TVA-Like Plan Put Forth to Cope With Oil Crisis
Suppose you are a senator or representative mulling over what to do about the Big Oil companies.
Your constituents are demanding that something be done about gas lines, sky-high gasoline prices, refineries operating well below capacity, gasoline being diverted by U.S. oil companies from their West Indies refineries to Europe, official figures showing crude oil stocks higher than 15 months ago (despite the interruption of Iranian oil) with consumption decreased, official charges of price gouging and violations, pending shortages of winter heating fuel that will be almost twice as expensive as last year, and the inflationary jolt being felt in food and other energy-reliant sectors of the economy. The list could be longer. But as a legislator, you’re getting the idea that the public holds Big Oil in low regard and wants Congress to act.
So Congress acts–incredibly, A majority of the legislators approve decontrol of old oil (in production before 1973)–taking, according to the Congressional Budget Office, anywhere from $68 billion to $94 billion from consumers in the next six years alone. And a major synfuel boondoggle is rushing recklessly through Congress without a pause to analyze why this very costly alternative is chosen over conservation, solar energy and natural gas.
Moreover, Congress shows little sign of turning off demands by U.S. energy monopolies to tie all domestic U.S. energy to the world cartel price. Already the Wall Street Journal reports that Alaskan oil is priced at OPEC levels. Big Oil is telling Congress every day that receiving four or five times more for new U.S. crude oil and natural gas than they received profitably in 1972 is not enough! They want more and the economy begins to crack.
Yet a major solution to the monopoly power of Big Oil to generate shortages and gyrate prices lies nearly ignored on Capitol Hill. Two bills, numbered 8.580 (introduced by Sen. Adlai Stevenson, D-Ill.) and H.R.3885 (filed by Rep. Joseph Minish, D-N.J.), would create the Energy Company of America (ECA), a Tennessee Valley Authority-like entity, to develop and produce energy found on federal lands.
Stevenson explains the public’s energy corporation this way:
“The bulk of the nation’s proven and undiscovered energy reserves lie on federal land, on and offshore. The American people own these resources, yet their government knows little about their location and extent, and leaves their development and allocation to private oil companies.”
The Energy Company of America would operate the Strategic Petroleum Reserves and the Federal Naval Petroleum Reserves in Alaska and elsewhere. Stevenson adds that “ECA could return substantial revenues to the Treasury. It could allocate supplies during times of shortage and spur competition, not through costly regulations but as a competitive entity whose production costs and performance would be a matter of public record and whose sales would aid independent refiners and marketers as well as regions of the United States suffering from shortages.”
Last month, Minish put his bill into the hopper with this comment: “Recent experience proves that it is foolish and costly to leave the energy fate of America in the hands of the oil giants. They are accountable only to themselves, not to the American people and have no incentive to lower energy costs.”
The idea of a public energy corporation was advocated in 1969 by chairman Lee White of the Federal Power Commission. Like the TVA, such a public enterprise would be a yardstick for the oil giants. More than the Tennessee Valley Authority, ECA would stimulate competition within the private oil industry, give the little producers and refiners some help and be more environmentally accountable.
Legislation similar to H.R.3885 and S.580 was introduced in 1974 with dozens of congressional backers. In that year David Freeman, who now heads the TVA, told the Senate Commerce Committee that most of the nation’s oil and gas are on lands that belong to the people. Their trustee, the U.S. government, he testified, has not been keeping this fact in mind when the large oil companies bid their pittance for these treasures.
The Stevenson-Minish bills are designed to make sure there are no more unexplained shortages, to develop a purchasing policy for imports and to safeguard our national security when multinational oil giants, domiciled in the United States, show primary allegiance to overseas markets. Data about actual energy reserves, costs of production and other crucial information no longer will be the secret preserves of these oil companies.
But the ECA bills are not flawless. They include development of uranium reserves. It would be more prudent to substitute geothermal production instead of fueling further the folly of atomic energy.
“ECA is an alternative to regulation and nationalization. It would supplement, not supplant, private enterprise,” Stevenson said a few weeks ago.
Whether you are a motorist in a gas line or a home dweller anxious about next winter’s heating bill, act like you are a member of Congress. Tell the lawmakers on Capitol Hill to apply the ECA solution to the vast energy reserves that belong to you.