Oil Industry Group Urges Import Fees to Avert Crisis

The National Petroleum Council said Tuesday that only new government policies such as oil import fees and decontrol of natural gas prices will forestall an impending energy crisis.

The council said lower oil prices, reduced domestic production and an increase in dependence on imports would lead to an impending energy crisis similar to the one in the 1970s. The council predicted that U.S. petroleum imports could rise as high as 50% in the mid-1990’s from 27% in 1985.

“The potential for shortage is here. It is only a question of when will it first show up,” chairman Ralph Bailey told reporters after a meeting of the council, an industry advisory body to the Energy Department.

The council said policy options should include consumption taxes, public lands access, federal research policies and domestic production and exploration incentives.

Energy Secretary John Herrington, whose department will present a study about the potential energy shortage in March, did not endorse particular strategies but promised Cabinet discussion of the report, which he called “thorough” and “credible.”

The Reagan Administration has been opposed to an oil import tax, which would drive oil prices higher and make it more economical to drill for higher priced U.S. oil.

The council report said the nation’s vulnerability to imported oil increased dramatically in 1986,when domestic oil production dropped about 700,000 barrels a day and oil imports rose 23% during the year.

But earlier Tuesday the Energy Department projected that U.S. oil imports would grow only about 9% this year because of an expected lower growth in petroleum demand.

The council said imports from the Organization of Petroleum Exporting Countries also increased between 1985 and 1986, from 300,000 barrels per day to 900,000.

Last year, exploration and production budgets were cut by one-third, the report said, resulting in the loss of 148,000 jobs.