(The complete prepared statement of Dr. Woolman follows:)

STATEMENT OF DR. NATHANIEL WOLLMAN

During the last 2 years I have had a chance to go beyond the preliminary estimates on water supply and demand that I prepared for the Senate Select Committee on National Water Resources, based upon the data that had been prepared by various Federal agencies. Among other changes I computed water requirements for low and high economic projections (a minority statement in the select committee report objected that the medium projections were too low),. and for water quality level of 1 mg./1 of dissolved oxygen and 6 ms./1 of dissolved oxygen in addition to the 4 mg./1 which had already been estimated. I should like to indicate the results of these estimates.

By "water requirements" I mean the amount of water that must be flowing in the streams of a water resource region in order to offset evaporation and transpiration losses and which, when mixed with the effluent of waste treatment plants will provide water of a designated quality as measured by dissolved oxygen in milligrams per litre. (By implication, inplant recirculation takes. place an indefinite number of times.) Waste dilution flow is computed for the time of the year in which stream conditions are poorest. The designated quality, therefore, is a measure of the minimum quality that will be encountered on a seasonal basis. Since different combinations of waste treatment (percent of biochemical oxygen demand (BOD) removed) and waste dilution can provide water of a designated oxygen content, I shall concentrate my remarks on the combination of treatment and sustained flow that minimizes required flows. Dissolved oxygen in the stream is used as a rough index of water quality and in specific cases may not accurately reflect the adverse effects of other pollutants. As you are aware, estimated water requirements for evaporation, transpiration, and waste dilution are subject to an unknown amount of error, let alone the error that is inherent in projections of population and output. My estimates of water use are subject to another limitation, namely, the fact that improved technology of water use, except for recirculation, is not taken into account. This omission does not mean that I do not expect technology to improve, but only that we cannot predict by how much or with what rapidity.

Subject to all of the foregoing qualifications the data indicate that for high economic projections required flows would be as follows (minimum flow program) for dissolved oxygen contents of 4 and 6 milligrams per litre:1

Even the medium economic projection, 4 milligrams per litre, requires a flow of 554 billion gallons per day by the year 2000.

Four points deserve emphasis in connection with estimated required flows: 1. For the high economic projections, by the year 2000, 12 out of 22 regions in the United States will be deficient in flow for a stream standard of 6 milligrams per litre; 11 will be deficient for a stream standard of 4 milligrams per litre. (The 22 regions are: New England, Delaware and Hudson*, Chesapeake Bay*, Ohio, Eastern Great Lakes*, Western Great Lakes*, Upper Mississippi*,. Lower Missouri, Southeast, Cumberland, Tennessee, Lower Mississippi, Lower Arkansas-White-Red, Uupper Missouri*, Upper Arkansas-White-Red*, Western Gulf *, Rio Grande-Pecos *, Colorado *, Great Basin *, South Pacific *, Central Pacific and Pacific Northwest. (Those marked with an asterisk are deficient in flow for 2000, high, 6 milligrams per litre.)

2. Treatment levels assumed to prevail are very high relative to present standards of performance, namely 95 percent or 97% percent BOD removal; (90 percent in lower Missouri). (If treatment levels are lower, waste dilution flows must be higher. For example if maximum reliance is placed on waste dilution, the total required flow for 1980, medium, 4 milligrams per litre, is 735 billion gallons per day, and there must be 100 percent regulation of flow in 12.

1 Data taken from a study on water supply and demand prepared under a grant to the University of New Mexico by Resources for the Future. Neither the university nor Resources for the Future are responsible for any data or conclusions presented by the author. 20-495-634

regions. The same policy would require full regulation of streamflow in 17 regions by 2,000, medium, 4 milligrams per litre, and in all 22 regions for 2,000, high, 6 milligrams per litre.)

3. Required flow regulation is substantially in excess of what engineers have considered to be a practicable maximum. This rule of thumb practicable limit has been given as about 50 percent of long run average flow, or, for the country as a whole, about 550 billion gallons per day. By contrast, the estimate of required flow for 2,000 high, 6 milligrams per litre, is 1,026 billion gallons per day: for 4 milligrams per litre it is about 900 billion gallons per day. (Maximum theoretical sustained flow with 100 percent regulation is about 1,100 billion gallons per day).

4. Finally, most of the required flow is for waste dilution. In the Northeastern part of the United States (New England, Delaware and Hudson, Chesapeake Bay, Ohio, Eastern Great Lakes, Western Great Lakes, Upper Mississippi, Lower Missouri) 82 percent of required flow is for waste dilution, in the United States as a whole, 55 percent. The remaining flow is to offset transpiration and evaporation losses; most losses are expected to occur in the western half of the country.

The importance of pollution and pollution abatement is even greater if we look at the costs of storage and treatment. For 2,000, medium, 4 miligrams per litre, the cost of waste treatment plus the cost of waste dilution, as a fraction of total costs of storage and treatment, is estimated at 94 percent. The remaining 6 percent is for the cost of storage needed to assure flow to offset evaporation and transpiration. Estimated annual dollar costs are $3.8 billion, covering operation, maintenance, and amortization of storage reservoirs and waste collection and treatment facilities, public and private.

These estimates, in view of the uncertainity that surrounds each element out of which they are composed, must be treated with circumspection. Nonetheless, they imply one or more of several adaptations (some are alternatives, some are joint):

1. The shortage of water may mean that aggregate projected national levels of output are not achieved;

2. A varying number of regions, depending upon the choice of policy, and in the absence of a change in the way water is used, will be committed to 100 percent regulation of surface flow.

3. The pattern of the Nation's bill of goods may be modified by reducing the level of output of pollution-inducing products and increasing the output of other goods and services. (This runs counter to projected changes in the pattern of

goods produced.)

4. The geographic pattern of population and production may be rearranged in order to minimize the need for fresh water dilution of waste effluent. (This is likely to provoke serious economic dislocation in many parts of the country.) 5. The quality of surface water may be allowed to deteriorate below the stipulated standard, measured in dissolved oxygen.

6. Finally, we may find ways of producing goods and services with less waste per unit of product and we may develop feasible techniques of waste treatment that remove more pollution and require less dilution.

The measures of required flows that I have given rest upon a simplified model in which the pollutant is degradable organic matter. We do not yet know to what extent our theoretical models must be modified to take into account other pollutants such as chlorides, detergents, various other chemicals, and heat.

Solving our water problem hinges mostly on the question of pollution and pollution abatement. In the immediate future we should concentrate attention on production processes that reduce waste production and on waste collection and treatment techniques that reduce the need for dilution flows. I say this for two reasons: First, it is doubtful whether the large projected dilution flows can be provided since adequate reservoir sites in many parts of the country may no longer be available. Second, a high degree of regulation imposes irreversible changes upon a river's regimen. It seems foolhardy to commit the Nation to a large construction program that technological advances in process engineering and waste treatment may make obsolete. (This does not mean that we should not make an inventory of reservoir sites and acquire them or otherwise assure their availability for the time when their need is proven.)

Our water resource program must recognize that regional water shortages are national in significance, since for any designated national projected level of output the amount by which one region fails to produce an allocated share

of the national product must be supplied by another. The water resource policy of each region should be determined relative to the projected levels of population and production in all other regions as well as relative to its own projected activity. Orderly development implies a complex and sophisticated approach to water use. We have been moving in this direction, but in parts of the country the problems have outrun our capacity to solve them.

In addition to the obvious interaction between a water resource policy and the general level of economic activity there are a number of other economic factors in the choice of policy. The cost of providing water of adequate quality and stability of flow varies in accordance with the combination of waste treatment and dilution flow that is chosen.

For example, we can choose to rely to the maximum degree on waste dilution and carry treatment only as high as necessary, given the maximum regulated flow that can be achieved. The opposite policy would be to carry treatment to the highest possible point, thereby minimizing the required amount of dilution flow. Still another policy would be to pick the combination of flow and treatment that minimizes the costs of storage and treatment taken together. For 1980, medium projection, 4 milligram per liter, the estimated annual costs of these alternative programs for the United States as a whole, are as follows (rounded):

1 Treatment at minimum level consistent with complete regulation of flow but no lower than 50 percent treatment for industrial waste and 70 percent for municipal waste.

The estimated cumulated value of capital facilities (storage and waste collection and treatment) associated with these programs is as follows:

Again treating these figures as only rough approximations they are, nonetheless, indicative of an important point: it costs less to adopt a policy of high treatment and low flow than the reverse. Furthermore, the difference in cost between the minimum cost program and the program that maximizes waste treatment is negligible. Relying on dilution to save treatment raises annual total costs by about 50 percent, and cumulated capital costs by almost 60 percent, relative to a high treatment, low-dilution program.

Other economic considerations are also involved in the choice of policy. Any pollution in an area inhabited or used by man-whether of air or waterinvolves a cost to society. The questions which society faces are: (1) are the costs of pollution worth the benefits derived from the commodities that create the pollution; (2) can pollution be abated, and if so, at what cost; (3) are the benefits of pollution abatement worth the cost; (4) who should bear the cost of pollution or the cost of pollution abatement.

One of the merits of a free market economy is the presumption that these questions are answered satisfactorily and automatically by the operation of the market. In general we expect that market prices reflect all costs (including social costs) and that the purchaser of the product is willing to pay a price that covers all costs. Where a polluter fails to assume the full cost to society of pollution or the full cost of pollution abatement the cost of his product (and, presumably, the price at which he sells it) understates social cost and we no longer can rely upon the free market to yield a satisfactory solution.

A mechanism that compels the producer to assume the cost of pollution (either by stipulation of level of treatment or standard of water quality) helps the free market to function efficiently. Pollution abatement costs become a part of the cost of production and are reflected in market prices. Unless people are willing to pay for full costs the product is presumably not produced. (In some cases the abatement costs may be so high as to be wholly beyond reason with available technology. In this case we must assess the cost of the unabated pollution, determine whether the benefits of having the pollutioninducing product exceed the costs, and, if benefits exceed costs, devise a system for its equitable allocation. We should, of course, develop new technology that will facilitate abatement. This may be in the form of process engineering that reduces the production of waste or in the form of treatment that reduces the amount of waste discharges from a treatment facility. Complete economie analysis also takes into account the physical-chemical power of a stream to cope with waste and the relationship between this capacity and other uses to which the stream is put.)

The choice of policy may rest upon economic considerations alone or upon economic plus other considerations. Preservation of life, for example. is not subject to meaningful economic analysis. Where water is in relatively short supply, however, the economic system can be used to help make decisions. For example, a water resource policy can rest upon the criterion of maximizing gross regional (or national) product net of water costs. If such criterion is systematically pursued a pattern of water use along with specified levels of treatment and water quality emerge as a part of the solution. Of course such analysis begins by specifying other resource constraints and prospective levels of production in the absence of a water quantity or quality constraint. An optimizing criterion of this type applicable to the Nation as a whole requires not only a theoretical model for the national economy but its disaggregation into regional components and a specified level of mobility among regions of factor inputs and consumer demand. In the immediate future we shall probably have to be satisfied with limited suboptimizing guides.

Senator MUSKIE. I cannot speak for the other members of the panel, but I would say I have been educated this morning. It has been a very interesting and enlightening presentation. And we will look forward to other opportunities to question you. Would members of the committee have further questions of Dr. Wollman at this time?

Senator RANDOLPH. No; except that I concur in what you have said with reference to the extreme value of the testimony the witness has presented.

Senator MUSKIE. Senator Boggs?

Senator BOGGS. I want to thank you, too, Dr. Wollman, for your helpful testimony this morning. It certainly was a help to me personally to better understand some of these technicalities. I hope you will submit for the record your prepared statement and give us more time to read it with care.

Dr. WOLLMAN. Thank you very much. It has been a privilege and a pleasure to be here.

Senator MUSKIE. Any other questions?

Senator Bayh?

Thank you very much, Dr. Wollman.

Our next witness is Mr. Murray Stein of the Public Health Service. Mr. Stein is the Chief Enforcement Officer of the Division of Water Supply and Pollution Control of the Public Health Service.

We are delighted to welcome you here this morning, Mr. Stein. I notice you have a prepared statement. a prepared statement. You can present that in any way you like, read it or highlight it. It is available to the committee. You may proceed.

STATEMENT OF MURRAY STEIN, CHIEF ENFORCEMENT OFFICER OF THE DIVISION OF WATER SUPPLY AND POLLUTION CONTROL, PUBLIC HEALTH SERVICE

Mr. STEIN. Thank you, Mr. Chairman.

If I might, I would like the statement to appear in the record, and, to save time, I will attempt to summarize the statement.

Senator MUSKIE. That is fine.

Without objection, it will be printed in the record in full.

Mr. STEIN. The enforcement provisions have been in the Federal Water Pollution Control Act since its inception in 1948. These provisions have been modified substantially every time the act has been amended.

In 1956, the enforcement provisions were considerably changed, and the existing procedure evolved.

And in 1961, the enforcement provisions were further extended. I think there are three basic steps to the enforcement procedure. The first is the calling of a conference. A conference is held between the representatives of the Federal Government, representatives of the States concerned, and the interstate agency.

It is not in the nature of an adversary proceeding. There are attempts to develop the factual situation, attempts to develop the nature of delays, if any, in the abatement of pollution, and what has to be done to clean up such pollution.

In almost all of the enforcement cases, the cases have been resolved at the conference stage. Only four cases have gone beyond the conference stage.

I think this is in accordance with long experience in the field, because as long ago as 1921 in the famous case of New York against New Jersey, the Supreme Court, after extended hearings in the case, indicated that the conference technique was far better for the resolution of pollution cases than a court procedure, however constituted. However, if the conference does not work, the next stage is a public hearing board appointed by the Secretary.

The Secretary of Health, Education, and Welfare, after taking the recommendations of this hearing board, establishes a reasonable timetable for compliance.

I might indicate that at least 6 months has to be given for such compliance, and at least 6 months for compliance between a conference and a hearing.

The hearings have been very successful, too, because we only had to go to court in one instance, and there against the municipality involved, and not the industry.

However, if, after a hearing and due notice by the Secretary for compliance, remedial action is not taken, the Secretary may refer the case to the Attorney General of the United States for appropriate court action.

Senator MUSKIE. Mr. Stein, I note that it appears in your written testimony, but I think it ought to be made clear, in what situations you are empowered to take enforcement action.

Mr. STEIN. Yes, sir.

I was going to come to that.