By Victor Perlo

Wit the cold snap in parts of the coun-
try early in January, the press sud-
denly discovered an ‘‘energy crisis.”’
Schools in Denver were shut down. Boat-
loads of grain on Midwest waterways
were stalled for lack of fuel, Flights from
Kennedy were cancelled. Landlords
found a new excuse for not heating
apartments. :

Senator Henry Jackson, Washington
State’s man from Boeing, called the
energy crunch “the most critical prob-
lem — domestic or international — facing
the nation today.” :

Newsweek warned that the solution
“‘may well strike at the very heart of the
American life-style. Consumers inescap-
ably will see their bills for electricity,
heating and gasoline raised ever higher —
and they could conceivably find these
necessities being rationed.” Newsweek
predicted blackouts, brownouts, worsen-
ed pollution, and even diplomatic reper-
cussions: ‘‘The U.S. could ultimately find
itself alientating its Israeli allies as it
tries to improve relations with the Arab
nations that control most of the world’s
oil reserves” (January 22).

The Wall Street Journal warned of
consumer prices for oil doubling by 1980

(January 23).

The long-run problem is real. The im-
mediate shortage is not. :

The United States recklessly con-
sumes mounting quantities of fuel of all
sorts. With 6% of the world’s population,
it uses one-third of the globe’s energy
output. Consumption of oil anf gas has
evén gone beyond what can be supplied by -
the huge U.S. reserves. Oil imports

reached 19% of total consumption in 1972
and are expected by the industry to reach
35% in 1973 — and evidently this will be ex-
ceeded as imports reached 44% of con-
sumption in mid-January.

United States production of oil peaked
two years ago and is gradually declining,
despite capacity pumping in the Texas
fields, previously kept shut down part of
the time to keep up prices. Output of the
more efficient natural gas has also peaked.

For some time, oil and gas companies
have campaigned for higher prices, in
order, they say, to provide an “incentive”
for increased exploration and drilling
within the United States. :

The cry of shortages, combined with
Phase III regulations, opened the way for
the start of sharp increases in prices.
Beginning January 22, the big companies
increased prices of home heating oil and
gasoline one cent-a gallon. The Cost of
Living Council, while cracking down on
New York hospital workers and West
Coast longshoremen, offered no objec-
tions. :

The natural gas producers have a peti-
tion before the Federal Power Commis-
sion for a 73% increase in prices, while
press reports state that the White House
will ask Congress to end FPC’s power to
regulate wellhead gas prices altogether.
However, there is no excuse for higher
prices. Oil companies are reporting higher
profits in 1972, and record profits in the
fourth quarter.

The short-term “‘shortage”’ is largely
contrived, and partly brought on by oil
company tactics. This autumn was un-
usually cold, so fuel oil consumption in-
creased. In the ‘three months ending
November, consumption of distillate oil.
used in home heating, increased 15%< over
the same period a year ago. But even so.
stocks of distillate, at 154 million bar-
rels on January 5. while below the excep-
tionally high levels of 1971 and 1972, were
close to normal for that tire of year. They
were high enough to last 38 days at peak
winter consumption rates.. They were 507%
above the low-point of stocks reached
normally at the end of the winter. So there
was no call for spot shortages to appear.
Some may have resulted from faulty
distribution by the companies, others may
have been faked for purposes of company

IS
there
a fuel
crisis
in the
U.S.?

propaganda. Significantly, no big compan-
ies were forced to curtail production.
Meanwhile, oil imports have sharply
increased and January has been unusually
mild, especially in the densely populated

*

Offshore oil tig, Texas USA

: , WORLD MAGAZINE PACIFIC TRIBUNE—FRIDAY, MARCH 16, 1973—PAGE 6

Gas pipeline being plac

ail i oe BE
ed, Louisiana

Northeast. Stocks of petroleum products,
including distillate, almost stabilized
in the two middle weeks of January, in-
stead of, as normal, sharply dipping. It
seems probable that by the end of Febru-
ary stores will actually exceed the 1972
level, since consumption was exception-
ally high last February.

Up-to-date figures on natural gas
stores are not available, but as of the end
of 1971 underground reservoirs held a
three-month supply, providing an ample
margin for any subsequent rundown.

Distributive margins absorbed as
profits by the oil companies have been
rising steadily: The price of oil at Okla-
homa wells is now $3.51 a barrel. Import-
ed oil, even with transport cost, is nearly
$1 per barrel cheaper. But the average
Price to final consumers is $13 per barrel,
and still pointing upwards. All in all, it
seems as if the oil companies put
over their recent price increases just in
time to beat a widespread realization
that the ‘‘shortage’’ was over.

JA particularly sinister feature of the
situation is the corporation propaganda
campaign for dirtier fuel, linked to the
supposed shortage. Thus New York City
was pressured into accepting high-sulphur
fuel oil by the Texaco Company.

With the capitalist world recovering
from the economic slump centered in the
United States, demand for oil is soaring.
Under such conditions, temporary tight-
ness in fuel supplies is not unusual, and
the pinch in the U.S. and its use to hike
prices have been matched elsewhere. This
is especially true of the developing coun-
tries, and India is engaged in a Struggle
with the oil monopolies over the sharply
rising prices.

The effect of econemic conditions
was aggravated by oil company tactics
in the struggle against producing coun-
tries. Early in 1972, the Iraq Petroleum
Co. cut in half output at the Kirkuk fields,
the largest in Iraq. This was done in re-
prisal for Iraq developing its own oil out-
put, with Soviet help, on the North Rum-
eila field. When the Anglo-American mon-
opoly refused to restore output, Iraq na-
tionalized the Kirkuk field. Since then,

_ing countries significantl

-further notice — part of his

the U.S. and British companies If
tempted to organize a capi
boycott of Iraqi oil, with partia port
keeping Iraqi output well beloae a
Similarly,
preparations to take ove
national oilfields in the 1980s,
ies reduced output in that country. io
Output cuts in these two maj? H
y alee
global supply-demand balance.
ministration and the oil comp# anil

Negotiations with the Soviet | ull Ey
2 US acty
ies Wor, Tae],
ply. But when the U.S. compan esi “Dy
the verge of an agreement,

Nixon ordered them to delay ‘util ‘7

to pres oo

paign to get the USSR
F Cons

Democratic Republic of vietnam
to his terms. 1 sho a One
For the long run the fue rive turn

real only in- relation to the pril® the
superprofits of the U.S. am aintall Mom

monopolies. They aim to it
trol of the world’s oil, to BF gdle
from the countries of the sae
Africa, Latin America, and Ah Ast |
it to consumers at increasingly 5 of ing
But the liberation strue® | cgi mer
world’s peoples is rapidly
this setup. Even the Shah of 2
ing to effectively take over © 5 90%, Chie
Within a decade or two, per pee
the bulk of the world’s oil wily is fang
led by the people or govern 10 1 Bro)
ducing countries. The U.S. ¥? se SM has
be able to claim for its ow? ts
dominating share of total out? “ae
have to rely more.on its own o ot ® Br
These are plentiful.Shale i eat th
the government has not 4 So:
ficient research and develoP
is sufficient to last a century
‘supply, part of which can 28
aitfieceat to last five centurie
before these reserves ae de

met

of 2 d
with virtually unlimited supply the
gen as the basic fuel source: ies ip

f
(r

tary, directly and through Be
makers, continues to consU
one-fifth of the energy 5¥ 1 be
United States. This could W°)4, ol!
eliminated. Sooner or latef a ot
will have to set some 14! of 8
over automotive consumption 4 rea) i
by limiting traffic density @ nei Ou
the use of less fuel-wastiNb |. yy:
improving mass transit systeP™ tle
The main road to a solu
lic interest is to nationaliz®
electric power industries:
cratic control. Then the §
could be organized for th
according to a single plan: 15
sold to ultimate consume
with specially low prices
class consumers. The GOV
carry out the research to d AMS Mot
time alternate fuel sources: tut” Son
oil and gas sources would 0 4 Wain:
to their rightful owners | iy é
contracted for on a stricuag
basis, on terms advantaer
producers as well as for
consumers.

For the present. the
demand: int

1. Prohibition of any
prices of oil. gas, and

and rollback of all price s
over during the past year

2. An end to all limita
of oil and gas. af

3. U.S. cooperation ie
National Oil Co. and with ¥
Government, to break the ©
oil cartel in the former
sabotage of production !1

4. Prompt conclusion ° as
for supply of Soviet natural

i I f
ions

case dpe
yall }

abt