Page Six
THE MICHIGAN DAILY
Tuesday, April 14, 1970
The strange workings of oil import restric
/tions
By LEE KIRK
Daily WildlifeRdifor.
First of a two partseries
E ACH IVAY in Brownsville,
Texas, a most unusual sight
can be seen on the road leading
to the Rio Grande bridge and
on to Mexico. Every three min-
utes, a tanker truck full of crude
oil heads down the road, through
customs, and across the bridge
to Mexico. Once across thd bor-
der, the tankers turn around on
a traffic circle and head back
across the bridge.
This would hardly seem like
any way to make money, but the
operators of the trucks are prob-
ably running the shrewdest
game in the oil industry.
In the late 1950's, the govern-
ment placed a quota on the-
amount of foreign oil that could
be brought into this country,
but, of course, the law had
numerous loopholes. One of
these loopholes said that oil
imported overland was not be
counted in the quota limitations.
The Brownsvillle operation takes
full advantage of this loophole.
Crude oil from Mexico is ship-
ped by barge to Brownsville,
,where it is unloaded into the
tanker trucks and hauled to
Mexico and back. Thus, in the
eyes of the law, the oil arrives
in this country overland and is
exmept from the quota restric-
tions.
This little ruse is only a small
part of the profits made possible
for American oilmen by the
quota'on foreign oil. The quota
was instituted after the Suez
crisis in 1956. When Nasser
closed the canal, oil shipments
from the vast mid-East fields
were severely restricted. Western
Europe had to fall back on
American oil and it was ob-
vious that if the canal remained
closed indefinitely, a disastrous
oil shortage would develop. The
quota was imposed to encourage.
the expansion of the American
oil industry. By limiting the
amount of cheaper foreign oil
that could be imported, the gov-
ernment made it more desirable
and profitable for American oil
companies to expand their op-
erations into areas that would
have been unable to successfully
compete with unlimited imports.
THE FEDERAL government
is now considering loosening the
import restrictions, but they'
have run into strong opposition
from the oil lobby, undoubtedly
the most influential lobby in
Washington. They favor con-
tinuation of the .quota, which
currently restricts foreign im-
ports to 20 per cent of total dom-
estic consumption, contending
that the quota is vital to na-
tional security.
They argue that so long as
this county produces 80 per cent
of its own oil, its security can-
not be impaired by any foreign
crisis that could interrupt oil
production in areas like the mid-
East or Venezuela. If the quota
were loosened, they argue, the
influ of foreign oil would force
many marginal wells iin this
country to close down and if a
crisis were to come about caus-
ing a drop in imports, it would
be impossible for this country's
industry to pick up the slack.
But the argument on national
security is not nearly as fool-
proof as it sounds. Sherman
Adams, presidential advisor dur-
ing the Eisenhower administra-
tion, has said that the decision
to restrict foreign oil imports
was primarily an economic one,
and that national security was
a secondary consideration. If
national security was not a key
consideration in the 1950's when
this country relied heavily on oil
from the Near East, it should be
even a less valid argument to-
day. A Presidential commission
that studied the problem has
recommended that the quota be
phased out over the next ten
years. If this should come to
pass, the commission estimates
that the United States would
import roughly the same amount
of oil that it produces domestic-
ally.
BREAKING IT down still fur-
ther, the commission estimates
that 36 per cent of the import-
ed oil would come from Vene-
zuela, 15 per cent would come
from Canada, and perhaps -10
per cent would come from In-
donesia. This would mean that
about 40 per cent of the oil im-
ported to this country, in other
words, about 20 per cent of
domestically consumed oil, would
come from sources in the mid-
East.
Even a temporary loss of
mid-East oil would not be catas-
trophic, the quota's foes argue,
and if perchance the mid-East's
20 per cent was permanently
shut off, they contend that this
country could easily afford to
import more foreign oil while
new domestic sources were found
and old marginal were re-activ-
ated.
The national security argu-
ment has had a sole reign for
the past twelve years, and the
result has been a bonanza for
American oil producers. The
Presidential Commission has es-
timated that the exclusion of
cheaper foreign oil costs the
Americain consumer about $5
billion a year. This five billion
goes directly to the oil industry.
Thus, while oil magnates talk
about national security, they are
lining their pockets with the
consumers' money.
Oil now costs an average of
$3.90 a barrel. If free market
conditions were allowed to pre-
vail, in other words, if free en-
terprise were to be truly free, oil
in this country would cost about
$2.25 a barrel. This artificially
inflated price has driven oil pro-
ducers to frantic searches for
new fields, and the search has
led to Alaska and the remote
and desolate coast of the Arctic
Ocean. The three companies
that have enegaged in explora-
tory operations in this region
have already invested nearly one
billion dollars and to date, they
have nothing to show for it.
EVEN IF they get the strike
they expect, there is still the
problem of getting the oil to the
distant markets. The Arctic
Ocean is a sea of ice much of the
year, and even though the voy-
age of the gargantum tanker
Manhattan proved that it is pos-
sible to break through the ice,
there is no guarantee that other
ships will always have the same
success. There is also the pos-
sibility that the oil will be ship-
ped out via pipeline. This pros-
pect has alarmed conservation-
ists who, noting that much of
the pipeline would pass through
permafrost regions, contend that
a pipeline would impair the eco-
logical balance of a region far
bigger than the immediate area
used for the laying of the pipe-
line.;
Given enough time, a satis-
factory solution could probably
be found so that the oil could
be safely transported to market,
but if the oil industry expects
to keep the quota, they know
that they must continue to be
able to supply their 80 per cent
at a price low enough to prevent
public outcries. Thus, it's north
to Alaska and damn the con-
sequences.
The real power of the oil in-
dustry lies in Washington, a
fact that most congressmen have
been slow to realize and slower
to admit. There are over 60 of-
fices in Washington run by oil
companies that deal primarily
in lobbying, and their behind
the scenes power is awesome.
Senator Proxmire of Wisconsin,
a leader in the fight to reduce
the privileges of the industry,
has incurred a great deal of
wrath from the oil lobby. An oil
representative told on of Prox-
mire's aides that "it doesn't
matter who runs against Prox-
mire; he'll be the best financed
candidate Wisconsin has ever
seen."
Whether this remark was an
actual threat or an idle boast,
it is indicative of the power that
oil feels that it has in Washing-
ton. Their successful fight
against a large reduction in the
depletion allowance is also in-
dicative of this power. And they
have the financial resources to
perpetuate this power. Last
year, oil got 25 per cent of the
profits made by the 2,000 largest
United States corporations.
But even if the quota restric-
tions are loosened and the power
of the oil industry is reduced a
host of difficulties will remain
to be solved. Right now, these
problems focus on the tiny vil-
lage of Machias in Washington
County, Maine, a most improb-
able place for a controversy over
oil to arise. These problems will
be examined in the concluding
part of this series.
NEXT: A look at Washing-
ton County.
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SERVING BIG 10SCHOOLS SINCE 1961
By BETSY MAHON
After being roughly treated at
the hands of their instate rivals,
the Wolverine horsehidemen are
set to try their luck againsta
group of out of state invaders, the
Fighting Irish of Notre Dame. The
game will be played this after-
noon on Ferry Field.
Whether or not the Wolverines
can break their losing string de-
pends largely on the condition of
pitcher Jim Burton. Burton, who
has been by far the team's most
effective moundsman, has been
hospitalized with a case of tonsil-
itis. If he is well enough, Coach
Moby Benedict intends to start
him and then bring in freshman
southpaw Pete Helt when Burton
begins to tire. Helt will. get the
starting call is Burton is unable
to play.
Benedict plans to use the pla-
toon system at two positions-first
base and right field. If the Irish
start a right hander on the mound
Benedict will counter with either
of two left-hand hitting freshmen,
Pat Sullivan or Bob, Makoski at
first and Mike Bowen in the out-
field. On the other hand, if the
Irish go with a southpaw, Bene-
dict wil start two right-handed
batters, Bob Bower and John
Hornyak at these positions.
Benedict refused to use the cold,
rainy weather as an excuse for
the poor performances of his
charges in the weekend defeats.
"We can't blame our losses on
the weather. It was just as cold
on Eastern's and Central's sides.
It isn't very much fun to play in
cold weather though."
Benedict was particularly dis-
appointed with the pitching and
the team's overall defensife play.
"These are pretty important,
areas," he admitted, "We'll have
to work on them." The pitching
staff gave up 12 runs while the
fielders contributed 7 errors,
The absence of Burton in the
past few games has served to
emphaseize the weakness of the
pitching staff. "The weekend
would have been different if we
had had Burton," Benedict said.
"It was like the Tigers not hav-
ing Deny McLain." Benedict be-
lieves that "Pitching is eighty to
ninety percent of the game." Con-
sequently, "The other pitchers be-
sides Burton, are going to ,have
to make improvements."
Despite his team's sub par show-
ings so far Benedict is not yet
ready to push the panic button.
"We have a young team and
we're going to make mistakes.
We're just going to have to work
harder, that's all. If the boys
snap out of their slump we can
still be a team to be reckoned
with."
t
Reggie Ball scrambles to second
r . -
m
U__________________________________________________
4FpGU
\ NtO
We would like to thank the many individuals who
help to make Michigras a success:
Len Simpson (c.c.)
Trudy Harrison cac.)
Harry Hartstein
(c.c.)
Ellen Greenstone (c.c.)
Nancy Sherman
Howard Sachs (
Mark Schrader
(c.c.)
c.c.)
(c.c.)
Wendi Langer
Mark Kettler+
(c.c.)
(c.c.)
Adolph Lohausser
Randy Paschke
Sally Vander Weele
Carol Cutter
Maureen Sheridan
Debbie Paulen (c.c.)
Is
Sugar Cane (c.c.)
Mel Pohl
(c.c.)
Sara Fitzgerald
(c.c.)
Joyce Wagner
Sherry Reese
Lin Polan
Linda Friedman
Karen Harbeck
Candy Cane
Mel Miller (c.c.)
Liz Kochanczyk
George Johnson
Penny Fleming
Dan Levine
Rich Urbin
Kim Kuhlmann
Andy Klee
Flip Herman
(c.c.)
Steve Rosenthal
David
Nancy Bechek
Sue Eydenberg
Linda Gryzan
Lin Polan
Bruce Long
-4
(c.c.)
Bev. Stewart
(c.c.)
Sara Brown (c.c.)
Rif Braun
"What Are You Wearing to the Revolution?"
Dan Flaggman
Bill Nagler
Melanie Wallace
Gail Winston
Sheri Simpson
Donna Greenberg
A SPECIAL THANKS TO:
i 1 e-. 1 f a a !1 a --% r /1 1\ I 1 1 r-
,raw \ t v41 r r% ON K
A .....-- I - k 3: A'I. L I P Imns