Attachment I WOODRIVER PIPELINE The new Woodriver pipeline will be owned and operated by Minnesota Pipe Line Company, St. Paul Park, Minnesota. It will be designed solely for the transportation of crude oil. It will originate at Woodriver, Illinois, and closely follow a direct route through Illinois, Iowa and Minnesota with its termination at Pine Bend, Minnesota. This pipeline will transport crude oil supplies available in central Illinois from other pipelines and river barges to Minneapolis/St. Paul area refiners. This new pipeline project is estimated to cost in the range of $110-160 million and is scheduled to be in service September 1, 1978. Its size is planned to be 20 or 24 inch O.D.. The final size determination will be based upon the most probable crude oil volumes to be transported. The pipeline size and maximum design capacities are listed below as functions of the volume study cases being considered. Cost estimates have been developed individually for each of the three volume cases (Cases I, II, and III). The economic life for all study cases is 20 years. Individual cost estimates are as follows: Because of the operating flexibility afforded by the three pipeline connections and the Mississippi River in Illinois, it is possible at virtually any time to transport domestic crude oil from various regions of the southwestern United States and foreign crude oil from various parts of the world. The origin of the crude oil at any given time will largely be determined as a function of availability and competitive pricing. Potential sources of crude oil supply for the Woodriver project are as follows: 1) Capline Pipe Line, a 40" pipeline originating at St. James, Louisiana, and running directly to Patoka, Illinois, up the Capwood line to Woodriver; 2) Texoma Pipe Line, a 30" line originating at Beaumont, Texas, continuing through Cushing, Oklahoma, and Ozark Pipe Line; 3) Explorer Pipe Line, a 24" line from Houston, Texas, through Tulsa, Oklahoma; 4) Seaway Pipe Line, a 30" pipeline originating in the Gulf of Mexico at Seadock and going to Cushing, Oklahoma, continuing on to Woodriver via Ozark Pipe Line; 5) Barging crude oil up the Mississippi. Refer to Attachment B for illustrations of various routes. *Calculated for that portion of the new pipeline to be constructed in Minnesota. Mr. JENKINS. Mr. Klemer? Mr. QUIE. This Bob Klemer, who produces the beautiful blankets. You never feel cold when the energy is turned down if you sleep under Faribault blankets. Mr. JENKINS. Mr. Klemer, we are delighted to have you. STATEMENT OF ROBERT W. KLEMER, PRESIDENT, FARIBAULT WOOLEN MILL CO., FARIBAULT, MINN. Mr. KLEMER. Thank you, Mr. Quie, Mr. Steiger. Mr. Chairman, members of the subcommittee, I am Robert Klemer, president of the Faribault Woolen Mill Co., of Faribault, Minn. Our firm is in its 112th year of operation under active management of four generations of my family. Our firm is relatively small when compared with many of the large textile firms in the East and South. We employ approximately 150 people at our Ogilvie plant located in southern Minnesota. Our principal products have been and continue to be high quality woolen blankets and car or stadium robes. This legislation proposes to eliminate import duties on coarse wool 46's grade or lower, production of which is practically nonexistent in the United States, well under one-half of 1 percent of domestic wool production. The resilience and lofty characteristics inherent in the coarser wools are most desirable for certain types of fabrics and for many years such wools have been granted duty-free status for such items as carpets and industrial felts which require wools of such characteristics. Because there are other woolen fabrics, namely, blankets, coatings, upholstery, and others for which these qualities are desirable and even essential, I could see no logical reason why such wools should not be granted duty-free status for any purpose. Accordingly, several years ago I proposed to the American Textile Manufacturers Institute that legislation of this nature be introduced. The wool committee of this organization fully endorsed the idea and subsequently the subject was discussed with the National Wool Growers Association and their board also gave approval to proceed with the legislation. I will try to outline briefly for you what passage of this legislation will mean specifically to my own company and what benefits will accrue to the American consumer. For blanket use, the principal grades affected by this legislation would be 44's and 46's for which we pay 8.5 and 25.5 cents per pound duty respectively. Using equal quantities of these two grades, this average out at 17 cents per pound. There is at least a 20-percent loss-dead loss-in manufacturing which brings this figure up to over 21 cents per pound. Additional costs of overhead burden expenses are applied to this figure. When multiplied by the average pounds in a blanket, they will increase the wholesale price between $1.50 and $2. Since retail outlets presently expect to establish their retail prices at double their costs, this means an increase between $3 and $4 in the retail price to a customer attributable entirely to the duty paid on the wool content. In many cases these coarse wools are blended with medium and finer grades of domestic wools up to 50 percent; but even here, the import duty can mean a $2 higher price at retail. Selling at a more competitive price level should substantially increase total consumption of wool going into the production of such blankets or similar items. This additional demand would benefit the consumption of the medium and finer grades of domestic wool since they are frequently blended with the coarser types. This, in turn, would help to stimulate wool production both worldwide and domestically, especially since wool prices are now at a very favorable level to the grower. Additional production of wool is sorely needed along with other natural fibers. These sources are renewable and self-generating. On the other hand, the sources of the principal synthetic fibers, polyesters and acrylics, are finite and are completely dependent upon oil and gas as their raw material. The desirable characteristics of a quality wool blanket are those which provide bulk, loftiness, and resilience or resistance to matting. Many types of blankets will mat or flatten down in use, which destroys their insulating properties. These coarse wools are essential to provide these qualities. Such characteristics are, of course, desirable in other fabrics such as coating and other outerwear. Since we must use these coarse wools and pay duty on them and since they are not available domestically, it only results in higher costs to the American consumer for products which I can foresee becoming more important in the future with the increasing energy crisis. With future bedroom temperatures in the low 60-degree range, and at least one authority mentioned 55 degrees, a warm bulky blanket is going to feel mighty comfortable. I appreciate the opportunity to present our views on this legislation. Mr. JENKINS. Thank you very much, Mr. Klemer. Is this same type of wool used in the carpet industry? Mr. KLEMER. Yes. It is now coming in duty free. Mr. JENKINS. Is the wool coming into this country duty free for the particular purpose of carpet manufacturing? Mr. KLEMER. Yes. Carpets, certain industrial felts, and lumbermen's socks, a limited number of uses now are granted duty-free status. Mr. JENKINS. Mr. Holland? Mr. HOLLAND. No questions. Mr. STEIGER. May I say you made a very, very good statement. It is obvious that there is a need to take a better look at natural fibers, and it seems to me, anything that we can do would help in that effort. It would be in the long run best interests of not only cold Wisconsinites and Minnesotans, but our concern over petroleum consumption as well. We welcome you to the committee. It is clear, I think, that you are particularly fortunate to have a man of Al Quie's caliber and characteristics representing that district, that State; and his presence here today lends even greater support to this effort. Thanks very much. Mr. JENKINS. Thank you, Mr. Quie, for appearing before the committee. |