25 after any appUcation for a determination under this section is
S 318 IS
18
11
1 received by the Secretary, the Secretary shall notify the At-
2 tomey General of the filing of such application and shall pro-
3 vide the Attorney General with a copy of such application
4 and such other information as the Attorney General may re-
5 quest. The Attorney General shall conduct an antitrust
6 review to determine the likely effects upon competition of
7 approval of such application, and not later than one hundred
8 and twenty days after the date of receipt of such notification
9 shall advise the Secretary of the results of such review, in-
10 eluding, but not limited to, findings, and recommendations
11 concerning such terms and conditions as the Attorney Gen-
12 eral deems necessary to protect and promote competition. No
13 application may be determined to be in the national interest
14 under this section if the Attorney General advises the Secre-
15 tary in writing that, on the basis of such review, approval of
16 such application is not consistent with the antitrust laws.
17 (2) For the purpose of paragraph (1), the term —
18 (A) "antitrust laws" has the meaning such term
19 has under section 1 of the Clayton Act (15 U.S.C, 12);
20 and
21 (B) "antitrust review" has the meaning the term
22 "antitrust investigation" has under section 2 of the
23 Antitrust Civil Process Act (15 U.S.C. 1311).
24 (f) Eminent Domain Authoeity. — (1) Any person
25 proposing to build an interstate coal pipeline distribution
S 318 IS
19
12
1 system, the construction of which has been determined by the
2 Secretary to be in the national interest, may, after making
3 good faith efforts to acquire, such rights-of-way by negotia-
4 tions between such person and private landowners, acquire
5 rights-of-way over, under, upon, or through private lands by
6 exercise of the power of eminent domain in the United States
7 district court for the district in which such lands are located
8 or in the appropriate court of the State in which such lands
9 are located. In any action or proceeding to acquire rights-of-
10 way under this section, such action or proceeding shall con-
11 form to the laws, practices, and procedures relating to the
12 general eminent domain law of the State where the property
13 is situated, except that in the case of any such State law,
14 practice, or procedure, the effect of which would prohibit any
15 acquisition under this section, or which discriminates against
16 interstate coal pipeline distribution systems, such State law,
17 practice, or procedure shall not be applicable.
18 (2) Nothing in this section shall be construed to permit
19 any person to acquire any water rights through the exercise
20 of the power of eminent domain granted under this Act.
21 (3) No interstate coal pipeline distribution system con-
22 structed pursuant to the authorities of this section shall be
23 considered to be a Federal project for purposes of the applica-
24 tion for or assignment of water rights.
S 318 18
20
13
1 (4) Unless there is no feasible and prudent alternative to
2 the acquisition of a right-of-way and reasonable planning is
3 made to minimize harm resulting from the acquisition, no
4 such right-of-way may be acquired through exercise of the
5 power of eminent domain under this Act if such right-of-way
6 is over, under, upon, or through —
7 (A) lands of National, State, or local historic sig-
8 nificance as determined by the Federal, State, or local
9 officials having jurisdiction thereof; or
10 (B) lands held by a qualified organization as de-
ll fined in section 170(h)(3) of the Internal Revenue
12 Service Code of 1954 primarily for wildlife refuge,
13 sanctuary, recreational or natural resource conserva-
14 tion purposes.
15 (g) Alteenative Routes. — (1) Nothing in this sec-
16 tion shall be deemed to prohibit the applicant from amending
17 his appUcation to request a right-of-way over any alternative
18 route.
19 (2) The Secretary may require the relocation of any
20 right-of-way sought pursuant to this Act upon a showing
21 that—
22 (A) such relocation is necessary to enable the
23 United States to reahze fully the value of its mineral
24 interest;
25 (B) such alternative route is available; and
S 318 IS
21
14
1 (C) such relocation would not result in unreason-
2 able expense.
3 (h) Payment foe Fedeeal Coal. — (1) Each applica-
4 tion for a determination of national interest filed pursuant to
5 subsection (a) shall list each instance where the proposed
6 right-of-way crosses lands wherein the United States main-
7 tains a mineral interest regarding coal (hereinafter referred to
8 as "Federal coal"). Not later than ten days after any such
9 application is received by the Secretary, the Secretary shall
10 notify the Secretary of the Interior of the filing of such appli-
11 cation and shall provide the Secretary of the Interior with a
12 copy of such application and such other information as the
13 Secretary of the Interior may request.
14 (2)(A) The Secretary of the Interior shall evaluate the
15 effects of approval of such appHcation upon the ability of the
16 United States to realize the value of such mineral interest as
17 a result of approval of the appUcation.
18 (B) The Secretary of the Interior shall —
19 (i) establish terms and conditions necessary to
20 minimize the impact of such right-of-way on the estab-
21 lishment of logical mining units; and
22 (ii) determine the extent to which alternative
23 routes are available which would minimize the impact
24 of granting the right-of-way on the ability of the Fed-
25 eral Government to reaUze the value of Federal coal.
S 318 IS
22
15
1 (C) The Secretary of the Interior shall establish the fair
2 market value of the Federal coal precluded from being recov-
3 ered as a result of the proposed right-of-way. The Secretary
4 of the Interior shall also estabUsh the amount of reduction of
5 the fair market value of Federal coal which will be more
6 costly to recover as a result of the proposed right-of-way.
7 (3) The Secretary shall thereafter establish such terms
8 and conditions requiring the applicant to pay the United
9 States the amount established by the Secretary of the
10 Interior pursuant to subparagraph (C).
11 (i) Rules and Regulations. — The Secretary shall
12 promulgate such rules and regulations as are necessary for
13 the expeditious exercise of the authority granted in this
14 section,
15 (j) Additional Requirement. — In implementing this
16 section, the Secretary shall be subject to the provisions of
17 section 210 of Pubhc Law 90-537, as amended (43 U.S.C.
18 1511).
19 PEIMACY OF STATE WATER LAW
20 Sec. 5. (a) No person, legal entity, or governmental
21 entity (including the United States, a State or subdivision
22 thereof), their agents, permittees, Ucensees, or transferees, or
23 any interstate coal pipeline distribution system, shall control,
24 reserve, appropriate, purchase, transfer, use, divert, dedicate,
25 (Espose of, distribute, acquire,, exercise, export or claim
26 water, or any right or interest therein, for export er use
8 SlS^IS
23
16
1 within or outside the State granting or denying the export or
2 use of water in an interstate coal pipeline distribution system,
3 unless such control, reservation, appropriation, purchase,
4 transfer, use, diversion, dedication, disposal, distribution, ac-
5 quisition, exercise, export or claim takes place pursuant to
8 and in compUance with the State water law of that State.
7 Such State water law shall be enforced even though enforce-
8 ment would result in the failure to build an interstate coal
9 pipeline distribution system, and even though it would result
10 in uneven and disparate effects on interstate commerce.
11 (b) In full recognition of its powers under Article I, sec-
12 tion 8, of the United States Constitution, Congress expressly
13 delegates to the States the power to regulate the use or
14 export of water in interstate coal pipeline distribution sys-
15 tems, through State water laws, notwithstanding any adverse
16 impact such delegation may have on interstate commerce or
17 on any interstate coal pipeline distribution system. This dele-
18 gation expressly includes but is not limited to provisions of
19 State water law which provide for the establishment or exer-
20 cise of terms or conditions (including terms or conditions ter-
21 minating use or relating to or prohibiting the export of water)
22 on permits or authorizations for, interests in, or rights to con-
23 trol, reservation, appropriation, purchase, transfer, use, di-
24 version, dedication, disposal, distribution, acquisition, exer-
S 318 IS
24
17
1 cise, export or claim of water for the export or use in any
2 interstate coal pipeline distribution system.
3 (c) Nothing in this Act shall —
4 (1) impair the validity of or preempt any provision
5 of State water law, or of any interstate compact gov-
6 eming water;
7 (2) alter the rights of any State to its apportioned
8 share of the waters of any body of surface or ground-
9 water, whether determined by past or future interstate
10 compacts, or by past or future legislative or final judi-
11 cial allocations;
12 (3) preempt or modify any State or Federal
13 law or interstate compact dealing with water quality
14 or disposal;
15 (4) confer upon any non-Federal entity the ability
16 to exercise any Federal right to the waters of any
17 stream or to any ground water resources; or
18 (5) affect water rights of any Indian or Indian
19 tribe which were estabhshed by the setting aside of a
20 reservation by treaty, executive order, agreement or
21 Act of the Congress.
22 (d) No waters to which a Federal right can be asserted
23 shall be used or exported in any interstate coal pipeline distri-
24 bution system, unless authorized pursuant to and subject to
S 318 IS
25
18
1 State water law in the same maimer as provided for in sub-
2 section (a).
3 APPLICATION OP STATE AND LOCAL LAW
4 Sec, 6. (a) Nothing in this Act shall impair the validity
5 of or in any way preempt the applicability of a State water
6 law to an interstate coal pipeline distribution system even if
7 such appUcability discriminates against or would have the
8 effect of prohibiting the location, construction, operation, or
9 maintenance of such pipeline.
10 (b) Nothing in this Act shall impair the validity of or
11 preempt any State or local law, regulation, or rule of law
12 pertaining to the location, construction, operation, or mainte-
13 nance of an interstate coal pipeline distribution system except
14 where such State or local law, regulation, or rule of law dis-
15 criminates against interstate coal pipeline distribution sys-
16 tems.
17 UNDEEGEOUND CON8TBUCTION
18 Sec. 7. All coal pipelines granted Federal powers of
19 eminent domain, pursuant to the provisions of this Act, for
20 rights-of-way and extensions thereof shall, to the maximum
21 extent practicable, consistent with environmental protection,
22 safety, and good engineering and technological practices, be
23 located underground, and the person holding such right of
24 Federal eminent domain shall replace sufficient topsoil on dis-
25 turbed areas so that a vegetative cover, comprised of native
26 species where practicable, can be reestablished at least equal
S 318 IS
26
19
1 in extent of cover as that which sustained the natural vegeta-
2 tion in the area.
3 CONTINUING JURISDICTION OF STATE PUBLIC UTILITY
4 COMMISSIONS
5 Sec. 8. Nothing in this Act shall be construed to require
6 any forms of automatic passthrough of, or preempt the rate-
7 making authority of any State utUity regulatory agency or
8 the Federal Energy Regulatory Commission with respect to
9 costs related to construction, operation, and maintenance of
10 any interstate coal pipeline distribution system, whether or
1 1 not such costs have been provided for by contract between a
12 utility and the interstf e coal pipeline distribution system
13 operator.
14 APPLICABILITY OF ENVIEONMENTAL CONTROL LAWS
15 Sec. 9. Any interstate coal pipeline distribution system
16 authorized under this Act shall be subject to the requirements
17 of the Federal Water Pollution Control Act, as amended (33
18 U.S.C. 466 et seq,), and any other applicable State and
19 Federal environmental control laws.
20 WATEE DISCHARGE EEQUIEEMENTS
21 Sec. 10. With respect to any proposed pipeline distribu-
22 tion system using water as the transport medium, prior to the
23 issuance of any findings pursuant to section 4 of this Act, the
24 Secretary shall notify the Administrator of the Environmen-
25 tal Protection Agency of his consideration of the application
26 for a determination under subsection (4)(a). The Secretary
S 318 IS
27
20
1 and the person applying for such determination shall provide
2 such information as the Administrator shall require to con-
3 duct a review of the abihty of the proposed interstate coal
4 pipeline distribution system to comply with Federal water
5 discharge requirements. The Administrator shall have one
6 hundred and twenty days from the date of receipt of such
7 notification to conduct such review and to advise the Secre-
8 tary with respect thereto. The Secretary shall not issue any
9 findings pursuant to section 4 unless he has received a report
10 from the Administrator of the Environmental Protection
11 Agency advising that, in the judgment of the Administrator,
12 it can reasonably be expected that the water discharge can
13 meet the requirements of the Federal Water Pollution Con-
14 trol Act.
15 ACCESS TO COAL PIPELINB TRANSPOETATION CONTEACTS
16 Sec. 11. (a)(1) By filing a contract between a prospec-
17 tive shipper and a pipeline carrier vdth the Federal Energy
18 Regulatory Conmiission (hereinafter referred to as the Com-
19 mission), within ten business days of signing said contract,
20 any person operating or proposing to operate an interstate
21 coal pipeline distribution system may enter into contracts
22 with one or more shippers of coal to provide transportation
23 under specified rates, terms, and conditions but may not un-
24 reasonably discriminate by refusing to enter into similar con-
25 tracts under similar rates, terms, and conditions with other
26 shippers who are seeking service from the same origin areas
8 318 IS
28
21
1 to the same terminus areas and are ready, fit, willing, and
2 able to enter into such contracts in a contemporaneous
3 period. The term "ready, fit, willing, and able" as used in
4 this section includes, but is not limited to financial fitness.
5 Such contract filing shall include all rates, terms, and condi-
6 tions of said contract.
7 (2) Service under a contract executed pursuant to para-
8 graph (1) of this subsection is deemed to be a separate and
9 distinct class of service. Persons operating interstate coal
10 pipeline distribution systems shall be obligated to perform
11 only those duties specified by the terms and conditions of any
12 such contract in connection with the services provided under
13 such contract. Service under such contracts shall not be in-
14 temipted for the purpose of prorating or allocating to other
15 shippers the pipeline capacity committed to service under
16 such contracts.
17 (b)(1) Any person operating or proposing to operate an
18 interstate coal pipeline distribution system who files contracts
19 under this section for the transportation of a volume of coal
20 which is less than the volume of coal that would totally obU-
21 gate the capacity of the pipeline shall, in the sixty-day period
22 beginning on the date of the filing of such contract, enter into
23 contracts with shippers who are ready, fit, willing, and able
24 to enter into such contracts under rates, terms, and condi-
25 tions similar to the rates, terms, and conditions contained in
29
22
1 the contract that has been so filed. That person shall enter
2 into such similar contracts in the chronological order in which
3 binding written offers to enter into such similar contracts are
4 submitted to such person. The obligation imposed by this sub-
5 section shall remain in effect —
6 (A) until the capacity of the pipeline is totally
7 committed for providing transportation under contracts
8 approved under this section, or
9 (B) until the end of the sixty-day period, which-
10 ever occurs first.
11 (2) Not later than the thirtieth day following the end of
12 such sixty-day period, a shipper of coal may file a complaint
' 13 with the Commission on the grounds that the person operat-
14 ing the interstate coal pipeline distribution system is violating
15 this subsection.
16 (3) If, following a notice and an opportunity for a hear-
17 ing, but not later than the thirtieth day following the filing of
18 a complaint in accordance with paragraph (2) of this subsec-
19 tion, the Commission finds that the person is violating this
20 subsection and has, with respect to the complaining shipper,
21 an obUgation under this subsection to enter into a contract,
22 the Commission shall order that person to provide the service
23 specified in the offer under such rates, terms, and conditions
24 contained in the contract that is filed with the Conunission
25 under paragraph (1) of this subsection. In addition, if the
S 318 IS
30
23
1 Commission finds that a person is violating this subsection by
2 entering into contracts with shippers of coal pursuant to
3 paragraph (1) of this subsection in an order other than the
4 order in which binding offers are submitted, the Commission
5 shall establish the proper order of such for approval under
6 subsection (c) of this section.
7 (4) The Commission may not approve, under this sec-
8 tion, any contract for the transportation of coal by pipeline —
9 (A) if approval of such contract will result in the
10 total tonnage of coal obligated to be transported by the
11 pipeline in any period under contracts approved under
12 this section exceeding the maximum capacity of the
13 pipeline in such period; or
14 (B) if the provision of coal transportation services
15 under such contract would result in a destructive com-
16 petitive practice.
O
S 318 IS
31
The Chairman. I thank our distinguished witnesses for being
here today and I look forward to their testimony. We begin this
morning — I might add that we have a large number of witnesses,
so as usual we would like to receive all written statements, put
them in the record verbatim and then urge — strongly urge wit-
nesses not to read statements, but to hit the highlights. This is not
the first time, of course, that this Committee has considered this
legislation. However, we want to give time to Senator Burns and
others who are new to this legislation to ask the questions that
they wish.
We begin with the first panel, Marvin J. Boede, General Presi-
dent of the United Association of Journeymen and Apprentices of
the Plumbing and Pipefitting Industry, also testifying on behalf of
the Building and Construction Trades Department of the AFL-CIO,
and Jack Otero, International Vice President for Transportation,
Communication and International Union. He is accompanied by
K.O. Richardson, Chairman of the Railway Labor Executives' Asso-
ciation Task Force on Coal Slurry.
Gentlemen, welcome to the Committee and please proceed as you
wish. Mr. Boede, I guess you will begin.
STATEMENT OF MARVIN J. BOEDE, GENERAL PRESIDENT,
UNITED ASSOCIATION OF JOURNEYMEN AND APPRENTICES OF
THE PLUMBING AND PIPEFITTING INDUSTRY, AND ON BEHALF
OF THE BUILDING AND CONSTRUCTION TRADES DEPARTMENT,
AFL-CIO
Mr. Boede. Thank you, sir.
Mr. Chairman, members of the Committee, I am Marvin Boede,
the 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 & Utilization Act. I should
point out also that I am the Vice President of the Building and
Construction Trades Department of the AFL-CIO, made up of 15
national-international unions in the construction industry.
The Chairman. Mr. Boede, may I interrupt you at that point and
I welcome all the members of organized labor who I hear in the
audience. We appreciate their presence here.
Mr. Boede. It is gratifying, is it not, senator?
The Chairman. Yes, it is.
Mr. Boede. I am fully authorized to speak for the Department,
which has repeatedly and unanimously passed resolutions support-
ing eminent domain legislation for coal pipelines. All together, the
unions making up the Department total more than 4 million mem-
bers.
Frankly, our members need the work that this legislation would
provide, but there is another more compelling reason to enact this
legislation, a reason that impacts on every citizen and every
worker in the United States, no matter what his occupation may
be.
We must have an increased measure of energy independence, or
our national security will continue to be jeopardized and under-
mined by foreign nations, often our bitter foes, who control so
much of the flow of oil in international commerce.
32
The United States is heading full-speed into another energy
crisis and its accompanying nightmares. Right now, we are import-
ing 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 Ad-
ministration 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.
An3d:hing we can do to promote the increased use of coal to re-
place oil in the power plants of American industry, especially in
the production of electricity, should be done — and done immediate-
ly. 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 devel-
oped. 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 environmental-
ly sound. It calls for no government subsidy, no expenditures of
Federal revenue, strict compliance with all environmental protec-
tion statutes and expressly delegates to the states the power to reg-
ulate the use or export of water in the interstate coal slurry pipe-
line system. It would provide jobs in construction and manufactur-
ing, 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 Corpora-
tion shortly before the 1983 vote on a similar bill. Using standard
Bureau of Labor statistics methods, it was estimated that construc-
tion of seven pipelines then under consideration would have cre-
ated 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 equip-
ment, 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 deliv-
er coal to ships for the export market, a market that is sitting
there for American coal producers to develop. Jobs would be cre-
ated to build new marine terminals and shipyard workers would