Energy Secretary James R. Schlesinger yesterday said the nation's summer energy outlook has improved and supplies of gasoline and other products will be tight but manageable. He also said that the United States has met its International Energy Agency commitment to reduce oil consumption by 1 million barrels a day.
Schlesinger said the world oil market "is stretched taut and any further interruption could interfere with the delicate balance we have today." He added that the current shortage runs between 1 and 2 million barrels a day worldwide. Department of Energy projections distributed at a press briefing yesterday set the shortfall at 1.6 million barrels a day, with total free world demand at 53.6 million barrels a day.
As for the slightly improved domestic oil outlook, he told reporters "there will be some easement, but it will not be great." Overall, he said motorists can expect about 5 percent more gasoline at the pumps this summer than during the May crunch that forced gas lines locally, in California and elsewhere.
Schlesinger's more optimistic energy outlook comes when his often controversial policies are continunig to draw criticism within some senior administration circles, as well as on Capitol Hill.
His finding that the United States has already met its IEA goal, along with a firm statement yesterday that the United States has outperformed Western European nations in conservation, is geared, some administration sources said, to strengthen President Carter's position as he prepares to meet with other industrial nation leaders at the Tokyo summit later this month.
The secretary's markedly more encouraging supply prouncements yesterday were offset by little encouraging world oil prices, which have risen more than 33 percent since January, or gasoline prices, up nearly 16 cents a gallon in the same period.
Future prices, he said, depend on decisions taken at the June 26 meeting of the Organization of Petroleum Exporting Countries in Geneva. "One would be rash to predict there will be no price increase," he said.
In a related development yesterday, a senior DOE official, Douglas Robinson, told a Hill subcommittee that there is strong evidence of price gouging at retail service stations. Robinson said some stations could be guilty of "substantial overcharges" for unleaded gas. He said that of 1,137 alleged violations so far, 757 operators have signed consent orders with DOE to lower their prices.
At his press conference, Schlesinger said there was no evidence of any collusion among refiners to hold back supplies and push up prices.
In recent days, DOE and State Department analysts have suggested privately that OPEC will raise its prices - now officially $14.55 a barrel although the average is more than $17 a barrel - to $18 or more. At the least, these officials say, U.S. gasoline prices will increase by an additional 12 to 15 cents by December.
As for the improved outlook for domestic gasoline supplies, Schlesinger said it is due primarily to the increased output of refiners, who are now operating at 85 to 87 percent of capacity, compared with about 83 percent in recent months.
"There has been some excess conservatism in refining policy," Schlesinger said. As for the shift upward in the output of gasoline and other products, Schlesinger said, "We have strongly encouraged the industry to operate at these levels."
Last month, Schlesinger critics in the administration and on Capitol Hill - such as Rep. Toby Moffett (D-Conn.) - appealed to the secretary to force the oil companies to increase refinery production.
At yesterday's briefing, Schlesinger said the U.S. consumer is faced with a "disproportionate share" of the world shortfall because of the more-pronounced impact the Iranian shutdown had on U.S. oil companies, the tendency of oil exporting countries to break contracts in order to sell at more-lucrative spot market prices and the unwillingness, until recently, of U.S. companies to bid for oil in the high-priced spot market.
Oil company executives, however, say that the United States had a disproportionate share of the shortfall because of DOE pressure - since ended - not to buy in the spot market and because companies can command higher profits for oil products in some other countries.
Schlesinger said that while the administration had asked Saudi Arabia to increase its oil production, "I do not know that we can state we have any expectation of an increase." Last week there were reports from Riyadh that it would boost oil production by as much as a half a million barrels a day in July.