YES, THERE WAS CERTAINLY a uranium cartel in operation several years ago. But no, it's not clear whether it had much effect on the terrific rise in prices here. The cartel operated outside the United States at a time when Americans were prohibited from using imported uranium. As for the hapless Gulf Oil Corp., clearly its subsidiary Gulf Minerals Canada, Ltd., was a willing participant in the cartel. An enthusiastic participant, you might even say.
A House Commerce subcommittee, under Rep. John Moss (D-Calif.), has been vigorously rummaging around in the records of the cartel. But the subcommittee seems to be heading toward all the wrong conclusions. It is now off in hot pursuit of that favorite American idea - wrong, but cherished nevertheless - that it's only the wicked oil companies that are responsible for rising energy prices. The idea is a very comforting one for Americans and for congressmen, because most of the oil companies lie within the jurisdiction of Congress to regulate and to punish.
The reality is more disquieting: Americans have lost control of the international energy markets. To Mr. Moss, it seems self-evident that the public interest requires the lowest possible prices to the American consumer. But the Canadian government, which organized the cartel, doesn't see it that way at all.
Americans might note, first of all, that the cartel was the direct response to American protectionism. Uranium prices had been falling steeply and, to protect its own industry, the United States in 1966 prohibited foreign fuel for American reactors. That closed 70 per cent of the world market to foreign producers and the price fell further. Eventually, in 1972, Canada began to set up the cartel.
But in 1973, the market picked up when the U.S. government began pressing power companien to line up future supplies. Then came the oil crisis and utilities all over the world frantically began scrambling for uranium. That led to the Westinghouse fiasco. Westinghouse, the largest producer of commercial reactors, had been sweetening its sales with contracts guaranteeing fuel at the old low price. After the oil crisis, prices trebled and in 1975 Westinghouse announced that it would have to renege on contracts to deliver some 65 million pounds of uranium fuel. That set off a further panic among Westinghouse's customers and the price surged again.
Westinghouse, defending itself against more than $2 billion worth of damage suits, argues that the cartel was a major reason for its troubles. But the evidence so far is not impressive. The company took a huge gamble on a volatile market - and lost. As for the cartel, it fell into disuse after 1975 with prices soaring far higher than any it had tired to set.
For Americans, there's a further point to the story. Gulf Minerals Canada, Ltd., took part in the cartel voluntarily - but it had no choice. Participation was a condition of mining uranium in Canada. When the United States tries to impose its anti-trust tradition a companies' Canadian operations, Canada regards that as an infringement of its sovereignty. Some Canadians, in fact, see American attempts at extraterritorial anti-trust enforcement as a device to knock down the price for foreign fuel to feed the insatible American economy. That accusation, you'd have to agree, is not wholly inaccurate.
But in the end the cartel didn't make much difference. The ineptitude of Gulf and its complaisant subsidiary is the smallest part of the uranium case. At bottom, it was another collision of national interests amidst the world's tightening competition for fuel.