Meeting on Oil and Gas Issues, September 17, 1986

Item

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Extent (Dublin Core): 20 Pages
File Name (Dublin Core): lead_390_058_all
Title (Dublin Core): Meeting on Oil and Gas Issues, September 17, 1986
Date (Dublin Core): 1986-09-17
Date Created (Dublin Core): 1986-09-17
Congress (Dublin Core): 99th (1985-1987)
Topics (Dublin Core): See all items with this value Energy policy--United States
Policy Area (Curation): Energy
Creator (Dublin Core): Dole, Robert J., 1923-2021
Record Type (Dublin Core): memorandums; attendance lists
Rights (Dublin Core): http://rightsstatements.org/vocab/CNE/1.0/
Language (Dublin Core): eng
Collection Finding Aid (Dublin Core): https://dolearchivecollections.ku.edu/index.php?p=collections/findingaid&id=26&q=
Physical Location (Dublin Core): Collection 007, Box 390, Folder 58
Institution (Dublin Core): Robert J. Dole Institute of Politics, University of Kansas, Lawrence, KS
Archival Collection (Dublin Core): Robert J. Dole Republican Leadership Collection, 1985-1996
Full Text (Extract Text): (page one)

WEDNESDAY, SEPTEMBER 17, 1986 4:30 p.m.
S-230

oil and gas issues

(handwritten check mark) Ted Garrish, Assistant Secretary for Congressional Affairs Department of Energy
(handwritten) epa official

Earl Gjelde Counselor to the Secretary

(handwritten check mark) Dole
(crossed out) McClure - conflict can't change
(handwritten check mark) Nickles -
(handwritten check mark) Andrews
(handwritten check mark) Gramm
(handwritten check mark) Domenici
Symms
Armstrong
Kassebaum-not sure
(handwritten check mark) Wallop
(handwritten check mark) Simpson - will be a little late
(handwritten, check mark) Helms

(page two)

WEDNESDAY, SEPTEMBER 17, 1986 4:30 p.m.
S-230

oil and gas issues

Ted Garrish, Assistant Secretary for Congressional Affairs Department of Energy

Earl Gjelde Counselor to the Secretary

Dole
McClure - conflict can't change
Nickles -
Andrews
Gramm
Domenici
Symms
Armstrong
Kassebaum-not sure
Wallop
Simpson - will be a little late

(page three)

WEDNESDAY, SEPTEMBER 17, 1986 4:30 p.m.
S-230

oil and gas issues

Ted Garrish, Assistant Secretary for Congressional Affairs
Department of Energy
Herrington out of the country

Earl Gjelde Counselor to the Secretary
Hodel out of the city

Dole
McClure - conflict can't change
Nickles -
Andrews
Gramm
Domenici
Symms
Armstrong
Kassebaum-not sure
Wallop
Simpson - will be a little late

(page four)

September 12, 1986

TO: Senator Dole
FROM: Rod DeArment
Re: Senator Gramm's Proposed Oil and Gas Bill

Whit and I met yesterday first with Senator Gramm's staff and then with Senator Gramm to review the substance and strategy of the oil and gas bill that he has been working on. Attached is the latest outline of his proposal.

Senator Gramm has been working closely with Secretaries Herrington and Hodel and claims the Administration is prepared to energetically support the effort. He has also obtained tentative approval of all of the major oil and gas groups (API, IPAA, TIPRO, Mid Continent, etc), but he asked these groups to go back to their boards to double check their support.

Political Advantage

Pushing this legislation with the President's explicit endorsement would demonstrate Republican concern for the plight of the oil and gas industry. Even if the bill ultimately does not pass the Senate because of the objection of Senator Metzenbaum or some other Democrat, it will provide Republican candidates with concrete evidence that we care and are trying to help the industry.

Potential Problem Areas

1. No import fee -- Many (but certainly not all) in the oil patch believe an import fee is a panacea to the industry problems. Nevertheless, an import fee has no chance of being enacted before the end of the session. This bill takes no position on the ultimate advisability import fee. it merely recognizes that adding an import fee will drag the whole effort down in the short time available. Senator Gramm is seeking an understanding with the oil groups that they will not undercut this effort by deprecating it as tokenism.

Obviously, we should expect that Senators Hart or Boren might offer an import fee as a floor amendment. But given the 82 to 15 vote on Senator Hart's last import fee amendment, there is no great danger that the amendment will pass even with Republicans, like Senator Nickles, voting for it.

(page five)

- 2 -

2. Environmental Issues -- A large number of proposed relief provisions involve environmental restrictions. The EPA has not yet been consulted on these items and Senator Gramm acknowledges that some may drop out in the consultative process. Nevertheless, we may find that Senators such as Senator Stafford and Chafee may oppose the environmental changes.

3. Canadian Gas Tariff -- One of the proposed items in Senator Gramm's package is a prohibition of differential treatment in the design of natural gas rates. This addresses a complicated rate structure advantage enjoyed by the Canadians. This change will undoubtedly be opposed by the Canadian government and perhaps our State Department.

Proposed Action

Senator Gramm would like for you to call a meeting of the oil-state Republicans (particularly those up for election) to review the package to discuss introducing and attempt to move a package of this sort. It is hoped that Secretaries Herrington and Hodel would attend the meeting to indicate Administrative support for the effort.

Would you like for us to set up such a meeting on Tuesday or Wednesday?

(blank line) Yes
(blank line) No

Attachment

(page six)

OIL AND GAS PRODUCTION REVITALIZATION ACT OF 1986

SUMMARY OF PROPOSALS

• OIL PROVISIONS

• Windfall Profit Tax. The bill repeals the Windfall Profit Tax.

• Strategic Petroleum Reserve. The bill requires that 50% of the purchases for the Strategic Petroleum Reserve be from domestic sources. Oil being acquired would be at prices no less favorable than from foreign sources.

• Oil And Gas Leases. The bill allows a 2 year extension of leases where exploration has not begun but where there is a showing that the owner of the lease will commence exploration during the extension period.

NATURAL GAS PROVISIONS

• Transportation of Natural Gas. The bill empowers the Federal Energy Regulatory Commission to mandate the transportation of natural gas without discrimination as to class of shipper or recipient.

• Fuel Use Act. The bill repeals the demand restraints of the Fuel Use Act.

• Incremental Pricing. The bill repeals the incremental pricing requirements of the Natural Gas Policy Act of 1978.

• Pooling Exemption. The bill permits a limited exemption to small producers to discuss and contract for the pooling of natural gas for sale.

• Natural Gas Rate Design. The bill prohibits differential treatment in rate design with regard to the allocation of costs.

REGULATORY REFORM PROVISIONS

• Waste Requirements. The bill requires that the high volume low toxicity waste study required under the Resource Conservation and Recovery Act be performed by January 1, 1989. Affected industries and appropriate Departments would be allowed full participation in the study.

(page seven)

• Underground Tanks. The bill clarifies Resource Conservation and Recovery Act requirements imposed on underground storage tanks, and exempts well cellars, sumps, drip collection devices and hydraulic reservoirs.

• Drilling Fluids. The bill expresses the sense of the Congress that the Environmental Protection Agency should establish a mechanism for the approval of drilling fluids used in exploration and production, rather than simply setting toxicity limits for discharge.

• Underground Injection Control Program. The bill revises certain record keeping requirements for underground injection systems in order to facilitate the use of such systems.

• Oil And Gas Extraction Permits. The bill expresses the sense of the Congress that Environmental Protection Agency permits for the oil and gas extraction point category be modified to reflect subsequently promulgated national effluent limitation guidelines.

• Facility Variances. The bill expresses the sense of the Congress that "fundamentally different factors" variances should be available for any facility that is subject to national effluent limitation guidelines.
• Recycling Activities. The bill expresses the sense of the Congress that "mixture" and "derived from" rules should not be invoked to curtail recycling activities designed to conserve resources when there is no information to demonstrate that such recycling practices pose any threat to human health and the environment.

• Land Treatment Sites. The bill expresses the sense of the Congress that any decisions regarding air emissions for land treatment sites should be made utilizing regulations under Section 3004(n) of the Solid Waste Disposal Act.

• Stormwater Runoff. The bill exempts oil, gas and mining operations from Environmental Protection Agency permit requirements for runoff consisting solely of stormwater which had not come into contact with any potential pollutants.

(page eight)

September 12, 1986

TO: Senator Dole
FROM: Rod DeArment
Re: Senator Gramm's Proposed Oil and Gas Bill

Whit and I met yesterday first with Senator Gramm's staff and then with Senator Gramm to review the substance and strategy of the oil and gas bill that he has been working on. Attached is the latest outline of his proposal.

Senator Gramm has been working closely with Secretaries Herrington and Hodel and claims the Administration is prepared to energetically support the effort. He has also obtained tentative approval of all of the major oil and gas groups (API, IPAA, TIPRO, Mid Continent, etc), but he asked these groups to go back to their boards to double check their support.

Political Advantage

Pushing this legislation with the President's explicit endorsement would demonstrate Republican concern for the plight of the oil and gas industry. Even if the bill ultimately does not pass the Senate because of the objection of Senator Metzenbaum or some other Democrat, it will provide Republican candidates with concrete evidence that we care and are trying to help the industry.

Potential Problem Areas

1. No import fee -- Many (but certainly not all) in the oil patch believe an import fee is a panacea to the industry problems. Nevertheless, an import fee has no chance of being enacted before the end of the session. This bill takes no position on the ultimate advisability import fee. it merely recognizes that adding an import fee will drag the whole effort down in the short time available. Senator Gramm is seeking an understanding with the oil groups that they will not undercut this effort by deprecating it as tokenism.

Obviously, we should expect that Senators Hart or Boren might offer an import fee as a floor amendment. But given the 82 to 15 vote on Senator Hart's last import fee amendment, there is no great danger that the amendment will pass even with Republicans, like Senator Nickles, voting for it.

(page nine)

- 2 -

2. Environmental Issues -- A large number of proposed relief provisions involve environmental restrictions. The EPA has not yet been consulted on these items and Senator Gramm acknowledges that some may drop out in the consultative process. Nevertheless, we may find that Senators such as Senator Stafford and Chafee may oppose the environmental changes.

3. Canadian Gas Tariff -- One of the proposed items in Senator Gramm's package is a prohibition of differential treatment in the design of natural gas rates. This addresses a complicated rate structure advantage enjoyed by the Canadians. This change will undoubtedly be opposed by the Canadian government and perhaps our State Department.

Proposed Action

Senator Gramm would like for you to call a meeting of the oil-state Republicans (particularly those up for election) to review the package to discuss introducing and attempt to move a package of this sort. It is hoped that Secretaries Herrington and Hodel would attend the meeting to indicate Administrative support for the effort.

Would you like for us to set up such a meeting on Tuesday or Wednesday?

(blank line) Yes
(blank line) No

Attachment

(page ten)

OIL AND GAS PRODUCTION REVITALIZATION ACT OF 1986

SUMMARY OF PROPOSALS

• OIL PROVISIONS

• Windfall Profit Tax. The bill repeals the Windfall Profit Tax.

• Strategic Petroleum Reserve. The bill requires that 50% of the purchases for the Strategic Petroleum Reserve be from domestic sources. Oil being acquired would be at prices no less favorable than from foreign sources.

• Oil And Gas Leases. The bill allows a 2 year extension of leases where exploration has not begun but where there is a showing that the owner of the lease will commence exploration during the extension period.

NATURAL GAS PROVISIONS

• Transportation of Natural Gas. The bill empowers the Federal Energy Regulatory Commission to mandate the transportation of natural gas without discrimination as to class of shipper or recipient.

• Fuel Use Act. The bill repeals the demand restraints of the Fuel Use Act.

• Incremental Pricing. The bill repeals the incremental pricing requirements of the Natural Gas Policy Act of 1978.

• Pooling Exemption. The bill permits a limited exemption to small producers to discuss and contract for the pooling of natural gas for sale.

• Natural Gas Rate Design. The bill prohibits differential treatment in rate design with regard to the allocation of costs.

REGULATORY REFORM PROVISIONS

• Waste Requirements. The bill requires that the high volume low toxicity waste study required under the Resource Conservation and Recovery Act be performed by January 1, 1989. Affected industries and appropriate Departments would be allowed full participation in the study.

(page eleven)

• Underground Tanks. The bill clarifies Resource Conservation and Recovery Act requirements imposed on underground storage tanks, and exempts well cellars, sumps, drip collection devices and hydraulic reservoirs.

• Drilling Fluids. The bill expresses the sense of the Congress that the Environmental Protection Agency should establish a mechanism for the approval of drilling fluids used in exploration and production, rather than simply setting toxicity limits for discharge.

• Underground Injection Control Program. The bill revises certain record keeping requirements for underground injection systems in order to facilitate the use of such systems.

• Oil And Gas Extraction Permits. The bill expresses the sense of the Congress that Environmental Protection Agency permits for the oil and gas extraction point category be modified to reflect subsequently promulgated national effluent limitation guidelines.

• Facility Variances. The bill expresses the sense of the Congress that "fundamentally different factors" variances should be available for any facility that is subject to national effluent limitation guidelines.
• Recycling Activities. The bill expresses the sense of the Congress that "mixture" and "derived from" rules should not be invoked to curtail recycling activities designed to conserve resources when there is no information to demonstrate that such recycling practices pose any threat to human health and the environment.

• Land Treatment Sites. The bill expresses the sense of the Congress that any decisions regarding air emissions for land treatment sites should be made utilizing regulations under Section 3004(n) of the Solid Waste Disposal Act.

• Stormwater Runoff. The bill exempts oil, gas and mining operations from Environmental Protection Agency permit requirements for runoff consisting solely of stormwater which had not come into contact with any potential pollutants.

(page twelve)

WEDNESDAY, SEPTEMBER 17, 1986 4:30 p.m.
S-230

oil and gas issues

Ted Garrish, Assistant Secretary for Congressional Affairs
Department of Energy

Earl Gjelde Counselor to the Secretary

Dole
McClure - conflict can't change
Nickles -
Andrews
Gramm
Domenici
Symms
Armstrong
Kassebaum-not sure
Wallop
Simpson - will be a little late

(page thirteen)

September 12, 1986

TO: Senator Dole
FROM: Rod DeArment
Re: Senator Gramm's Proposed Oil and Gas Bill

Whit and I met yesterday first with Senator Gramm's staff and then with Senator Gramm to review the substance and strategy of the oil and gas bill that he has been working on. Attached is the latest outline of his proposal.

Senator Gramm has been working closely with Secretaries Herrington and Hodel and claims the Administration is prepared to energetically support the effort. He has also obtained tentative approval of all of the major oil and gas groups (API, IPAA, TIPRO, Mid Continent, etc), but he asked these groups to go back to their boards to double check their support.

Political Advantage

Pushing this legislation with the President's explicit endorsement would demonstrate Republican concern for the plight of the oil and gas industry. Even if the bill ultimately does not pass the Senate because of the objection of Senator Metzenbaum or some other Democrat, it will provide Republican candidates with concrete evidence that we care and are trying to help the industry.

Potential Problem Areas

1. No import fee -- Many (but certainly not all) in the oil patch believe an import fee is a panacea to the industry problems. Nevertheless, an import fee has no chance of being enacted before the end of the session. This bill takes no position on the ultimate advisability import fee. it merely recognizes that adding an import fee will drag the whole effort down in the short time available. Senator Gramm is seeking an understanding with the oil groups that they will not undercut this effort by deprecating it as tokenism.

Obviously, we should expect that Senators Hart or Boren might offer an import fee as a floor amendment. But given the 82 to 15 vote on Senator Hart's last import fee amendment, there is no great danger that the amendment will pass even with Republicans, like Senator Nickles, voting for it.

(page fourteen)

- 2 -

2. Environmental Issues -- A large number of proposed relief provisions involve environmental restrictions. The EPA has not yet been consulted on these items and Senator Gramm acknowledges that some may drop out in the consultative process. Nevertheless, we may find that Senators such as Senator Stafford and Chafee may oppose the environmental changes.

3. Canadian Gas Tariff -- One of the proposed items in Senator Gramm's package is a prohibition of differential treatment in the design of natural gas rates. This addresses a complicated rate structure advantage enjoyed by the Canadians. This change will undoubtedly be opposed by the Canadian government and perhaps our State Department.

Proposed Action

Senator Gramm would like for you to call a meeting of the oil-state Republicans (particularly those up for election) to review the package to discuss introducing and attempt to move a package of this sort. It is hoped that Secretaries Herrington and Hodel would attend the meeting to indicate Administrative support for the effort.

Would you like for us to set up such a meeting on Tuesday or Wednesday?

(blank line) Yes
(blank line) No

Attachment

(page fifteen)

OIL AND GAS PRODUCTION REVITALIZATION ACT OF 1986

SUMMARY OF PROPOSALS

• OIL PROVISIONS

• Windfall Profit Tax. The bill repeals the Windfall Profit Tax.

• Strategic Petroleum Reserve. The bill requires that 50% of the purchases for the Strategic Petroleum Reserve be from domestic sources. Oil being acquired would be at prices no less favorable than from foreign sources.

• Oil And Gas Leases. The bill allows a 2 year extension of leases where exploration has not begun but where there is a showing that the owner of the lease will commence exploration during the extension period.

NATURAL GAS PROVISIONS

• Transportation of Natural Gas. The bill empowers the Federal Energy Regulatory Commission to mandate the transportation of natural gas without discrimination as to class of shipper or recipient.

• Fuel Use Act. The bill repeals the demand restraints of the Fuel Use Act.

• Incremental Pricing. The bill repeals the incremental pricing requirements of the Natural Gas Policy Act of 1978.

• Pooling Exemption. The bill permits a limited exemption to small producers to discuss and contract for the pooling of natural gas for sale.

• Natural Gas Rate Design. The bill prohibits differential treatment in rate design with regard to the allocation of costs.

REGULATORY REFORM PROVISIONS

• Waste Requirements. The bill requires that the high volume low toxicity waste study required under the Resource Conservation and Recovery Act be performed by January 1, 1989. Affected industries and appropriate Departments would be allowed full participation in the study.

(page sixteen)

• Underground Tanks. The bill clarifies Resource Conservation and Recovery Act requirements imposed on underground storage tanks, and exempts well cellars, sumps, drip collection devices and hydraulic reservoirs.

• Drilling Fluids. The bill expresses the sense of the Congress that the Environmental Protection Agency should establish a mechanism for the approval of drilling fluids used in exploration and production, rather than simply setting toxicity limits for discharge.

• Underground Injection Control Program. The bill revises certain record keeping requirements for underground injection systems in order to facilitate the use of such systems.

• Oil And Gas Extraction Permits. The bill expresses the sense of the Congress that Environmental Protection Agency permits for the oil and gas extraction point category be modified to reflect subsequently promulgated national effluent limitation guidelines.

• Facility Variances. The bill expresses the sense of the Congress that "fundamentally different factors" variances should be available for any facility that is subject to national effluent limitation guidelines.
• Recycling Activities. The bill expresses the sense of the Congress that "mixture" and "derived from" rules should not be invoked to curtail recycling activities designed to conserve resources when there is no information to demonstrate that such recycling practices pose any threat to human health and the environment.

• Land Treatment Sites. The bill expresses the sense of the Congress that any decisions regarding air emissions for land treatment sites should be made utilizing regulations under Section 3004(n) of the Solid Waste Disposal Act.

• Stormwater Runoff. The bill exempts oil, gas and mining operations from Environmental Protection Agency permit requirements for runoff consisting solely of stormwater which had not come into contact with any potential pollutants.

(page seventeen)

BOB DOLE
KANSAS

United States Senate
OFFICE OF MAJORITY LEADER
S-230 THE CAPITOL

September 17, 1986

We have just been informed that Herrington is out of the country and will not be back until (date handwritten) Oct. 2. His representative is Ted Garrish, Assistant Secretary for Congressional Affairs. Secretary Hodel is out of the city today and won't be back until late Thursday evening. Earl Gjelde, Counselor to the Secretary will be his representative.

Attached is the list of Senators.

Do you want to go ahead with the meeting today?
Sheila Burke

(handwritten signature)

(page eighteen)

September 17, 1986

TO: SENATOR DOLE
FROM: SHEILA BURKE

You would be available this afternoon from 3:00 until 5:00 to set up a meeting with Hodel and Herrington.

Listed below are suggested oil state senators for the meeting:

Mcclure (handwritten) - N
Nickles
Andrews (handwritten) Y
Gramm (handwritten) Y
Domenici (handwritten) Y
Symms (handwritten) Y
Armstrong
Kassebaum
Wallop
Simpson (handwritten) Y
4:30

Would you like for us to set up for today?

(handwritten) 4:30

(checked line)
yes

(blank line)
no

(handwritten) TED GARRISH - ASSISTANT SECY CONG. AFFAIRS
DEPT. OF ENERGY
HERRINGTON OUT OF COUNTRY

(handwritten) EARL Gjelde Counselor TO THE SECY INTERIOR

(page nineteen)

BOB DOLE
KANSAS

(handwritten) tomorrow

United States Senate
OFFICE OF MAJORITY LEADER
S-230 THE CAPITOL

(rest of page handwritten)

GC Deputy (illegible) under out of town today

252-5450
Ted Garrish

Hader & Herrington (Europe)

343-7351
Terry

252-6210
Joyce

oil and gas

1/2 hour

[tomorrow]

McClure
Nickles
Andrews
Gramm
Domenici
symms
Armat
Kassebaum
Wallop
Simpson

(page twenty)

September 17, 1986

TO: SENATOR DOLE
FROM: SHEILA BURKE

You would be available this afternoon from 3:00 until 5: 00 to set up a meeting with Hodel and Herrington.

Listed below are suggested oil state senators for the meeting:

(handwritten) web (typed) McClure (handwritten) conflict will call back
Nickles
Andrews (handwritten) YES
(circled) Gramm (handwritten) YES
Domenici (handwritten) YES
Symms (handwritten) YES
Armstrong (handwritten) not sure
(handwritten) web (typed) Kassebaum
(handwritten) web (typed) Wallop
(handwritten) web (typed) Simpson

Would you like for us to set up for today?

(blank line)
yes

(blank line)
no

(handwritten) 4:30 Today
S-230

(handwritten) Counselor to secy earl gjelde; (page one)

WEDNESDAY, SEPTEMBER 17, 1986 4:30 p.m.
S-230

oil and gas issues

(handwritten check mark) Ted Garrish, Assistant Secretary for Congressional Affairs Department of Energy
(handwritten) epa official

Earl Gjelde Counselor to the Secretary

(handwritten check mark) Dole
(crossed out) McClure - conflict can't change
(handwritten check mark) Nickles -
(handwritten check mark) Andrews
(handwritten check mark) Gramm
(handwritten check mark) Domenici
Symms
Armstrong
Kassebaum-not sure
(handwritten check mark) Wallop
(handwritten check mark) Simpson - will be a little late
(handwritten, check mark) Helms

(page two)

WEDNESDAY, SEPTEMBER 17, 1986 4:30 p.m.
S-230

oil and gas issues

Ted Garrish, Assistant Secretary for Congressional Affairs Department of Energy

Earl Gjelde Counselor to the Secretary

Dole
McClure - conflict can't change
Nickles -
Andrews
Gramm
Domenici
Symms
Armstrong
Kassebaum-not sure
Wallop
Simpson - will be a little late

(page three)

WEDNESDAY, SEPTEMBER 17, 1986 4:30 p.m.
S-230

oil and gas issues

Ted Garrish, Assistant Secretary for Congressional Affairs
Department of Energy
Herrington out of the country

Earl Gjelde Counselor to the Secretary
Hodel out of the city

Dole
McClure - conflict can't change
Nickles -
Andrews
Gramm
Domenici
Symms
Armstrong
Kassebaum-not sure
Wallop
Simpson - will be a little late

(page four)

September 12, 1986

TO: Senator Dole
FROM: Rod DeArment
Re: Senator Gramm's Proposed Oil and Gas Bill

Whit and I met yesterday first with Senator Gramm's staff and then with Senator Gramm to review the substance and strategy of the oil and gas bill that he has been working on. Attached is the latest outline of his proposal.

Senator Gramm has been working closely with Secretaries Herrington and Hodel and claims the Administration is prepared to energetically support the effort. He has also obtained tentative approval of all of the major oil and gas groups (API, IPAA, TIPRO, Mid Continent, etc), but he asked these groups to go back to their boards to double check their support.

Political Advantage

Pushing this legislation with the President's explicit endorsement would demonstrate Republican concern for the plight of the oil and gas industry. Even if the bill ultimately does not pass the Senate because of the objection of Senator Metzenbaum or some other Democrat, it will provide Republican candidates with concrete evidence that we care and are trying to help the industry.

Potential Problem Areas

1. No import fee -- Many (but certainly not all) in the oil patch believe an import fee is a panacea to the industry problems. Nevertheless, an import fee has no chance of being enacted before the end of the session. This bill takes no position on the ultimate advisability import fee. it merely recognizes that adding an import fee will drag the whole effort down in the short time available. Senator Gramm is seeking an understanding with the oil groups that they will not undercut this effort by deprecating it as tokenism.

Obviously, we should expect that Senators Hart or Boren might offer an import fee as a floor amendment. But given the 82 to 15 vote on Senator Hart's last import fee amendment, there is no great danger that the amendment will pass even with Republicans, like Senator Nickles, voting for it.

(page five)

- 2 -

2. Environmental Issues -- A large number of proposed relief provisions involve environmental restrictions. The EPA has not yet been consulted on these items and Senator Gramm acknowledges that some may drop out in the consultative process. Nevertheless, we may find that Senators such as Senator Stafford and Chafee may oppose the environmental changes.

3. Canadian Gas Tariff -- One of the proposed items in Senator Gramm's package is a prohibition of differential treatment in the design of natural gas rates. This addresses a complicated rate structure advantage enjoyed by the Canadians. This change will undoubtedly be opposed by the Canadian government and perhaps our State Department.

Proposed Action

Senator Gramm would like for you to call a meeting of the oil-state Republicans (particularly those up for election) to review the package to discuss introducing and attempt to move a package of this sort. It is hoped that Secretaries Herrington and Hodel would attend the meeting to indicate Administrative support for the effort.

Would you like for us to set up such a meeting on Tuesday or Wednesday?

(blank line) Yes
(blank line) No

Attachment

(page six)

OIL AND GAS PRODUCTION REVITALIZATION ACT OF 1986

SUMMARY OF PROPOSALS

• OIL PROVISIONS

• Windfall Profit Tax. The bill repeals the Windfall Profit Tax.

• Strategic Petroleum Reserve. The bill requires that 50% of the purchases for the Strategic Petroleum Reserve be from domestic sources. Oil being acquired would be at prices no less favorable than from foreign sources.

• Oil And Gas Leases. The bill allows a 2 year extension of leases where exploration has not begun but where there is a showing that the owner of the lease will commence exploration during the extension period.

NATURAL GAS PROVISIONS

• Transportation of Natural Gas. The bill empowers the Federal Energy Regulatory Commission to mandate the transportation of natural gas without discrimination as to class of shipper or recipient.

• Fuel Use Act. The bill repeals the demand restraints of the Fuel Use Act.

• Incremental Pricing. The bill repeals the incremental pricing requirements of the Natural Gas Policy Act of 1978.

• Pooling Exemption. The bill permits a limited exemption to small producers to discuss and contract for the pooling of natural gas for sale.

• Natural Gas Rate Design. The bill prohibits differential treatment in rate design with regard to the allocation of costs.

REGULATORY REFORM PROVISIONS

• Waste Requirements. The bill requires that the high volume low toxicity waste study required under the Resource Conservation and Recovery Act be performed by January 1, 1989. Affected industries and appropriate Departments would be allowed full participation in the study.

(page seven)

• Underground Tanks. The bill clarifies Resource Conservation and Recovery Act requirements imposed on underground storage tanks, and exempts well cellars, sumps, drip collection devices and hydraulic reservoirs.

• Drilling Fluids. The bill expresses the sense of the Congress that the Environmental Protection Agency should establish a mechanism for the approval of drilling fluids used in exploration and production, rather than simply setting toxicity limits for discharge.

• Underground Injection Control Program. The bill revises certain record keeping requirements for underground injection systems in order to facilitate the use of such systems.

• Oil And Gas Extraction Permits. The bill expresses the sense of the Congress that Environmental Protection Agency permits for the oil and gas extraction point category be modified to reflect subsequently promulgated national effluent limitation guidelines.

• Facility Variances. The bill expresses the sense of the Congress that "fundamentally different factors" variances should be available for any facility that is subject to national effluent limitation guidelines.
• Recycling Activities. The bill expresses the sense of the Congress that "mixture" and "derived from" rules should not be invoked to curtail recycling activities designed to conserve resources when there is no information to demonstrate that such recycling practices pose any threat to human health and the environment.

• Land Treatment Sites. The bill expresses the sense of the Congress that any decisions regarding air emissions for land treatment sites should be made utilizing regulations under Section 3004(n) of the Solid Waste Disposal Act.

• Stormwater Runoff. The bill exempts oil, gas and mining operations from Environmental Protection Agency permit requirements for runoff consisting solely of stormwater which had not come into contact with any potential pollutants.

(page eight)

September 12, 1986

TO: Senator Dole
FROM: Rod DeArment
Re: Senator Gramm's Proposed Oil and Gas Bill

Whit and I met yesterday first with Senator Gramm's staff and then with Senator Gramm to review the substance and strategy of the oil and gas bill that he has been working on. Attached is the latest outline of his proposal.

Senator Gramm has been working closely with Secretaries Herrington and Hodel and claims the Administration is prepared to energetically support the effort. He has also obtained tentative approval of all of the major oil and gas groups (API, IPAA, TIPRO, Mid Continent, etc), but he asked these groups to go back to their boards to double check their support.

Political Advantage

Pushing this legislation with the President's explicit endorsement would demonstrate Republican concern for the plight of the oil and gas industry. Even if the bill ultimately does not pass the Senate because of the objection of Senator Metzenbaum or some other Democrat, it will provide Republican candidates with concrete evidence that we care and are trying to help the industry.

Potential Problem Areas

1. No import fee -- Many (but certainly not all) in the oil patch believe an import fee is a panacea to the industry problems. Nevertheless, an import fee has no chance of being enacted before the end of the session. This bill takes no position on the ultimate advisability import fee. it merely recognizes that adding an import fee will drag the whole effort down in the short time available. Senator Gramm is seeking an understanding with the oil groups that they will not undercut this effort by deprecating it as tokenism.

Obviously, we should expect that Senators Hart or Boren might offer an import fee as a floor amendment. But given the 82 to 15 vote on Senator Hart's last import fee amendment, there is no great danger that the amendment will pass even with Republicans, like Senator Nickles, voting for it.

(page nine)

- 2 -

2. Environmental Issues -- A large number of proposed relief provisions involve environmental restrictions. The EPA has not yet been consulted on these items and Senator Gramm acknowledges that some may drop out in the consultative process. Nevertheless, we may find that Senators such as Senator Stafford and Chafee may oppose the environmental changes.

3. Canadian Gas Tariff -- One of the proposed items in Senator Gramm's package is a prohibition of differential treatment in the design of natural gas rates. This addresses a complicated rate structure advantage enjoyed by the Canadians. This change will undoubtedly be opposed by the Canadian government and perhaps our State Department.

Proposed Action

Senator Gramm would like for you to call a meeting of the oil-state Republicans (particularly those up for election) to review the package to discuss introducing and attempt to move a package of this sort. It is hoped that Secretaries Herrington and Hodel would attend the meeting to indicate Administrative support for the effort.

Would you like for us to set up such a meeting on Tuesday or Wednesday?

(blank line) Yes
(blank line) No

Attachment

(page ten)

OIL AND GAS PRODUCTION REVITALIZATION ACT OF 1986

SUMMARY OF PROPOSALS

• OIL PROVISIONS

• Windfall Profit Tax. The bill repeals the Windfall Profit Tax.

• Strategic Petroleum Reserve. The bill requires that 50% of the purchases for the Strategic Petroleum Reserve be from domestic sources. Oil being acquired would be at prices no less favorable than from foreign sources.

• Oil And Gas Leases. The bill allows a 2 year extension of leases where exploration has not begun but where there is a showing that the owner of the lease will commence exploration during the extension period.

NATURAL GAS PROVISIONS

• Transportation of Natural Gas. The bill empowers the Federal Energy Regulatory Commission to mandate the transportation of natural gas without discrimination as to class of shipper or recipient.

• Fuel Use Act. The bill repeals the demand restraints of the Fuel Use Act.

• Incremental Pricing. The bill repeals the incremental pricing requirements of the Natural Gas Policy Act of 1978.

• Pooling Exemption. The bill permits a limited exemption to small producers to discuss and contract for the pooling of natural gas for sale.

• Natural Gas Rate Design. The bill prohibits differential treatment in rate design with regard to the allocation of costs.

REGULATORY REFORM PROVISIONS

• Waste Requirements. The bill requires that the high volume low toxicity waste study required under the Resource Conservation and Recovery Act be performed by January 1, 1989. Affected industries and appropriate Departments would be allowed full participation in the study.

(page eleven)

• Underground Tanks. The bill clarifies Resource Conservation and Recovery Act requirements imposed on underground storage tanks, and exempts well cellars, sumps, drip collection devices and hydraulic reservoirs.

• Drilling Fluids. The bill expresses the sense of the Congress that the Environmental Protection Agency should establish a mechanism for the approval of drilling fluids used in exploration and production, rather than simply setting toxicity limits for discharge.

• Underground Injection Control Program. The bill revises certain record keeping requirements for underground injection systems in order to facilitate the use of such systems.

• Oil And Gas Extraction Permits. The bill expresses the sense of the Congress that Environmental Protection Agency permits for the oil and gas extraction point category be modified to reflect subsequently promulgated national effluent limitation guidelines.

• Facility Variances. The bill expresses the sense of the Congress that "fundamentally different factors" variances should be available for any facility that is subject to national effluent limitation guidelines.
• Recycling Activities. The bill expresses the sense of the Congress that "mixture" and "derived from" rules should not be invoked to curtail recycling activities designed to conserve resources when there is no information to demonstrate that such recycling practices pose any threat to human health and the environment.

• Land Treatment Sites. The bill expresses the sense of the Congress that any decisions regarding air emissions for land treatment sites should be made utilizing regulations under Section 3004(n) of the Solid Waste Disposal Act.

• Stormwater Runoff. The bill exempts oil, gas and mining operations from Environmental Protection Agency permit requirements for runoff consisting solely of stormwater which had not come into contact with any potential pollutants.

(page twelve)

WEDNESDAY, SEPTEMBER 17, 1986 4:30 p.m.
S-230

oil and gas issues

Ted Garrish, Assistant Secretary for Congressional Affairs
Department of Energy

Earl Gjelde Counselor to the Secretary

Dole
McClure - conflict can't change
Nickles -
Andrews
Gramm
Domenici
Symms
Armstrong
Kassebaum-not sure
Wallop
Simpson - will be a little late

(page thirteen)

September 12, 1986

TO: Senator Dole
FROM: Rod DeArment
Re: Senator Gramm's Proposed Oil and Gas Bill

Whit and I met yesterday first with Senator Gramm's staff and then with Senator Gramm to review the substance and strategy of the oil and gas bill that he has been working on. Attached is the latest outline of his proposal.

Senator Gramm has been working closely with Secretaries Herrington and Hodel and claims the Administration is prepared to energetically support the effort. He has also obtained tentative approval of all of the major oil and gas groups (API, IPAA, TIPRO, Mid Continent, etc), but he asked these groups to go back to their boards to double check their support.

Political Advantage

Pushing this legislation with the President's explicit endorsement would demonstrate Republican concern for the plight of the oil and gas industry. Even if the bill ultimately does not pass the Senate because of the objection of Senator Metzenbaum or some other Democrat, it will provide Republican candidates with concrete evidence that we care and are trying to help the industry.

Potential Problem Areas

1. No import fee -- Many (but certainly not all) in the oil patch believe an import fee is a panacea to the industry problems. Nevertheless, an import fee has no chance of being enacted before the end of the session. This bill takes no position on the ultimate advisability import fee. it merely recognizes that adding an import fee will drag the whole effort down in the short time available. Senator Gramm is seeking an understanding with the oil groups that they will not undercut this effort by deprecating it as tokenism.

Obviously, we should expect that Senators Hart or Boren might offer an import fee as a floor amendment. But given the 82 to 15 vote on Senator Hart's last import fee amendment, there is no great danger that the amendment will pass even with Republicans, like Senator Nickles, voting for it.

(page fourteen)

- 2 -

2. Environmental Issues -- A large number of proposed relief provisions involve environmental restrictions. The EPA has not yet been consulted on these items and Senator Gramm acknowledges that some may drop out in the consultative process. Nevertheless, we may find that Senators such as Senator Stafford and Chafee may oppose the environmental changes.

3. Canadian Gas Tariff -- One of the proposed items in Senator Gramm's package is a prohibition of differential treatment in the design of natural gas rates. This addresses a complicated rate structure advantage enjoyed by the Canadians. This change will undoubtedly be opposed by the Canadian government and perhaps our State Department.

Proposed Action

Senator Gramm would like for you to call a meeting of the oil-state Republicans (particularly those up for election) to review the package to discuss introducing and attempt to move a package of this sort. It is hoped that Secretaries Herrington and Hodel would attend the meeting to indicate Administrative support for the effort.

Would you like for us to set up such a meeting on Tuesday or Wednesday?

(blank line) Yes
(blank line) No

Attachment

(page fifteen)

OIL AND GAS PRODUCTION REVITALIZATION ACT OF 1986

SUMMARY OF PROPOSALS

• OIL PROVISIONS

• Windfall Profit Tax. The bill repeals the Windfall Profit Tax.

• Strategic Petroleum Reserve. The bill requires that 50% of the purchases for the Strategic Petroleum Reserve be from domestic sources. Oil being acquired would be at prices no less favorable than from foreign sources.

• Oil And Gas Leases. The bill allows a 2 year extension of leases where exploration has not begun but where there is a showing that the owner of the lease will commence exploration during the extension period.

NATURAL GAS PROVISIONS

• Transportation of Natural Gas. The bill empowers the Federal Energy Regulatory Commission to mandate the transportation of natural gas without discrimination as to class of shipper or recipient.

• Fuel Use Act. The bill repeals the demand restraints of the Fuel Use Act.

• Incremental Pricing. The bill repeals the incremental pricing requirements of the Natural Gas Policy Act of 1978.

• Pooling Exemption. The bill permits a limited exemption to small producers to discuss and contract for the pooling of natural gas for sale.

• Natural Gas Rate Design. The bill prohibits differential treatment in rate design with regard to the allocation of costs.

REGULATORY REFORM PROVISIONS

• Waste Requirements. The bill requires that the high volume low toxicity waste study required under the Resource Conservation and Recovery Act be performed by January 1, 1989. Affected industries and appropriate Departments would be allowed full participation in the study.

(page sixteen)

• Underground Tanks. The bill clarifies Resource Conservation and Recovery Act requirements imposed on underground storage tanks, and exempts well cellars, sumps, drip collection devices and hydraulic reservoirs.

• Drilling Fluids. The bill expresses the sense of the Congress that the Environmental Protection Agency should establish a mechanism for the approval of drilling fluids used in exploration and production, rather than simply setting toxicity limits for discharge.

• Underground Injection Control Program. The bill revises certain record keeping requirements for underground injection systems in order to facilitate the use of such systems.

• Oil And Gas Extraction Permits. The bill expresses the sense of the Congress that Environmental Protection Agency permits for the oil and gas extraction point category be modified to reflect subsequently promulgated national effluent limitation guidelines.

• Facility Variances. The bill expresses the sense of the Congress that "fundamentally different factors" variances should be available for any facility that is subject to national effluent limitation guidelines.
• Recycling Activities. The bill expresses the sense of the Congress that "mixture" and "derived from" rules should not be invoked to curtail recycling activities designed to conserve resources when there is no information to demonstrate that such recycling practices pose any threat to human health and the environment.

• Land Treatment Sites. The bill expresses the sense of the Congress that any decisions regarding air emissions for land treatment sites should be made utilizing regulations under Section 3004(n) of the Solid Waste Disposal Act.

• Stormwater Runoff. The bill exempts oil, gas and mining operations from Environmental Protection Agency permit requirements for runoff consisting solely of stormwater which had not come into contact with any potential pollutants.

(page seventeen)

BOB DOLE
KANSAS

United States Senate
OFFICE OF MAJORITY LEADER
S-230 THE CAPITOL

September 17, 1986

We have just been informed that Herrington is out of the country and will not be back until (date handwritten) Oct. 2. His representative is Ted Garrish, Assistant Secretary for Congressional Affairs. Secretary Hodel is out of the city today and won't be back until late Thursday evening. Earl Gjelde, Counselor to the Secretary will be his representative.

Attached is the list of Senators.

Do you want to go ahead with the meeting today?
Sheila Burke

(handwritten signature)

(page eighteen)

September 17, 1986

TO: SENATOR DOLE
FROM: SHEILA BURKE

You would be available this afternoon from 3:00 until 5:00 to set up a meeting with Hodel and Herrington.

Listed below are suggested oil state senators for the meeting:

Mcclure (handwritten) - N
Nickles
Andrews (handwritten) Y
Gramm (handwritten) Y
Domenici (handwritten) Y
Symms (handwritten) Y
Armstrong
Kassebaum
Wallop
Simpson (handwritten) Y
4:30

Would you like for us to set up for today?

(handwritten) 4:30

(checked line)
yes

(blank line)
no

(handwritten) TED GARRISH - ASSISTANT SECY CONG. AFFAIRS
DEPT. OF ENERGY
HERRINGTON OUT OF COUNTRY

(handwritten) EARL Gjelde Counselor TO THE SECY INTERIOR

(page nineteen)

BOB DOLE
KANSAS

(handwritten) tomorrow

United States Senate
OFFICE OF MAJORITY LEADER
S-230 THE CAPITOL

(rest of page handwritten)

GC Deputy (illegible) under out of town today

252-5450
Ted Garrish

Hader & Herrington (Europe)

343-7351
Terry

252-6210
Joyce

oil and gas

1/2 hour

[tomorrow]

McClure
Nickles
Andrews
Gramm
Domenici
symms
Armat
Kassebaum
Wallop
Simpson

(page twenty)

September 17, 1986

TO: SENATOR DOLE
FROM: SHEILA BURKE

You would be available this afternoon from 3:00 until 5: 00 to set up a meeting with Hodel and Herrington.

Listed below are suggested oil state senators for the meeting:

(handwritten) web (typed) McClure (handwritten) conflict will call back
Nickles
Andrews (handwritten) YES
(circled) Gramm (handwritten) YES
Domenici (handwritten) YES
Symms (handwritten) YES
Armstrong (handwritten) not sure
(handwritten) web (typed) Kassebaum
(handwritten) web (typed) Wallop
(handwritten) web (typed) Simpson

Would you like for us to set up for today?

(blank line)
yes

(blank line)
no

(handwritten) 4:30 Today
S-230

(handwritten) Counselor to secy earl gjelde; (page one)

WEDNESDAY, SEPTEMBER 17, 1986 4:30 p.m.
S-230

oil and gas issues

(handwritten check mark) Ted Garrish, Assistant Secretary for Congressional Affairs Department of Energy
(handwritten) epa official

Earl Gjelde Counselor to the Secretary

(handwritten check mark) Dole
(crossed out) McClure - conflict can't change
(handwritten check mark) Nickles -
(handwritten check mark) Andrews
(handwritten check mark) Gramm
(handwritten check mark) Domenici
Symms
Armstrong
Kassebaum-not sure
(handwritten check mark) Wallop
(handwritten check mark) Simpson - will be a little late
(handwritten, check mark) Helms

(page two)

WEDNESDAY, SEPTEMBER 17, 1986 4:30 p.m.
S-230

oil and gas issues

Ted Garrish, Assistant Secretary for Congressional Affairs Department of Energy

Earl Gjelde Counselor to the Secretary

Dole
McClure - conflict can't change
Nickles -
Andrews
Gramm
Domenici
Symms
Armstrong
Kassebaum-not sure
Wallop
Simpson - will be a little late

(page three)

WEDNESDAY, SEPTEMBER 17, 1986 4:30 p.m.
S-230

oil and gas issues

Ted Garrish, Assistant Secretary for Congressional Affairs
Department of Energy
Herrington out of the country

Earl Gjelde Counselor to the Secretary
Hodel out of the city

Dole
McClure - conflict can't change
Nickles -
Andrews
Gramm
Domenici
Symms
Armstrong
Kassebaum-not sure
Wallop
Simpson - will be a little late

(page four)

September 12, 1986

TO: Senator Dole
FROM: Rod DeArment
Re: Senator Gramm's Proposed Oil and Gas Bill

Whit and I met yesterday first with Senator Gramm's staff and then with Senator Gramm to review the substance and strategy of the oil and gas bill that he has been working on. Attached is the latest outline of his proposal.

Senator Gramm has been working closely with Secretaries Herrington and Hodel and claims the Administration is prepared to energetically support the effort. He has also obtained tentative approval of all of the major oil and gas groups (API, IPAA, TIPRO, Mid Continent, etc), but he asked these groups to go back to their boards to double check their support.

Political Advantage

Pushing this legislation with the President's explicit endorsement would demonstrate Republican concern for the plight of the oil and gas industry. Even if the bill ultimately does not pass the Senate because of the objection of Senator Metzenbaum or some other Democrat, it will provide Republican candidates with concrete evidence that we care and are trying to help the industry.

Potential Problem Areas

1. No import fee -- Many (but certainly not all) in the oil patch believe an import fee is a panacea to the industry problems. Nevertheless, an import fee has no chance of being enacted before the end of the session. This bill takes no position on the ultimate advisability import fee. it merely recognizes that adding an import fee will drag the whole effort down in the short time available. Senator Gramm is seeking an understanding with the oil groups that they will not undercut this effort by deprecating it as tokenism.

Obviously, we should expect that Senators Hart or Boren might offer an import fee as a floor amendment. But given the 82 to 15 vote on Senator Hart's last import fee amendment, there is no great danger that the amendment will pass even with Republicans, like Senator Nickles, voting for it.

(page five)

- 2 -

2. Environmental Issues -- A large number of proposed relief provisions involve environmental restrictions. The EPA has not yet been consulted on these items and Senator Gramm acknowledges that some may drop out in the consultative process. Nevertheless, we may find that Senators such as Senator Stafford and Chafee may oppose the environmental changes.

3. Canadian Gas Tariff -- One of the proposed items in Senator Gramm's package is a prohibition of differential treatment in the design of natural gas rates. This addresses a complicated rate structure advantage enjoyed by the Canadians. This change will undoubtedly be opposed by the Canadian government and perhaps our State Department.

Proposed Action

Senator Gramm would like for you to call a meeting of the oil-state Republicans (particularly those up for election) to review the package to discuss introducing and attempt to move a package of this sort. It is hoped that Secretaries Herrington and Hodel would attend the meeting to indicate Administrative support for the effort.

Would you like for us to set up such a meeting on Tuesday or Wednesday?

(blank line) Yes
(blank line) No

Attachment

(page six)

OIL AND GAS PRODUCTION REVITALIZATION ACT OF 1986

SUMMARY OF PROPOSALS

• OIL PROVISIONS

• Windfall Profit Tax. The bill repeals the Windfall Profit Tax.

• Strategic Petroleum Reserve. The bill requires that 50% of the purchases for the Strategic Petroleum Reserve be from domestic sources. Oil being acquired would be at prices no less favorable than from foreign sources.

• Oil And Gas Leases. The bill allows a 2 year extension of leases where exploration has not begun but where there is a showing that the owner of the lease will commence exploration during the extension period.

NATURAL GAS PROVISIONS

• Transportation of Natural Gas. The bill empowers the Federal Energy Regulatory Commission to mandate the transportation of natural gas without discrimination as to class of shipper or recipient.

• Fuel Use Act. The bill repeals the demand restraints of the Fuel Use Act.

• Incremental Pricing. The bill repeals the incremental pricing requirements of the Natural Gas Policy Act of 1978.

• Pooling Exemption. The bill permits a limited exemption to small producers to discuss and contract for the pooling of natural gas for sale.

• Natural Gas Rate Design. The bill prohibits differential treatment in rate design with regard to the allocation of costs.

REGULATORY REFORM PROVISIONS

• Waste Requirements. The bill requires that the high volume low toxicity waste study required under the Resource Conservation and Recovery Act be performed by January 1, 1989. Affected industries and appropriate Departments would be allowed full participation in the study.

(page seven)

• Underground Tanks. The bill clarifies Resource Conservation and Recovery Act requirements imposed on underground storage tanks, and exempts well cellars, sumps, drip collection devices and hydraulic reservoirs.

• Drilling Fluids. The bill expresses the sense of the Congress that the Environmental Protection Agency should establish a mechanism for the approval of drilling fluids used in exploration and production, rather than simply setting toxicity limits for discharge.

• Underground Injection Control Program. The bill revises certain record keeping requirements for underground injection systems in order to facilitate the use of such systems.

• Oil And Gas Extraction Permits. The bill expresses the sense of the Congress that Environmental Protection Agency permits for the oil and gas extraction point category be modified to reflect subsequently promulgated national effluent limitation guidelines.

• Facility Variances. The bill expresses the sense of the Congress that "fundamentally different factors" variances should be available for any facility that is subject to national effluent limitation guidelines.
• Recycling Activities. The bill expresses the sense of the Congress that "mixture" and "derived from" rules should not be invoked to curtail recycling activities designed to conserve resources when there is no information to demonstrate that such recycling practices pose any threat to human health and the environment.

• Land Treatment Sites. The bill expresses the sense of the Congress that any decisions regarding air emissions for land treatment sites should be made utilizing regulations under Section 3004(n) of the Solid Waste Disposal Act.

• Stormwater Runoff. The bill exempts oil, gas and mining operations from Environmental Protection Agency permit requirements for runoff consisting solely of stormwater which had not come into contact with any potential pollutants.

(page eight)

September 12, 1986

TO: Senator Dole
FROM: Rod DeArment
Re: Senator Gramm's Proposed Oil and Gas Bill

Whit and I met yesterday first with Senator Gramm's staff and then with Senator Gramm to review the substance and strategy of the oil and gas bill that he has been working on. Attached is the latest outline of his proposal.

Senator Gramm has been working closely with Secretaries Herrington and Hodel and claims the Administration is prepared to energetically support the effort. He has also obtained tentative approval of all of the major oil and gas groups (API, IPAA, TIPRO, Mid Continent, etc), but he asked these groups to go back to their boards to double check their support.

Political Advantage

Pushing this legislation with the President's explicit endorsement would demonstrate Republican concern for the plight of the oil and gas industry. Even if the bill ultimately does not pass the Senate because of the objection of Senator Metzenbaum or some other Democrat, it will provide Republican candidates with concrete evidence that we care and are trying to help the industry.

Potential Problem Areas

1. No import fee -- Many (but certainly not all) in the oil patch believe an import fee is a panacea to the industry problems. Nevertheless, an import fee has no chance of being enacted before the end of the session. This bill takes no position on the ultimate advisability import fee. it merely recognizes that adding an import fee will drag the whole effort down in the short time available. Senator Gramm is seeking an understanding with the oil groups that they will not undercut this effort by deprecating it as tokenism.

Obviously, we should expect that Senators Hart or Boren might offer an import fee as a floor amendment. But given the 82 to 15 vote on Senator Hart's last import fee amendment, there is no great danger that the amendment will pass even with Republicans, like Senator Nickles, voting for it.

(page nine)

- 2 -

2. Environmental Issues -- A large number of proposed relief provisions involve environmental restrictions. The EPA has not yet been consulted on these items and Senator Gramm acknowledges that some may drop out in the consultative process. Nevertheless, we may find that Senators such as Senator Stafford and Chafee may oppose the environmental changes.

3. Canadian Gas Tariff -- One of the proposed items in Senator Gramm's package is a prohibition of differential treatment in the design of natural gas rates. This addresses a complicated rate structure advantage enjoyed by the Canadians. This change will undoubtedly be opposed by the Canadian government and perhaps our State Department.

Proposed Action

Senator Gramm would like for you to call a meeting of the oil-state Republicans (particularly those up for election) to review the package to discuss introducing and attempt to move a package of this sort. It is hoped that Secretaries Herrington and Hodel would attend the meeting to indicate Administrative support for the effort.

Would you like for us to set up such a meeting on Tuesday or Wednesday?

(blank line) Yes
(blank line) No

Attachment

(page ten)

OIL AND GAS PRODUCTION REVITALIZATION ACT OF 1986

SUMMARY OF PROPOSALS

• OIL PROVISIONS

• Windfall Profit Tax. The bill repeals the Windfall Profit Tax.

• Strategic Petroleum Reserve. The bill requires that 50% of the purchases for the Strategic Petroleum Reserve be from domestic sources. Oil being acquired would be at prices no less favorable than from foreign sources.

• Oil And Gas Leases. The bill allows a 2 year extension of leases where exploration has not begun but where there is a showing that the owner of the lease will commence exploration during the extension period.

NATURAL GAS PROVISIONS

• Transportation of Natural Gas. The bill empowers the Federal Energy Regulatory Commission to mandate the transportation of natural gas without discrimination as to class of shipper or recipient.

• Fuel Use Act. The bill repeals the demand restraints of the Fuel Use Act.

• Incremental Pricing. The bill repeals the incremental pricing requirements of the Natural Gas Policy Act of 1978.

• Pooling Exemption. The bill permits a limited exemption to small producers to discuss and contract for the pooling of natural gas for sale.

• Natural Gas Rate Design. The bill prohibits differential treatment in rate design with regard to the allocation of costs.

REGULATORY REFORM PROVISIONS

• Waste Requirements. The bill requires that the high volume low toxicity waste study required under the Resource Conservation and Recovery Act be performed by January 1, 1989. Affected industries and appropriate Departments would be allowed full participation in the study.

(page eleven)

• Underground Tanks. The bill clarifies Resource Conservation and Recovery Act requirements imposed on underground storage tanks, and exempts well cellars, sumps, drip collection devices and hydraulic reservoirs.

• Drilling Fluids. The bill expresses the sense of the Congress that the Environmental Protection Agency should establish a mechanism for the approval of drilling fluids used in exploration and production, rather than simply setting toxicity limits for discharge.

• Underground Injection Control Program. The bill revises certain record keeping requirements for underground injection systems in order to facilitate the use of such systems.

• Oil And Gas Extraction Permits. The bill expresses the sense of the Congress that Environmental Protection Agency permits for the oil and gas extraction point category be modified to reflect subsequently promulgated national effluent limitation guidelines.

• Facility Variances. The bill expresses the sense of the Congress that "fundamentally different factors" variances should be available for any facility that is subject to national effluent limitation guidelines.
• Recycling Activities. The bill expresses the sense of the Congress that "mixture" and "derived from" rules should not be invoked to curtail recycling activities designed to conserve resources when there is no information to demonstrate that such recycling practices pose any threat to human health and the environment.

• Land Treatment Sites. The bill expresses the sense of the Congress that any decisions regarding air emissions for land treatment sites should be made utilizing regulations under Section 3004(n) of the Solid Waste Disposal Act.

• Stormwater Runoff. The bill exempts oil, gas and mining operations from Environmental Protection Agency permit requirements for runoff consisting solely of stormwater which had not come into contact with any potential pollutants.

(page twelve)

WEDNESDAY, SEPTEMBER 17, 1986 4:30 p.m.
S-230

oil and gas issues

Ted Garrish, Assistant Secretary for Congressional Affairs
Department of Energy

Earl Gjelde Counselor to the Secretary

Dole
McClure - conflict can't change
Nickles -
Andrews
Gramm
Domenici
Symms
Armstrong
Kassebaum-not sure
Wallop
Simpson - will be a little late

(page thirteen)

September 12, 1986

TO: Senator Dole
FROM: Rod DeArment
Re: Senator Gramm's Proposed Oil and Gas Bill

Whit and I met yesterday first with Senator Gramm's staff and then with Senator Gramm to review the substance and strategy of the oil and gas bill that he has been working on. Attached is the latest outline of his proposal.

Senator Gramm has been working closely with Secretaries Herrington and Hodel and claims the Administration is prepared to energetically support the effort. He has also obtained tentative approval of all of the major oil and gas groups (API, IPAA, TIPRO, Mid Continent, etc), but he asked these groups to go back to their boards to double check their support.

Political Advantage

Pushing this legislation with the President's explicit endorsement would demonstrate Republican concern for the plight of the oil and gas industry. Even if the bill ultimately does not pass the Senate because of the objection of Senator Metzenbaum or some other Democrat, it will provide Republican candidates with concrete evidence that we care and are trying to help the industry.

Potential Problem Areas

1. No import fee -- Many (but certainly not all) in the oil patch believe an import fee is a panacea to the industry problems. Nevertheless, an import fee has no chance of being enacted before the end of the session. This bill takes no position on the ultimate advisability import fee. it merely recognizes that adding an import fee will drag the whole effort down in the short time available. Senator Gramm is seeking an understanding with the oil groups that they will not undercut this effort by deprecating it as tokenism.

Obviously, we should expect that Senators Hart or Boren might offer an import fee as a floor amendment. But given the 82 to 15 vote on Senator Hart's last import fee amendment, there is no great danger that the amendment will pass even with Republicans, like Senator Nickles, voting for it.

(page fourteen)

- 2 -

2. Environmental Issues -- A large number of proposed relief provisions involve environmental restrictions. The EPA has not yet been consulted on these items and Senator Gramm acknowledges that some may drop out in the consultative process. Nevertheless, we may find that Senators such as Senator Stafford and Chafee may oppose the environmental changes.

3. Canadian Gas Tariff -- One of the proposed items in Senator Gramm's package is a prohibition of differential treatment in the design of natural gas rates. This addresses a complicated rate structure advantage enjoyed by the Canadians. This change will undoubtedly be opposed by the Canadian government and perhaps our State Department.

Proposed Action

Senator Gramm would like for you to call a meeting of the oil-state Republicans (particularly those up for election) to review the package to discuss introducing and attempt to move a package of this sort. It is hoped that Secretaries Herrington and Hodel would attend the meeting to indicate Administrative support for the effort.

Would you like for us to set up such a meeting on Tuesday or Wednesday?

(blank line) Yes
(blank line) No

Attachment

(page fifteen)

OIL AND GAS PRODUCTION REVITALIZATION ACT OF 1986

SUMMARY OF PROPOSALS

• OIL PROVISIONS

• Windfall Profit Tax. The bill repeals the Windfall Profit Tax.

• Strategic Petroleum Reserve. The bill requires that 50% of the purchases for the Strategic Petroleum Reserve be from domestic sources. Oil being acquired would be at prices no less favorable than from foreign sources.

• Oil And Gas Leases. The bill allows a 2 year extension of leases where exploration has not begun but where there is a showing that the owner of the lease will commence exploration during the extension period.

NATURAL GAS PROVISIONS

• Transportation of Natural Gas. The bill empowers the Federal Energy Regulatory Commission to mandate the transportation of natural gas without discrimination as to class of shipper or recipient.

• Fuel Use Act. The bill repeals the demand restraints of the Fuel Use Act.

• Incremental Pricing. The bill repeals the incremental pricing requirements of the Natural Gas Policy Act of 1978.

• Pooling Exemption. The bill permits a limited exemption to small producers to discuss and contract for the pooling of natural gas for sale.

• Natural Gas Rate Design. The bill prohibits differential treatment in rate design with regard to the allocation of costs.

REGULATORY REFORM PROVISIONS

• Waste Requirements. The bill requires that the high volume low toxicity waste study required under the Resource Conservation and Recovery Act be performed by January 1, 1989. Affected industries and appropriate Departments would be allowed full participation in the study.

(page sixteen)

• Underground Tanks. The bill clarifies Resource Conservation and Recovery Act requirements imposed on underground storage tanks, and exempts well cellars, sumps, drip collection devices and hydraulic reservoirs.

• Drilling Fluids. The bill expresses the sense of the Congress that the Environmental Protection Agency should establish a mechanism for the approval of drilling fluids used in exploration and production, rather than simply setting toxicity limits for discharge.

• Underground Injection Control Program. The bill revises certain record keeping requirements for underground injection systems in order to facilitate the use of such systems.

• Oil And Gas Extraction Permits. The bill expresses the sense of the Congress that Environmental Protection Agency permits for the oil and gas extraction point category be modified to reflect subsequently promulgated national effluent limitation guidelines.

• Facility Variances. The bill expresses the sense of the Congress that "fundamentally different factors" variances should be available for any facility that is subject to national effluent limitation guidelines.
• Recycling Activities. The bill expresses the sense of the Congress that "mixture" and "derived from" rules should not be invoked to curtail recycling activities designed to conserve resources when there is no information to demonstrate that such recycling practices pose any threat to human health and the environment.

• Land Treatment Sites. The bill expresses the sense of the Congress that any decisions regarding air emissions for land treatment sites should be made utilizing regulations under Section 3004(n) of the Solid Waste Disposal Act.

• Stormwater Runoff. The bill exempts oil, gas and mining operations from Environmental Protection Agency permit requirements for runoff consisting solely of stormwater which had not come into contact with any potential pollutants.

(page seventeen)

BOB DOLE
KANSAS

United States Senate
OFFICE OF MAJORITY LEADER
S-230 THE CAPITOL

September 17, 1986

We have just been informed that Herrington is out of the country and will not be back until (date handwritten) Oct. 2. His representative is Ted Garrish, Assistant Secretary for Congressional Affairs. Secretary Hodel is out of the city today and won't be back until late Thursday evening. Earl Gjelde, Counselor to the Secretary will be his representative.

Attached is the list of Senators.

Do you want to go ahead with the meeting today?
Sheila Burke

(handwritten signature)

(page eighteen)

September 17, 1986

TO: SENATOR DOLE
FROM: SHEILA BURKE

You would be available this afternoon from 3:00 until 5:00 to set up a meeting with Hodel and Herrington.

Listed below are suggested oil state senators for the meeting:

Mcclure (handwritten) - N
Nickles
Andrews (handwritten) Y
Gramm (handwritten) Y
Domenici (handwritten) Y
Symms (handwritten) Y
Armstrong
Kassebaum
Wallop
Simpson (handwritten) Y
4:30

Would you like for us to set up for today?

(handwritten) 4:30

(checked line)
yes

(blank line)
no

(handwritten) TED GARRISH - ASSISTANT SECY CONG. AFFAIRS
DEPT. OF ENERGY
HERRINGTON OUT OF COUNTRY

(handwritten) EARL Gjelde Counselor TO THE SECY INTERIOR

(page nineteen)

BOB DOLE
KANSAS

(handwritten) tomorrow

United States Senate
OFFICE OF MAJORITY LEADER
S-230 THE CAPITOL

(rest of page handwritten)

GC Deputy (illegible) under out of town today

252-5450
Ted Garrish

Hader & Herrington (Europe)

343-7351
Terry

252-6210
Joyce

oil and gas

1/2 hour

[tomorrow]

McClure
Nickles
Andrews
Gramm
Domenici
symms
Armat
Kassebaum
Wallop
Simpson

(page twenty)

September 17, 1986

TO: SENATOR DOLE
FROM: SHEILA BURKE

You would be available this afternoon from 3:00 until 5: 00 to set up a meeting with Hodel and Herrington.

Listed below are suggested oil state senators for the meeting:

(handwritten) web (typed) McClure (handwritten) conflict will call back
Nickles
Andrews (handwritten) YES
(circled) Gramm (handwritten) YES
Domenici (handwritten) YES
Symms (handwritten) YES
Armstrong (handwritten) not sure
(handwritten) web (typed) Kassebaum
(handwritten) web (typed) Wallop
(handwritten) web (typed) Simpson

Would you like for us to set up for today?

(blank line)
yes

(blank line)
no

(handwritten) 4:30 Today
S-230

(handwritten) Counselor to secy earl gjelde; (page one)

WEDNESDAY, SEPTEMBER 17, 1986 4:30 p.m.
S-230

oil and gas issues

(handwritten check mark) Ted Garrish, Assistant Secretary for Congressional Affairs Department of Energy
(handwritten) epa official

Earl Gjelde Counselor to the Secretary

(handwritten check mark) Dole
(crossed out) McClure - conflict can't change
(handwritten check mark) Nickles -
(handwritten check mark) Andrews
(handwritten check mark) Gramm
(handwritten check mark) Domenici
Symms
Armstrong
Kassebaum-not sure
(handwritten check mark) Wallop
(handwritten check mark) Simpson - will be a little late
(handwritten, check mark) Helms

(page two)

WEDNESDAY, SEPTEMBER 17, 1986 4:30 p.m.
S-230

oil and gas issues

Ted Garrish, Assistant Secretary for Congressional Affairs Department of Energy

Earl Gjelde Counselor to the Secretary

Dole
McClure - conflict can't change
Nickles -
Andrews
Gramm
Domenici
Symms
Armstrong
Kassebaum-not sure
Wallop
Simpson - will be a little late

(page three)

WEDNESDAY, SEPTEMBER 17, 1986 4:30 p.m.
S-230

oil and gas issues

Ted Garrish, Assistant Secretary for Congressional Affairs
Department of Energy
Herrington out of the country

Earl Gjelde Counselor to the Secretary
Hodel out of the city

Dole
McClure - conflict can't change
Nickles -
Andrews
Gramm
Domenici
Symms
Armstrong
Kassebaum-not sure
Wallop
Simpson - will be a little late

(page four)

September 12, 1986

TO: Senator Dole
FROM: Rod DeArment
Re: Senator Gramm's Proposed Oil and Gas Bill

Whit and I met yesterday first with Senator Gramm's staff and then with Senator Gramm to review the substance and strategy of the oil and gas bill that he has been working on. Attached is the latest outline of his proposal.

Senator Gramm has been working closely with Secretaries Herrington and Hodel and claims the Administration is prepared to energetically support the effort. He has also obtained tentative approval of all of the major oil and gas groups (API, IPAA, TIPRO, Mid Continent, etc), but he asked these groups to go back to their boards to double check their support.

Political Advantage

Pushing this legislation with the President's explicit endorsement would demonstrate Republican concern for the plight of the oil and gas industry. Even if the bill ultimately does not pass the Senate because of the objection of Senator Metzenbaum or some other Democrat, it will provide Republican candidates with concrete evidence that we care and are trying to help the industry.

Potential Problem Areas

1. No import fee -- Many (but certainly not all) in the oil patch believe an import fee is a panacea to the industry problems. Nevertheless, an import fee has no chance of being enacted before the end of the session. This bill takes no position on the ultimate advisability import fee. it merely recognizes that adding an import fee will drag the whole effort down in the short time available. Senator Gramm is seeking an understanding with the oil groups that they will not undercut this effort by deprecating it as tokenism.

Obviously, we should expect that Senators Hart or Boren might offer an import fee as a floor amendment. But given the 82 to 15 vote on Senator Hart's last import fee amendment, there is no great danger that the amendment will pass even with Republicans, like Senator Nickles, voting for it.

(page five)

- 2 -

2. Environmental Issues -- A large number of proposed relief provisions involve environmental restrictions. The EPA has not yet been consulted on these items and Senator Gramm acknowledges that some may drop out in the consultative process. Nevertheless, we may find that Senators such as Senator Stafford and Chafee may oppose the environmental changes.

3. Canadian Gas Tariff -- One of the proposed items in Senator Gramm's package is a prohibition of differential treatment in the design of natural gas rates. This addresses a complicated rate structure advantage enjoyed by the Canadians. This change will undoubtedly be opposed by the Canadian government and perhaps our State Department.

Proposed Action

Senator Gramm would like for you to call a meeting of the oil-state Republicans (particularly those up for election) to review the package to discuss introducing and attempt to move a package of this sort. It is hoped that Secretaries Herrington and Hodel would attend the meeting to indicate Administrative support for the effort.

Would you like for us to set up such a meeting on Tuesday or Wednesday?

(blank line) Yes
(blank line) No

Attachment

(page six)

OIL AND GAS PRODUCTION REVITALIZATION ACT OF 1986

SUMMARY OF PROPOSALS

• OIL PROVISIONS

• Windfall Profit Tax. The bill repeals the Windfall Profit Tax.

• Strategic Petroleum Reserve. The bill requires that 50% of the purchases for the Strategic Petroleum Reserve be from domestic sources. Oil being acquired would be at prices no less favorable than from foreign sources.

• Oil And Gas Leases. The bill allows a 2 year extension of leases where exploration has not begun but where there is a showing that the owner of the lease will commence exploration during the extension period.

NATURAL GAS PROVISIONS

• Transportation of Natural Gas. The bill empowers the Federal Energy Regulatory Commission to mandate the transportation of natural gas without discrimination as to class of shipper or recipient.

• Fuel Use Act. The bill repeals the demand restraints of the Fuel Use Act.

• Incremental Pricing. The bill repeals the incremental pricing requirements of the Natural Gas Policy Act of 1978.

• Pooling Exemption. The bill permits a limited exemption to small producers to discuss and contract for the pooling of natural gas for sale.

• Natural Gas Rate Design. The bill prohibits differential treatment in rate design with regard to the allocation of costs.

REGULATORY REFORM PROVISIONS

• Waste Requirements. The bill requires that the high volume low toxicity waste study required under the Resource Conservation and Recovery Act be performed by January 1, 1989. Affected industries and appropriate Departments would be allowed full participation in the study.

(page seven)

• Underground Tanks. The bill clarifies Resource Conservation and Recovery Act requirements imposed on underground storage tanks, and exempts well cellars, sumps, drip collection devices and hydraulic reservoirs.

• Drilling Fluids. The bill expresses the sense of the Congress that the Environmental Protection Agency should establish a mechanism for the approval of drilling fluids used in exploration and production, rather than simply setting toxicity limits for discharge.

• Underground Injection Control Program. The bill revises certain record keeping requirements for underground injection systems in order to facilitate the use of such systems.

• Oil And Gas Extraction Permits. The bill expresses the sense of the Congress that Environmental Protection Agency permits for the oil and gas extraction point category be modified to reflect subsequently promulgated national effluent limitation guidelines.

• Facility Variances. The bill expresses the sense of the Congress that "fundamentally different factors" variances should be available for any facility that is subject to national effluent limitation guidelines.
• Recycling Activities. The bill expresses the sense of the Congress that "mixture" and "derived from" rules should not be invoked to curtail recycling activities designed to conserve resources when there is no information to demonstrate that such recycling practices pose any threat to human health and the environment.

• Land Treatment Sites. The bill expresses the sense of the Congress that any decisions regarding air emissions for land treatment sites should be made utilizing regulations under Section 3004(n) of the Solid Waste Disposal Act.

• Stormwater Runoff. The bill exempts oil, gas and mining operations from Environmental Protection Agency permit requirements for runoff consisting solely of stormwater which had not come into contact with any potential pollutants.

(page eight)

September 12, 1986

TO: Senator Dole
FROM: Rod DeArment
Re: Senator Gramm's Proposed Oil and Gas Bill

Whit and I met yesterday first with Senator Gramm's staff and then with Senator Gramm to review the substance and strategy of the oil and gas bill that he has been working on. Attached is the latest outline of his proposal.

Senator Gramm has been working closely with Secretaries Herrington and Hodel and claims the Administration is prepared to energetically support the effort. He has also obtained tentative approval of all of the major oil and gas groups (API, IPAA, TIPRO, Mid Continent, etc), but he asked these groups to go back to their boards to double check their support.

Political Advantage

Pushing this legislation with the President's explicit endorsement would demonstrate Republican concern for the plight of the oil and gas industry. Even if the bill ultimately does not pass the Senate because of the objection of Senator Metzenbaum or some other Democrat, it will provide Republican candidates with concrete evidence that we care and are trying to help the industry.

Potential Problem Areas

1. No import fee -- Many (but certainly not all) in the oil patch believe an import fee is a panacea to the industry problems. Nevertheless, an import fee has no chance of being enacted before the end of the session. This bill takes no position on the ultimate advisability import fee. it merely recognizes that adding an import fee will drag the whole effort down in the short time available. Senator Gramm is seeking an understanding with the oil groups that they will not undercut this effort by deprecating it as tokenism.

Obviously, we should expect that Senators Hart or Boren might offer an import fee as a floor amendment. But given the 82 to 15 vote on Senator Hart's last import fee amendment, there is no great danger that the amendment will pass even with Republicans, like Senator Nickles, voting for it.

(page nine)

- 2 -

2. Environmental Issues -- A large number of proposed relief provisions involve environmental restrictions. The EPA has not yet been consulted on these items and Senator Gramm acknowledges that some may drop out in the consultative process. Nevertheless, we may find that Senators such as Senator Stafford and Chafee may oppose the environmental changes.

3. Canadian Gas Tariff -- One of the proposed items in Senator Gramm's package is a prohibition of differential treatment in the design of natural gas rates. This addresses a complicated rate structure advantage enjoyed by the Canadians. This change will undoubtedly be opposed by the Canadian government and perhaps our State Department.

Proposed Action

Senator Gramm would like for you to call a meeting of the oil-state Republicans (particularly those up for election) to review the package to discuss introducing and attempt to move a package of this sort. It is hoped that Secretaries Herrington and Hodel would attend the meeting to indicate Administrative support for the effort.

Would you like for us to set up such a meeting on Tuesday or Wednesday?

(blank line) Yes
(blank line) No

Attachment

(page ten)

OIL AND GAS PRODUCTION REVITALIZATION ACT OF 1986

SUMMARY OF PROPOSALS

• OIL PROVISIONS

• Windfall Profit Tax. The bill repeals the Windfall Profit Tax.

• Strategic Petroleum Reserve. The bill requires that 50% of the purchases for the Strategic Petroleum Reserve be from domestic sources. Oil being acquired would be at prices no less favorable than from foreign sources.

• Oil And Gas Leases. The bill allows a 2 year extension of leases where exploration has not begun but where there is a showing that the owner of the lease will commence exploration during the extension period.

NATURAL GAS PROVISIONS

• Transportation of Natural Gas. The bill empowers the Federal Energy Regulatory Commission to mandate the transportation of natural gas without discrimination as to class of shipper or recipient.

• Fuel Use Act. The bill repeals the demand restraints of the Fuel Use Act.

• Incremental Pricing. The bill repeals the incremental pricing requirements of the Natural Gas Policy Act of 1978.

• Pooling Exemption. The bill permits a limited exemption to small producers to discuss and contract for the pooling of natural gas for sale.

• Natural Gas Rate Design. The bill prohibits differential treatment in rate design with regard to the allocation of costs.

REGULATORY REFORM PROVISIONS

• Waste Requirements. The bill requires that the high volume low toxicity waste study required under the Resource Conservation and Recovery Act be performed by January 1, 1989. Affected industries and appropriate Departments would be allowed full participation in the study.

(page eleven)

• Underground Tanks. The bill clarifies Resource Conservation and Recovery Act requirements imposed on underground storage tanks, and exempts well cellars, sumps, drip collection devices and hydraulic reservoirs.

• Drilling Fluids. The bill expresses the sense of the Congress that the Environmental Protection Agency should establish a mechanism for the approval of drilling fluids used in exploration and production, rather than simply setting toxicity limits for discharge.

• Underground Injection Control Program. The bill revises certain record keeping requirements for underground injection systems in order to facilitate the use of such systems.

• Oil And Gas Extraction Permits. The bill expresses the sense of the Congress that Environmental Protection Agency permits for the oil and gas extraction point category be modified to reflect subsequently promulgated national effluent limitation guidelines.

• Facility Variances. The bill expresses the sense of the Congress that "fundamentally different factors" variances should be available for any facility that is subject to national effluent limitation guidelines.
• Recycling Activities. The bill expresses the sense of the Congress that "mixture" and "derived from" rules should not be invoked to curtail recycling activities designed to conserve resources when there is no information to demonstrate that such recycling practices pose any threat to human health and the environment.

• Land Treatment Sites. The bill expresses the sense of the Congress that any decisions regarding air emissions for land treatment sites should be made utilizing regulations under Section 3004(n) of the Solid Waste Disposal Act.

• Stormwater Runoff. The bill exempts oil, gas and mining operations from Environmental Protection Agency permit requirements for runoff consisting solely of stormwater which had not come into contact with any potential pollutants.

(page twelve)

WEDNESDAY, SEPTEMBER 17, 1986 4:30 p.m.
S-230

oil and gas issues

Ted Garrish, Assistant Secretary for Congressional Affairs
Department of Energy

Earl Gjelde Counselor to the Secretary

Dole
McClure - conflict can't change
Nickles -
Andrews
Gramm
Domenici
Symms
Armstrong
Kassebaum-not sure
Wallop
Simpson - will be a little late

(page thirteen)

September 12, 1986

TO: Senator Dole
FROM: Rod DeArment
Re: Senator Gramm's Proposed Oil and Gas Bill

Whit and I met yesterday first with Senator Gramm's staff and then with Senator Gramm to review the substance and strategy of the oil and gas bill that he has been working on. Attached is the latest outline of his proposal.

Senator Gramm has been working closely with Secretaries Herrington and Hodel and claims the Administration is prepared to energetically support the effort. He has also obtained tentative approval of all of the major oil and gas groups (API, IPAA, TIPRO, Mid Continent, etc), but he asked these groups to go back to their boards to double check their support.

Political Advantage

Pushing this legislation with the President's explicit endorsement would demonstrate Republican concern for the plight of the oil and gas industry. Even if the bill ultimately does not pass the Senate because of the objection of Senator Metzenbaum or some other Democrat, it will provide Republican candidates with concrete evidence that we care and are trying to help the industry.

Potential Problem Areas

1. No import fee -- Many (but certainly not all) in the oil patch believe an import fee is a panacea to the industry problems. Nevertheless, an import fee has no chance of being enacted before the end of the session. This bill takes no position on the ultimate advisability import fee. it merely recognizes that adding an import fee will drag the whole effort down in the short time available. Senator Gramm is seeking an understanding with the oil groups that they will not undercut this effort by deprecating it as tokenism.

Obviously, we should expect that Senators Hart or Boren might offer an import fee as a floor amendment. But given the 82 to 15 vote on Senator Hart's last import fee amendment, there is no great danger that the amendment will pass even with Republicans, like Senator Nickles, voting for it.

(page fourteen)

- 2 -

2. Environmental Issues -- A large number of proposed relief provisions involve environmental restrictions. The EPA has not yet been consulted on these items and Senator Gramm acknowledges that some may drop out in the consultative process. Nevertheless, we may find that Senators such as Senator Stafford and Chafee may oppose the environmental changes.

3. Canadian Gas Tariff -- One of the proposed items in Senator Gramm's package is a prohibition of differential treatment in the design of natural gas rates. This addresses a complicated rate structure advantage enjoyed by the Canadians. This change will undoubtedly be opposed by the Canadian government and perhaps our State Department.

Proposed Action

Senator Gramm would like for you to call a meeting of the oil-state Republicans (particularly those up for election) to review the package to discuss introducing and attempt to move a package of this sort. It is hoped that Secretaries Herrington and Hodel would attend the meeting to indicate Administrative support for the effort.

Would you like for us to set up such a meeting on Tuesday or Wednesday?

(blank line) Yes
(blank line) No

Attachment

(page fifteen)

OIL AND GAS PRODUCTION REVITALIZATION ACT OF 1986

SUMMARY OF PROPOSALS

• OIL PROVISIONS

• Windfall Profit Tax. The bill repeals the Windfall Profit Tax.

• Strategic Petroleum Reserve. The bill requires that 50% of the purchases for the Strategic Petroleum Reserve be from domestic sources. Oil being acquired would be at prices no less favorable than from foreign sources.

• Oil And Gas Leases. The bill allows a 2 year extension of leases where exploration has not begun but where there is a showing that the owner of the lease will commence exploration during the extension period.

NATURAL GAS PROVISIONS

• Transportation of Natural Gas. The bill empowers the Federal Energy Regulatory Commission to mandate the transportation of natural gas without discrimination as to class of shipper or recipient.

• Fuel Use Act. The bill repeals the demand restraints of the Fuel Use Act.

• Incremental Pricing. The bill repeals the incremental pricing requirements of the Natural Gas Policy Act of 1978.

• Pooling Exemption. The bill permits a limited exemption to small producers to discuss and contract for the pooling of natural gas for sale.

• Natural Gas Rate Design. The bill prohibits differential treatment in rate design with regard to the allocation of costs.

REGULATORY REFORM PROVISIONS

• Waste Requirements. The bill requires that the high volume low toxicity waste study required under the Resource Conservation and Recovery Act be performed by January 1, 1989. Affected industries and appropriate Departments would be allowed full participation in the study.

(page sixteen)

• Underground Tanks. The bill clarifies Resource Conservation and Recovery Act requirements imposed on underground storage tanks, and exempts well cellars, sumps, drip collection devices and hydraulic reservoirs.

• Drilling Fluids. The bill expresses the sense of the Congress that the Environmental Protection Agency should establish a mechanism for the approval of drilling fluids used in exploration and production, rather than simply setting toxicity limits for discharge.

• Underground Injection Control Program. The bill revises certain record keeping requirements for underground injection systems in order to facilitate the use of such systems.

• Oil And Gas Extraction Permits. The bill expresses the sense of the Congress that Environmental Protection Agency permits for the oil and gas extraction point category be modified to reflect subsequently promulgated national effluent limitation guidelines.

• Facility Variances. The bill expresses the sense of the Congress that "fundamentally different factors" variances should be available for any facility that is subject to national effluent limitation guidelines.
• Recycling Activities. The bill expresses the sense of the Congress that "mixture" and "derived from" rules should not be invoked to curtail recycling activities designed to conserve resources when there is no information to demonstrate that such recycling practices pose any threat to human health and the environment.

• Land Treatment Sites. The bill expresses the sense of the Congress that any decisions regarding air emissions for land treatment sites should be made utilizing regulations under Section 3004(n) of the Solid Waste Disposal Act.

• Stormwater Runoff. The bill exempts oil, gas and mining operations from Environmental Protection Agency permit requirements for runoff consisting solely of stormwater which had not come into contact with any potential pollutants.

(page seventeen)

BOB DOLE
KANSAS

United States Senate
OFFICE OF MAJORITY LEADER
S-230 THE CAPITOL

September 17, 1986

We have just been informed that Herrington is out of the country and will not be back until (date handwritten) Oct. 2. His representative is Ted Garrish, Assistant Secretary for Congressional Affairs. Secretary Hodel is out of the city today and won't be back until late Thursday evening. Earl Gjelde, Counselor to the Secretary will be his representative.

Attached is the list of Senators.

Do you want to go ahead with the meeting today?
Sheila Burke

(handwritten signature)

(page eighteen)

September 17, 1986

TO: SENATOR DOLE
FROM: SHEILA BURKE

You would be available this afternoon from 3:00 until 5:00 to set up a meeting with Hodel and Herrington.

Listed below are suggested oil state senators for the meeting:

Mcclure (handwritten) - N
Nickles
Andrews (handwritten) Y
Gramm (handwritten) Y
Domenici (handwritten) Y
Symms (handwritten) Y
Armstrong
Kassebaum
Wallop
Simpson (handwritten) Y
4:30

Would you like for us to set up for today?

(handwritten) 4:30

(checked line)
yes

(blank line)
no

(handwritten) TED GARRISH - ASSISTANT SECY CONG. AFFAIRS
DEPT. OF ENERGY
HERRINGTON OUT OF COUNTRY

(handwritten) EARL Gjelde Counselor TO THE SECY INTERIOR

(page nineteen)

BOB DOLE
KANSAS

(handwritten) tomorrow

United States Senate
OFFICE OF MAJORITY LEADER
S-230 THE CAPITOL

(rest of page handwritten)

GC Deputy (illegible) under out of town today

252-5450
Ted Garrish

Hader & Herrington (Europe)

343-7351
Terry

252-6210
Joyce

oil and gas

1/2 hour

[tomorrow]

McClure
Nickles
Andrews
Gramm
Domenici
symms
Armat
Kassebaum
Wallop
Simpson

(page twenty)

September 17, 1986

TO: SENATOR DOLE
FROM: SHEILA BURKE

You would be available this afternoon from 3:00 until 5: 00 to set up a meeting with Hodel and Herrington.

Listed below are suggested oil state senators for the meeting:

(handwritten) web (typed) McClure (handwritten) conflict will call back
Nickles
Andrews (handwritten) YES
(circled) Gramm (handwritten) YES
Domenici (handwritten) YES
Symms (handwritten) YES
Armstrong (handwritten) not sure
(handwritten) web (typed) Kassebaum
(handwritten) web (typed) Wallop
(handwritten) web (typed) Simpson

Would you like for us to set up for today?

(blank line)
yes

(blank line)
no

(handwritten) 4:30 Today
S-230

(handwritten) Counselor to secy earl gjelde

Position: 4027 (1 views)