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tanker down here [indicating] and anchor it off the port of Balboa, and transfer the oil to other smaller tankers of 65,000 deadweight tons to move it through the canal, it is very uneconomic, and I think it is very threatening from an environmental point of view to the Panamanian people, who also depend upon a very large fishing industry.
This is all that is involved and these [indicating) are the dates that it will go forward.
I asked Arthur D. Little if they would take their computer run and superimpose upon their matrix the cost of using very large supertankers on the order of 250,000 deadweight tons or more.
They took those figures and superimposed them upon their matrix, and what you see is the chart below that, which is very important and very revealing.
What this chart shows [indicating), is that for the pipelines, the flow figures are $2.06 to $2.78 for the Sohio and northern tier projects. For supertankers of 265,000 deadweight tons to 165,000 deadweight tons the cost is from $1.75 to about $2 per barrel.
Senator CHURCH. Senator, would you please read those two figures again? Senator GRAVEL. Surely.
This [indicating] would be $2.18, and this [indicating), would be $1.75. So this sindicating] is 30 cents cheaper and this sindicating] is 60 cents cheaper than these projected in existing pipelines. I am not speaking here to the environmental questions at all. Just on the sheer economics of it, it is cheaper to go with a sea-level canal.
Now I have included the toll in this $1.75. The cost of moving oil right now through the canal is 27 cents a barrel. I have jacked that up to full elasticity to 44 cents a barrel. So, giving the Panamanians more than they possibly could imagine, it still is considerably cheaper.
What it would mean in global terms is this. If you take Prudhoe Bay, which has 10 billion barrels of oil, and say that you could ship that 50 cents a barrel cheaper to market, then you are talking about a saving of some $5 billion.
The Sea Level Canal Study Commission which completed its efforts in 1970 indicated that it could build a sea-level canal for $2.8 billion. Today the Corps of Engineers tells me that that would be about $5.3 billion. We are talking just of the known discovered field of Prudhoe Bay, and we could probably pay for the entire cost of the canal with those savings, in relative terms.
To me, this is very, very meaningful, and I think it addresses important aspects of our energy problem.
CONSTRAINTS CAUSED BY SIZE OF PANAMA CANAL
I have only addressed oil, gentlemen, and have not touched upon natural gas, which is a similar situation. I have not touched upon the fact that the northwest part of the United States exports lumber to the Eastern part of the United States. A major constraint, from a competitive point of view, is the size of the vessels that go through the Panama Canal. I have also not talked about the potential of coal reserves in Alaska which could be utilized on the east coast of the United States, or the fact that the major export item of West Virginia is coal to Japan. The major constraint there, too, is the size of the Panama Canal.
I would mention that the size of the Panama Canal for all maritime aspects of the United States is limited by the cargo vessels, the large container-type vessels, which must be scaled down to fit through the canal. The economic advantages of a sea-level canal would just be tremendous.
MILITARY RAMIFICATIONS OF CANAL
The military ramifications of the canal deserve mention. The present value of the Panama Canal is very minuscule in military terms. First of all, it is not defensible and you have had quite ample testimony in that regard.
Where it does have a military benefit is very simply in the fact that the Panama Canal is an orifice, and you can increase the size of that orifice to whatever you want. So, when we had the Second World War, we did not have the time to build additional railroads to the west coast and additional port facilities on the west coast. We used our economic might to build the vessels that could transit the Panama Canal and handle our logistical needs on the west coast, in the Pacific and in the Atlantic. Similarly, a sea-level canal would be a larger orifice that could expand to almost any size, and of course it would be defensible because it would be veritably indestructible.
Presently our military establishment has been designed assuming that the Panama Canal will not be available to us in a war. That is the reason why we have both a Pacific Navy and an Atlantic Navy. With a sea-level canal we would have what would be the equivalent of an additional nuclear aircraft carrier task force. I might say that that costs about $20 billion to the American taxpayer.
Here is how it would work. Using this chart [indicating], if you had a crisis in the Mediterranean, in order to move your carrier task force from the Pacific—first you could move one from the Atlanticthat could be done in 15 days. If you moved one from the Pacific, you would send part of the cruisers and the escort vessels through the canal, and that would transit to Gibraltar in 15 days. The balance, the nuclear aircraft carrier and some degree of support, would go around the cape, and that would take 25 days. So you are talking about an advantage of some 10 days. That translates into some millions of dollars and thousands of gallons of fuel. But, more importantly, it translates into 10 crucial days, and in an emergency that could be the difference in whether you survive or you fail. So, I would submit that this military argument is the most important one.
SUMMARY OF TREATIES AND SEA-LEVEL CANAL BENEFITS
Let me summarize what will be the benefits of first, the passage of these treaties, and second, the ability to go into a mode of bringing about a sea-level canal. First would be energy and the fact that we would make more efficient our energy infrastructure as it presently exists. Second would be that the environmental benefits could well beand this could only be determined after a study was made—the environmental benefits of avoiding a new infrastructural system across the continent as opposed to a sea-level canal might be very, very beneficial in favor of a sea-level canal. Also, economically it is just cheaper to move goods through a sea-level canal. From the point of view of general commerce, the benefits of container vessels, timber, coal, et cetera, are obvious. From the military point of view, the addition of a nuclear task force, an aircraft carrier task force, increased mobility, expansion and defensibleness are all benefits to be perceived. The last benefit is the benefit to our foreign policy.
INTERPRETATION OF TREATIES
Let me just say, Mr. Chairman, that two criticisms have been made. One deals with the treaties. Mr. Dole made a statement about what will be their interpretation.
The United States, our negotiators, this committee, the Senate, the American people, the people of Panama, everybody is going to have an interpretation which suits his own particular needs now and which will suit his particular needs 20 years from now, or 50 years, or 100 years. What will determine our ability to enforce the neutrality treaty, as we understand it, 50 years from now will be the amount of muscle that we have. It is just that simple. It is tragic to say, but it is true, that might makes right when it is a point of interpretation as to what is right. So, we can talk speciously of the different interpretations that are given. They don't mean a hill of beans. What is going to count is who holds the paper 50 years from now and who has the muscle to back up the piece of paper he is reading and the interpretation he wants to give.
TREATY LANGUAGE DEALING WITH SEA-LEVEL CANAL
Another criticism that I hear relates to something I was party toand that is in getting language in the treaty that dealt with the sealevel canal. I want to read that language because it is subject to some very unfortunate misrepresentation. The language is this:
During the duration of this treaty, the United States of America shall not negotiate with third states for the right to construct an inter-oceanic canal on any other route in the Western Hemisphere except as the two parties may otherwise agree.
People are saying that that is a lock-in for us, that we will only be able to build a sea-level canal in Panama. Of course, that is right. But what have we given away by that lock-in?
Let me read further the language of the treaty: No new inter-oceanic canal shall be constructed in the territory of the Republic of Panama during the duration of this treaty, except in accordance with the provisions of this treaty or as the two parties may otherwise agree.
This means that we have said we will not build a canal elsewhere, and when you build a canal in Panama, we are going to be party to it. Now that is a good trade.
What did we give away in the first instance ?
We made a study—and here I would like to put up a chart that shows this we studied here the entire isthmus area going from Mexico to Colombia. We studied 30 possible sites for the location of a new canal.
We spent $22 million of good American taxpayers' money to make that determination. We narrowed that down to eight possible sites. Of those eight sites, four are in Panama. So there are now four sites left that deal with the first part of this treaty.
Of those, one of the sites involved a lock—not a sea level-canal. Of the three remaining, one was half in Colombia and half in Panama, so we would still need the agreement of the Panamanians. That brings us down to two sites.
Of the two sites, one is in Nicaragua and Costa Rica and one is in Colombia. Both had excessive amounts of dirt that had to be removed. One of them was only assumed to be effective if we would be able to use nuclear devices.
So, very quickly and clearly we came down to two sites in Panama and the site that was selected is the red line that you see there [indicating), which is exactly 10 miles to the West of the present Panama Canal.
[Senator Gravel's prepared statement follows:]
PREPARED STATEMENT OF SENATOR MIKE GRAVEL
Mr. Chairman and Members of the Committee. Thank you for this opportunity to appear before you in support of the newly negotiated Panama Canal treaties.
You have already heard from numerous expert witnesses on these two treaties. You have been told of their importance to the continued efficient operation of the canal, of how they preserve the U.S. interest in non-discriminatory access, and of how they provide the surest guarantee that the military significance of the canal will be protected. You also have heard the lasting effect Senate action on these treaties will have on the whole of Latin America, and the role they can play in realizing longstanding and legitimate Panamanian aspirations.
You also doubtless have heard one other reason for ratifying these treaties: Justice. We ought to ratify them because it is right to do so.
I happen to think that's one of the best reasons of all. And I don't accept the label "bleeding heart" that some would try to pin on this conviction. Justice is not, after all, out of fashion. It has always been a characteristic of the noble and the strong
not the mean and the weak to set their injustices right.
And there can be no real doubt that the 1903 treaty with Panama fell somewhat short of complete justice. The historical record is unequivocal on that point.
On June 2, 1902, the Congress authorized the President to acquire a specified strip of land and additional rights and territory from Colombia (of which Panama was then a part) for the construction and operation of a ship canal. But when negotiations with Colombia fell apart, President Roosevelt took things more into his own hands and sent gunboats to stand off-shore while the
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