In a spirited defense of oil industry profits, Exxon Corp. Chairman Clifton C. Garvin told his annual stockholders meeting today that, "in fact, the performance of this industry has not been that great," compared with other industries.
Garvin said that, "In our case at least, first quarter profits in the U.S. actually decreased (compared with the same quarter last year) about 5 percent."
He praised President Carter's proposal to remove crude oil price controls as "a wise and courageous decision," and at the same time attacked the related proposal to impose a windfall profits tax as "unfortunate" and "unnecessary."
"Historical data make it clear that oil profits can fall as rapidly as they can rise," Garvin said. "One has only to look back at the 1973-74 crisis and its aftermath to be convinced of this."
Garvin said he feared controls because they "get us into bad habits. Controls perpetuate a psychology of control both among the controllers and among those controlled. In a thousand ways they misdirect our energies and stifle enterprise. It is time they were gone."
First quarter profits in 1979 for Exxon were $955 million ($2.16 a share) compared with $695 million ($1.55) during the same period last year - an increase of 37.4 percent. Revenues during the same period were $18.7 billion compared with $15.2 billion last year.
Garvin also criticized the so-called "plowback provision" alternative that would require energy companies to reinvest excess profits in energy development.
"I have serious reservation about plowback," he said, preferring instead a taxation plan with a built-in phaseout.
Exxon capital and exploration expenditures for 1976 through 1978 totaled $26 billion, Garvin noted, adding, "The need for such outlays has been dramatized once again in the last few months by events over which we have no control," referring to the Iranian revolution.
"If I could leave one message with you," he told the 625 Exxon shareholders at the meeting, "It is that this shortage is real. It exists now and, in my opinion, will continue to exit for some time to come."
Because of the need to begin building up heating oil supplies for the winter, Garvin said, "you are now finding gasoline hard to buy," since crude oil is used for both.
"I went to assure you," Garvin said, "that Exxon has not withheld supplies during this past trying four-month period. We have withdrawn from inventories, produced at maximum capacity and bought as much as we could from suppliers under existing contracts. We have also sought new supplies of crude oil from anyone who is willing to sell to us under term arrangements."
Garvin accused the press of "inciting people," by writing scare stories about the gasoline situation. "You're telling them there is a crisis," he said.
The American public can take steps to ease the situation, Garvin said. "Drive those automobiles at 55 miles per hour and we'll get some relief," he said.
He also said yesterday's surprise emergency proclamation by California Lt. Gov. Mike Curb - once again serving as acting governor because of the absence of Gov. Edmond G. Brown - relaxing state air quality standards to encourage oil companies to produce more gasoline, would increase gas supplies.
But, he quickly added, "it will be at the expense of other products, like heating oil, which will be in shorter supplies."
President Carter's decontrol measure alone will result in increasing gasoline prices 6 cents a gallon at the pump by 1981, Garvin said in response to a question, adding that the 6 cents does not include any other possible increases because of high inflation or increased charges from OPEC countries.
In response to a shareholder's question, Garvin said the gasoline supply situation in California is worse than other parts of the country because demand there is up sharply compared with the rest of the nation.
Pointing out that federal laws force oil companies to allocate gasoline supplies on the basis of 1978 allocations, Garvin said that in California and four other Western states demand for gasoline increased 7.5 percent during the past four months - compared with the same period last year. The rest of the nation, he added, had only a 1.4 percent increase in demand.
He further claimed that West Coast demand for all petroleum products is up 10.4 percent over last year, compared to an increase of only 8 percent for the rest of the country.
Looking to the future, Garvin said "more oil can be obtained from established fields, as well as new fields, if the incentive to do so is sufficient and if the necessary investment funds are available."
"Less oil will be consumed," he added, "if it is realistically priced."
Shareholders proposals calling for limitations on corporate donations, restrictions in the company's South African activities and changes in voting procedures for corporate directors were defeated overwhelmingly. CAPTION: Picture, Exxon Chairman C. C. Garvin Jr. gestures at a news conference yesterday. AP