Allocation at Long Last

After months of fierce bureaucratic infighting, the Nixon Administration finally put together a mandatory allocation program for home heating oil. Announced last week, it may well be too little and too late to ensure that all Americans will be warm this winter. One Administration official even concedes, "We are going to have industries closing down and homes going cold. The question is how many--2% or 20%?"

The program has three main points:

1) After Nov. 1, refiners must supply wholesalers with the same quantity of fuel they received last year; in any supply cuts, each allotment will be reduced by the same proportion.

2) If one region of the nation is particularly hard-hit by cold weather, the Interior Department can order the transfer of fuel from less frozen regions.

3) Similarly, each state government will be able to redirect as much as 10% of the fuel supply within its borders to alleviate "exceptional hardships by wholesalers and end users."

The Administration also launched a publicity campaign, featuring a specially drawn Snoopy cartoon, to get consumers to save energy. Key recommendation: all householders should turn their thermostats four degrees lower than usual; if they do, the nation will save 400,000 barrels of heating oil a day.

The program starts out under two heavy handicaps. The first is that in order to keep from shivering this winter, the U.S. will have to import huge quantities of heating oil from Europe; but Europeans, worried that the Mideast war will cut off their crude-oil supplies, may not make the fuel available. Already Italy and Spain have clamped strict controls on heating-oil exports.

The second handicap is the confused state of the Administration's energy-policymaking apparatus. Indeed, the behind-the-scenes story, as pieced together by TIME Correspondent Sam Iker, sounds like a bureaucratic free-for-all in seven rounds. As the battle raged, the President apparently remained on the sidelines.

ROUND 1. In 1972, as fears of a fuel shortage became widespread for the first time, a federal interdepartmental task force, under the direction of White House Aide Peter Flanigan, started drafting a presidential energy message. Late in the year, the message reachedJohn Ehrlichman, then Nixon's chief domestic adviser, who recognized a fertile political issue and moved to put the planning under his control. Objecting to the draft's urgent tone (its writers dared to use the word crisis), Ehrlichman ordered extensive revisions.

ROUND 2. Last February the White House named Charles DiBona, 41, to coordinate energy planning. DiBona, a former Navy officer and systems analyst, combines a staunch belief in unregulated free enterprise with a lack of experience in the energy field. Under DiBona, a final draft of the message was produced, and Nixon delivered it six weeks later. It quite properly called for scrapping antiquated oil-import quotas but otherwise was distressingly bland.

ROUND 3. Also in February, Deputy Treasury Secretary William Simon was made head of the Government's Oil Policy Committee. When spot shortages of gasoline began to appear in the late spring, he decided that some allocation of petroleum products was necessary and prepared a voluntary system to accomplish it. The morning he was scheduled to present it to Congress, DiBona appealed to Simon's boss, Treasury Secretary George Shultz, to block the testimony. Shultz refused to interfere and the program was adopted.

ROUND 4. As evidence mounted that voluntary allocation did not go far enough, Simon and energy experts from the Interior Department reluctantly prepared a draft of a mandatory program in June. Then word came that the White House would establish yet another new advisory body, an Energy Policy Office. Simon concluded that the decision should be left to the EPO chief.

ROUND 5. Colorado Governor John Love, whose opposition to mandatory controls was already on record, was appointed to head the EPO. After DiBona, now his assistant, met with him in Denver, Love grew stronger in his opposition; he reiterated it at a press conference in San Clemente. When Love arrived in Washington, however, Simon got him to change his mind. On July 10, Simon told a House committee that a decision for mandatory allocation would be made "within a week."

ROUND 6. DiBona did not give up. He gathered support from White House aides who felt that such a politically sensitive decision should be left to Congress. The Administration decided to stop pushing the program.

ROUND 7. After passing the Senate, a bill to require mandatory allocation bogged down in a House committee. As indications of a serious winter fuel shortage mounted and pressure for a mandatory program intensified, the standby plan prepared in June received renewed attention. Faced with plaints from Congress, state governments and independent fuel suppliers, Love again changed course and backed a compulsory allocation system. The plan was announced last week.

Now that the program is finally in effect, additional conservation steps will be necessary. The Administration could, for example, ask Congress to impose a 10% tax on gasoline. That might reduce demand and allow refineries to shift some production from gasoline to heating oil. If the situation becomes dire, the Administration might even have to ration gasoline and diesel fuel at the consumer level. That step would be taken only with great reluctance. Says Love: "If there's any way to avoid end-use rationing, it should be used. Nothing would intrude more into people's lives."

Most important, someone in Washington has to take charge of energy policy and stop the waffling that so long delayed the mandatory allocation program. Last week Love was talking as if he intended to become that man; from now on, he said, "it's my intention that this office will be providing the focus and leadership in energy policy." But the issue is so complex that Love readily concedes that the ultimate big decisions will have to be made by the President himself.

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