The Synthetic Fuels Corp., set up by Congress to help make the United States self-sufficient in energy, is authorized to grant federal subsidies of up to $17.5 billion. Most of it will go to major companies, including Exxon.
Yet, in the late 1960s, Exxon's U.S. operating subsidiary "deliberately delayed development of alternative crude oil and energy sources knowing that this would encourage most of the industry to do the same," Canadian government antitrust investigators charge.
They made the charge in a report based on documents seized from Imperial Oil Limited, a Canadian firm 69 percent owned by Exxon, which is the worldwide industry leader. IOL declined to comment.
"As early as 1967, Exxon recognized that supply shortages were going to develop in the United States and calculated that the most profitable source of imports" would be Canada, the report says. In a 1968 memo, however, an Exxon officer revealed a strategy intended, according to the report, to deter development in the United States of alternative crude sources -- coal and shale. The report supported the charge with this excerpt from the memo:
"It is therefore desirable for Humble Exxon's operating subsidiary, now Exxon USA to do research work on shale and coal to know where the processes are headed and thus be in a position to anticipate government moves and be able to enter the field vigorously if commercial production commences. Humble should also encourage the government to initiate some private leasing of shale acreage but at a very restrained rate.
"In the meantime, it should not itself initiate commercial production, or take other action or make announcements that would motivate other companies to initiate commercial production or even development.
"It is felt that there is a fair amount of mass psychology in the industry and that, while many companies would prefer to go slow because of their domestic crude interests or because of uncertainties about the state of development of synthetic technology, they would feel compelled to start plants if others did and particularly so if a company with the stature of Humble did."