Learning to Live with Less

Petroleum is a fuel for all seasons--but the U.S. does not have enough of it for any season. That fact was brought home to Americans last week in jolting fashion. Before the frost was on the pumpkin, federal officials had begun warning of icicles in the bedroom next winter because of a general energy shortage.

Stephen A. Wakefield, Assistant Secretary of Interior, said that "there is no assurance whatever that there will be an adequate supply of heating oil" and warned that severe cold could bring genuine hardship. He explained: "I am talking about men without jobs, homes without heat, children without schools."

Price Boosts. The warnings came while consumers were still coping with the aftereffects of the summer gasoline shortage. That scarcity had spawned a bitter dispute between gas-station owners, who wanted to raise prices, and the Cost of Living Council, which had been trying to hold them down. Last week, in order to head off a nationwide protest shutdown that the gasoline dealers had called for Oct. 3, President Nixon ordered the COLC to move more swiftly in allowing price boosts.

By week's end the retailers had achieved their goal: the COLC approved a new price-ceiling formula that would permit station owners to boost prices by 10 to per gal., depending on how much they were selling gas for on May 15 and how much their wholesale costs had gone up since then.

Even though the President's order amounted to a guarantee that the dealers would be permitted a price rise, thousands of station owners from Long Island, N.Y., to Long Beach, Calif., closed down last week in what seemed to be an empty protest. Some motorists were stranded, and others were forced to queue up in lines four or five blocks long. National Guard troops were called out to pump gas at a station in Gleneden Beach, Ore., where Western Governors were holding a conference, so that the visiting politicians could get out for a ride. In San Jose, Calif., a dealer who decided to close before filling the tanks of all waiting motorists had to be rescued from irate customers by the state highway patrol.

The underlying problem is that leading oil firms such as Texaco, Mobil and Gulf are funneling most of their gas to their company-run stations and drastically slashing sales to independents. The "majors" claim that they simply do not have enough gas to go round; the independents are certain that they do. They say the big companies are sitting on supplies in hopes of driving out the competition and pushing up the cost of their cheaper brands. Station operators also complain that while prices were held down at the pump, the COLC has permitted producers and wholesalers to raise the prices they charge the stations for wholesale gas. Those rises reflect increased costs of importing high-priced foreign oil.

Though sporadic shortages of gasoline will probably continue for some time, that problem will ease as cold weather curtails driving. The increasingly inadequate supply of heating fuels raises a far more chilling specter. National stocks of all distillate oils, including home-heating and diesel fuels, now stand at about 190.5 million bbl., compared with 213.4 million bbl. in 1971.

Moreover, industrial demand for low-polluting No. 2 oil, the basic home-heating fuel, is ballooning because natural-gas supplies this winter are expected to fall at least 5% below those of last year; some estimates run to as much as 18%. Main reason: the U.S. has been burning natural gas much faster than new fields are brought into production.

Shuttered Schools. A recent Interior Department study asserts that "there is no possibility that domestic oil production will be enough to meet demand." To make up the difference the U.S. would have to import 650,000 bbl.

a day, even if winter temperatures remained normal. But, the study estimates, not much more than 550,000 bbl. will be available from European refineries --so the U.S. starts off 100,000 bbl. a day short of its projected needs. If the thermometer skids to icy levels in Europe and the U.S., the gap between supply and demand could widen by as much as 500,000 bbl. a day. That would almost certainly lead to shuttered factories and schools, frigid homes and even electric-power blackouts. In New York City, Con Edison, the nation's largest electric utility, reports that it has not been able to buy enough No. 2 fuel to get it through the winter and is already burning oil ordered for November:

Prospects for the entire Northeast, especially New England, are exceptionally grim. Big independent wholesalers that supply well over half the region's enormous oil needs are now unable to buy enough domestic fuel to fill their orders. Their usual sources--the major oil firms--are stockpiling what fuel they have for their own retail outlets. The independents are not eager to buy costly European oil, partly because it would boost their retail prices to roughly 360 per gal., while their large competitors charge about 27.40. Yet, unless the independents can get fuel somewhere, many homes and plants in the Northeast could well be cold this winter.

Elsewhere the situation is only slightly better. Colorado Springs' natural-gas supplies are so low that the city has been forced to declare a moratorium on tapping in new customers. In California, the State Public Utilities Commission plans a 10% cutback in electric power for homes and factories, and a 50% slash in electricity supplied to arenas for sporting events. Iowa's Governor Robert Ray estimates that supplies of liquefied petroleum and propane gas will fall 15% to 20% short of what is needed to dry crops and heat homes in his state.

Some cities, including Detroit, New York and Los Angeles, are reluctantly making plans to stretch their fuel supplies by permitting greater use of heavy-polluting oils and even coal.

Refining Capacity. Congressmen, Governors and businessmen have been demanding for months that the Administration create a nationwide program of mandatory allocations under which it could order companies to divert fuel to areas of the country where shortages are worst. A draft program has been circulating inside the Government since Aug. 9, but the White House has been reluctant to order it into effect, despite mounting evidence that energy resources are inadequate. Administration officials insist that the program is extremely complex and must be gone over with great care to ensure that there are no loopholes. Says John Love, the President's new energy adviser: "My main fear is that we wouldn't be able to run it very well."

An allocation program is needed, but it would not eliminate the basic cause of oil and gasoline shortages: a lack of refining capacity. An increase in refinery construction began last year, but it will not have very much impact until 1975. Until then, oilmen can accomplish little by juggling refinery runs:

the more gasoline they make, the more they have to scant on heating oil, and vice versa. And even after 1975, the enormous increase projected in per capita demand for oil will leave the nation increasingly dependent on costly imports. Thus Americans, who have long taken cheap energy for granted, will have to pay more for air conditioning, heat, lighting and auto fuel, while using less.

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