The Dark at the End of the Pipeline
GLASS, ANDREW J.
Washington-USA THE DARK AT THE END OF THE PIPELINE BY ANDREW J. GLASS WASHINGTON AS THE American Petroleum Institute has been reminding us, a nation that runs on oil cannot afford to run short....
...All that is left is the distribution "pipeline" stretching from the Persian Gulf to local gas stations...
...Until the Arabs flashed their oil trump, 21 million barrels a day —nearly half the world's total consumption, exclusive of the Communist bloc—flowed through the Persian Gulf...
...Conceivably, Nixon could decide to unleash the Central Intelligence Agency and its friends on the embargo declarers...
...This region is heavily dependent on low-sulfur Libyan crude processed by Italian refineries...
...The problem of soaring costs aside, there are not enough tankers or tank cars on hand to equalize expected hardships...
...But one wonders for how long...
...Ration coupons would meet about 60 per cent of demand and be issued at or near current price levels...
...The President and his Secretary of State believe that the exposure of the Gulf sheikdoms to the real or imagined greed of the Persians, the Iraqis and the Soviets is the American countertrump...
...This is the point of vulnerability that presumedly could be seized upon by the Nixon Administration...
...For years Arab oil has been too cheap and too plentiful to make development of alternative energy sources pay...
...The biggest crunch will occur along the Eastern seaboard, especially in New England, where 70 per cent of the electric power is generated by oil...
...Prior to the Arab move, U.S...
...But subversion, once initiated, cannot be Coming Next Issue: HANS J. MORGENTHAU on The Geopolitics of Israel's Survival easily shaped, let alone safely channeled for the sole purpose of safeguarding vital U.S...
...Depending on such variables as the weather and the level of imports from Canada, the cushion provided by the pipeline will last perhaps through the middle of this month...
...Unless the Arabs relent by Christmas, about as likely as their embracing the Israelis, some 35 per cent of New England's generating capacity will be idled...
...Those bruised lion trainers, Nixon and Kissinger, would no doubt agree...
...interests...
...Moreover, there is plenty of non-Arab oil around—on the North Slope in Alaska, off the continental shelf in the Atlantic and locked into ample U.S...
...The impeachment process is meant to punish a President for failure of duty, not of policy...
...How ironic it would be if the President were finally forced to retire by the uncertain light of a million flickering candles...
...From the standpoint of self-interest, some Arabs are concerned about having too much Western money in the treasury and too many Western goods in the shops...
...Instead, he has followed the advice of his laissez-faire economic experts, but the hard figures will soon give him no option but to impose very stiff controls...
...coal reserves...
...And is Nixon, in his Watergate-weakened state, capable of playing such a difficult game for such high stakes...
...But that is what has happened to the United States, of course, and in the words of Jimmy Durante, "you ain't seen nuttin' yet...
...consumption...
...That task is being efficiently carried out by the U.S...
...Washington has gone along with these investment calculations...
...The object of this elaborate scheme is to cut consumption by about 20 per cent without forcing people of modest means to junk their automobiles...
...Gasoline would also be available without coupons at the pump—but at considerable cost, perhaps as high as $1.25 a gallon...
...The Arabs have no dreadnaughts on the high seas to enforce their embargo...
...Likely as not, Nixon will first try several less drastic tactics, including fuel rationing...
...With 6 per cent of the world's population, the United States has been using about 35 per cent of the world's energy, twice as much per capita as West Germany and four times as much as Japan...
...The meat of the gazelle may be succulent indeed, but the wise gazelle does not boast of it to lions...
...Since the impact of the U.S...
...Saudi Arabia's King Faisal believes affluence may also be breeding political instability within the new middle class and weakening the historic character of his Moslem state...
...Bilateralism is running rampant throughout the Western alliance, too, making the prospect of these nations' banding together to enforce a counterembargo against the Arabs—as of now—altogether nil...
...The built-in delay between cause and effect has lent an unreal air to the crisis, allowing people to believe for the time being that the energy shortage is a distant threat rather than an immediate peril...
...companies who produce most of the oil along the Gulf and control one-third of the world's tanker capacity...
...Neither, for that matter, would mandatory allocations and rationing, should there not be enough fuel available to turn the generators...
...The U.S...
...As a consequence, the Nixon Administration's present budget earmarks less than 5 per cent of all Federal research and development dollars for energy...
...Western-owned consortiums have been ladling petroleum out of the Middle East as fast as the sheiks and supertankers would allow?against the day when political turmoil would curtail supplies...
...The immediate reason given for the shortage is the oil embargo, the centerpiece of the big-stakes diplomatic game the Arabs are playing against the Israelis, the West and Japan...
...A kind of rough justice is at work here: Since Nixon has always defended himself on the basis of performance, he should be willing to accept the consequences of a poor performance...
...Under the circumstances, the threats of retaliation recently voiced by Secretary of State Henry Kissinger and lesser officials are particularly empty gestures...
...The states along the Persian Gulf possess sufficient hard-currency reserves to see them through a prolonged U.S...
...2) the imposition of minor sanctions, such as lowered speed limits and Sunday gas station closings, to further cut demand...
...The public will be facing this thing a few weeks from now and most of them don't even know it's coming," a Los Angeles oil man told me recently...
...The embargo, however, has simply brought to the fore a problem that has long been with us...
...Bad as it is, this figure is likely to go higher...
...boycott...
...According to the best estimates available here, the shortfall amounts to 3.2 million barrels a day, or about 18 per cent of current U.S...
...Watergate has apparently left Nixon so groggy that he was unable to move decisively to meet the energy crisis at a time when it still might have done him some political good...
...should the mood turn uglier, the sheiks could look to the Soviets for essential supplies...
...if for no other reason than for their own protection...
...has no stockpiles, government or otherwise, to fall back on...
...American warships, for example, can no longer rely on off-shore fuel sources...
...and (3) quiet pleas to the Arabs to lift the siege, coupled with public threats of retaliation in the form of counterem-bargoes of military hardware and food...
...In that event, there would be no shortage of Bedouin, Palestinian and Yemeni chieftains willing enough to exchange Saudi lives for American gold...
...Yet despite their financial strength, the oil sheikdoms are politically and militarily weak...
...policy to assert that a concentrated and coordinated effort to withhold energy supplies for an ostensibly political objective would be "unacceptable...
...BEFORE THE oil embargo was imposed, it was U.S...
...Finally, an open market would be permitted for the ration coupons...
...The nation's high living standards have been based in large part on abundant supplies of cheap fuel...
...demand was projected as doubling again by 1990...
...So their needs must be met by dipping into dwindling domestic stockpiles...
...Now shipments have been cut 25 per cent, and prices have been doubled and redoubled...
...As the President's November 25 television speech made clear, White House policy is founded on three distinct lines: (1) An effort to convince Americans to use less energy...
...So far no one in Washington has figured out a way to prevent industries from closing down, workers from being laid off and cities from ceasing to function —all as a result of short-term energy deficiencies...
...Senate Foreign Relations Committee Chairman J. William Fulbright, Kissinger's good friend, alluded to the possibility before the current crisis arose: "The Persian Gulf countries would be well-advised not to press too hard...
...By now, Nixon senses, probably rightly, that Presidential sponsorship of a "Battle of Britain" psychology will not help him recoup his losses...
...But the sellers' market in crude oil and the worldwide competition for energy have left planners here shaken...
...Given all that has gone before, chances are he would be regarded as the Chamberlain rather than as the Churchill of our times...
...they could be traded for whatever the market would bear...
...These steps, though, would not turn on the lights in Boston should they go out in January...
...fuel shortage will be uneven, some people are going to suffer more than others...
...The plan favored by working-level officials here would establish a three-tier price scale for gasoline...
...If Lenin were alive today, he would doubtlessly be obliged to revise his theories of economic imperialism...
...As so often happens in the world, though, the unacceptable has become merely unpalatable...
...Unfortunately, none of it can be brought into production for at least several years...
Vol. 56 • December 1973 • No. 24
