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The Real Energy "Crisis": Oil Profits Speed Up as Traffic Slows Down & Cruisin' Crisis

The Real Energy "Crisis": Oil Profits Speed Up as Traffic Slows Down & Cruisin' Crisis image
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The Real Energy “Crisis”:
Oil Profits Speed Up as Traffic Slows Down

The gangs out for a quick profit in the 1800s were bound to try ambushing a stagecoach carrying gold and silver from the mines of the West. As time went on and the automobile developed, the mobs discovered big monev in the theft of armored cars.

And with the 1970’s a new breed of highway robbery has developed along with the energy crisis. Last month in Brooklyn, a Texaco tanker truck with 5,000 gallons of gasoline was successfully hijacked. The empty and deserted truck was later recovered by police.

The traditions of highway robbery are being helped along in another way by the energy crisis. Following in the footsteps of that infamous American robber baron, John D. Rockerfeller himself, the oil industry is rapidly increasing in power and profits, entirely at the expense of the American public.


The oil companies, with record profits for 1972, are likely to show even higher profits for 1973 once the figures are all in. Gasoline jumped 7-8 cents at the beginning of the month. William E. Simon, head of the Federal Energy Office, expects prices to be up a total of 1 1 cents by March. He believes that higher prices will discourage some drivers from buying gas.

The energy crisis is being used by the companies to increase profits, by charging higher prices as consumer demand increases wliile supplies of oil producís decrease. The price increases are being hardest feit by people with low to moderate incomes, approximately 70% of the U.S. population. While wages are frozen at a maximum 5.5 per cent increase per year, prices for oil products, such as gasoline and home heating oil, may rise as much as 50 per cent (along with the prices of everything else; inflation rates are 14 percent). For many of these people, driving a car is already becoming a luxury they can not afford. But the oil lobbies against mass transportaron have been highly successful, making the private auto 5n absolute necessity.

While Simon claims that federal energy policies are being formulated to preserve jobs (although it may seem a bit inconvenient for everyone), many people are already out of work. More than 86,000 in the auto industries and 1 1 ,000 in the airlines are expected to be laid off. Economie effects are expected to worsen as the”shortage”grows more severe in late February.

Although a bill is pending in Congress to heavily tax windfall profits resulting from the energy crisis, it will most likely be defeated by oil executives who all but control most committees dealing with energy, and strong lobbies by the industry. Even if passed, such methods do not touch on the real problem, in which íi few people liave to- tal comrol over the energy market for the entireWuntry. At present, the only statistics available on supplies of oü come from the industry itself, and it is clearly to their ad vantage to keep America in the dark about oil reserves.


But increased profits are not the only gain the oil industry is making during this energy crisis. A huge bureaucracy is being created at all levels of government to look into energy supplies and developments, and at every level, oil executives are being placed into positions of importance in determining the future of energy management. Despite the industries failure to provide for America’s current needs and a lack of preparation for an oil shortage predicted for the 70’s as much as 20 years ago, these same people are being put in control of America’s future.

The collusion between the industry and the Nixon administration becomes very clear in the light of currently proposed energy strategies. Long sought after corporate goals -- the trans-Alaskan pipeline, lax regulation of surface mining, off-shore drilling, oil shale development, relaxation of air quality standards, stepped up licensing of nuclear fission plants -- are being transformed into realities under the guise of an energy crisis.

The benefactor of each of these proposals is the oil industry. Twenty oil companies (eight major and twelve smaller) presently control most of the countries energy resources. According to a House Subcommittee on Specia Small Business Problems: “The. major oil companies account for approximately 84 per cent o f the U.S. refining capacity; about 72 per cent ofthe natural gas production and reserve ownership; 30 per cent ofdomestic coal reserves and over 20 per cent of domestic coal production capacity; over 50 per cent of uranium reserves and 25 per cent of the uranium milling capacities. Further, the major oil companies are acquiring oil shale and tar sands as wellas water rights in many áreas ofthe country.”

Testifying before the Senate Antitrust and Monopoly Subcommittee, former FPC economist Dr. John Wilson stated:

“...the top 14 natural gas producers in 1970 were also among the top 15 oil and íiquids producers and among the top 1 7’petroleumrefiners. These leading gas produ cers were also amone the lareest sellers ofgasoline and her refined petroleum producís and among the largest sellen of natural gas to interstate pipelines.”

The Nixon Proposals

With the people who control all of these - resources also in prominent decisión maI king posts in the government, energy poI licies and control wil! be firmly estab- I lished to benefit the oil industry rather I than the American public. A closer look I at some of Nixon’ s proposals shows how the oil industry can proiit. in [Nixon s rsovemoer j, speecn, he called for legislation to:

-authorize construction of the Alaskan pipeline. This has since been passed by Congress, assuring the oil industry control over the resources, and the cheapest possible way to exploit the oil fields, at the greatest ecological cost; Industry’s costs are lowered, while prices continue to soar. The pipeline will bring more oil to sell at higher prices.

-relax environmental standards to permit use of higher sulfur content fuels. This will help the oil industry sell more coal, while further polluting the environment.

-encourage production of natural gas. Also controlled by the oil industry, this will allow more tax breaks and depletion allowances, and higher costs will ensure for the consumer.

-speed up the licensing of nuclear fission plants. With a high percentage of uranium supplies controlled by the oil industry, this is once again to their advantage. While nuclear energy in this form is highly dangerous and unreliable, $563 million was spent in research on nuclear fission research, as compared to $15 million for solar research (the oil companies don’t control the sun.)

Many of Nixon’s other proposals are primarily aimed at the individual consumer. While such proposals as a lowering of thermostats, reduction of auto speeds and reduction of unnecessary lighting and other superfluous uses of’ energy are sound environmental programs, the major responsibility needs to be shifted to the corporate sector of the economy, responsible for this mess in the first place For example, at present large consumers are favored by utility rates; large users pay 13 to 12 less than the small residential or commercial users. This encourages waste by large industries.

The Nixon administration, heavily influenced by the large corporations, is passing the energy problems on to ‘ the consumer, rather than making hard (and politically dangerous) decisions regarding corporate practices and structures.


But the major question which must inevitably arise is whether there is an energy crisis at all? With all figures and facts on the shortage coming directly from oU industry, and all the evidence showing the gains made by that same industry through the energy hysteria, could the industry have lied?

According to a report by the Bureau of Mines and the American Petroleum Institute, there is enough oil in U.S. reserves to meet all current needs without any reductions Ánd despite Arab boycotts, oü imports of both crude oil and refined products are running ahead of the same period in 1972. Available data indicates that suppliesfor 1973 will; have exceeded demand, although final figures are not yet available. In addition, a continuing study by the Philadelphia Inquirer shows the government has consistently quoted low figures in reporting on the severity of the shortage.

There is further evidence that the oil industry has deluded the American people on the oil problem. Some oil fields in the U.S. have been operating at 40 per cent capacity. The five major firms have doubled their oil sales to Europe and Asia in 1973 (over 1972) and forecasts are for larger increases in 1974. A Cost of Living Council study indicated that export sales of oil have jumped 284 per cent over last year.

The lure of big profits is persuading major oil companies to export desperately Ineeded fuel oil. One figure showed that shipments to Europe had a price increase of 145 per cent, something quite above the 5.5 per cent guidelines on our wage increases. Despite propaganda campaigns like Exxon’s, their primary concern is not the national interest. Oil will be sold where profits are highest.

The energy crisis is being used to drive smaller independents out of business. This boosts oil profits for the big companies by lowering the competition and I ing the monopolies over energy production.

In the last 20 years, oil companies have cut f back not only ón national production, but also exploration for new oil sources, plus lobbied against the development of new energy torms. In short, they have utihzed economie and political ƒ power to créate , a crisis. The IT.S’. oil companies 4 have not only used the Mid-East war to further their ends 1 but were active supporters of the government’s military adventures in Vietnam. The whole S.E. Asian oceanarea has been divided up by the big oil companies for drilling and exploration rights and the companies need the i ranees of the corrupt regimes to guarantee their { tion of the resources.

And it now appears that a gasoline rationing system will be imposed upon individual drivers. This information was leaked recently in the form of a government announcement that rationing was being “considered”, but implementation of the plan is likely by this spring. A three month supply of ration coupons is already in print.

The system is a further example of how individual and innocent people must bear the blame for the subterfuge and schemes of the big oil corporations. Every licensed driver over 18 will be limited to government coupons good for 32 gallons per month. Purchase of gas can only be made with one coupon per gallon. Drivers who need more than 32 gallons have only one means of securing more gasoline: to buy from drivers who don’t need all of theirs. This is called a “white market” in that government and not the Mafia is behind the rip-off. Coupons will be available for purchase from individuals at the “going rate”, which will probably start off at about 30 cents a gallon and rise continually from there. So in addition to paying outrageous gasoline prices there will now be skyrocketing ration ticket costs.

Rationing is upon us, but it’s the oil companies who decide how much there is of any fuel. In the refining process, “iso-cracking,’ the oil molecules are broken inte components which are then withdrawn according to management decisionsas to marketability. Decisions can easily be made in terms of profit, rather than need.


While the energy crisis may be the result of a massive oil industry hoax to boost profits and control over energy sources, the U.S. is facing a real crisis. The American public , which constitutes only 6 per cent of the world’s population, is using up 30 per cent of the world’s resources . The energy crisis lias served to focus attention on the fact that the world’s resources are finite. With rational use and a strong national energy program, energy resources could last for many hundreds of years.

But profits and conservation do not mix. While Americans have finally been forced to look at the waste of resources which occurs daily in this country, it is also being faced with the truth; that the corporate ruling class has little interest in the needs of the individual. By allowing the oil industry the power to control energy resources, America will eventually be faced with a real crisis. Eventually the oil will have actually been used up, and the oil companies, in their search for the big money, will have prevented a number of less “profitable” alternative programs from ever being developed.

As long as America’s energy policies are determined by and for a ruling class, wewillfind ourselves continually faced with shortages and crises. A socialistic political and economie system, where the planet’s resources are utilized for the benefit of all those who walk upon it, is the only solution.

(What are the alternatives available to end all energy crises? What kinds of policies must we develop to use energy resources more rationally? Watcha forthcoming issue for alternative stratesies to tne Nixon Doomsdav plan.)

Ellen Hoffman

‘The rationing system is a further example of how individual and innocent people must bear the burden for the schemes of the big oil corporations.”

Pete’s Arco Station on Huron St. was forced to close recently, one of many independent dealers being squeezed out of business by the major oil corporations.


In this exclusive cross-country “Petrol Probe” your SUN reporter began to realize the vast effect the fuel crisis, or rather “gas fiasco”, is having on people across the country. From Mass. To Me, Pittsburg to Philadelphia and Montague to Deerfield, simple folk, just like you and me are paying for the crimes of a few “big” guys.

Cross country driving has become a rather exciting sport of late. Cruising from state to state requires a daring and spirit in the style of, oh say, Amelia Erhart or Charlie Lindburg. Driving at all nowadays is definitely not a sport for the weak willed as it involves the risk of running out of gas and being left stranded.

Thanks to common sense and good planning my co-pilot and I didn’t run out of gas once, even though we went so far as to venture driving on Christmas Day and thrice on Sunday! A few tips for a successful long distance jaunt (if you have the guts) follows this probe.

The drive from Ann Arbor to Niagara Falls, Ont. was moderately uneventful, as most of it was through Canada and the gasoline there is bountiful.

Because of reports of no Sunday gas we filled our tanks and the spare gas cans we brought with us at Niagara Falls on Saturday night. As it turns out it was an unnecessary precaution, many stations between Niagara Falls and Montague, Mass. being open on Sunday.

Just outside of Montague, a piece from the infamous “Total Loss Farm”, is a simple country store / gas station where as many as 23 cars have lined up to put the $2.00 limit in their tanks at this seemingly out of the way station. Montague to Boston presented no real problem, being only a two-hour drive.

Fuel seems to be plentiful in Boston, if you can find a station. Driving in Boston is a sure fire way to lose your mind.

New York City is another story. A strange land where cigarettes cost as much as 75 cents a pack and people are forced by law to carry a chip on their shoulders. It was here that we first began to wonder if it was all worth it.

While in New York City we waited in a line of 30 – plus cars to get gas, after which the manager laughingly said, “Hell, I ain’t making any money here.” While waiting in line for gas as few cars tried to cut in front of the line. Immediately people began shouting and getting out of their cars to protest. A Police car made the scene and the offender split, squelching a near riot.

Talking to people in the line I found out that the situation in the big apple is getting even worse. Many people in NYC believe the mafia controlled gas distributors are holding on to vast quantities of gas in order to push the price up even more. It is not uncommon to pay 60 cents a gallon and more there. Traveling to New Jersey to avoid two and three hour waits for fuel has become common practice.

Steve Diamond told me a rather horrifying story about some people who got gas fever. An ambulance in Massachusetts was enroute to a hospital with a sick passenger. Knowing that they couldn’t make it to the hospital with the gas they had, they pulled into a station to get fuel. As usual there was a line to get in the station and when the ambulance cut in the front of the line the drivers were beaten up by enraged citizens; the patient died.

From New York City we retraced our steps and in order for this article to make the deadline, I’ll just say Hasty Lombago!


If you are planning a long voyage by auto, here are a few tips from a seasoned veteran.

Unless absolutely necessary avoid driving on Sunday. If you must drive on Sunday, take major thoroughfares, as the likelihood of there being gas there is greater than on less traveled country roads.

If gas seems to be getting scarce in any given territory, fill up the spare gas cans you brought with you.

Always keep the gas cans in the trunk of your car, and avoid smoking.

Drive 50 miles an hour, it can really increase gas mileage. Stop as seldom as possible. If you have a standard transmission you are already getting better gas mileage than automatics are; keep your revs down.

If you want to take a trip, don’t let the stories of no gas scare you. If the chomps upstairs have their way we’ll all spend the rest of our lives watching television. Get out and see the world, just do it slower. Stay loose.

Carson X. Napier.