CONGRESSIONAL RESEARCH 8 S E RV I C E A A ~ ' V _ Universl » of Misuri - Columbi |||l|l|I|l||tTF.|t||||ll||||||||||||||||||||||||||||\|| CONGRESS ‘ S V . 439 010-1 013861 ENERGY: OIL IHPORTS ISSUE BREE? HUHBBB IB79066 AUTHOR: Kumins, Lawrence Environment and Natural Resources Policy Division Davis, David Howard Environment and Natural Resources Policy Division THE LIBRARY OF CONGRESS CONGRESSIONAL RESEARCH SERVICE HAJOR ISSUES SYSTEfl DATE ORIGINATED g_4ggg7 DATE UPDATED Q a FOR ADDITIORAL INFORHATION CALL 287-5700' 0305 CRS- 1 IB79066 UPDATE-03/04/80 l§§§§-2§§lE£E;.!. The United States presently imports over fi0% of its petroleum. It does so because, in current circumstances, importing is the most economical way to bridge the gap between domestic production and domestic demand. Imported oil presents dual problems of insecure sources and high prices.i Current American vulnerability stems chiefly from dependence on the OPEC cartel. Proposed remedies fall into two broad categories: (1) self-sufficiency, through (a) reduced domestic use of petroleum products, and (b) increased domestic production of oil, gas, or suitable substitutes. (2) Enhanced security of foreign supply at stable, affordable prices through (a) neutralization of OPEC, and (b) bilateral treaty arrangements and/or (c) various economic countermeasures to OPEC pricing. In his 1980 State of the Union speech, President Carter announced a quota of 8.2 MHB/D to be implemented by using a fee. The policy options reviewed here focus on the oil imports themselves, and may not be all the possible options. Nor are the possible combinations of these policies and their possible interactions with other domestic energy and economic problems fully explored here due to limitation on length. EACKGROQND A29 PQLlQX-AEALX§l§ The United States presently’ imports over uo% of its petroleum. The proportion climbed as high as 48% in 1977. Since then Alaskan oil, high prices, conservation, and foreign revolutions have reduced the proportion to n3%. ‘ 29:2; lmeerte 222929: 1973 17.3 mus/n 6.fl nun/n 35% 1974 16.7 6.1 37 1975 16.3 5.0 37 1976 17.5 , 7.3% a2 1977 13.4 3.3 as 1973 13.3 3.1 A3 1979 i13.u 3.1 44 Source: Monthly Ene;gy_§ggi§g. of total petroleum imports, now running over 8 million barrels per day, three-quarters enter in the form of crude oil and one quarter enters already refined. Of the latter, virtually all is refined in the Carribean or Canada. Imported oil presents two problems -- insecure supply and high prices. CRS- 2 ' I IB79066 UPDATE‘03/OH/80 The 1973-74 Arab embargo and the 1979 Iranian revolution are egamples of the former. The OPEC price is an example of the latter. while the two problems often occur together, they call for distinct solutions. The reasons for supply insecurity are usually political. In 1973, Arab nations wanted to punish the United States and the Netherlands for supporting Israel in the October War. In the mid—1970s, Canada reduced oil exports in order to become more self-sufficient. In December 1978, the Iranian oil workers‘ strike was an important part of the revolution that deposed the Shah. C _ The reasons for high prices are usually economic. Expectably, sellers want to earn as much as possible. Prior to October 1973, seller competition kept the price low. Since then, the OPEC cartel has exercized monopoly pricing power. OPEC's cohesiveness surprised observers who had expected the 13 members would soon fall to quarelling and cheating. Reasons for its success include a considerable unity of its Arab core and OPEC's Saudi pivot. Saudi Arabia has reserves of 160 billion barrels, low production costs and a small population. Hence it can reduce production without painful sacrifice. The Saudis, within broad limits, can balance increased production by poorer OPEC members who need more revenue. some observers maintain that the structure of the international oil industry and government regulation exacerbate OPEC power. They charge Ithat the major international oil companies have no incentive to bargain for low prices, that the American entitlement program favors imported oil, and that Department of Energy (DOE) policy is clumsy and coincides with oil industrv desire for high prices, though for different reasons. One approach to the risks and costs of import dependence is to pursue enhanced self sufficiency. In general; options in this category feature (a) reduced domestic use of gas and petroleum products and (b) increased U.S. production of affordable gas, oil, or suitable substitutes. The critical test for these options is their impact on the U.S. economy. The 1973‘Project Independence sought energy autarky. The United States iwould be self sufficient by 1980, then move on to become a net exporter once again. Nearly as soon as President Nixon proclaimed Project Independence, its impracticability was apparent. The cost of autarky was far (higher than the cost of OPEC oil. Although energy autarky may be too extreme a short-term goal, a number of techniques can reduce dependence on imports. The United States can reduce consumption. The mechanisms proposed include use of price, (including taxation), ’to modify) demand; .government regulation (energy efficiency standards, auto speed limits, rationing, fuel conversion requirements); import quotas; government subsidies, and technological development targetted on reduced use of gas and petroleum products. The difficulties of reducing consumption are well known. Individual consumers are willing to wait in line for hours to buy gasoline for $1 a gallon. ylndustrial and commercial consumers are much more sensitive to price and have already becomes more energy efficient. In all groups, ‘greater energy efficiency awaits treplacement of automobiles, housing and capital equipment since forlthe mt »part, the cost of retrofitting exceeds the savings. And, of coursegi energy muse and price are interwoven with the nation's economic fabric. (‘A I On June 1, 1979, President Carter began phased decontrol of domestic crude (oil in order to dampen demand and spur production, conversion to other fuels, CBS‘ 3 IB79066 UPDATE—03/UH/80 and conservatidfifl “If one accepts President Carter's estimate, his decontrol C“ crude oil prices will reduce imports by one million barrels a day in 1985. 1- that reduction were available today it would amount to 12% of imports. By 1985, the proportion will be less. Other estimates are far more pessimistic. Developing domestic fuels has proved more difficult than expected. ‘American reserves of coal are abundant but production has leveled off in the past three years. Nuclear power is at a standstill. Alternatives such as oil shale, tar sands, synfuels, ethanol, and methanol have some promise, but they now cost more than imported oil. If they could be produced at less than the OPEC price, OPEC might simply drop its price or reduce its output to balance the new production, keeping market prices the same. Since oil costs as little as 20 cents a barrel to lift and load into tankers in the Persian Gulf, OPEC's room for maneuver is wide. On the other hand, successful development of an alternative fuel could set a ceiling on the world price. For instance, if an alternative fuel could be produced in quantity at $10 a barrel, oil would sell for $9.. No alternative fuel would be produced since oil would still be cheaper. Inasmuch as alternative fuels would not be profitable, they would require a subsidy. Although OPEC has claimed "to encourage industrialized countries to develop alternatives, and might not initially undercut them, if production of alternatives began to threaten its revenues, OPEC would be likely to act. A limited but useful remedy for supply vulnerability is the Strategic Petroleum Reserve authorized in 1975. Stocks are now 83 million barrels. So as not to exacerbate the shortage caused by shutdown of the Iranian oil f'elds, DOE suspended buying crude oil during the spring of 1979. See IB 3,021 -- Energy: The Strategic Petroleum Reserve. . T The conceptual alternative to substantial self-sufficiency is enhanced security of foreign supply at reasonable prices. Several approaches have been discussed. OPEC's monopoly is the cause of the current high price; therefore neutralizing the cartel would reduce the price. How can this be done? military intervention in the Persian Gulf would give access to huge reserves.i It might also start world War III in a worst case scenario. Certainly, it would risk damage to the producing fields and facilities at stake, lead to broad condemnation of the invaders, and perhaps prompt parallel actions by other countries anxious ito protect their sources. Those countries not seizing resources would find themselves dependent on new suppliers seeking to supply their own needs more completely, perhaps leaving less for other former customers. Thus, military seizure is risky and likely to occur only in extreme circumstances. . A consumer nation consortium might form a monopsony to confront the OPEC monopoly. . The International Energy Agency (IEA) of 20 industrialized countries has considered unified bargaining, but so far agreement is lacking. The IEA lacks OPEC's cohesion. as. 1399 asks the President to negotiated with other oil importing nations to establish a Council of Oil Importing Nations (COIN) to bargain with OPEC. O DeveE6p£ng oil production in countries not in OPEC would weaken the cartel in two ways. First, total supply would be larger,"‘thusC moderating price. Second, new producing countries might either not join OPEC or if they joined, tend to destabilize the cartel since at larger group would be harder to discipline. In any event, greater world supply would put downward pressure on prices.i If the United States were to foster oil exploration with foreign CRS- n IB79066 UPDATE-O3/O4/8.0 aid, it would probably avoid grants to Arab ,countries and $to “politically unfriendly countries, and might seek a promise not té$V§5ih ‘OPEC as pa condition of the aid. (See H.R. 1965.)» Bilateral agreements are a beguiling approach to import problems. The" United States is negotiating on government to government level with Mexico. The United States has signed a treaty with Canada regarding pipelines. In 1973 several industrial countries dealt directly with the cartel members. Japan officially declared itself a friend of the Arabs; France claimed an historic relation with the Arabs. In recent years, the United States has had special relations with Saudi Arabia and Iran based partly on the sale wof military equipment. None of these arrangements, however, has lowered OPEC prices significantly. The question in such agreements, is always what to exchange for oil. ‘ ‘ ' whether oil exporters will honor bilateral agreements is "never certain. There are numerous examples of producing countries supplying less than agreed upon or raising the price. - i In 1976 Professor Morris“ Adelman of the nassachusetts Institute of Technology proposed a secret double auction, using only the power of the American market. Importers would buy tickets from a central U.S. supply agency entitling them to import x barrels of oil. Then oil exporters could bid secretly with the central agency to supply any or all of the total amount required. Since the auction would be secret, exporting countries desiring a larger market share could, according to Adelman, pviolate OPEC price and production levels without being caught by other OPEC mmembers. iThe OPEC members would soon be competing against each other, thereby mlowering t'\ price to a level reflecting their production costs. The Emergency iPetroleum Allocation Act, Section 13, gives authority to establish this plan. To begin it in the current tight market would be difficult. Virtually every other industrial nation, and many underdeveloped nations as well, have government corporations or other direct activities for petroleum. The United States has eschewed such proposals as "incompatible with private enterprise as well as being inefficient. If a [government corporation were created, it could perform such functions as purchasing oil for the Strategic Petroleum Reserve, dealing with the government companies of exporting nations, connecting energy supply to foreign aid and to commodities such as wheat, and serving as a yardstick for the performance of private oil companies. (See S. 113A and S. 1205.) ""“ " If OPEC must be lived with, then perhaps a counter-cartel would 3even the terms of trade. Various proposals have been made on the general theme of a food grains supply and price controlling organization centered on ~the 0.5., Canada, Argentina, and Australia. These nations, which share many interests, control about 80%v of the 'world's exportable surplus of -grains. This wmechanism would not necessarily reduce oil prices to the consumer but would, initially at least, promise relief for the balance of trade deficits‘ of the United States. Critics warn that the proposed cartel mwould pmonopolize the U.S. internal grain market, probably raise domestic grain and food%prices and that, in the longer term, it would result in loss of kexportmvmarkets as ~ importers expand their own production. It is argued that most export, gra is not imported by OPEC nations and that friends and allies woulgfflfgfinjured and alienated by such a cartel. A. number of wproposalsy.to solve vimport problems prescribed price manipulation. In the Spring of 1979, DOE informally discouraged“ American cns- 5 IB79066 UPDA'i’E"03/01$/80 companies from}buying on the spot market in Rotterdam in order to restrain fte price. While DOE may have achieved that goal, the result was a lower t an optimum crude purchases. Europeans got the oil because they were willing to pay the price. How American companies are buying in the spot market at prices undreamed of when the restraints were suggested. The DOE program of crude» oil entitlements for refineries encourages imports. Entitlement payments go up as the quantity of imported oil goes up. In may 1979, DOE expanded the entitlement programs to include home heating oil. On an emergency basis, the Department adopted a rule to provide entitlements benefits for imports of middle distillates. The rule established an entitlement between may 1 and August 31, 1979. The temporary extension of entitlement benefits to middle distillate imports was done to provide the economic incentive necessary to increase their importation from western hemisphere refineries during the period in which they were in short supply. This subsidy outraged Europeans who accused the United States of cutting into their historic share. The Administration was concerned that flew England have enough heating oil during the 1979-1980 winter. Some, concerned with supply dependability, propose a tariff on oil imported from insecure sources. For example, Libya has been "fickle" - leading price increases, embargoing shipments land nationalizing oil companies., Its government might be overthrown at any time. Therefore the United States might add an import fee of $3 a barrel. In contrast, Canada is a stable neighbor whose prosperity depends on the American economy. Therefore, its import fee should be zero. Venezuela, Nigeria, Saudi Arabia, Iran and other sources would be graded in between. This solution would not 1 luce import dependence, however, and would increase prices. I On July 15, President Carter announced a quota, set at 8.2 MMB/D for 1979. This level was slightly less than the demand projected for the remainder of the year.p In the 1980 State of the Union address to Congress, President Carter announced the same 8.2 HUB/D quota for 1980 and said it would be implemented by a fee system. An import quota would reduce ithe problem of insecure sources by reducing dependence on imports. The handatory Oil Import Program (M013) in effect from 1959 to 1973 limited imports to 12% of the market. The MOIP's purpose was not to assure supply but to protect domestic producers? price.m During the 1950's and 1960's foreign oil« (including transportation charges) was far cheaper. Today the purpose of an import quota is to reduce American vulnerability to an embargo or other interruption of supply The argument against it is twofold: (1) American dependence is so high at present (04%) that even with a quota, the United States ‘would still. be vulnerable; (2) a quota would'deprivep the United States of oil that, although ghigh priced compared to past years, is cheaper than the alternatives. Europe and Japan would buy the oil the United States kepti out for a relative gain in economic efficiency.w The United States hast tried to gain the cooperation of other Western industrial countries. In June 1979 at the Tokyo summit meeting several countries declared import goals. The United States hopes to negotiate lower and more binding limits at the Venice summit scheduled in June. The vehicle for planningl is the International iEnergy Agency. 1 As of agtiy 1980 the perception was that demand was somewhat more dampened than it had been in 1979. Net domestic demand was forecast at between 19.1 and 20.0 BBB/D during 1985, domestic supply at between 10.1 and 10.8 HUB/D and 1985 shortfalls under an 8.5 HHB/D quota of between 500,000 and 800,000 B/D. These ghértfalls were scaled down front those forecast earlier as a result of the effect of higher prices on demand as well as domestic supply. cns- 5 y IB79066 upnun-03/on/so Even so, such shortfalls - although they may beiquite "snail ~49’ result in U.S. oil consumers prices in 1985 which will be (under the most likely cas \ over $10 per barrel above world market prices at an additional cost totalli_g $72.5 billion. (This $72.5 billion 1985 figure will result in” $32.0 billion in Treasury revenues and $uo.5 billion in industry revenues. The shortfalls will begin in 1982 at relativelyn low levels: and build quickly in 1983. By 1985, negative macro-economic” effects stemming from higher oil prices being paid under the quota will havetbegun to be felt. GNP will be nearly 2% lower than it would have been, employment 500,000 jobs fewer, and the consumer price index 2% higher. Apart from the macro-economic consequences of this hiqh’Pkiced conservation tool, this projection implies that each of the 700,000 B/D saved will have cost the economy $280 apiece. while this scenario appeared most likely as of early 1980, many things could affect these figures. Among the imponderables are the gfiowth in demand and domestic supply and the amount of conservation‘which will;be elicited by higher prices under a quota. Consumers could,n for exampleiiconserve more than the base case anticipated in response to price increases and this would ameliorate the impacts described here. Producers could produce; more, or less, with major effect on the estimated shortfall, and its economic consequences. Another imponderable was the future course of OPEC:pricing and supply policy which could render an 8.5 EBB/D quota moot. where then, in the range of probability, does this forecast base case stand? While it certainly appears to be the most likely alternative when viewed from today's perspective, the next most likely scenario sis “that t‘: quota imposed shortfall would be twice as large (with double t-3 consequences). If this were to occur, it would likely be the “result of domestic supply turning out to be lower than the base case envisions. Since the base case contains the most optimistic supply estimates, thissisientirely possible. The third most likely scenario is that, through a Vcombifiation of high conservation and OPEC policy of either very high vprfcesF~or supply restrictions (inasmuch as the last two items are separable),"demandwwould be, dampened to the point where the quota would have insignificant effect. L§§l§LA2lQfl 3.12. 1965 (Hyde) Directs the Exportvlmport Bank to establish the Energy ~Development Facility, which is to: (1) increase world energy supplies; (2) promote U.S. economic security; (3) improve U.S. balance of payments; and (flyfifoffer the, (opportunity to diversify sources of foreign energy. Authorizesf*the Bank, (through the facility, to participate »with the World Bank inf tenergy exploration and development projects. Authorizes the President to 3negotiate agreements for the purchase of newly available energy resources in exchange for Bank letters of credit issued to the foreign energy supplier. iéfiequires such energy resources to be auctioned to U.S. bidders. Intro&uced*fFeb. 8, 1979; referred to Committees on Banking and on Foreign Affairs.4 H.R. 2156 (Bingham et al.) Provides that all petroleum imported into the United.States3aftér?Gct. (1, 1979, shall not be available for purchase other than by the Government of the United States. Directs the Secretary of Energy to promulgate regulations for‘ lhthe fair and equitable allocation by sale of all petroleum so imported. CBS— 7 1379055 UPDATE-03/om/so Introduced Feb. I§fifi197g& referred to Committees on Commerce and on Ways and r~ans. I H.B. 36Q4Z{Conyers et al.)9 Establishes the American Oil Import Corporation to act as the importing agent for crude oil and petroleum products imported into the United States. Establishesn a Public Energy Fund to finance the activities of such corporation., Amends the Emergency Petroleum Allocation Act of 1973 to repeal the standby purchase authority of the President to import and purchase crude oil and petroleum products. Introduced Apr. 10, 1979; referred to Committees on Commercegand on Ways and Heans. H.R. 5938 (Shannon) Amends the Trade Expansion Act of 1962 with respect to the powers of the President to adjust imports of petroleum and petroleum products. Introduced Nov. 16, 1979; referred to Committee on Ways and deans. S. #62 (fieicker et al.) Exemptsqthe price of natural gas imported from Eexico from regulation. under the Natural Gas Policy Act, the Natural Gas Act, or any other provision of federal or state law. Introduced Feb. 22, 1979; referred to Committee on Energy and Natural Resources. * s. 1067 (Bentsen et al.) Amends the Trade Act of 197$ in order to authorize the President to designate any country which is a member of the Organization of Petroleum Exportingpcountries as eligible for the tariff preferences- extended to developinggcguntries under Title V of such Act if the President determines that such designation is in the national economic interest and the Congress does not dhsapprove the designation. Introduced May 3, 1979; referred to Committee eniFinance. A 5. 113a (Eagleton) Establishes the_American Oil Import Corporation to act ash the importing agent for crude oil and petroleum products imported into the United States. Establishes a Public Energy Fund to finance the activities of such corporation. .Amends the Emergency Petroleum Allocation Act of 1973 to repeal the standbycpurchase authority of the President to import and purchase crude oil and petroleum products. Introduced may 15, 1979; referred to Committee on Energymandeuatural‘Resources. s. 1205 gnfirkin) Establishes the American Oil Import Corporation to act as the vimporting agent for grudegeil and petroleum products imported into the United States. Establishes awgPublic AEnergy ‘Fund to finance the activities of such v*rporation.y Amends the Emergency Petroleum Allocation Act of 1973 to repeal k a standby purchase authority of the President to import and purchase crude oil and petroleum products. Introduced May 20, 1979; referred to Committee on Enerqy:@ndmNatural Resources. Energy and Natural Resources. U.S. ,7 Print. 0ff-, cns-he IB79066 ‘UPDATE-O3/O4/80 Congress. House.’ Committee on Interstate and Foreign “pp Commerce."Subcommittee on Energy and Power2~ Home hei€ingFoil prices and supplies. Hearing, 95th Congress,§2d session. i" Dec. 20, 1979. Washington, U.S. Govt. Print.“0ff., 1979.p‘358 p. "Serial no. 95-192" ” ‘ “ Congress. House. Committee on Ways and fleans. §ubcqmmittee on Trade. gcauses and consequences of the U.S. trade defiicit and developing problems in 0:5. exports.” Hearings, 95th Congress, 1st session. Nov. 3-4, 1977.‘ Hashingtfin, U.S. Govt;xPrint:’7 Off., 1927. 563 p. ‘ " ‘ ““ ' " i”'”“ "Serial 95-Q4“ Congress. Joint Economic Committee.* Subcommittee onVfnergy. Energy in the eighties: can we avoid scarcity and inglation? Hearingsxbefore the Subcommittee on energy of the Joint§Economic Committee, Congress of the United States, 95Eh”Congre$s,ff?f 2d session, Mar. 8, 9, and 21, 1978. Washington, U.S.fiGov§.’ 1973. ‘iv, 165 p.; graphs:’2fl.cm.‘i ‘*"” gCongress¢ Senate; Committee on Commerce, Science, and“" ‘W Transportation.~ Energy Transportation Security Act of 1977.’ Hearings, 95th Congress, 1st session, on S. 61. 'Washing%bn,.9 0.5. Govt. Print. Off., 1977. 197 p. v “Serial no. 95-43" ~ ~ 1 Hearings held July 28, Oct. 5, and 7, 1977. Congress:f Senate. Committee on Energy and Natural aesgutces. Iran and uorld oil supply. Hearing, 96th Congress, 1st session. Feb. 27, 1979. vPart 2. Washington, 0.5. Govt. Print,flOff},_’. 1979. 7a p. "Publication no. 96-H" Congress. Senate. Committee on Interior and Insularilfiairs. Home heating oil. Hearing, 95th Congress, 1st session. Feb. 10, 1977. Washington, U.S. Govt. Print. Off., 1977.w262 p. Hearing on the "proposed Federal Energy Administration*s‘w ruling which would grant entitlements to importers of no. 2 fuel oil.” ’ "Publication no. 95-12" §EPQ£I§-A§2_§0N§B§§§£Q!éL_2Q§QEEET5 UCSO UCSC Congress. House. Committee on Rays and Means. Dut§%free ‘ treatment of certain Canadian petroleum; report to accémpany H.R. 5858. Washington, U.S. Govt. Print. Off., 1977. ,§“p. t (95th Congress, 1st session. House. Report no. 95-61§fi “W ‘ Congress. Senate. Committee on Energy and Natural Resources. mEnergy emergency preparedness in the United States;ifé§ort’t6‘fi accompany S.Res. 78. Washington, U.S. Govt. Print. o§f,,*19;_. 5 p. (96th Congress, I 1st/session. Senate. Report n69?9Bé3 cRs- 9 IB79066 upnAT2.o3/nu/so U.S. Congress. Senate, Committee on Interior, United states - OPEC Relations. This includes Morris Adelman's plan. At head of title: 94th Congress, 2d session. Committee print. U.S. wcongressional Budget Office. The economic impact of oil import reductions. Committee on Energy and Natural Resources, United States Senate. gfiashington, U.S. Govt. Print. Off., 1978. 31 p. ”"Publication no. 95-158" i . ,‘At head of title: 95th Congress, 2d session. Committee print. 0.5. General A§counting.0ffice. gore attention should he paid to making £henU.S. less vnlnerebleeto figreign oil price and supplygdecisions: repent to the Congress by the Comptroller senéta1‘o£ the United States. Washington 1973. 97 p.. ”BHD 78-2”, Jan- 3,.1978" U.S. Lihranynof Congress. icongressional Research Service. Enwitfinnent and Natural Resources Policy Division. Oilfinpdrtsz a range of policy options. .Prepared for the House Committee Qn.Interstate and Foreign Commerce. V‘ Subqomnittee on Energy and Power. November 1979. 31 pp. *2: head of title:, 96th Congress, 1st session. Committee print. -——— Economic effects of oil import quota proposals- Prepared for»the«House Committee on Ways and Heans.t Subcommittee’ on £rade.. Dec. Q, 1979. Washington, U.S. Govt. Print,A0ff., 197st“ ‘“ 9 A 9 ‘. 9* w int head of title: 96th Congress, 1st session. Connittee Ht 0 9 - U.S. Lihfifigxnof Congress. Congressional Research_Service.~ fiexico's Oilfinnfiflgas policy: an analysis. Prepared for the Committee on nneeign Relations, United States Senate and the Joint Ecohoaic Committee, Congress of the United States. Washington, U.S.iGovt. Print. Off., 1979. 67 p. » h At head of title: 95th Congress, 2d session. Joint qpnmi$tee-print. s§39n9;n§:i.+n£...:!n:11§_e » 06/00/80 +- Venice summit scheduled at which consuming nations could hannounce import reductions. O5/O0/80-- International Energy Agency meeting scheduled at which onconsuming nations could coordinate import reductions. 01/23/Boyrmnggesident Carter announced 8.2 EBB/D quota implemented, nignnecessary, by fees. 12/15/79 ii§§PEC set prices ranging from $21 to $30. Saudi t i .price was $2fl. 911/12)fi§g?;{§gited States suspended oil imports from Iran. 2 ‘i, j::;' X _ A _ _ 911/00719,~+@D§£_hearings held on oil import quota. 01/16/79 07/15/79 06/29/79 06/28/79 05/28/79 o3/0 o/-79 CBS-10 IB79066 UPDATE—03/O4/80 Quota set at 8.2 HHB/D for 1979. President Carter announced import guota*and program to increase domestic supplies. Western leaders meeting at Tokyo economic summit announced voluntary import quotas -- 8.5 HHB/D_ror U.S. OPEC announced price increases. Prices ranged £}§hi $18?23.5O peribarrel- Theodore Eck, chief economist of Standard Oil of Indiana, blames U.S. productéshorfiagembn DOE;policy of discouraging sPot purchases. The Nefi YorkfTimes;réPorted Dofififiafidxa reversed this policy due to shortage. = ‘r ’ ’DOE.informally discouragedfiAmericanacompaniesffrom‘buying petroleum products on Rotterdam spot market sonasl? not to drive up prices. Ht ~ ‘V 11/00/78*h+rSecretary+of¥Energy Schlesinger disappfoved 1937%Ebhtracts o9/o a/‘nu 12/2 2/75 os/co/75 N 05/01/75 03/04/75 02/19/79? o1n3/925% 09/13/75’ P11/O3/73 1o/4 don/13/737' 03/10/59 to buy Mexican natural gas. 4L#President:¢arter and Prime Binister‘Trudeau‘agreedLon=a nplan to build Alaskan gas pipeline.through7westerh“Cwfiada. -+"Energy'Policyiandficonservation Act*establishedbtHe£ Strategic Petroluem Reserve.: -D.Cu Court of Appeals ruled;President;lackedfauthority’ to impose import fee. The Supreme¢Cburt:reversedsthis later. President Ford raised import fee to $2. President Ford vetoed H.B. 1757. .Congress"passed HLR. 1767 suspending PresiflentfiFord$§V» authority to impose import fee under provisionswbiéthei of the Trade Expansion Act of 1962.’ P ' ' --PresiHent‘Ford imposed $1 per barrelfimpbrtwfee; President Ford's speech at United Nations discussed withholding 4 . food if OPEC withheld oil. President made stronge:“%peech ~at World Energy Conference and Secretary of State Kissinger did likewise at United Nations. ’ W P President Nixon declared Project Independencé&sng.$H*aas to be selfrsufficient in energy by 1980. Arab oil exporters declared boycott of United S§&£§§wahd the Netherlands and a general reduction in prbdficfiiénfl niPresident Nixon effectively ended MOIP. President Eisenhower established Mandatory Oil Import C35-1 1 IB79066 UPDATE--03/Oil/80 Program (HOIP). Quota was 12% of total Consumption. or GO/O0/Q7 ¢w»Hnite§ States became net iaeorter of crude oil. 01/O0 .? -- God created oil. éfiylilgflééo§§§§§§§§§l§QEE§§§ Brna, Theodore G.“ Petroleum's role in national security. :Army logistician, v. 9, Jan.—Feb. 1977: 16-19. Bohi,xDengdas; R. and Hilton Busseliao Limiting oil imports. Baltimoren Johns Bopkins,for REF, 1978. * . Corrigan. Richard. Now that Alaska has a pipeline, what do we do with the,oil and gas? ~Eational journal, v. 10, Dec. 30, 1978: f 2ou3—2952. Fieleke, Norman 3. Trade with the oil-exporting countries. Federal Reserve Bank of Boston New England economic review, Hay~Jnne 1977: 3-8. Gail, Bridgetzy The-West's jugular vein: vArab;oil.« nrmed=Eorces journaiaifiternational, August 1978: gJ8:20;w22~23. Gold, Fern Racine) find Conant, Melvin A.+ For Senate Committee. on Energy and Natural Resources.v , Access to oil -- the United States relationships with Saudi Arabia and Iran- vwashington, 5.E"‘l'.‘i11_1:'.‘._=- Offggo , . 1 1 3 pg. _ -. " . At head of title: 95th Congress, 1st session. Committee print. ”‘ e s "Publication no. 95~70" International Economic Policy Association. America's oil and energy goadsy:the=international,economic implications: —a_preliminary apgraisaiyby the International Economic Policy Association. Washington, IEPA, 1977.. ix, #5-p.;’28.Cm. Eaize, Kennedy.P.~gOil’imports. Washington Editorial Research Reports, @978. 623-6&0 p. (Editorial research reports, 1978, v. 2, no. 8) . Hndd,m§9uglas:R. and Hood, Geoffrey E. Oil imports and the fall of th%fiflo1ler;t;Federal Reserve Bank of St. Louis review, v. 60, August 1978: 2‘6. Oil inporfi Question [by] the Cabinet Task Force on Oil Import Control. GPO, 1970. RandaLgfiw§a§$y.=~Political risk and energy policy. Business economics, vYa£fl§wo§fl3239773 “0‘“5- Singer, 5. Fred.‘ The oil crisis that isn't. New republic, v. 180, Feb. 2Q, 1979: 13-15. T cas-42 ’ IB?§d66*CUPDATE+O3/OH/80 vVernon,;RaymQnfl,7ed;i»The Oil Crisis. _fifitten?unéef”%fi§%anspices3of L thé center for International Affairs; Ear#ar&wUfiii@rsity.= Nev‘ Hyman, Thomas S. “Petroleum imports and national security;~United % States Naval Institute proceedings, V. 103; Sept. 1977::y33+37-w Yergin, Daniel. U.S. efiergy policjé transition tbéwhat?'Wwotlds }% today, V. 35, march 1979: 81-91. Adelman} H.A.A Oil inporfi quota auctions. Challenge; ~Jan./Eeb. 1916. Cozrigan, Richard. =Three years after the embargo -"the failure of*? project independence! 'NatiQna1 journal. 3. B, June¢12,<1976:=T Karpé1;=Crai§S;é Ten ways ta break OPEC.% Harpér$¢ v. 158 ‘ (January 1979): >65—72. Stone,,ChristOpher D. and HcNamara¢_Ja¢kfl5% How!to take on-OPEC; .;fiéq§Ionk times nagdzine, Dec. 12.31976: %38,~u0,.H2;?4u,%u9, ;The?yeafi$“that the locust hath eaten: oil;Po1icyjand“OPEC; ’-deYel0pment_prosfiects. Foréign7affairs,;v; 57, “Wihter<1978~79} 287.305; ‘~ 1.’ _.J ;. .v,_>:, ._':._ ...._:a::; .-: ..L ' ' " ’ “V L.-1 "5 V: ;, ”‘ r.’ I :1 i’ :5” 5% ...L:7 I’. ‘L 3 J ‘H vs a 1.} E1 *§2}.q“ 5’ (:3 sggt 13 (jg, ‘ ‘,T 1; 5 a. 41' ‘ H "‘ { ,1 I \>' "«_ '7 '_Y ' '1 , ~_ 5‘ B uplg‘ $111.1 ;_ _vL 1 up . . , : .« r q‘ av :r':w-I’-,_‘ ' “ ' J -’ 73.J‘&'~:12‘W .’’.*-Z«.;'.: :3 :. 1 5 .»:: ' 5'. 3 n [-.4», 3 .3 » ERLuw@ Wmu n {_L -:.t._‘—_v_.:-:11 —?,—'>’w-—:;)“; rrr-' *f" V‘ '~’—"‘~'-‘ ‘ ,..