A long-term plan to assure adequate oil for the United States and other nations was urged yesterday by energy consultant Walter J. Levy.
He said on a television interview program that the plan is intended to win the cooperation of oil-exporting countries in averting disastrous cutbacks in oil production as these countries seek to conserve their supplies.
Under the plan, Levy told "Meet the Press" (NBC, WRC), oil consuming countries would urge exporting nations to produce the oil they otherwise might hold back.
In exchange, Levy said, the consuming countries would offer to pay for the oil with "energy bonds" that could be issued by an international institution.
The bonds would not be paid off in currency as normally would be the case, but with a fixed quantity, or "basket," of goods. What would be in the basket would be agreed upon in advance. The bonds would not necessarily carry an interest rate, Levy said.
"I think this is a way we must go," Levy said. "If we can't go that way, then a refusal to produce on terms and conditions would be as serious to us and our allies as an interdiction of supplies by the Soviets."
"I believe it's a question of firm leadership on our side," Levy added. "It's a question of realization that . . . if we do not act jointly, in a coordinated manner, we may find that we cannot maintain the world as we know it . . ."
"I believe that a determination is necessary [by the United States] to act unilaterally and may perhaps be the necessary precondition to act jointly, because when the chips are down so much more is at stake than just oil. . . ."
What would motivate the oil-producing nations to join in such a long-term agreement, Levy was asked.
"Their own survival, which is at stake, too," he replied. He said that none of the producing countries "can hope to escape a collapse of the world economy which, would in turn mean a collapse of the political system in their countries as well as ours."
A questioner observed: "So we're heading for an economic collapse if they don't cooperate?"
If they act in a very difficult manner, I believe we will have a hell of a problem," Levy answered.
Levy said that he expects the present situation to worsen because oil-producing countries, which already control production levels and prices, increasingly decide where their oil is to be sold and under what terms and conditions, including political conditions.
Moreover, he said, producer countries even have been changing agreed-upon prices retroactively, "so that all of a sudden, three months after an oil sale took place, the producing country says, 'No, it shouldn't have been sold at $20 [a barrel], it should have gone at $22."
As an example, Levy said, an unnamed U.S. oil company in 1979 "spent $230 million to pay for retroactive claims made for sales entered into in good faith. That means there are fundamentally no acknowledged and accepted rules for conduct governing the trade."
Pointing out that the federal tax on gasoline is 12 cents a gallon, compared with $1 to $2.50 in European countries, Levy recommended an increase in the U.S. tax to 50 cents.
He said that such a tax would be anti-inflationary, and would reduce imports, stimulate production, encourage the use of smaller cars and curb unnecessary driving. He said it would mean that Americans would pay a predicted $2 a gallon for gasoline by the end of the year, which is less than European motorist pay now.