As a candidate, Jimmy Carter was never bothered by indecision, but it seems that his administration just can't make up its mind about H.R. 1037.
For at least the fourth time in recent weeks, a House committee hearing that had been scheduled to receive the administration's verdict on the so-called "cargo preference" bill - a coveted goal of American maritime industry - had to be canceled. The government's collective mind is still in a dither over the idea.
"The more I talk about it, the less I understand it, and the more I wish it would go away," said a White House economist on the staff of the newly formed Economic Policy Group, which has been attempting to sum up the pros and cons for the President's enlightenment. "It's such a can of worms to try to find out what the impact would be."
The bill would require that a steadily increasing amount of the nation's imported oil - up to a ceiling of 30 per cent by 1980 - be shipped here in privately owned American-flag tankers. That, in turn, would require the construction of more than $13 billion worth of new U.S. built ships over the next few years, presumably with government-guaranteed loans, and finally their manning by U.S. crews.
The estimates and projections of what all this will cost vary wildly. Some proponents contend that American consumers will have to pay only .006 cents a gallon more for imported oil. But the critics put it at much more, estimating that the real cost to the public will be 12.2 cents a gallon more for "cargo preference" oil, 3.7 cents a gallon more for all imported oil, or, to put it another way, a cumulative total of $38.3 billion more by 1985.
The backers of the bill, led by Rep. John M. Murphy (D-N.Y.), the new chairman of the House Merchant Marine Committee, insist that the opposition is simply juandiced. Whatever the real costs, they contend, "it is worth the price for an independent American-flag fleet."
The Shipbuilders Council of America and its allies in maritime labor and industry are understandably eager for the bill and determined not to let it get away from them. A nationwide advertising blitz with an eye-catching slogan."It's Time to Turn the Tide," has just been launched. According to some observers, the only one who really needs to be convinced is President Carter, but in any case, a minimum budget of $500,000 has been allocated for the four-to-six-week promotional drive by Gerald Rafshoon Advertising Inc. of Atlanta, Ga.
This is, of course, as Shipyard Weekly reminded its subscribers last week, the same firm "which handled media program for President Carter during 1976 campaign."
Rafshoon's unabashedly prtectionist advertising theme, "FOREIGN OIL TANKERS THREATEN OUR ENVIRONMENT, WEAKEN OUR NATIONAL DEFENSE AND TAKE AWAY JOBS," has already stirred thousands of signatures in support of the maritime lobby's drive. Full-page newspaper ads from coast-to-coast, double-page displays in the newsmagazines, and television commercials in 14 cities all invite readers and viewers to go "on record for decreasing our dependency on oil imports shipped by foreign flag vessels" by sending their names and addresses to the U.S. Maritime Committee to Turn the Tide.
"Goodness gracious, I've got so many envelopes here we can't humanly open them in one day," Edwin M. Hood, chairman-president of the Shipbuilders Council and coordinator of the drive, exulted at midweek. "It's a deluge," he said, estimating that upwards of 10,000 responses have come in since the campaign started two weeks ago.
As the magnitude of the effort might suggest, the opposition to it is not inconsequential. Most of the big oil companies represented by the American Petroleum Institute are against the measure. And while the Commerce Department, which houses the Maritime Administration, and the Labor Department are understandably enthusiastic about building up the merchant marine fleet, the State, Treasury and Defense departments and the Office of Management and Budget are said to be opposed to H.R. 1037 on a wide variety of grounds: because it might cost too much, because it might invite retaliatory moves by other countries, because it might interfere with naval shipbuilding schedules.
At present, only 3 per cent of the nation's oil imports, which now total some 8.4 million barrels a day, is arriving here on ships flying the U.S. flag. According to the Committee to Turn the Tide's ads, "this alarming imbalance is largely perpetuated by American-owned multinational con 'flags of convenience,'" has given Liberia the biggest merchant marine fleet in the world, at least on paper.
Grabbing 30 per cent of that cargo for U.S.-flag ships could be mighty expensive, no matter whose projections are used. Even if the bill were passed immediately, according to a Maritime Administration spokesman, the demand for U.S. tankers for other purposes (such as the guaranteed Alaskan oil trade) is so pressing that the amount of imported oil shipped in U.S. bottoms would probably drop at first, down to 2 per cent. A lot of shipbuilding would need to be done. Even at an additional cost of 1 1/2 cents a gallon for "cargo preference oil," which Chairman Murhpy seems to have accepted as likely, the dollar cost of the program, expressed in yearly terms, would "sound staggering," an aide agreed.
"Based on current estimates, the construction cost of U.S.-flag tankers is more than twice that of comparable foreign flag tankers," an American Petroleum Institute representative told a House Merchant Marine subcommittee at a recent hearing on the bill. "The average annual operating cost of U.S.-flag tankers [excluding fuel and port charges] is almost 2.3 times higher . . ." Wages, he added, are almost four times higher.
Ironically, there is also a worldwide surplus in oil tankers right now despite the busy times for U.S.-flag vessels. According to the Maritime Administration, tankers of all nations displacing a total of about 30 million deadweight tons are currently laid up without any cargoes to carry. The figures has been as high as 45 million.
As a result, cargo preference legislation, protested the Norwegian chairman of Intertanko (the International Association of Independent Tanker Owners), will mean "the more or less duplication of the ships which are already laid up around the world."
"If you drop that brick," Intertanko Chairman Erlin Naess told Murphy of H.R. 1037, "it is our head that is going to hit it, sir."
The unprecedented world tanker surplus, which is expected to continue into the 1980s, has another aspect: used ships for sale. As another witness, Linzee Weld of the Environment Policy Center, reminded the committee, the Maritime Administration has indicated "it would cost a tenth as much to purchase a relatively new 60,000-deadweight-ton tanker as it would to construct a new ship in a U.S. shipyard - $4.25 million to purchase the ship versus $45 million to $50 million for new construction."
She suggested that any cargo-preference bill permit the purchase of foreign-built ships for inclusion in the U.S.-flag fleet, rather than requiring that U.S.-flag ships be U.S.-built.
Weld also disputed the notion that U.S. takers would be much safer. She cited the lack of various safeguards on most of the tankers expected to be involved in picking up oil from the Alaska pipeline.
Congress passed a similar "cargo preference" law in 1974 only to see it vetoed by President Ford who said it would create "serious inflationary pressures" and serve as a precedent for other countries while benefiting only "a limited group of our working population." (API maintains that the $5.5 billion a year cost of the program to consumers by 1985 will mean a loss of 284,000 jobs spread throughout the economy, more than offsetting any maritime employment gains."
Merchant Marine Committee Chairman Murphy contends Ford was simply "the victim of bad advice by his Cabinet and economic advisers' and says he hopes that won't happen again. The U.S.-flag merchant fleet, now 10th in the world, is in a "state of decline," he feels, and he is determined not to let cargo preference legislation be thwarted again.
By all accounts, the maritime interest would seem to have every reason to count on Carter. He was enthusiastically introduced last June 30 at a fund-raising "Maritime Management-Labor Salute" here by Marine Engineers Beneficial Association national president Jesse M. Calhoon. Speaking to about 150 people who were said to have contributed $1,000 each for his primary campaign, the Democratic presidential candidate told his audience:
"I want to be sure that as President, the American flag is returned to the seas again. I believe that American ships, built in American ships, built in American yards, designed by American engineers, built by American craftsmen, and manned by American seamen . . . can once again be the envy of the maritime world."
Carter said then that he recognized the cost of a strong U.S.-flag fleet "will be fairly large. Sometimes there will be a necessity for (a) slightly higher charge to haul cargo . . . But I believe that if I, as President, would present this proposition to the Congress and the people and say . . . it might cost a little more but it will provide for our nation's defense, I think the American people will respond."
Chairman Murphy says he is confident that the President will come through now on cargo-preference legislation though perhaps at more modest percentages. (The goals in the bill could not possibly be met anyway.)
In a speech at Port Everglades, Fla., last weekend, the outspoken New York Democrat said he did not have "direct knowledge of the machinations that have been going on in the administration over the past couple of months as the various departments quarrel." But he said he suspected that "our money watchers at the Treasury Department, the 'corridor corps' at the Department of State, and the 'gnomes of OMB' have been attempting to sabotage this vital legislation."
Even so, he said he felt sure the President would stick to his campaign pledge of "a fair share of all types of cargo" for the American-flag fleet. Predicting a verdict from the White House within a matter of days, Murphy said, "I am confident - because President Carter can rise above the mundane level of the bureaucrats - that it will be generally favorable."
Shipbuilders Council President Hood, who foresees declining employment in many shipyards next year without a new boost from Uncle Sam, is also optimistic.
"We have great faith in the democratic system," he said.