Offshore Oil Production
Secretary Hodel is wrong in reversing his agreement to limit offshore leasing and his argument for so doing is fallacious.
In the absence of government participation, only the largest producers--one of which, Shell, is now a wholly owned foreign corporation--can share in taking home the profits from offshore operations. New leases would not be produced for years because now there is no market for new supplies. Therefore, to award leases at this time to the giant producers is to give them a hold on future production when profits could be exponentially increased.
Based on what is known of offshore geology and the reservoir volumes required for the production of a given amount of oil, there appears to be less than a remote chance that California offshore production could at any time constitute 10% or even 5% of our nation’s needs. Therefore, offshore production will not make a significant difference in the amount of oil that must be imported, or energy that must be provided from alternate domestic sources, which in another decade is estimated to be 50% or more of the need.
It is because of this irresoluble deficiency of domestic crude supply that prices will be dictated by foreigners and profits on remaining domestic production could be so high. Any additional, virtually risk-free oil resources secured by the majors at this time is a windfall for future corporate welfare.
The spate of recent takeovers in the oil industry: Gulf by Chevron, Getty by Texaco, Cities Service by Occidental, Grace by Shell, Shell by Royal Dutch, etc., is confirmation of the future value of any and all domestic oil resources. Much as such takeovers insure the future profitability of the corporation doing the buying, the takeovers have resulted in thousands upon thousands of oil field workers, engineers and white-collar workers being fired or superannuated. When this is combined with the retrenchment associated with still others attempting to prevent being taken over (Arco, for example) and the large scale purchase of oil field goods and supplies from Japan and other cheap labor countries, the number of skilled Americans laid off by the oil industry in recent years is in the tens of thousands.
Now Hodel comes along and says he has been told by leaders of the oil industry that any limitation on offshore leasing will result in a loss of jobs. Because of this new information, Hodel wants to scrap his agreement to limit leasing. The record does not support the contention of the industry and Hodel. New jobs that would be created would be few at the best.
Furthermore, based on the industry’s track record a lot of the assembled steel that would grace the American shoreline will be hauled from foreign countries. The Reagan Administration has rejected far greater opportunities to provide useful, productive jobs for Americans by not restricting imports of labor-intensive goods such as shoes, automobiles, knits, etc.
It is absurd and unpatriotic to hurriedly give away America’s resources so as to guarantee the future profitability of major oil producers in exchange for a few jobs. And this at the potential expense of an environment of unrivaled beauty. Many more jobs and much more of this nation would be served by Interior setting out to develop and insure the truly large quantities of alternate energy supplies that will be necessary to keep America from crumbling in the 21st Century--a threat to its welfare that may supersede any threat from overseas weapons.
TODD M. DOSCHER
Ventura
