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Ralph Nader > In the Public Interest > Breaking the Energy Monopolies

WASHINGTON–Among the flurry of legislative proposals in Congress on the energy problem, one stands out as a constructive and lasting solution to the monopolistic grip that the giant oil companies have on the nation, small businesses and consumers. S. 2506 and H.R. 11648 are bills filed by Senator Adlai Stevenson and Cong. John Moss to establish a federal oil and gas corporation whose purposes are so sensible and necessary that support in the Congress is building up behind them.

Harking back to the example of the Tennessee Valley Authority which used public water resources to produce cheap, public power that saved a large region in America from economic disaster, the Stevenson-Moss legislation would operate to save consumers and the economy from a trillion dollar price gouge over the next generation.

The preamble to the bills makes clear their underlying rationale: “the people of the United States through the federal government own substantial lands which could be developed for the production of natural gas and oil”; “American consumers would benefit if the forces of competition operated to a greater extent than at present in the world oil and gas market”; “a corporation owned by the federal government, engaged in the development and sale of natural gas and oil [exclusively on federal lands], could provide competition in the energy industry and, through research and development, assure adequate supplies of these fuels without harm to the environment.”

The proposed company would have rights of exploration and production to half of the amount of oil and gas offered for lease by federal land authorities. This limitation in the Stevenson bill is consistent with the purpose of stimulating competition and stopping monopolies on either side. The added requirement that the company shall give price, supply or delivery preference to states, political subdivisions of states, cooperatives and independent refiners highlights the discrimination directed toward municipal power and transit systems by the oil giants.

Even after this fabricated energy shortage subsides, there is every prospect of another being created anytime the major oil companies want to jolt prices higher, drive small business competitors out of business, weaken anti-pollution health standards or pursue other irresponsible or criminal behavior. With a federal oil and gas company such predatory moves would not be possible.

For example, it independent gas stations, fuel distributors or refineries are being squeezed through a cutoff or reduction in supplies by monopolistic tactics of the oil majors, the federal company would assure them a supply. The mere presence of such a possibility would restrain the majors from trying such tactics.

If consumers, who must pay about $24 billion more for energy this year, are slated to be gouged by another energy scare, the federal company would be there to head it off.

If the national security is imperiled by multinational oil companies who have conflicts of interest overseas, the federal oil and gas company could protect the interests of Americans here at home.

If workers are about to be laid off due to the results of oil majors’ manipulations adversely affecting other business or government employers, the federal company would assure that this would not happen.

The Stevenson-Moss bills recognize that producing some of the massive amounts of oil and gas presently on federal lands requires strict environmental safeguards. Unlike the TVA law, enacted in the Thirties when environment was not considered an issue, these bills repeatedly emphasize the need to develop improved environmental techniques. They also require that the company collect comprehensive and accurate information about oil and gas so that the federal government not remain at the mercy of the oil industry’s assessments as has been the case. An explicit freedom of information provision is included.

Citizens have an important stake in studying these bills, suggesting improvements and supporting Senator Stevenson, Cong. Moss and the other co-sponsoring legislators–Senators Kennedy, Hart, McIntyre, Metcalf, McGovern, Mondale, Moss and Abourezk along with Reps. Dingell and Leggett.