Simple Simon?

WASHINGTON–Picture the scene: Harsh arguments and fights are breaking out at congested gas stations and between shivering tenants and landlords around the country. Workers are losing their jobs. Small businesses, including the independent gas stations who provide about the only retail competition to the big companies, are being severely squeezed or put out of business. The large industrial companies have been stockpiling or hoarding thus generating an “each one for himself” attitude that artificially worsens the crunch.

Meanwhile, the large oil companies have never had it so good. With their prices and profits screeching upward under the eager encouragement of the White House, these companies are spending millions of dollars of the consumers’ money to brainwash them with deceptive claims about the so-called energy shortage. The situation has gotten so extreme that the Federal Trade Commission is deep in an investigation of the basis for their “institutional advertisements. The FTC “would like to know” more about Exxon and its fraternity of giant oil combines.

Added to long standing reports of deliberate under producing of gas and oil Wells in the Southwest by the oil majors waiting for higher prices are more recent disclosures of oil tankers waiting to unload because storage tanks are filled in east coast ports. A New York ABC TV crew spotted a huge tanker with millions of gallons of refined gasoline leaving the fuel hungry New York City area for a leisurely trip through the Panama Canal to California. Prices will be higher by the time of arrival.

Just what is the federal energy chief, William Simon, thinking about all this? To find out, I recently went with my associates to see him one morning in his Treasury Department office. The meeting convinced us that he is still a Wall Street investment banker (his former occupation) in Treasury clothes.

Mr. Simon believes that energy, particularly oil and gas, has been too cheap for too long. He is working to see that the price per barrel of oil reaches $7. 50 very shortly in order to depress demand and encourage production. A few weeks ago, the Cost of Living Council permitted the barrel price to go from $4.25 to $5.25 but conceded that it could not say that production would be increased. Neither can Mr. Simon.

Next, Mr. Simon was asked whether he was going to develop an independent capacity to get the facts about oil and gas reserves, storage levels and other economic data which he now obtains entirely from the oil industry itself. William Johnson, Simon’s chief economic adviser, grew irritated and asked how we would suggest that this be done. (Mr. Johnson is on record as faithfully believing oil industry figures.) He was told that the way to get original data or cross-check secondary sources would be to get a team of experts and investigators and supply them with the legal powers that the White House has or could easily obtain from the Congress. Mr. Johnson was not satisfied.

The conversation turned to the enormous industrial and commercial waste of energy in this country. Mr. Simon is not responding to the federal office of energy conservation which can document how immediate waste reduction, without harming production, can more than compensate for the government’s fast dwindling estimates of the supposed energy shortage. He says he’s not convinced.

Are you going to support the faster licensing of nuclear plants, we asked? Yes, said Mr. Simon. But do you know about the hazards of these plants and their lack of reliability? No one in Mr. Simon’s group knew anything about this area. A few days later, Mr. Simon’s energy agency admitted it didn’t know that on
Dec. 10th, thirteen of the 38 operable nuclear plants in the country were completely shut down due to malfunctions or accidents and several others were operating at reduced capacity.

Does Mr. Simon favor, on the model of the TVA, a federal oil and gas development corporation to produce petroleum from federal lands owned by the people? Not at all, he replied, because he doesn’t think government can do it as efficiently as private corporations. He even thinks the big oil companies are competitive. Yet those same companies have led the country into this present situation while receiving vast tax savings which were not put into domestic oil production and refining as promised.

Do consumers have a right to know what his agency is doing at the same time as the petroleum industry? Absolutely, he replied. But his employees are privately showing proposals to oil men before they are adopted.

Time had expired. Mr. Simon was off and running to a consumer advisory committee meeting–a staffless window dressing creation of his public relations men. Our impression was that Mr. Simon was an official price escalator for the industry while keeping consumers, who use only 25 percent of the nation’s energy, frantic about getting in line at the gas station and worrying about possible rationing if they don’t behave.

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