The collapse of a Gulf Coast superport project has touched off a swirling controversy which the major oil companies are now watching nervously, as the Carter administration widens its confrontration with the industry over one of the oilmen's most cherished domains - oil pipeline regulation.
The regulation and control over billions of barrels of oil to be piped each year through two proposed deepwater terminals, to say nothing of millions of dollars in profits, ride on the outcome.
More important, the superport hattle will signal how resolute the Carter administration is in its effort to trim what some officials suspect is an unfair profit advantage the major oil compainies enjoy through existing oil pipeline regulation.
The issue is expected to be joined publicly at House Merchant Marine and Fisheries Committee hearings tommorrow, which chairman John M. Murphy (D.N.Y) has hurriedly called as one aide said, to find out "Why three major oil companies withdrew at the last minute from a project (Seadock) which the Congress thinks is a good idea for our nation."
In recent weeks Houston-based Seadock Inc's proposed $650 million, 2.4 million-barrel-a-day terminal, slated to go into operation in the Gulf 26 miles offshore from Freeport,Texas, was effectively killed when Gulf, Exxon, and Mobil withdrew from the project. Together the three major oul companies held a 52 per cent interest in the project.
But another project, offered by a New Orleans consortium, Loop Inc., for a 1.4 million-barrel-a-day terminal 18 miles off the Louisiana coast, is nearing final approval. Transportation Secretary Brock Adams sent a letter to Loop Friday indicating, as DOT General Counsel Linda Kamm says,
"We have just about wrapped up an agreement. The basic issues have all been resolved." Loop is dominated by independent and medium-sized integrated oul compaines.
Not so with Seadock, where 52 percent of the stock was held by three major companies.
Summing up the battle lines, Kamm said, "They (the major oil companies) have expressed disagreement with the Justice Deparment's approach to pipelines. some of the companies clearly feel the intrestof the Federal Trade Commission and Justice are not identical with their own."
Publicly the major oil companies and their supporters in the Congress have lambasted the Carter administration for excessive regulations that have choked off the major companies' interst in acquiring superport licenses.
Both Seadock and Loop have come under a series of charge since the Federal Trade Commission and Justice issued reports underlining the potential anti-competitive aspects of the projects. DOT has sought to correct these by, for example, calling for "one man one vote" instead of weighted voting by shareholders according to the amount of stock they hold. This provision, the administration says would prevent the majors from limiting an expansion in superport capacity.
Superports, despite the nautical aura, are regualted by the Interstate Commerce Commission, like oil pipelines. The only difference is that,in ascord with a 1974 law, Transportation issues licenses that set the conditions for their operation. The deepwater ports, in reality, are pipeline terminals offshore capable of accomodating supertankers too large for existingU.S. ports.