Editor's Page
The gasoline shortage Charles DiBona is president of the American Petroleum Institute. Last month he addressed the National Press Club in Washington, D.C. He offered an explanation of why this country is having shortages of gasoline and diesel fuel. Here, verbatim, are excerpts from what he had to say. During the next few months—and the next few years—the nation will be establishing policies to help it adapt to a changing worldwide energy situation. These policies will not succeed unless they are based on a solid understanding of what has caused the current problems. Any workable consensus must be derived from national agreement on why our country is so vulnerable to relatively small oil supply interruptions. No such national understanding or agreement now exists. Most people in the United States—one recent poll said 65%—think that petroleum shortages in America are contrived, unrelated to real changes in world oil market conditions. This unwillingness to face the actual causes of our problems is not merely an unpleasant public relations dilemma for oil companies. As the President has pointed out, it is difficult—I would say impossible—to formulate policies and legislation to cope with shortages if the public is not convinced that the causes are real. As long as the public believes that oil companies have created the problems, it will be hard for anyone to develop viable ways of dealing with them. Let me make [some] important points: First, the petroleum industry is not holding back products awaiting higher prices. Second, oil companies are running through their refineries all of the crude oil that they can safely run without the danger of disruption. Third, oil companies are distributing, according to government regulations, all the refined product that is prudently available for distribution. Fourth, because this country is not getting all the imports it expected to be getting now, our supply and distribution systems are stretched to their limits and, in some cases, beyond those limits. Low crude supplies are the key to our current dilemma. The fact is that our nation's overreliance on foreign sources of crude oil has finally caught up with us. Under price controls, the difference between shortage and surplus can be very small. The pendulum can easily swing in either direction—and then swing back again. And it undoubtedly will. Many observers are misled by comparing the size of the apparent shortfall—some 600,000 to 700,000 bbl a day—with the size of total use—an average of some 19 million bbl a day for the first five months of this year. But shortages of 3 to 5 % can cause lines and disruptions, just as an increase of a few per cent can cause a surplus. Those who are troubled by this situation also look at crude oil inventories of some 320 million bbl and cannot understand how a mere 600,000 to 700,000 bbl a day can have a significant impact. That is the wrong frame of reference, since most of that 320 million bbl of crude is needed simply to make the system work—to keep the pipelines filled so that oil moves through them and to keep refineries in steady operation. It is not available to make up the shortfall. In short, a difference of a few per cent in supply and demand can, for the next few years, result in the appearance—and reality—of swing from shortage to surplus. Since the margin is so small, the situation is certainly changeable and not very predictable. A few weeks without gas lines will not mean we are out of the woods, nor wiJTa few weeks of long lines mean they are a permanent part of the landscape. The fact that we face so much uncertainty in the future makes it all the more important that we understand what is happening in the present. The facts and figures that explain today's energy situation are available for inspection. Energy experts of various kinds are available for consultation. And the industry is ready to answer questions as completely as it can. The information is there—ready to be examined, interpreted, and understood. It offers the only valid basis for the American people to use in deciding their energy future. D
Views expressed on this page are those of the author only and not necessarily those of ACS
July 16, 1979 C&EN
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