Budget delay may cause crunch
HARRISBURG (AP) Hundreds of thousands of
Pennsylvanians will immediately feel the pinch if the
:legislature doesn't pass a state budget in the next 11
days.
But state grants to college, students would not be
dwithheld, By law, ' the 'state Higher Education
:Assistance Agency can award grants at the previous
'year's level if the budget isn't pass - ed on time, director
:Ken Reeher said. ,
t However, every State resident would be affected,
since without a budget, the state can't spend any
',money. ,
R However, the situation could be avoided if the 108,000
`state employees agree to work temporarily without
!pay, as they did once before, and if vendors agree to
~provide supplies in exchange for the state's 1.0. U.
"If we make those assumptions, there's no problem.
;But some of those assumptions are questionable," said
'John Hope, spokesman for the Department of
, Environmental Resources, (DER) whose services
°lnclude maintaining air and water quality.
The House will debate the budget and proposed school
.funding issues this week, but budget passage by the
`June 30 deadline seems questionable.
As the budget stands now, either the 6 per cent sales
tax or the 2 per cent state income tax would have to be
increased to fund expenditures.
• Most of the legislators have never had to vote on a tax
'hike and are leery of it. House leaders concede they are
•expecting a rough time in rounding up enough tax votes.
Gov. Shapp already has said he opposes any attempt
to pass stop-gap appropriations which would pay the
•bills until the budget is passed. A Shapp spokesman said
!stop-gaps "are irresponsible . . . and don't solve the
;budget dilemma."
Without stop-gaps, state officials couldn't • pay state
workers.
"We would expect them to work with the expectation
the
daily
Oil starts 800-mile trip
PRUDHOE BAY, Alaska (AP)
The world's largest and most ex
pensive private construction project,
the $7.7-billion trans-Alaska oil
pipeline, begins carrying black gold
today. Oilmen say the procedure, will
be about as dramatic as turning on a
garden hose... „_ . --..,. -
"Everything is ready to go; we're
in good shape. There is a lot of
hurrying and scurring going
on .. . mostly cleaning up for
reporters," said Mike Jens, manager
of Pump Station No. 1.
Startup of the 800-mile line from
Alaska's North Slope oil fields to
Valdez, an ice-free port on Prince
William Sound, "is not a spectator
sport," said Henry Mowell. He is vice
president of operations for , the
Alyeska Pipeline Service Co., the
consortium of eight oil companies
building and operating the line. •
No important state officials were
expected at Prudhoe, no ceremonies
were planned, and Gov. Jay Ham
mond will be hundreds of miles away,
on a tour of the- National Guard
facilities.
The actual startup will be executed
on Mowell's orders at Valdez. The
crude oil is expected to reach the
terminal in no less than 30 days, and
no later than July 20.
Alaskans have dreamed of this day
ever since July 1968, when the
Atlantic Richfield Co. and Humble Oil
& Refining, now Exxon, confirmed
discovery of oil.
Alaskan oil won't lower prices
NEW YORK (AP) The millions of barrels of oil
• from Alaska's North Slope will create new problems for
America's complex petroleum distribution system. And
the new supply won't lower consumer prices.
After nine years of controversy and construction, oil
will begin moving through the trans-Alaska pipeline
today, from Prudhoe Bay in the north to Valdez in the
south. The first shipment by tanker' will reach
California in August.
The pipeline is expected to carry at least 1.2 million
barrels of oil a day by the middle of next year 7 per
cent of the nation's daily consumption of 17 million
barrels.
Ironically, in the midst of an energy crisis, most
observers believe the Alaskan oil will create an over
supply problem on the West Coast, which has been
importing oil from the Mideast and Indonesia. The
surplus might reach 400,000 barrels a day, some oil
companies estimate.
That's because the West Coast lacks the refineries to
process Alaska's high sulfur content oil. The Gulf Coast
and the East have this type of refinery, but how to get
the Alaskan oil there?
With so much additional oil, consumers might expect
prices to decrease and supplies to increase. But that
will not be the case, due to the government's decision to
permit the sale of Alaskan oil at the foreign oil level of
$l4 a barrel instead of the highest domestic price, $11.28
a barrel. The high cost of pipeline transportation
• determined the government's decision.
"The difference seen by the comsumer will be zero,"
said Doug Robinson, Alaskan oil project coordinator for
the Federal Energy Administration (FEA). "What he is
getting is a more secure source of supply, but not a
price break."
The 800-mile, $7.7 billion pipeline was built by a
• consortium of eight companies, called Alyeska Pipeline
Service Co., to bring out their own oil from the northern
field. Three firms Sohio, Exxon and ARCO are the
major partners. Spokesmen for all three said their
shares of the Alaskan oil will replace foreign oil used by
refineries.
.• The adOntage, simply, is that the tundra belongs to
they would be paid later," said Chris Zervanos, state
director of labor relations:
They did in 1973, when the budget was passed late and
the state went without money for 12 days.
"Their response was responsible," Zervanos said.
But he conceded that as the pa yless paydays wore on,
"That would stretch pretty thin.'
Here are some of the effects if a budget-less state,
assuming state workers agree to pay less paydays:
Checks would not go out to 350,000 families who
receive cash subsidies to buy food, clothihg and shelter.
That involves 800,000 persons, including 450,000
children.
Medical treatment paid for by the state would not be
affected, state Welfare Secretary Frank Beal said.
Issuance of food stamps also would not be affected.
But many persons need their 'public assistance checks
to buy the food stamps, Beal said.
Much of the state's regulatory work depends on
travel. If problems arise with travel expenses and gas,
the Agriculture Department won't be able to check food
processors and weighing devices in stores. Health in
spections of farm animals would decrease or halt, said
Agriculture Secretary Kent Shelhamer.
Similarly, DER's checks, for example, on water and
sewage systems require traveling, although DER's
John Hope said state gas supplies could be available . . .
assuming the state can obtain gas.
Processing of property tax rebate checks to the
elderly could be slowed or halted. They are normally
done in early July.: '
Persons in nursing home's who depend on the state to
pay their bills wouldn't be evicted. There's typically a
month's delay between services rendered and payment
of the bill by the state.
The pipeline company plans to
move 600,000 barrels of oil through
the line daily almost immediately
after startup. By the middle of next
year, 1.2 million barrels will be
transported daily, equal to seven per
cent of the nation's daily consumption
of 17. million barrels.- • • • • • - -
The pipeline, three years in con
struction over some of the most
forbidding terrain in North America,
has been ready to perform for weeks.•
Testing of equipment has been under
way ever since Alyeska notified the
federal government 60 days ago that
the, 48-inch diameter steel tube, 12
pump stations and $1.25-billion ter
minal at Valdez were ready.
In Washington, the Department of
the Interior announced yesterday
that it has, approved the startup of the
pipeline.
"By approving startup we are not
signifying that we believe this entire
PUBLIC ASSISTANCE
CONSUMERS
ELDERLY
transportation system pipeline,
terminal, and marine tanker routes
is absolutely perfect," said Under
Interior Secretary James A. Joseph.
"We do believe, however, that the
national need for oil from arctic
Alaska far outweighs the importance
. of any remaining potential problems.
A careful analysis of matters still
unresolved has convinced me that
this oil transport system is capable of
operating safely and with minimal
adverse effects on the environment,"
Joseph said.
The Interior Department will
continue to monitor the pipeline with
"unremitting vigilance," he said.
Nitrogen was pumped into the oil line
to eliminate the possibility of an
explosion when the highly com
bustible oil enters it.
Today's first order of business is
insertion of an 8-foot-long scraper
called a "super pig." The device,
pushed by the oil, is equipped with a
mechanical knocker. Oil tracking
teams on the ground will be able to
hear the rapping as they trace the oil
south.
Two 'experienced pipeline men,
Harry Robertson and Bob McGill,
will lead tracking teams that follow
the oil down the line, reporting to the
Start-up Steering Committee in
Anchorage. State and federal
monitors will work with them.
After oil reaches Valdez, it will take
about 5 days to fill storage tanks
sufficiently to allow ships to load.
the United States, so the money more than $5 billion a
year— will stay in the country.
Two major alternatives have been under con
sideration for months as solutions to the over-supply
problem on the West Coast: Ship it by tanker or pipeline
to Gulf Coast refineries or ship it overseas, most likely
to Japan.
Such oil experts as John Lichtblau of the Petroleum
Industry Research Foundation prefer exportation to
improve the U.S. balance of payments.
But current law forbids exportation of American oil.
Ben Cooper, a member of the staff of the Senate Sub
committee on Energy . Conservation and Regulation,
said the're is little chance that Congress would change
the law, even if President Carter recommended a
change.
So that leaves shipment to the Gulf Coast. But oil
companies have not been able to win approval from
local authorities for construction of a West Coast-Gulf
Coast pipeline, or even permission to convert an
existing, unused natural gas pipeline.
Tankers would have to take the oil through the
Panama Canal to the Gulf Coast, and oil company of
ficials, say there are not enough tankers available for
such use. Sohio executives estimate that under the best
circumstances, 100,000 to 400,000 barrels of unrefined
crude still will accumulate each day as surplus on the
West Coast. .
Lichtblau said one alternative, for some of the firms,
might be the use of small existing pipelines. But the in
dustry says it still will need a major pipeline connecting
the West and Gulf Coasts.
The paradox of more oil but at the same price is
complex. To understand the current pricing structure,
one must go back to the oil shortages of the early 19705.
Along wish the price increase, the shortages resulted in
federal government regulation of oil prices.
Under current U.S. law, the ceiling on domestic oil
found before 1972 is $5.25 per barrel. On domestic oil
found after 1972 it's $11.28.
In addition, the so-called "entitlements program"
protects oil companies with large reserves of pre-1972
oil when the program began.
Will roads stop being paved? No, says James
Vovakes, director of fiscal management, a fiscal
analyst for the state Department of Transportation.
But he noted that depends on PennDOT employees
working without pay, and road contractors working for
a state 1.0. U. .
"In 1973, I believe in most cases the contractors
continued in good faith, believing it was only tem
porary," he said.
If state workers are around to mail them, retirement
checks will go out, 'said Andrew Sheffler, of the Public
School Employees Retirement Fund. Only part of the
retirement fund comes from state appropriations.
They'll still be held. The state lottery prizes come
from the money people spend on lottery tickets, not
from state appropriations.
LIQUOR STORES
"All we need is an executive authorization from the
governor to continue our operations," said William
Hardenstine, assistant comptroller in the Liquor
Control Board. "Since we generate our own revenues,
the budget crisis doesn't affect us."
As long as physicians and researchers on the
Health Department payroll continue to work with
out pay, laboratories and health care centers would
function.
But travel expense problems crop up here, too. Such
services as child health care, school immunizations,
public health nurses, screening of newborn children and
venereal disease treatment might be halted, a
spokesman said.
Also; if health officials can't inspect nursing homes on
schedule, some homes stand to lose their federal fun
ding.
• lan
University Park, Pennsylvania
Published by Students of The Pensylvania State University
TRANSPORTATION
RETIREMENT
LOTTERIES
HIALTH
Ten conle per copy
Monday, June 20, 1977
Vol. 78, No. 6 10 pages
Arabs give clean bill of health
U.S. companies off boycott list
ALEXANDRIA, Egypt (AP)
General Motors Corp. and Westinghouse
Electric Co., two American business
giants threatened with being blacklisted,
have been "cleared" after submitting
proof they have no dealings with Israel,
Arab boycott officials revealed
yesterday.
Mohamed Mahgoub, an Egyptian who
is chief administrator of the Damascus
based Arab League boycott
organization, said Westinghouse and GM
offered documentary proof that they
have no business ties with Israel.
The boycott organization, which has of
fices in 20 Arab countries, served notice
three months ago the two U.S. firms
would be blacklisted by the Arab states
if allegations proved true that they were
doing business with Israel.
Spokesmen for GM and Westinghouse
said their companies were not on the
boycott list.
A GM'spokesman in New York said his
'Watchdogging' SALT problem
WASHINGTON (UPI) American
disarmament experts believe the
biggest obstacle to a strategic weapons
agreement with Russia is a verification
system whereby each side can tell
whether the other is cheating. Some say
it is insurmountable.
Among those taking the gloomier view
is William Van Cleave, a member of the
first SALT negotiating team, who says
even the current arms agreement with
the Soviet Union no longer can be
adequately policed because of advances
in technology.
And the experts agree in general that a
limitation agreement without
verification would be worse than none at
$4.9 million
for stadium
University President John W. Oswald talks with several
trustees after the Board of Trustees meeting Friday after
noon. The trustees met in Keller Conference Center and
approved Beaver Stadium renovations.
Penn State's top gymnast, Ann Carr, (above) placed second at the U.S. World
Games trials over the. weekend. She' will be part of a five-woman team that will
travel to the games in Bulgaria later this summer. See related stories and photos
on page 5.
firm sells cars in Israel and the company
plans no change in policy. General
Motors, headquartered in Detroit, is the
world's largest auto manufacturer and
was ranked second to Exxon Corp. in
sales among the top 50 U.S. firms at the
beginning of 1976, according to the New
York Stock Exchange;
A spokesman for Westinghouse in
Pittsburgh, Pa., said his firm has sub
mitted bids along with two other
American companies to supply nuclear
equipment for an Israeli power plant to
be built in the 1980 s.
He said the Arabs were aware that the
bids are pending and that Westinghouse
has not withdrawn them.
"There was no problem in bidding to
be a supplier of equipment for a nuclear
power plant Israel itself is building," he
said. "The problem was whether
Westinghouse itself would be the
builder."
Westinghouse is a major manufac-
all, since it could foster mutual mistrust
and eventually an acceleration in the
arms race.
In the 1972 SALT agreement, the
verification problem was handled by
what is described as "national, technical
means of verification." That meant
sophisticated satellites and radar, as
well as radio listening posts, monitoring
the other side's activities.
Van Cleave argues that the satellites
only verify launchers, not missiles. In
1972, it was assumed one launcher meant
one missile. Now the Soviets have
developed a reloading capacity, so that
another missile can be dropped into a
tube within a few minutes, and the
is approved
turer of electrical and mechanical
equipment used by power companies,
railroads, and industrial plants. It was
ranked 26th among America's top 50
firms at the beginning of 1976.
Under legislation awaiting final
passage by the U.S. House, American
"companies generally will be forbidden
from cooperating in the Arab economic
boycott. But the compromise language
in the bill will permit U.S. businessman
operating in an Arab state that honors
the boycott to comply with local import
laws.
renovations
The University's Board of Trustees accepted a bid last
Friday for the expansion of Beaver Stadium which will not
include new press box facilities and some concession stands as
originally planned.
The stadium expansion was overbid last month by $1.4
million and new bids, with non-seating improvements con
sidered as options, were collected.
The successful bidder was H.B. Alexander and Sons, Inc.
who bid $4,338,000. The total project will cost about $4.9
million, including costs such as engineering consultant fees.
As well as increasing the seating capacity from 60,192 to
76,017, the optional improvements include:
Ground-level restroom facilities for the handicapped.
Adding 12.5 feet to the existing elevator.
Construction of four additional restroom-concession
buildings at the intermediate level.
Installation of a large high-speed elevator at the rear of
the existing press box. .
The installation of a new transformer to meet expanded
electricity needs.
The East and West portions of the stadium will be lifted on
hydraulic jacks, and new concrete seating will be slid un
derneath.
To all sunworshippers: Here's the one you've been waiting
for. Mostly sunny today with an afternoon delight high of 80.
Clear and cool tonight, low 55: Tomorrow, mostly sunny and
pleasant, high near 78.
Correction
Friday's In Edition column incorrectly
reported that former Undergraduate
Student Government President Joe
Seufer did not list USG president as one
of his extracurricular activities in La
Vie. Seufer said he listed the activity,
but La Vie did not print it.
United States no longer knows how many
missiles the Soviets have.
One high American disarmament
official said Van Cleave overstates the
case that reloading is not as easy as he
and others claim.
But that official acknowleges
verification is getting more com
plicated, especially in the case of
weapons that can be moved around
readily.
Consider the problem with verifying a
cruise missile. A long-distance cruise
missile essentially a pilotless jet
aircraft looks exactly like a short
range missile from the outside.
Weather