Broadcasting Telecasting (Oct-Dec 1959)

A service of Gulf Oil Corporation in the cause of creating— through the facts as we see them —a fuller understanding of the oil industry. Is there a fuel crisis? The coal people say there is. And they suggest that Uncle Sam step in. Historically, our fuel industries have grown the freely competitive way. Yet here we have one of them turning its back on that way. If only because the implications reach into all business, a few questions should be raised. What, exactly, are the facts? . . . Q. What are our fuel problems as the coal industry sees them? A. According to the coal people, we are in danger of running out of fuel. Any lack of energy, they point out, would threaten our economic development. Alj ways near the surface, of course, is the fact that coal's share of the fuel market has shrunk. Q. What does the coal industry want the government to do about it? A. Coal asks for a single, over all "national fuels policy." In the words of Joseph Moody, president of the National Coal Policy Conference, this would "insure an adequate energy supply for our nation while at the same time promoting the healthy and balanced development of the American economy." Q. Precisely what would coal's policy call for? A. The Senate resolution coal's spokesmen introduced in August would have the government consider "the optimal allocation of the various fuel and energy resources to their most productive economic uses, including such consideration as the geographic distribution of these resources and the development of balanced and interrelated regional fuel economies." Q. Why wouldn't such a policy be helpful? A. In the first place, the kind of crisis coal talks about simply does not exist. We are in no present danger of running out of oil, natural gas or coal. And the competition among fuels has actually promoted the development coal refers to. BROADCASTING, December 21, 1959 Q. Do the coal interests really want to see their industry controlled? A. Coal denies the policy would mean controls. But the word "allocation" in that Senate resolution is enough to frighten any businessman. It would probably lead to end-use controls on fuels. Q. Are any of the other fuel industries for coal's program? A. Let them speak for themselves. According to Frank Porter, president of the American Petroleum Institute, "We will fight hard to protect our industry and its customers from unjust restrictions." And John Ferguson, executive director of the Independent Natural Gas Association, says the policy "has as a principal purpose the curtailment and prohibition of the use of natural gas." Q. What of the consumer? Might he not gain from such a program? A. Fred Seaton, Secretary of the Interior, offers an answer: "I cannot believe that it would be appropriate or just for the government to distort the picture by preventing the function of normal economic forces. I do believe the consumption of fuels should continue to be determined by such forces as relative costs at specific locations, efficiency of use, dependability of supply, cleanliness, convenience and ease of control." Q. Are you saying coal would be the only beneficiary of the policy? A. Yes. And at the expense of oil, natural gas and the consumer. At the expense, in short, of our economy as a whole. Coal has failed to show a truly national justification for its policy. If there is a fuel crisis here, it is the one coal's policy would bring on. Q.But if there is no policy, what of coal's future then? A. It is true coal's share of the market has shrunk from 70 per cent in 1926 to less than 30 per cent in 1959. But coal has a future. Secretary Seaton cites these figures. The U. S. will use 5 billion barrels of oil in 1975 compared to 2.7 billion in 1955, 19 trillion cubic feet of gas to 9.1 trillion. And we will use 775 million tons of coal to less than 450 million. Q. Isn't coal essential to our national security? A. Of course it is. But no more so than oil and gas. It's worth remembering the oil industry has been cooperating with the government since World War I. A good recent example is the commendation the oil industry earned from our government for cooperating in the 195657 Suez crisis to stave off a European oil shortage. Q. Hasn't a National Energy Board recently been proposed in Canada? A. Yes. But Canada is concerned mainly with export and import of natural gas and oil. This demands some international negotiation at the official level. The board could suggest a domestic policy for all fuels. But the validity for such a program north of our border does not automatically extend south of it. Q. Elsewhere in the world, what is the trend in fuel coordination? A. The British attitude is fairly typical. Although Britain faces a glut in coal from state-owned mines, Fuel and Power Minister Richard Wood told the miners in November he "could not encourage any hope of measures to restrict the use of oil or to force fuel-consuming industries to use coal." We welcome further questions and comment. Please address them to Gulf Oil Corp., Room 1300, Gulf Bldg., Pittsburgh 30, Pa. 61