KICKABILITY

The lessons of oil are the same as for gasoline, but few seem to be heeding them. Domestic oil has a twotier price system. "Old" oil is controlled at $5.25 a barrel. The free market price for "new" oil is now about $10; "new" oil is newly discovered oil, or oil produced in excess of levels in previous years, or oil from wells producing less than 10 b/d (stripper wells). By and large, you get rewarded for producing a little oil, and punished for producing a lot of it.

The results are predictable. Oilmen are scrambling for the $10 oil, which has now jumped to 40% of the total production from only 25% at the beginning of this year. Exploration is booming, in spite of the pipe and rig shortages, and for the first time since 1969, more than 30,000 wells will have been completed this year.

But total oil production continues to decline from its 1970 peak. Which is not surprising: If you controlled the price of potatoes grown in fields, but promoted a free market of potatoes grown in flower pots potato production would decline, too.

The mood for the blood of "big oil" has had its consequences also. Gulf Oil is planning to modernize its 300,000 b/d refinery at Port Arthur, Texas, and to increase its capacity to 400,000 b/d. But at a time when the US has to import gasoline (in addition to crude oil) because there is an acute shortage of refining capacity, Gulf is delaying the decision to go ahead for at least a year, until there is "a stable business environment which would justify an investment of this magnitude," fearing particularly "the conflict between controlled prices and rapidly escalating construction costs." Can you blame them?

Mobil is buying Marcor, the parent company of Montgomery Ward. In part, to diversify and even out business cycles, but there are also other reasons. Says Mobil's chairman Rawleigh Warner: "We cannot ignore the many charges leveled at the oil industry by politicians and some segments of the communication media, nor the fact that more than 3,000 bills have been placed before the Congress with the intention of inhibiting the oil industry in one way or another." Can you blame them?

Some politicians and news media can. The ones who were shouting loudest about the oil companies monopolizing the energy industry are now shouting loudest about Mobil's perfidy in diversifying, for Mobil is damned if they do and damned if they don't. The whole bloodthirsty crowd, from the FTC to Congresswoperson Bella Abzug, seemed to rise as one man to scream indignantly "They're trying to crawl out from where we can kick them.

And all the while a hundred billion barrels of oil are waiting to be tapped in the continental shelves. This week, Colleen O'Connor, Democratic contender for the San Diego area congressional seat, is going for a swim in the Pacific as a publicity stunt to dramatize her opposition to offshore drilling. "If I can handle the sharks in the Pacific," says she, "I can handle the jellyfish in Washington."

We doubt that she is in any danger. We expect the sharks to panic in headlong flight as soon as she hits the water.