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Volume 5, Issue 1 — January 1975


Speeding Past the Danger Signs, the American Joy Ride Rolls On

by John R. Quarles Jr.

It has been a year now since the term "energy crisis" burst into our vocabulary. To most of us, it meant sitting in a line for gasoline and hoping that we would make it to the pump. To some of us, it meant "dialing down" the heat in our homes and a hefty increase in our electric bills. But with the spring came the thaw. Gasoline was once more plentiful—no more lines and fearful waits. We turned off the heat and enjoyed the sunshine. Our electric bills were still high and prices of everything else seemed on the increase, too, but it was great to climb into the car once more and let the engine roar. We were back to normal again.The energy crisis was over.

I wish that it were so, but it is not. The Arab oil embargo was lifted, but we still face a snarl of critical energy problems. H.G. Wells once wrote that "the crisis of today is the joke of tomorrow." I would like to think he might be right, but I cannot believe that it will happen in this case.


Toward an Energy Policy: Recent Studies Offer Guidance in Assessing the Administation's Forthcoming Proposals

More than one year has passed since the Arab oil embargo threw a complacent America into temporary panic and made it clear that Americans have irrevocably added energy to food, clothing, and shelter as one of life's essentials. While the panic is gone, at least for now, the crisis is likely to be with us for a long time in one form or another. Our appetite for energy, already six times the world per capita average,1 continues to grow faster than our capacity to develop new sources of supply.

Remarkable agreement exists among analysts as to the dimensions of the crisis. Its essence is that while the United States relies on oil and gas for 77 percent of its energy needs (46 percent oil, 31 percent natural gas) only about 10 years of proven domestic oil and gas reserves remain at current prices. Domestic crude oil production peaked in 1970 and has been steadily declining ever since.2 United States' coal reserves will last more than 800 years at current rates of consumption, but coal presently constitutes only 18 percent of our usage, and efforts to increase that percentage carry high costs in terms of environmental damage and social disruption. It was our increasing reliance on imported sources of crude oil (35 percent of our crude oil needs in 1973) that put drivers into gas lines this time last year, and while they waited in those lines the per barrel price of imported crude oil rose from $3 to $11. Clearly, current usage patterns cannot continue much longer.

Tall Stacks Versus Scrubbers: $3.5-Million Publicity Campaign Fails to Discredit Emission Reduction Technology

The latest skirmish in the battle for clean air centers around a recently developed device known as the flue gas desulphurization system or "stack gas scrubber." This emission control device utilizes a process by which flue gases are passed through a water suspension, or slurry, of lime or limestone that chemically removes the toxic sulphur oxides from the smoke before it is released into the atmosphere. Since the principal sources of sulphur oxide emissions throughout the nation are coal-fired electric power plants, the scrubbers controversy has focused on whether these plants should be required to install the devices.

This dispute, unlike most other environmental controversies at the federal level, has not been limited to the usual administrative battlegrounds of hearing rooms, public comment within the rule-making process, and litigation. Donald C. Cook, feisty head of the American Electric Power Company, the nation's largest privately owned utility company, added a new twist by mounting a $3.5-million campaign of full-page advertisements in major newspapers and national news magazines vigorously attacking both the efficacy of scrubbers and the advisability of requiring their use by coal-fired power plants.1 The ads have been so strident—and sometimes misleading—as to draw strong public protests from both Russell Peterson, Chairman of the Council on Environmental Quality, and John Sawhill, at the time, head of the Federal Energy Administration.

Freon Endangers Ozone Layer, Increases Risk of Skin Cancer, NRDC Charges

In November, the Natural Resources Defense Council petitioned the Consumer Product Safety Commission for an immediate ban on spray cans using freon (a DuPont tradename) and similar fluorocarbons as a propellant. NRDC cited growing scientific evidence that the gases released from aerosol cans are causing gradual deterioration of the ozone layer in the upper atmosphere. The ozone layer, about 10 to 20 miles up, shields the earth from ultraviolet radiation, a major cause of skin cancer. A study conducted by Dr. Michael McElroy of Harvard University predicted that if the use of freon continues at present rates, the ozone layer will be diminished by 10 percent within 15 years, and that as a result, the incidence of skin cancer will rise by 20 percent. By the year 2000, the study estimated, the ozone layer will have been reduced by 14 percent.

The fluorocarbons used in aerosol cans were originally thought to be ideal propellants, owing to their chemical stability. In the past five years, use of freon has increased some 15 percent per year, in spray cans of cosmetics, paints, and a variety of household products. In 1972, 1 1/2 billion aerosol cans of cosmetics were sold, and some 700 million cans of household products. One million tons of freon are released into the atmosphere each year. Recently, however, scientists discovered that at stratospheric levels, ultraviolet light causes fluorocarbons to break down, releasing free chlorine atoms that in turn break down the ozone. The Atomic Energy Commission has found fluorocarbons in the stratosphere from as far north as Greenland to as far south as Argentina. The sharp decrease in the ozone layer began in 1971, after 10 years in which the density of the gas increased. That increase is attributed to the 1963 ban on nuclear testing in the atmosphere.

Agency Procedures for Public Notice of Proposed Federal Actions: The Requirements of CEQ's NEPA Guidelines Remain Unfilled

Five years' experience with NEPA has taught environmentalists many lessons, but one of the most important is the necessity for effective administrative procedures for providing early public notice of proposed governmental actions that might significantly affect the environment.

While the Council on Environmental Quality's 1971 guidelines1 implementing NEPA's impact statement provisions acknowledged that federal agencies "have a responsibility to develop procedures to insure the fullest practicable provision of timely public information and understanding of Federal plans and programs with environmental impact," they did little to assure that agencies would shoulder this burden. Under these guidelines, the agency that prepared an environmental impact statement was responsible for making the statement and any comments received concerning it available to the public pursuant to the public information section of the Freedom of Information Act.2 But given the provisions of that statute, this represented essentially a duty to make information available upon request rather than to take the initiative and notify the public of the preparation or completion of impact statements and of their availability. The only requirement in the guidelines for publication in the Federal Register concerned notice and summaries of EPA comments on proposed federal action pursuant to EPA's substantive review authority under §309 of the Clean Air Act Amendments of 1970.3

New ELI Project Assesses Impact of Tax Code Provisions on Use of Depletable Resources and Recycling

The Environmental Protection Agency recently contracted with the Environmental Law Institute for a year-long research project entitled "Federal Tax Policy and Depletable Resources: Impacts and Alternatives for Recycling and Conservation." The project, which will join legal and economic talents, is the Institute's first major interdisciplinary venture.

The purpose of the research is to identify the nature, scope and impact of various special provisions of the tax code that have been applied to the primary production of metals and timber. The study will evaluate the effects of these provisions on the competitive position of scrap industries as compared with primary producers. The historical development of the depletion allowance and its probable effect on primary producers, expensing provisions for exploration and development, and capital gains treatment of iron, coal and timber are being investigated. The probable impact of these tax provisions is a relative benefit to primary producers, a factor which adversely affects incentives to recycle commodities which will compete with the primary products as inputs to various industries. The probable effects are being measured through econometric analysis, a statistical examination of the existing market relationships.

The Institute has added three new staff members for the project. Robert C. Anderson, who obtained his Ph.D. in economics from Claremont, heads the study. Mr. Anderson was formerly an assistant professor at Tufts University. Taylor Durham, a Ph.D. candidate in economics from Cornell, and Richard Spiegelman, an attorney and Ph.D. candidate in economics at the University of Pennsylvania, will assist in the project. Also contributing to the study are Frederick R. Anderson, William A. Irwin, and Alan S. Miller of the ELI staff.

1974 Developments Underscore Need for Altered Standard of Proof in Public Health Cases

If the downfall of Richard Nixon had not monopolized the news media in 1974, the year just past might well be remembered for its dramatic revelations about the various dangers to public health. For the first time, Americans learned that ordinary tap water in many areas contained potent carcinogens and that chlorination of water may cause cancer. In the aldrin/dieldrin hearings, the nation discovered how two carcinogenio pesticides have permeated the nation's food supply and the bodies of all Americans, to the point where breast-feeding of infants may be extremely hazardous.Americans learned also (in 1971) that diethylstilbestrol, a drug widely prescribed over a 20-year period to prevent miscarriage, has caused numerous cases of fatal vaginal cancer in girls who were still in the womb when their mothers took the drug. Freon, the propellant gas widely used in aerosol cans, was reported by several groups of scientists to be gradually disintegrating the ozone layer that protects the earth's population from cancer-causing ultraviolet radiation.

To many Americans, these discoveries came as a surprise. The United States is a society that, like many others, reasonably or unreasonably places great faith in its doctors and scientists. Perhaps, it is reasonable to assume that a nation capable of putting a man on the moon is able to ascertain whether a chemical causes cancer before allowing it to enter the food or water supply. This assumption ignores, however, an important distinction between the two situations: while there is no economic benefit for anyone in preventing men from landing on the moon, there is an enormous financial incentive for the manufacturers of pesticides, aerosol sprays, and drugs to prevent their products from being banned. Nor are the nation's laws designed, as many might imagine, to guarantee that in dubious cases the interests of public health will take precedence over mere economic considerations. In part because of legislation written with the interests of affected industries very much in mind, in part because of the application of traditional legal standards of proof to public health cases for which they are inappropriate, the last year has shown dramatically how inadequate existing law is to protect the American people's health.