The price of a gallon of leaded regular gasoline has climbed from 40¢ in 1973 to 71¢ today and predictions are that it will soon reach $1. Oil prices are a key factor in consumer prices, now rising at 15 percent on an annual basis.
We would probably all be better off if we had no Department of Energy. With its $10 billion budget, 20,000 employees, and 17 separate offices in Washington, D.C., it isn’t discovering or developing any new energy sources or facilitating distribution, and it is tying the hands of those who are.
The Department of Energy poured 80 million barrels of crude oil underground in empty salt caverns on the Gulf Coast. This was supposedly designed as a cache of oil which would be available to tide us over a national oil emergency. But the Department now can’t get the oil out of the caverns because it forgot to install any pumps.
Schlesinger’s experts had it all figured out that an oil emergency couldn’t happen before 1980. So our emergency reserve can’t be used during the present emergency caused by Iran’s revolution. Yet the U.S. shortage of oil because of Iran now comes to 500,000 barrels a day and is expected to rise to 750,000 by summer.
In 1977 Energy Secretary James Schlesinger vetoed a good deal between six U.S. gas companies and Mexico to import natural gas to the United States at $2.60 per thousand cubic feet, rising with OPEC prices. Schlesinger said the price was too high. All he did was to prevent Americans from getting the gas, while he alienated the Mexicans who have the largest oil reserves in the world next to Saudi Arabia.
The Department of Energy has blocked for four years the plan by Standard 0i1 of Ohio (Sohio) to build a marine terminal at Long Beach, California, and a 1,000-mile pipeline from there to Midland, Texas, to connect with existing oil lines into the Midwest and the Gulf Coast. Sohio agreed to install $80 million worth of anti-pollution equipment, but even that didn’t appease DOE’s anti-growth mentality.
Another proposed pileline that hasn’t been built is planned by Northern Tier Pipeline Co., a consortium including U.S. Steel, Burlington Northern Railroad and Milwaukee Railroad. It would run 1,550 miles from Port Angeles, Washington to Clearbrook, Minnesota, and serve 66 refineries in the northern and midwestern states. These refineries will be short nearly a million barrels a day when Canadian oil is cut off in 1982, as scheduled.
A third proposed pipeline, planned by Northwest Energy Co., would run from the port of Skagway, Alaska, to Alberta, where it would connect with existing pipelines to Chicago. The Energy Department has failed to approve this pipeline, too.
Schlesinger’s Department’s ideas on what to do about energy all run to reducing consumption, imposing new taxes, expanding the bureaucracy, and harassing the public with petty controls. Energy Department bureaucrats sit in their government offices and devise such “solutions” as closing gasoline stations on weekends, forcing corporations to cut the sizes of their parking lots, imposing jail sentences for setting thermostats higher than 65° in the winter or lower than 80° in the summer, and of course gasoline rationing.
The Energy Department’s policy is clearly to continue to subsidize OPEC oil production at $14.54 a barrel or higher, while discouraging domestic production and efficient distribution. The Energy Department keeps the lid on U.S. oil at $9.47, thereby making sure that there is no incentive to discover and tap new U.S. oil reserves.
The 23 associations of independent domestic petroleum producers, representing 10,000 independent American producers who drill 90 percent of the new wells in our country, cannot even get a meeting with the President to discuss ways of increasing U.S. production and eliminating our dependence on OPEC. The Energy Department seems to have a mind-set against any idea for private enterprise production or distribution.
Polls say that 68 percent of Americans believe the oil shortage is a hoax. Their intuitive feeling is correct; the shortage is largely created by the Department of Energy.
