U.S. Dependency on Foreign Oil

Kudos to The Times for its editorial (“We Oil Addicts Are at It Again,” Jan. 29) which cites the decline in domestic crude oil production and the increase in the nation’s dependency on foreign imports. However, the editorial fails to report that there is an economical and recoverable domestic supply and that without it, the import trend will continue leaving the nation vulnerable to supply disruptions imposed by importers.

Your editorial points to the need for developing greater energy efficiency as the panacea for attacking the nation’s addiction to fossil fuel. Independent petroleum producers encourage this action, but the reality is that even while alternatives are being developed, the nation is still going to rely on petroleum products for decades. Incentives for increasing domestic crude oil production should not be cast aside.

California is the world’s third largest daily consumer of petroleum products, trailing only the nation as a whole and the Soviet Union. Yet the state’s production--third in terms of volume nationally--has dropped below the 1-million barrel per-day mark for the first time since 1980. It is apparent that the state cannot meet its own energy demands, hence new methods for generating domestic supplies should be studied.

One such method is currently being debated in Congress, the bipartisan Archer-Andrews-Boren bill which suggests a 20% tax credit for exploration and development expenditures, and a 20% tax credit for the costs of operating economically marginal wells. According to a study, if the bill were to be adopted, by the year 2000 well completions would increase 23%, domestic crude oil production would rise 17% or 939,000 barrels per day, and natural gas production would increase by 11%.

But tax credits aren’t the only solution. Currently Congress is considering a report by the U.S. Commerce Department which recommends a limited export license for independent crude oil producers. The independents, small businesses for the most part with no retail gasoline stations or refineries, primarily produce a heavy-weight crude for which there is a limited domestic market. It is environmentally unacceptable for refining, and there is a relative glut of it in California. If the independents were allowed to export some of this crude to Pacific Rim countries who need it, marginal wells could continue to operate and offset the state’s import dependency.

Energy security amounts to national security, and all avenues to achieve it must be explored simultaneously--conservation, incentive development and new market proposals.

THOMAS R. HUNT II

Executive Vice President

California Independent

Petroleum Assn.

Yorba Linda