If the allocation snafu did no more than guarantee unfair distribution, it would be bad enough. (Last month an input data error in the FEO's computers, though quickly corrected, computed an extra allocation tocation to Texas, of all places.) But it does more than that; it actually produces shortages of its own.
Oil companies with more oil
¾old, new or imported must give it up to companies with less oil. If it were true that the majors are a monopoly and a conspiracy, surely nothing would suit them better. But in fact, the allocation program forces some to give up their oil to competitors at no profit, and sometimes at a loss. This is not only "confiscatory, discriminatory and illegal," as Gulf Oil has charged in its suit against the government, but above all, it kills all incentive to go out and get more oil: The receivers have no reason to do so when they can get confiscated oil, and the donors have no reason when it is going to be confiscated. At the moment, Gulf is a donor, and the receivers include Texaco, Atlantic Richfield, and many independents.Hitherto Mobil has been the exception among the basically meek and tame oil companies. It was the only major to shun the ecology-fad advertising of the type mentioned in our editorial. When six congressmen recently called for FTC control over advertisements expressing the oil companies' opinions, it spoke out and branded the demand as "totalitarian."
Now Gulf has hit back with a suit. Its spokesman also publicly condemned the televised kangaroo hearings in which the oilmen were attacked by Sen. Jackson's committee for an hour and then given 5 minutes to reply.
So the club now has two members. But the hope is that it will go forth and multiply.
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Vol. 1, No. 7
Newsletter: Access to Energy Newsletter Archive Volume: Volume 1 Issue/No.: Vol. 1, No. 7 Date: March 01, 1974 11:57 AM Title: A Dismal Failure
Copyright © 2004 - Access to Energy Newsletter Archive
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