Energy: the Crisis Behind the Crisis

...Small-scale community systems using tidal energy or methane gas generated from organic waste could also help break the dependence on fossil fuels...

...Current quotas would be gradually phased out...

...1 The crude oil shortage was further exacerbated when the Canadians, concerned that developing shortages in the United States might create a short supply situation north of the border, cut oil exports to the United States by four per cent in the spring of 1973...

...Because most economists understand so little about the relationship between energy and economic growth, they have been constantly revising their assessment of the effects of the oil shortage...

...the closing of service stations on Sundays...

...To a substantial extent, at this writing, it is still relying on such appeals...

...Governmental and corporate energy decisions which went virtually unnoticed at the time have now resulted in a genuine emergency...

...Homes without heat . . . Factories and schools closing for lack of fuel...

...Yet current demand is accelerating so rapidly that meeting just the non-Communist world's oil demand will, according to Gulf Oil's research, soon require finding new reserves each year equal to the total proven reserves of the United States...

...Their input could be supplemented by fossil fuels on cloudless or windless days...

...Alaskan and offshore deposits will have to provide additional oil, and though these new reserves appear substantial, a continuation of accelerating energy demand will also rapidly deplete them...

...It is more difficult and more expensive to find oil as drillers are forced offshore and into the frozen Arctic...

...And they may very well use our remaining resources to feed their fantasies of growth, instead of tapping the energy for construction of a sane, just, and viable society...

...In combination, these steps could temporarily alleviate the energy crisis—if the companies could get the oil...

...Domestic production is not expected to increase substantially until the Alaskan and new offshore fields become productive in the latter part of this decade...

...And as oil becomes scarcer, costs of finding it go up...

...Without sufficient energy, disruptions occur that could conceivably result in famine...

...As energy price increases drive up other prices, rampant inflation can literally rip apart the social economy...

...Experts assure us that rooftop solar collectors or wind generators could provide significant amounts of power...

...Independent oil companies, which had relied on the majors for supplies of refined products, were raising the alarm about being cut off...

...The political instrument for such obstruction exists in the Defense Production Act of 1950, which provides the President with sweeping powers of social control—to allocate materials, accelerate mineral development, and assure corporations of immunity from the antitrust laws...

...Except for a few speeches on consumer energy conservation by the head of the Office of Emergency Preparedness, the Government did nothing to step up the refining of fuel oil, and by the beginning of 1973 major manufacturers began making plans to allocate curtailed fuel rations to their customers...

...The Department of the Interior sent telegrams to all major refineries in November 1972, stressing the seriousness of the shortage and asking refiners to increase output from eighty-nine per cent of capacity to ninety-two per cent...

...If energy prices must go up, they should be carefully monitored and managed, since increases will harm the poor the most...

...In addition, the Nixon Administration decided to triple the leasing of offshore drilling sites...

...For example: Oil produces petrochemicals, which are moved (by energy) to plants for conversion (by energy) into plastic stock which is transported (by energy) to fabricators that make products (by energy) which are, in turn, moved (by energy) to wholesalers, distributors, retailers, and consumers...

...The timing was inopportune: Fuel oil prices were frozen at off-season lows and gasoline prices at seasonal highs...

...However, for the first time in a century, certain decentralized energy technologies could make people virtually independent of the Standard Oils which have built vast fortunes by owning the sources of the energy flow-stream...

...Tanks and missiles cannot be built from balsa wood...

...Increasingly, other analysts are coming to similar conclusions...

...2. all schemes to obtain and use energy require energy...

...In addition to fancying gas-guzzling limousines and frequent jet trips, he loves to sit in front of a wood fire all year round, even if he must turn up the air conditioning in the sweltering heat of the Capital's summers to compensate for the heat generated by the fire...

...it is virtually non-polluting...

...The United States slipped into the energy crisis in almost the same way that it slipped, gradually but steadily, into an ever-deeper quagmire in Southeast Asia...

...The statement also accused the President of calling for consumer sacrifices "as a pretext to avoid making hard decisions regarding corporate practices and structure...

...Regardless of the dynamics of the boycott, it will have a major impact on the American economy...

...The President's priorities were made clear when he put retired Vice Admiral Eli T. Reich in charge of the Interior Department's new Office of Petroleum Allocation...

...Such understanding is not easily attained—and there are bound to be disagreements among people of good will—but the consequences of not seeking out and understanding the truth can only portend even greater chaos in the future...

...As early as January 1970, his Cabinet Task Force on Oil Import Controls had recommended abandoning the import quotas—in defiance of the major oil corporations—but the President refused to accept his own Task Force's advice...

...Today, drilling the average offshore well costs more than $500,000, and the average well in Alaska will run to more than $2 million...

...history had already loaded the beast...

...But getting the oil is proving more difficult and more expensive as the easily recoverable domestic reserves dry up...

...In January 1973, General Lincoln acted to increase imports by suspending all import quotas for the first four months of the year...

...And, simultaneously, foreign countries are asserting more control over the resources within, their own boundaries...

...The alternative is to let the Administration allocate fuel on the basis of its arbitrary judgment—perhaps on the basis of campaign contributions...

...It should be intensively researched for several reasons: It can utilize coal, which we have in abundance...

...atomic energy was far behind schedule...

...Conversely, such socially useful programs as day care centers, health facilities, and mass transit can put people to work while conserving energy—if the political pressure can be generated to put such programs into effect...

...But even with such credible and documented information available to the White House, the Administration confined its action to a Presidential message that sought solutions at the expense of the consumer's thermostat and accelerator pedal...

...They were distressed when the Tax Reform Act of 1970 reduced the industry's treasured oil depletion allowance from 27.5 per cent to 22 per cent, and they warned that implementation of the Act would cost the industry $600 million a year and would produce a shortage by reducing the incentive to expand crude oil production...

...This strategy accounts for the peculiar maneuvers by which the oil companies helped engineer the domestic shortage with their refusal to increase refining capacity or even to run existing refineries at full output...

...An important potential source of energy that is generally neglected is magnetohydrodynamics...

...Some commentators are already calling for new military expenditures, alleging that the Arab-Israeli war has demonstrated the "superiority" of certain Soviet weapons systems...

...Stability is the principal attribute of a rational energy system...

...This is the real crisis, and in time it may eclipse the shortage of energy that inconveniences us today...

...In that amendment, Congress enjoined every department and agency of the Federal Government to decrease our dependency on overseas sources of supply...

...Still absent from the President's program, however, was any resort to rationing, to curtailing the use of fuel by the military, or to reducing long-term energy demand...

...Oil is not the only energy source that is being jeopardized by growing dependence on centralized supply, and more disruptions can be anticipated in the future...

...In an incisive front-page economic appraisal on November 20, The Journal of Commerce told its business subscribers that if the Arab boycott were to continue "sufficiently long," the end result could be "serious worldwide business recession bordering on depression, acute shrinkage in business earnings, large-scale business failures, massive unemployment, and a considerable amount of price deflation...

...A greatly expanded program of research into safe and efficient deep coal mining would eliminate the surface stripping problem—and only a small fraction of our coal reserves is available for stripping...

...it is theoretically an efficient process...

...According to the Bureau of Mines, domestic crude oil production peaked at about 8.8 million barrels per day in 1970 and has since been gradually declining because domestic reserves are being depleted...

...The Conference Board, an independent, nonprofit organization that specializes in forecasts by prominent economists and business analysts, predicts that the Gross National Product will continue to grow in 1974, but that the rate of increase in industrial production will decline from 1972's 8.9 per cent to 2.8 per cent...

...The Administration, preoccupied even before Watergate with Nixonian reorganization schemes, kept shuffling responsibility for energy decisions within the Executive branch...

...An analysis prepared by the Senate Committee on Government Operations revealed that by September 1970, the shortage had begun to take effect...

...At some point, decision-makers must realize that the planet is not expanding in direct relation to the Gross National Product...

...It is conceivable that an accident of staggering proportions will one day force a moratorium on nuclear power production...

...Together, they set the scene for an energy shortage, which the Arabs, by a twist of fate in the Middle East, managed to escalate into a crisis...

...He also launched a propaganda drive, "Project Independence," to make the United States self-sufficient in energy by 1980...

...The United States concentrated its dependence directly and indirectly on Arab oil, in violation of a 1953 amendment to the Defense Production Act in which Congress declared that continued dependence on overseas sources of supply of critical materials "gravely endangers the present and future economy and security of the United States...

...With petroleum already in short supply as a result of Administration blunders and oil company tactics, the Arab cutoff has come as a crippling blow...

...In September, Nixon allowed the oil companies to import up to ten per cent of their 1973 quota during the remainder of 1972, but some of the larger companies refused...

...But an Interior Department report earlier this year warned that extraction of the oil from shale would be at the expense of vegetation, wildlife, and water...

...The crisis has clearly put environmentalists on the defensive...

...It is vital to the production and distribution of food...

...Only recently the President's energy adviser, former Colorado Governor John A. Love—who was beginning to understand the dimensions of the problem—was "reorganized out," and President Nixon created a new Federal Energy Administration under Deputy Secretary of the Treasury William E. Simon...

...Despite the expanding costs and overseas uncertainties, the industry is concerned about oversupply once the new offshore and Alaska wells are in production...

...The energy crisis, then, confronts us with a threat as well as with an opportunity: the opportunity to build, from our present emergency, a more equitable distribution of power and wealth...

...Faced with such strenuous pressures, the oil corporations have fought hard to preserve the special privileges long accorded to them in the American political process...

...It is also imperative to establish a national energy-use inventory, which will provide the public with information on the significant users of energy...

...In February, several major oil companies decided to test the Cost of Living Council by imposing an eight per cent increase on fuel oil prices...

...The Government, to the extent that its bureaucratic inertia will permit, has been eager to serve their purposes...

...Many oil executives opposed the President's plan to borrow on the following year's quota and insisted on substantive changes...

...As the full economic impact of energy reduction is felt in the society, politicians will grope for ways to stimulate the sagging economy...

...The bombing of Cambodia alone required three million gallons of fuel a day, and the United States is still shipping 32,000 barrels a day to keep the Cambodian air force flying...

...The military establishment consumes vast quantities of precious fuel every day, and it squandered billions of gallons in Indochina...

...What are we to do...

...In response to such governmental magnanimity, the oil companies announced a number of new refinery projects designed to increase capacity...

...The corporations engaged in the extraction, producSam Love is now energy lobbyist of Environmental Action, of which he was formerly coordinator...

...Utilities are relying increasingly on nuclear power, though many very serious questions remain about the safety of nuclear plants...

...The project would reduce air quality and would increase the salt concentration in the Colorado River about 1.5 per cent at Hoover Dam...

...The current crisis has less to do with the Arab cutoff than with the failure to recognize a basic tenet of ecology: decentralized, diverse systems provide stability...

...The capability for such an increase was there, as a staff study of the Senate Committee on Government Operations confirms, but the refiners refused to accede to the Government request...

...The bulk of Federal energy research dollars expended since World War II have gone into centralized nuclear power plants...

...The major oil corporations, it should be noted, are not in trouble—not, at least, in the sense in which they are accustomed to gauge their performance...

...The boycott's impact will be further amplified because Washington has been unable or unwilling to deal effectively with the crisis...

...At this point, a full-blown crisis was all but inevitable...

...With fuel oil rationing under consideration in the Northeast, a House Subcommittee investigated the fuel crisis and heard, from government and industry witnesses, a number of suggested reasons for short supply: tougher environmental regulations were requiring utilities to burn larger quantities of cleaner fuels...

...But since the oil companies wanted a long-term plan and higher prices, they refused to step up production by making full use of already existing refining capacity...

...The industry contends that crude stocks were not available, while the Government maintains that the industry could have used the increased import quotas to step up fuel oil output...

...Service stations were closing...

...The only exceptions might be solar water and space heaters, nuclear breeder reactors, and fusion— but even these schemes will require so much energy to make them productive that any net gain is uncertain at this point...

...Predictably, the President saw in the energy crisis an opportunity to force relaxation of some of the environmental standards and controls that have been painfully achieved in recent years...

...international disruptions were decreasing crude oil imports...

...To encourage refinery construction, he threw the oil industry a juicy bone: refiners would be allowed to import seventy-five per cent of their new capacity duty free for the next five years...

...These actions were, of course, overlaid on an already complex system of government agencies involved in fuel matters...

...During 1971 the oil companies faced new problems as the Oil Producing and Exporting Countries (OPEC) in the Middle East demanded and won ownership rights in the operations of American oil companies occurring within their boundaries...

...In August 1970, he created a Special Energy Subcommittee of the White House Domestic Council and charged it with finding a solution to the existing fuel crisis...

...At some point such continued growth becomes impossible...

...3. the fossil fuels are being exhausted...

...Since physical growth is possible only through the utilization of energy, a reduction in available energy supplies forces a change in the growth system so that it maintains and sustains a steady state...

...Given the philosophy of the Nixon Administration, it is more than likely that the Government would lease vast tracts to the oil industry at prices so low as to allow the petroleum interests to harvest vast new profits...

...Imports from the Arab states account for only a fraction of that total —the exact figures are in dispute...

...He also put General George Lincoln, the director of the Office of Emergency Preparedness, in charge of a Fuel Supply and Fuel Transport Committee to handle short-term supply problems...

...Domestically, the United States is passing its oil production peak...

...It sounds formidable, but it js simply a process of producing an electric current by passing an ionized gas through a magnetic field...

...That such systems are still dismissed as impractical —though working models now exist—reflects the misplaced priorities of Government and industry...

...A cutback of oil at the refinery will thus diminish employment at every point on this stream...

...Although no independent reserve figures are available because the Bureau relies upon oil industry statistics, oil is being consumed so rapidly that—regardless of whose figures one chooses to believe—the reality must be confronted that at some point oil will dry up...

...Such changes cannot be brought about without greater social control over the oil companies...

...At home, meanwhile, inflationary pressures finally moved President Nixon to impose wage and price controls on the economy...

...For a limited time, corporations can maximize profits by extracting higher prices for a lower volume of production, but ultimately they must confront the reality of limited growth—or even shrinkage...

...Energy flows through the society like a network of uncharted streams...

...The President's second message, on November 25, conveyed a somewhat more realistic assessment of the economic implications of the Arab oil embargo...

...In a joint response to Nixon, seven environmental groups—including Friends of the Earth, Environmental Action, and The America the Beautiful Fund—and a number of other public interest groups contended that any retreat from environmental standards before efforts to conserve fuel have been exhausted would be "precipitous and irresponsible...

...tion, and distribution of energy have pursued their traditional, relentless, and single-minded quest for profits...

...In such circumstances, there will be no alternative to a structural transformation of growth-addicted capitalism...

...Consider the President's personal lifestyle...

...A looming food crisis of major proportions . . . Recession, perhaps depression, destroying the experts' neat projections of perpetual prosperity and endless growth...

...If the current crisis produces no other benefit, it will compel economic planners to learn some hard lessons about energy...

...But except for stressing that Congress should approve his new Energy Research and Development Administration program, he offered no insight as to how the United States, with an energy appfetite doubling every fifteen years, might become self-sufficient...

...but now that it is becoming scarce, its impact on economic growth is attracting more attention...

...Most of this energy input, or subsidy, comes from fossil fuels...

...the reduction of highway speed limits, and curbs on outdoor lighting and the use of aviation fuel...

...When rumblings of financial discontent in the Middle East failed to quench the American economy's thirst for oil, President Nixon increased the level of oil imports to offset an expected gap in domestic supply...

...But it is—it has been —an important fraction: the fraction that spells the difference between an economy of abundance and waste, and an economy of austerity and scarcity...

...The throw-away society is here, and people are among the objects thrown away...

...Simply put, demand is accelerating off the top of the corporate planning charts, but the supply curve is plunging downward...

...But the Government offered neither a relaxation of price controls nor other concessions that the industry sought...

...Some essential points which energy decision-makers must begin to take into account are these: 1. energy is the instrument which makes all work possible and transports all goods...

...In fact, oil profits surged—but the shortage materialized nonetheless...

...The highways are clogged with gas-guzzling behemoths—built by Detroit for quick obsolescence...

...But as demand has increased, supply has tightened...

...If he or his advisers had been paying attention to Congressional staff experts, energy trade publications, and others in a position to comprehend the facts, the Administration could have acted decisively in time to ameliorate the impact of the crisis...

...The military has already used this authority to claim first priority on fuel stocks...

...OPEC then celebrated its victory by increasing its prices...

...Encouraged by price increases of as much as twenty-five cents per barrel of crude in November 1970, the industry moved swiftly to increase supply...

...If the decision-makers knew more about energy and its role in the society, the record of the past—and the outlook for the future—might not be so bleak...

...The President's first message, on November 7, downplayed the importance of the Arab cutoff...

...the Department estimates that about 600 billion barrels of oil are locked in shale under Federal land...

...As a result of his inaction, demand levels continued to rise and refiners used up their yearly quotas early in 1972, forcing some to start drawing oil from stocks at a rate that plunged storage to the lowest point in postwar years...

...Once the Arabs announced their cutoff, the warnings of the Joint Economic Committee report became a chilling reality...

...For a limited time, politicians and economic prognosticated can play games with the public, but ultimately they must confront the need for basic structural transformation of economic institutions...

...This is public land—land owned by the people of the United States of America—and only the most vigilant public concern and demand for full facts at all times would prevent something resembling the Teapot Dome giveaway...

...Why they refused to increase production is a matter of controversy...

...The times demand change, but those who have a vested interest in the technologies of the centralized past will fiercely resist the transformation to a decentralized future...

...Even though the return in richer offshore fields may offset the increased costs, oil men claim that the chances of hitting a productive well are only one in eight...

...Because energy has been cheap and plentiful, economists have not given it sufficient thought...

...As soon as some agency (or individual) came to understand the problem, it (or he) was reorganized...

...High-energy consuming synthetics and metals have replaced such low-energy materials as cotton, wood, and glass...

...His articles have appeared in Living Wilderness and New South, and he is the editor of "Earth Tool Kit: A Field Manual for Citizen Activists...

...Acute scarcities triggered by energy shortages could render even such forecasts invalid...

...the threat that we will succumb, in the panic of shortages and disruption, to a militarized and repressive system of social and economic control...

...We are in trouble because we have operated an economy of growth and waste—a planless economy that could make some jungles look like well manicured lawns...

...The Congressional Joint Economic Committee noted that if new supplies were reduced by 200,000 barrels per day through import disruptions or refinery breakdowns, accompanied by a cold winter, the result would be "an economic crisis for the United States unparalleled since the Great Depression...

...The President himself was so busy with resignations, firings, defections, reorganizations, and the threat of impeachment proceedings that he could not devote time or energy to the energy crisis...

...Of the fossil fuels, only coal, which exists in quantities sufficient to provide energy for hundreds of years, can sustain demand, but strip mining, which provides more than fifty per cent of the supply at present, takes such a toll on the environment that it, too, must be challenged as an abundant resource...

...Between 1960 and 1970, the cost of drilling an average well in the United States rose from $55,000 to almost $95,000...

...Specifically, the energy pricing system must be reviewed to create rate structures and energy taxes which can be devised to charge users progressively higher prices as their consumption increases, thereby discouraging energy waste...

...Such information should serve as the basis for rational rationing, and for decisions regarding future energy conservation programs...

...However, it will require a substantial input of energy to retrieve this oil, and there are two other warning flags ahead: First, many ecologists are deeply concerned over the impact on the environment...

...The actions and statements of Nixon, his advisers, and most of Congress reveal how little they understand about energy...

...Grandiose promises of energy from nuclear power or oil shale are fine stuff for Presidential speeches, but application of the.laws of physics may well reveal that most of these new schemes cannot yield as much energy as they require for their operation...

...Demand is up because our society has become increasingly more energy-intense since World War II...

...In normal times, Americans consume about seventeen million barrels of crude oil a day...

...Driven by lavish corporate promotion designed to stimulate consumption, and by favorably low rates for industrial users, utilities have doubled demand every eight years...

...Another potential source of oil lies under the soil of such Western states as Colorado, Utah, and Wyoming...

...in 1971, more money was spent preparing environmental impact statements for nuclear plants than on researching solar energy...

...Reich, aided by a host of other retired or active duty military officers, can be expected to give top attention to the demands of the Department of Defense and its major contractors...

...There is no point in looking to the Nixon Administration for leadership...

...But the White House, isolated as it is, refused to consider adequate controls, and continued to rely on half-hearted appeals to consumers to exercise voluntary self-restraint...

...Long-term strategies must be designed to cut back on non-essential uses of energy so that the remaining oil can be used to create the decentralized technological base for the new society...

...To deal with these problems, President Nixon began creating and reorganizing a labyrinth of bureaucratic structures...

...demand for energy was shooting up...

...It can also finance the research required to develop other energy-conserving technologies...

...Superport plans were also advanced for the Gulf and East Coasts...

...The time had finally come when the Government could no longer evade decisive action on the import question...

...Second, most of the oil shale deposits are imbedded in Federal land...

...Gulf Oil recently reported a quarterly profit gain of ninety-one per cent, and the industry as a whole—led by such giants as Gulf and Exxon—is recording profits that have increased a record forty-seven per cent since 1972...

...The Government allowed the increase to stand, but the subsequent rush to increase fuel oil production under the higher prices delayed the seasonal switch to increasing gasoline production, so the gasoline supply at the beginning of the summer of 1973 was at a very low point...

...Our agriculture is already so energy-intensive that we expend seven to ten calories of energy input for fertilizers, pesticides, fuels, processing, and transportation in order to get one calorie of food on the table...

...4. the relationship between energy and economics is only beginning to be understood...

...I don't see that one is left with any wasteland at the end of all this," he insisted...

...The coal supply is also vulnerable: United Mine Workers contracts with all coal corporations expire at the same time, so a prolonged coal strike could put the lights out...

...In factories and on farms, energy-burning machines have replaced human labor...

...How could the world's leading industrial nation have stumbled into such a morass...

...But the industry is now facing a formidable squeeze which, depending on how it is managed, could dictate substantive changes in the industry—and in the country...

...Without it, work stops...

...The shortage could still have been averted if refiners had simply increased capacity...

...Our technological devices for tapping new energy sources require energy input for their construction and operation...

...If energy is the social lifeblood, we must obviously insist on its equitable distribution...

...Howard Odum, an ecologist who has made extensive studies of energy, calls it "the universal currency...

...The Russians have spent impressive sums on research and development of hydro-magnetics, and now reportedly have two such plants feeding into the Moscow power grid, demonstrating its practicality...

...The significance of energy to culture is only now beginning to be understood...

...The Arab oil boycott, like the Tonkin Gulf incident, represented only the final straw that broke the camel's back...

...It has also signaled the beginning of a new age in oil—an age in which major oil companies themselves may be subject to supply constraint tactics similar to those they have long used successfully against the public...

...Revenue from energy use taxes can provide the funds for such social purposes as conversion from automobile transportation to mass transit...

...Nixon admitted that the shortages could run as high as seventeen per cent, and announced a series of steps to deal with it: a fifteen per cent reduction in the amount of gasoline to be distributed by refiners to wholesalers and retailers...

...Cadillacs glutting the market as the rich dump limousines for compact cars...

...The Nixon Administration's "Project Independence" is, in fact, nothing more than a "Project Dependence" —dependence on continued, accelerated use of fossil fuels...

...He suggested a shorter workday, year-round daylight savings time, reductions in highway speed, accelerated licensing of nuclear plants, a ban on utilities switching from coal to oil, lower thermostat settings for the Government, and several other minor steps to alleviate the pinch in the short term...

...Professor Charles Prien of the University of Denver, one of the nation's leading oil shale experts, testified before a Congressional Committee in November that he did not believe the environmental problems were insurmountable...

...Therefore, the oil companies are focusing now on reinforcing their market positions and increasing prices while oil is still in short supply...

...It is oil shale, which the Interior Department estimates could fill about four per cent of the nation's 1985 liquid fuel demands...

...A massive fuel oil shortage seemed inevitable...

...Even the President's pet panacea, nuclear power, will require a large fossil fuel subsidy to enrich, burn, and reprocess the uranium fuel required by the plants...

...To try to comprehend the origins of the energy crisis, to unravel the complex web of decisions made or deferred, to scrutinize the interests that made or deferred these decisions—to do all this is to approach an understanding of how our economic and political system works—or fails to work— when the people's welfare is most vitally at stake...

...It is not a field that lends itself to easy and accurate predictions...

...The National Petroleum Council warned, in a self-fulfilling prophecy, that the country faced a deficit of 250,000 barrels per day of fuel oil during the winters of 1970 and 1971...

...It is the common thread that weaves through the processes of the society and the biosphere...

...The first winter of the decade passed without a major crisis...

...The President's program also assumes the continued subjugation of people to the energy corporations...

...they require such energy-intensive materials as aluminum and titanium, and they must be propelled by fuel...

...If there ever was a rationale for bolstering the economy by defense expenditures, this too is a victim of the energy crisis...

...In April, William Simon, the Deputy Secretary of the Treasury who became the nation's top oil official when Nixon phased out the Office of Emergency Preparedness, modified the fourteen-year-old import program by substituting license fees for the quota system...

...The largest remaining oil reserves are in the Third World and politically unstable areas...

...The result was to discourage the refining of fuel oil...