A mini-OPEC is emerging on this side of the pond -- an unorganized but highly effective oil cartel that might be known as OPES: Organization of Petroleum Exporting States. These are the states -- Alaska, Texas, California and Louisiana -- that are raking in billions of dollars from state-owned oil lands as the deregulated price of oil skyrockets.
Unlike the leaders of OPEC, the OPES representatives wear custom-tailored suits instead of flowing robes, and they prowl the corridors of Congress instead of the sands of Araby. But like their OPEC brethren, the American oil-producing states are exempt from any threat of a windfall profits tax on their oil income.
While the decontrol of oil and natural gas prices has wrought economic hardship on the 46 oil-consuming states, it has brought bonanza to the oil-producing states from their publicly owned oil fields. And it's a bonanza that the oil states and their representatives in Congress are not about to relinquish.
According to a still-secret Treasury Department report, the four states will collect 83 percent of U.S. oil revenues in the next decade, and a generous share of this income will go to a few state governments, thanks to the state-owned oil reserves.
Alaska heads the list. The benefits of oil-price decontrol will net the state a budget surplus of $37 billion in the next 10 years. Texas ranks second. Its state-owned oil fields will bring in more than $33 billion in the 1980s, according to the Treasury estimates. California will rake in $22 billion over the same period, while Louisiana will net about $14 billion.
The unexpected prosperity is already the subject of debate in the lucky states involved. Akaska's budget surplus last year ran to $1 billion -- enough to give every man, woman and child in the state $2,700 after all expenses of operating the state government have been paid.
Alaskan newspapers have been flooded with readers' suggestions for spending the money. The suggestions range from construction of a ski resort on Mt. Kinley to abolition of the state income tax. Alaska's happy quandary will only grow in size as the state's oil-induced surplus reaches the Treasury's estimate of more than $3 billion a year in the 1980s.
While the other three states have larger populations to serve, their oil revenues may still mean the end of all their state income taxes and sales taxes. And this in turn can have a profound effect on the economy of the entire country.
Drawn by the tax breaks that will be possible because of the oil revenues, industry will be encouraged to relocate in the Big Oil states. Texas, for example, already has no state income tax and a right-to-work law. With an estimated $3 billion in oil revenues that almost matches its entire state budget, it will probably be able to do away with its sales tax and offer further incentives to corporations seeking to escape the unions and taxes of the beleaguered Northeast industrial states.
As the economic power of the oil-producing states grows, so will that of their representatives in Washington. THE OPES muscle is already being felt on Capitol Hill as a non-oil-state senator, John Danforth (R-Mo.) tried to remove oil properties owned by state and local governments from their currently enjoyed exemption from the windfall profits tax. A Danforth aide told my reporter Adam Pfeffer that one of the senator's chief concerns is that the oil-producing states may decide to use their petrodollars to buy up private oil-producing land, thus increasing the property that's exempt from the windfall profits tax.
And indeed, when Danforth confronted Sen. Alan Cranston (D-Calif.) on the possibility, Cranston admitted that California might use its oil revenues in just such a way. Sens. Russell Long (D-La.), Ted Stevens (R-Alaska) and Lloyd Bentsen (D-Tex.) have also been active in the legislative infighting to kill Danforth's amendment to the windfall bill.
Like their Bedouin counterparts, the senators from OPES recognize that oil means power and intend to make the most of the clout that has been given them by a geological accident, even at the expense of the national interest.