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and respect for human rights. The only possible difference of opinion concerned the European and American assessments of what could be achieved by the Helsinki agreement. It was clearly unreasonable for the Western countries to expect the Eastern countries to come round to the West's position on human rights as the result of a diplomatic act. Nevertheless, contacts between individuals, particularly in the case of married couples, had been facilitated, and there had been some improvement in working conditions for journalists. Progress had clearly been limited.

Détente called for great patience. We should continue on this course, as no reasonable alternative existed. The Europeans supported President Carter's moral stance. Even if there existed certain differences of interpretation and opinion as to the tactics to be employed, this should in no circumstances impair relations between Western Europe and the United States, although such tactics should not jeopardize the process of détente with the Eastern countries.

Mr. Dodd, supporting Mr. Faure's views, noted the existence of varying shades of opinion in both Europe and the United States, although everyone agreed on the importance of a human rights policy.

Mr. Jahn cited the European Parliament resolution which called for compliance with the Helsinski Final Act and emphasized that détente was inseparable from the human rights issue.

EVOLUTION OF COMMUNIST PARTIES

Mr. Bordu shared many of the views put forward by Mr. Faure. Hensinki marked a turning point in relations between European countries, grouped together three interdependent baskets and should be seen in the wider context of all negotiations which aimed at securing cooperation and arms limitation. Analyzing Eurocommunism, Mr. Bordu considered that this phenomenon raised the question of whether states and Communist Parties should enjoy political and economic independence with a view to resolving their problems at national level. The European Communist Parties, like other parties, were capable of evolving and changing. This was the remarkable evolution which was evident in a number of these parties. They were particularly concerned by all aspects of the human rights issue. No country could consider itself "innocent" in this field. For this reason, it was necessary to examine the human rights situation in all countries and, above all, to prevent this issue from becoming a new ideological weapon.

Mr. Glinne endorsed Mr. Faure's conclusions. He stressed that some progress had been achieved in the areas covered by the first two baskets of the Helsinki Act. He warned governments that they would lose credibility among all young Europeans if they failed to achieve discernable and verifiable progress in the field of human rights. All governments were aware of the importance attached to this issue by public opinion. It was vital for the Western countries to put their own house in order before condemning the flouting of human rights in other countries.

Basket two, concerning economic relations, lends itself to much more progress even though it may aggravate local problems as shown by the concern in Belgium over increased imports from Eastern Europe as these affect the employment picture.

PAPERS 1

INFORMATION NOTE ON PRESIDENT CARTER'S NATIONAL

ENERGY PLAN

(Paper by Mr. Johnson)

Recent press reports and reactions by President Carter and members of his Administration could give the impression that the President is losing major battles in Congress over enactment of his energy proposals. The rejection by a House Committee of the gasoline tax, small car rebates and excise taxes on "gas guzzlers" as proposed have received considerable attention. A Subcommittee of the House Interstate and Foreign Commerce Committee has voted to deregulate price controls on natural gas immediately, but it is not certain that the Congress or the President will accept that decision. The President has chastized the Congress for bowing to pressures from the oil and automobile industries, characterizing these episodes as pressure by the special interests against the interests of consumers and the American people generally. Such charges seem anomalous, since the oil industry and the automobile industry are held in minimum high esteem by the Congress these days. As the most visible energy producers and energy users, much of the attention in the energy debate has focused on their activities over the last few years.

NATIONAL ENERGY PLAN (NEP)

As a general proposition, however, the President's National Energy Plan (NEP) and the policies it promotes are not in all that much trouble. Congress will almost certainly enact legislation this fall and early next year that will incorporate most of these policies with some refinements of its own. Hopefully, it will go farther, but that remains to be seen.

Some of the apparent dissent and disagreement in Congress with the President's proposals by both Democrats and Republicans is real and some is only rhetorical. This paper will not attempt to outline the specific policies and problems in each and every aspect of the National Energy Plan. Some examples are useful, however, in understanding the general politics between the Legislative and Executive Branches in the 95th Congress and some of the specific politics relating to energy. We cannot say with any high degree of certainty what the results of the energy debate will be, but an understanding of the process and political forces under which it will be conducted will be helpful in understanding the chaos that we seem to be going through on this issue.

At the outset, some background is necessary to understand the actions and reactions of the legislators and the policymakers involved, including President Carter. Over the last eight years, the normal conflicts and differences between the Legislative and Executive Branches have escalated to the point that confrontation and disagreement have become the rule in the normal pattern of conduct between what are Constitutionally independent political branches in our Government. Over that period, Congress has strengthened its independence and policymaking prerogatives. This has occurred not only at the level of political rhetoric, but at the organizational and function levels in the Congress as well. Members are more knowledgeable and more responsible to their local constituencies. The number and expertise of staff have increased significantly. Committees have developed techniques and procedures to obtain more and better information from the Executive Branch, special interest groups and individual citizens.

1 Papers are not normally requested for the question time but several U.S. participants believed it was useful to prepare these information notes because the questions raised by the EP delegation concerned detailed legislative issues considered by the Congress.

Before this period, the mass of information, organization manpower and expertise in the Executive Branch more easily dominated the Congress. Furthermore, in the 1960's, the Legislative and Executive Branches were dominated not only by the same political party, but by the same elements within the Democratic Party, that is, the Congressional elements. Over the past eight years, while the power in the Executive and Legislative Branches was held by opposing political parties, the Executive Branch was still heavily influenced by Congressional politics. The 95th Congress will not easily give up the independence and power over policymaking that has been acquired, even though Mr. Carter's election places both Branches under the control of the Democrats. The Carter Administration came to power without the general support of the Congressional elements in the Democratic Party and, with a few exceptions, knows very little about the personalities, functions and processes of the Congress. They will learn.

LITTLE ADVICE FROM CONGRESS

Unfortunately, the National Energy Plan was proposed by the President with little consultation with Congressional experts and leaders. Many of the political factors were either misunderstood, ignored or miscalculated by the Carter Administration.

The Congress started its own development and review of energy policies in 1973, following the oil embargo and continuing through the energy shortages of the last winter. For the most part, the Congress now is merely continuing its independent efforts within the context of the massive proposals by the Carter Administration. In the nearly four years that Congress has struggled with energy issues, they have become intimately familiar with the politics and controversies which are inherent in the energy problem. President Carter's National Energy Plan thus suffers from political inexperience, as well as some economic inadequacies.

Because of the general political opposition of the Congressional majority to the Administration, energy problems were approached on a crisis by crisis basis and resulted either in no legislation or legislation that was conflicting or uncoordinated with existing law. Thus, more through inaction and political conflict, the energy policy of the U.S. since 1973 has been dominated by a reliance on imported oil and price controls and regulation. These two basic policies are conflicting and have thus generated conflicting and uncoordinated policies in other areas throughout the Government. For instance, we control the price of oil and gas domestically well below the world market price. The current price ceilings are $5.25 bbl. for old oil and $11.28 bbl. for new oil. The current average price for interstate gas is $1.35 per thousand cubic feet (Mcf) and $1.85 (Mcf) for intrastate gas, which is unregulated on price. The current world price of oil is $13.50 bbl. We defer Outer Continental Shelf leasing and leasing on Federal lands for development and production of oil and gas and other minerals. The results has been an increase in oil imports amounting to nearly half of our current requirements while domestic development of oil, gas and other energy resources has leveled off or even declined.

RISING ENERGY COSTS

Through inflationary and environmental policies, we have increased the costs of development of our domestic energy resources. Thus, while the world price of energy resources has risen significantly, the economic feasibility of recovery of much of our domestic energy resources has not increased in the same proportion. The costs have risen almost as rapidly. For instance, only a few years ago, it was believed that a price of $10 a barrel for oil would make the production of oil from some two trillion barrels of oil from oil shale in the Western United States a feasible enterprise. That has not occurred because the cost of and road blocks to oil shale development have increased at the same time.

Laws requiring a reduction in gasoline consumption have been frustrated by laws requiring reduction in pollutants emitted by automobiles. Nuclear plant construction has been delayed by environmental, health and safety requirements. Costs of coal production have increased through implementation of mine safety requirements and will be increased further by passage soon of legislation to control surface or strip mining.

Any attempt to modify one policy by relaxing the conflicting policy results in political contests that are not easily or satisfactorily resolved. The President's national energy policy has not significantly contributed to an easing of these

political conflicts. In many instances, it has perpetuated the conflicts with no suggestions for resolution of the problems.

Under our system of government, the Congress must resolve these conflicts in order to enact a comprehensive policy. Thus, an extension of time for the auto industry to meet pollution standards, rejection of a gasoline tax and modification of excise taxes on high gasoline consuming automobiles is an attempt to balance conflicting policies, not necessarily rejection of the President's program. The basic objectives are to conserve gasoline and protect the environment are the same. The Congressional approach is more practicable.

BALANCING CONFLICTING VALUES

Most of the debate over energy policy is thus a debate of economic, health and environmental trade-offs. What, for instance, is an acceptable level of air pollution associated with the burning of coal compared to the desire to reduce our dependence on foreign oil? How fast should we convert to coal and can we afford to relax restrictions on strip mining and restoration of the environment to make its cost more competitive with foreign oil now rather than later? To what extent do we relax price controls in oil and natural gas to discourage their use in automobiles and industrial boilers, yet avoid providing so-called windfall profits for the producing companies?

The policy stated in the National Energy Plan, for instance, is that the price of oil and gas should at least equal its replacement cost. That cost is much higher if the oil and gas must be replaced by reserves located on the Outer Continental Shelf, in deep highly pressurized zones or with alternate fuels, such as gasification and liquification of coal. The system of price controls, taxes and tax rebates, on the other hand, proposed by the President is not consistent with the replacement cost theory. They are merely a continuation of present regulatory policies that have proved unworkable and which lack the proper economic incentives to convert to alternate fuels. Thus, much of the debate will center around elimination or continuation of those controls as the best means to both conserve oil and gas and convert to other fuels.

The nature of the policy debate and problems involved in resolving conflicting policies are best illustrated by reviewing the debate over deregulation of natural gas.

Individual states have controlled levels of production for years. Likewise, since gas was originally sold primarily as a byprodut of recovery of oil it has been cheap and the price at which it is sold in another part of the country has been controlled by the Federal Government. The price at which it was sold within the state produced was not controlled except by a few states. By restricting the imports of liquified gas and holding down the price of interstate gas by the Federal Government the past few years, exploration and drilling has lagged except for intrastate sale. Increased demand resulted in a situation last winter where interstate gas prices were held to $1.42 Mcf while intrastate prices were around $2.00 Mcf. Synthetic gas was being purchased to meet demand for residential heating at $4.14 Mcf until emergency legislation was passed to allow gas to be sold interstate at the $2.00 rate during the emergency.

DEREGULATION OF GAS

This general debate has been going on for several years and the decision of a House subcommittee to completely deregulate natural gas rather than just raising the ceiling price on new gas production should have come as no surprise to the President. The Senate passed a deregulation bill in the last Congress by a vote of 58 to 32 and the House barely failed to pass a similar bill before the winter emergency by a vote of 201 to 205.

Much of the debate centers on how much new gas would be discovered and produced at higher prices. There are those who believe there is little gas left at current or slightly higher prices. Some believe the oil companies have under estimated reserves and are withholding gas to raise prices. Others believe that market prices will be sufficient incentive to substantially increase our gas supplies.

An Administration spokesman recently characterized deregulation of gas as a "$71 billion ripoff" of consumers. Proponents however point out that conversion of electric utilities to coal will cost $50 billion plus the cost of anti-pollution systems costing $20-$50 million each; $610 million was lost in wages last winter because of gas shortages. Last winter the cost of synthetic gas was around $4.00

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