Western oil precautions

Press, Volume CXIII, Issue 33360, 19 October 1973, Page 11

Western oil precautions

(N.Z.P.A.-Reuter—Copyright) WASHINGTON, October 18. Senator Henry Jackson (Democrat, Washington), Chairman of the Senate Interior Committee, has announced that he will introduce immediately emergency petrol rationing and conservation legislation to counter any reduction in Arab oil supplies. His programme of combined rationing procedures and expanded domestic production, he said, would save about 3.3 million barrels a day — more than compensation for the estimated 1.2 million barrels imported daily from Arab nations. The programme includes a mandatory reduction of motor car speed limits to 50 miles an hour or less; increased subsidies to improve public transport; encouragement of motor car pools; and a scheme for regular engine tuning. His legislation would require oil or gas-burning

power plants to convert to coal if possible, and a reduction in the number of airline flights. It would allow temporary relaxation of air pollution standards, and permit lorries to change routes or increase loads to preserve fuel. It would call for the naval petroleum reserves in California — an estimated 1.1 million barrels, to be used. ‘Healthy effect’ At a news conference held to coincide with the meeting of Arab oil-producing nations in Kuwait, Senator Jackson said: “Americans, our European allies, and Arabs should know that the United States can effectively deal with this challenge ... Oil is a two-edged weapon, because the Arabs depend on the United States for a number of things — grain, for one thing — though I am not advocating retaliation.” Senator Jackson said that he believed his programme to make America independent of Arab oil supplies would have “the healthy effect of bringing the Middle East war to a speedy end.” West European Governments, ration cards at the ready, say they have enough oil to run their homes and factories for up to six months in case of an embargo.

“Even with a total embargo . . . our requirements for oil products are secured for a period of six months,” said the West German Eco-

nomics Minister (Mr Hans Friederichs). High reserves Oil sources say that this optimism is partly a deliberate attempt to cool consumer panic, and partly an accurate assessment of a situation that combines high reserves with plans for mild rationing in case of shortages. Most Governments say that they have ration cards ready — many of them printed during the 1967 war and never used. The most common plan calls for gradual decreases in petrol for pleasure driving and home heating oil. East European nations, which get most of their oil from the Soviet Union, seem unconcerned. So does Spain, which supports the Arab cause and which has just re-

ceived a gift of 35,000 tons of crude from Iraq in gratitude for her building seven new tankers for the Iraqis. The E.E.C. says its Executive Comission will discuss the oil situation during its weekly meeting today, but no announcement is expected. Oil Ministers from the nine Common Market nations will meet next month to make another attempt to work out a European oil policy, including possible crisis co-opera-tion with the United States. Into line In London, the main oil companies are themselves having difficulty in estimating the financial implications of the unilateral price increases decided in Kuwait. Oil company sources say that the effect of the new demands will apparently be to bring roughly into line the amount received by the country for the oil its markets itself and the amount received for the oil it sells to the oil companies. Thus the royalties and taxes paid by the companies would be roughly equivalent to the new market price of 8U53.65 per barrel announced by the Gulf States.