERNATIONAL UNIONS IN THE CONSTRUCTION INDUSTRY.

I AM FULLY AUTHORIZED TO. SPEAK FOR THE DEPARTMENT WHICH HAS REPEATEDLY AND UNANIMOUSLY PASSED RESOLUTIONS SUPPORTING EMINENT DOMAIN LEGISLATION FOR COAL PIPELINES. ALTOGETHER THE UNIONS MAKING

UP THE DEPARTMENT TOTAL MORE THAN 4 MILLION MEMBERS.

MR. CHAIRMAN, REPRESENTATIVES OF MY UNION, AND OF OTHER CONSTRUCTION UNIONS, AS WELL AS PRESIDENT ROBERT GEORGINE OF THE BUILDING AND CONSTRUCTION TRADES DEPARTMENT, HAVE TESTIFIED MANY TIMES IN SUPPORT OF COAL PIPELINES.

AND, I MUST SAY THAT THE REASONS FOR OUR TESTIMONY ARE EVEN MORE COMPELLING TODAY THAN THEY WERE IN THE PAST.

WE HAVE THE TRAINED MANPOWER THAT CAN BUILD THESE PIPELINES AND

WE HAVE A DEEPLY-FELT NEED TO PROVIDE MORE JOB OPPORTUNITIES FOR
CONSTRUCTION WORKERS WHO ARE ALWAYS HIT THE HARDEST BY RISING

UNEMPLOYMENT IN THE AMERICAN ECONOMY.

BUT THERE IS ANOTHER COMPELLING REASON TO ENACT THIS BILL, A REASON THAT IMPACTS ON EVERY CITIZEN AND EVERY WORKER NO MATTER WHAT HIS OCCUPATION HAPPENS TO BE.