Yesterday's editiors incorrectly reported that Energy Secretary James R. Schlesinger said the nation's oil import bill would be $60 billion this year. Schlesinger said that the nation's oil import bill would be $60 billion next year. CAPTION: (NEW-LINE)Picture, John Stevenson, owner of a gasoline station in Seven Corners, places 'last car' sign to close gas line. By Larry Morris - The Washington Post
Energy Secretary James R. Schlesinger charged yesterday that oil companies have aggravated the nation's gasoline squeeze by "unduly" building up their crude oil inventories while cutting back production.
He said American motorists should find it easier to buy gasoline this summer thanks to an unexpected spurt in oil imports, but he warned that the refineries must first increase their output.
"Gas lines should end around the country," he said. "There should be no generalized shortages."
Schlesinger repeatedly described the current situation as "disappointing, troublesome and indeed an irritant." His analysis of the current shortage marks yet another shift in the Carter administration's explaination for the gasoline lines that have plagued Washington and other parts of the country.
Asked what measured the Department of Energy is taking to force refiners to increase production of gasoline, Schlesinger said his agency has offered "moral suasion" and would "examine the discrepancies for individual companies" in the weeks ahead.
The secretary told a news conference that DOE's authority to mandate increased refinery production was "limited" but offered veiled suggestions that the department could consider forcing oil companies to allocate crude oil in order to increase gasoline supplies.
One reporter asked Schlesinger whether he was not "telling us in a scholarly way that the Energy Department shares the suspicions of the majority of the American public" - that the shortage is in part contrived to earn higher profits?
Schlesinger did not give a direct answer. "We have been concerned and have indicated our concern," he said, adding that there are "disparate trends."
Charles DiBona, president of the American Petroleum Institute, disputed Schlesinger's anlysis at a separate news conference. "Oil companies are running through their refineries all of the crude oil that they can safely run," DiBona insisted. The institute is an oil industry trade association and Washington lobbying arm dominated by the major oil companies.
DiBona went on to protest that the oil companies are "not holding back products awaiting higher prices."
Schlesinger opened his news briefing saying that oil imports rose to 6.6 million barrels a day last week, an increase of 840,000 barrels over the week before that. Nevertheless, he said that the refiners reduced output from 87 percent two weeks ago to 84.5 percent last week.
The question of refinery output and what constitutes an adequate level of oil inventories has continued to be the focus of debate over the gasoline shortfall for months. Administration critics such as Rep. Toby Moffett (D-Conn.) have repeatedly called on DOE to force oil companies to produce more gasoline.
In recent weeks, as President Carter's political advisers have become increasingly unnerved over the political impact of gas lines and anger over the 18 cents a gallon increase in gasoline prices since Jan. 1, the administration has begun to call for increased gasoline production.
Schlesinger also offered general criticism of efforts to strengthen the administrations "windfall profits" tax that "removed incentives for increased supply."
Yesterday the House Ways and Means Committee voted to increase sharply taxes on oil that has already been found. While stopping short of the outcry registered by producers on Alaska's North Slope, such as Standard Oil of Ohio, the energy secretary singled out Alaskan oil as an instance where Congress could overreact.
Schlesinger also said that the nation's oil bill could mount to $60 billion this year, a sharp increase over the estimate of $52 billion offered earlier this month by Treasury Secretary W. Michael Blumenthal. This increase, Schlesinger said, "could be of the same magnitude" as the rise in the country's oil payments during 1973-74.
Meanwhile, Rep. William S. Moorhead (D-Pa.) said Schlesinger called him yesterday to announce Department of Energy and White House support for a bill initiated by House leaders to develop a synthetic fuels program.
Moorhead said Schlesinger told him "the White House is on board, at least for now," President Carter had told congressional leaders earlier this week he had some reservations about the bill because of its cost.