No Shortage of Skepticism

The energy shortage is dividing Americans into two camps: those who are behaving as if the crisis is genuine, and those who are not. Last week the shortage touched the lives of additional citizens, but there were many who were still not much affected, and quite a number who continued to suspect that the crisis is overblown or phony.

The first solid evidence appeared last week that the energy shortage --whatever its causes or true dimensions --is hurting the economy. The Federal Reserve Board reported that industrial production fell .5% in December, the sharpest drop in 2 1/2 years. Main causes: a decline in utility output as consumers cut their use of electricity and gas for the first time since World War II, and a slump in the auto industry. In the first ten days of the new year, automobile sales were off 27% from last year. General Motors' deliveries were down a staggering 42%, largely because buyers were spurning big cars; but American Motors, which specializes in smaller autos, had a 33% increase in sales.

The Commerce Department announced that real growth for the economy as a whole slowed to 1.3% in 1973's fourth quarter. It was the smallest rise since late 1970 and a sign that a recession may well begin in the current quarter. William Simon, chief of the Federal Energy Office, said that he expects that the energy crisis could wipe out upwards of 1.8 million jobs. If so, that would add about two percentage points to the present 4.9% unemployment rate.

Many businessmen do not doubt that the energy shortage is real and acute. Officials of Consolidated Edison put the New York City area on a round-the-clock 5% voltage cutback because the company had only a 9 1/2-day stock of fuel left; that supply was dwindling steadily, and late last week FEO officials agreed to help Con Ed increase its reserves to a twelve-day supply. Airlines were also running short of fuel. Figuring that conventional sources of energy will remain scarce and costly, executives of RCA announced in Manhattan a major investment in solar energy. Next year the company will build a $6 million con-ference-and-dining-room addition to its Rockefeller Center skyscraper that will use solar energy for lighting and heating, though engineers at work on the project have not yet decided which solar processes they will employ.

Pump Appointments. Gasoline supplies remained capricious--plentiful in some places, scarce in others. On the 68-mile stretch of highway between Santa Fe and Albuquerque, well-supplied motorists continued to zip along at 70 m.p.h., in violation of the new 55-m.p.h. nationwide speed limit. Elsewhere, station owners, whose gasoline deliveries have been cut, are awash with fuel because customers have so drastically reduced their driving. At Walter Paul's Shell station in McDonough, Ga., just off Interstate 75, sales were running at half last month's rate, even though Paul has two-thirds of last month's supply. "Here I am, not able to sell the stuff," he laments.

On the other hand, long lines were still forming at gas stations in many major cities, prompting some dealers to require their customers to telephone for appointments at the pump. In Oregon, a voluntary gasoline rationing plan began. Motorists with license plates ending in even numbers will buy gasoline on even-numbered dates; those with odd numbers will buy on odd-numbered dates.

President Nixon and Simon both reiterated last week that they hope that gasoline rationing can be avoided, and Simon's deputy, John Sawhill, reaffirmed that the odds for introducing it by summer are fifty-fifty. Just in case, the FEO put out details of what rationing would be like. Every driver over 18 would get an allotment of coupons every three months, probably at a local post office. Drivers in rural -- '-- areas would get 41-49 gal. a | month. Motorists in large cities that have relatively poor public transportation, including Miami, Pittsburgh and Washington, D.C., would receive roughly 90% of the rural allotment. In big cities that have good transit facilities, including New York, Philadelphia and San Francisco, drivers would get 80% of the rural ration.

Show and Tell. To help dispel public doubts about the shortage, oil companies have begun releasing previously secret figures on their inventories of crude oil and refined products. On Saturday, Nixon promised to submit legislation requiring the oil firms to "provide a full accounting" of their inventories, reserves, production and costs. "I will not allow the American people to be victims of a snow job," he said. Exxon became the fifth major firm to make the disclosures. The companies' figures generally show that stocks of crude and most petroleum products are about the same as or slightly higher than a year ago, when the population was lower and there were far fewer cars on the road. Heating-oil inventories are markedly higher; oilmen credit that to the relatively mild winter and voluntary conservation.

Congress is tired of having to rely on the industry for enlightenment. As a result, no fewer than four congressional inquiries are under way into the causes and dimensions of the energy crisis. Hearings are being conducted by Senator William Proxmire's Joint Economic Committee, Senator Henry Jackson's Permanent Subcommittee on Investigations, Senator Frank Church's Multinational Corporations Subcommittee, and Representative John Dingell's Select Committee on Small Business.

There was one set of statistics that oil executives were not at all reluctant to disclose last week. Largely as a result of the Arab oil embargo, imports of crude into the U.S. declined by 10% from the week before, and are now running 22% behind the early autumn. Treasury Secretary George Shultz last week said that Middle East troop disengagement (see THE WORLD) would lead to a relaxation of that embargo; but he did not predict when. Saudi officials have declared that they would keep it clamped on until the Israelis agreed to a complete pullback behind 1967 borders. Simon expects that if there is a political solution to the embargo, "there will be compelling reasons to roll the price [of oil] back." Yet even a quick restoration of the Arab oil flow would not ease tight supplies in the U.S. immediately, and prices would remain well above preboycott levels. For some time, the nation will probably remain split into two equally hopeful and equally helpless factions, the believers and the doubters. And as every American has come to know, a house divided against itself will be a little colder this year.

This file is automatically generated by a robot program, so viewer discretion is required.