Energy Secretary James R. Schlesinger Jr. said yesterday he is reluctant to use his allocation powers to force the major oil companies to produce more gasoline even though the nation's refineries are running at disappointing levels.
In a contentious news conference, during which he seemed to back off from an earlier stand on the allocation issue, Schlesinger hinted that the companies could defer crude oil imports in reprisal and "keep it on the high seas."
Last week Schlesinger told reporters he was concerned about refiners building up oil inventories whil holding down refinery output, and made veiled threats he would consider mandating oil allocations to increase gasoline production.
Yesterday, while he said refiners were still running at below expected levels, Schlesinger spent the first half of his news conference defending the trust of the oil industry's policies, urging reporters and the public not to blame the companies. "The problems are fundamentally driven by a worldwide shortage of crude oil," Schlesinger said.
Some senior administration officials, however, expressed surprise over the tone of Schlesinger's comments defending the industry, given the administration's current preoccupation with urging refiners to increase their utilization levels.
The oil companies "cannot be held responsible for the basic shortage," Schlesinger said, adding that such a view would be "misleading and an unjustice to the companies."
Later, under stiff questioning, the secretary said that although medium-sized refiners are "moving through every barrel they can," some of the larger companies are not. Asked which major companies are holding back oil inventories, Schlesinger said, "it would be inappropriate to name them."
Nevertheless, he said that refinery utiliztion levels, 84.5 percent vs. the 87 percent called for by DOE, "were below the levels necessary . . . a disappointment to us."
And, at another point Schlesinger said, "It appears refining operations have been repressed."
"We have not gotten total satisfaction" from the refiners and "will continue to press them," Schlesinger assured reporters.
Asked about the drawdown in gasoline stocks from June through November last year which some oil industry analysts say provided the origin of the current gasoline squeeze, Schlesinger said, "That was regrettable, it was an error in judgment."
As for the general outlook regarding the shortage for the remainder of the summer, Schlesinger again said, "It may be bottoming out."
Last week the nation's crude oil imports were at 6.1 million barrels a day compared to nearly 6.5 million barrels a day the week before. "Continues imports at this level could lead to an alleviation of gasoline lines and permit us to build up to 240 million barrels," the administration's goal for middle distillate stocks by October.
The secretary also said that if domestic oil production remains at 8.6 million barrels a day, and oil imports continue at about 6.2 million barrels a day, and refineries operate at 87 percent utilization, the country could expect to have 95 percent of the fuel it had on hand last year.
Last week the nation's total crude oil stocks remained nearly the same as the week before, dropping from 330.2 million barrels to 329.9 million barrels.
Schlesinger underscored yesterday that the slight slowdown in the additions to the middle distillate stocks - including heating oil and diesel fuel - was "something of a disappointment."
On the issue of how much the Energy Department would like the oil industry to reduce its oil in inventories over the summer in order to increase gasoline supplies, Schlesinger said 250,000 barrels a day would be sufficient.
Yesterday the energy secretary also told reporters that his department would seek more comprehensive data on the oil industry, including:
A promised report to President Carter by DOE of causes of the current oil shortage.
An Energy Information Agency report to Congress and the public, digesting accrued oil industry data since the first of the year.
A comprehensive effort to match American Petroleum Institute and Energy Department inport numbers with those derived by the Customs Service in the Treasury Department.
Still another audit of the major oil refiners prepared by a private accounting company to determine whether any compaines are withholding supplies.
As for the outcome of these studies, Schlesinger said, "I expect no major discrepancies . . . we anticipate there will be numerous small discrepancies." Then he launched into his defense of the oil industry's intergrity. CAPTION: Picture 1, Schlesinger: "It appears operations have been repressed, By Douglas Chevalier - The Washington Post; Picture 2, Schlesinger, taking news conference questions, feels oil companies shouldn't be faulted for basis shortage. By Douglas Chevalier - The Washington Post