Oil’s “Battle of the Billions”

The stage is set for a dramatic struggle between Gerald Ford and consumer forces in Congress over the price of energy in this country. As if to punctuate the onset of this “battle of the billions,” the giant oil companies’ recent price in­creases signaled the second lap in their drive for $1­per-gallon gasoline.

President Ford’s energy policy would replace price controls by our government with OPEC-Exxon pricing of our domestic energy, in­cluding oil, gas and coal. That would be the direct re­sult of his oil price decon­trol plan.

No economist would deny that once controls go off, the price of domestic oil will rise to the level of the OPEC price for foreign oil.

SIMILARLY, if President Ford achieves his deregulation-of-natural­gas objective through Congress, the price of domestic natural gas will more than triple, rising to the equiva­lent price of OPEC oil. Steam coal prices have doubled in less than two years, mysteriously reflect­ing similar upward pulls of the price of oil.

Under the Ford energy plan, stripped of its presi­dential television rhetoric, every time OPEC raises its price $1 per barrel, Ameri­cans will pay almost $6 bil­lion more per year .for domestic oil, gas and coal.

This country’s domestic energy supplies provide our country with 80 percent of its energy consumption. So President Ford’s decontrol scheme would let the price of the 20 percent of the energy we import deter­mine the price of the 80 per­cent of the energy we pro­duce in the United States.

THE GIANT multinational oil compa­nies, of course, like the President’s program. In fact, they helped write it. Exxon, Gulf, Mobil, Arco, Shell and other oil giants are making more profits than ever before as the OPEC price goes up.

Moreover, as long as the OPEC price stays high or goes higher, the value of their oil, gas and coal re­serves in this country and elsewhere increase by hun­dreds of billions of dollars.

If OPEC did not exist, the big oil companies would want to create it. Fortune magazine, in its May issue, described how the OPEC cartel depends on the mul­tinational oil corporations to ensure that production cutbacks, needed to sustain cartel prices, are distrib­uted equitably among the cartel members.

IN A WORD, these oil companies are shoring up the cartel because they have a stake of billions in its continuance.

When representatives of the oil-producing countries visit this country, they must wonder how the oil indus­try’s White House service station can publicly con­demn OPEC while it and the large U.S. oil compa­nies are doing everything to keep it going.

What will the Ford plan cost the American family? At least $600 a year from higher fuel, electricity and gasoline prices. In addition, the ripple effect of higher food, clothing and other prices will add even more to the already strained family budget.

This means massive inflation, more unemploy­ment and recession. And that is why members of Congress have been balking at the veto-threatening President Ford.

AS A COUNTERMOVE to Ford, the House Com­merce Committee has re­ported to the House of Representatives HR 7019, the energy conservation and oil pricing act of 1975.

Bitterly fought over be­tween pro-consumer com­mittee members and other Democrats like Rep. John Dingell, who want to weak­en the bill in the oil indus­try’s favor to avoid a presi­dential veto, HR 7014 represents probably the best provisions likely to get through to law in this era of the imperial presidency.

Led by Congressmen Bob Eckhardt, John Moss and Andrew Maguire, HR 7014 holds oil prices far below the Ford plan but still at a level amply sufficient to en­courage exploration and production.

IT PROVIDES FOR mandatory automobile fuel economy standards, indus­trial fuel efficiency goals and several other ways to reduce inflationary energy waste.

It also sets up a petrole­um reserve and provides the General Accounting Of­fice with subpoena powers to get the facts about, re­serves, costs and other situations from the hidden recesses of the oil industry.

The congressional votes on HR 7014 will be coming up later this month and early August. If you’re interested in more informa­tion, write to your repre­sentative and ask for a copy of the House Commerce Committee report on HR 7019.