January 23, 1974

Oil Shortage Real But Manageable

Confusion, confusion, all is confusion!

Oil tankers line up in the Atlantic waiting to unload their precious cargoes, but on-shore storage bunkers are full.

U.S. Energy Czar William Simon asks gasoline stations to limit sales to 10 gallons per customer on week days and nothing on Sunday.  Florida Governor Ruben Askew takes to network television to assure would-be travelers there is "plenty of gas" in his state.

A hundred thousand workers allegedly are laid off because of the energy shortage while energy use by industry reaches record levels.

Much of the confusion comes from our ignorance of energy problems.  Until now, energy was too plentiful and too cheap to worry about.

Some confusion is deliberately created by the professional alarmists who would use the shortage as proof-positive of their political, environmental, economic or social views.

Here are some facts to help us get handle on the energy problem.

The extent of the oil shortage - the trigger for our present energy short fall - ranges from an estimate of zero by Consumer Advocate Ralph Nader to 30 percent by the liberals in Congress who gleefully thump the tub for all-out gas rationing.

The consensus is about what President Richard Nixon forecast in his November energy message - 17 percent.

The amount of oil used is up about five percent over last year.  The difference between shortage and use represents unfilled demands.

By government policy, and refinery cooperation, most of the unfilled demand has been concentrated in the market for gasoline.

Upon examination we find the policy working.  Voluntary conservation of gasoline by citizens, lower speed limits and sharp cutbacks of air line flights has saved about 10 to 15 percent of our gasoline stocks.  Florida has plenty of gas because, significantly, tourism there is down about 15 percent.

The east coast storage tanks are full simply because the amount of oil drawn from them has been tailored to the amount of oil going in.  So far we have been able to keep the out-go and input in balance.  This keeps our reserves at the maximum five-week level.  If and when the reserves fall below normal, then will be the time to consider drastic measures.

Be assured the oil shortage is real.

Our egg-head liberals can sneer all they want about the shortage being contrived by Nixon as a cover up for Watergate, and-by the oil companies as blackmail to get higher prices.

These preposterous assertions assume that Nixon - who supposedly has lost his power-can plunge Europe and Japan into chaos single handedly.  Or that the oil companies can destroy the nations with impunity.

This whole energy mess began in 1954 when Congress imposed price control on natural gas and oil at the well head, and in 1969 when the oil well depletion allowance was cut from 27 to 22 percent.  Company profits sank in lock step with price.  Consumers enjoyed a bonanza but exploration and expansion of energy fields stopped.

I remember well a few newspaper editorials and industry speeches that predicted an artificially created shortage as the big users switched from coal to the cleaner - and now cheaper - natural gas and oil.

But these were dismissed as "right wing" and "profit greed."  The populist congressmen had struck a blow for the "peepul" and the dirty capitalists put in their place.

How sad that we so often fall for the something-for-nothing malarkey and put dumbbells into positions of authority where they can louse things up in the name of "democracy."

Our trot to ultimate energy shortage became a canter when the planned installations of nuclear power plants were delayed, kept at nominal production or prohibited entirely.  We reached full gallop when the environmentalists succeeded in imposing immediate and often impossible emission standards for coal.

Each of these public decisions - well-head price controls, fail-safe nuclear plants, pollution-free industry - were reasonable, even laudable.  Yet, these are exactly the steps you would take to create an energy shortage.

"There is no shortage of energy, only a shortage of cheap energy," wrote Professor H.  C.  Slider in a recent issue of "News In Engineering" published by Ohio State University.

"If you let the price of energy seek its own level, then watch the boom.  The shortage will disappear rapidly as investment and exploration blossom.  There is plenty of energy in the world - but not at today's prices."

Slider, an oil expert and professor of chemistry, contends there would be no energy shortage now had there been free, worldwide competition.

"But we would pay more-probably double for gasoline, more than double for natural gas, and almost double for electricity.  And that's what it is worth," he declares.

"Be glad it happened now, when only 15 percent or so of our oil comes from the Mideast," says Slider.  "Imagine what it would be like if 25 percent or 60 percent were cut off.  They would control us completely."

Slider concludes on a note that raises the hair on my neck: "Thirty-five percent dependence is about the point where war would occur.  Politically, then, you might as well fight because you are going to become communist or be controlled by a communist country."

Personally, I'm not worried about Slider's dire possibility for the United States.  We can, and should, attain energy independence within the next decade.

But I can not be so sure of the rest of the energy-starved world.

The sooner we understand the true nature of our energy problem and find an unlimited source of power, the sooner we can attain true peace and prosperity.

Author: Lindsey Williams